International Commercial Arbitration: International Conventions, Country Reports and Comparative Analysis 9781509948710, 9783406743832

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Preface International arbitration remains one of the most challenging and exciting areas in international commercial law, in particular due to its cross-border dimensions. It is crucial for practitioners to understand not just the arbitration law of their home countries, but also that of other countries that have a link to a particular dispute. Questions that they may have to address may involve, for example, the law at the seat of the arbitral tribunal as well as the law of countries where recognition and enforcement is likely to occur. This guide aims at removing practical, linguistic and cultural barriers by providing access to various sources of arbitration law, covering the UNCITRAL Model Law on International Arbitration, the New York Convention, Investment Treaty Arbitration, as well as country reports on international commercial arbitration law in jurisdictions representing more than 60% of the global economy. The second edition of this guide addresses recent changes and developments in the area of international arbitration, including hundreds of new decisions, legislative reform, and topical problems such as challenges to arbitrators for lack of impartiality and independence, review of arbitral awards, third party funding, the ECtHR decision in Tabbanne on fair trial requirements in arbitral proceedings, and the ECJ ruling in Achmea on the compatibility of investment treaty arbitration with EU law. The new edition states the law as of 1 May 2020. This guide owes everything to the support from leading experts from various jurisdictions, and I wish to take this opportunity to express my deep gratitude to the authors who contributed to this guide and without whose efforts it would not have been possible to complete this project. I am greatly indebted to Professor Dr Florian Bien, Würzburg, Nadia Darwazeh, Paris, Dr Michele Potestà, Geneva, James Menz, Zurich, Dr Stephan Wilske, Stuttgart, Dr Wolfgang Winter, Munich, and Viktor von Essen, Bonn, for their generous advice and valuable comments. I also wish to thank Thomas Klich of C.H.Beck for his unfailing support with this new edition. Comments and suggestions from readers are welcome and can be sent to [email protected]. Le plus grand merci va à Cécile, et à nos enfants, Emilie et Matthias. Munich, 1 October 2020 Stephan Balthasar

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List of Abbreviations AA 1996 ............................. AAA ................................... AAA Rules 2013 .............. ABGB ................................. AC ....................................... ACA 1996 .......................... Act. dr. ............................... ACWS ................................ ADRLJ ................................ AG ....................................... AIR ..................................... AJIL .................................... AJT ..................................... ALD .................................... All ER ................................. ALR ..................................... Am. Rev. Int’l Arb. .......... AMC ................................... APC RF .............................. AppG .................................. APT .................................... Arb. ..................................... Arb. Int’l ............................ ArbLR ................................. Arr. Cass. ........................... Art. ...................................... ASA Bull. ........................... Asian Int’l Arb. J. ............ Austr. YIA ......................... BayObLG ........................... BayObLGZ ........................ BB ........................................ BBl ...................................... BCDR Int’l Arb. Rev. ...... BCSC .................................. BDSG .................................. BeckRS ............................... BezG ................................... BGBl ................................... BGE .................................... BGer. .................................. BGG .................................... BGH .................................... BGHZ ................................. BIT ...................................... BJM ..................................... BLR ..................................... BOE ....................................

Arbitration Act (England and Wales) American Arbitration Association AAA Commercial Arbitration Rules and Mediation Procedures effective 1 October 2013 Allgemeines Bürgerliches Gesetzbuch (Austrian civil code) The Law Reports, Appeal Cases Arbitration and Conciliation Act 1996 (India) Actualités du droit All Canada Weekly Summaries Arbitration and Dispute Resolution Law Journal Advocate General; Amtsgericht (German local court); Aktiengesellschaft (stock corporation) All India Reporter American Journal of International Law Algemeen juridisch tijdschrift Andhra Legal Decisions All England Law Reports Australian Law Reports The American Review of International Arbitration American Maritime Cases Arbitrazh Procedure Code of the Russian Federation (“Арбитражный процессуальный кодекс Российской Федерации”) Appellationsgericht Administration publique – trimestriel Arbitration: The International Journal of Arbitration, Mediation and Dispute Management Arbitration International Arbitration Law Reports and Review Arresten van het Hof van Cassatie Article(s) Association Suisse de l’Arbitrage (ASA) Bulletin Asian International Arbitration Journal Austrian Yearbook on International Arbitration Bayerisches Oberstes Landesgericht (Highest Regional Court of Bavaria) Sammlung der Entscheidungen des Bayerischen Obersten Landesgerichts in Zivilsachen Betriebs-Berater Bundesblatt (Switzerland) BCDR International Arbitration Review Supreme Court of British Columbia Bundesdatenschutzgesetz Beck-Rechtsprechung Bezirksgericht Bundesgesetzblatt (Austria, Germany) Entscheidungen des Schweizerischen Bundesgerichts Bundesgericht (Switzerland) Bundesgerichtsgesetz (Switzerland) Bundesgerichtshof (German Federal Court of Justice) Entscheidungen des Bundesgerichtshofs in Zivilsachen Bilateral Investment Treaty Basler Juristische Mitteilungen Business Law Review Boletín Oficial del Estado

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List of Abbreviations Bom. LR ............................. BRAO ................................. BRH .................................... Brussels I Regulation ...... Brussels Ia Regulation, Brussels I Regulation (recast) ............................... Bull. ..................................... BW ...................................... BYBIL ................................. CA ....................................... Cah. Arb. ........................... Cap. ..................................... CAS ..................................... Cass. .................................... CC ....................................... CCBE .................................. CEPANI ............................. Cf. ........................................ CF ........................................ Ch. ...................................... CIETAC ............................. Cir. ...................................... CISG ................................... Civ. ...................................... CJ ........................................ CLC .................................... CLJ ...................................... Col. J. Transnat’l L. ......... COMECON ...................... Comm ................................ Comp. L.Y.B. Int’l Bus. .. Contemp. Asia Arb. J. .... CPC .................................... CPC RF .............................. CPR ..................................... D. ......................................... D.Alaska ............................ DAOR ................................ D.Ariz. ................................ DB ....................................... D.C.Cir. .............................. D.Conn. ............................. D.D.C. ................................ D.Del. ................................. Dir. mar. ............................ DIS ...................................... DIS Rules 2018 ................. Disp. Res. J. ....................... DLR .................................... DLT .................................... DJ, DJe ............................... D.Mass. ..............................

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Bombay Law Reporter Bundesrechtsanwaltsordnung Belgische rechtspraak in handelszaken Regulation (EC) No. 44/2001, [2001] OJ L12/1 Regulation (EU) No. 1215/2012, [2012] OJ L351/1 Bulletin des arrêts de la Cour de Cassation Burgerlijk Wetboek British Yearbook of International Law Corte d’appello (Italy), Cour d’Appel (Belgium, France), Court of Appeal Les Cahiers de l’Arbitrage Capitulum Court of Arbitration for Sport Corte Suprema di Cassazione (Italy), Cour de Cassation (Belgium, France) Code civil (Belgium, France), Codice civile (Italy), Código civil (Spain) Council of Bars and Law Societies of Europe Centre Belge d’Arbitrage et de Médiation Confer Constituição federal (Brazil) The Law Reports, Chancery division China International Economic Trade and Arbitration Commission Circuit United Nations Convention on Contracts for the International Sale of Goods (11 April 1980) Civil division (Court of Appeal for England and Wales) Code Judiciaire (Belgium) Commercial Law Cases Cambridge Law Journal Columbia Journal of Transnational Law Council for Mutual Economic Assistance (Совет экономической взаимопомощи) Commercial Court (High Court of England and Wales) Comparative Law Yearbook of International Business Contemporary Asia Arbitration Journal Code de Procédure Civile (France), Codice di procedura civile (Italy), Código de Processo Civil (Brazil) Civil Procedure Code of the Russian Federation (“Гражданского процессуального кодекса Российской Федерации”) Civil Procedure Rules Recueil Dalloz District of Alaska Le Droit des affaires – Het Ondernemingsrecht District Court for the District of Arizona Der Betrieb Court of Appeals for the District of Columbia Circuit District Court for the District of Connecticut District Court for the District of Columbia District Court for the District of Delaware Il Diritto Marittimo Deutsche Institution für Schiedsgerichtsbarkeit (German Arbitration Institute) DIS Arbitration Rules effective 1 March 2018 Dispute Resolution Journal Dominion Law Reports Delhi Law Times Diário da Justiça, Diário da Justiça Eletrônico District Court for the District of Massachusetts

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List of Abbreviations D.N.J. .................................. EC ....................................... ECHR ................................. ECJ ...................................... ECLI ................................... Ecolex ................................. ECR ..................................... ECT ..................................... ECtHR ................................ ed., eds ............................... E.D.La. ................................ E.D.N.Y. ............................. E.D.Pa. ............................... E.D.Va. ............................... e.g. ....................................... EGLR .................................. E.J. ....................................... EO ....................................... et al. .................................... et seq. ................................. EU ....................................... EuC ..................................... EurLF ................................. EWCA ................................ EWHC ............................... F., F.2d, F.3d ..................... F. App’x ............................. F. Supp., F. Supp. 2d ....... FAA .................................... Fasc. .................................... FC ........................................ FCA .................................... FCAFC ............................... FCR ..................................... Fed. Appx. ......................... FLR ..................................... fn. ........................................ Fordh. Int’l L. J. ............... Foro it. ............................... Foro pad. ........................... FRD .................................... GDPR .................................

George Wash. Int’l L. Rev. ..................................... GesZR ................................. Govt .................................... GWB ................................... HK ...................................... HKC ................................... HKCFAR ........................... HKEC ................................. HKIAC ...............................

District Court for the District of New Jersey European Community Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human Rights) (4 November 1950) European Court of Justice European Case Law Identifier ecolex, Fachzeitschrift für Wirtschaftsrecht European Court Reports Energy Charter Treaty European Court of Human Rights Edition, editor(s) Eastern District of Louisiana Eastern District of New York Eastern District of Pennsylvania Eastern District of Virginia Exempli gratia Estates Gazette Law Reports Echtscheidingsjournaal Exekutionsordnung (Austria) Et alii Et sequens, sequentes European Union European Convention on International Commercial Arbitration, 21 April 1961 European Legal Forum England & Wales Court of Appeal [Neutral Citation] England & Wales High Court [Neutral Citation] Federal Reporter; Federal Reporter, 2nd Series; Federal Reporter, 3rd Series Federal Appendix Federal Supplement; Federal Supplement, 2nd Series Federal Arbitration Act Fascicule Federal Court Reports (Canada) Federal Court of Australia Federal Court of Australia, Full Court Federal Court Reports (Australia) Federal Appendix Federal Law Reports (Australia) Footnote Fordham International Law Journal Il Foro Italiano Il Foro Padano Federal Rules Decisions Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation), [2016] OJ L119/1–88 George Washington International Law Review Der Gesellschafter – Zeitschrift für Gesellschafts- und Unternehmensrecht Government Gerechtelijk Wetboek (Belgium) Hong Kong Hong Kong Cases Hong Kong Court of Final Appeal Reports Hong Kong Electronic Citation Hong Kong International Arbitration Centre

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List of Abbreviations HKIAC Rules 2018 ......... HKLR ................................. HKLRD .............................. HL ....................................... Hof ...................................... HR ....................................... IAA ..................................... IAICA ................................. IBA ...................................... ibid. ..................................... ICAA .................................. ICAC .................................. ICC ..................................... ICC Rules 2021 ................ ICCA .................................. ICCLR ................................ ICLQ ................................... ICSID ................................. ICSID Rev. ........................ i.e. ........................................ IEHC .................................. IHR ..................................... IIA ....................................... IL Pr. .................................. ILM ..................................... Int. A.L.R., Int’l Arb. L. Rev. ..................................... Int’l J. Arab Arb. .............. IPrax ................................... IPRG ................................... IPRspr. ............................... J ........................................... J. Int’l Arb. ........................ JAMS .................................. Jap. Ann. Int’l L. .............. JBl ........................................ JCP ...................................... JDI ....................................... J.E.C.L. & Pract. ............... JEV ...................................... J.L. & Comm. ................... JLMB .................................. JN ........................................ JORF ................................... JPIL ..................................... JT ......................................... JTT ...................................... JWIT ................................... KG ....................................... KGR .................................... Ktr ....................................... LA .......................................

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HKIAC Administered Arbitration Rules effective 1 November 2018 Hong Kong Law Reports Hong Kong Law Reports & Digest House of Lords Gerechtshof Hoge Raad der Nederlanden International Arbitration Act Inter-American Convention on International Commercial Arbitration of 1975 International Bar Association Ibidem International Commercial Arbitration Act of the Russian Federation (Закона Российской Федерации от 7 июля 1993 года № 5338-I “О международном коммерческом арбитраже”) International Commercial Arbitration Court (Russian Federation Chamber of Commerce and Industry) International Chamber of Commerce ICC Rules of Arbitration effective 1 January 2021 International Council for Commercial Arbitration International Company and Commercial Law Review International & Comparative Law Quarterly International Centre for the Settlement of Investment Disputes ICSID Review – Foreign Investment Law Journal id est High Court of Ireland [neutral citation] Internationales Handelsrecht – Zeitschrift für das Recht des internationalen Warenkaufs und Warenvertriebs International Investment Agreement International Litigation Procedure International Legal Materials International Arbitration Law Review International Journal of Arab Arbitration Praxis des Internationalen Privat- und Verfahrensrechts Bundesgesetz über das Internationale Privatrecht (Switzerland) Die deutsche Rechtsprechung auf dem Gebiete des Internationalen Privatrechts Justice Journal of International Arbitration Judicial Arbitration and Mediation Services Japanese Annual of International Law Juristische Blätter Jurisclasseur périodique, édition G Journal du droit international – Clunet Journal of European Competition Law and Practice Journal für Erbrecht und Vermögensnachfolge Journal of Law and Commerce Revue de Jurisprudence de Liège, Mons et Bruxelles Jurisdiktionsnorm (Austria) Journal Officiel de la République Française Journal of International Private Law Journal des tribunaux Journal des tribunaux du travail Journal of World Investment and Trade Kammergericht (Berlin), Kort Geding KG Report Berlin Kantongerecht Lei de Arbitragem no. 9.307, of 23 September 1996 (Brazil), Ley de Arbitraje (Spain)

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List of Abbreviations LAV .................................... LCIA ................................... LCIA Rules 2020 ............. LEC ..................................... LJ ......................................... Lloyd’s Rep. ...................... LNTS .................................. LQR .................................... LSF ...................................... Ltd ....................................... Lugano Convention ........ MBCA ................................ M.D.N.C. ........................... MDR ................................... Mh. L. J. ............................. ML ...................................... ML 1985 ............................ mn., mns ............................ MünchKomm(-BGB, -ZPO) ................................. MvA .................................... MvT .................................... NAFTA .............................. NAI ..................................... N.D.Cal. ............................. N.D.Ga. .............................. N.D.Ill. ............................... N.D.Ohio ........................... N.D.Tex. ............................ N.D.W. Va. ....................... NJ ........................................ NJA ..................................... NJB ..................................... NjW .................................... NJW .................................... NJW-RR ............................ No. ...................................... NSWSC .............................. NYC .................................... N.Y.S. .................................. NZLR .................................. OG ...................................... OGH ................................... OJ ........................................ OLG .................................... OLGR ................................. OR ....................................... p. .......................................... P&B .................................... Pace L. Rev. ....................... para., paras ........................ Parl. St. ............................... Pas. ...................................... PC .......................................

Lei de Arbitragem Voluntária no. 63/2011, of 14 December 2011 (Portugal) London Court of International Arbitration LCIA Arbitration Rules effective 1 October 2020 Ley 1/2000, de Enjuiciamiento Civil, of 7 January 2000 (Spain) Lord Justice Lloyd’s Law Reports League of Nations Treaty Series Law Quarterly Review Lag om skiljeförfarande (Sweden) Limited Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters, [2009] OJ L147/5 Manitoba Court of Appeal [neutral citation] District Court for the Middle District of North Carolina Monatsschrift für Deutsches Recht Maharashtra Law Journal UNCITRAL Model Law on International Commercial Arbitration (2006) UNCITRAL Model Law on International Commercial Arbitration (1985) Margin number(s) Münchener Kommentar (zum Bürgerlichen Gesetzbuch, zur Zivilprozessordnung) Memorie van Antwoord Memorie van Toelichting North-American Free Trade Agreement Nederlands Arbitrage Instituut District Court for the Northern District of California District Court for the Northern District of Georgia District Court for the Northern District of Illinois District Court for the Northern District of Ohio District Court for the Northern District of Texas District Court for the Northern District of West Virginia Nederlandse Jurisprudentie Nytt juridiskt arkiv Nederlands Juristenblad Nieuw Juridisch Weekblad Neue Juristische Wochenschrift Neue Juristische Wochenschrift, Rechtsprechungsreport Zivilrecht Number New South Wales Supreme Court (neutral citation) Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958 New York Supplement New Zealand Law Reports Obergericht (Switzerland) Oberster Gerichtshof (Austria) Official Journal of the European Union Oberlandesgericht (Austria, Germany) OLG-Report Ontario Reports Page Revue de droit judiciaire et de la preuve – Proces en Bewijs Pace Law Review Paragraph(s) Parlementaire Stukken Pasicrisie belge Privy Council

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List of Abbreviations Pepp. Disp. Resol. L.J. .... QB ....................................... QCCA ................................ RabelsZ .............................. RABG ................................. Rb. ....................................... RCJB ................................... RDIPP ................................ Rep. Jurispr. ...................... Rev. arb. ............................. Rev. Bras. Arb. ................. Rev. C. Esp. Arb. ............. Rev. crit. DIP .................... Rev. not. b. ........................ RIS ...................................... Riv. arb. .............................. Riv. dir. int. ....................... Riv. dir. proc. .................... RIW .................................... RJQ ..................................... Rome I Regulation .......... Rome II Regulation ......... RRD .................................... RS ........................................ RTD com. .......................... Rv ........................................ RW ...................................... RZ ....................................... S. .......................................... S. Ct. ................................... SAL Ann. Rev. .................. SALR .................................. SC ........................................ SCC ..................................... SchiedsVZ ......................... SchKG ................................ SCC Rules 2017 ............... SCR ..................................... S.D.Cal. .............................. S.D.Fla. ............................... S.D.Ohio ............................ S.D.Tex. .............................. Sec. ...................................... Sem. Jud. ............................ SFS ...................................... SGCA ................................. SGHC ................................. SGHCR .............................. SI ......................................... SIAA ................................... SIAC ................................... SIAC Rules 2016 .............. SJZ ....................................... SLR ...................................... SLR(R) ................................ SOU .................................... SPC ..................................... Stb ....................................... STJ ......................................

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Pepperdine Dispute Resolution Law Journal Law Reports, Queen’s Bench Division Québec Court of Appeal (neutral citation) Rabels Zeitschrift für ausländisches und internationales Privatrecht Rechtspraak Antwerpen Brussel Gent Rechtbank Revue critique de jurisprudence belge Rivista di diritto internationale privato e processuale Repertorio de Jurisprudencia Revue de l’arbitrage Revista Brasileira de Arbitragem Revista de la Corte Española de Arbitraje Revue critique du droit international privé Revue du notariat belge Rechtsinformationssystem Rivista dell’arbitrato Rivista di diritto internazionale Rivista di diritto processuale Recht der internationalen Wirtschaft Recueil de jurisprudence du Québec Regulation (EC) No. 593/2008, OJ, 4 July 2008, L 177/6 Regulation (EC) No. 864/2007, OJ, 31 July 2007, L 199/40 Revue Régionale de Droit Rechtssatz Revue trimestrielle de droit commercial Wetboek van Burgerlijke Rechtsvordering Rechtskundig Weekblad Österreichische Richterzeitung Sentence United States Supreme Court Reporter Singapore Academy of Law Annual Review South African Law Reports Supreme Court Supreme Court Cases (India); Stockholm Chamber of Commerce Zeitschrift für Schiedsverfahren Bundesgesetz über Schuldbetreibung und Konkurs (Switzerland) Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce effective 1 January 2017 Supreme Court Reports (Australia, Canada, India) District Court for the Southern District of California District Court for the Southern District of Florida District Court for the Southern District of Ohio District Court for the Southern District of Texas Section La Semaine Judiciaire Svensk författningssamling Singapore Court of Appeal Singapore High Court Singapore High Court Registrar Statutory Instrument Singapore International Arbitration Act Singapore International Arbitration Centre Rules of arbitration at the SIAC effective 1 August 2016 Schweizerische Juristen-Zeitung Singapore Law Reports Singapore Law Reports (Reissue) Statens offentliga utredningar Supreme People’s Court, China (最高人民法院) Staatsblad Superior Tribunal de Justiça (Brazil)

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List of Abbreviations Supr. Trib. ......................... Swiss Rules 2012 .............. Sw.U.L.Rev. ....................... SZ ........................................ T. Vred. .............................. TBH .................................... Tex. Int’l L. J. .................... TFEU .................................. TGI ..................................... TGR .................................... TJMG ................................. TJRJ .................................... TJSP .................................... TPI ...................................... TPR ..................................... Trib. Supr. ......................... TST ..................................... Tul. J. Int’l Comp. L. ...... TvA ..................................... TWVR ................................ UK ....................................... UKHL ................................. UKPC ................................. UKSC ................................. UN ...................................... UNCITRAL ...................... Unif. L. Rev. ...................... UNTS ................................. U.S. ..................................... US, USA ............................ USC .................................... UST ..................................... v. .......................................... VCLT ................................. VersR .................................. VIAC .................................. Vienna Rules 2018 .......... viz. ....................................... Vol. ..................................... WASC ................................ wbl ...................................... WIPO ................................. WL ...................................... WLR ................................... WM .................................... WPNR ................................ Yale J. Int’L L. .................. YCA .................................... YIA ..................................... ZDAR ................................. ZEV .................................... ZfRV ................................... ZIP ...................................... ZPO .................................... ZZP .....................................

Supremo Tribunal de Justiça (Portugal) Swiss Rules of International Arbitration effective 1 June 2012 Southwestern University Law Review Sammlung Zivilrecht – Entscheidungen des österreichischen Obersten Gerichtshofes in Zivil- und Justizverwaltungssachen Tijdschrift van de Vrede- en Politierechters Tijdschrift voor Belgisch handelsrecht Texas International Law Journal Treaty on the Functioning of the European Union Tribunal de Grande Instance Tijdschrift voor Gentse Rechtspraak Tribunal de Justiça de Minas Gerais Tribunal de Justiça do Estado do Rio de Janeiro Tribunal de Justiça São Paulo Tribunal de première instance Tijdschrift voor Privaatrecht Tribunal Supremo (Mexico, Spain) Tribunal Superior do Trabalho Tulane Journal of International and Comparative Law Tijdschrift voor Arbitrage Tijdschrift voor West-Vlaamse Rechtspraak United Kingdom United Kingdom House of Lords (neutral citation) United Kingdom Privy Council (neutral citation) United Kingdom Supreme Court (neutral citation) United Nations United Nations Commission on International Trade Law Uniform Law Review United Nations Treaty Series United States Supreme Court Reports United States (of America) United States Code United States Treaties and Other International Agreements Versus Vienna Convention on the Law of Treaties Versicherungsrecht Vienna International Arbitral Center Vienna Rules and Vienna Arbitration Rules effective 1 January 2018 videlicet Volume Western Australia Supreme Court Wirtschaftsrechtliche Blätter World Intellectual Property Organization Westlaw Transcripts Weekly Law Reports Wertpapiermitteilungen Weekblad voor Privaatrecht, Notariaat en Registratie Yale Journal of International Law Yearbook Commercial Arbitration Yearbook International Arbitration Zeitschrift der Deutsch-Amerikanischen Juristenvereinigung Zeitschrift für Erbrecht und Vermögensnachfolge Zeitschrift für Rechtsvergleichung Zeitschrift für Wirtschaftsrecht Zivilprozessordnung (Austria, Germany, Switzerland) Zeitschrift für Zivilprozess

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List of Authors Professor Dr Stephan Balthasar, LL.M. (Cambridge), Allianz, Munich, Germany Philipp Duncker, Counsel, Hogan Lovells International, Munich, Germany Georgios Fasfalis, LL.M. (Amsterdam), Associate, Linklaters, Amsterdam, The Netherlands Raquel Galvão Silva, Managing Associate, Linklaters, Lisbon, Portugal Priv.-Doz. Dr. Martin Illmer, MJur (Oxford), Richter am Landgericht, Landgericht Hamburg, Germany Marc Krestin, M.Sc., LL.M. (Rotterdam), Senior Associate, Allen & Overy, Paris, France Dantes Leung, BCL (Oxon), Partner, Oldham, Li & Nie, Hong Kong Amy Pui Sze Lo, LL.M. (Cambridge), Of Counsel, The Internet Law Group, Attorney-at-Law (admitted in New York State, England & Wales and Hong Kong), USA Nuno Lousa, Partner, Linklaters, Lisbon, Portugal Melissa Magliana, B.A. (Princeton), J.D. (Columbia), MLaw, Partner, Lalive, Zurich, Switzerland Dirk de Meulemeester, Partner, De Meulemeester & De Brabandere, Brussels, Belgium Dr Tilman Niedermaier, LL.M. (Chicago), Partner, CMS Hasche Sigle, Munich, Germany Dr Michael Nueber, LL.M. (UCL), Partner, Gasser Partner, Vaduz, Liechtenstein Kevin Ongenae, PhD Researcher, University of Ghent, Belgium Professor Dr Maud Piers, LL.M. (Miami), University of Ghent, Belgium Roman Richers, LL.M. (Cambridge), Counsel, Homburger, Zurich, Switzerland Ramesh Selvaraj, LL.B. (NUS), Partner, Allen & Gledhill, Singapore Professor Dr Dennis Solomon, LL.M. (Berkeley), University of Passau, Germany Dr Ben Steinbrück, MJur (Oxford), Partner, Schilling, Zutt & Anschütz, Mannheim, Germany Kai Liang Tan, LL.B. (NUS), LL.M. (Harvard), Partner, Allen & Gledhill, Singapore Professor Dr Cedric Vanleenhove, LL.M. (Cambridge), University of Ghent, Belgium Dr Hanno Wehland, LL.M. (London), Counsel, Lenz & Staehelin, Geneva, Switzerland Niclas Widjeskog, LL.M. (Harvard), Partner, Linklaters, Stockholm, Sweden Dr Nicolas Wiegand, Partner, CMS Hasche Sigle, Hong Kong Alex Ye, International Arbitration Lawyer, Withers, Hong Kong Sergey Yuryev, Partner, CMS, Moscow, Russian Federation Dr Gerold Zeiler, LL.M. (Washington University), Partner, Zeiler Floyd Zadkovich, Vienna, Austria Roland Ziadé, LL.M. (Harvard), Partner, Linklaters, Paris, France

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PART 1 INTRODUCTION A. International Commercial Arbitration: Comparative Reflections on the UNCITRAL Model Law Bibliography: International Commercial Arbitration (General): Ashford, The IBA Rules on the taking of evidence in international arbitration, Cambridge University Press 2013; Ashford, The IBA guidelines on party representation in international arbitration, Cambridge University Press 2016; Berger, Private dispute resolution in international business: negotiation, mediation, arbitration, 3rd ed., Kluwer Law International 2015; Bermann, Mandatory rules in international arbitration, Juris 2011; Betz, Proving Bribery, Fraud and Money-Laundering in Interational Arbitration, Cambridge University Press 2017; Bjorklund/Newcombe, International investment law and arbitration: cases, materials, and commentary, Oxford University Press 2014; Blackaby/Partasides/Redfern/Hunter, Redfern and Hunter on international arbitration, 6th ed., Oxford University Press 2015; Born, International arbitration and forum selection agreements: drafting and enforcing, 5th ed., Wolters Kluwer 2016; Born, International arbitration: cases and materials, 2nd ed., Wolters Kluwer 2015; Born, International Commercial Arbitration, 2nd ed., Kluwer 2014 (new edition in preparation); Brekoulakis, Third parties in international commercial arbitration, Oxford University Press 2010; Brunner, Force majeure and hardship under general contract principles: exemption for non-performance in international arbitration, Wolters Kluwer 2009; Carbonneau, Arbitration in a Nutshell, West Academic Publishing 2017; Caron/Caplan, The UNCITRAL arbitration rules: a commentary, Oxford University Press 2013, and Supplement, Oxford University Press 2015; Cordero-Moss (ed.), International commercial arbitration: different forms and their features, Cambridge University Press 2013; Friedland, Arbitration clauses for international contracts, 2nd ed., Juris Publishing 2007; Fry/Greenberg/Mazza, The Secretariat’s Guide to ICC Arbitration, ICC 2012; Gaillard, Legal theory of international arbitration, Nijhoff 2010; Gaillard (ed.), The review of international arbitral awards, JurisNet 2010; Gaillard/Bermann (eds), Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Brill Nijhoff 2017; Grégoire, Evidentiary privileges in international arbitration, Schulthess 2016; Greenberg/Kee/Weeramantry, International commercial arbitration: an Asia-Pacific perspective, Cambridge University Press 2011; Karrer, Introduction to International Arbitration Practice: 1001 Questions and Answers, Kluwer Law International 2014; Kronke et al. (eds), Recognition and enforcement of foreign arbitral awards, Kluwer Law International 2010; Kurkela/Turunen, Due process in international commercial arbitration, 2nd ed., Oxford University Press 2010; Martínez-Fraga, The American influence on international commercial arbitration: doctrinal developments and discovery methods, Cambridge University Press 2009; McIlwrath/Sagave, International arbitration and mediation: a practical guide, Kluwer Law International 2010; Mistelis, Concise international arbitration, 2nd ed., Kluwer Law International 2015; Moses, The principles and practice of international commercial arbitration, 3rd ed., Cambridge University Press 2017; Newman/Hill (eds), The leading arbitrators’ guide to international arbitration, 3rd ed., Juris Publishing 2014; O’Malley, Rules of Evidence in International Arbitration: An Annotated Guide, Informa 2013; Ostrove/Salomon/Shifman (eds), Choice of venue in international arbitration, Oxford University Press 2014; Park, Arbitration of international business disputes: studies in law and practice, 2nd ed., Oxford University Press 2012; Paulsson, The idea of arbitration, Oxford University Press 2013; Paulsson/Petrochilos, UNCITRAL Arbitration, Kluwer Law International 2018; Riesman/Craig/Park/Paulsson (eds), International Commercial Arbitration: Cases, Materials, and Notes on the Resolution of International Business Disputes, 2nd ed., Foundation Press 2015; RubinoSammartano, International arbitration law and practice, 3rd ed., JurisNet 2014; Schütze (ed.), Institutional arbitration: article-by-article commentary, C.H. Beck/Nomos 2013 (new edition in preparation); Sparka, Jurisdiction and arbitration clauses in maritime transport documents, Springer 2010; Strong, Research and practice in international commercial arbitration: sources and strategies, Oxford University Press 2009; UNCITRAL (ed.), UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), United Nations 2016; Webster/Bühler, Handbook of ICC Arbitration, 4th ed., Thomson Reuters 2018; Weigand/Baumann (eds), Practitioner’s Handbook on International Arbitration, 3rd ed., Oxford University Press 2019; Wilske/Markert/Bräuninger, Entwicklungen in der internationalen Schiedsgerichtsbarkeit, (2017) 15 SchiedsVZ 49–72, (2018) 16 SchiedsVZ 134–158, (2019) 17 SchiedsVZ 101–120; Wolff (ed.), New York Convention, 2nd ed., C.H. Beck 2019.

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Part 1. Introduction UNCITRAL Model Law on International Commercial Arbitration: Bachand/Gélinas (eds), The UNCITRAL model law after twenty-five years: global perspectives on international commercial arbitration, Juris 2013; Bantekas et al. (eds), UNCITRAL Model Law on International Commercial Arbitration: A commentary, Cambridge University Press 2020; Bañuelos Rizo, Arbitraje comercial internacional: comentarios a la Ley Modelo de la Comisión de Naciones Unidas sobre derecho comercial internacional, Limusa 2010; Bell (ed.), The UNCITRAL model law and Asian arbitration laws, Cambridge University Press 2018; Binder, International commercial arbitration and conciliation in UNCITRAL model law jurisdictions, 4th ed., Sweet & Maxwell 2019; Calavros, Das UNCITRAL-Modellgesetz über die internationale Handelsschiedsgerichtsbarkeit, Gieseking 1988; Fouchard, La loi-type de la C.N.U.D.C.I. sur l’arbitrage commercial international, JDI 1987, 861–900; Holtzmann/Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary, Kluwer Law and Taxation 1989; Holtzmann et al., A Guide to the 2006 Amendments to the UNCITRAL Model Law on International Commercial Arbitration, Wolters Kluwer 2015; Lewis, The interpretation and uniformity of the UNCITRAL model law on international commercial arbitration, Wolters Kluwer 2016; Roth, UNCITRAL Model Law on International Commercial Arbitration, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 1403–1571; Sanders, UNCITRAL’s Model Law on International and Commercial Arbitration: Present Situation and Future, (2005) 21 Arb. Int’l 443–482. Comparative analysis and country reports on international commercial arbitration: Amaral, Judicial precedent and arbitration–are arbitrators bound by judicial precedent?, A comparative study of UK, US and Brazilian law and practice, 2nd ed., Wildy, Simmonds & Hill Publishing, 2018; Bermann (ed.), Recognition and Enforcement of Arbitral Awards, Springer 2017; Born, International Commercial Arbitration, 2nd ed., Kluwer 2014 (new edition in preparation); Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Kluwer 2002–2020; Erk, Parallel proceedings in international arbitration: a comparative European perspective, Wolters Kluwer 2014; Fountoulakis, Set-off defences in international commercial arbitration: a comparative analysis, Hart 2011; Girsberger/Voser/Colacino et al., International arbitration: comparative and Swiss perspectives, 3rd ed., Nomos/Schulthess 2016; Kleinheisterkamp, Overriding mandatory laws in international arbitration, (2018) 67 ICLQ 903–930; Landrove, Assignment and arbitration: a comparative study, Sellier European Law Publishers/Schulthess 2009; Lew/ Mistelis/Kröll, Comparative international commercial arbitration, Kluwer Law International 2003; Lookofsky/Hertz, Transnational litigation and commercial arbitration: a comparative analysis of American, European, and international law, 4th ed., DJØF Publishing 2017; Marchisio, The notion of award in international commercial arbitration: a comparative analysis of French law, English law, and the UNCITRAL model law, Kluwer Law International 2017; Mistelis/Brekoulakis, Arbitrability: international & comparative perspectives, Kluwer Law International 2009; Nazzini, The law applicable to the arbitration agreement: towards transnational principles, (2016) 65 ICLQ 681–703; Noussia, Confidentiality in International Commercial Arbitration: a comparative analysis of the position under English, US, German and French law, Springer 2010; Poudret/Besson, Comparative law of international arbitration, 2nd ed., Sweet & Maxwell 2007; Reyes/Gu (eds), The developing world of arbitration: a comparative study of arbitration reform in the Asia Pacific, Hart Publishing 2018; Sanders, Quo vadis arbitration? – sixty years of arbitration practice – a comparative study, Kluwer Law International 1999; Schwebel/Sobota/Manton, International Arbitration: Three Salient Problems, 2nd ed., Cambridge University Press 2020; Vorburger, International arbitration and cross-border insolvency: comparative perspectives, Kluwer Law International 2014; Yang, Applicable laws to arbitration agreements under current arbitration law and practice in mainland China, (2014) 63 ICLQ 741–754; Zelst, Unilateral option arbitration clauses in the EU: a comparative assessment of the operation of unilateral option arbitration clauses in the European context, (2016) 33 J. Int’l Arb. 365–378. International case law databases: http://www.italaw.com (investment treaties and cases); http://www. newyorkconvention.org and http://newyorkconvention1958.org/ (material on the New York Convention); http://www.uncitral.org/clout/index.jspx (case law on the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration) (all accessed 1 August 2020). Domestic case law databases: Austria: http://www.ris.bka.gv.at/Judikatur; Belgium: https://www.juridat. be/; Brazil: http://www.stj.jus.br; China: http://www.court.gov.cn/zgcpwsw; England: http://www.bailii.org; France: http://www.legifrance.gouv.fr; Germany: http://www.disarb.org/en/47/database/overview-id0; Hong Kong: http://legalref.judiciary.gov.hk and http://www.hklii.hk; India: http://judis.nic.in; Netherlands: https:// uitspraken.rechtspraak.nl/; Russia: http://kad.arbitr.ru; Singapore: http://www.singaporelaw.sg; Spain: http:// www.poderjudicial.es/search/indexAN.jsp; Sweden: http://www.arbitration.sccinstitute.com; Switzerland: http://www.bger.ch and http://www.swissarbitrationdecisions.com; United States: http://case.law, http:// www.gpo.gov/fdsys/search/home.action and http://www.law.justia.com (all accessed 1 August 2020). International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, 330 UNTS 3, ratification status available at https://treaties.un.org/Pages/ViewDetails.

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A. UNCITRAL Model Law & Comparative Analysis aspx?src=IND&mtdsg_no=XXII-1&chapter=22&clang=_en; European Convention on International Commercial Arbitration, Geneva, 21 April 1961, 484 UNTS 349, ratification status available at https://treaties.un. org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-2&chapter=22&clang=_en; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington DC, 18 March 1965, 575 UNTS 159, list of member states available at https://icsid.worldbank.org/en/Pages/about/Databaseof-Member-States.aspx; United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, New York, 10 December 2014, ratification status available at https://treaties.un.org/Pages/ViewDetails. aspx?src=TREATY&mtdsg_no=XXII-3&chapter=22&clang=_en (all accessed 1 August 2020).

Contents I. Introduction ..................................................................................................... II. The principles of international commercial arbitration......................... 1. International commercial arbitration: a definition ............................. 2. The legal framework .................................................................................. 3. The territoriality principle and the place of arbitration .................... 4. Ad hoc and institutional arbitration....................................................... 5. Advantages and disadvantages of arbitration as a dispute resolution mechanism................................................................................ a) Practicability........................................................................................... b) Party autonomy and neutrality of the forum ................................. c) Efficiency and costs .............................................................................. d) Confidentiality ....................................................................................... e) Cross-border enforcement regime..................................................... f) Multi-party proceedings ...................................................................... g) Summary judgments and fast track procedures............................. III. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law governing the arbitration agreement ..................................... a) Formation and interpretation............................................................. b) Agency ..................................................................................................... c) Capacity, arbitrability, form................................................................ 3. The validity of the arbitration agreement............................................. a) Consent.................................................................................................... b) Capacity................................................................................................... c) Arbitrability ............................................................................................ d) Form......................................................................................................... e) Arbitration agreement by reference.................................................. f) Substantial validity of arbitration agreements ................................ aa) Arbitration agreements that are null and void ....................... bb) Arbitration agreements that are inoperative or terminated. cc) Arbitration agreements that are incapable of being performed ........................................................................................ 4. The interpretation and the scope of the arbitration agreement ...... a) Substantive scope (scope ratione materiae) .................................... b) Personal scope (scope ratione personae) ......................................... c) Pathological arbitration clauses ......................................................... d) Multi-tier clauses................................................................................... e) Compensation and set-off with counter-claims............................. 5. The effect of the arbitration agreement................................................. a) Enforcing the arbitration agreement ................................................ aa) Mandatory referral to arbitration............................................... bb) Scope of review and and Kompetenz-Kompetenz ................... cc) Anti-suit injunctions and damages for breach of arbitration agreements ....................................................................................... b) Parallel proceedings and lis pendens rules....................................... c) Challenges to an arbitral tribunal’s jurisdiction............................. d) Binding effect of state court decisions on jurisdiction ................. 6. Drafting arbitration clauses: a checklist ................................................

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Part 1. Introduction IV. The arbitral tribunal and the conduct of arbitral proceedings............. 1. The arbitral tribunal................................................................................... a) Constitution............................................................................................ b) Qualifications, impartiality and independence of arbitrators ..... c) Challenge procedure............................................................................. 2. The conduct of the arbitral proceedings ............................................... a) Equality of arms, fair trial and due process.................................... b) Place, venue and language .................................................................. c) Request for arbitration......................................................................... d) Terms of reference and written submissions.................................. e) Default ..................................................................................................... f) Oral hearing ........................................................................................... g) Evidence .................................................................................................. aa) Admissibility of evidence ............................................................. bb) Means of evidence ......................................................................... (1) Witnesses................................................................................... (2) Experts ....................................................................................... (3) Document production............................................................ cc) Standard of proof........................................................................... dd) Court assistance.............................................................................. ee) Parallel criminal investigations ................................................... h) Confidentiality and data protection.................................................. 3. The decision of the arbitral tribunal ...................................................... a) Arbitral award and termination of arbitral proceedings without an award .................................................................................. aa) Arbitral award................................................................................. bb) Award by consent .......................................................................... cc) Termination of arbitral proceedings without an award........ b) The law governing the dispute........................................................... aa) Freedom of choice and applicable law absent a choice ........ bb) Decisions in equity and ex aequo et bono................................ cc) Mandatory norms and lois de police.......................................... c) Costs......................................................................................................... aa) Advance on costs ........................................................................... bb) Security for costs ............................................................................ cc) Decision on costs in the arbitral award .................................... dd) Third party funding....................................................................... 4. Interim relief and emergency arbitration.............................................. a) Interim relief before the arbitral tribunal ........................................ b) Emergency arbitration.......................................................................... c) Powers of state courts to grant interim relief in support of arbitration ............................................................................................... 5. Multi-party and multi-contract arbitration .......................................... V. The review and the enforcement of arbitral awards............................... 1. Finality of arbitral awards and res judicata effects ............................. 2. Correction and interpretation of arbitral awards................................ 3. Review of arbitral awards before the state courts ............................... a) General principles and procedural framework............................... aa) No review of the merits................................................................ bb) Jurisdiction and time limits for setting aside applications ... cc) Waiver of setting aside applications .......................................... dd) Decisions subject to setting aside applications........................ ee) Remission of the award to the arbitral tribunal ..................... b) Grounds for setting aside arbitral awards under article 34(2) ML......................................................................... aa) Lack of jurisdiction........................................................................ (1) Incapacity of a party and invalidity of the arbitration agreement..................................................................................

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A. UNCITRAL Model Law & Comparative Analysis (2) Excess of mandate................................................................... 125 (3) Lack of arbitrability ................................................................ 126 (4) Scope of review of an arbitral tribunal’s jurisdiction...... 127 (5) Erroneous denial of jurisdiction .......................................... 128 bb) Lack of notice and breach of due process ................................ 129 cc) Irregular composition of the tribunal and procedural errors 132 dd) Breach of public policy ................................................................. 134 (1) Restrictive application ............................................................ 134 (2) Procedural and substantive public policy.......................... 135 (3) Divergent approaches to public policy control ................ 136 ee) Burden of proof.............................................................................. 138 c) Preclusion of grounds for setting aside............................................ 139 d) Partial annulment.................................................................................. 141 e) Discretion not to set aside .................................................................. 142 4. Recognition and enforcement of arbitral awards................................ 143 a) General principles and procedural framework............................... 143 aa) Decisions subject to recognition and enforcement ................ 144 bb) Jurisdiction and time limits for enforcement applications... 145 cc) Procedure for enforcement applications................................... 146 b) Defences to enforcement under article 36(1) ML.......................... 147 aa) Defences to enforcement coinciding with article 34 ML and article V NYC ......................................................................... 147 bb) Enforcement of awards that are not yet binding or have been set aside .................................................................................. 148 cc) Burden of proof for a defence to enforcement ....................... 151 c) Preclusion of defences to enforcement ............................................ 152 aa) Failure to object in arbitral proceedings................................... 152 bb) Failure to apply to have the award set aside ........................... 153 cc) Recognition of foreign decisions ................................................ 154 d) Partial enforcement............................................................................... 155 e) Discretion to enforce ............................................................................ 156 f) Stay of enforcement under article 36(2) ML .................................. 157 g) Enforcement and state immunity...................................................... 158 VI. Conclusion........................................................................................................ 159

I. Introduction The idea of arbitration – the resolution of disputes through a binding decision of 1 party-appointed arbitrators – is as old as legal history. It existed already in classical Roman law,1 continued to fascinate legal writers in the European ius commune2 and has been part of English common law for centuries.3 Today, it is the preferred dispute resolution mechanism in international business4 and as such remains one of the most challenging domains in cross-border legal practice. The success of the New York Convention of 1958 (NYC)5 is one of the reasons for the popularity of arbitration as a dispute resolution mechanism in international commercial practice: it requires courts in its Member States – a total of 164 as of 1 August 2020 – to recognize and enforce 1 Dig. 4.8; Zimmermann, The Law of Obligations, 1996, 526–530; Buchwitz, Schiedsverfahrensrecht in Antike und Mittelalter, 2020. On the history of arbitration law generally Born, International Commercial Arbitration, 2nd ed., 2014, 6–68. 2 See, e. g., Stryk, Specimen usus moderni pandectarum, vol. I, 8th ed., 1738, 431–439. 3 Born, International Commercial Arbitration, 2nd ed., 2014, 35–39. 4 Polkinghorne/Timonen/Larkimo, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 6; Thomas, (2019) 83 RabelsZ 487 (488), arguing that the corresponding decline in private law disputes coming to court creates a need for reform (489). 5 330 UNTS 3.

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arbitration clauses and arbitral awards, with limited possibilities for judicial review.6 There is no other dispute resolution mechanism with similar effectiveness. Other conventions such as the European Convention of 19617 and the Washington Convention of 19658 contributed to the widespread use of arbitration. The emergence of international standards such as the UNCITRAL Model Law on International Commercial Arbitration, adopted in 1985 and revised in 2006 (ML),9 as well as the IBA Guidelines on Conflicts of Interest in International Arbitration of 2014 and the IBA Rules on the Taking of Evidence in International Arbitration of 201010 led to the convergence of national arbitration laws,11 which further increases the attractiveness of arbitration, as does case law requiring state courts to interpret arbitration agreements in a way favouring their validity12 and to adopt an approach that is conducive to the recognition and enforcement of arbitral awards.13 2 This development has often been described as creating a “pro-arbitration” and “arbitration-friendly” legal environment. However, such labels do not do justice to the complexities of arbitration law14 and convey an impression of uniformity that does not correspond to reality. In fact, arbitration law and practice remain far from being fully harmonized.15 Attempts to unify arbitration law have remained unsuccessful,16 and as a result, legislation, case law and legal practice in the field of arbitration continue to differ from jurisdiction to jurisdiction. Even where harmonized laws and principles apply, solutions adopted by local courts diverge: this is well illustrated by a comparative study of the EU Parliament,17 a recent initiative of UNCITRAL18 and a study on the application of the New York Convention in more than 40 countries.19 Diverging solutions exist, in particular, regarding the application and interpretation of open-ended concepts such as impartiality and independence of arbitrators, due process, natural justice and public policy;20 the same applies to jurisdictional issues21 and the control of the discretion arbitral tribunals exercise in procedural matters such as evidence.22 Accordingly, awareness of differences in legal cultures remains key in international 6 Articles II, III and V NYC. For signatories, status and reservations, see https://treaties.un.org/Pages/ ViewDetails.aspx?src=IND&mtdsg_no=XXII-1&chapter=22&clang=_en (accessed 1 August 2020). 7 484 UNTS 349. On the Convention, see Hascher, YCA XXXVI (2011), 504–562 and Zeiler/Siwy, The European Convention on Arbitration, 2019. 8 575 UNTS 159. 9 UN Documents A/40/17 (1985) and A/RES/61/33 (2006). On the revision process, Sanders (2005) 21 Arb. Int’l 443–482. 10 See http://tinyurl.com/iba-Arbitration-Guidelines (accessed 1 August 2020). 11 Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, para. 957. 12 See infra mn. 29. 13 See infra mn. 147. 14 Bermann, (2018) 34 Arb. Int’l 341 (352). 15 See infra B mn. 4; Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, paras 990 et seq. 16 See infra E mn. 1. 17 Cole et al., Legal instruments and practice of arbitration in the EU, PE 509.988, 2014, http://www. europarl.europa.eu/RegData/etudes/STUD/2015/509988/IPOL_STU(2015)509988_EN.pdf, accessed 1 August 2020). 18 UNCITRAL (ed.), UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 2015, p. ix para. 3, identifying a need for promoting the uniform interpretation and application of the Convention. 19 The study aims at fostering an appreciation of the differences in understanding of the NYC: Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 3. 20 Infra mns 67–70, 129–131 and 136–137. Some of these ideas have been described as moral rather than legal concepts: Cremades, (2017) 83 Arb. 203 (206) regarding due process. 21 E. g., as regards the scope of arbitration agreements with regard to non-signatories: infra mn. 46. 22 Marghitola, Document Production in International Arbitration, 2015, § 10.01, § 10.04[B].

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arbitration, and there is a need for caution to avoid unjustified comparisons and uncritical importations of private foreign theories and usages, in particular between civil and common law jurisdictions.23 In fact, arbitration remains embedded in various ways in national legal systems and legal cultures, and their differences can have a decisive impact on the outcome of a dispute. This creates one of the major challenges for arbitration practitioners, and this challenge warrants a comparative, transnational approach as jurisdiction-specific issues come into play at various levels: first, an arbitration agreement must be drafted in such a way that it will be recognized and enforced not only by the courts at the place of arbitration but also in jurisdictions where an action could be brought in breach of an arbitration clause, and in jurisdictions where enforcement is likely to take place. Second, if a dispute arises, it is essential for parties, counsel and arbitrators to be familiar with the applicable arbitration law to conduct the arbitration in an efficient way and to develop appropriate strategies, and similar considerations come into play at the enforcement stage. Third, when interpreting their arbitration laws, courts are often willing to consider case law from other jurisdictions as persuasive authority, for example, as regards the recognition of foreign awards under the New York Convention,24 the scope of review of arbitrators’ jurisdiction by state courts,25 the validity of arbitration agreements26 as well as their interpretation,27 and the control of awards against standards of natural justice,28 finding persuasive value in foreign decisions even where there are differences in the relevant statutory provisions.29 Comparative approaches have also proved valuable in informing legislative reform.30 In international arbitration, best practice therefore requires the use of arguments and strategies based on a comparative law analysis. This guide addresses the need for access to domestic arbitration laws as well as 3 international treaties and conventions that is necessary for such a comparative, transnational approach. The first chapter (A) provides an orientation on the arbitration landscape, identifying, with the UNCITRAL Model Law as a starting point, common principles and major differences between numerous jurisdictions. This comparative approach provides a particularly useful toolbox for the application of the Model Law in countries that have incorporated it into their domestic arbitration law such as Australia, Canada, Ireland and New Zealand,31 or that have arbitration laws that follow substantially the Model Law.32 The chapters thereafter cover the framework provided by

23 Cf. the Portuguese decision Tribunal Central Administrativo Sul, No. 20011/16.3BCLSB, 16 February 2017, paras II.2, 1.3; Foty/Clanchy, (2019) 85 Arb. 185 (186) (“cultural insensitivities”). 24 E. g. Lombard-Knight v. Rainstorm Pictures Inc. [2014] EWCA Civ 356, paras 39–41. 25 Malini Ventura v. Knight Capital Pte Ltd [2015] SGHC 225, para. 37; Tomolugen Holdings Ltd v. Silica Investors Ltd [2015] SGCA 57, paras 45–56. 26 OGH, 21 December 2017, 6 Ob 104/17p, paras 2.3, 2.4. 27 MBC Financial Services Ltd v. Boston Merchant Financial, Ltd, 704 F. App’x 14 (2nd Cir. 2017), citing English case law; Premium Nafta Products Ltd v. Fili Shipping Co. Ltd [2007] UKHL 40, para. 14 per Lord Hoffmann, citing German case law. 28 TCL Air Conditioner (Zhongshan) Co. Ltd v. Castel Electronics Pty Ltd [2014] FCAFC 83, CLOUT Case No. 1756, paras 115–154. 29 TMM Division Maritima SA de CV v. Pacific Richfield Marine Pte Ltd [2013] SGHC 186, paras 48–50. 30 E. g., in Belgium: see infra E mn. 28. 31 Sec. 16 of the Australian International Arbitration Act 1974; sec. 2 of the Canadian Commercial Arbitration Act 1985; sec. 6(1) Irish Arbitration Act 2010 (cf. Reilly, (2011) 28 J. Int’l Arb. 163); sec. 5(b), 6(1) and Schedule 1 of the Arbitration Act 1996 of New Zealand. 32 UNCITRAL qualify more than 80 states as Model Law countries: https://uncitral.un.org/en/texts/ arbitration/modellaw/commercial_arbitration/status (accessed 1 August 2020).

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the most important international convention on arbitration, the New York Convention (infra B), and, given the overlap between commercial and investment arbitration and the growing practical importance of investment treaty protection, the principles of investment treaty arbitration under investment treaties also receive particular attention (infra C). The international framework is complemented by country reports on the arbitration laws of the most important jurisdictions across the globe (infra D–S), representing over 60 % of the world economy.33

II. The principles of international commercial arbitration 1. International commercial arbitration: a definition Arbitration, i. e., the submission of disputes for a final and enforceable decision to an arbitral tribunal chosen by the parties rather than a state court, has become the dispute resolution mechanism of choice in international commercial practice. Three distinctive features define the arbitral process: first, arbitration is based on the parties’ agreement; it is their agreement to arbitrate which creates jurisdiction for the arbitral tribunal, and without a valid arbitration agreement, an arbitral award cannot be enforced.34 Second, an agreement to arbitrate excludes jurisdiction of state courts, which will decline to hear a case brought in breach of an arbitration agreement.35 Third, the arbitral tribunal’s award can be enforced like a state court judgment if the unsuccessful party does not comply with it, with only limited scope for review and defences available to the award debtor.36 These features distinguish arbitration from other alternative dispute resolution mechanisms that do not provide for enforceable decisions, for example expert opinions, mediation, and conciliation. It is, however, not uncommon to combine different dispute resolution methods in so-called “multi-tier” clauses, providing for an escalation of disputes in several steps, e. g., mediation followed by arbitration.37 5 International trade practice has been the driving force in the development of international arbitration. This is reflected in article I NYC and article 1(1) ML as well as in various national arbitration laws, defining their scope of application as “international commercial arbitration”. Where limitations regarding commerciality exist, they have often been interpreted broadly,38 in particular, as including all commercial relationships, even where parties do not qualify as merchants or commercial persons,39 and as including tort claims as well as contractual claims arising out of a commercial relationship.40 In most jurisdictions covered in this guide, arbitration laws are in fact not limited to commercial arbitration but also apply to non-commercial arbitration.41 4

33 In terms of GDP figures published by the World Bank for 2019 (available at https://databank. worldbank.org/data/download/GDP.pdf, accessed 1 August 2020). 34 See articles II(1), V(1)(a), (c) NYC and articles 7(1), 36(1)(a), (c) ML. 35 See article II(3) NYC, article 8(1) ML. 36 See articles III and V NYC, articles 35, 36 ML. 37 Such multi-tier clauses have to be drafted with particular care to avoid doubts as to their interpretation and as to the steps to be taken before arbitration is admissible: infra mn. 49. 38 As is required by the footnote to article 1(1) ML. See, e. g., infra I mn. 8 for France, S mn. 10 for the United States. 39 Re Carter and McLaughlin, (1996), 27 O.R. (3rd) 792, CLOUT Case No. 390. 40 Kaverit Steel and Crane Ltd v. Kone Corp., 87 D.L.R. (4th) 129, CLOUT Case No. 586; Polkinghorne/ Timonen/Larkimo, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 8. 41 For exceptions in France and Russia see infra I mn. 8 and N mn. 17. Some jurisdictions apply the commerciality reservation under the NYC: infra G mn. 12 (China), L mn. 6 (India).

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Nevertheless, many jurisdictions impose some restrictions where parties do not have the same bargaining power, e. g., in consumer and employment disputes.42 Some caution is required as to the qualification of an arbitration as “international”: 6 while some arbitration laws do not differentiate between domestic and international arbitration,43 the Model Law and some jurisdictions have a specific regime for international arbitration. Under article 1(3) ML, an arbitration is international if the parties have places of business in different states; if the place of arbitration, any place of performance of a substantial part of the obligations or the place with which the dispute has the closest connection is in a country other than that where the parties have their places of business, or if the parties expressly agree that the arbitration relates to more than one country.44 Like the Model Law, many jurisdictions provide for specific arbitration regimes limited to international arbitration as opposed to domestic arbitration. Where this is the case, for example, in mainland China, France, India and Russia,45 the international regime is generally more liberal than the domestic. In other words, disputes that do not qualify as international in a particular jurisdiction may be subject to more restrictive requirements, in particular as to the arbitrability of disputes, the validity of arbitration agreements or the choice of law rules: for example, a choice of law is not possible in domestic arbitration in Mainland China, India and Russia.46 In India, issues of “serious fraud” are not arbitrable in domestic arbitration,47 and the scope of review of domestic awards is broader than that of international awards.48 The difficulties resulting from this situation are increased by the fact that the definitions of internationality differ: for example, under Russian law, foreign participation in a party suffices to make a dispute international,49 but will not be relevant in mainland China.50 The domicile of a party is decisive under article 1(3)(a) ML, but is irrelevant under French law.51 As a rule, where a relationship has a link to a jurisdiction that provides for a special regime for international arbitration, parties should make sure to draft contracts and arbitration clauses in such a way that a dispute qualifies as international and thus benefits from the more liberal rules.

2. The legal framework The legal framework for international commercial arbitration is dominated by two 7 standards, the New York Convention of 1958 and the UNCITRAL Model Law of 1985. The New York Convention governs the recognition and enforcement of foreign arbitral awards. As of 1 August 2020, it has 164 Member States and thus has virtually global range, with the exceptions being limited essentially to a number of African and Asian countries. While the text of the New York Convention is binding on all signatories, subject to reservations of commerciality and reciprocity, its application in practice varies from jurisdiction to jurisdiction, in particular, as to the reasons for refusing to enforce 42 Cf. infra B mns 126–127. On whether consumer and employment law disputes qualify as “commercial” within the meaning of article 1(1) ML, see Polkinghorne/Timonen/Larkimo, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 8–9. 43 E. g., Austria (infra D mn. 5). 44 The notion of “place of business” is interpreted broadly to include any place where a party conducts business: Polkinghorne/Timonen/Larkimo, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 14. 45 See infra G mn. 2, I mns 6 et seq. and N mns 15–16. 46 Infra G mn. 117, L mn. 76 and N mn. 79. 47 A. Ayyasamy v. A. Paramasivam (2016) 10 SCC 386; cf. Kumar, (2017) 33 Arb. Int’l 249–274. 48 Raheja, (2018) 84 Arb. 96 (97–99); Sindhu, (2017) 83 Arb. 147 (162–163). 49 See article 1(2) of the Russian Federal Law on International Commercial Arbitration. 50 Infra G mn. 20. 51 Infra I mn. 7.

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foreign awards. Moreover, article VII NYC allows for the implementation of enforcement regimes that are more liberal than the Convention itself, as is the case under the European Convention, the Washington Convention52 and French arbitration law.53 Unlike the New York Convention, the UNCITRAL Model Law, adopted in 1985 and amended in 2006,54 has no binding force as such and is meant to serve as guidance for national legislators. However, in some jurisdictions, it has legal effect.55 Where this is not the case, legislators often follow the Model Law in principle,56 but are free to deviate from the Model Law and do so frequently. 8 The UNCITRAL Secretariat established a system for collecting court decisions and arbitral awards relating to the New York Convention and the Model Law (Case Law on UNCITRAL Texts: CLOUT). The purpose of the system is to promote international awareness of the legal texts formulated by the Commission and to facilitate uniform interpretation and application of those texts. The database is available online.57 More recently, UNCITRAL also published a Guide on the New York Convention that is available online, together with a case law database.58

3. The territoriality principle and the place of arbitration 9

Most jurisdictions covered in this guide follow the territoriality principle enshrined in article 1(2) ML. Under the territoriality principle, the provisions of the arbitration law of a specific state apply, as a rule, only if the place of arbitration is in the territory of that state.59 Given this link between the place of arbitration and the applicable arbitration law (the lex arbitri or the curial law of the arbitration), the place of arbitration can have a strong influence on the arbitral proceedings. In fact, the lex arbitri at the place of arbitration will govern many essential aspects of the arbitration. For example, it will determine mandatory rules for the arbitral tribunal to follow (see article 19(1) ML) and whether and to what extent an arbitral award is subject to review by the courts (see article 34 ML). Moreover, the choice of the place of arbitration will normally imply supervisory jurisdiction of the courts at that place for disputes in connection with the arbitration, e. g., decisions on the appointment and challenge of arbitrators, on the tribunal’s jurisdiction, and, most importantly, jurisdiction to hear applications for setting aside arbitral awards.60 This supervisory jurisdiction is of paramount importance, particularly because the setting aside of the award by the courts at the seat of the arbitration will create a defence to enforcement in other jurisdictions as well.61 The seat can also determine enforceability of the award under the New York Convention in countries applying reciprocity requirements such as Belgium, China, France, India, the Netherlands, Russia, Singapore, the United Kingdom, and the United States.62 The place 52 Article IX EuC limits the defence to enforcement based on the setting aside of an award by the courts at the seat, while articles 53–55 of the Washington Convention provides for enforcement of investment dispute awards without any review by the courts at the place of enforcement. 53 Infra I mn. 5. 54 Supra fn. 9. 55 E. g., in Australia, Canada, Ireland and New Zealand (see supra mn. 3). 56 For a list of countries following the Model Law see supra fn. 32. 57 See http://www.uncitral.org/clout/index.jspx (accessed 1 August 2020). 58 See http://newyorkconvention1958.org (accessed 1 August 2020). 59 For the limited exceptions, see article 1(2) ML. For supervisory jurisdiction in case of “bare” arbitration agreements that do not specify the place of arbitration, see K.V.C. Rice Intertrade Co Ltd v. Asian Mineral Resources Pte Ltd [2017] SGHC 32. 60 Article 6 ML in conjunction with articles 11(3), (5), 13(3), 16(3) and 34(2) ML. 61 Infra mns 148–150. By contrast, an annulment of the award by courts other than those at the seat does not create a defence under article V(1)(e) NYC (infra B mn. 286). 62 For a list of countries that made reservations, see supra fn. 6.

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of arbitration can be agreed on by the parties (article 20(1) ML), and given the importance of this choice, parties are well advised to determine in their arbitration agreement a place of arbitration in a jurisdiction with an efficient and reliable court system63 and to adapt their agreement to the lex arbitri of the chosen seat.64 Where there is no agreement between the parties, the place of arbitration is determined by the arbitral tribunal.65 Absent an unequivocal agreement between the parties on the seat, uncertainties surrounding the seat can give rise to conflicting court decisions as regards supervisory jurisdiction.66 The place of arbitration is, above all, a legal concept, rooting the arbitration in a 10 specific legal system. It does not, however, have any implications for the location where oral hearings before the arbitral tribunal take place, where it takes evidence or where the arbitrators convene and deliberate.67 It is commonplace for the venue for hearings and the place of arbitration to be located in different jurisdictions, and this does not as such affect the location of the arbitral seat.68 Even where all hearings are conducted at a place other than the place of arbitration, the place of arbitration will still determine annex jurisdiction for the state courts, e. g., for setting aside applications.69 Where the arbitration agreement is silent as to the place of arbitration, an agreement between the parties as to the venue will often be seen as implying an agreement on the place of arbitration as well.70

4. Ad hoc and institutional arbitration Under article 19(1) ML, the parties are free to agree on the procedure to be followed 11 by the arbitral tribunal in conducting the proceedings, and such agreement may include a reference to a set of arbitration rules (article 2(e) ML). In particular, article 19(1) ML allows parties to choose between institutional and ad 12 hoc arbitration. Ad hoc arbitration refers to administration of arbitral proceedings by the parties, either on the basis of the arbitration law applicable at the seat of the arbitration or pre-formulated rules such as the UNCITRAL Arbitration Rules 2010.71 By contrast, institutional arbitration is characterized by an agreement between the parties on the use of arbitration rules pre-formulated by an arbitral institution and an administration of the arbitration by that institution.72 The arbitral institution is not the 63 The Rule of Law Index of the World Justice Project (see https://worldjusticeproject.org/our-work/ research-and-data/wjp-rule-law-index-2019, accessed 1 August 2020) may assist in the choice of appropriate jurisdictions. Caution is required regarding institutional arbitration rules providing for a mandatory place of arbitration (e. g., § 21(1) MKAS Rules 2017 (place of arbitration in Moscow)). 64 E. g., an appeal against an award can be waived under English law (section 69(1) AA 1996), and in some countries, it is possible to waive the right to have awards set aside (see infra mn. 119). 65 Article 20(1) ML. 66 See, for example, the Indian Supreme Court decision in Enercon (India) Ltd v. Enercon GmbH, Civil Appeal No. 2086 of 2014, 14 February 2014, where English and Indian courts both claimed to have supervisory jurisdiction as the court at the seat of the arbitration. 67 Article 20(2) ML. 68 Born, International Commercial Arbitration, 2nd ed., 2014, 1596 et seq.; infra D mn. 11. 69 Chantiers de l’Atlantique SA v. Gaztransport & Technigaz SAS [2011] EWHC 3383 (Comm), para. 3 (place of arbitration in London, all hearings in Paris); PT Garuda Indonesia v. Birgen Air [2002] 1 SLR 393 (place of arbitration in Indonesia, all hearings in Singapore). 70 Shagang South-Asia (Hong Kong) Trading Co. Ltd v. Daewoo Logistics [2015] EWHC 194 (Comm); Shashoua v. Sharma [2009] EWHC 957 (Comm); Brahmani River Pellets Ltd v. Kamachi Industries Ltd, Supreme Court of India, Civil Appeal No. 5850 of 2019, 25 July 2019 (but in Union of India v. Hardy Exploration and Production (India) Inc., FAO (OS) 59/2016 and CM Nos 7062–63/2016 and 7066/2016, the Indian Supreme Court held that an agreement on a venue outside India did not imply an agreement on the place of arbitration outside India). 71 UN Document A/65/17, Annex I (adopted by resolution A/RES/65/22). 72 Berger, (2018) 34 Arb. Int’l 473 (476).

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tribunal and will not decide the dispute; rather, it will provide, through its arbitration rules, a procedural framework in support of the arbitration, governing the appointment of the arbitral tribunal, the conduct of the proceedings, and the award. The institution will also assist with service of the request for arbitration or of the arbitral award as well as the choice and the appointment of arbitrators. Arbitral institutions revise their rules from time to time. Unless the parties agree otherwise, there is a general presumption that the most recent version applies.73 13 The expertise of arbitral institutions, their administrative support and their framework of institutional rules can be highly beneficial to the efficiency of arbitral proceedings, and therefore, institutional arbitration is an option preferred by many practitioners. However, parties should make sure they are sufficiently familiar with an institution and its rules before agreeing to arbitrate under them. Arbitral institutions in the jurisdictions covered in this guide and often used in international arbitration are (in alphabetical order) the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), the Câmara de Comércio Brasil-Canadá (CCBC), the Centre belge d’arbitrage et de médiation (CEPANI), the Centro Internacional de Arbitraje de Madrid (CIAM), the China International Economic and Trade Arbitration Commission (CIETAC), the Deutsche Institution für Schiedsgerichtsbarkeit (DIS), the Hong Kong International Arbitration Centre (HKIAC), the Indian Council of Arbitration (ICA), the International Centre of Dispute Resolution (ICDR) of the American Arbitration Association, the International Court of Arbitration of the ICC, the London Court of International Arbitration (LCIA), the Nederlands Arbitrage Instituut (NAI), the Singapore International Arbitration Centre (SIAC), the Swiss Chambers’ Arbitration Institution, and the Vienna International Arbitration Centre (VIAC). The International Centre for the Settlement of Investment Disputes (ICSID) is an institution specifically dedicated to the arbitration of claims under investment treaties.74

5. Advantages and disadvantages of arbitration as a dispute resolution mechanism 14

Various reasons lead parties to opt for arbitration rather than litigation as a dispute resolution mechanism. The choice of the dispute resolution mechanism remains, however, a complex exercise and requires a thorough understanding of the benefits and drawbacks of arbitration.

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a) Practicability. In some cases, an agreement to submit disputes to arbitration is a question of practicability and convenience, in particular, where parties cannot agree on a jurisdiction clause and arbitration is the only viable option. Moreover, an arbitration agreement may also be the only way to opt out of jurisdictions that do not recognize jurisdiction clauses in favour of courts elsewhere.75 It also opens the possibility to 73 For example, article 1(3) Swiss Rules 2012, article 6(1) ICC Rules 2021, article 1(2) DIS Rules 2018. AQZ v. ARA [2015] SGHC 49, para. 125, CLOUT Case No. 1535, confirms this approach for rules that “contain mainly procedural provisions” but makes an exception where rules contain mainly “substantive provisions”, and similar case law exists in Germany (infra J mn. 5). Occasionally courts have held that this would also allow application of new rules on emergency arbitration that were not yet in force at the moment of the conclusion of the arbitration agreement: cf. Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 887. 74 See https://icsid.worldbank.org (accessed 1 August 2020). On investment treaty arbitration see infra C. 75 E. g., Brazilian courts do not recognize exclusive jurisdiction clauses in favour of foreign courts if they derogate from the concurrent jurisdiction of Brazilian courts, STJ, 19 August 2008, REsp 804.306/SP, IPRax 2012, 170, note Oliveira.

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choose the applicable substantive law for the underlying contract in jurisdictions where a choice of law in litigation is not possible.76 b) Party autonomy and neutrality of the forum. Another important aspect in 16 favour of arbitration is the degree of party autonomy: the parties are free to determine the procedural rules of the arbitration (article 19(1) ML), subject to only a few mandatory rules such as equal treatment of the parties and due process (article 18 ML). Parties may determine the venue and the language of the proceedings, the rules applicable to the taking of evidence, and the number as well as the expertise and other qualifications of the arbitrators.77 Moreover, the parties have a direct influence on the composition of the arbitral tribunal. This allows them to ensure the dispute is decided in a neutral forum, which may be more difficult or at least perceived to be more difficult in state courts.78 In addition, the party autonomy principle also enables parties to set up a tribunal with the resources and the flexibility necessary to deal with the dispute at hand. c) Efficiency and costs. It is often argued that arbitration is more efficient than 17 litigation in terms of costs and time as the arbitral proceedings are limited to one instance before the arbitral tribunal, rather than two or three instances as is the norm in litigation.79 However, much depends on the circumstances. A comparison of fees for an arbitral tribunal and state courts does not necessarily favour arbitration, even taking into account litigation through three instances.80 When it comes to costs for the parties’ counsel, experts and witnesses, the different cost rules make it virtually impossible to compare arbitration and litigation: in international arbitration, the unsuccessful party will normally have to reimburse the other party on an indemnity basis for all costs in connection with the arbitration (infra mn. 103). By contrast, in litigation, cost reimbursement may be limited to statutory fees (e. g., in Germany81), be subject to the discretion of the judge (e. g., in France82) or be available only in limited circumstances (e. g., in the United States83). As to the duration of proceedings, some legal systems will process routine cases in a timeframe that arbitral tribunals will struggle to emulate: current data for the Member States of the Council of Europe show first instance proceedings in civil and commercial matters of well under one year, with an average duration in some countries of just four months.84 76 E. g., Brazilian conflict of law rules do not allow parties to agree on the law of a contract (article 9 Lei de Introdução às normas do Direito Brasileiro), but a choice of law is possible if parties agree to arbitrate (article 2 Brazilian arbitration law, cf. infra F mn. 61; Brazil-David, (2011) 27 Arb. Int’l 57 (68)). 77 See articles 10(1), 20(1), 22(1), 23(1), 24 ML. 78 A jurisdiction clause in favour of a “neutral” forum will not be recognized in jurisdictions where the chosen forum is required to have a “connection” to the dispute as is the case, for example, in China: see Tang, (2012) ICLQ 459 (461 et seq.). A compromise is sometimes found in a jurisdiction clause requiring each party to litigate its claims in the country of the defendant, but this creates considerable procedural risks as it may prevent the defendant from bringing counter-claims or counter-claim related defences such as set-off (BGH, NJW 2015, 1118). 79 See ICC (ed.), Effective Management of Arbitration, 2014. 80 For example, for an amount in dispute of US$ 100 k, 1 m, 10 m and 30 m, the average fee for an ICC tribunal under the ICC Rules 2021 would amount to US$ 16 k, 63 k, 397 k and 509 k respectively (with a sole arbitrator in the first two cases). Court fees for three instances under the German Gerichtskostengesetz would amount to US$ 12 k, 64 k, 453 k and 1.3 m. 81 See § 3a(1) Rechtsanwaltsvergütungsgesetz. 82 Article 700 CPC. 83 Rule 54(d) Federal Rules of Civil Procedure. 84 CEPEJ (ed.), European judicial systems, Efficiency and quality of justice, CEPEJ STUDIES No. 26, 2018 Edition (2016 data), 250, https://rm.coe.int/rapport-avec-couv-18-09-2018-en/16808def9c (accessed 1 August 2020).

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d) Confidentiality. Another benefit of arbitration relates to its confidential nature,85 based on the fact that hearings before an arbitral tribunal are not open to the public, arbitrators are often bound by rules of professional secrecy, and most jurisdictions recognize the arbitrator’s duty to keep the deliberations of the tribunal confidential. There is, however, no agreement that the parties themselves must treat an arbitration confidentially: courts in England and Singapore have held that there is an implied obligation, arising out of the nature of arbitration itself, on both parties not to disclose information on the arbitration, save with the consent of the other party,86 and some legislators have adopted specific rules to that effect.87 However, even so, parties often lose confidentiality in arbitration-related court proceedings in jurisdictions where court decisions will be published including the names of the parties.88 Moreover, courts in other jurisdictions such as Sweden and the United States have refused to recognize an “implied confidentiality obligation”,89 so depending on the relevant jurisdiction, a specific agreement may be necessary to create a duty of confidentiality, unless applicable institutional rules such as article 44.1 DIS Rules 2018 or article 30.1 LCIA Rules 2020 impose an obligation of confidentiality on the parties. It is worth mentioning that the European Court of Human Rights has held that in cases of “compulsory arbitration”, article 6(1) ECHR requires a hearing before the tribunal to be public.90

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e) Cross-border enforcement regime. The international enforcement regime applicable to arbitral awards, in particular on the basis of the New York Convention, is also an aspect where arbitration can have advantages over litigation. Under Article V NYC, enforcement of a foreign arbitral award can only be refused in limited circumstances, and at a global level, there is no comparable enforcement regime for state court judgments: in many cases, cross-border enforcement of judgments depends on the existence of bilateral treaties or reciprocity and is often virtually impossible. However, surveys suggest that an award often leads to negotiated agreements with considerable discounts91 rather than spontaneous compliance by the award debtor – which suggests that enforcing arbitral awards is not always straightforward. Depending on the jurisdictions involved, it may in fact be easier to enforce state court judgments, as is the case, for example, for the enforcement regime in the EU under the Brussels Ia Regulation: while an arbitral award must ordinarily be declared enforceable by the state courts, no such exequatur is needed for the enforcement of judgments within the EU,92 and while state courts will review the jurisdiction of the arbitral tribunal, the jurisdiction of the original court will not be reviewed for recognition and enforcement under the Brussels Ia Regulation.93 85

For a recent analysis see Caprasse/Ziadé, Rev. Arb. 2014, 593–616. England: Emmott v. Michael Wilson & Partners Ltd [2008] EWCA Civ 184, para. 81 per Collins LJ; Singapore: infra O mn. 61. 87 E. g., section 18(1) of the Hong Kong Arbitration Ordinance 2011 expressly forbids the parties to disclose information relating to the arbitral proceedings. For Spain, see infra P mn. 55. 88 E. g., in England: Tout/Patel, (2017) 20 Int. A.L.R. 144. 89 Infra Q mn. 53 and S mn. 73. On divergent approaches as to confidentiality see Born, International Commercial Arbitration, 2nd ed., 2014, 2791–2801. 90 Mutu and Pechstein v. Switzerland, 2 October 2018, 40575/10, 67474/10, ECLI:CE:ECHR:2018:1002JUD004057510, paras 178–184. 91 See Mistelis/Baltag, (2008) Am. Rev. Int’l Arb. 319 (340, 343): in 40 % of the cases, an award is followed by a settlement, which in 20 % of the cases involves a discount of over 25 %. 92 See article 35 ML and article 39 Brussels Ia Regulation. 93 See article V NYC, article 36 ML and article 45(3) Brussels Ia Regulation. Accordingly, the existence of a valid arbitration agreement is no defence to enforcement of an EU judgment under the Brussels Ia Regulation: see infra B mn. 94. 86

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f) Multi-party proceedings. A notable drawback of arbitration is that it is impractic- 20 able in multi-party situations as it will not be possible to include a third party in an arbitration without its consent.94 Where multi-party scenarios are likely to materialize, special consideration must therefore be given when drafting the arbitration clause.95 g) Summary judgments and fast track procedures. Another disadvantage of arbitra- 21 tion relates to the uncertainty regarding the availability of summary judgment. In fact, where parties agreed to arbitrate, state courts will stay proceedings and refer parties to arbitration notwithstanding that, in the absence of an arbitration agreement, summary judgment would have been available96 – which leaves it to the arbitral tribunal to decide whether and what kind of summary award is possible. However, just like the Model Law, most arbitration laws do not expressly address the question of whether arbitral tribunals may adopt summary procedures to expedite the arbitral proceedings,97 and the same applies to many institutional rules.98 An amendment to the UNCITRAL Arbitration Rules, introducing a new Annex dealing with expedited proceedings, is currently under discussion.99 In the meantime, while there have been arbitral awards summarily dismissing claims,100 and state courts have confirmed that, in the light of arbitrators’ wide discretion in respect of procedure, summary awards can be enforced,101 there remains considerable uncertainty on arbitrators’ powers to expedite proceedings, and arbitral tribunals will have to exercise their procedural powers with caution.102 To a certain extent, the non-availability of summary proceedings may be compensated by institutional rules that provide for fast-track procedures, such as the expedited procedure under article 30 ICC Rules 2021103 or under article 1.4 DIS Rules 2018,104 and institutional rules that provide for the early dismissal of claims and defences such as article 22.1(viii) LCIA Rules 2020 and the SIAC 2016 Rules.105 Expedited proceedings under ICC and other institutional rules provide for a decision by a sole arbitrator even where the parties agreed on a panel of three arbitrators, but some courts have held that awards on that basis are unenforceable.106

III. The arbitration agreement The arbitration agreement is the very basis of dispute resolution through arbitration. It 22 is defined as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal

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Choi, (2019) 35 Arb. Int’l 29 (33). Infra mns 108–111. 96 Halki Shipping Corp. v. Sopex Oils Ltd [1998] 1 WLR 726. 97 A notable exception is section 15 of the US Revised Uniform Arbitration Act (2000). 98 Chong/Primrose, (2017) 33 Arb. Int’l 63 (68). 99 UN Document A/CN.9/WG.II/WP.212, dated 21 November 2019. 100 First Interim Award in ICC Case No. 11413, (2010) 21(2) ICC Int’l Ct Arb. Bull. 34 (para. 47). 101 Travis Coal Restructured Holdings Llc v. Essar Global Fund Ltd [2014] EWHC 2510 (Comm); Sherrock Brothers Inc. v. Daimler Chrylser Motors Co. LLC, 260 F. App’x 497 (3rd Cir. 2008). Likewise, a recent US decision in setting aside proceedings confirmed that tribunals’ general power to conduct arbitral proceedings in a fair and efficient manner authorizes summary procedure even absent express agreement of the parties: Weirton Medical Center Inc. v. Community Health Systems Inc., Civ. Action No. 5:15CV132 (N.D.W. Va. 12 December 2017). 102 Chong/Primrose, (2017) 33 Arb. Int’l 63 (78). 103 For commentary on ICC rules on expedited procedure, see Schütt, (2017) 15 SchiedsVZ 81. 104 Cf. Fiebinger, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 30 mns 19–22. 105 See infra O mn. 12. 106 E. g., in China: Wilske/Markert/Bräuninger, (2018) 16 SchiedsVZ 134 (150). 95

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relationship, whether contractual or not.107 The requirement of an agreement to arbitrate enshrines a fundamental principle: in the words of the US Supreme Court in Stolt-Nielsen SA v. Animalfeeds International Corp., arbitration “is a matter of consent, not coercion”,108 which is also reflected in the case law of the European Court of Human Rights that an agreement to arbitrate implies a waiver of ECHR guarantees that is only compliant with the ECHR if it is “established in a free, lawful and unequivocal manner”.109 The arbitration agreement has two effects: first, it bars jurisdiction of the state courts which will refer the parties to arbitration if an action is brought in breach of an arbitration agreement,110 and second, it creates the jurisdictional basis for the decision of the dispute by the arbitral tribunal. Where the arbitration agreement is invalid or where it does not cover the dispute to be decided, the arbitral tribunal must decline jurisdiction. An award made without an arbitration agreement can be set aside111 and will be refused recognition and enforcement.112 The importance of the arbitration agreement cannot be overestimated, and it is therefore essential for parties to understand the requirements for a valid arbitration agreement and the ways to enforce it.

1. The doctrine of separability 23

While an arbitration agreement is ordinarily part of the main contract, either as a specific arbitration clause or through a reference in the main contract to another document containing an arbitration clause such as general terms and conditions, it can also be concluded separately.113 Either way, under the Model Law the arbitration agreement is legally independent from the underlying contract.114 On the basis of this so-called doctrine of separability, the principle is that the illegality, the invalidity or the termination of the main contract does not as such invalidate the arbitration clause contained therein.115 Accordingly, an arbitration agreement enables the arbitral tribunal to decide on consequences resulting from such defects of the main contract, including allegations that the matrix contract was obtained by fraud or bribery.116 Exceptions to the separability doctrine apply where the arbitration clause is affected by the same ground for invalidity as the main contract, for example, where the signature on the main contract including the arbitration agreement was forged117 or where one party suffers from mental incapacity affecting both the main contract and the arbitration agreement.118 Where the parties never agree on the draft of a matrix contract containing an arbitration clause, there is no arbitration agreement if the entire draft, including the arbitration clause, was

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Option I, Article 7(1) ML, article II NYC. 559 U.S. 662 (681), 130 S. Ct. 1758 (2010), taking up a phrase from Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468 (479) (1989). 109 Mutu and Pechstein (supra fn. 90), 2 October 2018, 40575/10, para. 96 with further references, holding that without such waiver, the ECHR guarantees remain applicable. 110 Article 8 ML, article II(3) NYC. 111 Article 34(2)(a)(i), (iii), (b)(i) ML. 112 Article 36(1)(a)(i), (iii), (b)(ii) ML, article V(1)(a), (c), (2)(a) NYC. 113 Option I, article 7(1) ML. 114 Article 16(1)(2) ML. On the separability doctrine, see Feehily, (2018) 34 Arb. Int’l 355–383. 115 NYC: infra B mn. 96; England: Fiona Trust & Holding Corp. v. Yuri Privalov [2007] EWCA Civ 20, para. 20 (per curiam); [2007] UKHL 40; India: World Sport Group v. MSM Satellite, (2014) 11 SCC 639, para. 25. See also Born, International Commercial Arbitration, 2nd ed., 2014, 401–456. 116 England: Fiona Trust (supra fn. 115) [2007] EWCA Civ 20, para. 20 (per curiam); [2007] UKHL 40; United States: Prima Point Corp. v. Flood, 388 U.S. 395 (1967); Horvath/Khan, (2017) 15 SchiedsVZ 127 (130). 117 Feehily, (2018) 34 Arb. Int’l 355 (371, 372). 118 Spahr v. Secco, 330 F.3d 1266 (10th Cir. 2003). 108

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subject to contract.119 However, on the basis of the separability doctrine, it is conceivable that the parties already agreed on the arbitration clause contained in the draft contract.120

2. The law governing the arbitration agreement a) Formation and interpretation. One consequence of the separability doctrine is that 24 the arbitration agreement and, in particular, its formation, construction and interpretation are not necessarily governed by the law applicable to the main contract.121 In fact, article V(1)(a) NYC as well as articles 34(2)(a)(i), 36(1)(a)(i) ML provide that the parties are free to choose the law applicable to their arbitration agreement,122 and while these provisions govern primarily the review and enforcement of arbitral awards, they apply by analogy to the pre-award phase.123 Absent a choice of the parties, the law at the place of the arbitration will govern the clause.124 Some courts follow this rule even where neither the parties nor the dispute has a link to the place of arbitration.125 The law governing the arbitration agreement will determine, inter alia, the conclusion of the agreement to arbitrate and its interpretation.126 In this context, the law governing the arbitration agreement can have a decisive impact as courts adopt diverging approaches as to the construction of arbitration clauses: examples include Sulamérica, where the applicable law had an impact on the validity of the arbitration agreement,127 and more recently, Kabab-Ji SAL v. Kout Food Group, where the applicable law determined the scope of the arbitration agreement, notably the question of whether a non-signatory was bound by an arbitration agreement entered into by its subsidiary.128 A much debated issue regarding the law applicable to an arbitration agreement is 25 whether a choice of law for the main contract implies a choice of law for the arbitration agreement. This has been affirmed, for example, by courts in Germany, India and

119

BCY v. BCZ [2016] SGHC 249. BGE 142 III 239, ASA Bull. 2016, 967, para. 6. 121 See Born, International Commercial Arbitration, 2nd ed., 2014, 464 et seq., 475 et seq.; Nazzini, (2016) 65 ICLQ 681–703. 122 In mainland China, the choice appears to be limited between the law of the place of arbitration and the law of the place of the arbitral institution: Yang, (2017) 33 Arb. Int’l 121 (134). 123 Choi, (2016) 19 Int. A.L.R. 121 (123); infra B mn. 123; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. II para. 228; Travaux préparatoires for the Model Law, A/CN.9/264, art. 16 para. 3. The same applies under article VI(2) EuC. 124 Article 34(2)(a)(i) ML, article V(1)(a) NYC. Where there is no express or implied choice, English courts apply a closest connection test (Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi AS v. VSC Steel Company Ltd [2013] EWHC 4071 (Comm), para. 101), which deviates from article V(1)(a) NYC but will often coincide with the approach under the Convention. 125 Spain: infra P mn. 14, but contrast this with Habas Sinai, supra fn. 124, [2013] EWHC 4071 (Comm). 126 Cf. infra B mn. 122, 136. As regards its extension to third parties, see infra B mn. 133. In Germany, BGH, BeckRS 2014, 11030, para. 21, held that the law applicable to the arbitration agreement also governs the question whether it can be extended, on the basis of a group of companies doctrine, to third parties who are not party to the arbitration agreement. 127 TJSP, 19 April 2012, No. 0304979-49.2011.8.26.0000, holding that under Brazilian law, the arbitration agreement was prima facie invalid, while Sulamérica Cia Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638 held that, precisely because of the potential invalidity under Brazilian law, the parties cannot have intended Brazilian law to apply and that, by default, English arbitration law as the law at the seat would apply. On Sulamérica see Pearson, (2013) 29 Arb. Int’l 115–126. 128 [2020] EWCA Civ 6. Another example is Peterson Farms Inc. v. C&M Farming Ltd [2004] EWHC 121 (Comm), [2004] 1 Lloyd’s Rep. 603. 120

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Singapore.129 English courts adopt a similar approach,130 but also held that a choice cannot be implied where applying the law of the main contract to the arbitration agreement might affect its validity, and that absent such choice, the law at the place of arbitration as the law most closely connected to the arbitration would apply.131 Other decisions have held that, in the absence of indications to the contrary, the choice of the seat will imply a choice of the law governing the arbitration agreement, an approach that is followed in jurisdictions including Belgium, the Netherlands, Sweden and Switzerland.132 French courts adopt yet another approach, analysing the existence, the validity and the effect of arbitration agreements on the basis of the “common intention of the parties” and transnational principles rather than national laws.133 These diverging solutions make it preferable to include a clear choice of law provision in the arbitration agreement.134 26

b) Agency. Arbitration agreements may be concluded by an agent on behalf of a third party,135 and in commercial relationships, this is the norm as they involve legal entities that act through their directors, officers and agents. The power to agree on arbitration on behalf of a third party requires a separate conflict of law analysis,136 and accordingly, the conflict of law rules of the lex fori will determine the applicable law as to agency.137 The authority of a company’s directors to make binding declarations on its behalf will normally be governed by the law applying to its constitution,138 but uncertainties as to the validity of arbitration agreements remain if the applicable company law allows for restrictions of authority in the by-laws,139 or if the company has its real seat in a jurisdiction other than that where it is incorporated.140 A power of attorney to enter into an M&A transaction will ordinarily be seen as encompassing an arbitration clause in the sales and purchase agreement, but this ultimately depends on 129 OLG Hamburg, SchiedsVZ 2003, 283 (287); infra L mn. 24; BNA v. BNB [2019] SGCA 84, paras 45–48, confirming BCY v. BCZ [2016] SGHC 249, overruling FirstLink Investments Corp Ltd v. GT Payment Pte Ltd [2014] SGHCR 12. 130 See Sulamérica (supra fn. 127) [2012] EWCA Civ 638, para. 26; Habas Sinai, supra fn. 124, [2013] EWHC 4071 (Comm), para. 101. In Kabab-Ji SAL v. Kout Food Group [2020] EWCA Civ 6, a choice of law clause for the “entire” agreement was interpreted to be an “express” choice regarding the arbitration clause contained in the agreement. 131 Sulamérica (supra fn. 127) [2012] EWCA Civ 638, paras 31, 32. For a similar conclusion, see Balkan Energy Ltd v. Republic of Ghana, 302 F. Supp. 3d 144 (D.D.C. 2018), CLOUT Case No. 1835 (applying the law at the Dutch seat rather than Ghanaese law governing the main contract to reject a jurisdictional challenge of the Republic of Ghana based on requirements under Ghanaese law). 132 See the case law referred to by Nazzini, (2016) 65 ICLQ 681 (692 fn. 50) and Ashford, (2019) 85 Arb. 276 (298). As regards Switzerland, it is worth noting that for agreements providing for a seat in Switzerland, a specific conflict of law analysis is warranted under article 178(2) IPRG. 133 France: infra I mn. 21; cf. the French law analysis in Dallah Real Estate and Tourism Holding Co. v. Government of Pakistan [2010] UKSC 46, paras 14 et seq. 134 For a critical comparative analysis, see Choi, (2016) 19 Int. A.L.R. 121–129 and Ashford, (2019) 85 Arb. 276 (297–299). 135 E. g., Toyota Tsusho Sugar Trading Ltd v. Prolat S.R.L. [2014] EWHC 3649 (Comm); Habas Sinai, supra fn. 124, [2013] EWHC 4071 (Comm). 136 BGH, WM 2018, 817 (818, para. 14). 137 As is the case under the NYC: see infra B mn. 131. 138 Austria: OGH, 7 Ob 236/05 i, JBl 2006, 726; England: Integral Petroleum SA v. SCU-Finanz AG [2015] EWCA Civ 144. 139 This is the case, for example, in Brazil (articles 47, 1015 and 1174 CC), India (Nariman, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Supplement No. 104, February 2019, 16) and Russia (Marenkov, SchiedsVZ 2011, 136 (145)). 140 In that case, some jurisdictions apply the law of the real seat, while others apply the law of incorporation: Gerner-Beuerle/Mucciarelli/Schuster, The private international law of companies in Europe, 2019, 2.

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the wording of power of attorney.141 As a result, there is a risk that at the enforcement stage, courts may come to a different conclusion than the arbitrators as to the binding effect and refuse to enforce the award.142 Therefore, particular care is required at the moment an arbitration agreement is concluded by an agent to make sure it is binding on the principal. On form requirements for a power of attorney, see infra mn. 33. c) Capacity, arbitrability, form. Issues of capacity and arbitrability require a separate 27 conflict of law analysis (see the relevant sections infra mns 30, 31). Form requirements are harmonized by article II(2) NYC, but article VII NYC allows for more liberal form requirements under the arbitration laws of the Member States or removing all form requirements as is the case under option II article 7 ML.

3. The validity of the arbitration agreement An arbitration agreement requires an agreement between the parties on a binding 28 submission of a present dispute, or of future disputes, from a specific legal relationship, to an arbitral tribunal and to thereby exclude the default jurisdiction of state courts (article 7(1) option I, article 8(1) ML). For an arbitration agreement to be valid, there must be consent between the parties, the parties must be capable of submitting to arbitration, the dispute must be arbitrable, and the agreement must also comply with applicable form requirements. a) Consent. Consent to arbitration requires an agreement by the parties to submit to 29 arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship (article 7(1), option I ML). There is a presumption that an arbitration agreement should be interpreted in a way favouring its validity.143 However, this presumption only applies where there is consent from both parties to submit the dispute in question to arbitration. Accordingly, where a clause does not state with sufficient clarity the objective intention of the parties to waive their right to submit potential disputes to a state court, the doubts resulting therefrom cannot be resolved in favour of a binding agreement to arbitrate.144 Likewise, where parties “endeavour”145 or “aim”146 to resolve disputes through arbitration, or agree to arbitrate “if possible”,147 there is no consent on a binding submission to arbitration und thus no valid arbitration agreement. A somewhat unusual type of consent is created by a policy of the EU Commission to require applicants in merger control proceedings to submit to arbitration in a way that allows other market participants to enforce the applicant’s commitments through arbitration.148 141

BGH, WM 2018, 817. As was the case in HK Heung Chun Cereal & Oil Food Co. Ltd v. Anhui Cereal & Oil Food Import & Export Co., YCA XXXI (2006), 620. 143 See infra B mns 97, 141 and D mn. 45; BGer., 16 October 2012, 4A_50/2012 (“favor validitatis”); PoolRe Insurance Corp. v. Organizational Strategies, Inc., 783 F.3d 256 (5th Cir. 2015) (“courts resolve doubts concerning the scope of coverage of an arbitration clause in favor of arbitration”), Z v. A [2015] HKEC 289, paras 47–48 (holding that an agreement on a place of arbitration in “China” referred to Hong Kong where enforceability of an award made in mainland China was in doubt). 144 See, e. g., BGer., 3 June 2015, 4A_676/2014, para. 3.2.3.2, for a clause according to which the contract was to be governed “by the provisions and statutes of the International Chamber of Commerce in Zurich” without express reference to arbitration or common intention of the parties to that effect. 145 Kruppa v. Benedetti [2014] EWHC 1887 (Comm). 146 BGH, SchiedsVZ 2016, 42. 147 BGE 140 III 367. Likewise, the Italian decision Cass., sez. I Civile, 4 January 2017, No. 81, para. 6.3 holds a clause providing for arbitration as a mere possibility (“mera possibilità”) not to be binding. 148 Commission notice on remedies acceptable under Council Regulations (EC) No. 139/2004 and (EC) No. 802/2004, [2008] OJ C267/1, mns 66, 130; Dürrschmidt/Niedermaier, (2018) 29 M&A Review 130 (131). 142

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b) Capacity. The Model Law is silent as regards the capacity to conclude arbitration agreements. Unlike articles 34(2)(a)(i), 36(1)(a)(i) ML, article V(1)(a) NYC requires application of the law “applicable to the parties” rather than the law chosen by them.149 However, article V is silent on how this law should be determined,150 and the most practical approach for national courts will be to apply their own conflict of law rules regarding capacity.151 As a rule, the capacity to enter into binding agreements will suffice to conclude arbitration agreements. Exceptions occasionally exist, for example, regarding the capacity of consumers.152 Under article II(1) EuC, “legal persons of public law” have the right to conclude valid arbitration agreements, and the capacity of public authorities and publicly-owned companies to submit to arbitration in an international context is widely accepted.153

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c) Arbitrability. For a valid arbitration agreement, the subject-matter of the dispute has to be arbitrable (objective arbitrability). Unlike capacity, which is governed by the law of each party, arbitrability is governed by the lex fori.154 This means that the courts at the place of arbitration will apply the lex arbitri to determine arbitrability, while enforcement courts elsewhere will apply the law of the enforcement state.155 The Model Law does not define arbitrability, nor does the New York Convention, so there is no harmonized regime in this respect. Most jurisdictions follow a liberal approach,156 so that arbitrability is rarely an issue. The fact that a dispute requires the application of mandatory or public policy rules does not as such imply that the dispute is not arbitrable.157 Courts have thus recognized the arbitrability of competition law disputes158 as well as the arbitrability of allegations of fraud159 and corruption.160 It should be noted, however, that courts have refused to enforce arbitration agreements that were perceived to circumvent mandatory law of the forum by providing for arbitration abroad under a law other than that of the forum.161 Mandatory law regarding the merits of a dispute may also have an impact on the validity of arbitration agreements (see infra mn. 37). Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed. 2019, article V mn. 105. See infra B mn. 215. 151 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 868. Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, §§ 20.537, 20.578 proposes to apply the conflict of law rules at the seat, but that appears less convincing in enforcement proceedings in a country other than that of the seat. 152 E. g., infra J mn. 20. 153 Poudret/Besson, Comparative law of international arbitration, 2nd ed., 2007, paras 228 et seq.; Fouchard/Gaillard/Goldman, International Commercial Arbitration, 1999, para. 547; infra B mn. 53, 216. 154 Cf. infra B mns 129, 298 and article VI(2) EuC in fine. 155 Article V(2)(a) NYC, infra B mns 125, 291, E mn. 32. See, e. g., for Germany: OLG München, 34 SchH 18/13, openJur 2014, 13939, and for Singapore: Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd [2006] 3 SLR(R) 174 (206). 156 See infra B mns 129, 299, D mn. 30 (Austria), E mn. 27 (Belgium), H mn. 28 (England). 157 See infra P mn. 19 (Spain); Cass. com., 1 March 2017, 15-22.675, Cabinet maîtrise d’oeuvre (CMO) v. SNC Lavalin international, RTD civ. 2017, 391 (France); Desputeaux v. Editions Chouette (1987) Inc., 2003 SCC 17, [2003] 1 SCR 178, para. 53 (Canada). 158 See, e. g., Mitsubishi Motors v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985); Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987); Et Plus SA [2005] EWHC 2115 (Comm), para. 51. 159 E. g., Prima Paint Corp. v. Flood & Conklin Mfg, 388 U.S. 395 (1967); World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) Private Ltd (2014) 11 SCC 639. 160 E. g., Fiona Trust (supra fn. 115) [2007] EWCA and [2007] UKHL 40; Interprods Ltd v. De La Rue International Ltd [2014] EWHC 68 (Comm). 161 See, e. g., the Belgian case law on arbitration of compensation claims under distribution agreements, infra E mns 31–33. 149 150

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In some jurisdictions, limits to arbitrability exist in cases such as employment law and 32 consumer law disputes, and where such disputes are arbitrable, special protection will often be afforded to consumers and employees.162 Occasionally, restrictions to arbitrability can affect core issues of international commercial transactions: under Russian law, for example, corporate law disputes were not arbitrable, and even following legislative reform, there remain considerable limits as to the arbitrability of such disputes.163 d) Form. As to form, the Model Law proposes two options, either an agreement 33 recorded “in writing” (article 7, option I), or a definition of an arbitration agreement without any form requirement (option II). Both solutions are more liberal than the form requirements under article II(2) NYC: option I includes additional options to fulfil the “in writing” requirements, option II eliminates form requirements altogether.164 Under option I, an agreement “in writing” was held to include a unilateral record of one party, even if not signed,165 and likewise, the “in writing” requirement under some domestic arbitration laws was held to encompass arbitration agreements concluded by exchange of emails.166 Where form requirements exist, they may also apply to powers of attorney, and an authorization given orally may therefore not be sufficient for a binding arbitration agreement.167 Form requirements do not apply to cases where an arbitration agreement is transferred (e. g., by way of assignment – infra mn. 45 and B mn. 134) or where the term of a contract containing a valid arbitration agreement is extended.168 Some arbitration laws, e. g. in Belgium, France and Sweden, follow option II of the Model Law and have no formal requirement for the validity of an arbitration agreement,169 and accordingly, a “handshake” over a draft contract containing an arbitration clause may thus create an enforceable arbitration agreement.170 Notwithstanding more liberal arbitration laws, it is recommended and common 34 practice to respect the written form defined in article II(2) NYC171 as this ensures enforceability of an award in all Member States of the Convention, irrespective of more favourable local laws. Under article II(2) NYC, the “in writing” requirement includes an arbitral clause in a contract or a separate arbitration agreement which is either signed by the parties or contained in an exchange of letters or telegrams. While an arbitration clause in a contract and a separate arbitration agreement require the signature of both parties,172 an arbitration agreement by exchange of documents does not have to be signed.173 e) Arbitration agreement by reference. There is some controversy as to the validity 35 of arbitration agreements through reference in the main contract to another document such as general terms and conditions, in particular as regards issues of consent and 162

See, e. g., infra B mn. 305, D mn. 6, E mn. 29, I mns 27, 28, K mn. 9. Kocí, (2019) 22 Int. A.L.R. 97 (106–110). 164 See infra B mn. 113. 165 AQZ v. ARA [2015] SGHC 49, paras 119–120 per Prakash J for an oral agreement over an unsigned draft contract, Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.123. 166 BGE 142 III 239, ASA Bull. 2016, 967, para. 3.3.1. Whether emails would satisfy the form requirements under article II NYC is, however, subject to debate: see infra B mns 113–118. 167 E. g., in Austria: OGH, 17 January 2018, 6 Ob 195/17w; infra D mn. 24. 168 Infra E mn. 35; BGer., 17 April 2019, 4A_646/2018. 169 Infra E mn. 35, I mn. 29 and Q mn. 20. Similarly, oral arbitration agreements may suffice under article I(2) EuC. 170 Hovrätten för Västra Sverige, 19 March 2008, T 2863-07, Profura v. Stig Blomgren. 171 See infra B mns 100–118; Born, International Commercial Arbitration, 2nd ed., 2014, 663–692. 172 Infra B mns 103–104. 173 Infra B mns 107. 163

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form. Depending on the law applicable to the arbitration agreement, consent may require an express reference the arbitration agreement,174 and in cases governed by the CISG, a mere reference to general terms and conditions has been held to be insufficient where the terms and conditions were not made available to the other party.175 As regards form, under option I article 7(6) ML, a reference to any document is sufficient, even where the contract making the reference is made orally,176 but this approach is not universal: for example, as regards form requirements, a recent Italian decision on the reference in a bill of lading to a charter-party required the reference to “specifically” mention the arbitration agreement to meet the form requirement,177 but the predominant view is that a generic reference is acceptable,178 at any rate in jurisdictions where there are no form requirements.179 36

f) Substantial validity of arbitration agreements. An arbitration agreement produces no effect if it is null and void, inoperative or incapable of being performed (article 8 ML). This provision mirrors article II(3) NYC (on article II(3) NYC, also see infra B mns 86–156).

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aa) Arbitration agreements that are null and void. Apart from the form and arbitrability requirements, article 7 ML and article II NYC (infra B mn. 96) do not contain specific limits to the validity of arbitration agreements. While there is a presumption that an arbitration agreement should be interpreted in a way favouring its validity,180 grounds for invalidity may result from the law governing the arbitration agreement.181 Courts have refused to enforce arbitration agreements where they were considered abusive or unconscionable.182 In particular, arbitration agreements in adhesion contracts or in general terms and conditions may be subject to additional requirements under domestic arbitration laws183 or judicial review as to fairness.184 Some courts have held arbitration agreements containing the unilateral option for one party to litigate to be invalid on the basis of procedural fairness and equality of arms principles,185 but a number of commentators argue that they are acceptable in principle.186 An arbitration agreement in breach of public policy will be invalid,187 as will be an arbitration agreement if consent to arbitrate was obtained in breach of overriding mandatory laws of the forum, e. g., an arbitration agreement obtained through abuse of 174

See infra B mn. 111. KG, BeckRS 2016, 115227 for cross-border commercial relationships. 176 Wolff, in: idem (ed.), New York Convention, 2nd ed., 2019, art. II para. 123. 177 Cass., Sez. VI Civile, 19 September 2017, No. 21655, Kenobi International Ltd v. Comaco SpA, CLOUT Case No. 1836. Likewise, Cass., Sez. I Civile, 4 January 2017, No. 81, holds that the reference must be “specifically” to the arbitration agreement to meet the form requirement, referring to Cass., Sez. Un., 19 May 2009, No. 11529, Louis Dreyfus SpA v. Cereal Mangimi srl, CLOUT Case No. 1785. 178 Roth, in: Weigand/Baumann, International Commercial Arbitration, 3rd ed., 2019, § 20.128; on the requirements under article II NYC, infra B mn. 111. 179 Cass. civ. 1ère, 11 July 2006, 05-18.681, Generali France Assurances v. Universal Legend, Bull. 2006 I No. 365 p. 313, reflecting that French arbitration law only requires consent, without any form: infra I mn. 29. 180 See supra mn. 29. 181 See supra mns 24–25 and infra B mn. 96, 119–127 as to article II NYC. 182 E. g., in the United States, see infra S mn. 36. 183 See infra F mn. 25 for formal requirements in Brazil. 184 E. g., in Germany: OLG Dresden, IPRax 2010, 241; OLG Düsseldorf, NJW-RR 1997, 372. 185 See infra N mn. 47 on unilateral options under Russian law. Courts elsewhere took a critical view, too, at least for contracts of adhesion, e. g. in Germany (BGH, NJW 1999, 282 (283)) and the United States (Nagrampa v. MailCoups Inc., 469 F.3d 1257, 1280 (9th Cir. 2006), infra S mn. 72). 186 Bälz/Stompfe, (2017) 15 SchiedsVZ 157 (163–164); Draguiev, (2014) 31 J. Int’l Arb. 19–45. 187 Infra B mn. 135. 175

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a dominant position in breach of competition law.188 However, the validity of an arbitration agreement is not only subject to public policy as regards consent and arbitrability. In fact, courts have also invalidated arbitration agreements with a view to their effect on the law that the arbitrators would apply to the merits: for example, courts have invalidated arbitration agreements aimed at circumventing the application of overriding mandatory law of the forum,189 operating as a prospective waiver of statutory remedies for anti-trust violations,190 providing for the application of a foreign law to the merits which would in all likelihood disregard overriding mandatory laws of the forum,191 and also where an arbitration agreement covered claims against a party that later became subject to international sanctions.192 It has been argued that courts should recognize and enforce arbitration agreements only if they are satisfied that the arbitral tribunal will apply the overriding mandatory laws of the forum in its award on the merits.193 However, against the background of the requirement in article 8 ML and article II NYC to recognize arbitration agreements, the starting point generally is that the applicability of mandatory law and public policy provisions does not exclude the arbitrability of a dispute (supra mn. 31), and the mere possibility that the tribunal may apply such mandatory laws incorrectly does not affect the validity of an arbitration agreement but rather remains a question of setting aside and enforcement proceedings. Accordingly, considerations as to the law applicable to the merits of the dispute justify a refusal to recognize an arbitration agreement only in exceptional cases where, by its design, it excludes the application of overriding mandatory law of the forum194 or where the dispute is not arbitrable (supra mns 31–32). bb) Arbitration agreements that are inoperative or terminated. An arbitration 38 agreement is “inoperative” if it is validly concluded but ceases to have effect.195 That has been held to apply to an arbitration agreement covering claims in connection with a contract that later is the object of international sanctions.196 More importantly, there is case law confirming that the parties can agree on a termination of the arbitration agreement at any time.197 For example, a jurisdiction clause in a settlement agreement has been held to displace an arbitration clause in previous contracts,198 and where a party brings an action in breach of an arbitration agreement and the defendant files a defence 188 BGH, NJW 2016, 2266 (2270, para. 44), SchiedsVZ 2016, 268; for comment see Motyka-Mojkowski/ Kleiner, (2017) 8 J.E.C.L. & Pract. 457–462. 189 OGH, 1 March 2017, 5 Ob 72/16y, para. 3.1 (holding that an arbitration agreement providing for arbitration in New York under New York law breaches Austrian public policy in as much as it excludes application of mandatory Austrian law implementing the EU Directive 86/653/EEC of 18 December 1986 on self-employed commercial agents). 190 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985), fn. 19. 191 See, for example, the Belgian decision in Cass., 14 January 2010, C.08.0503.N, Sebastian International Inc. v. Common Market Cosmetics NV. 192 Cass., Sez. Un., 24 November 2015, No. 23893, Republic of Iraq v. Armamenti e Aerospazio SpA, CLOUT Case No. 1837. That approach is questionable in as much as compliance of an arbitral award with international sanctions could conceivably also be ensured through review in setting aside and enforcement proceedings as in Ministry of Defence of the Republic of Iran v. International Military Services Ltd [2020] EWCA Civ 145. 193 Kleinheisterkamp, (2018) 67 ICLQ 903 (926), proposing an appropriate undertaking by the parties to require the tribunal to apply the relevant mandatory norms. 194 E. g., where the place of arbitration and the law applicable to the merits refer to another jurisdiction (see the example supra fn. 189). 195 Malini Ventura (supra fn. 25), [2015] SGHC 225, para. 42. 196 Cass., Sez. Un., 24 November 2015, No. 23893, CLOUT Case No. 1837 – but cf. supra fn. 192. 197 Dyna-Jet Pte Ltd v. Wilson Taylor Asia Pacific Pte Ltd [2017] 3 SLR 267, paras 162–166; Sembawang Engineers and Constructors Pte Ltd v. Covec (Singapore) Pte Ltd [2008] SGHC 229, para. 41. 198 Monde Petroleum SA v. Westernzagros Ltd [2015] EWHC 67 (Comm), paras 38, 39.

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on the merits without a jurisdictional challenge, the arbitration agreement was terminated.199 By contrast, a waiver to arbitrate a specific dispute does not make the arbitration agreement inoperable for future disputes.200 39 Solutions differ where a party refuses to pay its share of advance on costs for the arbitral tribunal required under applicable arbitration rules: while some courts have held that this renders the clause inoperative,201 a decision of the English High Court adopted the opposite view where it was possible for the non-defaulting party to pay the advance on costs on behalf of the other party.202 It is worth noting that the nondefaulting party will normally be able to obtain an immediate award on repayment of the substitute advance.203 40 It has been suggested that an arbitration agreement can, at least in principle, be terminated unilaterally for cause; however, instances where termination for cause have been upheld by the courts are rare. In particular, there is no agreement as to whether a party’s lack of resources to fund arbitral proceedings creates a right to terminate the arbitration agreement or renders it inoperative or incapable of being performed: while German courts grant termination rights in these cases204 and U.S. courts allow parties to resist arbitration where it involves “prohibitive” costs205, courts elsewhere appear to be more willing to enforce arbitration agreements irrespective of the financial resources of the parties.206 In any event, the mere fact that a party is put into administration or that insolvency proceedings are initiated does not as such lead to the termination or inoperativeness of the arbitration clause (see infra mn. 45). 41

cc) Arbitration agreements that are incapable of being performed. An arbitration agreement is “incapable of being performed” when there is “an obstacle which cannot be overcome which prevents the arbitration from being set in motion”,207 for example, where there is a practical, albeit not legal, impediment to the arbitration.208

4. The interpretation and the scope of the arbitration agreement 42

The fundamental impact of the arbitration agreement on the jurisdiction of the arbitral tribunal and the enforceability of its award is the reason why its construction and its scope are often subject to debate in the arbitral proceedings.

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a) Substantive scope (scope ratione materiae). Arbitration agreements are concluded with respect to “a defined legal relationship” (article 7(1) ML), almost always of a contractual nature. The wording of the arbitration clause is decisive for the arbitral tribunal’s jurisdiction: for example, an arbitration clause stating that the arbitral tribunal “may not change, modify or alter any express condition, term or provision of this

199

Marty Ltd v. Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63. Dyna-Jet (supra fn. 197) [2017] 3 SLR 267, para. 174. 201 In Pre-Paid Legal Services, Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015) it was held that “a party’s failure to pay its share of arbitration fees breaches the arbitration agreement and precludes any subsequent attempt by that party to enforce that agreement” (at 1294). A similar conclusion was reached by Canadian courts in Resin Systems Inc. v. Industrial Service & Machine Inc., 2008 ABCA 104, para. 16. 202 BDMS Ltd v. Rafael Advanced Defence Systems [2014] EWHC 451 (Comm). 203 See infra mn. 101. 204 See infra J mn. 26 and, for a similar approach in Austria, D mn. 39. 205 See infra S mn. 83. 206 E. g., in France (infra I mn. 30) and Switzerland: BGer., 11 June 2014, 4A_178/2014, ASA Bull. 2014, 782–798. See infra B mn. 142 and Kühner, (2014) 31 J. Int’l Arb. 807–818. 207 Dyna-Jet Pte (supra fn. 197) [2017] 3 SLR 267, para. 152. 208 E. g., K.V.C. Rice Intertrade Co. Ltd v. Asian Mineral Resources Pte Ltd [2017] SGHC 32, para. 27. 200

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Agreement and to that extent the scope of its authority is expressly limited” may not allow for an award based on implied duties.209 A central question is whether an arbitration clause covers non-contractual claims 44 such as tort or restitution arising in the context of a contractual relationship. There is case law suggesting that arbitration clauses covering disputes arising “under” a specific contract are to be interpreted more narrowly than clauses including disputes arising “in connection with” a contract.210 In fact, some courts have held that an arbitration clause only covers non-contractual disputes where there is express agreement between the parties and that, accordingly, a clause referring to “disputes deriving from the present contract” does not include non-contractual claims.211 However, the more convincing view adopted in most jurisdictions is to apply a general presumption that rational parties intend any dispute arising out of their relationship to be decided by the same tribunal,212 and correspondingly construe any arbitration clause in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.213 As a result, non-contractual claims – e. g. restitution, tort – are covered by an arbitration clause contained in a contract if there is a link between the claim and the main contract, e. g., where contractual claims coincide with claims in tort, or where there is a close factual relationship between the contract and the non-contractual claim.214 It can, however, be difficult to assess whether there is a sufficient link: in Ryanair Ltd v. Esso Italiana srl the English Court of Appeal held that an anti-trust claim against a price-fixing cartel was “entirely non-contractual” and would thus not fall under a contractual dispute resolution clause.215 Dutch and Finnish courts adopted a similar approach,216 and the ECJ held in Cartel Damage Claims Hydrogen Peroxide that an anti-trust dispute that the parties could not “reasonably foresee” cannot be regarded as stemming from a contractual relationship and would thus fall outside a contractual jurisdiction or arbitration clause.217 Courts elsewhere came to the opposite conclusion, holding that an arbitration clause covering disputes “out of a contract” covers not only claims for breach of contract, but also “collateral matters” such as antitrust claims.218 209

Rechtbank Amsterdam, 4 March 2015, ECLI:NL:RBAMS:2015:1181. See the references in Fiona Trust (supra fn. 115) [2007] UKHL 40, para. 11. 211 Cass., Sez. VI Civile, 13 October 2016, No. 20673, (2017) 27 Riv. Arb. 733, with critical comment by Licci, ibid. 737. The decision is somewhat surprising given that, under Italian arbitration law, in case of doubt an arbitration agreement is to be interpreted to include all claims deriving from a contract or a relationship to which it refers (article 808 quater CPC). 212 See infra B mn. 137. 213 Fiona Trust (supra fn. 115) [2007] UKHL 40, para. 13 per Lord Hoffmann. 214 The Angelic Grace [1995] 1 Lloyd’s Rep. 87; Et Plus SA v. Welter [2005] EWHC 2115 (Comm); Cass. com., 1 March 2017, 15-22.675, Cabinet maîtrise d’oeuvre (CMO) v. SNC Lavalin international, RTD civ. 2017, 391 (France); OLG Stuttgart, IPRax 1992, 86 (88); Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.137. But note that under Chinese arbitration law, a claimant can circumvent arbitration by showing prima facie evidence of the existence of the joint tort claim against signatories and non-signatories to the arbitration clause (see Liu/Brock/Yue/Feldman, (2013) 29 Arb. Int’l 641–652). 215 [2013] EWCA Civ 1450, paras 46, 49. The case concerned the construction of a jurisdiction clause, but the principles are the same for arbitration clauses: Fiona Trust (supra fn. 115) [2007] EWCA Civ 20, para. 12. In Microsoft Mobile OY Ltd v. Sony Europe Ltd [2017] EWHC 374 (Ch.) an arbitration clause was held to cover tort claims resulting from a cartel because there was an arguable parallel claim for breach of the contract as the contract contained a requirement to negotiate price increases in good faith. 216 Sendetska, (2018) 35 J. Int’l Arb. 357 (366). 217 ECJ Case C-352/13 Cartel Damage Claims Hydrogen Peroxide SA v. Evonik Degussa GmbH, ECLI: EU:C:2015:335, para. 70. 218 Germany: LG Dortmund, NZKart 2017, 604 (605); United States: JLM Industries, Inc. v. Stolt-Nielsen SA, 387 F.3d 163 (172–173) (2nd Cir. 2004). 210

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b) Personal scope (scope ratione personae). As to the personal scope of an arbitration agreement, it is widely accepted that an arbitration agreement is binding not only on its signatories but also on successors in interest such as assignees.219 A third party beneficiary of a contract will be bound by an arbitration agreement contained in that contract if it wants to enforce its rights,220 and likewise, courts considered a party bringing a direct claim against an insurer to be bound by the arbitration agreement contained in the underlying policy even if it is not a party to that policy.221 In insolvency proceedings, much will depend on an analysis of the applicable insolvency law to determine the arbitrability of a dispute, the capacity of the parties involved and the scope of an arbitration agreement.222 An insolvency administrator is, as a rule, bound by arbitration clauses entered into by the insolvent entity, both where the administrator or liquidator pursues claims under the contract223 and where the creditor seeks determination of his claims against the estate.224 However, the insolvency proceedings as such are widely considered not arbitrable,225 and insolvency-specific rights of the insolvency administrator such as avoidance or claw-back of payments will not be covered by an arbitration agreement entered into by the insolvent entity.226 46 Beyond succession in interest and similar scenarios, considerable differences remain as regards the application of arbitration agreements to non-signatories. One example is the application of an arbitration agreement in a credit contract to claims against a guarantor who is not party to the credit contract: while German courts have held that a guarantor is not bound by an arbitration agreement in a credit facility, a recent decision of the Supreme Court of Finland came to the opposite conclusion.227 Divergent views also exist on concepts referred to as “alter ego” and “group of companies” doctrine. For example, under the alter ego doctrine as applied by courts in the United States, corporations can be bound by arbitration agreements entered into by their subsidiaries when their conduct demonstrates a virtual abandonment of separateness.228 In France, a non-signatory which has participated in the negotiation, performance or termination of the contract, can be bound by an arbitration clause in that contract,229 and similar case 45

219 See infra B mn. 134; Poudret/Besson, Comparative law of international arbitration, 2nd ed., 2007, para. 289, Cass. civ. 2ème, 20 December 2001, 00-10.806, Quille Le Trident v. CEE, Bull. civ. 2001 No. 198, p. 139; BGH, NJW 2000, 2346. For an arbitration clause contained in corporate by-laws, infra R mn. 55, and in a partnership agreement, BGH, NZG 2002, 955. 220 OGH, 13 June 1995, 4 Ob 533/95 and infra D mn. 42; BGer., 19 April 2011, 4A_44/2011; Cass. civ. 1ère, 11 July 2006, 03-11.983, Bull. civ. 2006 I No. 368 p. 315; OLG Brandenburg, 21 February 2013, BeckRS 2013, 4179. 221 AIG Insurance Hong Kong Ltd v. Lynn McCullough [2019] HKCFI 1649, para. 100. 222 See infra B mn. 304. 223 France: Cass. civ. 1ère, 1 April 2015, 14-14.552, SER Ducros v. GFC Construction, Bull. 2015, I, No. 76; England: Richard James Philpoot & Mark Jermey Orton v. Lycée Français Charles de Gaulle [2015] EWHC 1065 (Ch). 224 Austria: OGH, 30 November 2018, 18 ONc 2/18s, ecolex 2019, 232; France: Cass. civ. com., 2 June 2004, 02-18.700, Industry SA v. Alstom Power Turbomachines SA, Bull. 2004 IV No. 110, p. 114; Germany: BGHZ 179, 304. However, the creditor will have to comply with insolvency law requirements, such as registration of claims with the insolvency courts within applicable time limits (Cass civ. com., 2 June 2014, Bull. 2014 IV No. 112 p. 115) and the par conditio creditorum (BGHZ 179, 304). See also BGer., 16 October 2012, 4A_50/2012 (commented by Lembo/Hari, (2014) 32 ASA Bull. 735–756) and infra R mn. 54. 225 Infra B mn. 304. 226 Infra J mn. 29. 227 Infra J mn. 28; Korkein oikeus, 19 December 2019, S2018/745, ECLI:FI:KKO:2019:111. 228 Infra S mn. 37. 229 Infra I mn. 31.

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law exists in Switzerland.230 By contrast, English courts have proved reluctant to extend arbitration agreements on that basis.231 These divergent views account for conflicting decisions which is well illustrated in Dallah, where French courts held that a party that was not a signatory to the contract was bound by an arbitration agreement because it had participated in the conclusion of the contract, while English courts, albeit recognizing that the arbitration clause was governed by French law, adopted the opposive view.232 c) Pathological arbitration clauses. Poorly drafted arbitration agreements risk being 47 considered null and void, inoperative or incapable of being performed (supra mns 36–41) and thus will be unenforceable.233 While courts normally adopt a pro-arbitration approach interpreting such pathological clauses in a way that favours their validity,234 inaccurately drafted clauses may result in uncertainties that seriously affect the resolution of the dispute. A common error is an incorrect reference to arbitral institutions. Errors of this sort leave room for interpretation in favour of an institution that was presumably intended by the parties or for an interpretation as an ad hoc arbitration clause,235 but this depends on the facts of the case and the willingness of the courts to give effect to the arbitration agreement. Accordingly, references to non-existent arbitration institutions risk being held invalid.236 Doubts may also exist where parties agree for the arbitration to be subject to certain institutional rules, but to be administered by an arbitral institution other than the one whose rules apply.237 On the principle of party autonomy courts have upheld the validity of such combinations,238 even where parties chose institutional rules that do not allow for administration by another institution.239 However, the arbitral award may be difficult to enforce nonetheless.240 In some cases, contracts contain both a forum selection and arbitration clause. Here, 48 the solutions are even more divergent: some courts have held the arbitration agreement to be invalid,241 while others have adopted a different view, by upholding the arbitration clause and limiting the jurisdiction agreement to annex litigation in support of the arbitration.242 Similarly, language such as “may submit to arbitration” can give rise to 230 Infra R mns 52, 55–56; BGer., 7 April 2014, 4A_450/2013 and 17 April 2019, 4A_646/2018, ATF 145 III 199, paras 2.5, 2.6, holding that extension to a third party on that basis is not subject to the form requirement “in writing” under article II(2) NYC and article 178(1) IPRG. Swiss law is perceived as particularly favourable to extending arbitration agreements to third parties, Voser, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 24 mn. 24 et seq. 231 See infra H mn. 41. 232 CA Paris, 17 February 2011, 09/28533, Gouvernement du Pakistan v. Dallah Real Estate and Tourism Holding, JDI 2011, 395, Rev. Arb. 2011, 286 note Michou and Dallah Real Estate (supra fn. 133) [2010] UKSC 46, [2011] 1 AC 763. For comment, see Beatson, (2017) 33 Arb. Int’l 175. 233 See article II(3) NYC (infra B mns 138 et seq.) and article 8(1) ML. For an analysis of pathological clauses see Henriques, (2015) 31 Arb. Int’l 349–362. 234 Supra mn. 29; infra B mn. 141. 235 BGH, SchiedsVZ 2011, 284 (285). See infra I mn. 34, R mn. 61 for France and Switzerland. 236 Cf. the Danish decision Højesteret, 22 June 2012, 210/2011, Dregg v. Chr. Jensen Shipping A/S, CLOUT Case No. 1432 (reference to the “Copenhagen Maritime Arbitrators Association”, an institution that never existed); Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.142. For a similar example see supra fn. 144. 237 See Berger, (2018) 34 Arb. Int’l 473 (478–483). 238 Insigma Technology Co. Ltd v. Alstom Technology Ltd [2009] SGCA 24; Exxon Neftegas Ltd v. Worleyparsons Ltd, 2014 (WL 9873313) (NY Sup.); Svea Hovrätt, 23 January 2015, Case No. T 2454-14, The Government of the Russian Federation v. I.M. Badprim SRL. 239 HKL Group Co Ltd v. Rizq Internaitonal Holdings Pte Ltd [2013] SGHCR 8, para. 10. 240 See Berger, (2018) Arb. Int’l 473 (483 fn. 61). 241 Austria: OGH, 19 December 2018, 3Ob153/18y, ecolex 2019, 330; England: Kruppa v. Benedetti [2014] EWHC 1887; Singapore: infra O mn. 35. 242 BGH, SchiedsVZ 2007, 273; Ross Dress for Less, Inc. v. VIWY, LP, 570 F. App’x 123 (3rd Cir. 2014). On the position in Austria, see infra D mn. 45.

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doubts as to whether there is a valid submission to arbitration or whether it is just an option,243 and similar problems arise where parties agree to “endeavour” to resolve disputes through arbitration.244 On the effect of such wording on the question of whether there is consent to arbitrate, see supra mn. 29. 49

d) Multi-tier clauses. It is not uncommon for commercial parties to combine an arbitration agreement with other alternative dispute resolution mechanisms in so-called “multi-tier clauses” which provide for several steps in the dispute resolution process, e. g., first mediation, then arbitration. Solutions differ as to the consequences of disregarding mandatory steps in the escalation process: in some countries, courts have set aside arbitral awards where a party had not complied with a duty to “negotiate” prior to commencing arbitral proceedings.245 By contrast, French courts have held that non-compliance with a multi-tier clause does not affect the jurisdiction of the arbitral tribunal, and in a similar approach, the Brazilian Supremo Tribunal held that it is for the arbitral tribunal to determine whether the parties complied with the requirements of a multi-tier clause and that it will not review an award in that regard.246 A recent decision of the Swiss Bundesgericht only requires arbitral tribunals to stay the arbitration until the multi-tier steps have been completed.247 In any event, in order to have mandatory character, the procedural tiers must be defined with sufficient certainty in the agreement.248

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e) Compensation and set-off with counter-claims. A defendant, whether in proceedings before state courts or an arbitral tribunal, may wish to rely on counterclaims by way of set-off or compensation, even where the counterclaims do not fall under the jurisdiction of the court or tribunal where the proceedings are pending. Some courts have held that an arbitration agreement does not imply a prohibition to set-off or compensate, and accordingly assumed jurisdiction to determine counter-claims even where they fall under an arbitration agreement.249 In that logic, an arbitral tribunal could assume jurisdiction to determine claims raised by way of set-off even if they are not covered by the arbitration agreement.250 However, other jurisdictions are more restrictive and limit set-off defences to claims for which the court251 or the arbitral tribunal252 has jurisdiction. 243 Contrast the Hong Kong and US decisions in Grandeur Electrical Co. Ltd v. Cheung Kee Fung Cheung Construction Co. Ltd [2006] HKCA 305 and Travelport Global Distribution Systems B.V. v. Bellview Airlines Ltd, No. 12 Civ. 3483 (DLC), 2012 WL 3925856 (S.D.N.Y. 12 September 2012), holding that the clause is a valid submission, with the Indian decisions in M/S Linde Heavy Truck Division Ltd v. Container Corporation Of India Ltd (2012) 195 DLT 366 and Wellington Associates Ltd v. Kirit Mehta (2004) 4 SCC 272, taking the opposite view. See also infra S mn. 39. 244 Kruppa v. Benedetti [2014] EWHC 1887, para. 9; infra H mn. 46. Similarly, a submission to arbitration “if possible” is not binding: BGE 140 III 367. 245 E. g., International Research Corp. plc v. Lufthansa Systems Asia Pacific Pte Ltd [2013] SGCA 55. In Emirates Trading Agency LLC v. Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm), the English court followed this approach in principle but held the obligation to negotiate had been complied with. 246 Infra I mn. 35 (regarding France) and STJ, 29 November 2017, SEC 16.208 – EX(2016/0281131-9) YCA XLIV (2019), 470, Ecodiesel Colombia v. Dedini S/A Indústrias de Base. 247 BGE 142 III 296; Wilske/Markert/Bräuninger, (2017) 15 SchiedsVZ 49 (60). 248 Sulamérica (supra fn. 127) [2012] EWCA Civ 638, para. 37. For Switzerland, infra R mn. 27. 249 Austria: OGH, 14 November 1990, 1 Ob 711/89 (but also see infra D mn. 56); Switzerland: BGE 85 II 103 para. 2b; BGE 124 III 207 para. 3b)bb). 250 BGer., 7 February 2011, 4A_482/2010, para. 4.3.1, relying on article 21(5) Swiss Rules and article 377(1) CPC. 251 BGH, SchiedsVZ 2010, 275, YCA XXXVI (2011), 277. 252 See Econet Satellite Services Ltd v. Vee Networks Ltd [2006] EWHC 1664 (Comm), para. 17; Borris/ Hennecke, in: Wolff, New York Convention, 2nd ed., 2019, art. V mn. 214.

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5. The effect of the arbitration agreement a) Enforcing the arbitration agreement. aa) Mandatory referral to arbitration. The 51 effect of the arbitration agreement is that it creates jurisdiction of the arbitral tribunal. Under article 8 ML (reflecting article II(3) NYC), state courts must decline jurisdiction where an action is brought in breach of an arbitration agreement if a party so requests before submitting the first statement on the dispute, unless the arbitration agreement is null and void, inoperative or incapable of being performed.253 Subject only to a request of the parties, referral to arbitration is mandatory254 and does not depend on the defendant submitting an arguable defence.255 Courts have no discretion to make referral to arbitration dependent on policy considerations regarding access to justice or procedural efficiency.256 If an action is brought in breach of an arbitration clause, the defendant must request 52 the state court to refer the parties to arbitration no later than at the moment where he submits his first statement on the substance of the dispute (article 8(1) ML).257 Courts will not by their own motion refer parties to arbitration.258 bb) Scope of review and Kompetenz-Kompetenz. A quintessential issue in this 53 context is the allocation of the decision on jurisdiction between the state courts and the arbitral tribunal, often referred to as Kompetenz-Kompetenz, which raises essentially two questions: firstly, whether state courts, when faced with an application to refer the parties to arbitration, give priority to the arbitral tribunal to rule on challenges to its jurisdiction, and secondly, whether and to what extent an arbitral tribunal’s jurisdictional decision is then binding on state courts, e. g., in setting aside and enforcement proceedings. Depending on applicable arbitration laws, the solutions to these questions differ substantially.259 As regards the first issue, French courts will allow arbitral tribunals to rule first on their jurisdiction unless an arbitration clause is “manifestly void or inapplicable” and the tribunal is not yet constituted,260 and a similar approach is followed by courts in Brazil, giving arbitrators priority to rule on jurisdictional issues,261 as well as in Singapore and the United States which refer parties to arbitration as soon as they are satisfied “on a prima facie basis” that an arbitration agreement exists.262 By contrast, German arbitration law does not provide for such priority, and state courts may rule on the arbitral tribunal’s jurisdiction even pending the arbitral proceedings.263 As regards deference to jurisdictional decisions of arbitral tribunals at the review and enforcement stage, solutions differ, too: German courts will always conduct a full review 253 Article II(3) NYC, article 8 ML. Moreover, court intervention during the arbitral proceedings is limited, cf. article 5 ML. 254 Cf. Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V paras 322–323. 255 Tai Hing Cotton Mill Ltd v. Glencore Grain Rotterdam BV [1995] HKCA 626, para. 47; Halki Shipping Corp. v. Sopex Oils Ltd [1998] 1 WLR 726. However, in some jurisdictions, such as France, courts may issue summary judgments where the defendant submits no arguable defence: infra I mn. 74. 256 TELUS Communications Inc. v. Avraham Wellman, 2019 SCC 19, para. 8. 257 But some arbitration laws are more liberal (e. g., infra J mn. 37 for German arbitration law). 258 See the travaux préparatoires for article 8 ML (UN document A/CN.9/264, article 8 para. 3). 259 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. II paras 299–301. 260 See infra I mn. 37; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., art. II para. 301. 261 STJ, 11 October 2017, CC 139.519 – RJ(2015/0076635-2), Petróleo Brasileira S.A. v. Agencia Nacional de Petróleo, Gás Natural e Biocombustíveis, CLOUT Case No. 1764. 262 Malini Ventura (supra fn. 25), [2015] SGHC 225, paras 36–37; Tomolugen Holdings (supra fn. 25) [2015] SGCA 57, paras 65–70; for the United States, see Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., art. II para. 301. 263 Infra J mn. 33; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., art. II para. 300.

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of the validity and the scope of an arbitration agreement, whether it is raised as a defence in litigation or whether in setting aside or enforcement proceedings.264 At the enforcement stage, French courts will also conduct a full review of the jurisdictional point.265 Swiss courts adopt a similar approach for arbitral tribunals seated in Switzerland,266 but consider themselves to be bound by the factual findings of the arbitral tribunal when reviewing the jurisdictional issue.267 Under US federal arbitration law, parties are free to decide whether courts or arbitrators will determine threshold issues of arbitrability and can express their intent in the arbitration agreement itself, which then limits review by the state courts: parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability’ (understood in a broad sense), such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy, and the arbitral tribunal’s decision on jurisdiction will then be binding and not subject to review by courts in setting aside or enforcement proceedings.268 These differences in allocating the decision on jurisdiction between arbitral tribunals and state courts can play an important role in the clarification of jurisdictional defences. cc) Anti-suit injunctions and damages for breach of arbitration agreements. A party defending an action that is brought in breach of an arbitration agreement faces the risk that a state court assumes jurisdiction notwithstanding the arbitration agreement and that, eventually, it is confronted with an adverse judgment in the non-agreed forum that may also be enforceable elsewhere.269 Given that litigation and arbitral proceedings may run in parallel (infra mn. 58), there also is a risk of conflicting decisions if both the arbitral tribunal and state courts assume jurisdiction and proceed to a decision on the merits. A well-known instrument to reduce that risk is the anti-suit injunction developed by English courts, by which a party to an arbitration agreement can restrain proceedings brought by the other party in a non-agreed forum in breach of the arbitration agreement.270 This approach is followed in other common law jurisdictions as well, for example in Hong Kong and the United States.271 55 However, such anti-suit injunctions are difficult to reconcile with principles of comity and are often seen as a potential breach of the sovereignty of the state where proceedings are pending.272 It has happened that state courts have issued anti-arbitration 54

264

Infra J mn. 34. Infra I mn. 38. The principle of full review at the enforcement stage has been confirmed in CA Paris, 19 February 2013, no. 12/09983, République populaire démocratique du Laos v. Thai Lao Lignite (Thailand) Co. Ltd, YCA XXXVIII (2013), 376. 266 See infra R mn. 66 (Switzerland). 267 BGE 140 III 477. 268 Infra S mns 46 et seq. (United States). This has been confirmed in Henry Schein, Inc. v. Archer and White Sales, Inc., 586 U.S. 480, 139 S. Ct. 524 (2019) (cf. Samuel, (2019) 35 Arb. Int’l 263–273); BG Group plc v. Republic of Argentina, 572 U.S. 25 (2014) (cf. Mazzuoli/Massa, (2015) 32 J. Int’l Arb. 215–236) and Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S. Ct. 2772 (2010). Courts will, however, review whether there is an arbitration agreement, as in the absence of such an agreement, the question of arbitrability cannot be referred to the arbitral tribunal (see VRG Linhas Aereas S/A v. MatlinPatterson Global Opportunities Partners II L.P., 605 F. App’x 59 (2nd Cir. 2015)). 269 E. g., state court judgments of EU and Lugano Convention Member States are enforceable throughout the EU, Switzerland, Norway and Iceland, and under the Brussels Ia Regulation and the Lugano Convention as lack of jurisdiction is no defence to enforcement: see supra mn. 19 and infra mn. 62. 270 See infra H mn. 51. This power was confirmed in Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35. 271 See regarding Hong Kong infra K mn. 37 and Ever Judger Holding Co. Ltd v. Kroman Celik Sanayii Anonim Sirketi [2015] 3 HKC 246, and regarding the United States, infra S mn. 48. 272 See infra J mn. 78 (Germany). 265

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injunctions in turn.273 In West Tankers, the ECJ held that the mutual trust principle of the Brussels I Regulation prohibits EU Member States courts from interfering with the decision of other EU courts on their jurisdiction,274 and that solution was also applied after the 2012 recast of the regulation.275 While the Brussels Ia Regulation, including the West Tankers prohibition, will continue to apply in the United Kingdom during the transition period under article 126 of the Withdrawal Agreement,276 its future depends on the outcome of the negotiations between the EU and the United Kingdom.277 As an alternative to an anti-suit injunction issued by state courts, parties have also 56 applied for a similar injunction from the arbitral tribunal itself. In Gazprom, the ECJ held that the Brussels Ia Regulation does not preclude a court of a Member State from recognizing and enforcing an anti-suit injunction from an arbitral tribunal prohibiting a party from bringing certain claims before a court of that Member State.278 Recognition and enforcement of the injunction will then depend on the decision of the courts of that Member State on the arbitral tribunal’s jurisdiction.279 In other words, enforcement will only take place if the courts of that Member State decline jurisdiction in favour of the arbitral tribunal anyway, so the effect of Gazprom will be limited. In particular, Gazprom is no basis for recognition and enforcement of arbitral anti-suit injunctions in one Member State if they prohibit a party from bringing claims in another Member State, and the reasoning of the ECJ suggests that this would not be compatible with the Brussels Ia Regulation.280 As an alternative to anti-suit injunctions, the defendant in the non-agreed forum can 57 bring an arbitration for a declaration of non-liability and have the award declared enforceable.281 The award, or the state court decision recognizing the award, may then bar enforcement of a conflicting state court judgment on the merits.282 Another option is to bring a claim for damages for breach of the arbitration clause. A defendant who is able to obtain an arbitral award for damages can thus have a powerful tool to resist an adverse state court judgment on the merits, particularly where that judgment is made later than the award, as in case of conflicting decisions, enforcement is usually limited to the prior decision.283 English courts have adopted the view that a damage claim on that basis includes costs for defending the litigation brought in breach of the arbitration clause and 273 For example, the anti-suit injunction in Sulamérica (supra fn. 127) [2012] EWCA Civ 638 restraining proceedings in Brazil was countered by an anti-arbitration injunction by the Brazilian courts (Tribunal de Justiça do Estado de São Paulo, 19 April 2012, no. 0304979-49.2011.8.26.0000). On antiarbitration injunctions in the United States, see infra S mn. 48. 274 ECJ Case C-185/07 Allianz spa v. West Tankers Inc. [2009] ECR I-663. On parallel proceedings under the new regulation see Bollée, Rev. Arb. 2013, 979–987; Carducci, (2013) 29 Arb. Int’l 467–492. 275 Nori Holdings Ltd v. PJSC Bank Okritie Financial Corp. [2018] EWHC 1343 (Comm), rejecting the argument of AG Whatelet in his Opinion para. 134 in ECJ Case C-536/13 Gazprom OAO v. Lietuvos Respublika ECLI:EU:C:2014:2414. The ECJ itself included in its decision only a reference to West Tankers under the previous regulation, without, however, addressing whether it continued to apply: ECJ Case C536/13 Gazprom OAO v. Lietuvos Respublika ECLI:EU:C:2015:316, paras 32–34. 276 [2019] OJ C 384 I/01. 277 On anti-suit injunctions post-Brexit, see Ndolo/Liu, (2017) 83 Arb. 254. 278 ECJ Case C-536/13 Gazprom OAO v. Lietuvos Respublika ECLI:EU:C:2015:316. On anti-suit injunctions of arbitral tribunals see Vishnevskaya, (2015) 32 J. Int’l Arb. 173–214. 279 Article V(1)(a) NYC. On anti-suit injunctions from arbitral tribunals, see Varesis, (2019) 35 Arb. Int’l 275 (283–287). 280 In fact, the ECJ has confirmed in Gazprom (supra fn. 278) ECLI:EU:C:2015:316 that an applicant considering an arbitration agreement to be void must have access to the courts, and allowed recognition only where this judicial protection was not denied: paras 34, 38. 281 This was done in West Tankers v. Allianz [2012] EWCA Civ 27. 282 E. g., under articles 45, 46 Brussels Ia Regulation. Cf. infra H mn. 54. 283 As is the case, for example, in article 45(1)(d) Brussels Ia Regulation.

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potential liability in the non-agreed forum,284 and arbitral awards on that basis have been enforced in other countries, for example, Switzerland.285 However, there is no consensus on this point. While in some countries, the prevailing view is that damages cannot be based on an alleged breach of an arbitration agreement,286 a recent German decision accepted that bringing an action in a non-agreed forum may give rise to a damage claim, but relied in that specific case on the fact that the non-agreed forum had already declined jurisdiction.287 It remains an open question whether an award for damages can be reconciled with the ECJ’s decision in West Tankers.288 58

b) Parallel proceedings and lis pendens rules. A question related to the enforcement of arbitration agreements is whether an arbitral tribunal must stay proceedings under lis alibi pendens principles if the case is pending elsewhere before state courts. According to article 8(2) ML, arbitral proceedings may be continued, and an award may be made, while the issue is pending before state courts.289 However, there is the risk that the award will be set aside if the courts at the seat of the arbitration assume jurisdiction on the merits or recognize a foreign decision on the merits, as the implication in both cases is that there is no arbitration agreement, so arbitral tribunals should remain cautious in applying article 8(2).290 On the requirement to stay arbitral proceedings pending the outcome of parallel criminal investigations see infra mn. 89.

c) Challenges to an arbitral tribunal’s jurisdiction. A party must observe certain procedural limits where it intends to challenge the arbitral tribunal’s jurisdiction: under article 16(2) ML, a party must raise defences regarding the arbitral tribunal’s jurisdiction no later than the submission of the statement of defence (see also article V EuC to the same effect). This time limit would also inform the interpretation of a requirement under institutional rules to raise such defences “as soon as possible”.291 It is worth noting in this context that, option I article 7(5) ML implies an arbitration agreement by exchange of statements of claim and defence in which the existence of an arbitration agreement is alleged by one party and not denied by the other. 60 If its jurisdiction is challenged, the arbitral tribunal can make a preliminary decision on jurisdiction, and, if the tribunal assumes jurisdiction, either party may request a court ruling on the jurisdictional issue (article 16(3) ML).292 Failure to raise the jurisdictional defence before the arbitral tribunal will be regarded as a waiver of jurisdictional defences which will then not be available in setting aside or enforcement 59

284 West Tankers Inc. v. Allianz spa [2012] EWHC 854, paras 64, 68, 77; Starlight Shipping Co. v. Allianz Marine and Aviation Versicherungs AG (The Alexandros T) [2014] EWCA Civ 1010. See infra H mn. 55. 285 BGer., 30 September 2013, 4A_232/2013. The arbitration agreement in question was governed by English law. Under Swiss law, the question of damages for breach of an arbitration agreement is subject to debate: infra R mn. 72. 286 See infra M mn. 43. 287 BGH, NJW 2020, 399; cf. Hess, JZ 2014, 538 (542). 288 Betancourt, (2018) 34 Arb. Int’l 511 (526–528) argues that such claims are compatible with EU law. However, West Tankers means that if a court of an EU Member State assumes jurisdiction, its decision on the merits must be recognized and enforced throughout the EU. This principle would be pre-empted if it were possible to circumvent it by a damage claim aimed at producing the opposite effect. 289 See infra R mns 68 et seq. for Switzerland and more generally Born, International Commercial Arbitration, 2nd ed., 2014, 3794, contra: Q mn. 90 (Sweden). 290 As to the inverse situation, see article VI(3) EuC, requiring state courts to stay proceedings if proceedings were first pending before the arbitral tribunal, unless they have “good and substantial reasons to the contrary”. 291 A v. B [2017] EWHC 3417 (Comm) on the LCIA Rules 2014. Under the 2020 version of the LCIA rules, see the new article 22A. 292 In some jurisdictions, recourse against interim decisions of arbitral tribunals assuming jurisdiction is only possible once a final award on the merits has been made: e. g., Belgium (infra E mn. 111).

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proceedings.293 It is, however, less clear whether failure to pursue the jurisdictional challenge before the state courts will also bar the party from raising it later: while the German Bundesgerichtshof has held that failure to apply for review by state courts will preclude subsequent jurisdictional challenges,294 the courts in Singapore adopted the opposite view, giving parties the choice between review under article 16(3) ML and review in setting aside or enforcement proceedings (“choice of remedies” doctrine).295 d) Binding effect of state court decisions on jurisdiction. Given the importance of 61 the jurisdictional point, the question often arises whether and to what extent a court decision regarding the validity and the scope of an arbitration agreement is binding in subsequent proceedings where the same issue arises, e. g., in setting aside and enforcement proceedings. Where the question arises within one and the same jurisdiction, the answer will depend on res judicata principles.296 In cross-border scenarios, the result will depend on applicable rules of recognition and enforcement of foreign judgments. As a rule, recognition and enforcement of foreign judgments is subject to a review of the original court’s jurisdiction,297 so the enforcement courts will determine whether a foreign decision on the merits breaches an arbitration agreement between the parties. However, there are more liberal enforcement regimes such as the Brussels Ia 62 Regulation. While the regulation does not require the recognition of interim or implied decisions on jurisdiction,298 enforcement courts are not allowed to question the original court’s jurisdiction and must thus enforce a decision on the merits even if perceived as a breach of an arbitration agreement.299 It remains to be seen how courts will deal with this requirement where there is both a foreign judgment on the merits and a conflicting decision from an arbitral tribunal. Recital 12 and article 73(2) of the Brussels Ia Regulation have been read to allow for enforcement of an arbitral award under article V NYC, even where a Member State court made a conflicting decision on the merits.300 However, recitals of a regulation do not have force of law,301 and recital 12 is certainly not of straightforward application to the problems posed by parallel proceedings.302 Moreover, article 73(2) allows the application of international conventions only in so far as the principles of free movement of judgments and mutual trust in the administration of justice are observed,303 a principle which was the basis for the ECJ decision in 293 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.268; infra B mn. 191 et seq., D mn. 58, H mn. 163, I mn. 105 and J mn. 36 for the NYC, Austria, England, France and Germany respectively and for Sweden Högsta Domstolen, 14 June 2013, Case T 2104-12, Joint Stock Company Technopromexport v. Mir’s Limited. Preclusion may not apply where considerations of public policy or consumer protection are involved: infra I mn. 105. 294 BGH, SchiedsVZ 2003, 133. 295 See infra O mn. 46 and PT First Media TBK v. Astro Nusantara International BV [2013] SGCA 57. A similar approach was adopted by Cour d’Appel de Paris, 4 March 2004, Rev. Arb. 2005, 143. It is unclear, however, whether this is still true after the 2011 recast of the French arbitration law. 296 As a result, the binding effect will be limited to the parties to the state court proceedings where the question was addressed: BGH, NJW 2014, 3655. 297 E. g., section 32 Civil Jurisdiction and Judgments Act 1982, § 328 German ZPO. 298 Recital 12 Brussels Ia Regulation. On that basis, decisions to the opposite effect under the previous version of the regulation (National Navigation Co. v. Endesa Generacion SA [2009] EWCA Civ 1397 and OLG Düsseldorf, OLGR 2007, 704) are no longer good law: Auda, (2016) 82 Arb. 122 (126). For a critical view on the Regulation, see Linna, (2016) 19 Int. A.L.R. 70 (78). 299 See article 45(3) and recital 12 of the Brussels Ia Regulation. 300 Auda, (2016) 82 Arb. 122 (127). 301 ECJ Case C-136/04 Deutsche Milch-Kontor v. Hauptzollamt Hamburg-Jonas, [2005] ECR I-10095, para. 32. 302 Auda, (2016) 82 Arb. 122 (125–128). 303 ECJ Case C-452/12 Nipponkoa Insurance Co. (Europe) Ltd v. Inter-Zuid Transport BV, ECLI:EU: C:2013:858, para. 47.

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West Tankers prohibiting interference with the decision of a Member State’s courts on jurisdiction,304 so the question remains subject to a ruling of the ECJ.

6. Drafting arbitration clauses: a checklist An effective arbitration clause authorizes the arbitrators to decide all disputes that may arise between the parties, excludes state courts, to the extent possible, from the dispute resolution process, and sets out an efficient procedural framework that secures an enforceable arbitral award. Failure to do so may result in pathological arbitration clauses, where the scope of the clause is unclear or the procedural framework is inappropriate. This can lead to expensive and time-consuming disputes about the validity or the meaning of the arbitration clause. In the worst scenario, a party may find out only after the conclusion of an arbitration that there was no valid arbitration agreement and that, as a result, the arbitral tribunal’s award cannot be enforced. Any point that is not covered by the arbitration clause or the applicable procedural rules is likely to provide the arbitrators with some discretion and make the outcome of the dispute less predictable. 64 Therefore, in the arbitration clause, the parties should: – Make an informed choice between institutional (or administered) and ad hoc arbitration (supra mns 11–13). Where institutional arbitration is selected, the clause should include a correct reference to the institution (supra mn. 47). – Clearly specify arbitration as the binding dispute resolution mechanism (supra mns 29, 48). – Cover all claims likely to arise between the parties and cover all parties that are to be bound by the outcome of the arbitration (supra mns 43–46). – Where the law at the place of arbitration allows, provide that arbitrators have the power to decide on their own jurisdiction (supra mn. 53). – Address the number and qualifications of the arbitrators. – Determine the seat of the tribunal (see supra mn. 9), and ensure that the arbitration clause complies with the law at the seat of the tribunal. – Consider the seat of the other party and the location of its assets and adapt the clause, if necessary, to the requirements in these jurisdictions. – Define the law applicable to the dispute and to the arbitration clause, and comply with mandatory law and formal requirements, such as those under article II NYC. – Address procedural issues where appropriate or necessary, including the language of the arbitration, the rules on the taking of evidence, the confidentiality of the proceedings, and any exclusion of the right to appeal to state courts. The IBA Guidelines for Drafting International Arbitration Clauses (2010)305 may provide additional guidance. 63

IV. The arbitral tribunal and the conduct of arbitral proceedings 65

Party autonomy is the overarching principle of arbitral proceedings. Parties are free to agree on the number of arbitrators (article 10(1) ML), the procedural rules (article 19 (1) ML), the place of arbitration (article 20(1)(1) ML), the language of the proceedings (article 22(1)(1) ML), the timeline for written submissions (article 23(1) ML) and 304 ECJ Case C-185/07 Allianz spa v. West Tankers Inc. [2009] ECR I-663 and the case law referred to in para. 29 of the ruling. 305 Supra fn. 10.

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hearings (article 24 ML). However, one rule is so fundamental that parties may not derogate from it: the arbitral tribunal must treat the parties with equality and give each party a full opportunity of presenting its case (article 18 ML).306 A breach of procedural rules – whether applicable arbitration law or an agreement of the parties – will in most jurisdictions justify the setting aside of the award.307

1. The arbitral tribunal a) Constitution. Under the Model Law, the parties are free to agree on the number of 66 arbitrators (article 10(1) ML). Failing an agreement between the parties, the number of arbitrators is three (article 10(2) ML). Many institutional rules deviate from this default rule. An important example is article 12(2) ICC Rules 2021, which provides for a single arbitrator unless the dispute warrants the appointment of three arbitrators.308 Where there is a panel of three arbitrators, the default procedure under the Model Law is for each party to appoint an arbitrator, and the two party-appointed arbitrators will then in turn appoint the third arbitrator.309 The unilateral appointment of co-arbitrators by the parties may create the impression of bias,310 and under some institutional rules, the default rule therefore is that the arbitrators are selected by the institution rather than the parties.311 Where the dispute is decided by a sole arbitrator, the parties must agree on his appointment, and where no agreement can be found, the arbitrator will be appointed by the institution or the appointing authority designated by the parties.312 Where a party or an arbitral institution does not make the appointment, or where an agreement on the presiding or sole arbitrator cannot be found, any party may request the court at the seat of the arbitration (supra mn. 9) to take the necessary measure.313 b) Qualifications, impartiality and independence of arbitrators. Arbitrators must 67 meet the qualifications agreed by the parties, as a breach of the parties’ agreement on procedural rules will be a ground for setting aside or refusing enforcement of an award.314 A requirement found in some contracts is that an arbitrator must be a “commercial person”, a requirement which has been given broad interpretation in court practice.315 In addition to qualifications under the arbitration clause or applicable institutional rules, arbitrators must be impartial and independent, and the parties may challenge an arbitrator where qualification requirements are not met or if there are justifiable doubts on their impartiality and independence (article 12(2) ML). An arbitrator has the duty to disclose any circumstances liable to give rise to 68 justifiable doubts on his impartiality and independence.316 This duty exists vis-à-vis all 306 As to the mandatory character, see infra B mn. 239 and Soh Beng Tee & Co. Pte Ltd v. Fairmount Development Pte Ltd [2007] 3 SLR (R) 86. 307 E. g., under article 34(2)(a)(iv) ML. A notable exception is Switzerland, where setting aside is limited to breaches of equal treatment, right to be heard, and public policy: see infra R mn. 136. 308 Which is normally the case where the amount in dispute is in excess of US$ 3–5 million, Reiner/ Jahnel, in: Schütze (ed.), Institutional Arbitration, 2013, Art. 8 mn. 5. Similar rules exist in article 5(8) LCIA Arbitration Rules 2020 and article 6(1) SIAC Arbitration Rules. 309 Article 11(3)(a) ML. 310 For a recent discussion see Tufte-Kristensen, (2016) 32 Arb. Int’l 483, suggesting to limit or even prohibit pre-appointment interviews to “increase the appearance of impartiality” (at 503). 311 For example, article 5(9) LCIA Arbitration Rules 2020, LCIA Notes for Parties, para. 41. 312 Article 11(3)(b) ML. 313 Article 11(4) ML. 314 Articles 34(2)(a)(iv), 36(1)(a)(iv) ML, article V(1)(d) NYC. 315 See, e. g., US Ship Management, Inc. v. Maersk Line, Ltd, 188 F. Supp. 2d 358 (S.D.N.Y. 2002). Cf. also the liberal approach in Allianz Insurance plc v. Tonicstar Ltd [2018] EWCA Civ 434. 316 Article 12(1)(1) ML.

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parties, including the party that appointed the arbitrator.317 The facts to be disclosed are not confined to those warranting disqualification but extend to all facts that warrant a bona fide challenge.318 Failure to comply with the disclosure requirement may in turn contribute to justifiable doubts on the impartiality and independence of an arbitrator.319 69 Generally, the standard of justifiable doubts is an objective one, i. e., a challenge does not require proof of actual lack of independence and impartiality, but only reasonable doubts based on external indicators.320 However, to protect the viability of arbitral proceedings and to avoid disruptions, courts normally take a restrictive approach: there must be a real possibility for bias, i. e., a situation where a fair-minded and informed observer would hold that the arbitrator might not bring an impartial and unprejudiced mind to the resolution of the dispute.321 The IBA Guidelines on Conflicts of Interest322 provide valuable assistance in this regard, and some court decisions have made express reference to them323 but remain free to deviate from the guidelines.324 While it is generally accepted that apparent bias exists where the arbitrator has a direct interest in the outcome of the dispute,325 the assessment of bias gives some discretion to the courts which accounts for diverging solutions, in particular as regards the assessment whether the relationship between parties, counsel and arbitrators justify a challenge: a business relationship between an arbitrator and a party may justify a challenge,326 but not where it ended a long time before the arbitral proceedings.327 While some courts consider the relationship between the arbitrator and counsel for a party to be generally irrelevant,328 others have accepted challenges on that basis.329 The Swiss Bundesgericht held that a challenge is justified where the arbitrator is acting as counsel in another case in which the same legal questions are at issue,330 while a German court came to the opposite conclusion.331 While combining preliminary views with a settlement proposal will be seen in some jurisdictions as part of an arbitrator’s role and not justify a challenge,332

317 CA Paris, 14 October 2014, no. 13/13459, S.A. Auto Guadeloupe Investissements (AGI) v. Columbus Acquisitions Inc. 318 Jung Science Information Technology Co. Ltd v. Zte. Corporation [2008] HKCFI 606. 319 England: Sierra Fishing Company v. Farran, [2015] EWHC 140 (Comm), para. 60; France: Cass. civ. 1ère, 18 December 2014, No. 14-11.085, Dukan de Nitya v. VR Services, for the case of a “deliberate omission”; Cass. civ. 1ère, 16 December 2015, No. 14-26.279, Columbus Acquisitions Inc. v. AutoGuadeloupe Investissement; Hong Kong: Jung Science Information Technology Co. Ltd v. Zte. Corporation [2008] HKCFI 606 [57]; India: Vinod Bhaiyalal Jain v. Wadhwani Parmeshwari Cold Storage Pty Ltd, Supreme Court, Civil Appeal No. 6960 of 2011 dated 24 July 2019. 320 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 227. 321 Porter v. Magill [2001] UKHL 67. 322 Supra fn. 10. 323 E.g., in Austria (infra D mn. 69 and OGH, 15 May 2019, 18 ONc 1/19w; Sippel, (2014) 32 ASA Bull. 490–414), England (H mn. 75), Sweden (Q mn. 43) and Switzerland (BGE 142 III 521). 324 W Limited v. M SDN BHD [2016] EWHC 422 (Comm). 325 See infra E mn. 51, H mn. 75 and R mn. 83 for Belgian, English and Swiss decisions. 326 For an example see Sierra Fishing Company v. Farran [2015] EWHC 140 (Comm). See infra H mn. 75 and I mns 49, 50 for additional English and French decisions. 327 Under the IBA Guidelines, business relationships between an arbitrator and his law firm with one of the parties are normally irrelevant if they have ended more than three years before the appointment (otherwise, they would normally fall under item 3.1 of the “Orange List”). 328 OLG Frankfurt a. M., NJW-RR 2008, 801 (803); Jung Science Information Technology Co. Ltd v. Zte. Corporation [2008] HKCFI 606. 329 See OGH, 15 May 2019, 18 ONc 1/19w for Austria and infra I mn. 49 for French case law. 330 See infra R mn. 83. 331 OLG Hamburg, SchiedsVZ 2003, 191. 332 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.482; and for German case law, infra J mn. 6.

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this may be different in common law jurisdictions, in particular where an arbitrator’s efforts at conciliation are subject to written consent by the parties.333 c) Challenge procedure. While in some jurisdictions a challenge against an arbitrator 70 will only be possible in a challenge against the final award,334 under most arbitration laws, a party must bring a challenge before the arbitral tribunal within a certain time limit after it becomes aware of the grounds for challenge (fifteen days under article 13 (2) ML), and, if unsuccessful, take the challenge to the courts at the place of arbitration, again within a certain time limit (thirty days under article 13(3) ML). Failure to take a challenge to the arbitral tribunal, the arbitral institution or to the courts will bar a party from subsequently challenging an award on similar grounds.335 This procedural framework causes difficulties in cases where grounds for challenge become known only after the award has been made: while it is common ground that an award can be set aside where it reveals an arbitrator’s conduct with a lack of impartiality and independence that also amounts to a breach of public policy,336 or is particularly serious,337 solutions differ in particular as regards situations where an arbitrator failed to disclose relevant facts: courts in some countries would interfere only in cases of a “blatant lack of impartiality”.338 Others go beyond this and set aside any arbitral award where there are circumstances that would have justified a challenge of the arbitrator while the arbitral proceedings where pending,339 an approach that is justified by the need to balance the limited review of arbitral awards with adequate safeguards as to the impartiality and independence of the arbitrators.340 The diverging standards of review can lead to opposite conclusions in similar instances: an arbitrator’s failure to disclose business relationships of his law firm with affiliates of one of the parties to the arbitration was held by the French Cour de Cassation to justify the annulment of an award,341 while the Swiss Bundesgericht held a comparable situation not to amount to a blatant breach of impartiality required to create a defence against enforcement.342

2. The conduct of the arbitral proceedings The parties are free to agree on the procedural rules governing the conduct of 71 the arbitral proceedings (article 19(1) ML). The arbitral tribunal’s failure to comply with the rules agreed by the parties is a ground for setting aside its award under the 333

As is the case, for example, in Singapore under sec. 17(1) SIAA. As is the case in the United States: infra S mn. 62. 335 EMS Technologies Canada Ltd (Honeywell International Inc.) v. Advantech Satellite Networks Inc. [2013] QCCS 4333; Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V paras 296, 305 (failure to bring a challenge before the tribunal); Cass. civ. 1ère, 25 June 2014, No. 11-26.529, Avax v. Tecnimont, Bull. 2014, I, No. 115 and 19 December 2018, No. 16-18.349, Société J&P Avax v. Société Tecnimont SPA, Rev. Arb. 2018, 848 (failure to bring a challenge before the arbitral institution); Habitations d’Angoulème Inc. v. Létourneau [2005] CanLII 12888, para. 46 (failure to bring a challenge before the courts); OGH, 1 October 2019, 18 OCg 5/19 p. 336 E. g., Cass. civ. 1ère, 24 March 1998, No. 95-17.285, Excelsior Film TV v. UGC-PH, Bull. 1998, I, No. 121 p. 80; Blavi, (2016) 82 Arb. 2 (11). 337 See infra M mn. 58 for Dutch case law. 338 BGer., 27 May 2019, 4A_663/2018, para. 3.4.2. 339 See infra I mn. 47 and J mn. 48 for French and German case law; Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V para. 296. 340 OGH, 1 October 2019, 18 OCg 5/19p, para. A.1.2.c, overruling previous case law that only “blatant” lack of partiality justified the annulment of an award. 341 Cass. civ. 1ère, 3 October 2019, 18-15.756, confirming CA Paris, 27 March 2018, 16/09386, Saad Buzwair Automotive Co. v. Audi Volkswagen Middle East FZE LLC. 342 Supra fn. 338. 334

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Model Law and a defence to enforcement under the New York Convention,343 but in some jurisdictions such as Switzerland, a setting aside application can only be based on a breach of rules of procedure, whether agreed by the parties or contained in rules of arbitration chosen by the parties, if the breach amounts to a violation of the right to equal treatment, the right to be heard, or a violation of public policy.344 72 Absent an agreement between the parties, the arbitral tribunal has large discretion as to the procedure generally, oral hearings, evidence, the place and language of the arbitration and the applicable law.345 When reviewing or enforcing awards, courts will rarely interfere with the exercise of arbitrators’ discretion regarding procedural matters,346 and some decisions suggest that they will even defer to arbitrators’ interpretation of the parties’ agreement on procedural issues.347 Where the arbitral tribunal is composed of several arbitrators, questions of procedure may be decided by a presiding arbitrator if so authorized by the parties or all other members of the arbitral tribunal.348 If a party fails to object to non-compliance with procedural requirements under statute law or the arbitration agreement without undue delay, it is deemed to have waived its right to object.349 73 In 2018, a group of arbitration experts published the “Prague Rules”, a set of rules that apply by agreement of the parties and that cover case management, the taking of evidence and the decision-making process.350 It aims primarily at increasing the efficiency of arbitral proceedings by encouraging tribunals to take a more active role in managing the proceedings, and in that context, makes specific reference to traditional procedural rules in civil law countries.351 The impact of the rules on arbitral practice remains yet to be seen. 74

a) Equality of arms, fair trial and due process. The fundamental and mandatory rule in all arbitral proceedings is that parties must be treated equally and have the opportunity to present their case (article 18 ML). The opportunity to present one’s case contemplated in article 18 ML is supported by other provisions, namely the obligation of the arbitral tribunal to hold an oral hearing if requested by a party, to give advance notice of any hearings, and to communicate to the parties all statements and evidence on which it intends to rely in the award.352 Observance of these principles by the arbitral tribunal is essential as a breach may lead to the setting aside of the award or make it unenforceable.353 The requirements of fair trial and due process are explained in more

343

Article 34(2)(a)(iv) ML, article V(1)(d) NYC. Infra R mn. 136; Marghitola, Document Production (supra fn. 22), 2015, § 10.11[B]. 345 Articles 19(2), 20(1)(2), 22(1)(2) and 28(2) ML. 346 Berger/Jensen, (2016) 32 Arb. Int’l 415 (425–429); Sharma, (2018) 84 Arb. 314 (324–325); infra B mn. 234. 347 Bamberger Rosenheim, Ltd v. OA Development, Inc., 862 F.3d 1284 (1288) (11th Cir. 2017), CLOUT Case No. 1728. 348 Article 29 ML. 349 Article 4 ML. In Brockton Capital LLC v. Atlantic-Pacific Capital, Inc. [2014] EWHC 1459 (Comm), para. 27, it was held that the mere “reservation” of future objections was not sufficient. 350 For comment, see Stampe, (2019) 35 Arb. Int’l, 221–244; Rombach/Shalbanava, (2019) 17 SchiedsVZ 53–60. 351 The Prague Rules, p. 2 (available at https://praguerules.com/upload/medialibrary/9dc/9dc31ba7799 e26473d92961d926948c9.pdf, accessed 1 August 2020). For comment, see Henriques, (2018) 36 ASA Bull. 351–363 and Stampa, (2019) Arb. Int'l 221–224. 352 Articles 24, 26(2) ML. 353 By contrast, it will not normally be possible to review arbitral proceedings against due process standards of article 6 ECHR as the Convention allows for a waiver such as by a free, legal and unequivocal agreement to arbitration: Mutu and Pechstein (supra fn. 90), 2 October 2018, 40575/10, para. 96. 344

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detail below in the section dealing with review of arbitral awards against due process requirements (infra mns 129–131) and procedural public policy (infra mn. 135). b) Place, venue and language. The place, the venue and the language of the arbitral 75 proceedings are subject to the parties’ agreement, and absent an agreement, will be determined by the arbitral tribunal (articles 20, 22 ML). While the place of the arbitration is a legal concept rooting the arbitration in a specific legal system and giving the courts there supervisory jurisdiction, it is not necessarily identical with the venue of hearings that can take place elsewhere (supra mn. 10). The language of the arbitration is particularly relevant with regard to due process requirements: for example, a request for arbitration that is not made in the language agreed between the parties for the arbitration is not valid notice, and an award would not be enforceable.354 By contrast, where the request is made in the agreed language it is valid even if that is not the language at the domicile of the recipient of the request.355 c) Request for arbitration. Subject to the parties’ agreement, arbitral proceedings 76 commence when a request for arbitration is received by the respondent (article 21 ML). Commencement may be decisive for questions of prescription,356 and, more importantly, receipt of the request for arbitration is also essential for giving the respondent the opportunity to present his case, as failure to comply with this requirement can lead to the annulment of the arbitral award or create a defence against enforcement.357 Under article 3(1) ML, there is a presumption that communications are received if delivered to the recipient personally, at his place of business or, where this cannot be established, if sent to the last known business address by registered letter or other means providing a record of the attempt to deliver it. However, this presumption can be rebutted where a party produces evidence to show that, notwithstanding the delivery of any written communication to its last known place of business, habitual residence or mailing address, it had not in actual fact received such written communication.358 Under some arbitration laws, courts will refuse to enforce arbitral awards where the request for arbitration had been sent to the last known address of the respondent but where actual receipt cannot be established.359 For requirements as to the language of the request for arbitration, see supra mn. 75. d) Terms of reference and written submissions. Following the request for arbitration 77 and the constitution of the arbitral tribunal, the parties and the tribunal will ordinarily define further steps in the arbitration, often referred to as “terms of reference”. Parties will be required to file the statements of claim and defence within the period of time agreed between them or determined by the arbitral tribunal.360 All statements, documents and Ceeg (Shanghai) Solar Science & Technology Co. v. LUMOS LLC, 829 F.3d 1201 (10th Cir. 2016). Zavod Ekran OAO v. Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm); Corte Suprema, 29 November 2016, 24.348-2016, Bakalland SA v. Agroprodex Internacional SA, YCA XLIV (2019), 493 (Chile); Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V para. 161. 356 See Fustar Chemicals Ltd v. Sinochem Liaoning Hong Kong Ltd [1996] 2 HKC 407. Depending on the applicable rules, an action brought in breach of an arbitration agreement may not be sufficient to interrupt prescription: Lafarge Canada Inc. v. Edmonton (City), 2015 ABQB 56. Institutional rules often contain a provision to the effect that the proceedings commence when the request for arbitration is received by the institution (e. g. article 4(2) ICC Rules 2021). 357 Articles 34(2)(a)(ii), 36(1)(a)(ii) ML (see infra mns 129–131); Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V paras 158–168. 358 Sun Tian Gang v. Hong Kong & China Gas (Jilin) Ltd [2016] HKCFI 1611, para. 37 per Chan J. 359 Högsta Domstolen, 16 April 2010, Ö 13–09, Lenmorniiproekt OAO v. Arne Larsson & Partner Leasing AB, YCA XXXV (2010), 456. 360 Article 23(1) ML. 354 355

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other information supplied to the tribunal must be communicated to the other party, and the tribunal must communicate to the parties expert reports and other evidence on which it intends to rely.361 By implication, parties must be given reasonable time to comment on information communicated to them.362 78

e) Default. Default of a party can affect the arbitral proceedings in various ways. Where the claimant fails to submit the statement of claims, the tribunal shall terminate the proceedings.363 By contrast, if the respondent fails to submit the statement of defence, the tribunal shall continue the proceedings, without treating such failure in itself as an admission of the claimant’s allegations.364 If any party does not appear at a hearing or does not produce documentary evidence, the tribunal may make the award on the evidence before it.365 Failure to participate in the arbitral proceedings will not create a defence against such an award unless it is excused.366

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f) Oral hearing. Where there is no agreement between the parties, the arbitral tribunal decides whether to hold oral hearings.367 Unless the parties have agreed that no hearings shall be held, the arbitral tribunal must hold a hearing if this is requested by a party;368 non-compliance with this requirement will normally lead to the setting aside of the award.369 The tribunal’s procedural discretion will also allow it to hold remote hearings through videoconferencing and similar means (see, e. g., article 26.1 ICC Rules 2021). Where a hearing is held, sufficient advance notice must be given.370

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g) Evidence. Arbitration laws and institutional rules often contain little or no guidance regarding the administration of evidence in arbitral proceedings. Absent an agreement of the parties, the arbitral tribunal’s discretion in procedural matters includes the power to determine the admissibility, relevance, materiality and weight of any evidence (article 19(2) ML), and courts will normally defer to arbitrators’ decisions.371 However, arbitrators should be cautious to not create a conflict between the evidentiary procedure where the tribunal may exercise discretion, and the law governing the substance of the dispute which is not in the discretion of the tribunal.372 The IBA Rules on the Taking of Evidence373 are not binding as such but may provide directional guidance. Like the IBA Rules, the Prague Rules are only binding on the tribunal if agreed by the parties (supra mn. 73). 361

Article 24(3) ML. See Paklito Investment Ltd v. Klockner East Asia Ltd [1993] 2 HKLR 39, refusing enforcement of an award where the tribunal had made an award a few days after receipt of an expert report by the parties. 363 Article 25(1) ML. 364 Article 25(2) ML. 365 Article 25(3) ML. But a breach of due process was found where after the parties’ failure to reach a settlement, a tribunal made an award without granting the defendant time to submit a defence: infra fn. 575. 366 Cf. infra B mn. 228; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V para. 157. 367 Article 24(1) ML. 368 Article 24(1) ML. 369 OGH, 30 June 2010, 7 Ob 111/10 i, SZ 2010/75 (breach of the right to be heard); cf. infra B mn. 235. However, failure to object to the tribunal’s announcement to make an award without a hearing may be deemed a waiver of an earlier request for a hearing: OLG Naumburg, NJW-RR 2003, 71. 370 Article 24(2) ML. 371 See, e. g., Catz American Co. v. Pearl Grange Fruit Exchange Inc., 292 F. Supp. 549 (S.D.N.Y. 1968): “Arbitrators must be given discretion to determine whether additional evidence is necessary or would simply prolong the proceedings” (at 553). 372 See Rosengren (2013) 30 J. Int’l Arb. 1 (6) (as regards admissibility of evidence) and Trittmann, (2016) 14 SchiedsVZ 7 (15) (as regards burden of proof). Cf. BQP v. BQQ [2018] SGHC 55, paras 116–119 on whether the parol evidence rule is a question of procedure or of substantive law. 373 Supra fn. 10. For commentary, see Zuberbühler et al., IBA Rules of Evidence, 2012. 362

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aa) Admissibility of evidence. Under the IBA Rules on the Taking of Evidence as 81 well as under article 19(2) ML and institutional rules such as article 22.1(vi) LCIA Arbitration Rules 2020, the tribunal may determine the admissibility of evidence.374 Arbitral awards have been set aside where tribunals refused to consider, or to give any weight to evidence produced by one party,375 so caution is needed when exercising the power to exclude evidence. Some courts have held that the admission of unlawfully obtained evidence is not as such a breach of public policy376 justifying an exclusion of relevant evidence, but application of the public policy varies between jurisdictions (infra mn. 136). The discretion of arbitral tribunals as regards evidence also implies that arbitrators may depart from traditional evidentiary rules such as the common law rule on the admissibility of parol evidence in contractual interpretation.377 bb) Means of evidence. (1) Witnesses. Article 20(2) ML implies that the parties may 82 present witness evidence, but does not make any specific provisions for witnesses. While some civil law systems do not allow parties or their legal representatives to act as witnesses, common law jurisdictions often follow a more liberal approach378 which is also taken up in article 4(2) of the IBA Rules on the Taking of Evidence. The discretionary power of arbitral tribunals as to admissibility and form of witness testimony is wide, and courts will not interfere with witness examination except in extreme cases of unfairness that had an effect on the arbitral proceedings.379 Accordingly, the substitution of an oral examination of witnesses with written witness statements does not as such constitute a ground for annulment or non-recognition of arbitral awards.380 (2) Experts. Article 26(1) ML enables the tribunal to appoint an expert and to require 83 the parties to provide the relevant information to that expert, including access to documents, goods or property. Where a party so requests or where the tribunal deems it necessary, the expert shall participate in a hearing after the delivery of his report where the parties can question his findings and present expert witnesses of their own (article 26(2) ML). As is the rule for issues of procedure under the Model Law, expert evidence is subject to the parties’ agreement, and non-compliance with such agreements may lead to the setting aside of an award.381 The Model Law does not contain a requirement of independence and impartiality regarding experts, but under some arbitration laws, such requirements exist where experts are appointed by the tribunal.382 As regards party-appointed experts, commentators have suggested that arbitral tribunals have discretion to exclude experts in certain circumstances, e. g., where an expert is not independent from the parties, has a conflict of interest involving the tribunal or is 374

For relevant criteria see Pilkov, (2014) 80 Arb. 147–155. Refusal to hear a witness: Tempo Shain Corp. v. Bertek, Inc. 120 F.3d 16 (2nd Cir. 1997); refusal to give any weight to the only evidence available to the losing party: Hoteles Condado Beach, La Concha and Convention Center v. Union De Tronquistas Local 901, 763 F.2d 34 (1st Cir. 1985). 376 BGer., 27 March 2014, 4A_362/2013; Ashford, (2019) 85 Arb. 377. 377 BQP v. BQQ [2018] SGHC 55, paras 127–130 per Loh J. 378 Angoura, (2017) 20 Int. A.L.R. 106 (107). 379 Born, International Commercial Arbitration, 2nd ed., 2014, 3524. For example, the examination of a witness that would be excluded under domestic procedural law will create no defence against enforcement: Corte Suprema, 30 November 2017, 82.442-2016, Almendra y Miel SA v. Gonzalo Luis Gallegos Davico, YCA XLIV (2019), 496 (Chile). 380 Angoura, (2017) 20 Int. A.L.R. 106 (117). 381 OLG Frankfurt a. M., SchiedsVZ 2013, 49. But contrast this with the more lenient approach in Luzon Hydro Corp. v. Transfield Philippines Inc. [2004] SGHC 204, [2004] 4 SLR 705 to post-hearing communications between the arbitral tribunal and the tribunal-appointed expert. 382 E. g., in Germany: infra J mn. 70. 375

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closely associated with a competitor of one of the parties.383 However, the exclusion of party-appointed experts is potentially in conflict with the right to be heard and therefore must be exercised with caution.384 (3) Document production. It is widely accepted that arbitral tribunals have the power to order document production. A document production order will often be based on a format referred to as “Redfern Schedules” that allow parties to consolidate production requests, objections and the tribunal’s decision.385 Where a party refuses to comply with a document production order, courts have been willing to enforce arbitral awards based on an adverse inference by the tribunal.386 There is, however, no international consensus as to the appropriate scope of document production: the IBA Rules intend to provide for a compromise between common and civil law thinking by limiting document production, but this compromise is questioned by legal writers,387 and the new Prague Rules follow a policy of avoiding document production, including e-discovery.388 In common law jurisdictions, courts will not take issue with arbitral tribunals ordering document production, and it has even been held that such power allows tribunals to order the production of documents subject to a confidentiality agreement with third parties.389 Whether document production orders amount to a breach of public policy in jurisdictions where pre-trial discovery or disclosure procedures do not exist has been discussed extensively by legal writers,390 but there appears to be no reported decision setting aside an award or refusing enforcement on that basis, and a recent decision of the German constitutional court (Bundesverfassungsgericht) appears to imply that pre-trial discovery under US rules is not as such a breach of German public policy.391 Conversely, it has been suggested by some writers that due process includes the right to present evidence and that, accordingly, an arbitral tribunal’s refusal to order document production may constitute a breach of the right to be heard.392 85 A recent discussion regarding document production has been fuelled by the increasing popularity of arbitration funding by third parties: to obtain arbitration funding, a would-be claimant will often make available to prospective funders confidential documents allowing to determine the prospects of success. There are no generally applicable rules for the question whether or to what extent such a disclosure is protected by legal professional secrets or, conversely, is regarded as a waiver of secrecy interests, and therefore production of such documents can be ordered from a party, or even from the legal cost financier itself,393 a point that parties need to consider prior to the exchange of 84

383

Smiley, (2019) 85 Arb. 360 (365). Burianski/Lang, (2017) 15 SchiedsVZ 269 (277). 385 Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 mns 117–128. 386 E. g., CA Paris, 21 March 2017, 15/17234, Yemen v. Gujarat State Petroleum Corp. Ltd (India), Rev. arb. 2018, 587. There is, however, no consensus on when an adverse inference is justified: Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 mn. 163. 387 Risse, (2019) 35 Arb. Int’l 1 (11). 388 Article 4.2 Prague Rules. 389 Jardine Lloyd Thompson Canada Inc. v. SJO Catlin [2006] ABCA 18, CLOUT Case No. 1247. 390 For an overview on Austrian, German, Italian and Swiss law, see Marghitola, Document Production (supra fn. 22), 2015, § 10.05. 391 Cf. infra J mn. 71. 392 E. g., in Switzerland: Marghitola, Document Production (supra fn. 22), 2015, § 10.06[D]. Karaha Bodas Co. LLC (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia) 364 F.3d 274 (5th Cir. 2004) rejected a challenge on that basis because parties had waived disclosure requests in the hearing. 393 Brabant et al., (2016) 19 Int A.L.R. 113 (118–119). For example, US courts have been willing to grant discovery relating to litigation funding (e. g., Miller UK Ltd v. Caterpillar, Inc., 17 F. Supp. 3d 711 (N.D. Ill. 2014), holding that a privilege, if any, had been waived by passing on the information without confidentiality agreements, and Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731 (D. Del. 9 February 2018), and tribunals may adopt a similar approach as to arbitration funding. 384

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such documents to avoid unwelcome surprises in the discovery process in subsequent arbitral proceedings. cc) Standard of proof. There are different standards of proof in common law, where 86 the standard is one of a balance of probabilities, and civil law jurisdictions, where somewhat stronger requirements prevail.394 Depending on the background of arbitrators, these differences may have an influence on arbitral proceedings as the standard of proof will in most cases not be defined by the law applicable to the merits and as most arbitration laws and rules do not specifically address the point either. Research on practices of arbitral tribunals suggest that standards of proof issues are not applied consistently.395 As regards corruption and illegality, some writers suggest that there is a transnational 87 rule requiring arbitrators and state courts to apply a “red flags methodology as a principled response to inherent difficulties of proving corruption and other illic.t practices”.396 However, the probative value of red flags differs,397 and an approach based on the mere presence of risk factors is therefore questionable.398 Some commentators have proposed to differentiate between contracts procured by bribery, where normal standards of proof apply, and bribe agreements, where a lower standard should apply.399 On the control of issues of corruption in setting aside and enforcement proceedings, see infra mns 136, 137. dd) Court assistance. The arbitral tribunal itself, or a party with the tribunal’s 88 approval, can apply to the competent court for assisting with taking evidence (article 27 ML), e. g., to compel third parties to provide witness evidence, or to compel a party to produce documents. While article 27 ML allows only for assistance by the courts at the place of arbitration,400 and similar territorial limitations exist, for example, in England,401 many arbitration laws allow for such measures in support of arbitration abroad. An example is 28 USC § 1782, allowing discovery in support of foreign arbitral proceedings.402 Views also differ as to whether article 27 ML or equivalent national laws allow courts to order pre-trial discovery or document production against third parties as in litigation.403 ee) Parallel criminal investigations. An important question in the context of 89 evidence is whether an arbitral tribunal has to stay arbitral proceedings pending the 394 Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 paras 111–112. For a comparative review of standards of proof, see Clermont/Sherwin, (2002) 50 Am. J. Comp. L. 243. On the standard of proof in arbitration see Bond, (2011) 77 Arb. 304. 395 Horvath/Khan, (2017) 15 SchiedsVZ 127 (132–134) for arbitral awards dealing with allegations of corruption. 396 Gaillard, (2019) 35 Arb. Int’l 1 (9). Others have identified a need for arbitral institutions to tackle corruption, money-laundering and similar issues by appropriate safeguards such as blacklisting of counsel, compliance and ombudsman programmes: Wilske, (2019) 12 Contemp. Asia Arb. J. 147 (163–166). 397 See the examples cited by Low, (2019) 113 AJIL 341 (343). 398 Low, (2019) 113 AJIL 341 (344). 399 Horvath/Khan, (2017) 15 SchiedsVZ 127 (135). 400 B.F. Jones Logistics Inc. v. Rolko, 2004 CarswellOnt 3478, 72 O.R. (3d) 355 (Ont. S.C.J.). 401 See infra H mn. 106. 402 See infra S mn. 91 and O’Malley/Eaton, (2014) 31 J. Int’l Arb. 111–120. 403 Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 mn. 159. For example, contrast BNP Paribas v. Deloitte and Touche LLP [2003] EWHC 2874 (Comm), para. 13, holding that section 43 AA 1996 (giving effect to article 27 ML) does not deal with the disclosure process and thus does not allow for pre-trial discovery orders against third parties (cf. infra H mn. 106), with Jardine Lloyd Thompson Canada Inc. v. SJO Catlin, 2006 ABCA 18, holding that article 27 ML could be used to seek pre-hearing disclosure of documents from third parties.

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outcome of related criminal or regulatory investigations, e. g. into allegations of fraud or corruption. While the Swiss Bundesgericht held that a stay is not mandated by public policy requirements and hence in the discretion of the arbitral tribunal,404 a recent Spanish decision set aside an arbitral award for breach of public policy on the basis that a stay of arbitral proceedings is mandatory if the pending criminal proceedings may have an impact on the matters submitted to arbitration.405 h) Confidentiality and data protection. Hearings in arbitral proceedings are not public. However, the Model Law and many arbitration laws are silent on the question of confidentiality, and solutions differ depending on the jurisdiction involved.406 Where confidentiality is important to the parties, appropriate provisions should be included in the arbitration agreement. 91 An issue that has gained some attention, in particular following the entry into force of the EU General Data Protection Regulation,407 is compliance of arbitral proceedings with data protection requirements.408 It is generally recognized that enforcing rights in arbitral proceedings creates a legitimate interest for the parties and the tribunal to process relevant data even without consent of the person concerned, e. g., under article 6 (1)(f) GDPR.409 Given that arbitral proceedings are not at the heart of data protection concerns, and in order to protect the viability of arbitration, it is desirable that regulators support a robust approach to exemptions, e. g., under article 14(5)(b) GDPR.410 However, parties and arbitrators are well advised to bear in mind their obligations under applicable data protection regimes, e. g., by determining data protection procedures in the terms of reference and implementing appropriate cyber security mechanisms,411 and to document the application of available exemptions.412 90

3. The decision of the arbitral tribunal 92

a) Arbitral award and termination of arbitral proceedings without an award. aa) Arbitral award. The arbitral tribunal will decide on the merits of the disputes by an arbitral award. The award shall be made in writing and signed by the arbitrators and state the reasons as well as the date and place of arbitration.413 Where there is more than one arbitrator, the award can be made and signed by the majority of arbitrators,414 but where a majority of arbitrators excludes the minority from partici404

BGer., 29 January 2015, 4A_532/2014, para. 5.2. Tribunal Superior de Justicia Madrid, 22 March 2019, 38/2018, Aguas de las Cuencas del Mediterraneo SA v. UTE IV Ingenieros Consultores SA. 406 Supra mn. 18. 407 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), [2016] OJ L119/1–88. 408 See, e. g., Zahariev, Data Protection in International Commercial Arbitration, 2019; Paisley, (2018) 41 Fordh. Int’l L. J. 841–935; Rosenthal, (2019) ASA Bull. 822–852. 409 Cervenka/Schwarz, (2020) 18 SchiedsVZ 78 (81). 410 It has been argued that in most arbitral proceedings, the exemption under article 14(5)(b) GDPR (and also under § 33(1)(2)(a) German BDSG) will apply: Müller, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 4 paras 66, 68–69. 411 Cf. Cervenka/Schwarz, (2020) 18 SchiedsVZ 78 (82–83). It is worthwhile mentioning in this context the Protocol on Cybersecurity in International Arbitration (2020 Edition) (ICCA Reports No. 6), available online at https://www.arbitration-icca.org/media/14/76788479244143/icca-nyc_bar-cpr_cybersecurity_ protocol_for_international_arbitration_-_print_version.pdf (accessed 1 August 2020) and the new platform of the SCC (infra Q mn. 8). 412 E. g., under §§ 32(2), 33(3) German BDSG. 413 Article 31(1), (2), (3) ML. 414 Article 29, 31(1) ML. 405

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pating in the deliberations, the majority award can be set aside for breach of fair trial.415 In some jurisdictions, it is not necessary that the award states reasons,416 but like the Model Law, most arbitration laws and institutional rules have a mandatory requirement for an award to state reasons, and where it is not complied with, the award can be set aside417 or refused enforcement.418 Failure to consider or to address evidence in the award,419 or manifestly wrong or illogical reasons420 do not as such justify the setting aside of an award, but courts in some countries will set aside awards or refuse enforcement where the reasons of an award do not address central arguments of one of the parties (infra mn. 131). Time limits for the arbitral tribunal to make its award may exist under applicable 93 laws or under the agreement between the parties. Under some arbitration laws, an award out of time can be set aside.421 bb) Award by consent. Under article 30(1) ML, the tribunal can record a settlement 94 between the parties in the form of an arbitral award on agreed terms (consent award), and many instutional rules also include powers to that effect.422 Under the Model Law, a consent award is enforceable like an ordinary award (article 30(2) ML), and a consent award can also be enforced under the New York Convention.423 At any rate, article VII(1) NYC allows the application of national arbitration law provisions for the enforcement of consent awards.424 Where a consent award is not enforceable under the New York Convention or domestic arbitration law, it may be enforceable under the 2019 Singapore Mediation Convention425 once it comes into force.426 cc) Termination of arbitral proceedings without an award. The tribunal can order 95 the termination of the arbitral proceedings when the claimant withdraws his claim, when the parties agree on termination and when the tribunal finds that continuation of the proceedings has become unnecessary or impossible.427 b) The law governing the dispute. aa) Freedom of choice and applicable law 96 absent a choice. In its award on the merits, the arbitral tribunal must apply the law chosen by the parties, and under the Model Law, such choice is interpreted as one of substantive law.428 A choice of the seat does not normally imply a choice of the law

415 Audiencia Provincial de Madrid, 10 June 2011, 200/2011, Puma AG RDS v. Estudio 2000, S.A., ECLI: ES:APM:2011:7542, CLOUT Case No. 1789. Subsequently, the Spanish Supreme Court held the majority arbitrators liable in damages (Tribunal Supremo, 15 February 2017, 102/2017, ECLI:ES:TS:2017:362). 416 Switzerland: BGE 133 III 235. 417 See Tweeddale, (2019) 85 Arb. 153 (155). 418 Infra B mn. 325. 419 UMS Holding Ltd v. Great Station Properties SA [2017] EWHC 2398 (Comm), para. 28 per Teare J. 420 Tweeddale, (2019) 85 Arb. 153 (160). 421 See infra mn. 125. 422 Marchisio, (2016) 32 Arb. Int’l 331 (336). 423 Meidanis, (2019) 85 Arb. 49 (62); infra B mn. 44. 424 Marchisio, (2016) 32 Arb. Int’l 331 (341). However, where parties reach a free-floating settlement before an arbitration even started, it will be difficult to convert that settlement into a consent award by subsequently adding arbitration proceedings of little or no substance: Castro v. Tri Marine Fish Co., 1735703 (9th Cir., 27 Feb. 2019), CLOUT Case No. 1834. 425 United Nations Convention on International Settlement Agreements Resulting from Mediation (New York, 2018); Meidanis, (2019) 85 Arb. 49 (62). 426 The status of the Convention is available at https://treaties.un.org/pages/ViewDetails.aspx?src= TREATY&mtdsg_no=XXII-4&chapter=22&clang=_en (accessed 1 August 2020). 427 Article 32(2) ML. 428 Article 28(1) ML.

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governing the dispute,429 and where the parties do not choose the applicable law, the Model Law requires the tribunal to determine the law governing the dispute on the basis of the conflict of law rules which it deems “applicable”.430 There is case law suggesting that the application of a law other than the law chosen by the parties would justify the setting aside of an award.431 However, the prohibition of review of the merits does not allow state courts to review whether the interpretation of a choice of law clause by the arbitral tribunal is correct.432 At most, conscious disregard of the agreed governing law may be a reason to set aside an arbitral award,433 or where a tribunal deliberately fails to apply the agreed law with the intent to arrive at conclusions contradicting the legal authorities.434 97

bb) Decisions in equity and ex aequo et bono. An arbitral tribunal may decide inequity, “ex aequo et bono” or as “amiable compositeur” only if expressly authorized by the parties.435 Deciding ex aequo et bono without authorization by the parties may justify the setting aside of an award436 or create a defence against enforcement.437

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cc) Mandatory norms and lois de police. The applicable law, whether chosen by the parties or determined by the tribunal, will determine the jurisdiction whose mandatory laws apply to the dispute. Arbitrators will also have to make sure that their award complies with the public policy at the seat as otherwise, an award may be set aside.438 The answer is less obvious where the dispute calls for the application of mandatory law beyond the law applicable to the dispute and the public policy at the seat. Mandatory rules – also referred to as lois de police, normes d’application immédiate – that can come into play cover a broad range of areas, including, inter alia, competition law,439 anticorruption, and tax law as well as international sanctions.440 Article 28 ML and most domestic arbitration laws do not expressly address whether and under which circum-

429 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.453. It is, at most, an indicator, but not as such compelling: Lew/Mistelis/Kröll, Comparative International Arbitration, 2003, 416. 430 Article 28(2) ML, a solution also referred to as “voie indirecte” (in the sense that the tribunal determines the conflict of law rules as opposed to directly determining the applicable law). Many arbitration laws adopt, however, a voie directe, requiring the tribunal to apply the law that it deems appropriate (Austria, France) or most closely connected to the dispute (Germany, Switzerland): Bantekas, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 749. 431 E. g., BGH, BGHZ 96, 40 (45), NJW 1986, 1436 (1437): the court would not review whether the law chosen was correctly applied, but would review whether the arbitrator applied the law chosen by the parties. A decision of the Russian Supreme Arbitrazh Court also appears to imply that the determination of the applicable law by the arbitral tribunal is subject to review by the state courts (Supreme Arbitrazh Court, 13 January 2011, OJSC Efirnoe v. LLC Delta Villmar CIS, Case No. BAC-11861/10). 432 See infra B mns 245–248; Singapore: Quarella Spa v. Scelta Marble Australia Pty Ltd [2012] SGHC 166; Sweden: Svea Hovrätt, 21 February 2005, T 1164–03, JSC Aeroflot Russian Airlines v. Russo International Venture Inc. and MGM Productions Group Inc. 433 B v. A [2010] EWHC 1626 (Comm). 434 American Int’l Group, Inc., v. X Co. [2016] HKCFI 1530, para. 22 per Chan J.; Svea Hovrätt, 15 May 2003, T 8735-01, Czech Republic v. CME Czech Republic. 435 Article 28(3) ML. 436 E. g., OLG München, SchiedsVZ 2005, 308 and infra E mn. 118. 437 Infra B mn. 249. 438 Article 34(2)(b)(ii) ML. 439 Cf. ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV [1999] ECR I-3055, effectively incorporating European competition law into the public policy control by Member States’ courts. 440 On the impact of sanctions see Cass., Sez. Un., 24 November 2015, 23893 (supra fn. 192); Ministry of Defence of Iran (supra fn. 192) [2020] EWCA Civ 145; Böckstiegel, (2014) 30 Arb. Int’l 605–614.

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stances arbitral tribunals have an obligation to apply mandatory provisions of a law other than that chosen by the parties. The solution is relatively straightforward in as much as the parties agreed on the 99 application of a law under which a contract is considered to be unlawful if it breaches foreign mandatory laws.441 In such circumstances, application of the foreign law as required by the law of the contract should be a matter of course. Similarly, in some jurisdictions, a breach of foreign mandatory law may be seen as a breach of the public policy of the forum.442 Accordingly, an arbitral award in breach of the foreign law would be seen as conflicting with the public policy of the forum and be set aside or refused enforcement. Arbitral tribunals may therefore be compelled to comply with foreign law in order to make an enforceable award, at any rate, where arbitral rules443 or applicable arbitration law444 requires them to make a valid award. Some authors go beyond the control in setting aside and enforcement proceedings 100 and argue that an arbitral tribunal should, or has at least discretion to, apply mandatory rules that have a “close link” to the dispute, provided their application does not conflict with the lex arbitri.445 It has also been suggested that arbitrators should apply principles of international public policy as to which a broad consensus has emerged in the international community446 – but the very concept of a transnational, universal public policy to be applied by any arbitral tribunal has been criticized as providing only for a lowest common denominator and as being too fluid and imprecise.447 In fact, the application of mandatory norms that is not required under the law applicable to the dispute or as a matter of public policy at the seat of the tribunal may not be much more than the enforcement of a policy choice of the tribunal which is at odds with the powers granted under article 28 ML and which calls for a cautious approach by arbitrators. The result may well be that a subsequent award is not enforceable in the specific jurisdiction whose mandatory laws have not been applied, but this is simply a result of the decentralized enforcement process under articles 35, 36 ML and articles III, V NYC. On the impact of overriding mandatory law on the recognition and enforcement of arbitration agreements, see supra mn. 37. c) Costs. aa) Advance on costs. Arbitral tribunals will typically request parties to pay 101 an advance on costs at the outset of the arbitral proceedings and will not proceed with the arbitration until the advance is paid.448 It is common practice that both parties are requested to pay half of the advance, and where the defendant does not pay its share, the claimant will have the right to make a substitute payment.449 Some institutional rules contain explicit provisions allowing arbitral tribunals to immediately issue an

441 E. g., under English law, a contract is unlawful if unlawful at the place of performance (Gaillard, (2019) 35 Arb. Int’l 1 (18)). Under German law, a contract is unlawful if it breaches foreign law that protects public interests that are recognized globally (BGH, NJW 1972, 1575 (1576)). 442 See infra B mn. 315. E. g., OLG Stuttgart, SchiedsVZ 2014, 307 (309), held the principle of Swiss insolvency law that creditors must be treated equally (par condicio creditorum) to be part of German public policy. 443 E. g., article 42 ICC Rules 2021. 444 E. g. arbitration laws where an arbitrator’s liability for damages depends on the annulment of an award, as is the case in Austria: OGH, 22 March 2016, 5 Ob 30/16x, para. 3. 445 See infra D mn. 97 for Austria. For a review of lois de police and arbitration see Kessedjian, (2007) 18 Am. Rev. Int’l Arb. 147 and Kleinheisterkamp, (2018) 67 ICLQ 903–930. 446 Gaillard, (2019) 35 Arb. Int’l 1 (18). 447 Brekoulakis, (2018) 84 Arb. 205 (218–219). 448 See, for example, articles 16, 37(6) ICC Rules 2021. 449 Elofsson, (2017) 33 Arb. Int’l 415 (415, 419).

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award on reimbursement of the substituted advance on costs,450 but even absent such explicit rules, the prevailing view appears to be that the non-defaulting party is entitled to immediate reimbursement in the form of a partial award.451 102

bb) Security for costs. During the arbitration, the tribunal’s power to grant interim relief will in many cases also cover orders for security of costs.452 In that context, the existence of third-party funding may be a relevant factor, but does not as such justify an application for security of costs.453 However, arrangements designed to collect money if the case is won and escape cost claims if the case is lost are perceived as grounds for an order granting security, e. g. where a party is lacking assets to satisfy a final costs award but is pursuing claims in arbitration with third-party-funding, or where a claimant is set up as a mere procedural vehicle.454 Under English law, it may even be possible to obtain a security for costs order against the arbitration funder itself, and accordingly, courts have held arbitral tribunals to have the implied power to order disclosure of the identity of third party funders to allow for an application for security for costs.455

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cc) Decision on costs in the arbitral award. As regards the final decision on costs, the Model Law does not explicitly authorize the arbitral tribunal to make an award. However, the common view is that a final award within the meaning of article 32(1) ML includes a decision on costs,456 and most institutional rules and arbitration laws will contain an express provision enabling the tribunal to make an order on costs.457 An arbitral tribunal can make an award on costs of its own motion without such award being ultra petita,458 and the award on costs is not subject to review as regards its proportionality.459 A rule often adopted by arbitral tribunals is that costs follow the event, i. e., the unsuccessful party bears the costs,460 even where domestic civil procedure rules are different.461 Arbitral tribunals can order reimbursement on an indemnity basis rather than statutory fees or other standards,462 and a recent English decision upheld an arbitral award under the ICC rules ordering reimbursement of the success fee payable to a third-party funder.463

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dd) Third-party funding. Third-party funding has attracted much attention over recent years. While some jurisdictions continue to consider third-party funding agreements as illegal,464 most countries appear to adopt a more liberal approach: the Conseil de l’ordre des avocats of Paris passed a resolution confirming that there is no prohibition of third-party financing in French law, and recent German case law 450 E. g., article 51(5) SCC Rules 2017. Awards on that basis have been upheld in Sweden, e. g., Svea Hovrätt, 25 August 2016, Case T 391-16, AFO Entreprenader AB v. Infratek Sverige AB. Article 24.7 LCIA Rules 2020 contains a similar provision. 451 Elofsson, (2017) 33 Arb. Int’l 415 (423); Buchwitz/Schütt, (2015) 13 SchiedsVZ 1 (6 et seq.). 452 Anukaran, (2018) 84 Arb. 77 (78–79). 453 South America Silver Ltd v. Plurinational State of Bolivia, PCA Case No. 2013-15, Procedural Order No. 10, 11 January 2016, para. 73, https://www.italaw.com/sites/default/files/case-documents/italaw7176.pdf (accessed 1 August 2020); Frignati, (2016) 32 Arb. Int’l 505 (518); Anukaran, (2018) 84 Arb. 77 (82, 88). 454 Anukaran, (2018) 84 Arb. 77 (87). 455 Wall v. Royal Bank of Scotland Plc [2016] EWHC 2460 (Comm). 456 Tang Boon Jek Jeffrey v. Tan Poh Leng Stanley [2001] 3 SLR 237, [2001] SGCA 46, para. 35. 457 E. g., section 61(1) of the English Arbitration Act 1996, article 38(4) ICC Rules 2021. 458 Audiencia Provincial de Madrid, 2 February 2007, ECLI:ES:APM:2007:1255. 459 VV v. VW [2008] 2 SLR(R) 929, [2008] SGHC 11, paras 32 et seq. 460 See infra H mns 102 et seq. for England. 461 See infra S mn. 85 for the United States. 462 See infra J mn. 65 for Germany. 463 Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 361 (Comm). For comment, see Dundas, (2017) 83 Arb. 114. 464 E. g., in Ireland: Persona Digital Telephony Ltd v. Minister for Public Enterprise [2017] IESC 27.

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confirmed the legality of third-party funding in principle.465 Legislators in Hong Kong and Singapore introduced specific provisions to that effect as regards third-party funding for arbitral proceedings.466 There appears to be a consensus that a party making use of third-party funding is well advised to make appropriate disclosure of that fact in the arbitral proceedings,467 most importantly, to allow arbitrators to determine whether that would, in turn, trigger disclosure obligations for them under article 12(1) ML (supra mn. 68).

4. Interim relief and emergency arbitration a) Interim relief before the arbitral tribunal. The Model Law dedicates an entire 105 chapter to interim measures and preliminary orders of the arbitral tribunal (articles 17–17J ML). The arbitration laws covered in this handbook all contain similar provisions, with the notable exception of mainland China where arbitrators cannot order emergency relief or interim measures.468 Arbitral tribunals may grant interim measures to secure the status quo, protect the arbitral proceedings, freeze assets, and preserve evidence.469 Prior to such an interim measure, the tribunal may also make ex parte preliminary orders.470 Not being a final decision on the merits, such interim measures and preliminary orders do not qualify as an “award” within the enforcement regime of the New York Convention.471 However, state courts will recognize and enforce such measures of the arbitral tribunal where domestic arbitration law so provides.472 Domestic laws differ as to the specific requirements for enforcement of interim measures of the tribunal. For example, some jurisdictions will allow state courts some discretion in enforcing interim relief granted by the arbitral tribunal,473 while others require enforcement without such discretion.474 In some countries, the arbitral tribunal can impose financial penalties in case of noncompliance with interim orders.475 Enforcing ex parte orders may not be possible in certain jurisdictions.476 b) Emergency arbitration. Following revisions over the past few years, many institu- 106 tional rules provide for “emergency arbitration” aimed at interim relief.477 Some jurisdictions such as Hong Kong have set up a special enforcement regime for orders issued by an

465 BGH, NJW 2020, 208 confirms that assignment of claims for the purpose of enforcement is not as such prohibited. There remain, however, uncertainties as to compliance with applicable regulatory requirements, as such non-compliance may affect the validity of the assignment (LG München I, NZKart 2020, 145). 466 See infra K mns 89–94 and O mns 93–96. 467 In some countries, there is a disclosure obligation: see infra K mn. 93 and O mn. 95 for Hong Kong and Singapore. The new ICC Rules contain a specific disclosure obligation (article 11(7) ICC Rules 2021). 468 Infra G mn. 126; Wei, (2019) 22 Int. A.L.R. 75 (93). 469 Article 17(1) and (2) ML. 470 Article 17B(1) ML. 471 See infra B mns 65, 66, 68. 472 Cf. article 17H ML. 473 E. g., in Germany: infra J mn. 79. 474 E. g., in Austria: Fiebinger, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 24 mn. 202. 475 E. g., in France (infra I mn. 74). 476 E. g., Austria: Fiebinger, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 24 mn. 195. 477 E. g., article 23 HKIAC Rules 2013. On the development of emergency arbitration see Ghaffari/ Walters, (2014) 30 Arb. Int’l 164–168, and on ICC emergency arbitration Baigel, (2014) 31 J. Int’l Arb. 1–18.

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emergency arbitrator,478 but absent such provisions, enforceability of the emergency arbitrator award may be uncertain,479 in particular where the emergency award is not binding on the arbitral tribunal ultimately appointed480 and therefore lacks finality that is normally required for recognition and enforcement under article V NYC.481 For example, under US law, an award must be final to be enforced,482 and there are conflicting decisions as to whether an emergency award can be treated as final,483 with recent decisions refusing enforcement of emergency awards for lack of finality.484 Courts may be willing to order interim relief in similar terms as the emergency arbitrator.485 107

c) Powers of state courts to grant interim relief in support of arbitration. Notwithstanding an arbitration agreement, under the Model Law state courts retain the same power to grant interim measures that they have in ordinary state court proceedings (articles 9, 17 J ML). However, these provisions are not perceived as extending the state court powers to grant interim relief, and accordingly, state courts can only grant such relief within the framework of applicable domestic procedural law.486 As an exception to the territoriality principle, injunctive relief can also be granted if the place of arbitration is outside the jurisdiction where the measure is sought.487 However, interim relief in support of foreign arbitration may be subject to specific limits: for example, in Singapore, interim relief in support of arbitration abroad will not be granted if deemed “inappropriate”, and in Hong Kong, courts will grant interim measures only if the foreign-seated arbitration is capable of giving rise to an award which is enforceable in Hong Kong.488 English courts have adopted a court-subsidiarity model where the arbitral tribunal’s powers have primacy over the powers of state courts to grant interim relief provided there is access to efficient remedies,489 and dismissed applications for interim relief where the matter was not so urgent as to be incapable of being resolved by an emergency arbitrator.490 In some jurisdictions, the power of the state courts to grant interim relief is limited once the arbitral tribunal is appointed,491 or courts will grant interim measures only if the arbitral tribunal has no power to grant it or if it is unable to act effectively.492 478 E. g., sections 22A, 22B Hong Kong Arbitration Ordinance. Similarly, section 2(1) of the Singaporian International Arbitration Act includes emergency arbitral tribunals in the definition of tribunals whose awards are enforceable under its section 19. 479 Carter/Chaize, (2017) 20 Int. A.L.R. 1 (3); Wei, (2019) 22 Int. A.L.R. 75 (93–94); Fiebinger, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 24 mn. 182. On the enforcement of emergency arbitrator awards generally, Santacroce, (2015) 31 Arb. Int’l 283–312. 480 As is the case under article 29(3) ICC Rules 2021, article 6(5) ICDR Rules. 481 See infra B mn. 68. 482 Bassler, (2016) 32 Arb. Int’l 559 (564). 483 Ibid. 569–673. 484 Al Raha Group for Technical Services v. PKL Services, Inc., No. 1:18-cv-04194-AT (N.D.Ga., 5 September 2019), holding that an emergency award subject to modification by a subsequently appointed arbitral tribunal lacked the finality necessary for enforcement. 485 Avitel Post Studioz Ltd v. HSBC Pi Holdings (Mauritius) Ltd (Bombay High Court, appeal No. 196 of 2014). 486 SCL Basilisk AG v. Agribusiness United Savannah Logistics LLC, 14 November 2017, 875 F.3d 609 (617) (11th Cir. 2017), CLOUT Case No. 1725. 487 Articles 1(2), 17J ML. See, e. g., Front Carriers Ltd v. Atlantic & Orient Shipping Corp. [2006] SGHC 127, [2006] 3 SLR(R) 854. But some jurisdictions adopted a more restrictive approach in the past, for example, India: infra L mn. 81. 488 Singapore: article 12(3) IAA; Hong Kong: section 45(5a) Arbitration Ordinance. 489 Kabra, (2017) 20 Int. A.L.R. 149 (160). 490 Gerald Metals SA v. Timis [2016] EWHC 2327 (Ch.). 491 E. g., in France (infra I mn. 73). 492 E. g., in Singapore: section 12A(6) IAA, Maldives Airport Co. Ltd v. GMR Malé International Airport Pte Ltd [2013] SGCA 16. For restrictions in India, see infra L mn. 84.

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5. Multi-party and multi-contract arbitration In various situations, arbitral proceedings may affect more than two parties. This is the case, for example, in M&A transactions involving multiple parties as sellers or buyers, or where a party to an arbitration intends to seek recourse against a third party in case of an adverse decision in the arbitral proceedings, e. g., against its supplier. The Model Law and many arbitration laws are silent on issues of multi-party and multicontract arbitrations.493 However, most modern institutional rules address the point.494 Multi-party and multi-contract scenarios create difficulties in particular at two stages: first, it is not possible to extend the arbitral tribunal’s jurisdiction to a third party on the basis of a “third party notice” or similar mechanisms available in litigation. Rather, it will be necessary for all parties involved in the arbitration to be party to the underlying arbitration agreement.495 When drafting arbitration agreements, parties and their advisors will have to consider with particular care whether additional entities should be included in the agreement in order to avoid conflicting decisions of the arbitral tribunal on claims between the parties to the arbitration agreement and of state courts as to claims involving non-signatories.496 Second, and more importantly, the arbitral proceedings must comply with the equality principle under article 18 ML. In the process of appointment of the arbitral tribunal, this principle requires that each party has equal weight as to the composition of the arbitral tribunal.497 This may lead to problems if several parties on one side cannot agree on an arbitrator. Institutional rules often address this problem by providing for an appointment by the institution – but different views exist whether it is more appropriate to limit intervention by the institution to appointment of the arbitrator only on behalf of those parties which were unable to agree, or whether it is more appropriate to have the entire tribunal appointed by the institution.498 Where an institution appoints the entire tribunal under applicable rules, but then confirms the arbitrator appointed by one party and only proceeds to a choice of its own in as much as the other parties failed to agree, it may be doubtful whether this complies with equal treatment principles.499 Particular care is necessary with regard to applicable arbitration rules: many specifically address multi-party and multi-contract arbitration, and parties must make sure their requests comply with the requirements under the rules. Absent an institutional rule allowing to bring one arbitration under several contracts, it may not be possible to combine in one request for arbitration several claims relating to separate arbitration agreements.500 493

But see infra K mn. 82 on Hong Kong arbitration law. E. g., articles 7–10 ICC Rules 2021. See infra D mn. 102 for the VIAC Arbitration Rules and Choi, (2019) 35 Arb. Int’l 29 (39–53) for institutional rules on joinder. 495 Choi, (2019) 35 Arb. Int’l 29 (33). But contrast this with the Indian Supreme Court decision in Chloro Controls India (P) Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, paras 167–168, where in a multi-party context all parties were referred to arbitration, even where they were not party to the arbitration agreement (cf. infra L mn. 86 and Mahajan/Bhatt, (2013) 30 J. Int’l Arb. 711–726). 496 In such a situation, the Chinese People’s Supreme Court held that where a claimant can show prima facie evidence of the existence of the joint tort claim against signatories and non-signatories, state courts will have jurisdiction over the entire claim, including claims against signatories (see Liu/Brock/Yue/ Feldman, (2013) 29 Arb. Int’l 641–652). 497 See infra I mn. 76 on the Dutco decision of the French Cour de Cassation. 498 Contrast article 18(4) Vienna Rules 2018 on the one hand with article 12(8) ICC Rules 2021 and article 17(5) SCC Rules 2017 on the other hand. Cf. the new article 12(9) ICC Rules 2021. 499 This was the case in Svea Hovrätt, 20 March 2015, T 8043-13, Advadis SA v. Royal Unibrew A/S. The majority of the court saw no breach of the equality principle, but with a dissenting opinion on that point. 500 A v. B [2017] EWHC 3417 (Comm) on the LCIA Rules 2014. For comment, see Puschmann/ Geroldinger, (2018) 21 Int. A.L.R. 37. 494

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V. The review and the enforcement of arbitral awards 1. Finality of arbitral awards and res judicata effects The arbitral award is the final decision of the dispute and res judicata between the parties. The extent to which parties are precluded from raising issues determined in the award in subsequent proceedings varies between jurisdictions.501 In some countries, the res judicata effect is limited to the dispositive part of an arbitral award, while others extend it to issues decided in the reasoning of the award.502 Similarly, some jurisdictions require strict mutuality for preclusion to apply, while others do not.503 Beyond the effect of res judicata, a party may be barred from re-litigating issues that have already been determined in previous arbitral proceedings, and some courts extend this principle even to a non-party to the previous arbitration.504 113 The principle of finality of arbitral awards, and the primacy of the arbitration as the dispute resolution mechanism agreed by the parties, justify limiting the scope for review by the state courts.505 This is reflected in the Model Law provisions on control and enforcement of arbitral awards: leaving aside amendments by the tribunal under article 33 ML and the exceptional case where arbitral rules allow for an appeal to another arbitral body,506 there is no appeal against an arbitral award,507 and it will be set aside or refused recognition and enforcement only for the exhaustive grounds listed in articles 34(2) and 36(1) ML.508 The framework for setting aside and enforcement applications under articles 34 and 36 ML is based on a pro-enforcement bias.509 The most important implication is that courts will not review the merits of the case, the no révision au fond principle, and errors in fact or law are no reason to set aside an award or to refuse enforcement (infra mn. 117). The principle of finality is given particular weight in jurisdictions where courts will not consider setting aside applications based on circumstances that were not part of pleadings and evidence put before the arbitral tribunal510 and only allow enforcement defences based on the text of the award but not on issues or documents not contained in the award.511 114 Broadly speaking, a setting aside application under article 34 ML will only be successful in the following cases: 112

501

See infra B mn. 160; Lacson, (2019) 85 Arb. 388 (399). E. g., in Belgium, Germany, Switzerland: Lacson, (2019) 85 Arb. 388 (395). 503 English courts require strict mutuality, US courts do not: Lacson, (2019) 85 Arb. 388 (395). 504 E. g., OMV Petrom SA v. Glencore International AG [2014] EWHC 242 (Comm), paras 16, 24. 505 CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK [2011] SGCA 3, para. 25. 506 See, for example, the AAA Optional Appellate Arbitration Rules 2013, and Indian Supreme Court, M/S. Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd, 15 December 2016, CLOUT Case No. 1758, for an arbitration agreement providing for an arbitral appeal. 507 For an exception in England see infra H mns 137 et seq. (appeal on a point of law available under section 69 AA 1996). 508 A special enforcement regime applies ICSID awards: articles 53 et seq. of the convention. 509 Infra mn. 147. 510 See, the Indian Supreme Court decision in M/s Canara Nidhi ltd v. M. Shashikala, Civil appeal No. 7544-5 of 2019 arising out of SLP(C) Nos 35673-4 of 2014, judgment of 23 September 2019, para. 9. However, additional evidence is arguably permissible where a party alleges lack of impartiality of an arbitrator, fraud, etc.: Ahuja/Mal, (2019) 22 Int. A.L.R. 224 (230). 511 E. g., in Brazil: STJ, 15 August 2018, SEC 14.385 – EX(2015/0206738-2), YCA XLIV (2019), 473, Edmund Burke v. Carlos Alberto Resende Sobral. 502

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– – – –

the arbitral tribunal lacked jurisdiction,512 there was a breach of a party’s right to be heard, due process or natural justice,513 there was a breach of rules as to procedure or the composition of the tribunal,514 or the award is in breach of public policy at the seat of the arbitration.515 Article 35(1) ML requires courts to recognize and enforce arbitral awards irrespective 115 of the seat of the arbitration, i. e., with no requirement of reciprocity as regards foreign awards.516 Under the Model Law, the defences to recognition and enforcement mirror those for setting aside an award (infra mns 122–137), and the only difference is the additional defence to enforcement under article 36(1)(a)(v) ML where an award is not yet binding or has been set aside by the courts at the seat.517 Accordingly, any analysis of grounds for annulment under article 34 ML must also consider case law on enforcement defences under article 36 and vice versa.518 Also, for practical purposes, the grounds for setting aside arbitral awards and the defences to enforcement set out in articles 34 and 36 ML are identical to the defences to enforcement available under article V NYC so that case law applying the Convention (see infra B mns 173–328) will inform the application of articles 34 and 36 ML and equivalent national arbitration laws.519

2. Correction and interpretation of arbitral awards A party may request the arbitral tribunal to correct clerical errors or to make an 116 additional award if the first award does not deal with all requests put before the arbitral tribunal.520 If agreed by the parties, the tribunal may also provide an interpretation of the award.521 The time limits for applications for correction, amendment, and interpretation differ from jurisdiction to jurisdiction (under article 33 ML, thirty days from the receipt of the award). In some jurisdictions, it may only be possible to apply for correction or clarification to the courts at the seat unless the parties authorize the arbitral tribunal to do so.522

3. Review of arbitral awards before the state courts a) General principles and procedural framework. aa) No review of the merits. A 117 party may apply before the courts at the seat of the arbitration to set aside an award (article 34(1) ML). Setting aside proceedings are not appeal proceedings allowing for reexamination of evidence or the decision on the merits: rather, the award will only be reviewed under the limited grounds provided for by the lex arbitri, which will in most countries reflect the grounds listed in article 34(2) ML. The principle is therefore the finality of the arbitral tribunal’s decision, also referred to as the prohibition of review of the merits or the no révision au fond principle: even where there is a serious error of 512 E. g., because the arbitration clause is invalid, inoperative or incapable of being performed, because it does not cover the specific dispute or because the dispute is not arbitrable: article 34(2)(a)(i), (iii), (b)(i) ML. 513 Article 34(2)(a)(ii) ML. 514 Article 34(2)(a)(iv) ML. 515 Article 34(2)(b)(ii) ML. 516 For reciprocity requirements under the NYC, see infra B mns 74–76. 517 Article 36(1)(a)(v) ML, article V(1)(e) NYC. 518 Treating article 34 and article 36 separately even where they contain identical wording (e. g., Bantekas et al. (eds), UNCITRAL Model Law, 2020, 858–898, 927–976) risks giving a truncated view. 519 However, as article V NYC only governs the enforcement of foreign arbitral awards, Member States may provide for a setting aside regime that goes beyond article V NYC. Cf. infra O mn. 93 and S mn. 116. 520 Article 33(1)(a), (3) ML. 521 Article 33(1)(b) ML. 522 See infra S mns 110 et seq. (United States).

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law, courts will not set aside an arbitral award,523 nor will they re-evaluate the evidence put before the arbitral tribunal.524 In some jurisdictions, a setting aside application cannot be based on circumstances that are not part of pleadings and evidence put before the arbitral tribunal.525 In practice, challenges to arbitral awards are rarely successful. 118

bb) Jurisdiction and time limits for setting aside applications. There is wide agreement that a court has only jurisdiction to hear a setting aside application if the place of arbitration (which is not necessarily identical to the venue of hearings, supra mn. 10) is within its jurisdiction.526 Time limits for bringing a setting aside application vary, e. g., from twenty-eight days in England, three months in Sweden, three months under article 34(3) ML to six months in China.527 In case of awards obtained by fraud, it may be possible to seek annulment of an arbitral award even after the lapse of these time limits.528 Some courts have interpreted the language of article 34(3) ML to give courts discretion to accept setting aside applications that are out of time.529

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cc) Waiver of setting aside applications. Some jurisdictions such as Belgium, France, Sweden, and Switzerland, allow parties to exclude the right to apply for annulment of an award,530 and the ECtHR confirmed in a recent decision that a waiver of setting aside application is, in principle, compliant with the fair trial requirements under article 6(1) ECHR.531 However, such agreements typically need to be made expressly, and courts will not infer a waiver of setting aside application from generic language regarding the finality and binding effect of an arbitral award.532 Where there is no legal provision specifically authorizing an agreement to exclude setting-aside applications, as is the case under the Model Law, courts are reluctant to enforce such a waiver.533

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dd) Decisions subject to setting aside applications. A setting aside application can only be brought against arbitral awards. This excludes procedural orders from direct review.534 In some jurisdictions, review may also be limited with regard to partial awards 523 American Int’l Group, Inc., v. X Co. [2016] HKCFI 1530, para. 15 per Chan J; BLC v. BLB [2014] SGCA 40, paras 100, 103 (for comment, see Tan/Ahmad, (2014) 31 J. Int’l Arb. 413–423); Johnson Controls, Inc. v. Edman Controls, Inc. 712 F.3d 1021 (7th Cir. 2013). But see infra mn. 128 for review of awards in “manifest disregard of the law” or for “arbitrariness”. 524 Cukurova Holdings AS v. Sonera Holding BV [2014] UKPC 15 (with comment by Berard/Lewis, (2014) 32 ASA Bull. 869–882); Sonatrach v. Statoil Natural Gas LLC [2014] EWHC 875 (Comm); TCL Air Conditioner (supra fn. 28) [2014] FCAFC 83, CLOUT Case No. 1756; infra J mn. 92. 525 See, the Indian Supreme Court decision in M/s Canara Nidhi ltd v. M. Shashikala, Civil appeal No. 7544-5 of 2019 arising out of SLP(C) Nos 35673-4 of 2014, judgment of 23 September 2019, para. 9. However, additional evidence is arguably permissible where a party alleges lack of impartiality of an arbitrator, fraud, etc.: Ahuja/Mal, (2019) 22 Int. A.L.R. 224 (230). 526 PT Garuda Indonesia v. Birgen Air [2002] 1 SLR 393; Karaha Bodas (supra fn. 392), 364 F.3d 274 (308–310) (5th Cir. 2004). 527 See infra G mn. 138, H mn. 123 and Q mn. 73. 528 For révision under French procedural law in case of fraud, see CA Paris, 17 February 2015, Tapie, appeal no. 13/13278, confirmed Cass. civ. 1ère, 30 June 2016, nos 15-13.755, 15-13.904 and 15-14.145, ECLI:FR:CCASS:2016:C100932. For Germany infra J fn. 313. 529 Sun Tian Gang v. Hong Kong & China Gas (Jilin) Ltd [2016] HKCFI 1611, para. 92 per Chan J. 530 Infra E mn. 5, I mn. 87, Q mn. 72; R mn. 127; Scherer, (2016) 32 Arb. Int’l 437 (439–440). 531 Tabbane v. Switzerland, 1 March 2016, 41069/12, ECLI:CE:ECHR:2016:0301DEC004106912, paras 33–35, on the basis that the award remains subject to review at the enforcement stage. For critical comment, see Münch, (2017) 15 SchiedsVZ 114. 532 Scherer, (2016) 32 Arb. Int’l 437 (441). 533 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.525; India: Shin Satellite Public Co. Ltd v. Jain Studios Ltd (2006) 2 SCC 628; United States: infra S mn. 121. 534 See, e. g., Triulziu Cesare SRL v. Xinyi Group (Glass) Co. Ltd [2014] SGHC 220, para. 19; ZCCM Investment Holdings plc v. Kansanshi Holdings plc [2019] EWHC 1285 (Comm). Such procedural orders do not qualify for enforcement under the regime for arbitral awards either: infra mn. 144 and B mn. 66.

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or awards on preliminary issues, i. e., awards limited to specific issues (prescription, liability etc.).535 For example, a German court has held that where a preliminary award determines liability in principle, a setting aside application is inadmissible and could only be brought once an award on quantum is made.536 In Switzerland, setting aside applications against interim decisions can only be based on an incorrect composition of the tribunal or its lack of jurisdiction.537 However, other courts have accepted that recourse is admissible even against awards on preliminary issues.538 Recourse is also possible against an award in which the arbitral tribunal declines jurisdiction – the decisive question in such cases is whether the erroneous denial of jurisdiction is, in itself, a ground for setting aside an award.539 ee) Remission of the award to the arbitral tribunal. Under article 34(4) ML, courts 121 have discretion to suspend the setting aside proceedings and remit the award to the arbitral tribunal. Such power is only available upon request of one of the parties, and remission to the tribunal must be “appropriate” (article 34(4) ML). b) Grounds for setting aside arbitral awards under article 34(2) ML. The grounds 122 for setting aside an award under article 34(2) ML are exhaustive.540 These grounds mirror the defences under article V NYC, but as the annulment of arbitral awards is outside the scope of the Convention, national legislators may adopt diverging solutions reflecting their policy choices as regards the supervisory jurisdiction by their courts over arbitrations seated in their jurisdiction.541 The various grounds for annulment under article 34 ML can be grouped into the following four categories: – the arbitral tribunal lacked jurisdiction, e. g., because the arbitration agreement is invalid, inoperative or incapable of being performed, because it does not cover the specific dispute or because the dispute is not arbitrable,542 – there was a breach of a party’s right to be heard, due process or natural justice, e. g., if a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case,543 – there was a breach of statutory rules or of the parties’ agreement as to procedure or the composition of the tribunal,544 or – the award is in breach of public policy at the seat of the arbitration.545

The arbitral tribunal’s description of the decision is not relevant; the decisive point rather is whether the decision is final in the sense that it disposes of the matters submitted to arbitration so as to render the tribunal functus officio, either entirely or in relation to that issue or claim, and whether it deals with substantive rights and liabilities of parties as opposed to purely procedural issues (ZCCM at para. 40). 535 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.527. 536 OLG Frankfurt, 10 May 2007, 26 Sch 20/06. For a similar approach under Austrian law, cf. OGH, 26 April 2006, 7 Ob 236/05i (no review of a partial award (“Zwischenschiedsspruch”) on the validity of a contract) and 7 Ob 545/92, SZ 65/95. 537 See article 190(3) IPRG and BGE 140 III 477. 538 The Gazette v. Rita Blondin [2003] RJQ 2090. 539 See infra mn. 128. 540 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 865; Corte Suprema de Justicia del Paraguay, Sala Constituciona, 28 March 2019, Ac. y Sent. No. 156, Yvu Poty SA v. PABENSA, CLOUT Case No. 1842. 541 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 863. For a comparative review of setting aside regimes in England, France, the United States, and Singapore, see Carter/Macpherson, (2016) 19 Int. A.L.R. 89. 542 Article 34(2)(a)(i), (iii), (b)(i) ML. 543 Article 34(2)(a)(ii) ML. 544 Article 34(2)(a)(iv) ML. 545 Article 34(2)(b)(ii) ML.

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The grounds for annulment under article 34(2)(a) ML must be put forward by the applicant, while those under article 34(2)(b) ML may be relied upon by the court ex officio.546 However, this distinction has little practical importance as annulment proceedings require an application of one of the parties, and an applicant making that effort will inevitably put forward all grounds for which there is a good arguable case. 123

aa) Lack of jurisdiction. An award will be set aside if the tribunal lacks jurisdiction, i. e., in the scenarios covered by article 34(2)(a)(i), (iii) and (b)(i) ML.

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(1) Incapacity of a party and invalidity of the arbitration agreement. Article 34(2)(a) (i) ML covers two scenarios in which the tribunal has no jurisdiction: first, where one of the parties was not capable of agreeing to arbitrate, and second, where the arbitration agreement is invalid. Issues of capacity (supra mn. 30) have limited relevance in practice, but it is worthwhile mentioning that the incapacity defence also covers lack of authority of individuals signing an arbitration agreement on behalf of a legal person.547 By contrast, the invalidity of the arbitration agreement is an important ground for annulment – covering all issues described in section II above, i. e. questions of consent as well as formal and substantial validity of the arbitration agreement (supra mns 28–41) that all have to be addressed on the basis of the separability doctrine under which the arbitration agreement must be treated as distinct from the main contract (supra mn. 23) and under the law determined under applicable conflict of law rules (supra mns 24–27).

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(2) Excess of mandate. Under article 34(2)(a)(iii) ML, a ground for setting aside an award also exists where the award is “beyond the scope of the submission to arbitration”. This ground is also referred to as “excess of authority” or “excess of mandate”. It applies to awards on matters not covered by the arbitration agreement, but can also be read as encompassing other situations such as awards infra or ultra petita548 or awards in breach of time limits: while the Model Law does not contain time limits for the making of an award, such limits may exist in national arbitration laws and institutional rules. Where this is the case, some courts have been lenient,549 but this is no general rule and disregard of such time limits creates serious risks for awards to be set aside.550 However, parties participating in the arbitral proceedings after the time limit without raising a procedural challenge will not be able to rely on an alleged lack of jurisdiction in setting aside or enforcement proceedings.551

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(3) Lack of arbitrability. Lack of arbitrability of the dispute (supra mn. 31) will also imply lack of jurisdiction of the tribunal and therefore justify the setting aside of an award. Under article 34(2)(b)(i) ML, this ground for annulment may be considered by the supervisory courts of their own motion – reflecting the fact that questions of arbitrability are subject to the policy choice of the legislator at the seat. Accordingly, 546

Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 865–866. Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 869. On applicable law regarding agency, see supra mn. 26. 548 See infra B mns 251, 252 (NYC) and E mn. 118 (Belgium). However, a tribunal may grant ancillary relief that is crucial to the applicant’s relief without an express request to that effect: Rintin Corp., SA v. Domar, Ltd, No. 05-14092, (11th Cir., 2007), CLOUT Case No. 1726. 549 As to the time limit under article 31 ICC Rules 2021, courts have mostly upheld awards made in breach of the time limit: infra B mn. 254; Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, mn. 454; OLG Karlsruhe, SchiedsVZ 2012, 101, YCA XXVIII (2013), 379. 550 Cf. infra B mn. 254; India: NBCC Ltd v. J.G. Engineering Pvt. Ltd (2010) 2 SCC 385 for breach of a time limit agreed by the parties, and in Brazil, article 32 VII LA, and for Belgium and France infra E mn. 73, I mn. 96. 551 See the Italian decision Cass., Sez. I Civile, No. 21536, 31 August 2018. 547

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annulment on that basis is not precluded by failure of a party to object in the arbitral proceedings (as would be the case for other jurisdictional challenges: infra mn. 138). (4) Scope of review of an arbitral tribunal’s jurisdiction. The principle under article 34 127 (2)(a)(i), (iii), (b)(i) therefore is that state courts will review the arbitral tribunal’s jurisdiction – but this principle is applied in different ways (supra mn. 53): English, French and German courts have routinely held that they are not bound by the arbitral tribunal’s findings in fact or law when reviewing the jurisdictional point.552 By contrast, United States courts take a more deferential approach when reviewing the tribunal’s decision to assume jurisdiction,553 allowing parties to refer certain jurisdictional matters altogether to the arbitral tribunal.554 The extent of judicial review of the validity, the scope and the interpretation of the arbitration agreement will thus depend on the jurisdiction where the issue is raised.555 (5) Erroneous denial of jurisdiction. Under the Model Law and most arbitration laws, 128 the fact that jurisdiction was wrongfully declined is no ground for setting aside arbitral awards.556 Where this is the case, a negative jurisdictional decision contained in an award can thus only be set aside for other grounds such as procedural errors or breach of public policy. However, some courts have gone beyond this and held that an arbitral tribunal’s decision to decline jurisdiction is not subject to setting aside proceedings at all.557 By contrast, some arbitration laws deviate from the approach under the Model Law and allow courts to review decisions of arbitral tribunals declining jurisdiction.558 bb) Lack of notice and breach of due process. Under article 34(2)(a)(ii) ML, an 129 award will be set aside where a party was not given notice of the arbitration or the appointment of the tribunal or was otherwise unable to present its case.559 This ground, often referred to as a breach of the “right to be heard” or “natural justice”, has considerable overlap with the public policy defence under article 34(2)(b)(ii) ML.560 In principle, due process requires the arbitral tribunal to allow the parties to make submissions and present evidence without unnecessary or unreasonable restrictions,561 and the tribunal must take these submissions into consideration.562 While a tribunal may strike out a counterclaim if the party raising it fails to pay the necessary advance on costs, there may be a breach of due process if the counterclaim cannot be separated 552

See infra H mn. 123, I mn. 38, 92 and J mn. 90. First Option Chicago, Inc. v. Kaplan, 514 U.S. 938 (943) (1995); VRG Linhas Aereas S.A. v. MatlinPatterson Global Opportunities Partners II L.P., 717 F.3d 322 (2nd Cir. 2013). See also Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013); Stolt-Nielsen S.A. v. Animalfeeds Int’l Corp., 559 U.S. 662 (2010). 554 Oracle America, Inc. v. Myriad Group A. G., No. 11-17186 (9th Cir., 2013), CLOUT Case No. 1727, confirming that the incorporation of the UNCITRAL Rules constituted clear and unmistakable evidence that the parties agreed that the arbitrator, rather than a court, should decide issues of arbitrability; Balkan Energy Ltd v. Republic of Ghana, 302 F. Supp. 3d 144 (D.D.C. 2018), CLOUT Case No. 1835; infra mn. 46. 555 See the analysis supra mn. 53. 556 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 871. 557 E. g., PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2006] SGCA 41; Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 871. 558 E. g., in Austria, France, and Switzerland: infra D mn. 111, I mn. 93 and R mn. 129. This is possible because the NYC does not govern annulment proceedings so does not prevent Convention States from determining grounds for annulment that go beyond the grounds for refusing enforcement under article V NYC (infra B mn. 284). 559 Article 34(2)(a)(ii) ML. 560 TCL Air Conditioner (supra fn. 28), [2014] FCAFC 83, CLOUT Case No. 1756, para. 70. 561 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 876. 562 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 877. 553

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from the primary claim.563 The arbitral tribunal must give each party “a fair opportunity to address its arguments on all of the essential building blocks in the tribunal’s conclusions”,564 which prevents it from basing its decision on evidence or other material not known to the parties, or on legal arguments that have not been addressed in the arbitral proceedings and that could not be anticipated by the parties.565 Some courts have held that the principle iura novit curia requires arbitral tribunals to apply the law of their own motion, without being limited to the legal arguments advanced by the parties.566 Still, an arbitral tribunal may not adopt a course of action that takes the parties by surprise without giving them the opportunity to comment,567 for example, by making an award where its essential building blocks are based on an argument raised ex officio without giving the parties an opportunity to comment.568 It must take into consideration relevant evidence,569 but there is no breach of the right to be heard where the arbitral tribunal rejects evidence for procedural reasons or because it considers it to be irrelevant to the decision on the merits.570 130 Applications involving review, enforcement or recognition of arbitral awards should not be permitted to be used to undertake, in substance, a rehearing of factual or legal reasoning under the guise of a complaint about a breach of the rules of natural justice,571 and the vaguness of the concepts of due process, natural justice and fair and equitable treatment requires striking a balance between the finality of the award and court intervention.572 As regards arbitrators’ procedural management decisions – such as refusals to extend deadlines, to consider unsolicited submissions or submissions after a cut-off date, or to re-schedule a hearing – state courts allow wide discretion for arbitrators,573 in particular where arbitral tribunals reject procedural applications that they consider as dilatory,574 but a breach of due process was found where, after the parties’ failure to reach a settlement, an arbitral tribunal made an award without granting the defendant in the arbitration time to submit a defence on the merits.575 Generally, procedural errors will only justify interference with an award where the error had some impact on the outcome of the proceedings.576

Cass. civ. 1ère, 28 March 2013, 11-27.770, Pirelli & C. v. Licensing Projects, Bull. 2013, I. No. 59. OAO Northern Shipping Co. v. Remolcadores de Marin Sl [2007] EWHC 1821 (Comm), para. 22. 565 BGer., 9 February 2009, 4A_400/2008, ASA Bull. 2009, 495; Brockton Capital LLC v. Atlantic-Pacific Capital, Inc. [2014] EWHC 1459 (Comm), paras 29 et seq. and infra H mn. 137. 566 BGer., 21 May 2015, 4A_709/2014, consid. 4.1 and infra R mn. 93; Abdel Wahab, (2017) 83 Arb. 412 (419); Jemielniak/Pfisterer, (2015) 20(1) Unif. L. Rev. 56–80; Meier/Mcgough, (2014) 32 ASA Bull. 490–507. 567 BGer., 9 February 2009, 4A_400/2008, para. 3.2; Lorand Shipping Ltd v. Davof Trading (Africa) BV [2014] EWHC 3521 (Comm), paras 26, 29 per Eder J.; Malicorp Ltd v. Egypt [2015] EWHC 361 (Comm). 568 For example, where a tribunal finds against a party on a ground not raised or disputed by the other party: OAO Northern Shipping Co. v. Remolcadores de Marin SL (Remmar) [2007] EWHC 1821 (Comm), paras 9, 23. 569 BGH, NJW 1986, 1436. 570 OLG Köln, SchiedsVZ 2005, 163 (165), YCA XXX (2005), 557; Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 535. 571 TCL Air Conditioner (supra fn. 28), [2014] FCAFC 83, CLOUT Case No. 1756, para. 113. 572 Blavi, (2016) 82 Arb. 2 (9). 573 Berger/Jensen, (2016) 32 Arb. Int’l 415 (425–429); Sharma, (2018) 84 Arb. 314 (324–325). 574 CA Paris, 21 May 2019, No. 17/19850, Egyptian General Petroleum Corporation v. National Gas Company (NATGAS); cf. Högsta Domstolen, 20 March 2019, Case No. T 5437-17, Belgorkhimprom v. Koca Inşaat Sanayi Ihracat, paras 39–41 (“the decision of the arbitral tribunal should hold, unless the decision appears indefensible” at para. 40). 575 Högsta Domstolen, 4 May 2018, Case No. Ö 3626-17, Belaya Ptitsa v. Robot Grader AB. 576 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 878; cf. infra B mns 261–262. 563 564

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A detailed comparative analysis suggests that there are noticeable differences as to 131 how state courts apply due process principles to the review of arbitral awards: English courts, for example, limit challenges for serious procedural irregularities to “extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected”.577 Likewise, in Austria, the right to be heard is only violated if a party is completely deprived of any possibility to argue its case.578 The Singapore Court of Appeal held that a misunderstanding on the part of the arbitrator as to the arguments presented to him is no breach of natural justice that would warrant the setting aside of an arbitral award.579 According to an Australian decision, a breach of due process is only relevant where there is “real practical injustice or real unfairness” that can be demonstrated without “detailed re-examination of the facts”.580 By contrast, the Swiss Bundesgericht has been more inclined to enforce the right to be heard, setting aside awards where the reasoning of the arbitral tribunal failed to address a central defence of one party, where the quantum calculations in the arbitral award were unclear, or where there is a misunderstanding or some inadvertence on the part of the tribunal.581 Recent German case law follows a similar approach, finding a breach of due process where an award fails to deal with the substance of the parties’ submissions.582 cc) Irregular composition of the tribunal and procedural errors. An award can be 132 challenged if the composition of the tribunal or the arbitral proceedings do not comply with the law at the place of the arbitration or with the parties’ agreement.583 For example, if an arbitral tribunal is appointed under other rules than the agreed rules, its award can be set aside,584 as is the case if an arbitrator does not have the qualifications required under the arbitration agreement or applicable arbitration rules.585 As challenges based on a lack of impartiality or independence or other required qualifications must be raised when they become known,586 they will normally be dealt with in the course of the arbitral proceedings. Where a party becomes aware of grounds for challenge only after the tribunal has made its award, views differ as to whether the award will be set aside only if the case is particularly serious or as soon as circumstances emerge that would have justified a challenge during the arbitration.587 Similarly, where arbitral proceedings were not in accordance with the rules agreed by 133 the parties, or absent such agreement, not in accordance with the applicable arbitration law, an award can, as a rule, be set aside. However, there are important limits to setting aside awards on this basis. First, courts will be reluctant to interfere with discretion exercised by tribunals, and there are decisions suggesting that courts should defer to the 577 Primera Marime (Hellas) Ltd v. Jiangsu Eastern Jeavy Industry Co. Ltd [2013] EWHC 3066 (Comm); see also ABB AG v. Hochtief Airport GmbH [2006] EWHC 388 (Comm), para. 63, and infra H mns 133 et seq. 578 Infra D mn. 79 and OGH, 18 April 2012, 3 Ob 38/12b, CLOUT Case No. 1572. 579 BLC v. BLB [2014] SGCA 40. 580 TCL Air Conditioner (supra fn. 28), [2014] FCAFC 83, CLOUT Case No. 1756, paras 111, 113; Mango Boulevard Pty Ltd v. Mio Art Pty Ltd [2018] QCA 39, CLOUT Case No. 1755. 581 BGer., 16 May 2011, ASA Bull. 2011, 643; BGer., 17 April 2013, 4A_669/2012 and BGer., 21 May 2015, 4A_709/2014, consid. 5.1. See also infra R mn. 133 on the arbitral tribunal’s failure to consider central aspects of the case. 582 BGH, SchiedsVZ 2018, 318 (para. 6); OLG München, BeckRS 2018, 1172; infra J mn. 55. 583 Article 34(2)(a)(iv) ML. In Switzerland, this applies only in exceptional circumstances: infra R mn. 136. 584 Shagang South-Asia (Hong Kong) Trading Co. Ltd v. Daewoo Logistics [2015] EWHC 194 (Comm); PoolRe Insurance Corp. v. Organizational Strategies, Inc., 783 F.3d 256 (5th Cir. 2015). 585 Supra mn. 67. 586 Supra mn. 70. 587 Supra mn. 70.

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arbitral tribunal’s interpretation of the parties’ agreement on matters of procedure.588 Moreover, a procedural error will only justify the setting aside if the breach may have affected the outcome of the arbitration.589 134

dd) Breach of public policy. (1) Restrictive application. Finally, under article 34(2) (b)(ii) ML, an award will also be set aside if it is in breach of public policy at the place of arbitration. Review of the award under this heading creates a potential conflict with the prohibition of review on the merits which justifies a restrictive interpretation and application of this ground for setting aside.590 On that basis, courts have set high hurdles, holding that a breach of public policy must be “manifest” to justify the setting aside of an award,591 and that not every violation of a mandatory provision amounts to a violation of public policy.592 Other courts limited its scope to instances where the award would “shock the conscience” or where it is “clearly injurious to the public good or […] wholly offensive to the ordinary reasonable and fully informed member of the public, or where it violates the forum’s most basic notion of morality and justice”.593

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(2) Procedural and substantive public policy. It is, in principle, common understanding that the notion of public policy encompasses both procedural and substantive aspects.594 For example, a breach of due process requirements (see supra mns 129–131) may also amount to a breach of procedural public policy,595 just like an award beyond the relief requested by the parties (ultra petita)596 or an award disregarding the res judicata effect of a previous decision.597 Substantive public policy encompasses scenarios where arbitral awards violate legislation on fraud and corruption as well as anti-trust laws598 or international sanctions.599 588

Supra mn. 72. Polkinghorne et al., in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 886, as is the case under the NYC (infra B mns 261–262) and, for example, in Germany: OLG Frankfurt a. M., SchiedsVZ 2013, 49. 590 Blavi, (2016) 82 Arb. 2 (15); also see infra B mn. 307; Singapore: PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2006] SGCA 41, para. 59; Canada: Desputeaux (supra fn. 157) 2003 SCC 17, [2003] 1 SCR 178. 591 See for Germany: BGH, NJW 2014, 1597, BeckRS 2014, 4892. The French Cour de Cassation had adopted a similar approach, but in recent decisions French courts appear to have abandoned it: infra I mn. 99. 592 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.583; Canada: Desputeaux (supra fn. 157) 2003 SCC 17, [2003] 1 SCR 178, for Austria infra D mn. 114 and for Germany: BGH, SchiedsVZ 2009, 66. Cf. infra B mns 303, 306 on the difference between “ordre public interne” and “ordre public international”. 593 PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2006] SGCA 41, para. 59; AJT v. AJU [2011] SGCA 41, paras 69, 65. 594 Polkinghorne et al., in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 969, see, e. g., Cass. civ. 1ère, 24 March 1998, 95-17.285, Excelsior Film TV v. UGC-PH, Bull. 1998, I No. 121 p. 80; infra B mn. 309 (NYC), D mn. 114 (Austria) and R mn. 137 (Switzerland). 595 TCL Air Conditioner (supra fn. 28), [2014] FCAFC 83, CLOUT Case No. 1756, para. 84; Blavi, (2016) 82 Arb. 2 (8–9). 596 OLG Köln, SchiedsVZ 2012, 161. An instance of ultra petita can also be addressed under article 34 (2)(a)(iii) ML: supra mn. 125, cf. infra B mn. 251. Some countries such as Switzerland have a specific ground for setting aside in such cases: article 190(2)(c) IPRG. 597 BGE 140 III 278; Blavi, (2016) 82 Arb. 2 (11–12). On binding effects of a previous arbitral award, see BGer., 29 May 2015, 4A_633/2014. On the obligation to stay arbitral proceedings pending public investigations, see supra mn. 87. There is no breach of public policy if an arbitral award disregards a decision made in foreign proceedings lacking “rudimentary due process”: Telenor Mobile Communications v. Storm LLC, 584 F.3d 396 (410) (2nd Cir., 2009), CLOUT Case No. 1730. 598 See infra B mns 331, 332. On fraud, Sher/Kazaz, (2014) 80 Arb. 124–135; Blavi, (2016) 82 Arb. 2 (10). 599 In Iraq v. Armamenti (supra fn. 192), compliance with UN and EU sanctions was held to be a requirement of public policy (in that case held to invalidate the arbitration agreement altogether) controlled at the review and enforcement stage; cf. Ministry of Defence (supra fn. 192) [2020] EWCA Civ 145). 589

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(3) Divergent approaches to public policy control. As article 34(2)(b)(ii) ML refers to 136 the public policy “of this State”, the Model Law makes it clear that it does not impose a harmonized understanding of public policy and rather makes the scope of public policy dependent on the domestic law of the forum state.600 As a result, the precise definition of public policy and its application to concrete cases has given rise to diverging interpretations and uncertainties about how the potential contradiction between review of the award under public policy and the principle of finality of awards can be resolved. For example, while there is universal agreement that a contract to pay or transfer a bribe breaches public policy (infra mn. 137), there is no such consensus regarding the enforcement of a contract induced or obtained by bribery: the English High Court held in National Iranian Oil Company v. Crescent Petroleum that it would not, as a matter of English public policy, refuse to enforce a contract procured by bribery,601 while courts elsewhere appear willing to accept a defence on the basis that an arbitral award enforces a contract obtained through corruption.602 Some courts have suggested that an award can be set aside where it is “arbitrary”, “patently illegal” or in “manifest disregard of the law”603 or where an award contains “an unreasonable assessment of the evidence and unreasonable failure to deal with applicable rules”.604 However, review under these headings is in conflict with the principle that state courts will not review the merits of the case605 and should be applied only in extreme circumstances. In some cases, arbitral awards were set aside where liability was thought “disproportionate”606 and where courts considered the interest rate to be excessive,607 but the English High Court has held that the desirability of finality in international arbitration outweighs the public policy of refusing to enforce penalty clauses.608 These interpretations show that the public policy defence can create considerable discretion for courts in reviewing and setting aside arbitral awards and effectively lead to a review of the application of substantive law. In some jurisdictions, judicial practice is seen as potentially undermining the principle of finality of the award,609 and the concept of public policy has been extended in some countries to include instances where an award harms budgetary interests of the state610 or 600

Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 894. [2016] EWHC 510 (Comm), para. 49, CLOUT Case No. 1698, regarding a challenge under section 68 AA 1996; in the same sense Sinocore International Co. Ltd v. RBRG Trading (UK) Ltd [2017] EWHC 251 (Comm), CLOUT Case No. 1696, and [2018] EWCA Civ 838. 602 Cf. CA Paris, 16 May 2017, No. 15/17442, République démocratique du Congo v. Société Customs and Tax Consultancy LLC, Rev. arb. 2018, 248; Gerechtshof Den Haag, 22 October 2019, ECLI:NL: GHDHA:2019:2677, para. 4.2, NTHR 2020, afl. 1, p. 22; Tribunal da Relação de Lisboa, 10 October 2019, 1667/18.9YRLSB-B-2. 603 Infra L mn. 104 (India) and S mns 122 et seq. (USA). In the United States the question was ultimately left open in Hall Street Assocs, LLC v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008) and is still subject to debate in the United States: see infra S mn. 123. A recent decision by the New York Supreme Court setting aside an ICC award for manifest disregard of the law was subsequently overturned: Daesang Corp. v. Nutrasweet Co., 167 A.D. 3d 1 (N.Y. App. Div. 2018), but some federal Circuit Courts of Appeals continue to consider “manifest disregard” as a ground for setting aside awards (Weiss v. Sallie Mae, Inc., No. 18-2362 (2nd Cir., 12 September 2019)). 604 Tribunal Superior de Justicia de Madrid, 5 April 2018, 6/2017, Engasa Eolica, S.A. v. Vestas Eolica S.A.U. (finding in the award an “appearence of arbitrariness” (apariencia de arbitrariedad) and a “fragmentary analysis of evidence” (una prueba fragmentariamente analizada)). Likewise, the Austrian decision in OGH, 28 September 2016, 18 OCg 3/16i, requires a minimum of substance of the reasoning of the award. 605 See BGer., 21 May 2015, 4A_709/2014, consid. 6.2. 606 Infra N mn. 105 (Russia). 607 E. g., in Austria (OGH, 3 Ob 221/04 b, JBl 2005, 661) and Germany (KG, BeckRS 2019, 5992 – but contrast this with the more liberal approach in OLG Saarbrücken, SchiedsVZ 2012, 47). 608 Pencil Hill Ltd v. US Città Di Palermo S.p.A. [2016] EWHC 71 (QB), CLOUT Case No. 1723. 609 E. g., in India: Oswal/Krishnan, (2016) 32 Arb. Int’l 651 (657). 610 Arbitrazh Court Moscow District, 16 January 2019, A40-117331/18, YCA XLIV (2019), 664. 601

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where an award is perceived to be inconsistent with a state court judgment between different parties.611 The influence of cultural, educational and political factors in the application of public policy in the context of international arbitrations can hardly be overestimated. 137 Views also differ as to the review of factual findings in the context of public policy defences: English courts will, in principle, not re-assess the arbitral tribunal’s factual findings regarding an alleged breach of public policy612 and only consider evidence where it was not available to the party alleging it at the time of the arbitration hearing or, if perjury is alleged, if the evidence for it is so strong that it would reasonably be expected to be decisive at the hearing.613 Similarly, the Swiss Bundesgericht has confirmed that it will not review the factual findings of the arbitral tribunal unless these are in themselves affected by one of the grounds for setting aside arbitral awards.614 US courts apply a three-prong test to determine whether an arbitration award should be refused enforcement because of fraud, requiring that fraud is established “by clear and convincing evidence”, was not discoverable before or during the arbitration, and materially relates to an issue in the arbitration.615 All these approaches limit the availability of fraud and other public policy defences. By contrast, in other jurisdictions, courts will review all evidence as to grounds for setting aside an award or defences against its enforcement,616 reflecting a different balance between finality of arbitral awards and considerations of justice. In particular, a number of decisions of French courts in recent years have conducted a full review of the facts before the arbitral tribunal to conclude a breach of public policy and set aside arbitral awards.617 The different approach as to the scope of review of awards can be seen in instances such as the decisions in Alstom Transport v. Alexandre Brothers, where French courts found that the underlying contract was aimed at corruption and refused to enforce the arbitral award for the “service fee”,618 while the Swiss Bundesgericht had previously dismissed a setting aside application against the same award on the basis that it would not review the arbitral tribunal’s factual findings.619 138

ee) Burden of proof. As regards the burden of proof, commentators often differentiate between the annulment grounds under article 34(2)(a) ML, which expressly puts the burden of proof on the applicant, and those under article 34(2)(b) ML that a court 611 Arbitrazh Court Moscow District, 11 December 2015, A40-50778/15, YCA XLI (2016), 550: public policy prevents enforcement of an award rendered on the basis of a contract that had been declared invalid by Russian courts in proceedings between different parties – a decision that creates loopholes for evading the jurisdiction of arbitral tribunals. 612 Westacre Investments Inc. v. Jugoimport-SDRP Holding Company Ltd [1999] EWCA Civ 1401, paras 70, 71 per Mantell LJ; RBRG Trading (UK) Ltd v. Sinocore International Co. Ltd [2018] EWCA Civ 838, para 33 per Hamblen LJ; National Iranian Oil Co. v. Crescent Petroleum [2016] EWHC 510 (Comm), para. 49 per Burton J., CLOUT Case No. 1698. Cf. Brekoulakis, (2018) 84 Arb. 205 (217). A prominent case where enforcement is resisted on the basis of a fraud defence is currently pending: see IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corporation [2017] UKSC 16. 613 Honeywell International Middle East Ltd v. Meydan Group LLC [2014] EWHC 1344 (TCC), para. 169. 614 BGE 140 III 278 (283); BGer., 29 January 2015, 4A_532/2014, para. 4.1; BGer., 27 May 2019, 4A_663/2018, para. 4. As a result, the arbitral tribunal’s findings as to corruption or the amount of damage are binding for the assessment of a public policy defence. 615 Karaha Bodas (supra fn. 392), 364 F.3d 274 (306-307) (5th Cir. 2004). 616 E. g., in France (CA Paris, 30 September 1993, Rev. Arb. 1994, 359) and Germany (BGH, WM 1983, 1207 (1208)). Cf. infra B mn. 316. 617 E. g., CA Paris, 21 February 2017, République du Kirghizistan v. M. Belokon, Rev. Arb. 2017, 915. 618 CA Paris, 28 May 2019, No. 16/11182. 619 BGer., 3 November 2016, 4A_136/2016, ASA Bull. 2017, 129.

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may raise on its own motion.620 However, just like at the recognition and enforcement stage, the preferable view as being more conducive to the finality of awards is that the differences in wording of article 34(2)(a) and (b) ML only relates to the burden of production, whereas the burden of persuasion always remains with the applicant so that even in the context of article 34(2)(b) ML, a setting aside application has to be dismissed where there is not sufficient evidence for a ground for annulment (for a similar approach at the recognition and enforcement stage, infra mn. 151). c) Preclusion of grounds for setting aside. A party will be barred from relying on 139 grounds for annulment if this is incompatible with its conduct in the arbitration. For example, failure to object to the arbitral tribunal’s jurisdiction in the arbitral proceedings in a timely manner will ordinarily bar the unsuccessful party from raising this ground in setting aside proceedings,621 but preclusion principles may not apply to challenges raised on the basis that a dispute is not arbitrable.622 Where the arbitral tribunal makes an interim decision or award assuming jurisdiction, courts disagree whether the failure to challenge that decision (e. g., under article 16(3) ML) precludes a party from relying on the jurisdictional challenge in setting aside proceedings or whether the unsuccessful party has a “choice of remedies”.623 Similarly, a party may be precluded from raising procedural errors in setting aside 140 proceedings where it fails to object to procedural choices made by the arbitral tribunal.624 This applies, in particular, where the failure to object to procedural choices made by the arbitral tribunal is seen as an implicit agreement of the parties.625 A party that has received notice of the arbitration, but does not participate in the proceedings, cannot rely on a breach of the right to be heard.626 d) Partial annulment. Where possible, annulment will only be partial. This is 141 expressly stated in article 34(2)(a)(iii) ML for awards on matters which are only partly outside the scope of the arbitration agreement.627 The principle is generally followed in comparable situations.628 e) Discretion not to set aside. Some courts retain discretion not to set aside arbitral 142 awards even where one of the annulment grounds listed in article 34 ML exists.629 In particular, where procedural errors did not affect the outcome of the arbitration, a court may be inclined to confirm the arbitral award.630

620

Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 865 et seq. Supra mn. 60. 622 See, for example, infra M mn. 113 (Netherlands) and § 1060(2) German ZPO. 623 Supra mn. 60. 624 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 888. 625 See, for example, Galsworthy Ltd of the Republic of Liberia v. Glory Wealth Shipping Pte Ltd [2010] SGHC 304. 626 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 888 fn. 106; supra mn. 78. 627 Audiencia Provincial Madrid, 2 February 2007, 94/2007, ECLI:ES:APM:2007:1255. 628 OGH, 28 September 2016, 18 OCg 3/16i; e. g., Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Industrial Co. Ltd [2009] HKCFI 94, annulling an award only in as much as the award debtor had no opportunity to present his case. 629 Based on the wording “may”: Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 864; Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2016 ONSC 7171, CLOUT Case No. 1649, para. 151. 630 Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Industrial Co. Ltd [2009] HKCFI 94, para. 111. 621

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4. Recognition and enforcement of arbitral awards 143

a) General principles and procedural framework. Under article 35(1) ML, awards are recognized as binding, irrespective of the country in which they are made,631 and will be enforced upon application of the award creditor to the competent state court.632 By contrast, enforcement under the New York Convention may be subject to reciprocity,633 and some jurisdictions provide for reciprocity restrictions not contemplated in the Convention.634 Under article 35 ML and article V NYC, recognition and enforcement of a foreign award does not depend on its confirmation at the seat.635

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aa) Decisions subject to recognition and enforcement. In most jurisdictions, articles 35, 36 ML and the corresponding provisions in articles III, V NYC are interpreted to require enforcement only of awards that are final, which includes partial awards on the merits636 and consent awards637, but excludes procedural orders and provisional measures.638 However, some courts have even enforced interim awards ordering payments to be made pending the final resolution of the dispute through a final award.639 Some courts have held that an award made by a tribunal whose composition does not comply with minimum standards of independence does not qualify as an “arbitral award” capable of enforcement.640

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bb) Jurisdiction and time limits for enforcement applications. Some jurisdictions will only enforce awards if they have jurisdiction over the award debtor or over its assets,641 but that requirement appears to be irreconcilable with article V NYC,642 and a number of jurisdictions will enforce awards even where the award debtor is neither domiciled in that jurisdiction nor has assets there.643 Enforcement may also be subject to time limits.644 These may be relatively short (e. g., two years from the making of the

631 Unlike under article 35 ML, in some jurisdictions enforcement regimes differ as to domestic and foreign arbitral awards. More particularly, some jurisdictions allow the enforcement of domestic arbitral awards without the need for an exequatur order from the state courts. 632 It should be noted though that many jurisdictions provide for different enforcement regimes for domestic awards on the one hand and foreign awards on the other. 633 Infra B mns 74–76. 634 For example, India will only enforce arbitral awards from NYC convention states that have been “gazetted”, i. e., published in the Official Gazette: L mn. 99. 635 CBF Indústria de Gusa, S/A v. AMCI Holdings, Inc., 15-1133-cv(L), (2nd Cir., 2 March 2017), cert. den.; and it is equally irrelevant whether an exequatur order would be needed for enforcement at the seat: OGH, 3 Ob 65/11x, 24 August 2011, CLOUT Case No. 1573. 636 Ortolani, in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 905. 637 For enforcement under article V NYC, which is virtually identical to article 36 ML, Transocean Offshore Gulf of Guinea VII v. Erin Energy Corp., YCA XLIII (2018), 722 (S.D. Tex. 2018). 638 Cf. infra B mns 65–68. 639 PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation (Indonesia) [2014] SGHC 146. 640 BGH, NJW 2018, 869 for an award made by a panel of five arbitrators of which two were directors of one of the parties. 641 United States: First Investment Corp. v. Fujian Mawei Shipbuilding Ltd, 703 F.3d 742 (5th Cir. 2012, revised 2013); GSS Group Ltd. v. National Port Authority, No. 11-7093 (D.C. Cir. 2012). 642 Infra B mn. 343. 643 See the references infra B mn. 341 and, for the Netherlands, HR, 1 May 2015, ECLI:NL: HR:2015:1194 and 17 April 2015, ECLI:NL:HR:2015:1077. 644 Such time limits are compliant with the NYC: Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19 (CanLII), [2010] 1 SCR 649, paras 14–29, CLOUT Case No. 1009; infra B mn. 345.

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award in China645 and three years in the United States646 and Russia647), so parties must keep applicable local rules in mind to be able to benefit from the award. cc) Procedure for enforcement applications. Article 35(2) ML requires a party 146 seeking to have an award recognized or enforced to supply an authenticated original award and the original arbitration agreement or a certified copy of the award and the arbitration agreement; but where the accuracy of a copy is not contested, courts may disapply formal requirements.648 Unlike the Model Law, some jurisdictions have different enforcement regimes for domestic awards and awards made in other states. Where this is the case, enforcement of domestic awards is sometimes given preferential treatment, and in some instances, domestic awards can be enforced without the need for an exequatur order.649 In some jurisdictions, courts may grant an application for enforcement ex parte, without hearing the award debtor.650 b) Defences to enforcement under article 36(1) ML. aa) Defences to enforcement 147 coinciding with article 34 ML and article V NYC. All grounds for setting aside arbitral awards under article 34(2) ML are adopted almost verbatim as defences against enforcement under article 36 ML. Accordingly, for practical purposes, the observations on the grounds for annulment (supra mns 122–137) also apply in the context of enforcement proceedings. In addition, a defence to enforcement exists under article 36(1)(a)(v) ML where an award is not yet binding or has been set aside. As a result, article 36 ML mirrors the defences under article V NYC,651 and accordingly, its interpretation should be informed by case law on article V NYC (infra B mns 173–328) which is often read to imply a pro-enforcement bias,652 requiring that courts should “read an arbitration award in a reasonable and commercial way, expecting, as is usually the case, that there will be no substantial fault that can be found with it”.653 bb) Enforcement of awards that are not yet binding or have been set aside. In 148 addition to the grounds for setting aside an award (supra mns 122–137), the fact that an award is not yet binding or has been set aside, will create a defence to enforcement under the Model Law and the New York Convention.654 By contrast, the annulment of an arbitral award by a court other than that at the seat of the arbitration does not create a defence to enforcement elsewhere.655 The fact that the setting aside of an award is a defence against enforcement elsewhere 149 implies that the law and the supervisory jurisdiction of the courts of the seat have a dominant influence on the enforceability of an award, an aspect that has sparked

645

Art. 239 Chinese Civil Procedure Law, article 62 Chinese Arbitration Law, infra K mn. 141. However, US courts may still recognize and enforce foreign court judgments enforcing arbitral awards, which may make it possible to enforce awards beyond the three year time limit: Commissions Import Export S.A. v. Republic of the Congo, 757 F.3d 321 (D.C. Cir. 2014). 647 Infra N mn. 118. 648 Lombard-Knight v. Rainstorm Pictures Inc. [2014] EWCA Civ 356. 649 For example, in Sweden (infra Q mn. 91) and Switzerland (infra R mn. 139). 650 This is the case, for example, in England and France (infra H mns 145 et seq., I mn. 102). 651 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.574. 652 Infra B mn. 12. 653 Zermalt Holdings v. Nu-Life Upholstery Repairs [1985] 2 EGLR 14 per Bingham J, a phrase taken up in subsequent decisions in England and elsewhere: see Dongwoo Mann+Hummel Co. Ltd v. Mann +Hummel GmbH [2008] SGHC 67, [2008] 3 SLR(R) 871, para. 151; TMM Division Maritima (supra fn. 29); Primera Maritime (supra fn. 577). See also infra B mn. 12 and Born, International Commercial Arbitration, 2nd ed., 2014, 3173 et seq. and 3410 et seq. 654 Article 36(1)(a)(v) ML, article V(1)(e) NYC. 655 Karaha Bodas (supra fn. 392), 364 F.3d 274 (308–310) (5th Cir. 2004). 646

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criticism.656 Commentators suggested that an annulment decision of the courts at the seat should only be recognized, and enforcement of an award should only be refused, where an award was set aside on grounds “internationally recognized” or on grounds contained in article V(1)(a)–(d) NYC.657 While most countries follow, at least in principle, the territorial approach of the Model Law and accept annulment at the seat as a defence to enforcement,658 there are important exceptions to the rule that an award set aside can no longer be enforced: for example, French arbitration law applies a delocalized concept under which a foreign decision setting aside an arbitral award will not as such create a defence against enforcement.659 A recent example illustrating the divergence compared to other jurisdiction is the award in Maximov v. Novolipetsky Metallurgichesky Kombinat which was enforced in France notwithstanding its prior annulment660 but refused enforcement in England and the Netherlands.661 Enforcement of awards set aside at the seat may also be possible under article IX EuC, according to which the setting aside of an award for breach of public policy at the place of arbitration does not affect its enforceability in other Convention states.662 150 Leaving aside the divergence in principle of the “territorial” and “delocalized” approach, where the decision setting aside the award is seen as an unjustified interference with the arbitral process or perceived as biased in favour of the award debtor, the question arises whether the enforcement court must still recognize the setting aside decision and refuse enforcement. German courts have held that it is, in principle, not possible to review the merits of a foreign setting aside decision,663 while courts in England, the Netherlands and the United States have concluded that they will not recognize a foreign decision setting aside an arbitral award if that decision was in breach of due process and natural justice, and will enforce an award in such a case even if set aside by the courts at the seat.664 151

cc) Burden of proof for a defence to enforcement. As regards the burden of proof for a defence to enforcement, the starting point is that it lies with the party seeking to resist enforcement.665 This also applies to defences under article 36(1)(b) ML: while such 656

Infra B mn. 289. Bansal, (2017) 20 Int. A.L.R. 206 (210, 211). 658 Infra B mn. 291; Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 301 (326–331). 659 Infra I mn. 105. The principle was confirmed in CA Paris, 19 February 2013, No. 12/09983, République populaire démocratique du Laos v. Thai Lao Lignite (Thailand) Co. Ltd, YCA XXXVIII (2013), 376 and more recently in CA Paris, 21 May 2019, No. 17/19850, Société Egyptian General Petroleum Corporation v. Société National Gas Company (NATGAS). 660 Cass. 1ère civ., 25 May 2016, 14-20.532, Novolipetski Matellurgicheski Kombinat v. Maximov. 661 Maximov v. Open Joint Stock Company “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC 1911 (Comm); HR, 24 November 2017, 16/05686, ECLI:NL:HR:2017:2992, Maximov v. Novolipetsky Metallurgichesky Kombinat. 662 On article IX EuC, see infra B mn. 293. 663 OLG München, SchiedsVZ 2013, 339 (341). 664 Yukos Capital Sarl v. OJSC Rosneft Oil Co. [2012] EWCA Civ 855; Yukos Capital SARL v. OJSC Rosneft Oil Company [2014] EWHC 2188 (Comm); Corporación Mexicana de Mantenimiento Integral v. PEMEX-Exploración y Producción, 832 F.3d 92, 107 (2nd Cir. 2016). See infra H mn. 158 (England), M mn. 120 (Netherlands) and Radicati di Brozolo, (2014) 25 Am. Rev. Int’l Arb. 47 (enforcement of annulled awards in the United States). For a critical view, see Seyadi, (2018) 83 Arb. 128. 665 Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd [2006] 3 SLR(R) 174 (206); Paklito Investments (supra fn. 362) [1993] 2 HKLR 39; Cass. civ. 1ère, 5 November 2014, 13-11.745, Yukos v. Tomskneft, ECLI:FR:CCASS:2014:C101281; Telenor Mobile Communications v. Storm LLC, 584 F.3d 396 (405) (2nd Cir., 2009), CLOUT Case No. 1730; Balkan Energy Ltd v. Republic of Ghana, 302 F. Supp. 3d 144, (D.D.C. 2018), CLOUT Case No. 1835; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V para. 41. 657

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defences may be considered or established by the enforcement judge ex officio (i. e., there is no burden of production), the award debtor still has the burden of persuasion in the sense that lack of evidence will work against the award debtor.666 There is, however, some dispute as regards the burden of proof regarding the existence of an arbitration agreement: some countries require the award debtor to prove the arbitration agreement, while elsewhere the award is seen as prima facie evidence of an agreement that the award debtor must displace.667 The burden of proof may also shift as regards sufficient notice of the arbitration: in Lenmorniiproekt, the Swedish Supreme Court refused enforcement of an award on the basis that the respondent had provided evidence giving rise to reasonable doubt that the request for arbitration had reached the respondent.668 c) Preclusion of defences to enforcement. aa) Failure to object in arbitral proceed- 152 ings. Under article 4(1) ML, a party that fails to object to non-compliance with procedural requirements is deemed to have waived this requirement. As a result, it is generally recognized that failure to object to procedural errors in the arbitral proceedings or failure to challenge the arbitral tribunal’s jurisdiction will bar the party from raising the objection in setting aside or enforcement proceedings.669 Likewise, failure to raise challenges against arbitrators or to the tribunal’s jurisdiction may preclude a party from relying on these arguments in enforcement proceedings (see supra mns 60, 70). bb) Failure to apply to have the award set aside. While the lapse of the relevant 153 time limit excludes a setting aside application under article 34(3) ML, article 36 ML does not contain time limits for raising defences to enforcement.670 In principle, the failure of an award debtor to apply for annulment of the award at the seat of the arbitration does therefore not prevent him from raising defences in enforcement proceedings, whether brought at the seat of the arbitration671 or in another jurisdiction.672 This principle is, however, not followed everywhere, and the failure to apply to have the award set aside creates a risk for the award debtor that enforcement courts will not admit defences against enforcement that could have been put forward in setting aside proceedings.673 cc) Recognition of foreign decisions. A decision setting aside an award will nor- 154 mally be recognized in enforcement proceedings in other countries (supra mn. 149). This is, however, less clear regarding decisions rejecting a setting aside application and decision on enforcement defences. While they will often have persuasive authority, it is 666 See, on the corresponding provision of article V NYC, infra B mn. 186 with further references; Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V para. 41. The proposition of some writers that the burden of proof regarding defences under article 36(1)(b) ML is on the award creditor (e. g., Roth, in: Weigand/Baumann, International Commercial Arbitration, 3rd ed., 2019, § 20.574) is only correct as to the burden of production, but not as regards the burden of persuasion. 667 Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V paras 42–44. 668 Högsta Domstolen, 16 April 2010, Ö 13-09, Lenmorniiproekt OAO v. Arne Larsson & Partner Leasing AB, YCA XXXV (2010), 456. 669 Supra mn. 60. 670 Infra B mn. 192–193. 671 PT First Media (supra fn. 295) [2013] SGCA 57. On Singaporian practice infra O mns 123 et seq. 672 Astro Nusantara Int’l B.V. v. PT Ayunda Prima Mitra [2016] HKCA 595, paras 43–60; Dallah Real Estate (supra fn. 133) [2010] UKSC 46, [2011] 1 AC 763, paras 23 per Lord Mance and 98 per Lord Collins (on both cases, see the comment by Beatson, (2017) 33 Arb. Int’l 175); Paklito Investment (supra fn. 362) [1993] 2 HKLR 39; BGH, SchiedsVZ 2011, 105 (106 et seq.). Cf. infra B mn. 195; H mn. 159; Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, art. V paras 63b, 67. 673 Polkinghorne et al., in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 937; infra N mn. 116 and R mn. 148. Similarly, under German law, the lapse of the time limit for a setting aside application regarding a domestic award excludes defences to enforcement under article 36(1)(a) ML: § 1060(2) ZPO.

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an open question whether such decisions are binding in other jurisdictions as the New York Convention and the Model Law are silent on this issue.674 Legal writers argue that in principle courts in enforcement proceedings are not bound by a decision of the courts at the place of the arbitration rejecting a setting aside application and confirming the arbitral award.675 In cases where recognition of foreign judgments supports the enforcement of an award, courts are willing to recognize foreign decisions as such approach is conducive to judicial comity and a uniform approach to enforcement under the New York Convention.676 For example, English courts have held that a foreign state court decision confirming the arbitral tribunal’s jurisdiction,677 rejecting a defence under article V(1)(e) NYC678 or allegations of fraud679 can create issue estoppel in enforcement proceedings. Similar case law exists, for example, in Australia,680 Germany681 and Italy.682 The binding effect of a foreign decision will depend on a precise analysis whether it actually decides the same question that is at issue in the enforcement forum: in particular, the public policy defence under article V(2)(b) NYC aims at public policy as it is defined in the jurisdiction where enforcement is sought, which will often differ from conceptions of public policy in other jurisdictions (supra mns 136–137). As a result, the decision on that defence in one jurisdiction will therefore not be binding in enforcement proceedings elsewhere: for example, the Hong Kong High Court held in a recent decision that it would give “due weight” to the decision of the supervisory courts at the seat in mainland China on the setting aside application, but enforcement might be refused on public policy grounds even where the setting aside application remains unsuccessful.683 Likewise, in Stati v. Republic of Kazakhstan, English courts concluded that a foreign setting aside decision did not pre-empt the decision of English courts as to whether enforcement in England was a breach of English public order.684 The same reasoning applies for the reverse scenario, i. e. enforcement may be allowed notwithstanding a decision of another jurisdiction refusing enforcement for breach of public policy there.685 155

d) Partial enforcement. Where a defence affects only part of the award, recognition and enforcement will only be refused regarding that part. This is expressly required in cases of excess of mandate (article 36(1)(a)(iii) ML) but also extended to other defences to enforcement.686

156

e) Discretion to enforce. Article 36 ML was subject to some discussion among the drafters as regards discretion to enforce arbitral awards even where one of the defences 674

On the NYC, see infra B mns 202 et seq. Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 205 (215), Born, International Commercial Arbitration, 2nd ed., 2014, 3781 et seq., 3791. 676 Özdel, (2017) 20 Int. A.L.R. 191 (197–198). 677 Leibinger v. Stryker Trauma GmbH [2006] EWHC 690 (Comm), para. 19 per Cooke J. 678 Diag Human v. Czech Republic [2014] EWHC 1639 (Comm), paras 51 et seq. per Eder J. 679 Chantiers de l’Atlantique SA v. Gaztransport & Technigaz SAS [2011] EWHC 3383 (Comm), paras 51, 313 et seq. per Flaux J. In Stati v. Republic of Kazakhstan [2017] EWHC 1348 (Comm), CLOUT Case No. 1694, it was held that a Swedish court rejecting a setting aside application based on fraud for being out of time did not estop the award debtor from raising a fraud defence in English enforcement proceedings (para. 87). 680 Gujarat NRE Coke Ltd v. Coeclerici Asia (Pte) Ltd [2013] FCAFC 109, para. 65, confirming Coeclerici Asia (Pte) Ltd v. Gujarat NRE Coke Ltd [2013] FCA 882, CLOUT Case No. 1763. 681 See OLG München, SchiedsVZ 2010, 169, YCA XXXV (2010), 371. 682 CA Rome, 27 February 2019, 1490/2019, Kazakhstan v. Anatolie Stati, YCA XLIV (2019), 562. 683 U. v. S. [2018] HKCFI 2086, YCA XLIV (2019), 527. 684 Stati v. Kazakhstan [2017] EWHC 1348 (Comm), para. 87. 685 BGer., 27 May 2019, 4A_663/2018, para. 3.7. 686 Polkinghorne et al., in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 957. 675

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to enforcement exists. The wording “may be refused” preserves discretion of the enforcement judge.687 Accordingly, in some countries, courts retain discretion to enforce awards even where there are grounds for refusing enforcement.688 f) Stay of enforcement under article 36(2) ML. Where enforcement is sought while 157 setting aside proceedings are pending, the court may decide to adjourn its decision and may also make an order for appropriate security.689 Depending on the effectiveness of the courts dealing with a setting aside application, this may cause considerable delay in enforcement. As a result, many courts tend to adjourn enforcement only in exceptional cases690 or if the award-debtor has a “realistic prospect of success” to have the award set aside691 and will normally make a stay subject to security. For example, when determining a stay application, English courts will consider determine whether the application is bona fide and not a delay tactic, whether the setting aside application at the seat has at least a realistic prospect of success; and the extent of the delay occasioned by an adjournment and any resulting prejudice.692 As only annulment by the courts at the seat creates a defence to enforcement (supra mn. 148), no stay is possible as regards annulment applications in other jurisdictions.693 g) Enforcement and state immunity. Arbitral awards against public entities raise 158 issues of state immunity, which in some countries is limited to cases where a state acts in its sovereign capacity (acta iure imperii),694 while others recognize immunity both with regard to acta iure imperii and acts of a private or commercial nature (acta iure gestionis).695 An agreement to arbitrate implies a waiver of immunity for the purpose of the arbitral proceedings, but some courts will differentiate between jurisdictional immunity and enforcement immunity: submission by a state to arbitration does not automatically constitute a waiver of immunity for enforcement proceedings.696 Recent legislative change in France requires an immunity waiver to be express,697 and the previous decision of the Cour de Cassation, holding that an ICC arbitration agreement implied a waiver of immunity from enforcement,698 which had been subject to criticism by commentators,699 appears to be incompatible with the new regime.700 687 Polkinghorne et al., in: Bantekas et al. (eds), UNCITRAL Model Law, 2020, 934, as is the case under article V NYC (infra B mn. 181, 290). 688 Roth, in: Weigand/Baumann (eds), International Commercial Arbitration, 3rd ed., 2019, § 20.575, for example, in Hong Kong (L v. B., HKCFI, 5 May 2016, HCCT 41/2015, YCA XXXI (2016), 490) and the Netherlands (HR, 24 November 2017, 16/05686, ECLI:NL:HR:2017:2992, Maximov v. Novolipetsky Metallurgichesky Kombinat). 689 Articles 36(2) ML and VI NYC. On article VI NYC, see infra B mns. 333 et seq. 690 See infra B mn. 334 and CA Paris, 29 January 2015, Bolivarian Republic of Venezuela v. Gold Reserve Inc., case No. 14/21103. 691 Travis Coal (supra fn. 101) [2014] EWHC 2510 (Comm), paras 33, 62. 692 These criteria established in IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2005] EWHC 726 (Comm), [2005] 1 CLC 613 were recently confirmed in AIC Ltd v. Federal Airports Authority of Nigeria [2019] EWHC 2212 (TCC), and are followed in other common law jurisdictions. 693 Belize Social Development Ltd v. Government of Belize, 10-7167 (D.C. Cir. 2012). 694 NML Capital Limited v. Republic of Argentina [2011] UKSC 31, para. 29; BGH, SchiedsVZ 2013, 110, YCA XXXVIII (2013), 384, para. 13. 695 E. g. in China and Hong Kong: see infra K mns 156 et seq. On issues of immunity generally De Stefano, (2014) 30 Arb. Int’l 59–90. 696 BGH, SchiedsVZ 2013, 110, YCA XXXVIII (2013), 384 et seq. Contra: NML Capital Limited v. Republic of Argentina [2011] UKSC 31, para. 89 on section 9 of the State Immunity Act 1978. 697 See infra I mn. 106. 698 Cass. civ. 1ère, 6 July 2000, 98-19.068, Creighton v. Qatar, JDI 2000, 1054. 699 Kudrna, (2016) 19 Int. A.L.R. 133 (134). 700 Malet-Deraedt, (2018) 36 ASA Bull. 332 (343–344).

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VI. Conclusion 159

The existing framework for international commercial arbitration is based on a common understanding of its principles which is shared across jurisdictions and legal traditions. This common understanding is one of the reasons for the success of arbitration. However, the comparative analysis in this chapter also revealed that the arbitration laws remain fragmented and that considerable differences remain between various jurisdictions. As a result, arbitration practitioners will benefit from a comparative view enabling them to grasp the differences between legal cultures and legal traditions and to use these to develop strategies and arguments. A comparative mindset will remain key to best practice in international arbitration, as it will for discussing future development and reform of arbitration law at domestic and international level. A recent example in that area is a 2014 study of the European Parliament proposing to address the issue of parallel proceedings, references to the ECJ by arbitral tribunals and the scope of public policy under EU law.701 It has also been argued that setting aside proceedings should be abolished and that review should be limited to the enforcement process,702 an option that is already available in some jurisdictions703 and, according to the ECtHR decision in Tabbane, compliant with article 6 ECHR.704 More recently, concerns were voiced that the confidential nature of arbitral awards is an impediment to the development of the law and that efforts should be undertaken to create a corpus of decisions of private dispute resolution bodies as well as a set of principles developed by these institutions that could, in turn, be tested by the courts to develop the law.705 These discussions all touch upon the international dimension of arbitration for which a comparative approach will prove highly beneficial. 701

Cole et al., Legal Instruments (supra fn. 17), 200–204. van den Berg, (2014) ICSID Rev. 1–26. 703 Supra, fn. 530. 704 Supra, fn. 531. 705 Thomas, (2019) 83 RabelsZ 487 (505). 702

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PART 2 INTERNATIONAL CONVENTIONS AND TREATIES B. The New York Convention Bibliography: van den Berg, The New York Arbitration Convention of 1958, Kluwer Law and Taxation 1981; Born, International Commercial Arbitration, 2nd ed., Kluwer Law International 2014; Fach Gomez/ Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, Kluwer Law International 2019; Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards. The New York Convention in Practice, Cameron May 2008; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019 (Chapter 21, 1572–1777); International Council for Commercial Arbitration, ICCA’s Guide to the Interpretation of the 1958 New York Convention, 2011, available at http://www. arbitration-icca.org/publications/NYC_Guide.html (accessed 1 August 2020); Kronke/Nacimiento/Otto/ Port (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention, Kluwer Law International 2010; M.R.P. Paulsson, The 1958 New York Convention in Action, Kluwer Law International 2016; Smith, in: Kolkey/Chernick/Reeves Neal, Practitioner’s Handbook on International Arbitration and Mediation, 3rd ed., Juris 2012 (Chapter I.8, 283–364); UNCITRAL Secretariat, Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 2016, available at http://newyorkconvention1958.org (accessed 1 August 2020); United Nations (ed.), Enforcing Arbitration Awards under the New York Convention, 1999, available at http://www.uncitral.org/ pdf/english/texts/arbitration/NY-conv/NYCDay-e.pdf (accessed 1 August 2020); Wolff (ed.), New York Convention, 2nd ed., C.H. Beck/Hart/Nomos 2019. Country reports: General: Bermann (ed.), The Interpretation and Application of the New York Convention by National Courts: A Comparative Study, Springer 2017; ICC Guide to National Procedures for Recognition and Enforcement of Awards under the New York Convention, 2nd ed., ICC Publications 2013. Various countries: Choy, Arbitrating and Enforcing Foreign Awards in the ASEAN Region: Confronting the Perennial Issues, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, Kluwer Law International 2019, 317–328; Okubote, 60 Years of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958: Are We There Yet in Sub-Saharan Africa?, ibid., 329–348; Hober/Kryvoi (eds), Law and Practice of International Arbitration in the CIS Region, Kluwer Law International 2017; Hwang/Lee, Survey of South East Asian Nations on the Application of the New York Convention, (2008) 25 J. Int’l Arb. 873–892; Le-Ahdab, The Recognition and Enforcement of Foreign Arbitral Awards in the Arab Gulf Region, (2014) 1 BCDR Int’l Arb Rev 105–120; Liebscher, Application of the New York Convention in Austria and Eastern Europe, (2008) 25 J. Int’l Arb. 771–786; Magnusson, Application of the New York Convention. A Report from Denmark, Finland, Norway, and Sweden, (2008) 25 J. Int’l Arb. 681–690; Onyema, Enforcement of Arbitral Awards in SubSahara Africa, (2010) 26 Arb Int’l 115–138; Oo, A Survey of National Laws and Practices on Enforcement of Foreign Arbitral Awards in South and South East Asia, in: van den Berg (ed.), International Arbitration: The Coming of a New Age?, Kluwer Law International 2013 (ICCA Congress Series Vol. 17), 235–278; Ouerfelli, Enforcement of Foreign Arbitral Awards in Maghreb Countries, (2008) 25 J. Int’l Arb. 241–256; Rubins/Sur, Application of Article V of the New York Convention. A Central Asian Perspective, (2008) 25 J. Int’l Arb. 808–819; Weimann/Wang, The Award and the Courts: Enforcement of Foreign Arbitration Awards in Greater China – Mainland China, Hong Kong, Taiwan and Macau, Austr YIA 2012 245–267. Australia: Garnett/Pryles, Recognition and Enforcement of Foreign Awards under the New York Convention in Australia and New Zealand, (2008) 25 J. Int’l Arb. 899–912. Bahrain: Ali Radhi, International Arbitration and Enforcement of Arbitration Awards in Bahrain, (2014) 1 BCDR Int’l Arb Rev 29–48. Brazil: De Campos Melo, Recognition and Enforcement of Foreign Arbitral Awards in Brazil: A Practitioner’s Guide, Kluwer Law International 2015; Garcia da Fonseca/Abdalla, Recognition and enforcement of foreign arbitral awards in Brazil, (2012) 2 YIA 167–176; de Oliveira/Miranda, International Public Policy and Recognition and Enforcement of Foreign Arbitral Awards in Brazil, (2013) 30 J. Int’l Arb. 49–70. Canada: Alvarez, The Implementation of the New York Convention in Canada, (2008) 25. J. Int’l Arb. 669–679. China, People’s Republic: Darwazeh/Yeoh, Recognition and Enforcement of Awards under the New York

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Part 2. International Conventions and Treaties Convention. China and Hong Kong Perspectives, (2008) 25 J. Int’l Arb. 837–856; Hu, Enforcement of Foreign Arbitral Awards and Court Intervention in the People’s Republic of China, (2004) 20 Arb. Int’l 167–178; Lu, The Recognition and Enforcement of Foreign Arbitral Awards in China, in: van den Berg (ed.), New Horizons in International Commercial Arbitration and Beyond, Kluwer Law International 2005 (ICCA Congress Series Vol. 12), 346–350. France: Clay, La Convention de New York vue par la Doctrine Française, (2009) 27 Bull ASA 50–65; Hanotiau/Caprasse, Arbitrability, Due Process, and Public Policy Under Article V of the New York Convention. Belgian and French Perspectives, (2008) 25 J. Int’l Arb. 721–741. Germany: Kröll, in: Böckstiegel/Kröll/Nacimiento (eds), Arbitration in Germany, 2nd ed., Kluwer Law International 2015, 443–504 (§ 1061); Kühn, Current Issues on the Application of the New York Convention. A German Perspective, (2008) 25 J. Int’l Arb. 743–757; Solomon, Recognition and enforcement of foreign arbitral awards. The application of the New York Convention by national courts, in: SchmidtKessel (ed.), German National Reports on the 19th International Congress of Comparative Law, 2014, 55–133. Hong Kong: Darwazeh/Yeoh, Recognition and Enforcement of Awards under the New York Convention. China and Hong Kong Perspectives, (2008) 25 J. Int’l Arb. 837–856. India: Nariman, Application of the New York Convention in India, (2008) 25 J. Int’l Arb. 893–898. Italy: Emanuele/Molfa/Santoro/Bergamini, Recognition and enforcement in Italy of foreign arbitral awards, in: Emanuele/Molfa (eds), Selected Issues in International Arbitration: The Italian Perspective, Thomson Reuters 2014, 201–214; Frignani, Recognition and enforcement of foreign arbitral awards: The application of the New York Convention by Italian Courts, EurLF 2013 I 65–76. Japan: Taniguchi/Nakamura, Japanese Court Decisions on Article V of the New York Convention, (2008) 25 J. Int’l Arb. 857–863. Korea: Kim, International Arbitration in Korea, Oxford University Press 2017; Wha Chang, Article V of the New York Convention and Korea, (2008) 25 J. Int’l Arb. 865–871. Kuwait: Al Anezi, Enforcement of Foreign Arbitral Awards in Kuwait, (2014) 1 BCDR Int’l Arb Rev 85–94. Moldova: Svetlicinii, Enforcement of Foreign Arbitral Awards in the Republic of Moldova, (2007) 24 J. Int’l Arb. 249–264. Netherlands: King/Schluep, Application of Article V of the New York Convention in the Netherlands, (2008) 25 J. Int’l Arb. 759–770. New Zealand: Garnett/Pryles, Recognition and Enforcement of Foreign Awards under the New York Convention in Australia and New Zealand, (2008) 25 J. Int’l Arb. 899–912. Nigeria: Ufot, The Influence of the New York Convention on the Development of International Arbitration in Nigeria, (2008) 25 J. Int’l Arb. 821–836; Ufot, The Enforcement of Foreign Arbitral Awards in Nigeria: Current State of Play and a Look Towards the Future, in: Cascante/Spahlinger/Wilske (eds), Global Wisdom on Business Transactions, International Law and Dispute Resolution, Festschrift für Gerhard Wegen, Beck 2015, 758–772. Oman: Hirst, The Recognition and Enforcement of Foreign Arbitral Awards in the Sultanate of Oman, (2014) 1 BCDR Int’l Arb Rev 61–68. Pakistan: Ghouri, Law and Practice of Foreign Arbitration and Enforcement of Foreign Arbitral Awards in Pakistan, Springer 2012. Philippines: Prodigalidad, Recognition and Enforcement of Foreign Arbitral Awards in the Philippines: Challenges after the 2009 Special ADR Rules, (2010) 6 Asian Int’l Arb J 101–133. Qatar: Khatchadourian, The Application of the 1958 New York Convention in Qatar, (2014) 1 BCDR Int’l Arb Rev 49–60. Romania: Pongracz/Smeureanu, A Procedural Road Map for the Recognition and Enforcement of Foreign Arbitral Awards in Romania, (2008) 25 J. Int’l Arb. 181–195; Smeureanu, Recognition and Enforcement of Foreign Arbitral Awards in Romania, in: Leaua/Baias (eds), Arbitration in Romania: A Practitioner’s Guide, Kluwer Law International 2016, 236–254. Russia: Nacimiento/Barnashov, Recognition and Enforcement of Arbitral Awards in Russia, (2010) 27 J. Int’l Arb. 295–306; Nikiforov, Interpretation of Article V of the New York Convention by Russian Courts. Due Process, Arbitrability and Public Policy Grounds for Non-Enforcement, (2008) 25 J. Int’l Arb. 787–808; Tapola, Recent Case Law on the Recognition and Enforcement of Foreign Arbitral Awards in Russia, (2005) 22 J. Int’l Arb. 331–350. Saudi Arabia: Zegers, Recognition and Enforcement of Foreign Arbitral Awards in Saudi Arabia, (2014) 1 BCDR Int’l Arb Rev 69–84. Spain: Gómez Jene, International Commercial Arbitration in Spain, 2019. Switzerland: Bühler/Cartier, in: Arbitration in Switzerland: The Practitioner’s Guide, 2nd ed. Kluwer Law International 2018, 403–433 (Art. 194 PILS); Geisinger, Implementing the New York Convention in Switzerland, (2008) 25 J. Int’l Arb. 691–706; Girsberger/Voser, International Arbitration: Comparative and Swiss Perspectives, 3rd ed., Nomos 2016, 448–458. Turkey: Bayata Canyas, Enforcement of Foreign Arbitral Awards in Turkey, (2013) 31 Bull ASA 537–557; Şanlı/Esen, Recognition and Enforcement of Foreign Arbitral Awards, in: Esin/Yesilirmak (eds), Arbitration in Turkey, Kluwer Law International 2015, 211–240. Ukraine: Alyoshin/Slipachuk, Enforcement of Foreign Arbitral Awards in the Ukraine: To Be or Not to Be, (2005) 22 J. Int’l Arb. 65–73; United Arab Emirates: Blanke, Enforcement of New York Convention Awards in the UAE. The Story Re-told, (2013) 5, Issue 3, Int’l J. Arab Arb. 19–36; Corm-Bakhos/Blanke, Recognition and Enforcement of Foreign Arbitral Awards in the UAE: Practice and Procedure, (2014) 1 BCDR Int’l Arb Rev 3–28. United States: Ferrito, Enforceability of Foreign Arbitration Awards in the US, (2013) 68 Disp Res J 33–58; Frischknecht/Lahlou/Walters/Poplinger/Sado (eds), Enforcement of Foreign Arbitral Awards and Judgments in New York, Kluwer Law International 2018, 91–250; Shore/Cheng/La Chiusa/Schaner/Senn (eds), International Arbitration in the United States, 2018. Vietnam: Tran, Recognition and Enforcement of Foreign Arbitral Awards in Vietnam, (2005) 22 J. Int’l Arb. 487–503.

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B. The New York Convention Contents I. General .............................................................................................................. 1. General purpose and scope of the New York Convention ............... 2. History of the Convention ....................................................................... 3. Status and implementation of the Convention into the national law of the Contracting States................................................................... 4. Interpretation of the Convention............................................................ 5. Relationship to other sources of law...................................................... II. Scope of application of the Convention .................................................... 1. General.......................................................................................................... 2. Temporal applicability............................................................................... 3. Applicability to the recognition and enforcement of arbitral awards ........................................................................................................... a) Overview of the requirements............................................................ b) The territorial scope of application................................................... aa) General ............................................................................................. bb) Article I(1) s. 1 NYC: Foreign awards (“awards made in the territory of [another] State”) ....................................................... (1) General ...................................................................................... (2) Determination of the place where the award was made cc) Article I(1) s. 2 NYC: Non-domestic awards (“awards not considered as domestic awards”) ............................................... (1) General ...................................................................................... (2) Specific applications ............................................................... dd) Applicability to “a-national” or “transnational” awards ....... c) The kinds of awards covered by the Convention.......................... aa) General considerations ................................................................. bb) Resolution of a legal dispute ....................................................... cc) Authority derived from the autonomy of the parties............ dd) Further elements relating to the existence of an “arbitral award”............................................................................................... (1) Regarding the arbitral tribunal............................................. (2) Regarding the parties.............................................................. (3) Regarding the nature of the legal dispute.......................... ee) Requirements with regard to the content of the decision .... (1) General considerations – the requirement of a “final and binding” award ................................................................ (2) Partial awards........................................................................... (3) Interim awards......................................................................... (4) Provisional measures .............................................................. (5) Decisions with merely contractual force............................ (6) Extension of scope of application by other law ............... d) Reservations, article I(3) NYC ........................................................... aa) General ............................................................................................. bb) Reservation of reciprocity (s. 1).................................................. cc) Commercial dispute reservation (s. 2) ...................................... dd) Interaction of both reservations ................................................. 4. Applicability to the recognition of arbitration agreements............... a) General considerations......................................................................... b) Territorial scope of application.......................................................... c) Application of the reservations to the enforcement of arbitration agreements ......................................................................... III. Recognition of Arbitration Agreements .................................................... 1. General.......................................................................................................... a) Structural considerations..................................................................... b) Situations in which article II applies ................................................ 2. Validity of the arbitration agreement .................................................... a) General principles .................................................................................

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Part 2. International Conventions and Treaties b) Separability doctrine............................................................................. c) Form of the arbitration agreement ................................................... aa) The “in writing” requirement of article II NYC..................... bb) Agreement signed by both parties ............................................. cc) Exchange of letters or telegrams................................................. dd) Arbitral clauses contained in general terms and conditions ee) Approaches towards a liberalization of the Convention’s form requirements ......................................................................... d) Substantive validity in general ........................................................... aa) Autonomous substantive requirements of article II NYC.... bb) Determination of the applicable law ......................................... cc) Provisions on the protection of the weaker party.................. e) Subject matter capable of settlement by arbitration (“objective arbitrability”).......................................................................................... f) Capacity of the parties to arbitrate ................................................... g) Agency ..................................................................................................... h) Effectiveness of the arbitration agreement for and against third parties ............................................................................................ i) Public policy ........................................................................................... 3. Determination of the scope of the arbitration agreement ................ 4. Other objections to the recognition of arbitration agreements, in particular: good faith and arbitration agreements “incapable of being performed”........................................................................................ 5. Cure of defective arbitration agreements, preclusion with regard to the defence of invalidity of the arbitration agreement ................. a) General considerations......................................................................... b) Cure of an initially defective arbitration agreement ..................... c) Procedural preclusion........................................................................... d) Good faith............................................................................................... 6. Referral to arbitration................................................................................ a) General .................................................................................................... b) Relationship between national court and arbitral tribunal ......... 7. More favourable law .................................................................................. IV. Recognition and Enforcement of Arbitral Awards ................................. 1. The obligation to recognize and enforce foreign arbitral awards, article III NYC............................................................................................. 2. Formal requirements for recognition and enforcement, article IV NYC ............................................................................................ a) General .................................................................................................... b) Presentation of the arbitral award, article IV(1)(a) NYC............ c) Presentation of the arbitration agreement, article IV(1)(b) NYC.......................................................................................................... d) Exceptions to the requirements of article IV(1) NYC.................. e) Submission of a translation, article IV(2) NYC............................. f) More favourable law............................................................................. 3. Grounds for refusal of recognition and enforcement of arbitral awards, article V NYC............................................................................... a) General principles ................................................................................. aa) Exhaustive grounds for refusal, narrow interpretation ......... bb) Prohibition of a “révision au fond”............................................ cc) Discretion to enforce awards despite the existence of a ground for refusal?......................................................................... dd) Establishing defences and burden of proof.............................. ee) Waiver and preclusion.................................................................. (1) General ...................................................................................... (2) Party agreement (waiver) ...................................................... (3) Failure to make a timely objection to the arbitral tribunal ......................................................................................

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B. The New York Convention (4) Failure to take recourse against the award in the country of origin ..................................................................... (5) Good faith................................................................................. ff) Partial recognition and enforcement......................................... gg) Relevance of decisions by the arbitral tribunal or national courts ................................................................................................ (1) General ...................................................................................... (2) Decisions by the arbitral tribunal........................................ (3) Decisions by national courts ................................................ b) Lack of a valid arbitration agreement, article V(1)(a) NYC ....... aa) General ............................................................................................. bb) Form.................................................................................................. cc) Substantive validity........................................................................ dd) Capacity to conclude an arbitration agreement...................... ee) Objective arbitrability.................................................................... ff) Other defects of the arbitration agreement.............................. gg) More favourable law, article VII(1) NYC................................. c) Violation of “due process”, article V(1)(b) NYC............................ aa) General principle and applicable standard .............................. bb) Elements of “due process” ........................................................... (1) General ...................................................................................... (2) Proper notice............................................................................ (3) Right to present case .............................................................. cc) Causality........................................................................................... dd) Waiver and preclusion.................................................................. d) Excess of the submission to arbitration, article V(1)(c) NYC.... aa) General ............................................................................................. bb) Application of incorrect rules to the substance of the dispute .............................................................................................. cc) Decisions ultra and infra petita .................................................. dd) Time limits and similar limitations ........................................... e) Improper composition of the arbitral tribunal and improper proceedings, article V(1)(d) NYC ..................................................... aa) General ............................................................................................. bb) Applicable standard....................................................................... (1) General principles ................................................................... (2) Party autonomy and mandatory rules of the place of arbitration ................................................................................. cc) Limitations to the relevance of procedural irregularities...... f) Award not yet binding or no longer binding, article V(1)(e) NYC.......................................................................................................... aa) General ............................................................................................. bb) Award not binding ........................................................................ (1) General considerations........................................................... (2) Formal requirements for the making of the award......... (3) Confirmation by a court in the country of origin........... (4) Availability of recourse against the award ........................ (5) Party agreement....................................................................... (6) Passing of time limits for enforcement .............................. (7) Effects of a merger .................................................................. cc) Award set aside or suspended..................................................... (1) General principles ................................................................... (2) Jurisdiction................................................................................ (3) Scope of review ........................................................................ (4) Enforcement of awards despite an annulment................. g) Non-arbitrability of the subject matter, article V(2)(a) NYC..... aa) General principle and applicable law ........................................ bb) Specific applications ......................................................................

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Part 2. International Conventions and Treaties h) Violation of public policy, article V(2)(b) NYC. ........................... aa) General principles .......................................................................... (1) Notion of public policy and applicable law ...................... (2) “International” public policy and sufficient connection to the forum ............................................................................. (3) Prohibition of a review on the merits ................................ (4) Foreign public policy.............................................................. (5) Extent of review of the arbitral award ............................... bb) Procedural public policy............................................................... (1) General considerations........................................................... (2) Particular applications............................................................ cc) Substantive public policy.............................................................. 4. Adjournment in view of setting-aside proceedings, article VI NYC ............................................................................................ 5. Enforcement procedure for arbitral awards ......................................... a) General .................................................................................................... b) Jurisdictional requirements for enforcement, forum non conveniens ............................................................................................... c) Periods of limitation............................................................................. d) Counterclaims and set-off ................................................................... e) Prohibition of discriminatory provisions ........................................ 6. Alternative means of enforcement.......................................................... a) Enforcement under more favourable law of the Contracting State, article VII(1) NYC..................................................................... b) Recognition and enforcement of court decisions granting exequatur of the award ........................................................................ c) Other means of enforcement..............................................................

307 307 307 310 314 315 316 317 317 321 328 333 336 336 340 344 346 347 349 349 350 351

I. General 1. General purpose and scope of the New York Convention With 161 Contracting States as of 1 January 2020, the New York Convention (NYC) is one of the most widely ratified treaties in force today and probably the most successful treaty in the area of international commercial law, certainly of international commercial arbitration. It provides conditions not only for the recognition and enforcement of arbitral awards (articles III–VI) but also for the recognition of arbitration agreements (article II). 2 In principle, as is the case with foreign judgments, no State is obligated as against other States to recognize or enforce foreign awards (or any other awards, for that matter). Rather, in the first instance, it is a matter of national law to determine under which conditions a particular State is willing to enforce arbitral awards. Against this background, it is the purpose of the NYC to unify the conditions of recognition and enforcement of awards and to obligate the Contracting States to enforce the awards falling within the NYC’s scope of application (“Convention awards”). In that respect, article III provides that Convention awards shall be entitled to recognition and enforcement if the formalities of article IV are fulfilled and unless one or more of the defences laid down in article V can be established. 3 Furthermore, article II of the Convention obligates the Contracting States to recognize agreements to arbitrate, particularly by refusing to render a court judgment on the merits and referring the parties to arbitration. The provision was only added to the text of the Convention at the very last moment. As a consequence, this important extension of the NYC to the recognition of arbitration agreements is unfortunately reflected 1

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neither in the name of the Convention nor in other provisions of general importance like article I on its scope or the more-favourable law provision in article VII(1). However, it is generally accepted that such provisions must be applied by analogy as far as they properly relate to the enforcement of arbitration agreements.1 The NYC does not bring about an overall harmonization of all aspects of interna- 4 tional arbitration, but only provides for the most essential cornerstones of arbitration: the recognition of arbitration agreements as the basis of the arbitral process on the one hand and the recognition and enforcement of awards as its product on the other hand. Other matters, in particular the conduction of the arbitral proceedings and, to a large extent, the relation to national courts, remain to be governed by national law. In that respect, further harmonization can be achieved, e. g., by the adoption of the UNCITRAL Model Law on International Commercial Arbitration.

2. History of the Convention2 Prior to the adoption of the NYC, the international regime regarding the enforcement 5 of arbitration agreements and arbitral awards was largely determined by the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927. The system set up by these Conventions in time was found to suffer from several drawbacks, most prominently the frequent need to obtain confirmation of an award in its country of origin in order to have it enforced under the Geneva Convention in another country (“double exequatur”; also see infra mn. 265). A proposal for a new and improved convention was made by the ICC in the year of 6 1953, directed at a convention on the enforcement of international arbitral awards. The proposal was further developed by an ad hoc committee of the United Nations Economic and Social Council (ECOSOC) and the new draft submitted to the UN Member States, the ICC and non-governmental organizations for comments. During the course of the discussions, scepticism with regard to the desirability or even feasibility of truly “international” awards, as envisaged by the ICC proposal, led to a more conservative approach making the Convention applicable to “foreign” rather than “international” awards (cf. infra mn. 21). A final conference on the Convention was held in New York from May 20 until June 10, 1958. It was only during the last week of that conference that the obligation to recognize arbitration agreements was incorporated into the text of the Convention. The final text of the NYC was adopted on June 10, 1958. It entered into force on June 7, 1959 (infra mn. 19). Since its entry into force, the NYC has naturally been subject to various reform 7 discussions. Given the large number of Contracting States, an actual amendment of the Convention itself appears unrealistic. Another possibility to further develop the Convention is by way of interpretation by national courts, which may be assisted by respective guidelines of UNCITRAL (cf. infra mn. 10). Apart from that, a modernization of the enforcement regime can be brought about by supplementing treaties or, more importantly, national legislation that remains applicable despite the NYC to the

1 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Prel. Rem. mns 26–28; van den Berg, The New York Arbitration Convention of 1958, 1981, 56 et seq. 2 See Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Prel. Rem. mns 41–54 (with a list of the travaux préparatoires in Annex IV 1); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.08–21.09; van den Berg, The New York Arbitration Convention of 1958, 1981, 6–8; for extensive material on the history of the NYC see Gaja (ed.), International Commercial Arbitration – New York Convention, 1990.

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extent that it is more favourable to the enforcement of arbitration agreements and arbitral awards (article VII(1), infra mn. 13).

3. Status and implementation of the Convention into the national law of the Contracting States 8

The status of the Convention within each Contracting State’s legal system depends on the approach prevailing in that State with regard to the status of international treaties in general. As a consequence, the NYC may be considered to be directly applicable3 or only by implementing legislation.4 Such implementing legislation may consist in a mere reference to the NYC5 or a reproduction of the provisions of the NYC in national law.6 – For the status of ratification, the date of entry into force and any reservations made by Contracting States, see https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards/status2 (accessed 1 August 2020).

4. Interpretation of the Convention As a matter of principle, the provisions of the NYC are subject to an autonomous interpretation, that is, a uniform interpretation which is independent of the corresponding legal concepts existing in the national law of the Contracting States.7 Recourse must, however, be made to national law where the NYC so provides, e. g. with regard to “awards not considered as domestic awards” in the enforcement State (article I(1) s. 2, infra mn. 30) or the validity of an arbitration agreement pursuant to article V(1)(a) (infra mns 122, 209). 10 The interpretation of the NYC must proceed from its authentic languages: Chinese, English, French, Russian and Spanish; article XVI(1). The traditional rules of interpretation also apply for the NYC; thus, the wording, systematic context, object and purpose (ratio) and the legal history of the particular provision must be taken into account.8 As the NYC aims at an international harmonization of the law, comparative law may be given particular consideration, as far as the NYC does not give guidance as to the proper interpretation of its provisions, e. g. for the notion of “awards” to which it 9

3 See, e. g.; Japan (by virtue of article 98(2) of the Japanese Constitution); Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 7 (fn. 2); Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 498 (fn. 1). 4 Such implementing legislation may exist even where the NYC would be considered self-executing in the particular State, e. g. Switzerland: article 194 IPRG; cf. Patocchi/Jermini, in: Honsell et al. (eds), Basler Kommentar. Internationales Privatrecht, 3rd ed., 2013, Art. 194 mn. 19. Contracting States may, as in the case of Bangladesh between 1992 and 2001, fail to pass necessary implementation legislation even years after accession to the Convention; cf. Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 499. 5 See, e. g., Germany: § 1061 (1) ZPO; USA: §§ 201 et seq. FAA (with further implementing provisions; cf. Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 7 (fn. 4). 6 See, e. g., UK: §§ 100–104 Arbitration Act 1996. – It is doubtful whether a mere adoption of the UNCITRAL Model Law in a Contracting State, even though it mirrors article V NYC in article 36 ML, should be considered an “implementation” of the NYC (rather than national law coexisting with the NYC). However, this must be decided on the basis of the respective Contracting State’s approach to the implementation of international treaties; for examples see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 8 (fn. 6). 7 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.15; van den Berg, The New York Arbitration Convention of 1958, 1981, 1 et seq.; Kronke, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 4 et seq. 8 Also see Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Prel. Rem. mns 78–91; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.15.

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is meant to apply (infra mns 38–39). In interpreting the NYC, the practice of the other Contracting States has to be taken into account. However, there is no central judicial body with the authority to make binding decisions on the proper interpretation of the NYC. Some coordination and harmonization of the Convention’s interpretation may be effected through UNCITRAL guidelines like the 2006 Recommendation regarding the interpretation of articles II(2) and VII(1) (infra mn. 114). A particular problem in having recourse to the (most importantly: legislative or 11 judicial) approaches in other Contracting States when deciding questions of interpretation derives from the NYC’s more-favourable law principle (infra mns 13–17). Since, under that principle, a Contracting State is always free to adopt a more liberal approach to the enforcement of arbitration agreements and awards, it is not always necessary for such a State to precisely determine whether it derives such an approach from an interpretation of the Convention itself or from an autonomous decision, under national law, to go beyond the Convention’s regime (cf., e. g., for the notion of “awards”, infra mn. 39). Yet, it is only in the first alternative that the respective reading of the Convention would imply a corresponding obligation of the other States arising from the Convention. In any case, however, the practice in Contracting States is evidence of what these States consider the appropriate approach to the problem at hand, which may in turn inspire the interpretation of the Convention. Taking into account the purpose of the NYC, many jurisdictions observe a “pro- 12 enforcement bias” with regard to its interpretation, favouring the interpretation that is more conducive to the enforcement of arbitration agreements or awards.9

5. Relationship to other sources of law Article VII(1) NYC provides that the NYC shall not deprive any interested party of 13 any right to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon. Thus, the NYC allows application of more favourable provisions contained in national law or other conventions with regard to the recognition and enforcement of arbitral awards. Although article VII(1) only refers to awards, it should be extended to apply to the recognition of arbitration agreements in the context of article II as well10 (cf. supra mn. 3). Given the obstacles to a reform of the NYC as such (supra mn. 7), the morefavourable law principle of article VII(1) has gained increasing importance as a means to bring about modifications and improvements to the NYC regime and adapt it to the needs of modern times, e. g. with regard to the form of arbitration agreements (cf. infra mns 113–118). At least in principle, the NYC and the alternative enforcement regime (treaty or 14 national law) must be considered independently to determine whether they will support the enforcement of an arbitral award (or arbitration agreement). A party seeking to enforce an award is consequently not allowed to combine elements of the different 9 See, e. g., Austria: OGH, SZ 65, no. 95, 482 (486) = YCA XXII (1997), 619 (624 et seq.); India: RM Investment & Trading Co. Pvt. Ltd v. Boeing Co., YCA XXII (1997), 710 (712 et seq.); USA: Parsons & Whittemore Overseas Co. Inc. v. Société Générale de L’industrie du Papier, 508 F.2d 969 (973) (2nd Cir. 1974), Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (288) (5th Cir. 2004). 10 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VII mns 45–48; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner's Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.507; France: CA Paris, Rev. arb. 2003, 1286 (1290) = YCA XXIX (2004), 657 (660), confirmed by Cass. civ., Rev. arb. 2006, 863 = YCA XXXII (2007), 290 (292 et seq.); Germany: BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (219); Spain: Trib. Supr., YCA XXXIII (2008), 703 (706).

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regimes which are most favourable to its cause (no “cherry picking”).11 However, the prohibition against “cherry picking” is not always strictly applied by the courts. For example, it has been held that the NYC rules on the validity of arbitration agreements (articles II, V(1)(a) NYC) may be supplemented by national law within a decision on the enforcement of an award under article V NYC (cf. infra mn. 219). 15 The NYC does not determine whether the party seeking enforcement needs to invoke the more favourable legal regime or whether the court will apply it ex officio; rather, this question is left to be decided by the national law of the forum.12 In many Contracting States, more favourable law is applied ex officio.13 16 Article VII(2) NYC provides that the Convention replaces its predecessors, the Geneva Protocol of 1923 and the Geneva Convention of 1927 (supra mn. 5). Apart from that, parties are free under the more-favourable law principle of article VII(1) to avail themselves of other bilateral or multilateral treaties on the recognition and enforcement of arbitration agreements or arbitral awards, in particular the European Convention on International Commercial Arbitration of 1961 (EuC), the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 (“ICSID Convention”) or the Inter-American Convention on International Commercial Arbitration of 1975 (“Panama Convention”). 17 The right of a party to avail itself of national law has been of particular importance in France, where foreign awards are almost exclusively enforced under the more liberal national regime.14

II. Scope of application of the Convention 1. General 18

Despite its name, the NYC not only provides for the recognition and enforcement of arbitral awards (articles III–VI), but also for the recognition of arbitration agreements (article II) (supra mn. 3). However, its scope of application is only specifically defined with regard to the recognition and enforcement of awards in article I, while its applicability with regard to arbitration agreements was left unprovided for. In fact, different considerations may apply with regard to awards (infra mns 20–78) and to arbitration agreements (infra mns 79–85).

2. Temporal applicability 19

Under article XII(1), the Convention came into force on 7 June 1959. In cases of subsequent ratification or accession, the Convention shall enter into force on the ninetieth 11 van den Berg, The New York Arbitration Convention of 1958, 1981, 85 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.522; Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VII mns 59–62; Germany: BGH, SchiedsVZ 2006, 161 (163) = YCA XXXII (2007), 328 (337); BGH, SchiedsVZ 2003, 281 (282) = YCA XXIX (2004), 767 (769). – Contra: Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 26–34; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 271. 12 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VII mn. 40; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.520. 13 France: Cass. civ., Rev. arb. 1985, 432 (433) = YCA XI (1986), 484 (489, 491); CA Paris, Rev. arb. 1995, 275 (280) = YCA XXII (1997), 682 (685); Germany: BGH, SchiedsVZ 2006, 161 (163) = YCA XXXII (2007), 328 (337); BGH, SchiedsVZ 2003, 281 (282) = YCA XXIX (2004), 767 (769); USA: Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F.Supp. 907 (914) (D. D.C. 1996). 14 See Train, Rev. arb. 2014, 249 et seq.

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day after the deposit of the instrument of ratification or accession, article XII(2). Unfortunately, the NYC does not contain any provision with regard to its temporal applicability. It is clear that the NYC will apply if both the arbitration agreement and any arbitral award rendered on the basis of that agreement were made after its entry into force in the respective State. However, it is doubtful whether the Convention should also have retroactive effect with regard to agreements or awards made before its entry into force.15 Legal certainty and the protection of the legitimate expectations of the parties argue against retroactive application: Consequently, the Convention should not apply to the enforcement of agreements or awards that were made before it entered into force in the respective State. With regard to the recognition and enforcement of an arbitral award, the time of its making should control even when the respective agreement to arbitrate was made before the date of entry into force: At the time of the conclusion of the arbitration agreement, the parties have no legitimate expectation that a future award will necessarily be enforced pursuant to the regime existing at the time of contracting. Therefore, an award made after the entry into force of the NYC should be enforced under the NYC regardless of the time the underlying arbitration agreement was made.

3. Applicability to the recognition and enforcement of arbitral awards a) Overview of the requirements. According to its title, the NYC is directed at the 20 recognition and enforcement of “foreign arbitral awards”. Thus, the Convention’s scope of application with regard to awards involves two elements which are more specifically defined in article I: First, it must be determined whether the award is “foreign” within the meaning of the Convention; this may be called the “territorial” scope of application, which is governed by article I(1) (infra mns 21–37). Second, it must be determined whether the particular kind of award falls under the Convention; this question is governed (though not exhaustively) by article I(1) and (2) (infra mns 38–72). Finally, the applicability of the NYC may be subject to reservations by the Contracting States pursuant to article I(3) (infra mns 73–78). b) The territorial scope of application. aa) General. The Convention’s territorial 21 scope of application, as defined in article I(1) is the product of different compromises made in the course of its legislative history: In 1953, the ICC had presented a draft providing for the enforcement of “international” arbitral awards (regardless of the place of arbitration) encompassing the notion of awards completely independent of national laws (supra mn. 6). However, due to resistance to the notion of such awards, it was finally decided to make the Convention applicable to “foreign”, rather than “international” awards.16 This, in turn, required the determination of a criterion for distinguishing between 22 “foreign” awards (falling under the Convention) and “domestic” awards (left to be 15 Pro: Kölbl, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. XII mn. 11 (with further references); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.21; van den Berg, The New York Arbitration Convention of 1958, 1981, 78 et seq.; Bagner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 503 et seq.; Germany: BGH, NJW 1982, 1224 (1225) = YCA VIII (1983), 366 (367); Italy: Cass., RDIPP 1972, 563 = YCA I (1976), 190; Cass., RDIPP 1976, 133 = YCA II (1977), 247; Cass., YCA IV (1979), 286 (288); Netherlands: Hoge Raad, YCA I (1976), 195 (198); UK: Sir Frederick Snow & Partners v. Minister of Public Works of the Government of the State of Kuwait, [1984] AC 426 (428 et seq.) = YCA X (1985), 508 (510 et seq.); USA: Fotochrome Inc. v. Copal Co. Ltd, 517 F.2d 512 (515) (2nd Cir. 1975). – Contra: Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Prel. Rem. mn. 58; Germany: OLG Hamburg, RIW 1975, 432. 16 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 34–37.

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governed by national law). To that effect, there existed two different approaches: the socalled “territorial theory” and the “procedural theory”. According to the territorial theory, the nationality of an award was to be determined by the place where the award was made. This approach found the support of the majority of delegates and resulted in the adoption of article I(1) s. 1, providing for the applicability of the Convention to “awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought”. However, at the time, a considerable number of States – among them, in particular, Germany17 and France18 – advocated a different approach, the so-called “procedural theory”, which distinguished foreign from domestic awards pursuant to the procedural law under which the award was made. In order to allow those States also to subject such awards to the regime of the Convention, a second sentence was added to article I(1), extending the applicability of the NYC to “awards not considered as domestic awards in the State where their recognition and enforcement are sought”.19 Article I(1) thus represents a compromise between the supporters of the “territorial” and those of the “procedural” theory of localizing arbitral awards. 23 As a consequence, both sentences of article I(1) may provide a basis for applying the NYC. Conforming to the Convention’s name, which refers to the recognition and enforcement of “foreign” awards in general, both instances may properly be understood to define a “foreign” award that is within the NYC’s territorial scope of application. In contrast, to allow for a more precise distinction between both alternatives, this commentary uses the term “foreign” award to refer only to awards made in another State within the meaning of article I(1) s. 1, while the awards falling under article I(1) s. 2 are referred to as “non-domestic” awards. As to the relationship between both alternatives, see infra mns 29–31. bb) Article I(1) s. 1 NYC: Foreign awards (“awards made in the territory of [another] State”). (1) General. For the purposes of article I(1) s. 1, the only decisive factor is whether the award was made in the territory of another State. Whether that State is also a Contracting State of the NYC is of no relevance, unless the enforcing State has made the reciprocity reservation pursuant to article I(3) s. 1 (infra mns 74–76). Furthermore, there is no requirement as to “internationality” (cf. supra mns 6, 21);20 as a consequence, an award rendered in a purely “domestic” case in State A (arbitration between parties from that State in a dispute having connections only to that State) is considered “foreign” from the perspective of another State B (in the improbable case that State B should be called upon to enforce the award rendered in State A). 25 As a further consequence, the fact that, aside from the place of arbitration, all other connections of the parties or the dispute are to the State of enforcement does not preclude the application of the Convention.21 It is to be expected that in such a case 24

17 BGH, NJW 1986, 1436; BGH, NJW 1988, 3090 (3091) = YCA XV (1990), 450 (451 et seq.); BGH, NJW-RR 2001, 1059. 18 CA Paris, Rev. arb. 1980, 524 (532) = YCA VI (1981), 221 (223 et seq.). 19 As for the history of that provision, see van den Berg, The New York Arbitration Convention of 1958, 1981, 23 et seq.; van den Berg, (1985) 6 Pace L. Rev. 25 (33 et seq.) = (1986) 2 Arb Int 191 (195 et seq.); Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 115–117; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2955 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.29, 21.41 et seq. 20 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 95; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.31; Austria: OGH, SZ 65, no. 95, 482 (486) = YCA XXII (1997), 619 (625); Italy: CA Genova, RDIPP 1981, 166 = YCA VIII (1983), 380 (381). 21 Germany: OLG München, SchiedsVZ 2012, 43 = YCA XXXVII (2012), 213 (231 et seq.) (award between two German corporations, made in Zürich on the basis of the DIS Arbitration rules); Italy: CA

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(being, in substance, exclusively connected to the State of enforcement) the enforcing jurisdiction will be hesitant to allow the parties to evade the application of its mandatory rules; this consideration, however, does not preclude the applicability of the NYC as such, but may become relevant with regard to the review of the award, particularly under article V(2)(b)22 (cf. infra mn. 313). (2) Determination of the place where the award was made. The Convention does not 26 provide how the place where an award was made should be determined. Apart from article I(1), the connection of the arbitration to a certain geographical territory is also mentioned (albeit in varying terms) in article V(1)(a) (“country where the award was made”), article V(1)(d) (“country where the arbitration took place”) and article V(1)(e) (“country in which […] that award was made”). However, in all of these provisions, the localization of the award, or the arbitration, should be conducted in the same way.23 It is unclear, however, whether that place should be determined on the basis of factual 27 connections or rather of normative considerations. A very drastic example of a purely factual approach was given by the English House of Lords in the infamous decision handed down in the case of Hiscox v. Outhwaite: In that case, the House of Lords held that an award was “made” within the meaning of article I(1) NYC when and where it was perfected. Consequently, in an arbitration having taken place in London under English law, the fact that the single arbitrator had signed the award in Paris (and stated so in the award) resulted in the award being considered “foreign” and subject to the NYC.24 This extremely formal approach, under which the applicability of the NYC was subject to the free discretion of the arbitrators and which might consequently lead to results unpredictable to the parties, met with considerable critique25 and was finally expressly rejected in the English Arbitration Act 1996.26 In contrast, the view prevailing today is that the place where the award was made (or, 28 more generally, the “localization” of an award) should be determined by normative considerations. The relevant factor, therefore, is the normative “center” of the arbitration proceedings or the “juridical seat”.27 This seat must be distinguished from the geographic location where hearings are physically held (cf., e. g., article 20 ML); in fact, it is accepted that it may be totally independent from the place where any part of the Milano, YCA II (1977), 247; Portugal: Supr. Trib., YCA XLII (2017), 488; Switzerland: BGE 110 Ib 191 (192) = YCA XI (1986), 536. 22 van den Berg, The New York Arbitration Convention of 1958, 1981, 376; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 525; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2952 (fn. 347). 23 Cf. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 103; Borris/Hennecke, ibid., mn. 275; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 288; van den Berg, The New York Arbitration Convention of 1958, 1981, 294 et seq. 24 Hiscox v. Outhwaite, [1992] 1 AC 562 (594), but allowing for an annulment of the award under English law on the basis of article V(1)(e), ibid. 595–599. 25 See, e. g., Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 101 et seq.; Bagner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 21; Reymond, (1992) 108 LQR 1–6; Mann, (1992) 108 LQR 6–8. 26 See section 100(2)(b) English Arbitration Act 1996, which provides that “an award shall be treated as made at the seat of the arbitration, regardless of where it was signed, despatched or delivered to any of the parties”. 27 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 99; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.33 et seq.; Bagner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 22; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 24–61 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2955 et seq.; France: Cass. civ, Rev. arb. 1998, 399 (401 et seq.); Germany: OLG München, SchiedsVZ 2010, 336; Switzerland: BGer., ASA Bull. 1997, 329; UK: section 3 English Arbitration Act 1996.

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arbitration actually takes place (“fictitious seat”).28 The seat of arbitration is primarily subject to the agreement of the parties. Where no such determination has been made by the parties, it must be assumed that the seat is determined by the arbitrators, where authorized to do so under the applicable procedural rules (e. g. article 20(1) ML, article 18(1) UNCITRAL Arbitration Rules 2010). In the rare case that neither the parties nor the arbitral tribunal have determined the seat of arbitration, it must be determined by a normative assessment of all objective connections of the proceedings (e. g. place of hearings, deliberations, registration of the award).29 cc) Article I(1) s. 2 NYC: Non-domestic awards (“awards not considered as domestic awards”). (1) General.30 Pursuant to article I(1) s. 2, the NYC also applies to arbitral awards “not considered as domestic awards in the State where their recognition and enforcement are sought”. This second sentence provides an alternative basis for the application of the NYC to the territorial approach embodied in article I(1) s. 1.31 30 The Convention does not provide any limits as to which awards may fall within its scope under article I(1) s. 2. As a consequence, Contracting States are free to choose any criteria they consider appropriate to determine the range of awards “not considered as domestic”.32 Even though this provision was inserted at the instance of the proponents of the “procedural theory” (supra mn. 22), there is no indication whatsoever in the language of article I(1) s. 2 that only the procedural law under which the arbitration was conducted should be a permissible basis to put an award under the regime of the NYC.33 In fact, there is no way that the NYC could (or, for policy reasons: should) effectively prevent a Contracting State from enforcing any award that it considers appropriate pursuant to the enforcement regime established by the Convention. Thus, there is no doubt at all that the UNCITRAL Model Law could legitimately extend the Convention’s enforcement regime to all awards, domestic or foreign, in its articles 35 and 36. Consequently, the question of whether any “other criteria” may be relevant to bring an award under the Convention via article I(1) s. 234 ultimately is moot. The only autonomous decision taken in the NYC relates to its applicability to “foreign” awards, that is to awards made in another state. What other awards may further be subordi29

28 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 100; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.35; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1590; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 26–44; van den Berg, (1986) 2 Arb Int’l 191 (202); Gambino, Int’l Arb. L. Rev. 1999, 22 et seq. 29 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 99; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.36; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. IIII, 2944; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1410. 30 With regard to non-domestic awards, also see Mantilla Serrano, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 55–66. 31 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 130; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.29, 21.41. 32 Rubinstein/Fabian, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 99; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2958; Petirochilos, Procedural Law in International Arbitration, 2004, 352; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 120 et seq. (but only “within reason”); Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.45. 33 But see van den Berg, (1986) 2 Arb Int’l 191 (201, 207) (only procedural theory allowed); however, the author has since abandoned that view: van den Berg, in: van den Berg (ed.) Improving the Efficiency of Arbitration Agreements and Awards, 1999, 25 (26 et seq.). 34 See, in that respect, e. g., Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 132–135.

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nated to the NYC regime for being “not considered as domestic” is exclusively determined by the respective position taken in the State of enforcement. It must be noted, however, that a Contracting State is only free to expand, but not to 31 limit the applicability of the NYC. Therefore, if an award is “foreign” under article I(1) s. 1 because it is made in another State, it may not be characterized as “domestic” by autonomous principles of the respective State of enforcement and thus taken out of the NYC.35 Contrary tendencies in some Contracting States like the USA36 or India37 are not compatible with the mandatory application of the NYC to “foreign” awards within the meaning of article I(1) s. 1 and undermine the obligations undertaken by Contracting States regarding the enforcement of such awards under the Convention.38 (2) Specific applications. As explained in more detail above (supra mn. 22), article I(1) 32 s. 2 was introduced to the NYC at the instance of countries like Germany and France that followed the “procedural theory”, distinguishing between foreign and domestic awards by the law under which the arbitration had taken place. However, a difference in result only occurred in the unusual case that the parties had chosen to apply an arbitration law different from that of the place of arbitration.39 Many of the original adherents of the “procedural theory” have since abandoned that approach, notably Germany40 and France.41 However, it has not completely disappeared from the arbitration landscape and may therefore still define awards not considered as domestic in a particular jurisdiction.42 A particularly prominent example of a Contracting State extending the scope of 33 application of the NYC beyond awards made in another state is that of the United States. There, in a constant line of cases, the courts have deduced from § 202 FAA43 that the 35 van den Berg, The New York Arbitration Convention of 1958, 1981, 24 et seq.; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 131. 36 The uncertainty in the US arises from the language of § 202 FAA (infra fn. 43), which purports to define the range of awards falling under the NYC exclusively depending on the existence of some “reasonable relation with one or more foreign states”. This has sometimes been held to limit the applicability of the NYC also with regard to awards made abroad; cf. Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., 887 F.2d 1357 (1362) (9th Cir. 1989) (but finding a relevant foreign element in the participation of the state of Iran). – Contra: Spier v. Calzaturificio Tecnica, S.p.A., 71 F.Supp. 2d 279 (284 et seq.) (S.D.N.Y. 1999); van den Berg, The New York Arbitration Convention of 1958, 1981, 17; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 125–126, 131. 37 National Thermal Power Corp. v. Singer Co., AIR 1993 S.C. 998 = YCA XVIII (1993), 403 (409 et seq.) (characterizing an award as domestic on the basis of the applicability of Indian law to the arbitration agreement); this controversial decision was reaffirmed by Indian courts even after the enactment of the UNCITRAL Model Law in 1996, but eventually overruled by Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 = YCA XXXVII (2012), 244. Also cf. IMAX Corp. v. E-City Entertainment (I) Pvt. Ltd, (2017) 5 SCC 331 (mns 27 et seq.); Shashoua v. Sharma, (2017) 14 SCC 722 = YCA XLIII (2018), 832. 38 See, e. g., Germany: OLG Hamm, IPRax 1985, 218 = YCA XIV (1989), 629 (630). 39 Such a possibility is, however, envisaged by article V(1)(d) (infra mns 256 et seq.). With the advent of the “fictitious seat” doctrine (supra mn. 28), there no longer is any practical need to make a choice of procedural law diverging from the (factual) place of arbitration. 40 Cf. § 1025 (I) and (IV), § 1061 (I)(1) ZPO; see e. g. BGH, NJW 2001, 1730 = YCA XXIX (2004), 724 (726). 41 Cf. article 1504 NCPC, now article 1518 CPC; Gaillard/Savage, International Commercial Arbitration, 1999, mns 1589 et seq.; Train, Rev. arb. 2014, 249 (253). 42 See, e. g., Taiwan: Article 47 Arbitration Act, defining a “foreign arbitral award” as “an arbitral award which is issued outside the territory of the Republic of China or issued pursuant to foreign laws within in the territory of The Republic of China”; Turkey: Bayata Canyas, (2013) 31 ASA Bull. 537 (542 et seq.). 43 9 U.S.C. § 202: “An arbitration agreement or award arising out of a legal relationship, whether contractual or not, which is considered as commercial, including a transaction, contract, or agreement described in section 2 of this title, falls under the Convention. An agreement or award arising out of such a relationship which is entirely between citizens of the United States shall be deemed not to fall under the

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NYC is meant to also apply to awards that were made in the United States, if at least one party was foreign or performance was to be made abroad or there was some other reasonable relation with a foreign country.44 § 202 FAA is thus held to define what constitutes a “non-domestic” award under United States law; in effect, it extends application of the NYC to all “international” awards made in the United States. 34 This extension of the NYC’s scope of application as such is perfectly possible, as a Contracting State is free to decide which awards made in its territory should be considered “non-domestic” (supra mn. 30). However, this approach triggers some further problems: First, the question arises whether such “non-domestic” awards are still subject to setting-aside proceedings in the United States. While this first question seems to be mostly answered positively by courts and commentators,45 there have been conflicting decisions regarding the further question whether, in such proceedings, court review may be exercised under the full panoply of § 10 FAA or whether it is limited to the grounds laid down by article V NYC.46 It should be noted that neither of these questions are disposed of by the NYC: As the NYC does not establish any obligation of Contracting States to enforce awards made in their territory according to the rules of the NYC, it is entirely for the Contracting States to decide whether and to what extend they consider such awards “non-domestic” and subject to the NYC’s enforcement regime. Consequently, as far as the Convention is concerned, the United States are free to retain full review under § 10 FAA over awards that are considered “non-domestic” under § 202 FAA. However, it is a matter of national law whether such retention of full review under national law should not be considered contradictory to the legislative decision in § 202 FAA to make the NYC regime applicable to “non-domestic” awards that have relevant connections to foreign States.47 35

dd) Applicability to “a-national” or “transnational” awards. There are conflicting views as to whether the NYC applies to (or: allows for recognition and enforcement of) so-called “a-national” (also: “transnational”, “supranational”, “delocalized” or “floatConvention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states. For the purpose of this section a corporation is a citizen of the United States if it is incorporated or has its principal place of business in the United States.” 44 The leading case is Bergesen v. Joseph Muller Corp., 710 F.2d 928 (932) (2nd Cir. 1983) (award made in New York between a Norwegian and a Swiss party); furthermore: Alghanim & Sons, W.L.L. v. Toys “R” Us, Inc., 126 F.3d 15 (19) (2nd Cir. 1997); Scandinavian Reinsurance Co. Ltd v. Saint Paul Fire & Marine Ins. Co., 668 F.3d 60 (71) (2nd Cir. 2012); Zurich American Insurance Co. et al. v. Team Tankers A.S. et al., 811 F.3d 584 (588 et seq.) (2nd Cir. 2016); Jacada (Europe), Ltd v. International Marketing Strategies, Inc., 401 F.3d 701 (706 et seq.) (6th Cir. 2005); Lander Co. v. MMP Investments, 107 F.3d 476 (482) (7th Cir. 1997); Industrial Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434 (1440 et seq.) (11th Cir. 1998); RZS Holdings AVV v. PDVSA Petroleos, SA, 598 F.Supp. 2d 762 (765 et seq.) (E.D.Va. 2009). 45 Cf. UNCITRAL Guide 2016, p. 25 (mn. 58). The question was considered in Dworkin-Cosell Interair Courier Services, Inc. v. Avraham, 728 F.Supp. 156 (161) (S.D.N.Y. 1989) and Amoco Overseas Oil Co. v. Astir Navigation Co., Ltd, 490 F.Supp. 32 (36) (S.D.N.Y. 1979), but left undecided, as no grounds for annulment were found. 46 No limitation to article V: Alghanim & Sons, WLL v. Toys “R” Us, Inc., 126 F.3d 15 (20 et seq.) (2nd Cir. 1997); Zeiler v. Deitsch, 500 F.3d 157 (164 et seq.) (2nd Cir. 2007); Scandinavian Reinsurance Co. Ltd v. Saint Paul Fire & Marine Ins. Co., 668 F.3d 60 (71 et seq.) (2nd Cir. 2012); Zurich American Insurance Co. et al. v. Team Tankers A.S. et al., 811 F.3d 584 (588 et seq.) (2nd Cir. 2016); Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277 (290 et seq.) (3rd Cir. 2010); Gulf Petro Trading Co. v. Nigerian National Petroleum Corp., 512 F.3d 742 (746 et seq.) (5th Cir. 2008); Jacada (Europe), Ltd v. International Marketing Strategies, Inc., 401 F.3d 701 (709) (6th Cir. 2005). – Review only under article V: Industrial Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434 (1443, 1445 et seq.) (11th Cir. 1998); Costa v. Celebrity Cruises, Inc., 768 F.Supp. 2d 1237 (1240) (S.D.Fla. 2011); RZS Holdings AVV v. PDVSA Petroleos, SA, 598 F.Supp. 2d 762 (767) (E.D.Va. 2009). 47 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2961 et seq.

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ing”) awards.48 The discussion suffers from the fact that these terms are often used to describe different variations of a possible detachment of the award (or the arbitration as such) from national legal systems, in particular that of the country of origin. In general, however, the notion of “a-national” awards is understood to designate awards detached from any particular national system of law and instead derived directly from the will of the parties or a supra-national body of rules or principles.49 Such a notion was originally advocated by the ICC proposal but ultimately abandoned in favour of the concept of “foreign” awards, to which the Convention was ultimately made applicable (supra mns 6, 21). This, however, does not allow for an inference that the Convention shall not apply to such awards; after all, the Convention itself, in article V(1)(d), still allows the parties to directly determine the rules of procedure regardless of the law governing at the arbitral seat (infra mn. 258). Therefore, the drafting history is not necessarily conclusive on the issue of “a-national” awards. In the end, the enforceability of “a-national” awards under the NYC can and should 36 not be assessed on the basis of philosophical discussions of the feasibility or desirability of such awards in general, but rather by analyzing the respective provisions of the NYC. In that respect, it must be noted that article I(1) s. 1 simply applies the territorial criterion of the place where the arbitral award was made, without any further restriction (supra mn. 24). In particular, it is immaterial whether the arbitral procedure was governed by any particular country’s law – the “procedural theory”, after all, did not prevail in the drafting of article I(1) s. 1 (supra mn. 22). Therefore, there should be no doubt that the Convention also applies to “a-national” awards under article I(1) s. 1, as long as they were made abroad.50 This is also true when the place where the award was made is understood to designate the “legal” seat of the arbitration.51 The modern doctrine of the “arbitral seat” is motivated by the objective to detach the legal “localization” of the arbitration or award from the possibly coincidental place where the proceedings physically took place (supra mns 27–28). This consequently allows the parties (or, subsidiarily, the tribunal) to determine the seat of the arbitration independently from the place where any hearings 48 Pro: UNCITRAL Guide 2016, p. 25 et seq. (mns 59 et seq.). Gaillard/Savage, International Commercial Arbitration, 1999, mns 96, 1702; Paulsson, (1981) 30 ICLQ 358 (372); Lando, (1985) 34 ICLQ 747 (763); Rensmann, (1998) 15 J. Int’l Arb. 37 (53 et seq.); France: Cass. civ., Rev. arb. 1987, 149; Netherlands: Hoge Raad, Rev. arb. 1974, 318 (321) = YCA I (1976), 195 (196); also cf. Sweden: Supreme Court, Rev. arb. 1980, 555 = YCA VI (1981), 237. – Contra: Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 105 et seq.; Redfern, BYBIL LV (1984), 65 (79); van den Berg, The New York Arbitration Convention of 1958, 1981, 34 et seq.; van den Berg, (1985) 6 Pace L. Rev. 25 (62 et seq.) = (1986) 2 Arb. Int. 191 (213); however, the author has since abandoned that view: van den Berg, in: van den Berg (ed.) Improving the Efficiency of Arbitration Agreements and Awards, 1999, 25 (28). 49 See, e. g., van den Berg, The New York Arbitration Convention of 1958, 1981, 29; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.56; Gaillard/Savage, International Commercial Arbitration, 1999, mns 82, 95; Rensmann, (1998) 15 J. Int’l Arb. 37 (38 et seq.); Paulsson, (1981) 30 ICLQ 358 (363 et seq.); Paulsson, (1983) 32 ICLQ 53 (57). – A further example for “delocalized” awards may be seen in the advent of blockchain arbitration. For the problems arising out of the use of AI in arbitration under the NYC, also see Ng/Benedetti del Rio, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 121–134. 50 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.57; Rubinstein/Fabian, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 105; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 96. – In particular, the issue is not whether and to what extent provisions like article V(1)(a), (d) or (e) refer to national law, as they do not govern the scope of application of the NYC; Gaillard/Savage, International Commercial Arbitration, 1999, mns 1688 et seq.; Switzerland: BGE 108 Ib 85 (89) = YCA IX (1984), 437 (439 et seq.); but see van den Berg, The New York Arbitration Convention of 1958, 1981, 37 et seq.; Redfern, BYBIL LV (1984), 65 (79). 51 Contra: Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 107.

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or the taking of evidence is expected to take place. If that seat is abroad, the Convention applies. To what extent the arbitration is subject to the law of the arbitral seat must then be determined according to the respective rules within the Convention, notably under article V(1)(a) (regarding the validity of the arbitration agreement) and article V(1)(d) (regarding the arbitral procedure). 37 Whether an “a-national” award is considered “non-domestic” under article I(1) s. 2 is entirely determined by the respective national law (supra mn. 30). If at all, the fact that the award is (or may be) detached from any national law would tend towards its characterization as “non-domestic” under that law.52 In any case, the NYC does not present any obstacle to the enforcement of such awards on that basis. c) The kinds of awards covered by the Convention.53 aa) General considerations. The NYC unfortunately does not contain any meaningful definition of the “arbitral awards” it is meant to apply to. In that respect, article I(2) merely provides that the term “shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted” (cf. infra mn. 39). Apart from that, article I(1) s. 1 states that the Convention shall apply to awards “arising out of differences between persons, whether physical or legal” (cf. infra mn. 53). In that respect, the situation is similar to that in many national jurisdictions, which also often lack a more specific definition of “arbitral awards”; the same is true, for example, for the UNCITRAL Model Law. However, the lack of a general definition has not led to major problems in practice in the past; rather, the discussion usually centers on specific questions that are analyzed without the need to refer to a more general notion of what constitutes “arbitral awards” within the meaning of the NYC. 39 The fact that the NYC does not specifically define the notion of “arbitral awards” to which it shall apply does not mean that this definition should be left to the national law of the Contracting States. Rather, the general principle of autonomous interpretation of the Convention (supra mn. 9) applies in this respect as well. As a consequence, the range of arbitral awards to which the NYC’s obligation of recognition and enforcement (article III) applies must be determined by way of an autonomous characterization.54 The national laws of the Contracting States cannot restrict the substantive scope of the obligations created by the Convention. On the other hand, there is no reason why Contracting States should be prevented from expanding the range of awards they are willing to enforce under the regime of the NYC (also see infra mn. 72). In that respect, the situation is comparable to the determination of “non-domestic awards” under article I(1) s. 2 NYC (supra mns 30–31). Therefore, if it results from the law of a Contracting State that it will enforce a foreign award (e. g., an award on provisional measures; infra mn. 69) under the NYC, this is enough to establish the applicability of the NYC in that State. It cannot, however, be inferred from such law that there must necessarily be a corresponding obligation arising under the NYC to enforce the respective awards. At the most, the fact that a larger number of Contracting States are willing to enforce a certain category of awards under the NYC will indicate that these 38

52 Cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.57; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 96. – Contra: Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 108. 53 Also see Marchisio, The Notion of Award in International Commercial Arbitration: A Comparative Analysis of French Law, English Law, and the UNCITRAL Model Law, 2017. 54 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 18–19; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.78; Germany: BGH, NJW 1982, 1224 (1225) = YCA VIII (1983), 365 (366); Italy: Cass., RDIPP 1983, 854 (858) = YCA IX (1984), 428 (429); Cass., RDIPP 1996, 523 (526) = YCA XXII (1997), 727 (729).

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States consider it appropriate to enforce these awards, which may in turn have an impact on the autonomous interpretation of the term “arbitral awards” under the Convention (cf. supra mn. 11). Once the autonomous standard for what amounts to an “arbitral award” within the 40 meaning of the NYC has been established, it may become necessary to refer to national law to determine whether a particular award fulfills these requirements (e. g., whether it has the force of a final judicial decision rather than merely contractual effects; cf. infra mns 70–71). In this respect, the characteristics of the award (e. g. its binding force) must be determined on the basis of the lex arbitri55 rather than according to the law of each individual State of enforcement.56 In determining whether an award falls under the NYC, two aspects can be distin- 41 guished: On the one hand, the question depends on the function conferred on the decision-making body and the basis for its authority to decide. In that respect, an “arbitral award” can be defined as the resolution of a legal dispute by one or several third parties on the basis of the autonomy of the parties to the dispute (infra mns 42–55). On the other hand, the question depends on the nature of the particular decision taken by the arbitral tribunal, i. e. the existence of what is frequently referred to as a “final and binding” decision of the tribunal (infra mns 56–71). bb) Resolution of a legal dispute. With regard to the function conferred on the 42 tribunal, it is generally accepted that it must consist in the resolution of a legal dispute. That is, the tribunal must fulfill an adjudicative function comparable to that of national courts in deciding on the merits of a case.57 Whether the tribunal actually has such a function, depends on the agreement of the parties and the powers conferred on the tribunal therein. In that respect, arbitration must be distinguished from other forms of decision-making: The actual resolution of a legal dispute must be distinguished from a binding 43 assessment of a legally relevant fact by a third party (the expert), e. g. the quality of goods sold. Such “expert determinations” do not fall under the NYC, as they do not as such decide on a legal dispute.58 Of course, the distinction between both categories may result difficult in particular cases. In a settlement, the parties themselves resolve their dispute by mutual agreement. As a 44 consequence, the settlement agreement in itself does not constitute a “decision” of the

55 van den Berg, The New York Arbitration Convention of 1958, 1981, 46; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 19, 22; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.79. Also cf. Germany: BGH, NJW 1982, 1224 (1225) = YCA VIII (1983), 365 (365). 56 In that sense, however, Gaillard/Savage (eds), International Commercial Arbitration, 1999, mns 259, 1668; Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 10 (but giving “regard” to the law of the country of origin); Germany: OLG Düsseldorf, SchiedsVZ 2005, 214 (215) = YCA XXXI (2006), 663. 57 van den Berg, The New York Arbitration Convention of 1958, 1981, 44 et seq.; Austria: OGH, SZ 65, no. 95, 482 (487) = IPRax 1994, 138 (140) = YCA XXII (1997), 619 (624); Germany: BGH, WM 1976, 910 (911); UK: Town & City Properties v. Wiltshier Southern Ltd and Gilbert Powell, (1988) 44 BLR 109 (119); USA: Seed Holdings, Inc. v. Jiffy International AS, 5 F.Supp. 3d 565 (576 et seq.) (S.D.N.Y. 2014). 58 van den Berg, The New York Arbitration Convention of 1958, 1981, 44; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019 Art. I mns 32 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.108 et seq.; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 158; cf. Switzerland: BGer., ASA Bull. 1994, 46 (49). For an extensive application (binding adjustment of the purchase price by an accounting firm) USA: Seed Holdings, Inc. v. Jiffy International AS, 5 F.Supp. 3d 565 (576 et seq.) (S.D.N.Y. 2014).

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arbitrators on the dispute and hence no “arbitral award” within the meaning of the NYC.59 Where, however, the applicable arbitration law allows for the adoption of the agreement in an award on agreed terms (cf. article 30(2) ML), such an award will be enforceable under the NYC if it acquires the force of a binding decision under the applicable arbitration law.60 45 With other forms of Alternative Dispute Resolution (mediation, conciliation, negotiation), the function of the third party is normally not to finally “decide” the legal dispute between the parties in a binding way, but rather to bring about some other form of resolution of the dispute. Therefore, the NYC is normally not applicable to the results of such dispute resolution mechanisms.61 46 Particular problems of characterization arise where different forms of dispute resolution are combined. As said above, a settlement agreement as such will not amount to an award enforceable under the Convention (mn. 44); this is true also where such an agreement results from a process of ADR, like mediated settlement agreements (cf. mn. 45). The enforcement of such agreements will be governed by other rules, e.g. the United Nations Convention on International Settlement Agreements Resulting from Mediation of 2018.62 However, under a “med-arb” system, parties may decide to incorporate a mediated settlement agreement into a consent award. In such a case, it is doubtful whether such award will benefit of the NYC regime. Article 30 ML (cf. supra mn. 44) only contemplates settlements reached “during the arbitral proceedings”. In that respect, such awards could be considered not to result from arbitral proceedings and thus not to fall under the NYC.63 On the other hand, such awards do result from a private dispute resolution system based on the autonomy of the parties. Furthermore, it is hard to see why awards based on settlement negotiations taking place within arbitral proceedings should be placed on an entirely different footing than awards resulting from a “med-arb” system.64 47 A system, where court judgments may formally be converted into arbitration awards has been set up by the dispute resolution system of the Dubai International Financial Centre (DIFC).65 Judgments rendered by DIFC courts, as such, are national court judgments and consequently subject to the rules on recognition and enforcement of 59 van den Berg, The New York Arbitration Convention of 1958, 1981, 50; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 78; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.110; for a more detailed discussion, see Salehijam, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 35–52. – However, settlements may be enforced if they qualify as awards under an interstate treaty signed by the enforcing state; cf. Germany: BayObLG, IPRspr 2004, no. 194, 441 (442) = YCA XXX (2005), 563 (563 et seq.); infra mn. 70. 60 van den Berg, The New York Arbitration Convention of 1958, 1981, 50; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 74 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.110; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 158 et seq.; Germany: BGH, NJW 2001, 373 = YCA XXVII (2002), 269; India: Mehta v. Mehta, (1999) 5 SCC 108 = YCA XXV (2000), 721 (724 et seq.). 61 van den Berg, The New York Arbitration Convention of 1958, 1981, 157; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 32; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.115; also cf. Germany: OLG Karlsruhe, DB 1974, 184 = YCA II (1977), 239. 62 Cf. uncitral.un.org/en/texts/mediation/conventions/international_settlement_agreements. 63 Cf. USA: Castro v. Tri Marine Fish Co., 921 F.3d 766 (9th Cir. 2019). 64 Also cf. Nigmatullina, (2016) 33 J. Int’l Arb. 37 (70). For a more skeptical view see Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 77 et seq. 65 In that respect, see Hwang, (2015) 31 Arb. Int’l 193–212; Demeter/Smith, (2016) 33 J. Int’l Arb. 441–469; Wilske, (2018) 11 Contemp. Asia Arb. J. 153–192.

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foreign judgments. However, the DIFC Courts Practice Directions66 suggest a way to convert these judgments into arbitral awards: Whenever the claimant fails to receive payment due under the judgment, this is held to give rise to a “judgment payment dispute” which the parties may (typically, ex ante) agree to refer to arbitration. In essence, the arbitral tribunal is then restricted to a confirmation of the court judgment, without the possibility of entering into the formal validity or substantive merits of the judgment. Here again (cf. mn. 46), a form of dispute resolution that does not fall under the Convention (in this case, a court judgment) is meant to be transformed into an arbitral award that would then benefit of the NYC enforcement regime. However, with regard to foreign judgments, there typically exist specific rules regarding the enforcement of foreign judgments (which, in turn, are not a product of party autonomy). It can hardly be assumed that Contracting States of the Convention wanted to allow parties to circumvent these rules merely by formally transforming them into an award. In general, therefore, such “awards on a judgment” should be considered to constitute no resolution of a legal dispute and thus no “award” within the meaning of the NYC.67 A further question that may arise (assuming the NYC is applicable) is whether post-judgment disputes relating to enforcement are considered arbitrable under the law of the enforcement forum (cf. article V(2)(a) NYC and infra mns 294 et seq.). However, again, Contracting States are always free to autonomously extend the benefits of the NYC to forms of decision that are not mandatorily covered by the Convention (cf. supra mn. 39). cc) Authority derived from the autonomy of the parties. It is clear from the 48 language of the Convention that it presupposes that the authority of the arbitral tribunal must be derived from the private autonomy of the parties (article I(2): “have submitted”).68 In that respect, the Convention assumes that an agreement by the parties is required (see article II(1), (2), article IV(1) lit. b, article V(1)(a)). While an agreement is certainly the paradigm case for party autonomy, it is doubtful whether the applicability of the Convention (as well as the enforceability of awards under the Convention) should be limited to cases where the adjudicative authority of the tribunal is based on a contractual agreement in the technical sense. It appears preferable that the notion should be given a broad interpretation,69 requiring only that the jurisdiction of the tribunal is derived from the autonomy of the parties subject to its decision. As a consequence, arbitration clauses contained in the charters or articles of associations and corporations should also be considered to constitute arbitration agreements within the meaning of the NYC regardless of their technical characterization under the applicable national law.70 Regarding decisions made by “internal tribunals” of associations and federations, see infra mn. 52. The situation is more doubtful where arbitration is unilaterally provided for by one of 49 the parties, e. g. in testamentary dispositions.71 Where the authority of the tribunal 66 More specifically, Amended DIFC Courts Practice Direction No. 2 of 2015, available under www. difccourts.ae. 67 Cf. Demeter/Smith, (2016) 33 J. Int’l Arb. 441 (456 et seq.); Tan, (2018) 34 Arb. Int’l 415 (428 et seq.); for a more positive argument, see Hwang, (2015) 31 Arb. Int’l 193 (203 et seq.). 68 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 29; Wolff, ibid., Art. II mn. 57; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.84; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2924; Germany: KG, KGR Berlin 1996, 68 (69); UK: Mark Dallal v. Bank Mellat, [1986] QB 441 (455). 69 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 39; Wolff, ibid., Art. II mn. 41; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.85. 70 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 39; cf. Haas, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1066 mns 71–72. 71 See, e. g. Haas, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1066 mns 71–73.

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established by the testamentary arbitration clause is also accepted by the parties subject to that authority, there is no reason not to apply the NYC. However, where this is not the case, the unilateral disposition of the testator should not be held to constitute an arbitration agreement within the meaning of article II NYC.72 As a consequence, an “award” rendered on such basis will not be enforceable under the Convention – either because the NYC as such is held inapplicable for lack of an “arbitral award” based on the autonomy of the parties or because the award was made without a valid arbitration agreement within the meaning of the Convention, article V(1)(a). 50 The NYC does not apply where the jurisdiction of the tribunal is provided for by law rather than derived from the agreement of the parties; consequently, statutory arbitral bodies are excluded from the scope of application.73 Where the arbitration is based on statute, this in itself precludes application of the NYC, regardless of whether the parties are permitted to select the arbitrators, agree on matters of procedure or choose the law applicable on the merits.74 However, the NYC may be applicable if the statute establishing the jurisdiction of the tribunal so provides75 (cf. infra mn. 72). – Awards rendered by the Iran-United States Claims Tribunal do not fall under the Convention, as they are not based on a submission agreement by the parties as required by the Convention.76 However, there have been decisions, particularly from the United States, that have held the NYC applicable to such awards.77 dd) Further elements relating to the existence of an “arbitral award”. (1) Regarding the arbitral tribunal. Article I(2) NYC expressly states that the term “arbitral award” shall include “not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted”. Thus, both ad hoc arbitration and institutional arbitration are covered by the NYC. The decisive factor, in each case, is whether the authority of the arbitral tribunal is based on a voluntary submission by the parties (supra mn. 48). – As for awards rendered by the Iran-United States Claims Tribunal, see supra mn. 50. 52 There are conflicting positions as to whether the decisions taken by internal tribunals of trade associations or sports federations, as provided for by their charters or regulatory codes, constitute awards within the meaning of the NYC.78 The problems arise where the tribunal deciding the dispute is composed entirely of members of the respective association. In such a case, it may be argued that, to constitute an arbitral award, a 51

72 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 57; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.86. 73 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 30, 91; Wolff, ibid., Art. II mn. 57; France: Cass. civ., Rev. arb. 1990, 721 (723); Germany: BGH, NJW 1994, 1008 (1009); BGH, NJW 2000, 3650 = YCA XXVI (2001), 771 (statutory option of claimant to refer dispute to arbitration not under NYC). 74 Cf. Germany: BGH, NJW 1994, 1008 (1009). 75 See, e. g., Germany: BGH, NJW 2000, 3650 = YCA XXVI (2001), 771. 76 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 88–90; UK: Mark Dallal v. Bank Mellat, [1986] QB 441 (455 et seq.). 77 USA: Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., 887 F.2d 1357 (1363 et seq.) (9th Cir. 1989) and 969 F.2d 764 (770 et seq.) (9th Cir. 1992); Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141 (144 et seq.) (2nd Cir. 1992); The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems, Inc., 665 F.3d 1091 (1095 et seq.) (9th Cir. 2011). 78 Pro: Lithuania: Supreme Court, YCA XXXVIII (2013), 414; Switzerland: BGer., YCA XLI (2016), 567; USA: Slaney v. The International Amateur Athletic Federation, 244 F.3d 580 (590 et seq.) (7th Cir. 2001); M.R.P. Paulsson, The 1958 New York Convention in Action, 2016, p. 123. – Contra: Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 46. Also see Mitten, (2009) 10 Pepp. Disp. Resol. L.J. 51–67.

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decision must have been made by a formally independent adjudicative body and that such independence is lacking with internal tribunals of associations and federations.79 However, it must be observed that doubts as to a party’s freedom in submitting to the jurisdiction of the tribunal or as to the impartiality of arbitrators, or the inequality of the parties in the constitution of the tribunal or the arbitral process80 are normally no reason to deny the applicability of the NYC altogether, but rather constitute grounds to refuse enforcement of the award under the NYC, notably article V(1)(a), (d) or (2)(b) (also cf. infra mn. 3).81 Therefore, the characterization of such decisions as “arbitral awards” within the meaning of the NYC should only be rejected where a party, by joining the respective association, necessarily submits to the authority of an internal decision-making body, which lacks minimum requirements as to independence and neutrality.82 Where, however, the party retains the power to select the members of the tribunal, even though the choice may be limited to the members of the association, the resulting decision should qualify as an award falling under the Convention. It then remains to be decided under article V NYC whether there is a valid objection to the enforcement of the award, e. g. because of the predominant position of the association.83 (2) Regarding the parties. Article I(1) NYC makes it clear that the differences which 53 gave rise to the award may have existed between either “physical or legal” persons. Thus, the parties to the arbitration may also be companies, corporations or other associations. Furthermore, the Convention is also applicable to arbitration agreements or awards involving States and their agencies84 or international organizations.85 For disputes involving States, the issue of sovereign immunity arises, which is not governed by the NYC but by the respective rules of public international law.86 As a general principle, it is now accepted that a State that made an agreement to arbitrate is considered to have thereby waived its defence of sovereign immunity.87 As for the defence of a possible incapacity to conclude an arbitration agreement, infra mn. 216.

Cf. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 44–46. Cf., e. g., France: Cass. civ., Rev. arb. 1992, 470 (471) = YCA XVIII (1993), 140; Switzerland: BGE 84 I 56 (60 et seq.); BGE 97 I 488 (490). 81 Cf., regarding the public-policy defence, Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 528. 82 Cf., regarding CAS arbitration, e.g., Germany: BGH, SchiedsVZ 2016, 218 (220 et seq.) and the decision below, OLG München, SchiedsVZ 2015, 40 (42 et seq.) (Pechstein); also see the judgment of the ECtHR, Mutu and Pechstein v. Switzerland, Nos. 40575/10 and 67474/10; ECLI:CE:ECHR:2018:1002JUD004057510. 83 Unfortunately, courts do not always clearly distinguish between the question whether the NYC applies and the question whether a defence to enforcement exists under the NYC; cf., e. g., USA: Moscow Dynamo v. Ovechkin, 412 F.Supp. 2d 24 (D.D.C 2006). 84 van den Berg, The New York Arbitration Convention of 1958, 1981, 277 et seq.; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 139; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.92; Rensmann, (1998) J. Int’l Arb. 37 (56). 85 van den Berg, The New York Arbitration Convention of 1958, 1981, 277 et seq.; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 139; Rensmann, (1998) J. Int’l Arb. 37 (56). 86 See, in more detail, Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 140–150; Bagner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 27 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mns 641 et seq.; García Olmedo, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 351–368. 87 See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.92; Bagner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 27; van den Berg, The New York Arbitration Convention of 1958, 1981, 280 et seq.; Montero/Castro, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New 79 80

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(3) Regarding the nature of the legal dispute. The NYC does not impose any restrictions with regard to the legal nature of the disputes submitted to arbitration. As reflected in article I(3) s. 2, the dispute may be either contractual or non-contractual. Thus, there is nothing to exclude disputes on property, family or succession law from the scope of the Convention, unless the respective State has made the commercial dispute reservation (infra mn. 77). Limitations as to the categories of disputes that may validly be submitted to arbitration do not involve the applicability of the NYC as such, but the existence of a possible defence against the enforcement of an arbitral award under article V(2)(a) NYC (infra mns 294–306) or of an agreement to arbitrate (infra mn. 128). 55 Consequently, legal disputes involving matters of public law are also not categorically excluded from the scope of the NYC.88 This may, for example, be relevant for international investment agreements, to the extent they are not subject to more specific bilateral or multilateral treaties, like the ICSID Convention.89 54

ee) Requirements with regard to the content of the decision. (1) General considerations – the requirement of a “final and binding” award. With regard to the contents of the decision, an award falling under the Convention is frequently defined by reference to its “final” or “binding” character.90 The underlying idea is that the decision of the arbitral tribunal must definitively resolve the dispute submitted to them and bring the proceedings to a close, thus terminating the office of the arbitrators. 57 The use of the terms “binding” or “final” to determine which awards are subject to the NYC is problematic for several reasons: First, the opposition of “binding” and “final” awards reflects the intention of the drafters of the New York Convention to eliminate the necessity of obtaining a “double exequatur” that existed under the system of the Geneva Conventions (supra mn. 5, infra mn. 265). This problem, however, has no relevance to the kinds of awards that fall within the scope of application of the Convention. Furthermore, the term “binding” appears in the English version of the NYC in two places: On the one hand, article III s. 1 obligates each Contracting State to “recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon”, while article V(1)(e) provides that recognition and enforcement of such awards may be refused if “[t]he award has not yet become binding on the parties”. Article III s. 1 certainly may be read to imply a particular quality that is presupposed for the award to fall under the NYC and then be recognized “as binding”. On the other hand, article V(1)(e), in order to be applicable at all, rests on the premise that the NYC as such can be applicable, even though the award is “not yet binding” within the meaning of article V(1)(e). As a 56

York Convention: Key Issues and Future Challenges, 2019, 369–388; France: Cass. civ., Rev. arb. 1987, 149; USA: Ipitrade Intern., S. A. v. Federal Republic of Nigeria, 465 F.Supp. 824 (826) (D.D.C. 1978). 88 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 162; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.91. 89 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 98 et seq.; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 151–160. – Regarding the relation between investment arbitration and the New York Convention, see Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 389–472. 90 van den Berg, The New York Arbitration Convention of 1958, 1981, 44 et seq.; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 54–55; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.98 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol III, 3013; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 50; Gaillard/Savage, International Commercial Arbitration, 1999, mns 1357 et seq.

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consequence, whatever “binding” means in article V(1)(e), it cannot be a prerequisite for the respective award to fall under the Convention to begin with. However, it must be noted that it is the English version in particular which uses the term “binding” both in article III and in article V(1)(e). In contrast, both the French and the Spanish versions use the corresponding terms in article V(1)(e) (“obligatoire”, “obligatoria”), while in article III s. 1 they take up the dispositive effects of an award (res judicata) that will be recognized in the respective Contracting State (“Chacun des États contractants reconnaîtra l’autorité d’une sentence arbitrale […]”, “Cada uno de los Estados Contratantes reconocerá la autoridad de la sentencia arbitral […]”) (cf. infra mn. 266). Against this background, it may be useful to distinguish two aspects: article V(1)(e) rests on the idea that an award (which is covered by the NYC’s scope of application) may become “binding”. As a consequence, the bindingness of an award within the meaning of article V(1)(e) is not determined by the nature and content of the decision to be taken (as that will usually not be subject to change over time) but by the procedural stage it has reached within the arbitration (e. g. its delivery to the parties, deposit with a court etc.; cf. infra mns 271–272). These questions do not involve the applicability of the NYC as such and are properly analyzed in the context of a decision on the enforceability of the award under article V, notably article V(1)(e) (infra mns 265–279). In contrast, questions of applicability are concerned with regard to the nature and contents of an award in that an “award” capable of recognition and enforcement must contain a dispositive element (“autorité”, “autoridad”) that may be recognized and enforced in another Contracting State. Such problems are raised with regard to the enforceability of, for example, “partial” or “interim” awards under the NYC. Such awards may have been duly delivered to the parties under the applicable procedural rules, but this in itself does not dispose of the question whether they contain a substantive decision amenable to recognition or enforcement under the Convention. It is this latter respect that may be analyzed as involving the scope of application of the NYC. Where the tribunal finally disposes of the dispute submitted to its jurisdiction, the respective decision will constitute an award within the meaning of the NYC regardless of the relief sought or the success of the claimant’s application. The paradigm example of enforceable awards is obviously the award with an enforceable content like the payment of a certain sum or the performance of some other act or forbearance. Obviously, also awards denying such claims will fall under the Convention and will be recognized as res judicata pursuant to articles III et seq. The NYC also applies to declaratory awards, not only where the claimant only sought declaratory relief but also where the tribunal makes a binding determination of a preliminary question by way of an interim award (cf. infra mn. 65). Enforcement under the NYC is also possible for (definitive) decisions on costs.91 Problems arise where the tribunal does not finally resolve all of the issues submitted to its jurisdiction but renders a decision on some questions relevant to the dispute and/ or the arbitral proceedings. It is highly doubtful to what extent the Convention applies to such kinds of decisions. To a large part, the necessary legal analysis is obscured by the fact that there is no uniform terminology with regard to such awards. The discussion relates to “interim”, “interlocutory”, “partial”, “preliminary” or “provisional” awards, but since the Convention itself does not use or define any of these terms, they are often 91 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III 3087; Germany: OLG München, SchiedsVZ 2012, 156 (158); OLG München, SchiedsVZ 2012, 287 (288); OLG Karlsruhe, SchiedsVZ 2012, 101; USA: August Aasma v. American Steamship Owners Mutual Protection and Indemnity, 238 F. Supp. 2d 918 (920 et seq.) (N.D.Ohio 2003).

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used with different meanings by courts and commentators.92 Therefore, care must be taken to determine the relevant substantive criteria for deciding whether a particular award is enforceable under the Convention. There is general agreement that, in this respect, it is immaterial how the decision is formally denominated by the tribunal93 and that the characterization must turn on the substantive content of the decision. 63

(2) Partial awards. Where the arbitral tribunal only renders a definitive decision on some of the legal claims submitted (e. g. on a claim for reimbursement of payments made under the contract but not yet on a claim for lost profits), this may be called a “partial” award. Since the Convention generally allows for partial enforcement of awards (cf. infra mn. 199), there is no reason why enforcement should not be available where the arbitral tribunal itself limits its decision to a separable part of the dispute and leaves the remaining part for further consideration. Thus, partial awards in that meaning are enforceable under the NYC.94

(3) Interim awards. In contrast to “partial” awards that contain a definitive decision on parts of the dispute submitted to arbitration (supra mn. 63), “interim” awards may be understood to designate decisions by the arbitral tribunal on legal issues that become relevant incidentally to the final decision on the merits. Such decisions, in turn, may relate to substantive or procedural matters. 65 In a substantive respect, an interim award relates to incidental questions of substantive law that are relevant to the decision on the merits, e. g. an award on the validity of the contract on which the claim is brought95 or an award on the grounds of liability, leaving the determination of the quantum for further decision.96 Such awards should be considered enforceable under the NYC, provided that the tribunal intended to make a binding determination of the incidental question on the merits that would not be subject to reconsideration when rendering the final decision.97 64

92 Cf. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 56; Liebscher, ibid., Art. V mn. 367; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 24–14 et seq. 93 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 24 et seq.; Liebscher, ibid., Art. V mn. 369; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 158; Australia: Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty Ltd, (1993) 118 ALR 655 = YCA XX (1995), 628 (642); France: CA Paris, Rev. arb. 1999, 834 (835 et seq.) = YCA XXIV (1999), 296 (297); USA: Yasuda Fire & Marine Insurance Company of Europe v. Continental Casualty Company, 37 F.3d 345 (347 et seq.) (7th Cir. 1994); Publicis Communication v. Publicis SA, True North Communications Inc., 206 F.3d 725 (728 et seq.) (7th Cir. 2000). 94 Cf. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 62; Liebscher, ibid., Art. V mn. 371; Colombia: Corte Suprema, YCA XXXVII (2012), 205 (mn. 11); Germany: OLG Jena, SchiedsVZ 2008, 44 = YCA XXXIII (2008), 534 (536 et seq.). 95 Cf., e. g., Austria: OGH, SZ 65, no. 95, 482 (487) = IPRax 1994, 138 (140 et seq.) = YCA XXII (1997), 619 (625 et seq.) (regarding setting-aside proceedings, held inadmissible to such awards). 96 For enforceability of such awards: Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 62; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 156. – Contra: Germany: OLG Frankfurt, SchiedsVZ 2007, 278 (279) (regarding setting-aside proceedings). 97 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 370; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.103 et seq.; Germany: OLG Thüringen, SchiedsVZ 2008, 44 (45) = YCA XXXIII (2008), 534 (535) (decision on the lawfulness of the continued use of know-how in a dispute arising out of a licence agreement); USA: Zeiler v. Deitsch, 500 F.3d 157 (169) (2nd Cir. 2007) (order for an accounting and transfer of documents, regarding a “non-domestic” award); Ecopetrol S.A. v. Offshore Exploration and Production LLC, 46 F.Supp. 3d 327 (336 et seq.) (S.D.N.Y. 2014); Publicis Communication v. Publicis SA, True North Communications Inc., 206 F.3d 725 (728 et seq.) (7th Cir. 2000) (order to produce tax records necessary for determinations in the final award). – Contra: OGH, SZ 65, no. 95, 482 (487 et seq.) = IPRax 1994, 138 (140 et seq.) = YCA XXII (1997), 619 (625 et seq.) (decision on the validity of the underlying contract).

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Where the interim award relates to procedural questions, it usually entails no 66 decision on the substantive rights of the parties that may be subject to recognition or enforcement. Such procedural orders therefore do not constitute awards within the meaning of the NYC.98 This is also true for interim decisions on jurisdiction, as they contain no decision on the merits of the dispute and are not binding with regard to the decision on jurisdiction (cf. infra mn. 201).99 The situation is different, where the award on jurisdiction also contains a final decision on the costs of the proceedings with regard to the jurisdictional dispute,100 as final decisions on costs are enforceable under the NYC (supra mn. 61). (4) Provisional measures. It is highly controversial whether orders for provisional 67 measures that are intended to secure the future enforcement of the award (e. g. the preservation of assets or the provision of security) qualify as “awards” that must be enforced under the Convention.101 There is no doubt that the availability of efficient procedures for providing provisional relief in support of arbitration is essential to the appropriate functioning of arbitration, particularly international arbitration, as a system of dispute resolution. It is therefore not surprising that the 2006 amendments to the UNCITRAL Model Law added a new Chapter IV A on “Interim measures and preliminary orders”. However, the question is not whether the enforcement of provisional measures ordered by the arbitral tribunal is desirable or necessary to safeguard the efficiency of arbitration but rather whether the New York Convention creates an obligation of Contracting States to enforce provisional measures ordered by an arbitral tribunal. In that respect, the case law in the various Contracting States is conflicting.102 In fact, 68 there are valid arguments for both positions: On the one hand, it can be argued that provisional measures are not merely procedural orders (cf. supra mn. 66) in that they not only determine the procedural positions of the parties but also affect their substantive rights for the purpose of securing the effectiveness of the final award Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 57. Cf., e. g., Austria: OGH, SZ 65, no. 95, 482 (487) = IPRax 1994, 138 (140) = YCA XXII (1997), 619 (622); Colombia: Corte Suprema, YCA XXVI (2001), 755 (762) – Contra: Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3019; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 62, 64. 100 Di Pietro, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 152 et seq.; Australia: Commonwealth Development Corp. v. Montague, [2000] QCA 252 = YCA XXVI (2001), 744 (745 et seq.); Germany: BGH, NJW-RR 2007, 1008 = YCA XXXIII (2008), 506 (508). 101 Also see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 14–17. 102 In favour of enforcement: Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 376; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. II, 2429 et seq., 2512 et seq.; India: Marriott International Inc. v. Ansal Hotels Ltd, AIR 2000 Del. 377 = YCA XXVI (2001), 788 (805). – Contra: Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 157; Argentina: Cámara Nacional de Apelaciones en lo Comercial, Revista La Ley 2003-C-676; Australia: Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty Ltd, (1993) 118 ALR 655 = YCA XX (1995), 628 (642), also see Pryles, (1994) 10 Arb. Int’l 385–394; Italy: Frignani, EurLF 2013, I-65 (66); Russia: Supreme Abritrazh Court, YCA XXXVI (2011), 317 (319). – In the US, awards on provisional measures are usually enforced; see, e. g. Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046 (1049) (6th Cir. 1984); Pacific Reinsur. Mgmt. Corp. v. Ohio Reinsur. Corp., 935 F.2d 1019 (1022 et seq.) (9th Cir. 1991); Yasuda Fire & Marine Insurance Company of Europe v. Continental Casualty Company, 37 F.3d 345 (348) (7th Cir. 1994); Banco de Seguros del Estado (Uruguay) v. Mutual Marine Office, Inc. (US), 344 F.3d 255 (259) (2nd Cir. 2003); Ecopetrol S.A. v. Offshore Exploration and Production LLC, 46 F.Supp. 3d 327 (336 et seq.) (S.D.N.Y. 2014); Sharp Corp. v. Hisense USA Corp., 292 F.Supp. 3d 157 (D.D.C. 2017); but also see contra: Chinmex Med. Sys., Inc. v. Alere San Diego, Inc., 2011 WL 2135350 (S.D. Cal. 2011). 98 99

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rendered at a later time.103 On the other hand, it cannot be denied that such provisional measures imply no final determination of the legal dispute and may be modified if the tribunal considers it proper to do so to take into account a change of circumstances (see, e.g., article 17 D ML).104 As the obligation set down in article III NYC to enforce an arbitral award is closely linked to the recognition of its “binding” effect (cf. supra mns 57–61), it should preferably be limited to awards containing a dispositive decision on the substantive rights and obligations of the parties. Orders for provisional measures should therefore not be held to constitute awards within the meaning of the NYC. In that respect, it is immaterial whether such orders are qualified as “awards” under the applicable rules of arbitration (as, for example, in articles 17 et seq. ML) or whether the arbitral tribunal intended that the provisional measure should be regarded as binding and enforceable.105 69 The fact that orders for provisional measures do not qualify as awards within the meaning of the NYC does not mean that they may not be so qualified on the basis of the autonomous law of a particular Contracting State (supra mn. 39). Thus, there may be statutory provisions to the effect that such measures shall be treated as awards (see, e. g. article 17 H ML). Such provisions may then result in the applicability of the NYC on the basis of national law (infra mn. 72). However, it must be carefully analyzed whether the characterization of an order for provisional measures as an “award” under national law can be held to also imply the applicability of the enforcement regime of the NYC.106 In any case, such characterization by national law only is effective with regard to the respective Contracting State and does not imply a corresponding obligation of other Contracting States to enforce provisional measures to the same extent. 70

(5) Decisions with merely contractual force. The notion of an arbitral award presupposes that the tribunal exercises an adjudicative function comparable to that of national courts (supra mn. 42). It is doubtful, however, whether the decision rendered by the tribunal must also be indued with the traditional effects of court judgments (in particular: res judicata, establishing the basis of enforcement proceedings) in order to qualify as an arbitral award enforceable under the NYC. The question particularly arises with regard to awards that, under the lex arbitri, only have “contractual force”, that is, must be enforced by another court action brought on the basis of the award, as for example the “lodo di arbitrato irrituale” of Italian law.107 The prevailing view rejects the applicability of the NYC, arguing that the award cannot be given greater effects under

See, e. g., Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 376. See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.101; Australia: Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty Ltd, (1993) 118 ALR 655 = YCA XX (1995), 628 (642). 105 But see France: CA Paris, Rev. arb. 2005, 737 (739 et seq.), where the court qualified an order of provisional measures accompanied by an astreinte as an award, arguing, inter alia, that the arbitrators were able to give such measures the form of an “award”, at least as long as the parties did not object. – Contra: Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 374. 106 Notably the UNCITRAL Model Law provides for a particular set of grounds for refusing recognition or enforcement of an “interim measure” in article 17 I ML, which is slightly different from the general regime of article 36 ML or article V NYC, respectively. 107 In 2006, the arbitrato irrituale was codified in article 808-ter (1) of the Italian Code of Civil Procedure, which provides that “the parties may establish in writing that the dispute be settled by the arbitrators through a contractual determination”; this is considered to constitute an “exception” to the general rule contained in article 824-bis (1) that an award has the same effects like the judgment of a court. As for the consequences of the new legislation concerning the arbitrato irrituale, see Sangiovanni, ASA Bull. 2008, 688–699. 103 104

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the Convention than under the lex arbitri.108 This approach was recently followed by a German court with regard to an award that had been made in California but had not yet been confirmed by a court, which under Californian law meant that the award merely had “the same force and effect as a contract in writing between the parties to the arbitration”.109 From this, the German court concluded that, prior to confirmation by a state court, the award could not be subject to enforcement under the NYC.110 For awards from jurisdictions following the Californian model, this approach effec- 71 tively reintroduces the necessity of a “double exequatur” which was meant to be abolished under the NYC (supra mn. 5, infra mn. 265). However, it is not necessary to draw such an inference from enforcement structures like that existing in California. Rather, it is both possible and preferable to interpret the respective provisions of Californian law as procedural technicalities directed at the enforcement of arbitral awards in California, which leave the existence of a “binding” award – that is, a definitive decision of the tribunal on the dispute submitted to arbitration (cf. supra mns 56, 61) – and its consequent enforceability in other countries unaffected. The same argument would apply to the Italian lodo irrituale, which accordingly should be held enforceable under the New York Convention, as it constitutes a definitive decision of the arbitrators on the merits of the dispute.111 (6) Extension of scope of application by other law. The scope of application of the 72 NYC may be extended by other law, particularly national law or other treaties. Such extension of course only has effect in the respective Contracting State.112 d) Reservations, article I(3) NYC. aa) General. Article I(3) NYC allows for two 73 reservations that States ratifying or acceding to the Convention may make: the so-called “reciprocity reservation”, limiting the application of the NYC to the recognition and enforcement of awards made in another Contracting State, and the “commercial dispute reservation”, limiting its application to differences out of legal relationships that are considered as commercial under the national law of the respective State. – For an overview of the current status of reservations, see: https://uncitral.un.org/en/texts/ arbitration/conventions/foreign_arbitral_awards/status2. bb) Reservation of reciprocity (s. 1). Article I(3) s. 1 provides that any State ratifying 74 or acceding to the Convention “may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State”. In general, requirements of reciprocity are used as leverage to induce other States to enforce the respective decisions on their part. Even though this objective is understandable, it is pursued at the expense of the parties, as they are deprived of a favourable enforcement regime, although they are not responsible

108 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 41; van den Berg, The New York Arbitration Convention of 1958, 1981, 44 et seq.; Germany: BGH, NJW 1982, 1224 (1225) = YCA VIII (1983), 365 (366). 109 § 1287.6 California CCP. 110 BayObLG, SchiedsVZ 2003, 142 (143) = YCA XXIX (2004), 754 (757); however, the court felt free to enforce the award since it had in fact been confirmed in California. 111 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 1925. This is, notably, also the position taken in Italy: Cass., YCA IV (1979), 296 (298 et seq.); Cass., YCA IX (1984), 429 (430); Cass., YCA X (1985), 464 (466); Cass., YCA XVIII (1993), 427 (429); also cf. Cass., Foro It. 2002, 2299 = YCA XXIX (2004), 784 (790). 112 E. g. Germany: BayObLG, IPRspr 2004, no. 194, 441 (442) = YCA XXX (2005), 563 (enforcement of a settlement pursuant to article 12 (II) of the German-Austrian Convention on the Recognition and Enforcement of Judgments, Settlements and Authentic Instruments).

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for the legislative acts at the seat of the arbitration.113 However, at least in arbitration, the parties can take care to place the seat of the arbitration in a Contracting State of the NYC, thus preventing possible reservations of reciprocity to have a negative effect on the enforcement of the award. 75 In this context as well, the place where the award was made is determined by the arbitral seat (supra mn. 28). However, it is doubtful whether, to fulfill the reciprocity requirement, it is enough that the arbitral seat was in another Contracting State (“formal reciprocity”) or whether it is also necessary that the actual enforcement practice of that State substantially corresponds to that of the State of enforcement (“substantive reciprocity”). Such an additional substantial element may arguably be derived from the phrase “on the basis of reciprocity” contained in article I(3) s. 1. However, a requirement of substantive reciprocity would require an in-depth, case-bycase analysis of the enforcement practice in the other State, which would be hardly conducive to the efficient enforcement of foreign awards that is the objective of the NYC.114 Furthermore, since (where the reciprocity reservation applies) it is in any case necessary that the award was made in a Contracting State, which consequently is bound to observe the obligation to enforce foreign awards established by the NYC, there is no cause for further investigations. Consequently, “formal reciprocity” should be held sufficient to comply with the reciprocity requirement. 76 Where made, the reciprocity reservation clearly applies with regard to awards made in another State and thus subject to the NYC pursuant to article I(1) s. 1 (supra mn. 24). However, it is doubtful whether the reservation also has any relevant scope of application with regard to “non-domestic” awards within the meaning of article I(1) s. 2 (supra mns 29 et seq.).115 In this respect as well, the question whether a Contracting State that characterizes certain awards made in its territory as “non-domestic” will only enforce these awards under the Convention on the basis of reciprocity must be determined according to the respective position of that Contracting State (cf. supra mn. 30). Where that State follows the “procedural theory” (supra mns 22, 32) and made the reciprocity reservation, it is conceivable that such State will apply that reservation to the effect that an award made in its territory under the law of another State will only apply the NYC if that other State is also a Contracting State.116 77

cc) Commercial dispute reservation (s. 2). The commercial dispute reservation was introduced to encourage States that distinguished, with regard to arbitrability, between commercial and non-commercial disputes, to join the New York Convention. For that purpose, however, a respective reservation would not have been necessary, as nonarbitrability will always be available to a Contracting State as a defence to the enforcement of arbitration agreements or arbitral awards (cf. article V(2)(a) and infra mns 128, 113 For criticism see, e. g. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 166, 177; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.64; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2973; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 261. 114 Cf. Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 175 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.69 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2976 et seq. (resp. Art. XIV); also cf. USA: Fertilizer Corporation of India et al. v. IDI Management, Inc., 517 F. Supp. 948 (952 et seq.) (S.D.Ohio 1981). 115 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2979; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.65 et seq.; USA: Productos Mercantiles e Industriales, SA v. Fabergé USA Ind, 23 F.3d 41 (44) (2nd Cir. 1994); Lander Company, Inc. v. MMP Investments, Inc., 107 F.3d 476 (482) (2nd Cir. 1997). 116 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 26.

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294–306). The question whether a certain dispute is to be considered as commercial is governed by the national law of the State making the declaration; in this respect as well, the reservation is parallel to the defence of non-arbitrability. However, this does not preclude a Contracting State that has made the reservation from interpreting the notion of “commercial disputes” in a broad manner that goes beyond the limits of a purely domestic perspective.117 dd) Interaction of both reservations. Where the State of enforcement has made the 78 reciprocity reservation but not the commercial dispute reservation, there is no reciprocity with regard to non-commercial disputes if the State of origin has made the commercial dispute reservation.118 Where the State of enforcement has made use of both reservations, reciprocity is given regardless of whether the State of origin has made any reservation.

4. Applicability to the recognition of arbitration agreements119 a) General considerations. The NYC not only establishes an obligation of the 79 Contracting States to recognize and enforce (foreign) arbitral awards, but also an obligation to recognize arbitration agreements pursuant to article II. Unfortunately, the Convention does not contain any provision on its scope of application with regard to the recognition of arbitration agreements. Article I NYC only defines the scope of application with regard to awards and is thus not directly applicable. This gap in the Convention is due to the fact that an obligation to recognize arbitration agreements was only introduced at a very late moment and the remaining provisions were not adapted accordingly (supra mns 3, 6). However, it is generally accepted that the NYC, and particularly its article II, is not applicable to every arbitration agreement that may be invoked in a Contracting State.120 One possible conclusion would be to leave the scope of application to be determined by the implementing legislation of the Contracting States (like, for example, § 202 FAA; cf. supra mns 33–34). However, this would allow each Contracting State to autonomously define the cases in which it will recognize arbitration agreements pursuant to the NYC. As a consequence, the scope of application must be determined from the the Convention itself also with regard to arbitration agreements. It follows that the scope of application must be derived from the principles set out in 80 the Convention, notably its article I regarding the applicability to arbitral awards.121 In particular, the “territorial scope of application” (cf. supra mns 21–37) also applies with regard to arbitration agreements, albeit with certain modifications (infra mns 82–84). Furthermore, the agreement must provide for the resolution of a legal dispute by an 117 van den Berg, The New York Arbitration Convention of 1958, 1981, 54; Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mns 182 et seq.; Pryles, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 179 et seq. For a particular application in India: RM Investment & Trading Co. Pvt. Ltd v. Boeing Co., YCA XXII (1997), 710 (712 et seq.). 118 It is only doubtful whether this results from article I (3) or from article XIV; cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.76; van den Berg, The New York Arbitration Convention of 1958, 1981, 14; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2977. 119 Also see Tsakiri, (2018) 36 ASA Bull. 364–376. 120 van den Berg, The New York Arbitration Convention of 1958, 1981, 63; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 24; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.123 et seq.; Germany: OLG Hamburg, RIW 1979, 482 (483) = YCA V (1980), 262. 121 van den Berg, The New York Arbitration Convention of 1958, 1981, 63; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 25; Wilske/Fox, ibid., mn. 203.

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arbitral tribunal; in this respect, the general principles apply (supra mns 40–55). Finally, reservations made by a Contracting State may also have a bearing on the recognition of arbitration agreements (infra mn. 85). 81 Where the existence and validity of an arbitration agreement is contested as a defence to the enforcement of an arbitral award pursuant to article V(1)(a), the Convention’s scope of application is determined directly by article I with regard to the award that is to be enforced. b) Territorial scope of application. It results from article I(1) NYC that where the arbitration agreement provides for a “foreign” award (supra mns 24–28) or an award “not considered as domestic” in the respective Contracting State (supra mns 29–34), the NYC shall apply to the recognition of the agreement.122 As a consequence, the NYC necessarily applies whenever the seat of arbitration is abroad; in such a case, the Convention’s applicability also cannot be limited by any other requirements (e. g. international elements) the Contracting State may want to impose123 (cf. supra mns 24, 31). 83 Problems arise when, at the time the arbitration agreement is invoked, it is not yet possible to determine whether the subsequent award will be “foreign” (or “nondomestic”) within the meaning of article I(1), particularly because the place of arbitration has not been determined by the parties. In such cases, there is some controversy as to the proper test to apply: some courts and commentators ask whether it is likely, or at least possible, that a foreign award will result,124 others require some international element with regard to the parties or the dispute.125 Both approaches will usually lead to the same result, as it may normally be considered “likely” that a “foreign” award will ensue when there is some relevant international element to the case. 84 Finally, it is doubtful whether there is room for application of the NYC where it is clear that the Convention would not apply to the resulting award, because the arbitration agreement provides for a place of arbitration in the forum State (and that State would not consider the award as “non-domestic”).126 Here it is proposed that the NYC should all the same apply to the enforcement of the arbitration agreement, if there is some international element to the parties or the dispute.127 This is based on the consideration that, in an international case, enforcement abroad under the Convention 82

122 van den Berg, The New York Arbitration Convention of 1958, 1981, 57 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 26; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.126; Wilske/Fox, ibid., mns 205, 209; Italy: Cass., RDIPP 1970, 585 = YCA I (1976), 192; Switzerland: BGer., ASA Bull. 2011, 129 (133) = YCA XXXVI (2011), 343 (mn. 4); Trib. cant. vaudois, ASA Bull. 1995, 64 (65); USA: Smith/Enron Cogeneration Ltd Partnership, Inc. v. Smith Cogeneration Intern., Inc., 198 F.3d 93 (2nd Cir. 1999). 123 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 27; Tsakiri, (2018) 36 ASA Bull. 364 (369 et seq.). 124 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 35; Wilske/Fox, ibid., mn. 206; Germany: BGH, NJW-RR 2011, 548 (549) = YCA XXXVII (2012), 216 (219); OLG Hamm, RIW 1995, 681 = YCA XXII (1997), 707 (708); Italy: Cass., YCA IX (1984), 431 (432); Switzerland: BGE 121 III 38 (42) = YCA XXI (1996), 690 (695); BGE 122 III 139 (141 et seq.). 125 van den Berg, The New York Arbitration Convention of 1958, 1981, 61 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 319 et seq.; Austria: OGH, JBl 1974, 629 = YCA I (1976), 183; India: Gas Authority of India, Ltd v. SPIE-CAPAG, SA, YCA XXIII (1998), 688; Italy: Trib. Milano, Il Foro Padano 1991, 169 (172) = YCA XVII (1992), 539 (540). Also cf. USA: § 202 FAA, supra mn. 33. 126 Regarding the applicability of the NYC to the recognition of arbitration agreements leading to “nondomestic awards” in the USA, see, e.g.: Stemcor USA Inc. v. CIA Siderurgica do Para Cosipar, 927 F.3d 906 (909 et seq.) (5th Cir. 2019); Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (339) (5th Cir. 2004). 127 van den Berg, The New York Arbitration Convention of 1958, 1981, 61 et seq.; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 212–213; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 319 et seq.; Austria: OGH, JBl 1974, 629 = YCA I (1976), 183; India: Gas Authority of India, Ltd v. SPIE-CAPAG, SA, YCA XXIII (1998), 688 (698 et seq.).

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is likely and this should find collateral support by recognizing the respective arbitration agreement also at the seat of the arbitration. However, it must be noted that, in any case, the resulting award would not be subject to the Convention in the respective Contracting State. Against that background, it appears preferable not to apply a different legal regime with regard to the arbitration agreement depending on the procedural situation (initiation of the proceedings and pre-award stage on the one hand, enforcement of the award on the other hand) within one and the same State. Therefore, the NYC is generally inapplicable where the arbitration agreement provides for domestic arbitration.128 However, it is always possible that the implementing legislation of a Contracting State may provide for the applicability of the NYC to the recognition of an arbitration agreement regardless of the characterization of the subsequent award as “foreign” or “non-domestic”.129 c) Application of the reservations to the enforcement of arbitration agreements. 85 Even though the reservation of reciprocity only refers to the recognition and enforcement of awards, it is generally accepted that both reservations provided for in article I(3) may also be applied with regard to the recognition of arbitration agreements.130 As a consequence, where a Contracting State has made the reservation of reciprocity, an arbitration agreement will only be enforced under article II if the place of arbitration is in another Contracting State (as regards the application of the reservation with regard to non-domestic awards, cf. supra mn. 76). Where the place of arbitration has not yet been determined, it is sufficient that, in consideration of the existing international elements, there is a reasonable likelihood that the resulting award will be made in another Contracting State (cf. supra mn. 83). To that effect, it is not necessary that the international elements specifically point to Contracting States, as the arbitral seat may still be placed in a Contracting State as a “neutral” State. – Where a Contracting State has made the commercial dispute reservation, application of the Convention depends on a finding that the dispute is considered commercial under forum law (supra mn. 77).

III. Recognition of Arbitration Agreements 1. General a) Structural considerations. Article II NYC sets out two obligations of Contracting 86 States with regard to arbitration agreements: article II(1) provides for the recognition of arbitration agreements in general, while article II(3) relates to a particular manner in which arbitration agreements may be enforced, that is by referring the parties to arbitration where a national court is seized in a dispute that is covered by an arbitration agreement. Both provisions are subject to certain conditions: Pursuant to article II(1), 128 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 28–30; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.130; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 41 et seq.; Switzerland: BGer, ASA Bull. 1996, 527 (529); also cf. BGer., ASA Bull. 2008, 329 (331). 129 Cf. Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 210–211. 130 van den Berg, The New York Arbitration Convention of 1958, 1981, 60; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 36; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.131 et seq.; USA: Andros Compania Maritima SA v. André & Cie., 430 F.Supp. 88 (89 et seq.) (S.D.N.Y. 1977); M. Sylvain Ledee v. Ceramiche Ragno, 528 F.Supp. 243 (244 et seq.) (D.C. Puerto Rico 1981); National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326 (331) (5th Cir. 1987).

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the agreement must be “in writing” (as further defined in article II(2)), and the parties must have undertaken “to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration”. Article II(3) takes up these conditions by referring to “an agreement within the meaning of this article”, but further adds that the court shall only refer the parties to arbitration “unless it finds that the said agreement is null and void, inoperative or incapable of being performed”. 87 Both the structure and the language of article II are not particularly clear. While it seems plausible that only a valid agreement to arbitrate will be recognized, article II(1) makes express reference only to some conditions of validity, namely the written form requirement and the arbitrability of the dispute. In contrast, article II(3) envisages that any reason for which the agreement will be “null and void, inoperative or incapable of being performed” will be a reason not to refer the parties to arbitration. While the precise meaning of these terms is not entirely clear (cf. infra mn. 95), it may be assumed that whenever an arbitration agreement is found to be invalid, it will generally not be recognized both under article II(1) and article II(3).131 In that respect, the requirements of article II(1) and (3) are largely parallel. 88 The validity of the arbitration agreement is also relevant for the enforcement of an award, as the lack of a valid agreement to arbitrate constitutes a ground to refuse enforcement of an award under article V(1)(a) (infra mns 205–221). While article V(1) (a) also contains choice-of-law rules regarding the validity of the arbitration agreement, article II is devoid of any allusion to choice-of-law concerns. It must therefore be decided whether the principles laid down in article V(1)(a) also apply in the context of article II (infra mn. 123). 89 As for the scope of application of the obligation to recognize agreements to arbitrate, cf. supra mns 79–85. b) Situations in which article II applies. Article II(3) NYC specifically provides that the court of a Contracting State, “when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall […] refer the parties to arbitration”. Thus, it is clear that article II applies when suit is brought before a national court and provides that the court must refrain from entering a judgment on the merits when the defendant invokes a valid arbitration agreement. As for the specific meaning of “referring the parties to arbitration”, see infra mn. 151. 91 Moreover, article II NYC applies whenever a court of a Contracting State is called on to determine the validity of an arbitration agreement, e. g. where the procedural law of the forum allows for a declaratory judgment on the validity of the arbitration agreement132 or for an anti-suit injuction directed against court proceedings in violation of an 90

131 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 164; Wilske/Fox, ibid., mn. 284. 132 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 186; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.259; Greece: CA Piraeus, YCA XIV (1989), 641 (642 et seq.); Switzerland: BGer., Sem. Jud. 1987, 230 (231) = YCA XV (1990), 505 (507); UK: Metal Scrap Trade Corporation Ltd v. Kate Shipping Co. Ltd, [1990] 1 WLR 115 (130 et seq.); USA: Builders Federal (Hong Kong) Ltd v. The Turner Construction, 655 F.Supp. 1400 (1405 et seq.) (S.D.N.Y. 1987).

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arbitration agreement,133 or where a claim subject to an arbitration agreement is brought as a counterclaim.134 It is doubtful whether the general notion of “referring the parties to arbitration” 92 implies further powers of national courts in support of arbitration, e. g. regarding the appointment of arbitrators or the taking of evidence. However, the NYC neither creates nor limits national court jurisdiction in support of arbitration;135 rather, such jurisdiction must be determined under national law (see, e. g., article 11 ML regarding the appointment of arbitrators). Where such jurisdiction exists and to the extent the decision of the court depends on the validity and enforceability of the agreement to arbitrate, the principles of article II NYC shall apply.136 The same is true with regard to provisional measures. In that respect as well, article II 93 NYC has no bearing on the distribution of jurisdiction between national courts and arbitral tribunals; in particular, article II NYC in itself does not preclude a party from obtaining provisional relief by national courts. Instead, the availability of provisional relief is governed by the law of the respective forum.137 Thus, for example, in the United States § 205 FAA (allowing for removal to federal courts of actions or proceedings which “relate to” an arbitration agreement or award falling under the Convention) is today read by a majority of courts to allow provisional remedies in support of arbitration.138 In France, national courts retain jurisdiction to order provisional measures until the arbitral tribunal has been constituted (Art. 1449, 1506 CPC).139 Where, however, national law precludes courts from granting provisional relief if there is a valid arbitration agreement, the validity of the agreement is again governed by article II NYC. It is doubtful whether article II, by providing that each Contracting State shall 94 “recognize” an agreement to arbitrate, also requires that State to deny recognition or enforcement of a foreign judgment that has been rendered despite the existence of the 133 Cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.259; Bermann, (1990) 28 Col. J. Transnat’l L 589 (619 et seq.). Within the European Union, the availability of such injunctions is limited; see ECJ Case C-185/07 West Tankers Inc. v. Allianz SpA, [2009] ECR I-663; for anti-suit injunctions against court proceedings outside the EU see Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP, [2013] UKSC 35. 134 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.259; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 220; UK: Metal Scrap Trade Corporation Ltd v. Kate Shipping Co. Ltd, [1990] 1 WLR 115 (130 et seq.). 135 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 222; Schramm/Geisinger/ Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 101. 136 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 184; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.260. 137 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.260; van den Berg, The New York Arbitration Convention of 1958, 1981, 142; UNCITRAL Guide 2016, p. 61 et seq. (mns 74 et seq.). Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 221, 267; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 38, 100 et seq.; Australia: Electra Air Conditioning BV v. Seeley Int’l Pty Ltd, [2008] FCAFC 169; Italy: Cass., YCA IV (1979), 286 et seq. 138 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.260; Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355 (376 et seq.) (4th Cir. 2012); Stemcor USA Inc. v. CIA Siderurgica do Para Cosipar, 927 F.3d 906 (909 et seq.) (5th Cir. 2019); Toyo Tire Holdings of Americas Inc. v. Cont’l Tire N. Am., Inc., 609 F.3d 975 (979 et seq.) (9th Cir. 2010). – Contra: McCreary Tire & Rubber Co. v. CEAT S.p.A., 501 F.2d 1032 (1036 et seq.) (3rd Cir. 1974); Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (725 et seq.) (9th Cir. 1999). – Also cf. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. II, 2533. 139 Cf. infra, I mns 70–71; Derains/Kiffer, National Report for France (2013 trough 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, p. 50 et seq.

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arbitration agreement. Such a situation will arise where the foreign court held the arbitration agreement to be invalid (for any of the grounds listed infra mns 95–135), while the agreement would be considered valid from the perspective of the Contracting State where recognition of the judgment is sought. Particularly where recognition or enforcement of the judgment is governed by the Brussels I Regulation (recast), the majority view is that the existence of a valid arbitration agreement is no obstacle to the enforcement of a foreign judgment under the Regulation,140 a position that finds support in Recital 12 of the Regulation.141 However, arguably, this approach undermines the obligation arising under article II of the Convention to give effect to arbitration agreements, an obligation that is meant to be left unaffected by the Regulation under its Art. 73(2). Therefore, it may be considered that at least in serious cases of disregard of an arbitration agreement, recognition or enforcement of the foreign judgment may be refused on the basis of the public-policy defence.142

2. Validity of the arbitration agreement 95

a) General principles. As a matter of principle, an agreement to arbitrate will only be enforced by national courts if it is found to be valid. While article II(1) only mentions some of the factors that may affect the validity of an arbitration agreement (form, arbitrability; cf. supra mn. 87), article II(3) is somewhat more copious by accepting it as a defence to an arbitration agreement that “said agreement is null and void, inoperative or incapable of being performed”. The terms “null and void, inoperative or incapable of being performed” have not given rise to particular problems of categorization in the different Contracting States. As a consequence, there is usually no need for courts to enter into a detailed distinction between the different objections encompassed by these terms.143 In the paradigm case of article II(3), courts are typically only called upon to determine the validity of the arbitration agreement as a defence to a decision by the court on the merits. In that respect, the relevant inquiry is whether the arbitration agreement is valid as to form (infra mns 100–118) and substance (infra mns 119–127), including whether the parties had the capacity to enter into an arbitration agreement (infra mn. 130) and whether the subject matter of the dispute is capable of settlement by arbitration (infra mns 128–129), and whether the dispute is covered by the arbitration agreement (infra mns 136–137). It is possible to conceptually distinguish such grounds, which make the agreement invalid ab initio, from circumstances that lead to the subsequent ineffectiveness of an initially valid agreement (e. g. waiver144 or revocation 140 Hartley, (2014) 63 ICLQ 843 (864); Leible, in: Rauscher (ed.), Europäisches Zivilprozess- und Kollisionsrecht, 4th ed. 2016, Art. 45 Brüssel Ia mn. 22; Germany: OLG Hamm, NJW-RR 1995, 189 (190); UK: National Navigation Co. v. Endesa Generacion SA, [2009] EWCA Civ 1397 (mns 60 et seq., 124 et seq.). 141 Brussels I Regulation (recast), Recital 12, par. 3, provides: “On the other hand, where a court of a Member State, exercising jurisdiction under this Regulation or under national law, has determined that an arbitration agreement is null and void, inoperative or incapable of being performed, this should not preclude that court’s judgment on the substance of the matter from being recognised or, as the case may be, enforced in accordance with this Regulation. […]”. 142 Cf. Kindler, in: Kindler (ed.), Fairness Justice Equity, Festschrift für Reinhold Geimer 2017, 321 (330 et seq.); Mankowski, in: Magnus/Mankowski (eds), European Commentaries on Private International Law – ECPIL, Vol. I, 2016, Art. 73 Brussels Ibis mn. 11; Switzerland: BGE 124 III 83 (87) = YCA XXIVa (1999), 727 (730 et seq.); BGE 140 III 278 (279 f.). 143 Cf. Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 303; van den Berg, The New York Arbitration Convention of 1958, 1981, 155. 144 With regard to the waiver of the arbitration agreement, see Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 274; Australia: Comandate Marine Corp. v. Pan Australia Shipping Pty Ltd, 157 FCR 45 (62 et seq.) = YCA XXXII (2007), 224 (237 et seq.); USA: Podar Brothers v. ITAD

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of the arbitration agreement);145 however, the distinction is of little relevance, as in both cases the agreement will not be recognized under the Convention. – With regard to instances, where an agreement may be found “incapable of being performed” for factual reasons, see infra mns 140–142. Apart from its autonomous rules on the form (infra mns 100–112) and the necessary 96 contents (infra mns 119–121) of the arbitration agreement, there is nothing in the NYC to limit the grounds which may lead to the invalidity or ineffectiveness of an arbitration agreement under the applicable national law.146 In contrast, a substantial number of courts and commentators hold that the grounds that may lead to an arbitration agreement being held ineffective under article II(3) should be limited to internationally accepted grounds.147 However, this approach should not be followed. First, the NYC does not provide any basis for establishing such an international standard with reasonable certainty. Second, the review of arbitration agreements in the context of the recognition and enforcement of arbitral awards (see, in particular, article V(1)(a)) is also governed by the full spectrum of requirements existing under the applicable national law (cf. infra mn. 205). National courts, particularly in the United States, often proceed from a presumption 97 in favour of the enforceability of arbitration agreements, based on the “pro-arbitration bias” inherent in the New York Convention.148 However, the significance of such a general argument is at least doubtful. On the one hand, it may be applied to the interpretation of the legal rules governing the validity of the arbitration agreement and militate in favour of a restrictive interpretation of potential grounds of invalidity.149 In that respect, the argument should be rejected: Where the NYC does not lay down its own substantive rules, it is left for the applicable national law to decide which grounds may invalidate an arbitration agreement and whether these grounds should be interpreted strictly or liberally (supra mn. 96). On the other hand, the argument may refer to the burden of proof with regard to the existence of a valid agreement to arbitrate. As a Associates Ltd, 636 F.2d 75 (77) (4th Cir. 1981); Sedco, Inc. v. Petroleos Mexicanos – Mexican National Oil Co., 767 F.2d 1140 (1150) (5th Cir. 1985); Apple & Eve LLC v. Yantai N. Andre Juice Co., 610 F.Supp. 2d 226 (229 et seq.) (E.D.N.Y. 2009). 145 Cf., e. g., Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 304 (“null and void”) and 309 (“inoperative”); Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 14–42 (“null and void”) and 14–45 (“inoperative”). 146 Cf. Austria: OGH, SchiedsVZ 2005, 52 (53) = YCA XXX (2005), 416 (417); Switzerland: BGer., YCA XXII (1997), 800 (805 et seq.); also see Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.266; van den Berg, YCA XXVIII (2003), 562 (621 et seq.). 147 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 307–308; Schramm/ Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 104 et seq.; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 14–41; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 840; Switzerland: BGE 121 III 38 (42); USA: Riley v. Kingsley Underwriting Agencies, Ltd, 969 F.2d 953 (960) (10th Cir. 1992); Bautista v. Star Cruises, 396 F.3d 1289 (1302) (11th Cir. 2005); Sea Bowld Marine Group LDC v. Oceanfast Pty, Ltd, 432 F. Supp. 2d 1305 (1318) (S.D.Fla. 2006); Khan v. Parsons Global Sers. Ltd, 480 F.Supp. 2d 327 (340) (D.D.C. 2007). 148 E. g. USA: Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (24 et seq.) (1983); Riley v. Kingsley Underwriting Agencies, Ltd, 969 F.2d. 953 (959 et seq.) (10th Cir. 1992); Willman Suazo v. NCL (Bahamas), Ltd, 822 F.3d 543 (552) (11th Cir. 2016); Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279 (1280) (11th Cir. 2015); Japan Sun Oil Co., Ltd v. M/V Maasdijk, 864 F.Supp. 561 (563) (E.D.La. 1994); Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39 (44 et seq.) (3rd Cir. 1978); Singapore: FirstLink Investments Corp. Ltd v. GTPayment Pte. Ltd, [2014] SGHCR 12 = YCA XXXIX (2014), 493 (495). 149 See, e. g., van den Berg, The New York Arbitration Convention of 1958, 1981, 155; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 307 et seq.

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matter of principle, the burden of proof lies with the party relying on the arbitration agreement, in particular the party opposing national court proceedings on the basis of article II(3) NYC.150 However, that party will normally meet the burden of proof by presenting an arbitration agreement which fulfills the written form requirements of article II(2) and covers the dispute at issue. The burden of proof then shifts to the party contesting the validity of the arbitration agreement, who must prove that the agreement is “null and void, inoperative or incapable of being performed” under article II(3).151 In that respect, it may indeed be said that there is a kind of presumption in favour of the validity of an arbitration agreement that meets the formal requirements of article II(2) NYC. – As for the standard of review of courts deciding on the validity of an arbitration agreement under article II(3) NYC, see infra mns 153–154. 98 Where an arbitration agreement is found to be invalid under the NYC, it may still be enforced pursuant to the more-favourable law principle of article VII(1) (supra mn. 13, infra mns 155–156). 99

b) Separability doctrine. According to the widely accepted doctrine of separability, the arbitration agreement and the main contract (in which that agreement is contained) constitute independent contracts; as a consequence, a possible invalidity of the main contract will normally leave the arbitration clause unaffected.152 However, the doctrine of separability does not preclude that, on the facts of the case, a particular defect may relate not only to the main contract but also to the arbitration agreement, e. g. lack of authority or fraud that also affects a party’s decision to enter into the agreement to arbitrate.153 Ultimately, the scope and operation of the separability doctrine is a matter of national law: whether the validity of the arbitration agreement depends on that of the main contract is an issue governed by the substantive law applicable to the arbitration agreement (infra mn. 122), not autonomously by the NYC.154 As the principle is so widely accepted, reference to a particular legal system will, for practical purposes, only become necessary in exceptional cases. 150 See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.276; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 748; Germany: BGHZ 184, 365 (372) = IPRax 2011, 497 (498); BGH, NJW-RR 2011, 1287 (1288); Italy: Cass., YCA XLIII (2018), 481 (mn. 10); Singapore: FirstLink Investments Corp. Ltd v. GTPayment Pte Ltd, [2014] SGHCR 12 = YCA XXXIX (2014), 493 (mns 6 et seq). 151 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.276; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 305, 287–288; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 102; Russia: Supreme Court, YCA XLIII (2018), 542 (mn. 21). 152 See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.222; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 294–298; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 221; Feehily, (2018) 34 Arb. Int’l 355–383; Australia: Comandate v. Pan Australia Shipping Pty Ltd, 157 FCR 45 (98 et seq.) = YCA XXXII (2007), 224 (249); Germany: OLG Koblenz, SchiedsVZ 2005, 260 (261) = YCA XXXI (2006), 673 (675 et seq.); UK: § 7 Arbitration Act 1996; USA: Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310 (313) (2nd Cir. 1998); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (445 et seq.) (2006); also see article 16 (1) UNCITRAL Model Law. 153 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.222; Germany: OLG München, SchiedsVZ 2012, 159 (161) (fraud); Switzerland: BGE 119 II 380 (384) (defect to consent and duress); UK: Fiona Trust & Holding Corp. v. Privalov, sub nom Premium Nafta Products Ltd v. Fili Shipping Co. Ltd, [2007] UKHL 40; also cf. El Nasharty v. J. Sainsbury Plc, [2008] 1 Lloyd’s Rep. 360. 154 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 167; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.222; Bermuda: Sojuznefteexport v. Joc Oil Ltd, YCA XV (1990), 384 (404 et seq.); but also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 357.

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c) Form of the arbitration agreement. aa) The “in writing” requirement of 100 article II NYC. With regard to the form of the arbitration agreement, article II(1) NYC provides for an autonomous requirement of uniform substantive law that the agreement be “in writing”.155 This requirement applies whenever the Convention is applicable (supra mns 79–85), regardless of any further choice-of-law analysis. The term “agreement in writing” is subject to an autonomous interpretation (supra mn. 9) to which article II(2) provides further specifications. However, it is doubtful whether article II(2) should be read as an exhaustive definition of the “in writing” requirement under the NYC or whether it also allows for a more liberal interpretation with regard to the form of the agreement (infra mns 113–118). The requirement of a “writing” is mandatory and cannot be waived by the parties.156 101 It only applies to the constituent elements of the agreement to arbitrate as such, but not to other agreements by the parties on procedural matters, like the choice of the place of arbitration or the procedural rules.157 Article II(2) NYC contains two alternatives in which the written form requirement can 102 be fulfilled: the arbitration agreement may either be “signed by the parties” (infra mns 103–105) or “contained in an exchange of letters or telegrams” (infra mns 106–109). bb) Agreement signed by both parties. In its first alternative, article II(2) requires 103 “an arbitral clause in a contract or an arbitration agreement, signed by the parties”. While it may arguably be possible to relate the signature requirement only to “arbitration agreement” but not to “arbitral clause in a contract”, it is generally accepted that article II(2) must be understood to place arbitral clauses in a contract and self-standing arbitration agreements on the same footing and that the requirement of a signature consequently applies to both cases.158 This alternative of article II(2) requires a hand-written signature of both parties on 104 the contract document.159 The signature of just one party is not enough, even if it is the signature of the party against whom the agreement is invoked160 (as for the question whether that party may be precluded from relying on the formal invalidity of the 155 See, e. g., van den Berg, The New York Arbitration Convention of 1958, 1981, 173 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 75; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.162. 156 Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 73 et seq.; USA: Czarina, LLC v. W.F. Poe Synd., 358 F.3d 1286 (1291 et seq.) (11th Cir. 2004). 157 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 87, 100; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.151. 158 van den Berg, The New York Arbitration Convention of 1958, 1981, 190 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 93; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.170; Schramm/ Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 73; USA: Kahn Lucas Lancaster, Inc. v. Lark International Ltd, 186 F.3d 210 (215 et seq.) (2nd Cir. 1999); Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (449 et seq.) (3rd Cir. 2003); Yang v. Majestic Blue Fisheries, LLC, 876 F.3d 996 (999 et seq.) (9th Cir. 2017); Czarina, LLC v. W.F. Poe Syndicate, 358 F.3d 1286 (1290 et seq.) (11th Cir. 2004). – Contra (requirement of a signature only refers to a separate arbitration agreement): USA: Sphere Drake Insurance plc v. Marine Towing, Inc., 16 F.3d 666 (669 et seq.) (5th Cir. 1994). 159 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.172; Austria: OGH, SZ 51, no. 18, 76 (78) = YCA X (1985), 418 (419); Germany: OLG München, SchiedsVZ 2013, 62 (64); Italy: Cass., YCA V (1980), 267 (268); Switzerland: BGE 110 II 54 (58) = YCA XI (1986), 532 (534). 160 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.172; Germany: BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (220); BGH, SchiedsVZ 2011, 157 (159) = YCA XXXVII (2012), 223 (224).

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agreement for reasons of good faith, see infra mn. 148). It is, however, sufficient that each party signs the document which is destined for the other party.161 In case of an arbitration clause, it is enough that the signature covers the entire contract; there is no need for a specific reference to the arbitration clause162 (for arbitral clauses contained in general terms and conditions, see infra mns 110–111). Where the necessary signature is initially lacking, it may be added later163 (also see infra mn. 145). 105 There is no further form requirement where the parties merely agree on the extension of a contract in which an arbitration clause (meeting article II(2)) is contained.164 Article II(2) has also been held to be satisfied in case of a mutual reference in writing to a previous contract containing an arbitration clause.165 cc) Exchange of letters or telegrams. Alternatively, the arbitration agreement may also be contained in an “exchange of letters or telegrams”. The paradigm case of this alternative is contract formation by communication. It is generally accepted that the second alternative also applies where one and the same document is exchanged between parties.166 Where different documents are exchanged, they must refer to each other (at least by implication) in a manner supporting the agreement on arbitration.167 This is, for example, not the case where one document contains a choice of jurisdiction clause and the other an arbitration clause or where the arbitral clause is only contained in the acceptance of an offer that is silent as to arbitration. 107 It is clear from the structure of article II(2) that with regard to the exchange of letters and telegrams, the signature of the parties is not required.168 It has been held that this 106

161 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.172; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 80. 162 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.173; Italy: Cass., RDIPP 1995, 104 = YCA XXII (1997), 715 (720); Cass., Foro It. 2000 I, 2226 = YCA XXVI (2001), 816 (820); Switzerland: BGer., YCA XV (1990), 509 (511); OG Basel-Land, BJM 1995, 254 (255 et seq.) = YCA XXI (1996), 685 (686). 163 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.173; Australia: Commonwealth Development Corp. v. Montague, [2000] QCA 252 (mns 32 et seq.) = YCA XXVI (2001), 744 (748); Germany: OLG Köln, EuZW 1992, 711 (712) = YCA XIX (1994), 856 (857); Italy: Cass., Foro It. 1983, 736 (739 et seq.) = YCA IX (1984), 429 (431). 164 Belgium: Trib. comm. Bruxelles, Rev. arb. 1995, 311 (314) = YCA XXII (1997), 637 (639 et seq.); Italy: Cass., YCA IV (1979), 286 (288); Japan: District Court Yokohama, YCA VIII (1983), 394 (396); USA: Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39 (45 et seq.) (3rd Cir. 1978) = YCA V (1980), 272 (273 et seq.). 165 van den Berg, The New York Arbitration Convention of 1958, 1981, 220 et seq.; France: Cass. civ., JDI 1990, 633 (634) = YCA XV (1990) 447; Spain: Trib. Supr., Rev. C. Esp. Arb. 1986, 249 (252 et seq.) = YCA XIII (1988), 512 (513). See, in more detail, Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.177; Schramm/Geisinger/ Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 88 et seq. 166 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 98; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.180; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 81; van den Berg, The New York Arbitration Convention of 1958, 1981, 193 et seq. 167 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 99; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.183; Italy: Cass., RDIPP 1995, 104 = YCA XXII (1997), 715 (720); Switzerland: OG BaselLand, BJM 1995, 254 (256) = YCA XXI (1996), 685 (686). 168 Austria: OGH, SZ 51, no. 18, 76 (79) = YCA X (1985), 418 (419); Switzerland: BGE 111 Ib 253 (255) = YCA XII (1987), 511 (513); BGE 121 III 38 (45) = YCA XXI (1996), 690 (695 et seq.); USA: Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (449 et seq.) (3rd Cir. 2003).

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also applies where one and the same document is exchanged.169 While this consequence is probably unavoidable under the wording of article II(2), it creates a peculiar distinction with regard to the first alternative, which clearly requires the signature of both parties on the contract document (supra mn. 104). Article II(2) specifically makes reference to “letters and telegrams” as the prevalent 108 means of communication at the time the NYC was drafted. It is clear that since that time, particularly in recent decades, communication technology has progressed considerably. The question therefore arises to what extent the requirements of article II(2) may be adapted to provide for modern means of communication. Even on a conservative reading, article II(2) should not be strictly confined to letters and telegrams but extended to also cover telexes and faxes.170 However, it is doubtful whether article II(2) allows for the formal validity of agreements concluded entirely by way of electronic communication (e-mail); in that respect, see infra mns 113–118. The second alternative of article II(2) requires that there is at least some formal 109 embodiment of the mutual statements of the parties. Thus, apart from the uncertainties with regard to electronic commerce (mn. 108), it is clear that an oral or tacit acceptance of a written offer containing an arbitration clause does not satisfy the requirements of article II(2).171 For that reason, acceptance by acts of performance under the contract is also not sufficient to establish a formally valid arbitration agreement under the Convention.172 The written form requirement is also not met where a prior oral agreement to arbitrate has been included by one party into a unilateral letter of confirmation to which the other party has not replied in the necessary form.173 However, it is sufficient that the

169 van den Berg, The New York Arbitration Convention of 1958, 1981, 194; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 102; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 81; USA: Sphere Drake Ins. plc v. Marine Towing, Inc., 1992 WL 404345 (4 et seq.) (E.D.La. 1992) = YCA XIX (1994), 792 (794 et seq.). 170 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 130; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.181; Austria: OGH, JBl 1974, 629 = YCA I (1975), 183 (telex); France: CA Paris, Rev. arb. 1987, 482 (485) = YCA XIII (1988), 466 (469) (telex); Cass. civ., YCA XX (1995), 660 (661) (telex); Germany: OLG Hamburg, NJW-RR 1999, 1738 (1739) = YCA XXV (1998), 714 (716) (telefax); OLG München, SchiedsVZ 2011, 337 (338) (fax); Italy: Cass., YCA XXXIV (2009), 639 (642) (telefax); Spain: Trib. Supr., YCA XXVI (2001), 851 (852) (telex); Trib. Sup. Cataluña, YCA XXXVIII (2013), 456 (para. 9), 459 (para. 10); Switzerland: BGE 111 Ib 253 (255) = YCA XII (1987), 511 (512) (telex); BGE 121 III 38 (43) = YCA XXI (1996), 690 (696) (telex); UK: Abdullah M. Fahem & Co. v. Mareb Yemen Insurance Co., [1997] 2 Lloyd’s Rep. 738 (telex); USA: Gabriel Capital, L.P. v. Caib Investmentbank Aktiengesellschaft, 814 N.Y. S. 2 d 66 (68) (N.Y.App.Div. 2006) (fax). 171 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.184; van den Berg, The New York Arbitration Convention of 1958, 1981, 196 et seq.; Germany: BayObLG, NJW-RR 2003, 719 (720) = YCA XXIX (2004), 761 (765); Italy: Cass., YCA XX (1995), 739 (740 et seq.); Spain: Trib. Supr., YCA XXVII (2002), 546 (549); Switzerland: BGE 111 Ib 253 (255) = YCA XII (1987), 511 (513). – Contra: Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 125 (as an “unlisted option”; cf. infra mn. 112); UK: Zambia Steel & Building Supplies Ltd v. James Clark & Eaton Ltd, [1986] 2 Lloyd’s Rep. 225 (229) (but on the basis of a more liberal implementing legislation). 172 Italy: Cass., Foro It. 1995 I, 942 = YCA XX (1995), 739 (740 et seq.); but see USA: Kahn Lucas Lancaster, Inc. v. Lark Intern. Ltd, 1997 WL 458785 (7) = YCA XXIII (1998), 1029 (1037). 173 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 98 (but valid as an “unlisted option”, ibid., mn. 127; cf. infra mn. 112); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.184; Germany: OLG Rostock, IPRax 2002, 401 (404) = YCA XXIX (2001), 732 (737); OLG München, SchiedsVZ 2009, 340 (341 et seq.) = YCA XXXV (2010), 383 (385 et seq.); Italy: Cass., Corriere giuridico 1991, 637 = YCA XVII (1992), 554 (557 et seq.); Cass., YCA XX (1995), 739 (740); Spain: Trib. Supr., YCA XXVI (2001), 854 (856); Trib. Supr., Rep. Jurispr. 1998 II, no. 2919, 4268 = YCA XXVII (2002), 528 (529 et seq.).

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requisite written confirmation or acceptance is provided at a later moment174 (also see infra mn. 145). dd) Arbitral clauses contained in general terms and conditions. Particular considerations apply with regard to arbitral clauses contained in general terms and conditions. Where the requirements of article II(2) are fulfilled with regard to the standard terms themselves, in particular where the contract document containing the standard terms was signed by the parties (supra mn. 104), it is clear that the arbitration agreement is formally valid. In contrast, it is doubtful whether the written form requirement is met where the contract signed by the parties merely refers to external standard terms which, in turn, contain an arbitration clause. In such a case, it may be argued that the arbitral clause is not contained “in” the contract that was signed by the parties. 111 Where the reference clause in the main contract specifically mentions the arbitral clause (e. g. “All terms and conditions, including the Arbitration Clause, of the CharterParty dated […] are hereby incorporated.”), this is enough to satisfy the requirements of article II(2).175 In the end, such a specific reference essentially contains the constituent elements of an arbitration agreement (supra mn. 101). The situation is more doubtful, however, in case of a reference that does not specifically mention the arbitral clause. Such a general reference has been considered valid as to form by some courts and commentators.176 However, the purpose of the written form requirement of article II NYC is not achieved where the standard terms are not supplied together with the contract document and the other party thus has no adequate opportunity to take notice of the arbitration clause. Therefore, the preferable view only accepts a reference to general terms if these terms are attached to the contract (or exchange of letters)177 or printed on the reverse side.178 If there is no written reference to the general terms at all, it is held that article II(2) is not fulfilled even if the terms were actually attached.179 A 110

174 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 98; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.184; Germany: BGH NJW 1983, 1267 (1268) (relevant part of decision not contained in YCA XV (1990), 660). 175 van den Berg, The New York Arbitration Convention of 1958, 1981, 217; Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.175; France: Cass. civ., Rev. arb. 1990, 134 (135) = YCA XV (1990), 447 (448); Germany: OLG München, NJW-RR 1996, 1532 (1532); Switzerland: OG Basel-Land, BJM 1995, 254 (257) = YCA XXI (1996), 685 (687); UK: The “Rena K”, [1978] 1 Lloyd’s Rep. 545 (551). 176 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 138, 143 (arguing that the opportunity to take notice of the arbitral clause is not a matter of form but rather of substantive validity); Germany: BGH, YCA II (1977), 242 (relevant part of decision not contained in BGH, NJW 1976, 1591); Switzerland: BGer., YCA XV (1990), 509 (511); USA: Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (446 et seq.) (3rd Cir. 2003). – In Italy, the Corte di cassazione recently abandoned its strict rejection of a general reference to standard terms containing an arbitration clause: Cass., Riv. arb. 2012, 835 = YCA XXXVII (2012), 255 (256); cf., in contrast, Cass., RDIPP 2010, 443 = YCA XXXIV (2009), 649 (650); also see Frignani, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 561 (572 et seq.). 177 van den Berg, The New York Arbitration Convention of 1958, 1981, 220 et seq.; Austria: OGH, SZ 51, no. 18, 76 (78 et seq.) = YCA X (1985), 418 (419); France: Cass. civ., Rev. arb. 1990, 134 (138 et seq.) = YCA XV (1990), 447 (448); Italy: CA Firenze, Dir. mar. 1982, 73 = YCA X (1985), 454 (455); Germany: BGH, NJW 1984, 2763 (2765) = YCA X (1985), 427 (430); OLG München, NJW-RR 1996, 1532. 178 Germany: BayObLG, NJW-RR 1999, 644 (645) (relevant part of decision not contained in YCA XXIV (1999), 645); OLG München, SchiedsVZ 2009, 340 (341) = YCA XXXV (2010), 383 (385 et seq.); Spain: Trib. Supr., YCA X (1985), 493 (494 et seq.); Switzerland: OG Basel-Land, BJM 1995, 254 (257 et seq.) = YCA XXI (1996), 685 (686 et seq.). 179 Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 88; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 137.

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reference contained in invoices sent after the conclusion of the contract (and not accepted in writing by the other party) does not meet the requirements of article II.180 With regard to the incorporation of arbitral clauses contained in standard terms, 112 some courts, in particular Swiss181 and French courts,182 have adopted a flexible approach, deciding upon the facts of the individual case according to the business experience of the parties.183 However, it seems preferable in the interest of legal certainty to apply the form requirements of article II more strictly. Extraordinary circumstances can still be taken into account through the principle of good faith which may preclude a party from invoking the lack of form (infra mns 147–148). ee) Approaches towards a liberalization of the Convention’s form requirements. It 113 appears to be common ground among courts, commentators and legislators alike that the formal requirements laid down in article II(2), which have remained unchanged since 1958, are too narrow to adequately cover certain mechanisms of contracting commonly accepted today in commercial transactions (like an oral agreement with written confirmation, supra mn. 109) and modern means of communication (like electronic mail, supra mn. 108).184 Accordingly, in 2006, UNCITRAL adopted an amendment to its Model Law, which provides two new options for the corresponding article 7 ML: one containing a broad array of additional varieties by which the “in writing” requirement can be met, the other doing away with formal requirements altogether. Similarly, individual States have reformed their national laws by liberalizing their rules on the form of arbitration agreements. However, what can be done by UNCITRAL or national legislators is not as easily achieved with an international convention binding over 160 States. Thus, the text of the NYC itself has remained unchanged. However, as a complementary measure, UNCITRAL on July 7, 2006 also adopted a 114 “Recommendation Regarding the Interpretation of Article II, Paragraph 2, and Article VII, Paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards”185 which suggests two possibilities to liberalize the form requirements for arbitration agreements: The first is to apply article II(2) NYC “recognizing that the circumstances described therein are not exhaustive”, the second is to apply the morefavourable law provision of article VII(1) NYC “to allow any interested party to avail itself of rights it may have, under the law or treaties of the country where an arbitration agreement is sought to be relied upon, to seek recognition of the validity of such an 180

Germany: BGH, SchiedsVZ 2005, 306 (307) = YCA XXXI (2006), 679 (681). BGE 111 Ib 253 (256) = YCA XII (1987), 511 (513 et seq.); BGE 110 II 54 (59) = YCA XI (1986), 532 (534 et seq.); BGE 122 III 139 (143 et seq.); also see Pattochi, National Report for Switzerland (2018 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 2018, 18 et seq. 182 France: Cass. civ., Rev. arb. 1994, 108 (109) = YCA XX (1995), 660 (662); also see Derains/Kiffer, National Report for France (2013 through 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 2018, 11 et seq. 183 For further references see Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 92. 184 See, e. g., Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 75; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 17; Kaplan, (1996) 12 Arb. Int’l 28–46; Switzerland: BGE 121 III 38 (45) = YCA XXI (1996), 690 (696 et seq.). 185 “Recommendation Regarding the Interpretation of Article II, paragraph 2, and Article VII, Paragraph 1, of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10 June 1958, adopted by the United Nations Commission on International Trade Law on 7 July 2006 at its Thirty-ninth Session”, Official Records of the General Assembly, Sixty-first Session, Supplement No. 17 (A/61/17), annex II; available at: http://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/A2E.pdf (accessed 1 August 2020). – For the drafting history of the Recommendation see Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 16–21. 181

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arbitration agreement”. The latter approach corresponds with the generally accepted possibility of recognizing arbitration agreements, despite the more limited wording of article VII(1), under more favourable law existing in the respective Contracting State (supra mn. 13, also see infra mn. 155). The first approach is the more intriguing one, since it involves an autonomous liberalization of the Convention’s formal requirements for arbitration agreements. To the extent that these requirements can actually be autonomously adapted to the needs of modern commerce, resort to national law by way of article VII(1) would largely become superfluous. 115 In fact, the possibility of interpreting article II(2) as a non-exhaustive list of contracting mechanisms fulfilling the “in writing” requirement of article II(1) has been taken up both by courts and commentators, in part even before 2006.186 The autonomous requirements of the NYC with regard to arbitration agreements could then be interpreted along the lines of the 2006 Revision of article 7 ML.187 On that basis, both the commercial letter of confirmation (supra mn. 109)188 and agreements concluded by electronic communication (supra mn. 108)189 could be held to fulfill the formal requirements of article II NYC. 116 However, despite its considerable substantive appeal, it is doubtful whether the obligation to recognize arbitration agreements laid down in article II NYC can thus be legitimately extended to embrace situations that cannot reasonably be assumed to have been contemplated by the drafters and, more importantly, by the Contracting States when acceding to the Convention. If it is accepted that, for example, letters in confirmation of a prior oral agreement do not fulfill the requirements of article II(2) as laid down by the drafters of the NYC, it is hard to see how the subsequent revision of a mere Model Law – even one brought about by UNCITRAL itself – can change the interpretation of article II(2) and thereby extend the treaty obligations incurred by Contracting States under the NYC. The Model Law in itself does not have the requisite normative quality. In order to bring about a change of the law in that respect, one would expect the intervention either of the Contracting States changing the NYC or of national legislators adapting their own law and thus providing a more favourable regime for the formal validity of arbitration agreements under article VII(1). It is true that the first alternative must be considered unrealistic; but this in itself does not provide a sufficient justification to bring about the respective change of the NYC without the intervention of a competent legislator. 186 For a detailed argument advocating the non-exhaustive character of Art. II (2) see Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 103–123; also cf. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 670 et seq., 690; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 75 et seq.; Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, mn. 187; Canada: Proctor v. Schellenberg, 2002 MBCA 170 = YCA XXVIII (2003), 745 (750 et seq.); Singapore: Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd, [2006] 3 SLR 174 (182) = YCA XXXII (2007), 489 (493); Spain: Trib. Sup. Cataluña, YCA XXXVIII (2013), 456 (para. 9), 459 (para. 10); also cf. Germany: BGH, SchiedsVZ 2014, 151 (154) = YCA XXXIX (2014), 401 (mns 24 et seq.). – Contra: Australia: HIH Casualty & General Insurance Ltd v. R.J. Wallace, 204 FLR 297 (333); USA: Chloe Z Fishing Co. Inc. v. Odyssey Re (London) Ltd, 109 F.Supp. 2d 1236 (1245 et seq.) (S.D.Cal. 2000). 187 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 114–115; Schramm/ Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 75 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 618; cf. Germany: BGH, SchiedsVZ 2010, 332 (333) = YCA XXXVI (2011), 282 (284 et seq.); Switzerland: BGE 121 III 38 (43) = YCA XXI (1996), 690 (696 et seq.). 188 Cf. article 7(3) ML and Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 127. 189 Cf. article 7(4) ML and Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 120, 130–131; also cf. Spain: Trib. Sup. Cataluña, YCA XXXVIII (2013), 456 (para. 9), 459 (para. 10); USA: Chloe Z Fishing Co., Inc. v. Odyssey Re (London) Ltd, 109 F.Supp. 2d 1236 (1250) (S.D.Cal. 2000).

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On the other hand, as the more-favourable law system embodied by article VII(1) 117 shows, there is no reason why the courts of Contracting States should not be free to autonomously construe the written form requirement of article II NYC more liberally and thus recognize arbitration agreements beyond the formal scope of their obligations under the Convention (cf. supra mn. 11).190 But since the decision to recognize such agreements as being “in writing” is autonomous, it cannot be understood as expressing a corresponding treaty obligation also binding other Contracting States. With regard to contracts concluded by way of electronic communications, the 118 requirements of article II NYC may be subject to modifications by the United Nations Convention on the Use of Electronic Communications in International Contracts of 2005, which entered into force on 1 March 2013.191 d) Substantive validity in general. aa) Autonomous substantive requirements of 119 article II NYC. Apart from form (supra mns 100–118), article II NYC makes little provision with regard to other, i. e. substantive, requirements for the validity of the arbitration agreement. One such requirement is that the arbitration agreement, pursuant to article II(1), must relate to a “defined” legal relationship. Consequently, agreements which indiscriminately submit any and all disputes between the parties to arbitration cannot be recognized under the NYC.192 On the other hand, the arbitration agreement need not relate exclusively to a single relationship; for example, arbitration agreements contained in a framework agreement are enforceable under article II.193 Furthermore, it is sufficient if the scope of the arbitration agreement can be determined with reasonable certainty by way of interpretation.194 It is also an autonomous principle derived from article II(1) that courts have to 120 equally recognize both arbitration agreements relating to existing disputes and those relating to future disputes. In particular, any national law provisions limiting the validity of the latter are displaced to the extent that the NYC applies.195 It may also be considered an autonomous substantive provision of the NYC that 121 arbitration agreements which are inherently contradictory or too vague or indefinite (so-called “pathological arbitration clauses”) will not be enforced for being “incapable of being performed”;196 in that respect, see infra mn. 141. bb) Determination of the applicable law. All other legal issues concerning the 122 conclusion and substantive validity of the arbitration agreement remain to be decided under the national law determined by the respective choice-of-law rules. This applies, in particular, with regard to a possible lack of consent, the substantive incorporation of an 190 In that respect, the situation is comparable to that regarding the enforceability of preliminary measures ordered by the arbitral tribunal (supra mn. 69). 191 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 120; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 174 et seq.; for a more detailed discussion see Wolff, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 101–120. 192 van den Berg, The New York Arbitration Convention of 1958, 1981, 149; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Article II mns 65 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.139 – But see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 295, finding that there are “virtually no reported cases in which an arbitration agreement has been held invalid on the grounds that it does not deal with a ‘defined legal relationship’”. 193 See, e. g., Germany: BGH, SchiedsVZ 2007, 215 (216). 194 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 66. 195 van den Berg, The New York Arbitration Convention of 1958, 1981, 133. 196 Cf. Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 306; Lew/Mistelis/ Kröll, Comparative International Commercial Arbitration, 2003, mn. 14–42.

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arbitral clause by way of standard terms (for the formal requirements of incorporation see supra mns 110–112), claims of duress or coercion, invalidity of the arbitration agreement for reasons of unconscionability, the termination of the arbitration agreement, or the separability doctrine (supra mn. 99). 123 Unfortunately, article II does not contain any indication how the law applicable to the substantive validity of the arbitration agreement should be determined. A corresponding choice-of-law rule is only provided in article V(1)(a), where the invalidity of the arbitration agreement is raised as a defence to the enforcement of a Convention award (infra mns 209–213). According to the prevailing view, article V(1)(a) should apply by analogy also in the pre-award phase, in particular, where a court is called upon to refer the parties to arbitration pursuant to article II(3).197 Others, however, want to apply the respective choice-of-law rules of the forum198 or refer to general principles of international law.199 The prevailing view should be followed, as it would be inconsistent to analyze the validity of an arbitration agreement when it is invoked as a defence to court proceedings pursuant to different legal rules than when the enforcement of an award rendered on the basis of that arbitration agreement is sought. 124 In analogy to article V(1)(a), the substantive validity of the arbitration agreement must therefore be determined under the law to which the parties have subjected it or, subsidiarily, under the law of the country where the award was made; see, in more detail, infra mns 210–213. However, at the pre-award stage, a particular problem can arise if the place of arbitration has not yet been determined by the parties (and the parties have not made any choice of law regarding the arbitration agreement). In that situation, the applicable law cannot be determined on the basis of article V(1)(a). As a consequence, it seems inevitable to resort to the respective choice-of law rules of the forum.200 At least as a matter of principle, however, it would appear preferable to fill this gap in the Convention by an autonomous rule. Yet, it must be admitted that there is no indication whatsoever to be taken from the NYC as to how this gap could be filled. Thus, the decision in the end necessarily turns on what the respective court considers the appropriate choice-of-law rule where the place of arbitration has not been determined. Often, the only reasonable possibility will be to apply the law applicable to the main contract (or the substance of the dispute, where it is not contractual).201 Consequently, a choice-of-law clause regarding the main contract will also determine the law applicable to the arbitration agreement,202 regardless of whether it would normally be interpreted as also extending to the arbitration clause (cf. infra mn. 211). 197 van den Berg, The New York Arbitration Convention of 1958, 1981, 126 et seq., 152; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 42, 165; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.207 et seq.; Wilske/Fox, ibid., Art. II mns 228–230, 290; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I 496 et seq., 518; Austria: OGH, JBl 1974, 629 = YCA I (1976), 183; OGH, SchiedsVZ 2005, 52 (53) = YCA XXX (2005), 416 (417); Italy: CA Genova, Foro Pad. 1991, 168 = YCA XVII (1992), 542 (543); Switzerland: BGer., ASA Bull. 1996, 255 (260 et seq.) = YCA XXII (1997), 800 (805). 198 Germany: BGH, SchiedsVZ 2016, 218 (223); Greece: CA Piraeus, YCA XXXIII (2008), 555 (558 et seq.); USA: Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (5th Cir. 2004); Apple & Eve LLC v. Yantai N. Andre Juice Co., 610 F.Supp. 2d 226 (229 et seq.) (E.D.N.Y. 2009). 199 Cf. France: Cass. civ., Rev. arb. 1994, 116 (117). 200 van den Berg, The New York Arbitration Convention of 1958, 1981, 127 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 42; Wilske/Fox, ibid., Art. II mn. 235. – This is also the solution adopted in article VI(2)(c) EuC. 201 Cf. Germany: BGH, SchiedsVZ 2011, 46 (49) = YCA XXXVII (2012), 216 (219); with regard to national choice-of-law rules also: BGH, SchiedsVZ 2005, 306 (307 et seq.) = YCA XXXI (2006), 679 (683 et seq.); BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (218 et seq.). 202 Germany: BGH, SchiedsVZ 2005, 306 (307 et seq.) = YCA XXXI (2006), 679 (683 et seq.); BGH, NJW-RR 2011, 1350 (1353); OLG Hamburg, SchiedsVZ 2003, 284 (287) = YCA XXX (2005), 509 (517);

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A differentiated choice-of-law analysis is necessary with regard to optional dispute 125 resolution clauses.203 Such clauses proceed from one system of dispute resolution (court litigation or arbitration) and grant one or both of the parties the right to unilaterally opt for another system. Thus, under a unilateral arbitration clause, the regular system of dispute resolution shall be court litigation, but there is an option to refer disputes to arbitration.204 Particularly where the option is granted to only one of the parties (asymmetrical option clauses), the validity of such clauses may be doubtful, as they grant one party a procedural advantage that typically reflects the unequal bargaining power of the parties. In such cases, the validity of the agreement may have to be determined under two different sets of rules: Where the option is not exercised, jurisdiction is governed by the rules governing the “regular” (or “default”) jurisdiction: if it lies with national courts, their jurisdiction is governed by the respective rules, e.g. in Europe by the Brussels I Regulation (recast) (in particular, article 25); if it is meant to lie with an arbitral tribunal, the respective arbitration agreement is governed by the law applicable pursuant to article II NYC. Concerns regarding the validity of the optional clause become relevant when the option is exercised. If the option is for court jurisdiction, the validity of the clause is governed by the rules on court jurisdiction (e. g. article 25 Brussels I Regulation (recast));205 if the option is for arbitration, the validity of the optional arbitration clause is again governed by the law applicable to the arbitration agreement under article II NYC (supra mn. 124).206 cc) Provisions on the protection of the weaker party. Intricate choice-of-law 126 problems arise when arbitration agreements are concluded with parties that may be considered in a “weaker” bargaining position (e. g. consumers, employees) and are therefore granted particular protection by national legislators.207 In such cases, the great liberty afforded by the principle of article V(1)(a) to choose the law applicable to the arbitration agreement either directly by a respective agreement or indirectly by determining the seat of arbitration may conflict with the substantive policies of national laws directed at the protection of such weaker parties. In order to reflect that protective purpose also on the level of the conflict of laws, national legislators may decide to restrict the autonomy of the parties to choose the applicable law and instead enforce certain mandatory provisions of national law against a possibly conflicting choice-oflaw clause contained in the contract concluded by the parties.208 Some courts, notably in Greece: Polimeles Protodikio, YCA XXXIII (2008), 552 (553); United Kingdom: Sonatrach Petroleum Corp. (BVI) v. Ferrell International Ltd, [2002] 1 All E.R. (Comm) 627; Svenska Petroleum Exploration AB v. Government of the Republic of Lithuania, [2005] 2 CLC 965 (1005); USA: Motorola Credit Corp. v. Kemal Uzan, 388 F.3d 39 (50 et seq.) (2nd Cir. 2004). 203 See, generally, van Zelst, (2016) 33 J. Int’l Arb. 365–378; Draguiev, (2014) 31 J. Int’l Arb. 19–45; Smit, (2009) 20 Am. Rev. Int’l Arb. 391–419; Nesbitt/Quinlan, (2006) 22 Arb. Int’l 133–149. 204 Cf. e.g., Germany: BGH, NJW 1999, 282; UK: NB Three Shipping Ltd v. Harebell Shipping Ltd, [2004] EWHC 2607 (Comm); for a unilateral litigation clause, cf. Law Debenture Trust Corp. PLC v. Elektrim Finance B.V., [2005] EWHC 1412 (Ch). 205 In particular, asymmetrical jurisdiction clauses have been held invalid under the Brussels I Regulation in France; cf. Cass. civ., Rev. crit. DIP 2013, 256. Contra: Draguiev, (2014) 31 J. Int’l Arb. 19 (37 et seq.); Fentiman, (2013) 72 CLJ 24–27. 206 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 69; van Zelst, (2016) 33 J. Int’l Arb. 365 (366, 373 et seq.). 207 Cf., e. g., USA: In re Turner Bros. Trucking Co., Inc., 8 S.W.3d 370 (376 et seq.) (Tex.App. 1999) (unconscionability of arbitration agreement between employee and employer); Broemmer v. Abortion Services of Phoenix, Ltd, 840 P.2d 1013 (1016 et seq.) (Ariz. 1992) (invalidity of arbitral clause in general terms and conditions regarding medical malpractice claims). 208 See, e. g., Rome I Regulation, article 6(2) on consumer contracts and article 8(1) on employment contracts, which, however, are not applicable on arbitration agreements pursuant to article 1(2)(e) Rome I Regulation.

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Germany, have extended the national conflicts rules regarding consumer contracts to arbitration agreements,209 which may result in the application of more restrictive provisions both in substance as well as in form to such arbitration agreements. 127 Under the NYC, such restrictions of party autonomy regarding the law applicable to the arbitration agreement cannot be as easily achieved.210 In any case, article V(1)(a) does not provide any basis for that purpose. One possibility would be to regard the respective categories of parties as incapable of concluding arbitration agreements (cf. infra mn. 130) or to consider the respective disputes as non-arbitrable (cf. infra mns 128–129 and 305), but this is often not the technical solution adopted under national legislation. Then the only remaining alternative is to invoke the public-policy defence (infra mn. 135),211 which, however, sets a high standard of intervention that will often hardly be met, particularly in consumer cases.212 The problems regarding the protection of weaker parties under the Convention arise because the provisions of the NYC are geared to international commercial transactions for which the broad respect of party autonomy afforded by provisions like article V(1)(a) is appropriate. Where, however, a Contracting State does not avail itself of the commercial dispute reservation (supra mn. 77), the liberal regime of the Convention is made to encompass situations where a somewhat more conservative approach may appear preferable. This, in turn, may tempt national courts to search for ways to protect parties from excessively burdensome agreements to arbitrate, which may arguably be considered justified in view of the need to protect weaker parties but which also may not always be entirely in harmony with the spirit of the New York Convention. e) Subject matter capable of settlement by arbitration (“objective arbitrability”). Article II(1) NYC provides that an agreement to arbitrate only needs to be enforced if it concerns “a subject matter capable of settlement by arbitration”. Even if the parties have agreed to submit their dispute to arbitration, this agreement may still be denied effectiveness if it concerns a kind of dispute that cannot be validly submitted to arbitration under the applicable law, but is reserved for the jurisdiction of national courts (also cf. infra mn. 294). This legal capability of a dispute to be submitted to arbitration is often also called (“objective”) “arbitrability”.213 129 Again (cf. supra mn. 123), article II(1) does not designate the law applicable to define the scope of disputes that may be submitted to arbitration. In turn, that question is addressed with regard to the enforcement of arbitral awards by article V(2)(a), which provides that enforcement of an award may be refused if the subject matter of the dispute is not arbitrable under the law of the country where enforcement of the award is sought (infra mns 294–306). Because of the lack of a corresponding provision, it is disputed what 128

209 BGH, SchiedsVZ 2011, 46 (49) = YCA XXXVII (2012), 216 (219); BGH, SchiedsVZ 2011, 157 (159) = YCA XXXVII (2012), 223 (225); BGH, NJW-RR 2011, 1350 (1353); BGH, NJW-RR 2012, 49 (50); BGH, NJW-RR 2011, 1287 (1288). 210 Also see Bates, (2003) 27 Fordh. Int’l L. J. 823 (867 et seq.). 211 E. g., regarding commercial agents, Austria: OGH, SZ 2017, no. 30 = YCA XLII (2017), 348; also see infra mn. 331. 212 But see ECJ Case C-168/05, Elisa María Mostaza Claro v. Centro Móvil Milenium SL, [2006] ECR I10421 (mns 35 et seq.); ECJ Case C-40/08, Asturcom Telecomunicaciones SL v. Cristina Rodríguez Nogueira, [2009] ECR I-9579 (mns 51 et seq.). 213 Note, however, that the term “arbitrability” is also used, particularly in the United States, in a wider sense, to denote the existence of a valid agreement to arbitrate in general or to refer to the scope of the arbitration agreement; see, e. g., Genesco Inc. v. T. Kakiuchi & Co. Ltd, 815 F.2d 840 (846) (2nd Cir. 1987). This may result in terminological ambiguity with regard to “arbitrability” in the stricter sense; cf. Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 418; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 9–4.

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law should govern the question of objective arbitrability in the pre-award stage.214 Some courts have held that the arbitrability of a dispute should be determined autonomously under the NYC.215 However, the NYC does not provide any support for such an autonomous definition. Furthermore, it is desirable to analyze the arbitrability of a dispute in the pre-award stage according to the same principles that also apply when enforcement of an award is sought. Thus, it is necessary to take recourse to the respective choice-of-law principles of article V NYC. The prevailing view therefore refers to article V(2)(a) by analogy, which results in the application of the lex fori of the court called upon to enforce the arbitration agreement.216 Others argue for an application of article V(1)(a),217 while yet another approach wants to apply both the law applicable to the arbitration agreement under article V(1)(a) and the lex fori under article V(2)(a).218 Since article V(2)(a) expressly subjects questions of arbitrability to the law of the enforcing court, this principle should also apply to the enforcement of arbitration agreements pursuant to article II. This excludes the possibility of applying only article V(1)(a) to questions of arbitrability. It is another question whether the non-arbitrability of a dispute may alternatively result from the law applicable to the arbitration agreement. In that respect, the same considerations apply as for the enforcement of foreign awards (see infra mn. 298); consequently, arbitrability should only be determined under the law of the enforcing court, without further recourse to the law applicable to the arbitration agreement under article V(1)(a). – As for the tendency of national laws to adopt an increasingly liberal approach to objective arbitrability, cf. infra mns 299–306. f) Capacity of the parties to arbitrate. Although article II does not specifically 130 mention the capacity of the parties to enter into an arbitration agreement, it is clear that an incapacity of the parties will render an arbitration agreement invalid and thus unenforceable under the NYC. In that respect, the applicable law is again determined according to the same principles as under article V(1)(a)219 (infra mns 214–216). g) Agency. Where the arbitration agreement was concluded by an agent, all matters 131 relating to agency are governed by the law determined by the choice-of-law rules of the forum.220 214

For an overview of the different positions see Hanotiau, (1996) 12 Arb. Int'l 391–404. USA: Meadows Indemnity Company Limited v. Baccala & Shoop Insurance Services, Inc., 760 F. Supp. 1036 (1042) (E.D.N.Y 1991); Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (639) (1985). 216 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.205; van den Berg, The New York Arbitration Convention of 1958, 1981, 152; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 71 et seq.; Belgium: Cass., RDC 2005, 488 = YCA XXXI (2006), 587 (591, 593 et seq.); Italy: Cass., RDIPP 1979, 565 (568 et seq.) = YCA VI (1981), 229 (230); CA Genova, Riv. arb. 1994, 505 = YCA XXI (1996), 594 (596 et seq.); Switzerland: BGer., ASA Bull. 1993, 58 (62 et seq.) = YCA XX (1995), 766 (767); USA: Corcoran v. Ardra Ins. Co. Ltd, 77 N.Y.2d 225 (231 et seq.) (N.Y. 1990). This is also the solution adopted in article VI(2) EuC in fine. 217 Australia: Recyclers of Australia Pty Ltd v. Hettinga Equipment Inc., [2000] FCA 547; Belgium: Trib. Comm., Bruxelles Rev. arb. 1995, 311 (315 et seq.) = YCA XXII (1997), 637 (641 et seq.); CA Bruxelles, RDIDC 1987, 296 (297) = YCA XIV (1989), 618 (619 et seq.). 218 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 160–163; Bernardini, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 197 et seq., 503, 516 et seq. 219 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 46; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.200; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 218 et seq. 220 van den Berg, The New York Arbitration Convention of 1958, 1981, 222 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 45; Haas/Kahlert, in: Weigand/Baumann (eds), 215

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h) Effectiveness of the arbitration agreement for and against third parties.221 The NYC, and its article II in particular, is based on the premise that an arbitration agreement will only be effective between the parties.222 This, however, does not necessarily imply that an arbitration agreement may not be invoked by or against a third party that is not a signatory to the agreement. The effectiveness of the arbitration agreement with regard to third parties may arise in two basic constellations: 133 First, the question may arise whether a third party is bound or entitled under the arbitration agreement in its own right, e. g. as a third-party beneficiary or as a surety or guarantor. It is disputed whether the effectiveness towards third parties should be governed by the law applicable to the arbitration agreement under article V(1)(a)223 (supra mns 122–124) or by the law applicable to the relationship towards the third party (e. g. the suretyship contract) as determined by the respective conflicts rules of the forum.224 Since the effectiveness of the agreement of the immediate parties to the contract towards a third party is not a function of the arbitration agreement as such, but is derived from the legal nature of the relationship which ties that third party to the contracting parties (e. g. contract for the benefit of third parties, contract of suretyship), the latter approach is preferable. Thus, the law governing the relationship to the third party should also determine whether, and under what circumstances, that party will be bound to an arbitral clause contained in the main contract.225 In particular, the NYC in itself should not be held to require that the third party participates in the conclusion of the arbitration agreement in a form that satisfies article II(2) NYC.226 132

Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.239; Wilske/Fox, ibid., mn. 244; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 56; Germany: OLG Celle, SchiedsVZ 2004, 165 (167) = YCA XXX (2005), 528 (531 et seq.); Switzerland: BGer., ASA Bull. 1996, 646 (648). – As for the law applicable to the formal requirements of the authorization, see: Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 156; Austria: OGH, IPRax 2006, 268 (269 et seq.) = YCA XXXII (2007), 254 (257 et seq.); Italy: Cass., RDIPP 1976, 133 (137 et seq.) = YCA II (1977), 247 (248); Cass., Foro It 1983, 2200 (2202) = YCA X (1985), 464 (465). 221 Also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 1406 et seq.; Pika, Third Party Effects of Arbitral Awards: Res Judicata Against Privies, Non-Mutual Preclusion and Factual Effects, 2019, mns 279–363 (especially 307 et seq.). 222 See, e.g., USA: Yang v. Majestic Blue Fisheries, LLC, 876 F.3d 996 (1001) (9th Cir. 2017). 223 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 44; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.213 (regarding third-party beneficiaries; but also see n. 224); Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 63 (if extension is based on interpretation of the arbitration agreement); Germany: BGH, SchiedsVZ 2014, 151 (152 et seq.) = YCA XXXIX (2014), 401 (mns 7 et seq.) (where third party acted as agent for the immediate party to the contract). 224 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.240 et seq. (for third-party beneficiaries, however, see n. 223); Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 62. – Regarding sureties: Germany: BGH, VersR 1983, 776 et seq.; USA: Minera Alumbrera Ltd v. Fluor Daniel, Inc., 1999 WL 269915 (3 et seq.) (S.D.N.Y. 1999). 225 The distinction between both approaches is irrelevant to the extent that a choice-of-law clause contained in the main contract is held to also govern the question whether a non-signatory is permitted to invoke the arbitration clause; see, e. g., Germany: BGH, SchiedsVZ 2014, 151 (152 et seq.) = YCA XXXIX (2014), 401 (mns 7 et seq.); USA: CCP Systems AG v. Samsung Electronics Corp., Ltd, 2010 WL 2546074, 1 (7) (D.N.J. 2010). 226 USA (under a theory of estoppel): Borsack v. Chalk & Vermilion Fine Arts Ltd, 974 F.Supp. 293 (301) (S.D.N.Y. 1997); Best Concrete Mix Corp. v. Lloyd’s of London Underwriters, 413 F.Supp. 2d 182 (186 et seq.) (E.D.N.Y. 2006). – Contra: Outokumpu Stainless USA, LLC v. Converteam SAS, 902 F.3d 1316 (1325 et seq.) (11th Cir. 2018), certiorari granted 139 S.Ct. 2776 (2019); Invista S.a.r.l. v. Rhodia SA, 503 F.Supp. 2d 195 (203) (D.D.C. 2007).

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Second, the effectiveness of an arbitration clause with regard to third parties is also 134 involved in cases of legal succession, that is, where a claim subject to an arbitration agreement is transferred by contract (assignment) or by operation of law (statutory succession, e. g. heirship) to another party. In these cases as well, the question whether the successor is bound or entitled under an arbitration clause should be determined by the law applicable to the particular ground of succession (e. g. assignment, inheritance).227 Again, it will normally be sufficient that the initial agreement to arbitrate satisfies the formal requirements of article II(2); the successor will then be bound even if the transfer or assignment of rights in itself does not meet these requirements.228 On the other hand, where the main contract is transferred to another party, this may result in the lack of a valid arbitration agreement with regard to the original party.229 i) Public policy. Even though it is not mentioned in article II, courts may always 135 refuse to recognize an arbitration agreement if it violates the public policy or overriding mandatory provisions of the forum; in that respect, article V(2)(b) may be applied by analogy;230 see, in more detail, infra mns 307 et seq. – The notable decision of the ECJ in the Achmea case is centrally based on the particularities of investement arbitration which the Court clearly distinguishes from commercial arbitration.231 Its reasoning is thus not applicable to impair the validity of commercial arbitration agreements in general.232

3. Determination of the scope of the arbitration agreement In particular where a court is asked to refer parties to arbitration under article II(3), it 136 is not enough that the arbitration agreement is valid, but it must also cover the dispute at hand. The determination of the scope of the agreement to arbitrate is a matter of its interpretation.233 While contract interpretation may undoubtedly be informed by legal 227 Germany: OLG Hamburg, RIW 1989, 574 (577) = YCA XV (1990), 455 (461); also cf. France: Cass. civ., Rev. arb. 2000, 85 (86). – Contra (law governing the arbitration agreement): Germany: BGH, SchiedsVZ 2014, 151 (153) = YCA XXXIX (2014), 401 (mns 11 et seq.). 228 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 152–153; Germany: BGH, SchiedsVZ 2014, 151 (154) = YCA XXXIX (2014), 401 (mn. 29); USA: Technetronics, Inc. v. LeyboldGraeus GmbH et al., 1993 WL 197028 (4 et seq.) (E.D.Pa. 1993) = YCA XIX (1994), 843 (847 et seq.). – Contra (arbitration agreement in original contract effective with respect to the assignee only if specifically mentioned in the act of assignment): Italy: Cass., Dir. mar. 1986, 407 = YCA XI (1986), 518; CA Salerno, RDIPP 1992, 115 (118) = YCA XXI (1996), 576 (578). 229 See, e.g., France: Cass., Rev. arb. 2017, 1073 = YCA XLII (2017), 382. 230 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.264; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 105; Austria: OGH, SZ 2017, no. 30 = YCA XLII (2017), 348; Egypt: Cour Cass., Rev. arb. 1994, 757 (758); Germany: BGH, NJW 1987, 3193 (3195) = YCA XIX (1994), 653 (654); BGH, SchiedsVZ 2014, 151 (153 et seq.) = YCA XXXIX (2014), 401 (mns 16 et seq.); BGH, SchiedsVZ 2016, 218 (223, 226); Israel: Teva Pharmaceutical Industries Ltd (Israel) v. Proneuron Biotechnologies, Inc., YCA XXXV (2010), 407 (408); USA: Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (637) (1985); Puliyurumpil Mathew Thomas v. Carnival Corp., 573 F.3d 1113 (1121 et seq.) (11th Cir. 2009). – Contra: Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 307; USA: Harold Leonel Pineda Lindo v. NCL (Bahamas), 652 F.3d 1257 (1263) (11th Cir. 2011); Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279 (1287) (11th Cir. 2015); Aggarao v. MOL Ship Management Co., 675 F.3d 355 (372 et seq.) (4th Cir. 2012); Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 909; van Zelst, (2016) 33 J. Int’l Arb. 365 (374). 231 ECJ Case C-284/16 Slovak Republic v. Achmea BV, ECLI:EU:C:2018:158 (mns 54–55). 232 Also cf. Paschalidis, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 219 (225). 233 See van den Berg, The New York Arbitration Convention of 1958, 1981, 150 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 43 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.227;

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principles, it is often conducted by courts on the basis of predominantly factual considerations, in particular the text of the agreement and the regular meaning of the words used, the surrounding circumstances and the purpose of the transaction.234 Where, however, recourse must be had to legal principles, it is again doubtful which law shall apply, as the NYC does not contain any specific choice-of-law rules in that respect – neither in article II nor in article V. Under the prevailing view, the interpretation of the arbitration agreement is governed by the law applicable to that agreement under article V(1)(a) (that is, lacking a respective choice by the parties, the law of the place of arbitration; supra mns 122–124).235 According to another approach, the scope of the arbitration agreement should be determined by the lex fori.236 At least as a question of legal principle, this approach should not be followed, as the interpretation of the arbitration agreement should not be subject to different rules depending on the jurisdiction where this issue is raised. However, to the extent that the interpretation is guided primarily by factual considerations, the choice-of-law question is of little practical relevance, which may explain why courts may tacitly assume the applicability of their own law. 137 It is often said that, given the general purpose of the NYC to favour enforcement of arbitral agreements and awards, the interpretation of arbitration agreements should proceed from a “pro-arbitration bias”, meaning that, in cases of doubt, an arbitration agreement should be found to cover the dispute at hand.237 However, it appears preferable, in interpreting arbitration agreements, to be guided not by abstract “proarbitration policies” but rather by the typical will of the parties having made the agreement to arbitrate. In that respect, it can often be safely assumed that such parties have no desire to establish a dispute-resolution mechanism for their relationship that is split between arbitral tribunals and national courts.238 Thus, there is indeed a certain presumption in favour of a wide interpretation of arbitration agreements, which, however, is always subject to a possibly more restrictive purpose pursued by the actual parties to the contract. – For example, an arbitration agreement providing that “all Wilske/Fox, ibid., mns 223 et seq.; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 57 et seq. 234 Cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 204; van den Berg, The New York Arbitration Convention of 1958, 1981, 312. 235 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 43, 67; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.227; Borris/Hennecke, ibid., Art. V mn. 206; Germany: BGH, NJW 1976, 1591 = YCA II (1977), 242 (243); OLG München, IPRspr 1989, no. 240, 531 = YCA XVII (1992), 500 (501); BGH, SchiedsVZ 2014, 151 (154); India: National Thermal Power Corp. v. The Singer Company, 1992 SCC (3) 551 = YCA XVIII (1993), 403 (406); Japan: Supreme Court, Jap. Ann. Int’l L. 41 (1998), 109 et seq.; Switzerland: BGer., ASA Bull. 1996, 255 (260) = YCA XXII (1997), 800 (805). 236 See, in particular, USA: Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39 (43) (3rd Cir. 1978); Genesco Inc. v. T. Kakiuchi & Co. Ltd, 815 F.2d 840 (847 et seq.) (2nd Cir. 1987). 237 Cf., e. g., Australia: Walter Rau Neusser Oel und Fett AG v. Cross Pacific Trading, Ltd, [2005] FCA 1102 (mn. 41) = YCA XXXI (2006), 559 (564); Comandate v. Pan Australia Shipping Pty Ltd, [2006] 157 FCR 45 (87 et seq.) = YCA XXXII (2007), 224 (240); Germany: OLG Hamburg, RIW 1989, 574 (578) = YCA XV (1990), 455 (464); BGH, NJW-RR 2002, 387; Switzerland: BGer., ASA Bull. 2004, 344 (350 et seq.); UK: Fiona Trust & Holding Corp. v. Privalov, [2007] 2 CLC 553 (564) = YCA XXXII (2007), 654 (679 et seq.); USA: Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (626 et seq.) (1985); David L. Threlkeld & Co., Inc. v. Metallgesellschaft Ltd, 923 F.2d 245 (250) (2nd Cir. 1991); Louis Dreyfus Negoce SA v. Blystad Shipping & Trading, Inc., 252 F.3d 218 (223 et seq.) (2nd Cir. 2001); also see Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 225, 261. – Contra: Gaillard/ Savage, International Commercial Arbitration, 1999, mn. 481. 238 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 226, 261; Lew/Mistelis/ Kröll, Comparative International Commercial Arbitration, 2003, mn. 7–67; UK: Fiona Trust & Holding Corp. v. Privalov, [2007] 2 CLC 553 (559) = YCA XXXII (2007), 654 (674).

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disputes arising out of or in connection with this contract” may typically be interpreted to also encompass claims in tort.239 In contrast, more careful analysis will be required to determine whether an arbitration agreement should be held to extend to counterclaims or rights of set-off or retention.240

4. Other objections to the recognition of arbitration agreements, in particular: good faith and arbitration agreements “incapable of being performed” Apart from the invalidity of the arbitration agreement (be it ab initio or subsequent to the conclusion of the agreement, cf. supra mn. 95) and the excess of an otherwise valid submission to arbitration (supra mn. 136), there are further possible objections to the recognition of an agreement to arbitrate. Thus, lack of good faith by the party invoking the arbitration agreement may exceptionally constitute an autonomous defence under article II NYC241 (also cf. infra mn. 147). This may, for example, apply where a party had initially argued in the arbitral proceedings that national courts were competent to hear the dispute; in such a case that party may be precluded from subsequently raising the arbitration agreement as a defence to a court proceedings on the merits.242 Furthermore, under article II(3) NYC, a court is not required to refer the parties to arbitration if it finds that the agreement to arbitrate is “incapable of being performed”. This exception is generally understood to refer to circumstances that present factual obstacles to arbitral proceedings.243 Such obstacles may, for example, arise where the parties have designated an arbitral institution that later ceases to exist or have nominated a particular arbitrator who later dies or is not willing to participate. In these cases, however, the arbitration agreement must be carefully analyzed whether it cannot be upheld by way of interpretation.244 Factual impediments may also be found to exist where the venue of arbitration is seriously inconvenient or dangerous for the parties or arbitrators.245 Arguably, the arbitration agreement may also be held “incapable of being performed” where its content is too vague246 to be implemented (e. g. insufficient determination of the

239 See, e. g., Germany: BGH, NJW 1988, 1215; India: Renusagar Power Co. Ltd v. General Electric Co., (1984) 4 SCC 679 = YCA X (1985), 431 (437); UK: Abdullah M. Fahem & Co. v. Mareb Yemen Insurance Co., [1997] 2 Lloyd’s Rep. 738 (742); USA: Telecom Italia SpA v. Wholesale Telecom Corp., 248 F.3d 1109 (1114) (11th Cir. 2001); Hudson v. ConAgra Poultry Co., 484 F.3d 496 (503) (8th Cir. 2007). 240 See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.234 et seq.; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 7–68 et seq.; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 209 et seq.; Mourre, (2008) 24 Arb. Int’l 387–404; UK: Norscot Rig Management PVT Ltd v. Essar Oilfields Services Ltd, 2010 WL 442409 (EWHC (Comm) 2010); USA: Enterprise Field Services, LLC v. Toc-Rocky Mountain, Inc., 405 S.W.3d 767 (773 et seq.) (Tex.App. 2013); also cf. ICC Case No. 12363, ASA Bull. 2006, 462 (469); ICC Case No. 5971, ASA Bull. 1995, 728 (738 et seq.). 241 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 272. 242 See Germany: BGH, NJW 1968, 1928 (1929). 243 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 311. 244 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 313; Germany: BGH, SchiedsVZ 2011, 284 (285). 245 This claim, however, is often unsuccessful; see, e. g., UK: Gatoil International Inc. v. National Iranian Oil Company, YCA XVII (1992), 587 (592) (EWHC 1988) (rejecting Claimant’s allegation that no arbitrator would be willing to arbitrate in Tehran); USA: Filanto SpA v. Chilewich International Corp., 789 F.Supp. 1229 (1242) (S.D.N.Y. 1992) (rejecting Claimant’s position that Moscow was not a suitable forum for the arbitration). 246 See, e. g., Italy: CA Salerno, RDIPP 1992, 115 (119) = YCA XXI (1996), 576 (579).

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arbitral institution)247 or where it is internally contradictory (e. g. by providing for both arbitration and litigation).248 These cases may, however, also be analyzed as resulting in an actual invalidity of the arbitration agreement for uncertainty.249 Here again, it is necessary to carefully determine whether the parties considered the characteristics of the arbitration that cannot be established with sufficient certainty from their agreement to be essential to their arbitration agreement or whether it must be assumed that they would have wanted to adhere to that agreement in any case. In case of such “pathological” arbitration clauses, it is generally appropriate for the court to seek to uphold the arbitration clause as far as possible by way of an interpretation in favorem validatis.250 142 A further instance of arbitration agreements that are considered to be “incapable of being performed” may be seen in German decisions finding lack of funding as a defence to arbitration,251 although here as well, these cases may arguably rather be analyzed as grounds for a revocation of the arbitration agreement.252 Other cases have held that the inability to pay the necessary advance on cost was not sufficient to render the arbitration agreement incapable of being performed.253 Where the parties have agreed on CIETAC arbitration, the Austrian Supreme Court has held that the Austrian party could not oppose referral to arbitration because arbitration in China was too expensive or unreasonable.254

5. Cure of defective arbitration agreements, preclusion with regard to the defence of invalidity of the arbitration agreement 143

a) General considerations. Even though an arbitration agreement was initially invalid, a party may be precluded from raising that invalidity as a defence to the recognition of the agreement by national courts. This applies both to the recognition of an arbitration agreement in the pre-award stage, notably under article II NYC, as well as 247 See, e. g., Germany: BGH, NJW 1983, 1267 (1268 et seq.) = YCA XV (1990), 660 (661 et seq.) (applying the EuC); also cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.216; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 7–75, 8–22. 248 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.217 et seq.; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 312; Born, International Commercial Arbitration, Vol. I, 2014, 770 et seq.; Spain: Trib. Supr., YCA XXXII (2007), 567 (569); Switzerland: BGer., ASA Bull. 2011, 129 (135 et seq.) = YCA XXXVI (2011), 343 (mns 9 et seq.) (arbitral clause providing that “the parties agree […] to have the dispute submitted to binding arbitration through The American Arbitration Association or to any other US court”). 249 Cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.216; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 8–22. 250 See, e. g., Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.216; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 7–74 et seq.; Germany: OLG Hamm, SchiedsVZ 2006, 106 (109); Korea: Supreme Court, YCA XVII (1992) 568 (569 et seq.); also cf. France: TGI Paris, Rev. arb. 2010, 571 (574 et seq.). 251 Cf. BGH, NJW 2000, 3720 (3721) = YCA XXVII (2002), 265; KG, SchiedsVZ 2003, 239; also see Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 314–316 (arguing for a more restrictive approach regarding that defence); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.221. 252 Cf. Wagner, SchiedsVZ 2003, 206 (216 et seq.). Contra: BGH, NJW 2000, 3720 (3721) = YCA XXVII (2002), 265. 253 Russia: Supreme Court, YCA XLIII (2018), 542 (mns 20–21); UK: El Nasharty v. J. Sainsbury Plc, [2008] 1 Lloyd’s Rep. 360 (361 et seq.); Paczy v. Haendler & Natermann GmbH, [1981] 1 Lloyd’s Rep. 302 (307 et seq.). 254 OGH, YCA XLII (2017), 346.

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to the defence of an invalid arbitration agreement with regard to the enforcement of an arbitral award under article V(1)(a) NYC. Therefore, reference is made to the respective comments infra mns 187–198. Generally, the NYC does not contain any specific provisions with regard to a possible 144 cure of an initially invalid arbitration agreement or with regard to the preclusion of a party to invoke a subsisting invalidity. As a consequence, it must always be determined first whether these aspects are governed by autonomous principles derived from the Convention itself or by national laws designated by conflicts rules (cf. infra mns 187–198). b) Cure of an initially defective arbitration agreement. Where the arbitration 145 agreement initially suffered from some defect with regard to form or substance, this defect may be cured where the parties make a new agreement satisfying all formal and substantive requirements. This may also be done by way of an implied agreement,255 e. g. where the arbitration agreement is invoked in proceedings before a state court,256 where a party signs the terms of reference without objecting to the tribunal’s jurisdiction,257 or where a party submits the nomination of its arbitrator, thus demonstrating its desire to have the dispute decided by arbitration.258 However, for such behavior to constitute a new (and valid) arbitration agreement, it must be carefully determined that it establishes a continued mutual agreement of the parties to submit their dispute to arbitration. Whether such agreement exists, must be determined under the law applicable to the arbitration agreement (supra mns 122–124);259 its form is governed by article II(2) NYC. Thus, where the contract initially lacked the signature of one of the parties (cf. supra mn. 104) or in case of a unilateral writing containing an arbitral clause (cf. supra mn. 109), the defect as to form under article II(2) NYC may be cured by a later signature or written confirmation by the other party. Whether the initial offer to conclude an arbitration agreement is still open for acceptance, however, is a matter of substance that is governed by the law applicable to the arbitration agreement. c) Procedural preclusion. A party may also be precluded from invoking a possible 146 defect of the arbitration agreement by appearing in the arbitral proceedings without objecting to the tribunal’s jurisdiction (see, e. g., article 16(2) ML, article V EuC). In this respect, the preclusive effect of the party’s conduct may occur regardless of whether such conduct would meet the substantive or formal requirements for the conclusion of a (new) agreement to arbitrate (supra mn. 145). It is disputed whether and under what conditions such procedural preclusion should be respected also under the regime of the NYC; see infra mns 191–194. d) Good faith. Finally, a party may be precluded from invoking the lack of a valid 147 arbitration agreement on the basis of the principle of good faith, more specifically the prohibition of contradictory behavior (venire contra factum proprium). While some courts have derived this limitation from their respective lex fori,260 the prevailing view 255 Cf., e. g., USA: First Citizens Mun. Corp. v. Pershing Div. of Donaldson, Lufkin & Jenrette Sec. Corp., 546 F.Supp. 884 (887) (N.D.Ga. 1982). 256 See, e. g., Italy: Cass., Foro Italiano 1983, 736 (739 et seq.) = YCA IX (1984), 429 (431); Cass., YCA XVI (1991), 588 (590). 257 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 53; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.242; see, e. g., France: CA Paris, Rev. arb. 1987, 498. 258 See, e. g. Germany: OLG Hamburg, NJW-RR 1999, 1738 (1739) = YCA XXV (2005), 714 (715). 259 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 50. 260 See, e. g., USA: Slaney v. International Amateur Athletic Federation, 244 F.3d 580 (591) (7th Cir. 2001).

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rightly considers the principle of good faith to be an inherent element of the NYC itself261 (also cf. infra mn. 198). 148 The defence of contradictory behavior may be taken into consideration where only one of the parties has validly agreed to arbitration, e. g. signed the contract containing an arbitral clause within the meaning of article II(2) NYC (cf. supra mn. 104). If the other party (who has not signed) later invokes the arbitration clause (e. g. by asking the national court where suit is brought on the merits to refer the parties to arbitration), the first party may arguably be precluded from invoking the formal invalidity of the agreement to arbitrate, as it has in fact signed the agreement and the other party now avails itself of the agreement.262 However, such a preclusion for reasons of good faith should only be recognized in exceptional circumstances, as it would effectively permit the other party a free choice between arbitration and litigation before national courts.

6. Referral to arbitration a) General. Pursuant to article II(3), “[t]he court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration”. The referral to arbitration requires a respective motion of one of the parties; a national court is not allowed to enforce the arbitration agreement ex officio.263 On the other hand, where there is a corresponding motion, the referral is mandatory; there is no discretion of the court with regard to the enforcement of a valid agreement to arbitrate.264 150 Some courts have interpreted the reference to “differences” between the parties in article II(1) NYC as limiting the obligation of courts to recognize arbitration agreements and refer the parties to arbitration.265 This restriction will only become relevant in unusual cases, e. g. where the defendant does not dispute the existence of a legal obligation, but still fails to perform. In such cases as well, however, the claimant should be allowed to rely on the arbitration agreement in order to obtain an award on the 149

261 van den Berg, The New York Arbitration Convention of 1958, 1981, 185; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 53; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.245; Germany: BGH, SchiedsVZ 2008, 196 (197); BayObLG, YCA XXX (2005), 568 (572); USA: Transrol Navegacao v. Redirekommanditselskaber Merc Scandia XXIX, 782 F.Supp. 848 (853 et seq.) (S.D.N.Y. 1991); also cf. Switzerland: BGE 121 III 38 (45 et seq.) = YCA XXI (1996), 690 (698); BGer., ASA Bull. 2016, 482 (485, 487 et seq.) = YCA XLI (2016), 573 (mns 3 et seq., 14 et seq.). 262 See, e. g., Italy: Cass., YCA XVI (1991), 588 (590). Also cf. the German decisions in BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (218 et seq.); BGH, NJW-RR 2011, 1350 (1352), where the argument was rejected because the defendant in the court proceedings was held to have acted contradictorily as well. 263 van den Berg, The New York Arbitration Convention of 1958, 1981, 138; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 200, 270; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 102. 264 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 322–323; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.278; USA: McCreary Tire & Rubber Co. v. CEAT, 501 F.2d 1032 (1036 et seq.) (3rd Cir. 1974); InterGen N.V. v. Grina, 344 F.3d 134 (142) (1st Cir. 2003); Answers in Genesis of Kentucky, Inc. v. Creation Ministries International, Ltd, 556 F.3d 459 (469) (6th Cir. 2009). 265 Australia: John Francis Davies v. Peter Hodgetts, YCA XXIII (1998), 619 (621 et seq.); USA: Ieyoub, Attorney General ex rel. State of Louisiana v. American Tobacco Company, et al., YCA XXIII (1998), 1068 (1070) (W.D.La. 1997); Cox v. Fremont Country Pub Building Auth., 415 F.2d 882 (886) (10th Cir. 1969). – This also used to be the position of the English Courts: Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd, [1992] QB 656 (669); Halki Shipping Corp. v. Sopex Oils Ltd, [1998] 1 WLR 726 (741 et seq.); S.L. Sethia Liners Ltd v. State Trading Corp. of India Ltd, [1986] 1 WLR 1398 (1401 et seq.). § 9 Arbitration Act 1996, however, no longer requires a “dispute” between the parties.

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merits against the defendant. Consequently, the existence of actual “differences” between the parties should not be attributed legal relevance of its own.266 Article II(3) does not specifically provide what the court must do in order to “refer 151 the parties to arbitration”; it only precludes the court from proceeding on the merits (supra mn. 90). The specific procedural steps to be taken in that respect (stay of proceedings, dismissal of action) are governed by the procedural law of the forum.267 Beyond its barring effect with regard to proceedings on the merits, article II(3) does not create any further competences of national courts in support of arbitration; such competences are rather governed by national law (supra mn. 92). b) Relationship between national court and arbitral tribunal. The validity and 152 scope of an agreement to arbitrate may fall to be assessed either by a national court under article II NYC (in particular on a motion to refer the parties to arbitration pursuant to article II(3)) or by an arbitral tribunal (see, e. g., article 16 ML). This raises the problem of the relationship between the national court and the arbitral tribunal with regard to the review of the arbitration agreement or, in other words, the jurisdiction of the arbitral tribunal, a problem that is commonly discussed under the multifaceted notion of “Kompetenz-Kompetenz”.268 In particular, the effect of “Kompetenz-Kompetenz” may on the one hand be positive, by authorizing the arbitral tribunal to decide on its own jurisdiction (e. g., article 16(1) ML; it is another question though, whether such a decision will be binding on national courts; see infra mn. 201), and it may on the other hand be negative, by excluding a corresponding review by national courts in favour of the arbitral tribunal. As far as article II NYC is concerned, there is nothing to restrict the review 153 performed by national courts with regard to the validity and effectiveness of arbitration agreements. In fact, article II(3) NYC expressly provides that the court shall refer the parties to arbitration, “unless it finds that the [arbitration] agreement is null and void, inoperative or incapable of being performed”. Thus, the NYC is based on the premise that the court may fully review the formal and substantive validity of the agreement to arbitrate, without having to defer to a prior assessment of this issue by the arbitral tribunal. However, national law may provide for a more limited review of the arbitration agreement by national courts.269 Such national law provisions are applicable to a referral to arbitration under article II(3) NYC, either on the basis of a characterization as procedural law or on the basis of the more-favourable law principle of article VII(1) (infra mns 155–156). While under the traditional view, the court retains full power to rule on the validity 154 and scope of the arbitration agreement,270 in an increasing number of jurisdictions, the 266 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 60–62; Wilske/Fox, ibid., Art. II mn. 265; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 338 et seq. 267 van den Berg, The New York Arbitration Convention of 1958, 1981, 139; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 318–321; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.278; Italy: Cass., YCA XIII (1988), 504 (506 et seq.); Cass., Riv. dir. proc. 2007, 1293 = YCA XXXIII (2008), 596 (598); Switzerland: BGE 111 II 62 (65 et seq.) = YCA XII (1987), 509 (510 et seq.); USA: Fetinia Basargin v. Shipowners’ Mutual Protection and Indemnity Assoc., 1995 AMC 1463 (1467 et seq.) (D.Alaska 1995) = YCA XXII (1997), 894 (895 et seq.). 268 See, for the different connotations of that term, e. g., Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 95 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mns 650 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 1046 et seq. 269 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 302. 270 Austria: OGH, SZ 2017, no. 30 = YCA XLII (2017), 348 (mn. 3); Germany: BGH, SchiedsVZ 2005, 95 (96) (holding that a “Kompetenz-Kompetenz” also cannot be conferred on the tribunal by agreement of

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court’s review is, at least initially, limited to a prima facie standard.271 For example, under French law, the court shall generally decline jurisdiction with regard to a dispute that is claimed to be subject to an arbitration agreement, except if an arbitral tribunal has not yet been seized of the dispute and if the arbitration agreement is “manifestly void or manifestly not applicable”.272 In Switzerland, the standard of review depends on the seat of arbitration: where the seat is abroad, the court retains full review, where it is in Switzerland, the court only reviews the arbitration agreement for “manifest invalidity”.273 In Canada, it is enough for the defendant to establish an “arguable case” for the existence of a valid arbitration clause; challenges to arbitral jurisdiction shall then be resolved by the arbitrators, unless the challenge is based solely on a question of law or requires only a superficial consideration of the documentary evidence.274

7. More favourable law It is generally accepted that the more-favourable law principle laid down in article VII(1) NYC also applies to the recognition of arbitration agreements under article II NYC (supra mn. 13). Thus, the restrictive form requirements of article II(2) NYC in particular may be supplemented by more favourable provisions contained in national law or other conventions (supra mn. 114; as for the enforcement stage see infra mns 219–221). Such a liberalization of article II(2) NYC is, for example, effected by article I(2)(a) EuC, which provides that the term “arbitration agreement” shall also include, “in relations between States whose laws do not require that an arbitration agreement be made in writing, any arbitration agreement concluded in the form authorized by these laws”.275 156 Other law may also become relevant with regard to the substantive validity of the arbitration agreement. In that respect, however, this law will normally not supplement any autonomous provisions of the NYC (cf. supra mns 119–121), but only the 155

the parties; for the contrary position of the U.S. Supreme Court, see fn. 272); Israel: hotels.com v. Zuz Tourism Ltd and Hotels Online Ltd, YCA XXXI (2006), 791 (796 et seq.); Italy: Cass., Riv. dir. proc. 2007, 1293 = YCA XXXIII (2008), 596. 271 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 302; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.268; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 109 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mns 671 et seq.; India: Shin-Etsu Chemical Co. Ltd v. Aksh Optifibre Ltd, [2005] 7 SCC 234 = YCA XXXI (2006), 747 (748); Portugal: Art. 5(1) LAV; USA: DiMercurio v. Sphere Drake Ins., plc, 202 F.3d 71 (74) (1st Cir. 2000); Venezuela: Trib. Supr., YCA XXXVI (2011) 496. This is also the position of article VI(3) EuC in case that arbitral proceedings have already been initiated. Court review may also be completely excluded where the parties have, by a valid arbitration agreement, delegated the determination of the scope of that agreement to the arbitral tribunal; see, e.g., USA: Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524 (2019). – For a detailed overview of the approaches in different Contracting States, see UNCITRAL Guide 2016, p. 62 et seq. (mns 79 et seq.); Penadés Fons/Tent Alonso, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 3–18. 272 Article 1448 CPC (ex article 1458 NCPC); also cf. Cass. civ., Rev. arb. 2006, 977; Cass. civ., Rev.arb. 2006, 1086 = YCA XXXII (2007), 294; CA Paris, Rev. arb. 2003, 1286 (1290) = YCA XXIX (2004), 657 (661); CA Paris, Rev. arb. 2006, 864 = YCA XXXI (2006), 635; Bermann, (2012) 37 Yale J. Int’l L. 1 (15 et seq.). 273 BGE 121 III 38 (41 et seq.) = YCA XXI (1996), 690 (693 et seq.); BGE 122 III 139 (142); BGer., ASA Bull. 2011, 129 (134) = YCA XXXVI (2011), 343 (mn. 5). 274 Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 = YCA XXXIII (2008), 446 (455–459); Seidel v. TELUS Communications Inc., 2011 SCC 15; Sum Trade Corp. v. Agricom Int’l Inc., 2017 BCSC 2213 = YCA XLIII (2018), 439. 275 Cf. Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 174–175; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.247 et seq.; Germany: OLG München, SchiedsVZ 2010, 50 (51 et seq.) = YCA XXXVI (2011), 273 (276).

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requirements of the national law determined under the choice-of-law principles of the NYC, in particular article V(1)(a) (supra mns 122–124). Thus, where the choice-of-law rules of the forum provide for the application of other national law than the law determined under article V(1)(a), such law may alternatively lead to the validity (and, consequently, enforceability) of an agreement to arbitrate.276 – It is, of course, another question whether it would not be preferable, as a matter of policy to be decided by national legislators and courts, for national choice-of-law rules regarding arbitration agreements to follow the model adopted in article V(1)(a) NYC.277

IV. Recognition and Enforcement of Arbitral Awards 1. The obligation to recognize and enforce foreign arbitral awards, article III NYC Article III s. 1 NYC provides that each Contracting State shall recognize arbitral awards “as binding” and enforce them in accordance with its procedural rules under the conditions laid down in the following articles. The Convention thus establishes an obligation of the Contracting States to recognize and enforce arbitral awards that fall within its scope of application, that is, foreign awards (supra mns 24–28) and awards not considered as domestic in the country where recognition or enforcement is sought (supra mns 29–34). The conditions for recognition and enforcement are laid down autonomously by the NYC, while the procedure of enforcement is governed by the respective lex fori (infra mns 336–348). In particular, article IV NYC sets down the formal requirements with respect to the documents to be supplied by the party seeking recognition and enforcement (infra mns 163–176), while article V NYC provides the substantive grounds on which recognition and enforcement may exceptionally be refused (infra mns 173–328). With regard to the conditions of recognition and enforcement, the Contracting States are not allowed to set up stricter rules than those provided by articles IV and V, while they are free to determine questions of procedure. In that respect, it is essential to distinguish between conditions of enforcement and rules of procedure (particularly with regard to jurisdictional requirements and time limits for enforcement; cf. infra mns 340–345). On the basis of article VII(1), Contracting States are always free to establish more liberal conditions for enforcement than those set up by the NYC (supra mns 13–17, infra mn. 349). By distinguishing between “recognition” and “enforcement” of arbitral awards, the NYC incorporates the classic distinction that is also commonly used with regard to foreign court judgments. However, the NYC does not provide any further guidance on what is to be understood by these terms. The term “recognition” implies that the effects of the award as an adjudicative act are also respected in the forum state. The most important of these effects are res judicata and the principle of ne bis in idem or a possible reformation of rights and legal relationships by the decision (“Gestaltungswirkung”), e. g. the annulment of a contract

276 Cf. Germany: BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (218 et seq.); BGH, SchiedsVZ 2011, 157 (159) = YCA XXXVII (2012), 223 (225); BGH, SchiedsVZ 2014, 151 (154) = YCA XXXIX (2014), 401 (mn. 28). 277 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 126 et seq. – But also see supra mns 126–127 on the protection of weaker parties.

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or the dissolution of a partnership.278 However, both the conceptual categories in which these effects are analyzed and their precise scope (e. g. the extension of res judicata to incidental questions or to third parties)279 vary considerably between the different jurisdictions.280 Therefore, it may have to be determined what law applies to the scope of effects of an arbitral award to be recognized in a Contracting State under the NYC. In that respect, it has been suggested that the effects attributed to a foreign award should be determined by the law of the country of recognition281 or that the effect should be determined by an autonomous international standard under the NYC.282 However, as for the recognition of foreign judgments,283 the scope of a foreign decision’s effects should be determined by the law governing the creation of that decision, that is, for arbitral awards, the lex arbitri.284 161 The enforcement of arbitral awards is traditionally preconditioned on a prior leave of enforcement (exequatur). The NYC, however, only determines the conditions under which a Convention award must be admitted to enforcement in a Contracting State (supra mn. 157). Whether enforcement requires a formal exequatur decision rendered by a local court is a matter of enforcement proceedings which are, pursuant to article III s. 1, governed by the law of the enforcement jurisdiction (infra mn. 339). 162 Since recognition and enforcement of Convention awards are subject to the same conditions in Arts III et seq., the term “enforcement” is used here to refer to both recognition and enforcement. The party seeking enforcement of the award is referred to as applicant, the other party as respondent.

2. Formal requirements for recognition and enforcement, article IV NYC 163

a) General. Article IV NYC lays down the formal requirements to be satisfied by an applicant seeking to enforce a foreign award under the Convention. For this purpose, the applicant must supply both the award (article IV(1)(a); infra mns 166–168) and the arbitration agreement (article IV(1)(b); infra mns 169–170) in the required form. A translation of the award may be necessary under article IV(2) (infra mns 174–175). The requirements of article IV apply regardless of the procedural context in which the enforcement or recognition of an award is sought (e. g. application for leave of enforcement or simple recognition of the award’s res judicata effect; cf. supra mn. 160). They supersede more restrictive requirements existing under national law;285 278 Also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3742 et seq.; Börner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 115 et seq. 279 For a detailed recent discussion, see Pika, Third Party Effects of Arbitral Awards: Res Judicata Against Privies, Non-Mutual Preclusion and Factual Effects, 2019. 280 Cf., e. g. De Ly/Sheppard, ILA Interim Report on Res Judicata and Arbitration, 25 (2009) Arb. Int’l 35–66. 281 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.285; van den Berg, The New York Arbitration Convention of 1958, 1981, 244. 282 Yaffe, (2017) 34 J. Int’l Arb. 795–833; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3768 et seq.; also cf. Born/Bull/Lim/Chan, in: Kaplan/Moser (eds), Liber Amicorum Michael Pryles, 2018, 1–18; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 9; ICSID Case Amco Asia Corp. v. Republic of Indonesia, YCA XIV (1989), 92 (96). 283 Cf., e. g., regarding the Brussels I Regulation (recast): Wautelet, in: Magnus/Mankowski (eds), European Commentaries on Private International Law, Vol. I: Brussels Ibis Regulation, 2016, Art. 36 mns. 7 et seq.; ECJ Case 145/86 Horst Ludwig Martin Hoffmann v. Adelheid Krieg, [1988] ECR 645 mn. 11. 284 Germany: LG München, SchiedsVZ 2014, 100 (111). 285 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mns 2, 36; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.322.

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more favourable provisions of national law or other conventions remain applicable under article VII(1) (cf. infra mn. 176). Article IV(1) provides for both the authentication (of the award) or the certification 164 of a copy (of the award or the arbitration agreement). Authentication relates to the original document and signifies the attestation that the signatures thereon are genuine. Certification signifies the attestation that the copy of a document is a true copy of the original.286 While article IV(1) NYC requires that the documents presented by the applicant 165 must be “duly” authenticated or certified, it does not provide which rules are applicable to such authentication or certification.287 It seems clear that the applicant meets all the necessary formal requirements if he satisfies the rules of the enforcement jurisdiction, as this will clearly provide sufficient guarantee of the authenticity of the documents supplied for the enforcing court.288 The only question therefore is whether the rules of another jurisdiction, in particular the place of arbitration, may also be applied to determine due authentication or certification under article IV NYC.289 In order to facilitate the enforcement of foreign awards and to allow the applicant to obtain one form of authentication or certification that may uniformly suffice for enforcement of the award under the Convention in all Contracting States, there are good reasons to alternatively accept authentication or certification pursuant to the rules of the arbitral situs.290 However, since there is nothing in the NYC to mandate such an approach, this question should be left to the law of the respective country of enforcement. In any case, foreign legalization will be sufficient where international treaties so provide.291 b) Presentation of the arbitral award, article IV(1)(a) NYC. Article IV(1)(a) 166 requires that either the duly authenticated original award or a duly certified copy thereof be submitted by the applicant. In principle, the applicant must present the entire award, including the signatures of arbitrators.292 It has been held, however, that 286 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.316; van den Berg, The New York Arbitration Convention of 1958, 1981, 251; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 26–61. 287 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.318; cf. Austria: OGH, YCA XXXVII (2013), 317 (319). 288 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.319 et seq.; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 26–61; Albania: CA Tirana, YCA XLIII (2018), 413; Austria: OGH, SZ 42, no. 87, 269 (271) = YCA II (1977), 232; Italy: Cass., Riv. dir. int. 1995, 823 (824 et seq.) = YCA XXI (1996), 607 (608); Mexico: Trib. Sup., YCA IV (1979), 301. 289 Only the rules of the arbitral situs are referred to by Onyema, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 609; Bulgaria: SC of App., YCA XXV (2000), 678 (680); Italy: CA Milano, RDIPP 1980, 615 (616 et seq.) = YCA XII (1982), 338 (339). – Against exclusive application of the rules of the arbitral situs Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 9. 290 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 12; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.319–21.320; van den Berg, The New York Arbitration Convention of 1958, 1981, 252 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1675; Austria: OGH, SZ 2011, no. 106, 163 (167 et seq.) = YCA XXXVIII (2013), 317 (mns 7 et seq.); OGH, ecolex 2016, 393 = YCA XLI (2016), 398 (mn. 4). 291 E. g. the Hague Convention Abolishing the Requirements of Legalisation for Foreign Public Documents of 1961 (available at https://www.hcch.net/en/instruments/conventions/specialised-sections/ apostille, accessed 1 August 2020); cf. Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 182 et seq.; Germany: OLG Hamm, RIW 1997, 962. 292 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 14; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.328; van den Berg, The New York Arbitration Convention of 1958, 1981, 250.

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the duty to submit the award does not extend to a possible dissenting minority opinion.293 While it may appear questionable that the applicant should be permitted to withhold a part of the award that may cast doubt on its enforceability, it must be taken into account that it is always possible for the respondent to supply such dissenting opinion when objecting to the enforcement of the award. 167 Article IV(1)(a) should also be applied to the enforcement of an award “not considered as domestic” within the meaning of article I(1) s. 2 (supra mns 29–34),294 unless it appears from the law of the respective State that such requirements should not be associated with the qualification of the award as non-domestic. 168 It is doubtful whether a certified copy of an unauthenticated award also satisfies the requirements of article IV(1)(a). The language of article IV(1)(a) is inconclusive in that respect, as “thereof” may also be read to refer only to the “original award”. However, it is difficult to explain why authentication of the arbitrators’ signatures should be necessary with regard to the original of the award but not when a mere copy of the award is presented. As a consequence, submission of a certified copy of an unauthenticated award should be held not to satisfy the formal requirements of article IV(1)(a).295 c) Presentation of the arbitration agreement, article IV(1)(b) NYC. With regard to the arbitration agreement, article IV(1)(b) requires the applicant to supply either the original agreement or a certified copy thereof. Thus, no authentication is required for the parties’ signature of the arbitration agreement.296 170 In principle, the entire arbitration agreement must be submitted under article IV(1) (b). This, however, will typically result difficult for the applicant in cases where the agreement was concluded by an exchange of letters or telegrams (supra mns 106–109). In such cases, it has been considered sufficient if the applicant produces the writing received from the other party297 (cf. infra mn. 173). 169

d) Exceptions to the requirements of article IV(1) NYC. Article IV NYC imposes considerable formal requirements on the party seeking to enforce an arbitral award under the Convention. As a consequence, courts and commentators have developed different exceptions to its requirements. 172 In that respect, most courts and commentators have qualified the requirements of article IV regarding authentication and certification as rules of evidence that only need to be satisfied if the existence or authenticity of the arbitration agreement or the arbitral 171

293 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 14; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.328; UNCITRAL Guide 2016, p. 107 et seq. (mns 38 et seq.); Austria: OGH, SZ 2006, no. 65, 420 (425 et seq.) = YCA XXXII (2007), 259 (262); India: General Electric Co. v. Renusagar Power Co., YCA XV (1990), 465 (482 et seq.). 294 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 17; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.329. 295 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.331; Austria: OGH YCA XXXIV (2009), 409 (416 et seq.); OGH, SZ 2011, no. 106, 163 (168) = YCA XXXVIII (2013), 317 (mn. 9) ; OGH, ecolex 2016, 393 = YCA XLI (2016), 398 (mns 5, 10). – Contra: Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 18; Germany: BGH, NJW 2001, 1730 = YCA XXIX (2004), 724 (726 et seq.). 296 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 22; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.337. 297 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 31 fn. 82; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.337; Canada: Proctor v. Schellenberg, YCA XXVIII (2003), 745 (750 et seq.); Germany: OLG Schleswig, RIW 2000, 706 (707) = YCA XXXI (2006), 652 (656).

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award are contested by the party opposing enforcement.298 Furthermore, the applicant has been dispensed of the need to supply the arbitration agreement altogether, where the jurisdiction of the arbitral tribunal is not contested by the respondent.299 At the very least, however, the applicant must supply the arbitration award,300 even if it need not necessarily satisfy the formal technicalities of legalization or certification. Exceptions have also been made for equitable reasons, where it is impossible or where 173 the applicant cannot reasonably be expected to obtain the necessary formal proof of the award or the agreement;301 the case of arbitration agreements concluded by exchange of letters (supra mn. 170) may be considered an application of this principle. In such cases – which should only be recognized with due restraint302 – the applicant will be allowed to rely on the means of evidence available to him (and admissible under the procedural law of the forum) to establish the existence and genuineness of the arbitral award and/ or the arbitration agreement. e) Submission of a translation, article IV(2) NYC. Article IV(2) also provides that 174 the applicant must produce a certified translation of the award and the arbitration agreement into the official language of the country in which the award is relied upon, if they are not already made in that language. The obligation to present a translation exists in addition to the obligations under article IV(1).303 With regard to the rules of certification, the same considerations apply as for article IV(1) (supra mn. 165).

298 van den Berg, The New York Arbitration Convention of 1958, 1981, 249; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mns 27–28; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.344; Austria: OGH, SZ 2008, no. 124, 253 (258) = YCA XXXIV (2009), 409 (416 et seq.); OGH, SchiedsVZ 2019, 154 (156 et seq.); Canada: Trans-Pacific Shipping Co. v. Atlantic & Orient Shipping Corp., [2006] 1 F.C. 154 (mns 10 et seq.) = YCA XXXI (2006), 601 (604 et seq.); Germany: BGH, NJW 2000, 3650 (3651) = YCA XXVI (2001), 771 (772 et seq.); BGH, NJW 2001, 1730 = YCA XXIX (2004), 724 (726 et seq.); BGH, NJW-RR 2001, 1059 = YCA XXIX (2004), 700 (709); Hong Kong: Medison Co., Ltd v. Victor (Far East) Ltd, YCA XXVI (2001), 774 (776); Netherlands: Rechtbank Amsterdam, YCA XXXIV (2009), 715 (717 et seq.); Poland: Supreme Court, YCA XLI (2016), 538 (540); Switzerland: CA Geneva, ASA Bull. 2000, 786 (789 et seq.) = YCA XXVI (2001), 863 (865 et seq.); BGer., ASA Bull. 2012, 76 = YCA XXXVI (2011), 340 (mns 11 et seq.); BGer., ASA Bull. 2013, 404 (412 et seq.) = YCA XXXVII (2012), 300 (mns 23 et seq.); USA: Belize Soc. Dev. Ltd v. Goverment of Belize, 5 F.Supp. 3d 25 (38 et seq.) (D.D.C. 2013); Overseas Cosmos, Inc. v. NR Vessel Corp., 1997 WL 757041, 1 (5) (S.D.N.Y. 1997) = YCA XXIII (1998), 1096 (1102). – Contra: Italy: Cass., YCA XVIII (1993), 419 (420); Cass., Riv. dir. int. 1995, 823 (825) = YCA XXI (1996), 607 (608 et seq.); Cass., YCA XXXIV (2009), 644 (648); USA: Czarina, LLC v. W.F. Poe Synd., 358 F.3d 1286 (1292) (11th Cir. 2004). 299 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 29; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.344; Austria: OGH, IPRax 2009, 352 (354) = YCA XXXIV (2009), 409 (416); Germany: BGH, NJW 2001, 1730 = YCA XXIV (2004), 724 (726); BGH, NJW-RR 2001, 1059 = YCA XXIX (2004), 700 (710), Switzerland: BGer., YCA XXXVI (2011), 340 (342); USA: Overseas Cosmos, Inc. v. NR Vessel Corp., 1997 WL 757041, 1 (5) (S.D.N.Y. 1997) = YCA XXIII (1998), 1096 (1102). 300 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 30; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.344; van den Berg, The New York Arbitration Convention of 1958, 1981, 249. 301 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.346; van den Berg, The New York Arbitration Convention of 1958, 1981, 249; Germany: BGH, NJW 2000, 3650 (3651) = YCA XXVI (2001), 771 (773). 302 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 31; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.346 et seq. 303 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 33; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.341.

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With regard to translations in particular, a flexible and liberal approach should be adopted:304 Thus, the applicant may be dispensed from the requirement of obtaining a translation to the extent that the parties and the enforcing court do not need a translation in the individual case.305

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f) More favourable law. The formal requirements of article IV regarding the presentation of the arbitral award and the arbitration agreement may be substituted by more favourable law of the enforcement forum under article VII(1) (supra mns 13–15), e. g. where national law requires only the award to be produced or does not impose the production of a translation.306

3. Grounds for refusal of recognition and enforcement of arbitral awards, article V NYC a) General principles. aa) Exhaustive grounds for refusal, narrow interpretation. The substantive grounds on which a Contracting State may refuse to recognize or enforce a Convention award are laid down in article V NYC. The defences to enforcement contained in that provision are exhaustive; national law may therefore not provide for additional grounds of refusal.307 In consideration of the general purpose of the NYC to promote the enforcement of foreign arbitral awards and the respective obligation undertaken by the Contracting States in article III (supra mn. 157), the grounds for refusal contained in article V should be narrowly interpreted.308 178 Where no ground to refuse recognition and enforcement of an arbitral award is established under article V, the courts of a Contracting State are therefore obligated to recognize and enforce the award under article III. However, pursuant to article VII(1), a Contracting State is always allowed to go beyond its obligations under the NYC in enforcing arbitral awards (supra mns 13–17, infra mn. 349). 177

304 See, e. g. Switzerland: CA Geneva, ASA Bull. 2000, 786 = YCA XXVI (2001), 863; BGer., ASA Bull. 2016, 482 (485) = YCA XLI (2016), 573 (mn. 5); but also see CA Zug, ASA Bull. 2000, 363 (364 et seq.) = YCA XXIX (2004), 805 (805 et seq.); Austria: OGH, ZfRV 1992, 234. 305 van den Berg, The New York Arbitration Convention of 1958, 1981, 259; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 35; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.344; Germany: OLG Köln, IPRspr 2014, no. 266, 713 = YCA XL (2015), 425 (426); Netherlands: Rechtbank Amsterdam, YCA X (1985), 487 (488); Rechtbank Rotterdam, YCA XL (2015), 471 (473); Rechtbank Rotterdam, YCA XLI (2016), 522 (524 et seq.); Switzerland: BGer., ASA Bull. 2013, 156 (161 et seq.) = YCA XXXVII (2012), 305 (mns 12 et seq.). 306 E. g. Germany: § 1064 (1) ZPO; BGH, SchiedsVZ 2003, 281 (282) = YCA XXIX (2004), 767 (770); also see Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. IV mn. 37 (with further references); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.508. 307 van den Berg, The New York Arbitration Convention of 1958, 1981, 265; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 1, 21; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.351; Belgium: TPI Bruxelles, YCA XXII (1997), 643 (647); Israel: Zeevi Holdings Ltd v. The Republic of Bulgaria, YCA XXXIV (2009), 632 (636); Switzerland: BGer., ASA Bull. 2015, 576 = YCA XLI (2016), 567 (mn. 5); UK: Rosseel N. V. v. Oriental Commercial Shipping (UK) Ltd, [1991] 2 Lloyd’s Rep. 625 (628); USA: Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15 (20) (2nd Cir. 1997); Industrial Risk Insurers v. M.A.N. Gutehoffungshutte GmbH, 141 F.3d 1434 (1445) (11th Cir. 1998). 308 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 5, 19; Brazil: STJ, YCA XXXVIII (2013), 334 (335 et seq.); Canada: Corporacion Transnacional de Inversiones, SA de C.V. v. STET International, S.p.A., 45 OR (3d) 183 (mns 26 et seq.) = YCA XXVI (2001), 323 (324); USA: Admart A. G. v. Stephen and Mary Birch Found., Inc., 457 F.3d 302 (308) (3rd Cir. 2006); CEEG (Shanghai) Solar Science & Technology Co. v. LUMOS LLC, 829 F.3d 1201 (1206) (10th Cir. 2016).

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bb) Prohibition of a “révision au fond”. It is firmly established by the case law that 179 enforcement courts will perform no “révision au fond”, that is, they will not review the tribunal’s decision on the merits,309 as such review would be incompatible with the function assigned to the arbitral tribunal: By submitting to arbitration the parties primarily seek a binding decision on the merits by the arbitrators, which implies that this decision will, in principle, not be subject to a later review on the merits by national courts called upon to annul or enforce the award. Thus, it is generally accepted that a mere error in applying the law does not constitute a defence under article V NYC. For particular applications of that fundamental principle see infra mns 245–250 and 314, 329. cc) Discretion to enforce awards despite the existence of a ground for refusal? It is 180 disputed whether the court of a Contracting State has discretion in deciding on an application to enforce a foreign award, when a ground for refusal exists under article V. The problem arises with regard to all grounds for refusal contained in article V, but it was particularly debated with regard to the enforcement of awards that were set aside in their country of origin (article V(1)(e), infra mns 289–293). The prevailing view advocates a discretionary decision of enforcing courts under 181 article V, primarily pointing to the permissive language contained at least in the English version of article V (“may [also] be refused”).310 In contrast, a minority position rejects such discretion, arguing that the Convention’s purpose of harmonizing the grounds for refusal would be undermined if the courts of Contracting State were able to exercise discretion in deciding on the enforcement of arbitral awards.311 309 van den Berg, The New York Arbitration Convention of 1958, 1981, 269; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 19; Wolff, ibid., Art. V mn. 561; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.352; Australia: Uganda Telecom Ltd v. Hi-Tech Telecom Pty Ltd, [2011] FCA 131 = YCA XXXVI (2011), 252 (255); Austria: OGH, JBl 2005, 661 (664) = YCA XXX (2005), 421 (428); OGH, SZ 2011, no. 106, 163 (174) = YCA XXXVIII (2013), 317 (mn. 40); OGH, YCA XLIII (2018), 415 (mn. 7); OGH, SchiedsVZ 2019, 154 (157); Brazil: STJ, YCA XXXVII (2012), 175; STJ, YCA XXXVIII (2013), 334 (335 et seq.); France: CA Paris, YCA XXXII (2007), 282 (286); CA Paris, Rev. arb. 2008, 161 = YCA XXXIII (2008), 480 (483); Germany: BGH, NJW 1999, 2974 (2975); BGH, SchiedsVZ 2012, 41 (mn. 6); OLG Thüringen, SchiedsVZ 2008, 44 (45) = YCA XXXIII (2008), 534 (537 et seq.); OLG München, SchiedsVZ 2012, 43 (47) = YCA XXXVII (2012), 231 (233); OLG München, SchiedsVZ 2012, 156 (158 et seq.) = YCA XXXIX (2014), 389 (391); Hong Kong: Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, YCA XXXIII (2008), 574 (576); India: Penn Racquet Sports v. Mayor International Ltd, YCA XXXVI (2011), 293 (295); Italy: Cass., YCA XXII (1997), 727 (729); Portugal: CA Lisbon, YCA XXXVIII (2013), 443 (441); Russia: Federal Arbitrazh Court, YCA XXXIII (2008), 658 (664 et seq.); Spain: Trib. Sup. Cataluña, YCA XLII (2017), 520 (523); Switzerland: BGer., YCA XXII (1997), 789 (797 et seq.); UK: Cukurova Holding A.S. v. Sonera Holding B.V., [2014] UKPC 15 = YCA XXXIX (2014), 516 (519); USA: Baxter Intern., Inc. v. Abbott Laboratories, 315 F.3d 829 (835) (7th Cir. 2003). 310 van den Berg, The New York Arbitration Convention of 1958, 1981, 265; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 351; Canada: Société d’investissments l’Excellence Inc. v. Rhéaume, 2010 QCCA 2269; Javor v. Francoeur, 2003 BCSC 350 = YCA XXX (2005), 156; Europcar Italia SpA v. Alba Tours International Inc., 23 OTC 376 = YCA XXVI (2001), 311; Hong Kong: China Nanhai Oil Joint Service Corp. v. Gee Tai Holdings Co. Ltd, YCA XX (1995), 671 (677 et seq.); Polytek Engineering Co. Ltd v. Hebei Import & Export Corp., YCA XXIII (1998), 666 (682 et seq.); Netherlands: Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529 (mns 12 et seq.); UK: Dowans Holding SA v. Tanzania Electric Supply Co. Ltd, [2011] EWHC 1957 (Comm) = YCA XXXVI (2011), 363; China Agribusiness Development Corp. v. Balli Trading, [1998] 2 Lloyd’s Rep. 76 (79 et seq.); USA: Parsons & Whittemore Overseas Co. v. Soc. Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (976 et seq.) (2nd Cir. 1974); Rhone Mediterranee Compagnia Francese di Assicurazioni e Riassicurazioni v. Lauro, 712 F.2d 50 (54) (3rd Cir. 1983); Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357 (369 et seq.) (5th Cir. 2003); Chromalloy Aeroservices Inc. v. The Arab Republic of Egypt, 939 F.Supp. 907 (911) (D.D.C. 1996). 311 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.355 et seq.; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 208; Kröll, Int’l Arb. L. Rev. 2002, 160 (171); Kröll, in:

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While it is certainly true that the interpretation of article V must proceed from its wording, and that consequently its permissive language must be given proper regard,312 it is also necessary to take into account the particular thrust of article V as a provision of an international treaty primarily directed at the States that are party thereto:313 As such, article V provides for an exception to the general obligation undertaken by the Contracting States to enforce foreign awards laid down in article III (supra mn. 157). The permissive language of article V must therefore be explained from the treaty perspective: where one of the grounds contained in article V is established, a Contracting State is relieved of its obligation under article III: it “may” consequently refuse to enforce the respective award. This is all that needs to be determined by the NYC as an international treaty imposing obligations on the Contracting States. It is therefore entirely up to the individual Contracting State whether and to what extent it wants to take advantage of that liberty (that is, to refuse enforcement of an arbitral award in the presence of a ground for refusal under article V) – always, never or only in certain cases.314 183 Whether a court has discretion to refuse enforcement when a ground for refusal under article V exists, must therefore be determined under the law of the respective Contracting State. The permissive wording of article V is of no avail in that respect. Both a discretionary refusal and a mandatory decision are consequently compatible with the NYC. 184 It must be noted, however, that even in jurisdictions where the decision on enforcement is held not to be discretionary, courts may find other possibilities allowing them to apply the grounds of refusal contained in article V in a flexible manner, e. g. on the basis of a principle of good faith inherent in the NYC (infra mn. 184) or by the requirement of a causal nexus between a procedural defect and the final decision of the tribunal (infra mns 238, 261–262). The public-policy defence is generally subject to a restrictive interpretation, as expressed by the notion of “international” public policy (infra mns 310–313). Furthermore, a defence under article V may have been waived by the parties, or the party opposing enforcement may be precluded for some other reason to raise such a defence (infra mns 187 et seq.). Thus, in the end, there may often be little difference to jurisdictions where the courts interpret article V as granting them discretion in their decision on the enforcement of the award. 182

185

dd) Establishing defences and burden of proof. While the defences under article V(1) must be raised by the respondent, the defences under article V(2) are considered by the court ex officio.315 Thus, the respondent may decide not to raise a particular defence contained in article V(1). This possibility does not exist with regard to non-arbitrability and the violation of public policy under article V(2), as these involve public interests that are beyond the autonomy of the parties (cf. infra mns 294, 307, 331).

Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 45; Germany: BGHZ 46, 365 = NJW 1967, 1178 (1179); Italy: Frignani, EurLF 2013, I-65 (69). 312 In that respect see, in particular, Paulsson, (1998) 14 Arb. Int’l 227–230; also cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 74, 76. 313 Cf. in particular Giardina, RDIPP 2001, 265 (270 fn. 21). 314 Paulsson, (1998) 9 ICC Bull 14 (20). Also see, e. g., UK: China Agribusiness Development Corp. v. Balli Trading, [1998] 2 Lloyd’s Rep. 76 (79). 315 Also see Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 39–40; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.361–21.362; Germany: OLG Brandenburg, SchiedsVZ 2016, 43 (49 et seq.); Ireland: Patrick Ryan v. Kevin O’Leary (Clonmel) Ltd, [2018] IEHC 660; Spain: Trib. Sup. Cataluña, YCA XXXVIII (2013), 459 (mn. 5).

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The burden of proof generally lies on the respondent, even in cases of article V(2), 186 particularly an alleged violation of the public policy of the enforcing jurisdiction.316 Thus, the court may consider a violation of public policy ex officio, but if such violation is not established, the award must be declared enforceable under article III. The only burden resting on the applicant with regard to establishing the existence of the award and the arbitration agreement is imposed by article IV (supra mns 163–176). Where the applicant has provided the documentation required by article IV, there is consequently a presumption in favour of the enforceability of the award that can only be rebutted by establishing a ground of refusal under article V. This also applies with regard to the validity and effectiveness of the arbitration agreement under article V(1)(a) (infra mn. 206). ee) Waiver and preclusion. (1) General. The respondent may be precluded from 187 raising a defence under article V as a result of his prior conduct. Such preclusion has been explained by different legal concepts like waiver, estoppel or good faith, depending on the legal doctrines existing in the respective jurisdictions.317 However, it appears preferable to primarily distinguish between the different situations in which a preclusion to invoke a defence under article V may arise. (2) Party agreement (waiver). The parties may have agreed not to object to the 188 enforcement of the award or at least not to raise certain objections to its enforcement (e. g. an excess of jurisdiction of the arbitral tribunal or possible errors in the arbitral proceedings). In that respect, two questions must be distinguished: First, it must be determined whether the parties in fact wanted to exclude review of the award in the context of an application for enforcement under the NYC. Second, where such an intention of the parties can be established, it must be determined whether the parties can validly exclude such review in the country of enforcement. The first question is a matter of interpretation of the parties’ agreement.318 In that 189 respect, the implications of the agreement may be doubtful where the parties have provided that the award shall be “final and binding” or where they have excluded any recourse against the award, a prominent example being article 35(6) ICC Arbitration Rules 2021.319 Here, the reach of such an agreement may be doubtful: In general, a mere agreement that the award shall be “final and binding” should be held not to have any legal effect at all with regard to the review of the award but merely to define its determinative character as a decision on the merits (cf. supra mns 56 et seq.). In contrast, provisions like article 35(6) ICC Rules 2021 should be understood to be 316 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 41; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.363; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 210 et seq.; Germany: BGH, NJW-RR 2001, 1059 = YCA XXIX (2004), 700 (710); OLG Brandenburg, SchiedsVZ 2016, 43 (49 et seq.); OLG Düsseldorf, IPRspr. 2004, no. 195, 443 (445) = YCA XXXII (2007), 315 (318); Spain: Trib. Sup. Cataluña, YCA XXXVIII (2013), 459 (mn. 8); UK: Rosseel N.V. v. Oriental Commercial Shipping (UK) Ltd, [1991] 2 Lloyd’s Rep. 625 (628); USA: Europcar Italia S.p.A. v. Maiellano Tours Inc., 156 F.3d 310 (314) (2nd Cir. 1998). 317 Cf., e. g., Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 47; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.358 et seq. 318 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.366; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 69. 319 Article 35(6) ICC Rules 2021 (corresponding to Article 34(6) ICC Arbitration Rules 2012) provides: “Every award shall be binding on the parties. By submitting the dispute to arbitration under the Rules, the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.”

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directed at excluding any kind of active recourse against the award by way of settingaside proceedings in the country of origin, but not the review performed in the country of enforcement under the NYC.320 In cases of doubt, the interpretation of the effect of such agreements should be governed by the lex arbitri.321 190 In the exceptional case that the agreement of the parties should be interpreted to exclude review of the award under article V NYC, it must be determined whether such review can be validly excluded by the parties. Since the grounds of refusal contained in article V(2) serve to protect the public interests of the enforcing jurisdiction, they are beyond the autonomy of the parties (cf. supra mn. 185). In contrast, an agreement to waive the grounds in article V(1) – either in advance or after the award has been made – should be respected in principle.322 However, it must be noted that even then the parties may not completely renounce the most fundamental safeguards. Notably, with regard to the rights of due process (article V(1)(b), infra mns 222–239), a largely congruent protection is provided by article V(2)(b) (infra mn. 319). But even beyond that, the public-policy defence guarantees a minimum protection of the parties that is not subject to any advance waiver. (3) Failure to make a timely objection to the arbitral tribunal. Apart from a positive agreement to waive defences against the enforcement of the award, a party may also be precluded from invoking such defences because it participated in the arbitral proceedings without making a timely objection (cf. supra mn. 146). Particularly with regard to the tribunal’s jurisdiction, national arbitration laws typically provide that objections must be raised within a certain time limit, e. g. until the submission of the statement of defence.323 Normally, however, no preclusion will occur where a party does not participate in the arbitral proceedings at all, e. g. because it considers the arbitration agreement to be invalid.324 192 The prevailing view is that, as a general principle, a failure to make a timely objection also precludes a party from raising the respective defence in enforcement proceedings under the Convention.325 This has also been accepted with regard to the existence of a 191

320 See, in particular, Switzerland, where the exclusion of recourse against the award leaves the review under the NYC unaffected: article 192(2) IPRG. Also cf. Belgium: CA Bruxelles, JT 1997, 319 = YCA XXII (1997), 643 (658 et seq.); Germany: OLG Frankfurt, IPRspr 2008, no. 203, 646 (647); BayObLG, BB 2000, Beilage Nr. 12, 16 (17) = YCA XXVI (2001), 330; USA: Chromalloy Aeroservices Inc. v. The Arab Republic of Egypt, 939 F.Supp. 907 (913) (D.D.C. 1996). 321 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.365; Petrochilos, (1999) 48 ICLQ 856 (873). 322 Austria: OGH, SZ 2011, no. 106, 163 (174) = YCA XXXVIII (2013), 317 (mn. 39). – Against any advance waiver: Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 71 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.367; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 216. – For the possibility of a waiver regarding article V in general: Canada: Food Services of America Inc. v. Pan Pacific Specialties Ltd, (1997) 32 BCLR (3d) 225 (mns 9 et seq.) = YCA XXIX (2004), 581 (584 et seq.). 323 See, e. g., article 16(2) ML; France: article 1466 CPC; UK: sections 31, 73 Arbitration Act 1996; also cf. article V EuC, infra mn. 190. 324 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 62; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.371; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 406. 325 van den Berg, The New York Arbitration Convention of 1958, 1981, 266; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 51 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.371; UNCITRAL Guide 2016, p. 150 et seq. (mns 54 et seq.); Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 34; France: Cass. civ., D. 2009, 1422 = YCA XXXV (2010), 353 (355); CA Paris, Rev. arb. 2008, 487; Germany: OLG München, SchiedsVZ 2013, 62 (64); Hong Kong:

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valid arbitration agreement covering the dispute at hand.326 However, since the NYC does not specifically provide for any preclusion regarding the defences contained in article V, particularly the lack of a valid arbitration agreement under article II or article V(1)(a), there are also some who reject any formal preclusion under the regime of the NYC.327 Indeed, the decisive question is what law governs the issue of preclusion. This 193 problem is often not addressed by national courts.328 The prevailing view seems to be that the issue of preclusion must be analyzed from the perspective of the enforcing court, that is, on the basis of the NYC and the principle of good faith inherent in the Convention329 (cf. infra mn. 198). In that respect, however, it must be observed that the NYC provides only a rather feeble basis for deriving any workable principle of preclusion. In contrast, national arbitration laws typically not only provide for preclusion as such, but also determine in what time and manner an objection must be raised in order to preserve that objection for any later annulment or enforcement proceedings (supra mn. 191). If it is up to the applicable law of procedure to determine when and how any objections against the proceedings must be raised, it should also be up to that law to determine the consequences attributed to any failure to so object. Thus, the preclusion for participating in the arbitral proceedings without raising a possible objection should be governed by the applicable lex arbitri.330 This ensures the application of a uniform standard to which the parties can adapt at the time of the arbitral proceedings and avoids the imposition of possibly varying standards of the different enforcement jurisdictions a posteriori. A preclusion resulting from delay in raising a plea as to the arbitral tribunal’s 194 jurisdiction is specifically provided for by article V EuC, which is applicable and

China Nanhai Oil Joint Service Corp. Shenzhen Branch v. Gee Tai Holdings Co. Ltd, YCA XX (1995), 671 (675); Hebei Import & Export Corp. v. Polytek Engineering Ltd, [1999] 2 HKC 205 = YCA XXIV (1999), 652 (667); Italy: Cass., YCA XXI (1996), 602 (605); Spain: Trib. Supr., YCA XXXII (2007), 525 (530); Switzerland: BGer., ASA Bull. 2012, 76 = YCA XXXVI (2011), 340 (mns 51 et seq.); BGer., ASA Bull. 2016, 134 (139); USA: AAOT Foreign Economic Association (VO) Technostroyexport v. International Development and Trade Services, Inc., 139 F.3d 980 (982) (2nd Cir. 1998); Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (293 et seq.) (5th Cir. 2004); International Standard Electric Corp. v. Bridas SA Petrolera, Industrial y Comercial, 745 F.Supp. 172 (180) (S.D.N.Y. 1990). 326 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 275; Borris/Hennecke, ibid., Art. V mn. 61; USA: Exportkhleb v. Maistros Corporation, 790 F.Supp. 70 (73) (S.D.N.Y. 1992). – With regard to form: van den Berg, The New York Arbitration Convention of 1958, 1981, 185; Germany: OLG Schleswig, IPRspr 2000, no. 185; 409 (411 et seq.) = YCA XXXI (2006), 652 (657 et seq.); OLG Hamburg, YCA IV (1979), 266 (267); BayObLG, YCA XXX (2005), 568 (570 et seq.); Greece: CA Athens, YCA XIV (1989), 638 (639); Hongkong: China Nanhai Oil Joint Service Corp. Shenzen Branch v. Gee Thai Holdings Co. Ltd, YCA XX (1995), 671 (677 et seq.). – Also cf. China: Higher People’s Court of Zhejiang, YCA XXXVIII (2013), 347 (350) (regarding an award made in China but held to be governed by the NYC). 327 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 51; Germany: OLG Frankfurt, IPRax 2008, 517 (518) = YCA XXXII (2007), 351 (352). 328 See, e. g., Germany: OLG München, SchiedsVZ 2013, 62 (64). 329 Borris/Henecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 52; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.370; Germany: OLG Schleswig, RIW 2000, 706 (707 et seq.) = YCA XXXI (2006), 652 (657); Switzerland: BGer., ASA Bull. 2012, 76 = YCA XXXVI (2011), 340 (mn. 51). – Also cf. Peru, where article 75(4)–(7) of the Arbitration Act 2008 provides autonomous principles of preclusion with regard to the defences of article V(1)(a)–(d). 330 Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 224.

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precludes the respective defence of article V(1)(a) NYC under the more-favourable law principle of article VII(1) NYC.331 (4) Failure to take recourse against the award in the country of origin. It is subject to dispute whether the respondent is precluded from raising defences against the enforcement of the award to the extent that the award could have been challenged in settingaside proceedings in its country of origin and the respondent failed to do so within the respective time limit. While some courts have accepted such a preclusion,332 the prevailing view among courts and commentators rejects any formal preclusion, arguing that the NYC does not require a party to the arbitration to take recourse against the award in order to preserve the right to raise a defence under article V.333 196 However, even where no formal preclusion is assumed for mere failure to make a timely application to have the award set aside, courts may resort to the principle of good faith and the prohibition of contradictory behavior (infra mn. 198) where the respondent behaved in a way that the claimant could reasonably assume that enforcement of the award would not later be resisted on those grounds.334 However, the mere failure to take recourse against the award in itself will normally not establish contradictory behavior on the part of the respondent. 197 In this respect as well, the analysis should not be made exclusively from the perspective of the country of enforcement and the NYC, but should take account of the respective provisions of the lex arbitri335 (cf. supra mn. 193). Thus, it would be inappropriate to preclude the respondent from raising defences for not having challenged the award in the country of origin, where failure to do so would not result in any preclusion under the law of that country.336 195

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(5) Good faith. It is also accepted that the principle of good faith and the prohibition of contradictory behavior derived therefrom are inherent principles of the New York Convention and may thus defeat a ground of refusal under article V that is otherwise formally established.337 However, a defence existing under article V may only be barred for reasons of good faith in exceptional circumstances. In particular, good faith and the 331 Austria: OGH, JBl 2005, 661 (664 et seq.) = YCA XXX (2005), 421 (428 et seq.); Germany: BGH, SchiedsVZ 2011, 105 (106) = YCA XXXVI (2011), 273 (276). 332 See, e. g., UK: Minmetals Germany GmbH v. Ferco Steel Ltd, [1999] 1 All E.R. (Comm) 315 (331). 333 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 67; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.372; Scherer, ibid., Art. V mn. 148; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 406 et seq.; Austria: OGH, IPRax 2006, 496 (498 et seq.) = YCA XXX (2005), 421 (426); Germany: BGHZ 188, 1 = SchiedsVZ 2011, 105 (106) = YCA XXXVI (2011), 273 (276), overruling the prior case law before the German arbitration law reform; Hong Kong: Paklito Investment Ltd v. Klockner East Asia Ltd, YCA XIX (1994), 664 (672 et seq.); Switzerland: BGer., ASA Bull. 2012, 76 = YCA XXXVI (2011), 340 (mn. 52). Also cf. Canada: Smart Systems Technologies Inc. (US) v. Domotique Secant Inc. (Canada), 2008 QCCA 444 = YCA XXXIII (2008), 464 (mns. 19 et seq.): no preclusion by not raising defences against confirmation of award in country of origin. 334 Germany: BGH, SchiedsVZ 2008, 196 (197 et seq.); BGHZ 188, 1 = SchiedsVZ 2011, 105 (107) = YCA XXXVI (2011), 273 (276); Hong Kong: China Nanhai Oil Joint Service Corp. v. Gee Tai Holdings Co. Ltd, YCA XX (1995), 671 (677). Also cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 185; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 50. 335 Cf., e. g., BGH, SchiedsVZ 2008, 196 (198) (“defences against a foreign award which could have been raised in the country of origin by a time-limited court proceedings but have not been so raised (and thus are precluded in the country of origin)”). 336 As is the case with the UNCITRAL Model Law, where a party may still resist recognition and enforcement of the award on the basis of article 36 after the time limit in article 34(3) for an application for setting aside the award has passed. 337 van den Berg, The New York Arbitration Convention of 1958, 1981, 185; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 48.

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prohibition of contradictory behavior have been invoked to preclude the respondent from asserting a defence where it has failed to raise that objection during the arbitral proceedings (supra mn. 193) or by challenging the award in the country of origin (supra mn. 196). As a principle inherent in the NYC, its application is autonomous and does not depend on the respective approach of the lex arbitri or the domestic law of the country of enforcement. ff) Partial recognition and enforcement. In cases where the arbitral tribunal has 199 exceeded its authority, article V(1)(c) provides that it is possible to enforce only a part of the award, to the extent that it is covered by the submission to arbitration (infra mn. 244). It is accepted, however, that article V(1)(c) is the expression of a general principle allowing for partial enforcement in any case where the defence to enforcement only affects part of the award and the different parts of the award can be separated.338 gg) Relevance of decisions by the arbitral tribunal or national courts. (1) General. 200 It is still a quite unsettled question to what extent a court deciding on a defence raised against the enforcement of an arbitral award under article V NYC may be bound by a decision of the arbitral tribunal or court judgments rendered in other jurisdictions.339 (2) Decisions by the arbitral tribunal. As far as deference to decisions by the arbitral 201 tribunal is concerned, the question arises mainly with regard to the jurisdiction of the tribunal, that is, the validity and scope of the parties’ agreement to arbitrate. The prevailing view does not recognize any “Kompetenz-Kompetenz” of the arbitral tribunal to decide on the existence of a valid arbitration clause which would bind the enforcement court. Instead, the court is bound neither by the legal nor by the factual findings of the tribunal and makes its own review under article V340 (as for the decision under article II, see supra mn. 152). This has been held to apply also to an interim award on jurisdiction.341 – As far as the scope of the arbitration agreement is concerned, see infra mn. 242. (3) Decisions by national courts. The situation is more controversial with regard to 202 the deference to be paid to decisions by national courts of other jurisdictions. In 338 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 81–84, 258; Quinke, ibid., Art. V mn. 449 (arbitrability); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.374; Austria: OGH, IPRax 2006, 496 (501) = YCA XXX (2005), 421 (423, 435) (public policy); France: CA Paris, Rev. arb. 1989, 280 (287) (due process); Germany: BGH, NJW 1986, 1436 (1438) (due process); also cf. BGH, SchiedsVZ 2017, 200 (202) = YCA XLIII (2018), 451 (mn. 22); Hong Kong: J.J. Agro Industries (P) Ltd v. Texuna International Ltd, YCA XVIII (1993), 396 (400 et seq.) (public policy); UK: IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2008] EWCA 1157 = [2009] 1 All E.R. (Comm) 611 (661 et seq.) (annulment proceedings); USA: Laminoirs-Trefilieries-Cableries de Lens, SA v. Southwire Co., 484 F.Supp. 1063 (1068) (N.D.Ga. 1980) (public policy). Also see King/Meredith, (2010) 26 Arb. Int'l 381–390. 339 In this respect, also see UNCITRAL Guide 2016, p. 148 et seq. (mns 48 et seq.). 340 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.377; van den Berg, The New York Arbitration Convention of 1958, 1981, 312; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 222; Austria: OGH, SchiedsVZ 2019, 154 (159); Germany: BGHZ 27, 249 = NJW 1958, 1538 (1539); OLG Celle, SchiedsVZ 2004, 165 (168) = YCA XXX (2005), 528 (533 et seq.); OLG München, SchiedsVZ 2009, 340 (342) = YCA XXXV (2010), 383 (385); Ireland: Kastrup Trae-Aluvinduet A/S v. Aluwood Concepts Ltd, YCA XXXV (2010), 404 (405); Italy: CA Trento, YCA VIII (1983), 386 (387); UK: Dallah Real Estate and Tourism Holding Co. v. the Ministry of Religious Affairs of the Government of Pakistan, [2011] 1 AC 763 (771 et seq.). – Contra: Austria: OGH, SZ 2011, no. 106, 163 (175) = YCA XXXVIII (2013), 317 (mn. 47). 341 Germany: OLG Schleswig, RIW 2000, 706 (708) = YCA XXXI (2006), 652 (659 et seq.); Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 60. – Contra: OLG Hamm, SchiedsVZ 2006, 107 (109) = ASA Bull. 2006, 153 (159 et seq.).

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principle, the NYC is silent on that issue, except for article V(1)(e), which provides that the setting aside of the award in the country of origin is a possible ground to refuse enforcement of the award in another country. Apart from that, the deference to foreign court decisions with regard to objections against the validity or enforceability of an arbitral award is altogether a matter of national law. In that respect, however, there is considerable uncertainty whether such decisions should be given conclusive effect (res judicata) or merely taken into consideration as possible indications as to the merits of an objection to the enforceability of the award where that objection is governed by foreign law. 203 While there are some statements to the effect that foreign judgments on the validity of an arbitral award, particularly those rendered in the country of origin, should be given effect under the general rules regarding the recognition of foreign judgments,342 it is helpful to distinguish between different situations: An annulment of the award rendered in the country in which or under the law of which the award was made may be given effect as a defence to the enforcement of the award under article V(1)(e) (infra mns 280–293). This is a strong indication that, if at all, only judgments rendered in the country of origin as defined in article V(1)(e) should be given effect. The dismissal of an application to set aside the award is not specifically provided for in article V(1)(e), as article V is only concerned with possible defences against the enforcement of the award. However, notably in Germany, the dismissal of an application for vacatur is recognized under the general rules on the recognition of foreign judgments.343 Accordingly, a declaratory judgment on the validity of the arbitration agreement is capable of recognition under the general rules.344 204 The grant of a leave of enforcement in the country of origin (or in a third country, for that matter) is generally not considered conclusive with regard to defences raised against an application to enforce the award in another country.345 However, there are jurisdictions in which the foreign leave of enforcement itself may be the object of enforcement (infra mn. 350). In a similar vein, the rejection of an application to enforce the award in a foreign country is generally held irrelevant to its enforcement in the forum.346 This is because the rejection of an exequatur, in contrast to the setting aside of 342 Australia: Coeclerici Asia (Pte) Ltd v. Gujarat NRE Coke Ltd, [2013] FCA 882 (mns 86 et seq., 102 et seq.) and, on appeal, Gujarat NRE Coke Ltd v. Coeclerici Asia (Pte) Ltd, [2013] FCAFC 109 (mns 55 et seq.); Germany: KG, SchiedsVZ 2007, 100 (101) = YCA XXXII (2007), 347 (349); OLG München, SchiedsVZ 2010, 169 (171) = YCA XXXV (2010), 373; Hong Kong: Astro Nusantara International BV v. PT Ayunda Prima Mitra, [2012] SGHC 212; India: International Investor KCSC v. Sanghi Polyesters Ltd, YCA XXX (2005), 577 (586); Lal Mahal Ltd v. Progetto Grano Spa, YCA XXXVIII (2013), 397; USA: Cerner Middle East Ltd v. iCapital, LLC, 939 F.3d 1016 (1023 et seq.) (9th Cir. 2019). Also cf. Hovaguimian, J. Int. Arb. 34 (2017), 79–106. 343 Germany: OLG München, SchiedsVZ 2010, 169 (171 et seq.) = YCA XXXV (2010), 371; OLG Thüringen, SchiedsVZ 2008, 44 (45 et seq.) = YCA XXXIII (2008), 534 (537 et seq.). Accord: Australia: Coeclerici Asia (Pte) Ltd v. Gujarat NRE Coke Ltd, [2013] FCA 882 (mns 86 et seq., 102 et seq.) and, on appeal, Gujarat NRE Coke Ltd v. Coeclerici Asia (Pte) Ltd, [2013] FCAFC 109 (mns 55 et seq.). In contrast, the foreign decision rejecting an annulment was given no further consideration by OLG Naumburg, SchiedsVZ 2011, 228 = YCA XXXVII (2012), 226. 344 Germany: OLG Bremen, BB 1999, Beilage Nr. 12, 18 (19) = YCA XXVI (2001), 326; KG, SchiedsVZ 2007, 100 (101). – Contra: Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 60. 345 Cf. Canada: Smart Systems Technologies Inc. (US) v. Domotique Secant Inc. (Canada), 2008 QCCA 444 = YCA XXXIII (2008), 464 (mns. 19 et seq.): no estoppel by not raising defences against confirmation of award in country of origin. 346 See, e. g., Germany: OLG Hamburg, SchiedsVZ 2003, 284 (286) = YCA XXX (2005), 509 (513). – But see, for a more generous approach, UK: Diag Human SE v. Czech Republic, [2014] EWHC 1639 (Comm) (mns 51 et seq.).

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the award, is considered to leave the existence of the award as a possible object of enforcement in another country unaffected. b) Lack of a valid arbitration agreement, article V(1)(a) NYC. aa) General. 205 Pursuant to article V(1)(a), recognition and enforcement of an award may be refused if “[t]he parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the 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”. Thus, any objection against the validity of the arbitration agreement can be raised against the enforcement of the award (cf. supra mns 95–135): lack of form, substantive invalidity, incapacity of the parties to conclude an arbitration agreement or other defences like the lack of authority of an agent acting for one of the parties (as to the question whether lack of “objective arbitrability” may become relevant under article V(1)(a), see infra mn. 298). A fortiori, article V(1)(a) also applies where it is claimed that the parties never concluded an agreement to arbitrate, as in cases of forgery.347 Where the respondent does not dispute the validity of the agreement but claims that the award deals with matters that are beyond its scope, the defence is governed by article V(1)(c) (infra mns 240 et seq.). With regard to the existence of a valid agreement to arbitrate, the general rule on 206 the burden of proof (supra mn. 186) requires additional consideration. As article V(1) (a) presupposes an “agreement referred to in article II” and article IV(1)(b) requires that the party seeking to enforce the award has to supply “[t]he original agreement referred to in article II or a duly certified copy thereof” (supra mns 169–170), the burden to establish the existence of an arbitration agreement within the meaning of article II (particularly an agreement meeting the formal requirements of article II(2)), is on the party seeking to enforce the award. Where that party submits the necessary documentation, this will normally be enough to establish whether the agreement meets the formal requirements of article II; to that extent, the burden of proof can be said to lie on the applicant. However, once the applicant has complied with the requirements of article IV, he has made out a prima facie case and it is up to the respondent to prove that the arbitration agreement is actually invalid under the general principle established by article V(1)(a) regarding the burden of proof.348 – Particular considerations apply where the arbitration agreement was allegedly signed by an agent of one of the parties. Since the applicant must establish a contract signed “by the parties” or an exchange of letters or telegrams between the parties, the 347 See, e. g., USA: China Minmetals Materials Import and Export Co., Ltd v. Chi Mei Corp., 334 F.3d 274 (279 et seq.) (3rd Cir. 2003). 348 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 125–127; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.377; Borris/Hennecke, ibid., mns 44–45; Scherer, ibid., Art. IV mns 20–21; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 211; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3402; Australia: Transpac Capital Pte Ltd v. Buntoro [2008] NSWSC 671 (mns 38 et seq.) = YCA XXXIII (2008), 349 (351 et seq.); Canada: Adamas Management & Services Inc. v. Aurado Energy Inc., YCA XXX (2005), 479 (486); Germany: OLG München, SchiedsVZ 2009, 340 (341) = YCA XXXV (2010), 383 (384); OLG München, SchiedsVZ 2011, 337 (338); Italy: Cass., YCA XXII (1997), 727 (730); Spain: Trib. Supr., YCA XXXII (2007), 518 (522); Trib. Supr., YCA XXXII (2007), 532 (536 et seq.); Switzerland: BGer., ASA Bull. 2003, 364 (374) = YCA XXVIII (2003), 835 (841); BGer., ASA Bull. 2000, 786 (788) = YCA XXVI (2001), 863 (865 et seq.); UK: Yukos Oil Co. v. Dardana Ltd, (2002) CLC 1120 (1125 et seq.) = YCA XXVII (2002), 570 (576); Dallah Real Estate and Tourism Holding Coo. v. Ministry of Religious Affairs, Government of Pakistan, [2010] 3 WLR 1472 (1478 et seq., 1487); USA: China Minmetals Materials Import and Export Co., Ltd v. Chi Mei Corp., 334 F.3d 274 (277) (3rd Cir. 2003). Czarina, LLC v. W.F. Poe Synd., 358 F3 d 1286 (1292) (11th Cir. 2004).

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applicant also bears the burden of proving that the person signing the arbitration agreement had the authority to act for the other party.349 207 For the possibility of a waiver or preclusion with regard to the validity of the arbitration agreement see supra mns 187–198; for the possible deference to decisions of the arbitral tribunal or national courts regarding the existence of a valid arbitration agreement see supra mns 200–204. 208

bb) Form. The reference in article V(1)(a) to an “agreement referred to in article II” is generally interpreted to mean that, also in the context of enforcement of a foreign award, the formal validity of the arbitration agreement must be determined under the autonomous requirements of article II NYC.350 As for the possibility to apply less strict requirements of national law regarding the form of the arbitration agreement, see infra mns 219–221.

cc) Substantive validity. Regarding the substantive validity of the arbitration agreement, article V(1)(a) does not lay down any autonomous requirements, but only provides the respective choice-of-law rule by referring these questions to “the law to which the parties have subjected it or, failing any indication thereon, […] the law of the country where the award was made”. Where the law referred to by article V(1)(a) provides for the validity of the arbitration agreement, enforcement of the award cannot be refused on that issue. Where it leads to the invalidity of the agreement, it may possibly still be upheld on the basis of a law determined by the autonomous choice-oflaw rules of the enforcing state (cf. infra mn. 220). 210 In the first place, article V(1)(a) NYC refers to the law to which the parties have subjected the arbitration agreement. The NYC does not impose any geographical limitations to the law chosen by the parties; they are allowed to choose any law, even if it has no objective connection to the parties or the dispute.351 Limits are only imposed, as always, by the public policy of the enforcing state (article V(2)(b); infra mns 307 et seq.). 211 In practice, parties rarely make a specific choice of law with regard to the arbitration agreement. However, it is generally accepted that such a choice may also be made implicitly.352 In that respect, the question frequently arises whether a choice-of-law clause contained in the main contract may be extended to also apply to the arbitration clause. If such interpretation is rejected, the consequence is that under article V(1)(a), lacking a choice of law by the parties, the place of arbitration will determine the law applicable to the validity of the arbitration agreement. This is indeed the position taken by some courts and commentators.353 However, where the parties have agreed on the 209

349 Germany: OLG Celle, SchiedsVZ 2004, 165 (167) = YCA XXX (2005), 528 (532 et seq.). – Contra: Austria: OGH, SZ 64, no. 61, 323 (324 et seq.) = YCA XXI (1996), 521 (522 et seq.); OGH, IPRax 2006, 268 (269 et seq.) = YCA XXXII (2007), 254 (257 et seq.). 350 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.377; Otto, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 159; Germany: OLG Hamm, RIW 1995, 681 = YCA XXII (1997), 707 (708); OLG Köln, IPRax 1993, 399 (400) = YCA XXI (1996), 535 (536 et seq.). This approach has now also been accepted by Italian courts: Cass., RDIPP 1986, 707 (708) = YCA XII (1987), 497 (498). 351 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 114; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.382; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 224 et seq. 352 See, e. g., Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 114; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.383. 353 van den Berg, The New York Arbitration Convention of 1958, 1981, 293; UK: Deutsche Schachtbauund Tiefbohrgesellschaft m.b.H. v. R’as al-Khaimah National Oil Co., [1987] 3 WLR 1023 (1029 et seq.); for the US case law, see next fn.

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law applicable to their agreement as such, it can be assumed (save contrary indications) that they intend this choice to cover the entire agreement and consequently also the arbitration clause contained therein. The prevailing position therefore rightly extends a general choice-of-law clause to the arbitration agreement, unless a contrary intent of the parties can be determined.354 It is much more doubtful whether a choice of the law governing the arbitration 212 procedure may be found to constitute an implicit choice regarding the arbitration agreement.355 Such a conclusion should only be drawn in exceptional circumstances. Where the parties have also chosen the law governing the main contract, this choice should prevail over a choice of procedural law. Where the parties have merely determined the place of arbitration, it is immaterial whether this can be interpreted as an implicit choice regarding the arbitration agreement, as that law would apply anyhow on the basis of the subsidiary reference to the place of arbitration contained in article V(1)(a). In other cases, a specific choice of rules governing the arbitration procedure will often reflect particular procedural concerns that do not necessarily involve the validity of the agreement to arbitrate as such. Where the parties have not chosen the law governing the arbitration agreement, 213 article V(1)(a) refers to the law of the country where the award was made. The criteria for determining that country are the same as for article I(1) s. 1.356 The award is therefore “made” at the place (or “seat”) of the arbitration (cf. supra mns 26–28). dd) Capacity to conclude an arbitration agreement. The arbitration agreement may 214 also fail because one of the parties lacked the capacity to conclude a valid arbitration agreement. Although article V(1)(a) speaks of the “parties”, it is clear that also the incapacity of just one party will constitute a defence to the validity of the arbitration agreement and thus to the enforcement of the award. The parties’ capacity to conclude an arbitration agreement is referred to “the law 215 applicable to them”. However, article V(1)(a) NYC is silent on how this law should be determined. The choice of law is therefore left to the respective rules of the enforcement state.357 Some jurisdictions apply the law of the nationality of the respective party,358 354 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 232–233, Art. V mn. 115; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 6–24, 6–59; Austria OGH, SchiedsVZ 2019, 154 (159); Canada: Achilles (USA) v. Plastics Dura Plastics (1977) Itée Ltd, 2006 QCCA 1523; Germany: BGH, NJW-RR 2011, 1350 (1353); OLG Dresden, IPRax 2010, 241 (242) = YCA XXXIII (2008), 549 (551); OLG Thüringen, IPRspr 2011, no. 293, 781 = YCA XXXVII (2012), 220 (222). Also cf. UK: Sulamérica Cia Nacional de Seguros S.A. v. Enesa Engenharia S.A., [2012] EWCA Civ 638 (mns 36 et seq.); Singapore: BCY v. BCZ, [2016] SGHC 249 (mns 38 et seq.), rejecting the rule followed in FirstLink Investments Corp. Ltd v. GT Payment Pte Ltd, [2014] SGHCR 12. – The case law in the USA is split; in favour of extending a general choice-of-law clause to the arbitral clause: Motorola Credit Corp. v. Uzan, 388 F.3d 39 (50 et seq.) (2nd Cir. 2004); Telenor Mobile Communications AS v. Storm LLC, 584 F.3d 396 (411 fn. 11) (2nd Cir. 2009); International Chartering Services, Inc. v. Eagle Bulk Shipping Inc., 138 F.Supp. 3d 629 (638) (S.D.N.Y. 2015); contra: Ario v. Underwriting Members of Syndicate 53 at Lloyds for 1998 Year of Account, 618 F.3d 277 (289) (3rd Cir. 2010); Alfa Laval U.S. Treasury Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 857 F.Supp. 2d 404 (417) (S.D.N.Y. 2012). 355 In that sense, e. g. Germany: BGH, NJW 1998, 2452 = YCA XXIV (1999), 928 (930). 356 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 295; Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 116; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 225. 357 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 106; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.386; van den Berg, The New York Arbitration Convention of 1958, 1981, 276 et seq.; Germany: BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (219). 358 Germany: Article 7(1) EGBGB; cf. BGH, SchiedsVZ 2011, 46 (48) = YCA XXXVII (2012), 216 (219); Italy: Frignani, EurLF 2013, I-65 (69).

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others the law of that party’s habitual residence or domicile.359 A divergence of approaches also exists with regard to the capacity of companies: here the applicable law is either that of the company’s seat (center of administration) or the place of incorporation.360 216 In principle, the incapacity defence also applies to States or State-controlled entities.361 However, the above choice-of-law principles will invariably lead to the respective State’s own law. Where that law restricts the capacity of public entities to enter into arbitration agreements,362 this would allow a State to invoke its own law in order to contest the validity of an arbitration agreement it has concluded. Such a defence is normally not accepted: This result can be derived from the general principle of good faith and the prohibition of contradictory behavior (cf. supra mns 147, 198), precluding a State or State-controlled entity that has, like a private actor in international trade, entered an arbitration agreement to claim that it lacks the respective capacity under its own law363 (also cf. supra mn. 53). 217

ee) Objective arbitrability. The arbitration agreement may also be invalid because it refers to a subject matter that is not capable of settlement by arbitration. The lack of “objective arbitrability” constitutes a specific defence under article V(2)(a), which, in that respect, refers to the law of the enforcement forum. As for the question whether objective inarbitrability may also be considered as a defence to the arbitration agreement under article V(1)(a) (and its choice-of-law rules), see infra mn. 298.

218

ff) Other defects of the arbitration agreement. Other aspects that may affect the validity of the arbitration agreement are governed by the law determined by the conflicts rule of the enforcement state, e. g. issues of agency364 (also see supra mn. 131).

219

gg) More favourable law, article VII(1) NYC. Particular problems regarding the operation of the more-favourable law principle established by article VII(1) (supra mns 13–17) arise in relation to the validity of the arbitration agreement, where this validity must be assessed in the context of a decision on the enforcement of an award on the basis of article V NYC. Here, the question is whether domestic law may substitute the provisions of the Convention if this would result more favourable to the validity of the arbitration agreement. Although the problem may arise with regard to any ground of invalidity, it is most prominently discussed for the purpose of overcoming the strict 359

Cf. ICCA’s Guide to the Interpretation of the 1958 New York Convention, 2011, 85. Cf. Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 107; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.386; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 219 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3489 et seq. 361 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 102; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.387. 362 See, e. g., Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 27–5; Foustoucos, (1988) 5 J. Int’l Arb. 113 (125 et seq.). 363 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 102–104; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.387; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 219; France: CA Paris, Rev. arb. 1993, 281 (285); Spain: article 2(2) Arbitration Act 2003; Switzerland: article 177(2) IPRG. 364 Wilske/Fox, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 123–124; Austria: OGH, YCA XXXIII (2008), 354 (357 et seq.); Germany: OLG Celle, SchiedsVZ 2004, 165 (167) = YCA XXX (2005), 528 (531 et seq.). – Contra: Italy: Cass., YCA XXIV (1999), 709 (710 et seq.) (authority of agent characterized as a question of capacity and thus subject to the personal law of the party, article V(1)(a)). 360

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formal requirements of article II(2) NYC (cf. supra mn. 113). A conservative understanding of the prohibition against “cherry picking” (supra mn. 14) would lead to the conclusion that domestic laws on the form of arbitration agreements could only be used where enforcement is entirely based on national law but not where it is based on the NYC.365 Under the prevailing view, however, courts may apply domestic law on the validity of arbitration agreements in the context of the enforcement of an award under the NYC, where it is more favourable than article II(2) or other law applicable under the choice-of-law principles of article V(1)(a).366 Such an approach may be justified by arguing that otherwise foreign awards would be treated less favourably with regard to recognition and enforcement than domestic awards, a result which would be against the rationale of both article VII(1) and the implementing national legislation.367 In the end, the question must be decided on the basis of the respective national law; if it results that the national legislator meant the domestic provisions to apply also within the framework of the NYC, then article VII(1) does not form an obstacle to such application. Where article VII(1) applies with regard to more favourable national law, it is up to 220 the respective national law to decide whether the enforcing courts shall refer directly to the formal requirements of forum law or to those of the law determined by the forum’s choice-of-law rules.368 Apart from national law, article VII(1) also allows for the application of more 221 favourable law contained in international treaties. As a consequence, the provisions of the EuC with regard to the arbitration agreement (particularly its form, supra mn. 151, but also a possible preclusion of the invalidity defence, supra mn. 190) are applicable, even though the EuC in itself does not provide for the recognition and enforcement of the resulting award as such.369 c) Violation of “due process”, article V(1)(b) NYC. aa) General principle and 222 applicable standard. Article V(1)(b) vindicates fundamental principles of procedural fairness by allowing the respondent to object to the enforcement of the award where he was not given proper notice of the appointment of the arbitrator or of the arbitration 365 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VII mns. 59 et seq.; van den Berg, The New York Arbitration Convention of 1958, 1981, 295; also see Landau/Moollan, in: Gaillard/di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 250 et seq. 366 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.507; Schramm/Geisinger/Pinsolle, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 74; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 271; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 618 et seq.; Germany: BGH, SchiedsVZ 2010, 332 (333) = YCA XXXVI (2011), 282 (283 et seq.); Switzerland: BGE 110 Ib 191 (193 et seq.) = YCA XI (1986), 536 (537 et seq.). 367 Cf., in particular, BGH, SchiedsVZ 2010, 332 (333) = YCA XXXVI (2011), 282 (283 et seq.). – The 2006 UNCITRAL Recommendation (supra mn. 114) is not conclusive in this respect; although its recommendation no. 2 encourages the application of article VII (1) where a party seeks recognition of the validity of an arbitration agreement, it does not explicitly state whether this should also apply where the validity of the arbitration agreement is merely an incidental question to the enforcement of an award. 368 In Germany, the BGH allows application of both the national form requirement and the requirements of the law applicable under German conflicts rules alternatively: BGH, SchiedsVZ 2005, 306 (307) = YCA XXXI (2006), 679 (683); BGH, SchiedsVZ 2010, 332 (333 et seq.) = YCA XXXVI (2011), 282 (283 et seq.); BGH, SchiedsVZ 2014, 151 (154) = YCA XXXIX (2014), 401 (mn. 28); also see Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mns 68 et seq. – In contrast, Austrian law (§ 614 (I)(2) ZPO) requires that the form of the agreement fulfills Austrian national law (§ 583 ZPO) and the law applicable to the arbitration agreement cumulatively. 369 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.515, 21.524 et seq.; van den Berg, The New York Arbitration Convention of 1958, 1981, 92 et seq., 96 et seq.; Austria: OGH, JBl 2005, 661 (664 et seq.) = YCA XXX (2005), 421 (428 et seq.); Germany: BGH, RIW 1970, 417 (418) = YCA II (1977), 237; OLG Köln, IPRax 1993, 399 (400) = YCA XXI (1996), 535 (537); OLG Celle, YCA VII (1982), 322 (324 et seq.).

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proceedings or was otherwise unable to present his case. As the defences contained in article V(1)(b) are special instances of the right to be heard and thus part of “procedural public policy” (cf. infra mns 317, 319), there is considerable overlap, not only with article V(2)(b) (public policy), but also with article V(1)(d) (improper procedure).370 As a consequence, it becomes doubtful what standard applies when the enforcement of an award is challenged under article V(1)(b). 223 First, the standard could be derived from the law governing the arbitral proceedings in general (lex arbitri).371 In that case, however, article V(1)(b) would be redundant next to article V(1)(d).372 Another possibility is to apply the standards of the state where the award is meant to be enforced.373 This would demonstrate the close affinity of this defence to the public-policy defence of article V(2)(b);374 on the other hand, such an interpretation again would run the risk of rendering article V(1)(b) superfluous in view of article V(2)(b).375 Finally, the award could be reviewed under an autonomous standard, applying “truly international” principles of procedural fairness.376 In that case, however, the respective standards would have to be developed independently of any particular national law. As the Convention itself does not provide any further guidance to that effect, recourse would have to be had to a comparative determination of what could be considered the indispensable standard of due process governing in international arbitration (cf. supra mn. 10). It is doubtful whether such an introduction of a third standard alongside article V(1)(d) (lex arbitri) and article V(2)(b) (lex fori) will contribute very much to the necessary review of an award. In the end, however, the distinction between an autonomous standard and application of the principles of the lex fori is of little practical importance,377 as there is no superior judicial body with the authority to make binding determinations on the autonomous interpretation of any due process standards under the Convention (supra mn. 10). Thus, it will make no difference whether an enforcing court bases its decision on forum law or on its understanding of what the NYC requires autonomously. Accordingly, it appears more 370 Cf., e. g., OLG München, SchiedsVZ 2012, 43 (45 et seq.) = YCA XXXVII (2012), 231 (233), where the analysis was done in relation to all three provisions. 371 Cf. Inoue, (2011) 11 Am Rev Int’l Arb, 247 (270 et seq.), who wants to apply the law governing the arbitral procedure and the lex fori consecutively. 372 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.393; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3500. 373 van den Berg, The New York Arbitration Convention of 1958, 1981, 297; Austria: OGH, ecolex 2016, 393 = YCA XLI (2016), 398 (mn. 27); France: CA Paris, Rev. arb. 1989, 62; Germany: OLG Hamburg, YCA IV (1979), 266 (267); Spain: Trib. Supr., YCA XXXII (2007), 532 (537); USA: Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA) and Bank of America, 508 F.2d 969 (975 et seq.) (2nd Cir. 1974); Iran Aircraft Industries v. Avco Corp., 980 F.2d 141 (146) (2nd Cir. 1992); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (298 et seq.) (5th Cir. 2004); CEEG (Shanghai) Solar Science & Technology Co. v. LUMOS LLC, 829 F.3d 1201 (1206) (10th Cir. 2016). 374 Cf. Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 153; Canada: Corporacion Transnacional de Inversiones, SA de CV v. STET International, SPA (1999), 45 OR (3d) 183; Switzerland: BGer., YCA XXIX (2004), 834 (840). 375 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 300. 376 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 141; Wolff, ibid., Art. V mn. 538; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1696; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3504 et seq.; Hong Kong: Paklito Investment Ltd v. Klockner East Asia Ltd, [1993] 2 HKLR 39 (46) = YCA XIX (1994), 664 (669 et seq.). 377 Cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.395; van den Berg, The New York Arbitration Convention of 1958, 1981, 298; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 240.

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straightforward to derive the relevant standard from the principles governing under the lex fori of the enforcing jurisdiction. In any case, there is a clear distinction to the review under article V(1)(d): With 224 regard to article V(1)(b), the question is not whether the specific rules of procedure that guarantee due process have been observed; this is a matter for article V(1)(d). Instead, the question is whether the minimum guarantees for a fair proceedings from the perspective of forum law have been observed (in that respect, the review in fact resembles that of public policy, cf. infra mns 307, 318–319). As a consequence, it is not enough that the applicable procedural rules of the lex arbitri have been observed where a higher standard is necessary under forum law.378 On the other hand, where this standard is met, any additional requirements could only be derived from the applicable procedural law in the context of article V(1)(d).379 Even where the standard of review is based on national (in particular: forum) law, not 225 all mandatory requirements of the respective procedural law must necessarily be observed, but only its indispensable minimum requirements of due process, oftentimes shaped by constitutional standards.380 It must be determined under national law whether the full level of the constitutional guarantee of the right to be heard will also be applied with regard to the enforcement of (foreign) arbitral awards.381 bb) Elements of “due process”. (1) General. The fundamental requirements of 226 procedural fairness may be defined on a general level in various terms,382 which essentially pick up the two basic elements also expressed in article V(1)(b), namely proper notice of the proceedings in its various stages on the one hand and the right to present one’s case on the other hand. The first aspect stresses the tribunal’s obligation to properly inform the parties of all relevant aspects, the second focuses on its obligation to take the contentions of the parties into consideration. Both aspects are obviously closely related, the first being the necessary precondition of any meaningful exercise of a party’s right to be heard. However, it may be helpful to distinguish between both aspects in analyzing individual problems of due process. There are some general principles that apply to any due-process defence: First, the 227 exception is given a narrow interpretation: only very serious (“egregious”) violations of procedural fairness will support a defence under article V(1)(b).383 Second, article V(1) 378

Germany: BayObLG, NJW-RR 2001, 431 = YCA XXVII (2002), 445 (449). Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 151. 380 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.395; Austria: OGH, IPRax 1992, 331 (332); Germany: OLG München, SchiedsVZ 2012, 43 (46) = YCA XXXVII (2012), 231 (233); USA: Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA) and Bank of America, 508 F.2d 969 (975 et seq.) (2nd Cir. 1974); Slaney v. International Amateur Athletic Federation, 244 F.3d 580 (591) (7th Cir. 2001); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (298 et seq.) (5th Cir. 2004). 381 For application of the regular constitutional standard, e. g. Germany: OLG Naumburg, SchiedsVZ 2011, 228 (229) = YCA XXXVII (2012), 226 (228); OLG München, SchiedsVZ 2010, 169 (172) = YCA XXXV (2010), 371 (373); OLG München, SchiedsVZ 2012, 43 (46) = YCA XXXVII (2012), 231 (233); Switzerland: BGer., ASA Bull. 2000, 96 (102). 382 See, e. g., Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 234 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3500 et seq. 383 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 130; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.396; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 233; Hong Kong: Pacific China Holdings Ltd v. Grand Pacific Holdings Ltd, [2012] HKCA 200 = YCA XXXVIII (2013), 577 (mn. 84); Germany: OLG Hamburg, RIW 1975, 432 = YCA II (1977), 241; OLG Brandenburg, BB 2001, Beil. zu Nr. 31, 21 (22) = YCA XXIX (2004), 697 (699); 379

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(b) only requires that a party be given proper opportunity to present its case; as a consequence, it is no defence against enforcement of the award if the party failed to make use of that opportunity.384 Third, even though not specifically expressed in article V(1)(b), it is widely accepted that due process under that provision requires equal treatment of the parties.385 228 It is an important consequence of the second aspect that a party who was duly notified of the proceedings, but did not participate in them, cannot later resist the enforcement of an award rendered by default on the basis of article V(1)(b) – unless, of course, that party is able to offer a satisfactory explanation for its default.386 (2) Proper notice. As article V(1)(b) explicitly makes clear, the right to be given proper notice relates to both the appointment of the arbitrators and the arbitration proceedings. For example, a party must be given notice of the arbitrator’s identity,387 hearing dates and deadlines,388 the content of expert opinions389 and the expert’s identity.390 230 Proper notice primarily raises concerns with regard to the manner and form in which notice is given. In general, no particular formality is imposed; specifically the domestic rules on service of process are not applicable.391 Consequently, it will normally be sufficient, for purposes of article V(1)(b), if service is done by simple mail,392 fax or 229

Switzerland: BGer., ASA Bull. 2016, 1015 (1023); BGer., ASA Bull. 2015, 576 (588); BGer., ASA Bull. 2014, 326 (331); USA: Generica Ltd v. Pharmaceutical Basics, 125 F.3d 1123 (1130) (7th Cir. 1997); Consorcio Rive, SA de C.V. v. Briggs of Cancun, Inc., 82 Fed.Appx. 359 (361) (5th Cir. 2003). 384 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 178; Wolff, ibid., Art. V mn. 539; van den Berg, The New York Arbitration Convention of 1958, 1981, 306; Austria: OGH, RdW 2011, 92 = YCA XXXVI (2011), 256 (257); OGH, ecolex 2016, 393 = YCA XLI (2016), 398 (mn. 28); Germany: OLG Hamburg, BB 1999, Beilage 4, 13 (15) = YCA XXV (2000), 714 (715 et seq.); Switzerland: BGer., YCA XV (1990), 509 (511 et seq.); UK: Minmetals Germany GmbH v. Ferco Steel Ltd, [1999] 1 All E.R. (Comm) 315 (327); USA: Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141 (146) (2nd Cir. 1992). 385 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 170–171; van den Berg, The New York Arbitration Convention of 1958, 1981, 306; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3520; Hong Kong: Paklito Investment Ltd v. Klockner East Asia Ltd, [1993] 2 HKLR 39 (46) = YCA XIX (1994), 664 (670). – Contra: Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.389 (procedural public policy). 386 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 157; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1698; Austria: OGH, RdW 2011, 92 = YCA XXXVI (2011), 256 (257); France: Cass. civ., Rev. arb. 2009, 437 = YCA XXXV (2010), 353 (355); Germany: OLG Hamburg, YCA IV (1979), 266 (267); Italy: Cass., Foro Pad. 1991, 289 = YCA XVII (1992), 545 (548); Spain: Trib. Sup. Cataluña, YCA XXXII (2007), 608 (612 et seq.); Trib. Supr., YCA XXXII (2007), 532 (538 et seq.); Trib. Supr., YCA XXXVIII (2013), 459 (mns 24 et seq.); Switzerland: BGer., YCA XV (1990), 509 (512); USA: Overseas Cosmos, Inc. v. NR Vessel Corp., 1997 WL 757041, 1 (4) (S.D.N.Y. 1997) = YCA XXIII (1998), 1096 (1100). 387 Germany: OLG Köln, ZZP 91 (1978), 318 (322) = YCA IV (1979), 258 (259). 388 Germany: OLG Hamburg, RIW 1985, 490 (491); Italy: Cass., RDIPP 1995, 104 (109 et seq.) = YCA XXII (1997), 715 (721 et seq.); Spain: Trib. Supr., YCA IX (1984), 435 (436). 389 France: Cass. civ., Rev. arb. 1979, 355; CA Paris, Rev. arb. 1984, 87 (90); Hong Kong: Paklito Investment Ltd v. Klockner East Asia Ltd, [1993] 2 HKLR 39 (47) = YCA XIX (1994), 664 (671 et seq.). 390 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 177; France: Cass. civ., Rev. arb. 1979, 355; CA Paris, Rev. arb. 1984, 87 (90). – Contra: USA: International Standard Electric Corporation v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F.Supp. 172 (179 et seq.) (S.D.N.Y. 1980). 391 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 159; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3509. See, e. g., Brazil: STJ, YCA XXXVII (2012), 187. 392 Switzerland: BGer., YCA XXXII (2007), 619 (625 et seq.); BGer., ASA Bull. 2016, 1015 (1024 et seq.); Mexico: Trib. Sup. Just., YCA IV (1979), 301; Trib. Sup. Just., YCA IV (1979), 302 (303).

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telex,393 or even electronic mail.394 Proper notice may be lacking in case of a “fictitious” or “substituted service” of the statement of claim.395 Concerns of the right to be heard can also arise with regard to the language used in the 231 arbitration proceedings, where one of the parties claims that it did not understand that language. That objection is closely tied to article V(1)(d). Consequently, the claim will normally not be successful where the parties had either agreed on the language used396 or selected a particular arbitral institution which implied the use of that language. In that case it is for the party concerned to obtain any necessary translations.397 In contrast, the use of a language different from the one agreed upon may constitute a violation of due process (or a violation of procedural law under article V(1)(d)),398 unless the party resisting enforcement has adequate command of that language and was therefore in a position to understand notices by the tribunal and follow proceedings.399 Obtaining a translation may be required by a respondent, if it has become clear from the documents transmitted that an arbitration proceedings is initiated on the basis of the agreement of the parties.400 The situation is somewhat less clear where the procedural language cannot be derived 232 from the agreement of the parties. Here, much will depend on the facts of the particular case. It has been held that the use of a language common in international commerce, particularly English,401 or of an official language of the place of arbitration402 as such will not establish a violation of article V(1)(b) or (2)(b), even if one of the parties does not understand that language. Furthermore, the use of a particular language does not 393 Germany: OLG Celle, YCA XXXII (2007), 372 (381 et seq.); Spain: Trib. Supr., YCA XXXII (2007), 608 (612). 394 Germany: OLG Celle, IPRspr 2007, 614 = YCA XXXIII (2008), 524 (531 et seq.). 395 Germany: BayObLG, NJW-RR 2001, 431 = YCA XXVII (2002), 445 (449); but cf. KG, IPRspr 2008, 638 (639 et seq.) = YCA XXXIV (2009), 510 (514); also see Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 168; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.400. 396 Germany: OLG Celle, IPRspr 2007, no./218, 614 (617) = YCA XXXIII (2008), 524 (531); USA: Yukos Capital s.a.r.l. v. OAO Samaraneftegaz, 963 F.Supp. 2d 289 (298) (S.D.N.Y. 2013). 397 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3515; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 163; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.401; Austria: OGH, YCA XXXIII (2008), 354 (357 et seq.); Germany: OLG Celle, YCA XXXII (2007), 303 (307); UK: Ekran OAO v. Magneco Metrel UK Ltd, [2017] EWHC 2208 (Comm) = YCA XLIII, 576 (mns 22 et seq.). 398 Cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 336; Austria: OGH, YCA XXXIII (2008), 354 (357 et seq.); USA: CEEG (Shanghai) Solar Science & Technology Co. v. LUMOS LLC, 829 F.3d 1201 (1207) (10th Cir. 2016). 399 Cf. Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 161; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.401; also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3567 (pointing out that the uncontested use of a different language during the arbitration proceedings may amount to a modification of the initial agreement). 400 UK: Ekran OAO v. Magneco Metrel UK Ltd, [2017] EWHC 2208 (Comm) = YCA XLIII, 576 (mns 22 et seq.). 401 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 162; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 251; OLG Köln, RIW 1993, 499 (501) = YCA XXI (1996), 535 (English); Spain: Trib. Supr., YCA XXX (2005), 627 (631) (English). 402 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 525; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.401; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 251; Austria: OGH, YCA XXXIII (2008), 354 (357) (Russian); Germany: OLG Celle, YCA XXXII (2007), 303 (307 et seq.) (Russian); OLG Hamm, IPRspr 2008, no. 208, 654 (656 et seq.) = YCA XXXIV (2009), 536 (541) (Russian); Ireland: Kastrup Trae-Aluvinduet A/S v. Aluwood Concepts Ltd, YCA XXXV (2010), 404 (406) (Danish); Japan: Dist. Ct. Yokohama, YCA XXVII (2002), 515 (517 et seq.) (Chinese); Switzerland: AppG Basel-Stadt, BJM 1991, 144 (146 et seq.) = YCA XVII (1992), 581 (583) (Romanian).

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affect a party’s right to be heard where that party’s representative was from the respective country.403 (3) Right to present case. Apart from proper notice, the parties must be given the opportunity to present their case in respect of all factual and legal circumstances which are relevant to the dispute and the arbitral tribunal must take note of and consider such statements of the parties.404 234 The parties must be given sufficient time to present their case. All the same, the tribunal may of course set time limits for briefs and pleadings and invariably will have to do so in order to safeguard efficient proceedings. As a consequence, the setting of time limits in itself is no violation of due process;405 the same is true for a refusal to extend deadlines or postpone hearings.406 A defence under article V(1)(b) therefore only arises when deadlines are so short that they prevent a party from reasonably presenting its case.407 Furthermore, where a party fails to meet a particular deadline for exceptional circumstances or provides other good excuse, this must be taken into consideration by the tribunal.408 235 It is widely assumed that a party is entitled to request an oral hearing and that refusal of such a request will normally be reason to refuse enforcement of the resulting award under article V(1)(b).409 However, the right to an oral hearing should be subject to the respective provisions of the rules governing the arbitral procedure; unless these rules provide for a mandatory hearing, the tribunal has discretion in deciding whether it will hear the parties in oral or in written from.410 However, it may violate article V(1)(b) if 233

403

OLG Schleswig, RIW 2000, 706 (708) = YCA XXXI (2006), 652 (662). Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.404; van den Berg, The New York Arbitration Convention of 1958, 1981, 306 et seq.; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 247 et seq.; Austria: OGH, SchiedsVZ 2019, 154 (157); Germany: BGH, NJW 1990, 2199 (2200) = YCA XVII (1992), 503 (509); OLG Köln, SchiedsVZ 2005, 163 (165) = YCA XXX (2005), 557 (560); OLG München, SchiedsVZ 2010, 169 (172) = YCA XXXV (2010), 371 (373); OLG München, SchiedsVZ 2012, 43 (45 et seq.) = YCA XXXVII (2012), 231 (233); OLG Naumburg, SchiedsVZ 2011, 228 (229) = YCA XXXVII (2012), 226 (228); USA: Generica Ltd v. Pharmaceutical Basics, 125 F.3d 1123 (1130) (7th Cir. 1997); Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141 (146) (2nd Cir. 1992). 405 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 172; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.406; van den Berg, The New York Arbitration Convention of 1958, 1981, 308; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3520 et seq.; Germany: OLG Hamm, RIW 1997, 962 (963); Italy: CA Brescia, RDIPP 1981, 781 (785 et seq.) = YCA VIII (1983), 383 (385); Netherlands: Rechtbank Rotterdam, YCA XXXVII (2012), 282 (284); Switzerland: OG Basel, BJM 1973, 193 = YCA IV (1979), 309 (310). 406 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.406; Germany: OLG Karlsruhe, SchiedsVZ 2006, 335 (336) = YCA XXXII (2007), 342 (346); USA: Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (975 et seq.) (2nd Cir. 1974). 407 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.406; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3521; Germany: OLG Hamburg, RIW 1985, 490 (492); OLG Hamm, RIW 1997, 962 (963); Italy: Cass., YCA XIV (1989), 675 (676); Spain: Trib. Supr., YCA IX (1984), 435 (436). 408 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 172. 409 van den Berg, The New York Arbitration Convention of 1958, 1981, 306; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 179; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. II, 2175, Vol. III, 3512; USA: Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123 (1130) (7th Cir. 1997). 410 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 180 (with the restriction that none of the parties have specifically requested an oral hearing); Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.403; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 294; Germany: OLG Hamburg, BB 1999, Beilage 4, 13 (15) = YCA XXV (2000), 714 (715); OLG Bremen, BB 2000, Beilage 12, 18 (19 et seq.) = YCA XXXI (2006), 640 (643 et seq.). 404

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the arbitral tribunal does not properly inform the parties that the dispute will be decided without an oral hearing.411 The inability of a party to attend hearings normally does not support a due-process defence where the party was legally represented412 or could have sent a suitable representative.413 Although the decision will always depend on the particular circumstances of each individual case, the defence that a party was prevented by factual obstacles from attending hearings has rarely been successful. Thus, neither the danger of arrest and deportation414 nor warlike situations415 were, on the facts of the case, held sufficient to establish a defence under article V(1)(b). The parties must be given the right to submit evidence in support of their case.416 236 However, article V(1)(b) allows for a wide discretion of the arbitral tribunal in deciding on the admissibility and relevance of evidence offered by the parties. As a consequence, the exclusion of any particular evidence, even a “key witness”, in itself will normally not support a challenge for lack of due process.417 Yet, an outright refusal by the arbitrators to hear certain relevant evidence at all will constitute a valid defence.418 Enforcement of an award may also be refused where a party’s claim was dismissed for lack of certain evidence that the panel had initially characterized as unnecessary.419 Parties must be granted an opportunity to comment on the arguments 237 advanced and the evidence taken in the proceedings,420 e. g. on the reports of

411 Cf. Russia: Supreme Arbitrazh Court, YCA XXXIII (2008), 650 (holding that the burden of proof regarding due notification was on the applicant). 412 Germany: OLG München, SchiedsVZ 2010, 169 (172) = YCA XXXV (2010), 371 (373). 413 Germany: OLG Karlsruhe, SchiedsVZ 2006, 335 (336) = YCA XXXII (2007), 342 (346); Switzerland: OG Basel, BJM 1973, 193 = YCA IV (1979), 309 (309 et seq.). 414 USA: Consorcio Rive, SA de C.V. v. Briggs of Cancun, Inc., 82 Fed.Appx. 359 (364) (5th Cir. 2003); Nat’l Dev. Co. v. Khashoggi, 781 F.Supp. 959 (962) (S.D.N.Y. 1992) = YCA XVIII (1993), 506 (508); Empresa Constructora Contex Limitada v. Iseki, Inc., 106 F.Supp. 2d 1020 (1026 et seq.) (S.D.Cal. 2000). 415 Germany: OLG Hamm, RIW 1997, 962 (963). 416 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 174; Wolff, ibid., Art. V mn. 541; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.403; Jana/Armer/Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 294; . 417 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 176; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.403; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3522 et seq.; Austria: OGH, YCA XXXI (2006), 583 (584 et seq.); France: CA Paris, Rev. arb. 2008, 161 = YCA XXXIII (2008), 480 (483); Germany: OLG Celle, IPRspr 2007, no. 218, 614 (617) = YCA XXXIII (2008), 524 (530); Netherlands: Rechtbank Rotterdam, YCA XXXVIII (2013), 434 (436 et seq.); UK: Cukurova Holding A.S. v. Sonera Holding B.V., [2014] UKPC 15 = YCA XXXIX (2014), 516 (520) USA: Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (975) (2nd Cir. 1974); Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123 (1130 et seq.) (7th Cir. 1997); Sonera Holding B. V. v. Cukurova Holding A.S., 895 F.Supp. 2d 513 (521 et seq.) (S.D.N.Y. 2012). 418 USA: Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16 (20) (2nd Cir. 1997); Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (300 et seq.) (5th Cir. 2004). 419 USA: Iran Aircraft Industries v. Avco Corp., 980 F.2d 141 (146) (2nd Cir. 1992). 420 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 188–195; Wolff, ibid., Art. V mn. 541; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.405; van den Berg, The New York Arbitration Convention of 1958, 1981, 307; Germany: BGH, NJW 1990, 2199 (2200) = YCA XVII (1992), 503 (508); Hong Kong: Polytek Engineering Co. Ltd v. Hebei Import & Export Corp., YCA XXIII (1998), 666 (682); Netherlands: Gerechtshof Den Haag, YCA XXIII (1998), 731 (733 et seq.); Switzerland: BGer., ASA Bull. 1990, 51 (52); BGE 117 II 346 (347 et seq.); BGE 116 II 639 (643); UK: Malicorp Ltd v. Egypt, [2015] EWHC 361 (Comm) = YCA XLI (2016), 585 (588 et seq.); USA: National Football League Management Council v. National Football League Players Association, 125 F.Supp. 3d 449 (470 et seq.) (S.D.N.Y. 2015); Gold Reserve Inc. v. Bolivarian Republic of Venezuela, 146 F.Supp. 3d 112 (129 et seq.) (D.D.C. 2015).

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experts.421 Where it appears that the arbitral tribunal took the evidence into consideration, its evaluation of the evidence is generally held to be beyond the scope of review, as this would constitute an improper “révision au fond”422 (cf. supra mn. 179). 238

cc) Causality. Under the prevailing opinion in many jurisdictions, the violation of a party’s right to be heard will only constitute a defence under article V(1)(b) NYC if there is “causality” between the infringement of the right to be heard and the decision taken by the tribunal. In that respect, however, it is enough for the respondent to show that the violation of due process may have had an influence on the outcome of the dispute.423 The requirement of causality allows for a cure of an initial error by granting the aggrieved party a proper hearing at a later point in the proceedings. It also provides a possibility to recognize or enforce an award where, formally, a ground for refusal under article V(1)(b) NYC could be found to exist (cf. supra mn. 184).

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dd) Waiver and preclusion. The general rules of waiver and preclusion apply (cf. supra mns 187–198). However, an advance waiver by the parties regarding fundamental principles of due process will normally be considered invalid.424

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d) Excess of the submission to arbitration, article V(1)(c) NYC. aa) General. Article V(1)(c) provides for the refusal of recognition and enforcement, if 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”. This ground of refusal is closely related to that of article V(1) (a) and the distinction between both provisions cannot always precisely be drawn: Where a valid agreement to arbitrate is lacking altogether, this is clearly a case for article V(1)(a) (cf. supra mn. 205). However, where there is a valid arbitration agreement but the tribunal rendered an award on a dispute which is not covered by it, this could be analyzed both under article V(1)(a) (as with regard to the dispute adjudicated there is no valid arbitration agreement) and article V(1)(c) (as the existing arbitration agreement does not cover the dispute). The language of article V(1)(c) suggests that 421 Hong Kong: Paklito Investment Ltd v. Klockner East Asia Ltd, [1993] 2 HKLR 39 (45 et seq.) = YCA XIX (1994), 664 (671 et seq.); Apex Tech Investment Ltd v. Chuang’s Development (China) Ltd, [1996] 2 HKLR 155 (157 et seq.). 422 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3525; Germany: OLG Saarbrücken, SchiedsVZ 2012, 47 (52); OLG München, SchiedsVZ 2012, 43 (47) = YCA XXXVII (2012), 231 (233 et seq.); Netherlands: Court of Appeal, YCA XXIII (1998), 731 (734). 423 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 142–144; Jana/Armer/ Kranenberg, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 252 et seq.; France: CA Paris, Rev. arb. 1987, 77; Germany: BGH, NJW 1986, 3027 (3028 et seq.) = YCA XII (1987), 489 (490 et seq.); BGH, NJW 1990, 2199 (2200) = YCA XVII (1992), 503 (508); BGH, SchiedsVZ 2009, 126 (127); Hong Kong: Apex Tech Investment Ltd v. Chuang’s Development Ltd, [1996] 2 HKLR 155 (157 et seq.); Guangdong New Technology Imp. & Exp. Corporation Jiangmen Branch v. Chiu Shing trading as B.C. Property & Trading Co., YCA XVIII (1993), 385 (388); Paklito Investment Ltd v. Klockner East Asia Ltd, [1993] 2 HKLR 39 (47) = YCA XIX (1994), 664 (671 et seq.); Netherlands: Court of Appeal, YCA XXIII (1998), 731 (734); Spain: Trib. Supr., YCA XXXII (2007), 555 (565); Trib. Supr., YCA XXXII (2007), 597 (600); Switzerland: AppG Basel-Stadt, BJM 1991, 144 (147) = YCA XVII (1992), 581 (583); also cf. BGer., ASA Bull. 2014, 356 (364); BGer., YCA XXXVI (2011), 337 (339) (regarding article V(1) (d)); USA: Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (305) (5th Cir. 2004); Calbex Mineral Ltd v. ACC Resources Co., 90 F.Supp. 3d 442 (460) (W.D.Pa. 2015). – Contra: Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1699; British Virgin Islands: Pacific China Holdings Ltd v. Grand Pacific Holdings Ltd, YCA XXXVI (2011), 262 (264 et seq.). 424 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 145; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.409; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3520; Germany: OLG Köln, ZZP 91 (1978), 318 (321) = YCA IV (1979), 258 (259); Switzerland: BezG Affoltern am Albis, SJZ 1997, 223 (226) = YCA XXIII (1998), 754 (762).

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such cases should be treated under this provision, but ultimately the classification is irrelevant, as the same principles will apply under both article V(1)(a) and (c).425 A similar problem arises with regard to an award rendered against a party that is not party to the arbitration agreement; here, article V(1)(a) should apply,426 but again the choice between both provisions is of no practical relevance. Under article V(1)(c), the scope of the arbitrators’ mandate is to be determined by the 241 “terms of the submission to arbitration” rather than the “arbitration agreement” to which article V(1)(a) refers. It is not entirely clear whether this is meant to imply a difference in meaning, particularly since, for example, the French version only refers to the “compromis” and the “clause compromissoire”, the two basic categories of arbitration agreements under French law. In any case, article V(1)(c) should be interpreted to cover both the initial arbitration agreement as well as subsequent agreements which more specifically define the mandate of the arbitral tribunal (like “terms of reference”).427 The scope of the submission to arbitration must be determined by interpretation of 242 the arbitration agreement (or any relevant subsequent agreements). As far as the scope and interpretation are governed by legal principles, these questions are determined by the law applicable to the arbitration agreement (supra mn. 136). It is doubtful, however, to what extent a national court deciding on an excess of competence under article V(1) (c) should defer to the assessment of this issue by the arbitral tribunal. Although it is widely accepted as a general principle that the arbitral tribunal has no “KompetenzKompetenz” with regard to its own jurisdiction (supra mn. 201), this principle is only applied with full force regarding the existence of a valid arbitration agreement as such. In contrast, where there is a valid agreement to arbitrate, there is a strong tendency among courts and commentators to defer to the determination by the arbitral tribunal, arguing for a “powerful presumption” that the tribunal acted within its powers428 and sometimes even awarding the arbitrators considerable discretion in interpreting the scope of their authority.429 However, it is hard to see on a matter of principle why the arbitral tribunal should have greater autonomy to decide on its own jurisdiction when the issue is one of interpreting the scope of an existing arbitration agreement than when the existence of such an agreement as such is in doubt.430 The fact that contract interpretation is one of the typical functions assigned to the tribunal is no helpful argument, when the very scope of the tribunal’s authority is in issue. Therefore, any 425 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.415; van den Berg, The New York Arbitration Convention of 1958, 1981, 312 et seq. 426 But see Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 348 (application of Art. V(1)(c)); Canada: Javor v. Fusion-Crete, YCA XXIX (2004), 596 (601) (application of Art. V(1)(d)). 427 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.412; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns. 201–202. 428 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 199, 234; Port/ Bowers/Davis Noll, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 261; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 26–91; Canada: Quintette Coal Ltd v. Nippon Steel Corp., (1990) 50 BCLR (2d) 207 (mn. 32); United Mexican States v. Cargill, Inc., 107 OR (3d) 528 (mn. 33); France: Cass. civ., Rev. arb. 1982, 424; Cass. civ., Rev. arb. 1982, 183 (186); Spain: Trib. Sup. Cataluña, YCA XLII (2017), 520 (522); USA: Parsons & Whittemore Overseas v. Société Générale de l’Industrie du Papier, 508 F.2d 969 (976) (2nd Cir. 1974); Management & Technical Consultants SA v. Parsons-Jurden International Corp., 820 F.2d 1531 (1534 et seq.) (9th Cir. 1987). Also cf. Ireland: Snoddy v. Mavroudis, [2013] IEHC 285. 429 See, e. g., USA: Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems, Inc., 29 F.Supp. 2d 1168 (1171 et seq.) (S.D.Cal. 1998). 430 van den Berg, The New York Arbitration Convention of 1958, 1981, 312.

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“discretion” by the arbitrators to interpret the scope of the submission to arbitration should be rejected. It is enough that, under the general principles regarding the burden of proof (supra mn. 186), the party resisting enforcement under article V must establish that the award actually was in excess of the submission to arbitrate. In that respect, there is indeed a “presumption” that the arbitral tribunal acted within its powers. And in order to rebut this presumption, the respondent must also overcome the general considerations militating in favour of a wide interpretation of arbitration agreements (supra mn. 137). Beyond that, there is neither need nor justification to recognize a discretion of the arbitrators to determine the scope of their own jurisdiction. 243 An excess of the submission to arbitration may arguably occur in two different forms. First, the arbitral tribunal may have decided on disputes that are not covered by the arbitration agreement; this may be called an excess of “jurisdiction” or “competence”. In this case, a defence under article V(1)(c) is normally established by the mere fact that the award transcends the scope of the arbitration agreement. Second, the arbitral tribunal may have decided on a matter which as such is within the scope of the arbitration agreement, but the manner in which it has decided on that matter may arguably be held to deviate in some other relevant form from the parties’ mandate; this may be called an excess of “authority”.431 This is a much more difficult proposition, as it involves the risk of exercising an improper “révision au fond” with regard to the arbitrators’ decision on the merits (infra mns 245–253). 244 In the situations to which article V(1)(c) applies, there is a particular likelihood that only some of the matters decided by the tribunal are beyond the submission to arbitrate while others are within. Therefore, article V(1)(c) expressly provides for a partial recognition or enforcement of the award, if the different matters can be separated from each other. However, article V(1)(c) is not only applicable to an excess of jurisdiction by the tribunal, but also to other cases where a defence to enforcement only affects part of the award (supra mn. 199). bb) Application of incorrect rules to the substance of the dispute. Whenever the arbitrators’ decision on the merits is based on a mistake of law or fact, this might be considered to constitute an “excess of authority”, as the parties’ objective arguably is to obtain a legally sound decision. However, it is clear that, normally, by submitting to arbitration the parties primarily seek a binding decision on the merits that will not be subject to a later review on the merits (“révision au fond”) by national courts called upon to annul or enforce the award (cf. supra mn. 179). Thus, it is generally accepted that a mere error in applying the law does not constitute a defence under article V(1) (c).432 It is another question whether an award in which the arbitrators outrightly refused to make a legally principled decision at all and instead relied on clearly arbitrary considerations may be refused enforcement for reasons of public policy (infra mn. 326). 246 The problem becomes more complicated, however, when it is not argued that the arbitral tribunal merely committed a simple error of law but that its decision on the merits was based on an incorrect set of rules altogether, in particular where the tribunal failed to apply the law chosen by the parties. Here, the argument that the arbitrators exceeded their mandate becomes stronger. Alternatively, these cases may also be analyzed under article V(1)(d), as such conduct by the tribunal may be held to be in 245

431 The terminology used by courts and commentators is not uniform. In particular, article V(1)(c) in itself does not distinguish between these two forms. 432 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 198, 244, 337; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.427; van den Berg, The New York Arbitration Convention of 1958, 1981, 313; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 26–66.

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violation of the rules governing the arbitral proceedings (e. g. article 28 ML).433 Here again, the formal classification of the defence has no relevance to its substance. The decision is hardly controversial where the parties have not chosen the law 247 applicable to the decision on the merits. Here, the arbitrators must determine the applicable law on the basis of the relevant conflict of laws rules (cf. e.g. article 28(2) ML). This determination is an integral part of its decision on the merits and should therefore be beyond court review because of the prohibition against a révision au fond.434 The same should apply in cases where the parties have chosen the applicable law 248 (article 28(1) ML) and the arbitrators did not apply the law so chosen. As a matter of principle, the situation is the same as where the tribunal conducts an objective determination of the applicable law: a challenge of the award should normally be excluded because of the prohibition of a révision au fond.435 Accordingly, the defence is rejected in cases where it appears that the tribunal made an error in interpreting the choice-of-law clause or determining its validity.436 In contrast, it has been considered to be a defence to the enforcement of the award if the arbitral tribunal deliberately disregarded an agreement by the parties on the applicable substantive law.437 The preferable approach, however, is to treat choice-of-law clauses no differently than any other agreements that the parties may have made. In all of these cases, review of the tribunal’s decision would constitute an improper révision au fond.438 Enforcement of the award should only be refused if the failure to respect the agreement of the parties on the merits exceptionally amounts to a violation of public policy (cf. supra mn. 245, infra mn. 326). A somewhat stricter approach is usually taken with regard to the arbitral tribunal’s 249 power to decide the dispute “ex aequo et bono” or as “amiable compositeur”. Here, the applicable arbitral rules often require an express authorization by the parties (see, e. g., article 28(3) ML). The prevailing view is that, where the tribunal acts as “amiable compositeur” without such authorization, enforcement of the award should be refused either under article V(1)(c)439 or article V(1)(d).440 Here as well, however, it seems preferable to accept the decision of the tribunal as to the basis of its decision on the merits,441 unless it deviates so radically from the parties’ agreement that it amounts to a violation of public policy. – In the opposite case that the tribunal is authorized to decide 433 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 337; Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 121; Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 51 et seq. 434 Cf. Italy: Cass., RDIPP 2005, 107 (110) = YCA XXXI (2006), 802 (804 et seq.). 435 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3554. – Contra: Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 121. 436 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.428; cf. Germany: OLG Frankfurt, RIW 1984, 400 (401). 437 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 235; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.427; Germany: BGH, NJW 1986, 1436 (1437) (improper procedure); USA: Edstrom Industries, Inc. v. Companion Life Ins. Co., 516 F.3d 546 (552) (7th Cir. 2008). 438 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3554; USA: Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 660 F.3d 281 (285) (7th Cir. 2011) (explicitly rejecting the decision in Edstrom, supra fn. 438). 439 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 236; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.425; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3555. 440 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 338; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.425; Germany: BGH, NJW 1986, 1436 (1437). 441 Cf. Austria: OGH, IPRax 1984, 97 (99) = YCA IX (1984), 159 (160) (setting-aside proceedings).

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“ex aequo et bono” but the decision is based on legal considerations, it is generally accepted that the arbitrators stayed within their mandate and there is no defence to the enforcement of the award.442 250 A final problem arises where the arbitral tribunal renders its decision on the basis of “international legal principles” like the Unidroit Principles of International Commercial Contracts or, more generally, the “lex mercatoria”, without specific authorization by the parties. Unless the applicable rules of procedure provide otherwise, such a decision should be considered to be based on legal considerations and therefore not to require the authorization necessary for decisions “ex aequo et bono”.443 Where the parties have agreed on the application of a particular national law, the principles on the disregard of a choice-of-law clause should be applied (supra mn. 248). In extreme cases, the enforcement of the award may be again refused on public policy grounds.444 cc) Decisions ultra and infra petita. A defence under article V(1)(c) may exist not only where the matter decided is beyond the objective scope of the arbitration agreement but also where the arbitrators render a decision that goes beyond a party’s request for relief (ultra petita),445 for example if the tribunal awards interest although no such claim had been brought or awards twice the amount of interest claimed.446 However, where the lex arbitri allows the tribunal to award interest at its own discretion, its decision will not be denied enforcement for being ultra petita.447 The same is true for an allocation of costs where the rules governing the arbitration procedure allow for a decision without specific authorization by the parties.448 If the arbitration agreement expressly provides that each party is to bear its own costs, it is a matter of interpretation whether this should be read as a substantive agreement on costs which is within the tribunal’s power of interpretation and appreciation or whether the parties have thereby excluded the tribunal’s authority to render a decision on the allocation of costs. In the latter case, enforcement may be denied on the basis of article V(1)(c) if the tribunal disregards this agreement.449 252 Similar considerations apply if the award grants a remedy that was specifically excluded by the parties in the main contract: Normally, such an agreement will be read as referring to the substantive rights of the parties arising under the contract. In 251

442 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 238; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.426; France: CA Paris, Rev. arb. 1985, 285 (287) = J. Int. Arb. 2 (1985), no. 4, 103; CA Paris, Rev. arb. 1989, 280 (291). 443 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mns 21.429 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1556; Port/Bowers/Davis Noll, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 260 et seq.; France: Cass. civ., Rev. arb. 1992, 457; Cass. civ., Rev. arb. 1985, 431 (433) = YCA XI (1986), 484 (490); also cf. Austria: OGH, IPRax 1984, 97 (99) = YCA IX (1984), 159 (160) (setting-aside proceedings). 444 Cf. UK: Deutsche Schachtbau- und Tiefbaugesellschaft mbH v. Ras Al Khaimah Oil, [1987] 2 All E.R. 769 (779) (where, however, the defence was ultimately rejected). 445 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 245; Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 102; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3545 et seq. – Contra: Haas/Kahlert, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.418; Port/Bowers/Davis Noll, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 268 et seq. 446 France: CA Paris, Rev. arb. 2001, 805 (809). 447 Germany: OLG Hamburg, BB 1999, Beilage 4, 13 (15) = YCA XXV (2000), 714 (715). 448 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 249. 449 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 249; Canada: Telestat Canada v. Juch-Tech Inc., 3 BLR (5th) 282 (mns 62 et seq.).

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that case, the construction of the parties’ agreement and the determination of its legal consequences will relate to the decision on the merits and be beyond the review of the enforcing court, due to the prohibition of a “révision au fond” (supra mn. 179).450 A case for article V(1)(c) would then only arise in the exceptional case that the parties’ agreement can be interpreted as intending to limit the tribunal’s mandate.451 In contrast, decisions infra petita will normally not give rise to a defence under 253 article V(1)(c).452 Where the tribunal simply awarded a party less than it had claimed, this is clearly no reason to deny enforcement of the award, as the tribunal has fully disposed of the matter submitted to it and the party has simply not been completely successful with its claim. Thus, problems only arise, where the tribunal has not adjudicated all of the issues the parties have submitted to its decision. Such an award will normally be enforceable as a partial award (supra mn. 63). Only exceptionally may enforcement be denied, if the dispute is of a nature that it can only be appropriately resolved by way of a comprehensive decision.453 dd) Time limits and similar limitations. Awards rendered outside a time limit set 254 by the parties or the applicable arbitration rules may also be analyzed as being “beyond the scope of the submission to arbitration” within the meaning of article V(1)(c), but may also be considered under article V(1)(a) or (d).454 With regard to a time limit set by the parties, the decision again turns on the interpretation of the parties’ agreement: In the exceptional case that the parties wanted to impose an absolute deadline after which the authority of the tribunal to render a decision was to end, this will be a defence to enforcement.455 On the other hand, no such defence exists if the time limit only serves an administrative function; this has in particular been held to be the case with regard to the time limit imposed by the ICC Arbitration Rules (article 31 of the 2021 version of the rules).456 Where the respondent continued to enter pleadings on the merits after the time limit had expired, he may be precluded from raising an objection to enforcement with regard to the time limit.457 – Where parties have set a word limit with regard to the written opinion, such an agreement will usually have only a clerical purpose. As a consequence, excess of such a limitation by the tribunal will not give rise to a defence under article V.458 450 Cf. Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (976) (2nd Cir. 1974) (award of damages for loss of production although liability in that respect had been expressly excluded in the contract; Fertilizer Corp. of India v. IDI Mgmt., Inc., 517 F. Supp. 948 (958 et seq.) (S.D.Ohio 1981) (“large award, based almost exclusively on consequential damages” despite clear exclusion of consequential damages in the contract); also see van den Berg, The New York Arbitration Convention of 1958, 1981, 313 et seq. 451 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3553 et seq.; Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 105. 452 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.417; van den Berg, The New York Arbitration Convention of 1958, 1981, 320 et seq.; Italy: Cass., YCA XXII (1997), 727 (731 et seq.); Luxemburg: CA, YCA XXIV (1999), 714 (721). 453 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 252. 454 Cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 232–233 (favouring Art. V(1)(d)), mn. 347. 455 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.421; Germany: BGH, NJW 1976, 1591 = YCA II (1977), 242 (243); also cf. OLG Koblenz, WM 2013, 1327 (1328 et seq.). 456 Germany: BGHZ 104, 178 = NJW 1988, 3090 (3091 et seq.) = YCA XV (1990), 450 (451 et seq.); OLG Karlsruhe, SchiedsVZ 2012, 101 (106) = YCA XXVIII (2013), 379 (383 et seq.); Switzerland: AppG Basel-Stadt, IPRax 1985, 44. 457 Germany: OLG Koblenz, WM 2013, 1327 (1329). 458 Austria: OGH, YCA XLIII (2018), 415 (mns 13 et seq.).

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e) Improper composition of the arbitral tribunal and improper proceedings, article V(1)(d) NYC. aa) General. Pursuant to article V(1)(d), recognition and enforcement of the award may be refused if “[t]he 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”. Thus, the entire process from the initiation of the arbitral proceedings through the constitution of the arbitral tribunal and the conduction of the proceedings until the rendering of the award may be subject to review, e. g. the number, qualification or impartiality of arbitrators, the time, place and manner of hearings, or the taking of evidence.459 Both with regard to the composition of the tribunal and the conduction of the arbitral proceedings, article V(1)(d) NYC does not provide any autonomous rules but refers to the agreement of the parties and, where no such agreement exists, to the law of the place of arbitration. Particular treatment is given to the parties’ right to be heard, which may give rise to a special defence under article V(1)(b) (as for the relationship between article V(1)(b) and (d), supra mns 223–224). As always, particularly serious violations of fundamental procedural principles may also establish a public policy defence pursuant to article V(2)(b) (infra mns 317 et seq.).

bb) Applicable standard. (1) General principles. Under article V(1)(d), the composition of the arbitral tribunal and the arbitral procedure are subject to the agreement of the parties and, subsidiarily, the law of the place of arbitration. The law governing the procedure may thus be distinct from that governing the arbitration agreement under article V(1)(a), if this results from the agreement of the parties. Where there is no agreement of the parties regarding the procedure, article V(1)(d) refers to the law of the country “where the arbitration took place”. This place should be interpreted in the same way as article I(1) s. 1 and article V(1)(a) as referring to the seat of arbitration (supra mns 28, 213).460 The law of the place of arbitration not only applies where the parties have not made any agreement with regard to procedure, but also to fill gaps where the parties’ agreement is incomplete.461 257 The agreement of the parties regarding procedure is not subject to the formal requirements of article II, as these apply only to the agreement to arbitrate.462 It need not be made explicitly but may also result by implication; in particular, choice of a particular place of arbitration is often interpreted as an implicit choice of the procedural law governing in that country.463 This implication, however, is not necessary, as the law of the place of arbitration would govern also without an (implicit) choice to that effect. On the basis of article V(1)(d), the parties may either directly create their own rules, choose institutional arbitration rules464 or choose those of a national legal system, 256

459 For a comprehensive discussion see Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 279–299, 323–350. 460 Cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 275; van den Berg, The New York Arbitration Convention of 1958, 1981, 323; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 288. 461 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 275, 312; van den Berg, The New York Arbitration Convention of 1958, 1981, 325. 462 Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 288. 463 See, e. g., Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 271; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 288. 464 See, e. g., Germany: OLG Bremen, BB 2000, Beilage 12, 18 (19 et seq.) = YCA XXXI (2006), 640 (641 et seq.). Switzerland: BGE 108 Ib 85 (90) = YCA IX (1984), 437 (440).

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regardless of whether there are any objective connections between that law and the parties or the dispute.465 (2) Party autonomy and mandatory rules of the place of arbitration. In contrast to 258 article V(1)(a), which refers to the “law to which the parties have subjected” the arbitration agreement, article V(1)(d) provides that the composition of the arbitral tribunal and the arbitral procedure must be assessed on the basis of the “agreement of the parties”. This implies that, under article V(1)(d), the parties are not limited to choosing a particular legal system but are free to directly define the procedural rules to be followed by the arbitral tribunal. As a consequence, party autonomy with regard to the composition of the tribunal and the conduction of the proceedings rests directly on article V(1)(d) and does not depend on any particular national legal system and the limits drawn by its mandatory provisions. In particular, enforcement of the award cannot be denied on the grounds that the constitution of the tribunal or the arbitral procedure followed an agreement which was contrary to the mandatory rules of the place of arbitration.466 While this liberal approach as to party autonomy regarding procedural issues results 259 quite clearly from the language of article V(1)(d), it creates an uneasy conflict with regard to the review of the award in its country of origin, that is, in the country where the award was made. The party challenging the award will often have the possibility to seek an annulment of the award in its country of origin (see, e. g., article 34 ML). However, the review exercised by the courts in the country where the award was made is not limited by article V NYC because, for that country, the award will not be “foreign” within the meaning of article I(1) s. 1 and the NYC will consequently not apply (cf. infra mn. 284).467 In particular, it will often be possible to have the award annulled if the composition of the tribunal or the arbitral procedure did not correspond to mandatory law of the country of origin.468 Such annulment would then be a possible ground to refuse enforcement of the award pursuant to article V(1)(e). Via annulment of the award, the disregard of mandatory provisions of the country where the award was made may thus have at least an indirect effect on its enforceability elsewhere. This in turn may cause a dilemma for the arbitral tribunal:469 If it disregards the agreement of the parties in favour of mandatory law of the arbitral situs, enforcement of the award may be refused under article V(1)(d); if it follows the agreement in spite of such law, it risks annulment of the award in the country of origin which in turn may justify a refusal to enforce the award in another country. As the problem results from the inherent 465

Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010,

283. 466 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 262–264, 270–273, 309–311; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.443; van den Berg, The New York Arbitration Convention of 1958, 1981, 322 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1702; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3574 et seq.; Germany: OLG Bremen, BB 2000, Beilage 12, 18 = YCA XXXI (2006), 640 (646); Italy: CA Firenze, YCA IV (1979), 294 (296); Switzerland: BGE 108 Ib 85 (90) = YCA IX (1984), 437 (438 et seq.). 467 As for the possibility of an annulment of awards that are considered “not domestic” in the country where they are made supra mn. 34. 468 Even article 34(2)(a)(iv) ML deviates from its model, article V NYC, in that respect by providing that the award may be set aside if “the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate”. 469 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 327 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3571 et seq.; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1702.

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inconsistency in the policies underlying article V(1)(d) and (e), it is difficult to find a convincing solution. Some have suggested that in such a situation, the tribunal’s deviation from the agreement of the parties is justified under article V(1)(d) if it was motivated by the desire to avoid annulment of the award.470 On the other hand, it may be argued that it is not up to the tribunal to disregard a party agreement that is legitimized by article V(1)(d);471 this latter approach would emphasize that arbitration is a creation of party autonomy and that it is consequently the responsibility of the parties to avoid contractual arrangements that jeopardize the enforcement of the award. Given the fact that most modern arbitration laws contain only few mandatory provisions with regard to procedure, the problem will not frequently arise in practice. 260 Even though article V(1)(d) grants the parties full autonomy in shaping the arbitral procedure without subordinating their agreement to national law (of the place of arbitration), the composition of the tribunal and the arbitration remain subject to the requirements of due process (article V(1)(b)) and the public policy of the enforcement forum (article V(2)(b)), which may assert itself also against a contrary party agreement.472 Thus, enforcement may be denied on these grounds, if the tribunal followed an agreement of the parties that restricted their right to equal treatment or to a proper opportunity of presenting their case. 261

cc) Limitations to the relevance of procedural irregularities. Under a strict reading of article V(1)(d), any minor irregularity in the composition of the tribunal or the arbitral procedure may establish a defence to enforcement, regardless of its relevance for the outcome of the dispute. This would give parties dissatisfied with the award carte blanche to resist enforcement for what may often appear frivolous grounds. To avoid such a result, most courts and commentators require an element of causality, to the effect that there must exist at least a possibility that the procedural mistake has influenced the decision of the tribunal.473 Others seem to impose an even stricter test by requiring a “grave” or “material” violation that substantially prejudices a party.474 However, it is doubtful whether these different approaches will actually lead to different

470 Gentinetta, Die lex fori internationaler Handelsschiedsgerichte, 1973, 302; Italy: CA Venezia, RDIPP 1976, 851 = YCA III (1978), 277 (278); USA: Al Haddad Bros. Enterprises, Inc. v. M/S AGAPI, 635 F. Supp. 205 (210) (D.Del. 1986); also cf. France: CA Paris, Rev. arb. 1995, 277 (282) = YCA XXII (1997), 682 (688) (regarding article 1502(2) NCPC). 471 van den Berg, The New York Arbitration Convention of 1958, 1981, 330; Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 273; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.445; Gaillard/ Savage, International Commercial Arbitration, 1999, mn. 1702; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3574 et seq. 472 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 274; van den Berg, The New York Arbitration Convention of 1958, 1981, 324; Switzerland: BGE 108 Ib 85 (89) = YCA IX (1984), 437 (439). 473 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 316–318; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.452; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 298 et seq.; Austria: OGH, JBl 2011, 603 (604); OGH, SchiedsVZ 2019, 154 (158); Germany: BGH, SchiedsVZ 2009, 126 (127); BayObLG, YCA XXX (2005), 568 (572 et seq.); OLG München, SchiedsVZ 2010, 169 (171 et seq.) = YCA XXXV (2010), 371 (373). 474 Canada: Food Services of America, Inc. v. Pan Pacific Specialties Ltd, YCA XXIX (2004), 581 (587); UK: Tongyuan (USA) International Trading Group v. Uni-Clan Ltd, YCA XXVI (2001), 886 (888 et seq.); USA: P.T. Reasuransi Umum Indonesia v. Evanston Insurance Co., 1992 WL 400733 (1) (S.D.N.Y. 1992) = YCA XIX (1994), 788 (789 et seq.); Compagnie des Bauxites de Guinee v. Hammermills Inc., 1992 WL 122712 (5) (D.D.C. 1992) = YCA XVIII (1993), 566 (571); Calbex Mineral Ltd V. ACC Resources Co., L.P., 90 F.Supp. 3d 442 (462, 465) (W.D.Pa. 2015).

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results in practice.475 Applying the criterion of causality, a procedural error will only lead to a defence under article V(1)(d), if it can be shown to have influenced the outcome of the decision, that is, it must be shown that there is a sufficient likelihood that without the error, the decision of the arbitral tribunal would have been different.476 Here again (cf. supra mns 184, 238), the requirement of causality serves to filter “immaterial” procedural irregularities which the courts consider should not hinder the enforcement of the award. The causality criterion will usually apply with full force to restrict the relevance of 262 alleged errors in the arbitration procedure. However, a more careful approach is warranted with regard to an improper composition of the tribunal, in particular the participation of an arbitrator whose impartiality may be doubtful: Here, causality will often be found to exist, as it will not be possible to exclude that a different tribunal might have rendered a different award.477 In such a case, the party resisting enforcement of the award should not be required to provide proof that the outcome of the dispute would have been different if the tribunal had been constituted differently.478 In that respect, it might be said that causality of the improper constitution of the tribunal is presumed.479 Furthermore, procedural errors will not justify a refusal to enforce the award if the 263 party resisting enforcement is precluded from invoking this error under the general principles; supra mns 187–198. f) Award not yet binding or no longer binding, article V(1)(e) NYC. aa) General. 264 Article V(1)(e) provides two grounds on which the recognition and enforcement of a foreign award may be refused, that is, either because it “has not yet become binding on the parties” or because it “has been set aside or suspended” by a competent authority in its country of origin. Article V(1)(e) thus contemplates, on the one hand, that the award must first reach the procedural stage in which it may be considered “binding” (infra mns 265–277), and, on the other hand, that it may later lose its binding character again by way of annulment (setting aside) or suspension by the courts in the country of origin (infra mns 280–293). However, the award may also lose its enforceability due to other circumstances which would then qualify as grounds of refusal under article V(1)(e) (in particular, the passing of time limits for enforcement, infra mn. 278, or the effects of a “merger”, infra mn. 279). bb) Award not binding. (1) General considerations. Although the first alternative of 265 article V(1)(e) makes it clear that an award must be binding in order to be enforceable 475 Cf. Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 321; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.454; Nacimiento, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 298. 476 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 317–318; Germany: OLG Bremen, BB 2000, Beilage Nr. 12, 18 et seq. = YCA XXXI (2006), 640 (646); also cf. fn. 479. 477 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 301–304; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.452; Germany: OLG Saarbrücken, SchiedsVZ 2003, 92 (93 et seq.); BGH, SchiedsVZ 2016, 41 (42). 478 Contra (requiring a showing of causality): Germany: regarding improper appointment procedure: OLG Karlsruhe, SchiedsVZ 2008, 47 (48) = YCA XXXIII (2008), 541 (547); regarding participation of a partial arbitrator (under the public policy defence): BGH, NJW 1986, 3027 (3028 et seq.) = YCA XII (1987), 489 (490 et seq.); BGH, NJW-RR 2001, 1059 (1060) (not contained in YCA XXIX (2004), 700). 479 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 304; Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 109.

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under the Convention, it is anything but clear either from the text or the legislative history of the Convention what the term “binding” is precisely meant to require.480 One of the central objectives of the drafters was to do away with the necessity of an order of enforcement (exequatur) in the country of origin as a precondition for the enforcement of the award in another country, as it existed under the regime of the Geneva Convention of 1927 (supra mn. 5). This need for a “double exequatur” resulted from the Geneva Convention, because it was a requirement for obtaining recognition or enforcement of an award “[t]hat the award has become final in the country in which it has been made”481 and the burden of proof with regard to the finality of the award rested on the applicant seeking to enforce it.482 The drafters of the New York Convention therefore substituted the notion of a “final” award by that of a “binding” award and shifted the burden of proof from the applicant to the respondent483 (cf. supra mn. 186). This effectively abolished the need of an exequatur in the country of origin (also see infra mn. 273). 266 Beyond that, it is not very clear what is positively required for the award to become “binding”. The interpretation of the NYC in that respect is further complicated by the fact that the term “binding” also appears in the English version of article III s. 1 which provides that each Contracting State shall recognize arbitral awards as “binding”. As explained above (mns 56–62), “binding” within the meaning of article V(1)(e) is here understood to refer to the procedural stage an award has reached within the arbitration, while questions relating to the content and effects of the award (in particular, the enforceability of partial or interim awards) are analyzed in the context of the applicability of the NYC as such (supra mns 63–71). 267 As for a possible determination of what is required for an award to become “binding” under article V(1)(e), two different basic approaches can be distinguished: On the one hand, there is an autonomous approach, attempting to establish a uniform definition of “binding” that is independent of national concepts.484 This approach is often, although not invariably, connected with a definition holding an award binding if there is no ordinary recourse available to another arbitral tribunal or a national court allowing for a review on the merits485 (also cf. infra mns. 274–276). Since such review is usually not possible, an award will normally become binding under that view once it has been “made” by the tribunal. The prevailing view, on the other hand, wants to determine the “bindingness” of an award according to the law applicable to the procedure.486 On that 480

See, in that respect, van den Berg, The New York Arbitration Convention of 1958, 1981, 333–337. Article 1(2)(d) Geneva Convention 1927. 482 Article 4(2) Geneva Convention 1927. 483 van den Berg, The New York Arbitration Convention of 1958, 1981, 332–334; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 353–356. 484 van den Berg, The New York Arbitration Convention of 1958, 1981, 341–346; Born, International Commercial Arbitration, Vol. III, 2014, 3608. 485 van den Berg, The New York Arbitration Convention of 1958, 1981, 342, 345; cf. Belgium: Cass., Rev. arb. 1998, 715 (716) = YCA XXIV (1999), 603 (610 et seq.); Germany: BGH, NJW 1990, 2199 = YCA XVII (1992), 503 (504); Hong Kong: Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire – Holding v. Keen Lloyd Resources Ltd, YCA XXIX (2004), 776 (778 et seq.); Spain: Trib. Supr., YCA XXXI (2006), 846 (850 et seq.); Sweden: Supreme Court, Rev. arb. 1980, 555 (556 et seq.) = YCA VI (1981), 237 (240 et seq.); Switzerland: BGer., ASA Bull. 2005, 119 (123 et seq.) = YCA XXIX (2004), 834 (838 et seq.); BGE 135 III 136 (139 et seq.) = YCA XXXIV (2009), 810 (812 et seq.). 486 Ehle, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. I mn. 82; Gaillard/Savage, International Commercial Arbitration, 1999, mns 1681 et seq.; Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 313; Belgium: Cass., Rev. arb. 1998, 715 (716) = YCA XXIV (1999), 603 (611); Switzerland: BGE 108 Ib 85 (88) = YCA IX (1984), 437 (439); BezG Zürich, YCA XXIX (2004), 819 (828); USA: Fertilizer Corp. of India v. IDI Management, Inc., 517 F.Supp. 948 (955 et seq.) (S.D.Ohio 1981). 481

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basis, it is sometimes said that an award has become binding if it meets all requirements to be declared enforceable under the law of its country of origin.487 However, both approaches should not be considered to be mutually exclusive.488 In 268 fact, a combination of autonomous considerations and the requirements of the lex arbitri must necessarily apply when deciding whether an award has become “binding” under article V(1)(e). The need for an autonomous determination of the meaning of “binding” becomes obvious in view of the drafters’ unequivocal decision against the necessity of a leave for enforcement in the country of origin (supra mn. 265).489 From that decision, it follows that it should be immaterial how the leave for enforcement is technically characterized under the law of the country of origin, i. e., whether it is considered necessary for the award to become “binding” or merely constitutes a particular procedural precondition to enforcement. On the other hand, whatever autonomous meaning of “binding” is adopted, it necessarily remains to be determined under the applicable procedural law whether the award has attained a quality meeting the requirements of that autonomous concept. For example, if the binding character of the award is tied to the non-existence of ordinary recourse against the award (supra mn. 267), the availability of such recourse cannot be determined by the NYC itself but only by the relevant national law. As a consequence, determining whether an award has become binding involves a two-step process: First, it must be determined autonomously what abstract quality is required by the Convention for an award to be “binding” and thus apt for enforcement in another State, and second, it must be determined under the applicable procedural law whether all the requirements for the award to attain that quality have been fulfillfed.490 The decision against the requirement of a “double exequatur” further shows that the 269 definition of a “binding” award results in a problem of characterization: it is necessary to distinguish between, on the one hand, requirements relating to the existence of an operative decision of the arbitral tribunal (which may then be subject to recognition and enforcement in the country of origin or elsewhere) and, on the other hand, requirements that only relate to the enforceability of the award in a particular jurisdiction, the most prominent example of the latter being a judicial leave for enforcement. Only the former elements should be considered necessary to constitute an award that is “binding” under article V(1)(e). This approach will normally result in the award becoming binding once it has been formally made in a manner that binds both the parties and the arbitrators,491 which usually happens when the award is signed and delivered to the parties pursuant to the applicable rules of procedure. However, it is still necessary to have a more differentiated look at specific aspects that may influence the “binding” character of the award (infra mns 271–279). 487 See, e. g. van den Berg, The New York Arbitration Convention of 1958, 1981, 341; Switzerland: BGE 108 Ib 85 (91) = YCA IX (1984), 437 (441). 488 See, e. g., Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 358, 365. 489 Cf. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 360. 490 Mayer, Rev. crit. DIP 1985, 658 (676); Sandrock, in: von Westphalen/Sandrock (eds), Lebendiges Recht. Festschrift für Reinhold Trinkner, 1995, 669 (678); also cf. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 364a; van den Berg, The New York Arbitration Convention of 1958, 1981, 341–343; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1684. 491 It must be emphasized that this is not meant to imply that interim measures by the arbitral tribunal should necessarily be held not to be binding within the meaning of article V(1)(e). As noted above, mn. 59, the issue here is only to determine whether the decision of the arbitrators fulfills all the procedural requirements to take effect according to its terms. If the decision, by its nature, does not finally dispose of the dispute between the parties but only provides some form of interim relief, this involves the applicability of the NYC to this kind of awards in general; in that respect, see supra mns 64 et seq.

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There are conflicting views as to which law should be applied in determining whether the award has fulfilled the requirements to be considered binding under article V(1)(e). Since this question involves matters of procedure, the rules applicable to the arbitration proceedings under article V(1)(d) should govern492 (cf. supra mns 256 et seq.). According to another approach, the applicable rules must be determined by reference to the second alternative of article V(1)(e); as a consequence, both the rules of the place of arbitration and those of the applicable procedural law may be relevant.493 However, article V(1)(e), alt. 2, only governs questions of jurisdiction with regard to the annulment of an award that presumably has become binding under the applicable law (infra mn. 286). Finally, some courts refer only to the place of the arbitration.494 As these approaches usually do not lead to different results, there is normally no need to make a choice between them.495

(2) Formal requirements for the making of the award. To be binding within the meaning of article V(1)(e), the award must fulfill the formal requirements to become operative under the applicable rules of procedure. This usually requires the proper delivery of the award pursuant to the rules of the lex arbitri.496 Mere drafts of awards (see, e. g., article 34 ICC Arbitration Rules 2021) are not binding and thus not enforceable. 272 Sometimes, the lex arbitri may require additional formalities in the context of making an award, e. g. its deposit or registration with a court or another public authority in the country of origin. As such requirements are typically directed at the enforceability of the award in the respective State and do not serve any meaningful purpose with regard to its enforcement elsewhere, they should not be considered necessary to render the award binding for purposes of its enforcement under the Convention.497 271

273

(3) Confirmation by a court in the country of origin. The requirement of a leave of enforcement or some other form of confirmation by a judicial court is the typical example of a requirement that is only directed at the enforcement of an award in a particular state. As a consequence, the enforceability of an award under the Convention, particularly article V(1)(e), does not require its confirmation or an exequatur decision in the country of origin.498 This should also apply where the law of the country of origin 492 Switzerland: BGE 108 Ib 85 (88 et seq.) = YCA IX (1984), 437 (439). Also cf. Belgium: CA Bruxelles, Rev. arb. 1998, 181 (186) = YCA XXII (1997), 643 (659). 493 van den Berg, The New York Arbitration Convention of 1958, 1981, 338 et seq. Contra: Belgium: TPI Bruxelles, 1997, 6 (8) = YCA XXII (1997), 643 (648). 494 See, e. g., Gemany: OLG Hamm, RIW 1983, 698 (699); USA: Spier v. Calzaturificio Tecnica, 663 F. Supp. 871 (874 et seq.) (S.D.N.Y. 1987); Fertilizer Corp. of India v. IDI Management, Inc., 517 F.Supp. 948 (956 et seq.) (S.D.Ohio 1981). 495 Cf. USA: American Construction Machinery & Equipment Corp. Ltd v. Mechanised Construction of Pakistan Ltd, 659 F.Supp. 426 (429) (S.D.N.Y. 1987). 496 Germany: OLG Celle, IPRspr 2005, no. 188, 518 (519) = YCA XXXII (2007), 322 (325); OLG München, SchiedsVZ 2011, 337 (338); Switzerland: BezG Zürich, YCA XXIX (2004), 819 (827 et seq.). 497 van den Berg, The New York Arbitration Convention of 1958, 1981, 349; Australia: Resort Condominiums International Inc. v. Ray Bolwell, 118 ALR 655 = YCA XX (1995), 628 (637); Belgium: CA Bruxelles, 1997, 319 (320) = Rev. arb. 1998, 181 (187 et seq.) = YCA XXII (1997), 643 (660 et seq.). – Contra: France: TGI Strasbourg, Rev. arb. 1970, 166 (169, 171) = YCA II (1977), 244; Germany: OLG Hamburg, NJW 1955, 390; OLG Hamm, RIW 1983, 698 (699); Switzerland: AppG Basel Stadt, SJZ 1968, 378 (379) (in this regard, not reprinted in YCA I (1976), 200). 498 van den Berg, The New York Arbitration Convention of 1958, 1981, 267, 332, 337, 341; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 357; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.461; Austria: OGH, SZ 2011, no. 106, 163 (173) = YCA XXXVIII (2013), 317 (mns 32 et seq.); Belgium: Cass., JT 1998, 701 (702) = Rev. arb. 1998, 715 (716) = YCA XXIV (1999), 603 (609, 611); France: TGI Strasbourg, Rev. arb.

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considers the award to have only contractual force prior to its confirmation by a court499 (cf. supra mns 70–71). (4) Availability of recourse against the award. It is doubtful to what extent the 274 availability of means of recourse against the award, either to a higher arbitral body or to a national court, may be an impediment to the award becoming “binding”. In any case, it is clear from the Convention that the mere possibility or even pendency of an application to set aside the award (e. g. article 34 ML) do not prevent the award from becoming binding.500 This finds support both in article V(1)(e), which provides that only the actual annulment or suspension of the award is a ground to refuse enforcement, and article VI, which provides that the pendency of setting-aside or suspension proceedings in the country of origin may give rise to a mere adjournment of the enforcement proceedings (rather than a refusal of enforcement). Against this background, the prevalent position is that an award is not binding where 275 it can be challenged before an appellate arbitral tribunal or by appeal to a state court501 (cf. supra mn. 267). This position is appropriate as far as an appeal to another arbitral body is concerned:502 In such a case, the system of dispute resolution chosen by the parties encompasses two levels; consequently, as long as the award is still subject to review within that system, it is not capable of enforcement by national courts.503 A fortiori, an award has not become “binding”, if it has been set aside by way of an internal appeal or review procedure within the arbitral system (cf. infra mn. 280).504 – In contrast, where recourse to national courts is concerned, the prevailing approach requires a distinction between forms of recourse to national courts that will prevent the award from becoming binding and those that will not (like setting-aside proceedings). On a purely conceptual level, this is usually done by distinguishing between 1970, 166 (171) = YCA II (1977), 244; Germany: BGHZ 104, 178 (180) = NJW 1988, 3090 (3091) = YCA XV (1990), 450 (452); Italy: Cass., RDIPP 1981, 903 (909 et seq.) = YCA VI (1981) 233 (236); Cass., Riv. arb. 1993, 237 = YCA XIX (1994), 685 (685 et seq.); Spain: Trib. Supr., YCA XXXI (2006), 846 (850 et seq.); Switzerland: BGE 108 Ib 85 (88, 91) = YCA IX (1984), 437 (441); BezG Zürich, YCA XXIX (2004), 819 (827 et seq.). – In Turkey, the former restrictive approach with regard to a confirmation in the country of origin seems to have been abandoned under the new legislation; cf. Bayata Canyas, (2013) 31 ASA Bull. 537 (548 et seq.). 499 Contra: Germany: BayObLG, SchiedsVZ 2003, 142 (143) = YCA XXIX (2004), 754 (757) (regarding an award made in California). 500 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 357; Austria: OGH, SZ 2011, no. 106, 163 (173) = YCA XXXVIII (2013), 317 (mn. 33); Germany: BGHZ 104, 178 (180) = NJW 1988, 3090 (3091) = YCA XV (1990), 450 (452); BayObLG, SchiedsVZ 2003, 142 (144) = YCA XXIX (2004), 754 (755, 758); Spain: Trib. Sup. Madrid, YCA XLIII (2018), 555 (559); USA: Fertilizer Corp. of India v. IDI Management, Inc., 517 F.Supp. 948 (957 et seq.) (S.D.Ohio 1981). 501 Austria: OGH, SZ 2011, no. 106, 163 (173) = YCA XXXVIII (2013), 317 (mn. 34); Germany: BGHZ 104, 178 (180) = NJW 1988, 3090 (3091) = YCA XV (1990), 450 (452); BGH, NJW 1990, 2199 = YCA XVII (1992), 503 (504); BGH, NJW 2001, 1730 = YCA XXIX (2004), 724 (727); Hong Kong: Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire – Holding v. Keen Lloyd Resources Ltd, YCA XXIX (2004), 776 (777 et seq.); Netherlands: article 1076(1)(A)(d) Code of Civil Procedure. Also cf. supra fn. 486. 502 See, e. g., Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 363. – Contra: Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.463. 503 A most recent example is provided by the convoluted Diag Human proceedings; see, in particular, Austria: OGH, wbl 2013, 621 = YCA XXXIX (2014), 347 (mns 10 et seq.); France: Cass. civ., Rev.arb. 2014, 718 = YCA XXXIX (2014), 386; UK: Diag Human SE v. Czech Republic, [2014] EWHC 1639 (Comm) (mns 64 et seq.); USA: Diag Human S.E. v. Czech Republic, 64 F.Supp. 3d 22 (D.D.C. 2014), reversed and remanded by 824 F.3d 131 (D.C.Cir. 2016), 279 F.Supp. 3d 114 (D.D.C. 2017), affirmed by 907 F.3d 606 (D.C.Cir. 2018). 504 Regarding the Diag Human case (cf. fn. 504), Netherlands: Gerechtshof Amsterdam, YCA XLIII (2018), 523, confirmed by Hoge Raad, NJB 2018, 1246 = YCA XLIV (2019), 598; USA: Diag Human S.E. v. Czech Republic, 907 F.3d 606 (D.C.Cir. 2018).

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“ordinary” and “extraordinary” means of recourse,505 the usual setting-aside proceedings like article 34 ML being considered to constitute an “extraordinary” means of recourse. In substance, the distinction is usually made by determining whether the recourse to national courts allows for a review on the merits.506 Where this is possible, the recourse is considered “ordinary”, where it is not (like in annulment proceedings), the recourse is considered “extraordinary”. 276 However, it is doubtful whether the relevance of means of recourse to national courts in the country of origin for the “bindingness” of the award under article V(1)(e), and hence its enforceability in another country, should turn on the extent of the control exercised by the courts in the country of origin. Thus, it is not at all clear whether a mere review on questions of law (as provided for by section 69 of the English Arbitration Act 1996) should be enough to characterize the respective appeal as “ordinary” or “extraordinary” for purposes of article V(1)(e). In fact, no such distinction can appropriately be made, as the measure of control exercised by national courts over arbitral awards does not affect the character of the award itself, which in either case still is the product of the system of dispute resolution chosen by the parties. The preferable view, therefore, is that any kind of recourse to national courts in the country of origin, regardless of the extent of review, does not effect the bindingness of the award507 – unless, of course, the award has been actually set aside on that basis. 277

(5) Party agreement. It is also disputed whether and to what extent an agreement by the parties that the award shall be binding or final must be taken into account when deciding on the enforcement of the award under article V(1)(e). In practice, the problem arises particularly with regard to agreements that the award shall not be subject to recourse in its country of origin (e. g. article 35(6) ICC Arbitration Rules 2021).508 However, such clauses may also have consequences regarding possible requirements of confirmation509 or deposit. In this respect, the agreement of the parties only becomes relevant to the extent that the respective requirements would influence the bindingness of the award in the absence of such an agreement. Under the approach advocated here, however, requirements of deposit (supra mn. 272) or confirmation (supra mn. 273) or any form of recourse to national courts (supra mns 274–276) should not be considered relevant when deciding whether an award is binding within the meaning of article V(1)(e). Where, however, it is considered that these circumstances may have a bearing on the existence of a binding award – as, for example, pursuant to the view that the existence of an “ordinary means of recourse” to national courts prevents the award from becoming final (supra mn. 267) – it must be determined whether the respective requirements may validly be excluded by the parties.510 With 505 See, e. g., Spain: Trib. Supr., YCA XXXI (2006), 846 (850 et seq.); Switzerland: BGer., ASA Bull. 2005, 119 (123) = YCA XXIX (2004), 834 (838); BGE 135 III 136 (140) = YCA XXXIV (2009), 810 (813); UK: Dowans Holding SA v. Tanzania Electric Supply Co. Ltd, [2011] EWHC 1957 (Comm) (mn. 26). 506 van den Berg, The New York Arbitration Convention of 1958, 1981, 342. Belgium: Cass., JT 1998, 701 (702) = Rev. arb. 1998, 715 (716) = YCA XXIV (1999), 603 (611); Hong Kong: Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire – Holding v. Keen Lloyd Resources Ltd, YCA XXIX (2004), 776 (779); Netherlands: Rechtbank Amsterdam, YCA X (1985), 487 (489); Sweden: Supreme Court, Rev. arb. 1980, 555 (556 et seq.) = YCA VI (1981), 237 (240). 507 Aksen, (1971) 3 Sw. U. L. Rev. 1 (11); USA: Fertilizer Corp. of India v. IDI Management, Inc., 517 F. Supp. 948 (957 et seq.) (S.D.Ohio 1981); Jorf Lasfar Energy Co., S.C.A. v. AMCI Export Corp., 2006 WL 1228930 (4) (W.D.Pa. 2006) = YCA XXXII (2007), 713 (717). 508 See, e. g., Belgium: Cass., JT 1998, 701 (702) = Rev. arb. 1998, 715 (716) = YCA XXIV (1999), 603 (609, 611); Germany: OLG Frankfurt, IPRspr 2008, no 203, 646 (647) = YCA XXXIV (2009), 527 (529 et seq.); Sweden: Supreme Court, Rev. arb. 1980, 555 (557) = YCA VI (1981), 237 (240 et seq.). 509 See, e. g., Switzerland: BGE 108 Ib, 85 (90 et seq.) = YCA IX (1984), 437 (440 et seq.). 510 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2014, 3619.

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regard to the formalities for making a binding award, the applicable rules would have to be determined by article V(1)(d) (supra mn. 271), while the exclusion of recourse to national courts would have to be assessed by the law of the country where a relevant decision can be obtained, that is, according to the law of the country in which, or under the law of which, the award was made, article V(1)(e).511 (6) Passing of time limits for enforcement. Some national laws provide that confirma- 278 tion or enforcement of the award can only be applied for in the country of origin within a certain time period (see, e. g., § 9 FAA). The passing of such time limits is generally held to constitute no obstacle to the enforcement of the awards in another country,512 usually because the respective rules are characterized as procedural.513 This corresponds to the approach taken under article III s. 1 NYC that each enforcing state is free to impose its own (procedural) time limits on the enforcement of an award (infra mns 344–345). It would seem preferable, however, to adopt a more differentiated approach: Where the passing of the time limit in the country of origin only precludes a particular form of enforcement (e. g. the confirmation of the award, but not an action on the award),514 the award should remain enforceable according to the national rules of the enforcing State (article III s. 1 NYC; infra mns 336–337). However, where the lex arbitri provides that the award loses all effect and cannot be enforced in any way after the time limit has passed, this should be considered a temporal limitation of effectiveness inherent in the award and therefore also an objection to its enforceability in other States. (7) Effects of a merger. According to the common law doctrine of “merger”, an award 279 loses its independent existence (and enforceability) once it has been confirmed or declared enforceable by a court.515 It is almost universally accepted that the effects of such merger do not preclude the enforceability of the award elsewhere.516 This is because the doctrine of merger was developed to explain that the technical basis of enforcement is the decision of the court and that the respondent – to the extent of the merger – can no longer bring forward objections against the claim on the merits,517 that is, in our case: defences against the award that has been declared enforceable. This 511 But also see Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F.Supp. 907 (D.D.C. 1996), upholding the parties’ exclusion of recourse to national courts regardless of the law of Egypt where the award had been made. 512 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 415; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.466; Canada: Northern Sales Co. Ltd v. Compania Maritima Villa Nova SA, [1992] 1 F.C. 550 (mns 28 et seq.) = YCA XVIII (1993), 363 (375 et seq.); Japan: Okayama District Court (14 July 1993), YCA XXII (1997), 744 (746). 513 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 415; Canada: Northern Sales Co. Ltd v. Compania Maritima Villa Nova SA, [1992] 1 F.C. 550 (mn. 29) = YCA XVIII (1993), 363 (375 et seq.). 514 As for the possibility to bring an action on the award independently of the time limits under the FAA, see, e. g. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3729 et seq.; also cf. infra mn. 347. 515 See, e. g., UK: Dicey, Morris & Collins, The Conflict of Laws, 15th ed., 2012, Vol. I, mn. 16–109; USA: Restatement, Second, Judgments, § 84. Also see Mosk/Nelson, (2001) 18 J. Int'l Arb. 463–474. 516 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.467; van den Berg, The New York Arbitration Convention of 1958, 1981, 347–349; Australia: Brali v. Hyundai Corp., 84 ALR 176 (1988) = YCA XV (1990), 360 (362 et seq.); Canada: Schreter v. Gasmac Inc., 7 O.R. (3d) 608 (617 et seq.); Germany: BGH, NJW 1984, 2763 = YCA X (1985), 427 (428 et seq.); India: Mehta v. Mehta, (1999) 5 SCC 108 = YCA XXV (2000), 721 (728 et seq.); USA: Oriental Commercial & Shipping Co., Ltd v. Rosseel, N.V., 769 F.Supp. 514 (516 et seq.) (S.D.N.Y. 1991). – Contra: USA: Island Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313 (1318) (2nd Cir. 1973). 517 Cf. Restatement, Second, Judgements, § 84 (1); Hay/Borchers/Symeonides/Whytock, Conflict of Laws, 6th ed., 2019, 1376 et seq. (§ 24.1), 1381 et seq. (§ 24.3).

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function is restricted to the effects of the exequatur decision in the country of origin and does not impair the enforceability of the award in another country – even more so since, on a substantive level, the confirmation of an award can hardly be considered to lead to its unenforceability as not being binding. cc) Award set aside or suspended. (1) General principles. In its second alternative, article V(1)(e) allows for a refusal of enforcement if the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made (the “country of origin”). For all practical purposes, the relevant case is the setting aside (annulment, vacatur) of the award in its country of origin, as a court-ordered suspension of the award rarely occurs. By referring to the “competent authority” of certain countries, the second alternative of article V(1)(e) envisages annulment by national courts (or other authorities) of the country of origin. However, it is clear that an award will also not be enforceable when it has been set aside by another arbitral panel in intra-arbitral appeal or review proceedings (supra mn. 275). 281 Only the actual setting aside of the award in the country of origin will constitute a ground of refusal. The mere possibility to apply for an annulment has no influence on the enforceability of the award under the NYC. Even the fact that an annulment proceedings is pending in the country of origin is no basis for an outright refusal of enforcement but only for an adjournment of the decision on enforcement pursuant to article VI (infra mns 333–335). According to the prevailing view, this also applies where the application for the setting aside of the award leads to an automatic suspension of its enforceability in the country of origin, as only a court-ordered suspension is relevant under article V(1)(e).518 282 Where the award has been set aside in the country of origin, but the setting-aside decision is itself subject to appeal, it is doubtful whether this already constitutes a defence under article V(1)(e). It has been held that an award ceases to be binding as soon as it has been set aside in its country of origin, even though the annulment decision is not final yet.519 It appears preferable, however, to make the decision against enforcement of the award contingent on the existence of a final annulment; before the annulment becomes final, the enforcement court should rather adjourn its decision pursuant to article VI. 283 The NYC contains no provision for the case that the award is set aside in the country of origin after it has been declared enforceable (or been enforced) in another country. In such a situation, the interests of the award creditor in the finality of the existing enforcement order must be weighed against the interests of the award debtor invoking the later annulment.520 Whether the enforcement order has preclusive effect as against a possible later annulment should be decided according to the procedural law of the country of enforcement.521 280

518 van den Berg, The New York Arbitration Convention of 1958, 1981, 352; Sweden: Supreme Court, Rev. arb. 1980, 555 (557 et seq.) = YCA VI (1981), 237 (241); Switzerland: BGE 135 III 136 (142 et seq.) = YCA XXXIV (2009), 810 (815 et seq.); UK: IPCO Nigeria Ltd v. Nigerian Nat’l Petroleum Corp., [2005] 1 C.L.C. 613 (617, 620) = YCA XXXI (2006), 853 (857, 861); USA: Alto Mar Girassol v. Lumbermens Mutual Casualty Co., 2005 WL 947126 (3 et seq.) (N.D.Ill. 2005) = YCA XXX (2005), 1152 (1155 et seq.). – For a more differentiated approach, see Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 395–396. 519 See Germany: OLG Rostock, IPRspr 1999, no. 183, 443 (445 et seq.) = YCA XXV (2000), 717 (720); left open on review by BGH, NJW 2001, 1730 (1730 et seq.) = YCA XXIX (2004), 724 (727 et seq.). 520 Also cf. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 417. 521 van den Berg, The New York Arbitration Convention of 1958, 1981, 351. See, e. g., Germany: § 1061 (3) ZPO, providing that if the award is set aside abroad after having been declared enforceable, application for setting aside the declaration of enforceability may be made.

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The New York Convention, and its article V(1)(e) in particular, is not applicable to the 284 annulment proceedings in the country of origin as such.522 Article V(1)(e) only governs the relevance of an annulment from the perspective of the enforcement court. It neither establishes nor limits the grounds on which other countries may base the jurisdiction of their courts to set aside the award. As a consequence, a State is free to lay down other bases for jurisdiction to set aside an award, e. g. jurisdiction based on the law applicable to the arbitration agreement.523 It is another question altogether whether such alternative grounds are appropriate; this is a question for the national legislator to decide, and usually jurisdiction with regard to setting-aside proceedings is tied to the place of arbitration. In any case, annulments based on such other factors are irrelevant to the enforcement of the award in a Contracting State under article V(1)(e) (infra mn. 286). Furthermore, as a matter of principle, the NYC establishes neither a minimum nor a maximum standard of review in the country of origin. Rather, the recourse against the award as such is entirely governed by the law of the country of origin.524 – Only in the exceptional case that settingaside jurisdiction should be claimed by a Contracting State with regard to an award made in the territory of another State (and therefore foreign within the meaning of article I(1) s. 1 NYC), review of the award is necessarily limited by article V NYC (supra mn. 31). In contrast, it has been held that article V(1)(e) also establishes jurisdiction for the 285 setting aside of an award as such.525 On a more fundamental level, there have been attempts to derive from the New York Convention a system of interdependent judicial control in the country of enforcement as a “secondary jurisdiction” and the country of origin as a (mandatory) “primary jurisdiction”; as a consequence, the latter is held to violate its obligations under the Convention if it does not provide for a recourse against the award.526 This argument, however, ignores the fact that the Convention only imposes obligations with regard to foreign awards, while the paradigm setting-aside proceedings refer to domestic awards, to which the Convention does not apply (cf. supra mns 24 et seq. on the territorial scope of the NYC) and for which it consequently cannot impose any obligations. Therefore, a State that does not provide the possibility of annulment for domestic awards may deviate from the conceptions of the drafters of the NYC, but it does not violate any obligations arising under the NYC.527 522 van den Berg, The New York Arbitration Convention of 1958, 1981, 20; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 379; USA: Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys “R” Us, Inc., 126 F.3d 15 (22 et seq.) (2nd Cir. 1997) = YCA XXIII (1998), 1058 (1066). 523 Cf., e. g., India: National Thermal Power Corp. v. Singer Co., AIR 1993 S.C. 998 = YCA XVIII (1993), 403 (409 et seq.); overruled by Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 = YCA XXXVII (2012), 244 (249); cf. supra mn. 31 fn. 37, infra mn. 304 fn. 601. 524 Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 379; Freyer, in: Gaillard/ Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 760; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1689. 525 See, in particular, USA: International Standard Electric Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F.Supp. 172 (175 et seq.) (S.D.N.Y. 1990); M & C Corp. v. Erwin Behr GmbH & Co. KG, 87 F.3d 844 (847, 849) (6th Cir. 1996). 526 See, in detail, Reisman, Systems of Control in International Adjudication and Arbitration, 1992, 112 et seq.; Reisman/Richardson, in: van den Berg (ed.), Arbitration: The Next Fifty Years (ICCA Congress Series Vol. 16), 2012, 17 (50 et seq.); the distinction between “primary” (“venue”) and “secondary” (“enforcement”) jurisdictions has been very influential, primarily in US case law; see, e. g., Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (287 et seq.) (5th Cir. 2004); Sharp Corp. v. Hisense USA Corp., 292 F.Supp. 3d 157 (166 et seq.) (D.D.C. 2017). – For a cogent critique see Paulsson, (1998) 9 ICC Bull 14 (26 et seq.); Radicati di Brozolo, in: van den Berg (ed.), Arbitration: The Next Fifty Years (ICCA Congress Series Vol. 16), 2012, 74 (84 et seq.). 527 Gaillard/Savage, International Commercial Arbitration, 1999, mns 1688 et seq.; Radicati di Brozolo, in: van den Berg (ed.), Arbitration: The Next Fifty Years (ICCA Congress Series Vol. 16), 2012, 74 (84 et seq.); Switzerland: BGE 108 Ib 85 (89) = YCA IX (1984), 437 (439 et seq.).

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(2) Jurisdiction. The jurisdiction for an annulment that may preclude enforcement is limited to the country in which the award was made and the country under the law of which it was made. Again, the country in which the award was made should be understood as referring to the place or “seat” of arbitration within the meaning of article I(1) s. 1 (supra mn. 28).528 The law under which the award was made is the procedural law as determined by article V(1)(d).529 Thus, a choice-of-law clause with regard to the substance of the dispute is irrelevant for the question of where an effective annulment of the award can occur.530 Both bases of jurisdiction are alternative: article V(1)(e) thus recognizes a concurring jurisdiction of both the place of arbitration and the country under the law of which the arbitration was conducted.531 In that respect, article V(1)(e) embraces both the “territorial” and the “procedural” theories of localization of arbitral awards (supra mns 22, 30). An annulment by the courts of another State than those mentioned in article V(1)(e) is irrelevant to the enforceability of the award in a Contracting State.532

(3) Scope of review. The only requirements imposed by article V(1)(e) with regard to the annulment (or suspension) of the award are jurisdictional: it must have been pronounced by a court (or other competent authority) of the country in which, or under the law of which, the award was made. Apart from that, there are no limits with regard to the scope of review exercised by the courts in the country of origin; the award may have been set aside for any reason.533 288 As a consequence, the full spectrum of grounds for annulment existing in the state of origin also obtains relevance to the enforcement of the award elsewhere, as an annulment based on these grounds will constitute a defence to enforcement under article V(1) (e) in another country. That way, the Convention takes back much of the liberalism afforded by article V(1)(d): The courts in the country of origin will typically review the award under their own mandatory law, and particularly their public policy. A violation of such mandatory law will thus ultimately result in a defence to enforcement by way of article V(1)(e) – despite the fact that article V(1)(d) seeks to relieve the parties from the need to observe mandatory law of the seat of arbitration (supra mns 258–260). This dominant influence of the law governing at the seat of arbitration has given rise to considerable criticism and an increasing tendency to enforce awards despite an annulment in the country of origin (infra mns 289–293). 287

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Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010,

320. 529 van den Berg, The New York Arbitration Convention of 1958, 1981, 350; Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 321 et seq.; USA: International Standard Electric Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F.Supp. 172 (178) (S.D.N.Y. 1990). 530 See, e. g., KG, SchiedsVZ 2007, 108 (112) = YCA XXXII (2007), 363 (368). 531 UK: Hiscox v. Outhwaite, [1992] 1 AC 562 (595 et seq.). – Contra (place of arbitration has only subsidiary jurisdiction where there is no agreement of the parties on the lex arbitri) Austria: OGH, SZ 65, no. 95, 482 (486 et seq.) = YCA XXII (1997), 619 (625); also cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 350. 532 van den Berg, The New York Arbitration Convention of 1958, 1981, 350; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 403; Germany: BGH, SchiedsVZ 2008, 196 (199); also cf. USA: International Trading and Industrial Investment Co. v. DynCorp Aerospace Technology AS, 763 F. Supp. 2d 12 (24) (D.D.C. 2011). 533 van den Berg, The New York Arbitration Convention of 1958, 1981, 355; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 379; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1689; Germany: BGH, SchiedsVZ 2013, 229 (230) (with note by Flecke-Giammarco/ Granier, Rev. Arb. 2014, 489–493); USA: Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys “R” Us, Inc., 126 F.3d 15 (22 et seq.) (2nd Cir. 1997).

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(4) Enforcement of awards despite an annulment.534 The strong hold exercised by the 289 country of origin (that is, the seat of arbitration) has generated considerable criticism.535 This criticism primarily focuses on the fact that an annulment for any reason will constitute a valid defence to enforcement under article V(1)(e) (supra mns 287–288). As a consequence, even a very strict review going beyond the review provided for in article V NYC may turn out to prevent enforcement of the award in another country. That concern particularly relates to grounds for annulment which allow for some form of review of the award on the merits, like the annulment for “arbitrariness” that used to be possible under Swiss law536 or the ominous possibility of setting aside an award for “manifest disregard of the law” under US law.537 As a result, it has been submitted by commentators that deference should only be given to such annulments that are based on internationally accepted standards of review (as defined, in the end, by article V(1)(a)-(d) NYC), while annulments based on a “local standard” should be disregarded.538 But also an annulment based on the generally accepted standards of public policy or lack of objective arbitrability (cf. article V(2) NYC, infra mns 294–332) is considered inappropriate to prevent enforcement in another country, as such review is generally predicated on the respective standards of the forum and should therefore arguably not prevent enforcement of the award in another country if that country’s public policy is not violated.539 The discontent with the purportedly automatic effect of any setting-aside decision as 290 a defence to enforcement under article V(1)(e) has led to an intensive theoretical discussion confronting the more conservative “territorial view”, according to which the validity and legal effects of an award are necessarily derived from the country of origin, and a more modern approach allowing for a “delocalization” of awards from the legal system of the seat of arbitration.540 On a more technical level, the discussion focuses on the question whether the grounds of refusal set down in article V NYC are mandatory or whether the court has discretion to enforce an award despite the existence of a ground of refusal.541 As explained in more detail above (mns 182–183), the language of article V NYC should not be considered determinative of the question whether an enforcing court has discretion when deciding on the enforcement of a Convention 534 The literature on the enforcement of awards annulled in their country of origin is abundant; for more recent analyses, see, e. g., Born, International Commercial Arbitration, Vol. III, 2014, 3621–3646; Hendel/Pérez Nogales, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 187–204; Álvarez Zárate/Valenzuela Bernal, ibid., 205–216; González de Cossío, (2016) 32 Arb. Int’l 17–27. 535 See, e. g., Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2014, 3639 et seq. 536 See BGE 116 II 634 (636); Heini, in: Girsberger et al. (eds), Zürcher Kommmentar zum IPRG, 2nd ed., 2004, Art. 190 mn. 38; also cf. Craig, (1995) 30 Tex. Int’l L. J. 1 (33). 537 See Born, International Commercial Arbitration, Vol. III, 2014, 3341 et seq. – As for the effects of Hall Street Associates, LLC v. Mattel, Inc., 128 S.Ct. 1396 (1403 et seq.) (2008) on the “manifest disregard” doctrine, see, e. g., Zurich American Insurance Co. v. Team Tankers A.S., 811 F.3d 584 (589) (2nd Cir. 2016); Wachovia Securities, LLC v. Brand, 671 F.3d 472 (480 et seq.) (4th Cir. 2012); Jones v. Dancel, 792 F.3d 395 (402 et seq.) (4th Cir. 2015); Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021 (1026) (7th Cir. 2013); Visiting Nurse Ass’n of Florida, Inc. v. Jupiter Medical Center, Inc., 154 So.3d 1115 (1125 et seq.) (Fla. 2014); Daesang Corp. v. NutraSweet Co., 85 N.Y.S. 3d 6 (17 et seq.) (N.Y.A.D. 2018). 538 Cf. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 382; Paulsson, (1996) 7 Am. Rev. Int’l Arb. 99–114 and (1998) 9 ICC Bull 14–31. 539 See, e. g., van den Berg, The New York Arbitration Convention of 1958, 1981, 355 et seq.; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2014, 3642. 540 For a current overview of the discussion see, e. g., Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 381–391, and Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 324–342, with further references. 541 See, e. g., Darwazeh, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 308–310; Liebscher, ibid., 387–388; USA: Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F. Supp. 907 (909) (D.D.C. 1996).

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award. Rather, the question should depend on the respective stance of the country of enforcement. In any case, the more-favourable law clause of article VII(1) NYC makes it clear that a Contracting State is always free to adopt a more liberal position with regard to the enforcement of foreign awards and is thus also free to enforce foreign awards despite their annulment in the country of origin.542 Such a more liberal approach may consist either in establishing an autonomous national regime of enforcement under which the annulment of the award is no relevant defence to enforcement (as, e.g., in France, infra mn. 291) or in adopting a restrictive approach to the annulment defence under article V(1)(e), e. g. by applying additional criteria when deciding whether to give deference to a foreign decision setting aside the award. In that respect, article V(1)(e) indeed should be understood not to require refusal of enforcement but rather to allow for a moderated application depending on the position adopted in the respective Contracting State. 291 Against this background, there is still a considerable degree of divergence between the positions taken by the different Contracting States. Under what is probably still the prevailing position, an award that has been set aside in its country of enforcement is no longer capable of enforcement in another State, at least as a matter of principle.543 This approach is based on the premise that the annulment necessarily eliminates the award as a possible object of enforcement.544 However, there has been a growing number of instances where foreign awards have been declared enforceable despite their annulment in the country of origin. The most notable example is France, where the annulment is generally not considered to constitute a defence to enforcement under the national regime applicable pursuant to article VII(1).545 In the United States, the position remains unsettled: While the District Court for the District of Columbia enforced an award despite an annulment in the famous case of Chromalloy Aeroservices v. Arab Republic of Egypt,546 later decisions reverted to the more conservative approach of deferring to annulment decisions of the country of origin.547 Only recently, however, the enforcement of annulled awards made a reappearance in the Southern District of New York.548 An award that had been set aside in the country of origin was also declared

542 Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1687; Born, International Commercial Arbitration, Vol. III, 2014, 3641; Paulsson, (1998) 9 ICC Bull 14 (17); Germany: BGH, SchiedsVZ 2008, 196 (198). – Contra: Carbonneau, (1998) 6 Tul. J. Int’l Comp. L. 277 (279). 543 Chile: Corte Supr., Revista de Arbitraje Comercial y de Inversiones 5 (2012), 915 = YCA XLI (2016), 441; Germany: BGH, SchiedsVZ 2008, 196 (198); BGH, SchiedsVZ 2013, 229 (230); Netherlands: Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529; UK: Maximov v. Novolipetsky Metallurgichesky Kombinat, [2017] EWHC 1911 (Comm) = YCA XLII (2017), 558. 544 Cf., e. g., van den Berg, (1998) 9 ICC Bull. 15 (16). 545 Cass. civ., Rev. arb. 1994, 327 (328) = YCA XX (1995), 663 (664 et seq.); Cass. civ., Rev. arb. 2000, 648 (650) = YCA XXVI (2001), 767 (770); Cass. civ., Rev. arb. 2007, 507 (514 et seq.) = YCA XXXII (2007), 299 (302); CA Paris, Rev. arb. 2012, 134 (137); also see Cass. civ., Rev. arb. 1993, 255 (258) = YCA XIX (1994), 662 (663); Pinsolle, (2008) 24 Arb. Int’l 277–295. 546 Chromalloy Aeroservices v. Arab Republic of Egypt, 939 F.Supp. 907 (D.D.C. 1996). 547 Baker Marine (Nig.) Ltd v. Chevron (Nig.) Ltd, 191 F.3d 194 (2nd Cir. 1999); Spier v. Calzaturificio Tecnica, S.p.A., 71 F.Supp. 2d 279 (S.D.N.Y. 1999); TermoRio S.A.E.S.P. v. Electranta S.P., 487 F.3d 928 (936) (D.C.Cir. 2007). 548 Corporación Mexicana de Mantenimiento Integral v. PEMEX-Exploración y Producción, 962 F. Supp. 2d 642 (657 et seq.) (S.D.N.Y. 2013), confirmed by 832 F.3d 92 (105 et seq.) (2nd Cir. 2016), cert. denied 137 S.Ct. 1622. But then see (refusing enforcement of an annulled award) Thai-Lao Lignite (Thailand) Co., Ltd v. Government of the Lao People’s Democratic Republic, 997 F.Supp. 2d 214 (222 et seq.) (S.D.N.Y. 2014), confirmed by 864 F.3d 172 (176 et seq.) (2nd Cir. 2017).

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enforceable in the Netherlands,549 but the Hoge Raad recently reaffirmed that annulled awards will be enforced only in exceptional circumstances.550 It appears that neither an absolute deference nor an invariable disregard of annul- 292 ment decisions is appropriate. At the least, the general principles governing the recognition of foreign judgments should apply in this respect.551 In particular, the traditional requirement that the foreign court was competent to render the decision is already taken up by the jurisdictional requirements of article V(1)(e) (supra mn. 286). In addition, recognition of the foreign annulment should be excluded if the foreign proceedings or the decision on the merits was incompatible with the public policy of the enforcement forum, in particular its notions of due process and procedural fairness.552 Beyond that, it is doubtful whether deference to the annulment decision should 293 depend on the grounds on which the annulment was based. It is all but clear that the choice of arbitral seat should not also determine the degree of finality of the award and the scope of review exercised by the courts in the country of origin.553 However, the skepticism regarding “local standard” annulments and annulments based on public policy grounds (supra mn. 289) was taken up by article IX EuC which provides that only an annulment based on grounds corresponding to those of article V(1)(a)–(d) NYC shall constitute a ground for refusal of enforcement in another Contracting State. Accordingly, where article IX EuC applies, awards must be enforced under the NYC despite an annulment if that annulment was based on some other ground as, in particular, the public policy of the country of origin.554 Even beyond the reach of the 549 Gerechtshof Amsterdam, Rev. arb. 2009, 557 (559) = YCA XXXIV (2009), 703 (706 et seq.) (cf. infra fn. 553). The recourse in cassation was held inadmissible by Hoge Raad, NJ 2012/55 = YCA XXXV (2010), 423, because the recourse against the order of enforcement was held to violate the nondiscrimination principle of article III s. 2 NYC; for a cogent critique of that reasoning see van den Berg, (2011) 28 J. Int’l Arb. 617–641. 550 Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529 (mns 12 et seq.); also see Gerechtshof Amsterdam, YCA XXXVIII (2013), 427 (430); Rechtbank Amsterdam, YCA XXXVII (2012), 274 (277). 551 Park, (1999) 93 AJIL 805 (813); Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529 (mn. 16). – Contra: Germany: BGH, SchiedsVZ 2013, 229 (230). Also see Reisman, Systems of Control in International Adjudication and Arbitration, 1992, 121 (“automatic deference”). 552 Cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.470; Park, (1983) 32 ICLQ (27 et seq.) and (1999) 93 AJIL 805 (813); Kröll, Int’l Arb. L. Rev. 2002, 160 (171); also see Hongkong: Dana Shipping and Trading SA v. Sino Channel Asia Ltd, YCA XLII (2017), 385 (388); Netherlands: Gerechtshof Amsterdam, YCA XLII (2017), 461 (469); UK: Maximov v. Novolipetsky Metallurgichesky Kombinat, [2017] EWHC 1911 (Comm) = YCA XLII (2017), 558; Malicorp Ltd v. Egypt, [2015] EWHC 361 (Comm) = YCA XLI (2016), 585 (588); USA: Termorio S.A.E.S.P. & Leaseco Group, LLC v. Electranta S.P., 487 F.3d 928 (939) (D.C. Cir. 2007); Getma International v. Republic of Guinea, 862 F.3d 45 (D.C. Cir. 2017) (both allowing for a disregard of the annulment if it is found to be “repugnant to fundamental notions of what is decent and just in the State where enforcement is sought”). The question whether the annulment violated U.S. public policy was also the relevant factor distinguishing the recent cases of Corporación Mexicana de Mantenimiento Integral v. PEMEX-Exploración y Producción, 962 F.Supp. 2d 642 (S.D.N.Y. 2013) and Thai-Lao Lignite (Thailand) Co., Ltd v. Government of the Lao People’s Democratic Republic, 997 F.Supp. 2d 214 (S.D.N.Y. 2014), supra fn. 549. – As always, however, the public-policy defence should be applied with care. The necessary caution was unfortunately disregarded in the Netherlands: Gerechtshof Amsterdam, Rev. arb. 2009, 557 = YCA XXXIV (2009), 703, with a problematic generalization as to the impartiality of Russian courts; cf. comment by van den Berg, (2010) 27 J. Int’l Arb. 179–198, and Nacimiento/Drop, SchiedsVZ 2009, 272–275. Also see supra fn. 550 and (regarding the same awards) Yukos Capital SARL v. OJSC Rosneft Oil Company, [2011] 2 CLC 129 (158) (High Court), [2012] 2 CLC 549 (609) (Court of Appeal) and [2014] EWHC 2188 (Comm) = YCA XXXIX (2014), 526 (530). – A more careful approach has been adopted in the Netherlands by Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529. 553 See, e. g., Samuel, Jurisdictional Problems in International Commercial Arbitration, 1989, 27; Park, (1999) 93 AJIL 805 (815); Petrochilos, (1999) 48 ICLQ 856 (883). 554 Austria: OGH, SZ 66, no. 131, 277 = Rev. arb. 1998, 419 = YCA XX (1995), 1051 (1054 et seq.); OGH, ZfRV 1999, 24 = Rev. arb. 1999, 385 = YCA XXIV (1999), 919 (922); OGH, SZ 2005, no. 9, 44 (48)

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EuC, the disregard for other than “international standard” annulments has found its way into the case law of Contracting States as a factor to be considered when exercising the discretion to decide on a defence based on article V(1)(e).555 g) Non-arbitrability of the subject matter, article V(2)(a) NYC. aa) General principle and applicable law. Pursuant to article V(2)(a), recognition and enforcement of an arbitral award may also be refused if the competent authority finds that the subject matter of the difference is not capable of settlement by arbitration under the law of the country where recognition and enforcement is sought, in other words, if the dispute is not (objectively) arbitrable under that law (cf. supra mn. 128). Arbitrability within the meaning of article V(2)(a) is typically denied in cases that particularly involve public interests or where national legislators consider it appropriate to restrict adjudication to state court proceedings to safeguard the application of protective provisions regarding the parties involved (for specific applications see infra mns 299–306). In restricting party autonomy for reasons of public interest, arbitrability is closely related to the public policy defence556 (infra mns 307 et seq.) which also finds its expression in the fact that both defences are structurally put on a par in article V(2)(a) and (b). However, while the defence of non-arbitrability excludes adjudication by arbitral tribunals altogether, the public policy defence allows for arbitral adjudication but subjects the tribunal’s decision to the review of the enforcing court with regard to the forum’s indispensable principles of law (infra mn. 307). 295 As article V(2)(a) expressly provides, arbitrability is to be determined under the law of the country of enforcement; there is no autonomous definition of the kinds of dispute that should be considered arbitrable under the NYC.557 As a matter of principle, the Contracting States are therefore free to define the objective arbitrability of disputes. At least in theory, this creates the risk that a Contracting State could thwart its obligation to enforce foreign arbitral awards (and to recognize arbitration agreements, cf. supra mn. 128) under the NYC simply by making a large range of legal disputes nonarbitrable under its national law. The question thus arises whether the NYC does not at least impose limitations to the kinds of dispute a Contracting State may legitimately consider to be non-arbitrable.558 However, it is hardly possible to derive from the NYC – which, after all, leaves the definition of arbitrability to the Contracting States – any workable criteria to establish limitations to what should be considered “acceptable” cases of non-arbitrability. In particular, the defence of article V(2)(a) is not limited to “internationally accepted” grounds of non-arbitrability.559 In any case, a Contracting State is always free to avail itself of the commercial dispute reservation and thus exclude the applicability of the NYC with regard to all disputes that are not considered as commercial under its law (supra mn. 77). – Since the current trend among Contracting States is to reduce the barriers of non-arbitrability (infra mn. 299), the danger of 294

= JBl 2005, 661 (663) = YCA XXX (2005), 421 (425 et seq.); Germany: BGH, SchiedsVZ 2013, 229; Russia: Arbitrazh Court of Kemerovo, YCA XXXVI (2011), 325 (328). For a recent analysis of article IX EuC, see Zeiler, in: Zeiler/Siwy (eds), The European Convention on International Commercial Arbitration: A Commentary, 2018, 125–136. 555 E. g. Hoge Raad, NJB 2017, 2296 = YCA XLIII (2018), 529 (mn. 16). 556 van den Berg, The New York Arbitration Convention of 1958, 1981, 360, 368; Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 424; Wolff, ibid., mn. 492. 557 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 430; also cf. Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 349. 558 See, in particular, Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 299 et seq., 611 et seq. 559 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 444.

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Contracting States imposing unusual, excessive barriers to arbitrability is becoming less disturbing. The application of forum law with regard to the arbitrability of a dispute may appear 296 doubtful in cases that have no or little objective connection with the country of enforcement (apart from the presence of assets of the award debtor) or, inversely, intensive connections with a particular foreign country (be it the situs of arbitration or, in the case of a neutral situs, a third state). Such lack of a sufficient connection to the forum state may be a reason to define the borders of arbitrability (under forum law) in a more liberal manner;560 in that respect, the analogy to the public-policy defence is helpful, where the intensity of the connections to the forum may be taken into account as a relevant factor in determining the availability of the defence (infra mn. 313). A common way of reflecting that consideration, taken up most prominently in the United States,561 is to apply a more liberal standard of arbitrability in international cases than in domestic cases (cf. infra mns 299, 301, 302). Since arbitrability is determined under forum law, the defence of article V(2)(a) 297 cannot be refuted by showing that the dispute would be considered arbitrable under some foreign law, be it the substantive law applicable to the dispute or the lex arbitri. However, the fact that the dispute would be arbitrable under these laws may be a consideration for the jurisdiction of enforcement to be more hesitant in asserting its contrary notions of arbitrability (cf. supra mn. 296). – On the other hand, nonarbitrability under a foreign law (particularly, again, the law applicable to the substantive claim or the lex arbitri) per se is no defence under article V(2)(a). However, this need not necessarily imply that the enforcing jurisdiction is generally precluded from taking foreign law restrictions on arbitrability into account. If the country of enforcement shares the policy pursued by these restrictions of foreign law, it may arguably vindicate this policy by a corresponding limitation of arbitrability562 (cf. infra mn. 315 with regard to the public-policy defence). The technical means of implementing a restriction of arbitrability under national law 298 is to make an agreement to submit the respective disputes to arbitration invalid or ineffective. As a consequence, the question arises whether the arbitrability of a particular dispute must also be determined pursuant to the law applicable to the validity of the arbitration agreement under article V(1)(a) (cf. supra mns 205, 217). Some courts and commentators have advocated such an approach, arguing that provisions of nonarbitrability render an agreement to arbitrate invalid which in turn establishes a defence under article V(1)(a).563 However, the mere fact that certain aspects will entail the invalidity of an arbitration agreement does not imply that the respective law must necessarily be determined by the conflicts rule established by article V(1)(a) with regard to the substantive validity of that agreement in general.564 Thus, article V(1)(a) itself provides for a separate treatment of the capacity of the parties to conclude an 560 Cf. Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 438 et seq.; Haas/ Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.486. 561 Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974) (infra mn. 298); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (infra mn. 297); also cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 362. 562 Also cf. Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 349; Switzerland: BGE 118 II 193 (196 et seq.) = YCA XVIII (1993), 143 (145 et seq.). 563 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mns 160–163; Bernardini, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 516; Italy: CA Genoa, Riv. arb. 1994, 505 = YCA XXI (1996), 594 (599). 564 But see Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. II mn. 161.

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arbitration agreement (supra mn. 215). With regard to the arbitrability of the dispute, it must be taken into account that the seat of the arbitration as such is of little relevance to these issues, particularly where the parties have chosen a neutral venue for their arbitration. Consequently, it is preferable to distinguish between the substantive validity of the agreement in general and the separate jurisdictional requirement that the dispute must be capable of settlement by arbitration; the latter, also due to its close proximity to public-policy concerns, should be determined exclusively pursuant to the limits established by the law of the country of enforcement under article V(2)(a).565 bb) Specific applications. Since the NYC does not restrict the kinds of dispute that Contracting States may consider to be arbitrable under their law (supra mn. 295), there is basically a wide range of possible grounds of non-arbitrability.566 However, recent decades have seen a general tendency in a large number of jurisdictions to liberalize the limits to arbitrability, in the course of which matters that used to be reserved for adjudication by national courts have become arbitrable, either generally567 or at least in cases involving international commerce568 (also cf. infra mns 301, 302). One frequent approach is to provide that all claims involving an economic interest may be submitted to arbitration, without any further restrictions;569 under such systems, the “classic” cases of antitrust and competition law (infra mn. 301) and intellectual property law (infra mn. 303) or consumer cases (infra mn. 305) will generally be arbitrable. Under another common approach, arbitrability is linked to the power of the parties to dispose of the respective right or their power to conclude a settlement on the dispute.570 300 A question of general relevance has arisen with regard to rules allocating the exclusive jurisdiction to adjudicate certain disputes to a particular State.571 Here, it is widely accepted that such provisions are only exclusive regarding the relationship between national courts but do not impose any limits to arbitrability.572 The result may be different where the respective rules provide for the exclusive jurisdiction of a particular adjudicative body or public agency573 (cf. infra mn. 303 in intellectual property rights). 299

565 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 425–426, 447; Germany: OLG Hamm, IPRax 1985, 218 = YCA XIV (1989), 629 (631); Switzerland: BGE 118 II 353 = YCA XX (1995), 766 (767 et seq.). 566 For a detailed overview see Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 450–479; Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 55–58. 567 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 430–431; Lew/Mistelis/ Kröll, Comparative International Commercial Arbitration, 2003, mn. 9–36; Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 56. 568 van den Berg, The New York Arbitration Convention of 1958, 1981, 369; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 9–35, 9–36; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1707. 569 See, e. g., Belgium: article 1676(1) s. 1 CJ; Germany: § 1030(1) s. 1 ZPO; Switzerland: article 177(1) IPRG. 570 See, e. g., Belgium (regarding disputes not involving an economic interest): article 1676(1) s. 2 CJ; Brazil: article 1 Arbitration Act 1996 (“disputes related to patrimonial rights over which they may dispose”); Croatia: article 3(1) Arbitration Act 2001; Germany: § 1030(1) s. 2 ZPO (regarding disputes not involving an economic interest); Italy: article 806(1) CPC; Netherlands: article 1020(3) Rv; Spain: article 2(1) LA. 571 See, e. g., article 24 Brussels I Regulation (recast). 572 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 430; Perales Viscasillas, in: Mistelis/Brekoulakis (eds), Arbitrability, 2009, mns 14–23 et seq. But see Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 9–39 (fn. 47). But see Bosnia and Herzegovina: Constitutional Court, YCA XXXVII (2012), 166; Supreme Court, YCA XLI (2016), 403 (refusing to enforce an Austrian award dealing with immovable property, for which Bosinan courts have exclusive international jurisdiction under Bosnian law). 573 Perales Viscasillas, in: Mistelis/Brekoulakis (eds), Arbitrability, 2009, mn. 14–23.

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Antitrust and competition law were traditionally held to be non-arbitrable due to the strong public interest involved in these areas of the law. However, there has been an increasing tendency towards liberalization, with the result that such disputes are now held to be arbitrable in a considerable number of jurisdictions,574 for example in the United States, where the Supreme Court in 1985 lifted the traditional exclusion of arbitrability for international cases,575 an approach that was later extended to domestic cases.576 In this decision, the Supreme Court expressly reserved the possibility of a later review of the award at the enforcement stage.577 Such a subsequent review (“second look”) always remains possible, and is particularly important, in cases where a State decides to abandon limitations of arbitrability in areas involving the public interest.578 However, such review can then no longer be based on non-arbitrability, but only on the public-policy defence, operating on a case-by-case basis579 (cf. infra mn. 331). A similar development has occurred in the area of securities law: Here as well, there is an international trend towards liberalization,580 and again, the U.S. Supreme Court has provided a prominent example in a case involving an international commercial transaction,581 which was later extended to domestic cases.582 Non-arbitrability has a somewhat stronger hold on disputes concerning intellectual property rights, particularly where they involve the participation of public agencies for the purpose of obtaining the necessary registration of the respective rights.583 In the area of insolvency law, there are quite diverging approaches to the arbitrability of disputes.584 Usually, the administration of insolvency proceedings as such (“core”

574 See Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 455–457; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 356 et seq.; Radicati di Brozolo, (2011) 27 Arb. Int’l 1 (3 et seq.); Australia: Stericorp. Ltd v. Stericycle Inc., [2005] VSC 700 = YCA XXXI (2006), 549 (556); Canada: Murphy v. Amway Canada Corp., 2013 FCA 38 (mns 40 et seq.); Switzerland: BGE 118 II 193 (198) = YCA XVIII (1993), 143 (148). For EU law: ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055 (mns 31 et seq.). Regarding ICSID arbitration: New Zealand: The Governement of New Zealand v. Mobil Oil New Zealand Ltd, YCA XIII (1988), 638 (650 et seq.). 575 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (631 et seq.) (1985). 576 See, e. g., Nghiem v. NEC Electronic, Inc., 25 F.3d 1437 (1441) (9th Cir. 1994); Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors Corp., 271 F.3d 6 (11) (1st Cir. 2001). 577 See the often-quoted “fn. 19” in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (634) (1985). 578 A “second look” approach was, however, refused in Austria by OGH, SZ 2017, no. 30 = YCA XLII (2017), 348, where an arbitration clause in a commercial agency contract was generally considered invalid for reasons of public policy; cf. mns 123 and 327. 579 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 457; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (638) (1985); also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 980 et seq. 580 See Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 477–478; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 985 et seq. 581 Scherk v. Alberto-Culver Co., 417 U.S. 506 (515 et seq.) (1974). 582 Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (232) (1987); Rodriguez de Quijas v. Shearson/American Express Inc., 490 U.S. 477 (482 et seq.) (1989); also see Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 9–49 et seq. 583 Cf. Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 470–472; Lew/Mistelis/ Kröll, Comparative International Commercial Arbitration, 2003, mns 9–64 et seq. – However, here as well, there are markedly liberal approaches in some jurisdictions, e. g. Switzerland: Dessemontet, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 556; USA: 35 U.S.C. § 294; Cara’s Notions, Inc. v. Hallmark Cards, Inc., 140 F.3d 566 (571 et seq.) (4th Cir. 1998). 584 See Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 467–469; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 355; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 894 et seq.

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insolvency issues) is considered to be non-arbitrable.585 Greater diversity exists with regard to the effects on individual claims by or against the insolvent party, particularly the question whether the opening of insolvency proceedings renders the arbitration agreement invalid, suspends arbitration, or leaves the arbitration agreement and arbitral proceedings unaffected.586 With regard to the possible effects of the insolvency on the arbitration agreement and/or arbitral proceedings, it will often be necessary to determine, on the basis of a careful analysis of the national provisions involved, whether they refer to the objective arbitrability of the dispute, the capacity of the parties to arbitrate (supra mns 214–215), or the validity of the arbitration agreement in general.587 305 Divergent approaches also exist with regard to consumer disputes. In some jurisdictions, such disputes are considered non-arbitrable.588 In other countries, consumer disputes are generally arbitrable, but the arbitration agreement may be considered invalid for reasons of substantive unfairness or unconscionability, particularly if they are imposed on the consumer by way of general contract terms.589 Such provisions may then become applicable under article V(1)(a) or, as a last resort, under the public-policy defence of article V(2)(b) (also cf. supra mn. 127). –Similar concerns may arise in the area of employment law590 or landlord-and-tenant law591. 306 Family and succession law is still largely a domain of non-arbitrability.592 However, the question whether such matters are arbitrable only becomes relevant under the NYC if the respective Contracting State has not made the commercial dispute reservation (supra mn. 77). Sometimes, non-arbitrability primarily affects status disputes (divorce, parentage), while economic disputes (matrimonial property, maintenance) are considered arbitrable.593

585 Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 355; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mn. 9–55; India: Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, [2011] 5 SCC 532 (mn. 22); USA: In re U.S. Lines, Inc., 197 F.3d 631(640 et seq.) (2nd Cir. 1999). 586 For an overview of possible provisions see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 895 et seq.; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 9–61 et seq. Also cf. the much-discussed proceedings in the Vivendi case: UK: Syska v. Vivendi Universal SA, [2009] EWCA Civ 677 = [2009] Bus. L.R. 1494; Switzerland: BGer., YCA XXXIV (2009), 286 (292). 587 Cf. USA: Société Nationale Algerienne pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures v. Distrigas Corp, 80 B.R. 606 (610 et seq.) (D.Mass. 1987); In re U.S. Lines, Inc., 197 F.3d 631 (640 et seq.) (2nd Cir. 1999); Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 9–57 et seq. 588 E. g. Turkey: Bayata Canyas, ASA Bull. 2013, 537 (554); Also cf. Canada: Seidel v. TELUS Communications Inc., 2011 SCC 15 (mns 31 et seq.); USA: McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017); rule held to be preempted by FAA by McGovern v. U.S. Bank N.A., 362 F.Supp. 3d 850 (S.D.Cal. 2019). – Also see Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 1014 et seq. 589 Cf. Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 459, 461. See, in particular, ECJ Case C-168/05 Elisa María Mostaza Claro v. Centro Móvil Milenium SL, [2006] ECR I10421; ECJ Case C-40/08 Asturcom Telecomunicaciones SL v. Cristina Rodríguez Nogueira, [2009] ECR I9579. Also see Brazil: article 4(2) Arbitration Act 1996. In some jurisdictions, the parties are limited to post-dispute agreements; e. g. Austria: § 617 ZPO. 590 Cf. Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 476; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. I, 1009 et seq. Employment contracts are considered nonarbitrable, e.g., in Italy: Cass., YCA XLIII (2018), 479. 591 For the liberal development in Italy, cf. Cass., YCA XLIII (2018), 477. 592 Quinke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 463. See, e.g., Austria: § 582 (2) ZPO; India: Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, [2011] 5 SCC 532 (mn. 22). 593 See, e. g., Germany: Trittmann/Hanefeld, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1030 mn. 21.

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h) Violation of public policy, article V(2)(b) NYC.594 aa) General principles. 307 (1) Notion of public policy and applicable law. Under article V(2)(b), recognition or enforcement of the award may finally also be refused if it would be contrary to the public policy (“ordre public”) of the country of enforcement. The NYC does not provide any autonomous or more specific definition of “public policy”; instead, public policy is left to be defined by the law of the State where enforcement is sought595 (as for the possible relevance of the public policy of another State, see infra mn. 315). Accordingly, the enforcement State is free to determine what constitutes public policy in its jurisdiction. At least as a matter of principle, however, it is almost universally accepted that article V(2)(b) must be interpreted narrowly (also cf. supra mn. 177): Thus, “public policy” is understood to encompass not any mandatory law of the enforcement forum596 but only its most fundamental notions of morality and justice,597 including constitutional rights and guarantees.598 The public-policy defence thus operates as a “safety valve”599 against the general obligation assumed by the Contracting States to recognize and enforce foreign arbitral awards under article III NYC. It may encourage States to join the Convention by giving them the assurance that awards which are irreconcilable with the most fundamental values of their respective legal system may still be denied enforcement. Even though the restrictive interpretation of the public-policy defence seems to be 308 generally accepted as a matter of principle, there is always the danger that national courts, in individual cases, may go beyond what would normally be considered the 594 Also see Maurer, The Public Policy Exception under the New York Convention, Rev. ed. 2013; Beatson, (2017) 33 Arb. Int’l 175–196; Moses, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 169–184; Chen, Predictability of “Public Policy” in Article V of the New York Convention under Mainland China’s Judicial Practice, 2017. 595 Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.489; Germany: BayObLG, IHR 2004, 81 (82) = YCA XXIX (2004), 771 (773); OLG Saarbrücken, SchiedsVZ 2012, 47 (50); Portugal: Supr. Trib., YCA XLII (2017), 484 (mn. 14); Russia: D.Ct. Moscow, YCA XXIII (1998), 735 (736). 596 Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 365. 597 Australia: Traxys Europe SA v. Balaji Coke Industry Ltd (no. 2), 201 FCR 535 (555); Austria: OGH, JBl 2005, 661 (664) = YCA XXX (2005), 421 (428); OGH, SZ 2011, no. 106, 163 (174 et seq.) = YCA XXXVIII (2013), 317 (mn. 41); OGH, ecolex 2016, 393 = YCA XLI (2016), 398 (mn. 31); OGH, SchiedsVZ 2019, 154 (157); Brazil: STJ, YCA XXXII (2007), 271; Colombia: Corte Suprema, YCA XLII (2017), 370 (373); Germany: BGHZ 98, 70 (73 et seq.) = NJW 1986, 3027 (3028) = YCA XII (1987), 489 (490); BGHZ 110, 104 (107) = NJW 1990, 2199 (2199) = YCA XVII (1992), 503 (505); BGH, SchiedsVZ 2017, 200 (202) = YCA XLIII (2018), 451 (mn. 21); BGH, SchiedsVZ 2018, 53 (59) = YCA XLIII (2018), 446 (mn. 12); OLG München, SchiedsVZ 2006, 111 (112) = YCA XXXI (2006), 722 (726 et seq.); OLG Thüringen, SchiedsVZ 2008, 44 (45) = YCA XXXIII (2008), 534 (538); OLG Saarbrücken, SchiedsVZ 2012, 47 (50 et seq.); Portugal: Supr. Trib., YCA XLII (2017), 484 (mns 16 et seq., 23 et seq.); Supr. Trib., YCA XLII (2017), 488 (mns 20 et seq.); USA: Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (973 et seq.) (2nd Cir. 1974); Ackerman v. Levine, 788 F.2d 830 (841 et seq.) (2nd Cir. 1986); Telenor Mobile Communications AS v. Storm LLC, 524 F.Supp. 2d 332 (356) (S.D.N.Y. 2007); Kaliroy Produce Co., Inc. v. Pacific Tomato Growers, Inc., 730 F.Supp. 2d 1036 (1042) (D.Ariz. 2010); Republic of Argentina v. BG Group PLC, 764 F.Supp. 2d 21 (39) (D.C.Cir. 2011). Also see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 60 et seq. 598 See, e. g., Austria: OGH, JBl 2005, 661 (664) = YCA XXX (2005), 421 (428); OGH, SZ 2011, no. 106, 163 (175) = YCA XXXVIII (2013), 317 (mn. 42); Portugal: Supr. Trib., YCA XLII (2017), 488 (mns 19, 30). 599 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 481, 490; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.489; also cf. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3647 (“escape device”); USA: Crystallex International Corp. v. Venezuela, 244 F.Supp. 3d 100 (120) (D.D.C. 2017) (“escape-hatch”).

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proper scope of review.600 Thus, the “safety valve” of article V(2)(b) may turn into a gateway for tendencies that are hostile to the generous enforcement of foreign arbitral awards envisaged by the NYC.601 It would help to limit this danger if it were possible to derive from the NYC at least some limitations to what may legitimately be invoked as public policy by Contracting States.602 This, however, would run counter to the very purpose of the public-policy defence, that is, to assure each Contracting State of the possibility to assert its most fundamental notions of justice and morality against the enforcement of decisions rendered by arbitral tribunals. Like with arbitrability (supra mn. 295), the Convention thus allows for wide leeway in the definition of public policy by Contracting States.603 309 The defence of public policy can arise with regard to fundamental principles of procedural law (“procedural public policy”, infra mns 317–327) or of substantive law (“substantive public policy”, infra mns 328–332).604 310

(2) “International” public policy and sufficient connection to the forum. The cautious use to be made of public policy as a defence against the enforcement of a foreign award is also reflected by the widely accepted distinction between “international public policy” (“ordre public international”) and “domestic public policy” (“ordre public interne”). The distinction is derived from French law in particular (and the legal systems influenced by French law in that respect), where the “ordre public interne” traditionally designates the entirety of mandatory rules of a given legal system, while the “ordre public international” is used to designate the category of mandatory law that is considered indispensable to that legal system and is therefore asserted also against the application of foreign law and/or the recognition of foreign judgments or awards.605 In that sense, the review under article V(2)(b) is therefore limited to “international public policy”,606 to 600 Cf., e. g., India: In 2008, the Supreme Court of India had extended the public-policy defence regarding domestic awards to foreign awards; as a consequence, enforcement of foreign awards could be refused if they were found to be “patently illegal”; Venture Global Engineering v. Satyman Computer Services Ltd, (2008) 4 SCC 190 = YCA XXXIII (2008), 239 (240 et seq.). However, that decision was overruled by Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 = YCA XXXVII (2012), 244 (246); Kenya: Tanzania National Roads Agency v. Kundan Singh Construction Ltd, YCA XXXIX (2014), 431 (433) (denying enforcement on public policy grounds as the tribunal had applied the wrong law); Ukraine: CA Kiev, YCA XLI (2016), 577 (580) (denying enforcement to an award contrary to the requirements of the Ukrainian Tax Code); this decision, however, was overturned by Supreme Court, YCA XLI (2016), 581 (585). Also cf. Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 510. 601 Cf. Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 491; van den Berg, The New York Arbitration Convention of 1958, 1981, 366. 602 To that effect, see e. g. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3662 et seq. 603 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 501; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.491; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1712. 604 See, e. g., Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 514; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 389 et seq. – Contra: Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3688 (limitation to substantive public policy). 605 Cf. van den Berg, The New York Arbitration Convention of 1958, 1981, 360 et seq. 606 van den Berg, The New York Arbitration Convention of 1958, 1981, 361 et seq.; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 496–498, 511; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1711; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3655; France: Cass. civ., Rev. arb. 2008, 473 (475) = YCA XXXIII (2008), 489 (493); CA Paris, Rev. arb. 2004, 987; Germany: BGH, NJW-RR 2001, 1059 (1061) = YCA XXIX (2004), 700 (714); BGH, SchiedsVZ 2006, 161 (164) = YCA XXXII (2007), 328 (339); BGH, SchiedsVZ 2017, 200 (202) = YCA XLIII (2018), 451 (mn. 21); BGH, SchiedsVZ 2018, 53 (59) = YCA XLIII (2018), 446 (mn. 13); OLG Karlsruhe, SchiedsVZ 2012, 101 (104 et seq.); Portugal: Supr. Trib., YCA XLII (2017), 484 (mns 14 et

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reflect the more tolerant approach under which not any and all mandatory law of the enforcement jurisdiction will give rise to a public-policy defence, but only its most basic legal principles (supra mn. 307). The term “international” public policy, however, is susceptible to misunderstanding: 311 First, it does not imply that the public policy that may legitimately be asserted by a Contracting State must necessarily be derived from international or supranational sources of law or correspond to an internationally accepted standard. To be true, such a restriction of the public-policy defence has been advocated under the notion of a “truly international” or “transnational” public policy,607 but for the above reasons (mn. 308), the NYC does not impose any such limitation.608 The call for a “truly international” public policy is therefore merely a (legitimate) policy claim directed at national legislators and courts. In that respect, a Contracting State may (and should) of course seriously consider foreign and international standards when deciding on whether any specific legal principle should be accorded the status of public policy under article V(2)(b). As a consequence, a State may be more hesitant to assert principles that are generally not shared by other jurisdictions609 or, on the other hand, more willing to enforce legal principles that are also accepted by a large number of other jurisdictions.610 In turn, not every mandatory rule derived from international or supranational law, in particular: not every mandatory rule of European law, is per se necessarily a rule of public policy, but only if it represents essential legal principles611 (as for EU competition law, see infra mn. 331). Furthermore, the notion of “international public policy” may be the cause of 312 uncertainty or confusion for those jurisdictions that generally use the term “public policy” (“öffentliche Ordnung”, “ordre public”) as such to designate the restricted range of fundamental principles that may be asserted against the recognition of a foreign decision or the application of foreign law.612 As a consequence, for such legal systems, there is no need, on a terminological level, to further restrict the notion of “public policy” to that of “international public policy” in order to contrast it to the larger range of mandatory law existing in the internal legal system.613 seq.); Supr. Trib., YCA XLII (2017), 488 (mns 14 et seq.); Singapore: Hainan Machinery Import and Export Corp. v. Donald & McArthy Pte Ltd, YCA XXII (1997), 771 (779); Switzerland: BGer., YCA XXXVI (2011), 337 (339); BGer., YCA XXXVI (2011), 340 (342 et seq.); USA: Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (638) (1985); Parsons & Whittemore Overseas Co., Inc. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (973 et seq.) (2nd Cir. 1974). 607 Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3657 et seq. Also see Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 496–497. 608 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 497–498; Gaillard/Savage, International Commercial Arbitration, 1999, mn. 1712. 609 See, e. g., Australia: Traxys Europe SA v. Balaji Coke Industry Ltd (No. 2), 201 FCR 535 (560) (“The public policy ground […] should not be used to give effect to parochial and idiosyncratic tendencies of the courts of the enforcement state.”). 610 Cf. Switzerland: BGE 120 II 155 (167); BGE 132 III 389 (394 et seq.). 611 Austria: OGH, SZ 71, no. 26, 151 (159); Germany: BGH, NJW 1969, 978 (979 et seq.). 612 See, e. g., Germany: Art. 6 EGBGB: “Public policy (ordre public). A provision of the law of another country shall not be applied where its application would lead to a result which is manifestly incompatible with the fundamental principles of German law. In particular, inapplicability ensues, if its application would be incompatible with civil rights.”; also cf. Greece: Areios Pagos, YCA XXXVI (2011), 284 (mns 1 et seq.); Portugal: Supr. Trib., YCA XLII (2017), 488 (mns 14 et seq.). 613 See, in that respect, Kröll, in: Böckstiegel et al. (eds), Arbitration in Germany, 2nd ed., 2015, § 1061 mn. 136; Kröll/Kraft, ibid., § 1059 mn. 79. – This fact was overlooked in Germany by OLG Karlsruhe, SchiedsVZ 2012, 101 (104), holding that “domestic” public policy was offended where the enforcement of the award was “clearly incompatible with essential principles of German law, in particular with constitutional civil rights”, while “international” public policy constituted a more permissive standard that was affected only where the arbitral proceedings suffered from a serious defect touching the foundations of political and economic life in Germany. However, both definitions, in essence, relate to

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In some jurisdictions, the finding of a violation of public policy depends on the existence of a sufficient connection to the forum (“Inlandsbeziehung”):614 Thus, in cases that have little connection to the enforcement forum, the standard of review may be quite lenient, while in cases that are more closely connected to that forum, it will be stricter. This approach also implements the idea of a more generous review in international cases where the connections to the forum are less intensive than in domestic cases.

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(3) Prohibition of a review on the merits. It is widely accepted that enforcement courts will perform no “révision au fond”, that is, they will not review the tribunal’s decision on the merits (supra mn. 179). Mere mistakes in the application of the law on the merits are therefore not enough to refuse enforcement of the award for reasons of public policy (for the particular considerations that apply in cases of “manifest disregard of the law”, see infra mn. 326).

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(4) Foreign public policy. Based on the principle that public policy depends on the law of the enforcing state (supra mn. 307), it is often held that a violation of foreign public policy is generally irrelevant, regardless of the seriousness of the infringement of that policy and the existence of a close connection of the parties or the dispute to the respective foreign country.615 To support that position, it could be argued that the aggrieved party can always obtain an annulment of the award in the country of origin, which would then serve as a defence to the enforcement of the award elsewhere under article V(1)(e). However, this would only be a solution to the extent that the public policy of the arbitral situs is concerned, which will normally not be true where the parties have chosen a neutral place of arbitration. Thus, there may be situations where the enforcing jurisdiction may consider it appropriate to vindicate the public interests of a foreign State, e. g. its law on competition, foreign commerce or the protection of cultural property.616 In such (exceptional) cases, it has been accepted by some courts and commentators that the public policy of the forum may incorporate public interests of a foreign country, as expressed in that country’s mandatory law.617 It must be noted that such an approach does not undermine the (exclusive) reference to forum law in article V(2)(b): A foreign public policy does not impose itself per se on the enforcement jurisdiction, but only to the extent that this jurisdiction is willing to incorporate and vindicate that policy, that is, where it is sympathetic of the policies pursued by the respective foreign State. In that respect, the determination of the relevant public policy to be asserted under article V(2) (b) still lies exclusively with the State where enforcement of the award is sought. “international public policy”. In particular, it is hardly conceivable that a German court would be willing (or, for that matter, justified) to enforce an award that was incompatible with constitutional civil rights, a matter that the court relegated to “mere” domestic public policy. 614 Notably Germany: BGH, NJW 1986, 3027 (3028) = YCA XII (1987), 489 (490); OLG Saarbrücken, SchiedsVZ 2012, 47 (50). Also cf. Portugal: Supr. Trib., YCA XLII (2017), 488 (mns 7 et seq.); Landolt, (2007) 23 Arb. Int’l 63 (71). 615 Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 369; Ireland: Brostrom Tankers AB v. Factorias Vulcano SA, [2004] IEHC 198 = YCA XXX (2005), 591 (596 et seq.); Mauritius: Supreme Court, YCA XXXIX (2014), 447 (mns. 74 et seq.) USA: Ukrvneshprom State Foreign Economic Enterprise v. Tradeway, Inc., 1996 WL 107285, 6 (S.D.N.Y. 1996) = YCA XXII (1997), 958 (964). 616 See, e. g. Landolt, (2007) 23 Arb. Int’l 63 (69–73). 617 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 493; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3667. See, e. g., Germany: OLG München, SchiedsVZ 2012, 339 (341 et seq.) (regarding Ukrainian prohibition of contractual agreements in restraint of competition, particularly p. 342: “It is the purpose of the public-policy defence to ensure that economic regulations of a state cannot be disregarded by resorting to arbitration.”); USA: Victrix Steamship Co., SA v. Salen Dry Cargo A.B., 825 F.2d 709 (714 et seq.) (2nd Cir. 1987).

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(5) Extent of review of the arbitral award. As a matter of principle, the enforcement 316 court may make its own legal review as far as it is necessary to determine whether there has been a violation of public policy; in that respect, the court is bound neither by the factual findings of the tribunal nor by its legal reasoning618 (also cf. supra mn. 201). However, in particular cases, the court may decide to defer to the findings of the tribunal, in particular where the tribunal had considered the objections raised by the respondent, had taken extensive evidence and given detailed reasons for its decision.619 Such decisions may be explained by the fact that the burden of proof lies on the respondent also with regard to the establishment of a violation of public policy (supra mn. 186). Where there is no cause to doubt the findings and decision of the tribunal as to their conformity with the public policy of the enforcement forum, the respondent simply has not met its burden of establishing a defence under article V(2)(b). bb) Procedural public policy. (1) General considerations. Many of the procedural 317 safeguards that may amount to “procedural” public policy are also covered by other defences available under article V(1), particularly article V(1)(b) (rights of “due process”; supra mns 222–239) and article V(1)(d) (improper procedure or constitution of the tribunal; supra mns 255–263). Even where a specific ground of refusal under article V(1) exists, the prevailing view is that this leaves the availability of the publicpolicy defence unaffected.620 There is a clear difference in the standard of review under article V(2)(b) as compared 318 to article V(1)(d): Under article V(1)(d), the arbitral proceedings and the composition of the arbitral tribunal are assessed pursuant to the agreement of the parties and, subsidiarily, the law of the place of arbitration (supra mns 256–260). In contrast, the standard of review under article V(2)(b) is the public policy of the enforcement forum (supra mn. 307). Under that standard, only serious procedural errors affecting the integrity and neutrality of the arbitral proceedings will amount to a violation of public policy.621 Thus, a violation of procedural public policy depends neither on a mere infringement of the

618 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 517 (subject the lex fori of the enforcement court); Hanotiau/Caprasse, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 787, 804 et seq.; Austria: OGH, SZ 2011, no. 106, 163 (174) = YCA XXXVIII (2013), 317 (mn. 41); France: Cass. civ., Rev. arb. 1987, 469 (470 et seq.) = YCA XIII (1988), 152 (153 et seq.); CA Paris, Rev. arb. 1994, 359 (365) = YCA XX (1995), 198 (201 et seq.); Germany: BGH, WM 1983, 1207 (1208); OLG Bremen, BB 2000, Beilage Nr. 12, 18 (19) = YCA XXXI (2006), 640 (657 et seq.); OLG Düsseldorf, IPRspr 2004, no. 195, 443 (445) = YCA XXXII (2007), 315 (318); UK: Westacre Investments Inc. v. Jugoimport-SDRP Holding Co. Ltd, [2000] QB 288 (299 et seq.). 619 See, e. g., Germany: OLG Hamburg, IPRspr 1999, no. 178, 425 (429) = YCA XXIX (2004), 663 (668); OLG Saarbrücken, SchiedsVZ 2012, 47 (49 et seq.). 620 van den Berg, The New York Arbitration Convention of 1958, 1981, 376; Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 514, 522; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.495. – Contra: Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 367. 621 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 549; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.495; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 389 et seq.; Canada: Schreter v. Gasmac Inc., 7 O.R. (3d) 608 (623); Germany: BGH, NJW 1990, 2199 = YCA XVII, 503 (505); OLG Hamm, IPRax 1985, 218 (219) = YCA XIV (1989), 629 (631); OLG Köln, SchiedsVZ 2005, 163 (165) = YCA XXX (2005), 557 (560); OLG Saarbrücken, SchiedsVZ 2012, 47 (50); Peru: Supreme Court, YCA XLIV (2019), 1 (16 et seq.); Switzerland: BGer., ASA Bull. 2015, 393 (399 et. seq.) = YCA XLI (2016), 564 (566 et. seq.); USA: Waterside Ocean Nav. Co., Inc. v. International Nav. Ltd, 737 F.2d 150 (151 et seq.) (2nd Cir. 1984).

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regular mandatory provisions of the enforcing jurisdiction nor on an infringement of the mandatory provisions of the foreign lex arbitri.622 319 In contrast – at least according to the interpretation of article V(1)(b) advocated here (supra mns 222–225) – the standards of review under article V(1)(b) and article V(2)(b) coincide: In both cases, the enforcement court will apply the requirements of “due process” under forum law; in that respect, therefore, reference can be made to the comments on article V(1)(b); supra mns 226–239. 320 In general, a procedural error will only constitute a defence to enforcement if it has specifically influenced the decision of the tribunal (with regard to the “causality” requirement, see supra mns 238, 261–262). While the public-policy defence is not generally subject to a formal preclusion by failure to take recourse against the award in its country of origin (cf. supra mns 195–197), such failure may still be taken into account in assessing whether a particular procedural defect amounted to a violation of “due process” requirements under article V(2)(b): Accordingly, it has been held – particularly with regard to allegations of partiality on the part of the arbitrators – that the enforcement of a foreign award cannot be objected to for reasons of public policy, if the allegation of partiality could have been invoked before the courts of the country of origin in a manner corresponding to the requirements of the enforcement jurisdiction.623 Under this approach, the defence of public policy can only be raised where such challenge was not available in the country of origin or had been attempted by the respondent without success. (2) Particular applications. In principle, the entire range of the arbitral proceedings, from the constitution of the arbitral tribunal until the making of the award, may be subject to a review for possible violations of public policy. In the following section, only some of the more prominent applications can be discussed.624 322 The “complete absence” (rather than a “simple invalidity”) of an agreement to arbitrate has been held to constitute a public-policy defence under article V(2)(b).625 In most cases, however, these cases will already be covered by article V(1)(a) (supra mns 205 et seq.). Recourse to public policy may be relevant to the extent that the right to invoke the lack of a valid arbitration agreement would normally be subject to preclusion (supra mns 191–198). Thus, in particularly grave cases of arbitral tribunals rendering an award despite the obvious lack of a valid arbitration agreement, the aggrieved party may be relieved from the need to invoke that defect either in the arbitration itself or by challenging the award in the country of origin. 323 It is an elementary principle of procedural public policy that the parties be treated with equality (see, e. g., article 18 ML),626 both in the selection of arbitrators and during 321

622 See, e. g. Germany: BGH, NJW 1986, 3027 (3028) = YCA XII (1987), 489 (490 et seq.); BGH, NJW 1990, 2199 (2200) = YCA XVII (1992), 503 (505); OLG Saarbrücken, SchiedsVZ 2012, 47 (50). 623 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 518, 530; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 370; Germany: BGH, NJW-RR 2001, 1059 (1060) = YCA XXIX (2004), 700 (712 et seq.); BGH, SchiedsVZ 2011, 105 (106); OLG Hamm, IHR 2010, 84 (85) = YCA XXXIV (2009), 536 (542); OLG Frankfurt, SchiedsVZ 2014, 206 (208) = YCA XLI (2016), 480 (mn. 20); USA: AAOT Foreign Economic Association (VO) Technostroyexport v. International Development and Trade Services, Inc., 139 F.3d 980 (982) (2nd Cir. 1998). 624 For a more detailed overview, see Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 522–558; also cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.495. 625 See, e. g., Germany: BGHZ 71, 131 (136 et seq.) = NJW 1978, 1744 (1745) = YCA IV (1979), 264 (265); Russia: Federal Arbitrazh Court, YCA XXXVIII (2013), 453 (mn. 5). 626 van den Berg, The New York Arbitration Convention of 1958, 1981, 377 et seq.; Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 369 et seq.; Germany:

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the arbitral proceedings. In particular, it may violate public policy if one of the parties reserves a predominant position in constituting the arbitral tribunal.627 This is a principle that has become increasingly relevant in the area of sports arbitration (supra mn. 52). The impartiality of the arbitrators is also guaranteed by principles of public policy.628 324 However, mere abstract connections of arbitrators to the country of one of the parties are generally not held to infringe the principle of neutrality.629 Furthermore, a number of jurisdictions require that allegations of bias be invoked by challenging the award in the country of origin in order to preserve the right to raise that defence in enforcement proceedings under article V(2)(b) (supra mn. 320). Divergent views exist with regard to the failure of the tribunal to provide reasons for 325 the award. Such failure has sometimes been held to violate public policy630, but the prevailing view among courts and commentators is that this does not in itself amount to a defence to the enforcement of the award.631 However, where the lex arbitri requires the tribunal to give reasons, failure to do so may constitute a defence under article V(1) (d) (supra mns 255 et seq.). It is also doubtful whether and to what extent the “arbitrariness” of the tribunal’s 326 decision on the merits or a “manifest disregard of the law” may constitute a violation of public policy.632 In that respect, it must be reaffirmed that the public-policy defence does not authorize the enforcing court to enter into a review of the tribunal’s decision on the merits (supra mn. 314). As a consequence, it is beyond doubt that mere errors in applying the substantive law do not constitute a defence to enforcement under article V(2)(b). However, the tribunal’s authority to render a binding decision on the BGH, NJW 1986, 3027 (3028 et seq.) = YCA XII (1986), 489 (490 et seq.); OLG Celle, IPRspr 2007, no. 218, 614 (618 et seq.) = YCA XXXIII (2008), 524 (532 et seq.). 627 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 527–528; France: Cass. civ., Rev. arb. 1992, 470 (471) = YCA XVIII (1993), 140 (141 et seq.); also cf. Germany: BGHZ 132, 278 (287 et seq.) = NJW 1996, 1753 (1755 et seq.); Switzerland: BGE 84 I 56 (60 et seq.); BGE 93 I 265 (272) = YCA I (1976), 199; Turkey: Bayata Canyas, (2013) 31 ASA Bull. 537 (552). But also see Netherlands: Hoge Raad, YCA XLIV (2019), 598 (mn. 38), where it was held not to conflict with public policy if arbitrators were appointed by the competent courts of a State which is also party to the arbitration. 628 Brazil: STJ, YCA XLIII (2018), 427 (mns 67, 69); France: Cass. civ., Rev. arb. 1999, 255 (256) = YCA XXIV (1999), 643 (644); Germany: BGHZ 98, 70 (73) = NJW 1986, 3027 (3028) = YCA XII (1986), 489 (490 et seq.); BGHZ 141, 90 (95) = NJW 1999, 2370 (2371 et seq.); Switzerland: BGer., YCA XXXVI (2011), 337 (338); USA: Application of York Hannover Holding A. G. v. American Arbitration Ass’n, 1993 WL 159961 (3 et seq.) (S.D.N.Y. 1993) = YCA XX (1995), 856 (861). See, in more detail, Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 530–536; del Rosal Carmona, in: Fach Gomez/ Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 137–152. 629 See, e. g., Germany: OLG Karlsruhe, SchiedsVZ 2008, 47 (48) = YCA XXXIII (2008), 541 (547 et seq.). 630 Canada: Smart Systems Technologies Inc. v. Domotique Secant Inc., 168 ACWS (3d) 696 = YCA XXXIII (2008), 464 (467 et seq.). 631 Belgium: TPI Bruxelles, YCA XXII (1997), 643 (652); Brazil: STJ, YCA XXXVII (2012), 175; STJ, YCA XXXVIII (2013), 338 (mn. 31); Canada: Schreter v. Gasmac Inc., 7 O.R. (3d) 608 (620 et seq.); France: CA Paris, Rev. arb. 1989, 309 (315); CA Paris, Rev. arb. 1990, 675 (680); Greece: Areios Pagos, YCA XXXIII (2008), 565 (568); CA Athens, YCA XIV (1989), 637; Switzerland: BGE 101 Ia 521 (525 et seq.). – Also cf. Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 557. 632 Pro: USA: Spector v. Torenberg, 852 F.Supp. 201 (208 et seq.) (S.D.N.Y. 1994); also cf. Germany: BGH, NJW 1990, 3210 (3211) (where, however, a “blatant violation of substantive justice” was not established); Turkey: Bayata Canyas, (2013) 31 ASA Bull. 537 (552). – Contra: Switzerland: BGE 115 II 102 (105); also cf. BGE 116 II 634 (637) = YCA XVII (1992), 279 (284 et seq.); USA: Parsons & Whittemore Overseas Co. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (977) (2nd Cir. 1974); M&C Corp. v. Erwin Behr GmbH & Co. KG, 87 F.3d 844 (851) (6th Cir. 1996); Alghanim & Sons, W.L.L. v. Toys ‘R’ Us, Inc., 126 F.3d 15 (20) (2nd Cir. 1997); International Standard Electric Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F.Supp. 172 (181 et seq.) (S.D.N.Y. 1990).

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merits should not be held to encompass carte blanche to hand down decisions devoid of any rational legal argument. In such extreme cases, therefore, the enforcement court should be able to refuse enforcement of the award. However, as the experience with the US doctrine of “manifest disregard of the law” has shown, such a defence should be subject to very strict requirements that will normally not be met in practice.633 327 The public-policy defence finally plays an important role in determining the relationship of the award to other decisions (by other arbitral tribunals or state courts) regarding the same dispute, since this relationship is not addressed by other provisions of the NYC. The mere fact that an award meets all the requirements for recognition and enforcement under the Convention in itself should not be sufficient to require a Contracting State to recognize or enforce the award despite the existence of another, particularly prior, decision on the same matter, as this would require the Contracting State to disregard the res judicata effect of that other decision (possibly even a judgment of its own jurisdiction). The res judicata effect of other decisions is therefore widely (albeit not unanimously)634 recognized to be protected by principles of public policy under article V(2)(b).635 Since this public policy is directed at safeguarding the effectiveness of prior decisions from the perspective of the country of enforcement, the enforcing court is in no way bound by the considerations of the arbitral tribunal in that respect.636 cc) Substantive public policy. A violation of substantive public policy derives from the tribunal’s decision on the merits of the dispute submitted to arbitration. As with procedural public policy (supra mn. 321), there is a wide range of possibilities in which substantive public policy can be affected in a particular jurisdiction.637 329 It is particularly with regard to an alleged violation of the enforcement forum’s substantive public policy that the prohibition of a “révision au fond” (supra mn. 179) must be carefully respected. Thus, it is not enough to establish a violation of public policy that the decision rendered by the arbitral tribunal differs in substance from the result that would have been obtained under the law of the enforcement forum; even a deviation of mandatory law of the forum does not necessarily amount to a violation of public policy (supra mn. 307). 330 This restrictive approach is particularly important with regard to the relief granted by the arbitral tribunal, e. g. damages or interest: A mere divergence in the type and amount of damages awarded or in the method of assessment of damages from domestic standards under the lex fori is not enough to support a public-policy defence.638 For the same reason, an award of interest at a considerably higher rate than under forum law 328

See, e. g., Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3341 et seq. Cf. Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 555. 635 China: Hemofarm DD v. Yongning Pharmaceutical Co., Ltd, YCA XXXIV (2009), 478 (484); France: CA Paris, Rev. arb. 1980, 506 (508); also cf. Cass. civ., Rev. arb. 1997, 376 = YCA XXII (1997), 696 (697 et seq.); Russia: Federal Arbitrazh Court, YCA XXXIII (2008), 687 (692 et seq.); UK: E.D. & F. Man (Sugar) Ltd v. Haryanto (No. 2), [1991] IL Pr. 393 (402 et seq.). Also cf., regarding setting-aside proceedings, France: CA Paris, Rev. arb. 2017, 1213 (1217); Germany: BGH, SchiedsVZ 2019, 150 (mn. 5 et seq.); Switzerland: BGer., BGE 140 III 278 (279 et seq.); BGE 141 III 229 (239). – Contra: Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3680 et seq. 636 But see France: Cass. civ., Rev. arb. 1982, 44; CA Paris, Rev. arb. 1983, 497 (499). 637 See, in more detail, Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 559–586; also cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.496. 638 Germany: OLG Dresden, YCA XXIX (2004), 679 (684 et seq.); Russia: Federal Arbitrazh Court, YCA XXXIII (2008), 658 (664 et seq.); USA: National Oil Corp. v. Libyan Sun Oil Co., 733 F.Supp. 800 (818 et seq.) (D.Del. 1990). 633 634

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per se is no violation of public policy.639 However, the threshold to a valid defence under article V(2)(b) is crossed where the remedy awarded is considered excessive as a matter of principle from the perspective of the forum State:640 Thus, an award of “punitive damages” or multiple damages as provided by common law systems, most notably the United States, may be denied enforcement for violating the public policy of jurisdictions adhering to a principle of strictly compensatory damages.641 Consequently, such awards may pass muster in countries where this category of damages is accepted.642 An award of compound interest is widely accepted, even in jurisdictions where compound interest is normally prohibited.643 Again, a violation of public policy may be found where interest is awarded at a grossly excessive rate.644 An important application of substantive public policy is disregard for mandatory 331 provisions that are intended to safeguard the public interests of a state, particularly its political, social or economic organization. Thus, a violation of antitrust and competition law,645 particularly of EU competition law,646 or of import or export restrictions647 may constitute an infringement of the forum’s public policy. Similarly, mandatory rights of commercial agents upon termination as provided by the European Directive 86/653/ EEC have been held to be protected by the public policy defence.648 639 Germany: OLG Hamburg, RIW 1991, 152 (154 et seq.) = YCA XVII (1992), 491 (496 et seq.); also cf. BGH, NJW 1993, 1801 (1802) (regarding foreign judgments); USA: International Standard Electric Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F.Supp. 172 (182) (S.D.N.Y. 1990). – The position may be different in countries applying shari’a principles; see, e. g., Otto/Elwan, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 390. 640 Portugal: Supr. Trib., YCA XLII (2017), 488 (mns 34 et seq.) (award granting a “colossal” amount of damages on the basis of a penalty clause for breach of non-competition obligations by a Portuguese lawyer). 641 Canada: Subway Franchise Systems of Canada Ltd v. Laich, 206 ACWS (3d) 655. – Also cf., regarding the enforcement of foreign judgments: Germany: BGH, NJW 1992, 3096 (3102) = (1993) 32 I. L.M. 1327 (1336 et seq.); Italy: Cass., Foro It. 2007, 1460; Cass., RDIPP 2013, 134. 642 USA: Willis v. Shearson/American Express, Inc., 569 F.Supp. 821 (823 et seq.) (M.D.N.C. 1983); In the matter of an arbitration between Marco Barbier and Shearson Lehman Hutton Inc., 752 F.Supp. 151 (157 et seq.) (S.D.N.Y. 1990). 643 Germany: OLG Hamburg, RIW 1991, 152 (154) = YCA XVII (1992), 491 (496 et seq.); OLG Hamburg, RIW 1992, 939 (940); India: Renusagar Power Co. Ltd v. General Electric Co., YCA XX (1995), 681 (711 et seq.); Switzerland: BGer., YCA XXII (1997), 789 (797 et seq.). 644 See, e. g., Austria: OGH, JBl 2005, 661 (665 et seq.) = YCA XXX (2005), 421 (430 et seq.) (107 % per annum, combined with daily capitalization); USA: Laminoirs-Trefilieries-Cableries de Lens, SA v. Southwire Co., 484 F.Supp. 1063 (1069) (N.D.Ga. 1980). 645 Wolff, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mn. 579; Radicati di Brozolo, (2011) 27 Arb. Int’l 1 (2–17); Tornberg, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 253–266; Germany: BGHZ 30, 89 (95 et seq.) = NJW 1959, 1438 (1440); BGHZ 46, 365 (367 et seq.) = NJW 1967, 1178; OLG Düsseldorf, IPRspr 2004, no. 195, 443 (446) = YCA XXXII (2007), 315 (320); OLG Thüringen, SchiedsVZ 2008, 44 (46) = YCA XXXIII (2008), 534 (539); BGH, SchiedsVZ 2016, 218 (223); USA: Mitsubishi Motors Corp. v. Soler ChrslyerPlymouth, Inc., 473 U.S. 614 (638) (1985); Baxter International, Inc. v. Abbott Laboratories, 315 F.3d 829 (831 et seq.) (7th Cir. 2003); Karen Maritime Ltd v. Omar Int’l Inc., 322 F.Supp. 2d 224 (227 et seq.) (E.D. N.Y. 2004). – But also see Switzerland: BGE 132 III 389 (395 et seq.) = Rev. arb. 2006, 763 (766 et seq.). 646 ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055 (mn. 39); also see Austria: OGH, ÖJZ 1994, 513 = YCA XXIV (1999) 919 (925); Germany: OLG Thüringen, SchiedsVZ 2008, 44 (46) = YCA XXXIII (2008), 534 (539); Greece: Areios Pagos, YCA XXXVI (2011), 284 (285 et seq.); Netherlands: Gerechtshof Den Haag, YCA XXXI (2006), 808 (815). 647 Germany: BGHZ 31, 367 (371 et seq.); India: COSID Inc. v. Steel Authority of India Ltd, YCA XI (1986), 502 (506 et seq.); European Grain & Shipping Ltd v. Seth Oil Mills Ltd, YCA IX (1984), 411 (413 et seq.); Malaysia: Harris Adacom Corp. v. Perkom Sdn Bhd, YCA XXII (1997), 753 (755 et seq.). 648 Austria: OGH, SZ 2017, no. 30 = YCA XLII (2017), 348. – In contrast, cf. Portugal: Supr. Trib., YCA XLII (2017), 484 (mns 28 et seq.), refusing to extent the public policy defence to claims for a goodwill indemnity under a distributership contract.

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It is also widely accepted that an award that ultimately enforces a contract which is directed at an illegal activity, notably a criminal offence, is incompatible with public policy.649 On that basis, in particular, arbitral awards that enforce contracts involving or induced by corruptive practices may be refused enforcement.650

4. Adjournment in view of setting-aside proceedings, article VI NYC Where a proceeding for the setting aside or suspension of the award is pending in the country of origin, the decision on the enforcement of the award may be adjourned pursuant to article VI NYC. Furthermore, the party against whom the award is to be enforced (the respondent) may be ordered to provide suitable security. If the award has already been set aside or suspended, article V(1)(e) applies (supra mns 280 et seq.). Only proceedings pending in the country in which, or under the law of which, the award was made (and thus directed at an annulment or suspension that would constitute a defence to enforcement under article V(1)(e), supra mn. 286) are relevant; as consequence, adjournment will be refused if such proceedings are pending in some other country.651 334 It is generally accepted that the court called upon to enforce the award has discretion in deciding on the adjournment.652 Article VI in itself, however, does not specify the criteria relevant for the court’s decision. Consequently, the court must take into consideration all relevant facts of the individual case and balance the interest of the applicant in a speedy enforcement of his award against the interest of the respondent in being protected against a precipitate enforcement of an award that may later be vacated by the competent court in the country of origin.653 Usually, the courts will be wary of delaying tactics taken by the respondent. Thus, the mere pendency of annulment proceedings in itself will rarely be considered sufficient reason to adjourn enforcement.654 Typical factors that are addressed when deciding on a motion to adjourn are the likelihood that the respondent’s application for annulment will be successful;655 the risk of substantial or irreparable harm to the respondent in case enforcement should go 333

649 Australia: Corvetina Technology Ltd v. Clough Engineering Ltd, 183 FLR 317 (320 et seq.); Austria: OGH, YCA X (1985), 421 (422); France: CA Paris, Rev. arb. 1994, 359 (365 et seq.) = YCA XX (1995), 198 (201); Germany: BGH, NJW 1973, 98 (100); Kenya: Glencore Grain Ltd v. TSS Grain Millers Ltd, YCA XXXIV (2009), 666 (669); UK: Westacre Investments Inc. v. Jugoimport SDPR Holding Co. Ltd, [1999] QB 740 (767 et seq.). 650 France: CA Paris, Rev. arb. 1994, 359 (365) = YCA XX (1995), 198 (201 et seq.); Germany: OLG Hamburg, IPRspr 1999, no. 178, 425 (428) = YCA XXIX (2004), 663 (669); OLG Hamm, SchiedsVZ 2006, 106 (110 et seq.); USA: Oscanyan v. Arms Co., 103 U.S. 261 (277) (1980); also cf. UK: Lemanda Trading Co. v. African Middle East Petroleum Co., [1988] QB 448 (461). 651 See, e. g., Germany: KG, SchiedsVZ 2007, 108 (112) = YCA XXXII (2007), 363 (371). 652 van den Berg, The New York Arbitration Convention of 1958, 1981, 353; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mns 1, 6 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.499; UNCITRAL Guide 2016, p. 269 et seq. (mns 20 et seq.). 653 As for the possible factors to be considered by the court, see in more detail, Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mns 6–14; also cf. Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.504. 654 But see, e. g., USA: Fertilizer Corp. of India v. IDI Management, Inc., 517 F.Supp. 948 (961 et seq.) (S.D. Ohio 1981). 655 van den Berg, The New York Arbitration Convention of 1958, 1981, 353 et seq.; Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mn. 7; Australia: Hallen v. Angledal, YCA XXIX (2004), 520 (531 et seq.); Belgium: CA Bruxelles, Rev. arb. 1998, 181 (193 et seq.) = YCA XXII (1997), 643 (667 et seq.); Canada: Powerex Corp. v. Alcan Inc., [2004] BCSC 876 (mns 25 et seq.) = YCA XXX (2005), 466 (472); Germany: BayObLG, SchiedsVZ 2004, 234 (237) = YCA XXIX (2004), 754 (755 et seq.); UK: Far Eastern Shipping Co. v. AKP Sovcomflot, [1995] 1 Lloyd’s Rep. 520 (524 et seq.); IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp., YCA XXXI (2006), 853 (858); USA: Spier v. Calzaturificio S.p.A., 663 F.Supp. 871 (874 et seq.) (S.D.N.Y. 1987).

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ahead and turn out to be unwarranted656 or the prospective duration of the annulment proceedings in the country of origin.657 The burden of proof regarding the existence of grounds to adjourn the enforcement is on the respondent.658 Where the decision on the enforcement of the award is adjourned, article VI also 335 allows the court to order the respondent to give suitable security. In this respect as well, the decision depends on a balancing of interests and the strengths of the parties’ case (cf. supra mn. 334).659 The specific form and manner in which security may be provided is governed by the law of the forum. Article VI NYC does not provide for the possibility of requiring the applicant to give security (e. g. with regard to a possible claim for reimbursement if the application for annulment turns out to be successful).660

5. Enforcement procedure for arbitral awards a) General. Article III s. 1 NYC provides that each Contracting State shall recognize 336 and enforce Convention awards in accordance with its procedural rules under the conditions laid down in the following articles. The following articles of the NYC that autonomously define the conditions of enforcement are, notably, article IV on the documentation to be supplied by the applicant (supra mns 163–176) and article V on the substantive grounds for refusal of enforcement (supra mns 205–332), but also article VI on the possibility of an adjournment of enforcement proceedings (supra mns 333–335). With respect to the conditions set down in these provisions, a Contracting State is consequently prohibited from imposing any stricter requirements: These “conditions” of enforcement are exhaustively governed by the NYC.661 Apart from that, the procedure of enforcement is governed by the law of the respective Contracting State. In that respect, article III s. 2 only prohibits a discriminatory treatment of Convention awards as compared to domestic awards (infra mns 347–348). Article III s. 1 thus requires a careful distinction between “conditions of enforce- 337 ment”, which are exclusively governed by the NYC, and “rules of procedure”, which are referred to the law of the Contracting State.662 The distinction cannot always be clearly drawn: As a matter of principle, the question whether an arbitral award shall be enforced in a Contracting State at all may be considered to relate to the “conditions of enforcement” subject to the provisions of the NYC, while the regulation of the technical Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mn. 10. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mn. 8; Australia: Toyo Engineering Corp. and John Holland Pty Ltd, YCA XXVI (2001), 750 (754); Canada: Powerex Corp. v. Alcan Inc., [2004] BCSC 876 (mns 26 et seq.) = YCA XXX (2005), 466 (472); Germany: KG, SchiedsVZ 2013, 112 (118) = YCA XXXVIII (2013), 384 (389); Italy: CA Firenze, Riv. arb. 2006, 127 = YCA XXXII (2007), 403 (405); UK: Far Eastern Shipping Co. v. AKP Sovcomflot, [1995] 1 Lloyd’s Rep. 520 (524 et seq.); USA: Jorf Lasfar Energy Co., S.C.A. v. AMCI Export Corp., 2005 WL 3533128 (3) (W.D.Pa. 2005) = YCA XXXI (2006), 1370 (1373); Alto Mar Girassol v. Lumbermens Mutual Casualty Co., 2005 WL 947126 (3) (N.D.Ill. 2005) = YCA XXX (2005), 1152 (1155). 658 van den Berg, The New York Arbitration Convention of 1958, 1981, 353 et seq.; Belgium: CA Bruxelles, Rev. arb. 1998, 181 (193 et seq.) = YCA XXII (1997), 643 (667 et seq.); USA: Unrvneshprom State Foreign Economic Enterprise v. Tradeway, Inc., 1996 WL 107285 (7 et seq.) (S.D.N.Y. 1996) = YCA XXII (1997), 958 (965). 659 Cf. Liebscher, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. VI mns 18–22. 660 Germany: OLG Frankfurt, RIW 1994, 686 = YCA XXII (1997), 699 (701); USA: Spector v. Torenberg, 852 F.Supp. 201 (204) (S.D.N.Y. 1994). 661 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 21; Kronke, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 15. 662 See, e. g., Germany: KG, SchiedsVZ 2007, 108 (112) = YCA XXXII (2007), 363 (369 et seq.); Italy: Cass., YCA XVIII (1993), 427 (428 et seq.); also cf. Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3409 et seq.; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.292. 656 657

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procedure of enforcement may be held to fall within the domain of national procedural law. However, even clearly procedural questions like, for example, formal requirements regarding an application of enforcement (infra mn. 338), may result in a dismissal of the application in a particular case. Furthermore, there is a certain danger that Contracting States may impose, on the basis of a characterization as “procedural” questions, limitations to the enforcement of foreign awards that may undermine the pro-arbitration thrust of the Convention. Thus, it is often necessary to carefully analyze whether a particular rule of procedure imposed by the law of a Contracting State is in fact compatible with the conditions of enforcement laid down by articles IV et seq. 338 The law of the respective country of enforcement thus determines the competent authority within that country663 (as for questions of international jurisdiction, see infra mns 340–343), the form and manner of applications to enforce the award, requirements of representation by legal counsel admitted to the local bar, the conduction of the proceedings (oral or written, adversarial or ex parte),664 the reimbursement of costs,665 the recourse available against the decision on an application for enforcement,666 the rules on provisional enforcement,667 and the availability of declaratory judgments of recognition or non-recognition.668 As for the consideration of counterclaims, see infra mn. 346. 339 The NYC does not specify whether enforcement of the award is predicated on a prior leave of enforcement (“exequatur”) issued by a competent court of the State of enforcement; this is also a procedural question to be determined by the law of that State.669 The same is true with regard to the question whether an award that does not have an enforceable content (e. g. an award denying a claim) may be declared enforceable.670 As for the possibility of an “action on an award”, see infra mn. 351. 340

b) Jurisdictional requirements for enforcement, forum non conveniens. It is a difficult question whether a Contracting State may require the existence of some factual basis of (“personal” or “international”) jurisdiction as a procedural requisite to the enforcement of a Convention award, e. g., a residence, domicile or principal place of business of the award debtor, or the presence of assets in the respective State. Such requirements are notably imposed by common law countries on the basis of article III s. 1.671 United States courts, for example, require the existence of sufficient “minimum

663 See, e. g., France: TGI Paris, Rev. arb. 1990, 693 (695) = YCA XVI (1991), 543 (545); Spain: Trib. Supr., YCA XXXI (2006), 834 (838); USA: Seetransport Wiking Trader Schiffahrtsgesellschaft mbH & Co., Kommanditgesellschaft v. Navimpex, 793 F.Supp. 444 (S.D.N.Y. 1992); Sembawang Shipyard, Ltd v. Charger, Inc., 955 F.2d 983 (987 et seq.) (5th Cir. 1992). 664 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 13. 665 See, e. g., USA: Matter of Arbitration Between Trans Chemical Ltd and China Nat. Machinery Import and Export Corp., 978 F.Supp. 266 (311 et seq.) (S.D.Tex. 1997). 666 See, e. g., Canada: Northern Sales Co. Ltd v. Compania Maritima Villa Nova SA, [1992] 1 F.C. 550 = YCA XVIII (1993), 363 (376); Peru: Corte Suprema, YCA XXXIII (2008), 616 (617); UK: Soinco SACI v. Novokuznetsk Aluminium Plant (No. 2), YCA XXIII (1998), 795 (796 et seq.). 667 See, e. g., Italy: CA Milano, YCA XXIII (1998), 723 (724 et seq.). 668 See, e. g., Austria: § 612 ZPO; France: TGI Paris, Rev. arb. 1990, 693 (694 et seq.) = YCA XVI (1991), 543; Italy: Cass., YCA XXXI (2006), 798 (800 et seq.); USA: Sharp Corp. v. Hisense USA Corp., 292 F. Supp. 3d 157 (167 et seq.) (D.D.C. 2017). 669 Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 12. 670 Such possibility exists, for example, in Germany: BayObLG, BB 1999, 1948. 671 Canada: TMR Energy Ltd v. State Property Fund of Ukraine & Aviation Scientific Technical Complex Named After O.P., 2003 FC 1517 (mns 24 et seq.) = YCA XXIX (2004), 607 (612 et seq.); USA: Monegasque de Reassurances S.A. M. v. Nak Naftogaz of Ukraine, 311 F.3d 488 (497, 501) (2nd Cir. 2002); Frontera Res. Azerbaijan Corp. v. State Oil Co. of the Azerbaijan Republic, 582 F.3d 393 (397) (2nd Cir. 2009).

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contacts” with the forum state for the purpose of establishing personal jurisdiction.672 Where such requirements exist, it is a further question whether the presence of any assets of the award debtor in itself is sufficient to establish jurisdiction or whether it must be reinforced by some other relevant connection to the country of enforcement.673 In contrast, some courts have held that no further jurisdictional requirements exist 341 for the enforcement of a foreign award under the Convention, in particular, that it is not necessary for the award debtor to have his domicile or any assets subject to execution in the country of enforcement.674 However, some courts have refused to declare an award enforceable in such cases not on jurisdictional grounds but for lack of a legitimate legal interest.675 This restriction as well has been held compatible with the NYC, as it does not relate to the merits of the application for enforcement but only to the admissibility of enforcement proceedings in general, a question that article III leaves to the law of the country of enforcement. In a similar vein, United States courts have characterized the doctrine of forum non 342 conveniens as a procedural rule that may apply under article III s. 1.676 On that basis, enforcement of an award falling under the Convention may be denied enforcement, even though a basis for jurisdiction formally exists (cf. supra mns 340–341), because there is an alternative forum for enforcement which the court considers manifestly more convenient, e. g. because there are no relations to the United States677 or the only connection to the United States consists in the presence of assets.678 The requirement of some factual basis of jurisdiction for the purpose of enforcing a 343 foreign award under the Convention has grave consequences for the applicant because, in contrast to other procedural requirements (cf. supra mn. 338), where a jurisdictional basis is lacking, the award will not be enforced in that State altogether. This effectively results in a substantive condition for the enforcement of a Convention award requiring that either the parties or the dispute have a relevant connection to the Contracting State 672 Frontera Resources Azerbaijan Corp. v. State Oil Co. of the Azerbaijan Republic, 582 F.3d 393 (396 et seq.) (2nd Cir. 2009); Telecordia Tech Inc. v. Telkom SA Ltd, 458 F.3d 172 (179) (3rd Cir. 2006); Base Metal Trading v. OJSC “Novokuznetsky Aluminum Factory”, 283 F.3d 208 (4th Cir. 2002); First Investment Corp. of the Marshall Islands v. Fujian Mawei Shipbuilding Ltd, 703 F.3d 742 (746 et seq.) (5th Cir. 2013); Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (9th Cir. 2002); GSS Group Ltd v. National Port Authority, 680 F.3d 805 (811 et seq.) (D.C. Cir. 2012); also cf. Strong, (2004) 21 J. Int’l Arb. 479–492. Also see India: Brace Transport Corp. of Monrovia (Liberia) v. Orient Middle East Lines Ltd, AIR 1994 SC 1715 (mns 14 et seq.) = YCA XXI (1996), 552 (554 et seq.); Onyema, in: Gaillard/Di Pietro (eds), Enforcement of Arbitration Agreements and International Arbitral Awards, 2008, 597, 601. 673 The presence of assets has been considered sufficient in: Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 26–56 et seq.; Germany: OLG Dresden, SchiedsVZ 2007, 327 (328) = YCA XXXIII (2008), 510 (512). Cf. USA: Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (1127) (obiter) (9th Cir. 2002). 674 Australia: ML Ubase Holdings Co. Ltd v. Trigem Computer Inc., [2005] NSWSC 224 = YCA XXXI (2006), 537 (541); France: CA Paris, Rev. arb. 2013, 295 = YCA XXXVIII (2013), 373 (375); Germany: OLG München, OLGR München 1995, 57 (mns 13 et seq.); South Africa: Laconian Maritime Enterprises Ltd v. Agromar Lineas Ltd, SALR 1984 (3) 233 (238 et seq.) = YCA XVII (1987), 499 (501); UK: Rosseel N.V. v. Oriental Commercial Shipping (UK) Ltd, [1991] 2 Lloyd’s Rep. 625 (629) = YCA XVI (1991), 615 (620). 675 See, in particular, Germany: BGH, SchiedsVZ 2008, 196 (197 et seq.), and court below KG, SchiedsVZ 2007, 108 (112) = YCA XXXII (2007), 363 (369 et seq.). 676 Monégasque de Réassurances S.A. M. v. NAK Naftogaz of Ukraine, 311 F.3d 488 (495 et seq.) (2nd Cir. 2002); Termorio SA E.S.P. v. Electrificadora Del Atlantico S.A. E.S.P., 421 F.Supp. 2d 87 (103 et seq.) (D.D. C. 2006); cf. Figueireido v. Republic of Peru, 665 F.3d 384 (390 et seq.) (2nd Cir. 2011) (Panama Convention); Frontera Resources Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d 393 (402) (2nd Cir. 2009); forum non conveniens was considered but denied in Sonera Holding B.V. v. Cukurova Holding A.S., 895 F.Supp. 2d 513 (522 et seq.) (S.D.N.Y. 2012); Tatneft v. Ukraine, 301 F. Supp. 3d 175 (192 et seq.) (D.D.C. 2018). 677 Monégasque de Réassurances S.A. M. v. NAK Naftogaz of Ukraine, 311 F.3d 488 (2nd Cir. 2002). 678 Figueireido v. Republic of Peru, 665 F.3d 384 (391 et seq.) (2nd Cir. 2011).

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where enforcement of the award is sought. Such a condition, however, is hard to reconcile with the general principle that the Convention’s scope of application is exclusively determined by the place where the award was made, regardless of whether there are any other connections either to the arbitral situs or the enforcement forum (supra mns 24–25). As a consequence, both the doctrine of forum non conveniens and the imposition of jurisdictional requirements in general should be held incompatible with the unqualified obligation of Contracting States under article III NYC to recognize and enforce arbitral awards, unless a ground of refusal exists under article V.679 Only in the exceptional case of an application for enforcement in a country where there are no assets of the award debtor and where no apparent possibility of enforcement exists, the application may be dismissed for lack of a legitimate legal interest, but such dismissal should not be predicated on the national law of each individual Contracting State but on the NYC’s autonomous principle of good faith (supra mn. 198). c) Periods of limitation. Some States impose limitation periods on the enforcement of foreign awards, either specifically680 or by applying the general rules on limitations to the enforcement of arbitral awards.681 Again, since the expiry of a limitation period will definitely preclude the enforcement of an award (cf. supra mn. 343 regarding jurisdictional requirements), the question arises whether this is compatible with the NYC, which does not specifically provide for any temporal limits to the obligation to enforce arbitral awards falling within its scope. 345 In general, the imposition of time limits for the enforcement of an award is characterized as a procedural question and thus considered compatible with article III s. 1.682 In fact, the determination of the relevant limitation period is a problem of characterization.683 In that respect, the application of the enforcement forum’s limitation periods perfectly corresponds with the prevailing view that the expiry of a limitation period existing under the lex arbitri is irrelevant to the enforceability of the award in another country (supra mn. 278). However, as argued above (mn. 278), it 344

679 Regarding forum non conveniens: Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 22; Borris/Hennecke, ibid., mns 25–26; Kronke, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 15; Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 2987 Mayer, in: Krauskopf/Babey (eds), Internationales Wirtschaftsrecht, 2014, 13 (39 et seq.). – Regarding jurisdictional requirements in general: Börner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 123 et seq. Also see Park, (2007) 18(2) ICC Bull. 65 (70 et seq.). 680 E. g. Netherlands: article 3:324 BW (20 years); UK: section 7 Limitation Act 1980 (6 years); USA: § 207 FAA (3 years). Also see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 67–68; Akter, in: Fach Gomez/Lopez-Rodriguez (eds), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019, 85–98. 681 E. g. Argentina: article 4023 C.civ. (10 years); Austria: § 1478 ABGB (30 years), cf. OGH, SZ 74, no. 50, 288 (296); France: article 2224 C.civ. (5 years; Italy: article 2946 C.civ. (10 years). 682 van den Berg, The New York Arbitration Convention of 1958, 1981, 241; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mns 14–16; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.303; Börner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 127; Australia: Antclizo Shipping Corp. v. The Food Corp. of India, [1998] WASC 342; Canada: Compania Maritima Villa Nova SA v. Northern Sales Co., [1992] 1 FC 550 = YCA XVIII (1993), 363 (376); Yugraneft Corp. v. Rexx Management Corp., [2010] 1 SCR 19 = YCA XXXV (2010), 343 (345); UK: Good Challenger Navegante SA v. Metalexportimport SA, [2003] EWCA Civ 1668 (mns 104 et seq.); USA: Seetransport Wiking Trader Schiffahrtsgesellschaft mbH & Co. v. Navimpex Centrala Navala, 989 F.2d 572 (581) (2nd Cir. 1993); Gulf Petro Trading Co., Inc. v. Nigerian Nat’l Petroleum Corp., 288 F.Supp. 2d 783 (788 et seq.) (N.D.Tex. 2003). 683 Cf. Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mns 14–15.

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would be preferable to determine the temporal limitations to the award’s effectiveness uniformly in all countries pursuant to the lex arbitri.684 d) Counterclaims and set-off. It is also doubtful whether and under what conditions 346 counterclaims may be asserted against the enforcement of the award, e. g. by way of setoff.685 Again, the question arises whether a consideration of possible counterclaims violates the exhaustive character of article V or may be characterized as a procedural question that is governed by the law of the respective enforcement forum. In that respect, it must be taken into account that the assertion of a counterclaim leaves the enforceability of the foreign award as such unaffected; in fact, it is predicated exactly on such enforceability, since the defence rests on circumstances external to the award and the dispute decided by the tribunal. The decision whether to allow counterclaims to be raised in enforcement proceedings is based primarily on considerations of procedural efficiency (speedy enforcement of the award on the one hand, efficient disposition of both the award claim and the counterclaim within the same proceedings on the other hand). It should consequently be characterized as a procedural question governed by the law of the respective enforcement forum that is not precluded by the NYC.686 – However, where the counterclaim was considered by the tribunal and the tribunal decided that the counterclaim did not exist, such holding cannot be challenged by the enforcing court as this would constitute an improper révision au fond.687 e) Prohibition of discriminatory provisions. Where the procedural law of a Con- 347 tracting State applies to the enforcement of an arbitral award under article III s. 1, article III s. 2 provides that that Contracting State shall not impose “substantially more onerous conditions or higher fees or charges” on the recognition or enforcement of Convention awards than are imposed regarding domestic awards. This prohibition of discriminatory treatment has been held to be violated where national law provides for a recourse against the leave of enforcement of a foreign award that is not available with regard to domestic awards.688 However, article III s. 2 only prohibits “substantially” more onerous procedural conditions of enforcements; thus, minor variations in the treatment of foreign and domestic awards may be acceptable.689 684 In contrast, the lex causae governing the underlying claim should not be determinative with regard to the effectiveness of the award; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 15. But see Börner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 127 et seq. – However, some jurisdiction do apply the lex causae with regard to limitations periods; see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 68 (with further references). 685 Pro: Austria: OGH, SZ 74, no. 50, 288 (295 et seq.); Germany: BGH, SchiedsVZ 2010, 330 (331) = YCA XXXVI (2011), 279 (281); USA: Jugometal v. Samincorp., Inc., 78 FRD. 504 (506); Compagnie Noga d’Importation et d’Exportation SA v. Russian Federation, 2002 WL 31106345, 1 (10 et seq.) (S.D.N.Y. 2002). – Contra: UK: Tongyuan (USA) International Trading Group v. Uni-Clan Ltd, YCA XXVI (2001), 886 (891 et seq.); USA: Fertilizer Corp. of India v. IDI Management, Inc., 517 F.Supp. 948 (963) (S.D.Ohio 1981); Geotech Lizenz AG v. Evergreen Systems Inc., 697 F.Supp. 1254 (1257) (E.D.N.Y. 1988); Kwong Kam Tat Trading Co., Ltd v. Comsup Commodities, Inc., YCA XIX (1994), 797 (798 et seq.) (D.N.J. 1992). 686 Borris/Hennecke, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. V mns 37–38; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.303; Börner, in: Kronke et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards, 2010, 131 et seq. – Contra: Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 23. 687 See, e. g., Germany: OLG München, SchiedsVZ 2013, 179 (180). 688 Netherlands: Hoge Raad, NJ 2012/55 = YCA XXXV (2010), 423 (426); Hoge Raad, NJB 2017, 857 = YCA XLII (2017), 452 (mns 17 et seq.); also cf. supra mn. 287 fn. 550. 689 van den Berg, The New York Arbitration Convention of 1958, 1981, 234 et seq.; Scherer, in: Wolff (ed.), New York Convention, 2nd ed., 2019, Art. III mn. 24; Haas/Kahlert, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, mn. 21.307. Also cf. Italy: CA Milano, YCA XXIII (1998), 727 (728 et seq.).

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In line with the more-favourable law principle of article VII(1) (infra mn. 349), article III s. 2 does not prohibit more favourable treatment of Convention awards,690 e. g. the provision of longer time limits than for domestic awards691 (but also cf. supra mns 344–345).

6. Alternative means of enforcement 349

a) Enforcement under more favourable law of the Contracting State, article VII(1) NYC. Article VII(1) allows for the application of more favourable provisions contained in national law or other conventions applicable in a Contracting State to the recognition and enforcement of arbitral awards (supra mns 13–17). This option has become particularly important with regard to formal requirements for arbitration agreements (supra mns 219–221) and the enforcement of awards that were set aside in the country of origin (supra mns 289–293).

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b) Recognition and enforcement of court decisions granting exequatur of the award. The leave of enforcement of an award (“exequatur”) rendered by a foreign court as such cannot be recognized or declared enforceable under the NYC, since the NYC only applies to the recognition and enforcement of the award itself. However, the national procedural law of a Contracting State may provide for the possibility of recognizing and enforcing a foreign exequatur pursuant to the rules on the recognition and enforcement of foreign judgments.692 This possibility may then exist alternatively to the enforcement of the award under the NYC.

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c) Other means of enforcement. The NYC also does not affect the availability of alternative technical means of enforcement of arbitral awards that may exist under the domestic law of a Contracting State, e. g. an “action on the award” or other proceedings assimilated to actions on contracts.693 Such alternative proceedings may also be characterized as procedural rules of enforcement that are governed by forum law under article III s. 1 (cf. supra mn. 339). 690 van den Berg, The New York Arbitration Convention of 1958, 1981, 243. Naturally, the NYC does not require Contracting States to create a regime treating foreign awards more favourably than domestic awards: UK: Far Eastern Shipping Co. v. AKP Sovcomflot, [1995] 1 Lloyd’s Rep. 520 (524) = YCA XXI (1996), 699 (705). 691 See, e. g., USA: Convention awards: 3 years (§ 207 FAA), domestic awards: 1 year (§ 9 FAA). 692 Enforcement of a foreign exequatur was allowed in Jordan: Cour cass., Rev. arb. 1993, 137 (138 et seq.) = YCA XVIII (1993), 437 (438 et seq.); USA: Seetransport Wiking Trader Schiffahrtsgesellschaft mbH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala and Unzinexportimport, 28 F.3d 79 (81 et seq.) (2nd Cir. 1994) = YCA XX (1995), 988 (990 et seq.); Commissions Import Export SA v. Republic of the Congo, 757 F.3d 321 (326 et seq.) (D.C. Cir. 2014) (enforcement of the English exequatur of a French award). – In Germany, the controversial judgment of BGH, NJW 1984, 2765 = YCA X (1985), 426, allowing enforcement of the confirmation of an award by a New York court, was overruled by BGH, SchiedsVZ 2009, 285 = YCA XXXV (2010), 374; as a consequence, the award creditor is now limited to enforcing the foreign award as such. – The Brussels I Regulation (recast) does not allow for the enforcement of a foreign judgment granting exequatur of an arbitral award; see Art. 1(2)(d) Brussels I Regulation (recast); Rogerson, in: Magnus/Mankowski (eds), Brussels Ibis Regulation, 2016, Art. 1 mns 42, 50. 693 See, e. g., UK: Redfern & Hunter, International Arbitration, 6th ed., 2015, mn. 11.14; USA: Born, International Commercial Arbitration, 2nd ed., 2014, Vol. III, 3729 et seq.; for an overview see Bermann, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 20.

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C. Investment Treaty Arbitration Bibliography: Bjorklund/Newcombe, International investment law and arbitration: cases, materials, and commentary, Oxford University Press 2017; Burgstaller/Zarowna, Effects of Disposal of Investments on Claims in Investment Arbitration, (2019) 36 J. Int’l Arb. 231–258; Commission/Moloo, Procedural issues in international investment arbitration, Oxford University Press 2018; Crawford, Treaty and Contract in Investment Arbitration, (2008) 24 Arb. Int’l 351–374; Demirkol, Judicial acts and investment treaty arbitration, Cambridge University Press 2018; Dolzer/Schreuer, Principles of International Investment Law, 2nd ed., Oxford University Press 2012; Douglas, The Hybrid Foundations of Investment Treaty Arbitration, (2003) 74 BYBIL 151–289; Douglas, The International Law of Investment Claims, Cambridge University Press 2009; Dumberry, A guide to general principles of law in international investment arbitration, Oxford University Press 2020; Ferrari/King, Investment arbitration in a nutshell, West Academic Publishing 2020; Hobér, Investment treaty arbitration: problems and exercises, Edward Elgar Publishing 2018; McLachlan/Shore/Weiniger, International Investment Arbitration: Substantive Principles, 2nd ed., Oxford University Press 2017; Newcombe/Paradell, Law and Practice of Investment Treaties: Standards of Treatment, Kluwer 2009; Paulsson, Jurisdiction and Admissibility, in: Aksen/Böckstiegel/ Mustill/Patocchi/Whitesell (eds), Global Reflections on International Law, Commerce and Dispute Resolution, Liber Amicorum in honour of Robert Briner, ICC Publishing 2005, 601–617; Reed/Paulsson/Blackaby, Guide to ICSID Arbitration, 2nd ed., Kluwer 2011; Rubins, Provisional measures in investment arbitration, Oxford University Press 2017; Salacuse, The Law of Investment Treaties, 2nd ed., Oxford University Press 2015; Schreuer, The ICSID Convention: A Commentary, 2nd ed., Cambridge University Press 2009; Sinclair, The Origin of the Umbrella Clause in the International Law of Investment Protection, (2004) 20 Arb Int’l 410–434; Sipiorski, Good faith in international investment arbitration, Oxford University Press 2019; Sourgens, Evidence in international investment arbitration; Oxford University Press 2018; Sornarajah, The International Law on Foreign Investment, 4th ed., Cambridge University Press 2017; United Nations Conference on Trade and Development (UNCTAD), UNCTAD’s Reform Package for the International Investment Regime, United Nations 2018, available online at https:// investmentpolicy.unctad.org/uploaded-files/document/UNCTAD_Reform_Package_2018.pdf (accessed 1 August 2020); Wälde, The “Umbrella” Clause in Investment Arbitration – A Comment on Original Intentions and Recent Cases, (2005) 6 JWIT 183–236; Waibel, Sovereign Defaults before International Courts and Tribunals, Cambridge University Press 2011; Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration, Oxford University Press 2013; Wehland, The Transfer of Investments and Rights of Investors under International Investment Agreements – Some Unresolved Issues, (2014) 30 Arb. Int’l 565–576; Wehland, The Regulation of Parallel Proceedings in Investor-State Disputes, (2016) 31 ICSID Review 576–596; Wehland, Competing Dispute Resolution Mechanisms in Public Contracts and International Investment Agreements, in: Audit/Schill (eds), Transnational Law of Public Contracts, Bruylant 2016, 375–403; Wehland, Jurisdiction and Admissibility in Proceedings under the ICSID Convention and the ICSID Additional Facility Rules, in: Baltag (ed.), ICSID Convention after 50 Years: Unsettled Issues, Kluwer 2017, 227–247; Wehland, Blue Bank International v. Venezuela: When Are Trust Assets Protected under International Investment Agreements?, (2017) 34 J. Int’l Arb. 947–962; Wehland, Domestic Courts and Investment Treaty Tribunals: The Effect of Local Recourse Against Administrative Measures on the Breach of Investment Protection Standards, (2019) 36 J. Int’l Arb. 207–229; Yannaca-Small, Arbitration under international investment agreements: a guide to the key issues, 2nd ed., Oxford University Press 2018. International conventions and other international instruments: 2009 Association of Southeast Asian Nations (ASEAN) Comprehensive Investment Agreement; 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention); 2001 Draft articles on the Responsibility of States for internationally wrongful acts, adopted by the International Law Commission at its fifty-third session (2001 ILC Draft Articles on State Responsibility); 1994 Energy Charter Treaty; 1994 General Agreement on Trade in Services (GATS); 2006 ILC Draft Articles on Diplomatic Protection; 1992 North American Free Trade Agreement; 1976 UNCITRAL Arbitration Rules; 2010 UNCITRAL Arbitration Rules; 2014 UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules); 2014 United Nations Convention on Transparency in Treaty-based Investor-State Arbitration.

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Part 2. International Conventions and Treaties Contents I. Introduction ..................................................................................................... 1 II. The general requirements for the protection of investors under IIAs 11 1. The nationality of investors ..................................................................... 12 2. The existence of an investment............................................................... 15 a) General characteristics of an investment......................................... 17 b) Link to the territory of the host State .............................................. 20 c) Legality of the investment ................................................................... 22 d) Specific approval requirements .......................................................... 24 e) Timing of the investment.................................................................... 26 f) The protection of shareholders and indirect investments ........... 28 III. Investor-State arbitration under treaty dispute resolution mechanisms .................................................................................. 31 1. Jurisdiction ratione personae.................................................................... 34 2. Jurisdiction ratione materiae ................................................................... 35 3. Jurisdiction ratione temporis.................................................................... 40 4. Additional requirements for the reliance of an investor on the dispute resolution clause in an IIA ........................................................ 41 a) Cooling-off periods............................................................................... 42 b) Prior-recourse to court requirements............................................... 44 c) Fork-in-the-road provisions ............................................................... 47 5. Ex-ante consolidation and proceedings involving multiple claimants....................................................................................................... 49 IV. Substantive protection standards under IIAs ........................................... 52 1. Protection in the event of an expropriation......................................... 54 2. Fair and equitable treatment.................................................................... 63 3. Full protection and security ..................................................................... 79 4. National treatment ..................................................................................... 83 5. Most-Favoured-Nation treatment........................................................... 87 6. Prohibition of unreasonable or discriminatory measures ................. 92 7. Umbrella clauses ......................................................................................... 95 V. Conclusion........................................................................................................ 101

I. Introduction Today’s framework for the protection of international investments is primarily based on a network of bi- and multilateral treaties, which are often referred to by the generic term of International Investment Agreements (IIAs).1 The total number of Bilateral Investment Treaties (BITs) is estimated at close to 3,000 worldwide, and an increasing number of bilateral Free Trade Agreements (FTAs) similarly address investment issues. In addition to these instruments, several multilateral treaties also contain investment chapters, the most important of these being the NAFTA2 and the Energy Charter Treaty (ECT). 2 While there are significant differences between these various treaties, one common characteristic of IIAs is that they usually confer rights of both a substantive and a procedural nature to investors with the nationality of one signatory making an investment in the territory of another signatory. The present Chapter deals with arbitral proceedings between investors and host States relating to these rights.3 Investment 1

1 For a historical overview of the formation of the modern IIA network see Dolzer/Schreuer, Principles of International Investment Law, 2nd ed., 2012, 6–12. 2 On 30 November 2018, the NAFTA parties signed a free trade agreement (the United States-MexicoCanada Agreement or USMCA), which upon ratification is meant to replace the NAFTA. 3 The present Chapter does not address proceedings that exclusively relate to the protection of investments under contractual arrangements or the domestic law of a host State nor does it address State-to-State arbitration based on IIAs.

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treaty arbitrations tend to raise an intricate amalgam of domestic and public international law issues. In addition to IIAs, the framework for the protection of international investments comprises a number of other legal instruments, some of which are international and some of which are domestic in nature. In terms of international treaties, the most important of these is the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), which offers a general procedural framework for the resolution of investment disputes. Customary international law, as expressed for instance in the 2001 ILC Draft Articles on State Responsibility, applies with regard to those matters that are not addressed in the applicable treaties. At the same time, international law is not the only legal order that may become relevant in the context of an investment treaty dispute. Certain aspects of the international protection of investments can in fact not be addressed without having recourse to the domestic laws of the signatories to an IIA. This is the case in particular with regard to property rights, which are at the heart of the notion of investment and can only arise under the laws of a particular State.4 Similarly, the definition of nationality with regard to natural persons is typically left to the laws of the home State of an investor.5 As a consequence, domestic laws often have a significant impact on the rights of investors under IIAs. The relationship between investors and host States in a broader sense is frequently also defined by contractual arrangements involving the State or a sub-State entity as well as licenses or permits issued by a State agency, all of which can in turn create rights and obligations for investors under a host State’s domestic laws. In addition, some domestic legal orders specifically provide for substantive protection standards and procedural rights similar to those that are usually found in IIAs.6 In terms of case law, the published decisions rendered in investment treaty arbitrations provide a quickly growing body of arbitral precedent that is frequently consulted in subsequent cases. Given the ad hoc composition of arbitral tribunals and the absence of any hierarchy between them, this body of precedent is not homogenous, with tribunals sometimes taking conflicting approaches regarding largely identical issues. While precedents are not binding on subsequent investment treaty tribunals, there is clearly a practice for tribunals to refer to relevant earlier cases as convincing authority and to justify a departure from any findings made in earlier proceedings.7 4 Once a property right is recognized by the municipal law of the host state, its continuity is protected under the treaty standards, see EnCana v. Ecuador, UNCITRAL, Award of 3 February 2006, para. 183. The protection under IIAs is therefore based on an acquired rights paradigm, see Douglas, (2003) 74 BYBIL 151 (200). 5 See infra mn. 14. 6 Such domestic investment laws have occasionally been understood by arbitral tribunals as unilateral declarations by the State promulgating them, with the consequence that they would have to be interpreted in accordance with the principles developed by the ICJ with regard to unilateral declarations, see Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010, paras 83, 85; Cemex v. Venezuela, ICSID, Decision on Jurisdiction of 30 December 2010, para. 79; Brandes Investment v. Venezuela, ICSID, Award of 2 August 2011, para. 36; Pac Rim Cayman v. El Salvador, ICSID, Decision on Jurisdictional Objections of 1 June 2012, para. 5.33. 7 Some tribunals have taken the view that arbitrators should, even beyond the argumentative value of previous decisions, depart from a jurisprudence constante only for compelling reasons, so as to help the fostering of a predictable normative environment, see e.g. Noble Energy v. Ecuador, ICSID, Decision on Jurisdiction of 5 March 2008, para. 50; Duke Energy v. Ecuador, ICSID, Award of 18 August 2008, para. 117; Renta 4 v. Russia, SCC, Award on Preliminary Objections of 20 March 2009, para. 16; Saipem v. Bangladesh, ICSID, Award of 30 June 2009, para. 90; Bayindir v. Pakistan, ICSID, Award of 27 August 2009, para. 145; Daimler Financial Services v. Argentina, ICSID, Award of 22 August 2012, para. 52. In addition, it has occasionally been assumed that investment treaty awards may ultimately become part of

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The majority of investment treaty arbitrations are conducted under the procedural regime established by the ICSID Convention, which has some unique characteristics in that it is largely self-contained and insulated from any national legal order.8 At the same time, a significant number of investment treaty arbitrations are conducted outside the ICSID framework, in particular under the UNCITRAL Arbitration Rules.9 As a consequence, there is no complete overlap between the ICSID system and investment treaty arbitration, and the two notions need to be carefully distinguished.10 8 Since investment treaty arbitrations can in principle be conducted under any set of arbitration rules, they show few truly unique procedural characteristics. While the ICSID system features some procedural particularities, in particular when it comes to the review of arbitral decisions and the enforcement of arbitral awards,11 non-ICSID treaty arbitrations are governed by the arbitration laws of their seats to the same extent as any other arbitral proceedings, and reference in this regard can be made to the relevant country Chapters in this handbook. 9 Some procedural issues may arise more frequently in the context of investment treaty arbitrations than in other types of arbitral proceedings. These include the question whether to bifurcate proceedings into a jurisdictional and a merits phase,12 issues relating to public access to the arbitral record13 and the possibility of third parties to present their own submissions to a tribunal,14 as well as challenges of arbitrators based on previously expressed legal opinions on contentious legal issues15 or the need to adopt such opinions when acting as counsel in concurrent investment treaty proceedings.16 7

the body of international law under article 38(1)(d) of the ICJ Statute, see Amco v. Indonesia, ICSID, Decision on Annulment of 16 May 1986, para. 44; Camuzzi v. Argentina II, ICSID, Decision on Objections to Jurisdiction of 10 June 2005, para. 19; Suez and Vivendi v. Argentina, ICSID, Decision on Liability of 30 July 2010, para. 189. 8 With regard to ICSID arbitration generally see Schreuer, The ICSID Convention: A Commentary; Reed/Paulsson/Blackaby, Guide to ICSID Arbitration, 2nd ed., 2011. ICSID is in the process of overhauling its Arbitration Rules. For the proposed amendments see ICSID Secretariat, Working Paper #3 of 16 August 2019, available at https://icsid.worldbank.org/en/Documents/WP_3_VOLUME_1_ENGLISH. pdf (accessed 1 August 2020). 9 While a number of IIAs allow investors to start treaty-based arbitrations under the rules of arbitral institutions such as the ICC, the LCIA, or the SCC, proceedings under these rules only represent less than 10 % share of the total, see UNCTAD, Special Update on Investor-State Dispute Settlement: Facts and Figures, 7 November 2017, available at https://unctad.org/en/PublicationsLibrary/diaepcb2017d7_en.pdf (accessed 1 August 2020). 10 It should equally be noted that not all ICSID arbitrations are investment treaty arbitrations. While most ICSID arbitrations today do arise under investment treaties, ICSID proceedings can (like any type of arbitral proceedings) in principle also be based on a contract or a domestic investment law. ICSID arbitrations and investment treaty arbitrations are thus best seen as two partially intersecting circles. 11 See in particular article 53(1) ICSID, providing that awards “shall not be subject to any appeal or to any other remedy except those provided for in this Convention.” The most important remedy against an ICSID award is the annulment procedure under article 52 ICSID. Signatories to ICSID are required to enforce pecuniary obligations imposed by ICSID awards as if the relevant awards were final judgments of their own courts, subject, however, to applicable domestic rules on State immunity, see articles 54 and 55 ICSID. 12 See article 41(2) ICSID and Rule 41(3) of the ICSID Arbitration Rules; article 21(4) of the 1976 UNCITRAL Rules; article 23(3) of the 2010 UNCITRAL Rules. 13 See Regulation 22 of the ICSID Administrative and Financial Regulations; article 48(5) ICSID; Rules 32(2) and 48(4) of the ICSID Arbitration Rules. See also articles 2, 3 and 6(1) of the 2014 UNCITRAL Transparency Rules. 14 See Rule 37(2) of the ICSID Arbitration Rules; articles 4 and 5 of the 2014 UNCITRAL Transparency Rules. 15 See e.g. Urbaser v. Argentina, ICSID, Decision on Claimants’ Proposal to Disqualify Professor McLachlan of 12 August 2010, para. 58. 16 See e.g. Blue Bank International v. Venezuela, ICSID, Decision on the Parties’ Proposals to Disqualify a Majority of the Tribunal of 12 November 2013, para. 68.

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However, similar issues can in principle also be encountered in non-treaty proceedings and they should therefore not be regarded as truly specific to investment treaty arbitrations. The defining features of investment treaty arbitrations can rather be found in IIAs themselves and relate in particular to the general protection requirements for investors, the dispute resolution mechanisms in those treaties, and the substantive protection standards that are at the origin of treaty claims. The remainder of this Chapter will therefore be structured as follows. The first part of 10 the Chapter looks at the general requirements that need to be fulfilled by investors to obtain protection under an IIA (II). The second part studies more specifically the treaty mechanisms for the resolution of investor-State disputes (III). The third part addresses the substantive protection standards that can typically be found in IIAs (IV). The Chapter finishes with a brief conclusion (V).

II. The general requirements for the protection of investors under IIAs The protection offered by investment treaties is typically limited to investors with the 11 nationality of one of the signatories who have made an investment in the territory of another signatory.17 For an individual or a company to qualify for protection under an IIA, it therefore needs to fulfill two basic requirements, one relating to its nationality and one relating to its status as an investor. Being a national of a signatory (1) and having made an investment in the territory of another signatory (2) are usually preconditions for both the ability to invoke an investor-State dispute resolution mechanism in a treaty and the possibility to rely on the treaty’s substantive protection standards.

1. The nationality of investors The protection available to investors under IIAs is typically limited to the signatories’ 12 nationals.18 Defining the nationality of investors under IIAs is generally a matter of agreement between the signatories.19 The definitions in IIAs in this regard show a considerable degree of variety, in particular with regard to corporate investors. The criteria most frequently relied upon to determine the nationality of a corporate investor are his place of incorporation and his place of central administration or siège social.20 Entities that are not recognized as having legal personality under the laws of their home State are usually not protected.21 17 See e.g. article 13(1) ECT (“Expropriation”), referring to “Investments of Investors of a Contracting Party in the Area of any other Contracting Party.” 18 Not all IIAs make explicit reference to the notion of nationality. Some treaties integrate the concept into their definition of “investors”, see e.g. article 1(7) ECT; article 1(3) of the 2008 German Model BIT. Others reserve the term “national” to natural persons and refer to “companies” of a contracting party when it comes to legal entities, see e.g. article 1(c) and (d) of the 2006 UK Model BIT. 19 See Autopista Concesionada v. Venezuela, ICSID, Decision on Jurisdiction of 27 September 2001, para. 109; Soufraki v. United Arab Emirates, ICSID, Award of 7 July 2004, para. 55; Rompetrol Group v. Romania, ICSID, Decision on Jurisdiction of 18 April 2008, para. 83; Oostergetel and Laurentius v. Slovak Republic, UNCITRAL, Decision on Jurisdiction of 30 April 2010, para. 119. 20 Some IIAs extend their protection to companies of the signatory in whose territory the investment is made or even to companies of third countries, as long as these companies are controlled by nationals of another signatory, see e.g. article 1(b)(iii) of the Bolivia-Netherlands BIT; article 1(b)(iii) of the Argentina-Netherlands BIT. 21 See Consortium L.E.S.I. – DIPENTA v. Algeria, ICSID, Decision on Jurisdiction of 10 January 2005, paras 38–41; Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 137. IIAs may, however, contain a different provision in this regard, see e.g. article 1(4) of the Argentina-Germany BIT, extending the protection under that treaty to partnerships without legal personality.

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A number of IIAs that define the nationality of corporate investors primarily through their place of incorporation nevertheless deny protection to companies that do not conduct any significant business activities in the State where they are incorporated and are controlled by nationals of a non-signatory through so-called “denial of benefits” clauses.22 The purpose of these clauses is to exclude mere “letterbox” or “shell” companies that do not make any contribution to their home State’s economy from the protective scope of the relevant treaty. Tribunals have held that, in the absence of an explicit “denial of benefits” clause, a requirement of real business activities cannot be read into a treaty.23 Similarly, the fact that a company is almost exclusively owned by nationals of the State against which treaty protection is being sought has been found insufficient to deprive that company of protection.24 14 With regard to natural persons, their recognition by a signatory as its nationals is usually left to the domestic laws of the relevant State.25 Arbitral tribunals have been reluctant to admit any further requirements regarding the recognition of an individual’s nationality, such as the existence of a “genuine connection” with its home State,26 finding that an “effective nationality” test could be applied only in exceptional circumstances.27 13

2. The existence of an investment 15

Another fundamental requirement for obtaining protection under an IIA is the making of an investment in the territory of another signatory State. Most IIAs contain a definition of investments that broadly refers to “every kind of asset” owned or controlled by nationals of another signatory and then lists a number of property rights that are specifically included in that definition.28 While tribunals usually have little difficulty to identify “assets” that could potentially fall within a treaty’s definition, a number of issues can nevertheless arise with regard to the existence of a protected investment.29 22 See e.g. article 17(1) ECT: “Each Contracting Party reserves the right to deny the advantages of this Part to … a legal entity if citizens or nationals of a third state own or control such entity and if that entity has no substantial business activities in the Area of the Contracting Party in which it is organized.” 23 See Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 241; Rompetrol Group v. Romania, ICSID, Decision on Jurisdiction of 18 April 2008, para. 110. 24 See Tokios Tokeles v. Ukraine, ICSID, Decision on Jurisdiction of 29 April 2004, para. 52; KT Asia Investment Group v. Kazakhstan, ICSID, Award of 17 October 2013, para. 128; Mera Investment Fund v. Serbia, ICSID, Decision on Jurisdiction of 30 November 2018, para. 154. 25 See Soufraki v. United Arab Emirates, ICSID, Award of 7 July 2004, para. 55; Pey Casado v. Chile, ICSID, Award of 8 May 2008, para. 256; Micula v. Romania, ICSID, Decision on Jurisdiction and Admissibility of 24 September 2008, para. 86; Tza Yap Shum v. Peru, ICSID, Decision on Jurisdiction of 19 June 2009, para. 54; Oostergetel and Laurentius v. Slovak Republic, UNCITRAL, Decision on Jurisdiction of 30 April 2010, para. 119; Arif v. Moldova, ICSID, Award of 8 April 2013, para. 354. Some IIAs extend their scope of protection to permanent residents of the signatories, see e.g. article 1(7)(a)(i) ECT. 26 With regard to this requirement for natural persons as a matter of international law see Nottebohm, Second Phase (Liechtenstein v. Guatemala), ICJ Reports (1955), 23. 27 See Olguín v. Paraguay, ICSID, Award of 26 July 2001, para. 62; Champion Trading v. Egypt, ICSID, Decision on Jurisdiction of 21 October 2003, 16; Fakes v. Turkey, ICSID, Award of 14 July 2010, paras 77–79; Micula v. Romania, ICSID, Decision on Jurisdiction and Admissibility of 24 September 2008, para. 104. It should be noted that under the ICSID Convention, pursuant to article 25(2)(a) ICSID, dual nationals that also hold the nationality of the host State are prevented from instituting proceedings against the latter, see also Champion Trading v. Egypt, ICSID, Decision on Jurisdiction of 21 October 2003, 17. 28 See e.g. article 1(6) ECT. Some IIAs additionally require the relevant asset to have “the characteristics of an investment”, such as the commitment of capital, the expectation of profit, or the assumption of risk, see e.g. Chile-US FTA, article 10.27; note 2 to article 4(c) of the 2009 ASEAN Comprehensive Investment Agreement. 29 While contractual rights can in principle constitute “assets” for purposes of the definitions in most IIAs, tribunals have occasionally held that these rights need to be of a “proprietary” nature, see Emmis

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In particular, there is some discussion as to whether and, if so, to what extent the 16 notion of “investment” implies certain general characteristics that go beyond the definitions typically contained in IIAs (a). Issues can also arise with regard to the link of an investment with the host State’s territory (b), the legality of an investment (c), and the need for its specific approval by a host State (d). In some cases the timing of an investment may give rise to difficulties (e). Finally, the protection of indirect investments and shareholdings raises additional questions (f). a) General characteristics of an investment. There is some discussion as to whether 17 the protection under IIAs should be limited to investments fulfilling certain criteria that are often seen as inherent to the notion of investment, even if they are typically not referred to in the definitions contained in IIAs. The starting point in this regard is Article 25 of the ICSID Convention, which limits ICSID’s jurisdiction to disputes “arising directly out of an investment.” While the ICSID Convention does not provide a definition of “investment”, it has long been argued based on the Convention’s negotiating history that the term is to be given an autonomous meaning. ICSID tribunals have therefore frequently assessed the existence of certain criteria thought to be inherent to the notion of “investment” when examining their jurisdiction.30 These criteria, often referred to as the “Salini test”,31 are typically described as follows: 18 (i) a commitment of resources to the host State’s economy; (ii) a certain duration of this commitment; (iii) the assumption of risk and the expectation of profit; and (iv) a contribution to the host State’s economic development. Some tribunals have found the criterion of a contribution to the host State’s economic development to be irrelevant.32 Others have sought to add criteria to the Salini catalogue, in particular the need for an investment to have been made in good faith.33 Recent decisions have often expressed the view that the Salini criteria should be applied with some flexibility, suggesting that not all of them need to be fulfilled for there to be an investment.34

International Holding v. Hungary, ICSID, Award of 16 April 2014, paras 169, 178; Accession Mezzanine Capital v. Hungary, ICSID, Award of 17 April 2015, para. 154. 30 See Joy Mining v. Egypt, ICSID, Award on Jurisdiction of 6 August 2004, para. 53; Mitchell v. Congo, ICSID, Decision on Annulment of 1 November 2006, para. 27; Bayindir v. Pakistan, ICSID, Decision on Jurisdiction of 14 November 2005, para. 130; Jan de Nul v. Egypt, ICSID, Decision on Jurisdiction of 16 June 2006, para. 91; Saipem v. Bangladesh, ICSID, Decision on Jurisdiction of 21 March 2007, para. 99; Fakes v. Turkey, ICSID, Award of 14 July 2010, para. 110; Global Trading v. Ukraine, ICSID, Award of 1 December 2010, para. 43; KT Asia Investment Group v. Kazakhstan, ICSID, Award of 17 October 2013, para. 173. 31 See Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001, para. 52. The criteria were first relied upon in Fedax v. Venezuela, ICSID, Decision on Jurisdiction of 11 July 1997, para. 43. 32 See e.g. Phoenix Action v. Czech Republic, ICSID, Award of 15 April 2009, para. 85; Fakes v. Turkey, ICSID, Award of 14 July 2010, para. 111; KT Asia Investment Group v. Kazakhstan, ICSID, Award of 17 October 2013, para. 171. 33 See Phoenix Action v. Czech Republic, ICSID, Award of 15 April 2009, para. 114. See also Plama Consortium v. Bulgaria, ICSID, Award of 27 August 2008, paras 144–146. 34 See Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, paras 316–318; Malaysian Historical Salvors v. Malaysia, ICSID, Decision on Annulment of 16 April 2009, para. 80; Pantechniki v. Albania, ICSID, Award of 30 July 2009, paras 43–48; Alpha v. Ukraine, ICSID, Award of 8 November 2010, para. 314; Inmaris v. Ukraine, ICSID, Decision on Jurisdiction of 8 March 2010, paras 129–131; Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 364; Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 479; Philip Morris v. Uruguay, ICSID, Decision on Jurisdiction of 2 July 2013, para. 206. The tribunal in Salini already suggested that the various criteria “should be assessed globally”, see Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001, para. 52. The tribunals in a number of recent decisions expressed doubts as to whether the Salini criteria should be accorded any relevance, suggesting that the only limitation contained in article 25 ICSID was the notion of investment, excluding “a single commercial transaction, such as the mere delivery of goods against payment”, see Philip Morris v. Uruguay, ICSID,

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Importantly, reference to the Salini criteria has not remained limited to the context of ICSID arbitrations, and some UNCITRAL tribunals have looked at the criteria when assessing the existence of an investment under an IIA.35 Others have criticized the commingling of the understanding of “investment” under IIAs and Article 25 ICSID, claiming that the two notions should be assessed independently.36 The tribunals in several UNCITRAL arbitrations arguably attempted to reconcile both views by acknowledging that the notion of investment under an IIA was in principle independent of the concept under the ICSID Convention, but still ascertaining that the Salini criteria were fulfilled in the cases before them.37

b) Link to the territory of the host State. Most IIAs contain language to the effect that, in order to qualify for protection under the relevant treaty, the investment needs to have been made in the territory of the host State.38 Such a territoriality requirement can be problematic in particular with regard to contributions of a purely financial nature that are not linked to any specific project in the host State’s territory. Some tribunals have suggested that the requirement may be satisfied simply by making funds available to the State for general financing purposes, and investments have been found to exist in cases involving the acquisition of promissory notes39 as well as sovereign bonds.40 In particular, it has been held that investments of a purely financial nature did not need to be linked to a specific economic enterprise or operation taking place in the host State’s territory.41 21 Others have expressed concerns with regard to such an understanding.42 In particular, the respondent-appointed arbitrators in the Abaclat and Ambiente Ufficio decisions disagreed with the majority findings of the respective tribunals, taking the view that, in order to fulfill the territoriality requirement, invested funds would have to be traceable to “a particular productive project or activity in the territory of the host country.”43 It remains to be seen how tribunals will address this issue in the future.44 20

Decision on Jurisdiction of 2 July 2013, para. 203. See also RREEF v. Spain, ICSID, Decision on Jurisdiction of 6 June 2016, para. 157. 35 See Romak v. Uzbekistan, UNCITRAL, Award of 26 November 2009, paras 188–242. See also Italy v. Cuba, ad hoc arbitration, Preliminary Award of 15 March 2005, para. 81; Italy v. Cuba, ad hoc arbitration, Award of 15 July 2008, para. 198; KT Asia Investment Group v. Kazakhstan, ICSID, Award of 17 October 2013, para. 166. 36 See Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 211; Mytilineos Holdings v. Serbia, UNCITRAL, Partial Award on Jurisdiction of 8 September 2006, para. 117; Malaysian Historical Salvors v. Malaysia, ICSID, Decision on Annulment of 16 April 2009, para. 61. The tribunal in Salini clearly distinguished between the definition of investment under the relevant IIA and the ICSID Convention, see Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001, para. 49. 37 See Oostergetel and Laurentius v. Slovak Republic, UNCITRAL, Decision on Jurisdiction of 30 April 2010, paras 161–172; White Industries Australia v. India, UNCITRAL, Final Award of 30 November 2011, paras 7.49–7.4.19. 38 See e.g. article 1(1) of the Argentina-US BIT, defining “investment” as “every kind of investment in the territory of one Party.” 39 See Fedax v. Venezuela, ICSID, Decision on Jurisdiction of 11 July 1997, para. 41. 40 See Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 378; Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 504. 41 See Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 375; Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 503. 42 See Waibel, Sovereign Defaults before International Courts and Tribunals, 2011, 241. 43 Abaclat v. Argentina, ICSID, Dissenting Opinion of Abi-Saab to Decision on Jurisdiction and Admissibility of 4 August 2011, para. 113. See also Ambiente Ufficio v. Argentina, ICSID, Dissenting Opinion of Torres Bernárdez to Decision on Jurisdiction of 8 February 2013, para. 313. 44 The tribunal in the Alemanni case avoided taking a decision in this regard, see Alemanni v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 17 November 2014, para. 297.

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c) Legality of the investment. Numerous IIAs explicitly only protect investments 22 made in accordance with the laws of the host State.45 However, even in the absence of an explicit provision to this effect, tribunals have frequently held that only investments made in accordance with the host State’s legislation can be protected.46 In the words of one decision, “one must of necessity examine how the possession or ownership of … property was acquired and in particular whether the process by which that possession or ownership was acquired complied with all of the prevailing laws.”47 At the same time there is agreement that minor infringements of the host State’s 23 legal order must not be seen as affecting the legality of an investment.48 Tribunals have also held that an investor’s failure to comply with local laws in the course of making an investment must be irrelevant where this failure was due to actions of the host State, or where the host State had assured the investor that local legislation had been complied with.49 Even where an investor was aware of irregularities, it has been held that a host State cannot oppose claims on grounds of illegality if the irregularities were countenanced or even orchestrated by the host State.50 By contrast, violations of the host State’s foreign investment regime, as well as instances of fraud or corruption will typically render an investment illegal and therefore unprotected under an IIA.51 According to the tribunal in one recent case, one needs to consider “both the seriousness of the investor’s conduct and the significance of the obligation not complied with so as to ensure that the harshness of the sanction of placing the investment outside of the protections of the BIT is a proportionate consequence for the violation examined.”52 45 See e.g. article 1(1) of the Lithuania-Ukraine BIT, defining “investment” as “every kind of asset invested … in the territory of the other Contracting Party in accordance with the laws and regulations of the latter.” Tribunals have occasionally emphasized that this requirement refers to the validity of an investment rather than to its definition, see Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2003, para. 46; Bayindir v. Pakistan, ICSID, Decision on Jurisdiction of 14 November 2005, para. 109. 46 See Plama Consortium v. Bulgaria, ICSID, Award of 27 August 2008, para. 138; Phoenix Action v. Czech Republic, ICSID, Award of 15 April 2009, para. 101; SAUR International v. Argentina, ICSID, Decision on Jurisdiction and Liability of 6 June 2012, para. 308; Minnotte and Lewis v. Poland, ICSID/AF, Award of 16 May 2014, para. 131. For a different view, based on the specific wording of the Free Trade Agreement between Canada and Peru, see Bear Creek Mining v. Peru, ICSID, Award of 30 November 2017, para. 319. 47 See Anderson v. Costa Rica, ICSID, Award of 19 May 2010, para. 55. See also Fraport v. Philippines, ICSID, Award of 16 August 2007, paras 345, 396. 48 See the decision in Tokios Tokeles v. Ukraine, ICSID, Decision on Jurisdiction of 29 April 2004, para. 86, referring to the object and purpose of IIAs. See also Mytilineos Holdings v. Serbia, UNCITRAL, Partial Award on Jurisdiction of 8 September 2006, para. 151; Fraport v. Philippines, ICSID, Award of 16 August 2007, para. 396; Desert Line Projects v. Yemen, Award of 6 February 2008, para. 104; Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 319; Fakes v. Turkey, ICSID, Award of 14 July 2010, para. 119; Metal-Tech v. Uzbekistan, ICSID, Award of 4 October 2013, para. 165; Hochtief v. Argentina, ICSID, Decision on Liability of 29 December 2014, para. 199; Mamidoil v. Albania, ICSID, Award of 30 March 2015, para. 483; South American Silver v. Bolivia, UNCITRAL, Award of 22 November 2018, para. 465. 49 See Kardassopoulos v. Georgia, ICSID, Decision on Jurisdiction of 6 July 2007, para. 184; Fraport v. Philippines, ICSID, Award of 16 August 2007, para. 346; Railroad Development Corporation v. Guatemala, ICSID, Second Decision on Objections to Juridiction of 18 May 2010, para. 146. See also Newcombe/ Paradell, Law and Practice of Investment Treaties, 2009, 96–97. 50 See Gavrilovic v. Croatia, ICSID, Award of 26 July 2018, para. 398. 51 See Metal-Tech v. Uzbekistan, ICSID, Award of 4 October 2013, para. 165. See also Al Warraq v. Indonesia, UNCITRAL, Final Award of 15 December 2014, paras 645–646, referring to the doctrine of “clean hands”. 52 Kim v. Uzbekistan, ICSID, Decision on Jurisdiction of 8 March 2017, para. 404. See also Cortec Mining Kenya v. Kenya, ICSID, Award of 22 October 2018, para. 320.

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d) Specific approval requirements. Some IIAs contain an additional requirement, according to which investments (and, less frequently, investors53) need to be specifically approved by the host State in order to qualify for protection. Article 2 of the IranTurkey BIT, for instance, provides: “This Agreement shall only apply to investments approved by the competent authorities of the host Contracting Party.”54 25 A number of tribunals have held with regard to similar provisions that their effects go beyond those of a simple statement to the effect that investments need to be made in accordance with domestic legislation and that they require an actual act of approval by the host State.55 This approval needs to relate specifically to the making of the investment, rather than merely to the business activities of the company in which the investment is being made.56 At the same time, it is clear that an approval requirement can only apply at the time of the investor’s entry into the country and that there is no need for continuous approval for the entire duration of an investment project.57 24

e) Timing of the investment. The timing of an investment may also be relevant for the protection of an investor under an IIA. The substantive protection standards under a treaty apply only while the general requirements for the protection of investments are in place.58 This follows from the “temporal rule” of Article 13 of the 2001 ILC Draft Articles on State Responsibility, according to which “[a]n act of a State does not constitute a breach of an international obligation unless the State is bound by the obligation in question at the time the act occurs.”59 Where an investment precedes the relevant IIA, it will usually be protected from the moment where the treaty enters into force.60 27 As a consequence of the temporal rule, if an unprotected investor transfers his investment to an entity qualifying for protection under an IIA after the events constituting a breach of the treaty’s standards have already taken place, this does not afford the relevant entity with protection regarding the earlier breach.61 The situation is more complicated when it comes to breaches that succeed the transfer, but could reasonably have been anticipated at the time the transfer was made. Here a number of tribunals have taken the view that a transfer made solely with the purpose of obtaining 26

53

See e.g. article 1(2)(b) of the Iran-Turkey BIT. Similarly, article 4(a) of the 2009 Comprehensive ASEAN Investment Agreement provides that an investment must be “specifically approved in writing” by the competent authority if the laws of the State in which the investment is made require such approval. 55 See Yaung Chi Oo Trading v. Myanmar, ASEAN, Award of 31 March 2003, para. 58; Mytilineos Holdings v. Serbia, UNCITRAL, Partial Award on Jurisdiction of 8 September 2006, para. 146. 56 See Gruslin v. Malaysia, ICSID, Award of 27 November 2000, para. 25.5. 57 See Churchill Mining v. Indonesia, ICSID, Decision on Jurisdiction of 24 February 2014, para. 295. 58 See e.g. Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 311; Victor Pey Casado v. Chile, ICSID, Award of 8 May 2008, para. 428; Ioan Micula v. Romania, ICSID, Decision on Jurisdiction and Admissibility of 24 September 2008, para. 157. The application of substantive protection standards must be distinguished from the right of an investor to bring a damages claim arising out of the breach of these standards, as well as the investor’s faculty to invoke the dispute resolution mechanism under an IIA. Both these rights can survive the loss of the status as an investor, see e.g. Mondev International v. United States, ICSID/AF, Award of 11 October 2002, para. 91; Daimler Financial Services v. Argentina, ICSID, Award of 22 August 2012, para. 142. 59 See also article 28 VCLT. 60 See e.g. Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 314. Some IIAs contain an explicit rule to this effect, see e.g. article 8 of the Germany-Philippines BIT. Pre-existing investments may, however, not be protected where the treaty contains a specific approval requirement, see Yaung Chi Oo Trading v. Myanmar, ASEAN, Award of 31 March 2003, para. 60. 61 See Lao Holdings v. Laos, ICSID/AF, Decision on Jurisdiction of 21 February 2014, para. 83. 54

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treaty protection with regard to a specific dispute might be abusive and that the investment should remain unprotected as a consequence.62 f) The protection of shareholders and indirect investments. Finally, a number of 28 questions can arise where investments are made indirectly through other companies.63 Indirect investments in the territory of a host State through one or several intermediate companies64 can come under the protective scope of a treaty in two different ways. First, the shares in a local company typically fall under a treaty’s definition of protected assets.65 Second, assets held indirectly through a local company or a company established in a third State may also be protected as indirect investments.66 While the protection of shareholders and the protection of indirectly held assets in principle constitute distinguishable concepts,67 they are often conflated in the practice of investment treaty tribunals.68 In particular, tribunals have found that the protection available to investors under 29 IIAs extends to losses of value in the shareholdings in a local company,69 including with

62 See Société Générale v. Dominican Republic, UNCITRAL, Decision on Objections to Jurisdiction of 19 September 2008, para. 110; Phoenix Action v. Czech Republic, ICSID, Award of 15 April 2009, para. 136; Cementownia “Nowa Huta” v. Turkey, ICSID/AF, Award of 17 September 2009, para. 154; Pac Rim Cayman v. El Salvador, ICSID, Decision on Jurisdictional Objections of 1 June 2012, para. 2.99; Tidewater v. Venezuela, ICSID, Decision on Jurisdiction of 8 February 2013, para. 184; Levy and Gremcitel v. Peru, ICSID, Award of 9 January 2015, para. 185; Philip Morris Asia v. Australia, UNCITRAL, Award of 17 December 2015, para. 554; Transglobal Green Energy v. Panama, ICSID, Award of 2 June 2016, para. 102. By contrast, there is agreement that the transfer of an investment with a view to obtaining treaty protection generally (rather than with regard to a specific dispute) is legitimate, see Aguas del Tunari v. Bolivia, ICSID, Decision on Jurisdiction of 21 October 2005, para. 330; Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010, para. 204; ConocoPhillips v. Venezuela, ICSID, Decision on Jurisdiction and the Merits of 3 September 2013, paras 279–280. 63 Similar questions arise where investments are made using trust structures, see Wehland, (2017) 34 J. Int'l Arb. 960. A trustee without any beneficial interest in the relevant assets will typically not qualify as an investor, see Blue Bank International v. Venezuela, ICSID, Award of 26 April 2017, para. 172. 64 See Siemens v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2004, para. 136. 65 See Berschader v. Russia, SCC, Award of 21 April 2006, para. 127; HICEE B.V. v. Slovak Republic, UNCITRAL, Partial Award of 23 May 2011, para. 147. 66 Some IIAs explicitly state that the notion of investment covers all assets “owned or controlled directly or indirectly” by an investor, see e.g. article 1(6) ECT; article 1139 NAFTA; article 1 of 2004 US Model BIT. 67 The jurisprudence of the ICJ clearly makes this distinction, see Ahmadou Sadio Diallo, Preliminary Objections (Guinea v. Democratic Republic of the Congo), 46 ILM 709 (2007), paras 67, 95. The distinction between the two concepts is also reflected in the 2006 ILC Draft Articles on Diplomatic Protection, article 11 of which addresses the “[p]rotection of shareholders”, while article 12 deals with “[d]irect injury to shareholders.” 68 See e.g. Goetz v. Burundi, ICSID, Award of 10 February 1999, para. 89; Azurix v. Argentina, ICSID, Decision on Jurisdiction of 8 December 2003, para. 73; Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, paras 214–218; Total v. Argentina, ICSID, Decision on Objections to Jurisdiction of 25 August 2006, para. 75; Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010, para. 165; RosInvestCo v. Russia, SCC, Final Award of 12 September 2010, para. 608; Impregilo v. Argentina, ICSID, Award of 21 June 2011, para. 138; Daimler Financial Services v. Argentina, ICSID, Award of 22 August 2012, para. 83. 69 See e.g. Asian Agricultural Products v. Sri Lanka, ICSID, Award of 27 June 1990, para. 95; Lanco v. Argentina, ICSID, Preliminary Decision on Jurisdiction of 8 December 1998, para. 10; CMS Gas Transmission v. Argentina, ICSID, Decision on Objections to Jurisdiction of 17 July 2003, para. 48; Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004, para. 49; GAMI Investments v. Mexico, UNCITRAL, Award of 15 November 2004, para. 37; Paushok v. Mongolia, UNCITRAL, Award on Jurisdiction and Liability of 28 April 2011, para. 202.

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regard to minority shareholdings.70 In addition, treaty tribunals have frequently assumed that assets indirectly held by investors (rather than merely their shareholdings) can also be protected under IIAs.71 In a number of decisions, tribunals have combined the two principles, finding that indirect shareholdings constituted protected investments, irrespective of whether the intermediary was situated in the investor’s home State,72 the recipient State of the investment,73 or even a third country.74 30 Tribunals have occasionally envisaged the need to establish a cut-off point, beyond which claims of indirect shareholders might no longer be permissible, as their connection with the affected company would be too remote and could not have been anticipated by the host State.75 Another criterion that has been considered in this context is the requirement of an “active and direct” control over the investment, which would exclude cases of mere “passive ownership of shares in a company … where that company in turn owns the investment.”76 By contrast, the fact that another entity further down the corporate chain (and thus closer to the direct investment) might also qualify as an investor has consistently been considered irrelevant by investment treaty tribunals.77

70 See e.g. Asian Agricultural Products v. Sri Lanka, ICSID, Award of 27 June 1990, para. 98; Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004, para. 49; Suez and Vivendi v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2006, paras 25, 49; BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, paras 26, 203; Impregilo v. Argentina, ICSID, Award of 21 June 2011, paras 110, 138. 71 See Total v. Argentina, ICSID, Decision on Objections to Jurisdiction of 25 August 2006, para. 74. See also Sedelmayer v. Russia, SCC, Award of 7 July 1998, 27; Lauder v. Czech Republic, UNCITRAL, Award of 3 September 2001, para. 202; Mondev International v. United States, ICSID/AF, Award of 11 October 2002, para. 82; Berschader v. Russia, SCC, Separate Opinion of Weiler to Award of 21 April 2006, para. 14; Azurix v. Argentina, ICSID, Award of 14 July 2006, para. 424; Azurix v. Argentina, ICSID, Decision on Annulment of 1 September 2009, para. 94. On the other hand, a number of treaty tribunals appeared to take the view that the only protected assets of indirect investors could be their shares in a local company, see Asian Agricultural Products v. Sri Lanka, ICSID, Award of 27 June 1990, para. 95; CME v. Czech Republic, UNCITRAL, Partial Award of 13 September 2001, para. 376; Nykomb v. Latvia, SCC, Award of 16 December 2003, 39; LG&E v. Argentina, ICSID, Decision on Objections to Jurisdiction of 30 April 2004, para. 50; GAMI Investments v. Mexico, UNCITRAL, Award of 15 November 2004, paras 35, 123; Gas Natural v. Argentina, ICSID, Decision on Preliminary Objections to Jurisdiction of 17 June 2005, para. 35; Berschader v. Russia, SCC, Award of 21 April 2006, para. 150; BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, para. 214; HICEE B.V. v. Slovak Republic, UNCITRAL, Partial Award of 23 May 2011, para. 147; El Paso v. Argentina, ICSID, Award of 31 October 2011, para. 214. 72 See Siemens v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2004, para. 23. 73 See Enron v. Argentina, ICSID, Decision on Jurisdiction (Ancillary Claim) of 2 August 2004, paras 28–31; BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, paras 24, 26, 203. 74 See Lauder v. Czech Republic, UNCITRAL, Award of 3 September 2001, paras 5, 77; Waste Management v. Mexico II, ICSID/AF, Award of 30 April 2004, para. 85; Société Générale v. Dominican Republic, UNCITRAL, Decision on Objections to Jurisdiction of 19 September 2008, para. 51; Oostergetel and Laurentius v. Slovak Republic, UNCITRAL, Decision on Jurisdiction of 30 April 2010, para. 144. See also BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, paras 24, 26, 203; Guaracachi America v. Bolivia, UNCITRAL, Award of 31 January 2014, para. 363; South American Silver v. Bolivia, UNCITRAL, Award of 22 November 2018, para. 309. 75 See Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004, para. 52; Noble Energy v. Ecuador, ICSID, Decision on Jurisdiction of 5 March 2008, para. 82; Société Générale v. Dominican Republic, UNCITRAL, Decision on Objections to Jurisdiction of 19 September 2008, para. 49. See also Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, para. 218, mentioning the possibility that only shareholdings of a certain importance might be protected. 76 See Standard Chartered Bank v. Tanzania, ICSID, Award of 2 November 2012, para. 230. 77 See e.g. Goetz v. Burundi, ICSID, Award of 10 February 1999, para. 89; Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, paras 212, 213.

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III. Investor-State arbitration under treaty dispute resolution mechanisms The jurisdiction of arbitral tribunals adjudicating claims of investors under IIAs is 31 usually based on the dispute resolution mechanism in the relevant treaty.78 Numerous IIAs contain a dispute resolution clause through which the signatories give their generic advance consent to international arbitration with investors of other signatories, provided that these investors meet certain requirements. For example, Article 9 of the Kazakhstan-Netherlands BIT provides: “Each Contracting Party hereby consents to submit any legal dispute arising between that Contracting Party and a national of the other Contracting Party concerning an investment of that national in the territory of the former Contracting Party to the International Centre for Settlement of Investment Disputes.”79 An arbitration agreement is formed at the moment when a qualifying investor 32 accepts a host State’s offer to arbitrate, typically by filing a notice of arbitration.80 Obviously, if the investor does not meet the prerequisites for the host State’s consent to arbitration under the treaty, there is no offer that he could accept. The investor’s compliance with the requirements for the host State’s consent under the relevant IIA is rather a precondition for the jurisdiction of any treaty-based arbitral tribunal. As a consequence, once a host State’s consent to international arbitration is established in principle, a treaty-based arbitral tribunal needs to ascertain whether this consent extends to the relevant investor and, if so, whether the claims brought against the host State come within the scope of the arbitration agreement resulting from the investor’s acceptance of the host State’s offer under the treaty mechanism. The question of whether an investor is covered by the offer under a treaty’s dispute 33 resolution clause is typically addressed under the heading of ratione personae jurisdiction and refers back to the general requirements for the protection of investors under investment treaties (1). In addition, the claims brought against a host State need to come within the ratione materiae scope of the relevant treaty’s dispute resolution clause. In practice, the main issue in this regard is the distinction between contract and treaty claims (2). Occasionally, there can also be a question as to the temporal scope of the arbitration agreement and the resulting ratione temporis jurisdiction of a treaty-based tribunal (3). In addition, dispute resolution clauses in IIAs may contain further requirements for the initiation of proceedings that can affect either the existence of the host State’s consent to arbitration or the admissibility of the claims brought by an investor (4). Finally, where a claimant seeks to rely on multiple legal instruments or 78 It seems possible to envisage situations where an investor might want to bring claims arising under an IIA relying on a different legal instrument, such as for instance the arbitration agreement in an investor-State contract, see Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration, 2013, paras 3.41–3.53; Wehland, in: Audit et al. (eds), Transnational Law of Public Contracts, 2016, 375 (392). 79 Dispute resolution clauses in IIAs containing a binding offer to arbitration must be distinguished from clauses that merely contain the promise to make such an offer at a later stage, see e.g. Planet Mining v. Indonesia, ICSID, Decision on Jurisdiction of 24 February 2014, para. 198 with regard to article 11 of the Australia-Indonesia BIT. Where the wording of a dispute resolution clause is equivocal, tribunals may have to consider the treaty’s object and purpose as well as its travaux préparatoires to establish whether the clause contains a binding offer or not, see Millicom International Operations v. Senegal, ICSID, Decision on Jurisdiction of 16 July 2010, para. 63; Churchill Mining v. Indonesia, ICSID, Decision on Jurisdiction of 24 February 2014, paras 154, 231. 80 See e.g. Eureko v. Slovak Republic, UNCITRAL, Award on Jurisdiction of 26 October 2010, para. 223.

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where multiple claimants try to assert rights against a host State in the same proceedings, this raises the issue of whether these possibilities are covered by the host State’s consent (5).

1. Jurisdiction ratione personae 34

The ratione personae jurisdiction of treaty-based tribunals is usually limited to investors qualifying for protection under the relevant treaty on one side, and the host State on the other side. As detailed earlier, in order to be protected the investor needs to possess the nationality of a signatory State to the IIA,81 and must have made an investment82 in the territory of the host State.83 The host State, in turn, obviously needs to be bound by the relevant IIA.

2. Jurisdiction ratione materiae Treaty-based arbitral tribunals generally have ratione materiae jurisdiction with regard to claims arising under the treaty containing the relevant dispute resolution clause. One question that tribunals may need to address in this context, in particular where the claims before them raise matters of contractual interpretation, is the distinction between contract and treaty claims. 36 In many cases, a foreign investor or his local subsidiary on one side, and the host State, a special State agency, or sub-State entity on the other side have entered into a contractual arrangement. In these situations, the treaty breaches alleged by the investor may be closely linked to questions regarding the contractual performance of the parties. What is more, the relevant contract often contains a dispute resolution clause submitting claims to a forum different from that under the dispute resolution mechanism in the treaty. As a result, the respondent State may argue that the claims brought before the treaty-based tribunal should instead be raised before the contractual forum.84 37 The starting point for the jurisdictional analysis in these instances is the recognition that, as a matter of substantive law, contract and treaty claims constitute distinct causes of action and can in principle be analysed separately.85 Claims that are formally based on the treaty containing the dispute resolution mechanism invoked by the investor will normally be covered by that treaty’s dispute resolution clause.86 A tribunal will apply a prima facie standard to the question of whether the actions complained of, if proven, are capable of constituting a violation of the relevant IIA and will address the question of 35

81

See supra mns 12 et seq. See supra mns 15 et seq. The existence of an investment is sometimes considered as part of the ratione materiae jurisdiction of a treaty-based tribunal, see e.g. Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 300. 83 See supra mn. 20. 84 See e.g. Lanco v. Argentina, ICSID, Preliminary Decision on Jurisdiction of 8 December 1998, para. 34; Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001, para. 25; SGS. v. Philippines, ICSID, Decision on Objections to Jurisdiction of 29 January 2004, para. 73. 85 See Vivendi v. Argentina, ICSID, Decision on Annulment of 3 July 2002, para. 96. 86 An exception to this principle might be conceived where an investor has previously waived his access to the investor-State dispute resolution mechanism under the treaty. However, it is generally assumed that such a waiver (if admissible at all) would need to be explicit and cannot be implied from the investor’s simple agreement to a different forum in a contract, see e.g. Suez and Interaguas v. Argentina, ICSID, Decision on Jurisdiction of 16 May 2006, para. 45; TSA Spectrum v. Argentina, ICSID, Award of 19 December 2008, para. 58; MNSS and Recupero Credito Acciaio v. Montenegro, ICSID/AF, Award of 4 May 2016, para. 163. 82

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whether these actions actually constitute a treaty violation only when dealing with the merits of the case.87 When it comes to claims arising under legal instruments other than the treaty 38 containing the relevant dispute resolution clause, the jurisdiction of a treaty-based tribunal may depend on the scope of the specific clause. Some IIAs explicitly only refer to disputes concerning alleged violations of the substantive provisions of the treaty.88 For these IIAs it is clear that treaty-based tribunals do not have jurisdiction with regard to claims arising under any other legal instruments, including with regard to contractual claims. By contrast, many IIAs contain dispute resolution clauses that extend to “any” or 39 “all” disputes relating to investments.89 Here the scope of jurisdiction of treaty-based tribunals is potentially more extensive. Numerous tribunals and commentators have taken the view that, in line with general interpretative principles, broadly worded dispute resolution clauses can extend to claims arising under legal instruments other than the relevant treaty itself.90 At the same time, a number of awards appeared to be based on the assumption that the jurisdiction of treaty-based tribunals would always have to be limited to claims arising under the relevant treaty.91 It remains to be seen how tribunals will address this issue in the future.92

3. Jurisdiction ratione temporis Finally, for a treaty-based tribunal to have ratione temporis jurisdiction, the claims 40 brought by an investor need to relate to events that took place while the investor was protected under the treaty. As explained earlier, claims with regard to the breach of investment protection standards can only arise if protection exists at the time of the 87 See e.g. Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, paras 303, 311; Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 537. For a case where the tribunal refused to exercise jurisdiction due to the claimants’ failure to substantiate the link between the incriminated host State behaviour and the alleged treaty violations see Iberdrola v. Guatemala, ICSID, Award of 17 August 2012, para. 373. 88 See e.g. articles 1116(1) and 1117(1) NAFTA; articles 26(1) and (2) ECT; article 9(1) NetherlandsVenezuela BIT. 89 See e.g. article 9 Kazakhstan-Netherlands BIT. Similarly, numerous US BITs extend their dispute resolution clauses to disputes relating to investment authorizations and investment agreements, see e.g. article 7(1) Argentina-US BIT. 90 See e.g. Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001, para. 59; Consortium RFCC v. Morocco, ICSID, Decision on Jurisdiction of 16 July 2001, para. 67; SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction of 29 January 2004, para. 132; Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 211; Siemens v. Argentina, ICSID, Award of 6 February 2007, para. 205; Jan De Nul v. Egypt, ICSID, Award of 6 November 2008, para. 139; SGS v. Paraguay, ICSID, Decision on Jurisdiction of 12 February 2010, para. 129; Crawford, (2008) 24 Arb. Int’l 351 (362). 91 See e.g. SGS v. Pakistan, ICSID, Decision on Objections to Jurisdiction of 6 August 2003, para. 161; Joy Mining v. Egypt, ICSID, Award on Jurisdiction of 6 August 2004, para. 75; Consortium L.E.S.I. – DIPENTA v. Algeria, ICSID, Decision on Jurisdiction of 10 January 2005, para. 25; L.E.S.I. and ASTALDI v. Algeria, ICSID, Decision on Jurisdiction of 12 July 2006, para. 84; El Paso v. Argentina, ICSID, Decision on Jurisdiction of 27 April 2006, para. 65; Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, para. 91; Toto Costruzioni v. Lebanon, ICSID, Decision on Jurisdiction of 11 September 2009, para. 214; Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 316. 92 Tribunals may need to consider in this regard to what extent a forum selection clause in a contract can be seen as a waiver of the right to have recourse to international arbitration under the treaty mechanism as far as contractual claims are concerned, see e.g. Malicorp v. Egypt, ICSID, Award of 7 February 2011, para. 103; MNSS and Recupero Credito Acciaio v. Montenegro, ICSID/AF, Award of 4 May 2016, paras 148–165. For a detailed discussion of this issue see Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration, 2013, paras 3.58–3.78; 3.88–3.116.

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breach.93 Similarly, the procedural protection granted to an investor through the dispute resolution mechanism in an IIA only relates to the time period where the investor is the holder of a covered investment.94 It has, however, been suggested that a treaty’s dispute resolution mechanism may extend to events preceding the existence of the mechanism, provided that they already constituted a breach of the treaty’s substantive protection standards when they occurred.95

4. Additional requirements for the reliance of an investor on the dispute resolution clause in an IIA 41

The dispute resolution mechanisms in IIAs often establish additional requirements that need to be fulfilled before an investor can initiate proceedings against a host State based on the treaty mechanism.96 These include the observation of so-called cooling-off periods aimed at reaching an amicable settlement of the dispute (a) or prior-recourse to court requirements, under which an investor needs to resort to the domestic courts of the host State for a certain period of time before being allowed to assert claims under the treaty mechanism (b). Other IIAs contain so-called fork-in-the-road provisions, precluding investors from invoking their dispute resolution mechanisms with regard to claims that have already been asserted elsewhere (c).

a) Cooling-off periods. The dispute resolution clauses in some IIAs provide that, before submitting a dispute to international arbitration, investors need to attempt to settle the dispute through amicable negotiations with the host State for a certain period of time. In the case of the Argentina-US BIT, for instance, Article 7(2) states that “the parties to the dispute should initially seek a resolution through consultation and negotiation”, with Article 7(3)(a) adding that “[p]rovided that … six months have elapsed from the date on which the dispute arose, the national or company concerned may choose to consent in writing to the submission of the dispute for settlement by binding arbitration.” 43 Arbitral tribunals have differed in their approaches to these provisions, which are frequently referred to as “cooling-off” periods. Some tribunals have found that disregarding a requirement such as Article 7(3)(a) of the Argentina-US BIT should not prevent an investor from filing a claim under the treaty mechanism.97 Others have held that cooling-off provisions constitute true jurisdictional requirements, and that non-compliance with them must therefore result in the failure of an investor’s 42

93

See supra mn. 26. See Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 314; Paushok v. Mongolia, UNCITRAL, Award on Jurisdiction and Liability of 28 April 2011, para. 467. This does not mean that the investor could no longer accept a jurisdictional offer made by a host State under an IIA after losing his status as a protected investor. Once made, the offer stays with the investor even if he ceases to qualify for protection under the treaty, see Wehland, (2014) 30 Arb. Int’l 565; Burgstaller/ Zarowna, (2019) 36 J. Int’l Arb. 234. 95 See Nordzucker v. Poland, UNCITRAL, Partial Award of 10 December 2008, para. 110. A different conclusion might have to be reached where a treaty explicitly provides that it does not apply to disputes that have arisen prior to its entry into force, see e.g. article 2(2) of the Argentina-Spain BIT. See also Ping An Life Insurance v. Belgium, ICSID, Award of 30 April 2015, para. 231. 96 With regard to many of these requirements there is no consensus as to whether they relate to jurisdiction or admissibility, and tribunals have frequently failed to make a clear distinction in this regard. For a detailed discussion of the two concepts and the need to differentiate between them see e.g. Douglas, The International Law of Investment Claims, 2009, 141; Paulsson, in: Aksen et al. (eds), Global Reflections on International Law, 2005, 601 (617); Wehland, in: Baltag (ed.), ICSID Convention after 50 Years, 2017, 227 (231). 97 See e.g. Ethyl Corporation v. Canada, UNCITRAL, Award of 24 June 1998, para. 85; Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 343. 94

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claims.98 In any event, there is agreement that investors do not need to seek negotiations with a host State if such negotiations would obviously be futile.99 b) Prior-recourse to court requirements. Other treaties stipulate that investors can 44 only resort to international arbitration after having sought relief before the national courts or administrative authorities of the host State for a certain period of time.100 Article 10(2) of the Argentina-Netherlands BIT, for instance, provides that disputes shall in the first place be submitted “to the administrative or judicial organs of the Contracting Party in the territory of which the investment has been made”, with Article 10(3) specifying that “[i]f within a period of eighteen months from submissions of the dispute to the competent organs … these organs have not given a final decision or if the decision of the aforementioned organs has been given but the parties are still in dispute, then the investor concerned may resort to international arbitration.” Here again, tribunals have varied in their interpretation of these provisions. Occa- 45 sionally tribunals have taken the view that these clauses do not serve any useful purpose and could therefore effectively be disregarded.101 The prevailing view, however, is that, by giving the courts of the host State the opportunity to vindicate the international obligations contained in the IIA, these provisions constitute a modification of the exhaustion of local remedies rule and need to be observed before any arbitral proceedings can be instituted under the treaty mechanism.102 Tribunals have nevertheless admitted exceptions to prior-recourse to court require- 46 ments, in particular where litigation in the local courts is unilaterally hindered by a host State.103 More controversially, the majority of the tribunal in Abaclat v. Argentina took the view that investors would not have to observe a prior-recourse to court requirement if their immediate recourse to arbitration did not deprive the host State of an opportunity to address the dispute through its domestic legal system because that system did not provide for an appropriate recourse in any event.104 98 See e.g. Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004, para. 88; Tulip Real Estate v. Turkey, ICSID, Decision on Bifurcated Jurisdictional Issue of 5 March 2013, para. 72; Guaracachi America v. Bolivia, UNCITRAL, Award of 31 January 2014, para. 390. 99 See Occidental Petroleum v. Ecuador, ICSID, Decision on Jurisdiction, 9 September 2008, para. 94; Teinver v. Argentina, ICSID, Decision on Jurisdiction of 21 December 2012, para. 126. 100 With regard to the relevance of a decision rendered in the host State’s domestic courts for a later treaty arbitration see Wehland, (2019) 36 J. Int’l Arb. 220. 101 See Hochtief v. Argentina, ICSID, Decision on Jurisdiction of 24 October 2011, para. 51; Plama Consortium v. Bulgaria, ICSID, Decision on Jurisdiction of 8 February 2005, para. 224. 102 See Maffezini v. Spain, ICSID, Decision on Objections to Jurisdiction of 25 January 2000, para. 36; BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, para. 146; Wintershall v. Argentina, ICSID, Award of 8 December 2008, para. 147; Impregilo v. Argentina, ICSID, Award of 21 June 2011, para. 94; ICS Inspection and Control Services v. Argentina, UNCITRAL, Award of 10 February 2012, para. 262; Daimler Financial Services v. Argentina, ICSID, Award of 22 August 2012, para. 193; Kilic Insaat v. Turkmenistan, ICSID, Award of 2 July 2013, paras 6.2.9, 6.3.15; Dede v. Romania, ICSID, Award of 5 September 2013, para. 225. While the tribunals in most of these cases considered the compliance with a prior recourse to courts clause to be a jurisdictional requirement, other tribunals have treated this as a matter of admissibility, see Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 496; Hochtief v. Argentina, ICSID, Decision on Jurisdiction of 24 October 2011, para. 96. Some tribunals have taken the view that the requirement did not necessarily need to be fulfilled at the moment of initiating proceedings, but that it was sufficient for court proceedings to have been initiated and the relevant time period to have passed before the rendering of a decision on jurisdiction, see Teinver v. Argentina, ICSID, Decision on Jurisdiction of 21 December 2012, para. 134; Philip Morris v. Uruguay, ICSID, Decision on Jurisdiction of 2 July 2013, para. 148. 103 See BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, para. 147. 104 See Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 582. See also Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 628. For a critique of the majority decision in this case see Abaclat v. Argentina, ICSID,

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c) Fork-in-the-road provisions. Another requirement for investors to be able to bring claims under some IIAs is that they must not previously have brought the same dispute in another forum, in particular the domestic courts of the host State. Article 7(3) (a) of the Argentina-US BIT, for instance, provides: “Provided that the national or company concerned has not submitted the dispute for resolution under paragraph 2 (a) or (b) [referring to the domestic courts and a previously agreed dispute settlement procedure respectively] … the national or company concerned may choose to consent in writing to the submission of the dispute for settlement by binding arbitration.” 48 Clauses such as Article 7(3)(a) have usually been held to restrict an investor’s ability to bring claims under a treaty mechanism only where the previous proceedings before the other forum related to the very same claims105 and were conducted between the very same parties.106 However, some tribunals have argued in favour of a broader interpretation of these clauses that would not require a strict identity of parties and claims,107 and might regard it as sufficient if the “fundamental basis” of the claims in the two sets of proceedings were the same.108 Here again, it remains to be seen how the relevant provisions will be applied in the future.109 47

5. Ex-ante consolidation and proceedings involving multiple claimants Tribunals in investment treaty arbitrations have repeatedly had to deal with cases where, at the moment of initiating a dispute, an investor does not rely on a single treatybased dispute resolution mechanism, but simultaneously invokes dispute resolution clauses contained in several instruments.110 Similarly, tribunals sometimes face a situation where several investors seek to initiate a single set of proceedings based on one or several IIAs against a host State, arguing there is some common element between them. The extent to which such an ex-ante consolidation of claims is possible in the absence of consent by the host State is the matter of some controversy. 50 Tribunals have typically acknowledged a single claimant’s right to invoke several legal instruments as the basis for a tribunal’s jurisdiction, as long as this is done already at the 49

Dissenting Opinion of Abi-Saab to Decision on Jurisdiction and Admissibility of 4 August 2011, paras 20–33. 105 See Middle East Cement v. Egypt, ICSID, Award of 12 April 2002, para. 71; CMS Gas Transmission v. Argentina, ICSID, Decision on Objections to Jurisdiction of 17 July 2003, para. 80; Occidental Exploration v. Ecuador, UNCITRAL, Final Award of 1 July 2004, paras 48–49; Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, para. 157. 106 See CMS Gas Transmission v. Argentina, ICSID, Decision on Objections to Jurisdiction of 17 July 2003, para. 80; Champion Trading v. Egypt, ICSID, Decision on Jurisdiction of 21 October 2003, (2004) 19 ICSID Rev. 291; Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004, para. 98. 107 See Vivendi v. Argentina, ICSID, Decision on Annulment of 3 July 2002, paras 55, 113. See also Douglas, The International Law of Investment Claims, 2009, 156. 108 See Pantechniki v. Albania, ICSID, Award of 30 July 2009, para. 61; H&H Enterprises Investments v. Egypt, Award of 6 May 2014, para. 368. See also Supervision y Control v. Costa Rica, ICSID, Award of 18 January 2017, para. 330. 109 For a detailed discussion of the issues arising with regard to various types of “fork-in-the-road” provisions see Wehland, The Coordination of Multiple Proceedings in Investment Treaty Arbitration, 2013, paras 3.119–3.158. 110 The alternative for an investor might be to initiate several sets of proceedings against the host State, where each set of proceedings would be based on a different instrument. Since there would likely be a significant degree of overlap between the different proceedings in that case, some sort of coordination mechanism might have to be applied between them, see Sanum Investments v. Laos, UNCITRAL, Award on Jurisdiction of 13 December 2013, para. 367; Ampal-American Israel Corp. v. Egypt, ICSID, Decision on Jurisdiction of 1 February 2016, paras 329–331; Orascom TMT Investments v. Algeria, ICSID, Award of 31 May 2017, paras 542–543; Wehland, (2016) 31 ICSID Review 581.

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moment of initiating the arbitration and the dispute resolution mechanisms under the relevant instruments are identical.111 The situation is more complicated, however, where multiple claimants are involved. Tribunals have allowed investors to jointly initiate proceedings against a host State under the same legal instrument112 or even different legal instruments113 in numerous instances. Some of these tribunals, whilst acknowledging the need for a certain link to exist between the claims of the investors, have taken the view that such a link could in particular be found in the commonality of the factual background underlying the claims.114 At the same time, respondent States have become increasingly assertive in their 51 objections against the attempts of investors to band together in ex-ante consolidated proceedings.115 The dissenting opinions to the jurisdictional decisions in the Abaclat and Ambiente Ufficio arbitrations lend support to these views.116 In any event, it seems clear that unrelated investors cannot assert entirely unrelated claims against a host State in a single set of proceedings without the State’s consent.117

IV. Substantive protection standards under IIAs Putting access to international arbitration to one side, the other main feature of IIAs 52 are the substantive standards for the protection of investors that can usually be found in these treaties. The observation of these standards is an international obligation of the signatories, and conduct attributable to a State that is not in conformity with an investment protection standard will usually constitute an international wrong,118 entailing the consequences set out in articles 28 et seq. of the 2001 ILC Draft Articles on State Responsibility. In particular, a State that breaches its obligations under an IIA has the duty to cease the act constituting the breach if it is still continuing, as well as the 111 See Tradex Hellas v. Albania, ICSID, Decision on Jurisdiction of 24 December 1996, 5 ICSID Reports (2002), 52; CCL v. Kazakhstan, SCC, Jurisdictional Award of 2003, (2005) 1 S.I.A.R. 128; Plama Consortium v. Bulgaria, ICSID, Decision on Jurisdiction of 8 February 2005, para. 1; Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 336; Duke Energy v. Ecuador, ICSID, Award of 18 August 2008, para. 156; Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, paras 60–102; Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010, para. 65; Pac Rim Cayman v. El Salvador, ICSID, Decision on Preliminary Objections of 2 August 2010, para. 253. 112 See e.g. Goetz v. Burundi, ICSID, Award of 10 February 1999, para. 89; Funnekotter v. Zimbabwe, ICSID, Award of 22 April 2009, para. 95; Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010, paras 1, 3; Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 4 August 2011, para. 490; Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, para. 172. The proceedings in Abaclat and Ambiente Ufficio feature 60,000 and 90 claimants, respectively. 113 See Suez and Interaguas v. Argentina, ICSID, Decision on Jurisdiction of 16 May 2006, para. 2; Suez and Vivendi v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2006, para. 2; Millicom International Operations v. Senegal, ICSID, Decision on Jurisdiction of 16 July 2010, paras 56, 88; Guaracachi America v. Bolivia, UNCITRAL, Award of 31 January 2014, para. 346. 114 See Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction of 8 February 2013, paras 153, 161. 115 See news article of 1 January 2014 available at www.iareporter.com/articles/20140102. 116 See Abaclat v. Argentina, ICSID, Dissenting Opinion of Abi-Saab to Decision on Jurisdiction and Admissibility of 4 August 2011, para. 77; Ambiente Ufficio v. Argentina, ICSID, Dissenting Opinion of Torres Bernárdez to Decision on Jurisdiction of 8 February 2013, para. 81. 117 See Erhas Dis Ticaret v. Turkmenistan, UNCITRAL, unpublished Award of 8 June 2018 referred to in news article of 23 June 2015 available at www.iareporter.com/articles/an-uncitral-tribunal-declines-jurisdiction-over-a-joint-treaty-claim-brought-against-turkmenistan-by-a-series-of-unrelated-claimants. 118 See article 12 of the 2001 ILC Draft Articles on State Responsibility. The attribution of State conduct is governed by the principles expressed in articles 4 to 11 of the 2001 ILC Draft Articles.

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obligation to repair any injury caused by the breach. In practice, the large majority of investment treaty arbitrations relate to claims of investors for compensatory damages. 53 While IIAs show a fair degree of variation with regard to the substantive protection standards they contain (as well as an even greater degree of variety when it comes to their exact formulation), a number of standards can be found in most IIAs. These include the protection of investors in the event of expropriation (1), the guarantee of fair and equitable treatment (2), full protection and security (3), national treatment (4), Most-Favoured-Nation treatment (5), the prohibition of unreasonable or discriminatory measures (6), and, to a lesser extent, so-called umbrella clauses (7). Each of these standards will now be addressed in turn.

1. Protection in the event of an expropriation In line with the traditional understanding of territorial sovereignty, investment treaties typically recognize the right of host States to expropriate investments, but establish a number of requirements in this regard. Thus an expropriation must serve a public purpose, must not be arbitrary or discriminatory, and must be accompanied by the payment of prompt, adequate and effective compensation. An expropriation that does not meet all of these requirements is illegal, and entails an obligation to compensate the investor for the breach of the standard under the IIA.119 55 Importantly, the protection under IIAs extends not only to direct expropriations involving a transfer of title over the investor’s assets, but also to indirect expropriations, where the title nominally remains with the investor, but the investor is nevertheless deprived of the benefits that this title normally confers.120 In indirect expropriation cases, the host State usually disputes that there is an expropriation and does not offer any compensation, with the consequence that the expropriation becomes necessarily illegal.121 56 In practice, investment treaty tribunals mostly deal with situations where the host State does not recognize that an expropriation exists.122 The focus of the debate in these cases is usually not on the existence of a public purpose or the absence of discrimination, but rather on the delimitation between the host State’s general freedom to regulate (without offering compensation) and its obligation to compensate investors for measures that have an expropriatory effect. 57 As a preliminary issue, one may need to address whether an expropriation necessarily has to relate to the entirety of an investor’s investment, or whether individual assets forming part of an overall investment can separately be the subject of an expropriation. Occasionally, tribunals have appeared to assume that any expropriation would have to relate to the “totality of an investment” rather than merely “some portion thereof.”123 By 54

119 Rusoro Mining v. Venezuela, ICSID/AF, Award of 22 August 2016, para. 407. However, tribunals have also held that “[a]n expropriation only wanting fair compensation has to be considered as a provisionally lawful expropriation” for which only “fair compensation” would have to be paid, see Tidewater v. Venezuela, ICSID, Award of 13 March 2015, para. 141. 120 IIAs frequently refer to the idea of indirect expropriations using terms such as “measures having effect equivalent to nationalization or expropriation”, see e.g. article 12(1) ECT. 121 See Quiborax v. Bolivia, ICSID, Award of 16 September 2015, para. 255; UP and CD Holding Internationale v. Hungary, ICSID, Award of 9 October 2018, para. 411. 122 See, however, e.g. Funnekotter v. Zimbabwe, ICSID, Award of 22 April 2009, para. 97; Guaracachi America and Rurelec v. Bolivia, UNCITRAL, Award of 31 January 2014, para. 437; Berkowitz v. Costa Rica, UNCITRAL, Award of 25 October 2016, para. 36. 123 See Grand River v. United States, UNCITRAL, Award of 12 January 2011, para. 147. See also Telenor Mobile Communications v. Hungary, ICSID, Award of 13 September 2006, para. 67; Philip Morris v. Uruguay, ICSID, Award of 8 July 2016, para. 283.

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contrast, in the majority of cases tribunals have been prepared to look at specific rights or physical assets owned by an investor, thus admitting that these specific rights could equally be the subject of an expropriation.124 A number of criteria have been developed in the jurisprudence of arbitral tribunals to 58 establish whether a measure that does not purport to be expropriatory nevertheless constitutes an indirect expropriation. The formula most frequently used is that an indirect expropriation exists where the investor has been substantially deprived of the economic value, use or enjoyment of his investment.125 There seems to be consensus that it is the effect of the measure on the investment 59 rather than the expropriatory intent of the host State that constitutes the key criterion for finding an expropriation.126 Tribunals consider both the intensity and the duration of the deprivation suffered by the investor when determining this effect.127 Thus a substantial deprivation of the use of the benefits of an investment will usually be found where the investor is no longer in control of the investment’s day-to-day operations.128 In addition, tribunals sometimes look at an investor’s legitimate expectations to establish whether the effect of a measure is severe enough to constitute an expropriation.129 In terms of duration, tribunals have taken the view that the deprivation must be permanent130 or at least “more than … ephemeral.”131 The primary importance of the effect of the incriminated measure notwithstanding, 60 the underlying intent of the host State may also be relevant. In particular, tribunals have held that a host State’s actions should not be considered expropriatory if they are adopted bona fide with the aim of advancing a public purpose, constitute a normal exercise of the State’s regulatory powers, and are non-discriminatory.132 Where a measure presents itself as an expression of the host State’s general freedom to regulate, this freedom must rather be balanced against the interference with the investor’s

124 See e.g. Middle East Cement v. Egypt, ICSID, Award of 12 April 2002, paras 127, 144; Eureko v. Poland, UNCITRAL, Partial Award of 19 August 2005, paras 240–243; EnCana v. Ecuador, UNCITRAL, Award of 3 February 2006, para. 183; Saipem v. Bangladesh, ICSID, Award of 30 June 2009, para. 128; Ampal-American Israel Corp. v. Egypt, ICSID, Decision on Liability and Heads of Loss of 21 February 2017, para. 180. 125 See e.g. Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 116; Telenor Mobile Communications v. Hungary, ICSID, Award of 13 September 2006, para. 65. However, tribunals have cautioned that the mere loss of the economic value of an investment may not justify a finding of expropriation in cases where “the substance and attributes of property are left intact”, see Mamidoil v. Albania, ICSID, Award of 30 March 2015, para. 571. 126 See Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 116; Plama Consortium v. Bulgaria, ICSID, Award of 27 August 2008, para. 193. 127 See Telenor Mobile Communications v. Hungary, ICSID, Award of 13 September 2006, para. 70; LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 190. 128 See LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 188. 129 See Metalclad v. Mexico, ICSID/AF, Award of 30 August 2000, para. 107; Tecmed v. Mexico, ICSID/ AF, Award of 29 May 2003, para. 149; LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 190. Other tribunals have implicitly dismissed this criterion, by finding that the fact that an investor remained in control of the investment’s day-to-day operations constituted a strong indication against the existence of an expropriation, see CMS Gas Transmission v. Argentina, ICSID, Award of 12 May 2005, para. 263. 130 See LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 193; Mobil v. Venezuela, ICSID, Award of 9 October 2014, para. 286. 131 See Wena Hotels v. Egypt, ICSID, Award of 8 December 2000, para. 99, finding the seizure of a hotel for nearly a year to be sufficient for an expropriation. See also Inmaris v. Ukraine, ICSID, Award of 1 March 2012, para. 300; Olin Holdings v. Libya, ICC, Award of 25 May 2018, para. 165. 132 See Methanex v. United States, Award of 3 August 2005, Part IV, Ch. D, 4, para. 7; Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 255.

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ownership rights.133 In the words of one arbitral tribunal, there has to be “a reasonable relationship of proportionality” between the burden imposed on the investor and the general welfare objective that the host State seeks to realize by adopting the measure.134 61 It is frequently admitted that these criteria can hardly be said to trace a bright line between non-compensable regulatory activity and measures equivalent to an expropriation that require the payment of compensation. Tribunals have tended to emphasize the need to decide each case on the basis of its own facts, explaining that this role can only be filled by the adjudicator in a specific dispute.135 62 Finally, tribunals have held that an expropriation can only result from actions carried out by a host State acting in an official capacity and through the exercise of public authority.136 In particular, the denial of a contractual right to an investor will constitute an expropriation only if it goes beyond mere contractual non-performance that could similarly be found in an investor’s relationships with any ordinary contracting party.137

2. Fair and equitable treatment Another substantive protection standard found in most IIAs is the guarantee of fair and equitable treatment. Article 3(1) of the Netherlands-Turkey BIT, for instance, provides, in relevant part: “Each Contracting Party shall ensure fair and equitable treatment to the investments of investors of the other Contracting Party.” The guarantee of fair and equitable treatment is the substantive protection standard most frequently and successfully invoked in investment treaty arbitrations. 64 Tribunals have occasionally considered the obligation to treat investments fairly and equitably as a general principle encompassing the more specific standards of full protection and security and the prohibition of unreasonable and discriminatory measures.138 In practice, the standard is frequently relied upon by investors as a subsidiary argument in case a claim for expropriation fails. Tribunals have accordingly noted that “fair and equitable treatment … ensures that even where there is no clear justification for making a finding of expropriation … there is still a standard which … can of itself redress damage that is unlawful and that would otherwise pass unattended.”139 65 There is some discussion as to how the fair and equitable treatment standard relates to the traditionally recognized minimum standard of treatment of aliens under customary international law.140 The latter had originally been described in the early 20th century in the Neer case before the Mexico-US General Claims Commission as follows: 63

133 See Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 122; Azurix v. Argentina, ICSID, Award of 14 July 2006, paras 311–312; LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 189. 134 See Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 122. 135 See Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 264. 136 See Consortium RFCC v. Morocco, ICSID, Award of 22 December 2003, para. 65; Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 281; Azurix v. Argentina, ICSID, Award of 14 July 2006, para. 315; Vigotop v. Hungary, ICSID, Award of 1 October 2014, para. 328. 137 See Waste Management v. Mexico II, ICSID/AF, Award of 30 April 2004, para. 160; Siemens v. Argentina, ICSID, Award of 6 February 2007, para. 253; Vanessa Ventures v. Venezuela, ICSID, Award of 16 January 2013, para. 209. 138 See e.g. Noble Ventures v. Romania, ICSID, Award of 12 October 2005, para. 182; Impregilo v. Argentina, ICSID, Award of 21 June 2011, paras 333–334. 139 See Sempra v. Argentina, ICSID, Award of 28 September 2007, para. 300. See also PSEG v. Turkey, ICSID, Award of 19 January 2007, para. 239. 140 In the context of NAFTA, a decision of the NAFTA Free Trade Commission specifies that fair and equitable treatment is to be understood by reference to the minimum international law standard, see Note of Interpretation of 31 July 2001, available at www.sice.oas.org/tpd/nafta/Commission/CH11understanding_e.asp.

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“[T]he treatment of an alien, in order to constitute an international delinquency, should amount to an outrage, to bad faith, to wilful neglect of duty, or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognize its insufficiency.”141 It is typically assumed, however, that since the time of the Neer decision the minimum standard of treatment has evolved to impose more exacting requirements with regard to State behaviour.142 As a consequence, even assuming that the fair and equitable treatment standard is not materially different from the minimum standard under customary international law,143 the obligation to provide fair and equitable treatment may go beyond the mere prohibition of “outrageous” behaviour: “To the modern eye, what is unfair or inequitable need not equate with the outrageous or the egregious.”144 Tribunals have sought to define the content of the fair and equitable treatment standard by referring to a number of components. These include the obligation of a State to act transparently and in good faith, to respect due process, to refrain from taking arbitrary, grossly unfair, discriminatory or idiosyncratic measures, to refrain from resorting to coercion and harassment, and to respect the investor’s reasonable expectations with regard to the legal framework affecting the investment.145 At the same time, tribunals have often stressed that a determination of what constitutes fair and equitable treatment is not possible in the abstract and can only be made on a case-bycase basis.146 With this caveat in mind, the various components of the fair and equitable treatment standard can be described as follows. A first component of the fair and equitable treatment standard is that States are supposed to act transparently towards investors. Transparency has been described as the “idea that all relevant legal requirements for the purpose of initiating, completing and successfully operating investments … should be capable of being readily known to all affected investors of another Party.”147 The concept implies an obligation of the authorities of a host State to correct any “misunderstanding or confusion” of investors with regard to regulatory requirements and to “ensure that the correct position is promptly determined.”148 A second component of the standard is the obligation to act in good faith towards investors. Bad faith actions are characterized by “the use of legal instruments for purposes other than those for which they were created” or the infliction of damage

141 Neer v. Mexico, Mexico-US General Claims Commission, Decision of 15 October 1926, United Nations Reports of International Arbitral Awards, Vol. IV, 60, at 61. 142 See Mondev v. United States, ICSID/AF, Award of 11 October 2002, para. 117; Merrill & Ring v. Canada, UNCITRAL, Award of 31 March 2010, para. 213. For a different view see Glamis Gold v. United States, UNCITRAL, Award of 8 June 2009, paras 614–616. 143 See e.g. Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 611. 144 See Mondev v. United States, ICSID/AF, Award of 11 October 2002, para. 116. 145 See Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 602; Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 609; Siag v. Egypt, ICSID, Award of 1 June 2009, para. 450; Bayindir v. Pakistan, ICSID, Award of 27 August 2009, para. 178; Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, para. 284; Paushok v. Mongolia, UNCITRAL, Award on Jurisdiction and Liability of 28 April 2011, para. 253; Crystallex v. Venezuela, ICSID/AF, Award of 4 April 2016, para. 543. 146 See Mondev v. United States, ICSID/AF, Award of 11 October 2002, para. 118; Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 610; Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, para. 284. 147 See Metalclad v. Mexico, ICSID/AF, Award of 30 August 2000, para. 76. See also Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 162. 148 See Metalclad v. Mexico, ICSID/AF, Award of 30 August 2000, para. 76.

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upon investments for reasons other than those put forward by the host State.149 While bad faith on behalf of a host State may be a strong indication that the fair and equitable treatment standard has been violated, numerous cases have found that a host State’s actions can breach the standard even when not carried out in bad faith.150 Arbitrariness is another aspect of unfair and inequitable behaviour that significantly overlaps with the notion of bad faith. In this regard, reference is often made to the ICJ’s definition in the ELSI case: “Arbitrariness is not so much something opposed to a rule of law, as something opposed to the rule of law. … It is a wilful disregard of due process of law, an act which shocks, or at least surprises, a sense of judicial propriety.”151 Arbitrariness is frequently associated with unreasonableness and has been found to exist where a measure is lacking any apparent legitimate purpose, is taken for motives different from those put forward by the decision-maker, or is simply not a reasonable means for achieving the stated purpose.152 The concept of arbitrariness is also closely related to the notion of due process, which includes the right to be heard in judicial or administrative proceedings.153 Extreme due process violations may result in a denial of justice, which always constitutes a violation of the fair and equitable treatment standard.154 Similarly, discriminatory treatment can lead to a violation of the fair and equitable treatment standard. Discrimination may exist if someone in a similar situation to the investor is treated more favourably.155 Given the close link between this concept and the Most-Favoured-Nation as well as national treatment standards that are also contained in most IIAs,156 tribunals sometimes assess discriminatory behaviour as part of those standards rather than under the heading of fair and equitable treatment.157 Threats, coercion and harassment against an investor have also been found to violate the fair and equitable treatment standard.158 Arguably the most fundamental component of the standard, which is closely linked to all of the previously-mentioned categories, but also presents the greatest challenges with regard to its practical application, is the protection of an investor’s legitimate expectations. This concept was described by the tribunal in Tecmed as follows: “The foreign investor expects the host State to act in a consistent manner, free from ambiguity and totally transparently in its relations with the foreign investor, so that it may know beforehand any and all rules and regulations that will govern its investments,

149 See Frontier Petroleum v. Czech Republic, UNCITRAL, Final Award of 12 November 2010, para. 300. 150 See Mondev v. United States, ICSID/AF, Award of 11 October 2002, para. 116. See also CMS Gas Transmission v. Argentina, ICSID, Award of 12 May 2005, para. 280; Duke Energy v. Ecuador, ICSID, Award of 18 August 2008, para. 341; Bayindir v. Pakistan, ICSID, Award of 27 August 2009, para. 181; Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 602. 151 Elettronica Sicula SpA (ELSI) (US v. Italy), Judgment of 20 July 1989, ICJ Reports (1989), para. 128. 152 See EDF v. Romania, ICSID, Award of 8 October 2009, para. 303; AES Summit Generation v. Hungary, ICSID, Award of 23 September 2010, para. 10.3.7. 153 Metalclad v. Mexico, ICSID/AF, Award of 30 August 2000, para. 91. 154 See Siag v. Egypt, ICSID, Award of 1 June 2009, para. 455; Chevron and Texaco Petroleum v. Ecuador, UNCITRAL, Second Partial Award on Track II of 30 August 2018, para. 8.24. 155 See Goetz v. Burundi, ICSID, Award of 10 February 1999, para. 121; Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 288. 156 See infra mns 83 et seq. and 87 et seq. 157 See Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 291. 158 See Desert Line Projects v. Yemen, ICSID, Award of 6 February 2008, para. 194.

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as well as the goals of the relevant policies and administrative practices or directives, to be able to plan its investment and comply with such regulations.”159 Subsequent decisions have emphasized that only legitimate expectations can be protected and that the concept does not free investors of the duty to conduct a due diligence before making an investment decision:160 “To be protected, the investor’s expectations must be legitimate and reasonable at the time when the investor makes the investment. The assessment of the reasonableness or legitimacy must take into account all circumstances, including not only the facts surrounding the investment, but also the political, socioeconomic, cultural and historical conditions prevailing in the host State. In addition, such expectations must arise from the conditions that the State offered the investor and the latter must have relied upon them when deciding to invest.”161 Tribunals have also stressed that the legitimacy of an investor’s expectations is limited by a host State’s regulatory freedom: “The idea that legitimate expectations, and therefore FET, imply the stability of the legal and business framework, may not be correct if stated in an overly-broad and unqualified formulation. The FET might then mean the virtual freezing of the legal regulation of economic activities, in contrast with the State’s normal regulatory power and the evolutionary character of economic life. Except where specific promises or representations are made by the State to the investor, the latter may not rely on a bilateral investment treaty as a kind of insurance policy against the risk of any changes in the host State’s legal and economic framework. Such expectation would be neither legitimate nor reasonable.”162 Tribunals are therefore required to attempt to strike a balance between the need of investors to have a predictable investment framework and the right of host States to regulate in the public interest.163 If understood in this fashion, fair and equitable treatment may be characterized as a “standard entailing reasonableness and proportionality.”164 Specifically, tribunals have to determine whether the relevant measures bear a reasonable relationship to some rational policy and were appropriately tailored so as not to impose an excessive burden on investors.165 Finally, there is some debate as to the requirements for a violation of the standard when it comes to contractual obligations of a host State. Some tribunals have taken the view that “a State’s non-payment under a contract is … capable of giving rise to a 159

See Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003, para. 154. See Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, para. 285. 161 Duke Energy v. Ecuador, ICSID, Award of 18 August 2008, para. 340 (footnote omitted). See also Mamidoil v. Albania, ICSID, Award of 30 March 2015, para. 634; United Utilities v. Estonia, ICSID, Award of 21 June 2019, para. 608. 162 See EDF v. Romania, ICSID, Award of 8 October 2009, para. 217. See also United Utilities v. Estonia, ICSID, Award of 21 June 2019, para. 575. Similarly, with regard to the effect of a change of jurisprudence on regulatory stability, the tribunal in a recent decision held that investors should anticipate that the law will “change over time as a function of judicial decision-making”, Eli Lilly v. Canada, UNCITRAL, Final Award of 16 March 2017, para. 384. 163 See Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, para. 285; Total v. Argentina, ICSID, Decision on Liability of 27 December 2010, para. 309; Perenco Ecuador v. Ecuador, ICSID, Decision on Remaining Issues of Jurisdiction and Liability of 12 September 2014, para. 560; Philip Morris v. Uruguay, ICSID, Award of 8 July 2016, para. 388; Novenergia II v. Spain, SCC, Final Award of 15 February 2018, para. 657. 164 See El Paso v. Argentina, ICSID, Award of 31 October 2011, para. 373; Blusun v. Italy, ICSID, Award of 27 December 2016, para. 372. With regard to the “requirement that the impact of the measure on the investor be proportional to the policy objective sought” see also Electrabel v. Hungary, ICSID, Award of 25 November 2015, para. 179. 165 Marfin Investment v. Cyprus, ICSID, Award of 26 July 2018, para. 1213. 160

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breach of a fair and equitable treatment requirement, such as, perhaps, where the nonpayment amounts to a repudiation of the contract, frustration of its economic purpose, or substantial deprivation of its value.”166 A greater number of tribunals, however, has taken the position that the standard can only be violated where contractual rights are frustrated through the exercise of a host State’s sovereign power.167

3. Full protection and security Another standard frequently found in IIAs is that of full protection and security. Article 3(2) of the Netherlands-Turkey BIT, for instance, provides: “Each Contracting Party shall accord to … investments full security and protection which in any case shall not be less than that accorded to investments of its own investors or to investments of investors of any third State.” The formulations of this standard vary considerably, and regard needs to be had to the specific wording of the clause at issue when determining its scope and its relationship to other protection standards in an IIA.168 This notwithstanding, a number of general observations can be made. 80 First, the act complained of by the investor is typically an omission rather than a positive measure by the host State, namely its failure to protect the investment from damaging acts of either its own organs or third parties.169 Tribunals in previous cases have found that the host State’s obligation to protect is not absolute, but merely involves a duty of “due diligence” to take protection measures that are reasonable under the circumstances.170 81 Second, the standard has traditionally been invoked in the context of physical violence against an investment, and there is some debate as to whether it can extend beyond that to also include the granting of legal protection.171 While some tribunals have taken the view that the traditional interpretation of the standard means that it should be limited to the guarantee of physical security,172 the majority position is that the standard also extends to the legal security of an investment.173 79

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See SGS v. Paraguay, ICSID, Decision on Jurisdiction of 12 February 2010, para. 146. See RFCC v. Morocco, ICSID, Award of 22 December 2003, para. 51; Duke Energy v. Ecuador, ICSID, Award of 18 August 2008, para. 345; Bayindir v. Pakistan, ICSID, Award of 27 August 2009, para. 180; Tulip Real Estate v. Turkey, ICSID, Award of 10 March 2014, para. 354. 168 Tribunals have occasionally taken the view that a violation of the fair and equitable treatment standard also implies a violation of the guarantee of full protection and security, see Occidental Exploration v. Ecuador, UNCITRAL, Final Award of 1 July 2004, para. 187. The other way around, others have assumed that a breach of full protection and security entails a violation of the fair and equitable treatment standard, see Suez and Vivendi v. Argentina, ICSID, Decision on Liability of 30 July 2010, para. 171. 169 See Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 355; Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 730; ICSID, Award of 28 July 2015, para. 597. 170 See Asian Agricultural Products v. Sri Lanka, ICSID, Award of 27 June 1990, para. 53; Wena Hotels v. Egypt, ICSID, Award of 8 December 2000, para. 84; Noble Ventures v. Romania, ICSID, Award of 12 October 2005, para. 164; Pantechniki v. Albania, ICSID, Award of 30 July 2009, para. 81. 171 See Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 484; Sempra v. Argentina, ICSID, Award of 28 September 2007, para. 323; Suez and Vivendi v. Argentina, ICSID, Decision on Liability of 30 July 2010, para. 173. 172 See BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007, para. 326; Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008, para. 668. 173 See e.g. CME v. Czech Republic, UNCITRAL, Partial Award of 13 September 2001, para. 613; Azurix v. Argentina, ICSID, Award of 14 July 2006, para. 408; Siemens v. Argentina, ICSID, Award of 6 February 2007, para. 303; Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 729. Some IIAs explicitly provide for full legal protection and security, see e.g. article 4(1) of the Argentina-Germany BIT. 167

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Finally, there is some debate as to the relationship of the standard to the 82 customary international law minimum standard in relation to the protection of alien property.174 Here again, in the absence of agreement as to how the customary international law standard may have evolved since its early formulation in the Neer decision, the practical value of this debate seems limited.175

4. National treatment Most IIAs contain a provision guaranteeing foreign investors national treatment with regard to their investments. For example, article 3(3) of the Germany-Philippines BIT states, in relevant part: “Each Contracting State shall apply in its territory to investments and to investors of the other Contracting State, with respect to their investments which are made in accordance with the legislation of that Contracting State and activities related to such investments, a treatment no less favourable than that granted to its own investments and investors.” The purpose of a provision such as article 3(3) is to protect foreign investors against national favouritism and thus to allow them to meet their local competitors on a level playing field. A host State violates the national treatment standard where it treats a foreign investor differently from his domestic counterparts who are in a comparable situation, without there being any valid justification for such a different treatment. The standard is therefore closely linked to the prohibition of discriminatory treatment found in many IIAs.176 Most tribunals agree that the showing of discriminatory intent on behalf of the host State is not necessary177 and that the standard covers both de jure and de facto discrimination.178 At the same time, tribunals have held that there can be no right to “equality in injustice” where a law is only partially enforced.179 The main difficulty regarding the practical application of the standard arguably consists in the determination of the comparator that the investor’s treatment should be held against. Approaches taken by tribunals vary from comparing the foreign investor only to domestic companies in the same, narrowly defined, economic sector180 to extending their comparison to domestic companies in general, including those active in entirely different economic sectors.181 At the same time, tribunals have found that no discrimination exists in the presence of rational policy grounds for the differentiation made.182 This additional criterion of a rational policy justification at least clarifies that an overall evaluation of the standard needs to take into account the existence of legitimate reasons for regulating different sectors of the economy differently. 174 See e.g. Noble Ventures v. Romania, ICSID, Award of 12 October 2005, para. 164; El Paso v. Argentina, ICSID, Award of 31 October 2011, para. 522. 175 See already supra mns 65 et seq. 176 See Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 367. See also infra mns 92 et seq. 177 See e.g. SD Meyers v. Canada, UNCITRAL, Partial Award of 13 November 2000, para. 254; Corn Products v. Mexico, ICSID/AF, Decision on Responsibility of 15 January 2008, para. 138. For an apparently different view see Genin v. Estonia, ICSID, Award of 25 June 2001, para. 369. 178 See Corn Products v. Mexico, ICSID/AF, Decision on Responsibility of 15 January 2008, para. 115. 179 See International Thunderbird v. Mexico, UNCITRAL, Award of 26 January 2006, para. 183. 180 See Feldman v. Mexico, ICSID/AF, Award of 16 December 2002, para. 171; Levy de Levi v. Peru, ICSID, Award of 26 February 2014, para. 396. 181 See Occidental Exploration v. Ecuador, UNCITRAL, Award of 1 July 2004, para. 173. 182 See SD Meyers v. Canada, UNCITRAL, Partial Award of 13 November 2000, para. 250; Apotex Holdings v. United States, ICSID/AF, Award of 25 August 2014, para. 8.55. See also Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 375.

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5. Most-Favoured-Nation treatment Most-Favoured-Nation (or MFN) clauses guarantee investors of a signatory State in the territory of the host State that they be treated at least as favourably as investors of any third country. Article 3(2) of the China-Colombia BIT, for instance, provides: “Each Contracting Party shall accord to investments of the investors of the other Contracting Party treatment no less favourable than it accords, in like circumstances, to investments of the investors of any third party with respect to the operation, management, use, enjoyment or disposal of investments.” The formulation of MFN clauses varies widely, and one always needs to look at the specific wording of an MFN clause to determine its exact scope of protection. 88 MFN clauses can be invoked in two different ways. First, one can envisage a situation where an investor de facto or de lege receives treatment less favourable than the treatment afforded to investors from a third country. Here the standard works similarly to the national treatment standard, with the difference that the investor’s treatment must be compared to the treatment afforded to other foreign investors rather than to his domestic competitors.183 If there is an unjustified differentiation between the investors despite them being in like circumstances, the MFN standard will have been breached. There are relatively few cases where the standard has been invoked in this manner. 89 Second, and of considerably greater practical relevance, the standard can be relied upon by an investor in the context of a dispute against a host State to seek the extension of benefits granted to investors under the host State’s IIAs with third countries.184 The rationale for this possibility is that, by not extending these benefits to the investor, the host State would be breaching the MFN provision in its IIA with the investor’s home State. Where tribunals find that more favourable treatment is being afforded to third country investors under a different IIA and that the MFN provision is applicable in this regard, they usually treat the investor as if the more favourable provision were directly applicable to him. In this second scenario tribunals frequently need to address the relationship between the MFN clause and the remainder of the IIA containing it. In particular, tribunals may have to consider whether specifically negotiated provisions in the IIA may effectively be overridden through the “import” of more favourable provisions from other treaties. 90 Whilst the jurisprudence of tribunals on this issue is far from homogenous, one distinction made in a number of decisions is that between (a) substantive protection standards, (b) access to a particular dispute resolution forum, and (c) procedural modalities with regard to such access (such as waiting periods or prior-recourse to court requirements).185 With regard to substantive protection standards, their “import” 87

183 See Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007, para. 366. Reference can therefore be made to the explanations provided with regard to the national treatment standard, see supra mns 83 et seq. 184 Arbitral tribunals have generally considered sufficient that an IIA with a third State grant benefits to investors in abstracto (see Bayindir v. Pakistan, ICSID, Award of 27 August 2009, paras 153–160). By contrast, the tribunal in a recent decision held that where an MFN clause refers to “treatment accorded in similar situations”, an investor must show the existence of a “factually similar situation” beyond the mere fact that investors of the third State have also invested in the host State (the tribunal did not elaborate on the type of similarities that might qualify), see İçkale İnşaat Limited Şirketi v. Turkmenistan, ICSID, Award of 8 March 2016, paras 329–332. 185 There is agreement that a treaty’s general protection requirements (such as the definition of an investment) cannot be overridden by means of an MFN clause, see Vanessa Ventures v. Venezuela, ICSID, Award of 16 January 2013, para. 133; Metal-Tech v. Uzbekistan, ICSID, Award of 4 October 2013, para. 145.

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through MFN clauses is usually accepted.186 By contrast, most arbitral decisions agree that MFN clauses cannot be used to give investors access to dispute resolution mechanisms that were previously unavailable to them under the relevant IIA.187 One of the most contentious issues is whether MFN clauses can be used to 91 circumvent specific requirements for the invocation of investor-State dispute resolution mechanisms such as cooling-off periods or prior-recourse to court requirements. While some modern IIAs specifically state that the application of their MFN provisions does not extend to investor-State dispute settlement mechanisms,188 others seem to specify the opposite.189 In the absence of an explicit provision in this regard, tribunals have found both for190 and against191 the application of the relevant MFN clauses in these situations.

6. Prohibition of unreasonable or discriminatory measures Closely linked to the fair and equitable treatment standard as well as national 92 treatment and MFN obligations is the prohibition of unreasonable or discriminatory measures found in many IIAs. For example, article 2(2) of the Argentina-UK BIT provides, in relevant part: “Neither Party shall in any way impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment or disposal of investments in its territory of investors of the other Contracting Party.”192 186 See MTD Equity v. Chile, ICSID, Award of 25 May 2004, para. 104; Bayindir v. Pakistan, ICSID, Award of 27 August 2009, para. 159. For a different view, suggesting that an MFN clause might only serve to “improve” substantive protection standards already contained in a treaty but not to “incorporate” a “new” standard, see Teinver v. Argentina, ICSID, Award of 21 July 2017, paras 884–892. 187 See e.g. Maffezini v. Spain, ICSID, Decision on Objections to Jurisdiction of 25 January 2000, para. 63; Plama Consortium v. Bulgaria, ICSID, Decision on Jurisdiction of 8 February 2005, para. 227; Renta 4 v. Russia, SCC, Award on Preliminary Objections of 20 March 2009, para. 119; Tza Yap Shum v. Peru, ICSID, Decision on Jurisdiction of 19 June 2009, para. 220; Austrian Airlines v. Slovak Republic, ad hoc arbitration, Final Award of 9 October 2009, para. 140; Hochtief v. Argentina, ICSID, Decision on Jurisdiction of 24 October 2011, para. 81; Sanum Investments v. Laos, UNCITRAL, Award on Jurisdiction of 13 December 2013, para. 358; Anglia Auto Accessories v. Czech Republic, SCC, Final Award of 10 March 2017, paras 191–193; Ansung Housing v. China, ICSID, Award of 9 March 2017, para. 138; Beijing Urban Construction Group v. Yemen, ICSID, Decision on Jurisdiction of 31 May 2017, para. 121. For a different view see RosInvestCo v. Russia, SCC, Award on Jurisdiction of 1 October 2007, para. 135. An arbitral tribunal similarly rejected an investor’s attempt to “import” the investor-State arbitration mechanism in a BIT through the MFN clause in the GATS of the World Trade Organization, Menzies Middle East and Africa v. Senegal, ICSID, Award of 5 August 2016, para. 136. 188 Article 3(3) of the China-Colombia BIT, for instance, provides: “The most favourable treatment to be granted in like circumstances referred to in this agreement does not encompass mechanisms for the settlement of investment disputes, … which are provided for in treaties or international investment agreements.” 189 See article 3 of Turkmenistan-UK BIT and the decision in Garanti Koza, finding that an investor could rely on that clause to choose ICSID arbitration (available under an IIA with a third country) instead of the arbitration mechanisms available under the Turkmenistan-UK BIT, Garanti Koza v. Turkmenistan, ICSID, Decision on the Objection to Jurisdiction for Lack of Consent of 3 July 2013, paras 79, 96. 190 See e.g. Maffezini v. Spain, ICSID, Decision on Objections to Jurisdiction of 25 January 2000, para. 64; Suez and Interaguas v. Argentina, ICSID, Decision on Jurisdiction of 16 May 2006, para. 59; Suez and Vivendi v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2006, para. 68; Hochtief v. Argentina, ICSID, Decision on Jurisdiction of 24 October 2011, para. 99; Teinver v. Argentina, ICSID, Decision on Jurisdiction of 21 December 2012, para. 186. 191 See e.g. Salini Costruttori v. Jordan, ICSID, Decision on Jurisdiction of 29 November 2004, para. 119; Kilic Insaat v. Turkmenistan, ICSID, Award of 2 July 2013, para. 7.9.1. 192 Some IIAs refer to “arbitrary” rather than “unreasonable” measures. The formulations are generally regarded as equivalent, see National Grid v. Argentina, UNCITRAL, Award of 3 November 2008, para. 197.

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Most decisions agree that where a treaty provision speaks of “unreasonable or discriminatory measures”, it effectively refers to two standards, which can in principle be analysed separately.193 At the same time, it is often assumed that both standards are special applications of the more general fair and equitable treatment standard and that unreasonable or discriminatory measures therefore always also violate the latter.194 94 Given the considerable overlap with the requirement to provide investors with fair and equitable treatment, reference can be made to the discussion of arbitrariness and discrimination within the context of that standard.195 Similarly, the meaning of “discriminatory” will be informed by the discussion in the context of the national treatment standard,196 with the difference that discrimination generally does not need to be linked to an investor’s nationality. 93

7. Umbrella clauses Another protection standard that can be found in many IIAs is the obligation of host States to observe any obligations they may have entered into with regard to specific investors, frequently referred to as an umbrella clause.197 Article 4(2) of the ArgentinaNetherlands BIT, for instance, provides: “Each Contracting Party shall observe any obligation it may have entered into with regard to investment[s] of investors of the other Contracting Party.” 96 Considerable controversy exists with regard to the scope of application of these clauses, and the following paragraphs can only highlight the disputed issues, most of which have not been settled so far. A first question relates to the types of contractual obligations that can be protected under umbrella clauses. Some tribunals have taken the view that umbrella clauses can only apply to contractual obligations entered into by the State “as a sovereign”, such as those relating to the stabilization of the host State’s legal framework that may be found in an investment agreement.198 By contrast, the majority of tribunals accepts that umbrella clauses can relate to any commitments arising under contracts entered into by the host State, even contracts of a purely commercial nature.199 97 A second question is whether their scope of application is limited to contractual obligations or whether it can also extend to legislative obligations of the host State. Here some tribunals have argued on the basis of the wording of these clauses, many of which speak of obligations “entered into” with regard to an investor, that they can only relate 95

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See Siag v. Egypt, ICSID, Award of 1 June 2009, para. 457. See CMS Gas Transmission v. Argentina, ICSID, Award of 12 May 2005, para. 290; Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010, para. 259. 195 See supra mns 70 et seq. See also Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006, para. 460; Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008, para. 692. 196 See supra mns 84 et seq. 197 Umbrella clauses constitute less of a universal feature than most of the other protection standards mentioned in this Chapter. NAFTA, for instance, does not contain an umbrella clause. On the historical origins of umbrella clauses see Sinclair, (2004) 20 Arb Int’l 410–434; Wälde, (2005) 6 JWIT 183 (200–209). 198 See El Paso v. Argentina, ICSID, Decision on Jurisdiction of 27 April 2006, para. 81; Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006, para. 109. For an even more restrictive view regarding the function of umbrella clauses see SGS v. Pakistan, ICSID, Decision on Objections to Jurisdiction of 6 August 2003, para. 173. 199 SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction of 29 January 2004, para. 127; Siemens v. Argentina, ICSID, Award of 6 February 2007, para. 206; SGS v. Paraguay, ICSID, Decision on Jurisdiction of 12 February 2010, para. 168. 194

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to contractual obligations or other specific personal promises.200 Others have taken the view that umbrella clauses can also relate to unilateral commitments arising from provisions of the law of the host State, to the extent where they are addressed specifically to foreign investors and their investments in a particular business sector.201 A third question is whether the scope of umbrella clauses is limited to obligations 98 assumed by the host State itself,202 or whether these clauses can also extend to (in particular contractual) obligations of sub-State agencies.203 A fourth question relates to the creditor of an obligation, raising the issue of whether an obligation – in order to fall under the scope of an umbrella clause – needs to be owed to the investor himself,204 or can also be owed to his local subsidiary.205 Finally, some arbitral awards propose not to make a distinction between different 99 types of contracts, but rather to distinguish between different types of host State behaviour. According to them, the differentiating criterion would be whether a breach arises “from the conduct of an ordinary contract party” or rather involves “conduct that only a sovereign State” could effect.206 Others have taken the view that the breach of an umbrella clause does not require the host State to act in the exercise of public authority and that a simple contractual non-performance can similarly constitute a breach.207 As this summary shows, there is a considerable degree of uncertainty in relation to 100 the application of umbrella clauses. It remains to be seen whether future awards will provide additional guidance for parties and tribunals in this regard.

V. Conclusion The number of investment treaty arbitrations has increased significantly since the 101 turn of the century, and the last few years have seen record numbers of over 70 new cases every year.208 Investors have brought arbitrations relating to investments in a large variety of economic sectors not only against States with developing and transition

200 Noble Ventures v. Romania, ICSID, Award of 12 October 2005, para. 51; Novenergia II v. Spain, SCC, Final Award of 15 February 2018, para. 715. 201 LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006, para. 174; Enron v. Argentina, ICSID, Award of 22 May 2007, para. 275; Continental Casualty v. Argentina, ICSID, Award of 5 September 2008, para. 301; Micula v. Romania, ICSID, Award of 11 December 2013, para. 415; Greentech Energy Systems v. Italy, SCC, Award of 23 December 2018, para. 464. 202 See e.g. Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 223; Azurix v. Argentina, ICSID, Award of 14 July 2006, para. 384; AMTO v. Ukraine, SCC, Award of 26 March 2008, para. 110; EDF v. Romania, ICSID, Award of 8 November 2009, para. 317; Hamester v. Ghana, Award of 18 June 2010, para. 348. 203 See Noble Ventures v. Romania, ICSID, Award of 12 October 2005, para. 82. 204 Azurix v. Argentina, ICSID, Award of 14 July 2006, para. 52; Siemens v. Argentina, ICSID, Award of 6 February 2007, para. 204; WNC Factoring v. Czech Republic, UNCITRAL, Award of 22 February 2017, para. 341. 205 See AMTO v. Ukraine, SCC, Award of 26 March 2008, para. 110; Continental Casualty v. Argentina, ICSID, Award of 5 September 2008, para. 297; Supervision y Control v. Costa Rica, ICSID, Award of 18 January 2017, para. 287. 206 See Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005, para. 260; Sempra v. Argentina, ICSID, Award of 28 September 2007, para. 310. 207 SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction of 29 January 2004, para. 127; SGS v. Paraguay, ICSID, Award of 10 February 2012, para. 91. 208 See UNCTAD, Fact Sheet on Investor-State Dispute Settlement Cases in 2018, 29 May 2019, available at https://unctad.org/en/PublicationsLibrary/diaepcbinf2019d4_en.pdf (accessed 1 August 2020).

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economies, but also against developed States.209 In fact, one of the most striking developments over the last decade has been the rising number of intra-EU arbitrations based on BITs between EU Member States or the ECT.210 However, in a landmark decision of 6 March 2018, the Court of Justice of the European Union held that dispute resolution clauses in intra-EU BITs allowing investors to submit disputes to international arbitration are incompatible with EU law.211 As a consequence, the number of intra-EU proceedings is bound to decline in the future.212 102 All this has contributed to raising public awareness with regard to the process of investment treaty arbitration and occasionally provoked critical responses from civil society. Concerns expressed by various non-governmental organizations include the perception of IIAs as imposing limitations on the freedom of States to regulate economic activity, an alleged bias of the dispute resolution process in favour of investors, and the costs that may result from international arbitrations for taxpayers in respondent States. 103 The large majority of States have reacted to these concerns not by disavowing the idea of investment treaty arbitration, but by looking into potential ways of improving it. Discussions on reforming the international treaty regime for the protection of investments have notably been held at the level of UNCTAD213 and UNCITRAL.214 Efforts have focused in particular on increasing the predictability and transparency of arbitral proceedings, and on limiting the opportunities for abusive behaviour by investors.215

209 According to UNCTAD, in the 71 publicly known cases initiated in 2018, Colombia was the most frequent respondent with six cases, followed by Spain with five, see UNCTAD, Fact Sheet on InvestorState Dispute Settlement Cases in 2018, 29 May 2019, available at https://unctad.org/en/PublicationsLibrary/diaepcbinf2019d4_en.pdf (accessed 1 August 2020). 210 For each of the years 2012 to 2017, the share of intra-EU cases as part of the total number of investment treaty arbitrations varied between 20 and 38 per cent, see UNCTAD, Fact Sheet on IntraEuropean Union Investor-State Arbitration Cases, 20 December 2018, available at https://unctad.org/en/ PublicationsLibrary/diaepcb2018d7_en.pdf (accessed 1 August 2020). 211 ECJ, Case C-284/16, Slovak Republic v. Achmea BV, ECLI:EU:C:2018:158. 212 On 15 and 16 January 2019, the Member States of the European Union issued declarations “on the legal consequences” of the ECJ judgment in Achmea, pledging to terminate any intra-EU BITs by December 2019 and purporting to “inform the investor community that no new intra-EU investment arbitration … should be initiated” under those treaties. While the majority of Member States considered that the consequences of the Achmea decision also extended to intra-EU arbitrations under the ECT, a minority took the view that it would be “inappropriate … to express views” in this regard, see Declarations of the EU Member States of 15 and 16 January 2019, available at https://ec.europa.eu/info/ publications/190117-bilateral-investment-treaties_en (accessed 1 August 2020). However, these declarations seem to have had limited effect on tribunal decisions so far, see Eskosol v. Italy, ICSID, Decision on Italy’s Request for Immediate Termination and Italy’s Jurisdictional Objection Based on Inapplicability of the Energy Charter Treaty to Intra-EU Disputes of 7 May 2019, paras 207–227; United Utilities and Aktsiaselts Tallinna Vesi v. Estonia, ICSID, Award of 21 June 2019, para. 558. 213 See UNCTAD’s Reform Package for the International Investment Regime, 2018, available at https:// investmentpolicy.unctad.org/uploaded-files/document/UNCTAD_Reform_Package_2018.pdf (accessed 1 August 2020). See also UNCTAD, Taking Stock of IIA Reform: Recent Developments, 7 June 2019, available at https://unctad.org/en/PublicationsLibrary/diaepcbinf2019d5_en.pdf (accessed 1 August 2020). 214 See UNCITRAL, Report of Working Group III (Investor-State Dispute Settlement Reform) on the Work of its Thirty-seventh Session (New York, 1–5 April 2019), UNGA Document A/CN.9/970 of 9 April 2019, available at https://undocs.org/en/A/CN.9/970 (accessed 1 August 2020). 215 See the changes made to the ICSID Arbitration Rules in 2006, Reed/Paulsson/Blackaby, Guide to ICSID Arbitration, 2nd ed., 2011, 11. See also the 2014 UNCITRAL Transparency Rules and the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, 11 December 2014.

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The European Union in turn has emerged as a key advocate for establishing a “standing mechanism” (sometimes also referred to as a “multilateral investment court”) for the resolution of investment treaty disputes.216 While the effects of these initiatives are difficult to evaluate at this stage, it seems fair to say that the system of investment treaty arbitration remains in flux. 216 See e.g. Speech by the European Commissioner for Trade Cecilia Malmström of 22 November 2018, available at http://trade.ec.europa.eu/doclib/docs/2018/november/tradoc_157512.pdf (accessed 1 August 2020). See also Submission of the European Union and its Member States to UNCITRAL Working Group III of 18 January 2019, available at http://trade.ec.europa.eu/doclib/docs/2019/january/tradoc_157631.pdf (accessed 1 August 2020). The European Union has included provisions on the establishment of semipermanent roster-based two-instance “Tribunals” (as well as the possibility to replace these through a multilateral mechanism in the future) in several recently concluded Free Trade Agreements, see e.g. Canada-EU Comprehensive Economic and Trade Agreement (CETA) of 30 October 2016 (not yet in force), articles 8.27–8.29.

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PART 3 COUNTRY REPORTS D. International Arbitration in Austria Bibliography: Backhausen, Schiedsgerichtsbarkeit unter besonderer Berücksichtigung des Schiedsvertragsrechts, Manz 1990; Beulker, Die Eingriffsnormenproblematik in internationalen Schiedsverfahren, Mohr Siebeck 2005; Born, International Arbitration: Law and Practice, 2nd ed., Kluwer Arbitration 2012; Czernich, New Yorker Schiedsübereinkommen, Lexis Nexis 2008; Czernich, Kriterien für die Aufhebung des Schiedsspruchs wegen mangelnden rechtlichen Gehörs, JBl 2014, 295; Dorda, “Pathologische Schiedsklauseln”: Die IBA Guidelines for Drafting Arbitration Clauses, ecolex 2011, 908; Fasching, Schiedsgericht und Schiedsverfahren im österreichischen und internationalen Recht, Manz 1973; Fasching/Konecny (eds), JN, 3rd ed., Manz 2013; Fremuth-Wolf/Schuch, The New Arbitration Rules of the Vienna International Arbitral Centre (Vienna Rules 2013), (2013) 16 Int’l Arb. L. Rev. 198–204; Geimer, Beteiligung weiterer Parteien im Schiedsgerichtsverfahren, insbesondere Drittwiderklage, in: Böckstiegel/Berger/Bredow (eds), Die Beteiligung Dritter an Schiedsverfahren, Carl Heymanns Verlag 2005, 71; Grimm, Applicability of the Rome I and II Regulations to International Arbitration, SchiedsVZ 2012, 189; ICC International Court of Arbitration Bulletin, Vol. 21/1–2010, 13; International Arbitration: Corporate Attitudes and Practices 2008 Queen Mary, University of London/Pricewaterhouse Coopers LLP, 2008 (https://www.pwc.co.uk/ assets/pdf/pwc-international-arbitration-2008.pdf); Heider/Nueber, in: Fitz et al. (eds) Liber Amicorum Hellwig Torggler, Verlag Österreich 2013, 451; Heller, Der verfassungsrechtliche Rahmen der privaten internationalen Schiedsgerichtsbarkeit, Manz 1996; Von Hoffmann, “Lex Mercatoria” vor internationalen Schiedsgerichten, IPRax 1982, 107; Jud/Kogler, Letztwillige Schiedsklauseln, GesRZ 2012, 79; Kappus, Lex Mercatoria in Europa und Wiener Kaufrechtskonvention in Europa 1980, Peter Lang 1990; Klausegger et al. (eds), Austrian Yearbook on International Arbitration, Manz 2011; Klausegger et al. (eds), Austrian Yearbook on International Arbitration, Manz 2012; Klausegger et al. (eds), Austrian Yearbook on International Arbitration, Manz 2013; Klausegger et al. (eds), Austrian Yearbook on International Arbitration, Manz 2014; Koller, Abschluss von Schiedsvereinbarungen durch rechtsgeschäftliche Vertreter – Problemfelder de lege lata, ecolex 2011, 878; Liebscher, Austria, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 98–155; Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, Springer 2012; Liebscher/Zeiler, Der OGH und § 617, ecolex 2014, 425; Melis, National Report for Austria (2018 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 104, February 2019; Neuteufel, Schiedsgerichtliche Entscheidungen 1898–1998, Verlag Österreich 2000; Nueber, Neues zum rechtlichen Gehör im Schiedsverfahren, wbl 2013, 130; Nueber, OGH als einzige Instanz in Verfahren zur Aufhebung von Schiedssprüchen (rechts) politisch möglich?, ZfRV 2013, 73; Nueber/Boltz, Schiedssprüche aus erstinstanzlicher Sicht, RZ 2013, 168; Nueber, Transnationales Handelsrecht, Jan Sramek Verlag 2013; Nueber, Schiedsverfahren von Todes wegen, JEV 2013, 118; Nueber, Schiedsgerichtsbarkeit und Europarecht-Eine Friktion, ecolex 2014, 31; Nueber, Choosing your arbitral seat: Austria – the key facts, Lexis RSL Arbitration, 7/2014; Oberhammer, Entwurf eines neuen Schiedsverfahrensrecht, Manz 2002; Pitkowitz, Die Aufhebung von Schiedssprüchen, Manz 2008; Pitkowitz, Interpretation and Application of the New York Convention in the Republic of Austria, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 133–147; Power, The Austrian Arbitration Act, Manz 2006; Rechberger (ed.), ZPO, 5th ed., Verlag Österreich 2019; Reiner, Schiedsverfahren und rechtliches Gehör, ZfRV 2003, 52; Reiner, Staatliche Justiz und Schiedsgerichtsbarkeit: Konkurrenz oder Kooperation?, Schriftenreihe niederösterreichische juristische Gesellschaft 2008/103; Reiner, The new Austrian Arbitration Law, Lexis Nexis 2006; Riegler et al. (eds), Arbitration Law of Austria, Juris Publishing 2007; Rummel (ed.), ABGB, 3rd ed., Manz 2000; Schilf, Römische IPR-Verordnungen – kein Korsett für internationale Schiedsgerichte, RIW 2013, 678; Schumacher (ed.), Beweiserhebung im Schiedsverfahren, Manz 2011; Schwarz/Konrad, The Vienna Rules, Wolters Kluwer 2009; Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., Verlag Österreich 2017; Trenker, Formzwang für die Bevollmächtigung zum Abschluss von Schiedsvereinbarungen, in: Nueber/ Przeszlowska/Zwirchmayr (eds), Privatautonomie und ihre Grenzen im Wandel, Verlag Österreich 2015, 151; Welser, Entwicklungen und Trends in der internationalen Schiedsgerichtsbarkeit, in: Liber Amicorum 50 Jahre ZfRV, Manz 2013, 239; Werner, Das Schiedsverfahren als Instrument zur Lösung

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Part 3. Country Reports erbrechtlicher Streitigkeiten, ZEV 2011, 506; Wilske/Michou/Zeiler, The view from Europe. What’s new in European Arbitration?, (2013) 68(3) Disp. Res. J. 96; Wilske/Michou/Fox/Zeiler, What’s new in European Arbitration, (2013) 68(4) Disp. Res. J. 105; Wirtschaftskammer Österreich (WKÖ), Handbook Rules of Arbitration and Mediation, Vienna Rules and Vienna Mediation Rules 2018, 2nd ed.,WKÖ 2019; Zeiler, Fragen der Mehrparteienschiedsgerichtsbarkeit gemäß den Wiener Regeln 2013, in: Liber Amicorum Torggler, Verlag Österreich 2013, 1403; Zeiler, Schiedsverfahren, 2nd ed., NWV 2014; Zeiler, Austria, in: International Bar Association (ed.), Arbitration Guide, 2018 (https://www.ibanet.org/LPD/ Dispute_Resolution_Section/Arbitration/Arbcountryguides.aspx); Zeiler/Steindl, Arbitration in Austria – A basic Primer, 2nd ed., NWV 2007. National legislation: §§ 577–618 Austrian Code of Civil Procedure (Zivilprozessordnung, ZPO). International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958 (BGBl 1961/200; 1988/161); European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (BGBl 1964/107); Convention on the Settlement of Investment Disputes between States and Nationals of Other States (BGBl 1971/357); Energy Charter Treaty (BGBl III 1998/81).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of Austrian arbitration law............................ II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration, statements of claim and defence, default ...................................................................................................... b) Equality of arms, fair trial principle and the right to be heard.. c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................

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D. International Arbitration in Austria e) Termination of the arbitration without an award......................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police ............................... a) Choice of law and domestic cases..................................................... b) Choice of law and lois de police......................................................... 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party and multi-contract arbitration .......................................... a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of arbitrators.......................... IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before state courts ...................................... a) Procedural framework (time limits, competent court, appeal) .. b) The Grounds for setting aside arbitral awards: An overview ..... c) Invalidity of the arbitration agreement and lack of jurisdiction of the arbitral tribunal ................................................... d) Right to be heard................................................................................... e) Arbitral award ultra petita .................................................................. f) Public policy ........................................................................................... 3. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... b) Enforcement of awards that were set aside..................................... c) Set-off....................................................................................................... 4. Preclusion of grounds for challenge and defences to enforcement

85 86 87 91 96 97 98 98 99 100 101 103 104 105 106 107 109 110 112 113 114 115 115 117 118 119

I. Introduction Historically as well as in modern days, Austria has always had a strong reputation as 1 venue for international arbitration. This is owed to the fact that Vienna – due to Austria’s neutrality – in times of the cold war was a popular place to solve disputes between parties from the Eastern and the Western part of Europe. Eventually, the “Vienna International Arbitral Center” (VIAC) was established in 1975 by the Austrian Federal Chamber of Commerce in order to react properly to this development. After the end of the cold war, arbitrations in Austria decreased significantly, but in 2 2006 the implementation of a new arbitration law reverted this trend and rapidly the number of cases commenced to grow again.1 The fact that the number of arbitrations in Austria is increasing steadily is also reflected by a recent case-statistic of the ICC, which ranked Vienna sixth among the world’s most chosen arbitration venues.2 Likewise, VIAC is constantly ranked among the world’s most popular arbitration institutions.3

1. The legal framework Austrian Arbitration Law is regulated in §§ 577–618 ZPO (Austrian Code of Civil 3 Procedure). No official English translation is provided but the law has been translated

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Infra mn. 12. ICC International Court of Arbitration Bulletin, Vol. 21/1–2010, 13; Nueber, Choosing your arbitral seat: Austria – the key facts, Lexis PSL Arbitration, 7/2014. 3 International Arbitration: Corporate Attitudes and Practices 2008 Queen Mary, University of London/Pricewaterhouse Coopers LLP, 2008, 15. 2

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by commentators.4 The original version of the law dates back to 1 August 1895, but meanwhile, these provisions have been amended several times.5 The last major amendments took place in 2006 and 2013. With the Arbitration Act 2006 Austrian arbitration law was basically adapted to the UNCITRAL Model Law on International Commercial Arbitration. On 1 January 2014 the Austrian Arbitration Act 2013 came into force, according to which the procedure to set aside an arbitral award had been significantly abbreviated.6 4 In addition, Austria is a member state of the New York Convention of 1958, the Geneva Convention of 1961, the Convention on the Settlement of Investment Disputes (Washington Convention) of 1965, the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927, a number of bilateral investment treaties7 as well as the Energy Charter Treaty.8 5

a) Domestic and international arbitration. Unlike article 1(1) ML, the Austrian law does not distinguish between domestic and international arbitrations. Thus, in both cases §§ 577–618 ZPO apply.

6

b) Commercial and non-commercial arbitration. Austrian arbitration law further does not distinguish between commercial and non-commercial arbitrations.9 There exist, however, some specialties in regard to arbitrations with consumers and employees. Although consumer and employment disputes, in principle, are arbitrable, the law protects consumers and employees in various ways.10

c) Ad hoc and institutional arbitration. Similar to most other jurisdictions under Austrian law it is up to the parties to choose between ad hoc and institutional arbitration. There exists one major arbitral institution in Austria, the Vienna International Arbitral Centre (VIAC). As already mentioned above, the VIAC has traditionally a strong reputation in solving disputes with a connection to the CEE (Central and Eastern Europe)-region. Constituted at the Austrian Federal Chamber of Commerce, VIAC’s main task is to administer arbitral proceedings according to its arbitration rules (“The Vienna Rules”). 8 The current version of the Vienna Rules came in force on 1 January 2018. Some amendments made already back in 2013 are of significant importance, such like the provisions on the joinder of third parties, consolidation of proceedings, appointment of arbitrators in multi-party arbitrations, confirmation of the nomination of arbitrators, expedited proceedings and the costs of the proceedings.11 9 When the member states of the COMECON developed to market economies in the 1990s, VIAC experienced a constant decrease of new cases. As from 2005, this situation began to change and VIAC recorded a significant increase of new cases.12 Accordingly, 43, 64 and 45 new cases were brought before the VIAC in 2017, 2018 and 2019 respectively.13 7

4 E.g., an English translation of the Arbitration Act 2006 can be found in Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007. 5 Heider/Nueber, in: Fitz et al. (eds), Liber Amicorum Hellwig Torggler, 2013, 451 (452). 6 Infra mn. 142. 7 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 577 mns 9 et seq. 8 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, Vor § 577 ZPO mn. 5. 9 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, 15. 10 Infra mns 49–50. 11 For a detailed analysis cf. Fremuth-Wolf/Schuch, (2013) 16 Int’l Arb. L. Rev. 198. 12 Heider/Nueber, in: Fitz et al. (eds), Liber Amicorum Hellwig Torggler, 2013, 451 (461). 13 See https://www.viac.eu/en/statistics (accessed 1 August 2020).

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There are some further arbitral institutions existing in Austria, e.g. the arbitral 10 institutions established at the Viennese Stock Exchange, the Austrian National Bank or the Austrian Bar Association. Some of them – like the arbitral tribunal of the Viennese Stock Exchange – have mandatory jurisdiction over disputes with a connection to their members.14 d) The territoriality principle, the seat of the arbitration and the lex arbitri. If the 11 seat of the arbitral tribunal is within Austria, § 577(1) ZPO provides for the application of Austrian arbitration law. The seat of the arbitral tribunal can be determined either by party agreement or by the arbitral tribunal in case no such agreement exists.15 In order to validly determine the seat of the arbitral tribunal it is also sufficient that the parties refer to arbitration rules and the respective default provisions of such rule which determines the seat in the absence of an agreement of the parties.16 The seat of the arbitral tribunal is the decisive criterion in order to assess whether Austrian arbitration law applies.17 The expression “seat of the arbitral tribunal” in § 577(1) ZPO does not necessarily mean the place where the oral hearing is conducted; it only refers to the legal seat of the arbitration.18 However, § 577(2) ZPO significantly deviates from this territoriality principle. Ac- 12 cordingly, §§ 578, 580, 583, 584 585, 593 subsections (3) to (6), 602, 612 and 614 ZPO apply even if the seat of the arbitral tribunal is not in Austria or has not yet been determined. These provisions mainly concern the interaction of municipal courts with arbitral tribunals19 and include important issues like the preconditions for the valid receipt of written statements, the form and conclusion of arbitration agreements, the enforcement of interim measures issued by the arbitral tribunal and the recognition and enforcement of foreign arbitral awards. In regard to the latter, § 614 ZPO provides that foreign arbitral awards shall be recognized and enforced according to the Austrian enforcement act unless otherwise provided by international law or by legal instruments of the European Union. The drafters of the new law had the New York Convention in mind, when they referred to international law.20 If the place of the arbitration has not yet been established and if (at least) one of the 13 parties has its seat, domicile or habitual residence in Austria the Austrian courts have limited jurisdiction to assist with the establishment of the arbitral tribunal as well as in regard to the challenge of arbitrators.21 e) Arbitration and other ADR mechanisms (mediation, expert determination). 14 Mediation is primarily based on negotiations that are conducted based on certain methods.22 Therefore, a competent mediator must be able to use a variety of methods in order to guide the parties of the dispute to a (final) solution.23 To comply with these requirements it is necessary that a mediator passes a solid training. Austrian legislation provides for such special training that leads to the qualification of so called “certified Ballon, in: Fasching/Konecny (eds), JN, 3rd ed., 2013, JN § 1 mns 30 et seq. § 595 ZPO. 16 Oberhammer, Entwurf eines neuen Schiedsverfahrensrechts, 2002, 94. 17 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 577 mn. 1. 18 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 595 ZPO mn. 1; Zeiler/ Steindl, Arbitration in Austria, 2nd ed., 2007, 16. 19 Cf. Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 577 mn. 6; FremuthWolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 577 mn. 21. 20 Reiner, The new Austrian Arbitration Law, 2006, § 614 mn. 215. 21 Power, The Austrian Arbitration Act, 2006, § 577 mn. 5. 22 Schäfer, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, 18. 23 Schäfer, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, 18. 14 15

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mediator”. The ZivilMedG (Zivilrechtsmediationsgesetz) establishes a mediation council at the Austrian ministry of justice and stipulates the requirements to be listed as certified mediator.24 15 According to § 18 ZivilMedG a mediator is obliged to keep information confidential which he became aware of in the course of the mediation. Thus, a certified mediator has the right to deny testifying in court proceedings. Another characteristic of a qualified mediator is that procedural time periods are suspended while mediation proceedings are being conducted.25 The result of mediation proceedings is not enforceable like arbitral awards. However, where parties conclude a settlement agreement, such agreement subsequently can be enforced in state court proceedings.26 Recently, a trend can be observed before Austrian commercial courts to offer parties the option of mediation previous to the commencement of court proceedings. 16 Another popular possibility to solve disputes apart from state court or arbitration proceedings is expert determination (Schiedsgutachten), which is closely related to arbitration. In the case of expert determination, the parties mandate a third person to determine certain facts of the case or to adopt or adjust a contract, e.g. due to a significant change of circumstances.27 Contracts for expert determination demand no special form requirement to be duly concluded.28 In doubt whether an agreement qualifies as an arbitration agreement or an agreement for expert determination, the manifest intention of the parties is decisive.29 If the legal nature of an agreement is not clear and the party appointed person – be it an arbitrator or an expert – renders an “arbitral award” (to which he is not entitled to), such arbitral award can be nevertheless challenged before state courts.30 Further, where an applicant has a legitimate interest § 612 ZPO provides for the right to request a state court to determine whether an arbitral award exists.31 17 State courts control the result of the expert determination and can annul a decision if its content is manifestly inequitable.32 Reasons to annul the result of an expert determination are that the expert has exceeded his authority given by the parties’ agreement or that the findings of the expert must be considered as manifestly incorrect.33 Austrian courts are silent in regard to the question whether a determination of an expert who acted in a partial way has still binding effect. Scholarly writing is inconsistent in regard of this topic. An expert determination does not lead to an enforceable title.34 It has, however, substantial effect and determines the legal relationship between the parties.35

2. The guiding principles of Austrian arbitration law 18

Arbitration in Austria is primarily based on party autonomy. Accordingly, one of the most famous Austrian scholars defined arbitration in its basic form as the pure result of § 2(1) ZivilMedG; § 8 ZivilMedG. § 22 ZivilmedG.. 26 Schäfer, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, 24. 27 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 143; OGH, 17 August 2001, 1 Ob 300/00z; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, Vor § 577 mn. 16. 28 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 581 mn. 139. 29 OGH, 13 July 2000, 8 Ob 93/00 k. 30 OGH, RIS-Justiz RS0045073. 31 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 612 mn. 1. 32 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 581 mn. 157. 33 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/22. 34 OGH, RIS-Justiz RS0004281. 35 Hausmaninger, in: Fasching/Konecny, ZPO, 3rd ed., 2016, § 581 mn. 152. 24 25

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the parties’ right to dispose about their private laws.36 Arbitration as method of dispute resolution is accepted by the Austrian constitution as well. There is, however, no duty stipulated by Austrian (constitutional) law to permit arbitration by the legislator. It has been advocated by Austrian scholars that such duty can possibly be deducted from the rule of law as well as from article 6 ECHR.37 Another question of importance is whether arbitration must be considered as a part 19 of (municipal) jurisprudence. Since an arbitral award has the same effect as a decision of a state court38, the Austrian Supreme Court in a line of decisions ruled that arbitrators act with sovereign power.39 In addition, the Arbitration Act 2006 grants arbitrators the right to issue interim injunctions.40 Hence, also fostered by further constitutional arguments, it can be corroborated that arbitration forms part of the municipal judicial system.41 A further principle of Austrian arbitration law is the guarantee of fair proceedings. 20 This principle is manifested several times within Austrian arbitration law. E. g., § 594(2) ZPO stipulates that parties have to be treated fairly and that they are fully granted their right to be heard. As can be seen below, Austrian state courts, in the context of annulment proceedings, advocate a very narrow view of the right to be heard.42 Accordingly, it is discussed whether under Austrian law the guarantees of article 6 ECHR in regard to the parties’ right to be heard apply to their full extent in arbitration proceedings as well.43 Since even the European Commission of Human Rights accepts several exceptions from the strict requirements of article 6 ECHR in the course of state court proceedings, (at least) the same must apply in regard to arbitration proceedings.44

II. The arbitration agreement As mentioned above, party autonomy is the basis of any arbitration proceedings 21 under Austrian law. Hence, the parties’ must have agreed voluntarily to arbitration as their method of dispute resolution. In fact, the arbitration agreement is the most important pillar that arbitration proceedings are based on. § 581 ZPO defines what constitutes an arbitration agreement under Austrian law. According to this provision, an arbitration agreement is the agreement by the parties to submit certain or all, contractual or non-contractual, current or future disputes to an arbitral tribunal.45 In any case, such disputes must arise out of a specified legal relationship of the parties.46 Accordingly, an arbitration agreement that refers all disputes of the parties to arbitration – irrespective of its origin – has been found invalid.47 Essentialia negotii of an arbitration agreement under Austrian law therefore include the exact description of the 36 37

Fasching, Schiedsgericht und Schiedsverfahren im österreichischen und internationalen Recht, 1973, 2. Heller, Der verfassungsrechtliche Rahmen der privaten internationalen Schiedsgerichtsbarkeit, 1996,

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§ 607 ZPO. E. g., OGH, 14 December 1994, 7 Ob 604/94. 40 § 585 ZPO. 41 Heller, Der verfassungsrechtliche Rahmen der privaten internationalen Schiedsgerichtsbarkeit, 1996, 27. 42 For an overview on recent Supreme Court decisions see Nueber, wbl 2013, 130. 43 See, e. g., by Reiner, ZfRV 2003, 52. 44 Cf. Nueber, wbl 2013, 130 (132) and supra A mn. 113. 45 § 581(1) ZPO. 46 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 581 ZPO mn. 1. 47 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 581 mn. 8; Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 4. 38 39

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parties, the exact description of the legal relationship as well as the unambiguous parties’ agreement to resolve their dispute before an arbitral tribunal.48 22 The arbitration agreement may be concluded in the form of a separate agreement or as a clause in a contract. As a rule of thumb, an arbitration agreement, in most cases, is concluded in the course of an arising dispute, whereas an arbitration clause normally refers to future disputes.49 Since there are no material differences between arbitration agreements and arbitration clauses in the following the use of any of this terms includes the other as well. 23 It is worth to be mentioned that § 581(2) ZPO stipulates that § 581(1) ZPO – the very definition of an arbitration clause under Austrian law – applies analogously to arbitration clauses established in a testament, other legal transactions that are not based on a party’s agreement, or in articles of association. Whereas in Germany a broad discussion in scholarly writing took place whether arbitration clauses in testaments are valid and disputes in connection to testaments are arbitrable, Austrian literature is relatively silent in regard to these topics. One major question in this context is whether an arbitration clause contained in a testament must meet the form requirements of Austrian arbitration law50 or the form requirements for testaments stipulated by the ABGB.51 The far dominant opinion advocated by Austrian and German scholarly writing states that the (more liberal) form requirements for testaments as stipulated by the ABGB are sufficient to incorporate a valid arbitration clause in a testament.52 In fact, such result does not comply with the doctrine of separability53 according to which an arbitration clause is an independent agreement standing next to the main contract. Therefore, an arbitration clause in a testament must meet the form requirements stipulated by § 583 ZPO like any other arbitration clause.54 It is commonly accepted by Austrian scholarly writing that inheritance disputes are arbitrable.55 However, whether or not claims to a compulsory portion of the inheritance are arbitrable is subject to discussions in scholarly writing.56 24 § 1008 ABGB stipulates that an agent requires a special power of attorney in order to validly conclude an arbitration agreement on behalf of another person. Austrian scholars currently discuss whether the requirements stipulated by § 1008 ABGB apply to representatives of limited liability companies as well.57 In a recent decision, the Austrian Supreme Court clarified that a proxy issued in a business-related context includes the competence to conclude arbitration agreements only if the proxy itself complies with the form requirements of § 583 ZPO.58

48 OGH, RIS-Justiz RS0044991; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 581 mn. 10. 49 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/1. 50 § 583 ZPO. 51 §§ 578 et seq. ABGB; Nueber, in: Gruber/Kalss/Müller/Schauer (eds), Erbrecht und Vermögensnachfolge, 2nd ed., 2018, Letztwillige Schiedsverfahren, mn. 44: Primarily the compliance with the form requirements under Austrian arbitration law is decisive and not the prerequisites for a valid testament. 52 E. g., Werner, ZEV 2011, 506; Jud/Kogler, GesRZ 2012, 79. 53 Infra mn. 35. 54 Nueber, JEV 2013, 118 (123). 55 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 3/87. 56 Jud/Kogler, GesRZ 2012, 79 (84); Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 3/87. The German Bundesgerichtshof recently held that such claims are not covered by an arbitration clause in a testament: infra J mn. 25 fn. 98. 57 Koller, ecolex 2011, 878; Trenker, in: Nueber/Przeszlowska/Zwirchmayr (eds), Privatautonomie und ihre Grenzen im Wandel, 2015, 151 et seq. 58 OGH, 17 January 2018, 6 Ob 195/17 w.

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1. The doctrine of separability In the vast majority of cases, an arbitration clause is contained in the main contract 25 concluded between the parties. To conclude an arbitration agreement after the dispute has arisen is – although permitted by Austrian law59 – a rare case, however, with the exception of consumer-related disputes. § 617(1) ZPO stipulates that arbitration agreements with consumers are only valid if the respective dispute has already arisen. This means that a consumer is only able to validly agree to arbitrate after the dispute has arisen.60 Unlike German61 arbitration law and article 16(1) ML (supra A mn. 23), no provision 26 of Austrian law describes the relationship between the main contract and an arbitration clause included in that main contract. The fact that Austrian law is silent on this issue is owed to a line of decisions of the Austrian Supreme Court, which clarified that a defect of the main contract, in principle, does not affect an arbitration clause.62 In the light of this line of decisions, the legislator found it superfluous to add an explicit statutory explanation for the phenomenon.63 As an exemption, according to decisions of the Austrian Supreme Court, an arbitration clause ends if the parties agree on the termination of the main contract or if they consensually consider the main contract void from the beginning.64 Hence, these court decisions are the basis for the application of the doctrine of 27 separability in Austria. In addition, the separate nature of the arbitration agreement is further justified by the fact that it is considered as procedural agreement based on procedural law.65 Further, even in the case one party terminates the main contract unilaterally, the arbitration clause remains still in force. Thus, this arbitration clause establishes jurisdiction of an arbitral tribunal to decide about disputes arising out of the termination as well.66

2. The law applicable to the arbitration agreement It must be distinguished between the law applicable to the form of the agreement and 28 the law applicable which governs the arbitration clause. In general, the parties can agree on the law governing the arbitration agreement. The Austrian Supreme Court ruled that the validity of the arbitration agreement must be assessed according to law of the country were the arbitral award was made.67 If the seat of the arbitral tribunal is in Austria, § 583 ZPO is decisive for the formal validity of the arbitration agreement.68 In the case the parties did not agree an applicable law to merits, the law of the arbitral tribunal’s seat is decisive (lex fori).69 The personal capacity to conclude an arbitration agreement must always be assessed based on the personal laws of the parties (lex domicilii).70 § 583(1) ZPO. Nueber, Lexis PSL Arbitration, 7/2014. 61 Infra J mn. 14. 62 OGH, 7 August 2007, 4 Ob 142/07 x; Oberhammer, Entwurf, 2002, 75. 63 OGH, 23 June 2015, 18 OCg 1/15 v; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 592 mn. 6. 64 OGH, 21 April 2004, 9 Ob 39/04 g; OGH, 29 April 2003, 10 Ob 22/03 x; OGH, 28 March 2018, 6 Ob 19/18 i. 65 Schwarz/Konrad, The Vienna Rules, 2009, mn. 19–035. 66 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 3/188. 67 OGH, 19 February 2004, 6 Ob 151/03. 68 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 581 mn. 70. 69 OGH, 26 April 2006, 7 Ob 236/05 i. 70 OGH, RIS-Justiz RS0045375. 59 60

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3. The validity of the arbitration agreement (capacity, arbitrability, form) 29

a) Capacity to conclude arbitration agreements. The capacity to conclude an arbitration agreement is not regulated in Austrian arbitration law. Thus, it corresponds to a person’s ability to enter into agreements.71 Since an arbitration agreement is of procedural nature, for Austrian citizens their capacity to conduct proceedings is relevant (too).72 In principle, this means that individuals above the age of eighteen are able to conclude arbitration agreements.73 Further, any legal entity or partnership fully capable of concluding a contract can enter into an arbitration agreement.74 According to § 611 (2) ZPO, an arbitral award must be set aside if a party was incapable of concluding a valid arbitration agreement.

b) Arbitrability. As a general rule, § 582(1) sets forth that all pecuniary claims (vermögensrechtliche Ansprüche) are arbitrable.75 An arbitration agreement relating to non-pecuniary claims is only valid if the parties of the dispute are capable to conclude a settlement regarding the matter of the dispute. Thus, in the context of international commercial arbitration the arbitrability of disputes is hardly ever an issue.76 31 In any case, § 582(2) ZPO stipulates several exemptions from the general rule set out above. Accordingly, family law matters as well as all contractual claims which are wholly or partly based on the Austrian Landlord and Tenant Act (Mietrechtsgesetz) are not arbitrable. Furthermore, claims pursuant to the Austrian Act on Assisted Housing (Wohnungsgemeinnützigkeitsgesetz), which also includes disputes relating to the entry into, existence, dissolution and legal classification of such contracts, and all claims in connection with cooperative apartment ownership (wohnungseigentumsrechtliche Ansprüche), cannot be subject to an arbitration agreement.77 The last sentence of § 582(2) ZPO further stipulates that legal provisions in legislation other than the Austrian Arbitration Act, which prohibit certain matters to be arbitrated, remain applicable as well. Therefore, according to § 9 ASGG (Arbeits- und Sozialgerichtsgesetz) collective labour law and social law disputes are not arbitrable.78 Criminal law issues, enforcement matters as well as issues of insolvency law are not arbitrable either.79 Also, claims based on public law are not arbitrable under Austrian law.80 32 It is undisputed, that corporate disputes are arbitrable as well.81 Hence, disputes regarding the (validity of) resolutions of the general assembly of an Austrian limited liability company (GmbH) are arbitrable.82 Also, pursuant to KartG 2005 and articles 101 and 102 TFEU antitrust and competition law matters are arbitrable.83 Although, in the light of a line of decisions of the ECJ arbitral tribunals are not allowed to ask the ECJ 30

Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 582 mn. 3. Zeiler, Schiedsverfahren, 2nd ed., 2014, § 611 mn. 14. 73 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 581 mn. 12. 74 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 582 mn. 21 et seq.; Schwarz/Konrad, The Vienna Rules, 2009, mn. 1–034. 75 Power, The Austrian Arbitration Act, 2006, § 582 mn. 1. 76 Cf. infra J mn. 18. 77 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, 33. 78 Reiner, The new Austrian Arbitration law, 2006, § 582 mn. 36. 79 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 582 mn. 6. 80 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 582 mn. 6. 81 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 582 mn. 19; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 582 mn. 11 with examples. 82 OGH, 19 April 2012, 6 Ob 42/12 p. 83 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 582 mns 13 et seq. 71 72

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for preliminary rulings in respect of issues of European law84, the ECJ ruled several times that arbitral tribunals are obliged to apply European antitrust and competition law, otherwise a respective arbitral award can be set aside by municipal courts based on the violation of the (European) ordre public.85 The same applies for European consumer protection law.86 It is questionable whether arbitral tribunals are allowed to request assistance87 from state courts in order to submit their questions of European law to the ECJ indirectly. Pursuant to the wording of the Nordsee-decision this seems not to be permitted.88 Despite severe restrictions stipulated by § 617 ZPO, consumer-related disputes are considered arbitrable as well.89 According to § 611(2)(7) ZPO, an arbitral award can be set aside when the underlying dispute lacks arbitrability. c) Form of the arbitration agreement. § 583 ZPO provides for special form require- 33 ments for arbitration agreements.90 Accordingly, the arbitration agreement must either be part of a document signed by the parties or must to be contained in an e-mail, a telefax or other means of telecommunication that gives a proof of the underlying arbitration agreement.91 Recently, the Austrian Supreme Court clarified that arbitration agreements included in the parties’ mutual communication are valid without complying with the signature-requirement.92 What is more, if a contract that fulfils the latter form requirements refers to a document that contains an arbitration agreement and this document was made part of the contract by way of reference, an arbitration agreement is deemed to be duly established.93 A lack of form of the arbitration clause heals together with the filing of acknowledgement of service by one party.94 There are, however, special form requirements stipulated in regard to consumer-related 34 disputes.95 Arbitration agreements with consumers must be contained in a document personally signed by the consumer. This document must not contain any other agreements than those relating to the arbitration agreement.96 In addition, a written legal instruction explaining the (major) differences between state court and arbitration proceedings must be provided to the consumer prior to the conclusion of the arbitration agreement.97 Further, an arbitration agreement with a consumer must stipulate the seat of the arbitral tribunal. The arbitral tribunal is only permitted to meet in another place to conduct hearings or to take evidence, if the consumer (explicitly) agrees to or if substantial obstacles prevent the taking of evidence at the seat of the arbitral tribunal.98 In addition, if the consumer’s domicile, place of habitual residence or place of employment is neither at the time of the conclusion of the arbitration agreement nor when the disputes arises in the territory of the state where the arbitral tribunal is located, the arbitral agreement is only deemed valid if the consumer relies on it.99 84

ECJ Case 102/81 Nordsee v. Reederei Mond, [1982] ECR 1095. ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055. 86 ECJ Case C-168/05 Elisa María Mostaza Claro v. Centro Móvil Milenium, [2006] ECR I-10421. 87 § 602 ZPO. 88 Nueber, ecolex 2014, 31 (35). 89 § 617 ZPO; see in more detail infra mn. 34. 90 § 583 ZPO. 91 § 583(1) ZPO. 92 OGH, 23 June 2015, 18 OCg 1/15v; OGH, 19 April 2018, 4 Ob 28/18 w. 93 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 583 mn. 9. 94 § 583(3) ZPO. 95 §§ 617, 618 ZPO. 96 § 617(2) ZPO. 97 § 617(3) ZPO. 98 § 617(4) ZPO; Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 617 ZPO, 92. 99 § 617(5) ZPO; Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 617 ZPO, 92. 85

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It is worth to be mentioned that the Austrian Supreme Court recently ruled that the question whether a person is to be qualified as consumer must always be assessed according to Austrian law.100 Moreover, in a line of decisions, the Austrian Supreme Court qualified certain types of shareholdings (which are not accompanied by entrepreneurial activities of the shareholder) of a limited liability company as consumers.101 This jurisprudence might cause problems in regard to arbitration clauses where shareholders are involved, who according to the Supreme Court must be qualified as consumers.102 36 The form requirements of arbitration agreement under Austrian law must comply with article II NYC.103 This result further complies with the intent of the Austrian legislator when drafting the Arbitration Act 2006 to interpret national form requirements of arbitration agreements according to the NYC.104 35

d) Termination of the arbitration agreement. In general, the parties have the right to terminate their arbitration agreement consensually without applying any specific form requirements.105 Only the date when the arbitral award gains legal effect is decisive for the parties whether they are (still) able to terminate the arbitration agreement by mutual consent.106 However, an arbitral award always gains legal effect when it is delivered to the parties.107 The Supreme Court further ruled that the mutual termination of the underlying main contract automatically involves the termination of the arbitration clause as well.108 38 It is worth to be mentioned that an arbitration agreement does not expire as soon as an arbitral award has been issued or the parties settled their dispute.109 Also, in the case one party agrees to the commencement of proceedings before a state court despite the existence of a valid arbitration agreement between the parties, the arbitration agreement is considered (partly) terminated up to the extent a dispute has arisen.110 39 In principle, arbitration agreements cannot be terminated unilaterally, unless such termination is based an important reason.111 There are decisions of the Austrian Supreme Court that financial distress of one party qualifies as such important reason.112 Some legal scholars advocate that the latter is also the case when a party denies or is unable to pay the advance on costs.113 37

4. The scope and the interpretation of the arbitration agreement 40

a) Personal scope of the arbitration agreement. In general, an arbitration clause is only valid between the respective parties of such agreement.114 Scholars and commentators discuss whether third persons, who are not parties of that respective arbitration 100

OGH, 16 December 2013, 6 Ob 43/13 m; Liebscher/Zeiler, ecolex 2014, 425. Nueber, Lexis PSL Arbitration, 4 July 2014. 102 Nueber, wbl 2014, 194. 103 Oberhammer, Entwurf, 2002, 147; Reiner, The new Austrian Arbitration Law, 2006, § 614 mn. 217. 104 ErläutRV 1158 BlgNR 22 GP 9. 105 OGH, RIS-Justiz RS0045079. 106 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/381. 107 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 607 mn. 11. 108 Cf. Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/380. 109 § 606(7) ZPO; Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 88. 110 Hausmaninger, in: Fasching/Konency (eds), ZPO, 3rd ed., 2016, § 581 mn. 125. 111 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 581 mn. 58. 112 OGH, 4 September 1936, SZ 18/151. For a comparative analysis, see supra A mn. 39. 113 Cf. Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 131. In other jurisdictions, refusal of a party to pay the advance does not make the arbitration agreement inoperative where the other party can make a substitute payment: supra A mn. 38. 114 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/289. 101

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clause, are entitled to rely on this arbitration agreement as well. The most important constellations in this context concern questions in regard to group of companies, shareholders and managers.115 Austrian scholarly writing in this respect is rather restrained and therefore, in line with German scholars,116 rejects the binding effect of arbitration agreements to third persons.117 As regards shareholders of partnerships (Personengesellschaften) the Austrian Supreme Court took a rather narrow view too. Accordingly, arbitration agreements with partnerships have no binding effect for their shareholders.118 However, Austrian courts as well as legal scholars advocate in favour for a binding 41 effect of an arbitration agreement as regards successors of parties of such arbitration agreement.119 Accordingly, arbitration agreements are effective in regard to both the singular successor as well as the universal successor of the right or legal relationship.120 The latter also applies to universal succession in the context of the restructuring of companies.121 Moreover, an arbitration agreement passes over to an inheritor and accordingly does not end with the death of one party.122 Further, Austrian courts accept the binding effect of arbitration clauses contained in 42 contracts for the benefit of third parties.123 The conclusion of such arbitration clauses in written form also fulfils the form requirements for arbitration agreements as stipulated by Austrian law.124 Whether an insolvency administrator is bound by an arbitration agreement con- 43 cluded by the debtor must be assessed case by case. The insolvency administrator is still bound by the arbitration clause in regard to disputes between a party entitled to release their property from the estate and the debtor. The same applies to not yet executed synallagmatic contracts, in which the insolvency administrator enters into by virtue of law.125 In contrast, Austrian scholars unanimously agree that the insolvency administrator is not bound by the arbitration clause in respect to insolvency claims.126 In case of already pending arbitration proceedings, the opening of bankruptcy results in the conversion into assessment proceedings pursuant to § 113 IO.127 b) Substantive scope of the arbitration agreement. In order to interpret an arbitra- 44 tion agreement, the same rules as in regard to contracts under civil law apply.128 For the interpretation of an arbitration clause one has to consider the party’s manifest intention in the context of the conclusion of the arbitration agreement as understood by a bona fide third person. Thus, the four corners of the document are the limit for the interpretation of an arbitration agreement.129 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 104. Infra J mn. 26. 117 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 581 mn. 204. 118 OGH, 5 August 1999, 1 Ob 163/99 y. 119 Fasching, Schiedsgericht und Schiedsverfahren, 1973, 27 et seq.; OGH, 30 March 2009, 7 Ob 266/08 f. 120 OGH, 11 April 1972, 4 Ob 18/72. 121 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 107. 122 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/296. 123 OGH, RIS-Justiz RS0053109; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 581 mn. 40. 124 § 583 ZPO; OGH, RIS-Justiz RS0053103. 125 Riegler, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, 715; Nueber, in: Höllwerth/ Ziehensack (eds), ZPO Taschenkommentar, 2019, § 582 mn. 44. 126 Koller, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 3/308. 127 OGH, 30 November 2018, 18 ONc 2/18s. 128 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mns 53 et seq. 129 OGH, 7 May 2013, 2 Ob 65/13 t; Wilske/Michou/Fox/Zeiler, What’s new in European Arbitration, DRJ 68/4, 105 (2013). 115 116

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In general, Austrian Courts can be considered arbitration-friendly when interpreting arbitration clauses.130 As a rule of thumb, the Austrian Supreme Court, in a line of decisions, ruled that if the wording of an arbitration clause is ambiguous, such interpretation result, which renders the arbitration agreement valid must be preferred.131 Recently, the Austrian Supreme Court confirmed the latter ruling in regard to an arbitration clause, which competed with a jurisdiction clause in the same contract.132 The Supreme Court decided that an arbitration clause always prevails over a jurisdiction clause, since it does not make the jurisdiction redundant. The latter still has its scope of application, e. g. defining the state court which are competent for ancillary jurisdiction attached to arbitration (appointment of arbitrators etc.).133 46 In a line of decisions the Austrian Supreme Court ruled that arbitration clauses contained in statutes of a company govern all disputes related to the corporate relationship. This includes disputes that evolve in connection with the termination of the company as well, since such disputes also “arose out of the corporate relationship”.134 45

c) Pathological arbitration clauses. According to decisions of Austrian courts and scholars some minimum requirements of an arbitration agreement have to be fulfilled in order for the arbitration agreement to be deemed valid.135 Hence, (at least) the essentialia negotii of an arbitration agreement must be sufficiently determined.136 48 It is necessary that both the underlying legal relationship (i. e. the contract) the arbitration clause is based on and the competent arbitral tribunal are clearly determined by the arbitration agreement. However, according to the Austrian Supreme court determinability of the arbitration agreement based on the underlying contract suffices for the arbitration agreement to be deemed valid under Austrian law.137 Therefore, the Austrian Supreme Court deemed even an arbitration clause valid which provided for jurisdiction of two (or more) arbitral institutions.138 49 As already stated above139, Austrian courts tend to interpret (pathological) arbitration agreements in such way that they remain effective.140 Accordingly, the Austrian Supreme Court considered an arbitration agreement valid, although it did not refer to an existing arbitral institution; in that case the Supreme Court interpreted the arbitration clause in favour of the jurisdiction of the arbitral institution established at the chamber of commerce at the seat of the arbitral tribunal.141 50 According to § 611(2)(1) ZPO an arbitral award based on an arbitration agreement that does not fulfil the necessary prerequisites to be valid, can be challenged before a state court. 47

130

OGH, RIS-Justiz RS0045337. OGH, 19 January 2003, 7 Ob 310/02 t. 132 OGH, 7 May 2013, 2 Ob 65/13 t. 133 Wilske/Michou/Fox/Zeiler, What’s new in European Arbitration, DRJ 68/4, 105(2013). 134 OGH, 8 May 2013, 6 Ob 47/12 z. 135 OGH, 3 September 1986, 1 Ob 545/86. 136 See for the essentialia negotii of an arbitration agreement supra mn. 30; Hausmaninger, in: Fasching/ Konecny (eds), ZPO, 3rd ed., 2016, § 581 mn. 32. 137 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 21 with further references. 138 OGH, 11 July 1990, 3 Ob 79/90; for the situation that a contract contains both a forum selection and an arbitration see supra mn. 45. 139 See for the interpretation of an arbitration agreement supra mn. 45. 140 See further Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 581 mns 191 et seq.; Dorda, ecolex 2011, 908; Zeiler, Schiedsverfahren, 2nd ed., 2014, § 581 mn. 21. 141 OGH, RIS-Justiz RS0045026. 131

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5. The effect of the arbitration agreement and Kompetenz-Kompetenz According to § 584(1) ZPO, a claim submitted before a state court always has to be 51 dismissed if a valid arbitration agreement exists between the parties and if the respondent objects to the jurisdiction of the state court before entering the merits of the case. Also, if the state court establishes that the arbitration agreement does not exist or is incapable to be performed, the state court will continue its proceedings (§ 584(1) (2) ZPO). Even in that case, however, parallel arbitration proceedings are permitted to commence or continue in the same matter, and the arbitral tribunal can even render an award on the merits of the case (§ 584(1)(3) ZPO). Further, if the arbitration proceedings are already pending when one of the parties commences litigation the action brought before a state court must be dismissed by the court.142 After an arbitral tribunal denied jurisdiction over a matter on the basis that no (valid) 52 arbitration agreement exists, a state court is prohibited to dismiss a claim in regard to that matter.143 If a claim is submitted immediately after its dismissal by a state court due to the jurisdiction of an arbitral tribunal (and vice versa) to the competent venue, § 584 (4) ZPO stipulates that the proceedings are deemed to be duly pursued. This provision solved years of uncertainty whether or not a claim becomes time-barred when brought before the incompetent venue.144 § 611(2)(1) ZPO provides that an arbitral award must be set aside by the competent 53 state court if the arbitral tribunal lacked jurisdiction over the respective matter. a) Enforcing arbitration clauses and Kompetenz-Kompetenz. § 578 ZPO stipulates 54 that state courts are only allowed to intervene where explicitly provided by Austrian arbitration law. Therefore, it is clear under Austrian law that a declaratory court decision on the validity of an arbitration clause or the jurisdiction of an arbitral tribunal are not permitted. Accordingly, anti-suit injunctions of courts are as well inadmissible in Austria.145 The principle of Kompetenz-Kompetenz is internationally recognized146 and explicitly 55 stipulated by § 592(1) ZPO.147 According to this provision an arbitral tribunal is entitled to render an award on its own jurisdiction. This award can be separately challenged before a state court.148 Alternatively, the arbitral tribunal’s decision on jurisdiction can be made together with the ruling on the merits of the case. Austrian arbitration law is silent to the question whether an arbitral tribunal has to deny its jurisdiction only upon objection of a party or if it must do so ex officio under certain circumstances.149 Some legal scholars argue in favour of such duty in regard to a lack of arbitrability and a violation of public policy.150 It is not clear under Austrian law how to deal with a counterclaim raised in the 56 course of state court proceedings, if this counterclaim is subject to an arbitration agreement. The Austrian Supreme Court decided that it is allowed to raise such

§ 584(3) ZPO. § 584(2) ZPO. 144 Reiner, Staatliche Justiz und Schiedsgerichtsbarkeit: Konkurrenz oder Kooperation?, Schriftenreihe niederösterreichische juristische Gesellschaft 2008/103, 13. 145 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 584 mn. 6. 146 OGH, 18 OCg 1/15 v. 147 Nueber, in: Höllwarth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 592 mn. 1. 148 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 592 mn. 4. 149 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 592 mn. 10 a. 150 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 592 mn. 22. 142 143

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counterclaim in state court proceedings.151 However, this decision was primarily based on scholarly writing152 to the law in force prior to the Arbitration Act 2006. Recently, it had been advocated that this result is not in line with Austrian arbitration law. Therefore, a state court must deny its jurisdiction over the counterclaim.153 57 Even if a claim to set aside an arbitral award based on the lack of jurisdiction of the arbitral tribunal is pending before a state court, the arbitral tribunal has the right to continue its proceedings and also may issue an arbitral award.154 b) Preclusion of jurisdictional defences. § 592(2) ZPO stipulates a strict time limit to raise objections against the jurisdiction of an arbitral tribunal. Accordingly, a plea that the arbitral tribunal has no jurisdiction must be raised no later than together with the first submission on the merits of the case.155 A lack of jurisdiction is cured if an objection is not raised in due time.156 Participation in the nomination of an arbitrator is not deemed to be a waiver of jurisdictional objections. The latter applies as well if the party appointed its arbitrator directly. 59 If a party objects to the excess of the arbitral tribunal’s authority, such plea must be submitted as soon as the respective matter is raised in the course of the arbitral proceedings. A later objection is only admissible if the arbitral tribunal considers the delay sufficiently excused. The preclusion of the objection to the jurisdiction of an arbitral tribunal continues to be effective also in post-award stages, which means that domestic courts in later proceedings to set aside the arbitral award are bound by the so established jurisdiction of the arbitral tribunal.157 58

c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. In the case an arbitral tribunal denied its jurisdiction a state court is prohibited to reject a claim in the respective matter. If an arbitral tribunal decides in favour of its decisions a state court must reject a claim concerning a dispute that falls within the scope of the arbitration clause.158 61 If a party objects to the jurisdiction of an arbitral tribunal in due time the decision of the state court on the jurisdiction of the arbitral tribunal has binding effect for the arbitral tribunal.159 However, if the arbitral tribunal’s decision on its jurisdiction nevertheless contradicts the court decision, the arbitral tribunal’s decision may violate Austrian public policy and can be challenged pursuant to § 611(2)(8) ZPO.160 60

III. The arbitral tribunal and the conduct of the arbitral proceedings 62

Arbitration agreements ordinarily address several issues: the agreement to arbitrate, the scope of dispute submitted to arbitration, the seat of the arbitration, the language of the arbitration, ad hoc or institutional arbitration and a choice of law clause.161 As 151

OGH, RIS-Justiz RS0033744. Fasching, Schiedsgericht und Schiedsverfahren, 1973, 34. 153 Rechberger, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahrensrecht I, 2012, mn. 6/25. For a comparative analysis, see supra A mn. 49. 154 Rechberger/Melis, in: Rechberger (ed.), ZPO, 5th ed., 2014, § 592 mn. 3. 155 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 592 mn. 4. 156 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 592 mn. 40; Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 592 mn. 17. 157 Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 592 mn. 24. 158 Rechberger, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 6/74. 159 E. g., Rechberger, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 6/75. 160 Power, The Austrian Arbitration Act, 2006, § 592 mn. 1. 161 Wegen/Eckardt, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 566 et seq. 152

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already outlined above, the seat of the arbitral tribunal determines the procedural rules to be applied in the arbitration proceedings (lex arbitri) and perhaps – in absence of a choice of law clause – the law applicable to the merits of the case (lex fori).

1. The arbitral tribunal, impartiality and independence of the arbitrator According to § 586 ZPO the parties are free to determine the number of arbitrators. If the parties agreed on an even number of arbitrators, the (party-appointed) arbitrators have to nominate an obligational person that will act as the chairman. In the absence of an agreement by the parties, the number of arbitrators is three. Further, the parties are free to agree on the procedure to appoint the arbitrators.162 In absence of such agreement, the following procedure applies:163 If the parties are unable to agree on a sole arbitrator within four weeks of receipt of a respective party’s written request to do so by the other party, the sole arbitrator is appointed upon request of a party by the competent court.164 Where the parties agreed to a tribunal consisting of three arbitrators, each party must appoint one arbitrator. The two arbitrators appoint the chairman of the tribunal. In addition, in an arbitration with more than three arbitrators, each party has to appoint an equal number of arbitrators. Finally, these arbitrators appoint the chairman of the tribunal. It is important to know that a party is bound by its nomination of an arbitrator when the written notification of the appointment has been successfully received by the other party. The court requested to appoint an arbitrator must consider any necessary qualifications of the arbitrator as stipulated by a party agreement. The decision to appoint an arbitrator is subject to no appeal.165 The parties conclude a contract with the appointed arbitrator, namely a contract for work and services.166 This contract is regularly concluded against payment and if not this must be explicitly stated in the contract. The Austrian Supreme Court clarified that in institutional arbitration proceedings the arbitrator has no contractual relationship with the arbitral institution.167 However, the parties and the arbitral institution are bound by a service contract with the purpose to organize the arbitration proceedings.168 Since the arbitrator is party of a contract for work and services with the party that appointed him, he has a claim for remuneration of his services. If there exists no further agreement, remuneration of the arbitrator shall be appropriate.169 The arbitrator’s claim for his fee arises together with the termination of the proceedings or at any other point of time if agreed so by the parties.170 The arbitrator even has a claim for remuneration after the beginning of the arbitration proceedings if it turns out that the arbitration agreement is invalid or other defects of the arbitral proceedings emerge.171 An arbitrator who is in delay with the fulfilment of his obligations can be held liable by the parties for any damage caused by this delay.172 § 587 ZPO. § 587(2)(2)-(5) ZPO. 164 For recent examples for appointments by the Austrian Supreme Court see OGH, 7 September 2017, 18 ONc 2/17 i; OGH, 8 May 2018, 18 ONc 1/18 v. 165 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 587 mn. 18 et seq. 166 OGH, RIS-Justiz RS0021668. 167 OGH, 18 September 2012, 4 Ob 30/12 h; Hahnkamper, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 997. 168 OGH, 18 September 2012, 4 Ob 30/12 h. 169 § 1152 ABGB. 170 OGH, 17 February 2014, 4 Ob 197/13 v. 171 OGH, 17 February 2014, 4 Ob 197/13 v. 172 § 594(4) ZPO; Leitner, Die Haftung des Schiedsrichters, 2016, 118. 162 163

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a) Duty to disclose. Every appointed arbitrator must disclose all circumstances likely to give rise to doubt as to his impartiality or independence or which contradict the parties’ agreement.173 The same applies to circumstances that emerge in the course of the arbitral proceedings.174 If the doubts as to the impartiality or independence are justified the arbitrator can be challenged by a party before the arbitral tribunal and subsequently before the competent state court. However, a party can challenge an arbitrator it appointed only based on such circumstances that the party becomes aware of after the appointment (§ 588(2) ZPO).

b) Grounds for challenge. As mentioned already above, an arbitrator can only be challenged if circumstances give rise to justified doubts as to the impartiality or independence or if he does not fulfil the requirements pursuant to a party’s agreement.175 Accordingly, an arbitrator can only be successfully challenged on the basis of justified doubts as to the impartiality or independence of the arbitrator. This lack of impartiality or independence must be of such nature that in state court proceedings the respective judge would be excluded by law.176 69 In order to assess whether circumstances can give rise to justified doubts as to the impartiality and independence of the arbitrator even Austrian state courts make reference to the IBA Guidelines on Conflicts of Interest in International Commercial Arbitration as practical guideline to establish the duty of arbitrators to disclose certain matters.177 This has been clarified by the Austrian Supreme Court. In that case, the Supreme Court expressly referred to the Guidelines in its decision.178 According to a line of decisions of the Supreme Court, an arbitrator can only be challenged by a party as long as the arbitral proceedings are still ongoing.179 Grounds for challenge that became known only after an award was made will not as such justify a setting aside application except in extreme circumstances.180 In principle, a challenged arbitrator can only be held liable if the respective award was subsequently successfully annulled.181 68

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c) Procedural aspects and preclusion of grounds for challenge. According to § 589 (1) ZPO, the parties are free to agree on a procedure to challenge an arbitrator. In the absence of such agreement, the party who challenges the arbitrator must do so within a time limit of four weeks after it became aware of the circumstances that give rise to doubt as to the impartiality or independence of the arbitrator.182 The reasons to challenge an arbitrator must be submitted by the party to the arbitral tribunal in written 173 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 588 mn. 46; OGH, 5 August 2014, 18 ONc 1/ 14 p; OGH, 13 November 2014, 18 ONc 5/14 a; OGH, 5 August 2014, 18 ONc 2/14 k = OGH, RIS-Justiz RS012968546. 174 OGH, 15 May 2019, 18 ONc 1/19 w. 175 § 588(2) ZPO. 176 See further on the grounds to challenge an arbitrator OGH, RIS-Justiz RS0046052; OGH, RIS-Justiz RS0046087; OGH, RIS-Justiz RS0045949; OGH, RIS-Justiz RS010937947. 177 OGH, 17 June 2013, 2 Ob 112/12 b = Wilske/Michou/Zeiler, (2013) 68(3) Disp. Res. J. 96; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 588 mn. 13. 178 OGH, 17 June 2013, 2 Ob 112/12 b = Wilske/Michou/Zeiler, (2013) 68(3) Disp. Res. J. 96. 179 OGH, RIS-Justiz RS0126434; OGH, 17 February 2014, 4 Ob 197/13 v. 180 OGH, 17 June 2013, 2 Ob 112/12 b, SZ 2013/57, para. 4.4. It is worth mentioning that the decision takes into account a decision of the German Bundesgerichtshof (BGH, BGHZ 141, 90) that has recently been overruled (infra J mn. 48). 181 OGH, RIS-Justiz RS0119996; OGH, 22 March 2016, 5 Ob 30/16 x; OGH, 17 February 2014, 4 Ob 197/13 v; Leitner, Die Haftung des Schiedsrichters, 2016, 51. 182 § 589(2) ZPO; Wong, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 240; OGH, 5 August 2014, 18 ONc 2/14 k; OGH, 5 August 2014, 18 ONc 1/14 p; OGH, 19 April 2016, 18 ONc 3/15 h; OGH, 13 August 2014, 18 ONc 3/14 g (18 ONc 4/14 d); OGH, 7 September 2017, 18 ONc 1/17 i.

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form. If the arbitral tribunal dismisses the challenge, such challenge can be brought before the competent state court.183 The arbitral tribunal is entitled to continue its proceedings and even may render an 71 award while the challenge is pending before a state court.184 However, the arbitral tribunal may be cautious in this respect since an arbitral award based on the decision of an arbitral tribunal in which a successfully challenged arbitrator participated can subsequently be set aside. d) Failure or impossibility to act. If an arbitrator is either unable to comply with his 72 duties or fails to comply with them without undue delay and does not withdraw from office, each party can request the court to decide on the termination of the arbitrator’s mandate. The respective decision of the state court is final and binding.185 According to § 591 ZPO the parties are entitled to appoint a substitute arbitrator. If the parties agree, the newly constituted tribunal can continue the proceedings on the basis of the outcome up to that point in time.

2. The arbitral proceedings Like in many other jurisdiction the conduct of the arbitral proceedings is mainly 73 subject to the parties’ agreement.186 However, the parties must comply with the mandatory rules of Austrian law. Where Austrian mandatory law is silent and the parties’ agreement does not provide a regulation, it is in the discretion of the arbitral tribunal how to further proceed.187 The parties can choose in which language the arbitral proceedings are conducted.188 If 74 they parties do not make a respective choice it is in the discretion of the arbitral tribunal to determine the language of the proceedings. Further, the parties can be represented in the proceedings by any person they want to choose. The parties cannot be precluded from this right to be represented by a person of their choice.189 a) The request for arbitration, statements of claim and defence, default. Austrian 75 Arbitration law does not expressly stipulate minimum requirements for a request for arbitration to be valid. However, § 587(4) ZPO stipulates that the request to appoint an arbitrator must contain both the relief sought in the arbitration and the reference to the underlying arbitration agreement.190 In practice, the appointment of an arbitrator will be submitted together with the statement of claim and by doing so the minimum requirements for initiation of an arbitration are fulfilled.191 § 597 ZPO stipulates the minimum content of a statement of claim as well as a 76 statement of defence. A statement of claim or statement of defence must be submitted in compliance with the time limit set by the parties or the arbitral tribunal. The Claimant in his statement of claim has to determine the relief sought as well as all the facts supporting its claim. The Respondent in return has to reply to the claim in due time. Further, the parties are free to present any evidence they consider to be relevant or indicate further evidence they intend to rely on. If the Claimant fails to comply with § 589(3) ZPO; OGH, 13 November 2014, 18 ONc 5/14 a. Platte, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 589 mns 24 et seq. 185 Rechberger/Hofstätter, in: Rechberger (ed.), ZPO, 5th ed., 2019, § 590 mn. 2. 186 § 594(1) ZPO. 187 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 594 mn. 3. 188 § 596 ZPO. 189 § 594(3) ZPO. 190 OGH, 6 February 2018, 18 ONc 4/17 h. 191 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 597 mn. 1 a. 183 184

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these minimum requirements, the arbitral tribunal according to §§ 600 and 608(2) ZPO must terminate the proceedings, whereas if the Respondent fails to submit a statement in reply the arbitral tribunal must continue the proceedings.192 The arbitral tribunal must not take Claimant’s argument as true only because of the Respondent’s failure to act.193 77 The Vienna Rules provide for more detailed information to be contained in a statement of claim. Accordingly, a statement of claim pursuant to the Vienna Rules must contain information about the parties, a statement of the facts and circumstances, particulars regarding the arbitrators as well as a request for relief.194 b) Equality of arms, fair trial principle and the right to be heard. § 594(2) ZPO stipulates that the parties have to be treated fairly and that every party must be granted the right to be heard. If the parties are deprived from their right to be heard they can file a claim before the competent state court in order for the award to be set aside.195 The term “treated fairly” used in § 594(2) ZPO has the same meaning as in article 6 ECHR.196 However, a line of decisions of the Supreme Court considers every arbitration agreement as partial waiver of the parties’ right to be heard according to the ECHR.197 79 A party must have the right to present all facts it deems to be relevant to properly present its case to the arbitral tribunal as well as to participate in the taking of evidence.198 § 598 ZPO stipulates that the parties have the right to apply for an oral hearing at an appropriate stage of the proceedings. Furthermore, the Austrian Supreme Court ruled that the omission of an oral hearing forms a ground to set aside the arbitral award.199 In general, the Austrian Supreme Court, in a line of decisions, takes a very narrow view in regard to setting aside an arbitral award based on a violation of the right to be heard.200 Accordingly, the right to be heard is only violated if a party, at all stages of the proceedings, is completely deprived from any possibility to argue its case.201 This line of decisions dates back to the beginning of the 20th century and has been upheld until yet. If the right to be heard has been violated an arbitral award can be set aside pursuant to § 611(2)(2) ZPO.202 In the case such violation of the right to be heard has influence on the result of the proceedings, § 611(2)(8) ZPO (violation of the Austrian public policy) might apply as well.203 78

Platte, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 597 mn. 2. § 600(2) ZPO; cf. Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 600 mn. 3. 194 Rechberger/Pitkowitz, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 7 mn. 9. 195 For a recent case on the right to be heard under the NYC see OGH, 19 December 2018, 3 Ob 153/ 18y; see also infra mn. 112. 196 Oberhammer, Entwurf, 2002, 92; Platte, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 594 mn. 15. 197 OGH, RIS-Justiz RS0117294; OGH, 1 April 2008, 5 Ob 272/07 x. 198 OGH, 6 September 1990, 6 Ob 572/90 = ecolex 1991, 86. 199 OGH, 30 June 2010, 7 Ob 111/10 i. 200 For the right to be heard in enforcement proceedings pursuant to the NYC see OGH, RIS-Justiz RS0075366. 201 OGH, RIS-Justiz RS00445092; Wiebecke/Ruckteschler/Schifferl, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 1510; OGH, 27 October 1926, ZBl 1927/60; OGH, 20 November 1934, Rsp 1935/17/10, 11; OGH, 23 February 2016, 18 OCg 3/15 p; OGH, 19 August 2015, 18 OCg 2/15 s. For comparative analysis, see supra A mn. 125. 202 OGH, RIS-Justiz RS0045092; OGH, 28 September 2016, 18 OCg 3/16 i; OGH, 28 September 2016, 18 OCg 2/16 t; OGH, 6 December 2016, 18 OCg 5/16 h; OGH, 10 Oktober 2014, 18 OCg 2/14 i; OGH, 15 May 2019, 18 OCg 1/19 z. 203 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 594 mn. 24; Czernich, JBl 2014, 295; OGH, 23 February 2016, 18 OCg 3/15 p; OGH, 2 March 2017, 18 OCg 6/16 f. 192 193

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c) Confidentiality. The arbitral proceedings and the oral hearings are not public. As 80 to a confidentiality obligation of the parties, no enforceable and sanctionable confidentiality duty will be established by virtue of law.204 Accordingly, the parties must include specific confidentiality obligations in the arbitration agreement. However, party representatives (e. g. attorneys at law) will be regularly bound by their professional duties of confidentiality.205 d) The arbitral award. The arbitral award must be rendered in written form.206 If the parties have not agreed otherwise the law requires a reasoned award.207 There is no provision on how detailed the reasoning has to be. However, at least under the Vienna Rules it is recommended that an award should cover certain essential points.208 The award has to be signed by the arbitrator, in arbitration proceedings with more than one arbitrator the signature of the majority of the arbitrators suffice. In such case the award must note the reason why the signatures of certain arbitrators are missing.209 In addition, an arbitral award must state the date of issuance as well as the seat of the arbitral tribunal as determined according to § 595(1) ZPO.210 It is advocated by Austrian scholars that an arbitral award under Austrian law must also meet the minimum contents requirements for decision of state courts pursuant to § 417(1) ZPO.211 Accordingly, an award must at least contain the names of the members of the arbitral tribunal, the names of the parties as well as the dictum or dispositive part, which means that the award must clearly determine a party’s duty to perform.212 A copy of the award signed by the arbitrators must be delivered to each of the parties. Upon request of a party the chairman or, in case of his incapacity, another member of the arbitral tribunal must confirm on one copy of the award its finality and enforceability.213 If an award lacks the following prerequisites it is deemed non-existing and therefore cannot be subject to a set-aside claim (Nichtschiedsspruch):214 the award lacks written form, the award has been rendered by persons who were not appointed as arbitrators according to §§ 587–591 ZPO215 or no request for arbitration216 has been submitted by any of the parties. § 612 ZPO provides for the right to apply for determination before the competent state court whether an arbitral award exists or not.217 By contrast, if the arbitral tribunal has just exceeded its power to decide, the underlying award can be challenged before a state court.218 § 605 ZPO provides for the opportunity of the arbitral tribunal to render an award by consent. Accordingly, the arbitral tribunal may record a parties’ settlement during the

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Fremuth-Wolf, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, 671. § 9(2) RAO (Rechtsanwaltsordnung). 206 § 606(1) ZPO. 207 § 606(2) ZPO; Horvath/Fischer/Prantl, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 1254. 208 Hauser, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 36 mns 5 et seq. 209 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 606 mn. 4. 210 Supra mn. 14. 211 Riegler, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 606 mn. 22. 212 Riegler, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 606 mn. 22. 213 § 606(6) ZPO; Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 606 mn. 112; However, this confirmation is not a prerequisite for the res judicata effect: OGH, 18 November 2015, 3 Ob 24/15 y. 214 Rechberger/Hofstätter, in: Rechberger (ed.), ZPO, 5th ed., 2019, § 606 mn. 2. 215 Supra mns 81–84. 216 No statement of claim under Austrian Law. 217 OGH, 30 November 2018, 18 OCg 5/18 m. 218 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 606 mn. 19. 205

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arbitral proceedings upon request of the parties as award by consent, provided that the content of the settlement does not violate Austrian public policy.219 85

e) Termination of the arbitration without an award. According to § 608(2) ZPO the arbitral tribunal has the right to terminate the arbitral proceedings, if the Claimant fails to file a statement of claim, the Claimant withdraws its claim, the parties agree on the termination of the proceedings and communicate this to the tribunal or the continuation of the proceedings has become impossible for the arbitral tribunal due to the conduct of the parties (e. g. non-participation).220

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f) The costs of the arbitration. Pursuant to § 609(4) ZPO the arbitral tribunal has to render its decision on costs in form of an award either in the award on the merits or in a separate award. The order for reimbursement of costs may include all reasonable costs for adequate enforcement or defence.221 Even if the arbitral tribunal decides that it has no jurisdiction for the dispute due to a non-existent arbitration agreement, it can render an award on costs upon request of the Respondent in order to establish the Claimant’s obligation to reimburse the costs of the proceedings.222 Further, the arbitral tribunal, when deciding about the reimbursement of costs, shall simultaneously determine the amount of cost to be reimbursed to the extent that it is already possible.223 The provision on the allocation of costs is not of mandatory nature and can therefore be derogated by an agreement of the parties or by reference to a set of arbitration rules.224 An award on costs can be challenged separately before the competent state court.225

3. Evidence, discovery, disclosure § 599 ZPO governs the procedure of taking evidence in arbitral proceedings. As a rule of thumb, the taking of evidence is in the discretion of the arbitral tribunal.226 Accordingly, the arbitral tribunal decides on the admissibility of the taking of evidence as well.227 This rule builds a mandatory rule of law which the parties cannot deviate from by agreement.228 88 In order to avoid a violation of the parties’ right to be heard Austrian courts have elaborated some minimum requirements regarding the taking of evidence by an arbitral tribunal. Hence, an arbitrator has to listen to the parties directly.229 Further, the examination of witnesses can be conducted by just one member of the arbitral tribunal.230 The principle of immediacy that applies in state court proceedings (§ 276 (1) ZPO) does not apply in arbitral proceedings.231 Accordingly, it is subject to a parties’ 87

219 Zeiler, Austria, in: International Bar Association, Arbitration Guide, 2018, 15; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 605 mn. 5. 220 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 608 ZPO mn. 76; infra J mn. 62; Horvath/ Fischer/Prantl, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 1291 et seq. 221 § 609(1) ZPO. 222 § 609(2) ZPO; Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 609 ZPO mn. 78. 223 § 609(3) ZPO. 224 Power, The Austrian Arbitration Act, 2006, § 609 mn. 2. 225 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 609 mn. 89. 226 Beisteiner, in: Zeiler (ed.), Austrian Arbitration Law, 2016, Section 599 mn. 4. 227 Platte, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 599 mn. 2. 228 Rechberger/Hofstätter, in: Rechberger (ed.), ZPO, 5th ed., 2019, § 599 mn. 1. 229 OGH, 3 May 1899, GlUNF 603, printed in Neuteufel, Schiedsgerichtliche Entscheidungen 1898–1998, 2000, Decision No. 4, 7. 230 OGH, RIS-Justiz RS0045359. 231 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 599 mn. 5; Schwarz/ Konrad, The Vienna Rules, 2009, mn. 20.201.

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agreement or in absence of such in the discretion of the arbitral tribunal to accept written witness statements.232 In practice, the proceedings to take evidence are mostly governed by the parties’ 89 agreement or procedural orders of the arbitral tribunal. In this context, the arbitral tribunal often refers to the IBA Rules on the Taking of Evidence in International Arbitration.233 If an arbitral tribunal violates the above obligations this might lead to the award being set aside pursuant to § 611(2) no 2 ZPO.234 Whether a so-called “discovery” and “disclosure” method of taking evidence is 90 permitted under Austrian law is difficult to say. Austrian arbitration law does not expressly govern on this issue and leaves the procedure of taking evidence to a parties’ agreement. In absence of such agreement it is always the arbitral tribunal that decides whether “discovery” or “disclosure” methods may be applied in the proceedings.235

4. The law governing the dispute and lois de police § 603 ZPO is the core provision in regard to the law applicable to the dispute: The arbitral tribunal has to decide the dispute according to the rules of law that the parties have chosen. If a choice of law clause refers to the legal system of a state such referral is deemed to be a choice of the substantive law of this state not including the private international law (conflict of law rules) of that state. Of course, the parties are free to agree on the application on the conflict of law rules of a state as well.236 In the absence of such agreement, the arbitral tribunal is free to apply the laws of a state it considers appropriate. The principle of the closest connection is not explicitly stipulated by Austrian arbitration law. However, the principle of the closest connection is broadly accepted in international arbitration and therefore is in many cases also applied by an arbitral tribunal with its seat in Austria.237 § 603(1) and (2) ZPO provide for a precise distinction regarding the applicable law: In absence of a parties’ agreement, the arbitral tribunal can only apply the laws of a state.238 Only if the parties agree on the application of so called rules of law, the arbitral tribunal is entitled to apply other provisions than the laws of a state.239 According to most of the Austrian scholars this gives the parties the right to agree on the application of the lex mercatoria or the UNIDROIT Principles of International Commercial Contracts.240 Some scholars even advocated that an application of the lex mercatoria without the parties’ consent forms no ground to challenge the respective arbitral award and primarily based their view on the famous decision of the Austrian Supreme Court in the case Noroslor v. Pabalk.241 This view does not correspond to the new legislation implemented by the Arbitration Act 2006, according to which the parties must agree on the application of so called rules of law.242 232

Kröllensberger, in: Schumacher (ed.), Beweiserhebung im Schiedsverfahren, 2011, mn. 389. Welser, in: Liber Amicorum 50 Jahre ZfRV, 2013, 239 (245). 234 Platte, in: Riegler et al. (eds), Arbitration Law of Austria, 2007, § 599 mn. 17; OGH, 28 September 2016, 18 OCg 3/16 i; OGH, 28 September 2016, 18 OCg 2/16 t; OGH, 6 December 2016, 18 OCg 5/16 h = OGH, RIS-Justiz RS013114617. 235 Schumacher, Urkundenbeweis, in: Schumacher (ed.), Beweiserhebung im Schiedsverfahren, 2011, 74. 236 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 603 mn. 51. 237 Nueber, Transnationales Handelsrecht, 2013, 63. 238 Beisteiner, in: Zeiler (ed.), Austrian Arbitration Law, 2016, Section 603 mn. 7. 239 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 603 mn. 15. 240 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 603 mn. 48. 241 OGH, 18 November 1982, 8 Ob 520/82; Von Hoffmann, IPRax 1982, 107; Kappus, Lex Mercatoria in Europa und Wiener Kaufrechtskonvention in Europa 1980, 1990, 97. 242 Nueber, Transnationales Handelsrecht, 2013, 99. 233

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§ 603(3) ZPO gives the arbitral tribunal the right to decide ex aequo and bono if the parties have expressly authorized it to do so.243 Although at some point similar, decisions based on the lex mercatoria must be precisely differentiated from those made ex aequo and bono.244

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a) Choice of law and domestic cases. Whether there are less restrictions regarding the choice of law in arbitration proceedings is subject to discussion by Austrian scholars. It has been advocated that only such provisions of Austrian law cannot be derogated by party agreement, which are part of Austrian public policy.245 Accordingly, the parties can deviate from mere mandatory provisions of Austrian law.246

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b) Choice of law and lois de police. It is questionable whether mandatory provisions of third countries must be applied by the arbitral tribunal. However, the following general rule has been established in order for such mandatory rules to be applied in arbitrations seated in Austria: a close link to the dispute must be existing and the values protected by the foreign state’s mandatory provisions must at least be compatible with the values protected by the forum state.247 Whether the parties can deviate from mandatory provisions of third countries by agreement is subject to discussions in scholarly writing. It has been advocated that the parties cannot derogate mandatory provisions of third countries which qualify as part of the public policy of the forum state.248

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a) Interim relief before state courts. § 585 ZPO stipulates that the existence of an arbitration agreement does not prohibit a party in the course of arbitration proceedings to request a preliminary or protective measure from a state court. In addition, § 577(2) ZPO stipulates that § 585 ZPO is as well applicable if the seat of the arbitral tribunal is located outside of Austria. § 585 ZPO is a mandatory rule of Austrian law and is therefore not subject to an agreement by the parties.249 The district court where the opponent of the endangered party has its seat, domicile or habitual residence has jurisdiction to order an interim measure.250 In general, if one of those links is fulfilled Austrian courts are competent to order interim or protective measures.251 However, the mere agreement to arbitrate in Austria does not establish jurisdiction of Austrian courts for interim or protective measures.252

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b) Interim relief before the arbitral tribunal. § 593 ZPO provides for the power of the arbitral tribunal to order, upon request of a party, such interim or protective measure it deems necessary to secure the enforcement of the claim. Before its decision the arbitral tribunal must first hear the opposing party. Also, the tribunal can require any party to provide appropriate security in connection with the respective measures.253 243 For awards rendered without such agreement see: Beisteiner, in: Zeiler (ed.), Austrian Arbitration Law, 2016, Section 603 mn. 8. 244 Nueber, Transnationales Handelsrecht, 2013, 93 et seq. 245 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 603 mn. 54. 246 Verschraegen, in: Rummel (ed.), ABGB, 3rd ed., 2000, § 11 IPRG mn. 1. 247 Siwy, in: Klausegger et al. (eds), Austrian Yearbook on International Arbitration, 2012, 165 (169). 248 Beulker, Die Eingriffsnormenproblematik in internationalen Schiedsverfahren, 2005, 246. 249 § 593(4) ZPO; Zeiler, Schiedsverfahren, 2nd ed., 2014, § 585 mn. 4 a; Riegler/Pickrahn/Zenhäusern, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mn. 1367. 250 Siwy/Beisteiner, in: Klausegger et al. (eds), Austrian Yearbook on International Arbitration, 2011, 275 (276); Zeiler, Schiedsverfahren, 2nd ed., 2014, § 585 mn. 12. 251 Zeiler, in: Liebscher/Oberhammer/Rechberger (eds), Schiedsverfahren I, 2012, mn. 7/24. 252 OGH, 4 September 2001, 5 Nd 510/01. 253 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 593 mn. 4.

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According to § 593(2) ZPO interim measures must be ordered in writing. A signed copy must be delivered to the parties. Pursuant to § 593(3) ZPO, upon request of a party, an interim measure of an arbitral tribunal can be enforced by the competent Austrian district court.254 The court has to hear the respondent prior to the enforcement of the measure ordered by the arbitral tribunal.255

6. Multi-party and multi-contract arbitration As outlined above, the Austrian arbitration law contains special provisions for the 100 appointment of arbitrators in cases where more than two parties are involved. a) Arbitration agreement involving several parties.256 Possible constellations of 101 multi-party arbitrations can evolve when more than two parties conclude a contract or two or more closely related contracts allow for multi-party arbitration.257 In any case, the parties’ intention when they concluded the arbitration agreement and the possibility for all the parties to participate in the formation of the arbitral tribunal are necessary prerequisites for multi-party arbitrations to be admissible under Austrian law.258 Especially the mutual consent of all parties is a crucial prerequisite for a third party to join arbitration proceedings under Austrian law. This is similar to German law, where a contract between two specific parties cannot bind a third party by virtue of law.259 Like the 2013 version, the 2018 arbitration rules of the VIAC (“Vienna Rules”) 102 contain specific provisions for multi-party arbitrations, joinder of third parties and consolidation of proceedings. Whereas article 18 of the Vienna Rules governs the procedure to appoint arbitrators in multi-party arbitrations, pursuant to article 15 of the Vienna Rules two or more arbitral proceedings can be consolidated upon request of a party if either all parties agree or the same arbitrators have been appointed in each of the proceedings.260 However, in all consolidated cases the place of arbitration must be the same. Finally, article 14 of the Vienna Rules stipulates under which circumstances third parties can join an arbitration that has already been instituted between other parties according to the Vienna Rules.261 Pursuant to article 14(1) of the Vienna Rules the joinder of a third party and the manner of such joinder is to be decided by the arbitral tribunal upon request of a (third-)party and after hearing all (third-)parties as well as considering all relevant circumstances. b) Equality of arms and appointment of arbitrators.262 If several parties on 103 claimant’s or respondent’s side cannot agree on a joint arbitrator, article 18(4) of the Vienna Rules provides for the power of the Board of VIAC to appoint the arbitrator after having heard all parties involved.263 This procedure is very similar to the subsidiary 254 Riegler/Pickrahn/Zenhäusern, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed., 2017, mns 1402 et seq. 255 Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 593 mn. 2. 256 See supra mns 40 et seq. 257 Zeiler, in: Fitz et al. (eds), Liber Amicorum Hellwig Torggler, 2013, 1403 (1405). 258 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 587 mn. 2. 259 Geimer, in: Böckstiegel/Berger/Bredow (eds), Die Beteiligung Dritter an Schiedsverfahren, 2005, 71 (74). 260 Zeiler, in: Fitz et al. (eds), Liber Amicorum Hellwig Torggler, 2013, 1403 (1407); Oberhammer/ Koller, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 15 mn. 1; Riegler/Boras, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 18 mns. 5–8. 261 Oberhammer/Koller, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 14 mn. 1. 262 Cf. infra J mn. 76. 263 Riegler/Boras, in: WKÖ (ed.), Handbook Vienna Rules, 2nd ed., 2019, Article 18 mn. 13.

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appointment of arbitrators in multi-party arbitrations under Austrian arbitration law by the competent state court.264

IV. The control and the enforcement of arbitral awards 104

According to § 607 ZPO an arbitral award has the effect of a legally binding judgement between the parties. The parties, however, are free to agree on an appellate arbitral tribunal.265

1. Correction and amendment of arbitral awards 105

§ 610 ZPO governs the correction of the arbitral award upon request of any party by the arbitral tribunal if: the award contains errors in computation or clerical and typographical errors. The arbitral tribunal, on the basis of a parties’ agreement, give an interpretation of specific parts of the award. Further, the arbitral tribunal can render an additional award as to claims asserted in the arbitral proceedings but not yet decided by the arbitral tribunal.266

2. Review of arbitral awards before state courts 106

In general, an arbitral award is final and binding. There is however the possibility for the parties to challenge the arbitral award pursuant to § 611 ZPO before the competent state court. The parties cannot waive certain or all grounds to set aside an arbitral award.267

a) Procedural framework (time limits, competent court, appeal). According to § 611(4) ZPO an application to set aside must be filed within three months of the day on which the claimant has received the arbitral award. The grounds for challenge must be specified in the claim otherwise the state court will not take them into account.268 This does not apply to the grounds that a dispute is not arbitrable under Austrian law or an arbitral award violates Austrian public policy, which the court will take into account even if the challenging party does not explicitly rely on them.269 Further, § 613 ZPO stipulates that these latter two challenge grounds are relevant in any other proceedings before a state court. Accordingly, any state court must ignore an arbitral award which is made in a matter that is not arbitrable or which violates Austrian public policy.270 108 Austrian courts will only set aside arbitral awards that have been rendered by an arbitral tribunal with its seat in Austria.271 As from 1 January 2014 the competent court for proceedings to set aside arbitral awards is the Austrian Supreme Court.272 Against the decision of the Supreme Court no appeal is available. This is relatively unique in Europe and leads to relatively short setting-aside proceedings. The one tier procedure does not apply to consumer- and employment related disputes. According to § 617(8) ZPO and § 618 ZPO in consumer- and employment related disputes the competent 107

§ 587(5) ZPO. Oberhammer, Entwurf, 2002, 120. 266 Zeiler/Steindl, Arbitration in Austria, 2nd ed., 2007, § 610 ZPO mn. 80. 267 Fasching, Schiedsgericht und Schiedsverfahren, 1973, 147. 268 OGH, RIS-Justiz RS0045085. 269 § 611(3) ZPO. 270 § 611(2)(7) and § 611(2)(8) ZPO. 271 Hausmaninger, in: Fasching/Konecny, ZPO, 3rd ed., 2016, § 611 mn. 67. 272 § 615 ZPO. 264 265

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district court in civil law matters has jurisdiction. In sum, such proceedings can pass three procedural levels (Trial Court, Appellate Court and Supreme Court).273 b) The Grounds for setting aside arbitral awards: An overview. The list of grounds 109 for setting aside an arbitral award as stipulated by § 611(2) ZPO is exhaustive.274 The state courts must not review the merits of the case and thus a révision au fond is prohibited by Austrian law.275 An arbitral award can only be set aside if: a valid arbitration agreement does not exist, the arbitral tribunal denied its jurisdiction, a party was incapable of concluding a valid arbitration agreement276, a party was not given proper notice of the appointment of an arbitrator or was unable to present its case277, the arbitral tribunal exceeds its authority to decide278, the composition of the arbitral tribunal does not comply with the requirements of Austrian arbitration law279, the arbitration proceedings violate Austrian public policy280, the preconditions under which a judgement of a court of law can be re-opened by a revision according to § 530 ZPO281 exist, the matter in dispute is not arbitrable282 or the arbitral award violates Austrian public policy283. c) Invalidity of the arbitration agreement and lack of jurisdiction of the arbitral 110 tribunal. In case arbitral proceedings lack an underlying arbitration agreement an award can be set aside upon request of a party. Practical grounds for the set aside are that the form requirements according to § 583 ZPO are not fulfilled.284 Further that the dispute lacks arbitrability or the arbitration agreement lacks determinability.285 However, the parties are precluded to base their annulment claim on this ground if it has not already been brought up by the parties in the course of the proceedings.286 In addition, if the arbitral tribunal denies its jurisdiction this forms a ground to 111 challenge an arbitral award as well. Another ground for challenging an arbitral award pursuant to § 611(2)(1) ZPO is fulfilled when one party lacks the capability to conclude arbitration agreements according to the laws of its personal status.287 If a party’s personal status is Austrian, the capability to conclude an arbitration agreement corresponds to the capacity to conduct proceedings in one’s own name.288 Finally, § 611(2) (7) ZPO stipulates a ground to set aside an arbitral award if a matter in dispute is not arbitrable. d) Right to be heard.289 Several constellations can fulfil a violation of a party’s right 112 to be heard (see supra mns 78–79). Accordingly, an award has to be set aside if the 273

Such proceedings take on average 32.5 months (Nueber, ZfRV 2013, 75 FN 15). Riegler, in: Riegler et al. (eds), Arbitration law of Austria, 2007, § 611 mn. 4. 275 Rechberger, in: Rechberger (ed.), ZPO, 5th ed., 2014, § 611 mn. 11. 276 § 611(2)(1) ZPO. 277 § 611(2)(2) ZPO. 278 § 611(2)(3) ZPO. 279 § 611(2)(4) ZPO. 280 § 611(2)(5) ZPO. 281 § 611(2)(6) ZPO; these preconditions are primarily circumstances under which criminal acts led to the making of a court decision. 282 § 611(2)(7) ZPO. 283 § 611(2)(8) ZPO. 284 OGH, 27 February 2001, 1 Ob 273/00 d. 285 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, § 611 mn. 90. 286 Pitkowitz, Die Aufhebung von Schiedssprüchen, 2008, mn. 145; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 611 mn. 11. 287 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 611 mn. 13. 288 Backhausen, Schiedsgerichtsbarkeit unter besonderer Berücksichtigung des Schiedsvertragsrechts, 1990, 22. 289 Supra mn. 27. 274

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parties had no opportunity to participate in the constitution of the arbitral tribunal290 or were not given proper notice of the arbitral proceedings. Further, the right to be heard is violated if a party due to other reasons was unable to present its case. 113

e) Arbitral award ultra petita. Whether an arbitral tribunal exceeded its authority to decide, must be assessed according to the matter in dispute. This matter in dispute is primarily determined by the statement of claim or counterclaim291 or by the arbitration agreement itself292. However, the parties must give notice as soon as the arbitral tribunal exceeds its authority, otherwise their right to claim for setting-aside an award based on this ground is precluded.293

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f) Public policy. Austrian arbitration law provides for two possibilities to base a setaside claim on a violation of public policy (ordre public). § 611(2)(5) ZPO governs on a violation of procedural laws that qualify as part of Austrian public policy, whereas § 611 (2)(8) ZPO only applies in the case of a violation of substantive (municipal) laws, which form part of Austrian public policy as well. In general, both alternatives are violated if fundamental principles of substantive or procedural Austrian law were breached.294 A mere violation of mandatory provisions of law does not automatically qualify as breach of Austrian public policy.295 However, in case an arbitral award includes no reasoning at all or only a pro-forma reasoning, this would qualify as violation of procedural public policy.296 What is more, to ignore already pending arbitral proceedings results in a violation of procedural public policy as well.297 Finally, blatant violations of provisions of European Union legislation result in a violation of substantive public policy.298

3. Enforcing arbitral awards a) General framework. § 1(16) EO (Exekutionsordnung) stipulates that an arbitral award constitutes an enforceable title under Austrian law. According to § 18, 19 EO the respective district court has jurisdiction to enforce domestic arbitral awards.299 § 614 ZPO and § 86 EO stipulate that the provisions of the EO are not applicable if international law or acts of the European Union provide otherwise.300 This is a clear reference to both the NYC and Geneva Convention 1961. In the course of the ratification of the NYC Austria did not implement a condition of reciprocity. If the state court affirms the enforceability of an arbitral award, the obliged party has the possibility to appeal within one month.301 116 According to a line of decisions of the Austrian Supreme Court, preliminary and interim decisions are not enforceable decisions pursuant to the NYC.302 On the contrary, partial awards that decide a certain part of a dispute finally, are enforceable 115

§ 611(2)(2) and (4). Zeiler, Schiedsverfahren, 2nd ed., 2014, § 611 mn. 20. 292 Heller, Verfassungsrechtlicher Rahmen, 60. 293 Zeiler, Schiedsverfahren, 2nd ed., 2014, § 611 mn. 24; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 611 mn. 23. 294 OGH, RIS-Justiz RS0110743. 295 OGH, 31 August 1995, 3 Ob 566/95; OGH, 7 June 2017, 3 Ob 10/17 t = YCA LXIII (2018), 415. 296 OGH, 28 September 2016, 18 OCg 3/16 i; Nueber, in: Höllwerth/Ziehensack (eds), ZPO Taschenkommentar, 2019, § 11 mn. 31. 297 OGH, 28 September 2016, 18 OCg 2/16 t. 298 OGH, 1 March 2017, 5 Ob 72/16y = YCA LXII (2017), 348. 299 Nueber/Boltz, RZ 2013, 168 (171). 300 OGH, 17 February 2016, 3 Ob 208/15 g = YCA LXI (2016), 398; OGH, 18 February 2015, 3 Ob 191/ 14f = YCA LX (2015), 377. 301 Hausmaninger, in: Fasching/Konecny (eds), ZPO, 3rd ed., 2016, IV/2, § 614 mns 60 et seq. 302 OGH, 25 June 1992, 7 Ob 545/92. 290 291

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titles under the NYC.303 The grounds to deny the recognition and enforcement of foreign arbitral awards are nearly identical to the grounds for setting aside an arbitral award.304 On the grounds for setting aside an award see supra mns 109–115. b) Enforcement of awards that were set aside. As long as setting-aside proceedings 117 are pending the court competent for the enforcement of a foreign arbitral award can suspend its proceedings.305 Whether an Austrian court is bound by the decision of a foreign court to set aside an arbitral award, which should be enforced in Austria, is much debated. Within the European Union article 33 Brussels I Regulation provides for the duty of each member state to recognize decisions from courts of another member state. However, article 1(2)(d) Brussels I Regulation excludes arbitration from its scope of application, which also applies to decisions of state courts on the setting-aside of arbitral awards.306 Such binding effect can be further established via bilateral treaties as well.307 Enforcement of foreign awards set aside at the seat may remain possible under article IX EuC (supra B mn. 293). c) Set-off. A defence against the enforcement of an arbitral award based on set-off is 118 successful if the claim for set-off has been addressed in the underlying award.308

4. Preclusion of grounds for challenge and defences to enforcement If a party fails to timely reprehend such challenge grounds that are precluded at some 119 point in the course of the arbitral proceedings, this effect extends to the recognition and enforcement proceedings as well.309 303 Czernich, New Yorker Schiedsübereinkommen, 2008, Article I mn. 1; Steindl/Mohs/Pörnbacher, in: Torggler (ed.), Handbuch Schiedsgerichtsbarkeit, 2nd ed. mn. 1666; Gaillard/Siino, in: Rowley/Gaillard/ Kaiser (eds), The Guide to Challenging and Enforcing Arbitration Awards, 2019, 88–89. 304 Nueber/Boltz, RZ 2013, 168 (172). 305 Article VI NYC. 306 Czernich, New Yorker Schiedsübereinkommen, 2008, Article V mn. 10. 307 Czernich, New Yorker Schiedsübereinkommen, 2008, Article V mn. 10; Horvath, in: Czernich/ Deixler-Hübner/Schauer (eds), Handbuch Schiedsrecht, mns 3.135 et seq. 308 OGH, 21 March 2001, 3 Ob 172/00s. 309 Fremuth-Wolf, in Riegler et al. (eds), Arbitration Law of Austria, 2007, § 592 mn. 24.

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E. International Arbitration in Belgium Bibliography: Cepani, Arbitrage en Verzekeringsrecht, Larcier 2014; Cepani, Arbitrage en vertrouwelijkheid, Larcier 2014; Cepani, Eerbetoon aan Guy Keutgen, Larcier 2012; Cepani, L’arbitrage et le droit de la concurrence, Bruylant 2010; Cepani, Arbitrage en derden, Rapporten van het Cepina Colloquium van 28 november 2008, Bruylant 2008; Cepani, De Arbitrageovereenkomst, Vennootschapsgroepen en Groepen Overeenkomsten, Rapporten van het Cepina Colloquium van 19 november 2007, Bruylant 2007; Cepani, Arbitral procedure at the dawn of the new millenium, Rapporten van het Cepina colloquium van 14 & 15 oktober 2004, Bruylant 2005; Cepani, Macht en onmacht van de arbiter, Rapporten van het Cepina Colloquium van 28 maart 2003, Bruylant 2003; Cepani, Arbitrage en Fiscaliteit, Rapporten van het Cepina Colloquium van 4 december 2001, Bruylant, 2001; Bassiri/Draye (eds), Arbitration in Belgium: A Practitioner’s Guide, Kluwer Law International 2016; Dal, National Report for Belgium (2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 104, February 2019; De Bournonville, L’arbitrage, Larcier 2017; De Meulemeester/Verbist, Arbitrage in de praktijk, Bruylant 2013; De Ruysscher/De Buyzer/Cox, Artikel & Commentaar: Arbitrage, Wolters Kluwer 2019; Den Tandt (ed.), The New Belgian Arbitration Law, die Keure 2015; Keutgen/Dal, L’arbitrage en droit belge et international, Tome I – Le droit belge, 3rd ed., Bruylant 2015; Piers (ed.), De nieuwe arbitragewet 2013, Intersentia 2013; Piers, Sectorale Arbitrage, Intersentia 2007; Verbist/De Vuyst, Arbitrage en alternatieve geschillenbeslechting in België/Arbitrage et modes alternatifs de règlement des conflits en Belgique, die Keure 2002; Verbist/van Houtte, Belgium, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 156–225. National legislation: Part VI of the Code Judiciaire/Gerechtelijk Wetboek (Belgian Judicial Code), Law of 24 June 2013 amending Part VI of the Judicial Code on arbitration, Official Journal 28 June 2013, 41263. Amended by articles 91–104 of the Law of 25 December 2016 concerning (inter alia) various provisions on justice, Official Journal 30 December 2016, 91963. An (unofficial) English translation of this law can be found on www.cepani.be. International Conventions: Belgium is a party to the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards (Official Journal 15 November 1975, 14410), ratification status and full text at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (accessed 1 August 2020), the European Convention on International Commercial Arbitration, Geneva, 21 April 1961, ratification status and full text available at https://treaties.un.org/Pages/ ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-2&chapter=22&clang=_en (accessed 1 August 2020) as well as to a number of bilateral treaties. There is the bilateral treaty with France of 8 July 1899 (Official Journal 30–31 July 1900), with the Netherlands of 28 March 1925 (Official Journal 27 July 1929), with Germany of 30 June 1958 (Official Journal 18 November 1960), with Switzerland of 29 April 1959 (Official Journal 11 September 1962) and with Austria of 26 June 1959 (Official Journal 28 October 1961).

Contents I. Introduction ..................................................................................................... 1. Legal framework ......................................................................................... a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of arbitration law ............................................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The applicable law...................................................................................... 3. The validity of the arbitration agreement (capacity, arbitrability, form) ................................................................... a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................

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E. International Arbitration in Belgium c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Jurisdictional challenges in arbitral proceedings ........................... c) Jurisdictional challenges in litigation brought in breach of an arbitration agreement........................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose conflicts of interest ................................................ b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration without an award......................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police ............................... a) Choice of law and domestic cases..................................................... b) Choice of law and lois de police......................................................... 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards: An overview.............. c) Lack of jurisdiction of the arbitral tribunal .................................... d) Composition of the tribunal and procedural irregularities ......... e) Public policy ........................................................................................... 3. Third party opposition against arbitral awards................................... 4. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... b) Defences against enforcement............................................................ 5. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

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I. Introduction 1. Legal framework The first Belgian arbitration law was enacted in 1972 and was based on the European Convention of 1966, providing a Uniform Law on Arbitration.1 Later amendments were adopted in 1985 and 1998 and were already inspired by the UNCITRAL Model Law. On 24 June 2013 the Belgian legislator adopted a new arbitration law that is now (more consistently)2 based on the UNCITRAL Model Law.3 It came into effect on 1 September 2013 and is applicable to all arbitrations initiated after that date.4 This Law has completely revised Part VI of the Belgian Judicial Code (Gerechtelijk Wetboek, GWB) dealing with arbitration. Minor amendments were made to the new arbitration law by articles 91–104 of the Law of 25 December 2016.5 2 The commission of experts that worked on a legislative proposal was strongly inspired by the UNCITRAL Model Law but also by comparative legal research and the experiences of many years of Belgian arbitration case law and legal practice. The new arbitration law reflects this as it retains a number of divergent rules in cases where Belgian legal practice and doctrine have proven these to be better suited for Belgium. The Belgian legislation on arbitration is thus founded on the UNCITRAL Model Law but at the same time embraces a limited number of typical Belgian solutions. 3 It should be noted at the outset of this country report that we refer to the current (new) articles of the Belgian Judicial Code (Gerechtelijk Wetboek, or GWB). Of course, where relevant, the case law and legal doctrine that came about under the former version(s) of the GWB are discussed. The fact of the matter is that the new Belgian arbitration law is in many ways built on the existing arbitration law and that it provides for solutions that are similar to what in practice had already become good law. The structure of Part VI of the GWB has been changed and the order of the articles been shuffled, but the content of the law has on many aspects not been altered dramatically. Of course, we will indicate to what extent the cases and the scholarly opinions that are discussed still make sense in light of the modernized Belgian arbitration law. 1

1 European Convention of 1966, providing a Uniform Law on Arbitration signed at Strasbourg on 20 January 1966. For the full text of this convention, see the website of the Council of Europe, on http:// conventions.coe.int/Treaty/en/Treaties/Html/056.htm (accessed 1 August 2020). This European Convention was established under the auspices of the Council of Europe and aimed at the harmonization of national arbitration laws in Europe (Linsmeau, L’arbitrage volontaire en droit privé belge, 1991, 15–19). One can hardly claim that there was an actual unification since Austria and Belgium were the only Member States to sign the European Convention and Belgium is the only country that ratified and implemented the Convention. Austria signed on 17 November 1966. Belgium signed on 1 January 1966 and ratified the Treaty on 2 February 1973. See: the website of the Council of Europe, on http:// conventions.coe.int/Treaty/Commun/ChercheSig.asp?NT=056&CM=7&DF=7/25/2007&CL=ENG (accessed 1 August 2020). 2 The amendment of 1998 to the first arbitration law of 4 July 1972 (Official Journal 8 August 1972, 8717) had already been heavily inspired by the UNCITRAL Model Law; Law of 18 May 1998 amending the provisions of the Judicial Code on arbitration, Official Journal 7 August 1998, 25353. 3 Law of 24 June 2013 amending Part VI of the Judicial Code on arbitration, Official Journal 28 June 2013, 41263. 4 The old arbitration law remains applicable to all arbitrations initiated prior to 1 September 2013, and to all court proceedings relating to such arbitrations (article 59 of the Law of 24 June 2013 amending Part VI of the Judicial Code on arbitration). 5 Law of 25 December 2016 concerning (inter alia) various provisions on justice, Official Journal 30 December 2016, 91963.

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a) Domestic and international arbitration. Belgium opts for a so-called monistic system of arbitration law: its rules apply equally to both national and international arbitration. An identical treatment is largely based on the assumption that what is good for international arbitration is also good for domestic arbitration and on the overall idea that differences between the two forms of arbitration are getting smaller. There is, however, one minor distinction between national and international arbitration in the context of the annulment procedure. Parties may waive their right to apply for annulment proceedings through an explicit declaration to this end in the arbitration agreement or in any later agreement. Such a waiver is only possible if none of the parties is a natural person of Belgian nationality or a natural person having his domicile or normal residence in Belgium or a legal person having its registered office, its main place of business or a branch office in Belgium.6 The waiver to pursue the annulment of the award is thus valid only in the event of an international arbitration that has no link with Belgium other than the place of arbitration. The Belgian arbitration law also acknowledges the particularities of international arbitration in the context of private international law. Chapter I of Part VI GWB puts forward specific rules to identify the competent state court and the applicable procedural law when the dispute is marked by international elements that transcend the national context. Article 1676, § 7 GWB expressly states that the Belgian courts have jurisdiction and that Part VI of the GWB is applicable when the place of arbitration (as defined in article 1701, § 1 GWB) is located in Belgium at the time the arbitral proceedings are introduced. Article 1676, § 6 adds that in the event that the place of arbitration has not yet been determined, the Belgian courts have jurisdiction to order interim or conservatory measures.

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b) Commercial and non-commercial arbitration. Part VI of the GWB has a wider 8 scope of application than the UNCITRAL Model Law. Whereas the Model Law only applies in commercial arbitration cases, the Belgian arbitration law is applicable in other areas of the law as well. An example of the latter is a dispute of a pecuniary nature between parties that are called to an inheritance. c) Ad hoc and institutional arbitration. The Belgian arbitration law does not make a 9 distinction between ad hoc and institutional arbitration, though at various points recognizes the option for the parties to call on the services of an arbitration institution. An example is the reference to the intervention of “a third party, including an institution” in the article 1685 GWB on the appointment of an arbitrator. The parties may subject their dispute to the arbitration procedure provided by the 10 rules of an arbitration institution. In case of such institutional arbitration the chosen arbitration institution offers administrative support and organizes the arbitral procedure. The most important arbitration institution in Belgium is Cepani; this is the Belgian Centre for Arbitration and Mediation. There are a number of other arbitration institutions as well. Most of those are institutions geared towards sector arbitration.7 d) The territoriality principle, the seat of the arbitration and the lex arbitri. 11 Paragraphs 7 and 8 of this article 1676 GWB deal with the applicable (procedural) law and expressly link the applicable lex arbitri to the place of arbitration; Belgium thus also adheres to the territoriality principle set out in article 1(2) ML. Article 1676, § 7 GWB states that Part VI of the Belgian Judicial Code shall apply where the place of arbitration 6 7

Article 1718 GWB. Piers, Sectorale Arbitrage, 2007, 548.

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is located in Belgium. Parties may, however, also opt for the Belgian regime when the place of arbitration is situated elsewhere. Article 1676, § 8 GWB specifies that the provisions in article 1682, 1683, 1696 through 1698, 1708 and 1719 through 1722 GWB shall apply irrespective of the place of arbitration and notwithstanding any clause to the contrary. Article 1676, § 7 GWB provides that the Belgian courts have competence to decide on issues related to the arbitration proceedings when the place of arbitration as defined in article 1701, § 1 GWB is located in Belgium at the time the arbitral proceedings are introduced. In the event that the place of arbitration has not been determined, the Belgian courts only have jurisdiction to order interim or conservatory measures (article 1676, § 6 GWB). We will deal with this under the heading of article 1690 GWB. 12 The parties can determine the place of the arbitration by agreement.8 In the absence of such an agreement, the arbitral tribunal determines the place of the arbitration, taking into account the circumstances of the case, including the convenience of the parties. The legislator clarifies that such circumstances could be of a practical nature, such as regarding the possibility of witnesses to be present at the hearing. Furthermore, the arbitral tribunal should take the legal reality of the lex arbitri into account.9 If neither the parties nor the arbitral tribunal determines the place of the arbitration, the place where the award is rendered is the place of the arbitration. Unless the parties have agreed otherwise, the arbitral tribunal, after consulting the parties, may hold its hearings and meetings at any place it deems appropriate.10 13 It should be noted that in the past, the Belgian arbitration law made a distinction between Belgian and foreign arbitral awards. This distinction was based on the place of arbitration. Foreign awards were subject to a different set of rules for recognition, enforcement and annulment. In the new arbitration law, that is no longer the case. The distinction between Belgian and foreign arbitral awards only remains relevant with regard to their annulment. e) Arbitration and other ADR mechanisms (mediation, expert determination). Other types of alternative dispute resolution that parties may agree on, are mediation or conciliation, and binding third party decision making (“bindende derdenbeslissing/tierce decision obligatoire”). These types of ADR are only limitedly regulated by law. 15 There is for instance Part VII of the GWB that was adopted in 2005. This Part consists of three chapters: chapter I sets out general rules on mediation; chapter II deals with voluntary mediation and for instance provides which steps parties must take when they wish to have their settlement agreement homologated by the courts; chapter III deals with court-instigated mediation. Further amendments to Part VII of the GWB were made by the Law of 18 June 2018 concerning (inter alia) the promotion of ADR.11 16 Binding third party decision making occurs when parties agree that a third person, other than an arbitrator or judge, will come to a final and binding decision on a dispute that exists between them. Similarly to arbitration, a third party decision-maker is independent and impartial and derives his or her power from the agreement of the parties in the dispute.12 Different from arbitration is, though, the lack of legal framework: 14

Article 1701, § 1 GWB. Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 28–29. 10 Article 1701, § 2 GWB. 11 Articles 204 to 237 of the Law of 18 June 2018 containing various provisions concerning civil law and provisions concerning the promotion of alternative methods of dispute resolution, Official Journal 2 July 2018, 53455. 12 Cass., 21 January 1999, Arr. Cass. 1999, 69. 8 9

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the decision-making power of the third party is based on article 1134 of the Belgian Judicial Code. Also, the third-party decision has no other than a contractual value. Two applications of the third-party decision-making process is the domain name dispute resolution process organized by Cepani13, and the process of expert determination. In 2017, against the backdrop of Brexit, the Ministry of Justice launched the idea of 17 establishing an international business court in Brussels. The Bill concerning the establishment of the Brussels International Business Court combined the favourable aspects of arbitration (party autonomy, efficiency, finality, etc.) with the immediate enforceability of a state court judgment (at least within the EU). The bill faced criticism from different stakeholders and did not make it through parliament due to the fall of the government at the end of 2018. It is uncertain whether it will be revived under the next government.

2. The guiding principles of arbitration law One of the essential pillars of the Belgian arbitration law is the principle of party 18 autonomy. The Belgian arbitration law makes it very clear that the parties have great autonomy when organizing the arbitration, including the proceedings to challenge the arbitrators and experts. The principle of party autonomy underpins the KompetenzKompetenz doctrine and principle of separability, which will be discussed further below. The ultra vires principle is also based on the notion of party autonomy. This principle dictates that an arbitral tribunal should rule on all the issues raised before it but nothing more. The new Belgian arbitration law also sets out a number of essential principles that 19 delineate the framework within which party autonomy may be exercised. It pays great attention to, for instance, the observance of the principle of equality of the parties, the principle of adversarial proceedings and the principle of fairness of the debates. Article 1699 GWB states that “the parties shall be treated with equality and [that] each party shall be given a full opportunity of presenting his case, pleas in law and arguments in conformity with the principle of adversarial proceedings [and that] the arbitral tribunal shall ensure that this requirement as well as the principle of fairness of the debates are respected”.

II. The arbitration agreement The arbitration agreement plays a pivotal role in the arbitral process because the 20 arbitral tribunal derives jurisdiction from the parties’ consent as expressed in this agreement. Article 1681 GWB defines the arbitration agreement as “an agreement by the parties to submit to arbitration14 all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not”.15 According to this definition, an arbitration agreement may come in the form of an 13

In this regard, see: https://www.cepani.be/be-domainname-whatis/ (accessed 1 August 2020). Note that an agreement in which the parties are left with an option (and not an obligation) to submit to arbitration once the dispute has arisen, is not an arbitration agreement. Comm. Ghent, 18 September 1997, TBH 1999, 43–44. 15 In a recent case, the Brussels Court of Appeal has held that an arbitration clause which governs all possible disputes between the parties, whatever their source or nature, was invalid because it was contrary to the requirement under Belgian law (article 1681 GWB) and under the New York Convention (article II.1) that an arbitration agreement must relate to a ‘defined legal relationship’ (CA Brussels, 29 August 2018, YCA XLIV (2019), 1–9. 14

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arbitration clause (“clause compromissoire”) or of a submission agreement (“compromis”). The former is concluded before a dispute has arisen, the latter is reached afterwards and is less prevalent.16 The Belgian arbitration law does not distinguish between the two types. The distinction nevertheless has a practical significance as certain disputes can only be submitted to arbitration after they have arisen (cf. infra mn. 29).

1. The doctrine of separability 21

Belgium follows the doctrine of separability of the arbitration agreement. When an arbitration agreement is part of a contract, it is viewed as an agreement that can be severed from the other contractual stipulations. The determination by the arbitral tribunal that the contract is null and void does not automatically lead to the nullity of the arbitration agreement.17 The reasoning behind the doctrine is that there is no argument to treat an arbitration agreement that is part of another agreement any different from an independent arbitration agreement. Separability, however, does not apply when the existence of the main agreement is uncertain. If the main agreement never existed, it could have never contained an arbitration agreement (cf. supra A mn. 23).

2. The applicable law 22

The law that governs the validity of an arbitration agreement has only given rise to controversy in the context of arbitrability. For a discussion of whether the lex fori or the lex contractus governs the validity of such an arbitration agreement, see infra mns 31 et seq.

3. The validity of the arbitration agreement (capacity, arbitrability, form) 23

One essential element of a valid arbitration agreement is the arbitrability of the dispute. ‘Arbitrability’ is a general term that refers to the autonomy of the parties to submit a dispute to arbitration.18 It is, in other words, one of the elements that determines whether the arbitral tribunal has jurisdiction. A distinction is traditionally made between ‘objective’ and ‘subjective’ arbitrability. Objective arbitrability concerns the question of whether a dispute can be submitted to arbitration in light of the restrictions of national mandatory law and public policy. Subjective arbitrability relates to the legal capacity of the contracting parties. In what follows, we will discuss, first, which kind of persons may enter into a valid arbitration agreement. Second, we will confer about the types of disputes that parties may refer to arbitration. Third, we will discuss the form of the arbitration agreement. Fourth, we will further explore when the legal effect of an arbitration agreement terminates.

a) Capacity to conclude arbitration agreements. The Belgian arbitration law links the capacity to conclude arbitration agreements to the capacity to conclude settlement agreements. Everyone who is qualified and authorized to conclude a settlement agreement is able to conclude an arbitration agreement.19 25 A relevant distinction is made between private legal persons and public legal persons concluding an arbitration agreement.20 Article 1676, § 3 GWB stipulates that public legal entities may only conclude an arbitration agreement about “disputes relating to an agreement”. This new provision confirms the possibility for public legal entities to 24

Craig/Park/Paulsson, International Chamber of Commerce Arbitration, 4th ed., 2017, 37. Article 1690, § 1 GWB. 18 Craig/Park/Paulsson, International Chamber of Commerce Arbitration, 4th ed., 2017, 37. 19 Article 1676, § 2 GWB. 20 Former article 1676, § 2 GWB. 16 17

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conclude an arbitration agreement concerning all contractual disputes, other than regulatory disputes arising from sovereign (rather than commercial) acts of the state. This general rule is applicable “without prejudice to specific laws”. Article 1676, § 3 26 further states that public legal entities may “moreover” enter into an arbitration agreement “on all matters defined by law or by royal decree” and that such a decree may set forth the conditions and rules to be respected when entering into an arbitration agreement. An example of such a specific rule is the Law of 21 March 1991 on the reform of some state enterprises.21 Article 14 of this law provides that an autonomous state enterprise may conclude an arbitration agreement after a dispute has arisen. One may assume that the use of the term ‘moreover’ indicates that the legislature makes a distinction between disputes relating to an agreement and other types of disputes. In other words, also tort disputes could be the subject of an arbitration agreement. One could wonder whether it serves public interest to have administrative acts resolved through the private procedure of arbitration, rather than through an administrative procedure. Also, the private nature of arbitration contrasts sharply with the public character of governmental acts.22 b) Arbitrability. Parties’ freedom to submit a dispute to arbitration is restricted: not 27 all disputes can be the subject matter of an arbitration agreement. Parties may only refer “arbitrable” disputes to arbitration. The Belgian arbitration law in article 1676 GWB adopted a new criterion for defining “subject-matter” or “objective arbitrability”. The new article 1676, § 1–2 GWB provides a double criterion.23 First, it states that “any pecuniary claim” may be the subject of an arbitration agreement. Second, “nonpecuniary claims with regard to which a settlement agreement may be made” may also be submitted to arbitration. This general rule applies without prejudice to the exceptions provided by specific laws.24 A pecuniary claim is understood as one that has a passive or active monetary value 28 for at least one of the parties to the dispute. The legislator clarified that this criterion should be interpreted rather broadly and herewith refers to the Swiss and German arbitration laws on which this provision is modelled.25 This would mean that not only claims for payment, but for instance also declaratory claims and claims for measures designed to protect monetary claims would be ‘arbitrable’.26 The second criterion, relating to the settlement agreement, is well-established. It is generally accepted that parties can validly conclude a settlement agreement about rights of which they may freely dispose. These rights should be determined or determinable at the time of conclusion of the settlement agreement.27 There was, however, quite some discussion as to whether a dispute that touched upon public policy could be the subject of a settlement agreement and hence could be solved through arbitration. The explicit choice for the clear material criterion of objective arbitrability in article 1676 GWB aims to clear up this issue that has given rise to a heated debate. The new double criterion does, however, not bring about much change in the arbitration practice: the new article 1676, § 1–2 GWB only confirms the majority opinion in case law and doctrine, i.e., that the 21

Belgian Official Journal 27 March 1991, 6155. Lagasse, APT 1993, 156–157. 23 Note that this is the case in the German arbitration law. See: § 1030 ZPO. 24 The new article 1676, § 5 GWB states, for instance, that the arbitration agreement entered into prior to any dispute that falls under the jurisdiction of the labour court pursuant to articles 578 through 583 GWB is automatically null and void. 25 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/001. 26 Demeyere, in: Piers (ed.), De nieuwe arbitragewet 2013, 2013, 1 (4). 27 Tilleman/Claeys/Coudron/Loontjens, Dading, Algemene Praktische Rechtsverzameling, 2000, 262. 22

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mere fact that a dispute is governed by public policy rules does not prevent it from being settled through arbitration.28 29 Article 1676, § 5 GWB reiterates the lex specialis that an arbitration agreement shall be automatically null and void when entered into prior to any dispute that falls under the jurisdiction of the labour courts pursuant to articles 578 through 583 GWB. These latter provisions contain quite a broad description of the range of disputes falling into this category by including all issues that may arise as a result of carrying out an employment contract. Article 13 of the Law on labour contracts29 repeats this principle. This provision prohibits that employers and employees conclude an arbitration agreement to solve disputes arising out of the labour contract, prior to any dispute materializing.30 An employee is protected against a forced arbitration by various legal provisions. Article 69 of this Law on labour contracts provides an exception to this rule when dealing with an employee whose annual pay exceeds the amount of 65.771 EUR and who is in charge of the day-to-day management of the company or who has management responsibility over one department or business unit of the company that is comparable to that over an entire company.31 30 The question of arbitrability arises in various areas of the law where mandatory provisions are in place. We think of competition law, intellectual property law, penal law, insurance law, distribution law, agency law, residential leases32, etcetera. The arbitrability of the disputes that arise in each of these fields of the law merits an extensive discussion for which we refer to the relevant literature. In what follows we will discuss one area of the law that has been subject of extensive debate in Belgium, namely the arbitrability of disputes relating to distributorship agreements. 31 The arbitrability of issues arising out of distributorship contracts has been widely discussed in Belgian case law and literature. Belgian law guarantees jurisdictional protection to the Belgian distributors. Article X.39 of the Belgian Commercial Code (the former article 4 of the Belgian Law of 27 July 1961 on the unilateral termination of exclusive distribution contracts of an undetermined duration33) states that for disputes regarding a distributorship agreement that has effect in all or part of Belgium, the distributor is “in any event” entitled to sue the principal before the Belgian courts. The Belgian courts seized of such an action are required to apply the mandatory provisions of the Belgian Law. Article X.35 of the Belgian Commercial Code (former article 6 of the Belgian law of 27 July 1961) also states that the provisions of this title X apply notwithstanding any agreement to the contrary that was concluded before the distributorship agreement had come to an end. Already under the Belgian Law of 27 July 1961 the question hence arose whether parties could agree to submit distributorship disputes to arbitration. In a case that dates back to 1979, the Belgian Court of Cassation (Cour de Cassation or Hof van Cassatie) held that a foreign arbitral award that concerns a 28 Fevery, AJT 1996–97, 183; Van den Heuvel, in: Liber Amicorum Lucien Simont, 2002, 335; Van Houtte, TvA 2001, Vol. 3, 125; Comm. Ghent, 8 November 1995, TGR 1996, 17. 29 Law of 3 July 1978 on labour contracts, Belgian Official Journal 22 August 1978, 9277. 30 See in this regard also: article 9 of the Law of 24 February 1978 regarding the labour contract concluded with a remunerated sportsman, Belgian Official Journal 9 March 1978, 2606; Labour CA Brussels, 8 March 1982, JTT 1982, 268–269; Labour CA Hasselt, 24 June 1974, RW 1975–76, 372–375. 31 Labour CA Ghent, 28 March 1986, RW 1987–88, 817–818. 32 Disputes relating to residential leases in Belgium can no longer be submitted to arbitration by way of an arbitration clause entered into before the dispute arose (e.g. in the rental agreement). Arbitration agreements entered into post litem natam are valid in Brussels and Wallonia but not in Flanders. Appeals against the non-arbitrability provisions in each of the three regional legislations on residential leases are pending before the Constitutional Court, so this situation may be subject to change. 33 Belgian Official Journal 5 October 1961; amended by the law of 13 April 1971, Belgian Official Journal 21 April 1971.

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distributorship agreement and that, contrary to the Belgian Law of 27 July 1961, fails to apply Belgian law, cannot be recognized and enforced in Belgium.34 The reason for this refusal was the fact that, pursuant to Belgian law, the dispute was not capable of settlement by arbitration when this form of dispute resolution was agreed upon before the termination of the distributorship agreement. This landmark decision of the Belgian Court of Cassation did not solve the question 32 according to which law the courts must assess the arbitrability of a dispute, in the context of a challenge of the court’s jurisdiction. Courts and legal doctrine were for a long time divided over the question of which law applied to assess the validity of an arbitration agreement when the arbitrability of the dispute is contested. Some courts and scholars argued that a court must assess this on the basis of the “lex consensus”. In other words, when parties agreed that foreign law should govern the merits of their distributorship dispute, then the articles 4 and 6 of the Belgian Law of 27 July 1961 could no longer prevent the arbitration to proceed.35 Others put forward that a judge cannot ignore the mandatory provisions of Belgian law and thus should consider the “lex fori’” when deciding on the arbitrability of the distributorship disputes.36 The Belgian Court of Cassation indeed confirmed that the lex fori must be taken into account when considering the arbitrability of a distributorship dispute.37 A recent decision of the Belgian Court of Cassation led to conclude that the court may assess the arbitrability of a dispute according to the lex contractus to the extent that the Belgian lex fori does not prohibit that parties submit their dispute to a non-Belgian legal system. The Belgian court must, however, consider the provisions of Belgian mandatory law.38 The question of the arbitrability of distributorship disputes that was discussed in the 33 above, has also stirred up some debate in the context of the recognition and enforcement of foreign arbitral awards. On the relevant provisions of the Belgian Law of 27 July 1961 we refer to what has been said supra mn. 30. Already in 1979, the Belgian Court of Cassation provided clarity on the application of article V(1)(a) NYC with the Audi NSU 34

Cass., 28 June 1979, Arr. Cass. 1978–79, 1303; Pas. 1979, I, 1260; RW 1980–81, 539. Hanotiau, ICCA Congress Series No. 9, 146–167; CA Antwerp, 17 December 2001, NjW 2005, 630; CA Liège, 28 April 2003, JT 2003, 811–813; CA Antwerp, 15 September 1997, TBH 1998, 132; CA Brussels, 4 October 1985, JT 1985, 93; Comm. Leuven, 14 September 1999, RW 1999–2000, 1302; Comm. Ghent, 21 December 2000, DAOR 2001, Vol. 60, 324–327; Comm. Brussels, 5 October 1994, Rev. Arb. 1995, 311–326; Comm. Leuven, 24 March 1992, TBH 1993, 1131; Comm. Brussels, 29 October 1991, TBH 1993, 1118–1130. 36 Demeulenaere/Looyens, Gerechtelijk Recht: Artikelsgewijze commentaar met overzicht van rechtspraak en rechtsleer, “Art. 1676, 1 Ger.W.”, 1999, 177–178; Kileste/Hollander, TBH 2003, 452–455; Court of First Instance Hasselt, 24 December 1996, RW 1997–98, 682–683; CA Brussels, 25 June 1982, TBH 1983, 186–187; Comm. Liège, 17 March 1975, BRH 1977, 186–197; CA Brussels, 27 February 2003, TBH 2005/9, 929; CA Ghent, 19 January 2004, 2002/AR/1503, unpublished. For further references of scholars adhering to this theory, see: Kileste/Hollander, TBH 2003, footnotes 511–514 and 518. 37 Cass., 16 November 2006, TBH 2007, 889; Mertens, TBH 2007, 890. In a previous case the Belgian Court of Cassation had already indicated that courts may take into account the lex fori, but it was unclear whether they had a duty to do so and under what circumstances. Cass., 15 October 2004, NjW 2005, 630; RW 2004–05, 1063; TBH 2005, 488 and [email protected] 2004, Vol. 5, 23. For a discussion of the latter case, see Piers, RW 2004–05, 1049–1055; Piers/Verbist, NjW 2005, 619–626; Traest, TBH 2005, 492–498; Hollander, TBH 2005, 498–504. 38 The Court of Cassation in the decision of 16 November 2006 held: “lorsque la convention d’arbitrage est, comme en l’espèce, soumise à une loi étrangère, le juge saisi d’un déclinatoire de juridiction doit exclure l’arbitrage si, en vertu de la loi du for, le litige ne peut être soustrait à la juridiction des tribunaux étatiques” (emphasis added). This decision was confirmed by the Belgian Court of Cassation in its recent case law of 14 January 2010, Pas. 2010, 119; RABG 2011, 303; RW 2010–11, 1087. For a discussion of this judgment, see Traest, RCJB 2013, Vol. 2, 255–276; Martens, RW 2011–12, Vol. 37, 1647–1650; Hansebout, RABG 2011, Vol. 4, 306–308. This decision has been followed by lower courts as well. See for instance: CA Ghent, 19 November 2007, RW 2009–10, Vol. 15, 635. 35

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v. Adelain Petit-case.39 The Belgian Court of Cassation decided that an arbitration agreement that was concluded before the distributorship agreement had terminated and that referred to the application of foreign law was not valid. Such an arbitration agreement was contrary to the mandatory provisions of Belgian law. It is clear from this and subsequent decisions that the Belgian courts give priority to the lex fori over the lex contractus, when an application of the lex contractus would lead to a violation of the mandatory and public policy provisions of Belgian law. Similar questions arose regarding other types of contracts as well. 34 The adoption of the new arbitration law has rekindled the debate concerning the arbitrability of exclusive distributorship contracts, and it has been decided in number of recent decisions by lower courts that distributorship disputes are arbitrable.40 In essence, the argument is that the new law has made all pecuniary claims arbitrable, unless expressly provided otherwise. As is the case in Germany, such a statutory deviation from the arbitrability presumption of pecuniary claims must explicitly pertain to arbitration. The mere mention of e.g. the exclusive jurisdiction of a specific court and/ or the mere mandatory nature of the applicable substantive provisions are not sufficient to rule out arbitration. This recent development is expected to consolidate in the following years. It was the express intention of the legislator to adopt a restrictive approach to deviations from the presumption of arbitrability for pecuniary claims.41 c) Form of the arbitration agreement. Article 1681 GWB does not require that an arbitration agreement be recorded in a written document. This is fully in line with the trend perceived in the last decennium in Belgian case law no longer strictly to enforce the writing requirement.42 By no longer requiring the arbitration agreement to be in writing, the Belgian legislator opted for a modern definition of the arbitration agreement. The burden of proving that there is an arbitration agreement lies with the party who wants to rely on it. Article 1681 GWB demonstrates that the Belgian legislator is cognizant of recent trends in modern business, of the reality of informal transactions, and of the new trends in (often electronic) communication. 36 The concept of an (unwritten) arbitration agreement promotes the favor arbitrandum trend strived for in Belgian arbitration. It is accepted that the “more favourable law provision” in article VII NYC43 allows Belgian law to effectively deviate from the stricter writing requirement stipulated in Article II NYC. 37 Arbitration clauses are often the subject of general contract terms. The Belgian arbitration law itself does not contain a specific provision on the validity of an arbitration clause inserted in general contract terms. According to general contract law, the arbitration clause will be enforceable against both parties, only when it (1) is a 35

39 Cass., 28 June 1979, JT 1979, 625–628; RW 1980–81, 539–541; Arr. Cass. 1978–79, I, 1303; Pas. 1979, I, 1260–1283. 40 Comm. Antwerp (Hasselt), 13 July 2017, RW 2018–19, 1067 and Comm. Hainaut (Tournai), 21 December 2016, TBH 2017, 1006. 41 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/001, 9–11. 42 Court of First Instance Liège, 14 September 1998, DAOR 1999, 226; Comm. Kortrijk, 9 October 1975, YCA XX (1995), 1057–1060; Court of First Instance Bruges, 3 January 2001, TWVR 2001, 161–165; Comm. Hasselt, 14 June 2000, RW 2000–01, 1283–1285. 43 Convention of 5 June 1958 of New York on the Recognition and Enforcement of Foreign Arbitral Awards, Official Journal 15 November 1975. Article VII(1) NYC states: “The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country were such award is sought to be relied upon.” (emphasis added).

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clear clause, (2) the parties knew or could have known about the existence and content of the arbitration clause and (3) have accepted it.44 A fictitious acknowledgment and expression of the will are not accepted by the Belgian courts. Parties must not only have formally accepted certain contract terms, they must also willingly and knowingly have consented to these. The courts thus examine whether there was an actual consensus ad idem, and whether the parties entered into the arbitration agreement out of their own free will. A party is, however, expected to assume a certain responsibility: a party that could reasonably have become aware of the contract terms but did not do the effort to take note will be bound. The courts submit the arbitration clause to a closer scrutiny when an (economically) weaker party is involved in the contractual relationship. This could concern a consumer, an employee, or a member of a professional organization. When all the parties involved are professionals or business people, the courts are less protective. Trade usages that apply to a specific business sector or that the parties established between themselves often serve as an argument in favour of the validity of the arbitration clause.45 An arbitration clause in the general (B2B) terms and conditions was at various occasions upheld vis-à-vis all parties to the contract despite the fact that these terms and conditions were not signed. In these cases, the courts found it sufficient that the parties had signed an individual contract that referred to and incorporated these general terms and conditions.46 d) Termination of the arbitration agreement. An arbitration agreement is in 38 principle concluded for an indefinite duration: it will have effect for as long as disputes arise that are covered by the agreement. Only the agreement of the parties on the termination of the arbitration agreement will have such an effect; the end of the arbitration proceedings, on the contrary, does not necessarily lead to the termination of the arbitration agreement. Keutgen and Dal report about a lower court case where exceeding the time-limit for rendering the award led to the termination of the arbitration agreement that nominatim indicated the arbitrators that made up the arbitral tribunal.47

4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. Pursuant to the principle of party- 39 autonomy and the principle of the relativity of contractual obligations as per article 1165 CC, the arbitration agreement only binds the parties to the contract. A third party cannot rely on the arbitration agreement, nor can this third party be forced to join the arbitration proceedings. The existence of the arbitration agreement, however, is opposable to third parties.48 b) Substantive scope of the arbitration agreement. The substantive scope of an 40 arbitration agreement determines the jurisdiction of the arbitral tribunal vis-à-vis the disputes brought before it. The rules of interpretation that apply to contracts in general are also relevant for arbitration agreements.49 This implies that the meaning of the 44 CA Antwerp, 22 December 2003, 2002/AR/25, unpublished; CA Brussels, 4 November 1991, JT 1992, 60–62; Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 99; Cass., 9 February 1973, RCJB 1974, 187–192. 45 Piers, Sectorale Arbitrage, 2007, 93 et seq. 46 Comm. Hasselt, 15 February 1999, TBH 1999, 872–875; Justice of the Peace Hasselt, 16 March 1999, DCCR 1999, 70–72; Court of First Instance Liège, 23 February 1996, JLMB 1996, 1319–1321; CA Antwerp, 14 October 1987, Pas. 1988, II, 31–34; Justice of the Peace Nivelles, 18 October 1978, T. Vred. 1979, 260–262. 47 Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 204. 48 On the topic of parties and third parties to the arbitration agreement, see Verbist, in: L’Arbitrage et les tiers, 2008, 27–75. 49 Articles 1156–1164 Belgian CC.

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arbitration agreement should be established on the basis of the common intent of the parties rather than by looking at the literal meaning of the words. Regard may be had to the written agreement, but also to the actions of the parties before conclusion of the contract or at the time of performance of the contract.50 Article 1157 of the Belgian CC also indicates that an ambiguous term should be interpreted in the sense that allows this provision to have effect. This functional interpretation method is certainly also used in the context of arbitration agreements. When examining recent case law, a favor arbitrandum interpretation approach can be established.51 c) Pathological arbitration clauses. It may occur that parties indicate their consent to arbitrate, but that the arbitration clause52 in practice is unworkable. This is the type of arbitration clause that the former Secretary-General of the ICC International Court of Arbitration, Frederick Eisemann, defined as “pathological”.53 42 On the occasions where the Belgian courts decided on pathological clauses, they employed a favor arbitrandum approach. It was, for instance, decided that an incomplete or, to the contrary, too detailed description of how the arbitral tribunal should be composed, could result in an unworkable arbitration clause. However, this should not be the case provided that the will of the parties to submit their disputes to arbitration is clear and that the defective provisions can be remedied by the default rules in the Belgian arbitration law.54 The Labour Court of Appeal of Brussels decided, though, that a reference to a decision body that cannot fulfil the function of arbitral tribunal (in that case, the “conciliation body” of the Labour Court), rendered it materially impossible to execute the arbitration clause.55 An arbitration clause is also unworkable when the arbitration-institution agreed upon no longer exists. The commercial Court of Brussels decided on the validity of an arbitration agreement that referred to an arbitration institution that had transferred its activities to another institution, provided that the parties agreed on trusting the administration of their dispute that institution.56 43 In order to avoid the problems caused by a pathological clause, parties may opt for an existing – and thus ‘tested’ – arbitration clause as provided by most arbitration institutions.57 41

5. The effect of the arbitration agreement and Kompetenz-Kompetenz 44

a) Enforcing arbitration clauses and Kompetenz-Kompetenz. The Kompetenz-Kompetenz principle is – together with the principle of party autonomy – one of the cornerstones of arbitration law. The principle is borrowed from the German legal system, although it has evolved away from the original German concept and acquired its own specific understanding within the international arbitration community. According to the Belgian Kompetenz-Kompetenz principle, the arbitral tribunal is indeed competent to rule on its own jurisdiction, including any objections with respect to the Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 177. See Storme/Voordeckers, TPR 2005, 1257; Piers/Storme/Snijders, TPR 2014, 859–901. 52 We deliberately use the term “arbitration clause” rather than “arbitration agreement” which is a term that includes a “submission agreement” as well. To our knowledge, only arbitration clauses, drafted prior to the dispute, have given rise to difficulties as a result of their pathological nature. 53 Eisemann, in: Arbitrage Commercial, Essais Eugenio Minoli, 1974, 130. 54 Court of First Instance Namur, 2 October 1996, JT 1997, 276; Court of First Instance Antwerp, 14 October 1987, Pas. 1988, II, 31–34. 55 Labour CA Brussels, 29 July 1974, JTT 1974, 276. 56 Comm. Brussels, 6 May 1993, RW 1993–94, 474–475. 57 The model clause under the Cepani Rules 2020, for instance, can be found at https://www.cepani.be/ wp-content/uploads/2019/12/Cepani_Brochure_03_EN-80.pdf (accessed 1 August 2020). 50 51

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existence or validity of the arbitration agreement.58 However, this does not deprive the state court from ruling on its jurisdiction when the exceptio arbitri is raised before it.59 b) Jurisdictional challenges in arbitral proceedings. The arbitral tribunal’s decision 45 that it has jurisdiction may only be contested together with the award on the merits and in the course of the same procedure. This rule aims to safeguard the efficiency of the arbitration.60 The award in which the arbitral tribunal decided that it has no jurisdiction may be immediately contested before the Court of First Instance.61 A plea that the tribunal does not have jurisdiction must be raised no later than the communication of the first written pleadings by the asserting party. Furthermore, a plea that the arbitral tribunal is exceeding the scope of its authority must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. In either case, the arbitral tribunal may admit a later plea if it considers the delay justified.62 c) Jurisdictional challenges in litigation brought in breach of an arbitration 46 agreement. The court before which a dispute is brought that is also the object of an arbitration agreement has to declare itself without jurisdiction at the request of a party, unless the arbitration agreement is invalid with regard to this dispute or has ceased to exist. The plea must be raised in limine litis, failing which it shall be inadmissible.63 Where such an action has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made.64 It has been generally accepted that a state court ruling on the appointment of an arbitrator cannot rule on the jurisdiction of the arbitral tribunal.65 The courts may typically examine a number of objections that specifically relate to 47 the validity of the arbitration agreement.66 First, a frequent recurring objection concerns the (objective)67 arbitrability of the dispute that is subject of the arbitration.68 Second, objections may arise with regard to the party concluding the arbitration agreement: the question then is whether someone is a party to the arbitration agreement. An important consideration here is, for instance, whether a contracting party has the legal capacity to

Article 1690, § 1 GWB. Alfaro/Guimarey, (1996) 12 Arb. Int’l 415–428; Dimolitsa, in: Van den Berg (ed.), Improving the Efficiency of Arbitration Agreements and Awards, 1999, 217–256. 60 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 23. 61 Article 1690, § 4 GWB. 62 Article 1690, § 2, in fine GWB. 63 Article 1682, § 1 GWB. 64 Article 1682, § 2 GWB. 65 CA Mons, 22 June 1982, Pas. 1983, II, 8; Comm. Tongeren, 18 March 1976, Rechtspraak in Handelszaken 1976, 501–508; Comm. Ghent, 21 December 2000, DAOR 2001, 324–327. 66 Of course, one should keep the validity requirements in mind that are imposed by general contract law. 67 As opposed to subjective arbitrability, relating to the legal capacity of the contracting parties. 68 For Belgian case law where the question of arbitrability was raised, see for instance: Labour Court Hasselt, 22 November 1974, Limb. Rechtsl. 1975, 82–85; Labour CA Ghent, 28 March 1986, RW 1987–88, 817–818; Labour CA Brussels, 8 March 1982, JTT 1982, 268–269; Justice of the Peace Nieuwpoort, 18 January 2000, RW 2000–01, 490; Justice of the Peace Berchem, 26 November 1996, Tijdschrift voor Appartements- en Immorecht 1997, 34–35; Court of First Instance Mechelen, 16 April 1985, Pas. 1985, I, 50; CA Liège, 20 February 1987, JLMB 1987, 837–838; Court of First Instance Mons, 22 March 1999, Rev. not. b. 1999, 564–569; Court of First Instance Brussels, 15 October 1975, JT 1976, 493–499. See also supra footnotes 32, 33 and 34 on decisions regarding the arbitrability of disputes arising out of distributorship contracts. 58 59

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conclude an arbitration agreement.69 Thirdly, the principle of equality of the parties to the arbitration agreement has played a significant role. Pursuant to the former article 1678, § 1 GWB an arbitration agreement was invalid if it granted one party the upper hand in the appointment of the arbitral tribunal.70 Up until the law of 24 June 2013, the existence of an agreement had to be proven by a written document. The former article 1677 GWB required that an arbitration be “agreed by the parties in writing, or by other documents that are binding on the parties and that reveal their intent to resort to arbitration.” It was generally accepted that this was a requirement ad probationem and not ad validitatem.71 The new article 1681 GWB adopts a more modern definition of the arbitration and no longer requires a written document.72 This is fully in line with the trend perceived in the last decade in Belgian case law no longer strictly to enforce the writing requirement.73

III. The arbitral tribunal and the conduct of the arbitral proceedings Many of the provisions in the Belgian arbitration law on the composition and appointment of the arbitral tribunal are default rules. The law grants the parties a broad autonomy to lay down the criteria that the arbitral tribunal should meet, and to agree on the procedure for appointing the arbitrators. 49 An example thereof is article 1684 GWB, which states that the parties may agree on the number of arbitrators that sit on the arbitral tribunal. If the parties have not agreed on the number of arbitrators, the arbitral tribunal shall be composed of three arbitrators.74 The new article 1684, § 1 GWB, however, imposes the requirement that the arbitral tribunal must be composed of an odd number of arbitrators. It provides that in the event that the arbitration agreement agrees on an even number of arbitrators, an additional arbitrator must be appointed.75 50 Another example is article 1685, § 2 GWB which confirms that parties are free to agree on a procedure for appointing arbitrators and that they may select their 48

69 For Belgian case law on the question of legal capacity to conclude an arbitration agreement, see: Court of First Instance Dinant, 13 December 1962, Jur. Liège 1962–63, 133; President of the Court of First Instance Mechelen, 27 June 1996, EJ 1997, 11–12; Comm. Verviers, 13 June 1977, Jur. Liège 1977–78, 79; Comm. Brussels, 31 May 2001, DCCR 53, 2001, 407–414; Court of First Instance Liège, 10 November 1976, JT 1978, 137–138; CA Liège, 26 March 1973, Jur. Liège, 1972–73, 281; CA Brussels, 14 June 1960, JT 1960, 719; Court of First Instance Liège, 13 October 1988, JLMB 1998, 1511–1513; Court of First Instance Brussels, 13 March 1992, Act. Dr. 1992, 1377–1388; CA Brussels, 21 February 1990, TvA 1990, 162–169; Court of First Instance Brussels, 14 June 1901, Pas. 1902, II, 8–11. 70 For Belgian case law regarding the objection of inequality of the parties, see: Court of First Instance Brussels, 23 June 1992, Res Jur. Imm. 1993, 87; CA Brussels, 9 September 1959, Pas. 1961, II, 59–61; Comm. Leuven, 19 September 1989, TBH 1990, 1022–1028; CA Liège, 17 November 1993, RRD 1994, 89–92; Court of First Instance Brussels, 20 February 1990, JT 1990, 744; CA Mons, 15 June 1995, JT 1996, 80; Court of First Instance Antwerp, 11 February 1991, Pas. 1991, II, 108–112; Justice of the Peace Ghent, 9 March 1998, DCCR 1998, 59–6; Court of First Instance Oudenaarde, 5 January 1984, RW 1984–85, 1098–1100. 71 CA Ghent, 6 January 2005, 2003/A.R./565, unpublished; CA Antwerp, 22 December 2003, 2002/A.R./ 25, unpublished; CA Ghent, 17 December 2002, P&B 2003, 227; Court of First Instance Tongeren, 2 November 2001, A.R. 00/789/A and 01/694/A, unpublished; CA Brussels, 4 November 1991, JT 1992, 60–62; Piers, Sectorale Arbitrage, 2007, 95; Linsmeau, L’arbitrage volontaire en droit privé belge, 1991, 64; Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 138. 72 This article copied the article 7, option II ML. 73 Court of First Instance Liège, 14 September 1998, DAOR 1999, 226; Comm. Kortrijk, 9 October 1975, YCA XX (1995), 1057–1060; Court of First Instance Bruges, 3 January 2001, TWVR 2001, 161–165; Comm. Hasselt, 14 June 2000, RW 2000–01, 1283–1285. 74 New article 1684, § 3 GWB. 75 New article 1684, § 2 GWB.

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arbitrators freely. This freedom is, evidently, restricted by the requirements of independence and impartiality. Also, article 1685, § 1 GWB states that no person shall be precluded by reason of his nationality from acting as an arbitrator. This provision is inspired by the principle of non-discrimination. The principle of non-discrimination is, however, made subordinate to the general provision of party autonomy which leaves parties the freedom to agree on quality standards relating to, for instance, nationality.76 Furthermore, parties’ freedom to agree on the appointment procedure is subject to 51 the fundamental requirements of due process and of efficiency guaranteed in the paragraphs 3 and 4 of article 1685 GWB.77

1. The arbitral tribunal, impartiality and independence of the arbitrator a) Duty to disclose conflicts of interest. A person who is approached in connection 52 with his possible appointment as an arbitrator shall without delay disclose any circumstances likely to give rise to justifiable doubts as to his independence or impartiality. This duty to disclose continues to exist throughout the arbitral proceedings.78 A reference to the arbitrators’ impartiality and independence can be found in 53 article 1685 § 2 GWB that deals with the appointment of arbitrators. The Belgian arbitration law, however, does not provide for a definition of impartiality and independence. The courts played an important role in establishing the meaning of both concepts for arbitrators and relied on the standards that are accepted for judges to do so. In a case concerning arbitration organized by the Belgian Royal Football Association, the President of the Court of First Instance decided that the fact that the partyappointed arbitrators had an interest in the outcome of the case that was, moreover, contrary to that of one of the parties, impaired the arbitral tribunal’s independence.79 The Court of First Instance of Brussels held that an arbitrator that had been appointed more than six times by one and the same party and for a similar type of dispute was not independent. The fact that this arbitrator always decided in a manner that was disadvantageous for the same party, moreover, was for the court a source of concern.80 In another case, the Court of First Instance of Brussels decided that there was no reason to doubt the impartiality of the arbitral tribunal on the basis of the mere fact that the hearings were held in a city that was closer to the domicile of one of the parties than to that of the other party in the arbitration.81 The Belgian Court of Cassation also confirmed that an appearance of bias is sufficient to challenge an arbitrator.82 b) Grounds for challenge. An arbitrator can be challenged on two grounds, namely 54 (1) when there are circumstances that raise justifiable doubts as to his independence or impartiality, and (2) when the arbitrator does not hold the qualifications agreed upon between the parties.83 A party may, however, only challenge an arbitrator for reasons of which it became aware after the appointment has been made.84 76 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 17. The legislator in this Explanatory Memorandum clarifies that the requirement of independence could require that the presiding arbitrator is of a different nationality than the parties in the dispute. 77 New article 1685, § 2 GWB. 78 Article 1686, § 1 GWB. 79 President Court of First Instance Brussels, 18 December 2009, JLMB 2010/1, 17. 80 Court of First Instance Brussels, 14 December 2006, JT 2007, 207. 81 Court of First Instance Brussels, 5 October 2006, JT 2007, 37. 82 Cass., 7 November 2013, b-Arbitra 2014, 211–213. 83 Article 1686, § 2 GWB. 84 Court of First Instance Brussels, 5 October 2006, JT 2007, 37; CA Ghent, 30 April 2009, 2008/A.R./ 1375, TBH 2009/9, 985.

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c) Procedural aspects and preclusion of grounds for challenge. The parties are free to agree on the procedure for challenging an arbitrator.85 In the absence of such an agreement the arbitration law lays down a procedure to be followed. The party who intends to challenge an arbitrator shall send a written statement of the reasons for the challenge to the relevant arbitrator and, where applicable, to the other arbitrators and to the opposing party. On pain of inadmissibility, this statement must be sent within a period of fifteen days after the challenging party has become aware of the constitution of the arbitral tribunal, the circumstances giving rise to justifiable doubts as to the independence and impartiality of the arbitrator or of the arbitrator’s lack of the agreed qualifications.86 56 If the arbitrator in question fails to withdraw within ten days after having been notified of the challenge, or if the other party does not accept the challenge, the challenging party shall summon the arbitrator and the other parties to appear before the President of the Court of First Instance, on pain of inadmissibility, within ten days.87 The President rules as in summary proceedings.88 Pending a ruling from the President of the Court of First Instance, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and render an award.89 57 The party who has appointed the arbitrator or has cooperated in his appointment can only challenge the arbitrator for a reason that became known to it after his appointment.90 55

d) Failure or impossibility to act. Unless otherwise agreed by the parties, if an arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay, his mandate terminates if he withdraws from his office (after authorization by the President of the Court of First Instance), or if the parties agree on the termination of the mandate.91 59 In all cases where the arbitrator’s mandate is terminated before the final award is made, a substitute arbitrator shall be appointed. This appointment shall be made in accordance with the rules that were applicable to the appointment of the arbitrator being replaced unless otherwise agreed by the parties.92 If the arbitrator is not replaced in accordance with article 1689, § 1 GWB, either party may refer the matter to the President of the Court of First Instance.93 Once the substitute arbitrator has been appointed, the arbitrators, after hearing the parties, shall decide if there are grounds to repeat the arbitral proceedings entirely or in part; they may not revise any partial final awards already made.94 58

2. The arbitral proceedings 60

a) The request for arbitration. Article 1702 GWB makes crystal clear at what point in time the arbitration commences. It states that that the arbitral proceedings start on 85 Article 1687, § 1 GWB. See also in this sense: CA Brussels, 5 March 2013, JT 2014, 119; Court of First Instance Brussels, 10 November 2011, JT 2012, 334. 86 Article 1687, § 2, a) GWB. 87 Article 1687, § 2, b) GWB. 88 Article 1680, § 2 GWB. A procedure ‘as in summary proceedings’ under Belgian procedural law is a fast-tracked court procedure. Contrary to normal summary proceedings, a procedure ‘as in summary proceedings’ results in a final decision on the merits and not a preliminary decision without prejudice to the merits (as is normally the case for summary proceedings under Belgian law). 89 Article 1687, § 2, b) GWB. 90 Article 1686, § 2 GWB. 91 Article 1688, § 1 GWB. 92 Article 1689, § 1 GWB. 93 Article 1689, § 2 GWB. 94 Article 1689, § 3 GWB.

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the date “on which an arbitration application is made, in accordance with article 1678, § 1(a)”. This article explicitly mentions that the parties can agree otherwise, e. g., in the arbitration agreement or by referring to the rules of an arbitration institution. It should be noted in this regard that the parties may charge a third party with the organization of the arbitral proceedings. Article 1677 GWB mentions this briefly, though explicitly. The date of commencement of the arbitration has great practical importance as it sets 61 a number of deadlines. The starting date affects the limitation of the action that is the subject of the request for arbitration. Article 2244 of the Belgian CC95 states that a civil interruption comes about by a summons before the court, an order to pay, or an attachment order served upon the party whom one is trying to prevent from pleading the statute of limitations.96 The commencement of an arbitration is not explicitly mentioned in article 2244 of the Belgian CC. Belgian case law97 and doctrine98, however, accepted that the request for arbitration equals a summons before the court and interrupts the term of limitation. In this context, mention should be made of the fact that the Belgian arbitration law 62 defines the word “communication”99. It also clarifies how such a communication should be made and as of what point in time certain time periods will commence. A communication is defined as the transmission of a written document by means of a method of communication or in a manner that provides proof of sending.100 Following the example of article 3 ML, article 1678, § 1 GWB states that the communication is to be delivered or sent to the addressee, either to his domicile, his residence or his e-mail address or, in the case of a legal entity, to its registered office, main place of business or e-mail address. If none of these can be found after making reasonable inquiries, a communication is deemed to have been received if it is sent to the addressee’s last known domicile or residence or, in the case of a legal entity, to its last known registered office, its last known main place of business or its last known e-mail address. Article 1678, § 2 GWB explicitly states that time periods commencing upon the 63 communication date are calculated as of the day following the day of the acknowledgement of receipt (by hand or by e-mail). When the communication is made by registered post with acknowledgement of receipt, the calculation begins from the first day following the date on which the letter was delivered in person to the addressee. Finally, when the communication was made by registered letter, the terms are calculated from the third working day after the date on which the letter was delivered to the postal service, unless the addressee provides proof to the contrary. Article 1678 GWB is applicable unless otherwise agreed by the parties, for instance, by referring to the arbitration rules of an arbitration institution.

95 Note that article 2244 CC was amended by the Law of 23 May 2013 adding a second paragraph to article 2244 CC, whereby the notification by a lawyer or bailiff equally interrupts the statute of limitations if certain conditions are met (Official Journal 1 July 2013, 41312). 96 Since Part VI of the GWB does not contain any provisions regarding interruption and limitation, the general provisions of civil law and jurisprudence apply. 97 Cass., 4 October 1963, RW 1963–64, 765. Recently applied again in CA Liège, 3 March 2015, JT 2015, 506, in which it was held that it is not material that the arbitration (agreement) was subsequently declared invalid. The statute of limitations was suspended for the duration of the (invalid) arbitration proceedings and any subsequent enforcement or annulment proceedings. 98 Brewaeys/Baele, Verjaring in het verzekeringsrecht, 2000, 46; de Page, Traité élémentaire de droit civil belge, Tome VII, 1953, Nr. 1172; Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 305; Linsmeau, L’arbitrage volontaire en droit privé belge, 1991, 121; de Bournonville, L’arbitrage, 2000, 172. 99 In Dutch this is “de mededeling”, in French “la communication”. 100 Article 1677, § 2 GWB.

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b) Equality of arms, fair trial principles and the right to be heard. The parties have to develop all the pleas and arguments supporting their claim or defence as well as all facts in support thereof within the period of time agreed by the parties or determined by the arbitral tribunal.101 The practical arrangements for exchanging pleadings are the subject of a procedural calendar set forth in a procedural order issued by the arbitral tribunal. A procedural order is binding upon the parties but is not carved in stone: flexibility is key here. This is expressed in the legislation as it provides that the parties may agree on, or the arbitral tribunal may order, the exchange of additional written pleadings between the parties as well as the terms for such an exchange. In addition, the parties shall submit with their written pleadings all documents that they wish to produce in evidence.102 65 Parties are allowed to amend or supplement their original claim or defence during the course of the arbitral proceedings. However, they may also agree against this possibility, for instance in the Terms of Reference. Also, the arbitral tribunal has discretion to refuse such an amendment or supplement of claim, when it considers it inappropriate, notably taking into account the delays it may cause.103 66 The Belgian arbitration legislation pays heed to the addressee’s rights of defence while bringing considerations of efficiency and speed into the equation. It was set out above that article 1699 GWB imposes the requirements of due process and equality; these requirements are of public policy and limit the parties’ freedom to choose arbitration rules that go against these principles.104 64

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c) Confidentiality. In principle, the arbitral proceedings take place behind closed doors. The debates are not public. Most arbitration institutions require explicitly that their arbitrators uphold the principle of confidentiality in the cases they are entrusted. Cepani, for instance, mention this duty in Rule 9 of their Rules of Good Conduct for arbitrators. Article 24.6 of the CEPANI Arbitration Rules 2020 provides that the hearings are not public.

d) The arbitral award. Only arbitrators may render an arbitral award. This seems like an obvious prerequisite. Yet, case law shows that it has not always been an undisputed proviso. For instance, it was, at one point, unclear whether an order issued by an arbitration institution constituted an arbitral award. The Belgian Court of Cassation established that the decision of an arbitration institution to grant an extension of the time limit imposed on arbitrators to hand down their award, was not an arbitral award.105 69 Not every communication or order coming from an arbitrator is an arbitral award. There is a whole variety of decisions that an arbitral tribunal can make during the arbitration procedure, but not all of them are arbitral awards. Article 1713, § 1 GWB explicitly grants the arbitral tribunal the power to render final and interlocutory awards. There is no doubt that a final decision that puts an end to all the issues at hand, should be recorded in an arbitral award. This is less evident when dealing with interlocutory decisions.106 Legislative history confirmed that certain interlocutory decisions need not be rendered through an arbitral award.107 The arbitrators’ decisions may thus come 68

Article 1704, § 1 GWB. Article 1704, § 1 GWB. 103 Article 1704, § 2 GWB. 104 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 27. 105 Cass., 8 December 1988, YCA XV (1990), 121–123. 106 On this point, see also Wautelet/Vermeersch, in: De Arbitrale Uitspraak/La Sentence Arbitrale, 2006, 100–102 and 114–117. 107 Law amending Part VI of the Belgian Judicial Code regarding arbitration, Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer, 1374/1, 1997–98, 8. The legislator, however, points 101 102

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under different forms, ranging from a simple communication (e. g., a letter108), to a procedural order, or a partial or final award109. The law itself is unclear on which matters should be subject of a procedural order and where the division line lies with an arbitral award.110 It is still generally accepted in legal doctrine that the arbitrators themselves must have the freedom to decide which format would be most appropriate to render a decision.111 A procedural order may be more suitable to organize a matter of practical importance (e. g., procedural calendar), while several partial rulings on the merits of the case (e. g., jurisdiction) should be the subject of a (partial) arbitral award. In arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal is to be made, unless otherwise agreed by the parties, by a majority of all of its members.112 Questions of procedure may be decided by the chairman of the arbitral tribunal if so authorized by the parties.113 The parties are also free to decide that the chairman’s vote shall be decisive where no majority can be formed.114 The arbitrators not only have the right to deliberate about the case but also the duty to do so.115 Where an arbitrator refuses to participate in deliberations or in the voting on the arbitral award, the other arbitrators are free to decide without him, unless otherwise agreed by the parties. The parties shall be given advance notice of the intention to make an award without the arbitrator refusing to participate in the deliberations or in the vote.116 The award is made in writing and is to be signed by the arbitrator(s). The signing of the arbitral award exhausts the jurisdiction of the arbitral tribunal.117 In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal suffice, provided that the reason for any omitted signature is stated.118 The award states the reasons upon which it is based.119 In addition to the decision itself, the award contains, inter alia: a) the names and domiciles of the arbitrators; b) the names and domiciles of the parties; c) the object of the dispute; d) the date on which the award is rendered; e) the place of arbitration and the place where the award is rendered.120 The award has the same effect as a court decision in the relationship between the parties.121 The parties may determine the time limit within which the arbitral tribunal must render its award, or the terms for setting such a time limit. Failing this, if the arbitral tribunal is late in rendering its award, and a period of six months has elapsed between the date on which the last arbitrator has been appointed, the President of the Court of First Instance, at the request of one of the parties, may impose a time limit on the out that an arbitral award has a more solemn character than a procedural order and might, therefore, be a preferable instrument. 108 Court of First Instance Brussels, 24 January 1962, JT 1962, 157. 109 Hanotiau, in: De Arbitrale Uitspraak/La Sentence Arbitrale, 2006, 27–39. 110 The law is clear on the fact that only an arbitral award can be set aside. Whether a decision is a challengeable arbitral award depends on its objective and content. It is the court called upon to set aside that will have the last word on whether a particular ruling is an award amenable to judicial review. 111 Taelman, TPR 1999, 1740 et seq.; Keutgen, JT 1998, 768; Caprasse/De Meulemeester, in: De Arbitrale Uitspraak/La Sentence Arbitrale, 2006, 43. 112 Article 1711, § 1 GWB. 113 Article 1711, § 2 GWB. 114 Article 1711, § 3 GWB. 115 Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 392. 116 Article 1711, § 4 GWB. 117 Article 1714, § 1 GWB. 118 Article 1713, § 3 GWB. 119 Article 1713, § 4 GWB. 120 Article 1713, § 5 GWB. 121 Article 1713, § 9 GWB.

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arbitral tribunal.122 The mission of the arbitrators ends if the arbitral tribunal has not rendered its award at the expiry of this time limit.123 Awards rendered after the expiry of the applicable time limit may be annulled on that ground.124 74 Once the arbitral award has been rendered, a copy is sent to each party by the sole arbitrator or by the chairman of the arbitral tribunal, who shall moreover ensure that each party receives an original copy if the method of communication did not entail the delivery of such an original (article 1713, § 8 GWB). e) Termination of the arbitration without an award. Article 1714, § 1 GWB provides that the arbitral proceedings end either with the signing of the arbitral award125 or when the arbitral tribunal issues an order terminating the arbitral proceedings. The arbitral tribunal will issue a termination order when (a) the claimant withdraws its claim, the respondent does not object thereto, and the arbitral tribunal recognizes a legitimate interest on its part in obtaining a final settlement of the dispute; or (b) when the parties agree on the termination of the proceedings.126 A situation envisioned in (b) may for instance be the case where the parties have agreed on a settlement on all disputed issues and have both requested that the arbitral tribunal ends the proceedings. The arbitral tribunal may not on its own motion issue such an order. Note in this regard that the article 1714, § 2 did not include a third ground listed in article 32(2) ML that allows the arbitral tribunal to issue an order for the termination of the arbitral proceedings when “the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible”. The Belgian legislator considered this provision too broad and vague.127 The arbitrators may, though, suggest that parties submit such a request jointly. A unilateral request from only one party will not be sufficient to justify a termination order. This provision in article 1714 GWB should be read in conjunction with article 1706, a) GWB which deals with the situation in which a claimant fails to communicate its statement of claim within the accorded period, as a result of which the arbitral tribunal shall end the proceedings provided no other parties’ claims are pending. 76 Another way of prematurely ending the arbitration without an award is when parties settle their dispute during the proceedings. The arbitral tribunal shall terminate the proceedings in that case. Unless the parties request the tribunal to record the settlement in an award on agreed terms, no award will be made. Even when the parties do request the recording of the settlement, the arbitral tribunal will not do so if it violates public policy.128 77 A final way of ending the mandate of a particular arbitral tribunal is when it has failed to render a decision within the time limit imposed by the parties or the Court of First Instance (article 1713 GWB). The arbitrators’ mandate may also end before the 75

122 The basis for his jurisdiction is to be found in article 1680, § 3 GWB. He rules as in summary proceedings and his ruling is not subject to any recourse. 123 Article 1713, § 2 GWB. 124 Cass. 26 October 2015, b-Arbitra 2017, 149. 125 Note that the mandate of the arbitral tribunal ends with the termination of the arbitral proceedings and the communication of the award pursuant to article 1714, § 3 GWB. However, all this is subject to the provisions in articles 1715 and 1717, § 6 GWB. These provisions envision the situation in which an arbitral tribunal may be asked to resume its mandate in the event of a request for interpretation or correction of the award, or when the Court of First Instance decides that the grounds for setting aside an award may be remedied by the arbitral tribunal. 126 Article 1714, § 2 GWB. 127 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 38–39. 128 Article 1712, § 1 GWB.

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termination of the arbitral proceedings, in the event of a challenge (articles 1686–1687 GWB), failure or impossibility to act (article 1688 GWB), and replacement of an arbitrator (article 1689 GWB). f) The costs of the arbitration. Article 1713, § 6 GWB explicitly provides for clear rules on the costs of arbitration. It states that the final award shall fix the costs of the arbitration and decide which party shall bear them and in what proportion they shall be borne. The term “final award” here refers to the last award that disposes of all the issues and which terminates the arbitral proceedings. The Belgian arbitration law does not provide for a specific method for the allocation of costs, leaving this issue at the discretion of the arbitral tribunal. Unless the parties have agreed on a cost-shifting method, arbitral tribunals with seat in Belgium will generally allocate costs on the basis of the relative success of the parties on the merits, taking into account further circumstances that they might find of relevance.129 Such further circumstances may include the parties’ behaviour during the proceedings130 or the difficulty of the issues at hand.131 Unless otherwise agreed by the parties, these costs shall include both costs of the arbitration as well as party costs. The former consist of the fees and expenses of the arbitrators, the fees and expenses of any experts appointed by the arbitral tribunal and the costs of the services rendered by the institutions in charge of the administration of the arbitration. The latter are comprised of the fees and expenses of the parties’ counsel and representatives, and all other expenses arising from the arbitral proceedings, such as expert costs and witness costs. Note that article 1022 GWB, which sets out the maximum flat fee that may be recovered for defence costs in litigation before the Belgian courts (“rechtsplegingsvergoeding”/”indemnité de procedure”) does not apply to arbitration proceedings with seat in Belgium, unless parties expressly agree differently. This is also the case for purely domestic Belgian arbitrations. As a result, the various limits to the recovery of procedural costs before the Belgian courts do not apply to arbitral proceedings.132 The arbitral tribunal can thus freely establish the amount that the parties prove to have incurred for the purpose of the arbitration proceedings and may also take into account other elements than attorney costs. The parties will need to demonstrate that the costs were reasonably incurred.133 In practice parties will have to prove their costs when these are contested. This will typically be done by showing invoices. The principle of professional secrecy has not been viewed as a problem in international arbitration. With regard to lawyer costs, it suffices that the party demonstrates the number of hours performed, in combination with the hourly rate. It is not necessary to provide a detailed overview of each and every performance by the lawyer(s).134 When assessing reasonableness, the arbitral tribunal 129 Hollander/Draye, in: Ostrove/Solomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, 199. 130 Price/Stans, 25(4) ASA Bulletin 2007, 704. 131 Caprasse/Henry, JT 2008, 566. 132 Caprasse/Henry, JT 2008, 565. 133 Cass., 2 September 2004, Arr. Cass. 2004, afl. 9, 1271. A number of arbitration rules also rely on the reasonableness test. Article 39(4) Cepani Rules 2020 requires the tribunal to have regard to the “reasonableness” of costs claimed by the parties. Article 38(1) of the ICC Rules 2021 refers to the prerequisite that the legal and other costs incurred by the parties need to be reasonable. In Article 28.3 of the LCIA Arbitration Rules 2020 the arbitral tribunal is granted the authority to decide on the amount of the legal or other expenses incurred by a party on such reasonable basis as it thinks appropriate. Article 44 of the SCC rules also requires the costs incurred by a party to be reasonable in order to be recoverable. 134 Caprasse/Henry, JT 2008, 566.

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will inter alia take into account the legal and factual complexity of the case, the time spent on the arbitration, and the amount in dispute.135 This allows the arbitral tribunal to reduce the requested counsel fees if, for instance a party claims exorbitantly high amounts, or if for instance there is too big a discrepancy between the claimed costs of both parties in the dispute. 83 Claimants may consider making use of third party funding. While the practice is not established in Belgium, there are no clear impediments to the use of third party funding under Belgian law.136 One potential area of difficulty, however, lies in the deontological obligation for Belgian lawyers to refrain from sharing any privileged information with third parties. While the issue remains delicate, only the attorney is bound by professional secrecy. In principle, nothing prevents the client from deliberately sharing privileged information with third parties.137

3. Evidence, discovery, disclosure 84 85

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The arbitral tribunal is free in its assessment of the admissibility and weight of the evidence, unless the parties have agreed otherwise.138 More specifically, with regard to applications to verify the authenticity of documents and to rule on allegedly forged documents, the tribunal has the power to decide. This power does not extend to applications relating to authentic instruments. The parties need to refer such matters to the Court of First Instance within a given time limit.139 The parties submit with their written pleadings all documents that they wish to produce in evidence.140 The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.141 The arbitral tribunal may order the necessary investigative measures unless the parties authorize it to entrust this task to one of its members. It may hear any person and such hearing shall be taken without oath. If a party holds a piece of evidence, the arbitral tribunal may enjoin it to disclose the evidence according to such terms as the arbitral tribunal shall decide and, if necessary, on pain of a penalty payment.142 The somewhat forceful language of the arbitration law on this point should be assessed in light of the reality of arbitration in which an arbitral tribunal only has limited powers to force a party to produce evidence. Therefore, the arbitration law provides that a party, with the approval of the arbitral tribunal, may apply to the Court of First Instance ruling as in summary proceedings to order all necessary measures for the taking of evidence.143 The Court of First Instance may thus be asked to assist the arbitral tribunal in taking evidence. Unless otherwise agreed by the parties, the arbitral tribunal also has the option of appointing one or more experts to report to it on specific issues it determines.144 It may 135 Claessens et al. (eds), Bestendig Handboek Verbintenissenrecht, 2007, II.4, 190 a; Caprasse/Henry, JT 2008, 566; Caprasse, in: Walking a thin line – What an arbitrator can do, must do or must not do, 2010, 156. 136 Lefèvre/Callens/Croisant, b-Arbitra 2017, 64–65. 137 Stevens, Advocatuur: Regels & Deontologie, 2015, 847–848. See also Cass., 12 November 1997, Arr. Cass. 1997, 1115 and Cass., 23 March 2010, www.cass.be. 138 Article 1700, § 3 GWB. 139 Article 1700, § 5 GWB. 140 Article 1704, § 1 GWB. 141 Article 1703, § 2 GWB. 142 Article 1700, § 4 GWB. 143 Article 1708 GWB. 144 Article 1707, § 1, a) GWB.

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require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.145 If a party so requests or if the arbitral tribunal considers it necessary, the expert shall participate in a hearing where the parties have the opportunity to put questions to him.146

4. The law governing the dispute and lois de police a) Choice of law and domestic cases. The parties may select the law applicable to 90 their dispute by agreement.147 The designation of the law of a given state shall be construed, unless otherwise expressed, as directly referring to the substantive law of that State and not to its rules of private international law.148 Provided that the parties’ choice of law clause is valid under the applicable law, the arbitrators must respect the parties’ choice of law. An important element in international arbitration has been the investigation by the arbitral tribunal of whether or not it is permitted to decide a dispute on the basis of rules not originating from an (inter)national legislative body but “a-national” or “transnational” in nature.149 Another important question is whether the parties’ choice of law clause could be overruled by applicable mandatory legal provisions. Pursuant to article 1710, § 1 GWB parties enjoy the freedom to apply a-national law 91 or transnational law. This is reflected in the provision’s reference to a collection of “rules of law”. The parties may, for instance, decide to subject their contract to the Unidroit Principles of International Commercial Contracts. They can opt for an exclusive application of the Principles or select the Principles in combination with a national law.150 This freedom is connected to the principle of party autonomy and is in keeping with the old Belgian arbitration law151, as well as with several other arbitration laws152 and rules153. The arbitral tribunal can deviate from the application of the rules of law and thus decide ex aequo et bono or as amiable compositeur, if the parties have expressly authorized it to do so.154 It should be noted here that the law provides that the arbitral tribunal, irrespective of whether it decides as amiable compositeur or according to the rules of law, must decide in accordance with the terms of the contract if the dispute opposing the parties is contractual in nature and shall take into account the usages of the trade if the dispute is between commercial parties.155 The arbitrators will need to check the choice of law clause against the legal framework 92 within which the arbitration is taking place. This question has been dealt with in the context of, among others, distribution contracts. The Belgian Court of Cassation held that the courts, even in the event that the parties had agreed on a substantive applicable law, had to assess the arbitrability of the distributorship dispute against the background Article 1707, § 1, b) GWB. Article 1707, § 2 GWB. 147 Article 1710, § 1 GWB. 148 Article 1710, § 1 GWB. 149 An example of such rules are the UNIDROIT Principles on International Commercial Arbitration. On the use of the UNIDROIT Principles in arbitration, see: Piers/Erauw, (2012) 8(3) JPIL 441–472. 150 Piers/Erauw, (2012) 8(3) JPIL 441 (449–450). 151 Article 1700 old GWB. 152 See e. g. article 1051(1) German ZPO; article 1511 French CPC; article 1054 Dutch Code of Civil Procedure; article 28 Danish Arbitration Law 2005. 153 See e. g. article 17 ICC Arbitration Rules; article 22(3) LCIA Rules; article 24(1) VIAC Arbitration Rules; article 28(1) ICDR Arbitration Rules; article 23(1) DIS Arbitration Rules; article 3(1) CAM Arbitration Rules; article 22(1) SCC Arbitration Rules; Article 45(1–2) NAI Arbitration Rules. 154 New article 1710, § 3 GWB. 155 New article 1710, § 4 GWB. 145 146

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of the mandatory provisions of the lex fori.156 Consequently, the decision on the arbitrability of a dispute may be assessed according to the lex contractus to the extent that the Belgian lex fori does not prohibit that parties submit their dispute to a nonBelgian legal system. The provisions of Belgian mandatory law may thus limit party autonomy, when the application of the lex contractus would lead to a violation of the mandatory and public policy provisions of Belgian law.157 93 Article 1710, § 1 GWB further confirms that, unless otherwise expressed, a reference to a law of a given state shall be construed as directly referring to the substantive law of that state and not its conflict of laws rules. This sentence rules out the possibility of renvoi whereby the conflict of laws rules of the designated state refer to the substantive law of another state. The parties’ choice for a certain national law will thus not be distorted by the interference of the chosen legal system’s private international law. 94 In the absence of a choice of law by the parties, the arbitral tribunal has the power to determine the substantive law that is applicable to the merits of a particular case. On the various methods available to arbitrators for selecting the applicable law, we refer to the relevant literature.158 95

b) Choice of law and lois de police. There is no doubt as to the duty of a judge to raise sua sponte questions of public policy during the procedure on the merits. The law is however less clear as to whether the arbitrator has this duty. The Belgian jurisprudence and doctrine nevertheless accept this duty as a general rule.159 The arbitrators are under a general duty to render an enforceable award. The arbitral award should not violate a provision of public policy, on pain of annulment or refusal of exequatur.

5. Interim relief in arbitration 96

a) Interim relief before state courts. State courts have the power to grant interim relief to parties involved in an arbitration. The court ruling in summary proceedings has the same power of issuing an interim or conservatory measure in relation to arbitration proceedings, irrespective of whether they take place on Belgian territory, as it has in relation to court proceedings. The court exercises such power in accordance with its own procedures taking into account the specific features of arbitration.160 It is important to underline that it is not incompatible with an arbitration agreement for a request to be made to a court for an interim or conservatory measure before or during arbitral proceedings and for a court to grant such measure, nor does any such request imply a waiver of the arbitration agreement.161

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b) Interim relief before the arbitral tribunal. Without prejudice to the powers accorded to the courts and unless the parties have agreed otherwise, the arbitral tribunal may order any interim or conservatory measures it deems necessary. The arbitral tribunal, however, has no power to authorize attachment orders.162 The arbitral tribunal may require the party requesting an interim or conservatory order to provide appropriate security.163

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Supra fn. 33. Supra fn. 34. 158 Piers/Erauw, (2012) 8(3) JPIL 441–472. 159 Cass., 5 September 1980, JT 1981, 518–519; de Bournonville, L’arbitrage, 2000, 162. 160 Article 1698 GWB. 161 Article 1683 GWB. 162 Article 1691 GWB. 163 Article 1693 GWB. 157

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At the request of one of the parties, the arbitral tribunal may amend, suspend or terminate an interim or conservatory measure.164 It may also require any party to promptly disclose any material change in the circumstances on the basis of which the measure was requested or granted.165 The party requesting an interim or conservatory measure shall be liable for any costs and damages caused by the measure to another party if the arbitral tribunal later determines that, in the circumstances, the measure should not have been granted. The arbitral tribunal may award such costs and damages at any point during the proceedings.166 An interim or protective measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced by the Court of First Instance, irrespective of the country in which it was issued.167 In limited circumstances the recognition or enforcement of an interim or conservatory measure may be refused. The grounds for refusal depend on whether the party against whom the measure is invoked requests the refusal or the court sua sponte determines a ground to be applicable. The recognition or enforcement may be denied at the request of a party if refusal is warranted on the first five of the seven grounds for the refusal of the recognition or enforcement of an arbitral award.168 It may also be denied if the arbitral tribunal’s decision with respect to the provision of security has not been complied with or if the interim or conservatory measure has been terminated or suspended by the arbitral tribunal or, where so empowered, by the court of the State in which the arbitration takes place or under the law of which that interim measure was granted.169 The recognition or enforcement may also be denied if the Court of First Instance finds that the subject-matter of the dispute is not capable of settlement by arbitration or the recognition or enforcement of the interim or conservatory measure would be contrary to public policy.170 Any determination made by the Court of First Instance on any of these grounds will only be effective for the purposes of the application to recognize and enforce the interim or conservatory measure. The Court of First Instance will not, in making that determination, undertake a review of the substance of the interim or conservatory measure. The party who is seeking or has obtained recognition or enforcement of an interim or conservatory measure is under the obligation to promptly inform the arbitral tribunal of any termination, suspension or modification of that measure.171 The Court of First Instance where recognition or enforcement is sought may, if it considers it proper, order the requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with respect to security or where such a decision is necessary to protect the rights of the respondent and of third parties.172 164

Article 1692 GWB. Article 1694 GWB. 166 Article 1695 GWB. 167 Article 1696, § 1 GWB. 168 These grounds are set forth in article 1721, § 1, a), i)– v) GWB. The two supplementary grounds that are not applicable in the sphere of the recognition and enforcement of interim measures are as follows: vi) the argument that 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 and vii) the fact that the arbitral tribunal has exceeded its powers. 169 Article 1697, § 1, a) GWB. 170 Article 1697, § 1, b) GWB. This provision again refers to the grounds for refusal of recognition and enforcement of arbitral awards. 171 Article 1696, § 2 GWB. 172 Article 1696, § 3 GWB. 165

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6. Multi-party arbitration 103

a) Arbitration agreement involving several parties. Arbitral proceedings that initially involved only two parties can transform into a multi-party arbitration. Any interested third party may apply to the arbitral tribunal to join the proceedings (voluntary joinder). The request must be put to the arbitral tribunal in writing, and the tribunal shall communicate it to the parties.173 A party may call upon a third party to join the proceedings (forced joinder).174 The admissibility of such joinder always requires an arbitration agreement between the third party and the parties involved in the arbitration. These rules on joinder thus do not cover the intervention of the socalled amicus curiae. Moreover, such joinder is subject to the unanimous consent of the arbitral tribunal.175

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b) Equality of arms and appointment of the arbitrators. The principle of equality of the parties to the arbitration agreement has played a significant role. Pursuant to the former article 1678(1) GWB an arbitration agreement shall not be valid if it allows one party a privileged position with regard to the appointment of the arbitral tribunal. Quite many an objection has been founded on the equality provision in the former article 1678(1) GWB.176 The new article 1699 GWB reiterates the principle of equality in more general terms and explicitly states that parties, notwithstanding any agreement to the contrary, should be treated equally throughout the proceedings.

IV. The control and the enforcement of arbitral awards 1. Correction and amendment of arbitral awards Within one month of the notification of the award, a party may request the arbitral tribunal to correct any errors in calculation, any clerical or typographical errors or any errors of similar nature in the award.177 The arbitral tribunal may also correct any of these types of errors suo motu within one month of the date of the award.178 If so agreed, a party may also request the arbitral tribunal to give an interpretation of a specific point or part of the award.179 The interpretation shall form part of the award.180 106 In both instances notice of the request needs to be given to the other parties.181 The one month time period is applicable unless the parties agreed on another period of time.182 If the arbitral tribunal considers the request for correction or interpretation to be justified, it shall make the correction or give the interpretation within one month of 105

Article 1709, § 1 GWB. Article 1709, § 2 GWB. 175 Article 1709, § 3 GWB. 176 For Belgian case law regarding the objection of inequality of the parties, see: Court of First Instance Brussels, 23 June 1992, Res Jur. Imm. 1993, 87; CA Brussels, 9 September 1959, Pas. 1961, II, 59–61; Comm. Leuven, 19 September 1989, TBH 1990, 1022–1028; CA Liège, 17 November 1993, RRD 1994, 89–92; Court of First Instance Brussels, 20 February 1990, JT 1990, 744; CA Mons, 15 June 1995, JT 1996, 80; Court of First Instance Antwerp, 11 February 1991, Pas. 1991, II, 108–112; Justice of the Peace Ghent, 9 March 1998, DCCR 1998, 59–6; Court of First Instance Oudenaarde, 5 January 1984, RW 1984–85, 1098–1100. 177 Article 1715, § 1, a) GWB. 178 Article 1715, § 2 GWB. 179 Article 1715, § 1, b) GWB. 180 Article 1715, § 1 GWB. 181 Article 1715, § 1, a) & b) GWB. 182 Article 1715, § 1 GWB. 173 174

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receipt of the request. The arbitral tribunal may, if necessary, extend the period of time within which it may make such a correction or interpretation.183 Unless otherwise agreed by the parties, a party, with notice to the other party, may 107 request, within one month of receipt of the award the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it will make the additional award within two months, even if the time limits determined by the parties or the President of the Court of First Instance184 have expired. The arbitral tribunal may, if necessary, extend the period of time within which it may make such an additional award.185 When it is no longer possible to reunite the same arbitrators, the request for 108 correction, interpretation or an additional award needs to be brought before the Court of First Instance.186

2. Review of arbitral awards before the state courts a) Procedural framework (time limits, competent court, appeal). An award can also 109 be set aside (i.e., annulled) by the Court of First Instance. Setting aside is only possible if the award can no longer be contested before the arbitral tribunal and thus has res judicata effect.187 The application needs to be brought by means of a writ of summons.188 The decision of the Court of First Instance is final and not subject to recourse.189 Only an appeal in cassation before the Belgian Court of Cassation is possible. The Court of First Instance can only annul Belgian arbitral awards. A Belgian court 110 cannot set aside a foreign arbitral award. The place of the arbitration determines the nationality of the award.190 As the place of the arbitration will, in principle, be mentioned in the arbitral award, the nationality will be easy to determine.191 The time limit is three months from the date on which the award was notified (in 111 accordance with article 1678 GWB) to the party making the application. In case a correction, interpretation or supplemental award was made, the three month period starts on the day the corrected award, the interpretation award or the supplemental award was notified.192 There is only one exception to the three month time period: the arbitral tribunal’s decision that it has jurisdiction may only be contested together with the award on the merits and in the course of the same procedure.193 The latter rule guarantees the effectiveness of the arbitration procedure.194 A party that wants to contest an adverse enforcement order but also wishes to see the award annulled, must launch its request for annulment together with its opposition against the enforcement order. It cannot contest the enforceability of the award in one procedure and request the annulment of the award in another. This will of course only be possible to the extent that the limitation period for challenging the award has not yet lapsed.195 Article 1715, § 4 GWB. In accordance with article 1713, § 2 GWB. 185 Article 1715, § 4 GWB. 186 Article 1715, § 6 GWB. 187 Article 1717, § 1 GWB. 188 Article 1717, § 2 GWB. 189 Article 1680, § 5 GWB. 190 Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 529. 191 Article 1713, § 5 GWB. 192 Article 1717, § 4 GWB. 193 Article 1690, § 4, paragraph 1 GWB. 194 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 23. 195 Article 1717, § 8 GWB. 183 184

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The parties have the option to exclude the possibility of setting aside the award. They do this by incorporating an explicit declaration in the arbitration agreement or by a later agreement. This exclusion is only possible if none of them is a natural person of Belgian nationality or a natural person having his domicile or normal residence in Belgium or a legal person having its registered office, its main place of business or a branch office in Belgium.196 113 The law explicitly states that certain annulment grounds cannot be raised by a party that failed to raise them in a timely manner.197 These concern procedural irregularities that parties should raise within a certain time limit.198 An example of such an irregularity is the requirement that the invalidity of an arbitration agreement should be raised “in limine litis”.199 Another example concerns the challenge of an arbitrator: this needs to occur within the time-limit of 15 days after the challenging party has become aware of the constitution of the arbitral tribunal or of any circumstance that might give rise to justifiable doubts as to his impartiality and independence.200 112

b) Grounds for setting aside arbitral awards: An overview. As to the grounds for setting aside an arbitral award, a distinction is made between grounds for which the party making the application must furnish proof and grounds that the Court of First Instance must/can raise ex officio. 115 The first category contains six grounds. First, an arbitral award may be annulled if 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 Belgium. Second, annulment may also take place if the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case. In this case, the award may not be set aside if it is established that the irregularity had no effect on the arbitral award. A third ground for setting aside manifests itself if the award deals with a dispute not provided for in, or not falling within, the terms of the arbitration agreement, or contains decisions on matters beyond the scope of the arbitration agreement. If the provisions of the award on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside. A fourth basis for annulment is the fact that the award is not reasoned.201 Fifth, annulment is possible if 114

196 Article 1718 GWB. In a recent decision, the Court of Cassation held that a de facto exclusion between Belgian parties is invalid and can be disregarded by the annulment court (Cass., 7 November 2019, www.cass.be). The case concerned an arbitration clause that included an arbitral appeal mechanism. The fee for initiating the arbitral appeal, however, amounted to EUR 15.000, whereas the dispute itself had a value of only EUR 40.000. The Court of Cassation decided that, in those circumstances, the annulment court was right in declaring the request for annulment admissible, despite the non-fulfilment of the arbitral appeal mechanism as would normally be required by article 1717, § 1 GWB. 197 Article 1717, § 5 GWB. 198 In fact this is the general principle that is put forward in article 1679 GWB which states that a party that, knowingly and for no legitimate reason refrains from raising, in due time, an irregularity before the arbitral tribunal, is deemed to have waived its right to assert such irregularity. 199 Article 1682, § 1 GWB. 200 Article 1687, § 1 GWB. 201 The obligation to provide reasons is a formal requirement under Belgian law. Whether the reasoning of the tribunal is incorrect (CA Liège, 28 April 2003, Cah. Arb. 2011, 847) or contradictory (Cass., 3 October 2019, www.cass.be) is irrelevant. The formal character of the duty to provide reasons cannot be taken too far, however. The Court of Cassation recently held that ‘catch all’ clauses are no substitute for the obligation to render a reasoned award. A general formula in an arbitral award to the effect that “all other claims are dismissed”, without indication of the reasons for such dismissal, could potentially be grounds for annulment or refusal of enforceability (Cass., 15 March 2019, RW 2019–20, 744–748, with an annotation by Ongenae).

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the composition of the arbitral tribunal or the arbitral proceedings were not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of Part 6 the Belgian Judicial Code from which the parties cannot derogate, or, failing such agreement, was not in accordance with Part 6 of the Belgian Judicial Code. With the exception of an irregularity affecting the composition of the arbitral tribunal, such irregularities may however not give rise to a setting aside of the arbitral award if it is established that they had no effect on the award. Sixth, an award may be set aside if the arbitral tribunal exceeded its powers.202 The Court of First Instance must/can annul the award ex officio on the basis of three 116 different grounds. The court may set the award aside if it finds that the subject-matter of the dispute is not capable of settlement by arbitration or that the award is in conflict with public policy or that the award was obtained by fraud.203 When asked to set aside an arbitral award, the Court of First Instance may, where 117 appropriate and if so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the latter’s opinion will eliminate the grounds for setting aside.204 This pragmatic solution contributes to the overall goal of the effectiveness of the procedure. The explanatory memorandum states that if there is an opportunity to eliminate the grounds for setting aside the award, it is most desirable that the court would remand the case back to the tribunal.205 c) Lack of jurisdiction of the arbitral tribunal. The lack of jurisdiction of an arbitral 118 tribunal could be based on the grounds provided for in article 1717, § 3 (a-i) and (a-iii) as well as 1717, § 3 (b-i) GWB. In other words, the absence of a valid arbitration agreement could lead to an annulment.206 Also, the arbitral tribunal may only render a decision within the boundaries of the mandate given to it by the parties. An ultra or extra petita judgment could lead to annulment of the arbitral award. The Court of Appeal of Antwerp annulled an arbitral award in which the tribunal ordered a rescission of an agreement where the claimant had merely requested damages for breach of contract. The court decided that this amounted to an ultra petita award.207 In another case, the Brussels Court of First Instance held that an arbitral tribunal that decided a case on the basis of considerations of fairness and equity acted ultra petita since it was not commissioned to judge as “amiable compositeur”.208 The Court of Appeal of Antwerp, in turn, did not annul an arbitral award that was rendered after the time limit had expired that the parties had set to the arbitral tribunal. The court held that there was no extra petita award since the parties had tacitly consented to extending such a time-limit.209 The Belgian Court of Cassation did confirm an annulment where the parties had not extended such a time-limit.210 The Court of Appeal of Brussels came to the same conclusion in a case where an extension was granted by the arbitration institution pursuant to its arbitration rules.211 A wrong application of the law was not Article 1717, § 3, a), i)– vi) GWB. Article 1717, § 3, b) GWB. 204 Article 1717, § 6 GWB. 205 Explanatory Memorandum (Memorie van Toelichting), Parl. St. Kamer 2012–13, no. 2743/005, 42. 206 CA Ghent, 9 September 2005, 2004/A.R.1511, unpublished. 207 CA Antwerp, 8 June 1998, P&B 1999, 181–183. 208 Court of First Instance Brussels, 30 December 1969, Pas. 1970, II, 73–75. 209 CA Antwerp, 13 November 2000, P&B 2001, 261–265. 210 Cass. 26 October 2015, b-Arbitra 2017, 149 and Cass., 5 March 2009, c.08.0028.G/52, unpublished. 211 CA Brussels, 25 February 1987, Ann. Liège 1988, 59–63. 202 203

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considered an ultra or extra petita decision,212 neither was an award in which the court had interpreted an agreement in an unconventional way.213 d) Composition of the tribunal and procedural irregularities. Article 1717, § 3, (a-ii) defines as an annulment ground the situation in which a party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case. Article 1717, § 3, (a-v) provides that the awards may be annulled if the composition of the arbitral tribunal or the arbitral proceedings were not in accordance with the agreement of the parties, unless such an agreement was in conflict with a provision of Part 6 of this Code from which the parties cannot derogate, or, failing such an agreement, was not in accordance with Part 6 of this code. With the exception of an irregularity affecting the composition of the arbitral tribunal, the irregularities described in both provisions may lead to an annulment only on the condition that they had an effect on the arbitral award. 120 Under the former article 1704(2)(g) GWB, there was quite some discussion as to whether such an additional condition applied to setting aside the arbitral award when there was a due process violation. The majority of case law and doctrine represented the point of view that such an additional condition was required only to justify an annulment when a mandatory legal provision was violated; it was not necessary to provide such proof in the event of a violation of a due process rule.214 This has now changed: a due process violation may only lead to an annulment if such an irregularity affected the arbitral award. The principle of due process was discussed in many annulment proceedings.215 119

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e) Public policy. Article 1717, § 3 (b-ii) GWB stipulates that an arbitral award should be annulled when the Court of First Instance finds that the award is in conflict with public policy. The court yet has a duty to examine the possibility to arbitrate a dispute and the conformity of any arbitral award with public policy.216 The court has the power to raise such issues of public policy at its own motion. The scope of this public policy ground remains debated. The provision in article 1717, § 3 (b-ii) GWB is a ‘catch all’provision: the courts may fall back on this provision when an infringement of a public policy rule is not explicitly defined in one of the stipulations laid out in article 1717, § 3 GWB. Indeed, the latter provision also sets out certain other specific annulment 212

Court of First Instance Brussels, 30 December 1969, Pas. 1970, II, 73–75. CA Antwerp, 13 December 2005, 2004/A.R./540, unpublished. 214 CA Antwerp, 19 December 2005, 2003/A.R./1909; CA Antwerp, 26 June 2000, P&B 2001, 183–188; Court of First Instance Ghent, 6 March 1997, 1995/A.R./129. Contra: Court of First Instance Tongeren, 2 November 2001, A.R. 00/789/A en 01/694/A, unpublished; Court of First Instance Brussels, 29 June 1959, Pas. 1961, II, 55–59; Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 477–478; Hanotiau/Caprasse, JT 2004, 424; de Bournonville, L’arbitrage, 2000, 212; Linsmeau, L’arbitrage volontaire en droit privé belge, 1991, 161; Matray/Moreau, in: Arbitrage et modes alternatifs de règlement des conflits, 2002, 295–296; Lievens, TBH 1993, 909. 215 Court of First Instance Brussels, 25 September 2009, JT 2010, Vol. 6383, 112; Cass., 25 May 2007, RCJB 2010, 453–469, with an annotation by Hanotiau/Caprasse; Arr. Cass. 2007, Vol. 5, 1109; Court of First Instance Brussels, 4 April 2001, R.G. 00/10.507/A and 00/10.611/A, unpublished; CA Antwerp, 19 December 2005, 2003/R.G./1909, unpublished; Cass., 10 November 2005, RW 2005–06, 1104–05; CA Brussels, 8 January 2002, JT 2002, 792–793; Court of First Instance Bruges, 3 January 2001, TWVR 2001, 162–165; CA Antwerp, 26 June 2000, P&B 2001, 183–188; Court of First Instance Hasselt, 13 May 2000, R. G. 00/1258/A, TBBR 2004, Vol. 4, 235; CA Antwerp, 8 June 1998, P&B 1999, 181–183; Court of First Instance Brussels, 25 October 1996, JT 1997, 394–395; Court of First Instance Mons, 4 October 1984, RRD 1984, 295–299; Justice of the Peace Verviers, 26 June 1982, JDF 1983, 318–320. 216 Court of First Instance Charleroi, 1 December 1978, RRD 1979, 935–948. The Belgian courts have a general duty to raise issues of public policy sua sponte; Cornelis, Algemene theorie van de verbintenis, 2000, 129–137; Linsmeau/van Gelder, RGJB 1975, 408–409. 213

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grounds that have public policy implications. Article 1717, § 3 a-ii) GWB, for instance, determines that a violation of the rights of defence is a reason to set aside an arbitral award. The principle of due process is considered a matter of public policy. Hence, an action to set aside an arbitral award on this specific basis could be founded on both article 1717, § 3 (b-ii) and (a-ii) GWB.217 Pursuant to article 1717, § 3 (a-i) GWB an arbitral award should be set aside when the arbitration is based on an invalid or inexistent arbitration agreement.218 Also, the provision on the non-arbitrability of a dispute, provided for in article 1717, § 3 (b-i) GWB also touches upon public policy. Their binding force, however, differs. The parties must themselves raise most grounds on the basis of which an arbitral award should be set aside.

3. Third party opposition against arbitral awards In a recent case, the Constitutional Court has decided that the absence of a 122 mechanism whereby aggrieved third parties can challenge the probative value of arbitral awards (while such a mechanism does exist for judgments rendered by the Belgian state courts) is unconstitutional because of the inequality it creates between third parties to a state court judgment and third parties to an arbitral award.219 The practical consequence of this decision is that, until the legislator remedies the situation, the courts must apply the law in a way that gives aggrieved third parties the right to oppose an arbitral award that prejudices their interests. The obvious way in which to do this is to apply the provisions on third party opposition (articles 1122–1131 GWB) to arbitral awards. Successful third party opposition against a final award does not alter the legal relationship between the parties to the underlying arbitration or the obligations resulting from the award. It does not lead to the annulment of the award and it does not render the award unenforceable. It merely renders the award (i.e., its existence and its factual and legal contents) unopposable to the successful third party applicant.

4. Enforcing arbitral awards a) General framework. The arbitral award rendered in Belgium or abroad may only 123 be enforced after the Court of First Instance has granted enforcement in full or in part.220 In the context of enforcement, the Belgian arbitration law does not make a distinction between Belgian and foreign arbitral awards.221 The Court of First Instance can refuse the recognition and enforcement of an award, irrespective of the country in which it was made.222 Foreign arbitral awards will only be treated differently when there is a reason to apply an existing treaty between Belgium and the country in which the award was rendered.223 In such a case, the treaty will prevail.224 217 See for instance: CA Antwerp, 19 December 2005, 2003/A.R./1909, unpublished. Another application can be found in article 1704, § 2, f) GWB regarding an irregularly appointed arbitral tribunal. An arbitral tribunal that is composed of arbitrators that fail to act impartially or independent, constitutes a violation of public policy. Court of First Instance of Brussels, 9 September 1959, Pas. 1961, II, 59–61. 218 CA Ghent, 9 September 2005, 2004/A.R./1511, unpublished; CA Antwerp, 26 June 2000, TPB 2001, 183–188. 219 Const. Court, 16 February 2017, no. 21/2017, www.const-court.be. 220 Article 1719, § 1 GWB. 221 Article 1720, § 1 GWB. 222 Article 1721, § 1 GWB. 223 Article 1721, § 3 GWB. 224 Note that Belgium is a party to the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards (Official Journal 15 November 1975, 14410), as well as to a number of bilateral treaties. There is the bilateral treaty with France of 8 July 1899 (Official Journal 30–31 July 1900), with the Netherlands of 28 March 1925 (Official Journal 27 July 1929), with Germany

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For awards rendered in Belgium, the competent court for enforcement proceedings is determined by the general rule laid down in article 1680, § 6 GWB, i.e., by reference to the place of arbitration. For foreign arbitral awards (where the place of arbitration is not a useful criterion), a cascade system is provided in article 1720, § 2 GWB: the court with territorial jurisdiction is the Court of First Instance of the seat of the court of appeal in the jurisdiction of which the person against whom the enforcement is requested has his domicile or, in the absence of a domicile, his usual place of residence or, where applicable, its registered office or, failing this, its place of business or branch office. If that person is neither domiciled in, or a resident of, Belgium, nor has its registered office, place of business or branch office in Belgium, the application is made to the Court of First Instance of the seat of the Court of Appeal in the jurisdiction of which the award is to be enforced.225 The application has to be introduced on a unilateral request. The applicant has to elect domicile in the jurisdiction of the court.226 The applicant also has to enclose with his request the original or a certified copy of the arbitral award and of the arbitration agreement.227 The Court of First Instance will ipso jure stay the application for as long as a written award signed by the arbitrators is not provided in support of the application.228 125 The Court of First Instance can render the award enforceable only if it can no longer be contested before the arbitrator(s) or if the arbitrators have declared it to be provisionally enforceable notwithstanding an appeal.229 124

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b) Defences against enforcement. Article 1721, § 1, a GWB establishes seven grounds that can be invoked to justify a refusal to recognize or enforce. The first one is based on the fact that 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 such indication, under the law of the country where the award was rendered. Second, the application for recognition or enforcement may be refused if 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 its case. In this case, recognition or enforcement of the arbitral award may not be refused if it is established that the irregularity had no effect on the arbitral award. Refusal is further allowed if the award deals with a dispute not contemplated by, or not falling within, the terms of the arbitration agreement, or if it contains decisions on matters beyond the scope of the arbitration agreement. If the provisions of the award on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters submitted to arbitration may be recognized or enforced. A fourth reason to refuse recognition or enforcement follows from the award not being reasoned whereas such reasons are prescribed by the rules of law applicable to the arbitral proceedings under which the award was rendered. Fifth, if the composition of the arbitral tribunal or the arbitral proceedings were not in accordance with the agreement of the parties or, failing such agreement, were not in accordance with the law of the country where the arbitration took place, the recognition of 30 June 1958 (Official Journal 18 November 1960), with Switzerland of 29 April 1959 (Official Journal 11 September 1962) and with Austria of 26 June 1959 (Official Journal 28 October 1961). On the content of these bilateral treaties, see Keutgen/Dal, L’arbitrage en droit belge et international, vol. I, 3rd ed., 2015, 534–541. 225 Article 1720, § 2 GWB. 226 Article 1720, § 3 GWB. 227 Article 1720, § 4 GWB. 228 Article 1721, § 2 GWB. 229 Article 1719, § 2 GWB.

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or enforcement of the arbitral award may be refused. With the exception of an irregularity affecting the composition of the arbitral tribunal, such irregularities may however not give rise to a refusal to recognize or enforce the arbitral award if it is established that they had no effect on the award. Refusal may also be based on the fact that the award has not yet become binding on 127 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. It follows from article 1721, § 1, a), vi) that an award which has been set aside may be refused recognition and enforcement by the Court of First Instance. In a prior publication, we argued that the French version (“Le tribunal de première instance ne refuse la reconnaissance et la déclaration exécutoire d’une sentence arbitrale, […] que dans les circonstances suivantes”) and the Dutch version (“De rechtbank van eerste aanleg weigert slechts de erkenning en uitvoerbaarverklaring van een arbitrale uitspraak, […] dan in de volgende omstandigheden”) of this provision may stir the argument that the courts must refuse the recognition and enforcement in such a case. However, we indicated that an identical discussion resulted from the different language versions of article V(1)(e) NYC, where it was indicated by leading scholars that this provisions allowed discretion to the court to still grant recognition and enforcement.230 Enforcement may, at any rate, remain possible under article IX EuC (supra B mn. 293). Lastly, if the arbitral tribunal exceeded its powers, its award may be refused.231 128 The Court of First Instance may also refuse the recognition and enforcement of the 129 award ex officio if it finds that the subject-matter of the dispute is not capable of settlement by arbitration; or that the recognition or enforcement of the award would be contrary to public policy.232 On public policy, see supra mn. 121.

5. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings. The first, second, 130 third and fifth cause for annulment do not give rise to the setting aside of the arbitral award whenever the party that invokes them has learned of the said cause in the course of the proceedings but failed to invoke it at that time.233 This rule reflects a general principle of arbitration which states that a party that, knowingly and for no legitimate reason refrains from raising, in due time, an irregularity before the arbitral tribunal is deemed to have waived its right to assert such irregularity.234 b) Preclusion due to failure to bring a setting-aside application. There is no 131 preclusion on the basis that the award debtor failed to bring a setting aside application before the courts at the seat (which is the prevailing view under article V NYC: supra B mn. 195). 230

Van den Berg, The New York Convention of 1958, 1981, 325. Article 1721, § 1, a) GWB. 232 Article 1721, § 1, b), i)– ii) GWB. 233 Article 1717, § 5 GWB. 234 Article 1679 GWB. 231

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F. International Arbitration in Brazil Bibliography: Abbud/Levy/Alves, The Brazilian Arbitration Act: A Case Law Guide, Kluwer 2020; Beraldo, Curso de Arbitragem nos termos da Lei no. 9.307/96, Editora Atlas 2014; Baptista, Arbitragem comercial e internacional, Lex Ed. 2011; Cahali, Curso de Arbitragem, 4th ed., Rev. dos Tribunais 2014; Carmona, Arbitragem e Processo, 3rd ed., Atlas 2009; Corrie, International commercial arbitration in Brazil, (2013) 35 Comp. L.Y.B. Int’l Bus. 113–158; de Oliveira, Arbitrability under the new Brazilian arbitration act: a real change?, (2017) 33 Arb. Int’l 295–316; Dill, Superior Tribunal de Justiça. Recurso Especial nº 1.698.730/SP. Ação cautelar de arresto. Bens de terceiros. Desconsideração da personalidade jurídica. Assegurar o resultado útil de vindoura sentença arbitral. Competência do juízo arbitral, (2018) 15 Rev. Bras. Arb., Issue 60, pp. 101–111; Figueira Júnior, Arbitragem, 3rd ed., Editora Forense, 2019; Gama/Teixeira, Interpretation and Application of the New York Convention in Brazil, in: Bermann, Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 149–161; Giusti/Catarucci, Brazil, in: Carter (ed.), The International Arbitration Review, 10th ed., The Law Reviews 2019, 106–114; Inglez de Souza/ de Gouvêa Leão/Rossi Machade, Brazil, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 226–274; Martins/Lemes/Carmona, Aspectos Fundamentais da lei de arbitragem, Ed. Forense 1999; Mazzonetto, Arbitragem e propriedade intelectual: aspectos estratégicos e polêmicos, Saraiva Jur 2017; Muniz/Basílio, Arbitration law of Brazil: practice and procedure, 2nd ed., Juris Publishing 2016; Nehring Netto, National Report for Brazil (2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 106, July 2019; Paes/Costa, Brazil, in: Taylor (ed.), The Dispute Resolution Review, 11th ed., The Law Reviews 2019, 23–37; Scavone Junior, Manual de Arbitragem, Mediação e Conciliação, 8th ed., Forense 2018. National Legislation: Lei de Arbitragem (Lei no. 9.307, of 23 September 1996, as amended by Lei no. 13.129, of 26 May 2015). The law is available online at http://www.planalto.gov.br/ccivil_03/leis/l9307. htm (accessed 1 August 2020). International Conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (330 UNTS 3); Inter-American Convention on International Commercial Arbitration, Panama, 13 January 1975 (1438 UNTS 245); Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, Montevideo, 8 May 1979 (1439 UNTS 87); Geneva Protocol on Arbitration Clauses, 24 September 1923 (27 LNTS 157); Las Leñas Protocol on Jurisdictional Assistance in Civil, Commercial, Labour and Administrative Matters, 27 June 1992 (2145 UNTS 397).

Contents I. Introduction ..................................................................................................... 1. Legal framework ......................................................................................... a) Domestic and foreign arbitration ...................................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration................................................. d) The territorial principle, the seat of arbitration and lex arbitri.... e) Arbitration and other ADR mechanisms (mediation) ................. 2. Guiding principles of Brazilian arbitration law................................... II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and interpretation of the arbitration agreement ............. a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses .........................................................

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F. International Arbitration in Brazil 5. The effect of the arbitration agreement and KompetenzKompetenz ................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. Arbitral proceedings................................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration without an award......................... f) Costs of the arbitration........................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police ............................... 5. Interim relief in the arbitration............................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. Control and enforcement of arbitral awards............................................ 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before state courts ...................................... a) Procedural framework (time limit, competent court, appeal) .... b) Grounds for setting aside arbitral awards: an overview............... c) Lack of jurisdiction of the arbitral tribunal .................................... d) Unlawful composition of the tribunal and other procedural irregularities............................................................................................ e) Public policy ........................................................................................... 3. Enforcing arbitral awards ......................................................................... a) Enforcement regime for domestic and foreign arbitral awards . b) Defences against enforcement of foreign arbitral awards............ aa) Incapacity to agree to arbitrate and invalidity of the arbitration agreement.................................................................... bb) Inadequate notice or opportunity to present one’s case....... cc) Award beyond the scope of the arbitration agreement......... dd) Improper composition of the tribunal and procedural errors................................................................................................. ee) Enforcement of awards that were set aside.............................. ff) Non-arbitrability of the dispute.................................................. gg) Public policy.................................................................................... c) Fulfilment, set-off and similar defences........................................... 4. Preclusion of grounds for challenge and defences to enforcement V. Investment Arbitration in Brazil .................................................................

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I. Introduction Over the past few years, Brazil has emerged as a leading jurisdiction in arbitration. Statistics from the ICC show a steady increase in the use of arbitration in disputes involving Brazilian parties, an increase in the number of Brazilian arbitrators and cases for which Brazil is the seat of arbitration. In 2017, Brazil jumped to 7th place in worldwide case rankings after an ICC case management team was established in São Paulo1 and, in 2018, entered the top five countries with parties represented in arbitration and occupied the 3rd place worldwide on newly registered cases2. 2 Following an initial period of hostility towards arbitration when the conformity of Arbitration Act with the Federal Constitution was challenged and later confirmed by the Brazilian Supreme Court3, the growing importance of arbitration in Brazil may certainly be explained by many factors: the lengthy proceedings in state courts, together with the economic growth of the last few decades, a friendly Arbitration Act and case law may certainly be named as some of the key factors. 3 Despite these developments, in 2015, 19 years after the entering into force of the Lei de Arbitragem (Lei no. 9.307, of 23 September 1996), the Brazilian Arbitration Act, Brazil has reviewed its legal framework for arbitration. The amendment to the Arbitration Act4 entered into force on 27 July 2015 and deals with important aspects, such as the participation of public entities in arbitration, injunctions and interim measures, selection of arbitrators and arbitrability of corporate and employment matters and includes some significant changes aimed at strengthening and fine-tuning the use of arbitration in Brazil. The Secretariat of the Superior Tribunal de Justiça recently published the 122nd edition of Jurisprudência em Teses (case law in theses), covering various areas of arbitration law.5 1

1. Legal framework 4

As mentioned, the legal framework had a considerable impact on the development of arbitration practice in Brazil. Besides being a member of the New York Convention6 and the Panama Convention,7 Brazil approved, in 1996, an Arbitration Act influenced by the New York Convention and the UNCITRAL Model Law on Commercial Arbitration and adopted, as a result, international standards for arbitration.8 Therefore, according to Brazilian arbitration law, and in very broad terms, parties can agree in

1 According to (2018) 2 ICC Dispute Resolution Bulletin 51 (60), Brazil ranks 7th on the list of countries selected as place of arbtration. 2 See https://iccwbo.org/media-wall/news-speeches/icc-arbitration-figures-reveal-new-record-casesawards-2018/ (accessed 1 August 2020). Also, recently the 2018 White & Case International Arbitration Survey (https://www.whitecase.com/sites/whitecase/files/files/download/publications/qmul-internationalarbitration-survey-2018-19.pdf, p. 10, accessed 1 August 2020), demonstrates that São Paulo occupies the eight place in the ranking of the most in-demand places for arbitration in the world. 3 The Supreme Court, on the appeal SE 5206, of 12 December 2001, confirmed that the Arbitration Act does not infringe the Brazilian Federal Constitution. 4 Lei no. 13.129, of 26 May 2015. 5 Available online at https://scon.stj.jus.br/SCON/jt/toc.jsp (accessed 1 August 2020). 6 With the enactment of Decree No 4311, of 23 July 2002. 7 Presidential Decree No 1.902, of 9 May 1996. 8 Law 9.307/96 brought several relevant changes, including, for example, the end to the need of having domestic arbitration awards confirmed before state courts and the recognition of the enforceability of arbitral clauses.

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writing to submit existing or future disputes to arbitration,9 to be decided in the time and procedural frame agreed.10 The arbitral award can only be set aside in limited circumstances11 and is enforceable like a state court judgment.12 Furthermore, Brazil is also a party to the Inter-American Convention on Extraterritor- 5 ial Validity of Foreign Judgments and Arbitral Awards (the Montevideo Convention), as well as the Geneva Protocol of 1923 on arbitration clauses.13 The recognition of foreign arbitral awards rendered in MERCOSUR member states (Brazil, Argentina, Uruguay and Paraguay) is regulated by the Protocol on Jurisdictional Assistance in Civil, Commercial, Labour and Administrative Matters, also known as the Las Leñas Protocol. a) Domestic and foreign arbitration. The criterion for deciding whether an award is 6 domestic or foreign is the place where the award has been rendered. If the award has been rendered outside Brazil, it will be considered a foreign award.14 Unlike article 1(1) ML, Brazilian arbitration law does not make a structural distinc- 7 tion between domestic arbitrations and international arbitration proceedings. Nevertheless, and differently from domestic awards, foreign arbitral awards need to be recognized by the Superior Court of Justice15 in order to be enforceable in Brazil. b) Commercial and non-commercial arbitration. Under Brazilian Law, arbitration is 8 not limited to commercial disputes and can be used for a variety of disputes as long as it is related to economic disposable rights.16 Most arbitral proceedings in Brazil arise from constructions contracts, corporate disputes, energy and insurance contracts and contractual disputes in general. Since Brazil has not signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”), even arbitrations where the state is one of the parties, will usually follow commercial standards17. Nevertheless, in some cases, Brazilian law establishes specific requirements and limitations. That is the case, for example, of contracts of adhesion18 in which, according to Brazilian law, the arbitration clause shall not be deemed to be enforceable unless the adhering party is the one initiating the arbitration proceedings or expressly agrees in writing to submit an already existing dispute to arbitration. c) Ad hoc and institutional arbitration. Brazilian arbitration law allows for institu- 9 tional and ad hoc arbitration alike. Brazil has several arbitral institutions and almost all make available tested arbitration clauses that parties can include in their contracts. One of the oldest arbitral institutions is the Centre for Arbitration and Mediation of the 9

Articles 3, 4 and 9 LA. Articles 10 and 11 LA. 11 Articles 32 and 33 LA. 12 Articles 31, 34 and 35 LA. 13 However, according to article VII(2) NYC, the Geneva protocol ceases to have effect between Convention states. 14 Article 34, sole paragraph, LA. 15 Article 35 LA. 16 Article 1 LA. 17 Monteiro/Fichtner/Mannheimer, Is Brazil an Arbitration-Friendly Jurisdiction, Kluwer Arbitration Blog, 6 January 2019, http://arbitrationblog.kluwerarbitration.com/2019/01/06/is-brazil-an-arbitrationfriendly-jurisdiction/ (accessed 1 August 2020). 18 Cf. article 4 § 2 LA. See also STJ, REsp 1.602.076-SP (2016/0134010–1), DJe 30 September 2016. Article 51, item VII of the Consumer Protection Act, establishes that any clauses in a consumer agreement providing for arbitration as a compulsory means of dispute resolution are null and void. According to the Superior Court of Justice, the validity of the arbitration agreement is conditioned to the effective agreement by the consumer when the dispute between the parties starts. Therefore, if the consumer initiates proceedings with a state court that shall constitute a rejection to the arbitral tribunal jurisdiction (STJ, AgInt no AREsp 1.192.648 – GO (2017/0274999–3), DJe 4 December 2018). 10

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Chamber of Commerce Brazil-Canada.19 Founded in 1979, the centre has a trusted reputation and handles dozens of cases a year. Since 2017, ICC expanded its operations in Brazil, with the establishment of a case management team in São Paulo, responsible for the administration of Brazilian domestic cases or cases which have a strong connection with Brazil.20 d) The territorial principle, the seat of arbitration and lex arbitri. In principle, Brazilian arbitration law only applies to arbitrations where the seat of arbitration is located in Brazil (territoriality principle). The place where the arbitral award is to be rendered is of paramount importance, as it will not only determine if the award is to be considered domestic (if the award is rendered in Brazil) or foreign (if the award is rendered elsewhere), with the consequent different requisites for enforcement in Brazil,21 but also determines any mandatory procedural rules applying to the arbitration proceeding and will give jurisdiction to the state courts for decisions in support of the arbitration (e. g., appointing arbitrators, setting aside proceedings). Given this relevance, Brazilian law establishes that the place where the arbitral award is to be rendered needs to be referred to in the separate agreement to arbitrate (compromisso arbitral). Otherwise, the arbitral award may be set aside later.22 11 It should be mentioned that the choice of the seat of arbitration does not determine the place where the hearing will effectively take place, which, according to Brazilian law, may be agreed by the parties in the separate agreement to arbitrate or decided by the arbitral tribunal.23 10

e) Arbitration and other ADR mechanisms (mediation). Apart from the Arbitration Act and some rules in the Brazilian Civil Procedure Code24 addressing conciliation during judicial proceedings, there was until recently no special set of rules regarding other alternative dispute resolution mechanisms. Nevertheless, enhancing these alternative mechanisms has been an assumed political concern and objective for the last few years.25 With this in view, a new law was enacted (Lei no. 13.140, of 26 June 2015), which entered into force on 26 December 2015, establishing a Judicial and Extrajudicial Mediation Law, i. e., mediation conducted both in- and outside the auspices of state courts, whether through ADR centres or ad hoc. 13 This law regulates the use of mediation between private parties but also between private and public entities and defines mediation as the process conducted by an impartial third party and aimed at helping the parties identify or develop consensual solutions. In very broad terms, the mediation law establishes the basic principles of the mediation proceedings (e. g. impartiality of the mediator, orality, informality, autonomy of the parties, confidentiality), whilst also determining that mediators need to follow a 12

19 Centro de Arbitragem e Mediação da Câmara de Comércio Brasil-Canadá, in http://www.ccbc.org.br (accessed 1 August 2020). 20 ICC, “ICC Court announces new operations in Brazil”, 4 May 2017, available at https://iccwbo.org/ media-wall/news-speeches/icc-court-announces-new-operations-brazil/ (accessed 1 August 2020). 21 See infra mns 80 et seq. 22 Cf. articles 32, I and 33 LA. 23 Cf. article 11, I LA and STJ, 20 November 2017, SEC 16.016 – FR(2016/0222227–6), Winterthur Gas & Diesel AG v. Nuclébras Equipamentos Pesados SA, YCA XLIV (2019) 467. 24 Cf., for example, articles 277 § 1º, 331 § 1º, 447 to 449 CPC. A new CPC has recently been enacted (approved by Lei no. 13.105, of 16 March 2015) and will enter into force in March 2016. The new CPC deals specifically with mediation in articles 3 § 3, 169 to 175, 250 and 335. 25 Cf. Resolution of the National Commission of Justice no 125 of 29 November 2010, as amended by the First Amendment of 31 January 2013, regarding the national judicial policy for the proper handling of conflicts within the judiciary, pointing conciliation and mediation as tools of pacification of society but also as a filter for lawsuits, in www.cnj.jus.br.

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special code of conduct and that the parties can be assisted by lawyers. Conciliation and dispute boards are nowadays also turning into important alternatives for dispute resolution in Brazil. Dispute adjudication boards and dispute review boards seem to be increasing, particularly in major infrastructure and civil construction projects.26

2. Guiding principles of Brazilian arbitration law Arbitration is grounded primarily in the principle of party autonomy. Given the 14 fundamental right of access to justice before state courts foreseen in the Brazilian Federal Constitution,27 arbitration is deemed to be admissible for as long as it is freely chosen by parties28 who are also free to dispose of their patrimonial rights.29 Thus, any legally capable parties are free to submit themselves to arbitration disputes in relation to their disposable patrimonial rights by entering into an arbitration agreement, as well as to decide on the choice of the arbitrator, the applicable law (for as long as it is not contrary to public policy and morality), the place of arbitration and procedural rules. Nevertheless, and although parties can choose the procedural rules applicable to the 15 arbitration proceedings,30 the proceedings must comply with the principle of due process of law, which comprises the parties’ right to equal treatment,31 the right to be heard and to defend one’s rights,32 impartiality and independence of the arbitrators33 – all specifically foreseen in the Arbitration Act.34

II. The arbitration agreement Arbitration agreements are the matrix of arbitration. In other words, arbitration 16 agreements are the way in which the parties select the arbitral jurisdiction. When well defined, the agreements are expected to allow for the arbitration procedure to run its normal course in an effective way. Given that without a valid agreement an award can be set aside and its enforcement refused,35 the relevance of the arbitration agreement is unquestionable. Arbitration agreements refer to arbitration clauses (“cláusula compromissória”, con- 17 sisting in pre-dispute clauses inserted in an agreement, according to which parties agree to submit future disputes to arbitration), as well as separate agreements to arbitrate (“compromisso arbitral”, agreement according to which the parties agree to submit a current dispute to arbitration).36 Furthermore, Brazilian Law also distinguishes between “empty arbitration clauses” 18 (open or vague clauses that fail to provide the details referring to the applicable arbitration rules) and “full arbitration clauses”37 (detailed clauses that already contain 26 Giusti/Catarucci, in Carter (ed.), Arbitration Review, 10th ed., 2019, 106 (114); Paes/Costa, in: Taylor (ed.), Dispute Resolution Review, 11th ed., 2019, 23 (37). 27 Article 5.º, XXXV CF. 28 Article 93.º, IX, and 131 CPC (Article 42 of the new CPC). 29 The Supreme Court, on the appeal SE 5206, of 12 December 2001, confirmed that Arbitration Law does not infringe the Brazilian Federal Constitution. 30 Article 21 LA. 31 Article 5., caput and I CF. 32 Article 5.º, LV, CF. 33 Article 5.º, XXXVII e LIII CF. 34 Article 21 n. 2 LA. 35 Article 32, I LA. 36 Articles 3, 4 and 9 LA. See also STJ, SEC 1.210/GB, published on DJ, 6 August 2007. 37 Article 5 LA.

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all the elements necessary to initiate an arbitration). In both types of arbitration clauses, there is an obligation to arbitrate and, in both cases, state courts should decline jurisdiction. Nevertheless, considering the vague and incomplete nature of empty arbitration clauses, Brazilian arbitration law requires parties to also agree in a separate agreement to arbitrate – one detailing the procedural rules, choice of arbitrators and specifying the dispute and the place of arbitration – whenever they wish to initiate an arbitration and the contract contains such arbitration clauses.38 In this case, if one of the parties refuses to agree on a separate agreement to arbitrate, the Law determines that the other party may resort to state courts, initiating the specific proceedings foreseen in article 7 LA.39 The state court will then try to conciliate both parties, and failure to do so will entitle the judge to decide upon the terms of the agreement to arbitrate. Furthermore, Brazilian law also determines that if, once the arbitration proceedings have been initiated, the tribunal finds that there are some aspects of the arbitration clause that need to be clarified, an addendum should be executed between the tribunal and the parties which will then form part of the arbitration agreement (article 19 § 2 LA).

1. The doctrine of separability 19

Even when included in an agreement, the arbitration agreement maintains its autonomy from the main contract (doctrine of separability).40 Thus, it is fair to say that there are, in fact, two different contracts: the main contract, where the parties agree on their main rights and obligations, and the arbitration agreement, where the parties agree to arbitrate their disputes arising in relation to the main contract. As a result of the autonomy between the two contracts, the termination or the nullity of the main contract does not necessarily lead to the termination or nullity of the arbitration clause. Ultimately, it is up to the arbitrators to decide on the existence, validity and enforceability of the arbitral clause41 and the main contract.42

2. The law applicable to the arbitration agreement 20

One issue that arises from the separability of the arbitration agreement from the main contract is the law to be applicable by the arbitrators when deciding upon the existence, validity and enforceability of the arbitral clause, particularly when the parties have not agreed in that regard. In what regards the validity of the agreement itself, and, again, in case the parties have not subjected the validity of the agreement to a specific law, the applicable law will be the law of country where the award was made.43

38

Articles 6, sole paragraph and 9 LA. Articles 6 and 7 LA. 40 Article 8 LA, sole paragraph. 41 Article 8 LA. Also see STJ, 29 November 2017, SEC 16208 – EX (2016/0281131–9), Ecodiesel Colombia S/A v. Dedini S/A Indústrias de Base, YCA XLIV (2019) 470 which appears to imply a certain deference of state courts at the stage of recognition of a foreign award, to the arbitral tribunal’s decision on jurisdiction: “No que concerne a alegação da requerida de que não foi demonstrado o esgotamento dos meios amigáveis de solução do conflito (conforme previsto contratualmente), o que conduziria ao reconhecimento da incompetência do Tribunal Arbitral, sobreleva consignar que esta Corte Superior possui entendimento assente no sentido de que as questões referentes a existência, a validade e a eficácia da clausula compromissória deverão ser apreciadas pelos próprios árbitros (kompetenz-kompetenz), a teor do que dispõem os arts 8°, parágrafo único, e 20 da Lei 9.307/96, e não pelo STJ na atual fase processual.” 42 Jurisprudência em teses (supra fn. 5), para. 3. 43 Article V, 1.º, a) NYC and article 38, II LA. 39

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3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. Under Brazilian arbitration law, 21 the capacity to conclude arbitration agreements is equivalent to the capacity to enter into binding agreements.44 According to the New York Convention, to which Brazil is a party, recognition and enforcement of an award may be refused if the parties to the arbitration agreement were under some incapacity, according to the law applicable to them45 (in Brazil, the law of their domicile or habitual residence – “lex domicilii”).46 There are not many statutory limitations to the capacity to execute arbitration agreements. By way of example, and contrarily to many jurisdictions, under Brazilian law public companies47 and public law entities48 can enter into arbitration agreements.49 b) Arbitrability. Disputes related to patrimonial rights over which parties may 22 dispose can be resolved by arbitration.50 This means that although the criterion adopted by Brazilian arbitration law is very broad and comprehensive, disputes related to, for example, criminal and antitrust matters are generally excluded. One topic that is worth mentioning is employment law disputes. Whilst it is clear that disputes related to collective bargaining agreements can be submitted to arbitration,51 the use of arbitration for disputes arising out of an individual employment agreement have been subject to much debate, with dissenting opinions from both legal writers and state courts.52 Nevertheless, despite these discussions, in 2017, Lei no. 13.467/2017 was approved, amending articles 444 and 507-A of Labour Law (Consolidação das Leis do Trabalho), allowing arbitration in relation to some individual employment agreements (relating to senior employees holding an university degree and earning a monthly wage of approximately US$ 3,500). Also, recently the Superior Court of Justice confirmed the jurisdiction of arbitral tribunals to decide issues in the context of insolvency proceedings, in particular relating to shareholders’ rights relating to a capital increase of a company which, when the dispute emerged, was under reorganization.53 c) Form of the arbitration agreement. According to Brazilian arbitration law, the 23 arbitration clause needs to be in writing and may be included in the contract itself or in 44

Article 1 LA. Article V, 1.º, a) NYC. 46 Article 7º Lei de Introdução às Normas do Direito Brasileiro. 47 Article 1 § 1 and 2 LA; article 173, § 1, II, of CF and article 41 CC. 48 Article 1 § 1 LA. See also STJ, AgInt no CC 156.133-BA (2017/0334832–7), DJe 21 September 2018. Nevertheless, according to article 2 § 3 LA, arbitrations involving public entities cannot be decided ex aequo et bono and are subject to public disclosure rules. Also, if the arbitration involves state entities, the application of Brazilian law is mandatory (Monteiro/Fichtner/Mannheimer, Kluwer Arbitration Blog, 6 January 2019, supra fn. 17). 49 Cf. Jurisprudência em teses (supra fn. 5), para. 13. 50 Article 1 LA. 51 Article 114, § 1 CF establishes that “if collective negotiations are unsuccessful, the parties may elect arbitrators”. See also articles 3 and 7 of Law 7.7783/1989 (arbitration of disputes related to labour strike) and article 4 of Law 10.101/2000 (arbitration for disputes related to the participation in company profits). 52 By way of example, in favour of the use of arbitration, see STJ, 778.154/BA, DJ 24 October 2005; TST, 1650/1999-003-15-00.3, DJ 30 September 2005; TST, 1475/2000.193-05-00, DJ 29 May 2009 against, see TST, RR 795/2006-028-05-00.8 and TST, 79500-61.2006.5.05.0028. 53 STJ, CC 157.099-RJ (2018/0051390–6), DJe 30 October 2018. This decision was rendered within the context of the Oi Group’s reorganization proceedings, and may affect not only the company’s restructuring plan, which includes thousands of creditors, but also other restructuring proceedings as well. Nevertheless, it was at stake an arbitration agreement included on the by-laws of the company according to which all and any disputes related with provisions of Brazilian corporate law or the company’s bylaws shall be resolved through arbitration, including the questions related with increases on the company’s capital. 45

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a separate document referring thereto.54 On this regard it should also be mentioned that letters or faxes exchanged between the parties will also suffice, as foreseen in the New York Convention to which Brazil is also a party.55 It should also be mentioned that there is some case law from the Superior Court of Justice admitting non-written arbitration clauses to be valid for as long as there are other elements proving that the parties have agreed to submit a dispute to arbitration.56 24 In what concerns the separate agreement to arbitrate, its formal requisites may differ, depending on the situation. Accordingly, if the dispute is already being heard by a state court when the parties agree to submit the dispute to arbitration, the agreement to arbitrate will be registered in the court records.57 Differently, if the parties opt to enter into a separate agreement to arbitrate before initiating judicial proceedings, then they must do so by a private written deed, executed by two witnesses or by notarial act.58 25 In any case, the agreement to arbitrate has to specify (i) the name, profession, marital status and domicile of both parties; (ii) the name, profession and domicile of the arbitrator or arbitrators, or, if applicable, the organization chosen to appoint arbitrators; and (iii) the place where the arbitral award will be rendered.59 Furthermore, there are special requirements for adhesion contracts. According to Brazilian law, in those contracts, the arbitration clause will only be effective if the adhering party is initiating the arbitral proceedings or if it expressly agrees to arbitration in writing in a separate document; or, if in the same document as the contract, the clause is in bold and requires autonomous and express consent by the adhering party.60 The possibility and requisites for including arbitration clauses in contracts of adhesion is a very debated subject and, accordingly, case law is abundant but not yet solid.61 26

d) Termination of the arbitration agreement. The most obvious way for an arbitration agreement to be terminated is by agreement of both parties. Brazilian law foresees, nevertheless, other situations that may lead to the termination of the arbitration agreement: According to Brazilian law, an arbitration agreement62 can terminate if the arbitrator excuses himself/herself prior to accepting the appointment, dies or becomes unable to render his decision and the parties expressly declare not to accept the replacement of the arbitrators appointed.63 Furthermore, the arbitration agreement will also terminate if, upon expiration of the time established for rendering the arbitral

Article 4 § 1 LA. Article II NYC. Nevertheless, against the possibility of an arbitration agreement being validly accepted by exchange of faxes with no signature of the other party nor any evidence of his/her accepting arbitration, see STJ, SEC 866, Rel. Min. Felix Fisher, DJ 16 October 2006. 56 See, for example, STJ, SEC 4.415, DJe 19 August 2010 and SEC 856, DJ 27 May 2005. It is nevertheless important to note that the Superior Court of Justice has already refused the homologation of a foreign award since there was no written clause subscribed by both parties (STJ, SEC 11.593 (2014/ 0148674–1), DJe 18 December 2015, Biglift Shipping BV v. Transdata Transportes Ltda, YCA XLI (2016), 418). 57 Article 9 § 1 LA. 58 Article 9 § 2 LA. 59 Article 10 LA. 60 Article 4 § 2 LA. STJ, REsp 1.602.076 – SP (2016/0134010–1), DJe 30 September 2016. The judge considered franchising contracts as adhesion contracts subject to the same two requirements. 61 By way of example, see TJSP, 9145778-38.2006.8.26.0000, DJ 20 September 2010. STJ, REsp 1.628.819 – MG (2016/0255310–1), DJe 15 March 2018. 62 Although the Law refers to the termination of the separate agreement to arbitrate, these provisions should also apply in case the arbitration is based on an arbitration clause. Nevertheless, differently, see TJMG, 1.0024.06.206390-4/001, DJ 1 December 2006. 63 Article 12, I and II LA. 54 55

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award, the arbitrator or the President of the arbitral tribunal fail to do so within 10 days after the parties request that such award be rendered.64

4. The scope and interpretation of the arbitration agreement The arbitration agreement creates jurisdiction for the arbitral tribunal to decide 27 disputes falling under the agreement. The jurisdiction of the tribunal is of paramount importance and, without a valid agreement, an award can be set aside and will not be enforced. If drafted in a correct way, the arbitral clause should allow for the arbitral proceedings to be initiated and conducted in a regular way without causing disputes related to its enforceability or scope. With this in mind, the arbitration agreement should be clear, precise, adjusted to the parties’ expectations and capable of being performed. Unfortunately, this is not always the case. a) Personal scope of the arbitration agreement. In general, the arbitration clause is 28 only binding to signatory parties.65 Nevertheless, and despite the lack of any specific rules regarding the extension of the arbitration agreement to non-signatory parties, Brazilian case law, as well as legal authors, recognize the existence of some exceptions to this general principle. This will be the case, for example, of the merger of a company that implies the acceptance of all rights and obligations of the merging company, including the arbitral agreements.66 Legal authors also mention the case of successors,67 assignees,68 as well as the group of companies.69 Likewise, the Superior Court of Justice recently ruled that an insurance company that subrogated to the rights of its clients in an agreement which included a clause establishing that all disputes would be resolved by arbitration, was not entitled to resort to state courts.70 Recently, the Superior Court of Justice allowed for the extension of an arbitration 29 agreement to a third party that, using its controlling powers over one of the parties to the agreement, executed a contract with an arbitration clause, which ultimate goal was to harm the other party by dissipating the assets of the controlled company. According to the Court, in some cases of bad faith or fraudulent intent, the arbitral tribunal may decide to disregard the legal entity (thus concluding that there was an implicit agreement to arbitrate) in order to extend the arbitral agreement to such (bad faith) third party.71 b) Substantive scope of the arbitration agreement. The substantive scope of the 30 arbitration agreement is a matter for interpretation. For as long as the dispute relates to patrimonial and disposable rights,72 it is up to the parties to freely establish the issues to be submitted to arbitration. One aspect that should be highlighted is that Brazilian arbitration law specifically determines that in case there is a need for clarification regarding an issue addressed in the arbitration agreement, the arbitral tribunal and the

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Article 11, item III and 12, III LA. TJSP 0214068-16.2010.8.26.01000 and TJRJ, 0329761-15-2011.8.19.0001. 66 STJ, 20 August 2008, SEC 894 / UY, DJe 9 October 2008 and STJ, 3 October 2007, SEC 831 / FR, DJ 19 November 2007 p. 177. 67 Martins/Lemes/Carmona, Aspectos Fundamentais da lei de arbitragem, 1999, 220. 68 Martins/Lemes/Carmona, Aspectos fundamentais da lei de arbitragem, 1999, 220. 69 Beraldo, Curso de Arbitragem, 2014, 219–224. 70 STJ, SEC 14.930 – EX (2015/0302344–0), DJe 27 June 2019. 71 STJ, REsp 1.698.730 (2016/0146726–1), DJ 21 May 2018. This case is, nevertheless, rather controversial among scholars that consider that the possibility to extend the arbitration agreement shall be construed restrictively. See Dill, (2018) 15 Rev. Bras. Arb., Issue 60, pp. 101–111. 72 Article 1 LA. 65

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parties can prepare an addendum that, after signed by all, will incorporate the arbitration agreement and be binding for all parties.73 31 Recently, in the context of a multi-contract bank loan operation, the Superior Court of Justice ruled in favour of the extension of the arbitration agreement contained in the main contract to its ancillary contracts. The Superior Court of Justice emphasized that, insofar as the connected contracts related to the same business transaction, they had to be interpreted together. Therefore, in its ruling, the court relied upon the “centre of gravity” doctrine, which provides that the main contract establishes the legal framework within which the ancillary contracts must function74. c) Pathological arbitration clauses. In broad terms, pathological arbitration clauses can be defined as clauses that are unclear, inoperative or ambiguous, raising doubts in relation to the parties’ willingness to submit a dispute to arbitration, in relation to the circumstances in which the arbitration should take place or how it should be conducted. A common mistake is, for example, to incorrectly name the arbitral institution where arbitration is to be conducted.75 33 When faced with pathological arbitration clauses, Brazilian courts have tried to understand the parties’ real intention when agreeing with the clause, adopting a policy favouring the enforcement of arbitration agreements.76 It should, however, be noted that in a decision issued in 2016, the Superior Court of Justice admitted that pathological clauses may work as an exception to the general rule set forth by the competencecompetence principle, described in detailed below. According to the court, this exception helped “better accommodating the principle of competence-competence in situation close to the limits of the general rule of arbitral priority”. The Superior Court of Justice also ruled that state courts may, in cases where the arbitration clause is prima facie pathological, i.e., clearly illegal, declare the nullity of such clause, irrespective of the state of the arbitral procedure.77 This decision goes against previous understandings by this court where it was recognized that arbitrators should decide first on any issues that might affect the validity of the arbitration clause,78 particularly when the Supreme Court considers that the courts can interfere even with ongoing arbitral proceedings. 32

Article 19 § 1 LA. STJ, REsp 1.639.035 – SP (2015/0257748–2), DJe 15 October 2018. For some, the Supreme Court adopted the most reasonable interpretation: it confirms the existence of parties’ intent to be bound by the same dispute resolution mechanism under all contracts of the group ensuring that the same body had jurisdiction to decide over the loan and its respective guarantees. However, some argue this decision ignores the fact that the dependency or connection between particular contracts is not what justifies the extension of the arbitration agreement but is a merely a strong indication of parties’ consent to arbitrate disputes (Leites, “To ‘Extend’ or Not to ‘Extend’? An Analysis of the Brazilian Superior Court of Justice’s Judgement in REsp. 1.639.035 – SP”, Kluwer Arbitration Blog, 23 November 2018, http://arbitrationblog. kluwerarbitration.com/2018/11/23/extensionofarbitrationagreementsbrazil/ (accessed 1 August 2020)). 75 TJSP, 0014578-23.2004.8.26.0100. 76 This principle follows from article 122 CC that establishes that intention shall prevail over the literal sense of a statement. According to the Supreme Court, the existence of different alternatives, such as mediation, does not make the arbitration agreement null and does not stop the party from requiring the use of arbitration as the party’s autonomy shall always prevail (STJ, REsp 1.331.100/BA (2012/ 0100301–4), DJe 22 February 2016). 77 STJ, REsp 1.602.076-SP (2016/0134010–1), DJe 30 September 2016. 78 In STJ, REsp 1.355.831-SP (2012/0174382–7), DJe 22 April 2013, the Supreme Court held that the allegation that an arbitration clause is null should be first submitted to the arbitral tribunal. It is not possible for a party to request to the courts the annulment of the arbitration clause before the formation of the arbitral tribunal as it is not admissible the premature involvement of the courts in this matter. See also Fleury, Brazil’s STJ Frames Franchising Agreements as “Adhesion Contracts” and Admits Prima Facie Pathological Clauses as Exception to the Competence-Competence Principle, Kluwer Arbitration Blog, 6 December 2016, http://arbitrationblog.kluwerarbitration.com/2016/12/06/brazils-stj-frames-franchis73 74

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5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) Enforcing arbitration clauses and Kompetenz-Kompetenz. Brazilian law recog- 34 nizes the principle of Kompetenz-Kompetenz by ensuring that the arbitrators are competent to decide disputes relating to “the existence, validity and effectiveness of the arbitration agreement, as well as the contract containing the arbitration clause”.79 On that basis, the arbitral tribunal has priority to rule on its own jurisdiction, and accordingly, prior to arbitral proceedings, Brazilian courts would only conduct a limited review of an arbitration agreement.80 However, in exceptional situations, state courts may declare an arbitration clause null and void when it is clearly illegal.81 A party wishing to raise issues as to the jurisdiction or the nullity, invalidity or ineffectiveness of the arbitration agreement, must do so at the first possible opportunity after the commencement of the arbitral proceedings.82 If the lack of jurisdiction of the arbitrator or the arbitral tribunal, or if the nullity, invalidity or ineffectiveness of the arbitration agreement is confirmed, the parties can then turn to the state court to decide the dispute.83 On the other hand, if the motion is not granted, the arbitral proceedings will then proceed normally, regardless of the possibility that such decision may be reviewed by the competent state court in proceedings initiated to set aside the award.84 Thus, although the arbitral tribunal is primarily competent to decide on its own 35 competence, its decision may be reviewed by state courts in case a party initiates the relevant proceedings to set aside the award with that same ground. Brazilian courts have generally followed these principles and many judicial precedents confirm such practice.85 It is important to note that since 2013, the Superior Court of Justice has extended its jurisdiction to conflicts of jurisdiction (“conflitos de competência”) between judges/courts and arbitrators/arbitral tribunals, although article 105(1)(d) of the Brazilian Constitution does not mention arbitration.86 Conflicts of jurisdiction happen when a state judge declares the invalidity of an arbitration agreement while an arbitral tribunal confirms its jurisdiction over the same case. The majority of legal scholars criticise this position, arguing that these conflicts work as a wrongful exception to the kompetenz-kompetenz rule as, in the end, the jurisdictional challenges are decided by the Superior Court of Justice, a state court.87 Despite this position, the Supreme Court’s case law has been broadly favourable to arbitration, confirming the jurisdiction of arbitral tribunals in nearly all cases.

ing-agreements-as-adhesion-contracts-and-admits-prima-facie-pathological-clauses-as-exception-to-thecompetence-competence-principle/ (accessed 1 August 2020). 79 Article 8 LA. STJ, REsp 1.656.643 – RJ (2015/0243634–0), DJe 12 April 2019. STJ¸ REsp 1.614.070 – SP (2016/0186006–8), DJe 29 June 2018. 80 Gama/Teixeira, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 149 (153). 81 Jurisprudência em teses (supra fn. 5), para. 4. 82 Article 20 LA. 83 Article 20 § 1 LA. 84 Article 20 § 2 and 33 LA. 85 By way of example, TJSP, 0037936-45.2012.8.26.0000, DJe 5 July 2012; STJ, 14.295-SP (2013/ 0303459-8), 2 September 2013; STJ, 1.278.852/MG, DJe 19 June 2013. 86 STJ, CC 150.830 – PA (2017/0024975-1), DJe 16 October 2018; STJ, CC 111.230 – DF (2010/ 0058736-6), DJe 03 April 2014; STJ, AgInt no CC 153.498 – RJ (2017/0181737-7), DJe 14 June 2018; STJ, CC 139.519 – RJ (2015/0076635-2), DJe 10 November 2017; STJ, CC 146.939 – PA (2016/0145422-2), DJe 30 November 2016. 87 Monteiro, The Kompetenz-Kompetenz Rule in Brazilian Arbitration Law, Kluwer Arbitration Blog, 29 May 2019, http://arbitrationblog.kluwerarbitration.com/2019/05/29/the-kompetenz-kompetenz-rulein-brazilian-arbitration-law/ (accessed 1 August 2020).

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b) Preclusion of jurisdictional defences. State courts cannot decide ex officio on the existence of an arbitration agreement and it is up to the parties to raise that defence when faced with judicial proceedings initiated before state courts in breach of an arbitration agreement.88 Failure to do so in the statements of defence may prevent the interested party to later raise a jurisdictional objection.89 In this case, it would be as if both parties had agreed to have the dispute heard by state courts.90

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c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. In case the defendant raises a successful jurisdictional objection in its statements of defence, the state court should then end the proceedings without analysing the merits of the case or the validity of the arbitration agreement.91 For that reason, and given that there is no effective decision on the merits, there is no binding effect on the jurisdiction or validity of the arbitral agreement, and parties can then raise any objection they have on those points before the arbitral tribunal.

III. The arbitral tribunal and the conduct of the arbitral proceedings 38

Although there are a few rules in the Brazilian Arbitration Act addressing specific issues of the arbitral proceedings, parties have almost full autonomy to determine which rules will be applicable. Nevertheless, there are some mandatory provisions regarding not only the arbitrators’ conduct but also the principles that should guide the proceedings (see infra mns 49–50).

1. The arbitral tribunal, impartiality and independence of the arbitrator 39

Any legally capable individual, trusted by the parties, may act as an arbitrator.92 The parties shall indicate one or more arbitrators, but necessarily in odd number, being also able to indicate their substitutes.93 The Arbitration Act specifically addresses the possibility of the parties indicating an even number of arbitrators, allowing the appointed arbitrators to nominate another arbitrator. If the arbitrators fail to reach an agreement to indicate another arbitrator, the parties may then request that such arbitrator be appointed by the state court originally competent to decide the case.94 As regards the rules to indicate the arbitrators, Brazilian arbitration law specifically determines that those may be defined, by mutual agreement, by the parties who may Article 337, X, and § 5 of the CPC. TJMG, 1.0027.04.005585-0/001, DJe 9 August 2011. On 22 September 2016, the Court of Jundiaí – São Paulo (1st instance), allowed for the jurisdictional arguments to be presented before the filing of the defence by the defendant. According to some authors, raising a jurisdictional argument with the defence is not effective as it means that the defendant will have to bear all costs involved in producing a merits defence and be placed in a position of having to reveal its arguments to its opponent before knowing if the Court will decide the dispute (see Hirst/Fernandes, Brazilian Court Dismisses Claim on Grounds of the Existence of an Arbitration Agreement under the New Brazilian Civil Procedure Code, Kluwer Arbitration Blog, 24 November 2016, http://arbitrationblog.kluwerarbitration.com/2016/11/24/brazilian-court-dismisses-claim-on-grounds-of-the-existence-of-an-arbitration-agreement-under-the-new-brazilian-civilprocedure-code/ (accessed 1 August 2020). 90 TJSP, 0225451-25.2009.8.26.0100, DJe 6 February 2013, a case where the Courts have decided that parties had implicitly rejected the arbitral jurisdiction as they both initiated judicial proceedings before state courts. 91 STJ, 712.566/RJ, DJ 5 September 2005; STJ, REsp 612.439 / RS, DJ 14 September 2006; TJSP, 9194361-49.2009.8.26.0000, DJe 5 October 2012; TJSP, 9036759-73.2001.8.26.0000, DJ 23 June 2008. 92 Article 13 LA. 93 Article 13 § 1 LA. 94 Article 13 § 2 LA. 88 89

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also elect to adopt the rules of an arbitral institution or specialized entity.95 It will be up to the arbitrators to select the President of the arbitral tribunal by majority vote. If no consensus is reached, the choice will fall on the eldest member of the tribunal.96 The characteristics and conduct expected from arbitrators is expressly foreseen in the 40 Arbitration Act, which establishes that in performing their duties arbitrators must behave in an impartial, independent, competent, diligent and discrete way.97 Disregard of these requirements may lead to severe consequences. In fact, lack of impartiality and independence may justify refusing an arbitrator,98 lead to the setting aside of the award,99 and ultimately entitle the parties to ask for damages. a) Duty to disclose. In order to ensure impartiality and independence, Brazilian law 41 determines that the same duties and responsibilities imposed on court members by the Civil Procedure Code100 are also applicable to arbitrators. Therefore, in case of proximity with the parties, the lawyers or the dispute itself, the arbitrator will be prevented to act in the arbitral proceedings. Brazilian Law also foresees a duty to disclose any facts likely to give rise to justified 42 doubts as to the arbitrator’s impartiality and independence.101 Thus, arbitrators are obliged to disclose, before accepting to act as such, any circumstances that may raise any questions as to their impartiality and independence. Further, it is worth mentioning that this duty to disclose exists throughout the proceedings and, for that reason, if any facts subject to disclosure occur after the arbitrator has accepted to act as such, they should still be revealed to the parties. b) Grounds for challenge. In case a fact occurs after the arbitrator appointment that 43 may be sufficient to question the arbitrator’s impartiality or independence, parties can also challenge the arbitrator.102 As for facts that occur before the arbitrator’s appointment, parties have a duty to evaluate the adequacy of an arbitrator prior to the appointment and, for that reason, in those circumstances, the arbitrator may only be challenged if he/she is not appointed directly by a party or if the reason for the challenge of the arbitrator becomes known only after his/her appointment.103 c) Procedural aspects and preclusion of grounds for challenge. If a party intends to 44 challenge the arbitrator, the challenge must be brought before the arbitrator or the Article 13 § 3 LA. Article 13 § 4 LA. 97 Article 13 § 6 LA. 98 Articles 14 and 15 LA. 99 Articles 32, VIII and 21 § 2 LA. 100 Articles 144 and 145 of the Civil Procedure Code, according to which it is forbidden to the judge to act in proceedings to which he/she is a party; in which he/she acted for the parties, was involved as an expert, acted for the prosecutors or testified as a witness; decided at another instance level; in which one of the parties, the Public Defensor, the attorney representing one of the parties or the member of the Public Prosecutor is his/her spouse or any relative by blood or affinity; or if the judge is administrator/ director of a company acting as one of the parties; if the judge is heir, donor or employer of any of the parties; if one of the parties is an education institution in which the judge is an employee or a provider of services; if one of the parties is client of the law firm of the judge’s spouse or other relative by blood or affinity; or if the judge has any proceedings pending against one of the parties or its lawyers. Furthermore, a suspicion of partiality may be considered grounded whenever the judge is a close friend or enemy of any party; when the party is a creditor or debtor of the judge, his/her spouse or their relatives; when he/she has received gifts before or after commencement of the proceedings; has advised any of the parties regarding the litigation or helped any party to meet the costs for litigation; or whenever the judge has an interest in the case in favour of one of the parties. 101 Article 14 § 1 LA. 102 Article 14 § 2 LA. 103 Article 14 § 2 a) and b) LA. 95 96

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President of the tribunal104 at the first opportunity after the beginning of the arbitral proceedings.105 Furthermore, the challenge needs to be motivated and the parties should file any supporting evidence available.106 45 In case the challenge is accepted, the arbitrator will then be replaced107 by the substitute arbitrator indicated in accordance to the arbitration agreement.108 If there are no substitute arbitrators indicated in the arbitration agreement, then the arbitrator will be replaced according the rules of the arbitral institution or specialized entity that may have been chosen by the parties in the arbitration clause.109 If the arbitration agreement is silent and the parties do not agree on the appointment of a substitute arbitrator, then it will be up to the state court initially competent to decide the matter, unless the parties have stated in the arbitration agreement not to accept the substitution of arbitrators. Conversely, if the challenge is not accepted, the arbitral proceedings will then proceed normally, regardless of the possibility of such decision being reviewed by the competent state court in setting aside proceedings initiated after the award is rendered.110 46

d) Failure or impossibility to act. If the arbitrator withdraws prior to accepting his/ her appointment or if, after acceptance, he/she dies or becomes unable to perform his/ her functions, the position shall be taken by the substitute member indicated in the arbitration agreement. If no substitute has been indicated, then the rules mentioned supra mn. 45 will be applicable.

2. Arbitral proceedings 47

Once again, and following the fundamental principle of parties’ autonomy, parties who choose to submit a dispute to arbitration are also free to select the rules of an arbitral institution or to agree on the procedure that will be adopted by the arbitrators.111 Accordingly, in the submission to arbitration, parties may establish the venue where the arbitral proceedings will be held, the authorization for the arbitrator or arbitrators to decide in equity, the time limit for rendering the arbitral award, the choice of the law or rules applicable to the arbitral proceedings, the provisions as to the responsibility for the fees and costs involved in the arbitral proceedings and terms regarding the fees of the arbitrator or arbitrators.112 Another possibility would be for the parties to empower the arbitral tribunal to regulate the procedure. In any case, if there are no provisions in relation to this point, it will be up to the arbitral tribunal to decide on the matter and adopt the rules it deems appropriate.

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a) The request for arbitration. Brazilian law determines that the arbitral procedure is commenced when the appointment is accepted by the sole arbitrator or by the arbitrators.113 As for the submission to arbitration, it will vary according to the circumstances and the rules applicable. As a rule, arbitral institutions have specific rules and requirements that must be adopted by the party that wishes to submit a dispute to arbitration. Frequently, there is also the need to make an advance payment to cover 104

Article 15 LA. Article 20 LA. 106 Article 15 LA. 107 Article 15, sole paragraph LA. 108 Article 16 LA. 109 Article 16 § 1 LA. 110 Article 33 LA. 111 Article 21 LA. 112 Article 11 LA. 113 Article 19 LA. 105

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costs and the Arbitration Act specifically foresees that the arbitrator may also order the parties to advance funds to cover expenses and actions deemed necessary.114 b) Equality of arms, fair trial principles and the right to be heard. Despite the 49 possibility of parties or the arbitrators themselves determining the rules applicable to the arbitration proceedings,115 some principles are mandatory and, when disregarded, may lead to the award being set aside.116 These are principles foreseen in the Federal Constitution as vital safeguards for parties litigating in any type of proceedings, whether judicial or arbitral. Thus, freedom to determine the rules applicable to the arbitration proceedings is circumscribed to the need to respect the principle of adversarial proceedings, equal treatment of the parties, impartiality of the arbitrator and freedom of decision.117 The respect for these principles can be achieved in many ways. In fact, adversarial 50 proceedings and equal treatment of the parties imply that the parties are both kept informed of actions taken by the counterparties, and that they are allowed to reply as they deem necessary, to state their reasons in a suitable way, to produce evidence and, if they so wish, to be represented by lawyers. Furthermore, impartiality of the arbitrator is also fundamental in this regard, helping to ensure the respect for the equal treatment of both parties. Lastly, the arbitrator should decide according to his/her free conviction on the evidence provided by the parties in the proceedings. c) Confidentiality. Confidentiality is often named as one of the advantages of 51 arbitration. Nevertheless, it should be highlighted that confidentiality is not established by the Arbitration Act and will only apply if the parties so agree. In any case, and even when such agreement is not reached, it is fair to say that the arbitrator’s legal obligation to act in a discrete way will contribute to maintaining some degree of confidentiality in the proceedings.118 d) The arbitral award. The award must be made in writing119 and by the majority of 52 the arbitrators.120 In case there is no majority, Brazilian law determines that the opinion of the President of the arbitral tribunal will then prevail,121 also allowing arbitrators to render a dissenting opinion if they so wish.122 The arbitral award must be reasoned; it must include a report identifying the parties, 53 as well as a summary of the dispute, the actual decision and the date and place in which the award was made.123 In case the parties are able to settle the dispute during the arbitral proceedings, they may also request the tribunal to render an award declaring that they have reached a settlement.124 In any case, the arbitral award must be signed by the sole arbitrator or by all the 54 arbitrators125 and must be rendered within the time limit specified by the parties or, subsidiary, in case the arbitration agreement is silent in this regard, the award must then be made within six months from the date of the beginning of the arbitral proceedings,

Article 13 § 7 LA. Articles 21 and 21 § 1 LA. 116 Article 32, VIII LA. 117 Article 21 § 2 LA. 118 Article 13 § 6 LA. 119 Article 24 LA. 120 Article 24 § 1 LA. 121 Article 24 § 1 LA. 122 Article 24 § 2 LA. 123 Article 26 LA. 124 Article 28 LA. 125 Article 26, sole paragraph LA. 114 115

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or from the date of the substitution of an arbitrator, as the case may be.126 Nevertheless, it should also be mentioned that the parties and the arbitrators may extend this deadline by mutual agreement.127 55 Once the award is completed, the sole arbitrator or the President of the arbitral tribunal will then send a copy of the decision to the parties.128 56

e) Termination of the arbitration without an award. Although there are no specific provisions in Brazilian law addressing this possibility, the arbitration may end without an award in case the claimant withdraws the request or if the parties agree on the termination of the arbitration proceedings.

f) Costs of the arbitration. The expenses normally involved in arbitration proceedings are the arbitrators’ fees, the attorneys’ fees and the expenses related to the arbitral institution. The responsibility for the fees and costs involved in the arbitral proceedings can be defined by the parties in the arbitration agreement.129 The responsibility for these will also be stated, together with any amounts resulting from bad faith litigation, in the arbitral award.130 58 Furthermore, the parties may also predetermine in the separate agreement to arbitrate the fees of the arbitrators;131 in that case, the agreement will be enforceable by the arbitrators.132 In case the parties are silent in this respect, the arbitrators will need to request to the state court originally competent to decide the dispute to rule upon the fees owned to the arbitrators.133 57

3. Evidence, discovery, disclosure The arbitrators’ powers under the Arbitration Act in relation to evidence production are considerably broad. In fact, the arbitral tribunal can ex officio or, at the parties’ request, take the parties’ deposition, hear witnesses and determine the production of other evidence deemed necessary.134 As already mentioned, parties are free to decide on the way in which evidence will be presented and may choose to adopt mechanisms which would otherwise be inadmissible in state courts, such as US-style disclosure proceedings. However, it should be noted that parties cannot limit the scope of the investigation powers of arbitrators, who are free to determine the production of any evidence deemed necessary. 60 Without prejudice to the possibility of parties agreeing specific rules in this regard, the Arbitration Act determines that the arbitrators’ decision to take depositions of parties and witnesses needs to be previously communicated to parties, and that a summary of the deposition will be signed by the deponent or, if he/she so requests, also by the arbitrators.135 Further, in case a party refuses to give a deposition, then the arbitral tribunal will consider such behaviour when issuing the award. Contrarily, if a witness refuses to give a deposition, the arbitrator or the President of the arbitral tribunal may request the state court to summon the defaulting witness.136 59

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Article 23 LA. Article 24 § 2 LA. 128 Article 29 LA. 129 Article 11, V LA. 130 Article 27 LA. 131 Article 11, VI LA. 132 Article 11, sole paragraph LA. 133 Article 11, sole paragraph LA. 134 Article 22 LA. 135 Article 22 § 1 LA. 136 Article 22 § 2 LA. 127

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4. The law governing the dispute and lois de police The parties can agree on the substantive law applicable to the dispute. Further from 61 being able to choose between, for example, the law of their domicile, of the place where the agreement was executed, or the law of a third country,137 parties may also allow arbitrators to decide in equity138 or to agree that the arbitration will be conducted under the general principles of law, customs, usages and international rules of trade.139 The only limitation to parties’ autonomy in this regard is good morals and public 62 policy.140 This means that the parties may freely determine which rules will be applicable to the arbitration agreement, to the arbitration proceedings and to the arbitration itself. The exact scope of the autonomy of parties specifically in domestic cases is not entirely clear but there are examples of case law adopting a considerably broad criterion in this regard.141

5. Interim relief in the arbitration a) Interim relief before state courts. Before initiating the arbitration proceedings, 63 parties can request state courts to grant interim relief, provided that, if granted, the interested party initiates arbitration in the following 30 days.142 The application for interim relief before the state courts will not affect the arbitration agreement.143 After the arbitral tribunal has been appointed and the proceedings have commenced, the role of state courts will be limited to the enforcement of injunctions determined by the arbitral tribunal.144 In addition, having been appointed, the arbitral tribunal will have jurisdiction to (i) maintain, modify or revoke an interim measure granted by state courts and (ii) grant interim measures (article 22-B LA). b) Interim relief before the arbitral tribunal. If coercive or injunctive orders become 64 necessary during the arbitration proceedings, the interested party will request the relief from the arbitrators, who will then grant or deny the request.145 In case the request is granted, the arbitrators will then defer its enforcement to state courts, if needed.146 As long as there are no procedural requirements left unfulfilled, the state courts should then enforce the relief. Courts have generally accepted and complied with these principles.147

6. Multi-party arbitration a) Arbitration agreement involving several parties. There are no specific provisions 65 in Brazilian Arbitration Law addressing arbitration agreements and proceedings invol137 Under article 2 LA, parties can choose a foreign law even where the contract is concluded and performed in Brazil: STJ, 7 June 2017, SEC 14.679 – EX(2015/0265413-8), Empresa de Investigação e Desenvolvimento de Electrônica S.A. v. INACE, YCA XLIV (2019), 460. 138 Article 2 LA. 139 Article 2 § 2 LA. 140 Article 2 § 1 LA. 141 STJ, REsp 712566 – RJ (2004/0180930-0), DJ 5 September 2005. 142 Article 806 CPC. STJ, REsp No 1.586.383 – MG (2014/0236615-2), DJe 14 December 2017. 143 Jurisprudência em teses (supra fn. 5), para. 6. 144 Article 22 § 4 LA. 145 Article 22-B LA. 146 Article 22-C LA. It should be noted that article 22-C, sole paragraph, LA, determines that in these situations, the confidentiality agreed by the parties in the arbitration proceedings should be ensured by state courts. 147 TJSP, 0130332-32.2012.8.26.0100, DJe 19 October 2012; STJ, 1.297.974/RJ, DJe 19 June 2012.

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ving several parties. Nevertheless, some regulations of arbitral institutions in Brazil address this topic.148 b) Equality of arms and appointment of the arbitrators. The appointment of arbitrators in multiparty arbitrations is a sensitive topic that in certain situations may raise problems with respect to the principle of equality of the parties. In fact, when there is more than one claimant or respondent, there is a need for coordination between them for the appointment of an arbitrator. In most cases, if claimants or respondents cannot reach an agreement, the appointment of the arbitrator will be decided by state court or, in case of institutionalized arbitrations, by the President of the arbitral institution. For this reason, it may happen that one of the parties is able to decide and appoint its arbitration of choice whilst the other side, composed of two or more claimants or respondents, is unable to agree on one arbitrator and is ultimately forced to accept an arbitrator chosen by state courts or by a third entity, like the President of the arbitral institution. 67 Brazilian Courts have addressed this issue and decided that although one might expect the arbitrator appointed by the party to be independent and impartial, there are several other aspects involving the appointment that are also relevant and that, without affecting their impartiality or independence, can decisively influence the outcome of the arbitration – such as, for example, the need to be familiar with certain very specific details of the case, rarely found in similar cases, the availability to full-time dedication or even an affinity with a certain doctrine. In any event, there seems to be a damage arising to the party unable to directly appoint the arbitrator. Thus, if the co-parties are, in fact, unable to agree on one arbitrator, there are other solutions that may be implemented apart from allowing only one party to have the advantage of being able to appoint its arbitrator. For example, the two arbitrators could be appointed by the President of the arbitral institution selected by the parties.149 66

IV. Control and enforcement of arbitral awards 68

Unless otherwise agreed by the parties, the arbitral award has the effect of a nonappealable judgment between the parties.150 It has res judicata effect and can be enforced like a state court judgment.151

1. Correction and amendment of arbitral awards 69

In some circumstances, parties can request the arbitral tribunal to correct and amend the arbitral award. Thus, an interested party can, in the five days after receiving the arbitral award, request the arbitral tribunal to correct any material error or to explain any obscurity, doubt or inconsistency of the arbitral award, or decide on an omitted point that should have been addressed.152 The arbitral tribunal shall decide within 10 days by means of an addendum to the award, which will also be communicated to 148 See for example article 3 of the Arbitration Rules of the Conciliation, Mediation and Arbitration Chamber for the Centre of the Federation of Industries of the State of São Paulo, and article 4.16 of the Arbitration Rules of the Centre for Arbitration and Mediation of the Chamber of Commerce BrazilCanada. 149 TJSP, 0002163-90.20133.8.26.0100. The judge decided that allowing only one party to be able to freely and directly choose its arbitrator constitutes an infringement of the principle of equal treatment of the parties established in article 21, § 2 LA, which entails the nullity of the arbitral award under article 32 LA. 150 Article 18 LA. 151 Article 18 LA. 152 Article 30, I and II LA.

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the parties.153 Furthermore, article 33 § 4 LA determines that in case the arbitral tribunal does not decide the whole dispute submitted to arbitration, the interested party can file an application with state courts asking for a decision on the outstanding issues.

2. Review of arbitral awards before state courts Apart from any correction made by the arbitral tribunal, awards can only be set aside 70 in very specific situations foreseen in the Arbitration Act.154 a) Procedural framework (time limit, competent court, appeal). According to 71 Brazilian law, a party may in certain cases submit to the state court an application to set aside an arbitral award. The competent court will be the court named in the arbitration agreement or, in case there is no agreements on the subject, the court of the place of residence of the respondent.155 The proceedings to set aside the arbitral award will follow the ordinary procedure provided for in the Civil Procedure Code and must be submitted within 90 days immediately following receipt of the award or its addendum.156 Furthermore, the motion requesting the nullity of the arbitral award may also be submitted under a debtor’s defence, in accordance with article 741 and following the Code of Civil Procedure, if judicial enforcement is requested.157 b) Grounds for setting aside arbitral awards: an overview. In broad terms, the 72 grounds that may justify setting aside an arbitral award can relate to the arbitration agreement, the arbitrators, the award itself or the arbitral procedure. Thus, an award may be challenged based on the nullity of the arbitration agreement itself, on the fact that the award was rendered by someone that could not be an arbitrator, on the grounds that the award was made through extortion or corruption or on the ground that arbitrators disregarded the principles of equal treatment of the parties, impartiality and independence of the arbitrators. Furthermore, an award that does not comply with the scope and limits of the 73 arbitration agreement,158 that is not reasoned, that fails to present a summary, to identify the parties, the date and place where it was made, or that does not comply with any other formal requirement specifically determined by the Law159 will also be considered null and void. The same conclusion would apply in case the award is rendered after the time limit agreed by the parties or established by law.160 The issue of whether the list of grounds foreseen in the Brazilian Arbitration Act for 74 setting aside an award is exhaustive has been the subject of much debate amongst legal writers. One of the grounds commonly pointed out as evidence that the grounds specifically mentioned by the Act are not exhaustive is public policy. Although not listed in article 32 of Brazilian Arbitration Law, and as we will see infra mns 78–79, public policy is frequently evoked to set aside awards. c) Lack of jurisdiction of the arbitral tribunal. As previously mentioned, although 75 the arbitral tribunal is primarily competent to decide on its own competence, the question may be addressed by state courts if a party initiates the relevant proceedings to set aside the award with that same ground. Thus, even if the arbitrators have decided 153

Article 30, sole paragraph LA. Article 33 LA. 155 Article 94 CPC (article 46 of the new CPC). 156 Article 33, § 1 LA. 157 Article 33, § 3 LA. 158 Article 32, IV LA. 159 Articles 26 and 32, III LA. 160 Article 32, VII LA. 154

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in favour of their own competence to decide the dispute, this decision will not be binding to state courts – which, if later asked by a party, will be able to reanalyse the validity of the arbitration agreement and competence of the tribunal. d) Unlawful composition of the tribunal and other procedural irregularities. As previously mentioned, a party wishing to raise issues as to the suspicion or impediment of an arbitrator or arbitrators must do so at the first possible opportunity after the commencement of the arbitral proceedings.161 If such challenge is not granted, parties may ask state courts to review the arbitrators’ decision in that regard in set aside proceedings initiated after the award is rendered.162 77 As for other procedural irregularities that may have an impact on the principle of due process, Brazilian courts seem to have adopted the view that, as a general rule, those irregularities will only justify the nullity of the award if, whilst being objective and clear, they also have impacted upon the decision.163 Thus, and by way of example, if a document filed by one of the parties is not notified to the other party but the arbitral tribunal then does not consider that document in the decision, such irregularity will not, as a rule, justify setting aside the award.164 76

e) Public policy. As mentioned, breach of public policy is not expressly foreseen by the Arbitration Act as one of the grounds to set aside an award. Nevertheless, some legal writers argue that despite being so, breach of public policy should also be recognized as a ground for setting aside an award, given the importance of public policy in the Arbitration Act. In this line, Brazilian arbitration law foresees public policy as a limitation to the ability of parties when choosing the rules applicable to the arbitration and also as a reason to deny enforcement of foreign arbitration awards. 79 As for the concept of public policy, although specifically addressing the case of recognition of foreign arbitral awards, the Brazilian Arbitration Act determines that the service of summons on a party resident or domiciled in Brazil, pursuant to the arbitration agreement or to the procedural law of the country in which the arbitration took place, including through mail with confirmation of receipt, will not be considered to infringe national public policy, for as long as the party is granted adequate time to exercise his/her right of defence.165 Contrarily, an award rendered in an arbitration where there is lack of proof that a party accepted to submit the dispute to arbitration may be considered to infringe public policy.166 The STJ has held that an award enforcing compound interest does not breach Brazilian public policy although compound interest is prohibited under Brazilian law, confirming that the mere contrast with the domestic legal system does not create a public policy defence.167 In Abengoa, the Sub-Attorney General stated that a public policy defence only exists where there is a “blatant breach”.168 78

161

Article 20 LA. Article 20 § 2 LA. 163 STJ, 15.231/RS, DJ 9 December 1991; STJ, 20 November 2017, SEC 16.016 – FR(2016/0222227-6), Winterthur Gas & Diesel AG v. Nuclébras Equipamentos Pesados SA, YCA XLIV (2019), 467. 164 STJ, REsp 33.200 / SP, DJ 15 May 1995. 165 Article 39, sole paragraph LA and STJ, SEC 4.213/EX, DJe 26 June 2013, Weil Brothers Cotton Inc. v. Estate of Pedro Ivo de Freitas, YCA XXXIX (2014) 361. 166 STJ, SEC 967/GB, DJ 20 March 2006 and SEC 978, DJe 5 March 2009. 167 STJ, SEC 4.024 – EX (2010/0073632-7), Keytrade AG v. Ferticitrus Indústria e Comércio de Fertilizantes Ltda, YCA XXXIX (2014) 364: “Ocorre que, não é qualquer contrariedade ao sistema jurídico local que pode implicar ofensa à ordem pública, de tal sorte que descabe ao STJ fazer análise profunda acerca do conteúdo e(ou) da justiça da decisão estrangeira quando não constatada malversação a valores fundamentais da cultura jurídica pátria”. 168 STJ, 19 April 2017, SEC 9.412, ASA Bioenergy Holding AG v. Adriano Giannetti Dedini Ometto, YCA XLIII (2018), 426: it must be flagrant and present itself at first sight (“primo ictu oculi”). 162

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3. Enforcing arbitral awards a) Enforcement regime for domestic and foreign arbitral awards. The proceedings 80 for enforcement will differ according to the national or foreign nature of the award: as regards domestic awards, the Brazilian Arbitration Act points out that arbitrators are the judges in fact and right, that their decision is not subject to homologation by state courts, and that the arbitral award has the same effect on the parties as a judgment issued by a state court, representing an enforceable instrument (articles 18 and 31 LA). The grounds for setting aside (supra mns 72–79) can also be raised in enforcement proceedings (article 33, § 3 LA). By contrast, as regards foreign awards, i.e., awards rendered outside Brazil,169 the 81 Brazilian Arbitration Act determines that in order to be enforceable in Brazil, foreign arbitral awards must be subject to homologation by the Superior Court of Justice.170 In other words, enforceability of foreign arbitral awards depends on previous recognition by the Superior Court of Justice. In order to obtain the homologation of a foreign arbitral award, a party must submit to the Superior Court of Justice a motion,171 together with the original arbitral award or a duly certified copy, authenticated by a Brazilian consulate, as well as a sworn translation and the original or a duly certified copy of the arbitration agreement.172 Brazilian courts will assume jurisdiction regarding enforcement of foreign awards where the award debtor is domiciled in Brazil or where the award creditor has an interest in recognition and enforcement of the foreign award in Brazil.173 There is no prescription period applicable to recognition or enforcement of a foreign arbitral award.174 The Superior Court of Justice will not analyse the merits of the foreign award.175 The 82 grounds for which homologation will be refused under articles 38, 39 of the Arbitration Act correspond to the defences available under article V NYC. Accordingly, the homologation request can only be denied if the defendant proves that (i) the parties to the agreement lacked capacity; (ii) the arbitration agreement was 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 rendered; (iii) proper notice of the appointment of the arbitrator or of the arbitral procedure was not given (iv) there was a violation of the adversary principle, in such a way that full defence was impossible; (v) the arbitral award has exceeded the terms of the arbitration agreement, and it is not possible to separate the portion exceeding the terms from what has been submitted to arbitration; (vi) the commencement of the arbitral proceedings was not in accordance with the submission to arbitration or the arbitral clause; (vii) the arbitral award is not yet binding 169

Article 34, sole paragraph LA. Article 35 LA; according to article 475 CPC, national and foreign awards recognized by the Superior Court of Justice, are enforceable in Brazil. This will be addressed in article 515, VIII and IX of the new CPC. 171 Article 282 CPC (article 960 of the new CPC). 172 Articles 36 and 37 LA. 173 Gama/Teixeira, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 149 (159 et seq.). 174 Gama/Teixeira, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 149 (160). 175 STJ, SEC 8.847/EX, DJe 28 November 2013, Paladin PM Holmes Brazil Investors LLC v. Molnar Construtora e Incorporadora Ltda, YCA XXXIX (2014), 372; SEC 4.516/EX, DJe 30 October 2013; SEC 6.753/EX, DJe 19 August 2013; SEC 15.977 – EX (2016/0210574-9), 6 September 2017. A recent decision also held that in enforcement proceedings, courts would only review the text of the award and no issues or documents not conaained in the award: STJ, 15 August 2018, SEC 14.385 – EX (2015/0206738-2), Edmund Burke v. Carlos Alberto Resende Sobral, YCA XLIV (2019), 473. 170

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on the parties, has been set aside or has been suspended by a court of the country in which the arbitral award has been made.176 The request of homologation for the recognition or enforcement of a foreign arbitral award shall also be denied if the Court of Justice ascertains that (i) in accordance with Brazilian Law, the subject matter of the dispute is not capable of settlement by arbitration; and (ii) the decision is offensive to national public policy.177 83 It is also worth mentioning that the Superior Court of Justice has already issued a decision pointing out that the fact that there are proceedings with the same object pending in Brazil or abroad will not prevent or suspend the homologation, nor will the fact that the award is not enforceable in the place of arbitration as, according to article 35 of Brazilian Law, in order to be recognized in Brazil, a foreign arbitral award needs to be homologated only by the Superior Court of Justice.178 More recently, the Superior Court of Justice has declined to recognize a foreign arbitral award issued by an arbitral tribunal in the United States based on the lack of impartiality of the arbitrators which, according to the judges, was a violation of Brazil’s public policy, even though such lack of impartiality was not accepted by the United States courts.179 The Superior Court of Justice considered that it was not bound by the decisions issued by the United States’ courts and was in no way prevented from examining the arbitral awards. According to some authors, this decision may threaten Brazil’s reputation as an arbitration friendly jurisdiction. Once recognized, foreign arbitral awards will be enforceable as national awards.180 84

b) Defences against enforcement of foreign arbitral awards. aa) Incapacity to agree to arbitrate and invalidity of the arbitration agreement. Homologation can be refused where a party to an arbitration is incapable of agreeing to arbitrate (article 38, I LA) or where the arbitration agreement is invalid (article 38, II LA), corresponding to article V(1)(a) NYC. The award debtor has the burden of proof that the ground for defence exists.181 In some cases in which the STJ refused to recognize foreign arbitral awards it was held that non-compliance with the form requirement under article 4 LA also qualifies as a breach of public policy.182 176

Article 38 LA. Article 39 LA. On December 2014, the Superior Court of Justice amended its Internal Rules to include offenses to human dignity as a ground for refusing to recognize a foreign award. According to some authors, it is highly doubtful that the Internal Rules can create a new requirement for the recognition of foreign awards. See Cavalcanti, Amendments to the Internal Rules of the Brazilian Superior Tribunal of Justice on Recognition of Foreign Awards, Kluwer Arbitration Blog, 24 January 2015, http:// arbitrationblog.kluwerarbitration.com/2015/01/24/amendments-to-the-internal-rules-of-the-braziliansuperior-tribunal-of-justice-on-recognition-of-foreign-awards/ (accessed 1 August 2020). 178 STJ, SEC 9.880-EX 2013/0296479-3, DJe 27 May 2014, CIMC Raffles Offshore (Singapore) Ltd v. Schahin Holding SA, YCA XL (2015), 383. 179 STJ, SEC 9.412-US (2013/0278872-5), DJ 30 September 2017, ASA Bioenergy Holding AG v. Adriano Giannetti Dedini Ometto, YCA XLIII (2018), 426. It should be noted that one judge voted in favour of the homologation of the award, arguing that the Superior Court should not serve as an appeal court from the decision rendered by the United State’s courts (as these are the judicial bodies competent to decide on the impartiality of an arbitrator where an arbitrator is seated in the US). See also, Lemgruber, Recognition of Foreign Arbitral Awards in Brazil: The Abengoa Decision one year on, Kluwer Arbitration Blog, 3 May 2018, http://arbitrationblog.kluwerarbitration.com/2018/05/03/recognition-foreign-arbitral-awards-brazilabengoa-decision-one-year/ (accessed 1 August 2020). 180 Article 475-N, IV and VI CPC (article 515, VI and VII of the new CPC). 181 STJ, SEC 856 – EX (2005/0031430-2), DJ 27 June 2005, p. 203, L’Aiglon S/A v. Têxtil União S/A. 182 STJ, SEC 967 – EX (2005/0053998-0), DJ 20 March 2006, p. 175, Plexus Cotton Ltd v. Santana Têxtil S/A; SEC 866 – EX (2005/0034926-5, DJ 16 October 2006, p. 273, Oleaginosa Moreno Hermanos SA v. Moinho Paulista Ltda; SEC 978 GB 2006/0173771-1: “A falta de assinatura na cláusula de eleição do juízo arbitral contida no contrato de compra e venda, no seu termo aditivo e na indicação de árbitro em nome de 177

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bb) Inadequate notice or opportunity to present one’s case. The ground for 85 defence under article V(1)(b) NYC corresponds to article 38, III LA. Notices with regard to the arbitration such as the request for arbitration or the appointment of arbitrators are not subject to specific formal requirements and can be validly transmitted by fax, letter, or courier.183 As regards the fairness of a hearing, the STJ applies a more flexible standard than under domestic law and has rejected an argument that costs associated with the arbitral proceedings are a breach of fair trial principles.184 cc) Award beyond the scope of the arbitration agreement. The ground for defence 86 under article V(1)(c) NYC corresponds to article 38, IV LA. As regards the scope of the arbitration agreement, see supra mns 27–31. The STJ has refused to accept a defence against enforcement on the basis that the application of the CISG by the arbitral tribunal contravened the choice of law agreement between the parties, holding that it would not review the merits of the foreign arbitral award.185 dd) Improper composition of the tribunal and procedural errors. The ground for 87 defence under article V(1)(d) NYC corresponds to article 38, V LA. As indicated above, it will not be possible to review whether the choice of law analysis of the arbitral tribunal is correct.186 However, in Abengoa, the STJ held that the presiding arbitrator of the foreign arbitral tribunal was biased and that enforcement would therefore be a breach of public policy.187 ee) Enforcement of awards that were set aside. The homologation request for the 88 recognition or enforcement of a foreign arbitral award can be denied in case the respondent proves that the arbitral award is not yet binding, has been set aside or has been suspended by a court of the country in which the arbitral award has been made.188 ff) Non-arbitrability of the dispute. Article V(2)(a) NYC corresponds to article 39, I 89 LA. This would justify refusing recognition of the foreign award where a dispute does not qualify as arbitrable under Brazilian law (supra mn. 22).

requerida exclui a pretensão homologatória, enquanto ofende o artigo 4°, parágrafo 2°, da Lei no 9.307/96, o princípio da autonomia da vontade e a ordem pública brasileira.” (The lack of signature in the arbitration clause contained in the purchase and sale agreement, in its additive term and in the appointment of an arbitrator on behalf of a defendant excludes the claim for homologation, as it offends article 4, paragraph 2, of Law No. 9307/96, the principle of party autonomy and Brazilian public policy.). 183 Gama/Teixeira, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 149 (156). 184 Gama/Teixeira, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 149 (156). 185 STJ, SEC 3.035 – EX (2008/0044435-0), Atecs Mannesmann GmbH v. Rodrimar S/A Transportes Equipamentos Industriais e Armazéns Gerais: “Com efeito, essas questões se confundem com o próprio mérito da sentença arbitral, que, na esteira da jurisprudência do Colendo Supremo Tribunal Federal e deste Superior Tribunal de Justiça, não pode ser apreciado por esta Corte, já que o ato homologatório da sentença estrangeira restringe-se a análise dos seus requisitos formais.” (In fact, these questions relate to the merits of the arbitral award, which, following the jurisprudence of the Supreme Court and the Superior Court of Justice, cannot be considered by this Court, since the homologation of the foreign judgment is restricted to the analysis of its formal requirements.). 186 STJ, SEC 3.035 / FR (2008/0044435-0), Atecs Mannesmann GmbH v. Rodrimar S/A Transportes Equipamentos Industriais e Armazéns Gerais. 187 STJ, 19 April 2017, SEC 9.412, ASA Bioenergy Holding AG v. Adriano Giannetti Dedini Ometto, YCA XLIII (2018), 426. 188 Article 38 LA. Recently, in STJ, SEC 5.782 – EX (2011/0129084-7), DJe 16 December 2015, EDF International S/A v. Endesa Latinoamérica S/A, YCA XLI (2016), 415, the Supreme Court refused to enforce a foreign arbitral award that had been set aside at the seat, in Argentina, affirming that an annulled award cannot be enforced, as the homologation is an extension of the arbitral award effects.

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gg) Public policy. The public policy defence under article V(2)(b) NYC corresponds to article 39, II LA. On the interpretation and application of public policy, see supra mns 78–79.

91

c) Fulfilment, set-off and similar defences. A party can oppose enforcement by contesting the enforcement petition submitted by the other party to court. The grounds for opposing are, nevertheless, only those specifically foreseen in the Brazilian Civil Procedure Code. Thus, enforcement will only be denied in case of, for example, (i) lack or improper service of process189; (ii) unenforceability of the award; (iii) enforcement excess; (iv) there was an amendment of the obligation following the award; (v) the obligation has been fulfilled by payment or compensation or has terminated by way of novation, transaction or has prescribed.190

4. Preclusion of grounds for challenge and defences to enforcement 92

The grounds that may lead to setting aside the arbitral award can also be invoked against the enforcement of the award in case the winning party initiates enforcement proceedings.191 Nevertheless, considering the deadline established by law, the possibility of invoking those grounds in enforcement proceedings seems to be only admitted if the 90-day deadline to initiate the set aside proceedings, following receipt of the award by the parties, has not yet passed.192 Thus, in addition to the grounds established in the Civil Procedural Code,193 and even if no setting aside proceedings have yet been initiated – although they are still possible – the losing party can also argue the grounds foreseen in Arbitration Law as reasons for setting aside arbitral awards, against enforcement of the award.

V. Investment Arbitration in Brazil 93

Brazil has been reluctant to enter into treaties that provide for the protection of investors and investments, with the argument that such treaties are detrimental to the host State and its national investors.194 Therefore, Brazil is not a signatory to the ICSID Convention and, controversially, it also did not ratify the Bilateral Investment Treaties it has entered into.195 In this context, Brazil has relied on commercial arbitration to resolve disputes with State parties. 189 Considering that this ground is also foreseen as a reason not to recognize foreign arbitral awards in article 38, III LA, the possibility of also being argued against the enforcement of foreign arbitral award is questionable. 190 Article 475-L CPC (article 515, VI and VII of the new CPC). 191 Article 33, § 3 LA. 192 Article 33, § 1 LA. The period of 90 days apply on cases where there is a challenge to the enforcement of the award, i.e. the possibility to set aside the arbitral award in case of a challenge to the enforcement proceedings shall not be considered as a possibility to modify the period of 90 days that is granted to set aside the award (TJMG, No AI 1.0000.16.049435-7/004, 22 July 2017). 193 Mentioned supra mn. 91 f. 194 Yarrow/Martins, Brazil Warms to the Global Procurement Market further with New Chile Treaty, but still no Arbitration for Investors, Kluwer Arbitration Blog, 19 October 2018, http://arbitrationblog. kluwerarbitration.com/2018/10/19/brazil-warms-global-procurement-market-new-chile-treaty-still-no-arbitration-investors/ (accessed 1 August 2020). 195 Cervantes/Barnes, The Trajectory of International Arbitration in Latin America and Current Trends in ISDS, Kluwer Arbitration Blog, 26 February 2019, http://arbitrationblog.kluwerarbitration.com/2019/ 02/26/the-trajectory-of-international-arbitration-in-latin-america-and-current-trends-in-isds/ (accessed 1 August 2020).

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Nevertheless, Brazil has been changing its approach to investment protection, leading 94 to many policy innovations. In 2015, Brazil started to follow a model of signing Cooperation and Facilitation Investment Agreements (CFIAs) aiming to promote foreign investment without sacrificing regulatory autonomy.196 In addition, Brazil has entered into a set of public procurement agreements (PPAs),197 which goal is to ensure open, fair and transparent conditions of competition in the global procurement markets.198 These agreements remain, nevertheless, outside the traditional model of investment 95 agreements in the sense that include some investor-friendly provisions, but limit the direct recourse of investors against the State. The method use is usually arbitration on the State-to-State level: investors with qualifying contracts will be confined to pursuing any dispute through the national courts or by escalating the dispute to the State level, who will bring the claim itself on arbitration proceedings.199 Usually, the proceedings involve before a phase of dispute prevention and if no agreement is reached, the investor can seek the support of its state, persuading that a damage was caused to the investment.200 Also, in February 2018, Decree No 46.245/2018 was issued by the state of Rio de 96 Janeiro to regulate arbitrations between state-owned entities and private corporations. According to the statute, state-owned entities are expressly allowed to resolve all conflicts related to pecuniary claims by arbitration. The statute clarifies that Brazilian law is mandatorily applied, that the City of Rio de Janeiro must be chosen as the seat, and that the parties must adopt Portuguese as the language of the arbitration. Further, only institutional arbitration is allowed and all written submissions, expert opinions and arbitral decisions shall be public.201 196 Brazil has signed CFIAs with Mozambique, Angla, Malawi, Mexico, Columbia, Chile, Ethiopia and Suriname. 197 Brazil has entered into Cooperation and Facilitation Investment Agreements with Chile, Colombia, Malawi, Mexico, Angola, Mozambique, Federal Democratic Republic of Ethiopia (2018) and Republic of Suriname (2018). Brazil has also entered into two PPAs with investment provisions: the Economic and Trade Expansion and Agreement in Peru and the Intra-Mercosur Investment Facilitation Protocol. New agreements are being negotiated with Mexico, the European Union and the European Free Trade Association. 198 These agreements provide a legal framework that aims to place international companies on a level playing field with Brazilian companies with regards to their competitiveness, as well as to facilitate their participation in public bids, containing provisions relating to national treatment and non-discrimination. See Yarrow/Martins, Kluwer Arbitration Blog, 19 October 2018, supra fn. 193. 199 See Yarrow/Martins, Kluwer Arbitration Blog, 19 October 2018, supra fn. 193. This alternative has been followed for different investment agreements: just as states provide diplomatic protection, if a private investor believes a host state is in breach of its investment obligations, it can ask its home state to bring a case on its behalf, and the home state can then decide whether it believes the case to be merited and to initiate a formal claim. In this context, States would have the power to prevent controversial claims from going forward, since home states would be expected to have other considerations besides the profit of its corporations. See also Menon/Issac, Developing Country Opposition to an Investment Court: Could State-State Dispute Settlement be an Alternative?, Kluwer Arbitration Blog, 17 February 2018, http:// arbitrationblog.kluwerarbitration.com/2018/02/17/developing-country-opposition-investment-courtstate-state-dispute-settlement-alternative/ (accessed 1 August 2020). 200 Moreira, Cooperation and Facilitation Investment Agreements in Brazil: the Path for Host State Development, Kluwer Arbitration Blog, 13 September 2018, http://arbitrationblog.kluwerarbitration.com/ 2018/09/13/cooperation-and-facilitation-investment-agreements-in-brazil-the-path-for-host-state-development/ (accessed 1 August 2020). 201 Fichtner/Mannheimer, Arbitration involving State-owned Entities in Rio de Janeiro: We Cannot See the Wood for the Trees, Kluwer Arbitration Blog, 2 May 2018, http://arbitrationblog.kluwerarbitration. com/2018/05/02/arbitration-involving-state-owned-entities-rio-de-janeiro-brazil-cannot-see-wood-trees/ (accessed 1 August 2020).

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G. International Arbitration in China (People’s Republic) Bibliography: Che, China’s State-Directed Economy and the International Order, Springer 2019; Chen, On the Supervision Mechanism of Chinese Arbitration Involving Foreign Elements and its Tallying with International Practices, (1997) 14 J. Int’l Arb. 39–78; Fan, Arbitration in China: A Legal and Cultural Analysis, Hart 2013; Fan, Arbitration in China: Practice, Legal Obstacles, and Reforms, (2008) 19(2) ICC International Court of Arbitration Bulletin 25–40; Fan, Foreign Direct Investment and Investment Arbitration in China and Hong Kong, in: Esplugues (ed.), Foreign Investment and Investment Arbitration in Asia, Intersentia 2019, 25–54; Gaillard/Savage, Fouchard, Gaillard, Goldman on International Commercial Arbitration, Kluwer 1999; Gu, China’s Arbitration Modernisation under Judicial Efforts and Marketisation Waves, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, Hart 2018, 17–38; Gu, Looking at Arbitration Through a Comparative Lens: General Principles and Specific, (2018) 13(2) The Journal of Comparative Law 164–188; Johnston, Party Autonomy in Mainland Chinese Commercial Arbitration, (2008) 25 J. Int’l Arb. 537–544; Hale, Between Interests and Law: The Politics of Transnational Commercial Disputes, Cambridge University Press 2015; Kaufmann-Kohler/Fan, Integrating Mediation into Arbitration: Why it Works in China, (2008) 25(4) J. Int’l Arb. 479–492; Kent/Hollis, Concurrent Jurisdiction of Arbitral Tribunals and National Courts to Issue Interim Measures in International Arbitration, in: Ziyaeva/Laird/ Sabahi/Whitesell (eds), Interim and Emergency Relief in International Arbitration, Juris 2015, 87–106; Lee, Arbitrating Chinese Disputes Abroad: A Changing Tide?, in: Kluwer Arbitration Blog, 2016, http:// arbitrationblog.kluwerarbitration.com/2016/04/07/arbitrating-chinese-disputes-abroad-a-changing-tide/ (accessed on 1 April 2020); Lianbin/Jian/Hong, Approaches to the Revision of the 1994 Arbitration Act of the People’s Republic of China, (2003) 20 J. Int’l Arb. 169–188; 林一飞主编, 最新商事仲裁与司法实务 专题案例. 第六卷, 对外经济贸易大学出版社 2011 [Lin (ed.), Cases of Latest Commercial Arbitration and Judicial Practice, Vol. 6, University of International Business and Economics Press 2011]; 林一飞主 编, 最新商事仲裁与司法实务专题案例. 第十一卷, 对外经济贸易大学出版社 2013 [Lin (ed.), Cases of Latest Commercial Arbitration and Judicial Practice, Vol. 11, University of International Business and Economics Press 2013]; Lin, China’s International Commercial Court under the Belt and Road Initiative, (2018) 11 ICCLR 664–670; Lin, Judicial Review of Arbitration: Law and Practice in China, Kluwer 2018; López, Independence and Impartiality of Arbitrators: A Comparative Perspective, in: Liu/Shan (eds), China and International Commercial Dispute Resolution, Brill 2015, 99–127; Moser, Dispute Resolution in China, Juris 2012; Nilsson/Lian/Gu, People’s Republic of China, in: Jorgensen (ed.), Finding, Freezing and Attaching Assets: A Multi-Jurisdictional Handbook, Kluwer 2016, 69–80; Pan, PRC Court Upholds ICDR Award Relating to International Franchise Agreement, in: Kluwer Arbitration Blog, 2019, http://arbitrationblog.kluwerarbitration.com/2019/01/10/prc-court-upholds-icdr-award-relating-to-international-franchise-agreement/ (accessed 1 August 2020); Reyes/Gu, Conclusion: An Asia Pacific Model of Arbitration Reform, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, Hart 2018, 279–300; Smeureanu, Confidentiality in International Commercial Arbitration, Kluwer 2011; Song, National Report for China (2014 through 2018)’, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 98, March 2018; Sun/Willems, Arbitration in China, Kluwer 2015; Tang/Xiao/Huo, Conflict of Laws in the People’s Republic of China, Edward Elgar 2016; Tao, Arbitration Law and Practice in China, 3rd ed., Kluwer 2012; Tao, China, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, Oxford University Press 2014, 93–117; Tao/Zhong, Resolving Disputes in China: New and Sometimes Unpredictable Developments, in: Quayle/Gao (eds), International Organizations and the Promotion of Effective Dispute Resolution, Brill 2019, 56–73; Van der Borght/Wang, Foreign Related Commercial Arbitration in China, in: Gołota/Hu/Van der Borght/Wang (eds), Perspectives on Chinese Business and Law, Intersentia 2018, 125–150; 万鄂湘主编, 最高人民法院民事审判第四庭编, 涉外商事 海事审判指导, 第1辑(总第12辑), 人民法院出版社 2006 [Wan, the Fourth Civil Division of The Supreme People’s Court, “Instruction on Trials of Commercial and Maritime Disputes with Foreign Elements”, Vol. 1, The People’s Court Press 2006]; Wang, Multidimensional Thinking about the ‘Soft Laws’ Phenomena in International Commercial Arbitration: A Chinese Perspective, (2018) 36 ASA Bull. 615–626; Wang, Distinct Features of Arbitration in China: An Historical Perspective, (2006) 23 J. Int’l Arb. 49–80; Wang/Mo, Chinese Law, Kluwer 1999; Xiong/Shang, International Arbitration in China (People’s Republic), in: Balthasar (ed.), International Commercial Arbitration: International Conventions,

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G. International Arbitration in China (People’s Republic) Country Reports and Comparative Analysis, C. H. Beck 2016, 265–298; Xu, Definition of Arbitration in China, (2012) 30 J.L. & Comm. 107–115; Yang, Foreign–related Arbitration in China: Commentary and Cases, 2nd Vol., Cambridge University Press 2016; Yeoh/Ang, People’s Republic of China and Hong Kong, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 275–370; Yu, People’s Republic of China: Comparison between UN Model Law and Chinese Arbitration, in: Bell (ed.), The UNCITRAL Model Law and Asian Arbitration Laws: Implementation and Comparisons, Cambridge University Press 2018, 271–299; Zhang, Arbitration of Foreign Investment Disputes in China, in: van den Berg (ed.), New Horizons in International Commercial Arbitration and Beyond, Kluwer 2005, 166–180; Zhang, Enforceability: Foreign Arbitral Awards in Chinese Courts, (2018) 20 No. 1 San Diego Int’l L. J. 1–69; Zheng, Jurisdiction and Arbitration Agreements in International Commercial Law, Routledge 2014. National Legislation: 中华人民共和国仲裁法 (Arbitration Law of the People’s Republic of China), adopted at the 9th Session of the Standing Committee of the eighth National People’s Congress on 31 August 1994, amended for the first time at the 10th Session of the Standing Committee of the eleventh National People’s Congress on 27 August 2009, and amended for the second time at the 29th Session of the 12th National People’s Congress on 1 September 2017. An English convenience translation is made available online by the Ministry of Commerce (http://english.mofcom.gov.cn/article/policyrelease/Businessregulations/201312/20131200432698.shtml, accessed 1 August 2020); 中华人民共和国民事诉讼法 (Civil Procedure Law of the People’s Republic of China), adopted at the fourth session of the seventh National People’s Congress on 9 April 1991 and amended for the first time at the 30th session of the Standing Committee of the tenth National People’s Congress on 28 October 2007, and amended for the second time at the 28th session of the Standing Committee of the 11th National People’s Congress on 31 August 2012, and amended for the third time at the 28th session of the Standing Committee of the 12th National People’s Congress on 27 June 2017; 中华人民共和国涉外民事关系法律适用法 (Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations), adopted at the 17th session of the Standing Committee of the 11th National People’s Congress, 28 October 2010, effective from 1 April 2011; 中华人民共和国合同法 (Contract Law of the People’s Republic of China), adopted at the second session of the ninth National People’s Congress 15 March 1999, effective from 1 October 1999; 中华人民共和国民法总则 (General Rules of the Civil Law of the People’s Republic of China), adopted at the 5th Session of the 12th National People’s Congress on 15 March 2017, effective from 1 October 2017; 中华人民共和国商标法 (Copyright Law of the People’s Republic of China), adopted at the fifteenth session of the Standing Committee of the seventh National People’s Congress on 7 September 1990 and amended for the first time at the 24th Session of the Standing Committee of the ninth National People’s Congress on 27 October 2001, and amended for the second time at the 13th session of the Standing Committee of the 11th National People’s Congress on 26 February 2010. Other Relevant Legal Authorities and Applicable Rules Beijing Arbitration Commission, Beijing Arbitration Commission Arbitration Rules (“BAC Rules”), revised and adopted at the Seventh Meeting of the Fourth Session of the Beijing Arbitration Commission on 15 July 2019. Effective as of 1 September 2019; China International Economic and Trade Arbitration Commission (“CIETA”), China International Economic and Trade Arbitration Commission Arbitration Rules (“CIETAC Arbitration Rules”), revised and adopted by the China Council for the Promotion of International Trade and China Chamber of International Commerce on 4 November 2014, Effective as of 1 January 2015; 国务院办公厅关于贯彻实施《中华人民共和国仲裁法》需要明确的几个问题的通知, 国办发 [1996]22号, General Office of the State Council, Notice Concerning Several Issues to be Clarified for the Purpose of Implementing the PRC Arbitration Law, June 1996; 最高人民法院关于人民法院处理与涉外仲裁及外国仲裁事项有关问题的通知，法发 [1995] 18号 [Supreme People’s Court, The Notice on the Handling of Issues Regarding Arbitrations with a Foreign Element and Foreign Arbitrations by the People’s Courts, Fa [1995] No. 18]; 最高人民法院关于甘肃省乡镇第三产业公司诉德国阿丝德有限公司、香港欣季实业有限公司合 作合同无效纠纷案的请示报告的复函, 法经 [1995] 273号[Supreme People’s Court, The Response of the Supreme People’s Court to Gansu Higher People’s Court on Issues relating to the Validity of Cooperation Agreement, Fa Jing [1995] No. 273]; 中华人民共和国最高人民法院公报 [Supreme People’s Court, Gazette of the Supreme People’s Court of the People’s Republic of China], 109–110 (3rd ed.), 1998; 最高人民法院关于人民法院撤销涉外仲裁裁决有关事项的通知, 法[1998]40号 [Supreme People’s Court, The Notice on Setting Aside Arbitral Awards involving Foreign Elements by People’s Courts, Fa [1998] No. 40]; 最高人民法院对仲裁条款中所选仲裁机构的名称漏字，但不影响仲裁条款效力的一个案例的批 复意见, 法经[1998]159号, [Supreme People’s Court, The Reply of Supreme People’s Court Re the Case Where Some Words Missing in Name of the Arbitration Institution Chosen by the Arbitration Clause Do Not Affect the Validity of the Arbitration Clause, Fa Jing (1998) No. 159];

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Part 3. Country Reports 最高人民法院关于确认仲裁协议效力几个问题的批复, 法释[1998]27号 [Supreme People’s Court, Supreme People’s Court Reply on Several Questions Regarding the Determination of the Validity of Arbitration Agreements, Fa Shi [1998] No. 27]; 最高人民法院关于内地与香港特别行政区相互执行仲裁裁决的安排, 法释[2000]3号 [Supreme People’s Court, the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and Hong Kong (“Mainland-Hong Kong Arrangement”), Fa Shi [2000] No. 3, effective on 1 February 2000]; 最高人民法院关于适用《中华人民共和国仲裁法》若干问题的解释, 法释[2006]7号 [Supreme People’s Court, Interpretation of the Supreme People’s Court concerning Some Issues on Application of the Arbitration Law of the People’s Republic of China (Adopted at the 1375th meeting of the Judicial Committee of the Supreme People’s Court on 26 December 2005), Fa Shi [2006] No. 7]; 最高人民法院关于内地与澳门特别行政区相互认可和执行仲裁裁决的安排, 法释[2007]17号 [Supreme People’s Court, the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and Macau (“Mainland-Macau Arrangement”), Fa Shi [2007] No. 17, effective on 1 January 2008]; 最高人民法院关于执行我国加入的《承认及执行外国仲裁裁决公约》的通知, 法[经]发[1987]5号 [Supreme People’s Court, Notice of the Supreme People’s Court Regarding the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China, Fa Jing Fa (1987) No. 5, effective on 10 April 1987]; 最高人民法院关于印发《第二次全国涉外商事海事审判工作会议纪要》的通知, 法发[2005]26号 [Supreme People’s Court, Minutes of the Second National Working Conference on Trial of Foreignrelated Commercial and Maritime Cases, Fa Fa (2005) No. 26]; 最高人民法院关于适用《中华人民共和国涉外民事关系法律适用法》若干问题的解释一）, 法 释[2012]24号 [Supreme People’s Court, Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Law of the People’s Republic of China on Foreign-Related Civil Relations (I), Fa Shi [2012] No. 24]; 最高人民法院关于为自由贸易试验区建设提供司法保障的意见, 法发[2016]34号 [Supreme People’s Court, Opinion of the Supreme People’s Court on the Provision of Judicial Safeguards for the Development of the Pilot Free Trade Zones, Fa Fa [2016] No. 34]; 最高人民法院关于仲裁司法审查案件报核问题的有关规定, 法释[2017]21号 [Supreme People’s Court, Provisions of the Supreme People’s Court on Issues Concerning the Reporting and Approval in the Judicial Review of Arbitration Cases, Fa Shi [2017] No. 21]; 最高人民法院关于审理仲裁司法审查案件若干问题的规定, 法释[2017]22号 [Supreme People’s Court, Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Judicial Review of Arbitration Cases, Fa Shi [2017] No. 22]; 十三届全国人大常委会立法规划 [13th National People’s Congress Standing Committee, Legislative Plan, 7 September 2018]. International Conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (ratified by China on 22 January 1987); Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (ratified by China ratified on 7 January 1993 and entered into force in China on 6 February 1993).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Sources of laws....................................................................................... aa) Statutory laws.................................................................................. bb) Legislative, judicial, and administrative interpretations........ cc) International treaties and arrangements with the SARs ....... b) Domestic and foreign-related arbitration ........................................ c) Commercial and non-commercial arbitration ............................... d) Ad hoc and institutional arbitration ................................................. e) The territoriality principles, the seat of the arbitration, and the lex arbitri ................................................................................. f) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of the PRC Arbitration Law.......................... a) Party autonomy ..................................................................................... b) Independence of arbitration ............................................................... c) Finality .....................................................................................................

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G. International Arbitration in China (People’s Republic) d) Courts have no jurisdiction when there is a valid arbitration agreement................................................................................................ 45 II. The arbitration agreement ............................................................................ 46 1. The doctrine of separability ..................................................................... 46 2. The law applicable to the arbitration agreement ................................ 48 3. The validity of the arbitration agreement: capacity, arbitrability, form ............................................................................................................... 52 a) Capacity to conclude arbitration agreements ................................. 52 b) Arbitrability ............................................................................................ 53 c) Form of the arbitration agreement ................................................... 56 d) Termination of the arbitration agreement ...................................... 57 4. The scope and the interpretation of the arbitration agreement ...... 58 a) Personal scope of the arbitration agreement .................................. 58 b) Substantive scope of the arbitration agreement ............................. 61 c) Pathological arbitration clauses ......................................................... 65 aa) Selection of arbitral institution ................................................... 66 bb) The effect of the word “may”...................................................... 70 cc) Either arbitrate or litigate............................................................. 71 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... 72 a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... 73 b) Preclusion of jurisdictional defences ................................................ 78 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... 80 III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 83 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... 84 a) Duty to disclose ..................................................................................... 86 b) Grounds for challenge.......................................................................... 88 c) Procedural aspects and preclusion of grounds for challenge...... 89 d) Failure or impossibility to act ............................................................ 92 2. The conduct of the arbitral proceedings ............................................... 93 a) Request for arbitration, statements of claim and defence, hearings, default .................................................................................... 93 b) Equality of arms, fair trial principles and the right to be heard 99 c) Confidentiality ....................................................................................... 101 d) The arbitral award ................................................................................ 104 e) Termination of the arbitration without an award......................... 109 f) The costs of the arbitration ................................................................ 110 3. Evidence, discovery, disclosure................................................................ 112 4. The law governing the dispute and mandatory rules (lois de police)............................................................................................................. 116 5. Interim relief in arbitration ...................................................................... 121 a) Interim relief before state courts ....................................................... 122 b) Interim relief before the arbitral tribunal ........................................ 126 6. Multi-party arbitration .............................................................................. 128 a) Arbitration agreement providing for joinder and consolidation 129 b) Equality of arms and appointment of the arbitrators .................. 131 IV. Control and enforcement of arbitral awards............................................ 133 1. Correction and amendment of arbitral awards ................................... 133 2. The reporting system................................................................................. 134 3. Review of arbitral awards before the people’s courts......................... 138 a) Procedural framework (time limit, competent court, appeal) .... 138 b) Grounds for setting aside arbitral awards ....................................... 139 c) Lack of jurisdiction of the arbitral tribunal .................................... 140 d) Unlawful composition of the tribunal and other procedural irregularities............................................................................................ 142 e) Public policy ........................................................................................... 144

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Part 3. Country Reports 4. Enforcing arbitral awards ......................................................................... a) Enforcement regime for domestic, foreign-related and foreign awards ...................................................................................................... b) Enforcement of awards that were set aside..................................... c) Fulfilment, set-off, and similar defenses .......................................... 5. Preclusion of grounds for challenge and defences to enforcement

147 147 153 158 159

I. Introduction* International commercial arbitration is increasingly becoming an important dispute settlement mechanism in the People’s Republic China (“PRC” or “China”), due to its flexibility, effectiveness, efficiency, independence, and recognition of party autonomy.1 The perception that China is not an international arbitration friendly jurisdiction no longer holds full force.2 This is evident in an emerging pro-arbitration stance backed by the introduction of several initiatives aimed at promoting arbitration as the preferred means for settling international commercial disputes.3 As a result of growing cross-border trade and China’s “going out” policy, notably the Belt and Road Initiative, international arbitration will play a more vital role in settling commercial disputes in China.4 2 Alternative dispute settlement has a long history in Chinese legal culture and has for centuries been recognized as an important means of settling disputes.5 While some convergence exists between arbitration in China and other jurisdictions, there are notable divergences.6 Distinct features of international commercial arbitration in China include institutional arbitration, a dual-track for foreign-related arbitration and domestic arbitration, and an emphasis on conciliation.7 It is important to highlight that international commercial arbitration in China is rather divided into three classes: domestic arbitration, foreign-related arbitration (arbitration involving foreign-related elements), and foreign arbitration conducted outside Mainland China.8 3 Against this background, “international arbitration” in China may be defined as arbitration administrated by Chinese arbitral institutions (“arbitration commissions” as referred by the Chinese legislation) in disputes involving foreign elements, i.e., foreignrelated arbitration and arbitrations administrated by foreign arbitral institutions, the enforcement of awards rendered by which is sought in China, i.e., foreign arbitration.9 General judicial practice in China has been that only such “foreign-related” disputes could be validly arbitrated outside Mainland China.10 In this regard, arbitration involving parties from Hong Kong, Macau and Taiwan are considered as “foreign-related” as 1

* This chapter was written when Alex Ye worked with CMS Hasche Sigle, Hong Kong. He now works with Withers, Hong Kong. 1 Zhang, in: van den Berg (ed.), New Horizons in International Commercial Arbitration and Beyond, 2005, 166 (166 et seq.). 2 Che, China’s State-Directed Economy and the International Order, 2019, 107. 3 Hale, Between Interests and Law: The Politics of Transnational Commercial Disputes, 2015, 346 et seq. 4 Lin, (2018) 11 ICCLR 664; Reyes/Gu, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, 2018, 279 (299 et seq.). 5 Fan, Arbitration in China: A Legal and Cultural Analysis, 2013, 3 et seq. 6 Zheng, Jurisdiction and Arbitration Agreements in International Commercial Law, 2014, 119 et seq.; Xu, (2012) 30 J.L. & Comm. 107 (116 et seq.). 7 Wang, (2006) 23(1) J. Int’l Arb. 49 (50 et seq.). 8 Van der Borght/Wang, in: Gołota et al. (eds), Perspectives on Chinese Business and Law, 2018, 125 (125 et seq.). 9 Zhang, (2018) 20(1) San Diego Int’l L. R. 1 (3 et seq.). 10 Tao/Zhong, in: Quayle/Gao (eds), International Organizations and the Promotion of Effective Dispute Resolution, 2019, 56 (60 et seq.).

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G. International Arbitration in China (People’s Republic)

these regions are considered as separate jurisdictions from Mainland China.11 However, as will be explored in more detail in this chapter, there are indications that this requirement has been in the process of being relaxed. This chapter mainly examines foreign-related arbitrations administered by Chinese 4 arbitral institutions and foreign arbitrations conducted outside China with a focus on their salient features and recent developments. Domestic arbitration, investor-State arbitration,12 and sector specific arbitration are not the main focus of this chapter. This chapter builds on the first edition of this Volume.13 Because Mainland China, Hong Kong, Macau and Taiwan are considered as separate jurisdictions, references to “China”, “PRC”, “Chinese law”, “PRC law” in this chapter refer to Mainland China as an individual jurisdiction and the applicable laws therein. On international commercial arbitration in Hong Kong, see infra K.

1. The legal framework a) Sources of laws. Commercial arbitration in China is regulated by three primary 5 sources of laws: (i) statutory laws, (ii) legislative, judicial and administrative interpretations, and (iii) international treaties and arrangements with the PRC’s Special Administrative Regions (“SARs”). In addition, the procedural rules of arbitral institutions are also sources of rules applying to arbitration proceedings in China.14 aa) Statutory laws. The fundamental legislation regulating arbitration in China is the 6 Arbitration Law of the PRC (“PRC Arbitration Law”). This law is largely influenced by the 1985 United Nations Commission on International Trade Law (“UNCITRAL”) Model Law on International Commercial Arbitration (“UNCITRAL Model Law”).15 However, China has not adopted the 2006 UNCITRAL Model Law on International Commercial Arbitration.16 When the PRC Arbitration Law came into effect, it unified the commercial arbitration legal framework. Previously, domestic and foreign-related arbitrations were regulated by diverse laws, administrative rules, and regulations.17 The Civil Procedure Law of the PRC (“Civil Procedure Law”) applies to all civil 7 commercial matters and is highly relevant for enforcement and annulment of arbitral awards.18 The Civil Procedure Law contains provisions on the validity of arbitration agreements, preservation of property in arbitration, enforcement of foreign arbitration awards, conditions for non-enforcement of arbitration awards, and remedies when the arbitration award is not enforced. This law also contains a chapter on “Judicial Assistance” in the enforcement of Chinese arbitral awards outside Mainland China.19 11 Gu, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, 2018, 17 (20 et seq.). 12 See Fan, in: Esplugues (ed.), Foreign Investment and Investment Arbitration in Asia, 2019, 25 (25 et seq.). On arbitration of investment treaty claims generally, see supra C. 13 See Xiong/Shang, in: Balthasar (ed.), International Commercial Arbitration: International Conventions, Country Reports and Comparative Analysis, 1st ed., 2016, 265 et seq. 14 For example, China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules revised and adopted by the China Council for the Promotion of International Trade/ China Chamber of International Commerce on 4 November 2014. Effective as of 1 January 2015 (“CIETAC Arbitration Rules”); Beijing Arbitration Commission Arbitration Rules revised and adopted at the Seventh Meeting of the Fourth Session of the Beijing Arbitration Commission on 15 July 2019. Effective as of 1 September 2019. 15 Yu, in: Bell (ed.), The UNCITRAL Model Law and Asian Arbitration Laws: Implementation and Comparisons, 2018, 271. 16 Yang, Foreign-related Arbitration in China: Cases and Commentary, 2nd Vol., 2016, 1 et seq. 17 Tao, in: Ostrove et al. (eds), Choice of Venue in International Arbitration, 2014, 93 (98 et seq.). 18 Chen, (1997) 14(3) J. Int’l Arb 39 (50 et seq.). 19 Lianbin/Jian/Hong, (2003) 20(2) J. Int’l Arb. 169 (172 et seq.).

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The Contract Law of the PRC (“PRC Contract Law”) governs whenever parties select the PRC law as the applicable law in the underlying contract. Disputes arising from such contracts will be construed in accordance with the PRC Contract Law, and the disputes must relate to matters that occur between the disputing parties concerning when contracts were legally formed; interpretations of terms and conditions of contracts; performance of contracts; liability for breach of contracts; and changes, suspensions, transfers, discharges, and terminations of contracts.20 Further, The Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations is significant for determining whether the PRC law or foreign law is applicable to the underlying dispute.

bb) Legislative, judicial, and administrative interpretations. Interpretations by the PRC’s four main governmental organs are also important sources of law. The main governmental organs are: the National People’s Congress and its Standing Committee;21 the Supreme People’s Court (“SPC”), the Supreme People’s Procuratorate, and the State Council.22 10 The SPC and the Supreme People’s Procuratorate provide judicial interpretations of the PRC law. Interpretations in the form of notices, replies and letters concerning arbitration matters are effectively integral sources of law.23 The SPC has issued several important judicial interpretations on the application of the PRC Arbitration Law.24 The most recent judicial interpretations were passed in late 2017.25 Unlike the practice in common law jurisdictions, notwithstanding the non-binding nature of decisions from higher courts, judicial interpretations by the SPC are heavily relied upon by lower courts and are considered as decisive decisions in ensuring uniformity of the PRC law.26 11 Further, the State Council, which is the central government, issues notices and opinions in supplement of legislation. For example, its 1996 Notice blurred the dual-track division of arbitration commissions in China and ended the China International Economic and Trade Arbitration Commission’s (“CIETAC”) long-standing exclusive jurisdiction over foreign related disputes.27 In December 2018, the State Council issued Several Opinions on Improving the Arbitration System to Strengthen the Credibility of Arbitration, which required arbitration committees to be independent from the administrative organs. In addition, the 13th National People’s Congress’ legislative plan included amendment of the PRC Arbitration Law in its Class II Projects for amendments.28 9

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cc) International treaties and arrangements with the SARs. The PRC signed the New York Convention in 1987 with two reservations upon ratification of the New York Convention.29 First, the PRC would apply the New York Convention to the recognition 20

Xu, (2012) 30 Journal of Law and Commerce 107 (113 et seq.). Fan, Arbitration in China: A Legal and Cultural Analysis, 2013, 12 et seq. 22 Ibid. 23 Xu, (2012), 30 Journal of Law and Commerce 107 (112 et seq.). 24 See Fan, Arbitration in China: A Legal and Cultural Analysis, 2013, 13 et seq. 25 Supreme People’s Court, Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Judicial Review of Arbitration Cases, Fa Shi [2017] No. 22; Supreme People’s Court, Provisions of the Supreme People’s Court on Issues Concerning the Reporting and Approval in the Judicial Review of Arbitration Cases, Fa Shi [2017] No. 21. 26 Gu, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, 2018, 17 (18 et seq.). 27 Notice Concerning Several Issues to be Clarified for the Purpose of Implementing the PRC Arbitration Law, issued by the General Office of the State Council, June 1996. 28 13th National People’s Congress Standing Committee, Legislative Plan, 7 September 2018. 29 Supreme People’s Court, Notice of the Supreme People’s Court Regarding the Implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Acceded to by China, Fa Jing Fa (1987) No. 5, effective from 10 April 1987. 21

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and enforcement of arbitral awards made in the territory of another contracting state only on the basis of reciprocity. Second, the PRC would apply the New York Convention only to differences arising out of legal relationships which are considered as commercial under the PRC law. Recognition and enforcement of arbitral awards between Mainland China and its two 13 special administrative regions (“SARs”) (Hong Kong and Macau) is somewhat complicated. Before reunification of Hong Kong and Macau with the PRC, application of the New York Convention in the two regions was through the ratification of the New York Convention by the United Kingdom and Portugal respectively with application to these two former colonies. The New York Convention was the proper instrument for crossborder recognition and enforcement of arbitral awards between Mainland China and the two regions. After reunification of Hong Kong and Macau in 1997 and 1999, respectively, Main- 14 land China, Hong Kong, and Macau were no longer “separate parties” to the New York Convention, despite their remaining three different jurisdictions under the “one country-two systems” principle. The New York Convention was no longer an appropriate instrument for the cross-border recognition and enforcement of arbitral awards among these three regions. In late 1997, a Hong Kong court rejected an application to enforce a arbitral award rendered in Mainland China under the New York Convention for this precise reason.30 To address this constitutional conundrum, authorities in Mainland China reached 15 two bespoke agreements with Hong Kong SAR and Macau SAR, namely, the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and Hong Kong (“Mainland-Hong Kong Arrangement”)31 in 1999 and the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and Macau (“Mainland-Macau Arrangement”)32 in 2007. The Mainland-Hong Kong Arrangement is of particular importance because of Hong Kong’s close economic cooperation with Mainland China and Hong Kong’s status as an international financial centre and international arbitration hub. It re-established the practice of cross-border enforcement of arbitral awards between Mainland China and Hong Kong along the line of the requirements under the New York Convention. b) Domestic and foreign-related arbitration. Under the PRC Arbitration Law, a 16 bifurcated regime exists. Chapter VII of the PRC Arbitration Law governs arbitration involving foreign elements; while Chapters I-VI and VIII are equally applicable to domestic and foreign-related arbitration if there is no specific provision regulating for the same under Chapter VII. The significance of this bifurcated system is that under the PRC law, only “foreign- 17 related” disputes can be submitted to arbitration outside Mainland China and/or to foreign arbitral institutions. In particular, article 128 of the PRC Contract Law provides that “parties to a foreign-related contract may, according to the arbitration agreement, apply to a Chinese arbitration institution or any other arbitration institution for arbitration” (emphasis added). Article 271 of the Civil Procedure Law states that if: “(1) any dispute arises out of foreign economic relations and trade or foreign-related transport and maritime activities, and (2) if the parties have agreed to arbitrate at a PRC arbitral institution or at any other arbitral institution, an action may not be brought before a PRC court” (emphasis added). 30

Ng Fung Hong Ltd v. ABC [1998] 1 HKC 213. Supreme People’s Court, Fa Shi [2000] No. 3, effective on 1 February 2000. 32 Supreme People’s Court, Fa Shi [2007] No. 17, effective on 1 January 2008. 31

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Therefore, an arbitration agreement governing a pure domestic dispute that stipulates a seat of arbitration outside Mainland China and/or a foreign arbitral institution, such as the International Chamber of Commerce (“ICC”), would be regarded as invalid under the PRC law. One example in this regard is the case Jiangsu HangTianWanYuan Wind Power Manufacturing Co. Ltd v. LM Wind Power, where the SPC examined a purchase agreement between a domestic joint venture and a wholly owned foreign enterprise (“WOFE”).33 The purchase agreement contained an ICC arbitration clause. The SPC held that the arbitration agreement was invalid as the dispute was not “foreign-related”.34 19 A further implication of the bifurcated system is that enforcement of an arbitral award rendered by a foreign arbitral institution can be refused by the PRC courts if the dispute is not “foreign-related”. In Beijing Chaolaixinsheng Sports and Leisure Co. Ltd v. Beijing Suowangzhixin Investment Consulting Co. Ltd, the SPC confirmed that an arbitral awarded rendered by the Korean Commercial Arbitration Board was unenforceable as the case involved a contract to operate a golf course in Beijing between a Chinese company and a WOFE registered in Beijing.35 The SPC held that the arbitration agreement was invalid due to lack of foreign elements and refused to recognize and enforce the award. 20 A dispute is “foreign-related” if (i) one or both of the parties is a foreign citizen, foreign legal person or other entity, or person with no nationality; (ii) the habitual residence of one or both of the parties is located outside the territories of the PRC; (iii) the subject matter is located outside the territories of the PRC; or (iv) the legal facts that create, alter or extinguish the civil matters occur outside the territories of the PRC.36 Foreign enterprises such as WOFEs, which have always been considered as Chinese legal persons, could not enforce foreign arbitral awards in China.37 The two SPC decisions mentioned above in Jiangsu HangTianWanYuan Wind Power Manufacturing Co. Ltd v. LM Wind Power and Beijing Chaolaixinsheng Sports and Leisure Co. Ltd v. Beijing Suowangzhixin Investment Consulting Co. Ltd are typical examples of the PRC courts’ application of such rule. 21 However, recent case law and opinions of the SPC indicate that this rule may be relaxed in the future. In Siemens International Trade (Shanghai) Co., Ltd v. Shanghai Golden Landmark Co., Ltd (the “Golden Landmark Case”), the Shanghai First Intermediate People’s Court ruled that “foreign-related” elements can be found where both parties are WOFEs registered in a free trade zone (“FTZ”) and when the performance characteristics of the contract bear foreign-related elements.38 This decision is considered ground-breaking because it loosens the definition of “foreign-related”.39 18

33 Jiangsu HangTianWanYuan Wind Power Manufacturing Co. Ltd v. LM Wind Power, Supreme People’s Court (2012). 34 Ibid. 35 Beijing Chaolaixinsheng Sports and Leisure Co. Ltd v. Beijing Suowangzhixin Investment Consulting Co. Ltd, Supreme People’s Court (2014). 36 Article 1, Interpretations of the Supreme People’s Court on Several Issues concerning Application of the Law of the People’s Republic of China on Choice of Law for Foreign-Related Civil Relationships (2012); Article 522, Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the PRC (2015). 37 Tao/Zhong, in: Quayle/Gao (eds), International Organizations and the Promotion of Effective Dispute Resolution, 2019, 56 (60 et seq.). 38 Siemens International Trading (Shanghai) Co., Ltd v. Shanghai Golden Landmark Co. Ltd, Shanghai First Intermediate People’s Court (2013), Hu Yizhong Minren (Waizhong) Zi No. 2, 27 November 2015. 39 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 17 et seq.; Tao/Zhong, in: Quayle/Gao (eds), International Organizations and the Promotion of Effective Dispute Resolution, 2019, 56 (60 et seq.).

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The Golden Landmark Case involved a dispute arising out of a contract for sale and purchase of equipment between two WOFEs registered in the Shanghai FTZ. The contract contained an arbitration clause to submit disputes to the Singapore International Arbitration Centre (“SIAC”). The dispute was submitted to SIAC and an arbitral award was rendered in favour of Siemens. Because Golden Landmark only made a partial payment, Siemens applied to the Shanghai First Intermediate People’s Court for recognition and enforcement of the award. Golden Landmark challenged this application on the ground that the dispute did not involve “foreign-related” elements, and thus the arbitration agreement was invalid. The court held that the arbitration agreement was valid, because the nature of the contract and the process of contractual performance as a whole were indications of “foreign-related” elements, although the dispute did not contain any foreign elements prima facie. In particular, the court considered that: (1) despite being registered in China, both parties are WOFEs registered within the Shanghai FTZ. The court noted that a distinction should be drawn between the parties and other domestic entities as WOFE’s sources of capital, ultimate beneficiary and management and control all contain foreign elements, and the policy of promoting trade within the FTZ should also be taken into account; (2) the performance of contract also involved foreign elements as the process of transporting the goods that were subjects of the contract had certain characteristics similar to international sale of goods, i.e., the process within the FTZ;40 and (3) Golden Landmark had actually participated in all the arbitral proceedings, asserting that the arbitration clause was valid, and had, after the arbitral award had been rendered, partially performed obligations determined by the award. As such, Golden Landmark’s application did not conform with the generally recognized legal principles of estoppel, good faith, and fairness and reasonableness. In December 2016, the SPC issued Opinions on Provision of Judicial Safeguards to the Development of Pilot Free Trade Zones (the “FTZ Opinion”), with important changes to promote arbitration between companies incorporated in the FTZs.41 Paragraphs 1 and 2 of article 9 of the FTZ Opinion state: “Correctly determine the validity of arbitration agreements and regulate the judicial review of arbitration cases. Where a foreign enterprise registered in the FTZ is bound to submit cross-border arbitration for commercial disputes, the relevant arbitration agreement shall not be invalidated on the ground that the dispute does not involve foreign factors. Where one party or both parties concerned which are foreign-funded enterprises registered in the FTZ have agreed to submit cross-border arbitration for commercial disputes, after the occurrence of a dispute, the parties concerned submit the dispute for arbitration abroad but then claim to not acknowledge, recognize or execute the award on the ground of invalidity of the arbitration agreement after the relevant award is made, the people’s court shall not uphold such request; where the other party concerned did not raise an objection to the validity of the arbitration agreement in the arbitration procedure, but claims that the arbitration agreement is invalid and refuses to acknowledge, recognize or execute the award therefor on the ground that the relevant dispute does not involve any foreign factor after the award is made, the people’s court shall not support the request.”42 Such opinion can be regarded as a breakaway from strict adherence to the “foreignelement” rule under the PRC law. There are a few important points to note: First, paragraph 1 of article 9 relates to the validity of an arbitration agreement. To come 40

Lee, Kluwer Arbitration Blog, 2016. Opinion of the Supreme People’s Court on the Provision of Judicial Safeguards for the Development of the Pilot Free Trade Zones (Fa Fa [2016] No. 34). 42 Ibid. at paras 1–2, article 9. 41

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within the purview of such rule, both parties to the arbitration agreement must be WOFEs registered in the FTZ. Foreign joint ventures or WOFEs that are not registered in the FTZ are not covered under this paragraph. 26 Second, paragraph 2 of article 9 relates to the recognition and enforcement of an arbitral award rendered by a foreign arbitral institution. This subsection is similar to the principle of estoppel in common jurisdictions. It is also a reflection of principles of good faith, as well as fairness and reasonableness recognized under Chinese civil law. This provision also recognizes the Shanghai First Intermediate People’s Court’s reasoning in the Golden Landmark Case where the court emphasized the principles of estoppel, good faith, and fairness and reasonableness. Distinct from paragraph 1 where both parties need to be WOFEs registered in the FTZ, the scope of paragraph 2 is broader and includes instances where one or both parties is a foreign-funded enterprise registered in the FTZ. That would include foreign joint ventures which are not wholly owned by foreign investors. 27 In light of the FTZ Opinion, it is important to note that the State Council has approved 18 pilot FTZs.43 Foreign investors who operate in these FTZs should take the FTZ Opinion into account when entering into arbitration agreements or formulating strategies on the enforcement of arbitral awards in the PRC. 28

c) Commercial and non-commercial arbitration. The scope of arbitration under the PRC Arbitration Law is not specifically limited to commercial arbitration. However, the PRC Arbitration Law specifically states that only contractual disputes and disputes over property rights may be subject of arbitration.44 It also expressly excludes family-related disputes and administrative disputes from the scope of arbitration.45 In particular, disputes involving marriage, adoption, guardianship, maintenance, succession, and administrative disputes are not arbitrable under the PRC law.46

d) Ad hoc and institutional arbitration. Under the PRC Arbitration Law, a designated arbitration commission is one of the mandatory requirements for a valid arbitration agreement. This is because article 16 of the PRC Arbitration Law requires a choice of a designated arbitration commission in an arbitration agreement. Article 10(3) of the PRC Arbitration Law further requires that arbitration commissions must be registered within the judicial administrative department of a Chinese province, autonomous region, or municipality directly under the Central Government. There are over 240 arbitration commissions established in the PRC.47 CIETAC, the Beijing Arbitration Commission/Beijing International Arbitration Centre (“BIAC”), the Shanghai International Arbitration Center (“SHIAC”, previously known as the Shanghai International Economic and Trade Arbitration Commission), and the China Maritime Arbitration Commission (“CMAC”) are the main institutions for administering foreign-related arbitration.48 30 As a result of the mandatory requirement of a designated arbitration commission, ad hoc arbitration is not formally recognized in China.49 The SPC has refused to recognize 29

43 These FTZs are located in Shanghai, Tianjin, Guangdong, Fujian, Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan, Shaanxi, Hainan, Shandong, Jiangsu, Guangxi, Hebei, Yunnan, and Heilongjiang. 44 Article 2, the PRC Arbitration Law. On arbitrability of tort claims, see infra mn. 55, and on the scope of an arbitration agreement regarding tort claims, see infra mn. 65. 45 Ibid. at article 3. 46 Xu, (2012) 30 Journal of Law and Commerce 107 (108 et seq.). 47 Reyes/Gu, in: Reyes/Gu (eds), The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, 2018, 279 (280 et seq.). 48 Tao, in: Ostrove et al. (eds), Choice of Venue in International Arbitration, 2014, 93 (100 et seq.). 49 Wang/Mo, Chinese Law, 1999, 781 et seq.

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the validity of arbitral agreements providing for ad hoc arbitration.50 However, this rule has arguably been loosened to a certain extent by the FTZ Opinion where “[i]n case companies registered within the Pilot Free-Trade Zones agree to arbitration in certain locations in the Mainland China, with certain arbitration rules, and by certain persons, such arbitration agreement may be recognized as valid. In case a people’s court finds such arbitration agreement to be invalid, it shall report the matter to a higher court for review. In case the higher court agrees with the lower court, it shall further report the matter to the SPC and shall only decide on the matter upon the SPC’s reply.”51 Although there is no specific reference to ad hoc arbitration, this provision can be deemed as an indication that ad hoc arbitration might be permitted in the PRC, if both parties are companies registered in the FTZs. In any event, agreements providing for ad hoc arbitration outside China, and arbitral awards made by ad hoc tribunals seated outside China, will be recognized and enforced in China according to articles II and V NYC. Also due to the mandatory requirement of a designated arbitration commission, in 31 particular the requirement that arbitration commissions must be registered within the relevant PRC judicial administrative department, foreign arbitral institutions have not been able to administer PRC-seated arbitrations. Such restriction limits parties’ choice of arbitral institutions or procedural rules and has been criticized by foreign investors. Recently, the PRC judiciary has become more receptive to parties’ choice of foreign 32 arbitral institutions administrating PRC-seated arbitrations. In 2013, the SPC in the case of Anhui Longlide Packing and Printing Co., Ltd v.s. BP Agnati S.R.L. confirmed the validity of an arbitration agreement providing for arbitration seated in the PRC and administered by the ICC.52 On 6 August 2019, the State Council published the General Planning of the New Area 33 of the China (Shanghai) Pilot Free Trade Zone Program (the “General Planning”). Under article 4 of the General Planning, reputable overseas arbitration and dispute resolution institutions will be allowed to “set up business organisations in the new area [of China’s (Shanghai Pilot Free Trade Zone)] and conduct arbitration businesses in relation to civil and commercial disputes arising in the areas of international commerce, maritime affairs, investment, etc.” and the relevant bodies will “support and assure the application and enforcement of interim measures by Chinese and foreign parties before and during the arbitration proceedings, such as asset preservation, evidence preservation and action preservation.” The General Planning, if fully implemented, will dramatically change the landscape of the PRC arbitration and effectively end the monopoly enjoyed by the PRC arbitral institutions. e) The territoriality principles, the seat of the arbitration, and the lex arbitri. The 34 seat of arbitration determines the nationality of an arbitral award, the governing law of arbitration proceedings, and the validity of arbitration agreements. Despite its significance, the seat of arbitration is not clearly defined under the PRC Arbitration Law. Instead, based on the current structure of the PRC Arbitration Law and the Civil Procedure Law, the nationality of an arbitral award is determined based on the place where the arbitral institution is located. In particular, article 283 of the Civil Procedure 50 Fujian Production Company v. Jinge Shipping Co. Ltd, Supreme People’s Court, Fa Han [1995] No. 135; People’s Insurance Company of China, Guangzhou v. Guanghope Power, et al., Supreme People’s Court, [2003] Min Si Zhong Zi No. 29. 51 Para. 3, article 9, the FTZ Opinion, supra fn. 41. 52 Reply of the Supreme People’s Court regarding the Dispute on the Validity of an Arbitration Agreement between Anhui Longlide Packing and Printing Co., Ltd and BP Agnati S.R.L., (2013) Min Si Ta Zi No. 13, 25 March 2013.

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Law treats an award rendered by a foreign arbitral institution as a foreign award, the enforcement of which should be based on relevant international treaties or the principle of reciprocity. That would mean, at least in theory, that an award rendered by a foreign arbitral institution would be considered as a foreign award even if the seat of arbitration is in the PRC. For example, in Duferco AS v. Ningbo Art & Craft Import and Export Co Ltd, the Ningbo Intermediate People’s Court considered an application for enforcement of an award rendered by an ICC arbitral tribunal seated in Beijing. The court treated such award as a foreign award and upheld the recognition and enforcement of the award under the New York Convention. 35 Due to such unique structure, the arbitration rules of major arbitral institutions in the PRC define the place where the arbitral institution is located as the “seat of arbitration”. For example, article 7(2) and (3) of the CIETAC Arbitration Rules states that “[w]here the parties have not agreed on the place of arbitration or their agreement is ambiguous, the place of arbitration shall be the domicile of CIETAC or its sub-commission/ arbitration centre administering the case. CIETAC may also determine the place of arbitration to be another location having regard to the circumstances of the case. The arbitral award shall be deemed as having been made at the place of arbitration.” 36 The PRC law also recognizes the connection between the seat of arbitration and the law to the arbitration agreement. When parties fail to agree on the applicable law to the arbitration agreement, article 18 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations provides two options: (1) the law of the place where the arbitral institution is located or (2) the law of the seat of arbitration. f) Arbitration and other ADR mechanisms (mediation, expert determination). Under article 51 of the PRC Arbitration Law, an arbitral tribunal may mediate/ conciliate a case before rendering the award, if parties agree to mediate/conciliate. If the mediation/conciliation fails, the arbitral tribunal shall proceed with rendering an award. Such combined system is considered as a distinct advantage of commercial arbitration in China.53 38 Article 44 of the PRC Arbitration Law provides for expert determination. If the arbitral tribunal considers that a special issue requires appraisal, it may refer the issue to an appraisal department agreed upon by the parties or designated by the arbitral tribunal. If requested by a party or required by the arbitral tribunal, the appraisal department shall send its appraiser to attend the hearing. Subject to the permission of the arbitral tribunal, the parties may question the appraiser.54 37

2. The guiding principles of the PRC Arbitration Law 39

The PRC Arbitration Law is guided by four main principles: party autonomy, independence of arbitration, finality of arbitral awards, and Chinese courts’ lack of jurisdiction over arbitration when provided in agreements.55

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a) Party autonomy. Under the PRC Arbitration Law, resorting to arbitration is based on the free will of the parties.56 This principle recognizes party autonomy to 53

Kaufmann-Kohler/Fan, (2008) 25 J. Int’l Arb. 2008, 479. Article 44, the PRC Arbitration Law. 55 Wang, (2006) 23 J. Int’l Arb. 49 (51 et seq.); Sun/Willems, Arbitration in China, 2015, 19 et seq. 56 Article 4, the PRC Arbitration Law; Beifang Wanbang Logistics Co., Ltd v. JMT Mining SPRL Ltd & JIAYA Group Ltd, Supreme People’s Court (22 January 2013), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV. 54

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mutually select arbitration to resolve a dispute,57 to choose an arbitral institution,58 and to select arbitrators.59 The PRC law, however, also imposes certain limitations on party autonomy, which do 41 not reflect the common practice of international arbitration. For example, generally parties can only choose to arbitrate outside Mainland China if the arbitration is “foreign related”.60 Parties are also generally restricted in choosing a “foreign seat” or a foreign arbitral institution if the dispute is not foreign-related.61 However, as discussed in detail above, some of these restrictions have been relaxed to a certain extent. It remains to be seen whether these limitations would be fully lifted in the foreseeable future so that the Chinese law would be consistent with the international standard of party autonomy. b) Independence of arbitration. Article 8 of the PRC Arbitration Law states that 42 arbitration shall be conducted independently, free from interference of the administrative organ, social groups or individuals. Article 14 of the PRC Arbitration Law provides that arbitral institutions shall be independent from the administrative organ (行政机关). There shall be no subordinate relationship between arbitral institutions and administrative organs, nor shall there be a subordinate relationship among the arbitral institutions. This principle is particularly important in the PRC. Historically, arbitral institutions 43 were established as part of the State’s administrative organs. Their personnel, funding, and daily management were subject to the administrative organs. Such setup would render arbitration similar to administrative determinations. The above provisions in the PRC Arbitration Law aim to eliminate the administrative nature of arbitral institutions and bring arbitration in the PRC more in line with international practice. c) Finality. Article 9 of the PRC Arbitration Law specifies that an arbitral award is 44 final. Courts or arbitral institutions cannot accept a case when an arbitral award has already been rendered.62 Parties cannot initiate arbitration or litigation over the same dispute that has been arbitrated.63 Article 57 of the PRC Arbitration Law further states that an arbitral award becomes effective upon issuance. d) Courts have no jurisdiction when there is a valid arbitration agreement. Under 45 this principle, where parties have entered into a valid arbitration agreement, they are bound to submit any arising disputes to arbitration and cannot submit such disputes to the people’s court, except when the arbitration agreement is invalid.64

II. The arbitration agreement 1. The doctrine of separability The doctrine of separability is a universally recognized principle which entails that an 46 arbitration agreement or an arbitration clause is independent from the main contract 57

Article 4, the PRC Arbitration Law. Ibid. at article 6. 59 Ibid. at articles 30–31. 60 Johnston, (2008) 25 J. Int’l Arb. 537 (540 et seq.). 61 Ibid. 62 Article 9, the PRC Arbitration Law; Beijing Kang Wei Pharmaceutical Consultation Centre Co. Ltd v. Asia Medical Resources Development (Holdings) Ltd, Supreme People’s Court (19 December 2012), in Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV. 63 Article 9, the PRC Arbitration Law. 64 Ibid. at article 5. 58

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and should be interpreted as distinct from the main contract. On this basis, the amendment, revocation, termination and invalidity of the main contract should not affect the validity of the arbitration agreement or the arbitration clause. 47 The PRC Arbitration Law recognizes the principle of separability.65 Article 19 provides that “[a]n arbitration agreement shall exist independently. The amendment, rescission, termination or invalidity of a contract shall not affect the validity of the arbitration agreement”. Article 57 of the PRC Contract Law contains a similar provision, stating that “if a contract is null and void, revoked or terminated, it shall not affect the validity of the dispute resolution clause which is independently existing in the contract.” The principle of separability was further supplemented by a SPC Interpretation to include the situation where the main contract is never entered into. According to the Interpretation of the Supreme People’s Court concerning Some Issues on Application of the Arbitration Law of the People’s Republic of China (“SPC 2006 Interpretation”), “[w]here a contract does not become effective or is cancelled after being formed, the effectiveness of the agreement for arbitration shall be ascertained under paragraph 1 of article 19 of the Arbitration Law. Where the parties concerned reach an agreement for arbitration regarding a dispute when concluding the contract, the effectiveness of the agreement for arbitration shall not be impacted if the contract is not formed.”66

2. The law applicable to the arbitration agreement For foreign-related arbitration, the applicable law to the arbitration agreement is primarily regulated by the following three provisions: Article 16 of the SPC 2006 Interpretation states that “[t]he examination of the effectiveness of an agreement for arbitration which involves foreign interests shall be governed by the laws agreed upon between the parties concerned; if the parties concerned did not agree upon the applicable laws but have agreed upon the place of arbitration, the laws at the place of arbitration shall apply; if they neither agreed upon the applicable laws nor agreed upon the place of arbitration or the place of arbitration is not clearly agreed upon, the laws at the locality of the court shall apply.” Article 18 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations states that “[t]he parties may by agreement choose the law applicable to their arbitration agreement. Absent any choice by the parties, the law of the place where the arbitration institution is located or the law of the seat of arbitration shall be applied.” Article 14 of Interpretation on Certain Issues Concerning the Application of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations (I) (“SPC 2012 Interpretation”) states that “[w]here the parties concerned do not select the law applicable to a foreign-related arbitration agreement and do not stipulate the arbitration institution or the place of arbitration or the stipulation is unclear, the people’s court may apply the laws of the People’s Republic of China to recognize the effect of the arbitration agreement.”67 49 All three provisions primarily recognize party autonomy to choose the applicable law to the arbitration agreement, which is in line with majority of the arbitration laws 48

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Article 19, the PRC Arbitration Law. Article 10, Interpretation of the Supreme People’s Court concerning Some Issues on Application of the Arbitration Law of the People’s Republic of China (Adopted at the 1375th meeting of the Judicial Committee of the Supreme People’s Court on 26 December 2005), Fa Shi [2006] No. 7 of the Supreme People’s Court. 67 Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Law of the People’s Republic of China on Foreign-Related Civil Relations (I), Fa Shi [2012] No. 24, 28 December 2012. 66

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worldwide and consistent with international practice. When parties fail to agree on the applicable law to the arbitration agreement, article 18 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations provides two options: (1) the law of the place where the arbitral institution is located or (2) the law of the seat of arbitration. Such options address the situations where (1) either the arbitral institution or the seat of arbitration cannot be identified; or (2) the law of the place where the arbitral institution is located and the law of the seat of arbitration are consistent as to the validity of the arbitration agreement. However, it does not provide a clear answer as to which law should prevail when the two choices of laws render different results as to the validity of the arbitration agreement. In this regard, article 14 of the Provisions of the Supreme People’s Court on Several 50 Issues Concerning the Trial of Judicial Review of Arbitration Cases (2017) provides further clarification. It states that “[w]here, absent the parties’ choice of the governing law, a people’s court is to ascertain the law governing the validity of a foreign-related arbitration agreement in accordance with article 18 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations, and application of the law of the place of the arbitral institution or the law of the seat of arbitration will bring about different results in respect of the validity of the arbitration agreement, then the people’s court shall apply the law that renders the arbitration agreement valid.” Such recent clarification demonstrates that the PRC is closely following the interna- 51 tional trend of recognizing the validity of arbitration agreements. Such effort is further demonstrated by article 14 of the SPC 2012 Interpretation, under which the validity of an arbitration agreement would be upheld in accordance with the PRC law if neither the arbitral institution nor the seat of arbitration could be identified.

3. The validity of the arbitration agreement: capacity, arbitrability, form a) Capacity to conclude arbitration agreements. Under the PRC law, arbitration 52 agreements may be entered into by individuals with full civil capacity and legal persons.68 Thus, an arbitration agreement concluded between persons with no capacity or limited capacity is invalid. b) Arbitrability. Article 2 of the PRC Arbitration Law provides that contractual 53 disputes and other disputes over rights and interests in property between citizens, legal persons, and other organizations are arbitrable. Article 3 of the PRC Arbitration Law provides a list of non-arbitrable matters, including (1) marital, adoption, guardianship, child support, and succession disputes; and (2) administrative disputes. Although it is unclear whether the list under article 3 of the PRC Arbitration Law is exhaustive, a wider scope of arbitrable matters is becoming the trend. This is demonstrated by Article 2 of the SPC 2006 Interpretation, which states that “[w]here the parties concerned synoptically agree that the matters to be arbitrated are contractual disputes, the disputes arising out of formation, effectiveness, modification, assignment, performance, liabilities for breach, interpretation, rescission, etc. of the contract may all be ascertained as matters to be arbitrated.” Judicial practice also demonstrates a wide scope of arbitrable matters. Nearly two 54 decades ago, the SPC had recognized the arbitrability of tort claims in Jiangsu Materials

68 Article 18 of the General Rules of the Civil Law of the People’s Republic of China provides that “[a]n adult has full capacity for civil conduct and may perform civil juristic acts independently. A minor aged over 16 whose main source of income is his/her job shall be deemed as a person of full capacity for civil conduct.”

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Group Light Textile Corporation v. (Hong Kong) Top Capital Holdings Ltd and (Canada) Prince Development Ltd69 On 12 June 2018, the Xiamen Intermediate People’s Court in Subway International B.V. v. Xiamen Woguan Enterprise Management Co., Ltd upheld the arbitrability of a tax dispute.70 Other courts have supported arbitrability of disputes involving securities and certain intellectual property matters.71 55 Despite the trend of broadening scope of arbitrable matters, certain matters remain non-arbitrable in practice. For example, administrative contracts are non-arbitrable under the PRC law.72 For intellectual property matters, it is expressly specified under the PRC Copyright Law that copyright disputes are arbitrable.73 However, there is no similar provision under the PRC Patent Law or the PRC Trademark Law, and the general view is that the validity of patents and registered trademarks is non-arbitrable under the PRC law as both are administrative matters. 56

c) Form of the arbitration agreement. Article 16 of the PRC Arbitration Law sets out the requirements for a valid arbitration agreement. An arbitration agreement must contain an arbitration clause that provides for arbitration in the contracts or other written agreements and contains (i) an expression of intention to apply for arbitration; (ii) the matters to be referred to arbitration, and (iii) the designated arbitration commission. Article 1 of the SPC 2006 Interpretation further clarifies that “other written forms” include contract forms, letters, or data messages (including telegraph, telefax, fax, electronic data interchange and email).

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d) Termination of the arbitration agreement. An arbitration agreement can theoretically be terminated as its validity is also governed by the PRC Contract Law (if the PRC law is the applicable law to the arbitration agreement). However, in practice, the issue of termination of an arbitration agreement rarely occurs as the focus would be that the effect of the invalidity of the main contract does not affect the validity of the arbitration agreement contained therein.74

4. The scope and the interpretation of the arbitration agreement 58

a) Personal scope of the arbitration agreement. As a general rule, an arbitration agreement only binds parties to the arbitration agreement and cannot bind non-parties. If individuals or entities are not parties to the arbitration agreement, they cannot initiate arbitration or participate in the arbitral proceedings as parties to the arbitration agreement. The above position was confirmed in Light Industry and Textiles Company of Jiangsu Material Group vs. (Hong Kong) Top Capital Holding Ltd, where the SPC stated that parties to the two contracts concerned had agreed in the contracts that their disputes should be resolved by arbitration; and even if a third party was involved in the case, the claimant could protect its interests by initiating an independent legal action against the third party in court when the arbitral tribunal has no jurisdiction over the

69 Jiangsu Materials Group Light Textile Corporation v. (Hong Kong) Top Capital Holdings Ltd and (Canada) Prince Development Ltd (SPC Gazette, Issue 3, 1998). 70 Pan, PRC Court Upholds ICDR Award Relating to International Franchise Agreement, in: Kluwer Arbitration Blog, 10 January 2019, http://arbitrationblog.kluwerarbitration.com/2019/01/10/prc-court-upholds-icdr-award-relating-to-international-franchise-agreement/ (accessed 1 August 2020). 71 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 217 et seq. 72 Ibid. at 223 et seq. 73 Article 55, Copyright Law of the People’s Republic of China. 74 Beijing Zhihua Jiayi Technology Co., Ltd v. Beijing Gaochu Advertisement and Communication Co., Ltd, Preliminary Civil Ruling No. 21719 (2009) of the People’s Court of Chaoyang District, Beijing.

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third party.75 The SPC’s decision makes it clear that a third party cannot be added as a party to arbitration if it is not bound by the arbitration agreement. Normally, a party to an arbitration agreement would be a signatory to the arbitration 59 agreement. However, there are certain circumstances, where non-signatories may be regarded as parties to an arbitration agreement and be held to be bound by the arbitration agreement as a result. These circumstances normally include the following: (1) merger or division of legal person; (2) assignment or transfer of contract; (3) subrogation; (4) agency; (5) succession.76 It is important to note that performing a contract without being a signatory to the 60 contract (and to the arbitration agreement as a result) does not generally qualify the performing party as a party to the arbitration agreement. In Guangdong JDB Beverage & Food Co. v. Guangzhou Pharmaceutical Holdings Ltd, the SPC held that as the appellants were not parties to the underlying trademark license agreement, they could not be bound by the arbitration clause therein solely because they were the actual performing parties to the underlying agreement.77 b) Substantive scope of the arbitration agreement. The substantive scope of the 61 arbitration agreement determines the scope of the arbitral tribunal’s jurisdiction. Commonly used terms in an arbitration agreement include “any disputes”, “arising out of or in connection with”, or “in the performance of”. PRC courts have adopted a broad approach to interpret the scope of an arbitration 62 agreement. According to the SPC when interpreting “disputes arising out of the contract performance”, the second part of the Response of the Supreme People’s Court to Certain Questions Concerning the Application of the Foreign Economic Contract Law shall apply. The relevant part provides that “the term ‘disputes arising from the contract’ as stated in article 5 of the Foreign Economic Contract Law shall be understood in the general sense. All disputes between the two parties to a contract over matters such as the existence of a contract, the time of its establishment, interpretation of the contents of a contract, implementation of a contract, liability for breach of contract, as well as disputes over the amendment, suspension, assignment, dissolution or termination of a contract shall be included under this term.”78 Such expansive method of construction of an arbitration agreement was also seen in 63 Jiangsu Materials Group Light Textile Corporation v. (Hong Kong) Top Capital Holdings Ltd and (Canada) Prince Development Ltd, where the SPC established that tort disputes were within the scope of the arbitration clause which stipulated that “[a]ny dispute arising out of or in relation to the performance of this contract shall be settled by the parties amicably through negotiation; if the parties fail to settle the dispute by negotiation, the dispute shall be submitted to China International Economic and Trade Arbitration Commission to arbitrate in accordance with the arbitration rules of this Commission. An arbitral award rendered herein shall be final and binding on the parties.”79 75 Gazette of the Supreme People’s Court of the People’s Republic of China, 109–110 (3rd ed., Supreme People’s Court of PRC 1998). 76 Lin, Judicial Review of Arbitration: Law and Practice in China, 124 et seq. 77 Guangdong JDB Beverage & Food Co. v. Guangzhou Pharmaceutical Holdings Ltd, (2014) Min San Zhong Zi No. 10. For a comparative view, see supra A mn. 45. 78 Supreme People’s Court, The Response of the Supreme People’s Court to Gansu Higher People’s Court on Issues relating to the Validity of Cooperation Agreement, Fa Jing [1995] No. 273, Supreme People’s Court; see also Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 66 et seq. 79 Gazette of the Supreme People’s Court of the People’s Republic of China, 109–110 (3rd ed., Supreme People’s Court of PRC 1998).

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Article 2 of the SPC 2006 Interpretation further echoed the judicial practice in this regard. It states that “[w]here the parties concerned synoptically agree that the matters to be arbitrated are contractual disputes, the disputes arising out of formation, effectiveness, modification, assignment, performance, liabilities for breach, interpretation, rescission, etc. of the contract may all be ascertained as matters to be arbitrated.”

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c) Pathological arbitration clauses. Under the PRC law, the issue of validity of pathological arbitration clauses is somewhat complicated due to the strict requirements for a valid arbitration agreement and various sources of laws governing such issue. The PRC courts, however, adopted a pro-arbitration stance when interpreting defective arbitration clauses, albeit the limit of strict statutory requirements. The following are the main types of pathological arbitration clauses that are specifically regulated by PRC law and/or considered by the PRC courts.

aa) Selection of arbitral institution. One of the strict requirements of a valid arbitration agreement is to have a specific arbitral institution agreed by the parties in the arbitration agreement.80 Failure to specify an arbitral institution in an arbitration agreement would generally render an arbitration agreement invalid. In this regard, article 18 of the PRC Arbitration Law further specifies that if an arbitration agreement contains no or unclear provisions concerning the matters for arbitration or the arbitration commission, the parties may reach a supplementary agreement. If no such supplementary agreement can be reached, the arbitration agreement shall be null and void. 67 That does not mean, however, that any kind of discrepancy or ambiguity in selecting an arbitral institution in an arbitration agreement would render the arbitration agreement invalid. The general judicial practice is that if from the various circumstances a specific arbitral institution can be unambiguously inferred, the validity of an arbitration agreement would normally be upheld. For example, the ambiguity in the name of the selected arbitral institution would not necessarily render an arbitration agreement invalid. In this regard, article 3 of the SPC 2006 Interpretation states that “[i]f the name of the arbitration institution agreed upon in an arbitration agreement is not described in an accurate way, but the specific arbitration institution is determinable, it shall be deemed that the arbitration institution has been selected.” Judicial practice is also consistent with such principle. In one case where the parties omitted “Economic” in the name of “China International Economic and Trade Arbitration Commission”, the SPC upheld the validity of the arbitration clause and held that CIETAC had jurisdiction over the dispute.81 68 Another situation is where the parties select arbitration rules but fail to select an arbitral institution in the arbitration agreement. In this regard, article 4 of the SPC 2006 Interpretation states that: “[w]here an arbitration agreement only includes the arbitration rules applicable for the dispute at issue, the parties concerned shall be deemed not to have agreed upon the arbitration institution, unless the parties have reached a supplementary agreement or the arbitration institution can be identified through their agreed-upon arbitration rules.” 69 A further example is when parties choose two or more arbitral institutions in an arbitration agreement. In this regard, article 5 of the SPC 2006 Interpretation states that “[i]f two or more arbitration institutions are agreed upon in an arbitration agreement, the parties concerned may select, by agreement, one of these arbitration institutions to 66

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Article 16(2), the PRC Arbitration Law. The Reply of Supreme People’s Court Re the Case Where Some Words Missing in Name of the Arbitration Institution Chosen by the Arbitration Clause Do Not Affect the Validity of the Arbitration Clause, Fa Jing (1998) No. 159, Supreme People’s Court. 81

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which they will apply for arbitration. If the parties fail to reach an agreement on the arbitration institution, the arbitration agreement shall be deemed invalid.” bb) The effect of the word “may”. Some arbitration clauses contain the word “may” 70 when describing parties’ choice to refer the dispute to arbitration. Whether such word would affect parties’ intention to resort to arbitration, and thus affect the validity of the arbitration agreement is not entirely clear. Judicial practice in this regard is not consistent. For example, in a case where the arbitration clause stated that “any dispute incurred during the performance of the contract shall be settled by the parties through friendly negotiation; in case of any failure to reach a settlement, either party may apply to Changde Arbitration Commission for arbitration” (emphasis added), the court held that such clause contained a specific arbitral institution, but it did not specify that the dispute can also be submitted to court. As such, despite the use of “may”, the clause could not be interpreted as to leave room for litigation.82 However, in Chongqing A Commercial Trading Co., Ltd v. Hengyang B Real Estate Development Co., Ltd, the court held that although the arbitration clause provided that any dispute may be submitted to arbitration, it did not expressly exclude the courts’ jurisdiction over the dispute, and the arbitration clause was invalid as a result.83 cc) Either arbitrate or litigate. Some arbitration clauses contain provisions under 71 which parties agree to resolve their disputes through either arbitration or litigation. The validity of such clauses is specifically regulated by article 7 of the SPC 2006 Interpretation, which states that “[a]n arbitration agreement shall be invalid if the parties thereto agree that disputes may be resolved either through submission to an arbitration institution for arbitration or by filing an action with a people’s court, unless one of the parties applies to an arbitration institution for arbitration and the other party fails to raise an objection within the time limit specified in paragraph 2 of article 20 of the Arbitration Law.”

5. The effect of the arbitration agreement and Kompetenz-Kompetenz Kompetenz-Kompetenz is generally an accepted principle according to which an 72 arbitral tribunal has the competence to determine its own jurisdiction. However, this principle is not fully recognized under the PRC law.84 Article 20 of the PRC Arbitration Law specifies that “if a party challenges the validity of the arbitration agreement, it may request the arbitration commission to make a decision or apply to the people’s court for a ruling. If one party requests the arbitration commission to make a decision and the other party applies to the people’s court for a ruling, the people’s court shall give a ruling.” As such, in the PRC, the power to decide the tribunal’s jurisdiction is conferred to the arbitral institution and the courts. The arbitral tribunal does not have the authority to decide the validity of an arbitration agreement. a) Enforcing arbitration clauses and Kompetenz-Kompetenz. If court proceedings 73 are commenced in contravention of an arbitration agreement, article 5 of the PRC Arbitration Law requires that the court shall not accept the case, unless the arbitration agreement is null and void. This provision restricts juridical intervention to limited circumstances and appears to be consistent with international practice. However, because article 20 of the PRC Arbitration Law grants the power of review to the court and the arbitral institution, the extent to which Kompetenz-Kompetenz is recognized 82

Guizhou X Technology Development Co. Ltd v. Li, (2009) Chang Li Min Zhong Zi No. 50. Lin, Cases of Latest Commercial Arbitration and Judicial Practice, Vol. 11, 2013. 84 Wang, (2018) 36 ASA Bull. 615 (621 et seq.). 83

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under the PRC law largely depends on the following question – who takes precedence in making the jurisdictional decision: the arbitral institution or the court? Article 20 of the PRC Arbitration Law specifies that the court takes precedence over the arbitral institution when one party makes an application to the court and the other party makes an application to the arbitral institution to determine the validity of the arbitration agreement simultaneously. The SPC, in its Reply on Several Questions Regarding the Determination of the Validity of Arbitration Agreements (“SPC 1998 Reply”) further clarifies that if jurisdictional challenges have been made to both the arbitral institution and the court, the court shall not accept the case if the arbitral institution has decided the matter. However, if the arbitral institution has not yet made a decision, the court should accept the case and instruct the arbitral institution to terminate the arbitral proceeding.85 The SPC 1998 Reply also specifies the following situation: If one party initiates an arbitration over a dispute arising from a contract or other property issue while the other party challenges the validity of the arbitration agreement and initiates the lawsuit in the same dispute before the court, once the court accepts the case, it must instruct the arbitral institution to suspend the arbitral proceedings. After the court’s decision on the validity of the arbitration agreement, the court shall send a copy of its ruling to the arbitral institution, which would then decide to resume arbitration or dismiss the case based on the court’s ruling. The SPC 2006 Interpretation takes a further step by specifying that once an arbitral institution has made a decision on the validity of an arbitration agreement, no application can be made to the courts on the validity of the arbitration agreement or to set aside the arbitral institution’s decision. This procedural mechanism empowers courts to intervene in an arbitral proceeding before the arbitral institution makes a jurisdictional decision. This is clearly in contrast to the essence of Kompetenz-Kompetenz which empowers the arbitral tribunal to rule on its jurisdiction despite the fact that its decision could later be overruled by a court. The courts’ power is exercised in a way of direct intervention, rather than the international standard of judicial review after the tribunal has made the decision.86 One related issue regarding Kompetenz-Kompetenz in enforcing arbitration clauses is the fact that the PRC law grants the power to rule on jurisdiction to the arbitral institution rather than the arbitral tribunal. In its attempt to address the departure of the generally accepted principle of Kompetenz-Kompetenz without violating the mandatory PRC law, the CIETAC Arbitration Rules permit CIETAC to delegate jurisdictional decision to the arbitral tribunal. Article 6(1) of the CIETAC Arbitration Rules states that “CIETAC has the power to determine the existence and validity of an arbitration agreement and its jurisdiction over an arbitration case. CIETAC may, where necessary, delegate such power to the arbitral tribunal.” b) Preclusion of jurisdictional defences. Article 20 of the PRC Arbitration Law specifies that jurisdictional challenges should be raised before the first hearing of the tribunal. Article 13 of the 2006 SPC Interpretation further specifies that where a party fails to submit an objection to the validity of an arbitration agreement prior to the first arbitration hearing and applies to a court to invalidate the arbitration agreement, the court shall dismiss the application.

85 Article 3, Supreme People’s Court Reply on Several Questions Regarding the Determination of the Validity of Arbitration Agreements, Fa Shi [1998] No. 27. 86 Fan, (2008) 19(2) ICC International Court of Arbitration Bulletin 25 (27–28).

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As such, the first arbitration hearing appears to be the cut-off line for raising 79 jurisdictional defence. Failure to raise a jurisdictional objection to the court before this cut-off line would be deemed as a waiver to challenge the validity of arbitration agreement to the court. However, “the first arbitration hearing” is not clearly defined under the PRC Law. The common view is that it refers to the first arbitration hearing on the substance of the dispute, thus excluding all the procedural meetings or hearings.87 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. 80 The PRC courts’ power of direct intervention makes the question of whether court’s decision on jurisdiction of the arbitral tribunal has binding effect somewhat different than the situation where the tribunal has power to rule on its own jurisdiction. As explained in detail above, when the question of validity of an arbitration agreement is raised before a court, it can either terminate the arbitral proceedings or suspend the arbitral proceedings and send its jurisdictional decision to the arbitral institution to follow.88 The arbitral institution would not have the power to rule on the validity of the arbitration agreement at all. In that sense, the court’s decision on the jurisdiction of the arbitral tribunal is binding. These rules have been adopted in judicial practice. For example, in Re Xingda 81 Company (Xiamen) Ltd, one party submitted the dispute to CIETAC, and the other party challenged CIETAC’s jurisdiction before the Xiamen Intermediate People’s Court. The court accepted the case and notified the CIETAC to stop the proceedings pursuant to article 3 of the SPC 2008 Reply. The courts would be deprived of the power to make a ruling if an arbitral institution has 82 made the decision on the validity of an arbitration agreement when an application is made to the court for the same issue. In this situation, the question on the binding effect of court’s decision would not have come into play as the court would dismiss the application.

III. The arbitral tribunal and the conduct of the arbitral proceedings Similar to most jurisdictions, under the PRC law, arbitral proceedings are governed 83 by the applicable laws and the agreement of the parties. Unless otherwise expressly agreed by the parties, the laws of the arbitral seat determine the arbitral procedures.89

1. The arbitral tribunal, impartiality and independence of the arbitrator The PRC Arbitration Law requires that an arbitral tribunal be composed of one 84 arbitrator or three arbitrators.90 Where a tribunal consists three members, each party shall appoint one arbitrator or entrust the president of the arbitral institution with appointing authority. The third arbitrator shall be jointly appointed by both parties or by the president of the arbitral institution jointly entrusted by the parties.91 If the parties agree that the arbitral tribunal should be composed of a sole arbitrator, the parties shall jointly appoint or jointly entrust the president of the arbitral institution to appoint the sole arbitrator.92 If the parties fail to agree on the composition of the arbitral tribunal or 87

Sun/Willems, Arbitration in China, 2015, 162 et seq. Articles 3 and 4, Supreme People’s Court Reply on Several Questions Regarding the Determination of the Validity of Arbitration Agreements, Fa Shi [1998] No. 27. 89 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 167 et seq. 90 Article 30, the PRC Arbitration Law. 91 Ibid. at article 31. 92 Ibid. 88

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the selection of the arbitrators within the time limit prescribed in the arbitration rules, the arbitrators shall be appointed by the president of the arbitral institution.93 After the arbitral tribunal is formed, the arbitral institution shall notify the parties of the composition of the arbitral tribunal in writing.94 Given that agreements providing for arbitration in China must refer to an arbitral institution it is worth mentioning that major institutions such as CIETAC contain default rules limiting the parties’ choice of arbitrators to individuals on the panel of the institution.95 85 Impartiality and independence of arbitrators are recognized requirements under the PRC law.96 The institutional rules of many Chinese arbitral institutions also have similar requirements. For example, article 13 of the PRC Arbitration Law provides that arbitration commissions shall appoint righteous and upright persons as arbitrators. The CIETAC Arbitration Rules prescribe that the arbitral tribunal shall act impartially and fairly in all circumstances97 and the arbitral tribunals shall independently and impartially render a fair and reasonable arbitral award.98 a) Duty to disclose. The PRC Arbitration Law does not expressly provide for disclosure obligations.99 However, some Chinese institutional rules do have specific provisions in this regard. For example, the CIETAC Arbitration Rules, adopting the UNCITRAL Model Law, provide that an arbitrator must sign a declaration disclosing any facts or circumstances likely to give rise to justifiable doubts as to his/her impartiality or independence.100 Such disclosure must be provided to the parties.101 87 Non-disclosure of relevant facts or circumstances might lead to setting aside or nonenforcement of an arbitral award on the ground of improper constitution of the arbitral tribunal under article 58(3) of the PRC Arbitration Law. For example, in Huainan Branch of China Mobile Communications Group Anhui Co., Ltd v. Huainan Dongshan Real Estate Development Co., Ltd, failure to disclose that the arbitrator and a party’s counsel worked in the same law firm was a basis for questioning the independence of the arbitrator in question. The court held that such relationship could compromise the arbitrator’s independence and the arbitrator should have withdrawn even if his appointment was not challenged. The application to vacate the arbitral award was therefore upheld.102 86

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b) Grounds for challenge. A party can challenge the appointment of an arbitrator and request his/her withdrawal on specific grounds. Article 34 of the PRC Arbitration Law sets out four grounds for challenge: (1) the arbitrator is a party in the case or a close relative of a party or of an agent in the case; (2) the arbitrator has a personal interest in the case; (3) the arbitrator has other relationship with a party or his agent in the case which may affect the impartiality of arbitration; or (4) the arbitrator has privately met with a party or agent or accepted an invitation to entertainment or gift 93

Ibid. at article 32. Ibid. at article 33. 95 Under the CIETAC Arbitration Rules, parties shall nominate arbitrators from the Panel of Arbitrators provided by CIETAC (article 26(1)). Where parties agree to nominate arbitrators from outside the panel, nomination is subject to the confirmation by the Chairman of CIETAC (article 26(2)). 96 Gu, (2018) 13(2) The Journal of Comparative Law 164 (164 et seq.). 97 Article 35(1), the CIETAC Arbitration Rules. 98 Ibid. at article 45(1). 99 Yang, Foreign-related Arbitration in China: Cases and Commentary, 2016, 182 et seq. 100 Gaillard/Savage, Fouchard, Gaillard, Goldman on International Commercial Arbitration, 1999, 579 et seq.; López, in: Liu/Shan (eds), China and International Commercial Dispute Resolution, 99 (113). 101 Article 31(3), the CIETAC Arbitration Rules. 102 Huainan Branch of China Mobile Communications Group Anhui Co., Ltd v. Huainan Dongshan Real Estate Development Co., Ltd, (2016) Wan 04 Min Te No. 314. 94

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from a party or agent. Under articles 34 and 38 of the PRC Arbitration Law, if an arbitrator has had ex parte meeting or accepted an invitation to entertainment or gift from a party or its agent and the circumstances are serious, he/she shall assume legal liability according to the relevant laws and the arbitration commission shall remove himself from the arbitration. c) Procedural aspects and preclusion of grounds for challenge. The procedural 89 aspects for challenge are governed by articles 35 and 36 of the PRC Arbitration Law. A challenge must be accompanied with a statement of reasons and the chairman of the arbitration commission shall determine if the arbitrator should withdraw from the case. Where the chairman of the arbitration commission also serves as an arbitrator in the case, the decision shall be made collectively by the arbitration commission. The PRC law also requires that a challenge to an arbitrator be raised timely. A 90 challenge shall be submitted with a statement of reasons prior to the first hearing. If the matter giving rise to the challenge became known after the first hearing, the challenge may be made before the conclusion of the final hearing of the case.103 Institutional rules of many Chinese arbitral institutions also require timely submission of a challenge to an arbitrator. For example, under the CIETAC Arbitration Rules, a party may challenge an arbitrator in writing within 15 days from the date it receives the notice of formation of the arbitral tribunal. Where a party becomes aware of a reason for challenge after such receipt, the party may challenge the arbitrator in writing within 15 days after such reason has become known to it, but no later than the conclusion of the last oral hearing.104 If a party fails to submit a challenge within the time periods prescribed by the PRC 91 Arbitration Law or institutional rules and later applies to annul the arbitral award on the grounds of improper constitution of arbitral tribunal, such application would normally be rejected by the PRC courts. For example, in Chengdu Food Factory v. A, a party sought to set aside the arbitral award on the ground that the counsel of the other party had teacher and student relationship with the arbitrator appointed by that party. The court, although it acknowledged such relationship, rejected the application on the grounds that the challenging party did not raise the objection during the arbitral proceedings.105 d) Failure or impossibility to act. If an arbitrator cannot perform his/her duties due 92 to withdrawal or for other reasons, a substitute arbitrator shall be selected or appointed.106 After a substitute arbitrator has been selected or appointed, a party may request that the arbitral proceedings begin afresh. The decision of whether to start proceedings de novo shall be made by the arbitral tribunal.107

2. The conduct of the arbitral proceedings a) Request for arbitration, statements of claim and defence, hearings, default. The 93 PRC Arbitration Law contains specific requirements for request for arbitration. To file a request for arbitration, the following requirements need to be satisfied: (1) an arbitration agreement is submitted; (2) there is specific statement of claim and facts and grounds on which the claim is based; (3) the statement of claim shall fall within the arbitrable scope of an arbitral institution; (4) both the original and the duplicate of the 103

Article 35, the PRC Arbitration Law. Article 32(3) CIETAC Arbitration Rules. 105 See Lin, Cases of Latest Commercial Arbitration and Judicial Practice, Vol. 6. 106 Article 37, the PRC Arbitration Law. 107 Yang, Foreign-Related Arbitration in China: Cases and Commentary, 2016, 181 et seq. 104

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request for arbitration should be submitted.108 Moreover, a request for arbitration shall specify the following particulars: (1) the name, sex, age, occupation, work unit, and domicile of each party, or the name and domicile of legal persons or other organizations and the names and positions of their legal representatives or chief responsible persons; (2) the arbitration claim and the facts and reasons on which it is based; and (3) the evidence, the source of the evidence, and the names and domiciles of witnesses.109 The arbitration procedure begins when the arbitral institution agrees to accept the request for arbitration. After receiving a request for arbitration, the arbitral institution needs to decide whether to accept the application. If it finds that the application complies with the requirements stated above, it shall accept the application and notify the party within five days from the date of receipt.110 If it finds that the application does not comply with the above mentioned conditions, it shall inform the party in writing of its rejection and explain the reasons within five days from the date of receipt.111 The respondent can reply to the claimant’s request for application by the means of defence. It should submit a statement of defence within the time limit prescribed by the arbitration rules.112 However, if the respondent fails to submit its statement of defence within the time limit, it would not affect the arbitral proceedings.113 The arbitral institution, after receiving the statement of defence, shall serve a duplicated copy of the statement of defence on the claimant within the time limit prescribed in the arbitration rules.114 The PRC Arbitration Law also contains specific provision regulating the issue of default. If the claimant fails to appear before the arbitral tribunal without justifiable reasons, it may be deemed to have withdrawn its application; while if the respondent fails to appear before the arbitral tribunal without justifiable reasons, a default award may be made.115 In China, oral hearing is the main form for arbitral proceedings.116 If, however, the parties agree not to hold oral hearings, the arbitral tribunal may render an arbitral award on the basis of the written application for arbitration, the written defence, and other documents.117 At the hearing, the parties may present and examine evidence and conduct debate.118 The arbitral tribunal shall record the hearing in writing. Where the parties and other participants consider that there is omission or error in the transcript concerning their statements, they are entitled to apply for correction.119 The written records of the hearings shall be signed or affixed with seals by the arbitrators, the stenographers, the parties, and any other participants at the hearing.120 In case of a foreign-related arbitration, the arbitral tribunal could make verbatim transcript or a transcript of key points of the hearing. The transcript of key points of the hearing shall be signed or affixed with seals of the parties concerned and other participants of the hearing.121 108

Articles 21–22, the PRC Arbitration Law. Ibid. at article 23. 110 Ibid. at article 24. 111 Ibid. 112 Ibid. at article 25. 113 Ibid. 114 Ibid. 115 Ibid. at Article 42. 116 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 171 et seq. 117 Article 39, the PRC Arbitration Law. 118 Ibid. at articles 45, 47. 119 Ibid. at article 48. 120 Ibid. 121 Ibid. at article 69. 109

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b) Equality of arms, fair trial principles and the right to be heard. In arbitral 99 proceedings, parties must be treated equally and given a fair chance to present their case. Article 1 of the PRC Arbitration Law provides the objective of ensuring fair and timely resolution of disputes. Article 7 of the PRC Arbitration Law further provides that arbitration disputes shall be resolved in a fair and reasonable manner. Some institutional rules embody these principles in more detail. For example, the CIETAC Arbitration Rules adopt a broader meaning of fair trial principles. Article 35(1) of the CIETAC Arbitration Rules specifically provides that under all circumstances, the arbitral tribunal shall act impartially and fairly and shall afford a reasonable opportunity to both parties to present their case.122 The Ethical Rules for Arbitrators of the Beijing Arbitration Commission also reiterate 100 the duty of an arbitrator to remain independent and impartial in conducting the arbitration, to thoroughly and meticulously examine all the evidence, and to be fair and reasonable in assessing and determining the merits of the arguments furnished by the parties.123 c) Confidentiality. Article 40 of the PRC Arbitration Law provides that arbitration 101 shall be conducted in camera. However, if the parties agree to have open sessions, the arbitration may be held openly except for cases where State secrets are involved. Aside from article 40 of the PRC Arbitration Law, there is no law or SPC interpretation which expressly addresses the issue of privacy or confidentiality in arbitration.124 However, it is widely recognized in practice that the conduct of arbitral proceedings is confidential in nature.125 Many institutional rules contain generic language, referring to a duty of confidenti- 102 ality covering the substantive and procedural matters of the case.126 For example, the CIETAC Arbitration Rules provide that “the parties, their arbitration agents, witnesses, arbitrators, experts […] and appraisers appointed by the arbitration tribunal and the relevant staff-members of the secretariat of the Arbitration Commission shall not disclose to outsiders the substantive or procedural matters of the case.”127 In addition, information received by a mediator/conciliator may not be disclosed to a 103 third party without the consent of the parties. Arbitrators and parties are required to maintain the confidentiality of all information disclosed during mediation/conciliation. In the event of an unsuccessful mediation/conciliation process, any statements given during the mediation/conciliation process may not be quoted or otherwise used in evidence by any party as the basis for claims, defences, or counterclaims in the subsequent arbitration, judicial, or other proceedings.128 d) The arbitral award. The PRC Arbitration Law contains specific provisions 104 regulating arbitral awards. The arbitral award shall be made in accordance with the opinion of the majority of the arbitrators. The dissenting opinions may be recorded in the transcript. If the arbitral tribunal is unable to form a majority opinion, the arbitral award shall be made in accordance with the opinion of the presiding arbitrator.129 Moreover, an arbitral award shall specify the request for arbitration, the facts of the 105 dispute, the grounds for the decision, the result of the award, the allocation of 122

Article 35(1), CIETAC Arbitration Rules. Tao, Arbitration Law and Practice in China, 3rd ed., 2012, 130. 124 Yang, Foreign-related Arbitration in China: Cases and Commentary, 2016, 168 et seq. 125 Tao, Arbitration Law and Practice in China, 3rd ed., 2012, 167 et seq. 126 Smeureanu, Confidentiality in International Commercial Arbitration, 2011, 78 et seq. 127 Article 37, the CIETAC Arbitration Rules. 128 Tao, Arbitration Law and Practice in China, 3rd ed., 2012, 159 et seq. 129 Article 53, the PRC Arbitration Law. 123

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arbitration fees, and the date of the award. Parties may agree not to record the facts of the dispute and the grounds for the decision in the award. The arbitral award shall be signed by the arbitrators and sealed by the arbitration commission. An arbitrator with dissenting opinions has the option to sign the award or not.130 An arbitral award is final and legally effective on the date it is made.131 106 After a request for arbitration has been made, the parties may reach conciliation on their own initiative. If the parties have reached a conciliation agreement, they may request the arbitral tribunal to make an arbitral award in accordance with the conciliation agreement; alternatively, the request for arbitration may be withdrawn.132 The arbitral tribunal may carry out conciliation prior to issuing an award and shall conduct conciliation if both parties voluntarily seek conciliation. If conciliation is unsuccessful, an arbitral award shall be made promptly. If an agreement is reached through conciliation, the arbitral tribunal shall make a written conciliation statement or make an arbitral award in accordance with the result of the agreement. A written conciliation statement and an arbitral award shall have equal legal effect.133 107 In the arbitral proceedings, if a part of the facts involved has already become clear, the arbitral tribunal may first make a partial award in respect of such part of the facts.134 108 If there are clerical or calculation errors in the arbitral award, or if the matters which have been decided by the arbitral tribunal are omitted in the arbitral award, the tribunal shall make relevant corrections or supplementation. The parties may, within 30 days from receipt of the award, request the arbitral tribunal to make such corrections or supplementation.135 109

e) Termination of the arbitration without an award. Under certain circumstances, the arbitral tribunal can terminate the arbitral proceedings without issuing an award. If the claimant is absent from the hearing without justified reasons after having been notified in writing or leaves the hearing prior to its conclusion without the permission of the arbitral tribunal, it may be deemed to have withdrawn its application for arbitration.136 The arbitral proceedings can also be terminated if parties reach a conciliation agreement after a request for arbitration has been made and decide to withdraw the application for arbitration.137

f) The costs of the arbitration. An arbitral tribunal has power to allocate the costs of the arbitration between the parties. Although in principle, parties are free to agree in the arbitration agreement on how to allocate the costs between them, they rarely do so in practice. As a result, the parties’ liability for costs usually needs to be addressed in the arbitral award.138 Article 54 of the PRC Arbitration Law specifies that the award shall set out the costs of the arbitration. In practice, arbitral tribunals follow the general rule in international arbitration proceedings that the unsuccessful party ought to bear responsibility for the reasonable costs of the successful party.139 111 Moreover, arbitral proceedings will not be commenced until the arbitration fees have been paid. As a matter of practicality, the claimant is therefore required to make an 110

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Ibid. at article 54. Ibid. at article 57. 132 Ibid. at article 49. 133 Ibid. at article 51. 134 Ibid. at article 55. 135 Ibid. at article 56. 136 Ibid. at article 42. 137 Ibid. at article 49. 138 Sun/Willems, Arbitration in China, 2015, 283 et seq. 139 Ibid. at 286 et seq. 131

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advance payment of the arbitration fees.140 For example, under the CIETAC Arbitration Rules, a claimant is required to pay the arbitration fee in advance when applying for arbitration.141 Such practice is different from many major institutional rules, under which both the claimant and the respondent are required to pay an advance on costs.

3. Evidence, discovery, disclosure Article 43 of the PRC Arbitration Law provides that parties shall provide evidence in support of their arguments. Such evidence shall be presented during the hearings and may be examined by the parties.142 Under circumstances where the evidence may be destroyed or lost or difficult to obtain at a later stage, a party may apply for preservation of the evidence. If a party applies for preservation of the evidence, the arbitration commission shall submit its application to the people’s court in the place where the evidence is located.143 The PRC Arbitration Law also recognizes the general power of an arbitral tribunal to obtain evidence for arbitration.144 The arbitral tribunal may, as it considers necessary, collect evidence on its own initiative.145 Following the 2012 Amendments to the Civil Procedure Law, parties may apply directly to the people’s court for preservation of evidence to be used in arbitration before the request for arbitration is filed.146 Similar to many civil law jurisdictions, the PRC law does not provide specific disclosure/discovery procedure and there is no duty of general discourse/discovery in the arbitration proceedings in China.147

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4. The law governing the dispute and mandatory rules (lois de police) In China, the distinction between disputes arising out of domestic relationships and 116 disputes arising out of relationships involving foreign elements plays a significant role in determining the law governing the dispute. A pure domestic civil and commercial relationship can only be governed the PRC law 117 and the parties to such a relationship have no right to choose other applicable laws. This is directly regulated by article 8 of the PRC General Principles of the Civil Law, which states “[t]he law of the People’s Republic of China shall apply to civil activities within the People’s Republic of China, except as otherwise stipulated by law. The provisions of this Law as regards citizens shall apply to foreigners and stateless persons within the People’s Republic of China, except as otherwise stipulated by law.” Laws other than the PRC law may apply to govern a relationship involving foreign 118 elements. In this regard, article 145 of the PRC General Principles of the Civil Law and article 126 of the PRC Contract Law both provide that the parties to a contract involving foreign elements may choose the law applicable to settle their contractual disputes, except as otherwise stipulated by law. Where the parties to a contract involving foreign elements have made no such choice, the law of the country to which the contract is mostly closely connected shall apply. Moreover, article 41 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations provides that parties concerned may choose the laws applicable to a contract by 140

Ibid. at 287 et seq. Article 12(3), CIETAC Arbitration Rules. 142 Article 45, the PRC Arbitration Law. 143 Ibid. at article 46. 144 Yang, Foreign-related Arbitration in China: Cases and Commentary, 2016, 150 et seq. 145 Article 43, the PRC Arbitration Law. 146 Article 81, the PRC Civil Procedure Law. 147 Sun/Willems, Arbitration in China, 2015, 264 et seq. 141

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agreement. Where the parties have made no such choice, the laws of the habitual residence of the party whose performance of obligations best reflects the characteristics of the contract or other laws having the most significant relationship with the contract shall apply. Despite the slight difference in wording in the above two provisions, it seems that the applicable law to the dispute should be the law which has the closet connection with the contract. The typical example would be the laws of the habitual residence of the party whose performance of the obligations best reflects the characteristics of the contract. 119 Further, parties’ choice of the applicable law to the dispute with foreign elements is subject to certain restrictions. It is mandatory to apply the PRC law to certain relationships, even if the parties have chosen some other law to govern that relationship, or some other law is the most closely connected law.148 Article 4 of the Law of the People’s Republic of China on the Laws Applicable to Foreign-related Civil Relations provides that where there are mandatory provisions on foreign-related civil relationships in the PRC laws, these mandatory provisions shall directly apply. One example in this regard is article 126(2) of the PRC Contract law, which provides that for contracts involving Sino-foreign equity joint venture, Sino-foreign cooperative joint venture, and Sinoforeign cooperation in exploring and exploiting natural resources to be carried out within the territory of the PRC, the PRC law shall apply. Article 10 of the SPC 2012 Interpretation further clarifies the mandatory provisions. It stipulates that cases where there is a public interest, foreign-related cases concerning labour protection, food and public health safety, environmental safety, financial safety, such as foreign exchange control, anti-monopoly and anti-dumping, the mandatory provisions of the PRC law govern.149 120 If parties attempt to evade the application of the mandatory provisions of the PRC law, such act would not constitute a reason to apply foreign laws. The SPC 2012 Interpretation clarifies that the laws of a foreign country are not applicable if one party purposely creates a link to a foreign-related civil relationship in order to circumvent the application of the mandatory provisions of the PRC law.150

5. Interim relief in arbitration 121

China is one of the few jurisdictions where courts have exclusive jurisdiction to grant interim reliefs.151 While many jurisdictions allow arbitral tribunals to issue interim orders which may be enforced by the courts (supra A mns 99–100), the PRC Arbitration Law requires arbitral institutions to forward applications for an order to preserve property or evidence to the competent court.152 Only the court is entitled to rule on such matters and impose relevant measures to preserve the evidence or property in question.153

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a) Interim relief before state courts. Chinese courts have powers to grant interim reliefs. This is however limited to preservation of property and preservation of evidence. Article 28 of the PRC Arbitration Law provides that a party may apply for the preservation of property where the actions of the other party or other circumstances 148

Ibid. at 125 et seq. Article 10, SPC 2012 Interpretation. 150 Ibid. at article 11. 151 Kent/Hollis, in: Ziyaeva/Laird/Sabahi/Whitesell (eds), Interim and Emergency Relief in International Arbitration, 2015, 87 (88 et seq.); Sun/Willems, Arbitration in China, 2015, 433 et seq. 152 Nilsson/Lian/Gu, in: Jorgensen (ed.), Finding, Freezing and Attaching Assets: A Multi-Jurisdictional Handbook, 2016, 69 (75 et seq.). 153 Sun/Willems, Arbitration in China, 2015, 120 et seq. 149

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may render it impossible or difficult to enforce the award. Where a party applies for the preservation of property, the arbitration commission shall forward the application to the people’s court. Preservation of property before the commencement of arbitral proceedings is also 123 possible. The applicant would need to show urgent circumstances where its lawful rights and interests would suffer irreparable damage if the application is not granted immediately.154 The applicant shall apply to the court at the place where the property to be preserved is located or at the place of residence of the respondent or a court having jurisdiction over the case for taking preservation measures.155 The court shall issue a ruling within 48 hours after receiving the application and the ruling to preserve property shall be enforced immediately.156 Where the applicant fails to initiate arbitration within 30 days after the court took preservation measures, such measure shall be rescinded.157 Previously, property preservation before or during arbitral proceedings was only 124 possible in arbitrations administrated by the arbitral institutions in Mainland China. This is because that the PRC Arbitration Law and the Civil Procedure Law, which provide for the preservation of property during and before arbitration, respectively, apply only to Chinese arbitrations. However, one exception has been made to arbitrations seated in Hong Kong: On 2 April 2019, the SPC and the Government of the Hong Kong SAR signed the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings, which later took effect on 1 October 2019. Under this arrangement, parties to arbitration seated in Hong Kong can now apply to an intermediate people’s court in Mainland China for property preservation, evidence preservation, and conduct preservation; whereas parties to arbitrations seated in Mainland China can apply to the Hong Kong High Court for injunctions or other interim measures. Under article 4 of the General Planning published by the State Counsel in April 2019, 125 reputable foreign arbitral institutions established in the New Lingang Area of the Shanghai FTZ and registered with the Shanghai Judicial Administrative Department can lawfully administer PRC-seated civil and commercial arbitrations and refer application for interim measures to the people’s courts. b) Interim relief before the arbitral tribunal. As explained above in detail, under 126 the PRC Arbitration Law, the arbitral tribunal has no power to grant interim reliefs, nor does the arbitral institution. The arbitral institution can only pass the relevant request to the court. If interim measures are sought prior to the commencement of the arbitral proceedings, the parties will need to apply directly to the competent court.158 However, if a claimant, during or before an arbitration administrated by a Chinese 127 arbitral institution, applies directly to a foreign court for interim measures against the respondent, or applies to the Chinese arbitral institution for interim measures and then applies to a foreign court for order allowing effective enforcement of such measures, the foreign court may grant such application according to the lex fori.159 In this regard, the CIETAC Arbitration Rules set out provisions for different forms of interim measures. The arbitral tribunal has power to make decisions on interim measures according to the applicable law and the agreement between the parties.160 154

Article 101, Civil Procedure Law. Ibid. at article 101. 156 Ibid. at article 101. 157 Ibid. at article 101. 158 Sun/Willems, Arbitration in China, 2015, 434 et seq. 159 Ibid. at 433 et seq. 160 Article 23, CIETAC Arbitration Rules. 155

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6. Multi-party arbitration 128

Due to their complex nature, commercial transactions normally involve several parties and several agreements. A mechanism for multi-party arbitration is thus necessary to avoid waste of time and costs on separate arbitrations for the same dispute and also potential conflicting arbitral awards. The PRC Arbitration Law does not provide specific provisions on multi-party arbitration. However, such gap was filled in by institutional rules.

a) Arbitration agreement providing for joinder and consolidation. For example, the CIETAC Arbitration Rules permit a party to request for joinder of additional parties. During the arbitral proceedings, a party wishing to join an additional party to the arbitration may file a request for joinder with CIETAC, based on the arbitration agreement invoked in the arbitration that prima facie binds the additional party.161 130 In addition, at the request of a party CIETAC may consolidate multiple arbitrations pending, under the CIETAC Arbitration Rules into a single arbitration, if (1) all of the claims in the arbitrations are made under the same arbitration agreement; (2) the claims in the arbitrations are made under multiple arbitration agreements that are identical or compatible and the arbitrations involve the same parties as well as legal relationships of the same nature; (3) the claims in the arbitrations are made under multiple arbitration agreements that are identical or compatible and the multiple contracts involved consist of a principle contract and its ancillary contract(s); or (4) all the parties to the arbitrations have agreed to consolidation.162 The conduct of the consolidated arbitral proceedings shall be decided by the CIETAC Arbitration Court if the arbitral tribunal is not formed or otherwise by the arbitral tribunal.163 129

b) Equality of arms and appointment of the arbitrators. In a multi-party arbitration, the arbitral tribunal would normally consist of three arbitrators. Both claimants and respondents are to consult amongst themselves and nominate a party-appointed arbitrator, or request that the chairman of the arbitral commission make the appointment on their behalf.164 Under the CIETAC Arbitration Rules, where either the claimant side or the respondent side fails to jointly nominate or jointly entrust the chairman of CIETAC to appoint one arbitrator within 15 days from the date of its receipt of the notice of arbitration, the chairman of CIETAC shall appoint all three members of the arbitral tribunal and designate one of them to act as the presiding arbitrator.165 132 Where a party is joined to the arbitral proceedings after the constitution of the arbitral tribunal, article 18(5) of the CIETAC Arbitration Rules provides that if the additional party requests to nominate or entrust the chairman of CIETAC to appoint an arbitrator, both parties shall nominate or entrust the chairman of CIETAC to appoint arbitrators again. 131

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Ibid. at article 18.1. Ibid. at article 19. 163 Ibid. at article 19(4). 164 Sun/Willems, Arbitration in China, 2015, 227 et seq. 165 Article 29, CIETAC Arbitration Rules. 162

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IV. Control and enforcement of arbitral awards 1. Correction and amendment of arbitral awards Article 56 of the PRC Arbitration Law provides that if there are typographical or 133 calculation errors in an arbitral award, or if determined matters are omitted from the arbitral award, the arbitral tribunal must correct or supplement the award. The parties may, within 30 days from the date of receipt of the award, request the arbitral tribunal to make corrections or issue a supplementary award. Institutional rules have supplemented article 56 of the PRC Arbitration Law with more specific rules. For example, articles 53 and 54 of the CIETAC Arbitration Rules contain detailed provisions regulating correction of award and issuance of additional award.

2. The reporting system The reporting system has been the most notable judicial invention of the SPC. It was established and has been further developed through a series of judicial interpretations over the last two decades to follow the international trend of limited judicial intervention in arbitration. The SPC first established the reporting system in 1995 in the Notice on the Handling of Issues Regarding Arbitrations with a Foreign Element and Foreign Arbitrations by the People’s Courts.166 Originally, the reporting system applied only in the context of enforcement of foreign or foreign-related arbitral awards or arbitration agreements. Under this system, if an intermediate people’s court intends to refuse enforcement of an arbitral award, it must report to and request approval from a high people’s court. If the high people’ court agrees with the intermediate people’s court’s decision, the high people’s court must further report to the SPC for approval. The scope of the reporting system was extended in 1998 to cover annulment/set-aside of foreign-related awards.167 In 2017, the SPC issued two judicial interpretations which further broaden the scope of the reporting system.168 The two SPC interpretations extended the scope of the reporting system to cover all arbitration cases, including foreign, foreign-related, and domestic arbitrations. Under the current reporting system, without the SPC’s final approval, no PRC court can refuse enforcement or set aside an arbitral award or determine that an arbitration agreement is invalid. One of the most important features of the reporting system is that the lower court is only required to report to the higher court for approval if it intends to render a negative ruling. For example, if the lower court decides to enforce an arbitral award, there is no similar review mechanism to protect the respondent.169

166 The Notice on the Handling of Issues Regarding Arbitrations with a Foreign Element and Foreign Arbitrations by the People’s Courts, Fa [1995] No. 18, Supreme People’s Court. 167 The Notice on Setting Aside Arbitral Awards involving Foreign Elements by People’s Courts, Fa [1998] No. 40, Supreme People’s Court. 168 Supreme People’s Court, Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Judicial Review of Arbitration Cases, Fa Shi No. 22 [2017]; Supreme People’s Court, Provisions of the Supreme People’s Court on Issues Concerning the Reporting and Approval in the Judicial Review of Arbitration Cases, Fa Jing Fa No. 21 [2017]. 169 Tang/Xiao/Huo, Conflict of Laws in the People’s Republic of China, 2016, 185 et seq.

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3. Review of arbitral awards before the people’s courts 138

a) Procedural framework (time limit, competent court, appeal). A party that wishes to apply for set-aside of an arbitral award must, within six months from the date of receipt of the award, apply to the intermediate people’s court where the arbitration commission is located.170 The people’s court shall, within two months from the date of accepting an application for setting aside an arbitral award, give its ruling.171 Courts must adhere to the finality principle and not review the correctness of the substantive outcome of the arbitral award in question.172 As discussed in detail above, there is no appeal mechanism per se for judicial review of arbitral awards. PRC courts need to follow the reporting system if they intend to set aside arbitral awards.

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b) Grounds for setting aside arbitral awards. In China, standards differ for setting aside domestic arbitral awards and foreign-related arbitral awards. An application for setting aside a foreign arbitral award would be heard by the court of the foreign seat and thus would not normally be an issue before the PRC court. For foreign-related arbitral awards, article 70 of the PRC Arbitration Law states that a party may present evidence to prove that a foreign-related arbitral award should be set aside based on the standards set out in the Civil Procedure Law.173 Interestingly, article 71 of the PRC Arbitration Law states that a party against whom enforcement is sought may present evidence which proves that the foreign-related arbitral award should be disallowed based on the same standards set out in the Civil Procedure Law as to article 70 of the PRC Arbitration Law.174 These two provisions effectively allow a dual supervision mechanism which gives parties two avenues for challenging arbitral awards.175 An application for setting aside or a decision of refusal to enforce a foreign-related arbitral award must be based on one of the following circumstances: (1) the parties did not have an arbitration clause in the contract or did not subsequently reach a written arbitration agreement; (2) proper notice for the appointment of an arbitrator or for the commencement of the arbitral proceedings was not given to the applicant or that the applicant was unable to present its case due to causes for which it is not responsible; (3) the composition of the arbitral tribunal or the procedure of arbitration was not in conformity with the rules of arbitration; (4) the matters dealt with by the award fall outside the scope of the arbitration agreement or the arbitral organ was not empowered to arbitrate the matters; and (5) if the people’s court determines that the enforcement of the award goes against the social and public interest, the people’s court shall make a written order not to allow the enforcement of the arbitral award.176 170 Article 59, the PRC Arbitration Law; Schroeder KG GmbH (Germany) v. China Dandong Junao Food Co. Ltd, (2012) Dandong Civil Special No. 00001, 14 October 2014. 171 Article 60, the PRC Arbitration Law. 172 Beijing Kang Wei Pharmaceutical Consultation Centre Co. Ltd v. Asia Medical Resources Development (Holdings) Ltd, Supreme People’s Court (19 December 2012), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV. 173 Article 70 of the PRC Arbitration Law. As regards domestic awards, pursuant to article 58 of the PRC Arbitration Law an award will be set aside if there was no arbitration agreement, if it decides on matters beyond the scope of the arbitration agreement, if the composition of the tribunal or the procedure was not in conformity with the statutory procedure, if the award was based on forged evidence, if a party concealed evidence with an impact on the award, or if the arbitrators accepted bribes or perverted the law. 174 Ibid. at article 71. 175 Fan, Arbitration in China: A Legal and Cultural Analysis, 2013, 90 et seq. 176 Article 274, Civil Procedure Law.

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c) Lack of jurisdiction of the arbitral tribunal. As discussed above, under the PRC 140 law, arbitral tribunals do not ordinarily have competence to determine their jurisdiction. The people’s courts have full power to review the validity of arbitration clauses and to decide if awards are within the scope of jurisdiction. The SPC has set aside arbitral awards on the ground that the arbitral tribunals lack jurisdiction.177 For example, in the arbitration between Jiehua Industry Co., Ltd and Jiangyin Qingmaman Auto Mould Co., Ltd, the tribunal considered the issues under three contracts between the parties and rendered an arbitral award determining the issues arising out of the three contracts. However, only one of the three contracts contained an arbitration clause. The SPC set aside the arbitral award upon finding that the award manifestly went beyond the tribunal’s jurisdiction.178 In practice, if the matter to be set aside is severable from other matters, the SPC may 141 make a ruling to set aside only the part of the award which exceeds the scope of the arbitration agreement or the jurisdiction of the arbitration tribunal.179 d) Unlawful composition of the tribunal and other procedural irregularities. In 142 judicial practice, courts uphold a pro-arbitration stance and do not indiscriminately set aside arbitral awards on the basis of procedural irregularities.180 One typical example is article 20 of the SPC 2006 Interpretation. It specifies that “violation of statutory procedures” under article 58 of the PRC Arbitration Law as a ground of setting aside an arbitral award refers to circumstances where violation of the requirements of the arbitral proceedings set out under the PRC Arbitration Law and the arbitration rules selected by the parties are likely to affect the correct ruling of the case. Courts have also denied applications for setting aside arbitral awards on the ground 143 of procedural irregularity. In Yabaili Company Shenzhen Overseas Chinese Tutorial School v. X,181 the applicant applied to set aside the award on the basis that the arbitrator appointed by the applicant was not accepted by the arbitration commission and the intervening conduct of the arbitration commission in its appointment of arbitrator had violated article 260(3) of the Civil Procedure Law. The court dismissed such application and held that the fact the applicant’s initial appointment of arbitrator was not accepted by the arbitration commission because the initially appointed arbitrator was not a domestic arbitrator did not violate articles 31 and 32 of the PRC Arbitration Law and the relevant institutional rules. In fact, the applicant was offered another chance to appoint a domestic arbitrator. e) Public policy. The term “social and public interest” is more frequently used than 144 “public policy” in Chinese legislation. Article 58 of the PRC Arbitration Law specifies that violation of social and public interest is a ground for setting aside a domestic arbitral award. For foreign-related arbitral awards, whether social and public interest is 177 Yichang Hongxing Industrial Development Co., Ltd v. Wu Yalun, Supreme People’s Court (25 July 2008), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV; Ka Kiu Enterprises Ltd v. Xi’an Automobile Industrial Co., Supreme People’s Court (12 October 2010), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV; Chengdu Youbang Stationery Co., Ltd and Wang Guojian v. Yau Bong Polybags Printing Company Ltd, Supreme People’s Court (20 March 2013), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV. 178 Wan, the Fourth Civil Division of The Supreme People’s Court, “Instruction on Trials of Commercial and Maritime Disputes with Foreign Elements”, 2006, p. 105. 179 Luoding Electricity Supply Bureau v. Huien Co., Min Si Ta Zi No. 47 (SPC ruling, 1 March 2006), reprinted in 12 Guide on Foreign-Related Commercial and Maritime Trials 58–61 (No. 1, 2006). 180 Tang/Xiao/Huo, Conflict of Laws in the People’s Republic of China, 2016, 191 et seq. 181 Yabaili Company Shenzhen Overseas Chinese Tutorial School v. X (2000) Shen Zhong Fa Jing Er Chu Zi No. 108.

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also a ground for setting aside the award is not without controversy. Article 70 of the PRC Arbitration Law refers to the first paragraph of article 260 of the Civil Procedure Law (article 274 of the current Civil Procedure Law)182 for grounds of setting aside a foreign-related arbitral award, which a party may present evidence to prove. The first paragraph of the corresponding article of the Civil Procedure Law, however, does not list social and public interest as a ground for setting aside a foreign-related arbitral award. Such ground was in fact listed in the third paragraph. 145 In 2016, the Beijing Second Intermediate People’s Court in one case denied an application for setting aside a foreign-related arbitral award and held that examining whether a foreign-related arbitral award violated the social and public interest was beyond the court’s jurisdiction as social and public interest was not a ground for setting aside a foreign-related arbitral award in accordance with article 70 of the PRC Arbitration Law and the first paragraph of the corresponding article of the Civil Procedure Law.183 Despite of this decision, the general view is that reference to the first paragraph of article 260 of the Civil Procedure Law (article 274 of the current Civil Procedure Law) in article 70 of the PRC Arbitration Law only refers to the subject of proof by the parties concerned. It does not address the fact the people’s court can review social and public interest ground on its own initiative.184 146 The same rationale applies to invoking social and public interest as a ground to resist enforcement of a foreign-arbitral award. Similarly, article 71 of the PRC Arbitration Law only refers to the first paragraph of article 260 of the Civil Procedure Law (article 274 of the current Civil Procedure Law)185 for grounds of refusing the enforcement of a foreign-related arbitral award, which a party may present evidence to prove. That does not mean, however, that courts cannot invoke social and public interest as a ground to refuse enforcement of a foreign-related arbitral award. In fact, the third paragraph of article 274 of the Civil Procedure Law expressly states that social and public interest is a ground for refusing enforcement of a foreign-related arbitral award. Such general view has received approval from judicial practice. That is to say that foreign-related arbitral awards can be set aside or refused of enforcement due to violation of social and public interest.186

4. Enforcing arbitral awards a) Enforcement regime for domestic, foreign-related and foreign awards. In China, enforcement of arbitral awards is governed by different mechanisms depending on the type of the awards. The categorization of domestic awards, foreign-related awards, and foreign awards plays an important role in this regard. 148 For foreign-related arbitral awards, if a party fails to comply with the award, the award creditor may apply for enforcement of the award to the intermediate people’s court at the place of domicile of the respondent or at the place where the respondent’s property is located.187 As discussed in detail in the above section, article 71 of the PRC Arbitration Law and article 274 of the Civil Procedure Law set out grounds for 147

182 Referring to article 260 of the 1999 edition of the Civil Procedure Law, which corresponds to article 274 of the 2012 edition of the Civil Procedure Law. 183 See Lin (ed.), Latest Commercial Cases in Arbitration and Judicial Practices, Vol. 6, 2011, 164–165. 184 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 232 et seq. 185 Referring to article 260 of the 1999 edition of the Civil Procedure Law, which corresponds to article 274 of the 2012 edition of the Civil Procedure Law. 186 Lin, Judicial Review of Arbitration: Law and Practice in China, 2018, 233 et seq. 187 Article 62, the PRC Arbitration Law; article 273, Civil Procedure Law.

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non-enforcement of foreign-related arbitral awards, which are identical to the grounds for setting aside foreign-related arbitral awards described supra mns 139–146.188 For foreign arbitral awards, article 283 of the Civil Procedure Law provides that where a party seeks the recognition or enforcement of an award made by a foreign arbitral institution in China, the party shall apply to the intermediate people’s court of the place where the party subject to enforcement has its domicile or where its property is located; and the court shall deal with the matter according to the international treaties concluded or acceded to by China or with the principle of reciprocity. As explained in detail in Section I, the principal international treaty signed by China for this purpose is the New York Convention. Article V of the New York Convention sets out the grounds on which a court may refuse to recognize or enforce a foreign arbitral award (on defences to enforcement under article V NYC, see supra B mns 177–332). Notably, these grounds are similar to the grounds for non-enforcement of foreign-related arbitral awards under article 71 of the PRC Arbitration Law and article 274 of the Civil Procedure Law, which are identical to the grounds for setting aside foreign-related arbitral awards. The general view is that China has adopted a proenforcement stance towards foreign arbitral awards. One typical example is the ground of public policy under article V(2)(b) of the New York Convention, which is generally regarded as a catch-all ground to refuse enforcement of arbitral awards. As discussed in detail above, the term “public policy” is not expressly defined in Chinese legislation. However, the SPC in some cases have clarified that public policy ground should be strictly interpreted and limited in its application as a ground to refuse foreign arbitral awards under the New York Convention. For example, the SPC in TCL Air-conditioner (Zhongshan) Ltd v. Castel Electronics Pty Ltd specified that violation of public policy ground under article V(2)(b) of the New York Convention shall be interpreted as that recognition and enforcement of a foreign arbitral award would result in violation of the basic Chinese legal principle, infringement of the national sovereignty, jeopardizing public security, violation of social morality and other circumstances which will infringe the basic public interest.189 The SPC in another case also clarified that violation of mandatory administrative rules (行政 法规) and departmental regulations (部门规章) does not necessarily constitute violation of public policy ground under the New York Convention.190 As also explained in detail in Section I, Mainland China and its two SARs (Hong Kong and Macau) have entered into two agreements for cross-border recognition and enforcement of arbitral awards. In Ennead Architects International LLP v. Fuli Nanjing Dichan Kaifa Youxian Gongsithe, the Nanjing Intermediate People’s Court approved the enforcement of an arbitral award made by a CIETAC Hong Kong tribunal. This is the first known case where a Chinese court granted an order to enforce a CIETAC Hong Kong arbitral award under the Mainland-Hong Kong Arrangement.191

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b) Enforcement of awards that were set aside. Article 64 of the PRC Arbitration 153 Law provides that if one party applies for enforcement of an arbitral award and the 188 Similarly, as regards enforcement of domestic awards, pursuant to article 237 of the Civil Procedure Law, the defences for enforcement are identical to the grounds for setting aside domestic awards (described supra fn. 173). 189 Reply of the SPC to Application of Castel Electronics Pty Ltd for Recognition and Enforcement of a Foreign Arbitral Award, Supreme People’s Court, [2013] Min Si Ta Zi No. 46. 190 Reply to Haikou Intermediate People’s Court Regarding the Request for Instructions on NonRecognition and Non-Enforcement of the Arbitral Award of the Arbitration Institute of the Stockholm Chamber of Commerce, Supreme People’s Court, [2001] Min Si Ta Zi No. 31. 191 Ennead Architects International LLP v. Fuli Nanjing Dichan Kaifa Youxian Gongsi, Nanjing Intermediate People’s Court, (2016) Su 01 RenGang No. 1 (13 December 2016).

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other party simultaneously applies for setting aside the award, the court should suspend the enforcement of the award. If the court decides to set aside the award, the enforcement proceedings shall be terminated. If the application for setting aside the award is denied, the enforcement proceedings shall continue. For a foreign-related arbitral award, where a party’s application to set aside the award is refused by a PRC court, other PRC courts (or the same court) will not entertain an application to resist enforcement which is based on the same grounds.192 For example, in Xu Jianwen v. Zhongwei Urban-Rural Comprehensive Development Corporation, the Ningxia High People’s Court found that the arbitral award should not be enforced because the arbitration was not conducted in accordance with the arbitration rules and the arbitral award dealt with a matter outside the scope of the arbitration agreement. It then reported its finding to the SPC for approval under the reporting system. In its reply, the SPC held that an intermediate people’s court had already rendered a final ruling and refused to annul the arbitral award concerned. Given that the current nonenforcement proceeding was based on the same grounds as in the annulment proceeding, the SPC rejected the application for non-enforcement of the award.193 For a foreign arbitral award, if the party can prove that such award has not become effective or has been set aside by a foreign court or the oversea enforcement proceedings have been terminated, the PRC court shall refuse its recognition and enforcement.194 The issue becomes less certain if the setting aside proceedings of a foreign arbitral award are pending when the award creditor applies to enforce the award before a PRC court. Article 83 of the Supreme People’s Court Minutes of the Second National Working Conference on Trial of Foreign-related Commercial and Maritime Cases (2005) provides that the people’s court may suspend recognition and enforcement proceedings of a foreign arbitral award if the setting aside proceedings are pending overseas. If corresponding foreign courts would not refuse to recognize and enforce the award under the same circumstances, the PRC courts shall treat the award reciprocally. There is little judicial guidance as to how the court would exercise its discretion in this regard. There appears to be only one reported case where the Shenzhen Intermediate People’s Court denied a party’s application to suspend the enforcement proceedings while the validity of the award was being challenged in the U.S.195 The Shenzhen court considered the following two factors: (1) the applicant failed to provide the security as requested by the Shenzhen court; and (2) the setting aside proceedings in the U.S. were at the appeal stage and the lower court had confirmed the validity of the award. Only one of the two award debtors appealed to the higher court in the U.S. regarding the lower court’s decision on confirming the validity of the award. c) Fulfilment, set-off, and similar defenses. The PRC Arbitration Law does not contain specific provisions on whether a party can raise set-off as a defense at the enforcement stage. Judicial practice is silent on this issue as well. However, the authors are of the view that based on the Chinese legal theory on set-off, a party should be able to set-off at the enforcement stage with a claim that has already been adjudicated.

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Article 26, SPC 2006 Interpretation. Xu Jianwen v. Zhongwei Urban-Rural Comprehensive Development Corporation, Supreme People’s Court (30 July 2012), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV. 194 Article 83, the Supreme People’s Court Minutes of the Second National Working Conference on Trial of Foreign-related Commercial and Maritime Cases, Fa Fa (2005) No. 26. 195 Hong Kong Water Solutions v. Shenzhen Tall & Stout, Shenzhen Intermediate People’s Court, (2016) Yue 03 Min Chu No. 366. 193

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5. Preclusion of grounds for challenge and defences to enforcement From a practical point of view, parties are advised to raise their objection as soon as possible, or they will risk being precluded from raising the relevant objection at a later stage. This becomes relevant at both setting aside stage and enforcement stage in China. Except for specific grounds as such the validity of an arbitration agreement or improper constitution of the tribunal, the PRC Arbitration Law does not contain a specific provision requiring that all relevant grounds of setting aside or resisting enforcement of an award must be put forward at a certain time. Judicial practice is clear that if a party fails to raise the issue of the validity of the arbitration agreement during the arbitral proceedings, it would be precluded from raising the same ground to apply to set aside or resist enforcement of the award.196 For example, in Dae Sung G-3 Co., Ltd of Korea v. Changchun Yuanda Automotive Engineering & Trading Co., Ltd, the SPC rejected the lower court’s decision to set aside an award based on the fact that Dae Sung G-3 Co., Ltd failed to raise the issue of the validity of the arbitration agreement before the first hearing of the arbitration according to article 20 of the PRC Arbitration Law.197 In the Golden Landmark case where the court rejected the application for resisting recognition and enforcement of an award on the ground of invalidity of the arbitration clause, one of the reasons of the court was that Golden Landmark had actually participated in all the arbitral proceedings accepting that the arbitration clause was valid, and its application did not conform with the generally recognized legal principles of estoppel, good faith, and fairness. Same applies to the circumstances where a party fails to submit a challenge of impartiality and independence of an arbitrator timely (i.e., within the time periods prescribed by the PRC Arbitration Law or institutional rules). Such party would normally be precluded from raising the ground of improper constitution of the tribunal at the setaside stage and the enforcement stage. For example, in Chengdu Food Factory v. A, a party sought to set aside the arbitral award on the ground that the counsel of the other party had student-teacher relationship with the arbitrator appointed by that party. The court, although acknowledged such relationship, rejected the application on the ground that the challenging party did not raise the objection during the arbitral proceedings.198 It is less certain as to other grounds of setting aside or resisting enforcement of an award which the PRC Arbitration Law does not provide a specific deadline to raise. As detailed above, articles 70 and 71 of the PRC Arbitration Law effectively allow a dual supervision mechanism which gives parties two avenues for challenging arbitral awards.199 A party should therefore generally not be precluded from applying to resist enforcement of an award if it fails to apply to set aside the award. However, as recognized by the court in the Golden Landmark case, the generally recognized legal principles of estoppel, good faith, and fairness would be relevant when determining whether failure to raise the relevant objection at an early stage would preclude a party from raising the same objection at the setting aside stage or the enforcement stage. It is therefore advisable that parties shall raise their objection as soon as possible to avoid the risk of being precluded from raising such objection later. 196

Moser, Dispute Resolution in China, 2012, 65 et seq. Dae Sung G-3 Co., Ltd of Korea v. Changchun Yuanda Automotive Engineering & Trading Co., Ltd, Supreme People’s Court (21 October 2008), in: Fan, Foreign-Related Arbitration in China: Commentary and Cases (2015), Part IV. 198 See Lin, Cases of Latest Commercial Arbitration and Judicial Practice, (2011) Vol. 6. 199 Fan, Arbitration in China: A Legal and Cultural Analysis, 2013, 90 et seq. 197

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H. International Arbitration in England and Wales Bibliography: Blackaby/Partasides/Redfern/Hunter, Redfern and Hunter on International Arbitration, 6th ed., Oxford University Press 2015; Clifford/Wade, Commentary on the LCIA Arbitration Rules, 2nd ed., Sweet & Maxwell 2020; Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., Sweet & Maxwell 2012 (5th Supplement 2018); Freedman/Farrell, Kendall on Expert Determination, 5th ed., Sweet & Maxwell 2014; Harris/Planterose, The Arbitration Act 1996 – A Commentary, 5th ed., Wiley-Blackwell 2014; Hayward, Conflict of Laws and Arbitral Disrection, Oxford University Press 2017; Hill/Chong, International Commercial Disputes: Commercial Conflict of Laws in English Courts, 4th ed., Hart Publishing 2010; Hodges, Delivering Dispute Resolution – A Holistic Review of Models in England and Wales, Beck/Hart 2019; Joseph, Jurisdiction and Arbitration Agreements and Their Enforcement, 3rd ed., Sweet & Maxwell 2015; Khanna, England, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 371–449; Merkin, Arbitration Law, LLP 2004; Merkin/Flannery, Arbitration Act 1996, 6th ed., Informa Law 2019; Mustill/Boyd, Commercial Arbitration, 2001 Companion Volume to the Second Edition, Butterworths 2001; Seriki, Injunctive Relief and International Arbitration, Routledge 2015; Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., Sweet & Maxwell 2015; Turner, Arbitration Awards: A Practical Approach, Wiley-Blackwell 2005; Vargiu/Ahmed, Interpretation and Application of the New York Convention in United Kingdom, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 977–993; Veeder/Diwan, National Report for England & Wales (2015 through 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 98, March 2018. National legislation: Arbitration Act 1996, accessible online at http://www.legislation.gov.uk/ukpga/ 1996/23/contents (accessed 1 August 2020); Arbitration Act 1950, accessible online at http://www. legislation.gov.uk/ukpga/Geo6/14/27/contents (accessed 1 August 2020); CPR 1998 (Part 62 in particular), accessible online at http://www.justice.gov.uk/courts/procedure-rules/civil/rules (accessed 1 August 2020); CPR Practice Direction 62, accessible online at http://www.justice.gov.uk/courts/procedure-rules/ civil/rules/part62/pd_part62 (accessed 1 August 2020). International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (330 UNTS 38), ratification status available at https://treaties.un.org; European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (484 UNTS 349), ratification status available at https://treaties.un.org; Convention on the Settlement of Investment Disputes between States and Nationals of Other States (575 UNTS 159), ratification status available at https://icsid.worldbank.org.

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional, general commercial and sectorspecific arbitration ................................................................................ d) The territoriality principle, the seat of the arbitration and the lex arbitri.......................................................................................... e) Arbitration as compared to ADR and expert determination ..... 2. The guiding principles of English arbitration law .............................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The formation of the arbitration agreement ........................................ a) General principles of contract law .................................................... b) Capacity (subjective arbitrability)...................................................... c) (Objective) Arbitrability ...................................................................... d) Formal requirements ............................................................................ e) Incorporation by reference ................................................................. 4. Termination of the arbitration agreement............................................

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H. International Arbitration in England and Wales 5. The scope and the interpretation of the arbitration agreement ...... 36 a) Personal scope of the arbitration agreement .................................. 37 b) Substantive scope of the arbitration agreement ............................. 42 c) Pathological arbitration clauses ......................................................... 44 6. Enforcing arbitration agreements ........................................................... 48 a) Direct enforcement ............................................................................... 49 b) Indirect enforcement ............................................................................ 55 c) Tactical considerations......................................................................... 56 7. The extent of the principle of Kompetenz-Kompetenz....................... 59 8. Binding effect of state court decisions on jurisdiction of the arbitral tribunal ........................................................................................... 64 III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 68 1. The arbitral tribunal................................................................................... 71 a) Impartiality, fairness and further duties of the arbitrators.......... 74 b) Grounds for challenging arbitrators ................................................. 75 c) Procedural aspects and preclusion of grounds for challenge...... 78 2. The arbitral proceedings ........................................................................... 80 a) Commencing the arbitration .............................................................. 81 b) Impartiality and fair trial..................................................................... 85 c) The tribunal’s powers with regard to procedural and evidential matters ..................................................................................................... 88 d) Determination of preliminary point of law .................................... 90 e) Confidentiality ....................................................................................... 93 f) The arbitral award ................................................................................ 95 g) The costs of the arbitration ................................................................ 102 3. Evidence, discovery, disclosure................................................................ 105 4. The law governing the dispute and lois de police ............................... 108 5. Interim relief in arbitration ...................................................................... 110 a) Interim relief before state courts ....................................................... 110 b) Interim relief before the arbitral tribunal ........................................ 111 c) Relief by the tribunal or by the courts? ........................................... 112 6. Multi-party arbitration .............................................................................. 113 a) Arbitration agreement involving several parties ............................ 114 b) Arbitration agreement and third persons or entities.................... 115 IV. The control, appeal and the enforcement of arbitral awards ............... 116 1. Correction of award or additional award ............................................. 117 2. Control, appeal and enforcement by the state courts ........................ 120 a) Procedural framework.......................................................................... 121 b) Grounds for challenging arbitral awards: An overview ............... 122 c) Section 67: Lack of substantive jurisdiction of the arbitral tribunal .................................................................................................... 123 d) Section 68: Serious irregularity........................................................... 127 e) Section 69: Appeal on point of law................................................... 137 f) Separating section 68 and section 69 applications......................... 143 3. Enforcing arbitral awards ......................................................................... 144 a) Domestic and foreign awards under the section 66 procedure.. 144 b) Enforcement of New York Convention awards............................. 147 aa) Invalidity of the alleged arbitration agreement (section 103 (2)(b) AA 1996).............................................................................. 150 bb) Award set aside by the seat courts (section 103(2)(f) AA 1996) ................................................................................................. 151 cc) Violation of English public policy by recognizing and enforcing the award (section 103(3) AA 1996) ...................... 154 c) Fulfilment and set-off........................................................................... 155 d) De minimis and waiver considerations ............................................ 156 4. Preclusion of grounds for challenge and defences to enforcement 157 a) Preclusion due to failure to object in the arbitral proceedings .. 158 b) Preclusion due to failure to bring a setting-aside application .... 159

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I. Introduction 1

England is nowadays one of the key arbitration places in the world, mainly in the field of international commercial arbitration, of which maritime arbitration takes a considerable share. With the growing popularity of arbitration as a dispute resolution mechanism providing an alternative to the state court systems, particularly in the international context, the London Court of International Arbitration (LCIA) as the most important arbitral institution has seen a constant rise in the number of cases filed in recent years,1 as has been the case for arbitrations under the LMAA Terms.2 Both LCIA Rules 2020 and LMAA Terms 2017 provide by default that the arbitral tribunal has its seat in England.3 London offers an outstanding range of arbitration and arbitration-related services including strong and experienced support for arbitral proceedings by the state courts.

1. The legal framework Arbitration with its legal seat in England and Wales is governed by the Arbitration Act 19964, which replaced the former Arbitration Acts of 1979 and 1950.5 In comparison to those former Arbitration Acts the latest 1996 Act brought about a substantial simplification and turn towards a more arbitration-friendly regime. In particular, domestic and international arbitration proceedings are now governed by the same rules. In addition to the AA 1996, Part 62 of the Civil Procedure Rules 1998 and the accompanying CPR Practice Direction 62 apply in relation to arbitration-related state court proceedings. Furthermore, the United Kingdom is a member state both of the New York Convention of 1958 and the Geneva Convention of 1961. 3 The AA 1996 is officially not an adaptation of the UNCITRAL Model Law on International Commercial Arbitration. Despite those official statements, the AA 1996 is in its structure close to the ML and many provisions of the AA 1996 are taken over from the ML so that it constitutes in fact an adaptation of the ML with some Englandspecific modifications and additions.6 Under the 13th Programme of Law Reform by the Law Commission the Arbitration Act 1996 is under review.7 A consultation phase was concluded by 31 October of 2016 but no further action has been taken so far. 2

1 According to the LCIA 2018 Annual Casework Report, a total of 317 arbitrations were referred to the LCIA in 2018, of which 271 were referred under the LCIA Rules. 2 The LMAA, the London Maritime Arbitrators Association, is not an arbitral institution as the ICC, LCIA, CIETAC, SCC etc. are, but an association of maritime arbitrators (as of February 2020, it had 33 so-called full members) practising in London which all accept and conduct arbitration under the association’s arbitration rules, the LMAA Terms 2017. In 2018, LMAA Members received about 2,600 new arbitration appointments and published emore than 500 awards. 3 Article 16.2 LCIA Rules 2020 and article 6(b) LMAA Terms 2017. 4 Hereinafter referred to as AA 1996, accessible online at http://www.legislation.gov.uk/ukpga/1996/23/ contents (accessed 1 August 2020). 5 Part II of the Arbitration Act 1950 on the enforcement of foreign arbitral awards under the Geneva Protocol of 1923 still applies but is nowadays of hardly any practical relevance. 6 On the relationship of the UNCITRAL Model Law with the AA 1996 see the official report preceding the enactment of the AA 1996: Departmental Advisory Committee on Arbitration Law (chaired by Lord Mustill), A Report on the UNCITRAL Model Law on International Commercial Arbitration, 1989 (published in (1990) 6 Arb. Int’l 3); Hill/Chong, International commercial disputes, 4th ed., 2010, paras 20.3.11 et seq. 7 See https://www.lawcom.gov.uk/arbitration/ (accessed 1 August 2020).

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a) Domestic and international arbitration. While the ML applies according to its 4 article 1(1) only to international arbitration proceedings, i. e. proceedings where the substance matter of the dispute has an international dimension, and while several national arbitration laws follow that limitation by providing for different sets of rules governing international in contrast to purely domestic arbitrations,8 the AA 1996 sets out one single regime following more or less the arbitration-friendly ML. b) Commercial and non-commercial arbitration. Again in contrast to article 1(1) 5 ML, the scope of the AA 1996 is not limited to commercial arbitration. Neither the AA 1996 nor any other English legislation contains specific restrictions or modifications concerning exclusively commercial or non-commercial arbitration. c) Ad hoc and institutional, general commercial and sector-specific arbitration. 6 English arbitration law provides for the possibility of ad hoc as well as institutional arbitration. There are numerous arbitral institutions in England most of which are seated in London as the commercial and legal centre of the country. The most important, non-sector-specific arbitral institution is the London Court of International Arbitration (LCIA).9 Other non-sector-specific institutions include the Chartered Institute of Arbitrators (CIArb),10 and the Centre for Effective Dispute Resolution (CEDR)11 which administers arbitrations governed by the UNCITRAL Arbitration Rules. Sector-specific arbitration concerning disputes in a particular trade area or industry is 7 partly institutional and partly ad hoc arbitration. Institutional arbitration is regularly administered by sector-specific arbitral institutions, often forming a sub-division of the respective trade association. Examples are the Federation of Oils, Seeds & Fats Associations (FOSFA),12 the Grain & Feed Trade Association (GAFTA)13 and the London Metal Exchange (LME)14. Often the standard form contracts issued by the respective trade association provide for arbitration under the trade association’s arbitration rules. Ad hoc arbitration is regularly conducted under the Arbitrations Rules and by arbitrators of sector-specific arbitrators’ associations. Examples are for insurance disputes the Insurance and Reinsurance Arbitration Society (ARIAS (UK)),15 for maritime disputes the London Maritime Arbitrators Association (LMAA)16 and for construction disputes the Society of Construction Arbitrators.17

8 Probably the most prominent example is France, where the arbitration law distinguishes between a regime for domestic arbitration (arbitrage interne) and another regime for international arbitration (arbitrage international), the latter being applicable to disputes affecting the interests of international trade or commerce. For details see infra I mns 6 et seq. 9 See www.lcia.org; the LCIA has affiliated arbitral institutions in Dubai (DIFC-LCIA, http://www.difclcia.org/), India (LCIA India, www.lcia-india.org) and Mauritius (LCIA-MIAC, www.lcia-miac.org, all accessed 1 August 2020). 10 See www.ciarb.org (accessed 1 August 2020); note that the CIArb provides a range of services in connection with arbitration going beyond those provided by a classic arbitral institution, such as training services, dispute appointment services, setting up guidelines and rules for arbitrators reflecting a best practice, etc. 11 See www.cedr.com; note that CEDR offers a wide range of services in connection with all the various ways of dispute resolution including ADR; an overview of its arbitration services can be found at https:// www.cedr.com/commercial/otherdisputeresolution/arbitration/ (accessed 1 August 2020). 12 www.fosfa.org (accessed 1 August 2020). 13 www.gafta.com/arbitration (accessed 1 August 2020). 14 www.lme.com/en-gb/regulation/arbitration/ (accessed 1 August 2020). 15 www.arias.org.uk (accessed 1 August 2020). 16 www.lmaa.org.uk (accessed 1 August 2020). 17 www.constructionarbitrators.org (accessed 1 August 2020).

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Almost all these arbitral institutions and arbitrators’ associations provide their own set of arbitration rules (apart from CEDR) and recommend a more or less detailed arbitration clause from which the parties should not deviate unless they are advised to do so by expert lawyers in the field based on an individual need for amendments.

d) The territoriality principle, the seat of the arbitration and the lex arbitri. The AA 1996 applies the territoriality principle as provided for by article 1(2) ML by setting out that its provisions apply only where the seat of the arbitration is in England and Wales or Northern Ireland.18 In doing so, English arbitration law adheres to the concept of the juridical seat,19 which has to be distinguished from the actual venue of the hearings which may be located elsewhere and which may even change during the arbitral proceedings. Hence, by choosing the seat of the arbitration the parties do in fact choose the law applicable to the arbitral proceedings, often referred to as the curial law of the lex arbitri, and they confer jurisdiction upon the state courts of that country with regard to supportive20 as well as controlling measures, such as: the appointment and challenge of arbitrators, the enforcement of peremptory orders of the tribunal, orders in respect of the taking and preservation of evidence, securing the attendance of witnesses due the lack of coercive powers by the arbitral tribunal in that regard, granting interim injunctions and determining preliminary points of law, as well as the controlling powers of the court in relation to an award,21 such as setting aside an arbitral award (for various reasons).22 10 If the parties fail to agree on a seat of the arbitration, section 3 AA 1996 sets out alternative ways to determine it. The two prevailing alternatives provide for any arbitral or other institution or person or the arbitral tribunal if the parties have designated one of these bodies to make the choice.23 If the parties have not done so, the seat has to be determined by the state courts with regard to the parties’ agreement (seen as a whole) and all relevant circumstances which include the nationality of the parties, the location of the dispute, the procedures adopted in the arbitration (if it has already commenced) and the place where the arbitral award was issued (if that has already happened).24 11 Exceptions to the territoriality principle are rare and conclusively addressed in sections 2(2) to 2(5) AA 1996. Section 2(2) AA 1996 refers to the application for a stay of proceedings brought before an English court by the defendant in those proceedings and to the enforcement of foreign arbitral awards. In doing so, the AA 1996 implements the United Kingdom’s treaty obligations under articles II(3) and III NYC. Section 2(3) AA 1996 empowers the English courts to exercise its supportive powers under section 43 AA 1996 (securing the attendance of witnesses) and section 44 AA 1996 (general supportive powers, e. g. freezing orders) even if the seat of the arbitration is outside England, Wales or Northern Ireland or if the seat has not been designated or determined yet. Section 2(4) AA 1996 allows the English courts to exercise any of its 9

18 Section 2(1) AA 1996; more precisely, section 2(1) refers to “this Part” of the AA 1996, i. e. Part I, which however comprises the entire regime applicable to an arbitration installed by an arbitration agreement. 19 See, explicitly, section 3 AA 1996. 20 See, in particular, sections 42 to 45 AA 1996. 21 The controlling powers of the state courts in relation to an award are contained in sections 67 to 71 AA 1996. 22 A good illustration of the consequences of a choice of the seat with regard to the lex arbitri is C v. D [2007] EWHC 1541 (Comm), affirmed by the Court of Appeal [2007] EWCA Civ 1282. 23 Section 3 AA 1996. 24 See, in that regard, Dubai Islamic Bank v. Paymentech Merchant Services Inc [2001] 1 Lloyd’s Rep. 65 (Comm); Arab National Bank v. El Sharif Saoud Bin Masoud Bin Haza’a El-Abdali [2004] EWHC 2381 (Comm); Halpern v. Halpern [2006] 2 Lloyd’s Rep. 83 (Comm), affirmed [2007] 2 Lloyd’s Rep. 56 (CA).

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powers under the AA 1996 where no seat has been designated or determined yet if the court is – due to a sufficient connection with England, Wales or Northern Ireland – satisfied that it is appropriate to do so.25 This residual power is vested in the English courts particularly in case of ad hoc arbitrations where the arbitration agreement quite often does not designate a seat but other factors point at England as the seat, e. g. the choice of English law to govern the dispute. e) Arbitration as compared to ADR and expert determination. Due to the extre- 12 mely high and often unpredictable litigation costs in civil proceedings before the English courts26 and due to the need for speed and expertise, mediation and other mechanisms of alternative dispute resolution (ADR)27 traditionally play a more prominent rule in England than in many other legal systems. Most arbitral institutions and trade associations offering arbitration services therefore also offer a broad range of ADR services to disputants in the international commercial context, most prominently mediation. In the intra-EU cross-border context mediation is now lightly regulated by the Cross-Border Mediation (EU Directive) Regulations 2011,28 which do, however, contain very little substance on the actual mediation process. Under a med-arb clause the parties appoint a third person to first serve as mediator and afterwards, if mediation fails, as arbitrator. Other multi-tier clauses accelerating from negotiations via mediation up to arbitration are also commonly used in contracts providing for English law and or arbitration in England. Other mechanisms of ADR include conciliation and adjudication (including dispute boards), particularly in the construction industry. In the case of adjudication a provisional decision – usually merely on an aspect of the latter dispute – is rendered very quickly to enable continuing performance under the contract but that decision is only binding until the dispute is arbitrated or litigated at a later stage or, of course, if the parties are satisfied by the adjudicator’s decision and do not pursue the matter any further. Expert determination is closest to arbitration in that the decision rendered by the 13 expert is as binding on the parties as is an arbitral award.29 However, expert determination and arbitration have to be distinguished since they follow different procedures and are subject to different rules in several respects: first, expert determination is not governed by the AA 1996 or any other statute or even institutional rules; it is therefore constrained by the terms of the respective contract clause providing for expert determination, lacking any statutory default rules. Second, judicial control of the expert’s findings goes beyond judicial review of an arbitral award under the New York Convention and sections 67 et seq. AA 1996, since the expert’s findings may be challenged for fraud, a manifest error in the expert’s calculations30 and departure from the instructions 25 For a recent example see Chalbury McCouat v. PG Foils [2010] EWHC 2050 (Comm) concerning an application for appointment of an arbitrator where no seat had been designated but there was a sufficiently close connection to England. 26 Due to that aspect, ADR mechanisms have been implemented into civil court proceedings by the CPR in so far as a failure to attempt ADR may trigger considerable consequences with regard to the distribution of costs; for a more detailed account see Scherpe/Marten, in: Hopt/Steffek (eds), Mediation: Principles and Regulation in Comparative Perspective, 2012, 367 (387 et seq.); Merkin, Arbitration Law, 2004, paras 6.17 et seq. 27 Just as in the international context, the term “alternative dispute resolution” and its abbreviation “ADR” are not used uniformly with an agreed meaning amongst English practitioners and scholars alike; sometimes all out of court-mechanisms for dispute resolution are described as ADR, and sometimes ADR refers only to non-binding dispute resolution mechanisms. 28 SI 2011/1133. 29 For details on expert determination see in particular Freedman/Farrell, Kendall on Expert Determination, 5th ed., 2014. 30 See Galaxy Energy International v. Eurobunker [2001] 2 Lloyd’s Rep. 725 (Comm).

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given to the expert.31 On the other hand, there is no common law basis for challenging the expert’s findings on the basis that they were reached through serious irregularity. Third, the expert’s decision cannot be enforced under a statutory mechanism close to that of judgments but only as a matter of contract. Fourth, an expert may be sued for negligence while an arbitrator is protected by immunity as far as his decision-making is concerned. Now, to distinguish one from the other may give rise to difficulties. While the distinction is clear when – as has traditionally been the case – the expert decides a factual dispute between the parties (such as one concerning quality and/or quantity of the purchased goods) relying on his expertise in the relevant field rather than applying any law,32 the distinction becomes far more difficult when the expert is a lawyer and therefore applies the law as part of his expertise. Since both experts and arbitrators may be either lawyers or non-lawyers trained in another area of expertise, one may distinguish arbitration and expert determination in so far as arbitration usually relates to performance or non-performance of the contract as a whole while an expert determines single aspects of such performance or non-performance, often while performance of the contract as a whole is non completed yet.33

2. The guiding principles of English arbitration law The guiding principles of English arbitration law are set out concisely and precisely by section 1 AA 1996 which requires each provision of the AA 1996 to be construed in accordance with these principles. 15 They represent the ML’s intention and present the AA 1996 as a modern, very arbitration-friendly set of rules following the pro-arbitration policy pursued by more and more national arbitration laws. According to section 1 AA 1996, “the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense”. To enable this and in attaching maximum weight to the principle of party autonomy, “the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest”. Ensuring the prevalence of party autonomy in practice and leaving no doubt as to the nature of the arbitral proceedings as an alternative way of resolving disputes parallel to litigation before the state courts, “in matters governed by this Part the court should not intervene except as provided by this Part.” 16 Hence, party autonomy and fairness of the arbitral process are the cornerstones of English arbitration law. The former aspect is reflected by the very requirement of an arbitration agreement as between the parties to which all legal principles generally relevant to contracts such as undue influence, duress and fraud apply. The latter aspect is reflected in the general duties of the arbitral tribunal as set out in section 33 AA 1996 which stresses that the tribunal in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it by the AA 1996, shall act fairly and impartially as between the parties, paying full tribute to the right to be heard in particular, while at the same time conducting the arbitral process in a way so as to avoid unnecessary delay or expenses. 17 The distinction between mandatory and non-mandatory provisions of the AA 1996 (contained in its section 4) is linked to these guiding principles. According to section 4 (1) AA 1996, the mandatory provisions of Part I of the AA 1996 are listed in Schedule 1. 14

31

Veba Oil v. Petrotrade Inc. [2002] 1 Lloyd’s Rep. 295 (CA). See Re Carus-Wilson v. Green (1886) 18 QB 7 (CA); David Wilson Homes Ltd v. Survey Services Ltd (in liquidation) [2001] 1 All ER 449 (Comm). 33 Similarly Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 2–029. 32

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These are, in particular, the provisions on: a stay of legal proceedings before a state court due to an arbitration agreement; an extension of agreed time limits; the power to remove arbitrator; issues related to the fees and expenses of arbitrators; the determination of preliminary points of jurisdiction; the general duties of the tribunal and of the parties; the enforcement of an arbitral award; and the grounds of substantive jurisdiction and serious irregularity for challenging and arbitral award. Against this background, section 4(2) AA 1996 is primarily of a declaratory nature in stating that all other provisions of Part I are non-mandatory, allowing for the parties’ own arrangements. Such arrangements may take the form of agreeing on the application of the arbitration rules of an arbitral institution34 or of agreeing on a law other than the law of England, Wales or Northern Ireland (in total or only with regard to a specific aspect)35. In the latter, rather rare case the national arbitration law of that other country applies save the mandatory rules listed in Schedule 1 AA 1996.

II. The arbitration agreement The arbitration agreement, i. e. the agreement between the parties to submit present 18 and/or future disputes to arbitration, is the contractual basis for the arbitral proceedings as opposed to state court litigation. It confers exclusive jurisdiction over the disputes governed by the arbitration agreement upon the arbitral tribunal and, at the same time, requires the English state courts to stay its proceedings in that respect as soon as one party applies for such a stay.36 Furthermore, the lack of a valid arbitration agreement is a ground for setting aside an arbitral award37 and for not enforcing a foreign arbitral award under the New York Convention.38

1. The doctrine of separability In common with most modern arbitration laws, the AA 1996 follows the doctrine of 19 separability, i. e. the arbitration agreement and the main contract remain separate and distinct agreements even if – as it will regularly be the case – the arbitration agreement takes the form of a clause (or even only part of a clause also dealing with the applicable law) of the main contract. Both contracts lead a separate life so that one may survive the breach or termination of the other, but even the invalidity, non-existence or (subsequent) ineffectiveness of the main contract do not affect the validity, existence or effectiveness of the arbitration agreement.39 Separability will often overlap with the distinct concept of Kompetenz-Kompetenz, i. e. 20 the arbitral tribunal’s competence to determine its own jurisdiction since this competence is regularly dependent upon the validity of the arbitration agreement.40 Both issues give rise to difficult problems mainly in proceedings brought before the English seat courts. If a party challenges the arbitration agreement’s existence, in particular by arguing that there was no agreement between the parties at all, the court will regularly decide the jurisdictional issue itself. Where the arbitration agreement takes the form of a clause of the main contract, such a challenge may be part of an overall challenge to the 34

Section 4(3) AA 1996. Section 4(5) AA 1996. 36 Section 9(1) AA 1996. 37 Section 67(1)(a) in connection with section 30(1)(a) AA 1996. 38 Article V(1)(a) and (c) NYC. 39 Section 7 AA 1996. 40 For further details on the concept of Kompetenz-Kompetenz see infra mns 59 et seq. 35

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main contract’s existence for lack of agreement. The issue whether there was an agreement at all affects all parts of it so that the ground upon which the main agreement is alleged to be invalid is identical with the ground upon which the arbitration agreement is alleged to be invalid.41 Still, the ground of attack does not relate to the main agreement, but to the arbitration agreement’s non-existence. Particularly in a case where the identity of the attacking grounds is not obvious nor follows from the ground’s nature, raising the ground in general terms will not suffice to attack the arbitration agreement. This is a direct consequence of the doctrine of separability which requires direct impeachment of the arbitration agreement, hence a challenge based on facts that are specific to the arbitration agreement.42 If, in contrast, a party’s challenge is not directed at the arbitration agreement’s existence but mainly concerned with aspects relating to the arbitration agreement’s validity and scope in particular, the court may – due to the principle of Kompetenz-Kompetenz – leave it to the arbitrators to decide these issues,43 resulting in a stay of proceedings before the English seat court under section 9 AA 1996, even though the English seat courts have the final word on the arbitral tribunal’s jurisdiction including the underlying question of the arbitration agreement’s existence or validity (either during the arbitral proceedings based on a party’s application to the court for determination of the arbitral tribunal’s substantive jurisdiction,44 or after the arbitral proceedings have resulted in an arbitral award in setting aside proceedings).45 Moreover, if a party to the alleged arbitration agreement challenges the existence, validity or effectiveness of the main contract based on a ground which does not also directly impeach the arbitration agreement, it is for the arbitral tribunal to determine these issues as part of the material dispute by way of a conclusive arbitral award on the merits if the parties – as is often the case – have excluded the right to appeal to the state courts on points of law under section 69 AA 1996. Hence, a court approached by one of the parties will stay the proceedings upon application by the other party pursuant to section 9 AA 1996 and in doing so in effect refers the parties to arbitration as is prescribed by article II(3) NYC. 21 Accordingly, the doctrine of separability preserves the right of the arbitral tribunal to determine the material dispute while the concept of Kompetenz-Kompetenz preserves the right of the arbitral tribunal to determine at least in the first place whether it has the power conferred by an arbitration agreement to decide the dispute brought before it by one of the parties.46

2. The law applicable to the arbitration agreement 22

It should be noted from the outset that one has to distinguish between the law governing the arbitration agreement, the law governing the arbitration proceedings (i. e. the lex arbitri or curial law47), and finally the law applicable to the material dispute in

41 Fiona Trust & Holding Corp. v. Privalov [2007] UKHL 40 per Lord Hoffmann at [17] and per Lord Hope at [34]; Beijing Jianlong Heavy Industry Group v. Golden Ocean Group [2013] EWHC 1063 (Comm). 42 Fiona Trust & Holding Corp. v. Privalov [2007] UKHL 40 per Lord Hope at [35]. 43 A v. B [2006] EWHC 2006 (Comm) at [109]; Al-Naimi (t/a Buildmaster Construction Services) v. Islamic Press Agency Inc. [1999] CLC 212 (Comm) at [18] affirmed by the Court of Appeal [2000] 1 Lloyd’s Rep. 522; see also Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 7–013; Merkin/ Flannery, Arbitration Act 1996, 6th ed., 2019, 150 et seq. 44 See the regime in sections 30 to 32 AA 1996. 45 Section 67 AA 1996. 46 Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 151. 47 See supra mn. 9.

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question, which in the case of contractual claims is often referred to as the proper law of the contract.48 The law applicable to the validity and scope of the arbitration agreement has to be 23 determined by applying common law rules for ascertaining the proper law of any contract as the Rome I Regulation excludes the matter from its substantive scope49 and, furthermore, the AA 1996 does not contain a conflict rule. According to settled case law the law governing the arbitration agreement is primarily the law chosen by the parties to govern it.50 It is rare that the parties explicitly choose a law to govern the arbitration agreement although that choice may take a rather general form, e. g., “arbitration in accordance with English law”.51 Rather, the parties usually include the arbitration agreement as a contractual clause into the main contract and choose a law applicable to that main contract as a whole. Still, the arbitration agreement is a separate agreement and may thus be subjected to another law so that a choice of the proper law of the contract does not automatically extend to the arbitration agreement.52 If the arbitration agreement does not form part of the main contract, as for instance in an ad hoc arbitration agreed upon after the dispute has arisen, the argument for a separate determination of the applicable laws is even more obvious. Hence, in the vast majority of cases, absent an explicit choice of the law governing the arbitration agreement, the applicable law has to be determined by considering whether the parties have made an implied choice of the law governing the arbitration agreement or, absent an implied choice, by identifying the law with which the arbitration agreement has the closest and most real connection according to common law principles.53 In search of an implicit choice or the closest and most real connection, the remaining provisions of the main contract and all other potentially relevant factors of the individual case have to be examined. The most important factors for determining the proper law of the arbitration agreement are, if the arbitration agreement takes the form of a clause in the main contract, the law applicable to that main contract and, in any event but particularly in case of a free-standing arbitration agreement, the chosen seat of the arbitration. If the arbitration agreement forms part of a main contract which contains an explicit choice of law, the English courts have regularly taken the view that the law chosen by the parties to govern the main contract also governs the arbitration agreement.54 If there is no express choice of the law applicable to the main contract or to the arbitration agreement but the parties agreed on an English seat for the arbitration, English courts have regularly regarded this as an implicit choice of English law in relation to the arbitration

48

See infra mn. 108. See article 1(2)(e) Rome I Regulation. 50 See e. g. Tamil Nadu Electricity Board v. ST-CMS Electric Company Private Ltd [2007] EWHC 1713 (Comm) at [35]; Sulamérica Cia Nactional des Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638 at [7] et seq. 51 Tamil Nadu Electricity Board v. ST-CMS Electric Company Private Ltd [2007] EWHC 1713 (Comm) at [35]; Abuja International Hotels Limited v. Meridien SAS [2011] EWHC 87 (Comm) at [18]. 52 Such an automatic extension of the law governing the main contract to the arbitration clause contained therein was acknowledged before English arbitration law accepted the doctrine of separability. 53 Arsanovia v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm); common law never drew a clear distinction between an implicit choice of law on the one hand, and a default determination of the applicable law on objective grounds on the other, when it came to determining the proper law of a contract; consequently, the criteria and indications for both are nearly identical. 54 Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1993] AC 334, 357 et seq. (HL); Sonatrach Petroleum Corp. v. Ferrell International Ltd [2002] 1 All ER 627 (Comm); Peterson Farms Inc v. C & M Farming Ltd [2004] EWHC 121 (Comm); Svenska Petroleum Exploration AB v. Lithuania (No 2) [2006] EWCA Civ 1529. 49

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agreement and even to the main contract.55 If the parties have chosen a seat as well as a (different) law governing the main contract, the courts have mostly given priority to the chosen seat,56 but the decision as to which factor prevails will depend largely on the circumstances of the individual case.57 Whether the preference for the chosen seat, regularly an English seat, and thereby English law is somehow connected to the fact that an English court is called upon to determine the arbitration agreement’s existence, validity and scope, is a matter of speculation. Usually, the chosen seat and the chosen proper law of the contract will suffice to find an implicit choice of the law governing the arbitration agreement. If they fail since the parties have neither chosen a seat nor a law applicable to the main contract, other relevant factors to determine the closest connection of the arbitration agreement are those that are usually taken into account when assessing the proper law of any other contract, such as: the domicile of the parties; the place in which the contract was made; the language of the contract; the place where the contract is to be performed; and sometimes – arbitration-specific – the place where enforcement of an arbitral award may be sought.58 This will usually result in the arbitration agreement being governed by the same law as the main contract since the factors for the closest and most real connection will regularly be identical with regard to both the main contract and the arbitration agreement.59 24 Matters covered by the law governing the arbitration agreement are all substantive matters relating to the agreement (which is regarded as an ordinary contract), in contrast to procedural aspects concerning the arbitration which are governed by the lex arbitri determined by the chosen seat of the arbitration. Such substantive matters relating to the arbitration agreement are, in particular, its formation, its validity, its scope and any other interpretation of it, the consequences and remedies in case of its

55 Hamlyn & Co. v. Talisker Distillery [1894] AC 202 (HL); Compagnie Tunisienne de Navigation SA v. Compagnie d’Armement Maritime SA [1971] AC 572 (HL); Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v. R’as Al-Khaimah National Oil Corporation [1990] 1 AC 295 (HL); Egon Oldendorff v. Liberia Corporation [1996] 1 Lloyd’s Rep. 380 (Comm); Sonatrach Petroleum Corp v. Ferrell International Ltd [2002] 1 All ER 627 (Comm). 56 Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v. R’as Al-Khaimah National Oil Corporation [1990] 1 AC 295, 310 (HL) – the law chosen with regard to the main contract were the general principles of commercial law, the chosen seat was Geneva and the court applied Swiss law to the arbitration agreement; XL Insurance Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500, 506 et seq. (Comm) – the law chosen with regard to the main contract was New York law, the chosen seat was London and the court applied English law to the arbitration agreement; C v. D [2007] EWHC 1541 (Comm), affirmed by the Court of Appeal [2007] EWCA Civ 1282 – again the law chosen with regard to the main contract was New York law, the chosen seat was London and the court applied English law to the arbitration agreement; to the contrary, i. e. affording priority to the law chosen with regard to the main contract, see Arsanovia v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm). 57 C v. D [2007] EWCA Civ 1282 at [26]; see in that regard the very illustrative judgment given by Kerr LJ in Naviera Amazonica Peruana SA v. Compania Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep. 116, 119 (CA) with various references to the relevant literature: “All contracts which provide for arbitration and contain a foreign element may involve three potentially relevant systems of law. (1) The law governing the substantive contract. (2) The law governing the agreement to arbitrate and the performance of that agreement. (3) The law governing the conduct of the arbitration. In the majority of cases all three will be the same. But (1) will often be different from (2) and (3). And occasionally, but rarely, (2) may also differ from (3).” 58 Merkin, Arbitration Law, 2004, para. 7.10; Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 2–095; for a thorough review of the case law and the importance of the particular facts of each case see Sulamérica Cia Nactional des Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638 at [7] et seq. 59 Hill/Chong, International commercial disputes, 4th ed., 2010, para. 21.1.3.

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breach, its effect and discharge as well as the issue of whether the arbitration agreement has been brought to an end.60 Aspects neither governed by the law of the arbitration agreement nor by the lex 25 arbitri are non-substantive matters relating to the arbitration agreement which would also not be covered by the proper law of any other contract such as capacity and form. They are governed by the respective conflict rules either in the AA 1996 itself, such as the formal requirements,61 or under common law, such as capacity for lack of a statutory rule and applicability of the Rome I Regulation.62

3. The formation of the arbitration agreement a) General principles of contract law. As an arbitration agreement is in many 26 respects a contract just as any other contract, the formation process is principally governed by the usual principles of English contract law apart from a few aspects which deserve special consideration such as capacity (sometimes referred to as subjective arbitrability), (objective) arbitrability and form. b) Capacity (subjective arbitrability). The capacity of a party to enter into an 27 arbitration agreement is governed by the ordinary law of contract. Hence, in principle, any individual or corporate body or other entity with legal personality can be party to an arbitration agreement. A bankrupt individual can still submit to arbitration but this does not bind his estate in bankruptcy. If the trustee in bankruptcy chooses to adopt a contract concluded by the bankrupt while solvent which contains an arbitration clause, the trustee is bound by it. If he does not adopt the contract, upon application by a party to the contract or the creditors the court will decide whether the case should be referred to arbitration.63 In case of corporate insolvency, an administrator or administrative receiver has the power to submit any dispute affecting the insolvent entity to arbitration by entering into an arbitration agreement.64 Furthermore, the Crown, i. e. state entities including public authorities, can enter into arbitration agreements free of any restrictions.65 c) (Objective) Arbitrability. English arbitration law is very liberal as to (objective) 28 arbitrability, i. e. the question of whether a particular kind of dispute is capable of being resolved by arbitration rather than any other method of dispute resolution including state court litigation.66 It is hardly ever an issue and case law on the matter is rare. Quite often the matter is addressed by simply stating that arbitrability is not a problem in the commercial field (which is regarded as the primary field where arbitration operates). 60 See Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 2–122; Hill/Chong, International commercial disputes, 4th ed., 2010, para. 21.1.5 with references to the respective case law. 61 Section 5 AA 1996 sets out the formal requirements for an arbitration agreement to be governed by AA 1996 (more specifically its Part 1) which amounts to an implicit (unilateral) conflict rule to the extent that English arbitration law applies only if the formal requirements of section 5 AA 1996 are met. 62 According to common law, capacity is governed alternatively by the law with which the contract, i. e. here the arbitration agreement, has the closest and most real connection, or by the law of the parties’ domicile or residence (see Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., 2012, para. 32R-168); the law with which the arbitration agreement has the closest and most real connection, is foremost the chosen seat of the arbitration or in case of no chosen seat the law applicable to the main contract (see supra mn. 23); therefore, capacity is in effect in most cases governed by the same law as the substantive matters relating to the agreement. 63 Section 349A (2) and (3) Insolvency Act 1986. 64 Sections 14, 42 in connection with paragraph 6 of Schedule 1 to the Insolvency Act 1986. 65 According to section 106 AA 1996 the Crown is bound by its Part I; for a comparative overview see Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, paras 228 et seq. 66 On the difficulties resulting from the inconsistent understandings of the concept of arbitrability, see Mustill/Boyd, Commercial Arbitration, 2nd ed., 2001, p. 70 et seq.

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Some authors merely point at what they regard as obvious, namely that criminal responsibility, civil status and the like are not arbitrable.67 In the commercial context, arbitrability has been discussed with regard to competition law claims and intellectual property rights. While both are principally arbitrable, any competition law issue dependent on coercive state powers, i. e. administrative measures such as prohibitions of a certain behaviour and penalties, be it under domestic and/or EU law,68 as well as the question of validity of a registered intellectual property right,69 are not arbitrable. d) Formal requirements. The core formal requirement appears in the heading of section 5 AA 1996: the arbitration agreement must be in writing to render the AA 1996 applicable. An arbitration agreement that is not in writing remains however enforceable at common law.70 30 The requirement of written form is, however, substantially qualified by the subsections of section 5 AA 1996 which provide a very broad definition of the concept of an “agreement in writing”. There are basically two constellations which one may distinguish under section 5 AA 1996: an arbitration agreement in writing according to subsections 2, 4 to 6 and an agreement otherwise than in writing by reference to a written agreement (according to subsection 3) which is then also regarded as an arbitration agreement in writing. 31 Subsections 2, 4 to 6 denote a very broad meaning to the concept of an “agreement in writing”. First, the agreement need not be signed by the parties.71 This is particularly relevant in the shipping context where a requirement of signatures (as is contained in article 7(2) ML) would be contrary to commercial practice. Second, the agreement need not be contained in a single document but may be made instead by exchange of communication in writing which encompasses, inter alia, communication by letter, telefax, and e-mail.72 As a safety net, even an agreement evidenced in writing will suffice; this is a clear expression of the pro-arbitration attitude of the AA 1996. As one commentator has put it, this “means that an agreement might be found to exist from the sketchiest of documents.”73 In the light of this function of section 5(2)(c) AA 1996, the potential limitation in section 5(4) AA 1996 is unclear, particularly when read together with section 5(6) AA 1996. While section 5(4) AA 1996 provides that for an agreement to be evidenced in writing that this agreement – actually made otherwise than in writing – has to be recorded by one of the parties, or by a third party, with the authority of the parties to the agreement, section 5(6) AA 1996 extends references in the AA 1996 to anything being written or in writing to its being recorded by any means. A possible explanation could be that the recording of the agreement itself, by electronic means for example, satisfies the requirement of the agreement in writing/being written, whereas in a case where not the agreement itself but only the evidence of an agreement actually made otherwise than in writing is recorded, this recording needs to be made with the authority of the parties to the alleged agreement to satisfy the formal 29

67 See e. g. Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, paras 2–080 et seq.; Departmental Advisory Committee on Arbitration Law (chaired by Lord Mustill), A Report on the UNCITRAL Model Law on International Commercial Arbitration, 1989 (published in (1990) 6 Arb. Int’l 3, 50). 68 Dalhuisen, (1995) 11 Arb. Int’l 151; Bridgman, [2008] EBLR 147; Hill/Chong, International commercial disputes, 4th ed., 2010, para. 21.2.12. 69 Nützi, [1997] 4 EIPR 192. 70 Section 81(1)(b) AA 1996. 71 Section 5(2)(a) AA 1996. 72 Section 5(2)(b) AA 1996; in Bernuth Lines Ltd v. High Seas Shipping Ltd [2005] EWHC 3020 (Comm) the court regarded an e-mail as being recorded and as such constitutes communication in writing under section 5(6) AA 1996. 73 Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 55.

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requirements of section 5(2)(c) AA 1996. Finally, an exchange of written submissions (hence not any form of communication) in arbitral or legal proceedings in which the existence of an arbitration agreement otherwise than in writing is alleged by one party and not denied by the other party in his response constitutes as between those parties an agreement in writing.74 Subsection 3 is concerned with agreements made otherwise than in writing, i. e. 32 particularly oral agreements, which refer to terms which are in writing and which contain an arbitration clause. Such an oral reference to a written document containing an arbitration clause is regarded as an arbitration agreement in writing so that Part I of the AA 1996 applies to them. Examples are salvage agreements based upon Lloyd’s Open Form (which contains a submission by the parties to London arbitration) and sales contracts concluded orally by reference to the seller’s or buyer’s standard terms which contain an arbitration clause. Overall, section 5 AA 1996 represents a very broad and open concept of an 33 agreement in writing, particularly open to new technological means of communication and recording between the parties. There will hardly ever be cases where an alleged arbitration agreement between the parties does not come within the concept of an agreement in writing as long as there is any written communication between the parties. The formal requirements are thus more liberal than they are under article 7 ML as well as under article II(1) and (2) NYC which, however, allows the courts of the contracting states to apply the more liberal rules.75 e) Incorporation by reference. Under English law, incorporation of an arbitration 34 clause by reference to another document is generally possible. Under the AA 1996, the reference may be made either to a self-standing arbitration clause or to a document, namely a contract, containing an arbitration clause. In both scenarios, the reference has to be such as to make that clause part of the agreement which contains the reference. English case law distinguishes between two categories of case with different prerequisites for an effective reference. If reference is made to standard form terms and conditions or to previous contracts between the same parties, a general reference to those terms suffices for validly incorporating the arbitration clause of such terms and conditions into the referring agreement.76 If, in contrast, reference is made to a nonstandard form contract between different parties, particularly in the context of charterparty/bill of lading cases, construction and reinsurance contracts, a specific reference to the arbitration agreement is required to incorporate it into the referring agreement.77 The rationale behind the stricter approach with regard to non-standard form contract lies in the fact that the parties to the referring contract do not have (actual or at least potential) knowledge of the terms of this other contract which will furthermore have to be adjusted in order to fit as between the parties of the referring agreement.78 74

Section 5(5) AA 1996. See article VII(1) NYC. 76 It should, however, be noted that the Unfair Terms in Consumer Contract Regulations 1999 (incorporating the EU’s Unfair Contract Terms Directive 93/13) apply in that scenario if one party to the arbitration agreement is a consumer; see sections 89 et seq. AA 1996. 77 See e. g. Sea Trade Maritime Corp. v. Hellenic Mutual War Risks Association (Bermuda) Ltd [2006] EWHC 2530 (Comm), where the court distinguished between single contract cases (reference to standard terms and conditions) and two-contract cases (reference to another contract); Habas Sinai Ve Tibbi Gazlar Isthisal Endustri AS v. Sometal SAL [2010] EWHC 29 (Comm), where the parties referred to previous contracts between them in a very general manner (“All the rest will be the same as our previous contracts.”) which was regarded as sufficient for an incorporation by reference; see also Aughton Ltd v. MF Kent Services Ltd [1991] 57 BLR 1 (CA). 78 Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 2–049. 75

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4. Termination of the arbitration agreement 35

Since arbitration is based on a consensus by the parties, they are free to terminate the arbitration agreement by a subsequent agreement. As opposed to the arbitration agreement itself, the termination agreement need not be in writing. If, however, the arbitration agreement forms part of a main contract which requires any variation of it to be in writing this applies equally to the arbitration clause contained within it.79 Apart from such a termination agreement, either party may repudiate the arbitration agreement expressly or impliedly, particularly by commencing court proceedings, which the other party may accept by concurrent behaviour inconsistent with the arbitration agreement. In any event, the allegedly repudiatory behaviour has to be such as to clearly and unequivocally demonstrate that the party no longer intends to be bound by the arbitration agreement. Hence, not any failure to comply with the arbitration agreement amounts to a repudiatory breach or even an abandonment of it. Overall, the English courts are rather reluctant to assume abandonment or acceptance of an implied repudiation of the arbitration agreement.80

5. The scope and the interpretation of the arbitration agreement 36

The content of an arbitration agreement, and in particular its scope and further interpretation, is disputed far more often than the formation of such an agreement. This raises a number of problems in theory and practice.

a) Personal scope of the arbitration agreement. As a matter of principle, since the arbitration agreement is an ordinary contract, it is only binding upon the parties to it. While the issue is rarely an issue with regard to individuals, in case of corporate bodies the personal scope of the arbitration agreement, i. e. its binding effect, depends on the legal personality of the corporate body. If the corporate body is an entity with legal personality separate from its members, the arbitration agreement is binding upon the entity regardless of any subsequent changes to its members. Therefore, companies incorporated under the Companies Act, limited liability partnerships, statutory corporations as well as simple partnerships – all having a legal personality – are bound by an arbitration agreement entered into in the name of the corporate body. In case of corporate insolvency, an administrator or administrative receiver has the power to submit any dispute affecting the insolvent entity to arbitration by entering into an arbitration agreement,81 while no arbitration proceedings may be commenced against the company without either consent of the administrator or permission of the court.82 38 If a contract containing an arbitration clause confers upon a third party a right to enforce a term of the contract, the third party is treated as a party to the arbitration agreement as regards disputes between himself and the promisor relating to the enforcement of the enforceable term.83 Accordingly, he may be entitled, as well as 37

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JSC Zestafoni G Nikoladze Ferroalloy Plant v. Ronly Holding Ltd [2004] EWHC 245 (Comm). See e. g. Shell International Petroleum Co. Ltd v. Coral Oil Co. Ltd [1999] 1 Lloyd’s Rep. 72 (Comm) requiring clear evidence of an intention to abandon and reliance by the other party to its detriment; Elektrim SA v. Vivendi Universal SA [2007] EWHC 11 (Comm); BEA Hotels NV v. Bellway LLC [2007] EWHC 1363 (Comm). 81 Sections 14, 42 in connection with paragraph 6 of Schedule 1 to the Insolvency Act 1986. 82 Paragraph 43(6) of Schedule B1 to the Insolvency Act 1986; for details on the effect of voluntary of compulsory winding-up on the arbitration agreement see Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, paras 3–040 et seq. 83 Section 8(1) Contracts (Rights of Third Parties) Act 1999. 80

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required, to arbitrate a dispute.84 Consequently, third parties other than those on which a right to enforce a term of the contract is conferred, are not bound by the arbitration agreement. That applies regularly to guarantors, sureties and indemnifiers: they are neither bound by the arbitration agreement nor by an arbitral award issued as between the parties to the arbitration agreement (to one of whom the guarantee relates). Hence, there is a risk of parallel proceedings by the creditor against the guarantor before the state courts and against the debtor before an arbitral tribunal. Consequently, the persons involved in such a three-party scenario are well advised to provide for it in their contractual relationships, for example by referring the disputes under all contracts either to arbitration or to litigation and by allowing a consolidation of both claims before one court or tribunal. In case of an assignment of a contract the assignee is bound by the arbitration 39 agreement. Hence, he may sue and be sued under the arbitration agreement.85 Furthermore, the assignee is entitled to join arbitration proceedings commenced before the assignment.86 Consequently, it is explicitly stated in the AA 1996 that any reference to a party to an arbitration agreement includes “any person claiming under or through a party to the agreement.”87 In case of a substitution of parties due to a corporate reorganization, the effect will depend on the exact nature and effect of that reorganization, i. e. whether the transferring entity ceases to exist and whether the reorganization triggers a universal succession. If the substituting entity becomes party to a contract containing an arbitration clause, it is bound by it when pursuing a claim arising out of the contract. Most importantly, however, for the substituted party (regardless of whether it is an assignee or a succeeding corporate entity), to proceed with arbitration proceedings it has to give notice of the substitution to the other party and the arbitral tribunal within a reasonable time.88 In case of the death of a party, the arbitration agreement is not discharged unless 40 provided so by the parties.89 Hence, it may be enforced by or against the personal representatives of the deceased party. It is, however, made clear, that the continuing life of the arbitration agreement does not affect the operation of any enactment or rule of law by virtue of which a substantive right or obligation is extinguished by death.90 The duration of the lives of the arbitration agreement and of the substantive right may therefore differ. Finally, while in some jurisdictions an arbitration clause may be binding upon a non- 41 party if it belongs to the same group of companies as one of the parties,91 the English courts have explicitly rejected this so called “group of companies” doctrine.92 b) Substantive scope of the arbitration agreement. The substantive scope of the 42 arbitration agreement depends on its proper construction based on the most likely intention of the parties. While such an interpretation of a contract usually turns on the Nisshin Sipping Co. Ltd v. Cleaves & Co. Ltd [2003] EWHC 2602 (Comm). Starlight Shipping Co. v. Tai Ping Insurance Co. Ltd [2007] EWHC 1893 (Comm); Schiffahrtsgesellschaft Detlev Von Appen GmbH v. Voest Alpine Intertrading GmbH [1997] 2 Lloyd’s Rep. 279 (CA). 86 Baytur SA v. Finagro Holding SA [1992] QB 610 (CA). 87 Section 82(2) AA 1996. 88 Baytur SA v. Finagro Holding SA [1992] QB 610 (CA); Republic of Kazakhstan v. Istil Group [2006] EWHC 448 (Comm); Eurosteel Ltd v. Stinnes AG [2000] CLC 470 (Comm). 89 Section 8(1) AA 1996; in trust instruments there will usually be specific provisions addressing the trustee’s powers in that regard. 90 Section 8(2) AA 1996. 91 CA Paris, Rev. Arb. 1984, 98; BGE 129 III 727. On the group of companies doctrine in France and Switzerland see infra I mn. 31, R. mns 51, 52. 92 Peterson Farms Inc. v. C&M Farming Ltd [2004] EWHC 121 (Comm). 84 85

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specific wording used by the parties, the English courts pursue a more liberal approach with regard to arbitration agreements. Although the courts will consider the wording as a starting point, they will construe the clause as commercial men acting sensibly and in a business-like manner would have wanted their dispute resolution mechanism to operate. In effect, the presumed sensibility and rationality of the parties prevails over intricate and minute semantic analysis of the arbitration agreement.93 In furtherance of this approach, although there is no general presumption in favour of arbitration, the English courts have upheld arbitration agreements as far as possible if the circumstances have allowed it94 and have given them the widest possible meaning in order to ensure a one-stop adjudication by the arbitral tribunal.95 If there is a valid arbitration clause contained in the contract, there is a presumption that the parties, as commercial men, wanted all disputes arising out of or even in connection with their contractual relationship (or even relationships) to be resolved by arbitration instead of different forms of dispute resolution resulting in several sets of proceedings before different courts and tribunals, unless the arbitration agreement contains clear wording to the contrary chosen by the parties with a clear intention and the awareness to exclude certain disputes from the realm of arbitration.96 Even counterclaims and set-offs are covered by the standard formula “dispute controversy or claim relating to this agreement”.97 In particular, an arbitration clause in a contract does not only cover contractual claims but also claims based on other causes of action, such as tort, relating to the same facts as the contractual claims so that “the resolution of the contractual claims cannot sensibly or practically be divorced from the resolution of the non-contractual claims”.98 Even bills of exchange used as part of performance of a sales contract are covered by an arbitration clause (“all disputes arising out of or in connection with” the sale contract) contained only in the sales contract but not in the bills of exchange.99 43 Special problems arise if the parties have concluded various contracts within the framework of one single, albeit complex, transaction (from a commercial point of view). As a starting point, it is also presumed that the parties as rational businessmen did not intend to submit all disputes arising out of or in connection with the transaction as a whole to different dispute resolution mechanisms.100 However, this does not automati93 Fiona Trust & Holding Corp. v. Yuri Privalov [2007] UKHL 40 at [8]: “A proper approach to construction therefore requires the court to give effect, so far as the language used by the parties will permit, to the commercial purpose of the arbitration clause.”; UBS AG v. HSH Nordbank AG [2009] EWCA Civ 585 at [83] et seq.: “…would be a wholly uncommercial result and one that sensible business people cannot have intended.”; Satyam Computer Services Ltd v. Upaid Systems Ltd [2008] EWCA Civ 487; Société Commerciale de Reassurance v. ERAS (Internationale) Ltd [1992] 1 Lloyd’s Rep. 570 (CA). 94 See e. g. Paul Smith Ltd v. H&S International Holdings Inc. [1991] 2 Lloyd’s Rep. 127 (Comm). 95 Fiona Trust & Holding Corp. v. Yuri Privalov [2007] EWCA Civ 20 and [2007] UKHL 40; Lesotho Highlands Development Authority v. Impreglio SpA [2005] UKHL 43; Asghar v. Legal Services Commission [2004] EWHC 1803 (Ch); Capital Trust Investments Ltd v. Radio Design TJ AB [2002] EWCA Civ 135. 96 Et Plus SA v. Welter [2005] EWHC 2115 (Comm); Capital Trust Investments Ltd v. Radio Design TJ AB [2002] EWCA Civ 135; Fiona Trust & Holding Corp. v. Yuri Privalov [2007] EWCA Civ 20, upheld with further considerations on the issue [2007] UKHL 40; for examples of standard wordings and the wide meaning attached to them see Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, paras 2–100 et seq. 97 Norscot Rig Management v. Essar Oilfields Services [2010] EWHC 195 (Comm) at [15]. 98 Asghar v. Legal Services Commission [2004] EWHC 1803 (Ch) at [18]; similarly Et Plus SA v. Welter [2005] EWHC 2115 (Comm) at [40] et seq. 99 Uttam Galva Steels Ltd v. Gunvor Singapore Pte Ltd [2018] EWHC 1098 (Comm). 100 Deutsche Bank v. Sebastian Holdings [2010] EWCA Civ 998 at [41]: “parties to an arrangement between them set out in multiple related agreements do not generally intend a dispute to be litigated in two different tribunals.” (Note that the case concerned jurisdiction clauses but the same principles apply to arbitration clauses.).

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cally lead to the positive presumption that an arbitration clause in one of the various contracts covers disputes arising under one or more of the other contracts. Whether or not this is the case has to be determined by interpreting the single contracts in the light of the transaction as a whole, particularly having regard to their arrangement. An important aspect for determining this issue is whether the diverging arbitration and or jurisdiction clauses in the various contracts forming one transaction were concluded in the knowledge of the divergence and with a clear intention of divergence for good reason, or whether in contrast they are boilerplate clauses which were not subjected to detailed or indeed any negotiation between the parties.101 Another important aspect is the period over which the various contracts were concluded and, most importantly, the question how closely related the various contracts are.102 If the arbitration clause in one of the various contracts does not extend to disputes under all contracts forming the transaction so that a dispute in connection with the transaction has to be allocated to one of the various contracts, this is done by determining the centre of gravity of the claim in question.103 c) Pathological arbitration clauses. When faced with the question of the arbitration 44 agreement’s validity, either in the course of an application to stay proceedings on the merits brought by one party in breach of an alleged arbitration agreement before the English courts, or less frequently in ancillary proceedings before the English seat court supporting the commencement of the arbitration,104 the English courts have been prepared, taking due account of the doctrine of separability105 and the pro-arbitration policy of English law,106 to uphold and enforce such agreements to a significant extent despite issues such as vagueness of the arbitration agreement, inconsistencies within the arbitration agreement or of an arbitration clause with other contract terms, and the problem of permissive arbitration agreements. For example, clauses providing for “arbitration to be settled in London”107 or “arbitra- 45 tion in London – English law to apply”108 were upheld by the English courts, being empowered by the AA 1996 to fill the gaps (e. g. the language, the constitution of the arbitral tribunal, time limits, judicial review) in case the parties cannot agree on them once the dispute has arisen. But even more vague and sometimes inconsistent phrases such as a heading “suitable arbitration clause” with no further content,109 “arbitration, if any, by ICC rules in London”,110 “disputes should be arbitrated” in communication between the parties, “arbitration in the usual manner”111 were all upheld by the English courts. 101

Deutsche Bank v. Sebastian Holdings [2010] EWCA Civ 998. UBS AG v. HSH Nordbank AG [2009] EWCA Civ 585 at [84]: “The agreements were all connected and part of one package…”; Deutsche Bank v. Sebastian Holdings [2010] EWCA Civ 998 at [57]: “The agreements were entered into over a two-year period. This is not the case of financial transactions closely related in time such as where conflicting clauses might be found within the agreements contained in the transaction bible or are different agreements which are part of one package (as in UBS).” 103 Deutsche Bank v. Sebastian Holdings [2010] EWCA Civ 998 at [49] and [61] et seq.; Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., 2012, para. 12–110. 104 Such as the extension of time for beginning arbitral proceedings under section 12 AA 1996. 105 See supra mn. 19. 106 This is repeatedly stressed by the English courts; see e. g. Sul América CIA Nacional de Seguros SA v. Enesa Engenharia SA [2012] 1 Lloyd’s Rep 275 (Comm); Christian Kruppa v. Alessandro Benedetti and Bertrand des Pallières [2014] EWHC 1887 (Comm). 107 Tritonia Shipping Inc v. South Nelson Forest Products Corporation [1966] Lloyd’s Rep. 114 (CA). 108 Swiss Bank Corporation v. Novorossiysk Shipping [1995] 1 Lloyd’s Rep. 202 (Comm). 109 Hobbs Padgett & Co. (Reinsurance) Ltd v. JC Kirkland Ltd [1969] 2 Lloyd’s Rep. 547 (CA). 110 Mangistaumunaigaz Oil Production Association v. United World Trading Inc [1995] 1 Lloyd’s Rep. 617 (Comm). 111 Tokumaru Kaiun Company Ltd v. Petredec Ltd, 1995, unreported. 102

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In case of conflicting jurisdiction and arbitration clauses in one contract, such that both clauses cover the same sort of disputes, the courts have tried to give effect to one of the clauses as far as possible, often in favour of the arbitration clause, construing the reference to the jurisdiction of the English courts as referring to their supportive and supervisory powers under the AA 1996.112 The matter lies differently if the clause is such that it is unclear whether it constitutes an arbitration agreement at all, for example: “In the event of any dispute … the parties will endeavour first to resolve the matter through Swiss arbitration. Should a resolution not be forthcoming the courts of England shall have non-exclusive jurisdiction.” The English High Court held that the clause did not constitute an arbitration agreement. First, it was merely an agreement to endeavour to resolve disputes by way of arbitration rather than an agreement so submit disputes to arbitration. Second, it could also not be interpreted as a multi-tier clause as it would consist of two binding tiers; this is logically not possible.113 47 As a guideline, as soon as the court can make out an agreement by the parties that disputes should be resolved by arbitration rather than by any other dispute resolution mechanism including state court litigation, uncertainty, vagueness and even inconsistencies concerning the how and where of the arbitration will not affect the existence of the arbitration agreement. Rather, such gaps are filled according to the presumed intention of the parties while inconsistencies will either be disregarded or resolved by preferring one statement over the other, again according to the presumed intention of the parties. If reference is made to an institution or rules that do not exist, such reference is corrected according to the presumed intention of the parties. Overall, in pursuing a strong proarbitration approach the English courts are prepared to stretch the presumed intention of the parties as far as possible in order to keep “pathological” arbitration agreements alive. 46

6. Enforcing arbitration agreements 48

An arbitration agreement confers jurisdiction upon the arbitral tribunal to decide all issues within the personal and substantive scope of the arbitration agreement. Under English law, there are several ways of enforcing an arbitration agreement relating to the situation of impending parallel proceedings which the means of direct enforcement aim to avoid. One may in that regard differentiate between direct (avoiding state court proceedings parallel to arbitration proceedings ab initio) and indirect enforcement (remedying the consequences of parallel proceedings and resulting irreconcilable decisions), and with regard to both ways of enforcement between scenarios involving EU member states and those involving non-EU member states.

a) Direct enforcement. With regard to direct enforcement of the arbitration agreement one has to distinguish between two different scenarios depending on where the parallel state court proceedings in alleged breach of the arbitration agreement were already brought or are most likely to be brought. 50 If state court proceedings are brought before the English state courts despite the claims114 advanced being subject to an arbitration agreement providing for England, Wales or any other country as the seat of the arbitration,115 the defendant may, if he wants to adhere to the arbitration agreement, apply to the English court for a stay of 49

112 See e. g. Paul Smith v. H&S International Holding Inc [1991] 2 Lloyd’s Rep. 127 (Comm); Axa Re v. Ace Global Markets Ltd [2006] EWHC 216 (Comm); Sul América CIA Nacional de Seguros SA v. Enesa Engenharia SA [2012] 1 Lloyd’s Rep 275 (Comm). 113 Christian Kruppa v. Alessandro Benedetti and Bertrand des Pallières [2014] EWHC 1887 (Comm). 114 Section 9 AA 1996 applies accordingly to counterclaims. 115 Section 2(2) AA 1996.

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the proceedings (arbitration defence).116 The application must not be made before acknowledgement of service117 or after the defendant has taken any step in the proceedings to answer the substantive claim.118 It is not a step in the proceedings if the answer to the substantive claim is made explicitly in the event that the application for a stay is unsuccessful.119 Equally, resisting or applying for interim relief before the state courts in relation to claims covered by the arbitration agreement is not a step in the proceedings which results in the foregoing of the arbitration defence.120 Arbitration proceedings need not have commenced and it does not impede a stay that the matter is to be referred to arbitration only after the exhaustion of other dispute resolution procedures.121 The court shall grant the stay unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.122 In the course of examining these aspects the English courts will determine whether the arbitration agreement is despite its formation null and void ab initio, whether it is inoperative (for example, by way of repudiation or abandonment), and whether it is incapable of being performed (for example, because the arbitral institution chosen longer exists or because war at the arbitral seat or other instances of force majeure present hindrances which render an arbitration impossible for the parties). Unlike in some other jurisdictions,123 poverty does not render the arbitration agreement incapable of being performed.124 The burden of proof differs as between the preconditions of a successful arbitration defence in section 9(1) AA 1996 and the grounds for rejecting it in section 9(4) AA 1996. While the defendant has to establish under section 9(1) AA 1996 the existence of the arbitration agreement,125 he only needs to raise an arguable case concerning the arbitration agreement’s validity for a stay to be granted.126 The application for a stay is, however, rejected if the claimant can establish the grounds in section 9(4) AA 1996.127 The matter is linked to the KompetenzKompetenz of the arbitral tribunal to which it is left to examine and determine the 116 Section 9(1) AA 1996. The procedural mechanism of a stay of proceedings deviates from the procedural mechanism of a dismissal of the claim under many other national arbitration laws, e. g. § 1032 I German ZPO; due to the mere stay of the proceedings, the English courts retain a residual jurisdiction over the claim which is, however, in practice hardly ever invoked; a rare example is Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd [1981] AC 909, 938 et seq. (HL), where one party had not pursued the arbitration for years. 117 See CPR Part 10. 118 Section 9(3) AA 1996. 119 Capital Trust Investments Ltd v. Radio Design TJ AB [2002] EWCA Civ 135. 120 Roussel-Uclaf v. GD Searle & Co. Ltd [1978] 1 Lloyd’s Rep. 225; Glidepath BV v. Thompson [2005] EWHC 818 (Comm). 121 Section 9(2) AA 1996 which is informed by the decision in Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1993] AC 334 (HL). 122 Section 9(4) AA 1996, drawing from article II(3) NYC; since the court ‘shall’ stay, it has a limited degree of discretion whether to grant the requested stay or not; relevant factors were recently listed by the High Court in Claxton Engineering Services v. TXM [2010] EWHC 2567 (Comm), consisting inter alia of the circumstances of the application, the clarity of the evidence, the interests of the parties, the avoidance of unnecessary cost and expense and of the facts whether in was more sensible to leave the matter for the tribunal to decide and whether the arbitration would take place in any event. 123 See infra J mn. 26. 124 Janos Paczy v. Haendler & Natermann GmbH [1981] 1 Lloyd’s Rep. 302 (CA). 125 Fiona Trust & Holding Corp. v. Yuri Privalov [2007] UKHL 40; Albon v. Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch); Sun Life Assurance Co. of Canada v. CX Reinsurance Co. Ltd [2003] EWCA Civ 283. 126 Hume v. AA Mutual International Insurance [1996] LRLR 19 (Comm); Downing v. Al Tameer [2002] EWCA Civ 721; Albon v. Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch) with a discussion of the conflicting authorities on the issue. 127 Albon v. Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch); Joint Stock Company Aeroflot Russian Airlines v. Berezovsky [2012] EWHC 1610 (Ch).

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arbitration agreement’s validity and scope in detail in the course of the arbitration proceedings,128 unless the claimant in the state court proceedings can prove one of the grounds of section 9(4) AA 1996 which will usually result in a refusal of the stay. However, even if the application for a stay is successful, the English courts will have the final word on the arbitration agreement’s validity and scope if the seat of the arbitration is England or Wales since the party objecting to the arbitration agreement’s validity or coverage of the claims in question may challenge the arbitral tribunal’s affirmative answer under its Kompetenz-Kompetenz during the arbitral proceedings by way of an application to the court for determination of the arbitral tribunal’s jurisdiction129 or subsequent to the arbitral award by way of challenging the award.130 51 If, in contrast, proceedings in breach of an arbitration agreement providing for England or Wales as the seat of the arbitration131 are brought before a foreign state court, the defendant in those proceedings may of course raise the arbitration defence (e.g. under article II(2) NYC). Depending on the country where the party challenging the arbitration agreement has initiated the foreign state court proceedings, the court may, however, take years to decide on its jurisdiction or there may be a real risk of a decision induced by corruption of the court. The arbitration defence therefore does not necessarily operate satisfactorily in avoiding parallel proceedings. Therefore, the defendant as the party adhering to the arbitration agreement is well advised to apply at the same time to the English seat courts for an anti-suit injunction, i. e. an injunction, which may be interim or final, based on the in personam-jurisdiction of the English courts over the opponent party, restraining that party from initiating or continuing proceedings before a foreign state court.132 By applying for an anti-suit injunction even before the foreign proceedings have been initiated, the party adhering to the arbitration agreement has the chance to prevent parallel proceedings with the risk of irreconcilable decisions ab initio. Due to their origins in the law of equity, anti-suit injunctions are a discretionary remedy.133 In the case of arbitration (and jurisdiction) agreements the court’s discretion is, however, limited: antisuit injunctions are regularly granted for a breach of the legal right to not be sued before the state courts.134 An anti-suit injunction is not directed at the foreign court, but at the 128 See section 31 AA 1996; the meaning and limitations of the principle of Kompetenz-Kompetenz under English arbitration law are explored further infra mn. 59. 129 See section 32 AA 1996. 130 See sections 67, 68 AA 1996. 131 A v. B [2007] 1 Lloyd’s Rep. 237 (Comm) where the court explicitly refused to grant an anti-suit injunction in favour of an arbitration agreement providing for a Swiss seat of the arbitration. 132 Whether an anti-suit injunction will be ordered against a non-party to the arbitration agreement (usually filing state court proceedings in an overlapping or related matter) depends on the very circumstances of the case (in particular common control and direct attempts to frustrate the arbitration proceedings), see e.g. Mace (Russia) Ltd v. Rentansel Enterprises Ltd [2016] EWHC 1209 (Comm); Evison Holdings Ltd v. International Co. Finvision Holdings, Orient Express Bank Public Joint Stock Company [2019] EWHC 3057 (Comm); for the exceptional instance of an anti-suit injunction restraining a party from initiating or continuing arbitration proceedings abroad where the proper seat of the arbitration is England (or Wales) see Sabbagh v. Khoury [2019] EWCA Civ 1219. 133 See the – now statutory – basis in section 37(1) Supreme Court Act 1981 (“… may by order … grant an injunction … in all cases in which it appears to the court to be just and convenient to do so.”) and section 44 AA 1996 as well as the leading cases Société Nationale Industrielle Aerospatiale v. Lee Kui Jak [1987] AC 871, 892 (PC); Airbus Industrie v. Patel [1999] 1 AC 119, 133 and 138 (HL); Donohue v. Armco Inc [2002] 1 All ER 749 (HL) at [19], [23], [53]; for further details see Raphael, The Anti-suit injunction, 2008, paras 3.03 et seq., 4.10 et seq. and 7.08 et seq. 134 See the The Angelic Grace [1995] 1 Lloyd’s Rep. 87, 96 (CA); Donohue v. Armco Inc [2002] 1 All ER 749 (HL) at [24], [45]; Turner v. Grovit [2002] 1 WLR 107 (HL) at [24] et seq.); West Tankers Inc v. RAS Riunione Adriatica di Sicurta SpA [2007] UKHL 4 at [8]).

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plaintiff in the foreign proceedings. Nevertheless, it (indirectly) interferes with the power of the foreign court to determine its jurisdiction. Due to the sanctions for contempt of court in case of disobedience, anti-suit injunctions have proven to be a very effective tool for avoiding parallel proceedings. Once the foreign proceedings are restrained, the arbitration can commence or continue without the ongoing threat of conflicting decisions on the arbitration agreement’s existence, validity and scope or on the merits. Apart from the restriction to an English (or Welsh) seat of the arbitration, another, even more important restriction is of course that anti-suit injunctions – at least up until Brexit135 – are no longer available to restrain proceedings before the courts of another EU member state since they violate the right of each member state court under the Brussels Ia Regulation to decide independently on its own jurisdiction when seized with an action which includes any preliminary issue such as the validity of the arbitration agreement.136 Under the recast Brussels Ia Regulation the ban on anti-suit injunctions is not lifted and the Regulation does not solve the problem of parallel proceedings in another way: the rather unsatisfactory status quo persists.137 Anti-suit injunctions by an arbitral tribunal taking the form of an award can be recognized and enforced by the member state in which the proceedings restrained by the injunction are pending.138 The ban on anti-suit injunctions relating to foreign court proceedings in other EU 52 member states brought in breach of the arbitration agreement has resulted in several attempts in the aftermath of the ECJ’s West Tankers decision to establish other direct and indirect ways of enforcement.139 One potential alternative of direct enforcement is to apply as a first step to the 53 English seat courts for a (positive) declaratory judgment to the extent that there is a valid and binding arbitration agreement between the parties and that the claims in question are within its personal and substantive scope. Upon a positive decision by the English seat court, the successful party (being the one adhering to the arbitration agreement) would then try to enforce the judgment in the country where the foreign court proceedings were brought in alleged breach of the arbitration agreement so that those state courts are bound by the seat court’s finding concerning the existence and validity of the arbitration agreement. The major problem – apart from the right timing – is, however, that such enforcement is quite uncertain in the international context. Amongst the EU member states such a decision by the English seat court would not be recognized under the Brussels Ia regime140 and the prospect of recognition and enforcement in non-member states appears to be even more uncertain. 135

See Varesis, (2019) 35 Arb. Int’l 275 (288 et seq.) on the potential scenarios after Brexit. ECJ Case C-185/07 Allianz v. West Tankers [2009] ECR I-663 (the decision was made under the old Brussels I Regulation, but remains applicable under the current Brussels Ia version). For a detailed analysis of the decision see Illmer, IPRax 2009, 312; Illmer/Naumann, [2007] 10 Int’l Arb. L. Rev. 147; for a detailed analysis of the consequential problems Illmer, (2011) 75 RabelsZ 645; concerning the remaining practice of English courts to grant anti-suit injunctions in relation to state court proceedings before nonEU member states see Shashoua v. Sharma [2009] EWHC 957 (Comm); Skype Technologies SA v. Joltid Ltd [2009] EWHC 2783 (Comm); Midgulf International Ltd v. Groupe Chimique Tunisien [2010] EWCA Civ 66; Ecom Agroindustrial Corp. Ltd v. Mosharaf Composite Textile Mill Ltd [2013] EWHC 1276 (Comm); Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35; approving this practice Fentiman, International Commercial Litigation, 2nd ed., 2015, paras 16–140 et seq.; Joseph, Jurisdiction and Arbitration Agreements and their Enforcement, 3rd ed., 2015, para. 12.59; rather critical, however, Knight, (2007) 66 CLJ 288 (297 et seq.). 137 Nori Holdings Ltd v. Bank Otkritie Financial Corp. [2018] EWHC 1343 (Comm) at [90] and [99]. 138 ECJ Case C-536/13 Gazprom. See supra A mns. 55, 56. 139 For a detailed assessment in light of the Brussels Ia Regulation see Dickinson/Lein-Illmer, Brussels I Regulation, 2015, art. 1 paras 2.48 et seq. 140 National Navigation Co. v. Endesa Generacion SA [2009] EWCA Civ 1397; in that regard, recitals 12 (2) and (3) of the reformed Brussels Ia Regulation do not affect the status quo under the old regime. 136

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Another alternative, which is currently most promising even if not ideal, is a direct enforcement via the arbitral tribunal and the New York Convention. To do so, the party adhering to the arbitration agreement should (rather quickly) commence arbitral proceedings resulting in a final arbitral award on the merits inherently upholding the arbitration agreement and deciding the substance of the dispute, or even resulting, upon application by said party, in a prior partial award on the arbitration agreement’s existence, validity and scope. If the partial or final award is rendered prior to the foreign court’s decision on the arbitration agreement’s existence, validity and scope the party may apply for enforcement of the award under the New York Convention in the state where the foreign proceedings have been brought so as to bind the foreign court in relation to its decision. If the partial or final award is rendered subsequently to the foreign court’s decision on the arbitration agreement’s existence, validity and scope the party may still use the arbitral award as a shield against recognition and enforcement of the foreign court’s judgment in other member states, since either the arbitral award itself or the seat court’s judgment granting leave to enforce the arbitral award (or entering judgment in terms of the award under section 66(2) AA 1996)141 will constitute a ground for refusing recognition and enforcement of the foreign court’s judgment, applying articles 45(1)(c) or (d) and 46 of the Brussels Ia Regulation either directly or by way of analogy.142 Member state courts are, due to recitals 12(2) and 12(3), no longer bound by the foreign court’s decision on the arbitration agreement’s existence, validity or scope even if forming the preliminary part of a judgment on the merits benefiting from the Brussels Ia regime’s rules on recognition and enforcement. Consequently the relevant member state court may grant leave to enforce the award irrespective of the foreign court’s judgment. The downside to this alternative is, of course, that there is, depending on a direct or analogous application of the Brussels Ia Regulation’s grounds for refusal of recognition and enforcement either a race to obtain the earlier decision on the arbitration agreement’s existence, validity or scope (award itself as ground of refusal) or even a race to the earlier exequatur of the arbitral award under the New York Convention versus that of the foreign court judgment under the Brussels Ia Regime (recast) (judgment granting leave to enforce the award or even entered in terms of the award as was held by the English courts as ground of refusal). In relation to judgments rendered in breach of an arbitration agreement by non-member state courts and – quite likely though not clear yet – even member state courts after Brexit, refusal to recognize and enforce such judgments will not depend on the Brussels Ia Regulation but on the autonomous English law rules on recognition and enforcement of foreign judgments.143 Under these rules a judgment obtained in breach of an arbitration agreement would not be recognized and enforced in England (and Wales).

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b) Indirect enforcement. In addition to direct enforcement by avoiding parallel proceedings the party adhering to the arbitration agreement may apply to the English

141 This route was pursued by the applicants in West Tankers v. Allianz [2011] EWHC 829 (Comm), confirmed [2012] EWCA Civ 27; for a critical assessment (not of the result but of the sparse reasoning) see Illmer, (2012) IPRax 264; Moody/Forsaith, (2012) 28 Arb. Int’l 567. 142 Neither the High Court nor the Court of Appeal in West Tankers v. Allianz [2011] EWHC 829 (Comm), confirmed [2012] EWCA Civ 27, considered this crucial question since they took the (incorrect) view that they did not have to for lack of relevance to their decision; the question was, however, answered in the affirmative in African Fertilizers v. BD Shipsnavo [2011] EWHC 2452 (Comm). 143 Recognition and enforcement would thus depend on common law rules, on the Administration of Justice Act 1920 (with regard to specific Commonwealth countries) and on the Foreign Judgments (Reciprocal Enforcement) Act 1933.

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seat courts to award damages for breach of the arbitration agreement.144 While the foreign state court proceedings are still running, this would be an application for (interim or final) declaratory relief to the extent that the party in breach of the arbitration agreement is held liable for the damage incurred by the other party in defending the foreign state court proceedings. Once those proceedings have come to an end, it would be an action for a specific amount of damages which can then be quantified. The English courts have so far awarded damages only in cases dealing with the breach of jurisdiction clauses and clauses to refer the dispute for expert determination.145 Applying the ECJ’s rationale in the West Tankers decision, however, the route may – at least up until Brexit – only be pursued successfully in relation to foreign court proceedings in a non-EU member state: if specific performance of the obligations under the arbitration agreement by way of an anti-suit injunction is incompatible with the Regulation, damages for breach of that obligation are prima facie incompatible with it as well.146 The matter lies differently with regard to a damages award by the arbitral tribunal since article 1(2)(d) Brussels Ia Regulation’s excludes arbitration from its substantive scope so that an arbitral tribunal is not bound by the procedural principles underlying the Regulation, even if it is seated in a member state. Consequently, the English courts have held that an arbitral tribunal may award damages for breach of an arbitration agreement by commencing proceedings before foreign state courts.147 c) Tactical considerations. Tactical considerations depend on whether the impending 56 or actual parallel proceedings in breach of the arbitration agreement are brought in an EU member state or in a non-EU member state. The contracting states to the Lugano Convention148 are in the same category as the EU member states were under the old Brussels I Regulation as long as the Convention does not replicate the Brussels Ia Regulation; as seen above, the changes brought about by the reform are, however, minimal. A party faced with foreign court proceedings before an EU member state court in 57 breach of an arbitration agreement providing for England (or Wales) as the seat of the arbitration appears to be best advised to quickly commence arbitration proceedings and ask the arbitral tribunal to issue an early partial award consisting of: (1) a positive declaration on the arbitration agreement’s existence, validity and scope; (2) an anti-suit injunction; (3) a declaration that the party in breach of the arbitration agreement is liable for damages occurring from that breach. This award should then be enforced 144 For a detailed analysis see Briggs/Rees, Civil Jurisdiction and Judgments, 6th ed., 2015, paras 5.57 et seq.; Michaelson/Blanke, (2008) 74 Arbitration 12 (23 et seq.); Santomauro, (2010) 6 JPIL 281 (310 et seq.); Betancourt, (2018) 34 Arb. Int’l 511; for the English practice in that regard see Mantovani v. Carapelli [1980] 1 Lloyd’s Rep. 375; Kyrgyz Mobil Tel Ltd v. Fellowes International Holdings Ltd [2005] EWHC 1314 (Comm); A v. B [2007] EWHC 54 (Comm); the latter two decision both concerning cost orders on an indemnity instead of the standard basis. 145 Discount Co. Ltd v. Zoller [2001] EWCA Civ 1755; Donohue v. Armco Inc [2002] 1 All ER 749 (HL); Sunrock Aircraft Corp. Ltd v. Scandinavian Airlines System [2007] EWCA Civ 882; National Westminster Bank Plc v. Rabobank Nederland (No 3) [2007] EWHC 1742 (Comm); A v. B [2007] EWHC 54 (Comm); Starlight Shipping v. Allianz (The Alexandros T) [2014] EWCA Civ 1010 addressing specifically the compatibility of a damages claim with the ECJ’s judgment in Turner v. Grovit (Case C-159/02 [2004] ECR I-3565) and EU law in general. 146 In West Tankers Inc. v. Allianz SpA [2012] EWHC 854 (Comm) concerning directly only the question whether an arbitral tribunal is prohibited from awarding such damages by virtue of the ECJ’s West Tankers decision; the English High Court seems to doubt the compatibility of a damages award of the seat courts with the ECJ’s ruling in West Tankers (see ibid at [53] and [57]); equally sceptical Briggs, Agreements on Jurisdiction and Choice of Law, 2008, para. 8.76; Mankowski, IPRax 2009, 23 (30 et seq.), both with regard to jurisdiction agreements to which the same reasoning applies though. 147 See the detailed analysis in West Tankers Inc. v. Allianz SpA [2012] EWHC 854 (Comm) which were judicial review proceedings under section 69 AA 1996. 148 [2009] OJ L147/5.

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under the New York Convention in the state where the foreign court proceedings were brought in order to bind the foreign court in its assessment of the arbitration agreement’s existence, validity and scope and/or in the relevant other EU member states so as to preclude recognition and enforcement of the foreign court’s judgment in these states. 58 A party faced with foreign court proceedings before a non-EU member state court in breach of an arbitration agreement providing for England (or Wales) as the seat of the arbitration has a wider armory to enforce the arbitration agreement. In particular, antisuit injunctions are still available enabling the party adhering to the arbitration agreement to prevent parallel proceedings ab initio which is of course the preferred solution when compared to solving the problem on the level of recognition and enforcement of irreconcilable judgments.

7. The extent of the principle of Kompetenz-Kompetenz English arbitration law recognizes the principle of Kompetenz-Kompetenz of the arbitral tribunal in expressing a clear preference for the tribunal’s having the first say on the arbitration agreement’s existence, validity and scope in the course of determining its jurisdiction.149 It is only under the preconditions of section 32 AA 1996 that a party may apply to the English courts to determine the arbitral tribunal’s jurisdiction prior to a decision by the tribunal itself on the matter, while it may regularly challenge the arbitration agreement’s existence, validity and scope before the state courts according to the preconditions laid down in sections 67, 73 AA 1996 once the tribunal has rendered an award on the matter (which may take the form of a partial award on jurisdiction only or of a preliminary part of the final award on the merits). With respect to nonparties to the arbitration proceedings special requirements are laid down in section 72 AA 1996. 60 The mechanism under sections 67 and 73 AA 1996 resembles the UNCITRAL Model Law: The party has to challenge the tribunal’s substantive jurisdiction first before the tribunal itself (section 73(1)(a), (2) AA 1996 referring to section 31 AA 1996) to be subsequently entitled to challenge the tribunal’s decision (in the form of an award) on its substantive jurisdiction before the state courts.150 61 Without a prior objection to the arbitral tribunal itself (under section 31 AA 1996), the tribunal’s substantive jurisdiction may be challenged directly before the state courts only under rather restrictive preconditions set out in section 32 AA 1996 (with the consent of all parties to the arbitration or with the consent of the arbitral tribunal and if the court is among other prerequisites satisfied that there is good reason why the matter should be decided by the court instead of the arbitral tribunal itself), which is a procedure peculiar to English arbitration law. 59

149 See e. g. Fiona Trust & Holding Corp. v. Yuri Privalov [2007] EWCA Civ 20 at [33] et seq.: “…The reference to section 67 in section 72 reminds the reader that once an award has been made an application to the court can be made challenging the award on jurisdictional grounds. It is also important to be aware that sections 30 — 32 of the 1996 Act relate to the jurisdiction of the arbitral tribunal. Section 30 provides that the arbitral tribunal may rule on its own substantive jurisdiction including (in the same words as used in section 72) the question whether there is a valid arbitration agreement. Section 31 provides that any objection as to jurisdiction must be taken before any step is taken to contest the merits of the matter and section 32 provides for the court to be able to determine a preliminary point of jurisdiction if all the parties agree in writing or the tribunal itself permits the court (for good reason) to do so. This combination of sections shows, together with the prescriptive section 9(4), that it is contemplated by the Act that it will, in general, be right for the arbitrators to be the first tribunal to consider whether they have jurisdiction to determine the dispute.” 150 For further details on a challenge under sections 67, 73 AA see infra mns 120 et seq.

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In section 32 proceedings the English courts will determine the arbitral tribunal’s 62 jurisdiction including the arbitration agreement’s existence, validity and scope without being restrained by the tribunal’s view: the tribunal had the chance to have the first say on the matter but has waived its right to do so by consenting to the section 32 application. In section 67 proceedings the English courts will, to the same effect, engage in a full rehearing of the matter as opposed to a mere review of the arbitral tribunal’s decision.151 Hence, unlike French law,152 but in accordance with most other arbitration laws, English law recognizes the positive effect of the principle of Kompetenz-Kompetenz (i. e. the arbitral tribunal’s power to determine its own jurisdiction),153 while it denies any negative effect (i. e. the preclusion of the state courts from determining the arbitral tribunal’s substantive jurisdiction during the arbitration proceedings until an arbitral award on the merits has been rendered). Furthermore, the principle of KompetenzKompetenz does not affect the English court’s right to fully rehear and reconsider the tribunal’s substantive jurisdiction including the arbitration agreement’s existence, validity and scope in judicial review proceedings under section 67 AA 1996.154 As a matter of comparison, it should be recalled that the matter lies differently when 63 the English courts determine whether to grant a stay of proceedings under section 9 AA 1996: since the arbitral tribunal has not had the chance to have the first say on the matter, the English courts, in exercising their discretion under section 9 AA 1996, will, paying due respect to the principle of Kompetenz-Kompetenz, often leave the first say to the arbitral tribunal by granting a stay of proceedings unless the arbitration agreement is obviously (i. e. on its face) non-existent, invalid or of such limited scope that it evidently does not cover the subject-matter of the claim before the court.155

8. Binding effect of state court decisions on jurisdiction of the arbitral tribunal As a matter of principle, a decision by an English state court on the jurisdiction of the 64 arbitral tribunal (for example, in stay proceedings under section 9 AA 1996 or in review proceedings under section 32 AA 1996), is binding on the English courts in subsequent proceedings addressing the arbitral tribunal’s jurisdiction including the arbitration agreement’s existence, validity and scope such as setting aside proceedings or applications for recognition and enforcement of a foreign arbitral award under the New York Convention. The binding effect of a foreign state court judgment on the arbitral tribunal’s 65 jurisdiction depends on the foreign state involved. If the foreign judgment emanates from the court of an EU member state or a Lugano 66 Convention state, the Brussels Ia Regulation’s and Lugano Convention’s rules on recognition of foreign judgments apply respectively. According to art 1(2)(d) Brussels Ia Regulation, as clarified by recital 12(2), a decision on the arbitration agreement’s existence, validity and scope, be it positive or negative, will not be recognized even if it forms part of a judgment on the merits. In contrast, the decision on the merits, even if forming part of the same judgment, has to be recognized and enforced under the Brussels Ia Regulation according to recital 12(3), unless there exists a prior arbitral award on the same subject matter or, as the English courts have held, there exists a prior 151

Dallah v. Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755. See articles 1448(2), 1465 French CPC; for further details see infra I mns. 37, 41. 153 As expressed in section 30 AA 1996. 154 Dallah v. Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46. 155 For other factors to be considered when exercising the discretion, see supra fn. 122. 152

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decision by the English seat courts granting leave to enforce the arbitral award under section 66 AA 1996.156 Under the present Lugano Convention, the matter lies differently as exposed by the English Court of Appeal in the National Navigation case157 under the old Brussels Ia Regulation. 67 If the foreign judgment emanates from the court of a non-EU/Lugano Convention member state, the autonomous rules of English international procedural law apply. According to section 32 of the Civil Jurisdiction and Judgments Act 1982, a judgment on the substance of the dispute rendered as a result of proceedings in breach of an arbitration agreement will not be recognized and enforced in the United Kingdom (including Scotland and Northern Ireland). A foreign judgment dismissing (instead of merely staying) an action in favour of arbitration for lack of the foreign court’s jurisdiction cannot be recognized as only decisions on the merits for payment of a sum of money are subject to recognition and enforcement.158

III. The arbitral tribunal and the conduct of the arbitral proceedings With arbitration as such being based on party autonomy, the course of the arbitral proceedings is to a large extent equally subject to party autonomy. Hence, the parties can tailor the procedure to be followed to their needs and preferences in light of the circumstances of the individual case. This constitutes one of the major advantages of arbitration over state court litigation. 69 The parties may therefore, in the arbitration agreement or subsequently, even during the arbitral process, as under most other state’s arbitration laws, agree on the procedure to be followed by the arbitral tribunal apart from a few mandatory rules contained in the AA 1996. These mandatory rules are (with regard to the arbitral proceedings) mainly concerned with ensuring a fair trial.159 Violations regularly constitute a ground for challenging the award under sections 67 and 68 AA 1996 and for not enforcing a foreign award under article V NYC. 70 In the vast majority of cases the parties will make use of their party autonomy not by individual agreement on the procedure to be followed160 but by choosing an arbitral institution’s or arbitrators association’s set of rules or terms to govern the arbitral proceedings and by choosing the seat of the arbitration determining the curial law of the arbitration (i. e. the lex arbitri),161 which is in relation to the arbitral proceedings predominantly non-mandatory so that the arbitral institution’s rules prevail. As with regard to most arbitration laws, the law of the seat performs a double function. One the one hand, it fills the gaps in the institutional rules in case of institutional arbitration and applies in its entirety to ad hoc arbitration subject to individual agreements by the parties or, for example, a reference to the UNCITRAL Arbitration Rules. On the other 68

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West Tankers v. Allianz [2011] EWHC 829 (Comm), confirmed [2012] EWCA Civ 27. National Navigation Co. v. Endesa Generacion SA [2009] EWCA Civ 1397. 158 See Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., 2012, paras 14R-020, 14R-118 and 14R-183. 159 Details in the forthcoming paragraphs; for a list of all mandatory Rules of the AA 1996 see its Schedule 1 and supra mn. 17. 160 Issues sometimes directly addressed in the arbitration agreement are, however, the seat of the arbitration, the composition of the arbitral tribunal, the language of the arbitration, rules regarding evidentiary matters (sometimes only agreed later on and sometimes also determined by way of referring to best practice rules such as the IBA Rules on the Taking of Evidence in International Arbitration) and often also the law applicable to the substantive dispute. 161 On the concept of the juridical seat see supra mn. 9. 157

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hand, its mandatory provisions apply to any arbitration with its seat in England as it constitutes the lex arbitri for those arbitrations.

1. The arbitral tribunal Unless the parties have agreed otherwise, the tribunal consists of a sole arbitrator as 71 this is the predominant practice in England.162 Again unless the parties agree otherwise, an agreement by the parties on an even number of arbitrators shall be understood as requiring the appointment of an additional arbitrator as chairman of the tribunal.163 This deviates from a past practice (still replicated in the Arbitration Act 1950) particularly in commodity trading and reinsurance matters according to which the tribunal consisted of two party-appointed arbitrators which were to be replaced by a socalled umpire in case the two arbitrators failed to agree. The parties may, however, still explicitly install an umpire for cases of disagreement.164 If the parties have agreed or are deemed to have agreed on a chairman, the chairman’s view prevails in relation to a decision, order or award in respect of which there is neither unanimity nor a majority among the arbitrators unless the parties specifically agree otherwise. In the case of a sole arbitrator, the parties must appoint him jointly,165 and, where 72 they cannot reach an agreement, the arbitrator will be appointed by the competent court (subject to appeal)166 or, if applicable institutional rules so provide, by the arbitral institution.167 In case of a tribunal consisting of two arbitrators each party appoints one of them and in case of a tribunal consisting of three arbitrators the two party appointed arbitrators will then agree on a third arbitrator as chairman which is again all subject to a deviating agreement by the parties.168 When choosing an arbitrator in the appointment process, it is essential to observe all 73 requirements contained in the arbitration agreement with regard to the arbitrators’ qualifications and any other characteristics. Otherwise, the arbitrator not meeting the qualifications may upon the application by one of the parties be removed by the court (section 24(1)(b) AA 1996), an award may be set aside for a serious irregularity (section 68 AA 1996) and/or recognition and enforcement abroad may be refused under the New York Convention (article V(1)(d)). a) Impartiality, fairness and further duties of the arbitrators. Regardless of any 74 specific agreement by the parties to that extent or even to the contrary, the arbitrators must, throughout the arbitral proceedings, act fairly and impartially as between the parties.169 These general duties cover a wide array of specific duties concerning the conduct of the arbitral proceedings, the treatment of the parties, the use of the arbitrator’s powers, and the drafting of the award.170 A breach of those duties may trigger serious consequences for the award, in particular its setting aside and a refusal to recognize and enforce it, and for the arbitrators as individuals, such as their removal as arbitrators upon a challenge by a party and, if they act in bad faith, liability for damages.

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Section 15(3) AA 1996; see also article 5.8 LCIA Rules 2020. Section 15(2) AA 1996. 164 See section 21 AA 1996. 165 Section 16(3) AA 1996. 166 Section 18(2) and (3) AA 1996. 167 See e. g. article 7.2 LCIA Rules 2020. 168 Sections 16(4) and (5) AA 1996. 169 Section 33 AA 1996. 170 A comprehensive list may be found in Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 4–109. 163

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b) Grounds for challenging arbitrators. The major ground for removing an arbitrator is his lack of impartiality, section 24(1)(a) AA 1996, which is assessed by asking whether the circumstances raised in the challenge “would lead a fair-minded and informed observer to conclude that there was a real possibility […] that the [arbitrator] was biased.”171 Hence, the court will put itself into the perspective of a hypothetical observer having knowledge of all relevant facts and taking into account the professional standing and experience of the arbitrator in question as well as the type of arbitration but not the foreign nationality of the party challenging the arbitrator’s appointment.172 Instances of bias include direct pecuniary interest173 and acting for or against a party only a few months prior to the arbitration.174 Borderline cases, largely depending on the specific circumstances, are unilateral communication of an arbitrator with one of the parties going beyond administrative matters,175 past or present positions held by an arbitrator, the fact that the arbitrator’s law firm acted or still acts for one of the parties of the arbitration (and the same holds true for other past contact of an arbitrator with one of the parties),176 multiple, overlapping appointments concerning the same subject-matter with only one common party.177 Assistance may be provided by the IBA Guidelines on Conflict of Interest in International Arbitration.178 As with regard to judges, actual or apparent bias is required for a successful challenge so that the same standard applies in that regard.179 76 Other grounds for removing an arbitrator are lack of the qualifications required by the arbitration agreement,180 physical or mental incapability of conducting the proceedings or justifiable doubts as to his capacity to do so, refusal or failure to properly conduct the proceedings, or to use all reasonable despatch in conducting the proceedings or making an award.181 77 In addition to a ground for removal, the party applying for the removal has to convince the court that it has or will suffer substantial injustice if the arbitrator is not removed.182 In case of actual or apparent bias of an arbitrator this requirement will, however, regularly be met.183 Hence, the standard for successfully applying for the 75

171 Re Medicaments & Related Classes of Goods [2001] 1 WLR 700 (Ch) as modified by the House of Lords in Porter v. Magill [2001] UKHL 67, replacing the former test of a real danger of bias as set out in R v. Gough [1993] AC 646 (HL); note that the preconditions for a disclosure to the parties are wider, extending to “circumstances which would or might lead the fair-minded and informed observer, having considered the facts, to conclude that there was a real possibility that the tribunal was biased” (see Halliburton v. Chubb [2018] EWCA Civ 817 at [65]). 172 ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm). 173 AT & T Corp. v. Saudi Cable Co. [2000] 2 All ER 625 (Comm). 174 ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm). 175 Norbrook Laboratories v. Tank [2006] 2 Lloyd’s Rep. 485 (Comm). 176 See e. g. Locabail v. Bayfield Properties [2000] QB 451 (CA). 177 Halliburton v. Chubb [2018] EWCA Civ 817 where the court held that something additional to the multiple overlapping appointments was needed to raise the appearance of bias (the case was heard by the Supreme Court in November 2019 on appeal (case number UKSC 2018/0100). 178 In ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm) the IBA Guidelines were considered, though not applied by the court since they did not fit in the specific case. 179 R v. Gough [1993] AC 646 (HL) which was not overruled in that regard; AT & T Corp. v. Saudi Cable Co. [2000] 2 All ER 625 (Comm). 180 See e.g. Allianz Insurance and Sirius International Insurance Corporation v. Tonicstar Limited [2018] EWCA Civ 434 where the Court of Appeal held that the qualification requirement that the tribunal “consist of persons with not less than ten years’ experience of insurance or reinsurance,” did not require that the arbitrators where employed by an insurance or reinsurance company so that lawyers with experience in the field were regarded as being sufficiently qualified. 181 Section 24(1)(b) to (d) AA 1996. 182 Section 24(1)(d) AA 1996. 183 Rustal Trading v. Gill & Duffus SA [2000] 1 Lloyd’s Rep. 14 (Comm); ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm).

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removal of an arbitrator during the arbitral proceedings and for successfully challenging the award for a serious irregularity is in that regard identical. c) Procedural aspects and preclusion of grounds for challenge. Prior to an applica- 78 tion to the state courts for the removal of an arbitrator, the party challenging the arbitrator’s appointment has to exhaust any available recourse to the arbitral institution or any other person vested by the parties with a right to remove arbitrators.184 An application for removal of an arbitrator should be brought before the arbitral 79 tribunal as soon as the party has knowledge of the essential facts constituting the ground for removal and, in the case of a refusal to recuse, the application for removal should be filed with the English courts immediately to avoid a loss of the right to object.185 A reservation of this right during the arbitral proceedings in view of subsequent setting aside proceedings was not upheld by the English courts186 so that the right to challenge the award for a serious irregularity is then lost. Unlike in the IBA Guidelines on Conflict of Interests in International Arbitration, under English law any of the grounds for removal may be waived by the parties.

2. The arbitral proceedings As with most arbitration laws, the actual arbitration proceedings are largely subject to 80 party autonomy which enables the parties to make the best use of the advantages of arbitration as compared to state court litigation. Apart from fundamental principles of a fair trial the parties can tailor the proceedings to their needs by choosing the language in which the arbitration is to be conducted, by agreeing on the rules on the taking of evidence and the conduct of the oral hearing, by agreeing on time limits, limits as to the written submission, etc. Regularly, the parties make use of such party autonomy by agreeing on an arbitral institutions or an arbitrators association’s set of arbitration rules, potentially supplemented by private set of rules on specific aspects of the arbitral proceedings such as the IBA Rules on the Taking of Evidence in International Arbitration and/or by private individual agreement. Where there is no agreement between the parties, the conduct of the arbitration is at the discretion of the arbitral tribunal.187 a) Commencing the arbitration. Unless agreed otherwise by the parties (for exam- 81 ple, by agreeing on an arbitral institution’s rules), arbitration must be commenced by serving a notice to submit the subject matter of the dispute to be arbitrated to the designated arbitrator or, if the arbitrators are not yet designated in the arbitration agreement, by serving a notice in writing on the other party requiring it to agree on the appointment of the arbitrator (in case of a sole arbitrator suggested by the requiring party) or, to appoint an arbitrator (in case of a tribunal consisting of two or more arbitrators) or, if the arbitrator is to be appointed by a non-party by requesting that party to make the appointment.188 The parties are free to agree on the manner of service. Lacking such agreement, the notice may be served by any effective means. In order to be on the safe side, the commencing party may follow the default method provided by section 76(3) AA 1996 under which the notice is treated as effectively served if it is addressed, pre-paid and delivered by post to the addressee’s last known principal residence, business address or registered or principal office. 184

Section 24(2) AA 1996. Section 73 AA 1996. 186 ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm). 187 Section 33 (general duty of the tribunal), section 34 (procedural and evidential matters), section 37 (power to appoint experts, legal advisers or assessors). 188 Section 14(3) to (5) AA 1996. 185

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Most institutional arbitration rules contain different rules for commencing arbitration. Under many rules the request for arbitration shall not be sent to the defendant, but rather to the arbitral institution which then forwards it to the defendant.189 Following the request for arbitration, the tribunal shall, subject to the parties’ agreement on all or specific matters, decide all procedural or evidential matters which it may do right away in further orders as to the proceedings. In particular, it can set deadlines for filing a statement of claim and a statement of defence.190 The tribunal can exclude arguments and evidence from the proceedings if deadlines are not observed and if the delay is not excused. 83 Compliance with the agreed or statutory prescribed manner of commencing the arbitration proceedings is of particular relevance for meeting limitation periods under the Limitation Acts since under English law limitation is a matter of procedure, not substance. In order to meet time limits for commencement agreed by the parties, each party may, after recourse to the arbitral tribunal for an extension, apply to the English courts for an extension of those time limits which is, however, only granted if there is a change of circumstances not contemplated by the parties when agreeing on the time limit or if the conduct of one party makes it unjust to hold the other party to the time limit.191 84 In any event, the written notice should contain the parties of the arbitration, the matters in dispute and several further aspects usually listed extensively in institutional arbitration rules.192 82

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b) Impartiality and fair trial. The (mandatory) general duty of the tribunal in conducting the arbitral proceedings (in decisions on matters of procedure throughout the proceedings and in the exercise of all other powers conferred on it) is to act impartially and fairly with regard to any aspect of the proceedings. This entails equality of arms, the right to be heard, and a reasonable (hence not a full, unfettered) opportunity to put one’s case before the tribunal, as well as duties in relation to the dispute resolution as a process such as the adoption of a procedure tailored to the case in question, avoiding in particular unnecessary delay or expense.193 In particular, both parties have to be given the opportunity to address all (legal and factual) issues on which the tribunal will rely for its decision and to reply to all submissions and evidence presented by the other party. Hence, while the tribunal is not obliged to communicate any different view on the facts to the parties, it has to do so with regard to those differences which are likely to result in a different judgment on the subject-matter. Likewise, while the tribunal is free to derive an alternative case from the parties’ submissions or to rely on legal considerations initially not contemplated by the parties, it has to inform the parties about this turn and afford them the opportunity of addressing the legal considerations and/or underlying facts in this new context.194 Use of expert knowledge or experience by the tribunal need not be communicated to the parties. Hence, the tribunal is not only entitled but should even be encouraged to actively manage the proceedings, which it is also specifically entitled to by section 34 AA 1996, by indicating to the parties at an early stage those issues which it considers relevant for its decision. Transparency and equal treatment of both parties are key in that regard. The provision of equality of arms must not result in over-assistance by the tribunal of one of the parties deemed to be weaker and in receipt of comparatively inferior representation. The line is a thin one and the “Guidelines for Arbitrators dealing 189

See e. g. article 1.1 LCIA Rules 2020; article 4(1) ICC Rules 2021; article 6.1 DIS Rules 2018. Section 34(2) AA 1996. 191 Section 12 AA 1996. 192 See e. g. article 1.1 LCIA Rules 2020; article 4(3) ICC Rules 2021. 193 Section 33 AA 1996. 194 See e. g. Vee Networks Ltd v. Econet Wireless International Ltd [2005] 1 Lloyd’s Rep. 192 (Comm). 190

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with cases involving consumers and parties with significant differences in resources” produced by the Chartered Institute of Arbitrators may serve as useful guidance.195 Due to the mandatory nature of section 33 AA 1996, there is a tension between party 86 autonomy on the one hand and adherence by the tribunal to its general duties of impartiality and fairness on the other hand, which carries the potential of conflict between the two. If such conflict arises, the arbitral tribunal has to resolve it by trying to persuade the parties to adapt their agreements on procedure so as to meet the tribunal’s duties under section 33 AA 1996. A violation of the general duties, particularly those to ensure an impartial and fair 87 trial, will regularly (in addition to providing a ground for removal of an arbitrator or the tribunal in toto) provide a ground for setting aside the award or for a foreign country to refuse recognition and enforcement of the English award under the New York Convention. As a rule of thumb, objections by the parties in relation to the procedure adopted by the tribunal should be raised before the arbitral tribunal as soon as they materialize to avoid preclusion in subsequent setting aside proceedings. While this is specifically provided in relation to applications for removal of arbitrators or the entire tribunal, this approach should also be followed with regard to other matters, in order to be on the safe side. If the failure to comply with the duties of impartiality and, in particular, a fair trial is revealed only in the arbitral award, a challenge of the award under section 68 AA 1996 is the only appropriate remedy. In those setting aside proceedings, the challenging party has to establish that there was a failure to comply with these duties which resulted in substantial injustice to it. In considering such a failure to comply, the English courts have pursued a rather robust approach by according “a reasonably generous margin of appreciation to arbitrators in the discharge of their functions.”196 Failures to comply with the general duties will not inevitably result in the award being set aside for serious irregularity. c) The tribunal’s powers with regard to procedural and evidential matters. In any 88 arbitration seated in England or Wales, it is for the arbitral tribunal to decide all procedural and evidential matters,197 some of which are listed non-exhaustively in section 34(2) AA 1996, in the light of its general duties to “act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent”198 on the one hand and to “adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined”199 on the other hand.200 Although these powers are subject to the parties’ agreement, the conferral of such powers on the arbitral tribunal is of great importance in practice since See Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 370 et seq. for further details. Warborough Investments Ltd v. S Robinson & Sons [2003] EWCA Civ 751 at [60]. 197 Section 34(1) AA 1996; further specific powers are listed in sections 37 to 39 and 41 AA 1996. 198 Section 33(1)(a) AA 1996. 199 Section 33(1)(b) AA 1996. 200 Chong/Primrose, (2017) 33 Arb. Int’l 63 et seq. discuss whether section 33(1)(b) AA 1996 allows a tribunal seated in England or Wales to adopt summary judgment procedures, eventually calling for legislative reform which was also considered by the Law Commission in its recent consultation phase on a reform of the Arbitration Act 1996 (see supra fn. 7); in Travis Coal Restructuring Holdings LLC v. Essar Global Fund Limited [2014] EWHC 2510 (Comm) the English court in enforcement proceedings of a New York award resorted to the arbitration agreement in order to determine whether the arbitral tribunal had the power to render summary judgment; the court held in the affirmative by stressing that the arbitration agreement conferred such wide power on the arbitral tribunal with regard to its procedure (“in accordance with such procedure as the arbitrators may deem appropriate”) that it encompassed summary judgment. 195 196

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the parties can rarely agree on all procedural and evidential matters in advance or even once they accrue. On the one hand, even institutional arbitration rules or special rules such as the IBA Rules on the Taking of Evidence on which the parties may agree will not cater for every eventuality. On the other hand, particularly with regard to matters arising during the proceedings and peculiar to the dispute in question, the arbitrators are, due to their general experience and their role as decision-maker in the given case, regularly better equipped to determine them than are abstract rules or the parties. These powers enable the arbitral tribunal, besides the advantages that may be played out by party autonomy, to make real and continuing use and advantage of arbitral autonomy as compared to the straight-jacket of state court proceedings within the limits of the tribunal’s general duties of impartiality and fairness. Subject only to the parties’ agreement, which includes reference to institutional arbitration rules, the tribunal is the master of its own procedure beyond any statutory regime such as the Civil Procedure Rules. 89 As with most other arbitration laws, the AA 1996 does not contain rules on the course and structure of the hearing which are entirely left to the tribunal’s and the parties’ autonomy. Most arbitrations in England will follow the Anglo-American model of opening statements, witness and expert evidence including examination and crossexamination or instead witness or expert conferencing and finally closing statements, regularly to be followed by written post-hearing briefs on the basis of the transcripts of the oral hearing, but that may also depend on trade and sector-specific usage. d) Determination of preliminary point of law. As a peculiarity of English arbitration law, each party to the arbitration proceedings may apply to the state courts asking them to determine any question of (substantive) law arising in the course of the proceedings which the court is satisfied substantially affects the rights of one or more of the parties.201 The arbitral tribunal may, however, continue the proceedings and even render an award on the merits in order to avoid a blockage or at least delay of the arbitration by one of the parties. 91 The right for such a reference of points of law to the state courts is, however, subject to an agreement of the parties to the contrary, and an agreement to dispense with reasons for the tribunal’s award is treated as an agreement to the contrary. Furthermore, a reference to institutional arbitration rules which (as is common) state that an award is binding on the parties without any right to any form of recourse202 is equally regarded as an agreement to the contrary. 92 Even if the parties have not excluded such recourse to the state courts, it is subject to rather restrictive preconditions, namely the agreement by all other parties or permission by the tribunal plus satisfaction of the seized state court of substantial savings in costs and a timely application to it.203 90

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e) Confidentiality. The arbitral proceedings and the oral hearings in particular are not public, but private and confidential instead.204 The arbitration agreement itself imposes an obligation on the parties to keep information related to the arbitral proceedings confidential.205 Such obligation is regularly regarded as an implied term to any arbitration agreement regardless of the presumed intentions of the parties.206 Where 201

Section 45(1) AA 1996. See e. g. article 26(8) LCIA Rules 2020, article 35(6) ICC Rules 2021. 203 See section 45(2) AA 1996. 204 See e. g. Oxford Shipping Co. Ltd v. Nippon Yusen Kaisha [1984] 3 All ER 835 (Comm). 205 See e. g. Ali Shipping Corp. v. Shipyard Trogir [1998] 2 All ER 136 (CA). 206 See most recently Emmott v. Michael Wilson Partnership [2008] EWCA Civ 184; rather critically (comparing it with the different views in Australia and the US) and calling for legislative reform Partasides/Maynard, (2017) 33 Arb. Int’l 197 et seq. 202

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confidentiality is of great importance to the parties, they are nevertheless well advised to make specific provision to that extent in the arbitration agreement. There are, however, exceptions to the duty of confidentiality such as consent by the other party, a reasonable necessity to disclose an award in order to protect one’s rights vis-à-vis third parties, and disclosure in the public interest or the interest of justice in general (e. g. regarding the lawfulness of an arbitration attracting public interest).207 A breach of the duty of confidentiality is regularly sanctioned by application for interim relief to the tribunal or the state courts. The arbitrators are usually also under a duty of confidentiality arising from their 94 contract with the parties which is, however, not regulated by the AA 1996. f) The arbitral award. An arbitral award as a final determination of a particular claim or issue has to be distinguished from an order or direction by the arbitral tribunal, regularly concerning procedural matters along the way to an award. Apart from (even partial) decisions on the substance of the dispute which clearly qualify as an award, decisions on the tribunal’s jurisdiction as well as the applicable law may take the form of an award whereas all decisions taken with regard to procedural aspects such as an extension of time and directions as to the taking of evidence do not qualify as an award. While an award may be challenged and appealed, orders and directions cannot. The tribunal may make several awards on different issues. These may be issues affecting the whole claim such as jurisdiction208 or applicable law or it may be parts of the claim or counter-claim which are capable of being decided separately.209 Such partial awards addressing only limited aspects of the dispute are final and binding as between the parties and may be set aside and appealed. Furthermore, the parties may expressly empower the tribunal to render provisional awards, i. e. ordering on a provisional basis any relief which it would have power to grant in a final award.210 To be final and binding on the parties,211 an award has to meet several formal requirements listed in section 52 AA 1996, unless the parties agree to the contrary. Failure to comply with those statutory or agreed requirements provides a ground for challenging the award if the failure results in substantial injustice to the challenging party, which is with regard to several of the requirements rather not the case.212 According to those requirements, the award shall be in writing, signed by all the arbitrators or at least by all those assenting to the award. Furthermore, the award shall contain the reasons for it unless it is an agreed award, state the seat of the arbitration and the date when the award is made. In addition to those formal requirements, an award has to meet several substantive requirements. First, it has to be a decision by the tribunal itself, i. e. the decision may not be delegated. In reaching its decision, the tribunal or each arbitrator may rely on special expertise (for which he may actually have been appointed by the parties) but not on facts exclusively known by him without disclosing this knowledge to the parties and thereby enabling them to file submissions with regard to those facts.213 It may, however, be safer to also disclose any knowledge or expertise to the parties so as to secure their right to be heard. Second, the award has to be a complete decision determining all 207

See to that extent Emmott v. Michael Wilson Partnership [2008] EWCA Civ 184. See in that regard also section 31(4)(a) AA 1996. 209 Section 47 AA 1996. 210 Section 39 AA 1996. 211 See section 58 AA 1996. 212 Section 68(2)(h) AA 1996. 213 Anangel Peace Compania Naviera SA v. Bacchus International Commerce Corp [1991] 1 Lloyd’s Rep. 452 (Comm). 208

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matters requiring a determination and dealing with all issues, not all arguments, submitted by the parties to it for a determination. Third, the award has to be based solely on the evidence and the arguments presented by the parties so that the parties effectively had the chance to present their case. If the tribunal wants to decide the case based on legal or factual aspects not dealt with by the parties so far, it has to notify the parties of it so as to enable them to address these aspects.214 It may, however, suffice if the aspects where raised in the parties’ submissions up to that point.215 Fourth, the award has to be certain in the sense of clearly expressing what is required to be done and by whom. Failures in that respect may not result in a setting aside of the award but in a remittance of it to the arbitral tribunal.216 The potential remedies which the tribunal may grant in the award range (subject to the parties’ (partial) modifications) from declaratory relief to the payment of a sum of money (including interest217) to orders to do or refrain from doing anything to specific performance of a contract to finally rectification, setting aside or cancellation of a deed or other document.218 99 If the tribunal consists of three or more arbitrators, the award has to be rendered by a majority of them. Where the parties have agreed that there is to be a chairman, his vote will be decisive if no majority can be reached unless the parties agree to the contrary.219 Dissenting opinions are, subject to the parties’ agreement to the contrary, possible but do not form part of the award. 100 Although there are no statutory time limits (apart from three special scenarios), the tribunal has to render its award promptly after the conclusion of the oral hearing or subsequent post-hearing briefs as the case may be.220 Once rendered, the award is notified to the parties without delay by service of copies to each of them unless the parties agree on a special procedure of notification.221 The tribunal may, however, retain the award in case of outstanding fees or expenses of the arbitrators (which it is entitled to do).222 101 In case the parties reach a settlement during the arbitral proceedings, the tribunal shall terminate the proceedings and, if so requested by the parties and not objected to by the tribunal, record the settlement in the form of an agreed award. It has the same status and effect as any other award on the merits of the case.223 102

g) The costs of the arbitration. Subject to any agreement by the parties, the tribunal will make an award allocating the costs of the arbitration.224 The costs of third party funding may be recoverable as “other costs” within the meaning of section 59(1)(c) AA

214

Ascot Commodities NV v. Olam International Ltd [2002] CLC 277 (Comm). Warborough Investments Ltd v. S Robinson & Sons [2003] EWCA Civ 751; ABB AG v. Hochtief Airport GmbH [2006] EWHC 388 (Comm). 216 See section 68(3)(a) AA 1996. 217 Section 49 AA 1996. 218 Section 48 AA 1996. 219 Sections 20(3) and (4) AA 1996. 220 See e. g. Bremer Handelsgesellschaft GmbH v. Westzucker GmbH (No 2) [1981] 2 Lloyd’s Rep. 130 (CA) and also the general duty of the tribunal under section 33 AA 1996 to proceed without unnecessary delay. 221 Section 55 AA 1996. 222 Section 56 AA 1996. 223 Section 51 AA 1996. 224 According to section 59 AA 1996 these comprise of the arbitrators’ fees and expenses, the fees and expenses of any arbitral institution, and the legal or other costs of the parties. 215

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1996.225 The allocation of costs is based (again subject to the parties’ agreement226) on the general principle that costs should follow the event except where it appears to the tribunal that in the circumstances this is not appropriate in relation to the whole or part of the costs.227 Hence, the tribunal has the discretion to take account of the specific circumstances of each case but any costs allocation should start from the loser-paysrule, i. e. the successful party will be awarded its costs and any departure from it will have to be justified by the tribunal in giving reasons (such as unreasonable and/or obstructive behaviour by the successful party). Subject to an agreement by the parties, the tribunal may determine by award the 103 recoverable costs of the arbitration on such basis as it thinks fit. Hence, even in relation to the recoverability of costs, the tribunal has discretion. If the tribunal does not determine the costs recoverable, according to the statutory default rule a reasonable amount in respect of all costs reasonably incurred shall be allowed and any doubt as to whether costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the paying party.228 It is worth noting in this context that the tribunal’s determination of recoverability and allocation of costs takes effect only as between the parties while it does not affect any right of the arbitrators, any expert, legal adviser or assessor appointed by the tribunal, or any arbitral institution, to payment of their fees and expenses.229 In order to avoid excessive costs (one of its general duties) the arbitral tribunal may, subject to the parties’ agreement, limit the recoverable costs to a specific amount.230 The award of costs may be challenged or appealed by the parties. Regularly, this will be 104 an appeal on points of law under section 69 AA 1996 (which is, however, excluded under many institutional arbitration rules, such as the ICC Rules), but not a challenge based on a serious irregularity under section 68(2)(b) AA 1996.231 In such review proceedings, the court will, however, only examine whether the discretion was exercised properly by the tribunal, and will not replace the tribunal’s determination with its own.232

3. Evidence, discovery, disclosure The procedural powers of the tribunal also apply to the taking of evidence; the 105 tribunal is therefore not bound by the strict rules applicable in state court proceedings. Forming part of the state court’s supportive powers in relation to arbitration, a party to 106 arbitral proceedings may (albeit only with the permission of the tribunal or the agreement of the other parties) use the procedures that are available in state court proceedings to secure the attendance of a witness before the tribunal in order to give oral testimony or to 225 Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 361 (Comm) at [58] where Waksman J held that “there are legal costs of the arbitration and there are other costs of the arbitration. The real limiting factor, in my view, is the functional one. Do the costs relate to the arbitration and are they for the purposes of it? If the costs have not been incurred in order to bring or defend the claim in question, I would accept that they fall outside the definition of “other costs” and they would not relate to the arbitration.” 226 Section 60 AA 1996 restricts party autonomy in so far as the parties may agree that a party is to pay the whole or part of the costs of the arbitration in any event but such agreement is only valid if made after the dispute in question has arisen. 227 Section 61 AA 1996. 228 Section 63(5) AA 1996; section 64 AA 1996 specifies the standard of reasonableness in relation to the arbitrators’ fees and expenses, prevailing in that regard over section 63 AA 1996. 229 Section 63(7) AA 1996. 230 Section 65 AA 1996. 231 For a recent example see Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 361 (Comm) where the tribunal had regarded the costs of third party funding as “other costs” within the meaning of section 59(1)(c) AA 1996. 232 Channel Island Ferries Ltd v. Cenargo Navigation Ltd [1994] 2 Lloyd’s Rep. 161 (Comm).

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produce documents or other material evidence.233 Such court support is, however, in contrast to several other arbitration laws, territorially limited to witnesses in the United Kingdom and arbitral proceedings with a seat in England, Wales or Northern Ireland.234 The powers which allow the tribunal to compel the production of documents by a witness also run parallel in arbitration and state court proceedings so that privilege and duties of confidentiality are preserved.235 The court may, however, not order disclosure in relation to arbitration proceedings but leave such an order to the arbitral tribunal without supporting it in that respect. As the Court of Appeal held in one of the rare decisions on the matter (usually applications by the recipient or other party to set aside witness summons or document production orders), “[t]he court’s power to order disclosure which was formerly contained in section 12(6)(b) of the Arbitration Act 1950 has disappeared and as a result disclosure is entirely a matter for the arbitral tribunal. One should not necessarily expect to find complete symmetry, therefore, between the documentary procedures that apply in arbitral proceedings and those that apply to proceedings in court.”236 As a consequence, English courts will no longer order disclosure of documents in support of arbitration proceedings in the same manner as they would in state court proceedings. Orders may rather relate only to specifically identified and circumscribed documents or a sufficiently narrow and limited number of specified documents. This restriction is in contrast to the U.S. courts’ recent turn to order discovery even in support of foreign arbitral proceedings under 28 U.S.C. § 1782.237 107 If the attendance of a witness at the arbitration may not be secured under section 43 AA 1996, the parties may revert to the broad supportive powers of the English courts under section 44 AA 1996.238 Those powers include orders to a foreign court (regularly under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970 or amongst EU Member States – so subject to Brexit – under Regulation (EC) No 1206/2001) of a commission or a request for the examination of a witness who is abroad as well as orders concerning witnesses in the United Kingdom in relation to foreign arbitral proceedings (usually requested by a foreign court which has been asked to do so by an arbitral tribunal seated abroad).239 Furthermore, the English seat courts may (only with the permission of the tribunal or the agreement in writing of the other parties) make any order it deems appropriate in the circumstances to preserve evidence for the purposes of the arbitration.240 Again, this does not extend to an order compelling disclosure but only to orders in relation to a particular document or a sufficiently narrow and limited number of specified documents.241 In any event, the state court shall make use of its supportive powers under section 44 AA 1996 only to the extent that the arbitral tribunal or arbitral institution has no power or is unable for the 233 Section 43(1) and (2) AA 1996; this relates to the respective parts 31 to 34 of the Civil Procedure Rules 1998; furthermore it should be noted that according to section 2(3)(a) AA 1996 the English state courts’ powers under section 43 AA 1996 are not limited to arbitrations with their seat in England, Wales or Northern Ireland but extend to arbitrations with overseas seats. 234 Section 43(3) AA 1996. 235 Section 43(4) AA 1996; again this relates to the respective parts 31 to 34 of the Civil Procedure Rules 1998. 236 Tajik Aluminium Plant v. Hydro Aluminium AS [2005] EWCA Civ 1218 at [26]. 237 For details see infra S mn. 91. 238 For details on the practice of applications under section 44 AA 1996 see Adams/Harvey, (2019) 36 J. Int. Arb. 337, 348 et seq., also p. 357 et seq. on the likely consequences of Brexit. 239 See section 44(2)(a) AA 1996; again, it should be noted that according to section 2(3)(b) AA 1996 the English state courts’ powers under section 44 AA 1996 are not limited to arbitrations with their seat in England, Wales or Northern Ireland but extend to arbitrations with overseas seats. 240 Section 44(2)(b) AA 1996. 241 Three Shipping Ltd v. Harebell Shipping Ltd [2005] 1 All ER 200 (Comm).

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time being to act effectively,242 and a state court’s order ceases to have effect upon an order concerning the same matter by an arbitral tribunal or institution.243

4. The law governing the dispute and lois de police As regards the law governing the substance of the dispute, the AA 1996 contains a lex 108 specialis in its section 46 which is in several respects modelled on internationally prevailing conflict of law rules. Accordingly, the substance of the dispute is primarily decided in accordance with the law chosen by the parties.244 They may, however, choose non-state law such as the UNIDROIT Principles of International Commercial Contracts245 and even general principles of law, the lex mercatoria, or a decision based on equitable considerations (ex aequo et bono/amiable composition).246 The choice may be express or implied (for example, by choosing an English seat, the LCIA Rules and/or by appointing English arbitrators; all three choices with regard to other aspects pointing strongly towards an implied choice of English law). Absent any choice by the parties, the tribunal will determine the applicable law according to the conflict-of-law rules it considers applicable in the given case.247 These may be the conflict of law rules of the seat (i. e. in the case of an English seat the Rome I Regulation), or the tribunal may consider the conflict-of-law rules of all states connected with the dispute and then chose the law to which the majority of those rules points. As a matter of fact, most conflict-oflaw regimes will in such case apply the law with which the conflict is most closely connected (which is also the rule under the Rome I Regulation). In case the parties have chosen English law, one should consider that an arbitral tribunal, even if its seat is in England, may apply such law, in particular with regard to the interpretation of the underlying contract, in a different manner as compared to English state courts, even though the rules of interpretation of contracts under English law are flexible taking due account of the contract’s commercial purpose and business common sense.248 Whether the choice of a non-EU member state law or of a non-state law is capable of 109 circumventing the restrictions for the preservation of mandatory provisions contained in articles 3(3), 6(2) and 9(2) Rome I Regulation is unclear as a matter of European private international law. From the perspective of English arbitration law, the fact that the parties can agree on a non-state law including purely equitable considerations suggests that limits to choice of a state-law in the Rome I Regulation do not apply in the arbitration context. From the perspective of European law, however, the ECJ’s answer may be different. In its judgment in Centro Móvil249 the ECJ required the national courts of the member states in setting aside proceedings to apply ex officio the provisions of the Unfair Terms Directive.250 Similarly, in its judgment in Eco Swiss,251 the ECJ held that disregard of European competition law by an arbitral tribunal required the setting aside of the award for a violation of public policy of the member 242

Section 44(5) AA 1996. Section 44(6) AA 1996. 244 Section 46(1)(a) AA 1996. 245 This modification was stressed by the Court of Appeal in Halpern v. Halpern [2007] 2 Lloyd’s Rep. 56 (CA). 246 Section 46(1)(b) AA 1996; for a more detailed account of those possibilities see Hill/Chong, International commercial disputes, 4th ed., 2010, paras 23.2.10 et seq. 247 Section 46(3) AA 1996. 248 See to that extent Wood v. Sureterm Direct Ltd [2017] UKSC 24 para. 11 et seq.; see more generally Greenwood, (2019) 35 Arb. Int’l 21 et seq. 249 Case C-168/05 Elisa María Mostaza Claro v. Centro Móvil Milenium SL [2006] ECR I-10421. 250 [1993] OJ L95/29. 251 Case C-126/97 Eco Swiss v. Benetton [1999] ECR I-3055. 243

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state in question (since primary EU law is part of the national law of the member states). The same principles hold true for disregard of any mandatory rules of the English seat law: they are likely to result in a setting aside of the award for a violation of (English) public policy.252 The matter is less clear in case of disregard of mandatory rules of a state which is not the seat but with which the contract giving rise to the substance of the dispute is closely connected. There is no English case law on the matter and international academic writers disagree on the issue (see supra A mns. 98–100).

5. Interim relief in arbitration 110

a) Interim relief before state courts. Subject to the parties’ specific exclusion, their agreement to refer disputes to arbitration does not affect the English state courts’ powers to grant interim relief,253 and these powers even extend to arbitrations with overseas seats254 (given the jurisdiction of the English courts under domestic (or European) rules of international civil procedure). The courts’ powers are the same as those in state court proceedings specified in particular by the Civil Procedure Rules 1998 and the Senior Courts Act 1981 (including ex parte interim relief under certain circumstances), unless the court is faced with a case of urgency in which the powers are limited to “such orders as it thinks necessary for the purpose of preserving evidence or assets”, with assets, however, encompassing contractual rights (which significantly reduces the relevance of the limitation).255 Interim relief before the English state courts includes anti-suit injunctions in relation to proceedings in non-EU member states,256 freezing orders, interim or final injunctions and orders to secure evidence.

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b) Interim relief before the arbitral tribunal. Once constituted, the arbitral tribunal can grant interim relief it deems necessary, inter alia in relation to security for costs, in relation to property affected by the proceedings and in relation to the preservation of evidence. The state courts are even barred from granting interim relief or making any orders to the extent that the arbitral tribunal itself has such power and is able, for the time being, to act effectively.257 If the parties have agreed on a set of institutional arbitration rules, these rules may confer further powers on the arbitral tribunal. In addition to such interim relief, the tribunal may issue peremptory orders in order to secure timely compliance with its procedural orders. Such peremptory orders by the tribunal may even be backed by court orders requiring a party to comply with a peremptory order made by the tribunal in so far as the tribunal lacks the means to “enforce” its peremptory orders due to its lack of coercive power towards the parties.258

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c) Relief by the tribunal or by the courts? In determining whether to apply to the tribunal or to the courts for interim relief, a number of factors have to be taken into account: the effectiveness or even availability of interim relief from the tribunal; the breadth and scope of the available interim relief; the non-availability of interim relief from See Hill/Chong, International commercial disputes, 4th ed., 2010, para. 23.2.31. Section 44(2)(e) AA 1996. 254 Section 2(3)(b) AA 1996. 255 Cetelem SA v. Roust Holding Ltd [2005] EWCA Civ 618; Starlight Shipping v. Tai Ping Insurance [2007] EWHC 1893 (Comm); Sabmiller Africa BV v. East African Breweries Inc [2009] EWHC 2140 (Comm). 256 For a detailed account of this issue see supra mn. 51; their statutory basis is, however, section 37 Senior Courts Act 1981 as opposed to the potentially more limiting section 44(2)(e) AA 1996 as recently clarified by the Supreme Court in Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35. 257 Section 44(5) AA 1996. 258 Section 42 AA 1996. 252 253

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the tribunal against third parties; the need for an ex parte order only available before the state courts; and the prospect of compliance with orders by the tribunal. Taking a closer look, these aspects will in the majority of cases call for interim relief by the state courts. From a more general perspective of the state courts’ role in relation to arbitral proceedings the English courts have taken a corresponding view. Considering the tension between a rather limited role of the state courts avoiding interference with the arbitral process on the one hand, and the need for state court support in order to ensure an effective resolution of the dispute by the arbitral tribunal on the other hand, the Court of Appeal gave precedence to the latter aspect by stressing the risk of a party frustrating the arbitral process by non-cooperation which can only be remedied by state court support. However, the courts should only step in as a last resort, cautious not to interfere with the arbitral process and leaving any substantive matters for the arbitral tribunal to decide.259 This robust, yet cautious approach to support, but only to the extent necessary, is reflected in the safeguards and thresholds contained in section 44 AA 1996.

6. Multi-party arbitration Special problems arise where the dispute involves more than two parties, such as in 113 post-M&A disputes with more than one party on each side and in redress scenarios (i. e. liability claims which trigger liability of third parties towards the liable defendant). These problems comprise of the inclusion of such third parties into the proceedings, the finality and binding effect of an award even vis-à-vis third parties and the appointment of arbitrators by each of the parties, but vary due to the quite distinct scenarios of third party-involvement. As with many other arbitration laws, English arbitration law does not provide special rules for the problems occurring in multi-party arbitration260 while institutional arbitration rules more frequently do.261 The central underlying problem in multi-party scenarios is the consensual character of arbitration: only the parties to the arbitration agreement are bound by it. a) Arbitration agreement involving several parties. If the dispute involves more 114 than two persons or entities who are all parties to the same arbitration agreement (for example, by forming part of a contract concluded between all of them), the only problem that may arise is that of equal treatment in appointing the arbitrators. The parties may cater for that in the arbitration agreement but many institutional arbitration rules also contain specific provisions for this problem.262 b) Arbitration agreement and third persons or entities. If the dispute involves 115 persons or entities who are not parties to the same arbitration agreement, a number of problems may arise which mainly concern consolidation of separate arbitral proceedings and the possibility of including those parties within the jurisdiction of the arbitral tribunal or, from their perspective, the possibility of joining the arbitral proceedings. If all bilateral relationships involved contain arbitration agreements which all allow consolidation with the related proceedings which were already contemplated when drafting the separate arbitration agreements, the consolidation has a contractual basis in all bilateral relationships and may thus be enforced as between the parties.263 Still, it may only be effected 259

Cetelem SA v. Roust Holding Ltd [2005] EWCA Civ 618. Section 35 AA 1996 is merely declaratory in allowing parties to consolidate proceedings (which they may do in any event as part of their party autonomy), but explicitly refuses any power of the tribunal to do so without the parties’ consent. 261 See in particular articles 7–10 ICC Rules 2021. 262 See e. g. article 8 LCIA Rules 2020 and article 12(6) ICC Rules 2021. 263 See e. g. City & General (Holborn) Ltd v. AYH Plc [2005] EWHC 2494 (Comm). 260

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upon application or by express empowerment of a third person or the tribunal by the parties, but not by the tribunal of its own motion.264 Similarly, without a prior265 or actual agreement to that extent by the parties, a third person or entity has no right to join the arbitral proceedings and without its own consent it may not be forced to join the arbitral proceedings by the tribunal or the parties to the arbitration agreement. Once a dispute has arisen, it will be very difficult to achieve such agreement without the provision of significant “consideration”, i. e. some benefit or gain to the consenting party in return. Against this background it does not come as a surprise that the subsequent consolidation of arbitral proceedings or joinder of a third party occur very rarely.

IV. The control, appeal and the enforcement of arbitral awards 116

The arbitral award is final and binding upon the parties to the arbitration proceedings. There may, however, arise issues of correction and amendments, and one of the parties may apply for a setting aside of the award (regularly the unsuccessful party) or for its enforcement (regularly the successful party). As a peculiarity of English arbitration law, the parties also have a (non-mandatory, hence waivable) right to lodge an appeal on questions of law to the English courts266 which corresponds with the possibility of the parties of referring the determination of preliminary points of law to the English courts during the arbitral proceedings.267

1. Correction of award or additional award 117

Subject to the parties’ agreement, the arbitral tribunal may on its own motion or upon application by the parties (after affording the other parties a reasonable opportunity to make representations to the tribunal) correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission, or clarify or remove any ambiguity in the award.268 Although the tribunal may not subsequently change its mind or re-open the award to deal with an issue which has been overlooked, the tribunal may correct any error arising from an accidental slip or omission which appears to cover awards based on false factual assumptions accepted by both parties to be false even if this has consequences on the outcome of the case and on the costs of the arbitration.269 Alternatively, the tribunal may leave the award untouched and wait for the award being remitted to it by the controlling state court as a result of setting aside proceedings.270 Similarly with regard to removing any ambiguity in the award, there is a thin line between the tribunal’s power to do so under its corrective powers on the one hand and upon remittal by the court in setting aside proceedings on the other.

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Elektrim SA v. Vivendi Universal SA (No 2) [2007] EWHC 571 (Comm). For example, by agreeing on the LCIA Rules 2020 which contain in article 22.1(x) a provision on joinder granting a third party the right to join upon consent by the party to the arbitral proceedings that has requested such joinder towards the arbitral tribunal; see also article 7 ICC Rules 2021 which, however, makes a joinder conditional upon consent by all parties once an arbitrator has been appointed. 266 Section 69 AA 1996. 267 See section 45 AA 1996 and supra mns. 90 et seq. 268 Section 57(3)(a) AA 1996; several institutional rules contain modifications, partly going beyond those instances for correcting an award. 269 See Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 582 et seq. with a detailed analysis of English case law. 270 See section 68(3)(a) AA 1996 although formally the procedure under section 57 AA 1996 prevails according to section 70(2)(b) AA 1996. 265

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If the award does not deal with (i. e. does not finally determine a claim presented to 118 the tribunal, including a claim for interest or costs), the tribunal may on its own motion or upon application by the parties (after affording the other parties a reasonable opportunity to make representations to the tribunal) issue an additional award in respect of that claim. The application for correction or an additional award has to be made within 28 days 119 of the date of the award unless the parties agree otherwise.271

2. Control, appeal and enforcement by the state courts While English arbitration law provides for a (mandatory) procedure before the state 120 courts to challenge the arbitral award for certain types of errors, framed under the two headings of “substantive jurisdiction”272 and “serious irregularity”,273 it also provides, unlike the majority of other national arbitration laws, for a (non-mandatory) appeal to the state courts on points of law.274 The latter is, like the now non-mandatory possibility of referring the determination of preliminary points of law during the arbitral proceedings,275 a relic of the extensive and compulsory powers of the state courts to exclusively determine questions of law under the Arbitration Act 1950, most of which were already removed or at least limited in the Arbitration Act 1979. a) Procedural framework. There are certain procedural rules and principles which 121 apply to all three possibilities of review and appeal. First, an application to the court may only be made once the applicant or appellant has exhausted any available arbitral process of appeal or review, and any available recourse under section 57 AA 1996 providing for the correction of an award or an additional award.276 Second, an application to the court has to be made within 28 days of the date of the award or notification of the result of any subsequent arbitral review process.277 Third, the court may require security for the costs of the review or appeal procedure.278 Fourth, the court may order that any money payable under the award shall be brought into court or otherwise secured pending the determination of the application or appeal, and may direct that the application or appeal be dismissed if the order is not complied with.279 In order to succeed with such an application, the respondent in the review/appeal proceedings (regularly the party that succeeded in the arbitration proceedings) has to establish certain facts depending on the challenge in question. With regard to any challenge the respondent in the review/appeal proceedings has to show that the challenge of the arbitral award puts the enforcement of the arbitral award at risk, e. g. due to impending shifts of money or assets in order to evade enforcement.280 In the case of a section 67 challenge (lack of jurisdiction of the arbitral tribunal), the court will 271

Section 57(4) AA 1996. Section 67 AA 1996. 273 Section 68 AA 1996. 274 Section 69 AA 1996. 275 See section 45 AA 1996. 276 Section 70(2) AA 1996. 277 Section 70(3) AA 1996; the English courts rejected an argument of unfairness and hardship in an application to extend that period based on the argument that a reasonably acting foreign party intending to challenge the award would have appointed an English lawyer earlier so as to meet the time limit (Broda Agro Trade v. Alfred C Toepfer International GmbH [2010] EWCA Civ 1100). 278 Section 70(6) AA 1996. 279 Section 70(7) AA 1996. 280 A v. B [2010] EWHC 3302 (Comm) at [50]; Dardana Ltd v. Yukos Oil Co. [2002] EWCA Civ 543 at [37] (the case concerned an order for security under section 103(5) AA 1996 whose preconditions are, however, identical to those under section 70(7) AA 1996). 272

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additionally consider whether the challenge is meritorious or whether it appears flimsy or otherwise lacking in substance before ordering security in the amount of the awarded sum of money.281 In the case of a section 69 challenge, the court will regularly not order security in the amount of the awarded sum of money since the requirements of section 69(3) already exclude flimsy challenges.282 In the case of a section 68 challenge, a general presumption of the award’s correctness has to be rebutted on the basis of the individual circumstances. Fifth, due to the territoriality principle, a challenge to an arbitral award may be brought before the English (or Welsh or Northern Irish) courts only in respect of awards283 issued by an arbitral tribunal seated in England and Wales or Northern Ireland.284 122

b) Grounds for challenging arbitral awards: An overview. The three grounds for challenging an arbitral award differ from those listed in article 34(2) ML and replicate traditional grounds of English arbitration law, albeit watered down by the Arbitration Acts of 1979 and 1996.285 This relates to the right of appeal under section 69 AA 1996 in particular. Under common law and later under section 21 AA 1950, the arbitral tribunal could on its own motion, or had to upon application by the parties, refer questions of law to the High Court for determination. Additionally, the parties had a mandatory right to appeal against an award on questions of law. Furthermore, the courts could on their own motion set aside arbitral awards ex officio if they contained errors of law or of fact-finding “on the face of the award”. The current, non-mandatory, section 69 AA 1996 is the cutback residue of those extensive rights of the past concerning recourse to the state courts which enables, if the parties so wish, the state courts to engage in a révision au fond of the arbitral award. The challenges under sections 67 and 68 AA 1996 overlap with several of the grounds of article 34(2) ML but are still different in wording and conceptualization.

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c) Section 67: Lack of substantive jurisdiction of the arbitral tribunal. Upon application by either party, the English courts will determine whether the arbitral tribunal had substantive jurisdiction over the claims in question. Although a challenge under section 67 AA 1996 requires a prior award by the tribunal on its substantive jurisdiction (which may take the form of a partial award solely addressing the jurisdictional issue or of a final award in which the decision on jurisdiction is only a preliminary issue), the English courts will not only review the tribunal’s decision but rather engage in a full rehearing of the relevant facts and reconsideration of the relevant law.286 Hence, while the arbitral tribunal has the first word on its jurisdiction under its limited KompetenzKompetenz, this decision is not binding on the state courts. Once an arbitral award is rendered,287 the last word lies with the state courts. Section 67 is mandatory. 281 A v. B [2010] EWHC 3302 (Comm) following the criteria laid down in Peterson Farms Inc. v. C & M Farming Ltd [2003] EWHC 2298 (Comm), while rejecting the approach in Tajik Aluminium Plant v. Hydro Aluminium AS [2006] EWHC 1135 (Comm) (which had disapproved any threshold requirement); the Supreme Court’s judgment in Dallah v. Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46 indirectly supports the view taken in A v. B and Peterson Farms. 282 A v. B [2010] EWHC 3302 at [59]. 283 On the distinction between an award and procedural orders see ZCCM Investment Holdings PLC v. Kansanshi Holdings PLC [2019] EWHC 1285 (Comm) and K v. S [2019] EWHC 2386 (Comm). 284 Section 2(1) AA 1996. 285 For an illustrative overview on the differences between the ML and the Arbitration Act 1996 in that regard see Hill, (2018) 34 Arb. Int’l 385 et seq. 286 Peterson Farms Inc. v. C & M Farming Ltd [2004] EWHC 121 (Comm) at [19] et seq.; Primetrade AG v. Ythan Ltd [2005] EWHC 2399 (Comm); A v. B [2010] EWHC 3302 (Comm); Dallah v. Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46. 287 Before an award on jurisdiction is rendered, the state courts may review the tribunal’s jurisdiction only under the prerequisites laid down in section 32(2) AA 1996.

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The concept of substantive jurisdiction not only covers the arbitration agreement’s 124 non-existence, invalidity or limited scope but also instances of an unlawful constitution or composition of the arbitral tribunal.288 According to section 73(1)(a) AA 1996, any ground of objection concerning the 125 tribunal’s substantive jurisdiction has to be raised by the challenging party forthwith or within the time limits set in the arbitration agreement in order to avoid any subsequent challenge in the section 67 proceedings from being precluded. The English courts have taken a rather broad approach on preclusion in holding that the grounds of objection must not be examined closely as in the case of pleadings, but broadly in so far as it is regarded as sufficient that the aspects and arguments raised in the challenge were within the grounds of objection to jurisdiction advanced before the arbitrators.289 Upon a section 67 application, the High Court has several possibilities as to how to 126 resolve the challenge. It may confirm, vary or set aside the arbitral award in whole or in part. An appeal against the High Court’s decision lies only if the High Court grants leave to appeal.290 Such leave is, however, granted only in exceptional cases in order to avoid further appeal stages in a situation where the parties intended to exclude exactly that (even if not only that), by choosing arbitration.291 d) Section 68: Serious irregularity. Either party may challenge the arbitral award for 127 a serious irregularity affecting the tribunal, the proceedings or the award. As with section 67 AA 1996, this right to challenge the award is also mandatory in nature. Together, sections 67 and 68 AA 1996 aim at ensuring that arbitration complies with the basic minimum standards of consensual private dispute resolution by way of fair proceedings. Considering the pro-arbitration policy of English law and the judicial self-restraint 128 once the substantive jurisdiction of the arbitral tribunal is established (which is the subject of section 67 challenges), the applicant has to overcome a high hurdle to succeed with a section 68 challenge.292 To be regarded as a serious irregularity, what has occurred has to be far removed from what could reasonably be expected from the arbitral process. And to cause substantial injustice, it has to be established by the applicant that the irregularity led the arbitral tribunal to reach a decision which, but for the irregularity, it might well never have reached, provided, of course, that the opposite conclusion was at least reasonably arguable.293 Furthermore, it is repeatedly stressed in that context that, as a matter of general approach, the courts should strive to uphold arbitration awards or to remit the matters in question to the tribunal for reconsideration according to section 68(3) AA 1996. Overall, the English courts aim to strike a fair balance between the legitimate interests of the parties in the integrity and lawfulness of the arbitral process on the one hand and due respect to the procedure and approach 288

See section 30(1) AA 1996. Primetrade AG v. Ythan Ltd [2005] EWHC 2399 (Comm). 290 The Court of Appeal has a residual jurisdiction to grant leave to appeal if the High Court has refused to do so which is, however, limited to exceptional cases; see Republic of Kazakhstan v. Istil Group Ltd [2007] 2 Lloyd’s Rep. 548 (CA). 291 This was made clear by the Court of Appeal in Amec Civil Engineering Ltd v. Secretary of State for Transport [2005] EWCA Civ 291. 292 Lesotho Highlands Development Authority v. Impregilo SpA [2005] UKHL 43; ABB v. Hochtief Airport GmbH [2006] 2 Lloyd’s Rep. 1 (Comm) at [61] et seq. with further references to previous case law; Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm); F v. M [2009] 2 All ER 519 (Comm); B v. A [2010] EWHC 1626 (Comm); many judgments refer to the DAC Report on the Arbitration Bill of 1996 with a similar reasoning and explanation of the rationale of the provisions. 293 See e. g. Latvian Shipping Co. v. Russian People’s Insurance Company (Rosno) [2012] EWHC 1412 (Comm). 289

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taken by the arbitral tribunal in the individual circumstances of the case on the other, coupled with the requirement that the irregularity has to have materialized in the outcome of the case. In recent years, the vast majority of applications under section 68 AA 1996 have failed since the parties did not realize the high threshold they had to meet in order to justify a successful challenge.294 As a result, in 2013, a system was introduced which enables the court to reject on paper weak applications with no real prospect of success, and thus without a hearing (albeit with the possibility of the applicant applying to set aside the order dismissing the section 68 challenge without a hearing which will result in a subsequent hearing and a new decision on the section 68 challenge). Furthermore, in a number of cases up until the Lesotho Highlands judgment by the House of Lords, the parties tried to dress appeals on points of law as serious irregularity in order to come within the realm of the mandatory section 68 when a section 69 appeal on points of law had been excluded by the parties in the arbitration agreement. Section 68(2) AA 1996 contains two prerequisites for a successful challenge. First, the applicant has to establish one of the serious irregularities listed in sub-section (2). Secondly, a causal link between the irregularity and the content of the arbitral award is required in that the irregularity has to result in a substantial injustice to the applicant, regularly by a negative outcome to its case. The irregularities listed in sub-section (2) consist of two groups: lit. a–e and (partly) lit. i concern the proceedings before the arbitral tribunal, and lit. f–h and (partly) lit. i concern the arbitral award. As with a section 67 challenge, the alleged irregularities have to be objected to before the tribunal in due course to avoid being subsequently precluded in section 68 proceedings before the state courts.295 The irregularities most often invoked (albeit regularly unmeritoriously) by the parties are section 68(2)(a), i. e. a breach of the general duty of the arbitral tribunal to act fairly and impartially296 (referring to sections 33 and 34 AA 1996), section 68(2)(d), i. e. failure by the tribunal to deal with all the issues that were put to it, and section 68(2) (g), i. e. the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy. Challenges under section 68(2)(a) AA 1996 span the entire arbitral proceedings and there is a body of case law on the matter which cannot be fully replicated here.297 Instances of unsuccessful challenges in relation to breach of the tribunal’s general duty as regards the arbitral process are a refusal of disclosure,298 making use of the arbitrators’ own expertise,299 limiting the amount of evidence on particular issues,300 not ordering witnesses to appear but instead drawing certain adverse inferences from one party’s refusal to call the witnesses,301 minor divergences from the procedure as agreed by the parties,302 deciding a case on a point on which the party raising it did not put any great emphasis,303 the tribunal’s reasoning being manifestly illogical or not 294 Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 695; according to Hill, (2018) 34 Arb. Int’l 385 (398), less than 5 % of all applications to set aside under section 68 AA 1996 are successfull. 295 See section 73(1)(b)-(d) AA 1996. 296 Due to the link to impartiality, section 68 challenges will go hand in hand with section 24 applications for removal of an arbitrator during the arbitral process. 297 For a detailed, yet concise overview see Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 702 et seq. 298 Bromley Park Garden Estates Ltd v. Mallen [2009] EWHC 609 (Ch). 299 Checkpoint Ltd v. Strathclyde Pension Fund [2003] EWCA Civ 84; Alphapoint Shipping Ltd v. Rotem Amfert Negev Ltd [2005] 1 Lloyd’s Rep. 23 (Comm). 300 UR Power GmbH v. Kuok Oils and Grains Pte [2009] EWHC 1940 (Comm). 301 Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm). 302 Tongyuan (USA) International Trading Group v. Uni-Clan Ltd, summarized in YCA XXVI (2001), 886. 303 See e. g. Terna Bahrain Holding Company WLL v. Al Shamsi [2012] EWHC 3283 (Comm).

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rationally sustained304 and reliance on voluntarily produced privileged material.305 Instances of potentially successful challenges for breach of the tribunal’s general duty as regards the arbitral process are failure to consider a central aspect of the case,306 adopting an argument not put forward by either party so that none of the parties could comment on it,307 allowing the introduction of new material into the proceedings without giving the parties a possibility to comment on it,308 reaching conclusions from contact with witnesses without the parties or their representatives being present309 and a decision of the case based on evidence or considerations not brought before the tribunal so that the parties could not comment on it.310 Challenges under section 68(2)(d) AA 1996 are often filed by parties frustrated with 133 the focus and effectiveness of the arbitral tribunal in disposing of their case. Most importantly, it has to be noted that the term “issue” does not mean each and every point, argument or aspect of the case nor any piece of evidence or document presented by the parties, but rather only the very dispute(s) of the case, i. e. the essence of claims and counter-claims or defences brought before the arbitral tribunal.311 The English courts have identified three steps to identify whether there has occurred a failure to deal with all issues under section 68(2)(d) AA 1996: First, it has to be ascertained whether the point allegedly not dealt with was an “issue” within the meaning of lit. d. If so, it has to be assessed, secondly, whether that issue was put to the tribunal,312 thirdly, whether the tribunal failed to deal with it and, fourthly, as with regard to all challenges under section 68 AA 1996, whether that has caused substantial injustice to the applicant313 and fifthly, whether the award should really be set aside if it appears more appropriate to remit the matter(s) to the arbitral tribunal for reconsideration according to section 68(3) AA 1996.314 The key task of the court lies in identifying the issues of the case and distinguishing them from lines of argument, steps in the argument, arguments, points, and aspects within such issues since the tribunal is not obliged to deal with every argument etc., within the issues and it is not required to set out each step in its reasoning.315 Furthermore, incidental or peripheral matters immaterial to the outcome of the case or rendered immaterial by other holdings of the tribunal are not “issues” within the meaning of lit. d.316 To “deal with” an issue does not mean to resolve it to the satisfaction of the applicant and an issue may be dealt with by making clear that it does not arise in the light of the 304

UMS Holding Ltd v. Great Station Properties S.A. [2017] EWHC 2398 (Comm) at [38]. Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm). 306 Ascot Commodities NV v. Olam International [2002] CLC 277 (Comm). 307 Oldham v. QBE Insurance [2017] EWHC 3045 (Comm); Compania Sud-Americana de Vapores SA v. Nippon Yusen Kaisha [2009] EWHC 1606 (Comm); Vee Networks Ltd v. Econet Wireless International Ltd [2005] 1 Lloyd’s Rep. 192 (Comm). 308 St. George’s Investment Co. v. Gemini Consulting Ltd [2004] EWHC 2353 (Ch). 309 Norbrook Laboratories Co. v. Tank [2006] 2 Lloyd’s Rep. 485 (Comm). 310 Milan Nigeria Ltd v. Angeliki B Maritime Co. [2011] EWHC 892 (Comm). 311 See e.g. Petrochemical Industries Company (K.S.C) v. The Dow Chemical Company [2012] EWHC 2739 (Comm); Sonatrach v. Statoil Natural Gas LLC [2014] EWHC 875 (Comm); The Celtic Explorer [2015] EWHC 1810 (Comm). 312 Instructive in that regard A v. B [2017] EWHC 596 (Comm) where the court held that an issue is not put to the tribunal if it is merely mentioned in passing at some stage of the arbitration. 313 K v. P [2019] EWHC 589 (Comm); Petrochemical Industries Company (K.S.C) v. The Dow Chemical Company [2012] EWHC 2739 (Comm). 314 Soeximex SAS v. Agrocorp International Pte Ltd [2011] EWHC 2743 (Comm); Symbion Power LLC v. Venco Imtiaz Construction Co. [2017] EWHC 348 (TCC). 315 Petroships Pte Ltd of Singapore v. Petec Trading [2001] 2 Lloyd’s Rep. 348 (Comm); Petrochemical Industries Company (K.S.C) v. The Dow Chemical Company [2012] EWHC 2739 (Comm). 316 Fidelity Management SA v. Myriad International Holdings [2005] 2 Lloyd’s Rep. 508 (Comm). 305

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tribunal’s decision on the facts or its legal conclusions.317 Furthermore, several issues may be disposed of together. In order to make their decision transparent and give sufficient reasoning, the tribunal does have to list all arguments made and all the evidence raised and the way in which it disposed of them or considered or not considered them; however, the reasoning may focus on the primary arguments and evidence that supports the tribunal’s decision.318 Especially with regard to a challenge under section 68(2)(d) AA 1996, the applicant will often be required under section 70 (2)(b) AA 1996 to apply first to the tribunal for clarification of ambiguities in the award under section 57(3)(a) AA 1996.319 In approaching all these questions, the English courts have held that they will read an award in a reasonable and commercial way, and in the expectation that substantial fault would not be found.320 Hence, there is a strong presumption of regularity in that regard so that the hurdle to establish an irregularity (let alone a serious one) is extremely high. 134 Fraud and public policy challenges under section 68(2)(g) AA 1996 are treated equally cautiously by the English courts. Fraud is only relevant if commited on the part of the successful party, not any witness unless it is privy to the successful party.321 It requires deliberate behaviour whereas a negligent or even careless act or omission (for example, failure to produce evidence) will not suffice.322 Similarly, for the way in which the award was procured to be contrary to public policy, the conduct has to be unconscionable or reprehensible (involving dishonesty or something equivalent to fraud) whereas mere negligence or inadvertence are not sufficient. Instances of such fraud or equivalent public policy violations are perjury, abuse of the arbitral process, the withholding of material evidence or, in relation to witnesses, knowledge of the fraud or dishonesty of the witness or any privity with that witness. In any event, the applicant has to show that the respective conduct of the successful party contributed in a substantial way to the obtaining of the award.323 Especially with regard to challenges under section 68(2)(g) AA 1996, the applicant will have to show that (at the time he took part or continued to take part in the proceedings) he did not know and could not with reasonable diligence have discovered the fraud or equivalent public policy violations to avoid preclusion with the objection under section 73 AA 1996.324 Finally, it should be noted in this context that ECJ case law requires the English courts to treat a violation of EU competition law and potentially also other mandatory, often regulatory EU law as a breach of English public policy.325 135 In contrast to a challenge under section 67 AA 1996, the court, upon a section 68 challenge, will only review the arbitral tribunal’s procedure and the tribunal’s award in light of the irregularities listed in section 68(2) AA 1996. Hence, for a challenge to be 317 Petrochemical Industries Company (K.S.C) v. The Dow Chemical Company [2012] EWHC 2739 (Comm). 318 Schwebel v. Schwebel [2010] EWHC 3280 (TCC). 319 Groundshire v. VHE Construction [2001] BLR 395 (Comm); Torch Offshore LLC v. Cable Shipping Inc. [2004] 2 Lloyd’s Rep. 446 (Comm). 320 Pace Shipping v. Churchgate Nigeria Ltd [2009] EWHC 1975 (Comm); Petrochemical Industries Company (K.S.C) v. The Dow Chemical Company [2012] EWHC 2739 (Comm); Atkins Ltd v. Secretary of State for Transport [2013] EWHC 139 (TCC); Crystal Palace v. Pulis [2016] EWHC 2999 (Comm); UMS Holding Ltd v. Great Station Properties SA [2017] EWHC 2398 (Comm). 321 Nestor Maritime SA v. Sea Anchor Shipping Co. Ltd [2012] EWHC 996 (Comm). 322 Profilati Italia Srl v. Paine Webber Inc [2001] 1 Lloyd’s Rep. 715; Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm). 323 Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm). 324 Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm); Nestor Maritime SA v. Sea Anchor Shipping Co. Ltd [2012] EWHC 996 (Comm). 325 ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055.

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successful, it is not sufficient to show that the arbitral tribunal could or should have acted and ruled otherwise in respect of the alleged irregularity. Rather, it is required that the tribunal had to act and rule otherwise. If the way the tribunal acted, proceeded and/ or ruled is one of several reasonable possibilities in that respect, the challenge will fail. Upon a section 68 application, the High Court has several possibilities as to how to 136 resolve the challenge. It may remit the award to the tribunal, in whole or in part, for reconsideration, set the award aside in whole or in part, or declare the award to be of no effect, in whole or in part.326 If appropriate, the court shall remit the case for reconsideration, instead of setting it aside or declaring it to be of no effect.327 In case of remittal the initial arbitrators will retain their function and are required to make a fresh award within three months of the remittal.328 If there are doubts as to the arbitrators’ impartiality or capability to properly conduct the proceedings, each party may apply to the courts to remove one of the arbitrators, or all of them, as the case may be. e) Section 69: Appeal on point of law. Apart from the non-mandatory grounds for 137 challenge in sections 67 and 68 AA 1996, either party may challenge the award by appealing to the English courts on a point of law. Hence, during the arbitral proceedings either party may apply to the English courts for a determination of a preliminary point of law under section 45 AA 1996, and after the award has been rendered, either party may appeal on a point of law to the English courts. There is a continuing possibility of bringing questions of law before the state courts. Both section 45 applications as well as section 69 appeals are, however, non-mandatory so that the parties may exclude them by an agreement in writing.329 A common, valid form of excluding both possibilities to revert to the state courts is a reference to institutional arbitration rules that contain an exclusion such as the ICC and the LCIA Rules.330 Another way of validly excluding the right under section 69 AA is an agreement to dispense with reasons for the tribunal’s award.331 In contrast, the English courts regard the mere agreement that the award shall be “final, conclusive and binding” as not sufficient to exclude an appeal on point of law under section 69 AA 1996.332 The vast majority of section 69 applications during the last few years concerned 138 maritime awards while the right under section 69 AA 1996 appears regularly to be excluded in commercial arbitration.333 The success rate is, as is the case with section 68 applications, very low. Even if the parties have not excluded an appeal on points of law, the right to file such 139 an appeal is already subject to a high hurdle: it may only be brought with the agreement of all other parties, which is rather unlikely to be obtained subsequently to an award clearly favourable to one party (so that an agreement prior to the award or in the arbitration agreement is required, or the leave of the court).334 In addition to those 326

Section 68(3) AA 1996. See e.g. (although only obiter since the section 68 application failed) Symbion Power LLC v. Venco Imtiaz Construction Co. [2017] EWHC 348 (TCC) at [84]. 328 Section 71(3) AA 1996. 329 For the written form-requirement see section 5 AA 1996. 330 See article 35(6) ICC Rules 2021 and article 26(8) LCIA Rules 2020. 331 Section 69(1) AA 1996. 332 Shell Egypt West Manzala GmbH v. Dana Gas Egypt Ltd [2009] EWHC 2097 (Comm) where the court held that the words “final and binding” merely referred to the long established principle of res judicata and that the addition of the word “conclusive” in the context of a standard governing law and arbitration clause was equally not sufficiently clear wording to construe it as an exclusion of section 69 AA 1996. 333 See Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 734 et seq. 334 Section 69(2) AA 1996. 327

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specific requirements, the general requirements for all challenges have to be met: exhaustion of any available arbitral process of appeal (which is rather rare) or recourse to section 57 AA 1996 (if the case is in fact rather about a correction or interpretation of a point of law) and the general time-limit of 28 days of the date of the award.335 The regularly required leave by the court is subject to a number of cumulative (!) prerequisites.336 First, the determination of the relevant question of law has to substantially affect the rights of one or more of the parties. This prerequisite aims to filter out appeals on those questions which did not form the basis of the award so that their determination by the court would not have any impact on the outcome of the case reached in the award. Second, the question has to be one the tribunal was asked to determine, i. e. a question which was not only addressed in the award but which was also put before the arbitral tribunal by the parties. Third, and most importantly, the tribunal’s decision has to be obviously wrong (often referred to as one-off cases) or, if it is only open to serious doubt, the question of law has to be one of general public importance. The first category, i. e. the one-off cases, concern contracts individually negotiated raising uncommon and unusual questions of law limited to the contract in question or more common questions which appear to be singularly based on the peculiar facts of the individual case. The “obviously wrong” test poses particular problems when the determination of the question of law concerns the construction and interpretation of documents since this will often raise questions of mixed law and fact. In such a scenario there is rarely a right or wrong answer to the question of construction. Rather, the court will have to determine whether the construction adopted by the arbitral tribunal was one within the permissible range of constructions, and by doing so refrain from substituting its own construction for that of the arbitral tribunal.337 The second category (i. e. the general public importance cases), concern the construction of standard form contracts or of questions of law occurring on the basis of very common facts. Hence, the term “public” does not refer to the public at large but rather refers to the relevant industry sector or market.338 The “open to serious doubt” test is not satisfied by the possibility of different outcomes based on the facts found by the arbitrators. Rather, it requires that the question of law that forms the subject-matter of the appeal is not solved by any previous judgment, either for lack of a judgment on the issue or for differing judgments on the matter in the past. In this regard, the requirements for a successful application for leave to appeal are wider than those for succeeding in the actual appeal. Fourth, it has to appear just and proper in the light of all circumstances for the state court to determine the question although the parties have agreed to a resolution by way of arbitration. In order to enable the court to assess those prerequisites, the application for leave has to identify the question of law to be determined and the grounds based on which the appeal should be granted.339 The court will usually determine the application for leave ex parte, i. e. without the other party being present at the hearing unless it appears otherwise to the court based on the individual circumstances of the case. An appeal (to the Court of Appeal) against the refusal of leave to

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Sections 69(2), 70(2) and (3) AA 1996. See section 69(3) AA 1996. 337 Cosemar SA v. Marimarna Shipping Co. Ltd (The Mathew) [1990] 2 Lloyd’s Rep. 323 (Comm); Benaim (UK) Ltd v. Davies, Middleton & Davies Ltd [2005] EWHC 1370 (TCC); Trustees of Edmond Stern Settlement v. Levy [2007] EWHC 1187 (TCC); Sylvia Shipping Co. Ltd v. Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm). 338 Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 746. 339 Section 69(4) AA 1996. 336

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appeal the arbitral award is dependent upon leave by the High Court;340 the Court of Appeal generally has no power to grant leave to appeal itself.341 There is, however, a residual jurisdiction of the Court of Appeal to set aside a refusal of leave to appeal if the decision to refuse is the result of unfair or improper process such that the decision to refuse permission cannot be categorized as a decision at all.342 Hence, the process of an appeal under section 69 AA 1996 is split into two stages: the 140 application for leave to appeal (absent the rare case where all parties agree to it) and upon leave the appeal proceedings as such. The appeal is limited to questions of law (defined by section 82(1) AA 1996 as meaning only English law343) on the basis of the findings of fact of the arbitral tribunal.344 In that regard it is irrelevant whether the court considers those findings of fact to be right or wrong, how obvious a mistake on issues of fact appears, or what the scale of the financial consequences of the wrong factual findings might be.345 Even the parties may not by agreement expand the English courts’ jurisdiction in that regard to include an appeal on a question of fact.346 The dichotomy and separation of questions of fact and questions of law for the purposes of section 69 AA 1996 was illustrated by Mustill J347 about 30 years ago by reference to a three stage reasoning process of an arbitral tribunal in a passage which has ever since been quoted with approval.348 The first stage is the ascertainment of the facts by the tribunal. The second stage is the ascertainment of the law by applied by the tribunal (which comprises of the identification of all relevant rules of statute and common law, but also the identification and interpretation of the relevant parts of the contract, and the identification of those facts which must be taken into account when the decision is reached). The third and final stage involves the consideration of the conclusion and decision-making of the tribunal based on the facts and the law so ascertained. While the first stage lies entirely outside an appeal on a point of law under section 69 AA 1996, it is the second stage which is the proper subject-matter of an appeal under section 69 AA 1996 (while the third stage may also be the proper subject-matter of an appeal if it involves an element of judgment or discretion so that there is more than one right application of the law to the facts in question). There is some uncertainty as to whether a total lack of an evidential basis for the findings of fact by the arbitral tribunal (as opposed to insufficient 340 According to section 69(8) AA 1996, such leave is only granted if the High Court considers the question upon appeal to be one of general importance or one which for some other special reason should be considered by the Court of Appeal. 341 See section 69(6) AA 1996; for case law see CMA CGM SA v. Beteiligungs-Kommanditgesellschaft MS ‘Northern Pioneer’ Schiffahrtgesellschaft mbH & Co. [2002] EWCA Civ 1878. 342 Kyla Shipping Company Limited v. Bunge SA [2013] EWCA Civ 734. 343 For case law see Schwebel v. Schwebel [2010] EWHC 3280 (TCC) where the court rejected leave to appeal on questions of Jewish law, and Sanghi Polyesters Ltd v. The International Investor KCFC (Kuwait) [2000] 1 Lloyd’s Rep. 480 (Comm) where the contract was governed by English law “except to the extent it may conflict with Shari’a law, which shall prevail” and the questions to be determined by the English courts upon the section 69 application where exactly those of Shari’a law which the High Court rejected by refusing leave to appeal. 344 See in that respect in particular section 69(3)(c) AA 1996 introducing the third requirement for leave to appeal (decision wrong or at least open to serious doubt) with the words “…on the basis of the findings of fact in the award…”. 345 See e. g. Geogas S.A. v. Trammo Gas Limited (The Baleares) [1993] 1 Lloyd’s Rep. 215 (CA); Dolphin Tanker SRL v. Westport Petroleum Inc [2010] EWHC 2617 (Comm); Guangzhou Dockyards Co. Ltd v. ENE Aegiali I. [2010] EWHC 2826 (Comm). 346 Guangzhou Dockyards Co. Ltd v. ENE Aegiali I. [2010] EWHC 2826 (Comm). 347 Vinava Shipping Co. Ltd v. Finelvet AG (The Chrysalis) [1983] 1 Lloyd’s Rep. 503 at 507 (even though the statements are based on the Arbitration Act 1979, they still hold true under the AA 1996, as the corresponding requirement in section 69 has not changed). 348 See e. g. Guangzhou Dockyards Co. Ltd v. ENE Aegiali I. [2010] EWHC 2826 at [21] et seq. (Comm).

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evidence) may amount to an error of law. Some High Court judgments349 considered that possibility, albeit only obiter, while others rejected it350 on the rationale that the arbitral tribunal is the master of the facts and that the English courts under section 69 AA 1996 must refrain from any investigation into the arbitral proceedings. 141 Since the appeal is limited to questions of law, the only evidence admitted in the appeal proceedings is the arbitral award and, depending on the circumstances of the individual award, “any document (such as the contract or the relevant parts thereof) which is referred to in the award and which the court needs to read to determine a question of law arising out of the award”.351 This restriction limits the grounds of appeal (not be mixed up with the ground for granting leave to appeal) since the case of the appellant may only be founded on those two documents. A side-effect of this restriction is that the confidentiality of arbitration is to a certain extent also guaranteed in judicial appeal proceedings under section 69 AA 1996. 142 Upon a section 69 application, the High Court has several possibilities as to how to resolve the appeal. It may confirm, vary, remit or set aside the award, in whole or in part. By far the most common remedy is remittal to the arbitral tribunal such that it may render a correct and enforceable award as the parties had asked it to do on the basis of their arbitration agreement. 143

f) Separating section 68 and section 69 applications. Since section 68 AA 1996 is mandatory while the right to appeal on points of law under section 69 AA 1996 may be, and in fact is quite often, excluded by the parties, distinguishing section 68 from section 69 applications is of crucial importance and parties have repeatedly tried to dress appeals on points of law as challenges for a serious irregularity based on the grounds of section 68(2)(b), (d) and (e) AA 1996 in order to evade an exclusion of section 69 applications. The House of Lords has, however, firmly rejected such attempts when it was faced with an application under section 68(2)(b) AA 1996 (i. e. the tribunal exceeding its powers), which it had to separate from an appeal on points of law under section 69 AA 1996.352 As a starting point, the House of Lords stressed, by referring to the spirit of the AA 1996, the UNCITRAL Model Law and the New York Convention, the parties’ intention and desire for one-stop adjudication, placing restrictions on the state court’s powers of controlling an award and in turn mandating a narrow interpretation of the powers under section 68 AA 1996 (and thereby creating a high threshold for successful applications). It then distinguished the respective grounds of challenge by stating that an excess of powers within the meaning of section 68(2)(b) AA 1996 was limited to those cases where the arbitral tribunal purported to exercise a power which it did not have whereas section 69 AA 1996 covered cases where the tribunal erroneously exercised a power that it did have.353 This requires a thorough scrutiny of the particular power which is involved under the arbitration agreement, the terms of reference, or the 349 Fence Gate Ltd v. NEL Construction Ltd [2001] 82 Con LR 41 (TCC); Guardcliffe Properties Ltd v. City & St James [2003] EWHC 215 (Ch); Benaim (UK) Ltd v. Davies, Middleton & Davies Ltd [2005] EWHC 1370 (TCC). 350 See e. g. Demco Investments & Commercial SA v. SE Banken Forsakring Holding AB [2005] EWHC 1398 (Comm); London Underground Limited v. Citylink Telecommunications Limited [2007] EWHC 1749 at [65] (TCC) House of Fraser Ltd v. Scottish Widows plc [2011] EWHC 2800 at [23] et seq. (Ch). 351 CPR Practice Direction 62, 12.5 (with the qualification: “Unless there is a dispute whether the question raised by the appeal is one which the tribunal was asked to determine…”, i. e. an appeal based on section 69(3)(b) AA 1996); for case law see Great Western Trains Co. Ltd v. Network Rail Infrastructure Ltd [2010] EWHC 117 (Comm); Sylvia Shipping Co. Ltd v. Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm); Dolphin Tanker SRL v. Westport Petroleum Inc [2010] EWHC 2617 (Comm). 352 Lesotho Highlands Development Authority v. Impreglio SpA [2005] UKHL 43. 353 Lesotho Highlands Development Authority v. Impreglio SpA [2005] UKHL 43 at [24].

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AA 1996, judged in all the circumstances of the case.354 In particular, one must refrain from re-describing an erroneous exercise of power as an excess of power by construing the power in question all too narrowly.355

3. Enforcing arbitral awards a) Domestic and foreign awards under the section 66 procedure. Domestic and 144 foreign awards may be enforced by applying for leave of the court356 and, in exceptional cases, under the old process of an action on the award.357 In respect of certain categories of foreign awards, namely those falling under one of the respective international conventions, the AA 1996 provides for additional ways of enforcement. This applies in particular to New York Convention358 and Geneva Convention awards.359 Under the section 66 procedure, which is a summary procedure, the application is 145 usually made (without notice to the other party) by an arbitration claim form supported by a witness statement and copies of the arbitration agreement and the arbitral award. Details on the procedure for enforcement are laid down in CPR 62.17 to 62.19. Although the court has discretion, leave is regularly granted upon said preconditions. Instances where leave is not granted are complex objections for which a summary procedure appears inapt, awards so defective in form or substance that they are incapable of enforcement and scenarios in which enforcement (hence not necessarily the award itself) would be contrary to public policy.360 In contrast, the declaratory nature of an award is regularly no obstacle to the granting of leave to enforce the award.361 Since applications are made without notice, the other party has a limited time after service of the order to challenge the enforcement order.362 While section 66(3) AA 1996 only mentions a challenge based on a lack of substantive jurisdiction of the arbitral tribunal, this provision is not exhaustive. Rather, the other grounds for challenging an award in sections 68 and 69 AA 1996 may also apply but in case of a New York Convention or Geneva Convention award they are limited by those conventions.363 In any event, the right to challenge the arbitral tribunal’s jurisdiction may be precluded under section 73 AA 1996 (to which section 66(3) AA 1996 explicitly refers).364 Upon a challenge following the order granting permission to appeal, the challenging party may apply for a stay of enforcement which the court will grant depending on the prospects of success of the challenge weighed against potential detriment of such a stay to the enforcing party.365 Sometimes, a stay is made dependant on a security payment into court by the applicant. Upon a successful application for leave to enforce the award, permission is regularly 146 granted to the extent that the award may be enforced in the same manner as a judgment 354

Lesotho Highlands Development Authority v. Impreglio SpA [2005] UKHL 43 at [32]. For an illustrative example see Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 361 (Comm) at [42]. 356 Section 66 AA 1996. 357 See, on that latter mechanism, e. g. Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, paras 8–019 et seq. 358 These are enforced pursuant to sections 100 et seq. AA 1996. 359 These are enforced pursuant to section 99 AA 1996. 360 Sutton/Gill/Gearing, Russell on Arbitration, 24th ed., 2015, para. 8–011; for a recent example see Sterling v. Rand [2019] EWHC 2560 (Ch). 361 See West Tankers Inc. v. Allianz Spa [2011] EWHC 829 (Comm), confirmed [2012] EWCA Civ 27; African Fertilizers v. BD Shipsnavo [2011] EWHC 2452 (Comm). 362 According to CPR 62.18(9)(b) it is 14 days after service of the order. 363 This is explicitly highlighted in section 66(4) AA 1996. 364 For details on preclusion in that regard see infra mns 162 et seq. 365 Socadec SA v. Pan Afric Impex Co. Ltd [2003] EWHC 2086 (Comm). 355

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or order of the court to the same effect.366 Where leave is granted, judgment may also be entered in terms of the award367 which may be advantageous to the party seeking enforcement (depending on the circumstances of the case). Upon permission by leave, it is still the award that is enforced while a judgment entered in terms of the award is then a judgment which may no longer benefit from the New York Convention but instead from conventions or European regulations such as the Brussels Ia Regulation368 concerning state court judgments. b) Enforcement of New York Convention awards. There is a special set of rules for enforcement of New York Convention awards which applies if the award originates from a tribunal seated in a convention state. The details of the procedure of enforcement are again laid down in CPR 62.17 to 62.19 with some additions in sections 100 et seq. AA 1996. The application for enforcement requires, in particular, production of the duly authenticated original award or a duly certified copy of it, and the original arbitration agreement or a duly certified copy of it, both accompanied by a translation if they are in a foreign language, the name and usual or last known place of residence or business of the applicant and of the enforcement debtor, a statement that the award has not been complied with or the extent to which it has not been complied with at the date of the application369 and in case of interest being claimed, some additional information.370 148 As under the section 66 procedure, the court will issue an enforcement order granting leave to enforce the award,371 which will be served on the enforcement debtor who will then have a limited period of time to apply for a setting aside of the order. In determining the application for setting aside the order, the High Court will assess the grounds for refusing recognition and enforcement listed in section 103 AA 1996 which replicates article V NYC. The burden of proof lies with the enforcement debtor. If he can prove such ground(s), the court will usually refuse leave to enforce the award but the court has a residual, albeit very narrow, discretion (“may be refused”), which must be based on some recognizable legal principle, to grant leave to enforce despite the existence of a ground of refusal.372 149 The most important grounds for refusing recognition and enforcement are the invalidity of the alleged arbitration agreement (section 103(2)(b) AA 1996), the fact that the award has been set aside by the seat courts (section 103(2)(f) AA 1996) and a violation of English public policy by recognizing and enforcing the award (section 103 (3) AA 1996). 147

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aa) Invalidity of the alleged arbitration agreement (section 103(2)(b) AA 1996). According to English case law, the invalidity-ground is not limited to the issue of the arbitration agreement’s validity, but also covers the arbitration agreement’s existence as well as its personal (proper parties to the arbitration agreement) and substantive (claims covered by the arbitration agreement) scope.373 366

Section 66(1) AA 1996. Section 66(2) AA 1996. The ECJ has not yet decided whether such a judgment is caught by the arbitration exception of article 1(2)(d) of the Brussels Ia Regulation. 369 CPR 62.18(6). 370 CPR 62.19. 371 Alternatively, as in case of the section 66 procedure, the court may enter judgment in terms of the award (section 101(3) AA 1996). 372 For details on this discretion, see Dardana Ltd v. Yukos Oil Co. [2002] EWCA Civ 543 at [8] and [18]; Dallah v. Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46 at [67] et seq. 373 This is partly expressly stated and partly implied by the judgments in Dardana Ltd v. Yukos Oil Co. [2002] EWCA Civ 543 at [8] and Dallah v. Ministry of Religious Affairs, Government of Pakistan [2010] 367 368

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bb) Award set aside by the seat courts (section 103(2)(f) AA 1996). A much 151 debated issue internationally is the enforcement of foreign awards irrespective of the fact that they have been set aside by the seat courts. One has to distinguish between two scenarios. As long as setting aside proceedings are pending before the seat courts, the English 152 court may, if it considers it proper (i. e. ex officio), adjourn the decision on recognition and enforcement of the award and, albeit merely upon application by the party seeking recognition and enforcement, order the enforcement debtor (who has initiated the setting aside proceedings) to give suitable security.374 The decision as to whether to adjourn recognition and enforcement rests on three factors, in effect weighing the interests of the parties involved:375 First, whether the setting aside proceedings before the seat courts were brought in good faith and not merely as a tool to delay enforcement has to be assessed. Second, whether the setting aside application has a real prospect of success has to be assessed. Third, it has to be assessed and weighed as against the first two factors the extent to which the delay occasioned by the adjournment may prejudice the party that applied for enforcement of the award. The same considerations apply to the decision as to whether to order security. Once the award has been set aside, the issue becomes problematic. As a starting 153 point, it follows from section 103(2)(f) AA 1996 that the English courts will regularly refuse recognition and enforcement of an award which has been set aside or suspended by the competent authority since the seat courts are best placed to decide on the setting aside of the award, and their decision therefore should as a general rule be respected by courts elsewhere.376 The problems start where there is suspicion or where it is even obvious that the award was set aside improperly, i. e. on grounds that to an English court look at best flimsy and at worst something far more nefarious.377 The matter was extensively discussed by the English courts in several recent judgments which considered previous case law as well as other authorities. As a starting point, no matter whether or not enforcement of an arbitral award is sought under common law, potentially also section 66 AA 1996 (which was not discussed in the recent case law since it involved complex objections) or in the context of the New York Convention (i. e. sections 100 et seq. AA 1996), the award creditor may, upon the enforcement debtor’s defence that the award has been set aside, counter-argue that the setting aside decision of the seat courts is not binding upon the English courts based on conventional English conflict-of-law principles (e. g. on the basis that the setting aside was obtained by fraud, that the setting aside was procured contrary to natural justice or that enforcement of the setting aside judgment would otherwise be contrary to English public policy).378 Hence, as the High Court put it, “a defendant’s ability to rely on a foreign decision setting aside an award would depend upon whether it would be recognized in accordance with ordinary principles applying to the recognition of foreign

UKSC 46 by discussing those issues as grounds for refusal based on a comparative review of US case law and international arbitration practice and literature. 374 Section 103(5) AA 1996. 375 See AIC Ltd v. The Federal Airports Authority of Nigeria [2019] EWHC 2212 (TCC); IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2005] EWHC 726 at [15] (Comm); Dardana Ltd v. Yukos Oil Co. [2002] EWCA Civ 543; Soleh Boneh v. Uganda Govt [1993] 2 Lloyd’s Rep. 208 (CA). 376 Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., 2012, para. 16–147. 377 Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 837 et seq. 378 Maximov v. Novolipetsky Metallurgichesky Kombinat [2017] EWHC 1911 (Comm) at [64]; Collins (ed.), Dicey, Morris and Collins, The Conflict of Laws, 15th ed., 2012, para. 16–147.

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judgments (i. e. the principles set out in Rules 41 to 45, as they were then, of Dicey).”379 In a previous judgment in the Yukos saga, the Court of Appeal had held that the Act of State doctrine did not bar this approach since it did not apply to allegations of impropriety against foreign court decisions as judicial acts were not acts of state for the purposes of the Act of State doctrine.380 154

cc) Violation of English public policy by recognizing and enforcing the award (section 103(3) AA 1996). It is important to note at the outset that the violations of English public policy relate to enforcement in England, not to the arbitral award as such. While the matter will regularly depend on the circumstances of the individual case, there is similarity to the principles that apply to setting aside of English awards under section 68(2)(g) AA 1996 based on an alleged violation of public policy although the subject-matter of the public policy defence differs in language, since a refusal to recognize and enforce an award being contrary to public policy may in any event be based on common law principles under section 81(1)(c) AA 1996. Hence, a violation of public policy as a ground for refusing recognition and enforcement of a foreign award was also considered by the English courts in cases where the arbitral award had been procured by fraud which, however, requires the enforcement debtor to establish that the supporting evidence would have materially influenced the tribunal’s decision, and that such evidence was at least not reasonably obtainable by the time of the hearing in the arbitral proceedings or within the time limits for setting aside proceedings before the seat courts.381 A matter of recent discussion is the question of whether it may be contrary to English public policy to enforce an arbitral award rendered on the basis of a contract void for illegality such that the contract’s enforcement (instead of the enforcement of the arbitral award) appears to be contrary to English public policy. While there are older authorities on the matter, it has recently been touched upon by several judgments of the English courts, albeit not directly overruling or modifying the older case law so that the state of the law is not at all certain and still developing.382 As a rough guideline, the arbitral tribunal’s decision on illegality should be given great weight and the recognition and enforcement court should refrain from re-opening the issue; and in the event of a failure to file a challenge before the seat courts based on the illegality of the underlying contract, such non-challenge will strongly militate in favour of enforcement unless there are valid reasons for it. Finally, it should again be noted that ECJ case law requires the English courts to treat a violation of EU competition law and potentially also other mandatory, often regulatory, EU law as a breach of English public policy.383

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c) Fulfilment and set-off. Another defence in enforcement proceedings is full or partial fulfilment of the award, be it in England or any other country. Similarly, if the enforcement debtor has a valid set-off, even under another award or judgment, the enforcement will be limited to the net amount.384

379 Yukos Capital Sarl v. OJSC Oil Company Rosneft [2014] EWHC 2188 (Comm) at [16] applying the Court of Appeal’s statements in that context in the leading case of Dallah v. Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755 at [91]. 380 Yukos Capital Sarl v. OJSC Oil Company Rosneft [2012] EWCA Civ 855. 381 Westacre Investments Inc. v. Jugoimport-SDPR Holding Co. Ltd [1999] QB 740 (Comm), affirmed [2000] QB 288 (CA). 382 For detailed principles reflecting the current state of the law, see Merkin/Flannery, Arbitration Act 1996, 6th ed., 2019, 840 et seq. 383 ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055. 384 Air India v. Caribjet Inc [2002] 1 Lloyd’s Rep. 314 (Comm).

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d) De minimis and waiver considerations. Finally, it should be noted that the 156 English courts have accepted a de minimis threshold in case of an alleged inability to present the case (section 103(2)(c) AA 1996)385 and an alleged breach of the agreed composition of the arbitral tribunal or the procedure to be followed by the arbitral tribunal (section 103(2)(e) AA 1996).386 Whether this may amount to a general de minimis threshold with regard to all grounds of refusal to be considered in the course of the court’s discretion to enforce (despite the existence of a ground for refusal) is an open question. Similarly, there have been judgments rejecting alleged grounds for refusal based on a waiver or preclusion of such ground by not having raised the respective objection timely in the arbitral proceedings and/or in setting aside proceedings.387 Whether such waiver may occur with regard to all grounds for refusal and in which circumstances and under which prerequisites it may occur, is equally unclear, and may best be left to the residual discretion of the court.

4. Preclusion of grounds for challenge and defences to enforcement As a general rule, any objections concerning grounds for challenge of an award 157 should be made before the arbitral tribunal as soon as a party becomes aware of the respective facts in order to avoid them from being precluded in the arbitral proceedings at a later stage (in state court proceedings concerning the award’s challenge or enforcement proceedings concerning a foreign arbitral award). a) Preclusion due to failure to object in the arbitral proceedings. A party to arbitral 158 proceedings that takes part, or continues to take part, in the proceedings without making, either forthwith or within such time as is allowed by the arbitration agreement or the tribunal or by any provision of Part I of AA 1996 (which contains all relevant arbitration law provisions), any objection concerning the arbitral tribunal’s substantive jurisdiction, improper conduct of the arbitral proceedings, non-compliance with the arbitration agreement or with any provision of Part I of AA 1996 or any other irregularity affecting the tribunal or the proceedings, may not raise those objections at a later stage, before the tribunal or the court, unless he can show that, at the time he took part or continued to take part in the proceedings, he did not know and could not with reasonable diligence have discovered the grounds for the objection.388 Hence, negligent unawareness of a ground for challenge results in preclusion; the parties are therefore required to carefully follow and critically assess the arbitral proceedings from their commencement up until the arbitral award. b) Preclusion due to failure to bring a setting-aside application. A much debated 159 question internationally (in the context of enforcing foreign arbitral awards) is whether failure to challenge an award before the supervisory courts at the seat of the arbitration precludes the award debtor from raising the respective defences in enforcement proceedings. The English courts have taken the view that the award debtor is not bound to challenge the award before the supervisory courts at the seat of the arbitration in order to avoid preclusion of a challenge of its enforcement in England.389 385

Omnium de Traitement et de Valorisation SA v. Hilmarton Ltd [1999] 2 Lloyd’s Rep. 222 (Comm). China Agribusiness Development Corporation v. Balli Trading [1998] 2 Lloyd’s Rep. 76 (Comm). 387 See e. g. Minmetals Germany GmbH v. Ferco Steel Ltd [1999] CLC 647; Svenska Petroleum v. Government of the Republic of Lithuania (No 2) [2006] EWCA Civ 1529. 388 Section 73 AA 1996. 389 Svenska Petroleum v. Government of the Republic of Lithuania (No 2) [2006] EWCA Civ 1529; Dallah v. Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755; the appeal against the latter judgment did not concern that question. 386

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I. International Arbitration in France Bibliography: Augendre, Loyauté et impartialité de l’arbitre, Gaz. Pal. 23–24 mai 2012, Colloque, 21–26; Bollée, L’arbitrage et le nouveau règlement de Bruxelles, Rev. Arb. 2013, 979–988; Castellane, The New French Law on International Arbitration, (2011) 28 J. Int’l Arb. 371–380; Clay (ed.), Le nouveau droit français de l’arbitrage, Lextenso 2011; Clay, “Liberté, égalite, efficacité”: la devise du nouveau droit français de l’arbitrage commentaire article par article, Journal du droit international 139 (2012), 443–532, 815–858; Clay, Code de l’Arbitrage 2019, Lexis Nexis 2019; Darwazeh/Rigaudeau, Clues to Construing the New French Arbitration Law – An ICC Perspective on Procedural Efficiency, Good Faith, and Independence, (2011) 28 J. Int’l Arb. 381–399; Derains/Kiffer, National Report for France (2013 through 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 99, June 2018; Fadlallah/Hascher, Les grandes décisions du droit de l’arbitrage commercial, Dalloz 2019; Gaillard/Darrigade, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 450–502; Gaillard/Lapasse, Le nouveau droit français de l’arbitrage interne et international, Dalloz 2011, 175–192; Jarrosson/Pellerin, Le droit français de l’arbitrage après le décret du 13 janvier 2011, Rev. Arb. 2011, 5; Jarrosson/Racine, Arbitrage commercial – Droit international, Jurisclasseur Commercial, Fascicule 199, LexisNexis 2012; Loquin, Arbitrage – Définition. Nature juridique. Distinction avec d’autres institutions. Avantages et inconvénients, Jurisclasseur Procédure Civile, Fascicule 1005, LexisNexis 2013; Ministre de la Justice et des Libertés, Rapport au Premier ministre relatif au décret no. 2011–48 du 13 janvier 2011 portant réforme de l’arbitrage, JORF no. 11 of 14 January 2011, 773; Nougein/Dupeyré, Règles et pratiques du droit français de l’arbitrage, Lextenso 2012; Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, Oxford University Press 2014; Racine, Arbitrage commercial international, Juris-classeur procédure civile, Fascicules 1060–1675, LexisNexis 2012; Racine, Droit de l’arbitrage, Presses Universitaires de France 2016; Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., LGDJ 2019; Train, Interpretation et Application de la convention de New York en France, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 281–316. National legislation: Articles 1442–1527 of the French Code of Civil Procedure (Code de procédure civile, CPC) and articles 2059–2061 of the French Civil Code (Code civil, CC) published online in French (https://www.legifrance.gouv.fr/telecharger_pdf.do?cidTexte=LEGITEXT000006070716) and English (https://www.legifrance.gouv.fr/content/location/1745, both accessed 1 August 2020) by the Government’s General Secretariat (Secrétariat général du gouvernement). Please note that the English translation is not updated regularly so it may not reflect the latest legislative changes. International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (at https://www.legifrance.gouv.fr/Droit-international/Traites, accessed 1 August 2020), ratification status available at https://treaties.un.org; European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (at https://www.legifrance.gouv.fr/Droit-international/Traites, accessed 1 August 2020), ratification status available at https://treaties.un.org; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (at https://www.legifrance.gouv.fr/Droit-international/Traites, accessed 1 August 2020), ratification status available at https://icsid.worldbank.org.

Contents I. Introduction ..................................................................................................... 1. Legal framework ......................................................................................... a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The seat of the arbitration and the lex arbitri................................ e) Arbitration and other ADR mechanisms ........................................ 2. The guiding principles of arbitration law ............................................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................

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Part 3. Country Reports 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. 22 a) Capacity to enter into arbitration agreements ............................... 23 b) Arbitrability ............................................................................................ 25 c) Form of the arbitration agreement ................................................... 29 d) Termination of the arbitration agreement ...................................... 30 4. The scope and interpretation of the arbitration agreement ............. 31 a) The scope of the arbitration agreement ratione personae ........... 31 b) The scope of the arbitration agreement ratione materiae ........... 33 c) Pathological arbitration clauses ......................................................... 34 d) Multi-tier clauses................................................................................... 35 5. The effect of the arbitration agreement and competencecompetence................................................................................................... 36 a) Enforcing arbitration clauses and competence-competence ....... 37 b) Preclusion of jurisdictional defences ................................................ 39 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... 41 III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 43 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... 44 a) Duty to disclose conflicts of interest ................................................ 47 b) Grounds for challenge.......................................................................... 48 c) Procedural aspects and preclusion of grounds for challenge...... 53 d) Failure or impossibility to act ............................................................ 54 2. The arbitral proceedings ........................................................................... 55 a) The request for arbitration ................................................................. 56 b) Equality of arms, principle of fair trial and the right to be heard 57 c) Confidentiality ....................................................................................... 58 d) The arbitral award ................................................................................ 59 e) Termination of the arbitration without an award; award by consent..................................................................................................... 65 f) The costs of the arbitration ................................................................ 66 3. Evidence, discovery, disclosure................................................................ 67 4. The law governing the dispute and mandatory laws (lois de police) 70 5. Interim relief in arbitration ...................................................................... 72 a) Interim relief before state courts ....................................................... 72 b) Interim relief before the arbitral tribunal ........................................ 74 6. Multi-party arbitration .............................................................................. 75 a) Arbitration agreement involving several parties ............................ 75 b) Equality of arms and appointment of the arbitrators .................. 76 7. Third-party funding................................................................................... 78 IV. The control and the enforcement of arbitral awards ............................. 79 1. Correction, amendment and other means of redress of arbitral awards ........................................................................................................... 82 2. Review of arbitral awards before the state courts ............................... 86 a) Procedural framework (time limits, competent court, appeal) .. 88 b) Grounds for setting aside arbitral awards: An overview.............. 91 c) Lack of jurisdiction of the arbitral tribunal .................................... 92 d) Irregularity in the constitution of the arbitral tribunal................ 95 e) Non-compliance by the arbitral tribunal with its mandate ........ 96 f) Violation of due process...................................................................... 97 g) International public policy.................................................................. 98 3. Enforcing arbitral awards ......................................................................... 101 a) General framework ............................................................................... 102 b) Enforcement of awards that were set aside..................................... 105 c) Enforcement and State immunities................................................... 106 4. Preclusion of grounds for challenge and defences to enforcement ... 107

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I. Introduction France is a leading venue for international arbitration. Its liberal arbitration legisla- 1 tion and case law, combined with the presence of the ICC headquarters in Paris, make France an attractive choice for international commercial arbitration. Paris is consistently ranked as the most frequently selected seat for ICC arbitration. According to ICC statistics for 2018, French law was ranked third as the law most chosen by parties to govern their contract, and 116 ICC arbitrators were of French nationality.1 France is recognized as one of the world’s most arbitration-friendly jurisdictions. This 2 is the result of its liberal arbitration laws, the pro-arbitration case law developed by the Cour d’appel de Paris and the Cour de Cassation as well as the concentration of leading arbitration practitioners in Paris. French arbitration law underwent significant reform in May 20112 (the “2011 Reform”). This codified some of the pro-arbitration trends in case law, and introduced innovative features to promote efficiency, drawing on arbitration practice and foreign laws.3 Arbitration agreements entered into, arbitral proceedings with tribunals constituted, and arbitral awards made, before 1 May 2011, may remain subject to the arbitration law in force prior to the 2011 Reform.4 In order to further “meet the expectations of commercial market participants seeking 3 the benefits of an attractive judicial system”, the Ministry of Justice sought the creation of an International Commercial Chamber at the Paris Court of Appeal, which was officially established in 2018.5 The International Commercial Chamber at the Paris Court of Appeal has jurisdiction over “appeals made against decisions rendered in relation to international economic and commercial disputes, as well as decisions rendered in the field of international arbitration.”6

1. Legal framework Unlike many national arbitration laws, French arbitration law is not directly based on 4 the UNCITRAL Model Law on International Commercial Arbitration and is in fact often considered even more liberal than the Model law. The provisions governing arbitration in France are mainly found in Book IV of the French Code of Civil Procedure (Code de Procédure Civile, CPC), supplemented by provisions contained in the French Civil Code (Code Civil, CC, articles 2059 to 2061). France is a member of several international conventions pertaining to international 5 arbitration. It is a party to the New York Convention on the recognition and enforcement of foreign arbitral awards of 1958 (the “New York Convention”), the Geneva Convention on International Commercial Arbitration of 1961 and the Washington 1

See ICC Dispute Resolution Bulletin 2019 Issue 1. Décret no. 2011–48 du 13 janvier 2011 portant réforme de l’arbitrage, JORF no. 11 of 14 January 2011, p. 777. 3 Rapport au Premier ministre relatif au décret no. 2011–48 du 13 janvier 2011 portant réforme de l’arbitrage, JORF no. 11 of 14 January 2011, 777. 4 Article 3 Décret no. 2011–48 du 13 janvier 2011 (supra, n. 3). 5 Protocol relating to procedural rules applicable to the International Chamber of the Court of Appeal of Paris of 7 February 2018 (the “ICCAP Protocol”) (available online in English and French at https:// www.cours-appel.justice.fr/paris/presentation-generale-ccip-ca-iccp-ca, accessed 1 August 2020) and Order issued by the President of the Paris Court of Appeal on 4 April 2018. 6 Article 1 ICCAP Protocol. The ICCAP may accept written testimony, exhibits and documentation from an arbitration proceeding to be introduced in English without translation and may permit nonFrench counsel to make oral submissions in English. Article 2 ICCAP Protocol. 2

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Convention of 1965 which created the International Centre for Settlement of Investment Disputes (ICSID). French arbitration rules on recognition and enforcement are generally more favourable than the New York Convention.7 a) Domestic and international arbitration. Under French law, two separate regimes apply to domestic and international arbitration.8 Despite many similarities, there are also some important differences. The rules applicable to international arbitration are generally more liberal than those that apply to domestic arbitration. In particular, the parties have greater freedom in consenting to and organizing the arbitral proceedings. To take one example, in international arbitration, an arbitration agreement need not be made in writing, whereas this is a requirement under domestic arbitration.9 7 An arbitration is considered international when international trade interests are at stake.10 Unlike in other countries, the determination of the international character of a transaction is based on an economic analysis rather than a legal one. According to case law, international trade interests are at stake when the economic transaction giving rise to the dispute is of an international dimension, i. e., it is not limited to a single country.11 Other criteria, such as the parties’ nationalities, the law applicable to the contract or to the arbitration proceedings, the seat of arbitration and the parties’ agreement, are irrelevant.12 Accordingly, a dispute is “international” under French law if it involves a cross-border transfer of goods, services or funds,13 and on that basis, a dispute can be classified as international even where both parties are French.14 The intention of the parties does not determine the qualification of an arbitration as international or domestic.15 6

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b) Commercial and non-commercial arbitration. International commercial arbitration is not limited to transactions that would be considered commercial under French domestic law16 but covers all disputes arising from an international economic transaction.17 International commercial arbitration notably covers both civil and commercial disputes as they are defined under French law, although specific requirements apply to certain areas, such as labour law.18

7 For example, as to the form of the arbitration agreement (infra mn. 27) and the enforcement of arbitral awards that were set aside abroad (infra mn. 103). 8 Articles 1442–1503 CPC govern domestic arbitration and articles 1504–1527 CPC govern international arbitration (incorporating certain rules for domestic arbitration referred to in article 1506 CPC). 9 See Gaillard/Lapasse, D. 2011, chron., 175, § 28. 10 Article 1504 CPC. 11 CA Paris, 29 March 2001, SARL Carthago Films c/ SARL Babel Productions, Rev. Arb. 2001, 543; CA Paris, 14 June 2001, SA Compagnie commerciale André c/ SA Tradigrain France, Rev. Arb. 2001, 773 note Seraglini; Cass. civ. 1ère, 26 January 2011, no. 09–10.198, Institut national de la santé et de la recherche médicale (Inserm) c/ Fondation Letten F. Saugstad, Rev. Arb. 2011, 284. 12 See e. g. CA Paris, 14 June 2001, SA Compagnie commerciale André c/ SA Tradigrain France, Rev. Arb. 2001, 773; Cass. civ. 1ère, 13 March 2007, no. 04–10.970, Société Chefaro International c/ Barrère, Rev. Arb. 2007, 499. 13 CA Paris, 5 April 1990, Société Courrèges Design c/ société André Courrèges, Rev. Arb. 1992, 110. 14 TGI Paris, 13 July 1999, Société Pangee c/ société Francefert, Rev. Arb. 1999, 625. 15 Cass. civ. 1ère, 13 March 2007, no. 04–10.970, Société Chefaro International c/ Barrère, Rev. Arb. 2007, 499, note Jaeger; CA Paris, 29 May 2018, no. 15/20168, Société Elcir c/ SA Bouygues Bâtiment Ile de France, Rev. Arb. 2018, 477. 16 Cass. civ. 1ère, 4 July 1972, no. 70–14.163, Hecht c/ Société Buisman’s, Rev. crit. DIP 1974, 82. 17 CA Paris, 13 June 1996, Société KFTCIC c/ société Icori Estero, Rev. Arb. 1997, 251. In 1989, France withdrew the reservation which it had initially made following the ratification of the New York Convention of 1958 that had limited the application of the Convention to matters considered as commercial under French law. As a result of the withdrawal of this reservation, the Convention has been applicable to awards concerning matters not traditionally considered commercial under French law. 18 Infra, mn. 26.

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c) Ad hoc and institutional arbitration. French arbitration law allows for both ad 9 hoc and institutional arbitration. An arbitration institution does not rule upon the dispute itself; rather, its role is to administer the proceedings, primarily nomination and challenges of arbitrators as well as dealing with questions of advances on costs and arbitrators’ fees.19 Some arbitration institutions, such as the International Court of Arbitration of the International Chamber of Commerce (the “ICC”), will also undertake a scrutiny of the award drafted by the arbitral tribunal before notification to the parties.20 In an ad hoc arbitration, the parties have greater freedom to determine the procedural rules applicable to the resolution of their dispute, while retaining the option of applying a set of pre-defined arbitration rules, such as the UNCITRAL Arbitration Rules.21 In addition to the headquarters of the ICC22, the leading international arbitration institution, France is home to several other arbitration institutions, including the French Arbitration Association (Association Française d’Arbitrage23), the International Arbitration Chamber of Paris (Chambre arbitrale internationale de Paris24), the Centre for Mediation and Arbitration of Paris (Centre de Médiation et d’Arbitrage de Paris25), as well as industry-specific institutions such as the Paris Maritime Arbitration Chamber (Chambre Arbitrale Maritime de Paris26). d) The seat of the arbitration and the lex arbitri. Unlike other arbitration laws, 10 French arbitration law does not stipulate any territorial criteria for its application to the arbitration proceedings. As a general rule, French provisions on international arbitration apply to arbitration proceedings seated in France. However, if chosen by the parties, French provisions on international arbitration may also apply to arbitration proceedings seated abroad.27 French courts apply this non-territorial approach to other matters as well (e. g. recognition and enforcement of awards annulled at their seat of arbitration28). The choice of the seat of arbitration is most often made by the parties themselves. If 11 the arbitration clause is silent, but an arbitration institution is administering the proceedings, the seat of arbitration is determined pursuant to the rules of the arbitration institution.29 In ad hoc proceedings, the arbitral tribunal, once constituted, rules on the issue. Under French international arbitration law, the determination of the seat of arbitration does not preclude the hearings from being held elsewhere.30 19 Given that the role of the arbitral institution is distinct from the mission of the arbitral tribunal to decide the dispute, the institution is not liable for the award made by a tribunal: TGI Paris, 28 May 2018, no. 17/00253, Société Kraydon c/ Chambre de commerce internationale, Rev. Arb. 2018, 835, 836. 20 Article 34 ICC Rules 2021. 21 Parties choosing Paris as the seat for an ad hoc arbitration may also consider using the Paris Arbitration Rules promulgated in 2013 by the non-profit association “Paris, the Home for International Arbitration”, available online at http://parisarbitration.com/en/materials/ (accessed 1 August 2020). 22 33–43 avenue du Président Wilson, 75116 Paris, T. +33 (0)1 49 53 29 05, E. [email protected]. 23 8 avenue Bertie Albrecht, 75008 Paris, T. +33 (0)1 53 77 24 31, E. [email protected]. 24 6 avenue Pierre 1er de Serbie, 75116 Paris, T. +33 (0)1 42 36 99 65, E. [email protected]. 25 39 avenue Franklin Roosevelt, 75008 Paris, T. +33 (0)1 44 95 11 40. 26 16 rue Daunou, 75002 Paris, T. +33 (0)1 42 96 40 41, E. [email protected]. 27 See article 1505, 2° CPC which provides for jurisdiction of a domestic court judge acting in support of the arbitral proceedings (juge d’appui) notably if “the parties have agreed that French procedural law shall apply to the arbitration”. 28 Infra, mn. 103. 29 The place of arbitration may then be determined by the arbitral institution (e.g., article 18(1) ICC Rules 2021) or the arbitral tribunal (e.g., article 17(1) ICDR Rules 2014), or the rules may provide for a seat by default (article 17(1) CMPA Rules). 30 Cass. civ. 2ème, 9 February 1994, no. 92–17.645, Gautier c/ Société Astra plastique, Rev. Arb. 1995, 127; CA Paris, 28 October 1997, Société Procédés de préfabrication pour le béton c/ Libye, Rev. Arb. 1998, 399.

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When the seat is in France or when the parties have chosen French arbitration law as the law applicable to the proceedings, or in case of a risk of denial of justice, a domestic court (the “juge d’appui” or “support judge”) will act in support of the arbitral proceedings. The support judge is the President of the Paris Tribunal Judiciaire (absent contrary provisions).31 French arbitration law stipulates that decisions by a support judge have res judicata effect.32 Such decisions will not be subject to appeal, except in cases where a support judge declares that there is no need to appoint the arbitral tribunal because of the manifest nullity or inapplicability of the arbitration agreement.33

e) Arbitration and other ADR mechanisms. When opting for arbitration, parties decide that a third party – an arbitrator – shall have the jurisdictional power to resolve their dispute by ruling upon it and delivering a binding decision.34 By contrast to other alternative dispute resolution methods35 such as mediation or conciliation, an arbitrator has the authority to settle the dispute and to render a binding decision that can be enforced. Differentiating between the various types of dispute resolution may sometimes prove difficult, notably due to the wording of some clauses. National judges are not bound by the characterization given by the parties but look for the intention of the parties to determine what dispute resolution method they intended to choose. 14 Similar issues arise when determining whether the parties chose to refer the matter to an arbitrator or an expert. Parties generally choose to have recourse to an expert to decide on technical issues or to determine a contract price.36 In some cases, it can be difficult to establish whether this third party acts as an expert or as an arbitrator. This is particularly so when referring the matter to the expert is compulsory or irrevocable, as the expert’s findings bind the parties. In this case, the characterization as either expert or arbitrator depends on what the third party is trying to achieve and the manner of doing so: if the third party merely seeks to determine a factual issue on which the parties disagree by applying his or her technical skill and/or judgment to the issue, he or she is an expert. If the third party must resolve disputed matters of contract interpretation in order to determine a factual issue and/or goes on to rule on the legal consequences of the factual determination, or if his or her mission is to settle the dispute between the parties at a legal level,37 it could be argued that he or she performs that function as an arbitrator.38 This remains, however, an unclear area and the application of the criterion is somewhat uncertain. It is possible for parties to agree in an arbitration agreement that the arbitral tribunal should also have the powers to make an expert determination.39 13

31 Article 1505 CPC. As of 1 January 2020, the Tribunal de Grande Instance has been combined with the Tribunal d’Instance into a new “Tribunal Judiciaire”: Article 9 of Decree No. 2019–966 of 18 September 2019. 32 Article 1460 and Article 1506, 2° CPC. 33 Article 1460, 3rd and Article 1455 CPC. 34 CA Paris, 15 December 1998, Consorts Attali c/ Lecourt, Rev. Arb. 2001, 151. 35 That is, methods of dispute resolution other than litigation before a national court. 36 For example, to determine the price of a sale under article 1592 CC or to determine the price of shares sold by a shareholder or redeemed by the company under article 1843–4 CC. 37 Cass. civ. 1ère, 15 December 2010, no. 09–16.943, General Motors France c/ société Champs de Mars automobile (CMA), Bulletin 2010, I, no. 260 = Rev. Arb. 2011, 435. 38 CA Paris, 4 December 2008, RTD Com 2009, 537. 39 Cass. com., 10 October 2018, no. 16–22.215, M. L. Gherardi c/ Société civile des Mousquetaires, Rev. Arb. 2019, 239.

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2. The guiding principles of arbitration law Arbitration is based on the parties’ agreement to arbitrate (see article 1442 CPC). Party autonomy is therefore the cornerstone of arbitration. This is reflected in the necessary condition that the parties must have consented to arbitration to resolve their dispute. Other fundamental principles relate to the conduct of the arbitration proceedings: the arbitral tribunal shall ensure equal treatment of the parties and uphold the principle of due process.40 The arbitral tribunal must be independent and impartial and the arbitral proceedings must be conducted with good faith and efficiency.41 The good faith and efficiency principles were codified pursuant to the 2011 Reform and apply to both the parties and the arbitrators. The codification of the principle of good faith shows that arbitration proceedings are governed in this respect by the same principles as domestic court proceedings, with good faith being one of the most important of these.42 The codification of the efficiency principle illustrates that the efficiency of the proceedings is a growing concern in arbitration. In addition, the arbitrators shall take all necessary steps concerning evidentiary and procedural matters together, unless the parties agree that such tasks be delegated to one of them.43 Finally, arbitration, and particularly international arbitration, is deemed to result in a final decision which binds the parties. Therefore, as explained below,44 the grounds for setting aside an arbitral award are very limited under the CPC.

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II. The arbitration agreement The agreement of the parties to arbitrate is fundamental to arbitration and is at the 19 heart of the jurisdiction of the arbitral tribunal to settle the dispute. The parties’ consent is therefore an essential condition for the validity of the arbitration agreement.

1. The doctrine of separability According to article 1447, para. 1 CPC, arbitration clauses are autonomous from the 20 main contract. As a consequence, arguments as to the invalidity and other causes of extinction such as termination and inexistence of the main contract do not affect the validity of the arbitration clause.45 Conversely, the nullity of the arbitration clause does not affect the validity of the main contract.

2. The law applicable to the arbitration agreement Under French law, the validity of an arbitration clause is independent from national 21 legislation: according to the decision in the leading case Dalico, the existence of an arbitration clause is determined, subject to mandatory rules of French law and interna40

Article 1510 CPC. See also article 1520, 4° CPC and infra mns 55, 95. Articles 1464, 1506 CPC. 42 Gaillard/Lapasse, Cah. Arb. 2011, 263, § 50. 43 Articles 1467, 1506 CPC. 44 Infra, mns 84 et seq. 45 Article 1447 CPC. See previously, Cass. civ. 1ère, 7 May 1963, JCP 1963 II 13405 = Dalloz 1963, 545 = Rev. Crit. DIP 1963, 615 = JDI 1964, 82. Cass. civ. 1ère, 25 October 2005, no. 02–13.252, Société Omenex c/ M. Hugon, Dalloz 2006, 199 = Rev. Arb. 2006, 103 = JDI 2006, 996. 41

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tional public policy, according to the parties’ common will, without applying rules of a specific domestic legal system.46 The presumption is that an agreement to arbitrate is valid and that additional conditions that would be required for domestic arbitration do not apply.47 The validity of an agreement to arbitrate is not assessed by reference to any national law but by the implementation of a substantive rule derived from the principle of validity of the arbitration agreement (principe de validité) based on the common will of the parties and the requirement of good faith.48 On this basis, courts apply the principle of good faith interpretation (principe d’interprétation de bonne foi), seeking to determine the true will of the parties beyond the literal meaning of the terms, as well as the principle of effectiveness (principe d’effet utile) according to which parties inserting an arbitration clause in their contract are presumed to have intended to establish an effective mechanism for the settlement of their disputes.49 The Courts also protect a party’s legitimate belief in the powers of the signatory acting on behalf of the other party to the arbitration agreement.50

3. The validity of the arbitration agreement (capacity, arbitrability, form) 22

Even though the validity of international arbitration agreements is subject to a particularly liberal regime, certain conditions need to be fulfilled.

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a) Capacity to enter into arbitration agreements. Under French law, the capacity to enter into an arbitration agreement is assessed in the same way as the capacity to enter into any contract. With regard to the capacity of corporations, arbitrators and judges may apply the law of the place where the corporation has its centre of business (siège social réel).51 With regard to an individual, judges generally apply the law of the individual’s nationality when determining the capacity to enter into an arbitration agreement.52 If the individual is a French national and French contract law applies, any individual who has the ability to enter into a contract (i. e., not a minor or incapacitated) can enter into an arbitration agreement. 46 Cass. civ. 1ère, 20 December 1993, no. 91–16.828, Municipalité de Khoms El Mergeb c/ société Dalico, Rev. Arb. 1994, 116 = JDI 1994, 432 and 690 = Rev. Crit. DIP 1994, 663. See also Cass. civ. 1ère, 30 March 2004, no. 01–14.311, Société Uni-Kod c/ Société Ouralkali, Rev. Arb. 2005, 959 and Cass. civ. 1ère, 7 June 2006, no. 03–12.034, Copropriété maritime Jules Verne c/ American Bureau of Shipping (ABS), Rev. Arb. 2006, 947 note Gaillard = YCA XXXII (2007), 290. 47 Cass. civ. 1ère, 5 January 1999, no. 96–21.430, M. Zanzi c/ J. de Coninck, Rev. Arb. 1999, 260, disapplying article 2061 CC that limited arbitrability to commercial relationships. (Article 2061 was subsequently redrafted to specify that arbitration is not limited to commercial relationships.) This approach was confirmed in various subsequent decisions, e.g. Cass. civ. 1ère, 7 June 2006, no. 03–12.034, Copropriété Maritime Jules Verne (France), et al. c/ ABS – American Bureau of Shipping, Bull. 2006 I no. 287 p. 251 = YCA XXXII (2007), 290; Cass. civ. 1ère, 4 May 2017, no. 16–16.853, Société Brisard Dampierre c/ Société Demathieu Bard Construction and CA Paris, 30 May 2017, République du Niger c/ Société A.D Trade Ltd Belgium, Rev. Arb. 2018, 765 note Cohen. 48 Cass. civ. 1ère, 8 July 2009, no. 08–16.025, Société d’études et représentations navales et industrielles (Soerni) c/ société Air Sea Broker Ltd (ASB), Rev. Arb. 2009, 529, note Cohen = YCA XXXV (2010), 356. 49 CA Paris, 7 April 2011, République de Guinée Equatoriale c/ Fitzpatrick Equatorial Guinea Ltd, Rev. Arb. 2011, 747, 750; CA Paris, 5 December 2017, no. 15/24961, République Togolaise c/ SAS Accor Afrique, Rev. Arb. 2018, 624 note Barbet. 50 Cass. civ. 1ère, 8 July 2009, no. 08–16.025, Société d’études et représentations navales et industrielles (Soerni) c/ société Air Sea Broker Ltd (ASB), Rev. Arb. 2009, 529, note Cohen = YCA XXXV (2010), 356. On that basis, an employee or director with the power to enter into transactions in the course of ordinary business will be deemed to also have the power to enter into arbitration agreements relating to such transactions: Cass. civ. 1ère, 4 May 2017, no. 16–16.853, Société Brisard Dampierre c/ Société Demathieu Bard Construction, Rev. Arb. 2018, 765. 51 Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, 570–571. 52 Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, 570–571.

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The Cour de Cassation has long held that a state or public body has the capacity to enter 24 into an arbitration agreement.53 As a result, French courts have consistently ruled that a state or a public body cannot rely on its national law to argue that it does not have the capacity to enter into an arbitration agreement to which it has consented. This substantive rule also applies to foreign public bodies.54 The situation is less clear with regard to the validity of arbitration agreements in administrative contracts entered into by public bodies. French civil55 and administrative courts56 are divided on this issue. To date, this division has not been resolved, although there seems to be a movement towards accepting the principle of validity of arbitration clauses in international administrative contracts.57 b) Arbitrability. A dispute is said to be arbitrable when its subject matter is capable 25 of being resolved by arbitration.58 The mere fact that a rule of public policy applies to the dispute at hand does not affect its arbitrability. In fact, according to the Cour de Cassation, arbitration is not excluded by the fact that mandatory laws or lois de police apply.59 On the contrary, the arbitral tribunal has the power to decide on the consequences that flow from a possible breach of public policy.60 In particular, competition law issues are arbitrable to a certain extent,61 as are claims for the sudden termination of contractual relationships (rupture brutale d’une relation commerciale établie, see article L. 442–1, II Code de Commerce).62 Even in the context of insolvency law, disputes remain, in principle, arbitrable unless they are within the exclusive competence of the judge in charge of the insolvency proceedings. The arbitral tribunal must, however, respect the basic principles that are a matter of public policy in these circumstances, such as the equality of creditors principle in case of an insolvency, and an award in breach of these principles will be set aside.63 53 Cass. civ. 1ère, 2 May 1966, Trésor public c/ Galakis, JDI 1966, 648 = Rev. Crit. DIP 1967, 553 = Dalloz 1966, 575. 54 CA Paris, 13 June 1996, Société KFTCIC c/ société Icori Estero, JDI 1997, 151 = Rev. Arb. 1997, 251. Already, CA Paris, 17 December 1991, société Gatoil c/ National Iranian Oil Company, Rev. Arb. 1993, 281; CA Paris, 24 February 1994, Ministère tunisien de l’Equipement c/ société Bec Frères, Rev. Arb. 1995, 275 = YCA XXII (1997), 682. Also, CA Paris, 15 June 2006, no. 04/21652, Gouvernment de la République de Djibouti c/ Société Cotecna Inspection SA, Rev. Arb. 2006, 864 = YCA XXXI (2006), 635. 55 CA Paris, 13 June 1996, Société KFTCIC c/ Société Icori Estero, Rev. Arb. 1997, 251; CA Paris, 15 June 2006, no. 04/21652, Gouvernment de la République de Djibouti c/ Société Cotecna Inspection SA, Rev. Arb. 2006, 864 = YCA XXXI (2006), 635. 56 Conseil d’Etat, Avis, 6 March 1986, Rev. Arb. 1992, 397. The French judicial system is divided into two systems, a civil order which has jurisdiction over private law matters and an administrative order, which has jurisdiction over public law matters. 57 See notably Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, § 632; Loquin, JDI 2011, 10 commenting on a decision of the Tribunal des Conflits, 17 May 2010, INSERM c/ Fondation Letten F. Sausgstad, Bull. 2010, Tribunal des conflits, no. 11 (Inserm); see also Bollée, Dalloz 2010, 2323. See, in relation to this decision, Cass. civ. 1ère, 8 July 2015, no. 13–25.846, Société Ryanair Ltd c/ Syndicat Mixte des Aéroports de Charente (SMAC), Rev. Arb. 2015, 966. 58 Gaillard, Savage, Fouchard Gaillard Goldman on International Commercial Arbitration, p. 312, § 532. 59 Cass. civ. 1ère, 8 July 2010, no. 09–67.013, Société Doga c/ société HTC Sweden AB, Rev. crit. DIP 2010, 743, note Bureau/Muir Watt = Rev. Arb. 2010, 513, note Dupeyré; Cass. com., 10 October 2018, no. 16–22.215, M. L. Gherardi c/ Société civile des Mousquetaires, Rev. Arb. 2019, 239. 60 CA Paris, 29 March 1991, Société Ganz c/ société nationale des Chemins de fer tunisiens, Rev. Arb. 1991, 478, note Idot, CA Paris, 19 May 1993, Société Labinal c/ Sociétés Mors et Westland Aerospace, Rev. Arb. 1993, 645, note Jarrosson. 61 CA Paris, 14 October 1993, Société Aplix c/ société Velcro, Rev. Arb. 1994, 164, note Jarrosson, and of 19 May 1993, Société Labinal c/ Sociétés Mors et Westland Aerospace, Rev. Arb. 1993, 645, note Jarrosson. 62 Cass. civ. 1ère, 21 October 2015, 14–25.080, Scamark c/ Société Conserveries des cinq oceans, Bull. 2016 no. 838 = Rev. Arb. 2015, 1229. 63 Cass. civ. 1ère, 6 May 2009, no. 08–10.281, Société MJA c/ Société International Company For Commercial Exchanges Income, Bull. 2009 I no. 86 = YCA XXXV (2010), 353.

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Some subject matters remain non-arbitrable, such as disputes related to “inalienable rights”.64 In practice, this means that an arbitral tribunal cannot rule on issues such as divorce and paternity. However, an arbitral tribunal does have jurisdiction to rule upon the financial consequences of a divorce. In the same fashion, criminal matters fall outside the jurisdiction of arbitral tribunals. However, an arbitral tribunal will have jurisdiction to rule upon the financial consequences of a criminal offence. 27 In order to protect the weaker party in an international employment contract, French courts have held that an arbitration clause in such an employment contract is valid, but that the employee could choose whether to bring his or her claim before the French courts or before the arbitral tribunal. Such a choice is only available to the employee, not the employer.65 After the employment contract has been terminated, the parties are free to enter into an arbitration agreement with respect to a dispute related to the employment contract.66 28 The fact that one of the parties to an arbitration clause is a consumer does not as such invalidate the arbitration agreement; accordingly it remains for the arbitrators to decide whether they have jurisdiction, notably regarding arbitrability.67 A cautious approach should be observed, however, since the Court of Justice of the European Union has ruled that a consumer could challenge the validity of an arbitration clause as late as the annulment proceedings, even though the consumer had not raised any jurisdictional objection during the arbitral proceedings.68 26

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c) Form of the arbitration agreement. There are no formal requirements for international arbitration agreements.69 As a consequence, an arbitration clause can be incorporated into a contract by reference.70 While the consent of the parties must still be ascertained, it is, however, sufficient that a party was aware of the reference in the contractual document and that it accepted such reference, even by mere silence.71 64

These rights notably encompass rights attached to a person and family rights. In a decision rendered in the context of a domestic arbitration, the Cour de Cassation held that the competence-competence principle according to which the arbitrator rules in priority on his own jurisdiction does not apply to employment matters: Cass. com., 30 November 2011, no. 11–12.905, Société Deloitte conseil v M. E. Serant, Rev. Arb. 2012, 333. 66 Cass. soc., 5 November 1984, Société H c/ Charles de T, Rev. Arb. 1986, 47. 67 See, e. g., Cass. civ. 1ère, 21 May 1997, no. 95–11.427, Renault c/ société V 2000 (Jaguar France), Rev. Arb. 1997, 537; Cass. civ. 1ère, 30 March 2004, no. 02–12.259, Rado c/ Société Painewebber, Bulletin 2004 I no. 97 p. 78 = Rev. Arb. 2005, 115. 68 ECJ Case C-168/05 Elisa María Mostaza Claro c/ Centro Móvil Milenium, [2006] ECR I-10421 = Rev. Arb. 2007, 109. See also ECJ Case C-40/08 Asturcom Telecomunicaciones SL c/ Cristina Rodríguez Nogueira, [2009] ECR I-9579 = Rev. Arb. 2009, 813: a national court hearing an action for enforcement of an arbitration award made in the absence of the consumer is required, where it has available to it the legal and factual elements necessary for that task, to assess on its own motion whether an arbitration clause in a contract concluded between a seller or supplier and a consumer is unfair, in so far as, under national rules of procedure, it can carry out such an assessment in similar actions of a domestic nature. 69 Article 1507 CPC. See article 1515 CPC for requirements for recognition and enforcement of awards rendered abroad. 70 For the consensualist approach (material rule) of the courts before the reform: Cass. civ. 1ère, 9 November 1993, no. 91–15.194, Société Bomar Oil NV c/ ETAP, Rev. Arb. 1994, 108 = YCA XX (1995), 660. Cass. civ. 1ère, 20 December 1993, no. 91–16.828, Municipalité de Khoms El Mergeb c/ société Dalico, Rev. Arb. 1994, 116. Cass. civ. 1ère, 3 June 1997, no. 95–17.603, Société Prodexport c/ société FMT productions, Rev. Arb. 1998, 537. Cass. civ. 1ère, 20 December 2000, no. 98–21.548, Prodexport c/ FMT Productions, Rev. Arb. 2003, 1341. Cass. civ. 1ère, 11 May 2012, no. 10–25.620, Société Ekato Ruhr Und Mischtechnik Gmbh c/ société Nipponkoa Insurance Company Europe Limited, Rev. Arb. 2012, 561. CA Paris, 18 January 2007, YCA XXXII (2007), 297. 71 Cass. civ. 1ère, 3 June 1997, no. 95–17.603, Société Prodexport c/ société FMT productions, Rev. Arb. 1998, 537; Cass. civ. 1ère, 9 November 1993, no. 91–15.194, Société Bomar Oil NV c/ ETAP, Bull. 1993 I no. 313 p. 218 = Rev. Arb. 1994, 108 = YCA XX (1995) 660. Partially performing a contract without 65

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d) Termination of the arbitration agreement. An arbitration agreement may be 30 terminated for several reasons such as waiver by all parties.72 Some legal writers argue that it is possible to terminate an arbitration agreement for cause (juste motif),73 but there is no case law supporting this. French courts have held that even where a wouldbe claimant is in financial difficulties, this does not affect the validity of an arbitration agreement he or she entered into.74 Similarly, insolvency of the defendant after the constitution of the arbitral tribunal will not invalidate the arbitration agreement; rather, it will suspend the arbitral proceedings until the creditor has declared his claim under the applicable insolvency regime, and then resume, with the administrator being heard, for the tribunal to make a declaration on the principle and amount of the claim without being able to order performance (payment).75 Agreements to submit a dispute to arbitration that are entered into after a dispute has arisen and are specifically related to such dispute, can also be terminated on two particular grounds: the issuance of the award and the expiration of the time period to render the award.76

4. The scope and interpretation of the arbitration agreement a) The scope of the arbitration agreement ratione personae. The arbitration agree- 31 ment is binding, first and foremost, on its signatories. Extension to non-signatories is, however, possible under certain circumstances. For instance, an arbitration agreement may be extended to a non-signatory (and notably a company from the same group of companies as one of the signatories) which has participated in the negotiation, performance or termination of the contract.77 Such an extension may also occur in the reservation as to the reference to an arbitration clause contained in the contract also is found to constitute such acceptance: Cass. civ. 1ère, 9 November 2016, no. 15–25.554, Société Vanille et produits c/ société Monapro BV, Rev. Arb. 2016, 1216. 72 E. g., where one party to an arbitration clause brings an action before state courts and the other party does not challenge its jurisdiction: Cass. civ. 1ère, 20 April 2017, no. 16–11.413; Société Carrefour proximité France c/ Société Distri Dorengts, Rev. Arb. 2017, 763. 73 Seraglini/Ortscheid, Droit de l’arbitrage interne et international, 2nd ed., 2019, § 719. 74 Cass. civ. 1ère, 13 July 2016, no. 15–19.389, Société MJA c/ Société Airbus Helicopters, Rev. Arb. 2016, 963 (the inability of the liquidator of a party to an arbitration clause to face the costs of the arbitral proceedings does not make an arbitration agreement manifestly inapplicable); CA Paris, 26 February 2013, no. 12/12953, SARL Lola fleurs c/ société Monceau fleurs, Rev. Arb. 2013, 527; cf. Pinna, Cah. arb. 2013, 479. For a different approach see, for example, the case law in Germany: Infra J mn. 26. For the obligation of the arbitral tribunal to adjudicate counterclaims of a defendant unable to pay an advance on costs unless the counterclaims can be separated from the principal claims, see Cass. civ. 1ère, no. 11–27.770, Société Pirelli & Cie Spa c/ société Licensing Projects, 28 March 2013, Bull. I 2013 no. 59 = Rev. Arb. 2013, 746 note Train. 75 CA Paris, 3 March 1998, Consorts de Coninck c/ Zanzi et Société Torelli ès qual., Rev. Arb. 2003, 207. 76 Gaillard, Savage, Fouchard Gaillard Goldman on International Commercial Arbitration, § 738–741. In general, see Article 1477 CPC, applicable through Article 1500 CPC. If the deadline is reached before the award is made, the arbitral proceedings come to an end. Nonetheless, contrary to a submission agreement, an arbitration agreement remains effective after the deadline for the arbitral proceedings has passed (CA Paris, 7 July 1992, Laiguède c/ Ahsen Inox, 1994, Rev. Arb. 1994, 728; Cass. civ. 2ème, 18 February 1999, no. 97–12.770). 77 Cass. civ. 1ère, 27 March 2007, no. 04–20.842, Alcatel Business Systems (ABS) c/ société Amkor Technology, Bulletin 2007, I, no. 129 = Rev. Arb. 2007, 785: “the effect of an international arbitration clause is extended to parties which are directly concerned with the execution of the contract and the disputes that may result therefrom”. Cf. Cour d’Appel de Paris, 18 December 2018, no. 16/24924, Société New Europe Corporate Advisory Ltd c/ Innova 5/LP ès qualités de liquidateur de la Société Twelve Hornbeams SARL, Rev. Arb. 2018, 847: these principles apply even if the involvement of the third party in the performance of the contract is the result of obligations under a different contract. The Paris Court of Appeal stated in the latter decision that the arbitration clause inserted in an international contract may be extended to a non-signatory which was directly involved in the performance of the contract or in disputes which may arise out of it, when it is established that the non-signatory’s situation and activities give rise to a presumption that they had knowledge of the existence and scope of the arbitration clause.

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event of fraud or an obvious case of wrongdoing which justifies piercing the corporate veil,78 for example where there is an abuse or where a non-signatory to an arbitration clause controls a party to an arbitration agreement in such a way that it must be treated as its alter ego.79 Nonetheless, an arbitration agreement will not be extended to a nonsignatory when dealing with two (or more) contracts with conflicting provisions, one of them conferring jurisdiction to a state court and the other to an arbitral tribunal, even when the contracts are within same economic transaction.80 32 In some circumstances, the arbitration agreement may also be assigned to a nonsignatory. Such assignment can take place when a substitution clause is incorporated into a contract or pursuant to the transfer of a claim (“cession de créance”) which is subject to an arbitration clause.81 The arbitration clause can also be assigned through a chain of contracts for the transfer of goods.82 Similarly, an arbitration clause in an insurance contract may be extended to the beneficiary of that contract.83 It will also bind a claimant bringing a direct action against the insurer.84 33

b) The scope of the arbitration agreement ratione materiae. French courts and arbitral tribunals tend to adopt a broad interpretation of the scope of an arbitration agreement, in particular with regards to tort claims. Accordingly, unless the arbitration agreement is drafted narrowly so as to include only contractual claims,85 tort claims related to the underlying contract are considered to fall within the scope of the arbitration agreement.86

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c) Pathological arbitration clauses. A clause is said to be pathological when it contains a defect or defects which could disrupt the smooth process of the arbitration proceedings.87 This is the case where, for example, the consent to refer the dispute to arbitration is uncertain. Some of these defects are said to be curable if they will not prevent the enforcement of the arbitration agreement. As a general rule, French law and French courts seek to give effect to the arbitration clause, and are willing to remedy 78 Cass. civ. 1ère, 11 June 1991, no. 90–12.966, Orri c/ société des Lubrifiants Elf Aquitaine, Rev. Arb. 1992, 73. 79 CA Paris, 16 October 2018, no. 16/18843, M. Ahmed Saeed Mohamed Albad Aldhaheri c/ Société Cerner Middle East Ltd, Rev. Arb. 2018, 838. 80 Cass. civ. 1ère, 1 June 2017, no. 16–11.487, Holding Financière Céleste c/ Société Federal State Unitary Enterprise Russian Satellite Communications Compagnie, Rev. Arb. 2018, 234. 81 Cass. civ. 2ème, 20 December 2001, no. 00–10.806, Société Quille le Trident c/ Société CEE Euro Isolation, Rev. Arb. 2002, 379; CA Lyon, 15 May 1997, Parodi c/ société Annecy et France Boissons, Rev. Arb. 1997, 402; Cass. civ. 1ère, 11 July 2006, no. 03–11.983, Banque populaire Loire et lyonnais c/ Société Sangar, RTD Com 2006, 773. 82 Cass. civ. 1ère, 6 February 2001, no. 98–20.776, Peavey Company c/ Organisme général pour les fourrages, Rev. Arb. 2001, 765; Cass. civ. 1ère, 9 January 2008, no. 07–12.349, Société HGL c/ société Spanghero, YCA XXXIII (2008), 478. See also, Cass. civ. 1ère, 27 March 2007, no. 04–20.842, Alcatel Business Systems (ABS) c/ société Amkor Technology, Bulletin 2007, I, no. 129 = Rev. Arb. 2007, 785 which is more general: “in a series of contracts regarding the transfer of property, the arbitration clause is automatically transferred as an accessory to the right of action, which is itself accessory to the transferred substantial right, without the homogeneous or heterogeneous character of this chain having any influence.” 83 Cass. civ. 1ère, 5 September 2018, no. 17–13.837, Société RSUI Indemnity Company c/ Société Tenergie Développement, Rev. Arb. 2018, 692. 84 Cass. civ. 1ère, 19 December 2018, no. 17–28.951, Les voies navigables de France c/ Société Cedecel, Rev. Arb. 2019, 296. 85 Cass. civ. 1ère, 6 March 2007, no. 06–16.423, Société Prodim c/ Société Distribution Casino France, Rev. Arb. 2007, 143 for a submission agreement. 86 Cass. civ. 1ère, 25 April 2006, Bull. 2006 I no. 196 p. 172; Cass. com., 4 July 2018, no. 17–13.674, Société Banque Delubac et Cie c/ Société Mayerhofer Agrarhandel GmbH, Rev. Arb. 2018, 691. 87 Gaillard/Savage, in: Fouchard/Gaillard/Goldman (eds), International Commercial Arbitration, 1999, § 484.

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certain defects, e.g., when the parties did not properly designate the arbitral institution. The defective designation of an arbitration institution is often, and as far as possible, cured by the national judge. For example, a reference to the “official chamber of commerce in Paris” has been interpreted to refer to the ICC Court of Arbitration,88 and even an arbitration clause that contained a reference to two different arbitral institutions was not considered to be manifestly void.89 d) Multi-tier clauses. In some cases, arbitration agreements provide for a multi-step 35 process, for example by requiring conciliation or mediation efforts prior to arbitration (so-called multi-tier clauses). However, non-compliance with the multi-tier process does not affect the arbitral tribunal’s jurisdiction.90 Accordingly, an award made by an arbitral tribunal although the multi-tier process had not been complied with, is not subject to annulment.91 However, arbitrators can suspend the arbitral proceedings until the parties have complied with the steps required under a multi-tier clause.92

5. The effect of the arbitration agreement and competence-competence The arbitration agreement binds the parties, who can no longer submit their disputes 36 to a state court.93 a) Enforcing arbitration clauses and competence-competence. Pursuant to the 37 competence-competence principle, state courts have to decline jurisdiction in matters falling under an arbitration agreement unless the arbitral tribunal is not yet constituted and the arbitration agreement is manifestly void or inapplicable.94 French courts are particularly restrictive in applying the exception for arbitration clauses that are manifestly void or inapplicable: the voidness or the inapplicability of the arbitration agreement must be absolutely obvious and not give rise to any doubt,95 e.g., where it is clear that an arbitration clause was replaced in a subsequent contract by a clause in which the parties agree to submit their disputes to litigation.96 The lack of jurisdiction of the arbitral tribunal is not manifest where determining the scope of an arbitration agreement would imply a detailed review of the negotiations97 or contractual relationships98 or where it would require an interpretation of the agreement of the parties and

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TGI Paris, 13 December 1988, Rev. Arb. 1990, 521. Cass. civ. 1ère, 20 February 2007, no. 06–14.107, Société Prodim c/ Painchaud, Bull. 2007 I no. 62 p. 56. 90 Cass. civ. 1ère, 20 April 2017, no. 16–18.093, Société Inthemix c/ Société Dia France, Société Ed Franchise, Rev. Arb. 2018, 618 note Barbet. 91 CA Paris, 28 June 2016, Société Vijay Construction Ltd c/ Société Eastern European Engineering Ltd, Rev. Arb. 2016, 1153 note Barbet; cf. CA Paris, 16 May 2017, no. 15/22848, M. Alain Guérard c/ SAS Matisco Développement, Rev. Arb. 2018, 612 note Barbet. 92 Jarrosson, Rev. Arb. 2003, 409, § 7; Barbet, Rev. Arb. 2016, 1158, 1160, § 5. This solution differs from the rules in civil proceedings, where the breach of an undertaking to attempt conciliation prior to litigation will make an action inadmissible without there being the possiblity to cure this while the proceedings are pending: Cass. com., 30 May 2018, no. 16–26.403, Société NRJ c/ Société Spéciaux transports aériens Roissy (STAR), Rev. Arb. 2018, 479. 93 Articles 1448, 1506 CPC. 94 Article 1448, 1st paragraph, article 1506 CPC. 95 Willaume, Rev. Arb. 2018, 235, 238 § 7. 96 Cass. civ. 1ère, 11 July 2006, no. 03–19.838, Société PT Andhika Lines c/ Société Axa corporate solutions assurance, Bulletin 2006 I no. 366 p. 314 = Rev. Arb. 2006, 979. 97 Cass. civ. 1ère, 21 September 2016, no. 15–28.941, Société BK Medical APS c/ M. D. Cardon, Rev. Arb. 2016, 1209. 98 Cass. civ. 1ère, 13 September 2017, no. 16–22.326, Société Oc’Via c/ Groupement solidaire Guintoli/ EHTP/NGE génie civil, Rev. Arb. 2017, 1079. 89

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establishing their common intentions.99 Accordingly, where there is an arbitration agreement, state courts will normally decline jurisdiction and refer the parties to arbitration (negative effect of the competence-competence principle),100 and as a result, arbitral tribunals have priority to decide upon the effect of an arbitration agreement and their own jurisdiction (positive effect of the competence-competence principle).101 38 National courts regain their power to conduct a judicial review of the arbitral tribunal’s jurisdiction to enforce arbitration agreements after the arbitration proceedings have ended, i. e. at the annulment or enforcement stage. At this stage, if a party has challenged the arbitral tribunal’s jurisdiction, the court will conduct a full review in fact and in law of the arbitral tribunal’s jurisdiction.102 b) Preclusion of jurisdictional defences. French arbitration law is silent as to when a jurisdictional defence must be raised before an arbitral tribunal. According to scholars, jurisdictional defences should be raised in limine litis. If a party participates in the arbitral proceedings without making an objection to jurisdiction, it will be precluded from raising such objections at a later stage.103 It will also be precluded from raising jurisdictional objections in subsequent setting aside proceedings based on an argument that was not raised in the arbitral proceedings.104 40 Before national courts, jurisdictional defences must be raised in limine litis (article 74 of the CPC).105 Filing a defence on the merits without challenging the jurisdiction of the state courts based on the existence of an arbitration agreement will be regarded as an implicit waiver of such arbitration agreement, and such waiver would exclude jurisdiction of the arbitral tribunal also in subsequent proceedings.106 A party bringing an action in court in disregard of an arbitration agreement cannot rely on the arbitration clause regarding counterclaims brought by the defendant.107 39

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c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. The recognition and enforcement of foreign state court decisions as to jurisdiction depends on the applicable recognition regime. As far as general conflict of jurisdictions 99 Cass. civ. 1ère, 24 February 2016, 14–26.964, Société Weissberg c/ société Subway international BV, Rev. Arb. 2016, 636 = YCA XLI (2016), 463. 100 Cass. civ. 1ère, 21 November 2006, no. 05–21.818, Société Groupama transports c/ Société MS Regine Hans und Klaus Heinrich KG, Bull. 2006 I no. 502 p. 447 = YCA XXXII (2007), 294. 101 Cass. civ. 1ère, 6 July 2016, no. 15–19.521, Société Football Club Sochaux Montbéliard c/ AssociationFédération internationale de football (FIFA), Rev. Arb. 2016, 961. 102 Cass. civ. 1ère, 6 October 2010, no. 08–20.563, Fondation Albert Abela Family Foundation (AAFF) c/ Fondation Joseph Abela Family Foundation (JAFF), JCP G 2010, 1028 = Rev. Arb. 2010, 813; Cass. civ. 1ère, 1 June 2017, no. 16–13.729, Société Egyptian General Petroleum Corporation c/ Société National Gas Company, Rev. Arb. 2017, 1073 = YCA XLII (2017), 382. 103 Cf. article 1466 CPC and infra mn. 105. However, see ECJ Case C-168/05 Elisa María Mostaza Claro c/ Centro Móvil Milenium, [2006] ECR I-10421 = Rev. Arb. 2007, 109, where the Court considered that the consumer’s right to challenge the jurisdiction of the arbitral tribunal on the ground that the arbitration clause was invalid could not be waived. 104 CA Paris, 30 May 2017, République du Niger c/ Société A.D Trade Ltd Belgium, Rev. Arb. 2018, 765, 767. The Court held that the jurisdictional objection raised by the claimant against the arbitral tribunal was inadmissible, as the claimant raised it for the first time before the Court of Appeal without even alleging that it had been impossible to raise it during the arbitral proceedings. 105 Cass. civ. 1ère, 23 January 2007, no. 06–10.652, Sociétés Cofief et Codix c/ Société Alix, Rev. Arb. 2007, 290; Cass. civ. 2ème, 22 November 2001, no. 99–21.662, Thuillier c/ Michelez, Rev. Arb. 2002, 371, note Théry; Cass. civ. 1ère, 3 February 2010, 09–13.618, Les Terres froides (SCI) c/ Robert Porcher and 14 April 2010, no. 09–12.477, TECA c/ société Baudin Châteauneuf, Rev. Arb. 2010, 495, note Callé. 106 Cass. civ. 1ère, 20 April 2017, no. 16–11.413, Société Carrefour proximité France c/ Société Distri Dorengts, Rev. Arb. 2017, 763. 107 Cass. civ. 1ère, 6 June 1978, no. 77–10.835, Société British Leyland International Services S.A. Suisse c/ Société d’Exploitation des Etablissements Richard, Bulletin I no. 214 p. 171.

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rules are concerned, the Paris Court of Appeal denied recognition to a foreign state court decision in which the court ruled on its own jurisdiction (but not on the merits) as it was rendered in breach of the competence-competence principle, i. e. the arbitral tribunal should have decided on its own jurisdiction rather than the foreign court.108 Within the framework of the European Union,109 the solution is uncertain. The 42 Brussels I Regulation, which applies to proceedings instituted on or after 10 January 2015, renews the exclusion of arbitration from the scope of the Regulation, as had done its previous version (Regulation (EC) No. 44/2001).110 The new Brussels I Regulation also contains a Recital, Recital 12, which aims at providing explanations as to the relationship between the Regulation and arbitration matters. Nevertheless, Recital 12 is somewhat unclear and subject to interpretation and it remains to be seen how case law will rule upon this issue.111

III. The arbitral tribunal and the conduct of the arbitral proceedings One of the advantages of arbitration is the flexibility parties have to customise the 43 way in which their dispute will be resolved. French arbitration law is very liberal in this respect by allowing parties to agree on virtually all aspects of the procedure (see, in particular, articles 1508, 1509 CPC).

1. The arbitral tribunal, impartiality and independence of the arbitrator There are no specific requirements regarding the composition of the arbitral tribunal 44 under French international arbitration law. Under domestic arbitration law, the number of arbitrators must always be uneven,112 which is not the case in international arbitration. French international arbitration law does, however, require that equality between the parties be respected during the constitution of the arbitral tribunal.113 Parties generally specify in the arbitration agreement the procedure for appointing the 45 arbitrators, often by reference to the rules of an arbitration institution. Absent a choice by the parties or designated arbitral rules, the CPC provides that a sole arbitrator will be appointed by the person or institution administering the arbitration or the support judge, and in case of a three-member tribunal, each party will nominate an arbitrator who will then appoint the chairman.114 The decisions of the support judge are generally not subject

108 CA Paris, 15 June 2006, Legal Department du Ministère de la Justice de la République d’Irak c/ Sociétés Fincantieri Cantieri Navali Italiani, Finmeccanica et Armamenti e Aerospazio, Rev. Arb. 2007, 90. 109 See, in that respect, the same 2006 decision CA Paris, supra fn. 112. 110 See Article 1(2)(d) of Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ, 20 December 2012, L 351/1. 111 For a more detailed discussion of the recast Brussels I Regulation, see supra H mns 54, 66. In a 2015 decision rendered on the basis of the Brussels I Regulation, the ECJ was asked whether it would be compatible with that regulation “for a court of a Member State to recognise and enforce an arbitral award ordering a party to arbitration proceedings to reduce the scope of the claims formulated in proceedings pending before a court of that Member State”. The ECJ answered that the Brussels I Regulation “must be interpreted as not precluding a court of a Member State from recognising and enforcing, or from refusing to recognise and enforce, an arbitral award prohibiting a party from bringing certain claims before a court of that Member State, since that regulation does not govern the recognition and enforcement, in a Member State, of an arbitral award issued by an arbitral tribunal in another Member State” (ECJ Case C536/13 Gazprom OAO c/ Lietuvos Respublika, EU:C:2015:316). 112 Article 1451 CPC. 113 Infra, mns 78 et seq. on equality of arms in multi-party situations. 114 Articles 1452, 1506 CPC.

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to appeal,115 unless the support judge has decided that no appointment needed to be made because the arbitration clause was manifestly void or inapplicable.116 46 There are some specific requirements in relation to the arbitrators. Apart from the requirements contained in the arbitration agreement, arbitrators must fulfil criteria of independence and impartiality,117 elements which are the very essence of the arbitrator’s function.118 While independence is an objective concept, meaning that there is no unacceptable external relationship or connection between the arbitrator and either a party or counsel, impartiality covers subjective situations regarding the arbitrator’s state of mind. A violation of the duties of independence and impartiality can lead to the award being set aside, provided the issue was raised during the course of the arbitration proceedings or was discovered subsequent to the end of the arbitration proceedings.119 47

a) Duty to disclose conflicts of interest. Before accepting an appointment, an arbitrator has the duty to disclose any circumstance that may affect his or her independence or impartiality, and if such circumstances occur after acceptance of the appointment, he or she must disclose them without delay.120 The violation of the duty to disclose can justify the annulment of the award on grounds of irregular composition of the arbitral tribunal.121 However, an award can only be set aside on the ground of non-disclosure if the undisclosed elements were of such a nature as to create a reasonable doubt about the arbitrator’s independence and impartiality.122 Moreover, a setting aside application cannot be based on an alleged breach of the duty to disclose if the relevant information was in the public domain and easily accessible but had not been used to raise a challenge during the arbitral proceedings within the applicable time limits.123

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b) Grounds for challenge. The case law in relation to the arbitrator’s duty of independence and impartiality has evolved over time. Initially, the grounds for challenge were similar to those for national judges, as set out in articles 341 of the CPC and L. 111–6 of the French Code de l’Organisation Judiciaire. However, subsequent case law has adopted a broader interpretation of this duty, notably to include the business

Article 1460, 3rd paragraph, article 1506 CPC. Article 1455 CPC. 117 Article 1456, 2nd paragraph, article 1506 CPC. Pursuant to article 3 of the Décret portant réforme de l’arbitrage, article 1456 is only applicable where the arbitral tribunal has been constituted after 1 May 2011. In other cases, it is the previous case law that is applicable. 118 CA Paris, 9 September 2014, no. 13/01333, M. Faisal Bin Fayyadh Al Gobain c/ SA Crédit Foncier de France, Rev. Arb. 2014, 1021. 119 Cass. civ. 1ère, 24 March 1998, no. 95–17.285, Soc. Excelsior Film TV c/ Soc. UGC-PH, Bull. 1998 I no. 121 p. 80 = YCA XXIV (1999), 643. 120 Article 1456, 2nd paragraph, article 1506 CPC. If a party fails to react to the disclosure or any other information, they will be deemed to have abandoned any challenge on the arbitrator: Article 1466 and Article 1506 3° CPC. 121 Cass. civ. 1ère, 20 October 2010, no. 09–68.997, Société Somoclest Bâtiment c/ société DV Construction, Bulletin 2010, I, no. 204; Cass. civ. 1ère, 16 December 2015, no. 14–26.279, Société Columbus acquisitions Inc. c/ Société Auto-Guadeloupe investissement, Rev. Arb. 2016, 348. 122 Cass. civ. 1ère, 10 October 2012, no. 11–20.299, Société Neoelectra Group SAS c/ Société Tecso EURL, Rev. Arb. 2013, 129. 123 Cass. civ. 1ère, 19 December 2018, no. 16–18.349, Société J&P Avax c/ Société Tecnimont SPA, Rev. Arb. 2018, 848. However, while parties are expected to actively consult at the moment of the constitution of the tribunal publicly available sources of obvious relevance, there is no obligation to continue such research during the arbitral proceedings: CA Paris, 27 March 2018, no. 16/09386, Société Saad Buzwair Automotive Co. c/ Société Audi Volkswagen Middle East Fze Llc., Rev. Arb. 2018, 472. 115 116

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relationship (“courant d’affaires”) that might exist between an arbitrator and a party124 or between an arbitrator and a party’s counsel.125 Courts assess whether the duty of independence and impartiality has been breached 49 on a case-by-case basis. The assessment is inherently fact-specific. Challenges have, for example, been successful in situations where an arbitrator had a professional relationship with one of the parties, e. g. by regularly acting as counsel for a party on a remunerated basis126 or regularly accepting appointments as arbitrator from companies of the same group in other matters.127 This would also include a situation where the arbitrator’s law firm accepts instructions from an affiliate of one of the parties to the arbitration.128 Likewise, in some situations where an arbitrator and a party have been found to share a significant common interest or have personal connections of sufficient importance, national courts have found that the arbitrator’s independence is compromised.129 A lack of independence has also been found in cases where there were links between a counsel and an arbitrator – including a case where an arbitrator had produced legal opinions for a counsel130 – or where an arbitrator was subordinate to another in a work environment.131 There are also useful illustrations in French case law of circumstances that are not 50 characterized as a breach of the duty of independence. There is no lack of independence where two arbitrators have both participated in scholarly work on arbitration,132 or

124 Cass. civ. 1ère, 20 October 2010, no. 09–68.997, Société Somoclest Bâtiment c/ société DV Construction, Bulletin 2010, I, no. 204. 125 CA Paris, 10 March 2011, no. 09/28537, EURL Tecso c/ SAS Neoelectra Group, Rev. Arb. 2011, 569. 126 TGI Paris, 15 January 1988, Rev. Arb. 1988, 316. On this subject, see the Tecnimont saga in which an ICC award was set aside because the chairman of the arbitral tribunal had not made a full disclosure of the links between the law firm where he was working as “of counsel” and one of the parties to the arbitration (CA Reims, 2 November 2011, Avax c/ Tecnimont, Rev. Arb. 2012, 112; CA Paris, 12 February 2009, SA J&P Avax SA c/ société Tecnimont SPA, Rev. Arb. 2009, 186). The Cour de cassation quashed this decision to set aside on the issue of the time-limit to file the challenge to the arbitrator (Cass. civ. 1ère, 25 June 2014, no. 11–26.529, Bull. 2014, I, no. 115). The issue of the scope of the arbitrator’s duty to disclose was remanded to the Paris Court of Appeal. The Paris Court of Appeal (CA Paris, 12 April 2016, no. 14/14884, Société J&P Avax c/ Société Tecnimont, Rev. Arb. 2017, 234, confirmed by Cass. civ. 1ère, 19 December 2018, no. 16–18.349, Société J&P Avax c/ Société Tecnimont SPA, Rev. Arb. 2018, 848) ultimately dismissed the annulment application because the information alleged in support of the challenge was public. Moreover, the information was easily accessible and the alleged search for information could have been conducted earlier. As for the fact that undisclosed elements appeared after the appointment of the arbitrator, they were not of a nature to significantly increase doubts about the arbitrator’s independence and impartiality. See also, on the same topic, the decision of CA Paris, 14 October 2014, S.A. Auto Guadeloupe Investissements c/ Société Colombus Acquisitions Inc., Rev. Arb. 2015, 151, confirmed by Cass. civ. 1ère, 16 December 2015, no. 14–26.279, Société Columbus acquisitions Inc. c/ Société Auto-Guadeloupe investissement, Rev. Arb. 2016, 348. 127 Cass. civ. 1ère, 20 Octobre 2010, no. 09–68.997, Société Somoclest Bâtiment c/ société DV Construction, Bull. 2010, I, no. 204 = Rev. Arb. 2011, 669. 128 CA Paris, 27 March 2018, no. 16/09386, Société Saad Buzwair Automotive Co. c/ Société Audi Volkswagen Middle East Fze Llc., Rev. Arb. 2018, 472. 129 See e. g. CA Paris, 23 March 1995, Société Maec c/ P. Mumbach, Rev. Arb. 1996, 446 (an arbitrator and a party filed a patent application together and constituted a company (société civile) to exploit the patent); CA Paris, 18 December 2008, société Avelines Conseil c/ M. Jean Masuy, Rev. Arb. 2011, 683 (close professional links between an arbitrator’s daughter and a party’s counsel). 130 CA Paris, 9 September 2010, Dalloz 2010, 2934. CA Paris, 10 March 2011, no. 09/28537, EURL Tecso c/ SAS Neoelectra Group, Rev. Arb. 2011, 569. 131 CA Rouen, Société Jean Lion c/ société Etablissements Gortzounian, 28 October 1988, Rev. Arb. 1999, 368. 132 Cass. civ. 1ère, 29 January 2002, Dalloz 2003, 2472 (in this case, both arbitrators participated in the publication of an arbitration journal).

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where a challenge was based on two arbitrators belonging to the same international network of law firms.133 51 As far as a lack of impartiality is concerned, challenges may be brought when there is a risk that the arbitrator may be prejudiced with regard to one of the parties or to the case of one of the parties. This may be the case, for example, where an arbitrator is involved in several matters involving the same party and in one set of proceedings makes a decision that would logically have an impact on the remaining proceedings because of factual or legal links between the proceedings,134 or where statements of a party-appointed arbitrator show bias towards the other party.135 52 Lack of independence or impartiality can also justify an application to set aside an arbitral award. To be admissible, challenges against the award that are based on lack of independence and impartiality must either have been unknown before the rendering of the award or have been raised during the course of the arbitration proceedings within applicable time limits, including time limits under applicable arbitration rules.136 53

c) Procedural aspects and preclusion of grounds for challenge. Challenges against an arbitrator are generally made before the arbitration institution or, in the absence of any institution, before the support judge.137 As far as timing is concerned, when the challenge is raised before the arbitral institution, the arbitral rules of the arbitral institution will apply.138 If no such rules are applicable, the CPC provides that the challenge must be brought within one month of discovering the fact giving rise to the challenge.139 Failure to bring a challenge during the arbitral proceedings will bar a party from relying on it in subsequent enforcement or setting aside proceedings.140 Where the arbitral institution decides on a challenge, French arbitration law does not provide for any direct recourse against the decision of the arbitral institution. However, French courts are not bound by such decision and may rule on the issue if proceedings are brought to set aside the award.141 By contrast, where a challenge is decided by the state courts, their decision is binding in subsequent proceedings, and accordingly, where they dismiss a challenge, the same underlying facts will not justify a setting aside application.142

133 CA Paris, 28 November 2002, Voith Turbo GmbH AG et Co c/ Société Nationale des Chemins de Fer Tunisiens (SNCFT), Rev. Arb. 2003, 445 (it is worth noting that the network was limited and could not be qualified as an international law firm). 134 CA Paris, 9 September 2014, no. 13/01333, M. Faisal Bin Fayyadh Al Gobain c/ SA Crédit Foncier de France, Rev. Arb. 2014, 1021. 135 CA Paris, 21 February 2012, Etat du Cameroun c/ SPRL Projet Pilote Garoube, Rev. Arb. 2012, 587. 136 Cass. civ. 1ère, 19 December 2018, no. 16–18.349, Société J&P Avax c/ Société Tecnimont SPA, Rev. Arb. 2018, 848; CA Paris, 28 October 2010, Rev. Arb. 2011, 691. Time limits in arbitration rules cannot, however, deprive a party of its right to challenge an arbitrator for reasons that became known only after the lapse of the time limit: Cass. civ. 1ère, 31 March 2016, no. 14–20.396, Association Chambre arbitrale maritime de Paris c/ Société Cool Carriers, Rev. Arb. 2017, 167, 168 note Henry. 137 Articles 1456, 1506 CPC. 138 Cass. civ. 1ère, 19 December 2018, no. 16–18.349, Société J&P Avax c/ Société Tecnimont SPA, Rev. Arb. 2018, 848. 139 Article 1456, 3rd paragraph, article 1506 CPC. 140 Cass. civ. 1ère, 15 June 2017, no. 16–17.108, République de Guinée Equatoriale c/ Société Orange Middle East and Africa, Rev. Arb. 2017, 1074. The claimant having acknowledged in the Terms of Reference that the constitution of the arbitral tribunal was lawful and that it had no objection against the arbitrators, the Court held that the claimant had waived the defence of lack of independence and impartiality of the arbitrators. 141 CA Paris, 13 June 1996, Société KFTCIC c/ Société Icori Estero, Rev. Arb. 1997, 251. 142 CA Paris, 3 March 2005, Malquin c/ Société Afac, Rev. Arb. 2006, 446.

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d) Failure or impossibility to act. Once an arbitrator has accepted a case, he or she 54 must see it through to completion.143 However, a variety of situations may arise where the arbitrator cannot – or is not willing to – continue to act. With respect to domestic arbitration, the CPC now provides that, unless otherwise stipulated, such events as death, legal incapacity, refusal to act, resignation, challenge or removal of an arbitrator will stay the arbitral proceedings until such time as a substitute arbitrator is appointed.144 This provision is, however, not applicable to international arbitration pursuant to article 1506 of the CPC, and the CPC does not provide for any alternative solution in international arbitration. Although French courts have thus far been silent on the issue, scholars consider that a stay of proceedings should also apply in international arbitration.145

2. The arbitral proceedings The fundamental principle governing arbitral proceedings in France is the parties’ 55 autonomy. Parties are free to choose the law applicable to the arbitral proceedings (article 1511 CPC) as well as procedural aspects such as the language of the arbitration, the time frame for rendering the award as well as the rules determining the administration of evidence (article 1509 CPC). Non-compliance with the procedural rules agreed between the parties may lead to the annulment of the award made by the arbitral tribunal.146 If the parties are silent as to a specific procedural issue, then the matter is generally left to the discretion of the arbitral tribunal.147 a) The request for arbitration. French law has no formal requirements regarding the 56 request for arbitration. If the arbitration proceedings are administered by, or subject to, arbitration rules, the early stages of the proceedings are governed by these rules. After the request for arbitration is filed, the defendant usually files a response and the tribunal is constituted thereafter. Arbitral proceedings (“l’instance arbitrale”) only start once the arbitral tribunal is constituted.148 Once constituted, the arbitral tribunal will often lay down further procedural rules and set a procedural timetable and/or terms of reference (“acte de mission”), in accordance with the parties’ wishes. b) Equality of arms, principle of fair trial and the right to be heard. Article 1464, 57 3rd paragraph, of the CPC provides that both the parties and the arbitrators shall act diligently and in good faith (“loyauté”) during the conduct of the proceedings. Further, the arbitral tribunal must ensure the respect of the principles of equality of the parties and due process (procès équitable, in particular the right to be heard or “principe du contradictoire”).149 A lack of due process constitutes one of the five grounds of annulment of an arbitral award.150 Nonetheless, as the Paris Court of Appeal recently ruled, the violation of a fundamental principle of due process is not

143

Articles 1457, 1506 CPC. Article 1473 CPC. 145 Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, § 849. 146 However, the arbitrators will only have to comply with clear and express procedural rules, and absent a clear agreement requiring separate awards on jurisdiction and the merits, arbitrators can combine these in one single award: Cass. civ. 1ère, 8 March 1988, no. 87–11.520, Sociétés Sofidif c/ O.I.A. E.T.I., Bull. 1988 I no. 64 p. 42 = Rev. Arb. 1989, 481. 147 See article 1509 CPC. 148 Article 1456, 1st paragraph, article 1506 CPC. 149 Article 1510 CPC. 150 Article 1520, 4th paragraph CPC. Infra, mn. 97. 144

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sufficient to constitute gross negligence of the arbitrator and will not entail the arbitrator’s liability.151 58

c) Confidentiality. Article 1506 of the CPC does not extend to international arbitration the principle of confidentiality that applies to domestic arbitration.152 This exclusion seems to be dictated by the need to accommodate certain fields of international arbitration, such as investment arbitration, where transparency is important. French scholars disagree as to whether this means that arbitration proceedings are not confidential per se.153 Nevertheless, arbitral hearings are usually conducted behind closed doors, and the deliberations of the arbitral tribunal remain confidential.154 It is recommended that parties specify in their arbitration agreement the duties of confidentiality they wish to apply to the arbitral proceedings.

d) The arbitral award. The arbitral award decides the underlying dispute. In this context, it is important to differentiate between arbitral awards and mere procedural orders. The distinction is important in that the procedural order is subject to review and amendment by the arbitral tribunal, while the arbitral award is the final decision of the arbitral tribunal on the dispute or a part thereof. While the arbitral award is – save an agreement between the parties to the contrary – subject to a setting aside application, this is not the case for a procedural order. The distinction does not depend on the qualification of the decision by the tribunal or the parties, but rather, on the substance: an arbitral award decides in a definitive manner the dispute in part or in total, either by a decision on the substance, on jurisdiction or on procedural measures leading the arbitrators to terminate the arbitral proceedings.155 60 If there is more than one arbitrator, the award is based on the deliberations of the tribunal. This requirement is a fundamental procedural guarantee of the arbitral proceedings.156 The arbitrators must keep the deliberations secret,157 but a breach of this obligation will not normally lead to the annulment of the arbitral award.158 61 The CPC sets out a number of formal and substantive conditions for the validity of the award.159 The award must be made in writing and contain the following elements: 1° the full names of the parties, as well as their domicile or corporate headquarters; 2° if applicable, the names of the counsel or other persons who represented or assisted the 59

151 CA Paris, 21 May 2019, no. 17/12.238, upholding TGI Paris, 22 May 2017, Rev. Arb. 2017, 977. In terms of legal reasoning the Tribunal de Grande Instance de Paris stressed that an arbitrator is invested with both a contractual and jurisdictional mission, and that his liability cannot therefore be strictly contractual in nature. Because of the dual nature of the arbitral institution, contractual by its foundation and jurisdictional by its mission, the arbitrator’s fault can only engage his liability in the event of a breach incompatible with the judicial function. The Cour de Cassation had ruled in 2014 (Cass. civ. 1ère, 15 January 2014, no. 11–17.196), an arbitrator may only be held liable based on facts likely to characterize a personal misconduct that equals to fraud, gross negligence or denial of justice. 152 Article 1464, 4th paragraph CPC: “Subject to legal requirements, and unless otherwise agreed by the parties, arbitral proceedings shall be confidential.” 153 See Jarrosson/Pellerin, Rev. Arb. 2011, 5 (confidentiality remains the general rule subject to certain exceptions) and Gaillard/de Lapasse, D. 2011, chron., 175 (only an agreement between the parties creates an obligation of confidentiality). 154 Articles 1479, 1506 CPC. 155 Cass. civ. 1ère, 12 October 2011, no. 09–72.439, Bulletin 2011, I, no. 164 = Rev. Arb. 2012, 86; CA Paris, 25 March 1994, Société Sardisud c/ société Technip, Rev. Arb. 1994, 391, note Jarrosson. 156 CA Paris, 16 January 2003, Société des télécommunications internationales du Cameroun (Intelcam) c/ SA France Télécom, Rev. Arb. 2004, 369, note Jaeger. 157 Articles 1479, 1506 CPC. 158 CA Paris, 7 April 2011, no. 10/09268, SAS Merial c/ société Klocke Verpackungs – Service GmbH, Rev. Arb. 2011, 575. 159 Articles 1481, 1482, 1506 CPC.

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parties; 3° the names of the arbitrators who made the award; 4° the date on which the award was made; and 5° the place where the award was made.160 The award must also concisely set forth the respective claims and arguments of the parties.161 Breach of some of these formal requirements can constitute grounds for annulment of the award in domestic arbitration, but none are sufficient to set aside an award in international arbitration.162 The arbitral award shall also be reasoned.163 Unless the arbitration agreement provides otherwise, the arbitral award is made by a 62 majority.164 In international arbitration, the CPC leaves it open to the chairman, however, to rule alone in the absence of a majority.165 Moreover, under French law, even if one arbitrator refuses to sign the award, the award can still be issued, provided that the majority of the arbitrators mention the refusal to sign in the award.166 Since the 2011 Reform, parties can agree on the method of service of process to notify 63 the other party of the award. Service of process by a bailiff (huissier) remains the default method.167 The parties’ choice of arbitration rules cannot amount to a waiver of the bailiff’s service (“notification par voie de signification”), as ruled by the Paris Court of Appeal regarding article 28 of the ICC Rules 1998 (now article 35(1) ICC Rules 2021) (which ICC rule provides that “once the award has been made, the Secretariat shall notify the parties of the text signed by the Arbitral Tribunal”). The Court decided that such provision only laid down the conditions under which the arbitral institution shall be released from its obligation to issue the award.168 Whatever the form of notification the parties have adopted, the notification must mention the legal remedies against the award and the conditions of their exercise, pursuant to article 680 CPC. Where the defendant does not appear in the arbitral proceedings, such default does 64 not amount to an admission of facts or of liability. However, the arbitral tribunal can still make an award, provided that due process principles and the right to be heard (“principe de la contradiction”) are observed. This requires informing the defaulting party about the initiation of the arbitration and its progress, and giving the defaulting party the opportunity to present its case.169 e) Termination of the arbitration without an award; award by consent. The 65 arbitration proceedings can be terminated without an award being rendered if the parties waive the recourse to arbitration, for instance, if they settle the case. Where the parties so require, the arbitral tribunal can incorporate any settlement in an arbitral award (“sentence d’accord-parties”). In international arbitration, there is no default time limit for the tribunal to make an award. However, where the parties agree on a time limit, or where the arbitral rules contain one, an award cannot be made after the lapse of such time limit.170 160

Articles 1481, 1506 CPC. Article 1482 CPC. 162 The grounds for setting aside in international arbitration (article 1520 CPC) do not include the lack of formalities that would justify setting aside an award in domestic arbitration under article 1492, 6°CPC. 163 Articles 1482, 2nd paragraph, 1506 CPC. 164 Article 1513, 1st paragraph CPC. 165 Article 1513, 3rd paragraph CPC. 166 Article 1513, 2nd paragraph CPC. For the solution when an arbitrator refuses to deliberate, see supra mn. 52. 167 Articles 1519, 1522 and 1525 CPC. 168 CA Paris, 17 March 2015, ThyssenKrupp and Société M.A.N. c/ Gouvernement de la République d’Irak, (2015) 33 ASA Bull. 924–928 and Kühner/Chamieh, (2015) 33 ASA Bull. 929–937. 169 For an example of enforcement of an award made against a party that did not appear in the arbitration, see Cass. civ. 1ère, 5 November 2014, no. 13–11.745, Société Yukos capital c/ Société Oktrytoye aktsionernoye obshestvo tomskneft vostochnoi neftyanoi kompanii, Rev. Arb. 2014, 1040, YCA XL (2015), 413. 170 An award made out of time could be set aside, see infra mn. 96. 161

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f) The costs of the arbitration. The allocation of costs of arbitral proceedings is at the discretion of the arbitral tribunal, which usually rules on this issue as part of the final award.

3. Evidence, discovery, disclosure Arbitral tribunals are not bound by the rules of evidence that are applicable to national courts, with limited exceptions. For example, evidence breaching public policy principles may not be admissible.171 Arbitral tribunals have wide discretion on how they choose to conduct proceedings, in particular with regard to document production, as well as witness and expert testimony. As a matter of practice, arbitral tribunals often refer to the IBA Rules on the Taking of Evidence in International Arbitration (supra, A fn. 9). 68 The arbitral tribunal can order the production of documents to which either party has access, and sanction non-compliance.172 Where parties agree on the application of the IBA Rules, there is no breach of due process by the arbitral tribunal where the latter relies on article 9(5) of the IBA Rules to draw adverse inferences from a party’s failure to comply with a document production order of the tribunal.173 There is usually no large volume or broad scope of production of documents before French courts as seen before common law jurisdictions and this approach would commonly carry over in international arbitrations conducted in France. The French national judge may assist the arbitral tribunal for the production of evidence. Indeed, upon leave of the arbitral tribunal, parties may request that a French national jurisdiction order a third party to produce documents relevant to the case and to sanction non-compliance with a document production order by a penalty.174 69 The arbitral tribunal can hear any person as a witness.175 It is not uncommon for parties’ counsel to assist witnesses in preparation for their testimony, and this practice is authorized by a resolution of the Ordre des Avocats de Paris.176 The tribunal can also appoint experts,177 provided that parties have access to the experts’ findings and have the opportunity to make submissions.178 67

4. The law governing the dispute and mandatory laws (lois de police) 70

Under article 1511 CPC, parties can choose the law governing the dispute and often do so. If this is not the case, the arbitral tribunal enjoys a wide discretion to determine the legal rules it considers appropriate.179 This choice is not governed by any specific conflict of law rules. The reference in article 1511 CPC to “legal rules” implies that the arbitral tribunal is not bound to apply the laws of a specific jurisdiction but may also base its decision on transnational law such as the lex mercatoria.180 The parties may also require the arbitral tribunal to rule ex aequo et bono or en amiable compositeur,181 and where they do, they cannot insist on a strict application of the law, and conversely, Article 1464, 1st paragraph, article 1506 CPC. Article 1467, 3rd paragraph CPC. 173 CA Paris, 28 February 2017, no. 15/06036, Société Dresser-Rand Group Inc. c/ Société Diana Capita I FCR, Rev. Arb. 2017, 1060. 174 Articles 1469, 1506 CPC. 175 Article 1467, 1506 CPC. 176 Résolution of 26 February 2008, Bulletin du Barreau, 2008 no. 9. 177 CA Paris, 3 December 1998, Société ITP Interpipe c/ Hunting Oilfield Services (HOS), Rev. Arb. 1999, 601. 178 CA Dijon, 19 January 2000, Blanchetete c/ Cornement, Rev. Arb. 2001, 199. 179 Article 1511 CPC. 180 Cass. civ. 1ère, 22 October 1991, Rev. Arb. 1992, 457 = Rev. Crit. DIP 1992, 113, note Oppetit. 181 Article 1512 CPC. 171 172

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arbitrators have the power to modify the consequences of the contractual agreement between the parties where equity or the common interest of the parties so require.182 Where the parties agree on a decision ex aequo et bono, an arbitral award that does not make it clear that the tribunal has taken equity into account is subject to annulment.183 Certain laws are designed to apply universally and independently from the law 71 applicable to the dispute: the lois de police. One should bear in mind that an international arbitrator is in a different position than a national judge regarding lois de police. As an arbitrator, he or she is “detached” from any national legal order, so in a sense all lois de police are foreign to him or her. An arbitral tribunal can for instance dismiss a claim on the basis that they are affected by international sanctions.184 When reviewing arbitral awards (e.g., in enforcement proceedings), French courts would not control compliance of the award with foreign lois de police as such.185 Rather, foreign lois de police would only come into play in as much as they are also part of the ordre public international as it is understood and applied in France.186 This is the case, for example, where the foreign law also reflects a general international consensus as it is derived, for example, from U.N. resolutions187 or international conventions.188

5. Interim relief in arbitration a) Interim relief before state courts. Before the arbitral tribunal is constituted, a 72 party can ask French courts for any measures necessary to prove its case (i. e. a request for document production) and for conservatory or provisional measures.189 If the matter is urgent, other provisional or conservatory measures can also be applied for and ordered through expedited proceedings. The Presidents of the Tribunal Judiciaire and of the Tribunal de Commerce190 have jurisdiction to rule on such requests. This includes a particular feature of French law, the procedure known as “référé-provision”, which allows a creditor to enforce its rights in expedited proceedings if the claim cannot be seriously disputed – however, such an order will only be made in case of urgency.191 Once the arbitral tribunal is constituted, it has jurisdiction to order conservatory or 73 interim measures. French courts only have jurisdiction thereafter (as per the 2011 Reform) to order measures that entail an exercise of sovereign constraint, such as 182 CA Paris, 23 January 2018, no. 16/12618, M. Christian Cabiron c/ SA ITM Entreprises, Rev. Arb. 2018, 297. 183 Cass. civ. 1ère, 24 May 2018, no. 17–18.796, F. Parienty c/ Société Carrosserie peinture system, Rev. Arb. 2018, 476; CA Paris, 23 January 2018, no. 16/12618, M. Christian Cabiron c/ SA ITM Entreprises, Rev. Arb. 2018, 297. 184 This amounts neither to a denial of justice nor to a breach of international public policy: CA Paris, 16 January 2018, no. 16/05996, Legal Department du Ministère de la Justice de la République d’Irak c/ Société Fincantieri Cantieri Navali Italiani Spa, Rev. Arb. 2018, 296. 185 CA Paris, 16 May 2017, JDI, 2017.1361, note Gaillard. 186 CA Paris, 20 December 2018, no. 16/25484, Etat du Cameroun c/ SPRL Projet Pilote Garoubé, Rev. Arb. 2018, 849, 851; CA Paris, 6 March 2018, no. 15/23711, Autorité pour l’administration des actifs de l’Etat de Roumanie c/ Société Arcelormittal Holding AG, Rev. Arb. 2018, 471. 187 CA Paris, 16 January 2018, no. 15/21703, Société MK Group c/ SARL Onix, Rev. Arb. 2018, 401, note Lemaire, setting aside an award held in breach of principles of state sovereignty as expressed in a UN Resolution of 4 December 1962. 188 CA Paris, 28 May 2019, no. 16/11182, Société Alstom Transport SA c/ Société Alexander Brothers Ltd, holding that corruption was part of the ordre public international on the basis of the OECD Convention of 17 December 1997 and the UN Convention of Merida dated 9 December 2003. 189 Articles 1449, 1506 CPC. 190 Article 1449, 2nd paragraph, article 1506 CPC. 191 Cass. com., 29 June 1999, Bull. 1999 IV no. 147 p. 122.

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conservatory attachments and judicial security,192 as well as measures directed against third parties that are not bound by the arbitration agreement.193 74

b) Interim relief before the arbitral tribunal. As explained above, once the arbitral tribunal is constituted, it can order any conservatory or provisional measures,194 with the exception of conservatory attachments and judicial security195 and measures directed against third parties not bound by the arbitration agreement. Decisions on interim measures that do not qualify as awards will not be enforced by French courts.196 To be characterized as an award, a decision of the arbitral tribunal must definitively resolve, in whole or in part, the dispute whether that decision pertains to the merits, the jurisdiction or the procedural grounds for putting an end to the proceedings.197 Nevertheless, it should be noted that since the 2011 Reform, arbitral tribunals may order the payment of a penalty (astreinte) if a party refuses to comply with an order for interim measures.198

6. Multi-party arbitration 75

a) Arbitration agreement involving several parties. When several entities are involved in a dispute, difficulties may arise regarding the jurisdiction of the arbitral tribunal. If all of the entities are signatories to the arbitration agreement, there is no issue. If, however, one of the potential parties to the arbitration is not a signatory to the arbitration clause, it is necessary to prove the extension of the arbitration clause to it,199 or that all parties specifically agree to include it in the arbitration proceedings.

b) Equality of arms and appointment of the arbitrators. Multi-party arbitrations may also cause problems with the appointment of the arbitral tribunal: under French international arbitration law, the principle of equality of parties must be complied with when constituting the arbitral tribunal. In the famous Dutco decision, the Cour de Cassation held that requiring multiple defendants to jointly nominate one arbitrator was contrary to the public policy principle of equality between the parties.200 Nevertheless, parties can choose the rules of an arbitration institution respecting this principle which provides for solutions related to the constitution of the arbitral tribunal in cases of multi-party arbitration. This is notably the case of the ICC Rules (see in particular article 12(8) of the ICC Rules 2021). 77 Absent parties’ consent regarding the modalities of constitution of the arbitral tribunal, article 1453 CPC provides that in case of multi-party arbitration, the person responsible for administering the arbitration or, where there is no such person, the 76

Articles 1449 and 1468, 1st paragraph CPC, article 1506 CPC. See, in that respect, articles 1469, 1506 CPC: “If one of the parties to arbitral proceedings intends to rely on an official (acte authentique) or private (acte sous seing privé) deed to which it was not a party, or on evidence held by a third party, it may, upon leave of the arbitral tribunal, have that third party summoned before the President of the Tribunal Judiciaire for the purpose of obtaining a copy thereof (expédition) or the production of the deed or item of evidence. […]” 194 Articles 1467, 1468, 1506 CPC. 195 Articles 1449, 1468, 1st paragraph, article 1506 CPC. 196 A different solution is adopted in other jurisdictions, e. g., in Germany (infra J mn. 77). 197 Cass. civ. 1ère, 12 October 2011, no. 09–72.439, Bulletin 2011, I, no. 164 = Rev. Arb. 2012, 86; CA Paris, 7 October 2004, Société Otor Participations c/ Société Carlyle Holdings 1, Rev. Arb. 2004, 982. 198 Articles 1468, 1506 CPC. 199 Supra, mns 29 et seq. 200 Cass. civ. 1ère, 7 January 1992, no. 89–18.708, BKMI Industrienlagen GmbH & Siemens AG c/ Dutco Construction, Rev. Arb. 1992, 470 note Bellet. 192 193

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support judge will nominate the arbitrator(s).201 In the case of ad hoc arbitration, the support judge will generally decide on the constitution of the arbitral tribunal.

7. Third-party funding In recent years, third-party funding has become of increasing importance in interna- 78 tional arbitration. So far neither statutes nor case law expressly address the problems resulting from the use of third party funding in arbitration. However, the Ordre des Avocats de Paris published a resolution on 21 February 2017 on the matter.202 According to the resolution, professional ethics require that counsel representing a party that relies on third-party funding must not accept instructions from the third-party funder, nor exchange information with the funder. It also recommends counsel to incite parties to disclose the existence of third-party funding. This recommendation is designed to make sure a subsequent award is not subject to annulment and can be enforced, in particular by allowing arbitrators to disclose possible grounds for challenges resulting from their relationships with the third-party funder.203

IV. The control and the enforcement of arbitral awards Under French international arbitration law, arbitral awards may not be appealed.204 79 Any recourse against an arbitral award may only be sought on very limited grounds, with national judges otherwise precluded from re-examining the assessment of the dispute by the arbitral tribunal.205 Once an arbitral award has been rendered, it benefits from the res judicata effect206 and may be enforced by the parties. Unlike decisions made by national courts, arbitral awards cannot be subject to 80 measures of compulsory enforcement as such. Rather, parties must initiate separate enforcement (exequatur) procedures in a national court. For various reasons,207 parties may also simply request recognition of the award. Since the 2011 Reform, the enforcement of an award will not be suspended due to the 81 commencement of annulment proceedings or an appeal against an enforcement order.208 Nevertheless, the new law provides for the ability to seek either a stay of the enforcement of the award, or the imposition of conditions thereon, in circumstances where enforcement could severely prejudice the rights of one of the parties.209

201 Most importantly, unlike in an arbitration opposing two parties, a panel of three arbitrators will not involve party-appointed arbitrators. 202 The text of the resolution is available online at http://www.avocatparis.org/system/files/publications/ resolution_financement_de_larbitrage_par_les_tiers.pdf (accessed 1 August 2020), together with a report dated 23 November 2016 (http://www.avocatparis.org/system/files/publications/rapport_et_projet_resolution_tpf_0.pdf, accessed 1 August 2020). 203 See report (supra, fn. 208), p. 10. 204 Article 1518 CPC. The parties cannot stipulate that an appeal should be available: Cass. civ. 1ère, 13 March 2007, no. 04–10.970, Société Chefaro International c/ Barrère, Rev. Arb. 2007, 499, note Jaeger. 205 See infra fn. 229. 206 Articles 1484, 1506 CPC. 207 See infra mn. 100. 208 Article 1526, 1st paragraph CPC. Previously, unless the award was rendered provisionally enforceable, it could not be enforced either during recourse proceedings, or before the period provided for such recourse had expired. 209 Article 1526, 2nd paragraph CPC.

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1. Correction, amendment and other means of redress of arbitral awards Once an award is rendered, the arbitral tribunal is divested of its jurisdiction.210 At the request of a party, however, the arbitral tribunal can interpret the award, rectify clerical errors and omissions, or make an additional award where it failed to rule on a claim.211 83 In domestic arbitration, if the arbitral tribunal cannot be reconvened and if the parties cannot agree on the constitution of a new arbitral tribunal, national courts have jurisdiction to rule upon these claims of interpretation and rectification.212 Article 1506 of the CPC does not extend this solution to international arbitration. Despite the CPC not giving any guidance on this and the issue not yet having been heard before the courts, it seems reasonable to presume that parties could agree upon the constitution of a new arbitral tribunal.213 84 Since the 2011 Reform, article 1486 of the CPC provides that requests for interpretation, correction and amendment of the arbitral award must be made within three months of the notification of the award.214 According to the same article, unless otherwise agreed by the parties, the decision must be handed down within three months of the filing of the request to the arbitral tribunal. Failing any agreement between the parties, the support judge may also extend the period for handing down the decision.215 Where the time limit for a request under article 1486 CPC has lapsed, the state courts will not assume jurisdiction in subsequent enforcement proceedings to interpret unclear parts of the award,216 so parties need to make sure that the dispositive part of the award is capable of being enforced. 85 Revision of the award is also available on the same limited grounds as for French court judgements.217 Such recourse is only available in the case of fraud218 by the party in favour of whom the arbitral award was rendered, in the case of wrongful retention of documents by one party, or when exhibits or testimony have been falsified.219 The party seeking such recourse must prove that it could not have raised such a complaint before the decision had acquired the authority of a final decision.220 The objecting party must seek recourse within two months of the date it became aware of the grounds for 82

Article 1485, 1st paragraph, article 1506 CPC. Article 1485, 2nd paragraph, article 1506 CPC. 212 Article 1485, 3rd paragraph. 213 Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, § 912; Gaillard/ Lapasse, Cah. Arb. 2011, 263, § 114. 214 Articles 1486, 1506 CPC. For discussion of notification of awards, see supra mn. 61. 215 Article 1486, 2nd paragraph, article 1506 CPC. 216 Cass. civ. 1ère, 13 September 2017, no. 16–16.468, Société Orion Satellite Communications Inc. c/ Société Federal State Unitary Enterprise Russian Satellite Communications Company, Rev. Arb. 2018, 221. 217 Articles 1502, 1506 CPC. Pursuant to article 3 of the 2011 Decree, article 1502 CPC only applies to cases where the arbitral tribunal was constituted after the 2011 Decree came into force (1 May 2011). In cases where the arbitral tribunal was constituted before 1 May 2011, solutions developed by case law apply. By way of example, in case of fraud, a “recours en rétractation”, a recourse before the arbitral tribunal, if still constituted or if it could be reconvened, was admissible before the courts. 218 For a case of revision for fraud, see the Tapie case: CA Paris, 17 February 2015, JCP 2015, 289 upheld by Cass. civ. 1ère, 30 June 2016, no. 15–13.755, Société Groupe Bernard Tapie c/ Société CDR créances, Rev. Arb. 2016, 1123. As the Cour de Cassation ruled, fraud is constituted when an arbitrator conceals information likely to give rise to reasonable doubt as to his impartiality and independence, with the aim of favouring one of the parties. In such a case, French courts may withdraw the arbitral award if the decision was rendered while there existed a fraudulent arrangement between the arbitrator and that party. 219 Article 595, 1st paragraph CPC. 220 Article 595, 2nd paragraph CPC. 210 211

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revision.221 The recourse for revision is usually made before the arbitral tribunal (article 1502, 2nd para. CPC). Although case law and legislation provide no insight regarding this issue, it can be argued that the parties could agree to the constitution of a new arbitral tribunal to decide on such recourse.222

2. Review of arbitral awards before the state courts Article 1520 of the CPC exhaustively lists the grounds for setting aside an award. The 86 2011 Reform did not bring any significant changes to these grounds for annulment. French courts tend to interpret these grounds restrictively. More particularly, they will not review the merits of the decision of the arbitral tribunal (no révision au fond principle).223 However, within the limits of the grounds for annulment, the courts will conduct a full review of the relevant facts and law.224 Pursuant to the 2011 Reform and as provided for under article 1522 of the CPC, 87 parties may, at any time, expressly waive their right to bring annulment proceedings by way of a specific agreement. This right is not limited by any eligibility criteria such as nationality or residence of the parties, as is the case in some other countries. Where parties waived this right, it is still possible for a party to bring an appeal against an order for enforcement (exequatur) on one of the grounds listed in article 1520 of the CPC.225 a) Procedural framework (time limits, competent court, appeal). Annulment 88 proceedings before the French courts may only be brought against arbitral awards which were rendered in France.226 Only decisions of the arbitral tribunal which can be characterized as awards under French law can be the subject of an annulment application, i. e., the decisions that definitively resolve, in whole or in part, the dispute before them, whether that decision pertains to the merits, the jurisdiction or the procedural grounds for putting an end to the proceedings.227 An application to annul an award should be lodged before the court of appeal in 89 whose territorial jurisdiction the award has been rendered (article 1519 CPC). A party can apply for annulment of an award as soon as it is rendered and, at the latest, within a month of the notification of the award.228 The time limit is three months if a foreign party is applying.229 According to the CPC, the default mode of notification of the award is a notification by service (“par voie de signification”), which the parties can derogate from should they so wish.230 The CPC also provides that a decision dismissing an application for annulment 90 proceedings is deemed to be an order enforcing the arbitral award (exequatur) or the 221

Article 596 CPC. Seraglini/Ortscheidt, Droit de l’arbitrage interne et international, 2nd ed., 2019, § 967; Gaillard/ Lapasse, Commentaire analytique du décret du 13 janvier 2011 portant réforme du droit français de l’arbitrage, Cah. Arb. 2011, 263, § 115; Jarrosson/Racine, Arbitrage commercial, Jurisclasseur Droit international, Fasc. 585, 2012, § 77. 223 CA Paris, 22 January 2019, no. 16/23370, SARL DGM Autos c/ Mme D. Martinez, Rev. Arb. 2019, 296; CA Paris, 27 February 2018, no. 16/01358, Société Riseria Prodotti del Sole c/ SAS Scamark, Rev. Arb. 2018, 299. 224 CA Paris, 16 January 2018, no. 15/21703, Société MK Group c/ SARL Onix, Rev. Arb. 2018, 401. 225 See infra mns 102 et seq. 226 Accordingly, French courts would not assume jurisdiction to hear a setting aside application for awards made by arbitral tribunals seated outside of France: CA Paris, 23 January 2018, no. 16/15258, SA Sovarex c/ SA Cargill SLU, Rev. Arb. 2018, 298. 227 Cass. civ. 1ère, 12 October 2011, no. 09–72.439, Bulletin 2011, I, no. 164 = Rev. Arb. 2012, 86. 228 Article 1519 CPC. 229 Article 643, 2nd para. CPC. 230 Article 1519 CPC. However, institutional rules would not normally be treated as waiving the default requirement of service by bailiff: supra, fn. 173. 222

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part of an award that was not overturned by the court.231 The Court of Appeal’s decision is subject to review by the Cour de Cassation (recours en cassation). 91

b) Grounds for setting aside arbitral awards: An overview. In annulment proceedings, the Court of Appeal does not review the merits of the reasoning of the arbitral tribunal,232 even where there is a serious error of fact or law. The recourse against the award may only be based on five limited grounds, as enumerated in article 1520 of the CPC, and as restrictively interpreted by the courts. An award may only be set aside where 1° the arbitral tribunal wrongly upheld or declined jurisdiction, 2° the arbitral tribunal was not properly constituted, 3° the arbitral tribunal failed to comply with its mission, 4° due process was violated, or 5° the recognition or enforcement of the award would be contrary to international public policy.

c) Lack of jurisdiction of the arbitral tribunal. As discussed above, the arbitral tribunal, pursuant to the principle of competence-competence, has priority to rule in the first instance on objections to its jurisdiction to hear the dispute, and the national judge must defer to the arbitral tribunal, except where the arbitration clause is manifestly void or inapplicable and the arbitral tribunal is not constituted.233 Although national courts are generally prohibited from undertaking a full review of the tribunal’s reasoning in a setting aside action, where annulment is sought on the basis of a challenge to the arbitral tribunal’s jurisdiction, the national judge regains full jurisdiction at the stage of annulment proceedings and can rule on the jurisdiction of the arbitral tribunal as well as review the decision of the arbitral tribunal on jurisdiction. For that purpose, the judge will have regard to all elements of fact and law bearing on the existence and the scope of the arbitration agreement.234 French courts have applied the same standard to assess the arbitral tribunals’ jurisdiction in the context of investment arbitration.235 93 An application for annulment for lack of jurisdiction is available in several situations, notably where the arbitral tribunal had no power to rule upon the dispute, where the dispute did not fall within the scope of the arbitration agreement,236 cases where one of the parties to the dispute was not bound by the arbitration agreement,237 where the arbitration agreement was null and void. An award will also be set aside if the arbitral tribunal wrongly declined its jurisdiction (article 1520, 1° CPC). 92

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Article 1527 CPC. See supra, fn. 229. 233 See supra, fn. 105. 234 Cass. civ. 1ère, 6 October 2010, no. 08–20.563, Fondation Albert Abela Family Foundation (AAFF) c/ Fondation Joseph Abela Family Foundation (JAFF), Rev. Arb. 2010, 813; Cass. civ. 1ère, 1 June 2017, no. 16–13.729, Société Egyptian General Petroleum Corporation c/ Société National Gas Company, Rev. Arb. 2017, 1198, 1200 = YCA XLII (2017), 382. 235 The Paris Court of Appeal annulled an award rendered in favour of a Ukrainian company against the Republic of Moldova, on the grounds that the arbitral tribunal did not have jurisdiction because there had been no “investment” within the meaning of the Energy Charter Treaty (CA Paris, 12 April 2016, République de Moldavie c/ Société Komstroy, Rev. Arb. 2016, 833, overturned by Cass. civ. 1ère, 28 March 2018, no. 16–16.568, Société Komstroy c/ République de Moldavie, Rev. Arb. 2018, 561 note Fouchard). The Paris Court of Appeal also analysed all elements of fact and law with regard to the definition of “State entity” and “investor” according to the 1998 Bilateral Investment Treaty (“BIT”) between Russia and Ukraine (CA Paris, 29 November 2016, État d’Ukraine c/ Société Pao Tatneft, Rev. Arb. 2017, 500) and to the definition of the “investor” according to the 1996 BIT between Venezuela and Canada (CA Paris, 7 February 2017, République bolivarienne du Venezuela c/ Société Gold Reserve Inc., Rev. Arb. 2017, 566). 236 CA Paris, 22 May 2003, SA Ess Food c/ Société Caviartrade, Rev. Arb. 2003, 1252; Cass. civ. 1ère, 30 October 2006, Dalloz 2006, 3026. 237 CA Paris, 26 June 2003, Baba Ould Ahmed Miske c/ Société AVC Shipping, Rev. Arb. 2006, 143. 232

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The French annulment judge’s power of scrutiny extends to jurisdictional matters but 94 not to questions of admissibility.238 Therefore, the question arises whether the review of the award concerns issues of jurisdiction or admissibility. As recently ruled by the Cour de Cassation, the transmission of the contract to a third party has an impact on the jurisdiction of the arbitral tribunal, and not only on the admissibility of the claim.239 Conversely, a preliminary conciliation clause relates to the admissibility of claims,240 as does the interpretation of the power of attorney given by one of the disputing parties to initiate the arbitration.241 d) Irregularity in the constitution of the arbitral tribunal. An application for 95 annulment based on an irregularity in the constitution of the tribunal is available in a number of situations. Most importantly, this ground is relied upon if the arbitral tribunal was not constituted in accordance with the parties’ agreement.242 An annulment may also be sought if the conditions imposed by French law on arbitrators are not satisfied, i. e. when a lack of independence or impartiality is invoked; however, the irregularity must have been raised in the arbitration if it was already known then.243 Grounds such as professional incapacity244 or the violation of the principle of equality in the designation of the arbitral tribunal may also be invoked.245 e) Non-compliance by the arbitral tribunal with its mandate. This ground relates 96 to situations where the arbitral tribunal did not abide by the parties’ claims, especially when it ruled ultra petita by granting a party more than what it requested. Noncompliance with the arbitral tribunal’s mandate also covers situations when the arbitral tribunal did not comply with the scope of the powers conferred to it, including if the arbitral tribunal did not comply with the procedural rules established by the parties, to the detriment of one party, or if the arbitral tribunal ruled ex aequo et bono while not empowered to do so or, on the contrary, did not comply with its mission to rule ex aequo et bono. It also covers cases where the arbitral tribunal did not comply with the time limit set by the parties.246

238

Cf. article 1520, 1° CPC. Cass. civ. 1ère, 1 June 2017, no. 16–13.729, Société Egyptian General Petroleum Corporation c/ Société National Gas Company, Rev. Arb. 2017, 1197 = XLII YCA (2017), 382; CA Paris, 25 April 2017, Société Damietta International Port Comany S.A.E c/ Société Archirodon Construction (Overseas) Co. S.A., Rev. Arb. 2017, 1201. 240 CA Paris, 28 June 2016, no. 15/03504, Société Vijay Construction Ltd c/ Société Eastern European Engineering Ltd, Rev. Arb. 2016, 1153; Cass. civ. 3ème, 19 May 2016, no. 15-14.464, Société Thales arhitectures c/ société Copvial, Rev. Arb. 2016, 1094 Cass. civ. 3ème, 16 June 2016, no. 15-16.309, Société Tecta c/ M. G. Gully, Rev. Arb. 2016, 1095 and Cass. com. 24 May 2017, no. 15–25.457. This latter decision is also relevant because a counterclaim that had not been submitted to mediation was also admissible even if a “multi-tier” arbitration clause required mediation. 241 Cass. civ. 1ère, 18 March 2015, no. 14–13.336. The Versailles Court of Appeal applied this ruling (CA Versailles, 30 June 2016, no. 15/03050 and no. 15/03639), and recently the Cour de Cassation upheld the latter decision (Cass. civ. 1ère, 10 January 2018, no. 16–21.391). 242 Cass. civ. 1ère, 4 December 1990, Rev. Arb. 1991, 81. 243 See supra mn. 55. 244 E. g., article 8 of Order no. 58–1270 dated 22 December 1958 prevents French professional magistrates in the civil system from acting as arbitrators. Other categories of persons are also subject to professional incapacity (e. g. public servants). 245 Articles 1453, 1506 CPC. 246 Accordingly, an award made after the time limit stipulated in the terms of reference will be annuled: Cass. civ. 1ère, 4 May 2017, no. 16–17.358, Société Route de Magny c/ Société Coredif, Rev. Arb. 2017, 770. The extension of a deadline that had been agreed by the parties by the arbitral tribunal itself can, in turn, amount to a breach of public policy: Cass. civ. 1ère, 15 June 1994, no. 92–15.098, Communauté urbaine de Casablanca c/ Société Degremont, Bull. 1994 I no. 209 p. 152. 239

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f) Violation of due process. Due process is a fundamental principle of arbitration. Parties have the right to be informed of the existence of the arbitration proceedings and must be able to make their arguments, in fact and in law, as well as to hear and to discuss the arguments of the opposing party.247 Any document submitted to the arbitral tribunal must also be submitted to the opposing party.248 Arbitrators must not base their decision on an argument without giving the parties the opportunity to make appropriate submissions,249 e.g., by applying a statutory interest rate that neither party had requested to apply.250 Likewise, arbitrators must not confer solely with one party, without giving the other party the opportunity to participate.251 The arbitral tribunal’s refusal to rule on counterclaims where the defendant failed to pay the required advance on costs is not a breach of due process principles unless the counterclaims cannot be separated from the principal claims.252

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g) International public policy. The French courts interpret the “public policy exception” very narrowly, consistent with a pro-arbitration approach. In international arbitration, the public policy exception is based on the standard of international public policy. This concept is generally interpreted more narrowly by the courts than domestic public policy, as international public policy usually covers only the fundamental principles of the French legal system in addition to the mandatory laws that preserve the essential political, social or economic interests of a state.253 A violation of international public policy exists, for example, where arbitral proceedings fail to comply with the principle of parties’ equality in the constitution of the arbitral tribunal,254 or where an award does not contain a statement of reasons.255 Fraud in the arbitration proceedings will also be sanctioned as a breach of public policy.256 Fraud is evidenced when false documents have been produced, deceitful witness statements have been established or documents relevant to the resolution of the dispute have been fraudulently concealed from the arbitrators.257 247 CA Paris, 4 November 2014, SAS Man Diesel & Turbo France c/ Société Al Maimana General Trading Company Ltd, Rev. Arb. 2015, 543. 248 CA Paris, 16 January 2003, Société des télécommunications internationales du Cameroun (Intelcam) c/ SA France Télécom, Rev. Arb. 2004, 369; CA Paris, 2 April 2019, no. 17/03739, Monsieur Osama El Badrawi c/ Société Synthes GmbH, Rev. Arb. 2019, 304, 305 f. 249 Cass. civ. 1ère, 29 June 2011, no. 10–23.321, Overseas Mining Investments Ltd (OMI) c/ Commercial Caribbean Niquel, Bull. 2011, I, no. 125 = Rev. Arb. 2011, 678; CA Paris, 16 January 2003, Société des télécommunications internationales du Cameroun (Intelcam) c/ SA France Télécom, Rev. Arb. 2004, 369; CA Paris, 25 November 1997, Société VRV c/ Pharmachim, Rev. Arb. 1998, 684. 250 CA Paris, 23 October 2018, no. 16/24374, SAS Cabinet Maîtrise d’oeuvre CMO c/ Société Lavalin International, Rev. Arb. 2018, 840. 251 CA Dijon, 19 January 2000, Blanchetete c/ Cornement, Rev. Arb. 2001, 199. 252 Cass. civ. 1ère, 28 March 2013, no. 11–27.770, Société Pirelli & Cie Spa c/ société Licensing Projects, Bulletin 2013, I, no. 59. 253 CA Paris, 14 June 2001, SA Compagnie commerciale André c/ SA Tradigrain France, Rev. Arb. 2001, 773. 254 Supra, mns 74, 75. 255 CA Paris, 2 April 2019, no. 16/24358, Monsieur Vincent J. Ryan, Sociétés Schooner Capital et Atlantic Investment Partners LLC c/ République de Pologne, Rev. Arb. 2019, 304: the requirement to motivate an award is a requirement of due process (“procès équitable”), and an unreasoned award breaches international public policy. The state courts would, however, only control the existence of reasons, not their merits: CA Paris, 20 November 2018, no. 16/10379, Ministère des Finances d’Irak c/ Société Instrubel NV, Rev. Arb. 2018, 844. 256 CA Paris, 30 September 1993, Société European Gas Turbines SA c/ société Westman International Ltd, Rev. Arb. 1994, 359 = YCA XX (1995), 198. 257 CA Paris, 28 June 2016, no. 15/03504, Société Vijay Construction Ltd c/ Société Eastern European Engineering Ltd, Rev. Arb. 2016, 1153; CA Paris, 20 December 2018, no. 16/25484, Etat du Cameroun c/ SPRL Projet Pilote Garoubé, Rev. Arb. 2018, 849, 851.

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French case law recognizes corruption as one of the possible grounds for violation of 99 the French public policy.258 As a result, an arbitral award giving effect to a contract influenced by corruption is contrary to international public policy and cannot be enforced.259 When dealing with corruption allegations, the courts exercise a vast power of scrutiny: “the judge must research, in law and in fact, all the elements” allowing to rule on the issue.260 Such allegations may be proven through the flouting of a series of red flags such as the absence or inadequacy of the production of documents, the inadequacy of the consultant’s material and human resources in relation to the importance of the claimed due diligence, the disproportion between the consultant’s due diligence and his remuneration, incomplete or insincere accounting of the consultant, the inexplicability of awarding a contract to the consultant’s client, while his offer was rated lower than that of its competitors, the fact that the country in question or certain sectors of activity in that country are known to be affected by corruption and that the consultant’s client is implicated for usual practices of corruption.261 Allegations of corruption will be admissible before the judge even on grounds that have not been raised before the arbitral tribunal.262 Overall, it is essentially the refusal of the French legal system to provide assistance through legal means for the performance of an unlawful contract that is at issue.263 For an award to be annulled for violation of international public policy, the court 100 must consider the violation to be manifest, actual and concrete (“flagrante, effective et concrète”).264 On that basis, the enforcement of public policy principles is very restrictive, which has been criticized by some authors. If review is limited to a manifest breach of public policy, it may become virtually impossible to set aside an award on that basis. In case law rendered in the context of corruption, the “manifest” (“flagrant”) requirement is no longer mentioned.265 Recent case law by the Paris Court of Appeal has shown the abandonment of the “flagrant” requirement, at least as far as allegations of corruption and money laundering are concerned.266

258 CA Paris, 16 May 2017, République Démocratique du Congo c/ Société Customs and Tax Consultancy LLC, Rev. Arb. 2018, 248 and Cass. civ. 1ère, 13 September 2017, no. 16–25.657, Société Indagro c/ société Ancienne Maison Marcel Bauche, Rev. Arb. 2017, 900. 259 Lacoste, (2018) 36 ASA Bull. 31–52. 260 CA Paris, 10 April 2018, Société Alstom Transport SA c/ Société Alexander Brothers Ltd, Rev. Arb. 2018, 574, 580 note Gaillard, ordering the production of documents to determine the issue of corruption. 261 CA Paris, 10 April 2018, Société Alstom Transport SA c/ Société Alexander Brothers Ltd, Rev. Arb. 2018, 574. Based on that list, the court subsequently refused enforcement of the award: CA Paris, 28 May 2019, no. 16/11182, Gaz. Pal. 2 July 2019, no. 354z1, p. 22. 262 Cass. civ. 1ère, 13 September 2017, no. 16–25.657, Société Indagro c/ société Ancienne Maison Marcel Bauche, Rev. Arb. 2017, 900 and Lacoste, (2018) 36 ASA Bull. 31–52. 263 CA Paris, 10 April 2018, Société Alstom Transport SA c/ Société Alexander Brothers Ltd, Rev. Arb. 2018, 574. 264 CA Paris, 18 November 2004, SA Thalès Air Défense c/ GIE Euromissile, Rev. Arb. 2005, 751. Cass. civ. 1ère, 4 June 2008, no. 06–15.320, Société SNF c/ Société Cytec Industries BV, Rev. Arb. 2008, 473 = YCA XXXIII (2008), 489; CA Paris, 22 October 2009, Sté Linde Aktiengesellschaft c/ sté Halyvourgiki – AE, Rev. Arb. 2010, 124. 265 See, for instance, CA Paris, 26 February 2013, M. J. Sprecher c/ M. K. A. Bughsan, Rev. Arb. 2014, 82; CA Paris, 4 March 2014, 12/17681; 12 October 2014, 13/03410; 4 November 2014, 13/10256; and Cass. civ. 1ère, 12 February 2014, Cah. Arb. 2014 no. 3 p. 385, in which the Cour de Cassation reiterated the principle according to which there should not be any revision of the merits of the case at the stage of the annulment proceedings. 266 See CA Paris, 21 February 2017, République du Kirghizistan c/ M. Belokon, Rev. Arb. 2017, 915. On the contrary, CA Paris, 16 May 2017, République Démocratique du Congo c/ Société Customs and Tax Consultancy LLC, Rev. Arb. 2018, 248 maintained the “manifest” requirement.

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3. Enforcing arbitral awards 101

Applications to enforce awards rendered in France must be filed before the Tribunal Judiciaire of the place where the award was made.267 Enforcement applications must be filed with the award and the arbitration agreement (an original or authenticated copy). If the award is in a foreign language, the applicant must provide a French translation.268 A party may also choose to bring proceedings for the recognition of an award when it wishes to rely upon the award in another set of proceedings, or when the award dismisses the claims and thus need not be enforced. There are two conditions for enforcement (exequatur) of awards: proof of the existence of the award and absence of manifest contradiction with international public policy.269 In practice this means that an exequatur order will only be refused in very rare circumstances.

a) General framework. For awards issued in France, the President of the Tribunal Judiciaire of the seat of the arbitration has jurisdiction over an enforcement application,270 whereas, for awards issued abroad, the President of the Tribunal Judiciaire of Paris has jurisdiction.271 The enforcement (exequatur) proceedings are ex parte. Pursuant to article 1517, 3rd paragraph of the CPC, reasons for the judge’s decision on exequatur need only be provided if the enforcement (exequatur) order is refused. 103 The conditions for recourse against an enforcement order vary depending on the seat of the arbitration, whether in France or abroad. For arbitrations seated in France, while an order refusing enforcement may be appealed, an order granting enforcement may not be appealed, unless the parties waived the right to apply for annulment of the arbitral award.272 However, it should be noted that, pursuant to article 1524 of the CPC, bringing annulment proceedings before the Court of Appeal also constitutes a recourse against the enforcement order. 104 For arbitrations seated abroad, it is always possible to lodge an appeal against an enforcement order.273 The appeal must be submitted within one month from the date of service (signification) of the order – or any form of notification for the award affixed with the enforcement order (exequatur) with additional time granted to parties not domiciled in metropolitan France – and may only be granted on the basis of the grounds for setting aside an arbitral award listed in article 1520 of the CPC.274 102

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b) Enforcement of awards that were set aside. The French courts have repeatedly stated that awards that have been set aside abroad at the seat of arbitration may still be enforced by French courts. This approach, developed by the Cour de cassation in

267

Articles 1487 and 1516 CPC. Article 1515 CPC. 269 Article 1514 CPC. 270 Article 1516 CPC. However, if annulment proceedings are brought against an award rendered in France, the exequatur judge automatically loses jurisdiction to grant exequatur as regards the parts of the award which are challenged (article 1524 CPC). In this case, it is the Court of Appeal which has jurisdiction to grant exequatur (articles 1521 and 1527 CPC). See also article 1527 CPC for decisions denying an appeal formed against an exequatur order. 271 Article 1516 CPC. 272 Article 1522, 2nd paragraph CPC. In this case, the appeal is made on the grounds specified for annulment proceedings at article 1520 CPC and within one month of notification of the award affixed with the enforcement order (exequatur). As already stated, the default mode, from which parties can derogate, is the signification (see supra mn. 61) and the appeal against the enforcement (exequatur) order does not preclude the execution of the award. 273 Article 1525 CPC. 274 See supra mns 84 et seq. 268

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Hilmarton275 and subsequently confirmed in Putrabali,276 is not endorsed worldwide, and is one of the peculiarities of the French international arbitration regime.277 It is based on the French law principle that an international award is not entrenched in any domestic legal order.278 c) Enforcement and State immunities. On 11 December 2016, a law reformed the 106 French Code of Enforcement Civil Procedures, enacting a new regime governing States’ immunities from enforcement.279 Under French law, it is necessary to obtain the authorization of a judge prior to taking provisional or enforcement measures against assets belonging to a foreign State.280 Pursuant to Article L 111–1-2 of the French Code of Enforcement Civil Procedures, a court may only authorize such measures under three alternative conditions. First, a judge may authorize that provisional or enforcement measures be taken against a foreign State’s assets if that State has expressly consented to the application of such measures.281 Second, a foreign State’s asset may also be seized if that State has allocated or earmarked that asset for the satisfaction of the claim which is the object of the proceeding.282 Finally, a foreign State’s assets may be seized if a judgment or an arbitral award has been rendered against that State and if the relevant assets are specifically in use or intended to be used by that State otherwise than for noncommercial public service purposes, and provided that these assets have a connection with the entity against which the proceedings were directed.283

4. Preclusion of grounds for challenge and defences to enforcement In post-arbitration proceedings for annulment or enforcement of arbitral awards, 107 parties cannot raise an argument that they have not raised during the arbitration,284 except if this argument is linked to a public policy provision that the parties cannot waive.285 Parties are estopped from raising the lack of or the nullity of the arbitration

275 Cass. civ. 1ère, 23 March 1994, no. 92–15.137, Société Hilmarton c/ société OTV, Rev. Arb. 1994, 327, note Jarrosson = YCA XX (1995), 663. The peculiar consequence is that any subsequent arbitral award that contradicts the first award will not be enforceable in France: Cass. civ. 1ère, 10 June 1997, no. 95–18.402, Société OTV c/ société Hilmarton, Rev. Arb. 1997, 376 = YCA XXII (1997), 696. 276 Cass. civ. 1ère, 29 June 2007, no. 05–18.053, Société PT Putrabali Adyamulia c/ Société Rena Holding et Société Mnogutia Est Epices, Rev. Arb. 2007, 507 = YCA XXXII (2007), 299. 277 In fact, while the annulment of an award is a valid defence under article V(1)(e) of the New York Convention, article VII permits a regime that is more enforcement-friendly: see CA Paris, 18 January 2007, YCA XXXII (2007), 297. 278 See Cass. civ. 1ère, 29 June 2007, no. 05–18.053, Société PT Putrabali Adyamulia c/ Société Rena Holding et Société Mnogutia Est Epices, Rev. Arb. 2007, 507 = YCA XXXII (2007), 299. 279 Loi no. 2016–1691 du 9 décembre 2016 relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique (“Loi Sapin II”). French Code of Enforcement Civil Procedures, Articles L111–1-1 to L111–1-3. 280 Article L111–1-1, of the French Code of Enforcement Civil Procedures. 281 Article L111–2-1, first paragraph of the French Code of Enforcement Civil Procedures. 282 Article L111–2-1, second paragraph of the French Code of Enforcement Civil Procedures. 283 Article L111–2-1, third paragraph of the French Code of Enforcement Civil Procedures. 284 Cass. civ. 1ère, 21 September 2016, no. 15–22.338, Société Finamur c/ société Spie Sud-Ouest, Rev. Arb. 2016, 1208; CA Paris, 31 January 2008, Société Thimonnier c/ société Inner Mongolia Yili Industrial Group Co. Ltd, Rev. Arb. 2008, 487. CA Paris, 4 May 2006, no. 04/22975, Société Matel Group SAS c/ Société Fart SPA, Rev. Arb. 2006, 488. CA Paris, 18 March 2004, Sarl Synergie c/ Société SC Conect SA, Rev. Arb. 2004, 917. This principle is expressly confirmed in articles 1466, 1506 CPC. See also, CA Paris, 20 September 2007, Société Baste SA c/ société Lady Cake Feine Kuchen GmbH, Rev. Arb. 2008, 325. 285 Arguably, this would only apply to substantial rules of public policy (ordre public international de fond) as opposed to procedural rules of public policy that can be subject to a waiver under article 1466 CPC: CA Paris, 2 April 2019, no. 16/24358.

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agreement if they have not done so while participating in the arbitration proceedings (with the same limit regarding public policy).286 The authors are grateful to Margaux Barhoum for her research and assistance in the preparation of this chapter. 286 Cass. civ. 1ère, 6 July 2005, no. 01–15.912, Golshani c/ Gouvernement de la République islamique d’Iran, Rev. Arb. 2005, 993. See also CA Paris, 7 April 2015, no. 14/00480, SARL Fairtrade c/ SAS Façonnable, Rev. Arb. 2015, 640.

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J. International Arbitration in Germany Bibliography: Baumbach/Lauterbach/Albers/Hartmann, Zivilprozessordnung, 78th ed., C.H. Beck 2020; Berger, To what extent should arbitrators respect domestic case law? The German experience regarding the Law on Stadard Terms, (2016) 32 Arb. Int’l 243–259; Böckstiegel/Kröll/Nacimiento (eds), Arbitration in Germany – The Model Law in Practice, 2nd ed., Wolters Kluwer Law & Business 2015; Boog/Wimalasena, The 2018 DIS Rules: New Rules for a Renewed Institution, (2018) 36 ASA Bull. 10–30; Buchwitz, Schiedsverfahrensrecht, Springer 2019; Ferrari/Kröll, Conflict of Laws in International Arbitration, Sellier 2011; Flecke-Giammarco et al. (eds), The DIS Arbitration Rules: An Article-by-Article Commentary, Wolters Kluwer 2020; Geimer, Internationales Zivilprozessrecht, 8th ed., Dr. Otto Schmidt 2019; Gerardy/Macher, Reform of Germany’s most important institutional arbitration rules: the new 2018 DIS arbitration rules, (2020) 23 Int. A.L.R. 1–18; Greger/Stubbe, Schiedsgutachten, C.H. Beck 2007; Hammer, Überprüfung von Schiedsverfahren durch staatliche Gerichte in Deutschland, C.H. Beck 2018; Hanefeld/Schmidt-Ahrends, Germany, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Arbitration, 3rd ed., Oxford University Press 2019, 503–561; Hunter, Arbitration in Germany – A Common Law Perspective, (2003) 1 SchiedsVZ 155–163; Kröll, National Report for Germany (2007 through 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Supplement No. 98, ICCA & Kluwer Law International, March 2018; Kröll, Die schiedsrechtliche Rechtsprechung 2018, (2019) 17 SchiedsVZ 135–140, 188–195; Die schiedsrechtliche Rechtsprechung 2016 und 2017, (2018) 16 SchiedsVZ 61–74, 201–219; Krüger/Rauscher (eds), Münchener Kommentar zur ZPO, vol. 3, 5th ed., C.H. Beck 2017; Lachmann, Handbuch für die Schiedsgerichtspraxis, 3rd ed., Dr. Otto Schmidt 2008; Lionnet/Lionnet, Handbuch der internationalen und nationalen Schiedsgerichtsbarkeit, 3rd ed., Boorberg 2005; Musielak/Voit (eds.), ZPO, 17th ed., Vahlen 2020; Raeschke-Kessler/Berger, Recht und Praxis des Schiedsverfahrens, 4th ed., RWS 2011; Rützel/Wegen/Wilske, Commercial dispute resolution in Germany – litigation, arbitration, mediation, 2nd ed., C.H. Beck 2016; Saenger/Eberl/Eberl, Schiedsverfahren, Nomos 2019; Salger/Trittmann (eds), Internationale Schiedsverfahren, C.H. Beck 2019, Schütze, Schiedsgericht und Schiedsverfahren, 6th ed., C.H. Beck 2016; Schwab/Walter, Schiedsgerichtsbarkeit, 7th ed., C.H. Beck 2005; Solomon, Interpretation and Application of the New York Convention in Germany, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 329–378; Stein/Jonas (eds), Zivilprozessordnung, vol. 11, 23rd ed., Mohr Siebeck 2014; Theune, DIS Rules, in: Schütze (ed.), Institutional Arbitration, C.H. Beck/Nomos/Hart 2013, 203–302 (new edition in preparation); Trappe, Arbitration in Germany – some aspects and comparison of law, (2013) 11 SchiedsVZ 167–172; Wegen/Barth/Fox, International Arbitration in Germany, Nomos 2020; Weinacht, Enforcement of Annulled Foreign Arbitral Awards in Germany, (2002) J. Int’l Arb. 313–336; Zöller (ed.), Zivilprozessordnung, 33rd ed., Dr. Otto Schmidt 2020. National legislation: §§ 1025–1066 German Code of Civil Procedure (Zivilprozessordnung, ZPO), published online in German and English by the Federal Ministry of Justice (Bundesjustizministerium) at www.gesetze-im-internet.de (accessed 1 August 2020). Please note that the English translation is updated only occasionally so may not reflect latest legislative changes. International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (BGBl 1961 II 122), ratification status available at https://treaties.un.org/ Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (accessed 1 August 2020); European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (BGBl 1964 II 426), ratification status available at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-2&chapter=22&clang=_en (accessed 1 August 2020); Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (BGBl 1969 II 1191), ratification status available at https://icsid.worldbank.org/en/Pages/icsiddocs/List-of-Member-States.aspx (accessed 1 August 2020); United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, New York, 10 December 2014, ratification status available at https://treaties.un.org/Pages/ ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-3&chapter=22&clang=_en (accessed 1 August 2020).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ...............................

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Part 3. Country Reports c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of German arbitration law............................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ a) Substantive validity and interpretation ............................................ b) Agency ..................................................................................................... c) Capacity, arbitrability, form................................................................ 3. The validity of the arbitration agreement............................................. a) Capacity................................................................................................... b) Arbitrability ............................................................................................ c) Form......................................................................................................... d) Incorporation of arbitration agreements by reference.................. e) Invalidity and termination .................................................................. f) Arbitral tribunals established without an agreement.................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of arbitral tribunals................................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal................................................................................... a) Constitution of the arbitral tribunal ................................................. b) Qualifications, impartiality and independence of arbitrators ..... aa) Duty to disclose.............................................................................. bb) Grounds for challenge................................................................... cc) Procedural aspects and preclusion of grounds for challenge c) Failure or impossibility to act ............................................................ 2. The conduct of the arbitral proceedings ............................................... a) Overview ................................................................................................. b) Request for arbitration......................................................................... c) Equality of arms, fair trial and due process.................................... d) Written submissions............................................................................. e) Default ..................................................................................................... f) Oral hearings.......................................................................................... g) Confidentiality ....................................................................................... h) Arbitral awards and termination of the arbitration without an award........................................................................................................ aa) Arbitral awards ............................................................................... bb) Awards by consent ........................................................................ cc) Termination of arbitral proceedings without an award........ i) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ a) Overview ................................................................................................. b) Admissibility of evidence .................................................................... c) Types of evidence.................................................................................. aa) Witnesses ......................................................................................... bb) Experts .............................................................................................. cc) Document production...................................................................

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J. International Arbitration in Germany d) Standard of proof and estimations.................................................... 72 e) Court assistance..................................................................................... 73 4. The law governing the dispute and lois de police ............................... 74 a) Overview ................................................................................................. 74 b) Overriding mandatory law and lois de police ................................. 75 5. Interim relief in arbitration ...................................................................... 77 a) Interim relief before state courts ....................................................... 77 b) Interim relief before the arbitral tribunal ........................................ 79 6. Multi-party and multi-contract arbitration .......................................... 81 a) Multi-party arbitration......................................................................... 81 aa) Arbitration agreement involving several parties..................... 82 bb) Equality of arms and appointment of the arbitrators ........... 83 b) Multi-Contract Arbitration................................................................. 84 IV. The control and the enforcement of arbitral awards ............................. 85 1. Correction and amendment of arbitral awards ................................... 86 2. Review of arbitral awards before the state courts ............................... 87 a) Procedural framework (time limits, competent court, appeal) .. 88 b) Grounds for setting aside arbitral awards ....................................... 89 aa) Overview .......................................................................................... 89 bb) Lack of jurisdiction of the arbitral tribunal ............................. 90 cc) Breach of the right to be heard................................................... 92 dd) Unlawful composition of the tribunal and other procedural errors................................................................................................. 94 ee) Public policy.................................................................................... 97 3. Enforcing arbitral awards ......................................................................... 100 a) Enforcement of domestic arbitral awards........................................ 100 b) Enforcement of foreign arbitral awards ........................................... 101 c) Grounds for refusing enforcement.................................................... 102 aa) Overview .......................................................................................... 102 bb) Enforcement of awards that were set aside.............................. 103 cc) Fulfilment, set-off and similar defences.................................... 105 4. Preclusion of grounds for challenge and defences to enforcement 106 a) Preclusion due to failure to object in the arbitral proceedings .. 107 b) Preclusion due to failure to bring a setting aside application .... 109 c) Preclusion on the basis of good faith principles............................ 110

I. Introduction Like in many other jurisdictions, adjudication of private disputes by arbitral 1 tribunals has become an increasingly popular dispute resolution mechanism in Germany as an alternative to litigation. Over the past decades, the number of arbitrationrelated cases before state courts has more than quadrupled,1 and the number of arbitrations filed before the German Arbitration Institute, one of Germany’s most important arbitral institutions, has increased at a similar pace.2 This development owes much to the legal framework on which it relies (infra mns 2–9) and the principles underpinning German arbitration law guaranteeing party autonomy and due process (infra mns 10–11).

1 From 1990 to 1999, there were 290 decisions related to arbitration reported in the case law database Juris. In the following decade, 2000 to 2009, there were 862 such decisions, and from 2010 to 2019, 1,273 decisions. 2 The German Arbitration Institute (Deutsche Institution für Schiedsgerichtsbarkeit, DIS) saw an average of 75 new arbitrations per year from 2001 to 2005, and an average of more than 150 cases per year from 2015 to 2018 (http://www.disarb.org/de/39/content/statistik-id79, accessed 1 August 2020).

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1. The legal framework 2

Germany is a member state of both the New York Convention of 1958 and the European Convention of 1961. Following legislative reform in 1997,3 Germany’s legislation regarding arbitration in §§ 1025–1066 of the Code of Civil Procedure (Zivilprozessordnung4) is closely modelled on the UNCITRAL Model Law.5 Parties can submit their dispute to an arbitral tribunal on the basis of an agreement to that effect,6 and the arbitral tribunal’s decision, the arbitral award, has the effect of a final judgment between the parties,7 can be set aside only in limited circumstances,8 and can be enforced like a state court judgment by leave of the court.9

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a) Domestic and international arbitration. While article 1(1) ML and many arbitration laws make a difference between domestic and international arbitral proceedings, the German legislator did not follow that approach. As a result, German arbitration law provides for a uniform regime that applies to the arbitration of both international and purely domestic disputes. While the domestic or international nature of the dispute plays no role, a certain differenciation is made depending on the seat of the tribunal, i.e. whether an award is made in or outside Germany: There is case law suggesting that regarding public policy, domestic awards (i.e. awards of tribunals seated in Germany) have to comply with the ordre public interne, while foreign awards only have to observe the more liberal standard of the ordre public international.10 On that basis, case law applying the enforcement regime may seem to favour foreign awards. However, there are no reported decisions where the differentiation between domestic and international public policy played a decisive role, and, according to the Federal Court of Justice, the differences are “minimal”.11

4

b) Commercial and non-commercial arbitration. The scope of German arbitration law is not limited to commercial arbitration and applies, accordingly, to all types of arbitration, including, for example, arbitration of disputes relating to sport.12 However, for arbitration agreements in a non-commercial context, more restrictive requirements may exist, such as the special form requirements for arbitration agreements involving consumers,13 or limits as to the capacity to conclude arbitration agreements in certain areas of law.14 3 Gesetz zur Neuregelung des Schiedsverfahrensrechts, 22 December 1997, BGBl 1997 I, 3224. For comment on the reform, see Böckstiegel (1998) 14 Arb. Int’l 19–32 and Kreindler/Mahlich, (1998) 14 Arb. Int’l 65–90. 4 An English translation of the Code is published online by the Federal Ministry of Justice at www. gesetze-im-internet.de/englisch_zpo/index.html (accessed 1 August 2020). 5 Münch, in: MünchKomm-ZPO, 5th ed., 2017, Vorbem § 1025 mn. 181. On the UNCITRAL Model Law, see supra A. 6 § 1029(1) ZPO. 7 § 1055 ZPO. 8 § 1059 ZPO. 9 Domestic awards: § 1060 ZPO. For foreign awards, § 1061(1) ZPO refers to the enforcement regime of the New York Convention and other applicable conventions. 10 BGH, SchiedsVZ 2017, 200 (202, para. 21), YCA XLIII (2018), 451; BGHZ 179, 304, NJW 2009, 1747 (para. 27). 11 BGH, NJW 2009, 1215 (1216, para. 5), SchiedsVZ 2009, 66. 12 For a notable example, see BGH, NJW 2016, 2266, recognizing an award of the Swiss Court of Arbitration for Sports. On that decision, see Kröll, (2018) SchiedsVZ 61 (65), Heermann, (2019) NJW 1560; Motyka-Mojkowski/Kleiner, (2017) 8 J.E.C.L. & Pract. 457–462. 13 § 1031(5) ZPO; infra mn. 24. 14 Infra mn. 20.

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c) Ad hoc and institutional arbitration. German arbitration law allows for both ad 5 hoc and institutional arbitration (see supra A mns 11, 12). There are various arbitral institutions in Germany: Many of the regional chambers of industry and commerce (Industrie- und Handelskammern) administer arbitrations, among others, the chambers of industry and commerce in Hamburg, Munich and Nuremberg, and there are also some industry-specific arbitral institutions.15 By far the most important arbitral institution is the German Arbitration Institute (Deutsche Institution für Schiedsgerichtsbarkeit, DIS) which has published new arbitration rules in 2018.16 Almost all institutions propose a model arbitration clause that has the benefit of being tested so should be relied on unless there is a specific need for amendments. A reference in an arbitration agreement to the rules of an arbitral institution will normally be understood to include subsequent changes to the institutional rules unless such changes breach legitimate expectations of one of the parties.17 The new rules contain various provisions to further the efficient conduct of the 6 arbitral proceedings; in particular, it prescribes a mandatory case management conference at the beginning of the proceedings that includes a discussion between the tribunal and the parties on the Measures for Increasing Procedural Efficiency set forth in Annex 3.18 From an international perspective, a unique feature of DIS arbitration is article 26 of the DIS Arbitration Rules 2018, containing an express mandate for the arbitral tribunal to facilitate a settlement between the parties.19 Efforts of arbitral tribunals to moderate a negotiated settlement are supported by case law according to which submitting a settlement proposal to the parties is not, as such, a ground for challenging arbitrators.20 The DIS Arbitration Rules 2018 also contain specific confidentiality obligation for the parties,21 reflecting the fact that under German law an arbitration agreement does not as such imply a duty of confidentiality.22 d) The territoriality principle, the seat of the arbitration and the lex arbitri. 7 German arbitration law follows the territoriality principle of article 1(2) ML: as a rule, it only applies to arbitrations where the seat or place of arbitration is located in Germany.23 The choice of the seat of the arbitration therefore determines the procedural law applying to the arbitral proceedings, the curial law of the arbitration or lex arbitri, and the choice of a seat in Germany will also give jurisdiction to the courts there for decisions in support of the arbitration, e. g., regarding appointments and challenges of 15 German Maritime Arbitration Association; Deutscher Verband des Großhandels mit Ölen, Fetten und Ölrohstoffen e. V., Verein der Getreidehändler Hamburg e. V., Schiedsgericht der Bayerischen Warenbörse e. V. 16 The rules are available online at http://www.disarb.org/en/16/rules/overview-id0 (accessed 1 August 2020). On the new rules see Boog/Wimalasena, (2018) 36 ASA Bull. 10–30; Gerardy/Macher, (2020) 23 Int. A.L.R. 1–18; Flecke-Giammarco et al. (eds), The DIS Arbitration Rules, 2020. 17 BGH, NJW-RR 2018, 1331, paras 21–22. 18 See article 27(2), (4) DIS Rules 2018. On the toolbox contained in annex 3, see Gerardy/Macher, (2020) 23 Int. A.L.R. 1 (9–12). 19 The role of arbitrators as settlement facilitators is one where so far there has not emerged a transnational practice (Berger, (2018) 35 J. Int’l Arb. 501 (502); Reeg, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 18 mns 8–14), and it remains therefore advisable for arbitrators to insist on a documented agreement of the parties before undertaking settlement efforts (ibid. 516). Settlement efforts are subject there being no objection from the parties, and where a tribunal intends to communicate a “preliminary, non-binding assessment”, this is subject to prior agreement: Annex 3 item F DIS Rules 2018. 20 OLG München, SchiedsVZ 2015, 309 (310), NJW 2016, 881; cf. KG, BeckRS 2018, 3961. 21 Article 44 DIS Rules 2018. 22 See mn. 60 below. 23 § 1025(1) ZPO.

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arbitrators as well as setting aside proceedings.24 As a consequence, the choice of the seat is one of the most important decisions in the arbitral process. The seat of the arbitration is determined by the parties or, failing an agreement between the parties, by the arbitral tribunal.25 It is worth noting that the seat of the arbitration does not determine the venue for hearings which can take place elsewhere.26 8 There are a few limited exceptions to the territoriality principle. Some rules also apply to arbitrations seated abroad or where the seat of arbitration has not yet been determined, namely, the requirement that state courts decline jurisdiction if there is a valid arbitration agreement27 as well as the provisions allowing courts to order measures of interim relief28 and to assist with evidence in support of an arbitration29. In cases where the seat of the arbitration has not yet been determined, some additional rules for court intervention in support of arbitral proceedings apply if one of the parties has its domicile or habitual place of residence in Germany.30 A special set of rules applies to the enforcement of foreign arbitral awards,31 reflecting the fact that enforcement of these awards is governed by the New York Convention. 9

e) Arbitration and other ADR mechanisms (mediation, expert determination). Besides arbitration, there exist various other alternative dispute resolution mechanisms that are subject to special legal regimes: Mediation is governed by a particular statute, aimed at ensuring neutrality of mediators, confidentiality of the mediation process and a standardization of the qualification of mediators.32 In the field of alternative dispute resolution, the closest relative of arbitration is the so-called “expert determination” (Schiedsgutachten).33 By agreeing to expert determination, parties refer to a third party not the decision of an entire dispute, but rather the decision on a specific question of fact or law. Typical examples of expert determination include the determination of the value of a business34 and the determination of certain issues in the process of an M&A transaction, such as the occurrence of a material adverse change event or establishing closing-day balance sheets for post-closing price adjustments.35 The decision of the expert will not be enforceable as such, but it will be binding between the parties and in subsequent proceedings unless it is “evidently inequitable”.36 This is the case if the findings of the expert are manifestly incorrect37 or lack reasoning that is sufficiently detailed to allow a review of the expert’s conclusions.38 Judicial control in the case of expert determination thus goes beyond the review of an arbitral award in setting aside and enforcement proceedings.39 Whether the parties agreed on arbitration or expert determination does not depend on the wording of their agreement, but primarily on the 24 The competent court is the court of appeal chosen by the parties in the arbitration agreement or, failing an agreement of the parties, the court of appeal with jurisdiction for the seat of the arbitration, § 1062(1) ZPO. 25 § 1043(1)(2) ZPO. 26 § 1043(2) ZPO. 27 § 1032(1) ZPO. 28 § 1033 ZPO. 29 § 1050 ZPO. 30 § 1025(3) ZPO. 31 § 1025(4) ZPO. 32 Law on Mediation of 21 July 2012 (BGBl. I p. 1577). 33 For an overview, see Greger/Stubbe, Schiedsgutachten, 2007, 35 et seq. 34 For example, OLG Frankfurt a. M., BeckRS 2011, 21503. 35 Sessler/Leimert, (2004) 20 Arb. Int’l 151–166. 36 § 319(1) BGB. 37 BGH, NJW 2013, 1296 (1297, para. 16). 38 BGH, NJW 2001, 3775 (3777); OLG Hamburg, BeckRS 2013, 2608. 39 On review of awards, see infra mns 89–99.

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tasks assigned to the decision-making body or person, and on the effect the decision is to have according to the intentions of the parties, including what kind of judicial review should apply to the decision.40 In case of doubt, the presumption is that the parties only agreed on expert determination as the mechanism that allows for broader judicial review.41

2. The guiding principles of German arbitration law Arbitration offers parties the possibility to submit their disputes to privately ap- 10 pointed arbitrators rather than the state courts that would have jurisdiction otherwise. As an alternative to litigation it is considered to derive from the constitutional guarantee of individual autonomy.42 However, given that the fundamental right to access to justice before the competent state courts is guaranteed by the constitution,43 arbitration is legitimate from a constitutional perspective only if the jurisdiction of an arbitral tribunal is based on a voluntary submission of the parties44 and if there is a minimum of procedural safeguards – most importantly, the right to be heard and the impartiality and independence of the arbitrators. As a result, arbitration under German arbitration law is based on two pillars: party 11 autonomy and fairness of procedure. This is reflected in the requirement of an arbitration agreement as the basis for jurisdiction of any arbitral tribunal,45 and is the reason for the fact that the neutrality of the arbitrators, equal treatment of the parties and fairness of the arbitral proceedings are binding principles from which the parties cannot derogate.46

II. The arbitration agreement The agreement between the parties to submit their disputes to arbitration creates 12 jurisdiction of the arbitral tribunal, and conversely requires state courts to decline jurisdiction if approached in breach of an arbitration agreement.47 Under the doctrine of separability, the arbitration agreement must be treated as distinct from the main contract (infra mn. 13), and this includes the applicable law analysis (infra mns 14–18). Without a valid arbitration agreement, an award can be set aside and can be refused enforcement,48 and as a result, the validity, the scope and the interpretation of arbitral 40

OLG München, SchiedsVZ 2016, 165 (166), NJW 2016, 1964; Kröll, (2018) 16 SchiedsVZ 61 (63). OLG München, SchiedsVZ 2016, 165 (167), NJW 2016, 1964. 42 BGHZ 144, 146, NJW 2000, 1713, CLOUT Case No. 406, para. II.2. 43 Article 101(1) GG establishes a constitutional right of access to justice through the natural judge, and this right is also enshrined in article 6(1) ECHR: Münch, in: MünchKomm-ZPO, 5th ed., 2017, Vorbem § 1025 mns 4, 6. 44 BGHZ 144, 146, NJW 2000, 1713, CLOUT Case No. 406. On that basis, recent legislative change introduceing arbitration prescribed by statute under § 23(7) Verpackungsgesetz for certain types of disputes is questionable from a policy point of view and arguably unconstitutional: von Hase/Groß/ Pape, (2019) 17 SchiedsVZ 324; contra: Köhler/Hudetz, (2020) 18 SchiedsVZ 68. 45 § 1029 ZPO. 46 See BGHZ 24, 1 (3 et seq.), NJW 1957, 791 for neutrality of arbitrators and § 1042(1), (3) ZPO for equality and fair trial principles and the right to be heard. Where the agreement between the parties by its design disregards the requirements of independence and impartiality of the adjudicating body, it will not be treated as an arbitration agreement, and the decision made under that agreement will thus be subject to full review by the courts (BGH, NJW 2004, 2226, SchiedsVZ 2004, 205 for a clause in articles of association referring disputes between members and the association to an “arbitral tribunal” appointed unilaterally by the association). 47 § 1032 ZPO. 48 See §§ 1059(1)(1), 1060, 1061 ZPO, article V(1) NYC. 41

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agreements are central topics in arbitration law (infra mns 19–32). Disputes on jurisdiction can arise at all stages of the dispute resolution process, and under German arbitration law, state courts retain the ultimate control on the jurisdiction of arbitral tribunals (infra mns 33–40).

1. The doctrine of separability 13

§ 1040(1) ZPO adopts the doctrine of separability in German arbitration law, and accordingly, the main contract and the arbitration agreement are two separate agreements. Therefore, the existence, the validity and the scope of an arbitration agreement must be assed independently from the main contract.49 As a consequence, the arbitration clause does not necessarily share the fate of the main contract, and the invalidity or the termination of the main contract does not imply the invalidity or the termination of the arbitration clause contained in it.50

2. The law applicable to the arbitration agreement 14

The separability doctrine also implies that the analysis of an arbitration agreement is subject to a separate conflict of law analysis to determine the applicable law governing issues surrounding the arbitration clause. The connecting factor determining the applicable law depends on the specific issue in question.

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a) Substantive validity and interpretation. Issues regarding the substantive validity and the interpretation of an arbitration agreement are resolved by the contract law governing the arbitration agreement,51 as is the question of whether a third party is included in the scope of the agreement.52 As regards the recognition and enforcement stage, article V(1)(a) NYC and § 1059(2)(1)(a) ZPO imply that the parties can choose the law that governs their arbitration agreement, and this conflict of law rule is also applied in prior proceedings, e.g., when deciding on jurisdictional challenges.53 Absent a choice of the parties, the law at the seat of the arbitration applies.54 A much debated question in this context is whether a choice of law for the main contract is an implied choice of the law applicable to the arbitration agreement contained in the contract. Under the separability doctrine, this is not necessarily so, but German courts tend to answer this question in the affirmative.55

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b) Agency. In international business relationships, the conclusion of an arbitration agreement will often imply the use of agents acting for the parties. German courts will determine the law governing the power to make a binding submission to arbitration on behalf of the principal is determined under German conflict of law rules.56 Where 49

BGHZ 53, 315 (318 et seq.); OLG München, SchiedsVZ 2011, 337 (338). BGH, BeckRS 2018, 31390, para. 9; BGH, SchiedsVZ 2017, 103 (105, para. 17). 51 OLG München, BeckRS 2018, 11663, para. 58; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1029 mn. 108; Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (353). 52 BGH, BeckRS 2014, 11030, para. 24, YCA XXXIX (2014), 401. 53 Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (337 et seq.); Wächter, (2018) 16 SchiedsVZ 294 (296). According to its article 1(2), the Rome I Regulation does not apply to arbitration agreements (Nueber, (2014) 12 SchiedsVZ 186). 54 § 1059(2)(1)(a) ZPO, OLG München, BeckRS 2018, 11663, para. 58. 55 BGH, SchiedsVZ 2019, 355, para. 12; BGH, SchiedsVZ 2011, 46 (48), YCA XXXVII (2012), 216; OLG Saarbrücken, SchiedsVZ 2019, 290 para. 26; OLG Hamburg, SchiedsVZ 2003, 284 (287), XXX YCA (2005), 509, but some legal writers disagree: see Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1025 mn. 11, § 1029 mns 17a, 107. For a comparative review see supra A mns 22 et seq. 56 Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1029 mn. 6. 50

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agency issues are governed by German law, a power of attorney regarding the main contract does not have to make express mention of the arbitration clause in the main contract for it to cover the arbitration agreement as well.57 Absent a valid power of attorney, an arbitration agreement is not binding on the principal, and an award can be set aside or refused enforcement.58 c) Capacity, arbitrability, form. The personal capacity to conclude an arbitration 17 agreement is governed by the personal laws of the parties, i. e., the law of their domicile or habitual residence (lex domicilii).59 Issues of arbitrability, i. e., the question of whether a specific dispute can be referred to arbitration, are governed by German law (§ 1030 ZPO) if the place of arbitration is in Germany, even where one of the parties is domiciled outside Germany,60 or where German courts are seized with a matter referring to an arbitration, e.g., in enforcement proceedings.61 As to the form of the arbitration agreement, the applicable law depends on the seat of 18 the arbitration,62 so form requirements are governed by German law if the arbitration is seated in Germany. If the arbitration is seated abroad, German courts will enforce an arbitration agreement not only if it meets the form requirements of article II NYC, but also if it satisfies the more liberal form requirements of German arbitration law63 or the form requirements of the law which governs the arbitration agreement.64

3. The validity of the arbitration agreement An arbitration agreement is often included as a specific clause in a contract between 19 the parties in advance of a possible dispute, but can also be concluded as a separate agreement, even after a dispute has arisen.65 An arbitration agreement requires an agreement between the parties to make a binding submission to the jurisdiction of an arbitral tribunal as opposed to a mere declaration of intent. For example, contractual language providing that, in case of a dispute, the parties “aim to have recourse to arbitration” has been considered as not binding,66 and drafting errors may also justify the conclusion that there is no valid agreement, for example, where an arbitration agreement can be read to refer to two different arbitral institutions67 or where an arbitration agreement refers to procedural rules that do not exist.68 An arbitration agreement will be subject to the substantive law requirements under the law governing the arbitration agreement69 as well as requirements of overriding mandatory norms 57

BGH, WM 2018, 817 (818, para. 21); Kröll, (2018) 16 SchiedsVZ 61 (66). OLG Celle, SchiedsVZ 2004, 165 (167 et seq.). 59 BGH, SchiedsVZ 2011, 46 (48), YCA XXXVII (2012), 216. 60 OLG München, SchiedsVZ 2014, 262 (264). 61 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1030 mns 24 et seq., § 1031 mn. 2. 62 See the sources referred to by Wächter, (2018) 16 SchiedsVZ 294 (298). However, where consumers are involved, courts my tend to apply the form requirements of the law at the consumer’s place of residence: OLG Düsseldorf, BeckRS 2017, 140328. 63 BGHZ 187, 126 (128 et seq.), SchiedsVZ 2010, 332 et seq., YCA XXXVI (2011), 282 on the basis of article VII(1) NYC which allows a party to avail itself of more arbitration-friendly laws and conventions. 64 BGH, SchiedsVZ 2005, 306, YCA XXXI (2006), 679; BGH, SchiedsVZ 2011, 46 (48), YCA XXXVII (2012), 216. However, for consumers domiciled in Germany, the special form requirements in § 1031(5) ZPO are mandatory even if a different law is chosen as the law governing the arbitration agreement: BGH, NJW-RR 2012, 49 (50). 65 § 1029(1) ZPO. 66 BGH, SchiedsVZ 2016, 42 (43). 67 See, for example, BGH, NJW 1983, 1267 (1268), YCA XV (1990), 660; OLG Hamm, RIW 1995, 681, YCA XXII (1997), 707; BayObLGZ 2000, 57 (59), OLG Köln, OLGR 2006, 28. 68 OLG München, BeckRS 2016, 6179, paras 1–2. 69 Cf. Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1029 mns 21–26 b. 58

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applying irrespectively of the law of the arbitration agreement.70 The validity of an arbitration agreement will also depend on the capacity of the parties, the arbitrability of the dispute, and applicable form requirements. As regards arbitral tribunals established without an agreement, see infra mn. 27) 20

a) Capacity. Under German law, there are virtually no limits as to the capacity to conclude arbitration agreements, and the general capacity to enter into binding agreements is sufficient for a party to be able to agree to arbitration.71 More particulary, the capacity to arbitrate is not limited to commercial persons,72 nor are there restrictions for public bodies, government agencies or publicly held companies to enter into arbitration agreements.73 Statutory limits to the capacity to conclude arbitration agreements are rare; one example worth mentioning is the provision that only commercial persons and public bodies can agree to submit future disputes relating to securities transactions to arbitration.74

b) Arbitrability. Like with the capacity to arbitrate, German arbitration law is also liberal as to the arbitrability of disputes. It allows arbitration for all disputes over pecuniary matters, and as regards disputes over non-pecuniary claims, an arbitration agreement is effective insofar as the parties to the dispute have the power to conclude a settlement regarding the dispute.75 As a result of this liberal approach, with few statutory exceptions,76 the arbitrability of disputes is rarely an issue. Where procedural law provides for the exclusive jurisdiction of state courts for specific matters, this has been read as governing only jurisdiction in case of litigation, but not as excluding such matters from arbitration.77 22 Company law disputes are arbitrable in principle.78 However, where intra-company disputes have effect erga omnes, i.e., against all shareholders, the arbitration agreement must be drafted in such a way that it ensures the participation of all shareholders potentially affected by the res judicata effect of an arbitral award.79 The DIS proposes specific wording for such an arbitration agreement that has been confirmed as valid in a recent decision.80 21

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c) Form. Where German law governs form requirements,81 the arbitration agreement must be set out either in a document signed by the parties, or in messages exchanged by the parties.82 In most cases, arbitration agreements will be contained in a contract signed by both parties which meets the first of these requirements, but for the alternative form of agreeing through the exchange of documents that evidence the arbitration agreement, it is 70 BGH, NJW 2016, 2266 (2270, para. 44), SchiedsVZ 2016, 268, controlling the validity of an agreement in favour of CAS arbitration in Lausanne with regard to German competition law. 71 Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1059 mn. 10. 72 OLG Jena, YCA XXXIII (2008) 495 (498). 73 § 173 VwGO allows application of German arbitration law even in a public law context. 74 § 101 WpHG. 75 § 1030(1)(2) ZPO. 76 E. g., non-arbitrability of disputes relating to tenancy agreements for residential purposes (§ 1030(2) ZPO). Arbitration of employment law matters is limited under §§ 101 et seq. Arbeitsgerichtsgesetz. 77 OLG Hamm, DB 2000, 1118. 78 For example, a dispute between shareholders of a company regarding the interpretation of the statutes of the company: BGH, NJW 2015, 3234. 79 See BGHZ 180, 221 for arbitration of disputes relating to the validity of shareholder resolutions in limited liability companies (Gesellschaft mit beschränkter Haftung, GmbH) and BGH, NJW-RR 2017, 876 for disputes relating to the validity of shareholder resolutions in partnerships (for a critical view on that decision see Kröll, (2018) 16 SchiedsVZ 61 (69)). 80 LG Köln, SchiedsVZ 2018, 275. 81 For the law governing the form requirements, see supra mn. 18. 82 § 1031(1) ZPO.

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not necessary for the documents to be signed.83 In as much as German arbitration law establishes more liberal form requirements than the New York Convention, article VII(1) NYC allows courts to apply the more liberal domestic rules.84 The form requirements can also be reduced under article I(2) EuC, according to which oral arbitration agreements are binding, provided that this is sufficient under the law applicable at the domicile or the habitual residence of both parties.85 The arbitration agreement is not subject to those stricter form requirements that may apply to the main contract.86 Special form requirements exist where a consumer is party to an arbitration agree- 24 ment. In that case, the arbitration agreement must be contained in a document signed by both parties,87 and the document must be limited to arbitration-related language.88 If an arbitration agreement does not fulfil these formal requirements, both the consumer and his counterpart can raise a jurisdictional defence on that basis.89 According to the ECJ decision in Centro Móvil, the Unfair Terms Directive90 requires national courts in setting aside proceedings to annul an award where the arbitration agreement contains unfair terms, and this applies even if the consumer has not raised a jurisdictional defence in the arbitration.91 However, beyond the special form requirements, German courts are reluctant to review arbitration clauses involving consumers under unfair terms of contract principles. In particular, the Federal Court of Justice held that the submission to arbitration as such does not put the consumer at a disadvantage.92 d) Incorporation of arbitration agreements by reference. A document in the form 25 described above can incorporate an arbitration clause by reference to another document,93 for example, by reference to general terms and conditions of one of the parties. The reference to the document as such is sufficient and does not have to expressly mention the arbitration clause.94 However, substantive law may have additional requirements as to consent where an arbitration agreement is incorporated by reference: for example, in cases governed by the CISG, a mere reference to general terms and conditions is insufficient as such terms and conditions are only part of the contract if they were made available to the other party,95 a principle that has recently been applied to an arbitration agreement contained in such general terms and conditions.96 e) Invalidity and termination. An arbitration agreement produces no effect if it is 26 null and void, invalid, or impossible to implement (§ 1032(2) ZPO). This is the case, for example, if an arbitration agreement is invalid as to its substance97 or if it is valid but This is implied in § 1031(1) ZPO: an exchange of telegrams – which are never signed – is sufficient. BGHZ 187, 126, SchiedsVZ 2010, 332, YCA XXXVI (2011), 282. 85 By contrast, admissibility of oral agreements only at the domicile of one party or under the law of the arbitration agreement (supra mn. 17) is not sufficient: BayObLGZ 2002, 392 (396), RIW 2003, 383, YCA XXIX (2004), 761. 86 BGH, NJW 2014, 3652 (3654, paras 13 et seq.), SchiedsVZ 2014, 303. 87 § 1031(5) ZPO. Electronic form under § 126 a BGB (qualified signature) is also sufficient. 88 § 1031(5)(3) ZPO (unless the document is notarized). 89 BGH, SchiedsVZ 2011, 227. 90 Directive 93/13/EEC of 5 April 1993, [1993] OJ L95/29. 91 ECJ Case C-168/05 Elisa María Mostaza Claro v. Centro Móvil Milenium SL, [2006] ECR I-10421. 92 BGH, NJW 2005, 1125; BGH, SchiedsVZ 2007, 163 (164, para. 14). 93 § 1031(3) ZPO. 94 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1031 mn. 10. Cf. the travaux préparatoires for the Model Law, A/CN.9/264, art. 7, para. 8. 95 BGHZ 149, 113, NJW 2002, 370 (371 et seq.). 96 KG, BeckRS 2016, 115227. 97 As was the case in Achmea, in which the ECJ held that an arbitration agrement contained in an investment treaty was incompatible with EU law (ECJ, C-284/16, Achmea B.V. v. Slovak Republic), and in which the German Federal Court of Justice subsequently set aside the arbitral award (BGH, WM 2018, 2294). 83 84

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subsequently terminated, e.g. by agreement between the parties. An arbitration agreement can also be terminated unilaterally for cause,98 but courts are reluctant to accept the right to terminate.99 An arbitration agreement terminates if a party is unable to pay its share for advances of costs of the arbitral tribunal, unless the other party agrees to step in and pay the entire advance.100 If a would-be defendant is unable or unwilling to pay the necessary advance for costs for the arbitration, the claimant can directly approach the competent state courts.101 The arbitration clause also ends if a party cannot afford legal representation in the arbitration unless it can be reasonably expected that that party represents itself in the arbitral proceedings.102 Where the parties to an arbitration agreement subsequently agree to submit a specific dispute to the state courts, this implies waiver of the arbitration agreement regarding the specific dispute submitted to the state courts, but not for subsequent disputes.103 27

f) Arbitral tribunals established without an agreement. Under § 1066 ZPO, German arbitration law also applies to arbitral tribunals that are established by last wills or other acts not containing an agreement, e.g. by statutes of a corporation or articles of association.104 However, the arbitration agreement in a will can only apply to rights of which the testator could dispose. Accordingly, it does not cover statutory rights of relatives that exist independently from the testator’s will.105 If an arbitration clause is added to the statutes of an association by majority resolution, it will not bind the members that have not consented to this amendment.106

4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. Where there is a valid arbitration agreement, its application to a specific dispute depends on its personal and substantive scope. As regards the personal scope, the principle is that an arbitration agreement is binding only on the parties to it. As a result, guarantors are not as such bound by an arbitration agreement contained in the contract between the debtor and the creditor.107 An arbitration clause in an asset deal involving multiple sellers will cover disputes between the sellers on the one hand and the buyer on the other, but not necessarily disputes among the sellers themselves.108 29 As an exception to the rule, an arbitration agreement is binding on successors in title such as assignees, even if the successor does not formally accede to the arbitration agreement.109 The assignment itself does not have to follow the form requirements for an arbitration agreement.110 Just like in the case of succession in title, an insolvency 28

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BGHZ 23, 198 (202 et seq.); BGHZ 41, 104 (108). OLG München, SchiedsVZ 2012, 96 (99). 100 BGHZ 145, 116 (119). The practical consequence is that the insolvent party can apply for legal aid which is available for state court litigation but not for arbitration. For a recent comparative analysis see Enghol Cardoso, (2020) 36 Arb. Int’l 1 (5–6). 101 BGHZ 102, 199 (203 et seq.); BGH, NJW 1999, 647 (648). 102 BGHZ 102, 199 (202), NJW 1988, 1215. 103 BGH, SchiedsVZ 2017, 107 (108, para. 14). 104 Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1066 mn. 7. 105 BGH, NJW 2017, 2115 (2117). 106 BGHZ 144, 146, NJW 2000, 1713, CLOUT Case No. 406. BGH, NJW 2009, 1962 (1964, para. 20) contains a similar requirement for arbitration of corporate law issues that must be agreed by all shareholders (which excludes a change of by-laws or articles by majority resolution). 107 BGHZ 68, 356 (359); BGH, NJW-RR 1991, 423 (424). 108 OLG Saarbrücken, SchiedsVZ 2019, 290, paras 31 et seq. 109 BGH, NJW 2000, 2346 (assignment), BGHZ 68, 356 (inheritance), OLG München, BeckRS 2016, 06080 (corporate spin-off). 110 BGH, NZG 1998, 63 (64) and NZG 2002, 955. 99

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administrator is bound by an arbitration agreement concluded by the insolvent entity with a third party.111 An arbitration agreement would also cover claims of the third party raised on the basis of insolvency law in as much as such claims relate to the original contract.112 An exception is made for disputes regarding insolvency-specific rights of the insolvency administrator such as claw-back actions challenging payments made by the insolvent entity, or termination rights of the insolvency administrator under insolvency law: as the insolvent entity cannot bind the insolvent administrator with regard to his insolvency-specific rights, an arbitration clause concluded by the insolvent entity does not cover disputes relating to these rights.113 While in some jurisdictions, an arbitration clause may be binding on a non-signatory 30 if it belongs to the same group of companies as one of the signatories,114 there is no case law in Germany that would support a “group of companies” doctrine as the constitutional guarantee of access to justice before the competent state court will protect a nonsignatory from being drawn into an arbitration against his will on the basis of concepts such as a group of companies doctrine. However, German courts will apply a group of companies doctrine if it exists under the law applicable to the arbitration agreement,115 and courts have held that an arbitration agreement entered into by a civil law partnership116 is also binding on the partners who are liable for the partnership’s liabilities117 and that an arbitration agreement may extend to the directors of the signatory.118 b) Substantive scope of the arbitration agreement. The substantive scope of the 31 arbitration agreement depends on its interpretation. Given that party autonomy is the basis of any arbitration agreement, its interpretation depends on the true intention of the parties.119 There is a presumption in favour of a broad interpretation of arbitration agreements.120 On the basis of the separability doctrine,121 it is common ground that the arbitration agreement covers not only claims based directly on the main contract, but also claims resulting from the invalidity or the termination of the main contract.122 An arbitration clause in the original agreement extends, in principle, also to disputes arising out of subsequent agreements or settlements that supplement or amend the original contract.123 Generally, an arbitration agreement regarding future disputes will also cover non-contractual claims that result from a breach of contract,124 that would not exist 111 BGHZ 179, 304 (but ascertainment and enforcement of claims against the insolvent estate must comply with mandatory rules of applicable insolvency law, in particular the equal treatment of creditors, to avoid a breach of German public policy); BGH, WM 2013, 1514; OLG Karlsruhe, SchiedsVZ 2012, 101 (104), YCA XXVIII (2013), 379. 112 BGH, SchiedsVZ 2018, 127 (129 paras 14 et seq.); Kuhli/Köppel, (2020) 18 SchiedsVZ 2 (5–6). 113 BGH, SchiedsVZ 2011, 281 (283); BGH, WM 2013, 1514, para. 9; KG, SchiedsVZ 2012, 218 (220); Kuhli/Köppel, (2020) 18 SchiedsVZ 2 (3–4). 114 On the extension of arbitration clauses to non-signatories in France, India and Switzerland, see supra I mn. 38 and infra L mn. 31, S mns 56 et seq. 115 BGH, SchiedsVZ 2014, 151 (152), YCA XXXIX (2014), 401. For commentary, see Schütze, (2014) 12 SchiedsVZ 274–278. 116 Gesellschaft bürgerlichen Rechts, Offene Handelsgesellschaft. 117 BGH, NJW-RR 1991, 423; OLG Köln, NJW 1961, 1312. 118 OLG München, NJW-RR 1998, 198. 119 BGH, NJW 1964, 591 (592). 120 BGH, ZIP 2004, 1616 (1618); BGH, BeckRS 2016, 15081, para. 17; Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1029 mn. 110. 121 Supra mn. 13. 122 BGHZ 53, 315 (319, 323), NJW 1970, 1046; BGH, BeckRS 2018, 31390, para. 9; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1029 mn. 91; Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1029 mns 110 et seq. 123 BGH, BeckRS 2019, 8071. 124 OLG München, SchiedsVZ 2014, 262 (264).

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without the contract125 or that have a close factual link to related claims for breach of contract.126 A recent decision suggests that it would also cover cartel damage claims resulting from a breach of anti-trust law.127 For practical purposes it is advisable to draft arbitration agreements using language referring to disputes “in connection with” the main contract as this will leave no doubt as to the parties’ intention to include within the scope of the arbitration agreement all claims that are somehow linked to the main contract.128 32

c) Pathological arbitration clauses. Under § 1032(1) ZPO, an arbitration agreement has no effect if it is “null and void, inoperative or incapable of being performed.”129 Pathological clauses of this sort cover arbitration agreements where a binding submission to arbitration cannot be ascertained at all (supra mn. 19) and where there remain doubts as to the content and the scope of the agreement. Uncertainties of that sort are a scenario that parties to an arbitration agreement wish to avoid as the ineffectiveness of the arbitration agreement may create the need to engage in litigation before the state courts, and possibly in a forum that is to the disadvantage of one of the parties – a scenario that can be prevented by providing for a jurisdiction clause that applies if the arbitration agreement is invalid.130 When dealing with pathological arbitration clauses, German courts have adopted a policy favouring the enforcement of arbitration agreements, interpreting problematic or “pathological” arbitration clauses in such a way that they remain effective.131 For example, an arbitration clause referring to an arbitral institution that does not exist is not necessarily “inoperative” if, on the basis of a proper interpretation of the arbitration agreement, the arbitration can proceed, for example, as an ad hoc arbitration.132 Likewise, an arbitration clause in a contract that also contained a non-exclusive jurisdiction agreement was held to be valid.133 Similarly, an arbitration agreement is capable of being performed even where the agreed rules on appointing arbitrators are impractical134 or where the details regarding the arbitral proceedings were to be governed by a separate agreement that never was concluded.135 Imprecise references to institutions have been corrected as well by means of interpretation – for example, an arbitration clause referring to the inexistent “German Chamber of Commerce” as the administering institution was held to refer to arbitration under the rules of the German Arbitration Institute.136 125

OLG Hamburg, RIW 1989, 574 (578), YCA XV (1990) 455. LG Düsseldorf, BeckRS 2008, 19891, but some legal writers will only include claims in tort if they concur with contractual claims: Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1029 mn. 80. 127 LG Dortmund, NZKart 2017, 604. Dutch and Finnish courts (cf. Sendetska, (2018) 35 J. Int’l Arb. 357 (366)) and the ECJ (Case C-352/13, CDC v. Evonik, ECLI:EU:C:2015:335) follow a more restrictive approach, and commentators suggest that the arbitration clause would only cover claims resulting from deliveries made by the other party under the contract and not its general liability for damages caused by the cartel (Weitbrecht, (2018) 16 SchiedsVZ 159 (165)). On anti-trust enforcement in arbitration generally Bien/ Weitbrecht, in: Fuchs/Weitbrecht (eds), Handbuch Private Kartellrechtsdurchsetzung, 2019, 658–718. 128 BGH, SchiedsVZ 2017, 144 (146, para. 17); Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1029 mn. 110. 129 § 1032(1) ZPO. 130 BGH, NJW-RR 1987, 227. 131 Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (338). 132 BGH, SchiedsVZ 2011, 284 (285). 133 BGH, NJW 2006, 779, SchiedsVZ 2006, 101 interpreted the jurisdiction agreement to refer only to cases in which the arbitral tribunal lacked jurisdiction. 134 OLG München, WM 2015, 949 (950). 135 OLG München, GWR 2016, 295. 136 KG, SchiedsVZ 2012, 337. On arbitration under the DIS Rules 2018, see supra mns 5–6. 126

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5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) Enforcing arbitration clauses and Kompetenz-Kompetenz. The arbitration agree- 33 ment creates jurisdiction for the arbitral tribunal to decide disputes falling under the agreement. Jurisdiction of the arbitral tribunal is of paramount importance in the arbitral process as, without a valid arbitration agreement, an award can be set aside and will not be enforced. The question of jurisdiction can become relevant in a number of scenarios: First, state courts must dismiss an action brought in breach of an arbitration clause if the defendant so requests.137 Second, until the appointment of the arbitral tribunal, either party can apply to the competent court to have it determine the admissibility or inadmissibility of arbitration proceedings.138 Third, if a defendant in an arbitration raises a jurisdictional defence, the arbitral tribunal shall ordinarily make an interim decision on its jurisdiction,139 and if it assumes jurisdiction in such an interim decision, the defendant can then apply to the state courts to review this decision.140 Pending such an application, the arbitral tribunal can continue the arbitration and make an award on the merits (§ 1040(3) ZPO). However, even after the making of an award, the state courts retain the power to rule on the jurisdictional challenge, and if they determine the tribunal had no jurisdiction, an award made in the meantime may be set aside,141 just like in a scenario where an arbitral tribunal rejects a jurisdictional challenge only in a final award and, upon application of the award debtor, the courts find the tribunal had no jurisdiction (infra mns 90–91). A point where arbitration laws differ internationally is the question of how the power 34 to decide jurisdictional challenges is allocated between arbitral tribunal and state courts (also referred to as “Kompetenz-Kompetenz”). Under German arbitration law, whenever courts are asked to decide on the jurisdiction of an arbitral tribunal, they will engage in a full review of the arbitration clause, its validity and its interpretation, and are not bound by a decision of the arbitral tribunal assuming jurisdiction. The full review principle applies at all stages of the process, i. e., independently of whether the state court is asked to dismiss an action in favour of the arbitral tribunal, whether it is asked to make a declaration that the tribunal has jurisdiction, whether it reviews a decision of the arbitral tribunal assuming jurisdiction or whether it is asked to set aside or enforce an award.142 Accordingly, state courts always retain the power to decide that a tribunal lacks jurisdiction, and a decision of the arbitral tribunal assuming jurisdiction, be it by an interim

§ 1032(1) ZPO, article II NYC. § 1032(2) ZPO. This goes beyond what is required under article II NYC and what is provided in article 8 ML. The competent court is defined in § 1062(1) ZPO as the court of appeals named in the arbitration clause or, failing this, the court of appeal at the place of arbitration. For arbitrations seated abroad, see § 1062(2) ZPO. However, article VI(3) EuC requires German courts to stay, on request of a party, to stay such application pending the making of an arbitral award: see, e.g., OLG München, BeckRS 2016, 20281. 139 § 1040(2) ZPO. However, the tribunal can also proceed with the arbitration and make an award. Its refusal to make an interim decision is no breach of German public policy and does not justify a setting aside application: cf. BGHZ 166, 278. 140 § 1040(3) ZPO. By contrast, a decision or an award of the tribunal declining jurisdiction will not be reviewed on its merits; it can only be set aside if the conditions of § 1059 ZPO are met: BGHZ 151, 79, NJW 2002, 3031 (3032), SchiedsVZ 2002, 39, CLOUT Case No. 560. 141 BGH, SchiedsVZ 2017, 103, holding that the time limit would only start running once the decision on jurisdiction is served on the applicant. This decision overruled BGH, SchiedsVZ 2013, 333. 142 BGHZ 162, 9, SchiedsVZ 2005, 95, confirmed in BGH, NJW 2014, 3652 (3653); Solomon, in: Bermann, Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (341). 137 138

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decision or in the award itself, is not binding on the state courts.143 This applies even where the parties agree to submit the question of jurisdiction to the decision of the tribunal: the parties cannot derogate the right to re-open the jurisdictional question before the state courts.144 The same principles of full review apply when a jurisdictional defence is raised in state court proceedings, i. e., if a defendant in state court proceedings requests the dismissal of an action in favour of arbitration. Unlike in some other jurisdictions, the court will not just conduct a summary review of the arbitration clause and leave it to the arbitral tribunal to make a decision on jurisdiction and then to the parties whether they seek recourse against the arbitral tribunal’s decision on jurisdiction before the state courts. The implication is that arbitral tribunals do not have priority to rule on their jurisdiction as is the case under some arbitration laws.145 35 Unlike courts in many common law jurisdictions, German courts will not enforce arbitration agreements by issuing anti-suit injunctions restraining proceedings brought in breach of arbitration clauses.146 At most, an anti-suit injunction can be sought before the arbitral tribunal. The question of whether an action before state courts in breach of an arbitration clause gives rise to a claim for damages that would eventually cover the liability in the non-agreed forum147 has been discussed by legal writers.148 A recent decision of the Federal Court of Justice awarding damages for breach of an exclusive jurisdiction agreement suggests that damages are available for breach of an arbitration agreement as well.149 However, the Federal Court made the damage claim dependent on the foreign court accepting the jurisdictional challenge on the basis of the dispute resolution agreement.150 Accordingly, the damage claim may cover costs for defending the action in the non-agreed forum if it is ultimately dismissed, but arguably not liability determined by the court in the non-agreed forum.151 36

b) Preclusion of jurisdictional defences. In an attempt to streamline the arbitral process, German arbitration law provides that under certain conditions, a party is precluded from raising a jurisdictional defence: A party seeking to challenge the jurisdiction of the arbitral tribunal must do so at the latest in its statement of defence.152 If it fails to do so, it cannot raise it at a later stage.153 If the tribunal makes an interim decision that it has jurisdiction, and the defendant wants to pursue the defence, he must do so by application to the state courts within a time limit of one month.154 An arbitral award can be made pending such application, but the jurisdictional challenge can be pursued before the courts at the seat even after an award is made, and such award can be set aside if it is determined that the tribunal had no jurisdiction.155 Failure to bring a 143 BGHZ 162, 9, SchiedsVZ 2005, 95; OLG Celle, SchiedsVZ 2004, 165 (168). On that basis, German law does not provide for Kompetenz-Kompetenz in favour of the arbitral tribunal (Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (341, 354)). 144 BGHZ 162, 9, SchiedsVZ 2005, 95. 145 Supra A mn. 53. 146 Supra H mns 54–57. 147 As is the case under English law, see West Tankers Inc. v. Allianz SpA [2012] EWHC 854 (Comm). 148 Mankowski, (2009) IPRax 23 (26 et seq.). 149 BGH, NJW 2020, 399 (401, para. 22) with comment by Wais (at 405–406). 150 BGH, NJW 2020, 399 (402, para. 31). 151 BGH, NJW 2020, 399 (403, para. 45). 152 §§ 1031(6), 1040(2)(1) ZPO. 153 BGH, SchiedsVZ 2003, 133; BayObLG, SchiedsVZ 2004, 163. 154 § 1040(3)(2) ZPO. 155 BGH, NJW 2017, 488 (489 para. 9), SchiedsVZ 2017, 103, overruling previous case law (BGH, SchiedsVZ 2014, 200), specifying that the three month time limit for filing the setting aside application (§ 1059(3) ZPO) only starts following service of the decision confirming the arbitral tribunal has no jurisdiction.

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jurisdictional challenge before the courts will preclude the defendant from raising jurisdictional defences at a later stage,156 which is in contrast with the “choice of remedies” policy adopted by the drafters of the UNCITRAL Model Law and by courts in some Model Law countries.157 A party seeking to enforce an arbitration agreement before the state courts can do so 37 until the beginning of the oral hearing.158 The request to dismiss an action brought in breach of an arbitration clause must indicate the arbitration agreement on which the defendant seeks to rely.159 If a party requests the state court to dismiss an action in favour of the arbitral tribunal, it cannot then argue in the arbitration that the arbitral tribunal lacks jurisdiction.160 Similarly, a party contesting the jurisdiction of the arbitral tribunal which then declines to decide on the merits cannot later contest the jurisdiction of the state courts by relying on the arbitration agreement.161 c) Binding effect of state court decisions on jurisdiction of arbitral tribunals. 38 Generally, a decision of German domestic courts on the jurisdiction of the arbitral tribunal will be binding for subsequent decisions: a state court judgment dismissing an action in favour of an arbitral tribunal will be treated as conclusive for the tribunal’s jurisdiction in setting aside or enforcement proceedings.162 The same applies to a state court decision confirming an arbitral tribunal’s decision assuming jurisdiction.163 The binding effect is more complex in the case of foreign judgments. Under German 39 domestic procedural law, a foreign decision dismissing an action in favour of arbitration cannot be recognized as only decisions on the merits of a dispute are subject to recognition and enforcement.164 If the arbitral tribunal’s jurisdiction is relevant in subsequent proceedings in Germany, the courts would address the question independently: e. g., if a foreign court dismisses an action because of an arbitration clause, and an action is then brought in Germany, the courts here would review the arbitration clause and the jurisdiction of the arbitral tribunal again. Similar principles apply to foreign judgments on the merits: As a general rule, a foreign judgment assuming jurisdiction in breach of an arbitration clause cannot be recognized and enforced in Germany165 as recognition and enforcement require a judgment of a court having jurisdiction.166 By contrast, where recognition and enforcement is governed by the Brussels Ia 40 Regulation or the Lugano Convention, German courts will not review the jurisdiction of the court of origin and will therefore enforce a state court judgment even if it was rendered in breach of an arbitration clause.167 The new recital 12 of the Brussels Ia 156 BGH, SchiedsVZ 2003, 133 and NJW 2009, 1747 (1749, para. 32); Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1040 mn. 12. 157 E. g., PT First Media TBK v. Astro Nusantara International BV [2013] SGCA 57; infra O mn. 46. 158 § 1032(1) ZPO; other general preclusion rules do not apply: BGHZ 147, 394 (396). 159 BGH, MDR 2011, 717. 160 BGH, NJW-RR 2009, 1582, SchiedsVZ 2009, 287; BGH, WM 2017, 1111; OLG München, BeckRS 2017, 125333. Similarly, a party that initiates an arbitration cannot later rely on an argument that there is no valid arbitration agreement: Kröll, (2019) 17 SchiedsVZ 188 (191). 161 BGH, NJW-RR 1987, 1194. 162 BGH, NJW 2014, 3655 (3657), but the decision leaves open the question of whether a decision of a state court on the merits dismissing a defence based on an arbitration clause would be binding. Cf. also Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1032 mn. 12. 163 BGH, SchiedsVZ 2016, 339 (340, para. 12). 164 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1032 mn. 17. By contrast, courts have recognized foreign decisions declaring an arbitration agreement to be invalid: KG, NJW-RR 2007, 1438. 165 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1032 mn. 17. 166 § 328(1)(1) ZPO. 167 OLG Düsseldorf, RIW 1998, 967; Stadler, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, art. 1 Brussels Ia Regulation mn. 10.

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Regulation suggests it may be possible for German courts to enforce an arbitral award under article V NYC even if that award is in conflict with a judgment on the merits of the courts of another EU Member State. However, according to the ECJ decision in Nipponkoa, the regulation requires other conventions to be applied in light of the mutual trust principle,168 and this arguably implies that recognition or enforcement of an arbitral award conflicting with a judgment of a court in a Member State is not permitted. Ultimately, the question will have to be decided by the ECJ.169 It is also unclear whether the decision of a court of an EU Member State dismissing an action in favour of an arbitral tribunal could be recognized under the new Brussels Ia Regulation. German courts have done so under the regime of the previous regulation,170 but the new recital 12 appears to exclude such a decision from the scope of the regulation.

III. The arbitral tribunal and the conduct of the arbitral proceedings 41

The course of the arbitral proceedings will be in the hands of the parties: following the request for arbitration (infra mn. 51), they will have to appoint the arbitral tribunal and make sure the arbitrators meet the requirements of independence and impartiality (infra mns 42–49). They will also be able to agree on numerous issues of procedure, such as the seat of the arbitration, the language of the proceedings, oral hearings and the venue of hearings (infra mn. 50) as well as the taking of evidence (infra mns 67–73), subject always to the requirement of equality of arms and fair trial principles (infra mns 52–56). The tribunal will then decide the case under the laws governing the dispute, including, where applicable, overriding mandatory law (infra mns 74–76). Special rules apply to interim relief, whether sought before the arbitral tribunal or state courts (infra mns 77–80). Multi-party and multi-contract arbitration – i.e., scenarios where there are more than two parties to a dispute, or where an arbitration is conducted under more than one contract –, raise specific issues as well (infra mns 81–84).

1. The arbitral tribunal 42

a) Constitution of the arbitral tribunal. Unless the parties agree otherwise, the default rule is that the dispute is decided by a panel of three arbitrators.171 The DIS Arbitration Rules 2018 follow that approach in principle but, with a view to cost efficiency, empower the institution to appoint a sole arbitrator where a party so requests.172 Where there is a panel of three arbitrators, each party nominates one arbitrator which in turn appoint the third arbitrator.173 If the case is to be decided by a sole arbitrator and if there is no agreement on the appointment process, the parties must appoint him jointly, and, where they cannot reach an agreement, the arbitrator will be appointed by the competent court or, if applicable institutional rules so provide, by the arbitral institution.174 The 168 ECJ Case C-452/12 Nipponkoa Insurance Co. (Europe) Ltd v. Inter-Zuid Transport BV, ECLI:EU: C:2013:858. 169 Hess, (2014) JZ 538 (541). 170 OLG Düsseldorf, OLGR 2007, 704. This conclusion is supported by the decision of the ECJ Case C456/11 Gothaer Allgemeine Versicherung AG v. Samskip, according to which a judgment of a court in a Member State dismissing an action in favour of the courts named in an exclusive jurisdiction clause must be recognized in all other EU Member States. For a detailed discussion of the implications of recital 12 of the regulation in this context, see supra H mns 54, 66. 171 § 1034(1)(2) ZPO. 172 Article 10.2 DIS Rules 2018. 173 § 1035(3)(2) ZPO. 174 § 1035(3)(1) ZPO, article 12.3 DIS Rules 2018.

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competent court is the court of appeals (Oberlandesgericht) specified in the arbitration agreement or, absent an agreement, the court of appeals with jurisdiction for the seat of the arbitral tribunal (§ 1062(1) ZPO). A decision of the competent court appointing an arbitrator is not subject to appeal.175 When considering an appointment application, the court of appeals will only review whether there is prima facie evidence for an arbitration agreement, without determining whether the agreement is valid and whether it covers the dispute at hand.176 b) Qualifications, impartiality and independence of arbitrators. When choosing an 43 arbitrator, it is essential to observe all requirements contained in the arbitration clause. Otherwise, there is the risk that the arbitration is deemed to be in breach of the procedural rules agreed on by the parties. As a result, the award can be set aside and will not be enforced.177 Most importantly, the arbitrator must meet the requirements of impartiality and independence.178 aa) Duty to disclose. There are various procedural safeguards aimed at securing 44 impartiality and independence of the arbitrators throughout the proceedings. An arbitrator has a duty to disclose any and all circumstances that might give rise to doubts as to his impartiality, and even after his appointment, he remains under a duty to disclose such circumstances.179 The IBA Guidelines on Conflict of Interest in International Arbitration do not have binding force as such,180 but will be used as guidance to determine disclosure obligations. The language used in § 1036(1) ZPO shows that the duty to disclose does not only 45 include circumstances that are sufficient to challenge the arbitrator but extends to all circumstances that may raise doubts as to the impartiality or independence of the arbitrator.181 However, courts have held that an arbitrator is not bound to disclose “all possible circumstances”, but only those circumstances which can reasonably create doubts as to his neutrality.182 Otherwise, there would be the risk that an alleged “breach of disclosure duties” is misused by parties to an arbitration to create grounds for challenges.183 Likewise, there is no duty to disclose circumstances known to the parties and the arbitrators.184 If an arbitrator or an expert violates his duty of disclosure, such failure only justifies a challenge if the non-disclosure in itself raises doubts about his impartiality, for example, where there were compelling reasons to disclose or where the arbitrator intentionally concealed the relevant facts.185 By contrast, failure to disclose facts that clearly do not justify a challenge of the arbitrator cannot then justify a challenge based on the failure to disclose.186 bb) Grounds for challenge. An arbitrator can be challenged if circumstances give 46 rise to justified doubts as to his impartiality or independence, or if he does not meet the 175

BGH, SchiedsVZ 2012, 281 (282). Kröll, (2018) 16 SchiedsVZ 61 (71). 177 § 1059(2)(1)(d), § 1060(2)(1) ZPO, article V(1)(d) NYC. 178 § 1036(2) ZPO. 179 § 1036(1) ZPO. 180 OLG Frankfurt a. M., BeckRS 2019, 848, para. 89; OLG Frankfurt a.M., 13 February 2012, 26 SchH 15/11, juris. 181 OLG Frankfurt a. M., BeckRS 2019, 848, para. 78; KG, SchiedsVZ 2010, 225 (227). 182 KG, SchiedsVZ 2010, 225 (227). 183 KG, SchiedsVZ 2010, 225 (227). 184 BGH, NJW 2018, 70 (76, para. 55), SchiedsVZ 2017, 317 for the duty to disclose of an expert appointed by the arbitral tribunal. 185 BGH, WM 2019, 875 (878, paras 23, 24). 186 BGH, WM 2019, 875 (878, para. 23); Schmidt-Ahrendts/Schneider, (2020) 18 SchiedsVZ 35 (39). 176

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prerequisites established by the parties.187 As a rule of thumb, German courts will apply the same standards as for state court judges.188 Circumstances in which courts confirmed a ground for challenge include situations where the arbitrator is acting as counsel for one of the parties in a different dispute,189 where an arbitrator is member of the board of management of one of the parties,190 where he has an economic interest in the outcome of the arbitration or where he has a close personal relationship with one of the parties.191 By contrast, a personal relationship or friendship between the arbitrators, or between an arbitrator and counsel for one of the parties, are not as such a ground for challenge,192 and the same applies to a close relationship between an arbitrator and the tribunal-appointed expert.193 Procedural errors or irregularities of the tribunal only justify a challenge if they are sufficiently serious and frequent.194 It is not unusual for an arbitral tribunal to communicate preliminary views on the case prior to making an award. The communication of the tribunal’s views on the prospects of the case, even where they are not expressly termed as “preliminary”, will not justify a challenge unless it becomes apparent that the tribunal’s view are final and that it has closed its mind to new arguments and submissions.195 47

cc) Procedural aspects and preclusion of grounds for challenge. Unless the parties agree on a specific procedure for raising challenges, a challenge must be brought before the arbitral tribunal within two weeks from the moment the party became aware of the ground for challenge.196 The entire arbitral tribunal will decide on a challenge, including the challenged arbitrator.197 If a challenge is unsuccessful before the arbitral tribunal, a party can request the competent court (supra mn. 42) to decide on the challenge; the deadline for such request is one month from the moment the party became aware of the decision of the arbitral tribunal rejecting the challenge.198 The parties cannot waive the right to submit a challenge to the competent state court.199 This procedure ensures that a challenge is dealt with in a timely manner. If the state courts do not sustain the challenge, their decision is binding in subsequent setting aside or enforcement proceedings.200 If a party does not bring the challenge before the state courts within a month from the decision of the tribunal, it is precluded from raising the challenge as a ground for setting aside the subsequent award or for refusing its enforcement.201 § 1036(2)(1) ZPO. BGH, NJW 1992, 2299; OLG Frankfurt a. M., NJW-RR 2008, 801 (802); KG, BeckRS 2018, 3961, para. 9; Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1036 mn. 4. 189 OLG Dresden, SchiedsVZ 2005, 159 (162). 190 BGH, NJW 2018, 869 (870), SchiedsVZ 2018, 271; OLG Frankfurt a. M., SchiedsVZ 2017, 150 (153 et seq.). 191 Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1036 mn. 8. 192 OLG Frankfurt a. M., BeckRS 2019, 848; OLG Frankfurt a. M., NJW-RR 2008, 801 (803); Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1036 mn. 11. 193 OLG München, SchiedsVZ 2014, 257 (260). 194 OLG Frankfurt a. M., SchiedsVZ 2010, 52 (54); OLG München, NJOZ 2014, 1779 (1782); OLG München, BeckRS 2016, 20169, para. 30; Armbrüster/Wächter, (2017) 15 SchiedsVZ 213 (217, 223). 195 OLG München, SchiedsVZ 2015, 309 (310), NJW 2016, 881; KG, BeckRS 2018, 3961; Armbrüster/ Wächter, (2017) 15 SchiedsVZ 213 (217–218). 196 § 1037(2)(1) ZPO. 197 § 1037(2)(2) ZPO. 198 § 1037(3) ZPO. 199 BayObLG, NJW-RR 2000, 360. 200 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1037 mn. 6. 201 BGH, NJW-RR 2001, 1059, YCA XXIX (2004), 700; OLG München, SchiedsVZ 2010, 52; OLG Frankfurt a. M., SchiedsVZ 2014, 206 (208), YCA XLI (2016), 480; OLG München, SchiedsVZ 2014, 257 (260). 187 188

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Where grounds for challenge become known only after the tribunal has made the 48 arbitral award, it will generally not be possible to put forward those grounds in setting aside or enforcement proceedings.202 However, where the arbitrator breached the duty to disclose, state courts would determine whether a challenge would have been successful and, if so, set aside the award or refuse enforcement.203 Similarly, an arbitral award made while a challenge was still pending can be set aside if the challenge is subsequently successful.204 c) Failure or impossibility to act. If an arbitrator is unable to perform his functions 49 or fails to do so in a timely manner, his mandate ends if he withdraws from his office or if the parties so agree.205 If necessary, the competent court (supra mn. 42) can make a declaration on the termination of the mandate or appoint a new arbitrator.206 However, such intervention will be limited to extraordinary cases, e.g., where the arbitrator is affected by serious illness, serves a prison sentence, or causes serious delay in the proceedings.207 A serious delay will only justify judicial termination of the arbitrator’s appointment in exceptional circumstances such as “manifest abuse”, and the court will not review the appropriateness of the timetable and the conduct of the proceedings by the arbitral tribunal.208

2. The conduct of the arbitral proceedings a) Overview. The arbitral proceedings are largely subject to party autonomy.209 The 50 parties can choose the language in which the arbitration is to be conducted (§ 1045(1) ZPO), and a breach of such agreement may be a ground for setting aside an award or for refusing enforcement.210 The parties can also agree on rules for the conduct of oral hearings and the taking of evidence.211 Where there is no agreement between the parties, the conduct of the arbitration is at the discretion of the arbitral tribunal, in particular as regards the place of arbitration, the language of the arbitration, deadlines for written submissions, and oral hearings.212 The arbitral tribunal’s discretion is only subject to principles of procedural public policy such as the right to be heard and equal treatment of the parties.213 b) Request for arbitration. Unless otherwise agreed by the parties to the dispute, the 51 arbitration proceedings regarding a certain dispute commence on the date on which the 202

BGH, SchiedsVZ 2017, 317 (321, para. 49), NJW 2018, 70. BGH, SchiedsVZ 2017, 317 (321 et seq., para. 49), NJW 2018, 70 (for a tribunal appointed expert), and, following that decision, OLG Frankfurt a. M., BeckRS 2019, 848 for an arbitrator; Schmidt-Ahrendts/ Schneider, (2020) 18 SchiedsVZ 35 (36); Kärcher, (2017) 15 SchiedsVZ 277 (282). The decision overruled previous, more restrictive case law (BGHZ 141, 90 (95), MDR 1999, 755 (756)) under which a failure to disclose would only lead to the setting aside of an award where there was a particularly serious or manifest case of partiality. 204 BGH, NJW-RR 2015, 1087 (1088), SchiedsVZ 2016, 41. 205 § 1038(1)(1) ZPO. 206 §§ 1038(1)(2), 1039 ZPO. 207 OLG München, SchiedsVZ 2019, 283, paras 58, 59. 208 OLG München, SchiedsVZ 2016, 51 (54). 209 § 1042(4)(1) ZPO. 210 OLG Köln, SchiedsVZ 2014, 203 (205), YCA XLI (2016), 484. 211 §§ 1042(3), 1046(1), 1047(1) ZPO. 212 See, §§ 1043(1)(2) ZPO, 1045(1)(2), 1046(1), 1047(1) ZPO. General discretion as to proceedings is provided for under § 1042(4)(1) ZPO. 213 BGH, SchiedsVZ 2019, 287, para. 8. Some commentators suggest that the tribunal’s discretion is subject to the presumed intentions of the parties and that an agreement on the place of arbitration would be a strong pointer towards applying the procedural rules of that jurisdiction (Schütze, (2018) 16 SchiedsVZ 101 (103)). 203

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defendant has received the petition to bring the matter before an arbitral tribunal, also referred to as the request for arbitration, which must contain the names of the parties, a description of the dispute and a reference to the arbitration agreement on which the claimant relies.214 It is not necessary to formally serve the request for arbitration on the defendant, but it is recommendable to do so to make sure that there is suitable evidence for the moment the defendant received the request. Such evidence is necessary in particular with regard to the fact that an award can be set aside if the defendant was not given proper notice of the arbitral proceedings (infra mn. 82), and it is equally useful regarding time-related defences of the defendant as the receipt of the request for arbitration interrupts prescription under German law.215 Arbitration rules of arbitral institutions often establish different rules for initiating an arbitration: Many provide that the request for arbitration is not sent to the defendant, but rather to the arbitral institution which then forwards it to the defendant,216 and also include specific requirements as to the content of the request for arbitration.217 Institutions will normally require an advance on costs before processing a request for arbitration.218 An arbitral tribunal may refuse to rule on a counter-claim or a set-off defence if the party raising that defence does not pay the advance on costs payable under the agreed arbitral rules.219 c) Equality of arms, fair trial and due process. § 1042(1) ZPO stipulates the fundamental rule of arbitral proceedings: “The parties are to be accorded equal treatment. Each of the parties is to be given an effective and fair legal hearing.” Parties cannot waive this requirement in advance,220 and a violation of equality and fair trial principles will justify an application to have the award set aside and create a defence to enforcement.221 As a result, it is important for arbitrators to comply with these principles in order to be able to issue an award that does not risk being set aside. Conversely, counsel for the parties must ensure that procedural objections are raised timely, as failure to do so may preclude a party from raising it in subsequent setting aside or enforcement proceedings.222 53 Fair trial principles and the right to be heard follow the same requirements as in state court proceedings.223 The parties must be given the opportunity to submit to the tribunal all facts and arguments that they estimate to be of relevance for the decision of the tribunal, and to comment on the other party’s submissions.224 The tribunal must make available to the parties any written pleadings, documents, and other communications (e.g., expert reports, written evidence) submitted to the arbitral tribunal.225 It may, 52

§ 1044 ZPO. Such evidence is necessary in particular with regard to the fact that an award can be set aside if the defendant was not given proper notice of the arbitral proceedings (infra mn. 82). It is equally useful regarding time-related defences of the defendant as the receipt of the request for arbitration interrupts prescription under German law (see § 204 I Nr. 11 BGB and Sessler, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 7 mn. 22). 216 E. g., article 5.1, 5.5 DIS Rules 2018. 217 Sessler, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 7 mns 40–57. 218 Article 5.3, article 35 DIS Rules 2018. 219 BGH, 14 November 2019, I ZB 54/19, SchiedsVZ 2020, 92. 220 § 1042(3) ZPO; but the mandatory character does not affect preclusion where a party does not object to a breach: see BGH, NJW 2018, 70 (72, para. 25), SchiedsVZ 2017, 317. 221 § 1059(2)(1)(b), (d), § 1060(2)(1) ZPO, article V(1)(b), (d) NYC. 222 E. g., OLG Stuttgart, SchiedsVZ 2003, 84 (85). On preclusion in setting aside and enforcement proceedings, infra mns 106–110. 223 BGH, NJW 1986, 1436 (1438). 224 OLG München, SchiedsVZ 2015, 303 (304); Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1042 mn. 6. 225 § 1047(3) ZPO. 214 215

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however, refrain from communicating documents to a party that are already in its possession or of which it is already aware otherwise.226 The arbitral tribunal must ensure that the parties are able to comment on all facts and 54 evidence on which it intends to base its decision.227 This does not, however, imply that the arbitral tribunal must communicate to the parties its preliminary views on the case in advance of the award to allow them to adapt or change their submissions accordingly.228 By contrast, if the tribunal did communicate preliminary assessments in the course of the proceedings and then changes its views, it must indicate this to the parties if otherwise they would be taken by surprise.229 The arbitral tribunal must give the parties the opportunity to make submissions, but 55 fair trial principles go beyond that: in fact, the arbitral tribunal is also under an obligation to actually consider all submissions made by the parties and to take the parties’ arguments into consideration.230 While this does not require the arbitral tribunal to address in the award each single argument raised by the parties,231 the right to be heard is violated if the award does not deal with a central argument of manifest relevance,232 or if it is clear from the award that the tribunal either disregarded completely submissions of one party or did not cover their substance and therefore did not consider them in its decision.233 This is the case, for example, if the arbitral tribunal treats submissions as uncontested while they are actually in dispute between the parties,234 or where the tribunal does not consider evidence regarding factual allegations that it considers to be relevant for its decision.235 It is worth noting that controlling whether a tribunal dealt with the substance of the parties’ submissions may come close to a review of the merits. For example, recent decisions set aside or refused to enforce arbitral awards after concluding that the reasoning of the award did not deal with the substance of the submissions of one of the parties, i.e., in an analysis that was based on a review of the reasoning applied by the arbitral tribunal in the award.236 Commentators have described this development as broadening the scope for review of arbitral awards.237 If the tribunal estimates a specific question of fact to be decisive, it must address all 56 evidence submitted by the parties.238 The tribunal has, however, some discretion as to how it determines the relevant facts. For example, if both parties submit expert opinions of party-appointed experts, the tribunal can proceed on the basis of these opinions, and

226

BGH, SchiedsVZ 2016, 163 (164 et seq.). OLG Naumburg, SchiedsVZ 2011, 228 (229), YCA XXXVII (2012), 226; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1042 mn. 9. 228 BGH, NJW 1990, 3210 (3211); OLG München, SchiedsVZ 2015, 303 (304); OLG Stuttgart, SchiedsVZ 2011, 49. 229 OLG Stuttgart, SchiedsVZ 2011, 49. It may, however, depart in its award from the content of its settlement proposal: Kröll, (2019) 17 SchiedsVZ 188 (192). 230 BGH, NJW 1986, 1436 (1438); OLG München, SchiedsVZ 2012, 43 (46), YCA XXXVII (2012), 231; OLG Naumburg, SchiedsVZ 2011, 228 (229), YCA XXXVII (2012), 226. 231 BGH, NJW 1992, 2299. 232 OLG München, SchiedsVZ 2015, 303 (304); OLG München, SchiedsVZ 2012, 43 (46), YCA XXXVII (2012), 231; OLG Naumburg, SchiedsVZ 2011, 228 (229), YCA XXXVII (2012), 226. 233 BGH, SchiedsVZ 2018, 318 (319, para. 6); OLG München, BeckRS 2018, 1172, para. 51. Cf. also BGH, SchiedsVZ 2020, 46, paras 19–30. 234 BGH, NJW 1986, 1436 (1438). 235 OLG München, SchiedsVZ 2014, 257 (260); OLG München, BeckRS 2018, 1172, para. 50. 236 E. g., BGH, SchiedsVZ 2018, 318 (para. 9); OLG München, BeckRS 2018, 1172; OLG Frankfurt a.M., BeckRS 2020, 4606, para. 131 (appeal pending, I ZB 11/20). 237 Wilhelmi, (2020) 18 SchiedsVZ 30 (34). 238 OLG München, SchiedsVZ 2012, 43 (46), YCA XXXVII (2012), 231. 227

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it is not required to seek a third opinion from a tribunal-appointed expert.239 A tribunal may disregard evidence submitted out of time.240 57

d) Written submissions. Following the request for arbitration, the tribunal will make further orders as to the proceedings. In particular, it can set deadlines for filing a statement of claim and a statement of defence.241 The tribunal can exclude arguments and evidence from the proceedings if deadlines are not observed and if the delay is not excused.242

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e) Default. Where the claimant fails to submit the statement of claim, the tribunal shall terminate the proceedings; where the respondent fails to submit the statement of defence, it continues the proceedings, without however, treating such failure as an admission of the claimant’s allegations.243 Where a party does not appear at the hearing or does not submit documentary evidence, the tribunal may make an award on the basis of the evidence before it.244

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f) Oral hearings. As under the Model Law, a hearing is compulsory if a party requests it.245 Otherwise, it depends on the discretion of the arbitral tribunal. Sufficient advance notice is required.246

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g) Confidentiality. The arbitral proceedings and the oral hearings in the arbitration are not public. The arbitrators must not disclose the deliberations of the arbitral tribunal,247 and lawyers involved, be it as arbitrators or counsel for the parties, must respect their professional duties of confidentiality.248 However, an arbitration agreement does not as such imply an obligation of the parties to keep information related to arbitral proceedings confidential.249 Where confidentiality is important, the parties will have to include specific obligations in the arbitration agreement.250

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h) Arbitral awards and termination of the arbitration without an award. aa) Arbitral awards. The award – which can be made by a majority of the arbitrators251 – must be made in writing and signed by all arbitrators, and it must indicate the date and the place where it is made.252 If an arbitrator refuses to take part in the decision process or to sign the award, the remaining arbitrators can decide without him.253 The arbitral award must 239

OLG München, SchiedsVZ 2012, 43 (46), YCA XXXVII (2012), 231. Kröll, (2019) 17 SchiedsVZ 188 (192). 241 § 1046(1)(1) ZPO. 242 § 1046(2) ZPO. 243 § 1048(1), (2) ZPO. 244 § 1048(3) ZPO. 245 § 1047(1) ZPO. 246 § 1047(2) ZPO. 247 BGHZ 23, 138. A recent decision suggests that a dissenting opinion is a breach of confidentiality obligations that justifies annulment of an award for breach of public policy: OLG Frankfurt a.M., BeckRS 2020, 4606, para. 206 (appeal pending, I ZB 11/20). 248 § 43a(2) BRAO. This would also apply to other lawyers from EU Member States involved in arbitrations seated in Germany under sec. 1.5 CCBE Code of Conduct. 249 Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1029 mn. 27. 250 Some institutional rules include such obligation (e.g., article 44 DIS Arbitration Rules 2018). 251 § 1052(1) ZPO. 252 § 1054(1)(1), (3) ZPO. Failure to indicate the date or the place does not make the award invalid: Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1054 mns 9, 10; OLG München, SchiedsVZ 2011, 167 (168); SchiedsVZ 2013, 231 (233) for the place of arbitration. 253 § 1052(2)(1) ZPO, but they must notify the parties in advance, § 1052(2)(2) ZPO. Given the majority requirement in § 1052(1), the decision of the remaining arbitrators (normally two) must be unanimous; if unanimity cannot be reached, the tribunal can terminate the arbitral proceedings under § 1056(2)(3) ZPO. The arbitrators participating in the decision on the award must be the majority of the members of the tribunal as only then can they meet the signature requirements of § 1053(1)(2) ZPO. 240

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be reasoned, but the parties can waive this requirement.254 The reasoning of the award does not have to meet the standards applicable to state court judgments.255 However, it must not be “manifestly absurd” or merely consist of “meaningless verbiage”, and it must address the central arguments of the parties.256 The arbitral tribunal must transmit a signed original257 of the award to each of the parties.258 This does not require formal service under procedural rules;259 however, as receipt of the award is relevant for the time limits for an application to correct or set aside the award,260 the arbitral tribunal will have to make sure that the transmission process is documented, e. g., through transmission by registered mail. bb) Awards by consent. Where the parties reach a settlement, the arbitral tribunal 62 will terminate the proceedings; on application of the parties, it can make an award by consent. The award by consent will have to meet the formal requirements of ordinary awards described above (supra mn. 61).261 cc) Termination of arbitral proceedings without an award. In special circum- 63 stances, the tribunal can terminate the arbitral proceedings without making an award. This is the case where the claimant does not file a statement of claim, where the claimant withdraws the request, where the parties agree on the termination of the arbitration or where it is impossible to continue the proceedings, e. g., because of the inactivity of the parties.262 i) The costs of the arbitration. The arbitral tribunal will also make an award on the 64 costs of the arbitration; in the award on costs, the arbitral tribunal shall take into account the circumstances of the individual case, in particular the outcome of the proceedings.263 As a consequence, in most cases, the award on costs will be made together with the award on the merits, but it is likewise possible to make a partial award on costs for a specific phase in the proceedings.264 The amount of costs that an arbitral tribunal can award to a party for its representa- 65 tion are not limited to statutory fees; it is common practice for tribunals to award fees – namely time-based fees – in excess of statutory fees, and state courts accept this practice.265 In the award on costs, the arbitral tribunal can also make an implicit decision on its own fees – e. g., by determining the value of the dispute if the tribunal’s fees depend on it, or by fixing hourly rates.266 However, this decision is only binding between the parties and has no effect between the parties on the one hand and the tribunal or the individual arbitrators on the other hand.267 The decision of the tribunal on the distribution of costs can only be set aside if the 66 general conditions for setting aside arbitral awards are met.268 As a result, review of cost § 1054(2) ZPO. BGH, RIW 1990, 495; OLG München, OLGR 2007, 361 (362). 256 BGHZ 96, 47, NJW 1986, 1436 (1437). 257 OLG München, SchiedsVZ 2012, 217. 258 § 1054(4) ZPO. 259 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1054 mn. 11. 260 §§ 1058, 1059 ZPO. 261 § 1053(1), (2) ZPO. 262 § 1056(2) ZPO. 263 § 1057(1) ZPO. 264 BGH, NJW-RR 2007, 1008. 265 OLG München, SchiedsVZ 2017, 40; OLG München, SchiedsVZ 2012, 156, YCA XXXIX (2014), 389; OLG München, SchiedsVZ 2012, 282. 266 BGH, SchiedsVZ 2017, 200 (201 et seq.), YCA XLIII (2018), 451. 267 BGHZ 193, 38, NJW 2012, 1811. 268 § 1059(2) ZPO. 254 255

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decisions of the arbitral tribunal is practically impossible.269 The reason is that under German arbitration law, the tribunal has large discretion when taking into account the outcome of the dispute, and more particularly, it is not bound by the cost rules that would apply in state court proceedings.270 Against that background, it is difficult to imagine a decision on costs that would breach public policy or give rise to any other ground for setting aside an award.

3. Evidence, discovery, disclosure 67

a) Overview. According to § 1042(4) ZPO, the procedural discretion of the tribunal also applies to the taking of evidence. The tribunal is “free” to assess the evidence put before it, and accordingly is not bound by the same rules as state courts when taking evidence.271 Occasionally, the parties agree that the IBA Rules on the Taking of Evidence govern the proceedings,272 but this is the exception.

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b) Admissibility of evidence. The tribunal’s discretion also extends to the admissibility of evidence (§ 1042(4) ZPO). An arbitral tribunal does not have to follow rules as to the admissibility of illegally obtained evidence in litigation.273 However, in exceptional cases, the use of illegally obtained evidence may amount to a breach of constitutional principles and thus to a breach of public policy.274

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c) Types of evidence. aa) Witnesses. In state court proceedings in Germany, parties and their legal representatives (e.g., member of the board of management of a company) may not act as a witness. However, this rule does not apply to arbitral proceedings,275 and any person can be heard as a witness in arbitral proceedings. As regards witness evidence, it is acceptable and common practice to submit written witness statements.276

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bb) Experts. The arbitral tribunal can decide questions of expert evidence purely on the basis of opinions submitted by party-appointed experts without appointing an expert of its own.277 However, where the arbitral tribunal does appoint an expert of its own, that expert is subject to the same requirements of impartiality and independence as an arbitrator and has the same duties of disclosure (as described supra mns 44–45).278 As regards party-appointed experts, tribunals tend to consider their independence and impartiality when weighing of the probative value of the expert evidence, and not as a matter of admissibility, and as the exclusion of a party-appointed expert affects the party’s right to present its case, such powers should be exercised only in rare circumstances.279

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cc) Document production. § 1042(2) ZPO does not address explicity an arbitral tribunal’s power to order document production. It has been discussed whether a disclosure order from an arbitral tribunal may be incompatible with German public policy.280 However, a recent decision of the German Federal Constitutional Court (Bundesverfassungsgericht) confirmed that the availability of pre-trial discovery in U.S. 269

OLG Bremen, OLGR 2006, 650 (652). OLG Karlsruhe, SchiedsVZ 2012, 101 (106), YCA XXVIII (2013), 379. 271 Risse/Höfling, (2020) 18 SchiedsVZ 74 (75). 272 E. g., OLG Hamm, SchiedsVZ 2013, 182. 273 Cf. supra A mn. 81; Schütze, Schiedsgericht und Schiedsverfahren, 6th ed., 2016, mn. 360. 274 Wolff, in: Wolff (ed.), NYC, 2nd ed., art. V para. 554 and infra mns 97–99. 275 Wittinghofer, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 13 mn. 8. 276 Wittinghofer, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 13 mn. 31. 277 OLG München, SchiedsVZ 2012, 43 (46 et seq.); Gramlich, (2019) 17 SchiedsVZ 233. 278 BGH, SchiedsVZ 2017, 317 (320, para. 40). 279 Burianski/Lang, (2017) 15 SchiedsVZ 269 (277). 280 See Marghitola, Document Production in International Arbitration, 2015, § 10.05[B]. 270

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litigation is not as such a breach of German constitutional guarantees.281 On that basis, it seems unlikely that document production orders from arbitral tribunals will be considered a breach of public policy affecting recognition and enforcement of a subsequent award.282 d) Standard of proof and estimations. The general standard of proof under German 72 procedural law requires not just a balance of probabilities, but a degree of certainty for practical purposes. While some authors argue that a similar standard should apply in arbitral proceedings,283 the language of § 1042(4) ZPO suggests that an arbitral tribunal has discretion to apply a lower standard.284 An arbitral tribunal may also proceed with estimations regarding the quantum of claims, and such estimations are neither a violation of the right to be heard, nor a decision ex aequo et bono which requires express authorization by the parties.285 e) Court assistance. The arbitral tribunal (or a party with leave of the tribunal) can 73 apply to the state courts to provide support by taking evidence or by taking any other actions reserved for judges that the arbitral tribunal is not authorized to take.286 On that basis, the court can examine witnesses and experts if they do not appear voluntarily before the arbitral tribunal, it can issue requests to foreign courts to hear witnesses abroad, it can take oaths and it can also order the production of documents.287 The power to order the production of documents is, however, limited to individual documents that must be specified in the order.288 German courts will not order general production of documents or witness statements to allow a party to gain access to information289 as is possible in other jurisdictions, for example in the U.S.290

4. The law governing the dispute and lois de police a) Overview. The parties can agree on the substantive law applicable to the dispute.291 74 Where there is no choice of law, the tribunal applies the substantive law that has the “closest connection” to the dispute.292 An arbitral tribunal is not bound by precedent when applying German law.293 It may decide without recourse to legal rules, purely on the basis of equitable considerations (“ex aequo et bono”), if the parties expressly authorize it to do so.294

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BVerfG, WM 2016, 51 (54). Poseck, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 23 mn. 37. 283 Münch, in: MünchKomm-ZPO, 5th ed. 2017, § 1042 mn. 119; Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 mn. 111. 284 Wilske/Markert, in: Vorwerk/Wolf (eds), BeckOK ZPO, 35th ed., § 1042 paras 28.1–29; at any rate, as regards estimation of quantum (Risse/Höfling, (2020) 18 SchiedsVZ 73 (75)) or costs (OLG Frankfurt, BeckRS 2017, 105025, paras 47–48). 285 OLG München, SchiedsVZ 2011, 159 (166 et seq.). 286 § 1050 ZPO. The application has to be made to the local court at the place where the relevant judicial support has to be provided (§ 1062(4) ZPO), e.g., at the place of the witness that has to be heard etc. 287 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1050 mn. 8. 288 Stadler, in: Musielak/Voit, ZPO, 17th ed., 2020, § 142 mn. 4 a. 289 BT-Drucks. 14/6036, p. 121; Trittmann, in: Salger/Trittmann (eds), Internationale Schiedsverfahren, 2019, § 10 mn. 159. 290 On discovery in the U.S. in support of foreign arbitions under 28 USC § 1782, see infra S mn. 96. 291 § 1051(1)(1) ZPO. 292 § 1051(2) ZPO. 293 Berger, (2016) 32 Arb. Int’l 243 (257). 294 § 1051(3) ZPO. An intentional and arbitrary breach of this provision leads to the setting aside of the award, BGH, RIW 1985, 972; OLG München, SchiedsVZ 2005, 308 (309). 282

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b) Overriding mandatory law and lois de police. There is some uncertainty whether party autonomy as to the choice of law is limited by mandatory rules under German law and whether the agreement between the parties on the applicable law is subject to the restrictions contained in articles 3(3), 6(2) and 9(2) Rome I Regulation.295 The fact that parties can agree on an award on the basis of purely equitable considerations296 suggests that the limits to party autonomy for purely domestic cases do not exist in arbitral proceedings. On that basis, some legal writers are of the opinion that, even in domestic cases, parties can opt out from mandatory provisions of German law such as the mandatory control of general terms and conditions.297 However, the choice of law agreement between the parties has its limits where it leads to a breach of public policy.298 76 The question of party autonomy is also unclear with regard to overriding mandatory law of third countries (lois de police). Some writers suggest the arbitral tribunal must take into account mandatory provisions of countries that have a close link to the dispute.299 For practical purposes, however, the only question is whether disregard of mandatory provisions of a third country would breach German public policy which would in turn justify an application to have the award set aside.300 In particular, some writers suggest that disregard of foreign legislation is a breach of German public policy if Germany is under an obligation of public international law to observe the foreign state’s legislation.301 The Federal Court of Justice has held that a contract in breach of foreign legislation aiming at protecting the legitimate interests of all nations was null and void.302 On that basis, an arbitral award in breach of foreign laws such as currency regulations and UN sanctions can be considered a breach of German public policy as Germany is bound by international public law to enforce such regulations and sanctions.303 Similar considerations may apply to foreign anti-bribery legislation as the international conventions in this area304 show that combating corruption is a “legitimate interest” of all nations within the meaning of the case law of the Federal Court of Justice. Conspiracy to bribe is a breach of German public policy,305 so an award involving the payment of a bribe would be set aside and refused enforcement.306 There is no case law as to whether an arbitral award on the basis of a contract procured or tainted by bribery would be a breach of public policy, but it arguably would be on the basis of case law holding that such a contract would be considered invalid as violating good morals307 and the impact of international conventions in that area.308, 309 75

295 Cf. the opposite views of Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1051 mn. 3 and Voit, in: Musielak/Voit (eds), ZPO, 17th ed. 2020, § 1051 mn. 3. 296 § 1059(3) ZPO. 297 Pfeifer, (2012) NJW 1169 (1174). 298 Voit, in: Musielak/Voit (eds), ZPO, 17th ed. 2020, § 1051 mn 3. 299 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1051 mn. 4. 300 § 1059(2)(2)(b) ZPO. 301 Schlosser, in: Stein/Jonas (eds), Zivilprozessordnung, 22nd ed., 2002, Anh § 1061 mn. 145. 302 BGHZ 59, 82 (87): breach of export control relating to art work. The decision only addresses the question of validity under general contract law, but can arguably be extended to public policy considerations. 303 Article VIII(2)(b) Bretton Woods Agreement (currency regultions) and article 41 UN Charter, 1 UNTS 16 (enforcement of international sanctions). 304 UN Convention Against Corruption of 31 October 2003, 2349 UNTS 41; OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 18 April 1998, 337 ILM 8. 305 OLG Celle, BeckRS 2011, 14113; OLG Hamburg, BeckRS 1998, 06221. 306 Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (368). 307 BGH, NJW 2001, 1065 (1067); Armbrüster, in: MünchKomm-BGB, 8th ed., 2018, § 138 mn. 128. 308 Supra fn. 304. 309 For a comparative analysis of case law on public policy and contracts tainted by corruption see supra A mn. 136.

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5. Interim relief in arbitration a) Interim relief before state courts. Even if parties agree to arbitrate, state courts 77 retain the power to grant interim measures310 such as freezing orders, injunctions or orders aimed at securing evidence.311 The courts will follow the rules normally applicable in proceedings of that sort when deciding on applications for interim relief. This means that an application only has prospects of success if German courts have jurisdiction over the defendant in these proceedings. In that context, it is worth noting that an arbitration agreement providing for a place of arbitration in Germany does not imply an agreement on international jurisdiction of German courts for the purpose of interim relief.312 There is some dispute regarding the reverse situation, namely, whether an agreement on a place of arbitration abroad implies an agreement to derogate the jurisdiction of German courts for interim relief.313 There is no court practice in Germany to grant anti-suit injunctions restraining 78 judicial proceedings brought in breach of an arbitration agreement.314 German courts will treat a foreign anti-suit injunction restraining proceedings in Germany as a breach of German sovereignty and refuse service of such orders in Germany.315 b) Interim relief before the arbitral tribunal. Once it is constituted, the arbitral 79 tribunal can make interim orders that it deems necessary.316 Such orders can be granted ex parte,317 and can be made dependent on security of either the applicant or defendant. Upon request of the party concerned, the competent court (supra mn. 42) can declare an interim order of the arbitral tribunal enforceable.318 The state court will conduct at least a summary review of the requirements for interim relief319 in order to ensure that interim orders do not pre-empt a decision on the merits.320 Interim relief before the arbitral tribunal requires completion of the appointment 80 process (which in itself can easily take weeks or months), and therefore has only limited scope in practice. As a consequence, some arbitral institutions have introduced specific provisions allowing recourse to an “emergency arbitrator”.321 It is unclear whether an order from an emergency arbitrator would be declared enforceable by German courts, as German arbitration law only provides for enforcement of interim orders from the arbitral tribunal itself322 which is not normally identical with the emergency arbitrator.323

§ 1033 ZPO. Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1033 mn. 13. 312 OGH, IPRax 2003, 64. 313 OLG Köln, OLGR 2002, 392 held that the agreement on the place of arbitration abroad does not exclude jurisdiction of German courts for interim relief under general rules; however, OLG Nürnberg, SchiedsVZ 2005, 50 adopted the opposite view. 314 Supra mn. 35. On the practice of English courts in that regard, supra H mn. 51. 315 OLG Düsseldorf, RIW 1996, 237. 316 § 1041(1)(1) ZPO. 317 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1041 mn. 1. 318 § 1041(2) ZPO. 319 OLG Saarbrücken, OLGR 2007, 426. 320 Cf. Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1041 mns 1, 3. 321 E. g., ICC Rules 2021, Appendix V. On the emergency arbitrator, see the commentary of Reiner/ Aschauer, in: Schütze (ed.), Institutional Arbitration, 2013, ICC Rules, mns 589 et seq. 322 § 1041(2) ZPO. 323 See, e. g., article 2(6) of Appendix V ICC Rules 2021 and Schedule 4, Clause 19 HKIAC Administered Arbitration Rules (2018 Edition). 310 311

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6. Multi-party and multi-contract arbitration 81

a) Multi-party arbitration. Specific issues arise where a dispute involves more than two parties: for example, M&A transactions will often involve several parties on both sides, which means that, in an arbitration on a dispute resulting from the transaction, there will be several claimants or several defendants. A similar situation arises where a party to an arbitration intends to seek recourse against a third party, e. g., the supplier, should the arbitral tribunal make an adverse decision: The party involved in the arbitration will wish to ensure that the third party cannot re-open the award and the findings of the tribunal. German arbitration law does not make any special provision for these situations which are solved by applying the fundamental principles of arbitration: namely, the principles of party autonomy and equality of arms.324

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aa) Arbitration agreement involving several parties. The principle of party autonomy requires that there is an arbitration agreement between all parties to an arbitration, and accordingly, multi-party arbitration is only possible to the extent all relevant parties are also parties to the arbitration agreement. This can be addressed quite easily in a contract involving more than two parties: if a contract of that sort contains an arbitration agreement, it will bind all parties to that contract.325 The issue is problematic, however, in scenarios where third parties are involved. Unlike in ordinary civil proceedings before the state court, jurisdiction of the arbitral tribunal cannot be created by a “third-party notice”. Rather, for a third party to be joined to the proceedings, it is necessary to obtain not only the consent of that party, but also the consent of all other parties to the arbitration.326 For obvious reasons, this is impractical and thus, the involvement of third parties that are not a party to the arbitration agreement is uncommon.

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bb) Equality of arms and appointment of the arbitrators. The principle of equality of arms requires that each party has equal influence on the composition of the arbitral tribunal,327 a requirement that cannot be waived in advance.328 This creates few problems when several parties on one side can agree on “their” arbitrator, which will often happen if several claimants or defendants belong to the same group of companies. By contrast, if there is a conflict of interest between the parties on one side – typically the case between a defendant and his supplier – these parties cannot reasonably be expected to agree on the joint nomination of an arbitrator. In scenarios such as these, a possible solution is to agree on the appointment of the arbitrators by a third party which secures equality of arms among the parties to the arbitration.329 The DIS Arbitration Rules 2018 introduced new rules specifically addressing the appointment of arbitrators in multi-party arbitration: Under article 20.3 DIS Rules 2018, where multiple claimants or respondents fail to jointly nominate a co-arbitrator, the DIS Appointing Committee will appoint co-arbitrators either for the parties who failed to nominate, or for the opposing side also.

324 Supra mns 10–11. On multi-party and multi-contract arbitration under the new DIS Arbitration Rules 2018, see Benedict, (2018) 16 SchiedsVZ 306–311. 325 But even a multi-party arbitration agreement may not at such include any dispute between any of the parties. For example, in a sale with multiple sellers and buyers, an arbitration agreement may only cover disputes between sellers and buyers, but not disputes among the sellers (supra mn. 28). 326 Elsing, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 9 mn. 12; Schütze, Schiedsgericht und Schiedsverfahren, 6th ed., 2016, mn. 158. 327 BGHZ 132, 278, NJW 1996, 1753 (1755). 328 BGHZ 180, 221; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1029 mn. 45. 329 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1029 mn. 42.

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b) Multi-Contract Arbitration. German arbitration law does not specifically address 84 multi-contract arbitration, i.e., scenarios where disputes arising under several contracts are consolidated in one set of arbitral proceedings, so the default rule is whether the arbitration agreement(s) can be interpreted in such a way as to allow for a single set of arbitral proceedings. Under article 17.1, 17.2 DIS Arbitration Rules 2018, claims arising from more than one contract can be raised in one set of arbitral proceedings if the parties so agree and if the arbitration agreements are compatible. On the face of it this appears to be more restrictive than other institutional rules that only require compatibility of the arbitration agreements, but depending on the circumstances, it is conceivable to imply consent from compatibility of arbitration agreements.330

IV. The control and the enforcement of arbitral awards According to § 1055 ZPO, an arbitral award has the effect of a non-appealable judgment 85 between the parties. In exceptional circumstances, it can be corrected or amended (infra mn. 88), but there is no appeal against an award,331 and state courts will set aside arbitral awards only on narrow grounds (infra mns 89–99). On application, courts can declare an arbitral award to be enforceable, with limited defences available to the award debtor (infra mns 100–104). Applications to have an award set aside, and defences to enforcement are subject to relatively strict rules of preclusion (infra mns 105–109).

1. Correction and amendment of arbitral awards In limited circumstances, an arbitral award can be reviewed by the arbitral tribunal 86 upon application of either party: Within a month from receipt of the arbitral award, the parties can apply to the arbitral tribunal to correct clerical errors in the award, to interpret parts of the award and to amend the award in as much as it does not deal with all requests for relief put forward in the arbitration.332

2. Review of arbitral awards before the state courts Leaving aside correction and amendment of the award by the arbitral tribunal, the 87 award is final and there is no possibility to appeal. A party can only apply to have the award set aside under the conditions set out in § 1059 ZPO. Parties cannot waive in advance the right to set aside the award333 but may be precluded from raising certain issues due to prior conduct during the arbitral proceedings (infra mns 106–110). a) Procedural framework (time limits, competent court, appeal). An application to 88 have an award set aside must be filed within three months from receipt of the award.334 The applicant will in principle have to indicate and substantiate the grounds on which the application relies within the time limit. However, courts will take lack of arbitrability and 330

Benedict, (2018) 16 SchiedsVZ 306 (311). Parties are, however, free to agree on a procedure for an arbitral appeal. Likewise, they can agree on an option to reject an award within a specific timeframe and bring the case before the state courts: BGHZ 171, 245, SchiedsVZ 2007, 160 (162). 332 § 1058(1), (2) ZPO. 333 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 79; Scherer, (2016) 32 Arb. Int’l 437 (442). 334 § 1059(3)(1) ZPO. In case of a correction or amendment under § 1058 ZPO, the deadline ends one month after receipt of the corrected or amended award, § 1059(3)(3) ZPO. BGH, SchiedsVZ 2017, 103 (104, para. 9), held that in the case of a state court decision accepting a jurisdictional challenge following an award on the merits, the time limit for the setting aside application only starts once the decision on the jurisdictional challenge is served on the applicant. 331

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a breach of public policy into account of their own motion even if this has not been raised by the applicant.335 Following the territoriality principle, German courts will only hear applications to set aside an award if the arbitration was seated in Germany.336 The competent court is the court of appeals named in the arbitration agreement, or, where the agreement is silent, the court of the place of the arbitration,337 i. e., the place indicated in the award.338 An appeal lies against the decision of the court of appeals to the Federal Court of Justice, but only if the dispute is of fundamental importance or if the development of the law or the consistency of jurisprudence requires a decision of the Federal Court of Justice.339 This is the rare exception which means that, in practice, setting aside proceedings are limited to one instance. If an award is set aside, the courts have discretion to remand the dispute before the original arbitral tribunal if one of the parties makes an application to that effect,340 but will not make use of that power where there has been a manifest breach of due process requirements in the arbitral proceedings.341 89

b) Grounds for setting aside arbitral awards. aa) Overview. The list of grounds for setting aside an award in § 1059(2) ZPO is exhaustive.342 By implication, the state courts must not review the merits of the case: there will be no révision au fond,343 so the state courts will not review the legal reasoning of the award,344 nor will they correct errors in fact, even where the findings of the tribunal are “visibly wrong”.345 The various grounds for setting aside an arbitral award fall into the following four categories: First, if the tribunal lacked jurisdiction, i. e., if the arbitration clause is invalid, if the dispute is not arbitrable or if the dispute does not fall under the arbitration agreement.346 Second, if the party making the application to set aside the award was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case,347 i. e., if there was a breach of the right to be heard. Third, if the composition of the arbitral tribunal or the arbitral proceedings did not comply with the requirements under applicable arbitration law or the agreement between the parties, provided it can be assumed that this has had an effect on the arbitration award.348 Fourth, if the award is in conflict with German public policy.349

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bb) Lack of jurisdiction of the arbitral tribunal. Lack of an arbitral tribunal’s jurisdiction can be raised under various headings: An arbitration award may be set aside if one of the parties concluding an arbitration agreement did not have the capacity to do so pursuant to the laws that are relevant to such party personally, or that the arbitration agreement is invalid under the laws to which the parties to the dispute have 335

BGH, NJW 2007, 772 (773); OLG Hamm, SchiedsVZ 2013, 182 (184). OLG Köln, BeckRS 2014, 11229, XL YCA (2015), 425; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 14. 337 § 1062(1)(4) ZPO. 338 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1062 mn. 2. 339 §§ 1065(1)(1), 574(2) ZPO. 340 § 1059(4) ZPO. That discretion also exists if the award is set aside in enforcement proceedings rather than annulment proceedings: BGH, SchiedsVZ 2018, 318 (320, paras 24, 25). 341 BGH, WM 2019, 1973 (1977, para. 46), SchiedsVZ 2020, 46. 342 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 30. 343 BGHZ 151, 79, NJW 2002, 3031 (3032), SchiedsVZ 2003, 39 (40); BGH, NZI 2018, 106 (108, para. 24); Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (365). 344 OLG Hamburg, BeckRS 2015, 2549. 345 OLG München, BeckRS 2014, 1197. 346 § 1059(2)(1)(a), (c), (2)(a) ZPO and infra mns 90–91. 347 § 1059(2)(1)(b) ZPO and infra mns 92–93. 348 § 1059(2)(1)(d) ZPO and infra mns 94–96. 349 § 1059(2)(2)(b) ZPO and infra mns 97–99. 336

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subjected it, or, if the parties to the dispute have not made any determinations in this regard, that it is invalid under German law (§ 1059(2)(1)(a) ZPO), where the arbitration award concerns a dispute not mentioned in the agreement as to arbitration, or not subject to the provisions of the arbitration clause, or that it contains decisions that are above and beyond the limits of the arbitration agreement (§ 1059(2)(1)(a) ZPO); and where the subject matter of the dispute is not eligible for arbitration under German law (§ 1059(2)(2)(a) ZPO). The decision of the tribunal to assume jurisdiction is not binding on state courts.350 Accordingly, state courts will fully review whether the arbitration clause is valid and whether the dispute decided by the arbitral tribunal actually fell within its scope: for the requirements under German law, supra mns 19–32, but certain elements may require the application of foreign law: supra mns 14–18. A previous decision of German courts on the jurisdiction of the tribunal – e. g., a decision dismissing an action in favour of the tribunal, or a decision on the tribunal’s interim decision on jurisdiction – will be binding at this stage.351 On preclusion of jurisdictional challenges see supra mn. 36 and infra mn. 107. The principle of full review does, however, not apply if the arbitral tribunal dismisses 91 the claim because it deems itself to lack jurisdiction. While it will still be possible for the unsuccessful claimant to file an application to have the award set aside,352 the mere fact that the arbitral tribunal’s decision to decline jurisdiction was incorrect will not justify annulment of the award refusing to assume jurisdiction over the dispute: such an award will only be set aside if one of the other grounds provided for in § 1059(2) ZPO exists, that is, unlawful composition of the tribunal, procedural irregularities or a breach of public policy.353 cc) Breach of the right to be heard. Under § 1059(2)(1)(b) ZPO, an award can be set 92 aside where a party has not been properly notified of the appointment of an arbitral judge, or of the arbitration proceedings, or was unable to present its case. While lack of notification is only rarely an issue, the right to be heard is a ground for annulment of considerable practical importance. Giving parties the ability to present their case requires a tribunal to give the parties the opportunity to make submissions on all facts and arguments relevant for its decision. While it must not take the parties by surprise, it does not have to communicate its preliminary views, nor does it have to address in the award every single argument raised by the parties (for details and case law references see supra mns 52–56). In particular, the right to be heard does not imply a right of the parties that the tribunal considers all evidence put before it.354 If an arbitral tribunal deemed particular evidence to be irrelevant in law, state courts will not review whether this assessment is correct as this would amount to a review of the merits of the case.355 The fact that a party that had previously been heard in the proceedings was not given the opportunity, alongside its legal counsel, to personally speak and argue its case in the final hearing does not justify the setting aside of an award either.356 If the arbitral tribunal deems the submission of one party to be unsubstantiated, it does not have to inform that party about this assessment so as to allow it to put forward additional arguments.357 350

Supra mns 33–34. Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mns 39, 39 c. 352 BT-Drucks. 13/5274, p. 44. 353 BGH, NJW 2002, 3031 (3032), SchiedsVZ 2002, 39, CLOUT Case No. 560. 354 OLG München, SchiedsVZ 2012, 43. 355 BGH, NJW 1992, 2299 (2300), OLG Karlsruhe, BeckRS 2011, 08009; OLG München, openJur 2012, 122347, YCA XXXIX (2014), 389–391. 356 OLG München, SchiedsVZ 2010, 169 (172), YCA XXXV (2010), 371. 357 OLG München, SchiedsVZ 2011, 230 (232). 351

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However, where it appears from the award that the tribunal has not considered in its decision the substance of central arguments of a party, the award will be set aside.358 By comparison, this test leads to a rather far-reaching review of the award (see supra A mn. 131). 93 A challenge based on the breach of procedural rules or the right to be heard also requires the applicant to show that the alleged breach had an effect on the award.359 For example, a party claiming a breach of its right to be heard must explain what it would have submitted to the arbitral tribunal and how this would have affected the proceedings,360 and a party claiming that the language of the arbitral proceedings was in breach of the language agreed in the arbitration agreement must show that the language used in the arbitration actually impaired its position in the proceedings.361 dd) Unlawful composition of the tribunal and other procedural errors. Annulment is also possible where the formation of the arbitral tribunal or the arbitration proceedings did not correspond to a provision of German arbitration law or to an agreement between the parties if it is to be assumed that this has had an effect on the arbitration award (§ 1059(2)(1)(d) ZPO). The composition of the arbitral tribunal will not normally justify the setting aside of an award: The reason is that, if a party does not bring a challenge or pursue it before the state courts within the relevant time limits during the arbitral proceedings, it will be precluded from raising it in the setting aside application (supra mn. 36). Conversely, if it brings a challenge and remains unsuccessful before the state courts, this decision will be binding in the setting aside proceedings.362 However, where an arbitrator did not disclose circumstances that would have justified a challenge, courts would set aside the award or refuse enforcement.363 Similarly, an arbitral award made while a challenge was still pending can be set aside if the challenge is subsequently successful.364 A breach of applicable institutional rules for the appointment of substitute arbitrators will also justify setting aside an award.365 95 Setting aside applications may also be brought on the basis of procedural irregularities not relating to the composition of the tribunal. In fact, the arbitral proceedings must comply with all applicable procedural rules, including the rules agreed by the parties. This includes institutional rules chosen by the parties in the arbitration agreement,366 but this is not the only situation in which this ground for annulment may become relevant: For example, at the beginning of an arbitration, the parties and the tribunal will often lay down a procedural framework in what is referred to as the “terms of reference”. In some instances, the parties will agree on procedural rules and the tribunal will then document these rules in a procedural order. Whatever form the agreement between the parties takes, be it terms of reference or a procedural order of the tribunal incorporating an agreement between the parties – if subsequent proceedings do not comply with them, the award can be set aside: this is the case where a 94

358

BGH, SchiedsVZ 2018, 318 (319, para. 6); OLG München, BeckRS 2018, 1172. BGH, SchiedsVZ 2008, 40 (42), OLG München, SchiedsVZ 2010, 169 (172), YCA XXXV (2010) 371. 360 BGH, NJW-RR 2017, 876 (877, para. 10); Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 40. 361 OLG München, SchiedsVZ 2010, 169 (172), YCA XXXV (2010), 371. 362 Supra mns 47–48. 363 BGH, SchiedsVZ 2017, 317 (321 et seq., para. 40), overruling BGHZ 141, 90 (95), MDR 1999, 755 (756); OLG Celle, OLGR 2007, 664, YCA XXXIII (2008), 524. 364 BGH, NJW-RR 2015, 1087 (1088), SchiedsVZ 2016, 41. 365 BGH, NJW 2008, 2718, YCA XXXIV (2009), 504. 366 In this context it is worth noting that the violation of time limits contained in arbitral rules for issuing an award do not normally justify a setting aside application: OLG Karlsruhe, SchiedsVZ 2012, 101, YCA XXVIII (2013), 379; OLG Dresden, SchiedsVZ 2008, 309, YCA XXXIV (2009), 522. 359

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tribunal relies on an expert opinion that did not comply with the requirements laid down in the terms of reference and subsequent procedural orders purporting to document an agreement between the parties,367 or where the proceedings were not conducted in the language agreed between the parties.368 Similarly, an award made “in equity” or “ex aequo et bono” constitutes a procedural error if the parties have not agreed on such decision.369 However, the estimation of quantum issues (e.g., the amount of a damage claim) by the arbitral tribunal does not amount to an unlawful decision rendered in equity.370 A ground for setting aside an award for errors in procedure only exists where it can 96 be assumed that the procedural error affected the outcome of the dispute. However, for that purpose it is sufficient if there was the mere possibility for such influence.371 As regards the composition of the arbitral tribunal, such possibility exists where an arbitrator that had been successfully challenged participates in the making of an award even where the award is made unanimously as the participation of a different arbitrator may also have had an impact on the decision of the other members of the tribunal.372 ee) Public policy. Finally, an award may be set aside if it is in breach of public policy 97 (§ 1059(2)(2)(b) ZPO). The starting position is the prohibition of a review on the merits.373 Accordingly, public policy has been described as an “emergency brake” for extreme cases374 which explains the narrow interpretation given to it in German case law.375 As a result, an award based on an error in fact or law will be final and binding just like in the case of a final and binding state court decision that is not subject to appeal.376 The application to set aside an arbitral award is not a means of controlling the award like in appeal proceedings in state court litigation.377 The public policy exception will only be successful if the award violates “a norm that regulates the foundations of state or economic life, or if it is in intolerable contradiction to German ideas of justice”.378 It is worth noting that there are numerous decisions attempting to define the concept of public policy, but in the vast majority of cases, they only contain obiter dicta as to what could, in theory, be considered to amount to a breach of public policy, and refuse to accept a challenge on that basis in the case at hand. In a decision in 2014, the Federal Court of Justice held that the breach of public policy must be “manifest” in order to justify the setting aside of an arbitral award,379 a decision which underlines the restrictive approach taken by the court when reviewing arbitral awards against public policy standards.

367

OLG Frankfurt a. M., SchiedsVZ 2013, 49. OLG Köln, SchiedsVZ 2014, 203 (205), YCA XLI (2016), 484. 369 See supra fn. 294. 370 BGH, NJW-RR 2016, 892 (895); OLG München, NJOZ 2016, 327 (330); Risse/Höfling, (2020) 18 SchiedsVZ 73–78. 371 BGH, SchiedsVZ 2009, 126 (127), both for a breach of the right to be heard and other procedural errors. 372 BGH, NJW-RR 2015, 1087 (1088, paras 10–13), SchiedsVZ 2016, 41. 373 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 47; Anders, in: Baumbach/Lauterbach/ Albers/Hartmann (eds), ZPO, 78th ed., 2020, § 1059 mn. 1. 374 Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1059 mn. 41. 375 Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (365). 376 BGH, MDR 1999, 1281; BGH, NJW 2002, 3031; OLG Köln, SchiedsVZ 2012, 161 (165). 377 OLG Stuttgart, SchiedsVZ 2003, 84 (85); OLG Karlsruhe, BeckRS 2011, 08009; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 47. 378 BGH, WM 2019, 36, SchiedsVZ 2019, 150 (para. 5); BGH, SchiedsVZ 2018, 53 (59, para. 55); BGH, NJW 2009, 1215 (1216), SchiedsVZ 2009, 66 (67). 379 BGH, NJW 2014, 1597 (1597 et seq.). 368

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For example, it has been said that a breach of public policy exists if the award is “intolerable”380 or amounts to a “gross miscarriage of justice”.381 Except in extreme circumstances of that sort, the arbitral award will not be reviewed as to whether it complies with German legal standards.382 Against that background, it is clear that the scope of “public policy” does not cover all mandatory law,383 but only the most fundamental provisions of German law.384 It has been suggested that an award will be set aside if it is arbitrary,385 but this does not sit easily with the prohibition of review of the merits.386 Other decisions have held that an award in breach of constitutional principles387 or in breach of good morals388 could be set aside for violation of public policy.389 For example, a recent decision held that a contractual penalty of 0.5 % per day of default amounted to a breach of public policy and only allowed enforcement of the award relating to other claims than the penalty.390 The case law of the ECJ will require German courts to treat a violation of EU competition law as a breach of German public policy,391 and similarly, a breach of domestic competition law will be treated as a breach of public policy.392 If a criminal judgment confirms the award has been obtained by fraud or false testimony, the award can be set aside.393 More generally, an award will be set aside if it has been obtained by immoral or illegal means,394 and an award debtor has a tort claim for repayment of sums paid under an award that the award creditor obtained through fraudulent behaviour.395 Under certain circumstances, the violation of foreign laws such as currency regulations, sanctions, anti-bribery legislation etc. may also amount to a breach of German public policy.396 In principle, the state court will not be bound by the factual findings of the arbitral tribunal when assessing a breach of public policy,397 and, in fact, may review compliance of arbitral awards with German public policy on their own motion.398 99 The review against the public policy standard will also include a review of the arbitral proceedings against public policy principles of procedural fairness. A breach of the procedural public policy requires serious shortcomings of the arbitral proceedings399 in 98

380

OLG Köln, SchiedsVZ 2012, 161 (165). OLG Saarbrücken, SchiedsVZ 2012, 47 (50). 382 OLG Saarbrücken, SchiedsVZ 2012, 47 (50). 383 BGH, NJW 2014, 1597; BGH, NJW 2009, 1215, SchiedsVZ 2009, 66; OLG Thüringen, SchiedsVZ 2008, 44, YCA XXXIII (2008), 534; Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 74. 384 BGH, BeckRS 2014, 11030, YCA XXXIX (2014), 401. 385 OLG Stuttgart, SchiedsVZ 2011, 49 (53); OLG Köln, BeckRS 2010, 30836. 386 See OLG München, OLGR 2007, 684, YCA XXXIII (2008), 517: the argument that the award is “illogical” and “incomprehensible” does not amount to a breach of public policy. 387 OLG Frankfurt a. M., SchiedsVZ 2006, 220 (223). 388 § 138 BGB. 389 BGHZ 27, 249 (254); but more recent decisions are more restrictive, e. g., OLG Saarbrücken, SchiedsVZ 2012, 47. 390 KG, BeckRS 2019, 5992. 391 ECJ Case C-126/97 Eco Swiss China Time Ltd v. Benetton International NV, [1999] ECR I-3055. 392 BGHZ 46, 365, NJW 1967, 1178. 393 BGHZ 145, 376 (381), NJW 2001, 373. 394 OLG Stuttgart, SchiedsVZ 2003, 84 (88), suggesting that, in such cases, the time limit of § 1059 (3) ZPO for a setting aside application does not apply; cf. BGHZ 145, 376 (381), NJW 2001, 373 in the context of enforcement proceedings. 395 OLG Köln, SchiedsVZ 2015, 295. 396 Supra mn. 76. 397 BGH, WM 1983, 1207 (1208). For a more restrictive scope of review, see Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 53. 398 Münch, in: MünchKomm-ZPO, 5th ed. 2017, § 1059 mn. 50; Schlosser, (2019) 17 SchiedsVZ 60 (62). 399 OLG Köln, SchiedsVZ 2012, 161 (165). 381

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breach of fundamental principles of procedural justice.400 This is the case where the arbitral tribunal makes an award granting relief that neither party had requested,401 or where the tribunal issues an award against a third party that is not a party to the arbitration.402 A as a rule, a breach of the right to be heard will also amount to a breach of public policy,403 but there is case law suggesting that this only applies in as much as the tribunal did not even comply with the minimum of fair trial protection required by constitutional rights.404 An arbitral award breaches procedural public policy if it is made if it disregards the binding effect of a previous decision or award, and the same applies if the tribunal erroneously believed itself to be bound by a prior decision.405

3. Enforcing arbitral awards a) Enforcement of domestic arbitral awards. Domestic awards can be enforced by 100 leave of the court unless there are grounds that would justify a setting aside application.406 The award debtor is barred from raising such defences against enforcement if an application to set aside the award has been unsuccessful, or if the time limit for filing a setting aside application has lapsed, with the exception of a breach of public policy and lack of arbitrability which may be raised at any time in the enforcement process.407 b) Enforcement of foreign arbitral awards. The enforcement of foreign arbitral 101 awards is governed by the New York Convention and other applicable international conventions such as the Geneva Convention.408 In Germany, enforcement under the New York Convention is not subject to reciprocity; German courts will therefore enforce arbitral awards from non-convention states under convention principles.409 By contrast, they will not recognize and enforce foreign court decisions enforcing arbitral awards.410 Article IV NYC is treated as a requirement of evidence, but not of admissibility of an enforcement application.411 c) Grounds for refusing enforcement. aa) Overview. The defences against enforce- 102 ment are essentially the same for domestic and foreign arbitral awards412 and correspond to the defences available under the New York Convention (infra B mns 177–332). As a rule of thumb, the grounds for setting aside an award (see supra mns 89–99) will also create a defence against enforcement. Moreover, there are a few additional defences for the award debtor that may be available at the enforcement stage, such as annulment of an award or fulfilment and set-off. bb) Enforcement of awards that were set aside. Under article V(1)(e) NYC, an 103 award cannot be enforced if it is not yet binding or if it has been set aside by the courts 400

BGH, WM 2010, 1522; OLG Köln, SchiedsVZ 2005, 163, YCA XXX (2005), 557. OLG Köln, SchiedsVZ 2012, 161 (165). 402 OLG München, NJW 2007, 2129. 403 BGH, NJW 2018, 70, para. 16; BGH, SchiedsVZ 2016, 339 (341, para. 21), BGH, SchiedsVZ 2005, 259 (260). 404 OLG München, SchiedsVZ 2012, 43 (46). 405 BGH, NJW-RR 2019, 762 (763), SchiedsVZ 2019, 150, para. 15. On breach of public policy by issuing a dissenting opinion supra fn. 247. 406 § 1060(2)(1) ZPO. 407 § 1060(2)(2), (3) ZPO. 408 § 1061(1) ZPO. 409 BGH, SchiedsVZ 2006, 161 (163). 410 Rather, the award creditor must seek enforcement of the award itself: BGH, NJW 2009, 2826, SchiedsVZ 2009, 285, YCA XXXV (2010), 374. 411 Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (375). 412 Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1061 mn. 13. 401

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at the seat of the arbitration.413 The mere fact that setting aside proceedings are pending does not affect the binding effect and the enforceability of the arbitral award.414 However, German courts can suspend enforcement in such cases under article VI NYC. In that regard, they will take into consideration the prospects of the setting aside application and allow enforcement to proceed if it is unlikely that the award will be set aside.415 Under article IX(2) EuC, the defence to enforcement under article V(1)(e) NYC is limited to situations where an award was set aside for lack of jurisdiction of the arbitral tribunal, a breach of the award debtor’s right to present his case, or a breach of applicable procedural rules. Conversely, an award set aside for breach of public policy at the seat of the tribunal would not bar enforcement under article IX EuC (supra B mn. 293). 104 A much debated issue in the context of article V(1)(e) NYC is to what extent the courts in Germany are bound by a foreign decision setting aside an arbitral award. In various jurisdictions, courts have decided that the decision of the courts at the seat of the arbitration must meet the requirements for recognition and enforcement under domestic law in order to create a defence to enforcement. On that basis, a setting aside decision would not create a defence to enforcement if it was obtained in breach of fair trial principles, if it was arbitrary or if it disregarded fundamental notions of justice.416 The point has not yet been decided by German courts, but in the past they have followed an approach favouring recognition of foreign setting aside decisions: unlike under ordinary rules of recognition and enforcement, no reciprocity is required for the recognition of the foreign setting aside decision.417 Moreover, German courts will, at least in principle, not review the merits of a foreign setting aside decision,418 but legal writers argued that review should be possible to avoid recognition of arbitrary or politically motivated annulment decisions as a defence to enforcement.419 105

cc) Fulfilment, set-off and similar defences. It is beyond dispute that the award debtor can set off at the enforcement stage with a claim that has already been adjudicated.420 The German Federal Court of Justice also admits a set-off defence in situations where set-off had been unsuccessfully pleaded in the arbitration itself if the arbitral tribunal deemed to have no jurisdiction regarding the counter-claim and therefore did not take into account the defence based on the set-off.421 By contrast, a defence based on a counter-claim cannot be considered by the enforcement judge if the counter-claim falls under the scope of the arbitration agreement422 or if the arbitral

413 Article V(1)(e) NYC, § 1061(1) ZPO. See, e. g., OLG Dresden, SchiedsVZ 2007, 327, YCA XXXIII (2008), 510. 414 OLG Köln, openJur 2014, 12150, YCA XXXIX (2014), 399–400. 415 OLG Dresden, SchiedsVZ 2008, 309, YCA XXXIV (2009), 522; OLG Schleswig, YCA XXXIV (2009), 516. 416 See supra, A mn. 150; Yukos Capital Sarl v. OJCS Rosneft Oil Company [2012] EWCA Civ 855; supra H mn. 153; Corporación Mexicana de Mantenimiento Integral v. Pemex Exploración y Producción, 2013 U.S. Dist. LEXIS 121951 (S.D.N.Y. 2013); infra S mn. 144. 417 BGH, SchiedsVZ 2013, 229 (230), YCA XXXIX (2014), 394–398. 418 OLG München, SchiedsVZ 2013, 339 (341); Solmon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (362). 419 Poseck, in: Salger/Trittmann, Internationale Schiedsverfahren, 2019, § 23 mn. 29. 420 OLG Düsseldorf, SchiedsVZ 2005, 214, YCA XXXI (2006), 663. 421 BGH, SchiedsVZ 2016, 343 (345, para. 20); BGH, SchiedsVZ 2010, 330, YCA XXXVI (2011), 279; OLG München, SchiedsVZ 2013, 179 (180). However, if the counter-claim is itself also covered by an arbitration clause, the set-off in the enforcement proceedings remains ineffective as the state courts cannot adjudicate the counter-claim: BGH, SchiedsVZ 2010, 275, YCA XXXVI (2011), 277. 422 OLG Bremen, BeckRS 2015, 2552; OLG München, SchiedsVZ 2016, 118 (119).

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tribunal has denied the existence of the claim.423 In enforcement proceedings, the courts will also take into account a defence put forward on the basis that the award debtor has already fulfilled the award.424

4. Preclusion of grounds for challenge and defences to enforcement As a rule, objections and defences have to be put forward as soon as possible – 106 otherwise, the party concerned risks being precluded from raising it at a later stage. This becomes relevant in particular in enforcement and setting aside proceedings. a) Preclusion due to failure to object in the arbitral proceedings. A party must 107 object to the breach of a non-mandatory provision of German arbitration law without undue delay or within a period set for such objections.425 If it fails to do so, it is barred not only from raising it later in the arbitral proceedings, but also from raising it in setting aside or enforcement proceedings.426 Preclusion principles apply in particular to jurisdictional challenges: As the claimant is deemed to have submitted to the jurisdiction of the tribunal by filing the request for arbitration, he is precluded from subsequently challenging the arbitral tribunal’s jurisdiction in setting aside proceedings.427 This also applies to the defendant in the arbitration if he filed a counterclaim.428 The defendant must raise a challenge to the jurisdiction of the arbitral tribunal in the statement of defence,429 and if the arbitral tribunal assumes jurisdiction in an interim decision, the defendant must bring the jurisdictional challenge before the state courts within the applicable time limits.430 Otherwise, state courts will not reconsider the jurisdiction of the arbitral tribunal in setting aside and enforcement proceedings.431 Similar concepts of preclusion apply to other challenges. Where a party has not 108 challenged an arbitrator within the timeframe in § 1037(2) ZPO, or where a party fails to pursue a challenge before the state courts under § 1037(3) ZPO, it will be precluded from raising it as a ground for setting aside the award or as a defence to enforcement.432 The decision of the state court sustaining or rejecting a challenge will be binding in subsequent setting aside and enforcement proceedings.433 Similarly, where a party will be precluded from relying on an alleged breach of its right to be heard if it has not made use of the procedural opportunities to raise that point before the arbitral tribunal,434 and the same applies to a breach of the parties’ agreement on the language of the arbitration.435

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OLG München, SchiedsVZ 2013, 179. BGH, NJW-RR 2013, 1336: unless otherwise agreed, the issue of fulfilment does not fall under the arbitration clause. This must be limited to the enforcement stage as the arbitral tribunal will ordinarily have the power to decide on a defence put forward by the defendant on the basis that he has already performed his obligations. 425 § 1027 ZPO. 426 OLG Stuttgart, SchiedsVZ 2003, 84; OLG Frankfurt a. M., OLGR 2003, 186. 427 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1059 mn. 39 a. 428 OLG Celle, OLGR 2007, 664 (666); OLG Hamm, SchiedsVZ 2013, 182 (183). 429 § 1040(2) ZPO. 430 § 1040(3)(2) ZPO. 431 Münch, in: MünchKomm-ZPO, 5th ed., 2017, § 1040 mn. 42; Voit, in: Musielak/Voit (eds), ZPO, 17th ed., 2020, § 1040 mn. 13; Lachmann, Schiedsgerichtspraxis, 3rd ed., 2008, mns 758, 2114. 432 See fn. 201 above. 433 Geimer, in: Zöller (ed.), ZPO, 33rd ed., 2020, § 1037 mn. 6. 434 BGH, NJW 2015, 3234 (3238, para. 31); BGH, SchiedsVZ 2017, 317 (319, para. 26), NJW 2018, 70. 435 OLG Köln, SchiedsVZ 2014, 203 (205), YCA XLI (2016), 484; Jäger/Zavodsky, (2019) 17 SchiedsVZ 175 (180). 424

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b) Preclusion due to failure to bring a setting aside application. A controversial issue in the context of enforcing foreign arbitral awards is whether failure to file a setting aside application at the seat of the arbitration precludes the award debtor from raising relevant defences in enforcement proceedings in Germany (as would be the case for domestic awards: see supra mn. 100). The Federal Court of Justice has held that a jurisdictional defence can be raised against the enforcement of a foreign award even if the award debtor has not filed an application to set aside the award before the courts at the seat of the arbitration,436 thus applying the principle of “dual control” in line with international practice.437 However, that approach has been criticized by commentators,438 and in the context of public policy defences, some lower courts adopted a different approach439 and have also been willing to treat a foreign court decision rejecting a setting aside application as binding for defences against enforcement.440 Against that background, an award debtor is well advised to file a setting aside application in time if he intends to resist the enforcement of a foreign arbitral award in Germany.

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c) Preclusion on the basis of good faith principles. A party cannot raise a jurisdictional defence to the enforcement of an arbitral award if it had previously relied on the arbitration agreement to obtain dismissal of an action brought before state courts.441 436 BGHZ 188, 1, SchiedsVZ 2011, 105 (106 et seq.); Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (344–345). 437 Borris/Hennecke, in: Wolff (ed.), NYC, 2nd ed., 2019, art. V paras 65, 67. 438 Santomauro, (2016) 14 SchiedsVZ 178 (188 et seq.). 439 Following BGH, NJW-RR 2001, 1059 et seq., OLG Karlsruhe, SchiedsVZ 2012, 101 (104), YCA XXVIII (2013), 379 held that the public policy defence was precluded if it had not been raised in either in the arbitration or in setting aside proceedings. 440 OLG Thüringen, SchiedsVZ 2008, 44, YCA XXXIII (2008), 534: the foreign decision in the setting aside proceedings will be followed unless it is “visibly wrong and grossly incorrect”. It is unclear, however, whether that decision is compatible with the more recent decision of the Federal Court of Justice mentioned supra fn. 427. Cf. also OLG München, SchiedsVZ 2010, 169, YCA XXXV (2010), 371, suggesting that a foreign decision rejecting a setting aside application can be recognized in the context of enforcement proceedings, and Solomon, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 329 (348). 441 BGH, SchiedsVZ 2018, 37 (41, para. 33), extending that principle under certain conditions to parallel proceedings with different parties.

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K. International Arbitration in Hong Kong Bibliography: Beale (ed.), Chitty on Contracts, vol. 1, 33rd ed., Sweet & Maxwell 2018; Gilchrist (ed.), Chitty on Contracts: Hong Kong Specific Contracts, 5th ed., Sweet & Maxwell 2016; Halsbury’s Laws of Hong Kong, 2nd ed., LexisNexis Hong Kong, 2016 Reissue; Kaplan/Morgan, National Report for Hong Kong (2013 through 2018), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 98, March 2018; Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., Sweet & Maxwell 2017; Merkin, Arbitration Law, Lloyd’s of London Press Ltd (Service Issue 82: 31 July 2019); Moser/Choong (eds), Asia Arbitration Handbook, Oxford University Press 2011; Sharma/Sajnani, Interpretation and Application of the New York Convention in Hong Kong, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 417–432; Yeoh/Ang, People’s Republic of China and Hong Kong, in: Weigand/ Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 275–370. National legislation and other material: HK Arbitration Ordinance (Cap. 609); Arbitration Ordinance (Cap. 341) (repealed); Arbitration (Appointment of Umpires) Rules (Cap. 609B); the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China; Limitation Ordinance (Cap. 347); Control of Exemption Clauses Ordinance (Cap. 71); Crown Proceedings Ordinance (Cap. 300); Mediation Ordinance (Cap. 620); HK Rules of the High Court (Cap 4A), Order 73; Practice Direction 6.1 of the High Court of Hong Kong; Practice Direction 31 of the High Court of Hong Kong; Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region, 21 June 1999; Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards between the Hong Kong Special Administrative Region and the Macao Special Administrative Region, article 219, Chapter XXI of the PRC Code of Civil Procedure. International conventions and materials: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958; UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006, available at www.uncitral.org; United Nations Convention on Jurisdictional Immunities of States and their Property (2004).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri.......................................................................................... e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of Hong Kong arbitration law ...................... II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses .........................................................

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Part 3. Country Reports 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... 31 a) Power of arbitral tribunals to rule on jurisdiction ........................ 31 b) Arbitration defence against actions in breach of arbitration agreements .............................................................................................. 33 c) Anti-suit and anti-arbitration injunctions....................................... 37 d) Preclusion of jurisdictional defences ................................................ 39 e) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... 42 III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 45 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... 46 a) Duty to disclose ..................................................................................... 51 b) Grounds for challenge.......................................................................... 52 c) Procedural aspects and preclusion of grounds for challenge...... 53 d) Failure or impossibility to act ............................................................ 56 2. The arbitral proceedings ........................................................................... 57 a) The request for arbitration ................................................................. 58 b) Equality of arms, fair trial principles and the right to be heard .. 59 c) Confidentiality ....................................................................................... 60 d) The arbitral award ................................................................................ 62 e) Termination of the arbitration without an award......................... 65 f) The costs of the arbitration ................................................................ 66 3. Evidence, discovery, disclosure................................................................ 69 4. The law governing the dispute and lois de police ............................... 73 a) The law governing the dispute and choice of law......................... 73 b) Choice of law and lois de police......................................................... 75 5. Interim relief in arbitration ...................................................................... 76 a) Interim relief before state courts ....................................................... 76 b) Interim relief before the arbitral tribunal ........................................ 79 6. Multi-party and multi-contract arbitration .......................................... 81 a) Overview ................................................................................................. 81 b) Equality of arms and appointment of the arbitrators .................. 85 7. Third-party funding of arbitration ......................................................... 86 a) Legislative framework........................................................................... 87 b) Code of Practice for Third Party Funding of Arbitration ........... 91 IV. The control and the enforcement of arbitral awards ............................. 92 1. Correction and amendment of arbitral awards ................................... 94 a) Correction ............................................................................................... 94 b) Interpretation ......................................................................................... 95 c) Additional award................................................................................... 96 d) Others ...................................................................................................... 97 2. Review of arbitral awards before the state courts ............................... 99 a) Procedural framework (time limits, competent court, appeal) .. 100 aa) Applications to set aside an arbitral award under section 81 100 bb) Challenging an arbitral award on the ground of serious irregularity ....................................................................................... 104 (1) Procedure .................................................................................. 106 (2) Remedies ................................................................................... 107 (3) Appeal against decision of Court ........................................ 108 cc) Appeal against an arbitral award on a question of law ........ 109 (1) Procedure .................................................................................. 110 (2) Remedies ................................................................................... 115 (3) Amended award ...................................................................... 117 dd) Indemnity costs orders for unsuccessful challenges .............. 118 b) Grounds for setting aside an arbitral award ................................... 119 aa) Overview .......................................................................................... 119 bb) Lack of jurisdiction of the arbitral tribunal ............................. 120

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K. International Arbitration in Hong Kong cc) Unlawful composition of the tribunal and other procedural irregularities..................................................................................... 121 (1) Unlawful composition of tribunal....................................... 121 (2) Inability to present case......................................................... 122 (3) Incapacity of party or invalidity of arbitration agreement.................................................................................. 123 dd) Public policy.................................................................................... 124 ee) Subject matter not arbitrable....................................................... 125 3. Enforcing arbitral awards ......................................................................... 126 a) Overview ................................................................................................. 126 aa) Awards made in Hong Kong ...................................................... 127 bb) Non-Convention awards made overseas .................................. 132 cc) Convention awards........................................................................ 133 dd) Mainland awards............................................................................ 136 ee) Macao awards ................................................................................. 142 b) Defences to enforcement ..................................................................... 144 aa) Overview .......................................................................................... 144 bb) Enforcement of awards that were set aside.............................. 145 cc) Set-off................................................................................................ 148 4. Preclusion of grounds for challenge and defences to enforcement 149 a) Preclusion due to failure to object in the arbitral proceedings .. 150 b) Preclusion due to failure to bring a setting-aside application .... 152 c) Effect of decisions in setting aside and enforcement proceedings outside Hong Kong ....................................................... 154 V. Immunity .......................................................................................................... 156 1. State immunity ............................................................................................ 156 2. Crown immunity ........................................................................................ 162 3. Conclusion ................................................................................................... 165

I. Introduction Hong Kong, a former British colony, has been ruled by the British government for 1 over 150 years. Since 1 July 1997, the PRC has resumed sovereignty over Hong Kong under the principle of “one country, two systems” in accordance with the Basic Law. This principle guarantees that the Hong Kong Special Administrative Region (HKSAR) enjoys a high degree of autonomy and continues to practise common law with an independent judiciary.1 Over the years, the HKSAR Government has worked extremely hard to promote Hong 2 Kong as a prime venue for international legal and dispute resolution services through arbitration (which is often regarded as a preferred form of dispute resolution in international transactions) by regularly updating its arbitration law and procedure and by upgrading its arbitration infrastructure. There is also an active and vibrant arbitration community in Hong Kong to discuss the latest arbitration issues. It is no surprise that Hong Kong has remained a top 5 arbitration seat in the world since 2015 according to the International Arbitration Surveys conducted by Queen Mary University of London. Recent political events in Hong Kong may prompt businesses to reconsider Hong 3 Kong as an international arbitration venue. It should be noted that international arbitration is a dispute resolution mechanism that is not subject to political interferences. Parties continue to be entitled to appoint arbitrators of their choice who will conduct hearings in a neutral venue and give awards which are enforceable globally. The 1 See Preamble as well as articles 2, 8, 12 and 85 of the Basic Law, which is often regarded as the “miniconstitutional document” of the Hong Kong Special Administrative Region. The Basic Law is available at http://www.basiclaw.gov.hk/en/index/index.html (accessed 1 August 2020).

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fundamentals and infrastructure of the arbitration system in Hong Kong (as explained further below) remain intact and world-class. With a judiciary renowned to be independent, there has been no suggestion whatsoever that commercial arbitrations or even litigations have been interfered with. Whilst political events may continue or resurge in future, confidence in Hong Kong as an international arbitration venue should not be affected.

1. The legal framework The arbitration framework of Hong Kong has been and continues to be proarbitration. As early as the 1980 s, the colonial government had been working with the local arbitration community to promote Hong Kong as a place for international arbitration in Asia.2 The principal legislation is the HK Arbitration Ordinance (Cap. 609).3 If the place of arbitration is in Hong Kong, the HK Arbitration Ordinance applies.4 Whilst not itself a complete code for the conduct of arbitrations, the HK Arbitration Ordinance aims to provide basic protections to parties and a general framework within which arbitrations can take place.5 5 It is important to note that, after the handover in 1997, the Hong Kong Special Administrative Region continues to be a common law jurisdiction. Pursuant to the Basic Law, laws in force in Hong Kong on 30 June 1997, including the common law, remain in force after the handover. Accordingly, Hong Kong courts may refer to precedents of Hong Kong courts, or case law in any other common law jurisdictions, in determining applications under the HK Arbitration Ordinance.6 As the HK Arbitration Ordinance aims only to provide basic safeguards and places great emphasis on party autonomy, a number of matters are still governed by the common law.7 4

a) Domestic and international arbitration. From 1990 to 2011, the “old” Arbitration Ordinance (Cap. 341) governed arbitrations in Hong Kong. Under the old Ordinance, arbitrations in Hong Kong were governed by two different regimes – “domestic arbitrations” (governed by the domestic regime) and “international arbitrations” (based on the UNCITRAL Model Law regime). The UNCITRAL Model Law only applied to international arbitrations in Hong Kong. This distinction, however, often led to confusions even among practitioners. 7 In June 2011, the “new” HK Arbitration Ordinance came into force and replaced the old regime. Abolishing the “dual regimes” for international and domestic proceedings 6

2 For a summary of the history of arbitration law in Hong Kong, see Weeramantry, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 1.001–1.035. 3 Came into force on 1 June 2011, repealing the “old” Arbitration Ordinance (Cap. 341). The HK Arbitration Ordinance is available at https://www.elegislation.gov.hk/hk/cap609 (accessed 1 August 2020). 4 See HK Arbitration Ordinance (Cap. 609), section 5. 5 Ibid., section 3. The object of the HK Arbitration Ordinance is to “facilitate fair and speedy resolution of disputes by arbitration without unnecessary expense”. The Ordinance is based on the principles that, “subject to the observance of the safeguards that are necessary in the public interest, the parties to a dispute should be free to agree on how the dispute should be resolved”; and that “the court should interfere in the arbitration of a dispute only as expressly provided for” in the Ordinance. 6 See article 8, Basic Law, “The laws previously in force in Hong Kong, that is, the common law, rules of equity, ordinances, subordinate legislation and customary law shall be maintained, except for any that contravene this Law, and subject to any amendment by the legislature of the Hong Kong Special Administrative Region”. Note, however, that the Hong Kong courts are no longer bound to follow English common law precedents after the 1997 handover. 7 For example, issues relating to confidentiality and validity of arbitration agreements. For a more detailed discussion on matters governed by common law, please refer to Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.197. See also Bateson/Wan, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, para. 4.161.

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under the old Ordinance, the HK Arbitration Ordinance now provides a single, unified, regime (for both domestic and international arbitrations) which is based on the UNCITRAL Model Law, with tailor-made modifications to suit the specific requirements of the Hong Kong Special Administrative Region.8 As a result, the HK Arbitration Ordinance provides for arbitrations in Hong Kong an internationally accepted legal framework which is closely in line with international standards. b) Commercial and non-commercial arbitration. The scope of Hong Kong arbitra- 8 tion is not limited to commercial arbitration but includes disputes falling within the categories of contract, tort, as well as other forms of legal relationship such as trust, restitution or statutory duties.9 It should be noted that the Control of Exemption Clauses Ordinance imposes more 9 restrictive requirements on arbitration agreements involving “consumers” within the meaning of the Ordinance.10 Accordingly, an arbitration agreement purporting to oblige a “consumer” to submit future differences to arbitration cannot be enforced, unless (a) the consumer gives his written consent after the differences have arisen; or (b) he has himself submitted to arbitration in pursuance of the agreement, whether in relation to the difference in question or any other difference.11 For the purposes of the Control of Exemption Clauses Ordinance, a person is dealing as “consumer” if he enters into a contract where (a) he neither makes the contract in the course of his business nor holds himself out as so doing, (b) the other party does make the contract in the course of a business, and (c) any good passing are of a type ordinarily supplied for private use or consumption.12 c) Ad hoc and institutional arbitration. Like many other common law jurisdictions, 10 Hong Kong arbitration law allows for both ad hoc and institutional arbitrations. The Hong Kong International Arbitration Centre (HKIAC) is a leading arbitration institution in the Hong Kong Special Administrative Region. Upon request by the parties, the HKIAC administers arbitration proceedings primarily according to either its administered rules (known as the “HKIAC Administered Arbitration Rules”(HKIAC Rules)) or the HKIAC Procedures for the Administration of Arbitration under the UNCITRAL Arbitration Rules.13 On the other hand, the parties may choose Hong Kong as the seat for their arbitrations, but have their arbitrations administered by other arbitration institutions, such as CIETAC Hong Kong Arbitration Centre or ICC-HK. More than half of the arbitrations conducted in Hong Kong are administered 11 arbitrations. According to the HKIAC’s statistics,14 308 arbitrations were submitted to HKIAC in 2019, of which 173 were administered by HKIAC under rules including the 8 For example, provisions relating to the mutual recognition and enforcement of PRC and Macao awards, to be discussed infra mns 128 et seq. 9 See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.003. 10 The Control of Exemption Clauses Ordinance (Cap. 71) is available at https://www.elegislation.gov. hk/hk/cap71 (accessed 1 August 2020). 11 Section 15(1), Control of Exemption Clauses Ordinance. However, section 15(2) provides that section 15(1) does not affect the resolution of differences arising under any contract so far as it is, by virtue of Schedule 1 of the Ordinance, excluded from the operation of section 7, 8, 9 or 12 of the Ordinance (such as terms purporting to exclude or limit liability in contracts of insurance and for sale of land). Note also that if section 15(1) applies, legal proceedings brought on the contract by the consumer may not be stayed in favour of arbitration, pursuant to section 20(3) of the HK Arbitration Ordinance. 12 Ibid., section 4. 13 The HKIAC Rules and the HKIAC Procedures for the Administration of Arbitration under the UNCITRAL Arbitration Rules can be found at https://www.hkiac.org/arbitration/rules-practice-notes (accessed 1 August 2020). 14 Available at https://www.hkiac.org/about-us/statistics (accessed 1 August 2020).

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HKIAC Administered Arbitration Rules, the UNCITRAL Arbitration Rules and the HKIAC Electronic Transaction Arbitration Rules. 12 The HKIAC is empowered under the HK Arbitration Ordinance15 to (1) appoint arbitrators and (2) determine the number of the arbitrators, if the parties to arbitrations seated in Hong Kong fail to agree on these issues.16 13

d) The territoriality principle, the seat of the arbitration and the lex arbitri. Hong Kong arbitration law follows the principle of territoriality. The seat of arbitration determines the lex arbitri (procedural law of the arbitration) which can be different from the substantive governing law in respect of the dispute. If the parties agree that Hong Kong be their seat of arbitration, the HK Arbitration Ordinance (incorporating and modifiying the provisions of the UNCITRAL Model Law) applies.17 Any court assistance required during the course of arbitration may be handled by the High Court in Hong Kong. Despite the fact that Hong Kong is the seat of an arbitration, hearings and meetings with witnesses, experts or the parties may take place outside Hong Kong, unless otherwise agreed by the parties.18

e) Arbitration and other ADR mechanisms (mediation, expert determination). Arbitration has traditionally been regarded as the first form of alternative dispute resolution (ADR) mechanisms, as alternative to litigation. However, arbitration proceedings can sometimes be lengthy, costly and therefore unsatisfactory as a form of ADR. Other forms of ADR including mediation, adjudication and expert determination have been rapidly developing in Hong Kong. 15 Different sets of rules will apply to different ADR mechanisms. For instance, mediation is governed by the Mediation Ordinance. The aim of the Mediation Ordinance is to promote, encourage and facilitate the resolution of disputes by mediation, and to protect the confidential nature of mediation communications.19 Mediation is a widely accepted form of ADR that is relatively speedy and inexpensive, and is becoming more and more popular in Hong Kong. In line with an important underlying objective of the Civil Justice Reform which is to facilitate settlement of disputes,20 Practice Direction 31 on mediation came into force on 1 January 2010, which encourages litigants to mediate during court proceedings.21 16 Another common alternative to litigation is expert determination. Parties to contracts may agree to refer certain issues to third parties with expertise in the particular areas. Typical examples of expert determination include the valuation of certain matters in the contracts, such as share values in takeover situations and certifiers in construction contracts. Expert determination is commonly adopted in construction contracts. Parties to construction contracts may make expert determination a precursor to arbitration in 14

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See HK Arbitration Ordinance, sections 23, 24 and 30. When carrying out these statutory functions, the HKIAC will follow the rules and procedures set out in Arbitration (Appointment of Arbitrators and Mediators and Decision on Number of Arbitrators) Rules (Cap. 609C), available at https://www.elegislation.gov.hk/hk/cap609C (accessed 1 August 2020). 17 See sections 4 (ML to have force of law in Hong Kong) and 5 (Arbitrations to which the Ordinance applies) of the HK Arbitration Ordinance. 18 See section 48 of the HK Arbitration Ordinance which incorporates article 20 ML. 19 The Mediation Ordinance (Cap. 620) is available at https://www.elegislation.gov.hk/hk/cap620 (accessed 1 August 2020). 20 The Civil Justice Reform in Hong Kong has been implemented since April 2009 in order to improve access to justice at reasonable costs and speed. For more details about the Civil Justice Reform, please refer to http://www.civiljustice.gov.hk/eng/home.html (accessed 1 August 2020). 21 Practice Direction 31 of the High Court of Hong Kong is available at https://legalref.judiciary.hk/lrs/common/pd/pdcontent.jsp?pdn=PD31.htm&lang=EN (accessed 1 August 2020). 16

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their dispute resolution clauses.22 An expert’s role is to act as an expert and make use of his expertise in the relevant area, skills and judgment, but he is not to act as an arbitrator. He is usually given wide discretion in performing his function. Unless the contract provides otherwise, an expert is under no obligation to receive evidence or submissions from the parties, and is often not required to give reason for his determination.23 Expert determination clauses usually provide that the determination will be final and binding on the parties. The courts in Hong Kong will usually enforce such clauses. The statutory avenues in relation to recourse against arbitral awards under the HK Arbitration Ordinance do not apply to expert determinations.24 The courts may only intervene under the following limited circumstances: (a) fraud or collusion; (b) error of law; (c) error of fact.25 The courts cannot vary or remit the expert’s determination, and may only uphold or set aside the determination.26

2. The guiding principles of Hong Kong arbitration law Arbitration is a generally accepted mechanism of ADR in Hong Kong (as alternative 17 to litigation in court) that allows the parties the freedom to choose their own arbitrator (s) and to have the proceedings conducted in accordance with their preferred procedural rules. In line with international best practices, Hong Kong arbitration law emphasizes the principles of party autonomy and limited judicial intervention. The “new” HK Arbitration Ordinance further strengthens Hong Kong as a user-friendly UNCITRAL Model Law jurisdiction.27 As can be seen in section 3 of the HK Arbitration Ordinance, the object of the Ordinance is “to facilitate the fair and speedy resolution of disputes by arbitration without unnecessary expense”.28

II. The arbitration agreement It is a generally accepted principle in arbitration that no arbitration may proceed 18 without an “arbitration agreement” between the parties. In other words, the parties must have “agreed” to resolve their disputes by way of arbitration in order for the arbitral tribunal to have jurisdiction. If there is no arbitration agreement, there can be no arbitration. If an arbitration is seated in Hong Kong, the HK Arbitration Ordinance, and its provisions relating to arbitration agreements will apply. In particular, section 19 of the HK Arbitration Ordinance provides that an arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether

22 Please refer to Bateson/Wan, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 4.086–4.101 for a more detailed discussion on ADR options and expert determination. 23 Ibid., para. 4.089. 24 Ibid., para. 4.096. See also the judgment of Kaplan J. in Edward Mayers v. Brian Dlugash [1994] 1 HKLR 442, where it was held that “the classic features of expert determination are: (a) The expert makes a final and binding decision. (b) The decision can only be challenged in the most exceptional circumstances such as when the expert answers the wrong question. (c) The expert can be sued for negligence in the absence of agreed immunity. (d) The expert’s determination cannot be enforced as an arbitral award” 25 Ibid., para. 3.099. See also Edward Mayers v. Brian Dlugash [1994] 1 HKLR 442. 26 Ibid. 27 Section 4 of the HK Arbitration Ordinance makes it clear that the UNCITRAL Model Law that are expressly stated in the HK Arbitration Ordinance as having effect have the force of law in Hong Kong subject to modifications and supplements as expressly provided for in the HK Arbitration Ordinance. 28 See section 3 of the HK Arbitration Ordinance (object and principles of the Ordinance).

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contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.29

1. The doctrine of separability 19

The doctrine of separability applies in Hong Kong. Section 34(1) of the HK Arbitration Ordinance makes it clear that “an arbitration clause which forms part of a contract is regarded as an agreement independent of the other terms of the contract”.30 Therefore, an arbitration clause is separable from the main contract containing it so that if the main contract is repudiated and the repudiation is accepted, the arbitration clause still survives the repudiation, thus enabling the arbitrator to render an award on the claim resulting from the alleged repudiation.31

2. The law applicable to the arbitration agreement 20

Although parties will normally agree the seat of the arbitration in their arbitration clause, it is not uncommon for parties not to specify expressly the law of the arbitration agreement (e. g. because they mistakenly assume that the substantive governing law of the underlying contract will apply automatically). This type of omission can lead to uncertainty and complications in arbitrations, especially when the law of the substantive contract is not the same as that of the seat of the arbitration as is sometimes the case. This question has arisen recently in a number of court decisions relating to arbitration claims, where the national courts of Hong Kong, England, India and Singapore have all considered (and disagreed) which law should apply.32 The new HKIAC model clause includes a provision allowing the parties to choose the law applicable to the arbitration agreement.33 Where the parties make no choice, Hong Kong courts will normally apply the law of the seat as the appropriate law to govern the parties’ arbitration agreement.34

3. The validity of the arbitration agreement (capacity, arbitrability, form) 21

a) Capacity to conclude arbitration agreements. Under Hong Kong law, there is basically no limit as to the capacity of parties to enter into arbitration agreements. Section 6 of the HK Arbitration Ordinance makes it clear that the HK Arbitration Ordinance and its provisions governing arbitration agreements apply to the Government of Hong Kong and the Offices set up by the Central People’s Government in the Hong Kong Special Administrative Region.35 Accordingly, there is no restriction for public bodies and government departments to enter into arbitration agreements.

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b) Arbitrability. Hong Kong arbitration law is very liberal as to the types of arbitrable disputes. Indeed, the arbitrability restriction has recently been further liberalized when an amendment was made to the HK Arbitration Ordinance in 2017 to allow 29

See Section 19 of the HK Arbitration Ordinance which gives effect to article 7ML. See section 34 of the HK Arbitration Ordinance (competence of arbitral tribunal to rule on its jurisdiction) which gives effect to article 16ML. Section 34(1) of the HK Arbitration Ordinance goes on to provide that “A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause” 31 The doctrine of separability, adopted by English courts since Heyman v. Darwins [1942] AC 356, has been widely adopted throughout the world. For English case law, see supra H mns 19 et seq. 32 See supra A mn. 21. 33 Available online at http://hkiac.org/en/arbitration/model-clauses. 34 Klöckner Pentaplast GmbH & Co. KG v. Advance Technology (H.K.) Co. Ltd, 14 July 2011, HCA 1526/2010, [2011] 4 HKLRD 262, paras 25, 26. 35 Section 6, HK Arbitration Ordinance. 30

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disputes over intellectual property rights, which were not arbitrable traditionally, to be resolved by arbitration.36 The question of arbitrability is one of jurisdiction, which can be decided either by the tribunal or the court. Disputes that may not be referred to arbitration include criminal charges, family law 23 matters (including child custody, marriage and divorce), actions in rem against vessels, and matters reserved to the state (such as immigration and taxation) as well as matters covered by legislation giving exclusive jurisdiction to another tribunal or the court.37 c) Form of the arbitration agreement. For the purposes of the HK Arbitration 24 Ordinance, the arbitration agreement shall be “in writing”. An arbitration agreement is in writing if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means.38 The Ordinance further makes clear that an arbitration agreement is regarded as “in writing” if (a) the agreement is in a document, whether or not the document is signed between the parties to the agreement;39 or (b) the agreement, although made otherwise than in writing, is recorded by one of the parties to the agreement, or by a third party who does so with the authority of each of the parties to the agreement.40 Therefore, under the current HK Arbitration Ordinance, an arbitration agreement does not need to be actually “signed” by the parties. The agreement can be made by an exchange of written communications in any form (including by way of electronic communication), such as by fax, email or telegram.41 A physical document (on paper) is not required. Like many other jurisdictions, Hong Kong does not impose strict formal require- 25 ments in relation to the contents of arbitration agreements. As long as the parties express a clear intention to submit their disputes to arbitration, they are free to agree on the content of the arbitration agreement. However, poorly drafted arbitration agreements often lead to unnecessary litigation, and thus unnecessary costs. In an arbitration agreement, it is important to clearly specify (a) the seat of the arbitration and the place of hearings; (b) the governing law of the arbitration agreement and the substantive dispute and applicable arbitration rules and whether it is administered by an institution; (c) the number of arbitrators; (d) the language of the arbitration; (e) how the arbitrators are going to be appointed (if different from the appointment mechanism in the arbitration rules); (f) opting in/out of Schedule 2 of the HK Arbitration Ordinance.42 36

See Part 11A, HK Arbitration Ordinance. For example, claims relating to the Employees Compensation Ordinance (Cap. 282), available at https://www.elegislation.gov.hk/hk/cap282 (accessed 1 August 2020). In Paquito Lima Buton v. Rainbow Joy Shipping Ltd Inc. (2008) 11 HKCFAR 464, the Court of Final Appeal held that section 18A(1) of the Employees Compensation Ordinance confers exclusive jurisdiction on the District Court to deal with all Employees Compensation Ordinance claims save in the cases expressly excepted, and that arbitration is not such an exception and there is no power to stay Employees Compensation Ordinance proceedings in favour of arbitration. 38 Ibid., section 19(1)(2) and (3). 39 Ibid., section 19(2)(a). 40 Ibid., section 19(2)(b). 41 See section 19(1)(5) to (6). 42 Under section 99 of the HK Arbitration Ordinance, the parties may specify whether they want to opt in to (all or part of) the provisions listed in Schedule 2 of the HK Arbitration Ordinance. Such opt-in provisions provide the following options to the parties: (a) sole arbitrator; (b) consolidation of arbitrations – the Court may order that 2 or more arbitral proceedings be consolidated (which usually happens when there are common questions of law or fact in the related proceedings); (c) decision of preliminary question of law by the Court – upon application by one of the parties, the Court may decide any question of law arising in the course of the arbitral proceedings; (d) challenging arbitral award on ground of serious irregularity – a party to an arbitral proceedings may apply to the Court challenging an award on the ground of serious irregularity affecting the tribunal, the proceedings or the award; (e) appeal against arbitral awards on question of law (see infra mns 106 et seq.). 37

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d) Termination of the arbitration agreement. Theoretically, an arbitration agreement can be terminated by agreement of the parties, express or implied. Whilst a reference to arbitration will not be repudiated or frustrated merely by inordinate delay in prosecution of the proceedings, a long period of default or inactivity by both parties may give rise to an implied agreement to terminate the reference to arbitration.43 Such termination will only be inferred by the court under unequivocal circumstances, where clear inference can be drawn from the parties’ inactivity that the parties did not wish to proceed and that there is mutual agreement to the abandonment of arbitration.44

4. The scope and the interpretation of the arbitration agreement 27

a) Personal scope of the arbitration agreement. An arbitration agreement is binding both on the parties and the person claiming through or under any of the parties.45 Persons bound by an arbitration agreement include an assignee, a successor by operation of law, a trustee in bankruptcy, and a statutory transferee of rights against insurers.46 The derivative party is obliged and entitled to arbitrate any claim, and can take advantage of any claim already advanced in pending arbitration proceedings by the original party so as to defeat any time bar arising before assignment or transfer.47 Further, a third party enforcing a term under a contract that is subject to an arbitration agreement may also be treated as a party to the arbitration agreement.48

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b) Substantive scope of the arbitration agreement. Under Hong Kong arbitration law, the substantive scope of the arbitration agreement is a question of construction. As a matter of general principle, the arbitration clause will be given its natural and proper meaning, taking into account all the circumstances of the case and the intention of the parties.49 While the earlier court decisions on a given form of words will provide persuasive values (depending on the extent of the similarity between the contracts and the surrounding circumstances in the two cases), the court is not bound by the doctrine of precedent to construe a particular form of words of the arbitration clause in one contract in the same way as that form of words has been construed in an earlier case involving another contract.50 The common wordings of arbitration clauses such as those covering disputes “out of and in connection with” the main contract are generally given effect by the courts.51 For example, an arbitration agreement which provides for the 43

See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.056. Ibid. 45 See section 73(1), HK Arbitration Ordinance. 46 Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.013. 47 Ibid. 48 See section 12, Contracts (Rights of Third Parties) Ordinance, which is available at https://www. elegislation.gov.hk/hk/cap623 (accessed 1 August 2020). 49 See, for example, Ashville Investments Ltd v. Elmer Contractors Ltd [1989] QB 488 at 495. See also Premium Nafta Products Ltd v. Fili Shipping Ltd [2007] UKHL 40, where Lord Hoffman pointed out that the correct approach to construction is to bear in mind the “purpose” of the arbitration clause. The latter case was referred to and applied in a recent Hong Kong case, UDL Contracting & Holdings Corpn v. Apple Daily Printing Ltd [2008] 2 HKC 534. As discussed in part I (1) (the legal framework) above, the Hong Kong courts are not obliged to follow decisions of courts in the other common law jurisdictions (except for pre-handover precedents), but these decisions will be of persuasive value to the Hong Kong courts. 50 Ashville Investments Ltd v. Elmer Contractors Ltd [1989] QB 488 at 495. 51 It appears that the courts are inclined to give effect to the widely drafted arbitration clauses, unless the claims in question are entirely unrelated to the commercial transaction covered by the arbitration agreement. For instance, in Roose Industries Ltd v. Ready Mixed Concrete Ltd [1974] 2 NZLR 246, the Court of Appeal in New Zealand held that “… the court should restrict the operation of such a wide clause no further than necessary, and on that reasoning should exclude…only claims which are entirely unrelated to the commercial transaction covered by the contract.” For a more detailed discussion 44

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reference of disputes “in connection with” the main contract has been held to be wide enough to cover disputes as to misrepresentation or negligent misstatement.52 c) Pathological arbitration clauses. An arbitration agreement is invalid if it is “null 29 and void, inoperative or incapable of being performed”.53 In order for an arbitration clause to be valid and enforceable, it must produce mandatory consequences for the parties, exclude the intervention of state courts in the settlement of the dispute, give powers to the arbitrators to resolve the disputes that are likely to arise between the parties and allow a procedure which results in an enforceable award.54 Thus, arbitration clauses may be held invalid if they are drafted with errors which result in difficulties in constituting an arbitral tribunal, litigation surrounding the scope, validity and effectiveness of such clauses and/or unenforceability of a final award from an arbitral tribunal under the New York Convention.55 Arbitration clauses drafted with such errors and ambiguity are generally known as “pathological arbitration clauses”.56 Clauses deemed to be defective, or “pathological” in catering for the operation of the 30 arbitration process are usually where inconsistency, uncertainty and inoperability are found. Common grounds include where there is a lack of mandatory words,57 nonexistent appointing bodies,58 non-existent procedural rules, reference to more than one set of institutional rules for arbitration in one single agreement, use of both the court process and arbitration to resolve the same claim, unclear rules as to the number of arbitrators and conflicting or defective provisions regarding the appointment of arbitrators.59 The Hong Kong courts tend to take a relatively lenient and flexible approach when considering arbitration agreements and will give effect to them, where the circumstances allow.60

5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) Power of arbitral tribunals to rule on jurisdiction. The concept of “Kompetenz- 31 Kompetenz” (or competence-competence) concerns the degree to which a tribunal may rule on its own jurisdiction as defined by the arbitration agreement.61 Like in other jurisdictions, in Hong Kong there has been a general shift away from court intervention in arbitration towards supporting the arbitration proceedings and keeping judicial review to a minimum. The HK Arbitration Ordinance attempts to balance the realizaregarding the court’s interpretation of the substantive scope of arbitration clauses, please refer to Halsbury’s Laws of Hong Kong, 2016 Reissue, paras 25.021–25.022. 52 Ashville Investments Ltd v. Elmer Contractors Ltd [1989] QB 488. 53 See section 20 of the HK Arbitration Ordinance which incorporates article 8 ML. 54 Eisemann, La clause d’arbitrage pathologique, Commercial Arbitration: Essays in Memoriam Eugenio Minoli, 1974. See also supra H mns 44 et seq. for English case law on pathological arbitration clauses. 55 See Article V(1)(a) NYC. 56 This term was taken from the concept “clause d’arbitrage pathologique”, which was first used in 1974 by Frédéric Eisemann, the then honorary Secretary General of the ICC (supra fn. 54). 57 JF Finnegan Ltd v. Sheffield City Council (1988) 43 BLR 124. 58 See, for example, Bell v. Lever Bros [1932] AC 161 at 217. For a discussion of this issue by the Hong Kong court, see Lucky-Goldstar International (HK) Ltd v. Ng Moo Kee Engineering Ltd [1993] 2 HKLR 73. 59 See Award in the Matter of an Arbitration between Kuwait and the American Independent Oil Company, IML, 1982 at 976. See also Bell v. Lever Bros, supra fn. 58. 60 See Yuen/Yeung, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, para. 10.012 and fn. 69. For an example of the Hong Kong court’s approach, see Werner A. Bock K. G. v. The N’s Co. Ltd [1978] HKLR 281, where the Hong Kong court considered and applied the English decision in Tritomia Shipping Inc. v. South Nelson Forest Products Corporation [1966] 1 Lloyd’s Rep. 114 (CA) and held that “Plain common sense and business efficacy demand that provision to be construed as a binding agreement by both parties to submit their disputes under the said Contract to arbitration […]” 61 See Broches, Commentary on ML on International Commercial Arbitration, 1990, pp. 74–75.

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tion of the objectives of commercial arbitration, which would be defeated if a tribunal would have to suspend or terminate every time a party pleaded invalidity or inadmissibility of the arbitration agreement, with an effective measure of court supervision to ensure fair and just disposal of the matter.62 32 The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.63 If the arbitral tribunal rules as a preliminary question that it has jurisdiction, within thirty days after having received notice of that ruling, any party may request the court to make a final ruling, but the arbitral tribunal may continue the arbitral proceedings and make an award in the meantime.64 Also, if a tribunal makes an award without proper jurisdiction, the defendant may apply to the court to have the award set aside, and the award may not be enforced.65 b) Arbitration defence against actions in breach of arbitration agreements. Where an action is brought in breach of an arbitration agreement, the court must stay the legal proceedings and refer the parties to arbitration upon application by a party, unless it finds that the agreement is null and void, inoperative or incapable of being performed.66 An arbitration defence must be raised no later than when the applying party submits its first statement on the substance of the dispute.67 Where such an action has been brought, the arbitral proceedings may, nevertheless, be commenced or continued, and an award may be made, while the issue is pending before the court.68 34 In considering an application to stay proceedings in favour of arbitration, the proper test, under Hong Kong law, is whether there is a prima facie case that the parties were bound by an arbitration clause.69 The onus is on the applicant to demonstrate this. Unless it is clear that the parties are not bound by an arbitration agreement, the court will not attempt to resolve the issue and the matter should be stayed for arbitration.70 When there is a dispute as to whether there was an arbitration agreement or clause, the applicant has to prove that there is a prima facie or plainly arguable case, predicated on cogent, and not dubious or fanciful, evidence that an arbitration clause or agreement existed.71 In considering whether to grant a stay, the court will consider four questions: (i) Is there an arbitration agreement between the parties? (ii) Is the clause in question capable of being performed? (iii) Is there in reality a dispute or difference between the parties? (iv) Is the dispute or difference between the parties within the ambit of the arbitration agreement?72 Once the applying party has established a prima facie case for the existence of a valid arbitration agreement covering the dispute, the court will usually stay the proceedings, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.73 33

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As discussed supra mn. 17. See section 34(1), HK Arbitration Ordinance. 64 Ibid. 65 See infra mn. 120. 66 See section 20, HK Arbitration Ordinance (adopting article 8 ML), which provides for a mandatory stay of proceedings in favour of arbitration where the action is the subject of an arbitration agreement, unless the court finds that the agreement is null and void, inoperative or incapable of being performed. 67 Ibid. If a party remains silent and submits his statement on the substance of the dispute, it is likely that he will be regarded as having waived his right to object. 68 See section 20(1)(2), HK Arbitration Ordinance. 69 See Sunglow Supplies & Engineering Limited v. Shing Hing Construction Company Limited (unreported) (DCCJ 1005/2013, 15/1/2014). 70 See PCCW Global Ltd v. Interactive Communications Service Ltd [2007] 1 HKLRD 309; Private Company “Triple V” Inc. v. Star (Universal) Co. Ltd [1995] 3 HKC 129. 71 Pacific Crown Engineering Ltd v. Hyundai Engineering & Construction Co. Ltd [2003] 3 HKC 659. 72 Per Ma J in Tommy CP Sze & Co. v. Li & Fung (Trading) Ltd [2003] 1 HKC 418. 73 Ibid. 63

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When granting a stay, the court may also grant any relief which would not be 35 obtainable from the tribunal, including an injunction.74 However, the court may only grant such ancillary relief in so far as such relief constitutes “interim measures” under the HK Arbitration Ordinance.75 The courts in Hong Kong are also empowered to grant declarations in relation to the 36 jurisdiction of the arbitrator and the validity of an arbitration agreement.76 c) Anti-suit and anti-arbitration injunctions. The courts have jurisdiction to grant 37 anti-suit injunctions and enforce arbitration agreements by restraining a party from pursuing foreign litigation in breach of an arbitration agreement, and there have been many such instances over the years. It appears increasingly common for the court to grant an anti-suit injunction when the subject matter of the foreign litigation falls within the scope of a valid arbitration agreement.77 The court also had no hesitation to grant an anti-suit injunction even where one of the parties in the foreign litigation was not a party to, and hence not bound by, the arbitration agreement, on the basis that the arbitral tribunal had dealt with the substance of those claims in the foreign litigation and it would be vexatious and oppressive to allow such issues to be reopened in the foreign litigation with the findings of the arbitral tribunal discredited.78 It is to be noted that the party seeking an anti-suit injunction should act promptly and should not wait for the outcome of the foreign proceedings. In Sea Powerful II Special Maritime Enterprises v. Bank of China Ltd (CACV 36/2016), the Court of Appeal upheld the Court of First Instance’s decision and refused to grant an anti-suit injunction because the applicant had not acted promptly, even though the respondent had not suffered any serious prejudice from the delay79. The court of first instance in Hong Kong is also empowered to grant injunctions to 38 restrain arbitration proceedings.80 However, the Hong Kong courts adopt a cautious approach and would only grant such relief if the applying party can satisfy the court that the continuance of arbitration proceedings would be oppressive, vexatious, unconscionable, or an abuse of process, or that the injunction sought would not cause injustice to the claimant.81 The Hong Kong courts also have jurisdiction to restrain foreign arbitration proceedings, but such jurisdiction will be exercised with great caution and very sparingly.82 d) Preclusion of jurisdictional defences. Under Hong Kong law, if a party fails to 39 raise jurisdictional objections promptly, it may be barred from raising such defence at a 74 See section 21, HK Arbitration Ordinance and Hitachi Shipbuilding and Engineering Co. Ltd v. Viafiel Cia Naviera SA [1981] 2 Lloyd’s Rep. 498, CA (Eng). 75 See section 12 (extent of court intervention) and section 45 (court-ordered interim measures), HK Arbitration Ordinance. For details in relation to interim measures, infra mns 74 et seq. 76 For an example where the Hong Kong court granted such a declaration, see Hyundai Engineering & Construction Co. Ltd v. Vigour Ltd [2004] 3 HKLRD 1. For more details in relation to the principles adopted by the courts, please refer to Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.055. 77 Giorgio Armani SPA v. Elan Clothes Co. Ltd [2019] HKCFI 530. 78 Argowiggins HKK2 Limited v. Shandong Chenming Paper Holdings Limited [2018] HKCFI 93. 79 As per Kwan J. at para. 27, the CFI judge had found there was “deliberate, inordinate and culpable delay on the part of the plaintiff, and the only motive was to wait for the Limitation Period to expire before applying for an anti-suit injunction so that the defendant would be left without a remedy in any available forum.” The CFI judge therefore exercised his discretion to refuse relief “given such delay coupled with the comity considerations.” 80 Section 21L of High Court Ordinance (Cap. 4), available at https://www.elegislation.gov.hk/hk/cap4 (accessed 1 August 2020). 81 See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.055. 82 Ibid.

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later stage. If a party wishes to challenge an award on the ground that the tribunal has no jurisdiction at all in the matter referred to it, but also wishes to defend the arbitration proceedings on the merits, it must raise objections to the jurisdiction of the tribunal and make it clear that its participation is without prejudice to his right to challenge to the jurisdiction.83 Otherwise he may be taken to have waived his objection to jurisdiction. 40 The doctrine of estoppel, which is a fundamental principle of good faith, may be adopted by Hong Kong courts when they are facing (a) applications for stay of proceedings; and (b) applications to set aside an award.84 It is generally accepted that the defendant is under a duty to act in good faith and to give notice to the tribunal about its objections to the formation of the tribunal within a reasonable time.85 41 However, where the respondent has raised an objection to the jurisdiction of the arbitral tribunal, and the arbitral tribunal has given a preliminary ruling that it has jurisdiction, it has been held that the respondent has a “choice of remedies”: it may either challenge the preliminary ruling before the supervisory court, or resist the enforcement of the final award. In Astro Nusantara International B.V. v. PT Ayunda Prima Mitra86, the Court of Appeal endorsed the “choice of remedies” approach and held that there was no breach of good faith by opting not to exhaust all remedies before the supervisory court before resisting enforcement of the final award, to the extent that the arbitration respondent reserved the position on jurisdiction throughout. On appeal, the Court of Final Appeal also pronounced that the absence of a valid arbitration agreement between the parties is a fundamentally important factor militating against discretionary enforcement.87 42

e) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. At the domestic level, a decision of a court in Hong Kong on jurisdiction will be binding for subsequent decisions of the courts.88 For example, if an arbitral tribunal makes a 83

Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.156. See Karaha Bodas Co. Llc v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (unreported, HCCT 28/2002, dated 27 March 2003) and China Nanhai Oil Joint Service Corp. v. Gee Tai Holdings [1995] 2 HKLR 215. In the latter case, Kaplan J (having considered the comments of van den Berg, The New York Arbitration Convention of 1958, 1981) held that: “If the doctrine of estoppel can apply to arguments over the written form of the arbitration agreement under Article II(2), then I fail to see why it cannot also apply to the grounds of opposition set out in Article V. It strikes me as quite unfair for a party to appreciate that there might be something wrong with the composition of the tribunal yet not make any formal submission whatsoever to the tribunal about its own jurisdiction, or to the arbitration commission which constituted the tribunal and then to proceed to fight the case on the merits and then 2 years after the award attempt to nullify the whole proceedings on the grounds that the arbitrators were chosen from the wrong CIETAC list. I think there is much force in Dr. van den Berg’s point that even if a ground of opposition is proved, there is still a residual discretion left in the enforcing court to enforce nonetheless.” 85 In China Nanhai Oil Joint Service Corp. v. Gee Tai Holdings, the Hong Kong court gave a careful consideration to the issue of estoppel and held that on a true construction of the New York Convention, there is a duty of good faith, which in the circumstances required the defendant to bring to the notice of the full tribunal or the CIETAC Commission in Beijing its objections to the formation of the tribunal. In this case, the court considered that the defendant’s failure to do so and its “obvious policy of keeping this point up its sleeve to be pulled out only if the arbitration was lost”, is not one what is consistent with its obligation of good faith nor with any notions of justice and fair play. See also Merkin, Arbitration Law (Service Issue 82), paras 20.49–20.51. 86 CACV 272/2015. 87 Astro Nusantara International B.V. v. PT Ayunda Prima Mitra [2018] HKCFA 12, para. 42. 88 As discussed supra mn. 1, the Hong Kong Special Administrative Region, established by the PRC National People’s Congress pursuant to article 31 of the PRC Constitution, has a separate legal system from the PRC. For the purposes of arbitration, the PRC and Hong Kong Special Administrative Region should be regarded as separate jurisdictions. Therefore, theoretically, a state court’s decision (i.e. decision of the PRC court) on jurisdiction will not be binding on Hong Kong courts. It is submitted that such decisions of PRC courts will be subject to the usual grounds of review before Hong Kong courts. 84

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preliminary ruling on jurisdiction, any party may request that the High Court of Hong Kong decide the matter.89 The court’s decision on jurisdictional issues is final, and not subject to appeal. Alternatively, if the tribunal makes a decision that it has jurisdiction at the same time as it gives an award on the merits, the objecting party can refer the matter to the court by application to set aside the award.90 As to international arbitrations, the binding effect is more complex in the case of 43 foreign judgments. In general, if an attempt has been made in another jurisdiction to enforce an award but has been rejected on jurisdictional grounds, the Hong Kong courts are not bound by the judgments of foreign courts if the unsuccessful party later makes an application to enforce the award in Hong Kong. This is because a subsequent enforcement application in Hong Kong involves a separate cause of action91 – whether the award should be enforced as a matter of Hong Kong law. The situation will be different if it is a case of issue estoppel (or issue estoppel per rem 44 judicatam). For example, a party having been unsuccessful in its jurisdictional objections in one jurisdiction would be estopped from raising the same issues again in Hong Kong.92 This happens if the matters relied upon by the foreign court in its rejection of the application are precisely the same as those relied upon by the Hong Kong court.93 The conditions for issue estoppel are: (1) the judgment in the earlier action relied on as creating an estoppel was (a) given by a court of competent jurisdiction, (b) final and conclusive and (c) on the merits; (2) the parties in the earlier action relied on it as creating an estoppel, and those in the later action in which that estoppel is raised as a bar, are the same; and (3) the issue in the later action in which the estoppel is raised as a bar, is the same issue as that decided by the judgment in the earlier action.94 It is to be noted that there can be an issue estoppel only where a foreign court has reached a decision on a particular matter, and that matter was fundamental to the court’s decision.95 In these circumstances, the judgment of a foreign court is not exactly “binding” on the Hong Kong courts, but the unsuccessful party will be “estopped” from re-opening the same issues in Hong Kong.

III. The arbitral tribunal and the conduct of the arbitral proceedings The arbitral process will be largely determined by the parties’ arbitration agreement. 45 In most cases, the arbitration clauses will provide for the place of the arbitration and therefore the applicable procedural law, the governing law of the dispute and the arbitration rules to be adopted.

89

See section 34, HK Arbitration Ordinance. See section 81(1), HK Arbitration Ordinance. On review of arbitral awards before state courts, see infra mns 92 et seq. 91 See Merkin, Arbitration Law (Service Issue No. 82), para. 19.50.1. 92 See, for example, Karaha Bodas Company LLC v. Persusahaan Pertambangan Minydak Dan Gas Bumi Negara (unreported, CACV 121/2003, dated 18 March 2008, [2003] 380 HKCU 1). 93 For a more detailed discussion on the doctrine of issue estoppel, please refer to Merkin, Arbitration Law (Service Issue No. 82), paras 19.50.1–19.50.1.1. 94 These conditions were set out by Lord Brandon in The Sennar (No. 2) [1985] 1 WLR at page 499. The principle was considered and adopted by the Hong Kong court in Karaha Bodas Company LLC v. Persusahaan Pertambangan Minydak Dan Gas Bumi Negara, supra fn. 92, where the Hong Kong court held that allegations of impropriety in an arbitration which had been rejected in enforcement proceedings in the US could not be re-opened again in Hong Kong enforcement proceedings. 95 See Merkin, Arbitration Law (Service Issue No. 82), para. 19.50.1.1 and Good Challenger Navegante SA v. Metalimportexport SA [2004] 1 Lloyd’s Rep. 67. 90

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1. The arbitral tribunal, impartiality and independence of the arbitrator 46

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Under the HK Arbitration Ordinance, the parties are free to decide how many arbitrators they want to have.96 If the parties to an arbitration agreement fail to agree on the number of arbitrators, the number shall be either one or three, as the HKIAC considers appropriate in the particular case.97 The freedom of the parties to determine the number of arbitrators also includes the right to authorize a third party, including an institution (such as the HKIAC), to make that determination.98 The appointment of arbitrators is governed by section 24 of the HK Arbitration Ordinance, which adopts article 11 ML.99 In general, the parties are free to agree on the procedure in respect of the appointment of arbitrators, subject to the provisions of the HK Arbitration Ordinance.100 The HKIAC (rather than the court) is the default arbitrator appointing authority in Hong Kong if an arbitrator fails to be appointed for whatever reason. The courts no longer play an active role in the appointment of arbitrators.101 Unless otherwise agreed by the parties, no one shall be precluded by reason of his nationality from acting as an arbitrator.102 In an arbitration with three arbitrators, if the parties have not agreed on a procedure for appointing the arbitrators, each party will appoint one arbitrator and the two party appointed arbitrators will then appoint a third arbitrator.103 The HKIAC will appoint the arbitrator if (a) a party fails to appoint an arbitrator within 30 days of receipt of a request to do so from the other party, or (b) the two party-appointed arbitrators cannot agree on the third arbitrator within 30 days of their appointment.104 In an arbitration with a single arbitrator, if the parties have not agreed on a procedure of appointment of the arbitrator and/or if the parties fail to agree on the arbitrator, the HKIAC will, upon the request of a party, appoint the arbitrator for the parties.105 In an arbitration with an even number of arbitrators, where the parties have not agreed on how to appoint the arbitrators, each party shall appoint the same number of arbitrators.106 In an arbitration with an odd number of arbitrators more than 3, if the parties have not agreed on how to appoint the arbitrators, each party shall appoint the same number of arbitrators, and the HKIAC must appoint the remaining arbitrator(s).107 If the parties have agreed on the procedures for the appointment of arbitrators, but fail to comply with the agreed procedures, then any party may request that the HKIAC appoint the arbitrator(s) for the parties.108

96 See section 23(1), HK Arbitration Ordinance, which adopts article 10 ML. Note, however, that if the “opt-in” provisions in Schedule 2 to the Ordinance apply, then the parties will be required to have the dispute arbitrated before a single arbitrator. 97 Ibid., section 23(3). 98 Ibid., section 23(2). 99 Section 24 must be read with section 13 of the HK Arbitration Ordinance under which the functions of the “courts or other authority” referred to article 11(3) and (4) of the UNCITRAL Model Law (i. e. section 24 of the HK Arbitration Ordinance) are to be performed by the HKIAC. 100 Ibid., section 24, which adopts article 11 ML. 101 Before the current HK Arbitration Ordinance came into force, the court had the power to appoint arbitrators or umpires in domestic arbitrations under the old Ordinance. 102 Ibid., section 24(1), which incorporates article 11 ML. 103 Ibid., section 24(1). 104 Ibid., section 24(1)(3). 105 Ibid., section 24(1)(3)(b). 106 Ibid., section 24(2). 107 Ibid., section 24 (3). 108 Ibid., section 24.

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a) Duty to disclose. A prospective arbitrator, on being approached in relation to 51 possible appointment, must disclose any circumstances that are likely to give rise to justifiable doubts as to his impartiality or independence.109 In addition, after being appointed and throughout the arbitral proceedings, an arbitrator is under a continuing obligation to disclose, without delay, any circumstances that are likely to give rise to justifiable doubts as to his impartiality or independence to the parties.110 The IBA Guidelines on Conflicts of Interest in International Arbitration are instructive as to the specific circumstances which may give rise to such justifiable doubts. A party may challenge an arbitrator that is appointed by himself, or in whose appointment he has participated, only for reasons he becomes aware of after the appointment has been made.111 b) Grounds for challenge. Under the HK Arbitration Ordinance, the appointment of 52 arbitrators can be challenged on two grounds: (1) justifiable doubts as to their impartiality or independence;112 or (2) non-possession of any qualifications required by the parties113. c) Procedural aspects and preclusion of grounds for challenge. Section 26 of the 53 HK Arbitration Ordinance sets out the challenge procedure.114 The parties are free to agree on their own procedure for challenging an arbitrator. Failing such agreement, the HK Arbitration Ordinance provides that a party who intends to challenge an arbitrator shall, within 15 days of becoming aware of the constitution of the tribunal, or after becoming aware of any circumstances referred to above, send a written statement setting out the reasons for the challenge to the tribunal. An arbitrator who is challenged can withdraw from office as an arbitrator, if he considers it appropriate in the circumstances.115 The tribunal shall decide on the challenge, unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge.116 If a challenge is unsuccessful, whether made under an agreed challenge procedure or 54 under the statutory procedures set out by the HK Arbitration Ordinance, the challenging party may request the High Court to decide on the challenge, within 30 days after having received notice of the decision rejecting the challenge.117 The decision of the court is not subject to appeal.118 Pending the outcome of the challenge before the court, the arbitral tribunal (including the challenged arbitrator) may continue the arbitral proceedings and make an award.119 The mandate of a challenged arbitrator will be terminated if (1) the arbitrator 55 withdraws from office; (2) the parties agree to the challenge; (3) the tribunal upholds the challenge and no request is made for the court to decide on the challenge; or (4) the 109

Ibid., section 25(1). Ibid. 111 Ibid., section 25(2). 112 Ibid., section 25(2) which incorporates article 12 ML. 113 Ibid. 114 Ibid., section 26 which adopts article 13 ML. 115 Ibid., section 26(3). 116 Ibid., section 26(1)(2). 117 Ibid., section 26(1)(3). The procedure for this application is set out in Order 73 rule 1 of the Rules of the High Court (Cap. 4A). 118 Ibid. 119 Ibid. For tactical reasons, therefore, the parties should take into account the risk of an award being set aside under section 81 of the HK Arbitration Ordinance (which provides, inter alia, that if the challenge is ultimately successful, the award may be set aside by the challenging party) and consider whether it would be desirable to apply for an adjournment of the proceedings, pending the outcome of the challenge. 110

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court upholds the challenge upon request to decide on the challenge.120 A substitute arbitrator must be appointed in accordance with the applicable rules relating to appointment121 where: (1) upon a challenge under section 25 of the HK Arbitration Ordinance, the arbitrator’s mandate terminates following the arbitrator’s withdrawal from the reference, or confirmation of the validity of a challenge by the tribunal or the court,122 (2) pursuant to section 27 of the HK Arbitration Ordinance, the arbitrator’s mandate terminates following the arbitrator’s withdrawal from the reference or by agreement of the parties or by order of the court;123 (3) the arbitrator withdraws from office for any other reason;124 and (4) where the arbitrator’s mandate is revoked or otherwise terminated by the parties. The court is empowered to appoint a substitute arbitrator, upon application by a party.125 56

d) Failure or impossibility to act. If the arbitrator becomes unable to perform his duties (e.g. due to physical or mental incapacity) or fails to act without undue delay, the parties may, by agreement, remove the arbitrator.126 If the arbitrator refuses to step down, a party may ask the court to decide on the termination of the mandate. The decision of the court thereon is not subject to appeal.127 If an arbitrator withdraws from his office or a party agrees to the termination of an arbitrator’s mandate of an arbitrator, this does not automatically imply acceptance of any grounds referred to in the challenge.128

2. The arbitral proceedings 57

The conduct of the arbitration is usually embodied in the arbitration agreement. The parties are free to agree between themselves on various aspects of the arbitration proceedings, such as the place of arbitration, language to be used and the procedure to be followed by the arbitral tribunal. As arbitrations in Hong Kong are governed by the HK Arbitration Ordinance, the parties are subject to the mandatory provisions of the HK Arbitration Ordinance, which are provisions the parties cannot contract out of or derogate from.129 Since the parties can only be bound by an award made by the procedure they have adopted, an award made in breach of an agreed procedure may be set aside.130 In practice, the parties often adopt the Domestic Arbitration Rules of HKIAC for domestic arbitrations in Hong Kong.131 In the absence of an agreement between the parties, the HK Arbitration Ordinance provides a procedural framework

120

Ibid., section 26(4). See section 28, HK Arbitration Ordinance, which adopts article 15 ML regarding “appointment of substitute arbitrator” 122 See section 25, HK Arbitration Ordinance, which adopts article 12 ML in relation to “grounds for challenge” and section 28, HK Arbitration Ordinance. 123 See section 27, HK Arbitration Ordinance, which adopts article 14(1) ML regarding “failure or impossibility to act” and section 28, HK Arbitration Ordinance. 124 Ibid., section 28. 125 By virtue of section 28, HK Arbitration Ordinance, which adopts article 15 ML. 126 Ibid., section 27(1) which incorporates article 14 ML. 127 Ibid. 128 Ibid., section 27(2) which incorporates article 14 ML in relation to “failure or impossibility to act” 129 Examples of mandatory provisions in the HK Arbitration Ordinance include section 11 (waiver of right to object to non-compliance with non-mandatory provisions of MLor with the arbitration agreement), section 12 (extent of court intervention), section 13 (HKIAC to exercise functions with regard to specified articles) and section 19 (arbitration agreement to be in writing). 130 Section 81(1), HK Arbitration Ordinance. 131 The HKIAC Domestic Arbitration Rules can be found at https://www.hkiac.org/arbitration/rules-practice-notes/domestic-arbitration-rules (accessed 1 August 2020). 121

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for the parties to follow and the tribunal may determine the set of rules to be followed by the parties as it considers appropriate.132 a) The request for arbitration. Arbitration is commenced by way of a notice of 58 arbitration, requesting to refer to a dispute to arbitration. The formalities required for the notice of arbitration vary depending on the arbitration rules adopted by the parties, but often require a statement of the nature of the dispute and identification of the relevant arbitration agreement. Unless otherwise agreed by the parties, the arbitration proceedings begin on the date on which the respondent receives a demand or notice from the claimant requesting to refer a dispute to arbitration.133 However, if the notice or demand fails to comply with the required formalities, the arbitration proceedings may be deemed not to have been commenced.134 b) Equality of arms, fair trial principles and the right to be heard. The tribunal 59 must ensure that natural justice is maintained in the proceedings and this is balanced with the need for speed and economy. The tribunal has an overriding duty to adopt procedures appropriate in providing equality and a reasonable opportunity for both parties to present their cases.135 The decision as to whether the relevant facts and law is to be ascertained is up to the arbitral tribunal.136 c) Confidentiality. Hong Kong law recognizes the common law duty of confidenti- 60 ality in respect of arbitration. As a matter of general principle (subject to a few exceptions), the parties to an arbitration agreement are under an implied duty of confidence in relation to documents and information disclosed in or for the purpose of an arbitration.137 In addition, section 18 of the HK Arbitration Ordinance makes it clear that no party may publish, disclose or communicate any information relating to (a) the arbitral proceedings under the arbitration agreement; or (b) an award made in those arbitral proceedings, unless the parties agree otherwise.138 However, the duty of confidentiality under section 18 does not prevent the publication, disclosure or communication of information made to protect a legal right or interest of the party, to enforce or challenge the award, if such disclosure is required by law, or made to a party’s professional or any other adviser.139 Similar provisions could also be found in article 45 of the HKIAC Rules. It is unclear whether a public company listed in the Hong Kong stock market could 61 disclose its involvement in an arbitration. Whilst Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Part XIVA of the Securities and Futures Ordinance require that a listed company shall disclose inside information to the public as soon as reasonably practicable after such inside information has come to its knowledge (which arguably includes a material claim in an arbitration), such disclosure does not seem to fall squarely within section 18 of the Arbitration Ordinance, in that it is made to the public rather than to a government or regulatory body as such. Extreme care must therefore be taken to balance the conflicting 132

Sections 47 and 52, HK Arbitration Ordinance. Section 49, HK Arbitration Ordinance. 134 See, for example, Article 4.6 of the HKIAC Rules. 135 Section 46, HK Arbitration Ordinance. 136 Section 56(7), HK Arbitration Ordinance. 137 See, for example, Dolling-Baker v. Merret [1991] 2 All ER 891. 138 See section 18(1), HK Arbitration Ordinance, in relation to “Disclosure of information relating to arbitral proceedings and awards prohibited”. See also Bao, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 6.026–6.033. 139 See section 18(2), HK Arbitration Ordinance. 133

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requirements. An easy way out may be to set out such circumstances of disclosure in the arbitration agreement. d) The arbitral award. Under Hong Kong law, it is generally accepted that by agreeing to arbitrate, the parties impliedly or expressly accept that the award will be final and binding. The HK Arbitration Ordinance makes it clear that an award made by an arbitral tribunal pursuant to an arbitral agreement is final and binding both on (a) the parties; and (b) any person claiming through or under any of the parties, unless otherwise agreed by the parties.140 63 An arbitral tribunal may make “interim measures” and interim or final orders.141 Generally an arbitral tribunal in Hong Kong may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in the court,142 including specific performance of contract (other than a contract relating to land or any interest in land),143 such as partial or interim award for the purpose of preservation of evidence or requiring a claimant to give security for costs;144 or a single final award; or a consent award145 (if the parties reach settlement on agreed terms). Additionally, a tribunal may give costs directions in an award.146 64 There are certain formal requirements on arbitral awards. An award must be made (a) in writing and (b) signed by the arbitrator(s)147. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is given.148 An award shall state the date and place of arbitration,149 and shall also state the reasons upon which it is based unless the parties have agreed otherwise.150 Although the reasons need not be elaborate or lengthy, they have to be sufficient to be understood in its proper context.151 Where the reasons are considered inadequate, enforcement of the arbitral award may be refused as contrary to public policy under section 95(3)(b) of HK Arbitration Ordinance.152 62

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e) Termination of the arbitration without an award. The tribunal can terminate the arbitral proceedings without making an award. The tribunal may issue an order for the termination of the proceedings if (a) the claimant withdraws his claim, (b) the parties agree on the termination of the proceedings, or (c) for any other reasons, the tribunal finds that the continuation of the proceedings has become unnecessary or impossible.153

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f) The costs of the arbitration. The tribunal can include in an award directions with respect to the costs of the arbitral proceedings, including the fees and expenses of the tribunal.154 In so doing, the tribunal may (a) direct to whom and by whom and in what 140

Section 73(1), HK Arbitration Ordinance. See, for example, sections 56 and 60 of the HK Arbitration Ordinance in relation to interim measures and interim or final awards. 142 See section 70(1), HK Arbitration Ordinance. 143 See section 70(2), HK Arbitration Ordinance. 144 See, for example, sections 56 and 60 of the HK Arbitration Ordinance. 145 See section 66, HK Arbitration Ordinance. 146 Section 74, HK Arbitration Ordinance. 147 Section 67(1), HK Arbitration Ordinance. 148 Ibid. 149 Ibid. 150 Ibid. 151 R v. F [2012] 5 HKLRD 278. 152 Z v. Y [2018] HKCFI 2342. 153 See section 68(2), HK Arbitration Ordinance, which adopts article 68 ML. 154 See section 74 of the HK Arbitration Ordinance. 141

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manner costs are to be paid;155 (b) assess the amount of costs to be awarded or ordered to be paid (other than the fees and expenses of the tribunal) and award or order those costs (including the fees and expenses of the tribunal).156 In practice, the tribunal will assess the costs of the award, unless the parties have 67 agreed that the costs be taxed by the court.157 The tribunal is not obliged to follow the scales and practices adopted by the courts on taxation, when accessing the amount of costs. However, in exercising its discretion, the tribunal must only allow costs that are reasonable, having regard to all the circumstances. In addition, unless otherwise agreed by the parties, the tribunal may allow costs incurred in the preparation of the arbitral proceedings before the commencement of the arbitration. If the parties have agreed that the costs are to be taxed by the court, then unless the 68 tribunal otherwise directs in an award, the award is deemed to have included the tribunal’s directions that the costs (other than the fees and expenses of the tribunal) are (a) to be taxed by the court; and (b) to be paid on any basis on which the court can award costs in civil proceedings before the court.158 On taxation by the court, the tribunal must make an additional award of costs reflecting the result of the taxation by the court.159 Such decision of the court on taxation is not subject to appeal.160

3. Evidence, discovery, disclosure Discovery and production of documents is undoubtedly an important part of the 69 arbitration proceedings. The general rule is that a party must prove the facts on which it relies in establishing its claim or defence.161 The usual approach adopted in arbitrations in Hong Kong is for the parties to adopt arbitration rules162 which set out the procedures for production of documents and witness evidence.163 The rules will differ in the scope and manner in which the discovery and disclosure process are to be conducted. The HK Arbitration Ordinance does not require disclosure and production of 70 evidence as between the parties, and the matter is left to the tribunal.164 The parties are not bound by any rules requiring disclosure and production of evidence between the parties, other than those agreed between themselves or determined by the tribunal. The tribunal is at liberty to make directions as to the production of evidence and make preemptory orders or sanctions if a party fails to comply with any rules or orders.165 The common practice is voluntary disclosure in the first place, followed with requests for

155 Section 74(1) and (2), HK Arbitration Ordinance. In exercising such discretion, the tribunal may take into account all relevant circumstances, including the fact that a written offer of settlement of the dispute concerned has been made. 156 Section 74(1), (2) and (5), HK Arbitration Ordinance. 157 See section 74(6), (7) and section 75, HK Arbitration Ordinance. 158 Section 75(1), HK Arbitration Ordinance. 159 Ibid., section 75(2). 160 Ibid., section 75(3). 161 This is not expressly provided for in the HK Arbitration Ordinance. However, many of the arbitration rules, such as article 27.1 UNCITRAL Arbitration Rules 2010 and article 22.1 HKIAC Rules 2018, contain express provisions in this regard. 162 For example, the parties may adopt ML or the HKIAC Rules. In line with international practice, it is common for the parties to adopt the IBA Rules on evidence. 163 For a detailed discussion on discovery and disclosure process in Hong Kong arbitration, see Starr, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 16.012–16.022. 164 Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.100. See also section 56, HK Arbitration Ordinance. 165 See section 53(3) and 53(4) of HK Arbitration Ordinance for the directions the tribunal may make if a party is in default.

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specific documents (if any). There are no limits on the permissible scope of disclosure or discovery, nor are there special rules for handling electronically stored information. 71 Unlike court proceedings, the tribunal is free to adjudicate on the matters relating to evidence. The tribunal is not bound by strict rules of evidence and can admit any evidence that it considers relevant to the proceedings.166 Besides from the rules on privilege, the tribunal has discretion to determine issues relating to admissibility, relevance, cogency and weight of evidence.167 In practice, arbitral tribunals in Hong Kong generally admit oral and written evidence from both lay and expert witnesses and documentary evidence. 72 Unless otherwise agreed by the parties, the arbitral tribunal has power to direct the parties to (a) give security for costs; (b) direct the discovery of documents or the delivery of interrogatories; (c) direct evidence to be given by affidavit; or (d) give directions in relation to any relevant property.168 Note, however, that the tribunal cannot compel a party to produce in arbitration proceedings any document or other material evidence that he could not be required to produce in civil proceedings before a court.169

4. The law governing the dispute and lois de police a) The law governing the dispute and choice of law. Under Hong Kong law, the parties are in general free to agree on the substantive law applicable to the dispute, subject to certain commonly adopted restrictions such as foreign illegality and violations of mandatory principles of Hong Kong law.170 The HK Arbitration Ordinance adopts the entirety of article 28 ML, which requires the tribunal to decide the dispute in accordance with the rules of law chosen by the parties as applicable to the substance of the dispute.171 Any designation of the law or legal system of a given state shall be construed as directly referring to the substantive law of that state, and not to its conflict of laws rules, unless otherwise specified.172 The tribunal (or the court) will consider all the facts surrounding the contract in order to determine whether there was an inferred or implied choice of law.173 In the absence of indication by the parties, express or implied, the tribunal shall decide what the applicable law should be, by applying the conflict of laws rules which it considers applicable.174 In practice, the tribunal (or the court) will determine and apply the system of law that has the closest and most real connection to the dispute.175 74 The tribunal shall decide ex aequo et bono (i. e. from equity and conscience) or as amiable compositeur, only if the parties have expressly authorized the tribunal to do so.176 In addition, the tribunal shall, in all cases, decide in accordance with the terms of 73

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Section 47(3), HK Arbitration Ordinance. Section 47(3), HK Arbitration Ordinance. 168 Section 56(1), HK Arbitration Ordinance. Note, however, that such discretion must be exercised “fairly and impartially” pursuant to section 46(3). 169 Section 56(9), HK Arbitration Ordinance. 170 Hong Kong law recognizes party’s freedom in their choice of governing law, subject to restrictions which are commonly adopted in other common law jurisdictions, including where the choice of law is not bona fide and legal; where there is an issue over foreign illegality and violation of foreign public policy; and where the choice of law violates mandatory principles of Hong Kong law. See Moser/Choong (eds), Asia Arbitration Handbook, 2011, para. 4.56, p. 197. Cf. supra H mns 108 et seq. and Vita Food Products Inc. v. Unus Shipping Co. Ltd [1939] AC 277. 171 Section 64(1), HK Arbitration Ordinance which gives effect to article 28 ML. 172 Ibid. 173 Chan Chi Keung v. Delmas Hong Kong Ltd (unreported, 7 June 2004, HCCL 40/2003, at para. 30). 174 Section 64(1), HK Arbitration Ordinance, giving effect to article 28(2) ML. 175 Ibid., para. 30. Cf. First Laser Ltd v. Fujian Enterprises (Holdings) Co. Ltd [2011] 2 HKLRD 45. 176 Ibid., section 64(3). 167

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the contract and shall take into account the usages of the trade applicable to the transaction.177 b) Choice of law and lois de police. The situation is more complicated when 75 mandatory provisions of foreign countries (i.e. lois de police) are involved. Case law seems to suggest that the court will give effect to the parties’ intention in relation to their choice of law, provided that such intention is bona fide and legal, and that there is no reason for not giving effect to the choice on the ground of public policy.178 In practice, however, the parties’ express choice of law is usually respected and it is rare that an award would be set aside on the ground that it is contrary to lois de police. For example, it was held in a case involving foreign exchange control legislation that the court could enforce a contract where one of the parties was a resident or national of a foreign country and where performance of the contract would be invalid or illegal under the law of that country, provided that the contract was to be performed in Hong Kong where neither the contract itself, nor acts in performance of the contract, were invalid.179

5. Interim relief in arbitration a) Interim relief before state courts. The HK Arbitration Ordinance confers sup- 76 portive powers on the High Court of Hong Kong to order interim measures of protection and to assist the parties in relation to evidence.180 The court has power to grant interim measures in relation to arbitral proceedings which have been or are to be commenced in or outside Hong Kong, i.e. in the case of foreign arbitral proceedings, the courts in Hong Kong also have jurisdiction to grant interim protective measures in aid of foreign arbitral proceedings. However, the court should only intervene where provided by the Ordinance.181 An interim measure is any temporary measure, prior to the issuance of the final 77 award, by which the tribunal or the court orders a party to: (a) maintain or restore the status quo pending determination of the dispute; (b) take action that would prevent, or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself; (c) provide a means of preserving assets out of which a subsequent award may be satisfied; or (d) preserve evidence that may be relevant and material to the resolution of the dispute.182 In addition, the court is empowered under section 60 of the HK Arbitration 78 Ordinance to make orders relating to the collection and production of evidence to an arbitral tribunal. In all cases, the court may decline to make an order on the ground that the matter is currently the subject of arbitral proceedings and the court considers that it is more appropriate for the matter to be dealt with by the tribunal.183 b) Interim relief before the arbitral tribunal. The tribunal is empowered to grant 79 interim measures or other forms of preliminary relief, unless otherwise agreed by the parties.184 Such interim measures include orders to (a) maintain or restore the status 177

Ibid., section 64(4). Vita Food Products Inc. v. Unus Shipping Co. Ltd [1939] AC 277, as referred to in Dow MBF Ltd v. Detrick Ltd [1988] 1 HKLR 344. 179 See Dow MBF Ltd v. Detrick Ltd [1988] 1 HKLR 344 at 352. 180 Sections 45 and 60, HK Arbitration Ordinance. See also Halsbury’s Laws of Hong Kong, vol. 2, 2nd ed., 2012, paras 25.109–25.111. Note also that under sections 35 and 45 of the HK Arbitration Ordinance, both the court and the tribunal have concurrent jurisdiction to grant interim measures. 181 Section 12, HK Arbitration Ordinance. 182 See sections 35(1)(2) and 45(9), HK Arbitration Ordinance. 183 Sections 45(4) and 60(4), HK Arbitration Ordinance. 184 Section 35 of HK Arbitration Ordinance which gives effect to article 17 ML. 178

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quo pending determination of the dispute; (b) take action that would prevent or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself; (c) provide a means of preserving assets out of which a subsequent award may be satisfied; or (d) preserve evidence that may be relevant and material to the resolution of the dispute.185 The tribunal may order interim measures on an ex parte basis as a preliminary order.186 If the tribunal does grant a preliminary order, the tribunal shall then give notice of the application and order to the other party and hear the other party’s case at the earliest practicable time.187 80 Unless otherwise agreed by the parties, the tribunal may also make an order to (a) require a claimant to provide security for costs; (b) direct the discovery of documents or the delivery of interrogatories; (c) direct evidence to be given by affidavit; (d) direct the inspection, preservation, custody, detention or sale of any relevant property and samples to be taken from, observations made of or experiments conducted on any relevant property.188 Such orders and directions are enforceable in the same manner as an order or direction of the court with the same effect, but only with the leave of the court.189 Leave to enforce an order or direction made outside Hong Kong will only be granted if the party seeking to enforce it can demonstrate that it belongs to a type or description of order or direction that may be made in Hong Kong in relation to arbitral proceedings by an arbitral tribunal.190

6. Multi-party and multi-contract arbitration a) Overview. While most arbitration agreements involve only two entities, there are some contracts that involve multiple parties, for example, M&A, joint venture and consortium contracts. As a result, in an arbitration on a dispute arising from such transactions, there will often be several claimants and respondents. Procedural complexities may arise in these multi-party arbitrations. For example, the late joinder of two arbitrations may cause delay and therefore prejudice to some of the parties. 82 In Hong Kong, the issue of consolidation is dealt with by Schedule 2 of the HK Arbitration Ordinance, which governs court-ordered consolidation and sets out the criteria to be taken into account in ordering such consolidation. Schedule 2 automatically applies to domestic and some construction arbitrations and can be opted into by the parties. Under Schedule 2, the Court of First Instance in Hong Kong is empowered to consolidate two or more different arbitral proceedings if there appears to the court that (a) a common question of law or fact arises in both or all of them, (b) the rights to relief are in respect of or arise out of the same transaction(s), or (c) it is desirable to do so for any other reason.191 81

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Ibid. See section 37, HK Arbitration Ordinance, which incorporates Article 17 ML. 187 Section 38(2), HK Arbitration Ordinance. 188 Section 56, HK Arbitration Ordinance. 189 Section 61(1), HK Arbitration Ordinance. 190 Section 61(2), HK Arbitration Ordinance. 191 Section 2(1), Schedule 2, HK Arbitration Ordinance. In relation to the approach adopted by the court when exercising its discretion in consolidation applications, it is submitted that analogy may be drawn from the approach of the court towards similar provisions (e. g. section 6B (Consolidation of Arbitrations) of the old Arbitration Ordinance (Cap 341)). Under the old section 6B (now repealed by the new Ordinance), which applied to domestic arbitrations or where the conditions in section 2M of the old Ordinance were met, the court was empowered to consolidate two or more arbitration proceedings if it appeared to the court (a) that some common question of law or fact arises in both or all of them; or (b) that the rights to relief claimed therein are in respect of or arise out of the same transaction or series of transactions, or (c) that for some other reason it is desirable to make an order. The usual factors that the court would take into account include: (a) the risk of inconsistent decisions; (b) whether the overlap 186

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On the other hand, the HKIAC Rules also give the tribunal the power to consolidate 83 two or more arbitrations if (a) the parties agree to consolidate; (b) the claims are made under the same arbitration agreement; and, (c) where under different but compatible arbitration agreements, there is a common question of law or fact or the rights to relief arise out of the same transaction or series of transactions.192 A Practice Note on Consolidation of Arbitrations has been published to set out the requirements of a request for consolidation and to provide practical guidance on the preparation of submissions. For practical reasons, the parties would be advised to adopt a set of arbitration rules 84 (for example, the HKIAC Administered rules193) which provide a mechanism for joinder and specific provisions as to the appointment of arbitrators when there are multiple parties. Otherwise, the parties should address these issues in the arbitration agreement.194 b) Equality of arms and appointment of the arbitrators. The principle of equality 85 of arms requires that each party has equal influence on the composition of the tribunal. Problems may arise when several parties on one side cannot agree on their arbitrator. In such circumstances, one solution is to agree on the appointment of the arbitrator by a neutral third party which secures equality of arms among the parties. This is indeed the approach adopted by the HKIAC Rules.195 If the appointment procedure fails or cannot be agreed upon, the HKIAC will act as the appointing authority and appoint the arbitrator(s) for the parties.

7. Third-party funding of arbitration There had been doubts whether the common law torts and crimes of champerty and 86 maintenance applied to arbitration. Indeed, the Court of Final Appeal judgment in Unruh v. Seeberger expressly left open this question.196 In June 2017, the Legislative Council passed amendments to HK Arbitration Ordinance,197 abolishing the doctrines of champerty and maintenance with respect to arbitration, thereby removing all doubts as to the legality of third-party funding for arbitration in Hong Kong. The amendments came into effect on 1 February 2019 with the issuance of the Code of Practice for Third Party Funding in Hong Kong (the Code). a) Legislative framework. The purposes of the new Part of HK Arbitration Ordi- 87 nance on third party funding of arbitration are to ensure that third party funding of arbitration is not prohibited by particular common law doctrines and to provide for measures and safeguards in relation to third party funding of arbitration.198 In between the common issues is so small that the court may regard it as not being a factor of great weight, even if the consequence is the risk of there being inconsistent decisions on the common issues; (c) the timing of the application for consolidation and whether any unfairness or injustice will be caused if a consolidation order were made (whether by way of delay, increased costs or otherwise); (d) costs and inconvenience; and (e) the factor that arbitrations are intended to be private and whether it is just and practicable in the circumstances to consolidate the proceedings (see Re Shui On Construction Co. Ltd and Schindler Lifts (HK) Ltd [1986] HKLR 1177). 192 See article 28.1, HKIAC Administered rules. 193 See articles 27 to 29 of the HKIAC Administered rules. 194 For example, to deal with the procedural complexities, the related contracts may have arbitration provisions which compel the relevant parties to participate in one arbitration, or to agree to appoint the same arbitrator (see Yuen/Yeung, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, para. 10.160). 195 See article 8.2 of the HKIAC Administered rules. 196 (2007) 10 HKCFAR 31, at para. 123. 197 See Part 10A, HK Arbitration Ordinance. 198 See section 98E, HK Arbitration Ordinance.

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particular, the common law offence of maintenance and champerty and of being a common barrator and tort of maintenance and champerty do not apply to the third party funding of arbitration199 which is defined as the provision of arbitration funding for an arbitration (a) under a written funding agreement made on or after 1 February 2019, (b) to a funded party to an arbitration, whether subsisting, yet to commence or has ended, (c) by a third funder who otherwise has no interest in the arbitration, and (d) in return for a financial benefit only if the arbitration is successful within the meaning of the funding agreement.200 88 There are two provisos to the application of the third party funding provisions of HK Arbitration Ordinance. First, whilst there is no general prohibition on lawyers or law firms funding an arbitration, they may not fund an arbitration if they act for any party in that arbitration.201 Second, where an arbitration is not seated in Hong Kong, the third party provisions of HK Arbitration Ordinance only apply to costs and expenses of services provided in Hong Kong in relation to the arbitration.202 89 To facilitate third party funding, confidential information about an arbitration may be communicated to a person for the purpose of having or seeking third party funding of arbitration from that person, but that person may not further communicate such confidential information unless the further communication is made (a) to protect or pursue a legal right or interest of the person or to enforce or challenge an award made in the arbitration in legal proceedings before a court or other judicial authority in or outside Hong Kong; (b) to any government body, regulatory body, court or tribunal and the person is obliged by law to make the communication; or (c) to a professional adviser of the person for the purpose of obtaining advice in connection with the third party funding of arbitration.203 90 The funded party is expected to give written notice to the arbitration body and each other party to the arbitration of (a) the fact that there is a funding agreement, (b) the name of the funder; and (c) the end of the funding agreement (other than because the arbitration has ended) within 15 days of the relevant event.204 Although technically noncompliance does not render any person liable in any judicial or other proceedings, it may be taken into account by the arbitral tribunal or the court in determining a relevant question.205 91

b) Code of Practice for Third Party Funding of Arbitration. After a two-month public consultation, the Code was issued on 7 December 2018 by the Secretary for Justice to set out the practices and standards with which third party funders are ordinarily expected to comply in carrying on activities in connection with third party funding of arbitration.206 The Code applies to any funding agreement commenced or entered into on or after 1 February 2019. The Code includes the following key provisions: (a) the funder must maintain capital adequacy of HK$20 million, provide audited proof of the same with the advisory body periodically, and inform the funded party of any material change to its financial situation;207

199

See See 201 See 202 See 203 See 204 See 205 See 206 See 207 See 200

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sections 98K and 98L, HK Arbitration Ordinance. sections 98G-J, HK Arbitration Ordinance. section 98O, HK Arbitration Ordinance. section 98N, HK Arbitration Ordinance. section 98T, HK Arbitration Ordinance. sections 98U and 98V, HK Arbitration Ordinance. section 98W, HK Arbitration Ordinance. section 98P, HK Arbitration Ordinance. para. 2.5 of the Code.

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(b) the funder must maintain effective written procedures to identify and manage conflicts of interest;208 (c) the funder will observe the confidentiality and privilege of all information and documents relating to the arbitration;209 (d) the funding agreement shall set out clearly that the funder will not seek to influence the funded party or its legal representative to give control or conduct of the arbitration, or to influence the arbitral tribunal or arbitration institution;210 (e) the funder must remind the funded party of the funded party‘s disclosure obligations under the legislation;211 (f) the funding agreement must state the extent of the funders’ liability to the funded party for costs, including security for costs, and other liabilities;212 (g) the funding agreement must exclusively identify whether, and if so how, the funder may terminate the funding agreement on grounds of the merits of the arbitration, material adverse change of prospects of success or material breach of funding agreement;213 (h) in the event of termination (other than for material breach) the funder is to remain liable for all funding obligations accrued;214 (i) the funded party may terminate the agreement if it reasonably believes that the funder has committed a material breach of the Code or the funding agreement that may lead to irreparable damage;215 (j) the funder must maintain an effective procedure for addressing complaints;216 and (k) the funder must submit annual returns to the advisory body and respond to any request from the advisory body for further information or clarification.217 Non-compliance with the Code does not render any person liable to any judicial or other proceedings, but it is admissible as evidence in other proceedings and may be taken into account by the arbitral tribunal or the court in determining a relevant question.218

IV. The control and the enforcement of arbitral awards It is well established that by agreeing to arbitrate, the parties impliedly or expressly 92 accept that the award will be final and binding. Under section 73 of the HK Arbitration Ordinance, an award made by an arbitral tribunal pursuant to an arbitral agreement is final and binding both on (a) the parties; and (b) any person claiming through or under any of the parties, unless otherwise agreed by the parties.219 Accordingly, arbitral awards are, in general, final and not subject to review. As will be further discussed in detail below, an award can be challenged under Hong 93 Kong law only under the following circumstances: (1) a party makes an application for setting aside an award under article 34 ML, as incorporated by section 81 of HK 208

Ibid., para. 2.7. Ibid., para. 2.8. 210 Ibid., para. 2.9. 211 Ibid., para. 2.10. 212 Ibid., para. 2.12. 213 Ibid., paras 2.13 and 2.14. 214 Ibid., para. 2.15. 215 Ibid., para. 2.16. 216 Ibid., para. 2.18. 217 Ibid., para. 2.19. 218 See section 98S, HK Arbitration Ordinance. 219 Section 73(1), HK Arbitration Ordinance. 209

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Arbitration Ordinance; or (2) if the Opt-in provisions under Schedule 2 of the Ordinance apply, and the award is challenged on the grounds of serious irregularity or appealed on the basis of a question of law.

1. Correction and amendment of arbitral awards 94

a) Correction. An arbitral award can be reviewed by the tribunal upon application by either party, or upon the tribunal’s own initiative. Pursuant to the HK Arbitration Ordinance, the tribunal is empowered to correct “any errors in computation, any clerical or typographical errors or any errors of similar nature”.220 A party requesting a correction must do so within 30 days of receiving the award, with notice to the other party, unless another time period has been agreed by the parties.221 Similarly, a tribunal may correct any error on its own initiative within 30 days of the date of the award.222

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b) Interpretation. If the parties agree, either party can, within 30 days of receiving the award and with notice to the other party, request that the tribunal give an interpretation of a specific point or part of the award. If the tribunal considers that such a request is appropriate, it shall, within 30 days of receipt of the request, give the interpretation, which will form part of the award.223

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c) Additional award. Within 30 days of receiving the award, either party may, with notice to the other party, request that the tribunal make an additional award in respect of claims presented in the arbitral proceedings, but omitted from the award. If the tribunal considers the request to be justified, it shall make the additional awards within 60 days.224

d) Others. The tribunal has the power to extend, if necessary, the time period within which a correction, interpretation or an additional award shall be made. Additionally, a tribunal can make other changes to an award, if such changes are necessitated by or consequential on the correction of any error in the award or the interpretation of the award.225 98 Within 30 days of the date of the award, the tribunal may review an award of costs if the tribunal was unaware of any information relating to costs which it should have taken into account when making the award.226 Upon such review, the tribunal may confirm, vary or correct the award of costs.227 97

2. Review of arbitral awards before the state courts 99

Under the HK Arbitration Ordinance, there are limited grounds to challenge an award. The only avenue to challenge an award before the court is set out in section 81 of the HK Arbitration Ordinance, under which a party may challenge an award before the court on the limited and exhaustive grounds as set out therein.228 Also, it is wellestablished under Hong Kong law that the court will not consider the substantive merits 220

See section 69(1)(1) of the HK Arbitration Ordinance. Ibid. 222 Sections 69(1) and (2), HK Arbitration Ordinance. 223 Ibid., section 69(1)(1)(b). 224 Ibid., section 69(1)(3). 225 Ibid., section 69(2). 226 Ibid., section 69(3). 227 Ibid., section 69(4). 228 See section 81, HK Arbitration Ordinance which gives effect to article 34 ML without modification. This is subject to the exceptions set out in section 81(2), namely: (1) setting aside an award under section 26(5) which provides that the court may do so upon upholding a challenge to an arbitrator’s impartiality or independence or an arbitrator’s qualifications, (2) challenging an award by apply to the 221

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of a dispute or the correctness of an award (whether error of fact or law). In other words, there is no general right of appeal or review of merits. The parties may, however, incorporate the “Opt-In” provisions in Schedule 2 of the HK Arbitration Ordinance to challenge an award on the ground of serious irregularity229 and/or appeal against an award on questions of law.230 In theory, challenges on such basis can only be made if the “Opt-In” provisions of HK Arbitration Ordinance apply. However, in practice, certain grounds in Schedule 2 of the HK Arbitration Ordinance may arguably be subsumed under the basis of “conflicting with/contrary to public policy” under which an award may be challenged in any event under section 81 of the HK Arbitration Ordinance. a) Procedural framework (time limits, competent court, appeal). aa) Applications 100 to set aside an arbitral award under section 81. The procedure for setting aside awards under section 81 of the HK Arbitration Ordinance is set out in Order 73 of the HK Rules of the High Court. An application to set aside an award must be made by originating summons or summons to the judge in charge of the High Court’s Construction and Arbitration List.231 Such application must be made within three months of receipt of the award.232 The originating summons or summons must state the grounds of the application, and where it is founded on affidavit evidence, a copy of the supporting affidavit must be served with it.233 The summons and affidavit must be served on the tribunal and all other parties to the arbitral proceedings.234 The court has made clear that it is “an abuse of process to issue a summons to set aside an order granting leave to enforce an arbitral award, if the summons does not set out or clearly disclose a ground for setting aside”235. Likewise, it is an abuse of process to issue a summons without a proper supporting affidavit (required under Order 73 r 10 (6A) of the HK Rules of the High Court to be filed with the summons)236. Where fraud is alleged, the threshold test requires the applicant to show that it has a 101 real prospect of success in persuading the judge to find that the award had been obtained by fraud237. The applicant must make “full and adequate disclosure of the facts and matters it relies upon to substantiate its allegation of fraud”.238 If the award is subject to a request for correction or an interpretation to the award,239 102 then the time limit for applying to set aside the award will be three months from the date on which the tribunal decides on the requests. If any such requests are refused by the tribunal, the three months’ time limit will, for the sake of uniformity, run from the court on the grounds of serious irregularity under Schedule 2, (3) appealing on a question of law under Schedule 2. 229 Section 4, Schedule 2, HK Arbitration Ordinance. 230 Section 5, Schedule 2, HK Arbitration Ordinance. 231 Order 73, rule 6 of the HK Rules of the High Court. See also Practice Direction 6.1 (Construction and Arbitration List), available at http://legalref.judiciary.gov.hk/lrs/common/pd/pdcontent.jsp? pdn=PD6.1.htm&lang=EN. 232 See section 81(1)(3), HK Arbitration Ordinance. This three month period is strictly construed although time extensions may be granted under Order 3 rule 5 of the HK Rules of the High Court under appropriate circumstances. See, for example, Chiu Siu Chung v. Yu Yan Yan [1993] 1 HKLR 225 where the court considered an application for extension of time to file a notice of appeal. 233 Order 73 rule 5(4), HK Rules of the High Court. 234 Order 73 rule 5(5), HK Rules of the High Court. 235 As held in KB v. S HCCT 13/2015 (15 September 2015) (paras 22–25), and affirmed in T v. C, [2016] HKCFI 559; HCCT 23/2015 (14 March 2016), para. 7, YCA XLI (2016), 487. 236 T v. C, [2016] HKCFI 559; HCCT 23/2015 (14 March 2016), para. 7, YCA XLI (2016), 487. 237 Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (2009) 12 HKCFAR 84, as referred to and applied in T v. C, supra fn. 236. 238 T v. C, supra fn. 236, para. 12. 239 See section 69(1), HK Arbitration Ordinance.

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date of receipt of the tribunal’s response rather than the date the response was made. The court has inherent jurisdiction to strike out proceedings to set aside an award where the applicant does not pursue them with all due dispatch.240 103 If an application for setting aside an award is made while an application for enforcement is pending, the court may adjourn the enforcement proceedings and order that the party against whom enforcement is sought give security.241 The Hong Kong court applied the legal principles for determination of the application of security set out in Soleh Boneh Intenrational Ltd v. Government of the Republic of Uganda242 in a few recent cases243. In short, the court looks at two important factors when considering security applications, namely (i) the strength of the argument that the award is invalid244, and (ii) the ease or difficulty of enforcement of the award, and whether it will be rendered more difficult, if enforcement is delayed245. bb) Challenging an arbitral award on the ground of serious irregularity. A party may apply to the court to challenge an award on the grounds of serious irregularity, only if the parties have opted in to the provisions of Schedule 2 to the HK Arbitration Ordinance.246 To rely on this provision, a party must establish one or more grounds of serious irregularities and the court must be satisfied that this has caused or will cause substantial injustice to the applicant. 105 Serious irregularity, for the purpose of Schedule 2, means (i) failure by the tribunal to comply with its obligation to treat the parties equally; (ii) the tribunal exceeding its powers (other than by exceeding its jurisdiction); (iii) failure by the tribunal to conduct the proceedings in compliance with the procedure agreed by the parties; (iv) failure by the tribunal to deal with all the issues put to it; (v) any arbitral or other institution or persons vested by the parties with powers in relation to the arbitral proceedings or the award exceeding its powers; (vi) failure by the tribunal to give an interpretation of an award, the effect of which is uncertain or ambiguous; (vii) the award being obtained by fraud, or the award or the way in which it was procured being contrary to public policy; (viii) failure to comply with the requirements as to the form of the award; or (ix) any irregularity in the conduct of the proceedings, or in the award, which is admitted by the tribunal, or by any arbitral or other institution or person vested by the parties with powers in relation to the arbitral proceedings or the award.247 Before making an application under this provision, a party must first exhaust all available recourse. This includes correction and/or interpretation of an award, or an additional award, and any available appeal or review procedure.248 104

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See Secretary of State for the Environment v. Euston Centre Investments Ltd [1995] 1 All ER 269, CA. Section 86(4), HK Arbitration Ordinance. 242 [1993] 2 Lloyd’s Rep 208. 243 Guo Shun Kai v. Wing Shing Chemical Co. Ltd [2013] 3 HKLRD 484, Dana Shipping and Trading SA v. Sino Channel Asia Ltd, HCCT 47/2015, 14 March 2016 and L v. B, HCCT 41/2015, 5 May 2016, YCA XLI (2016), 490. 244 See L v. B, supra (fn. 243), para. 7. The court referred to Soleh Boneh, which stated that “If the award is manifestly invalid, there should be an adjournment and no order for security; if it is manifestly valid, there should either be an order for immediate enforcement, or else an order for substantial security”. 245 Ibid. 246 Ibid., section 4 of Schedule 2, HK Arbitration Ordinance. 247 Section 4(2), Schedule 2, HK Arbitration Ordinance. Section 4 of Schedule 2 is a new section and there is no exact equivalent in the old Arbitration Ordinance. In interpreting this provision, reference may be made to the case law considering section 68 of the 1996 English Arbitration Act. For a more detailed discussion on serious irregularity, please refer to Chow/Cheng, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 20.083–20.145. 248 Section 7(1), Schedule 2, HK Arbitration Ordinance. 241

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(1) Procedure. An application to challenge an award on the grounds of serious 106 irregularity must be made by originating summons or summons,249 within 30 days after the award has been delivered.250 The originating summons must state the grounds of the application. Where the application is founded on affidavit evidence, a copy of every affidavit intended to be used must be served with the originating summons or the summons.251 The originating summons or summons and affidavit must be served on the arbitrator, the tribunal and on all the other parties to the proceedings.252 (2) Remedies. If leave to challenge the award is granted, and the court is satisfied that 107 there is serious irregularity affecting the tribunal, the arbitral proceedings, or the award, the court may by order (i) remit the award to the tribunal in whole or in part for reconsideration;253 (ii) set aside the award in whole or in part;254 or (iii) declare the award to be of no effect in whole or in part.255 The court must not set aside an award or declare it to be of no effect, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.256 If the award is remitted by the court, the tribunal must make a fresh award regarding the matters being remitted, within 3 months of the date of the order; or within the period which the court may direct.257 (3) Appeal against decision of Court. Leave from the High Court or the Court of 108 Appeal is required for appeal against the decision of the Court.258 cc) Appeal against an arbitral award on a question of law. The parties are entitled 109 to appeal an award on the basis of a question of law only when they have opted in to section 5 of Schedule 2 of the HK Arbitration Ordinance, which provides that a party may appeal against an award on question of law (i) with the agreement of all the other parties to the arbitral proceedings; or (b) with the leave of the court.259 (1) Procedure. An application for leave to appeal must (i) identify the question of law 110 to be decided; and (ii) state the grounds on which it is said that leave to appeal should be given.260 The application procedure is similar to the procedure for challenging an award on the grounds of serious irregularity. The application must be made by originating summons or summons to a single judge in court,261 and must be made within 30 days after the award has been delivered.262 The application is to be heard by the Judge in charge of the Construction and Arbitration List.263 If the application is founded on evidence by affidavit, a copy of every affidavit intended to be used must be served with the originating summons or summons.264 If the application is made with the

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Order 73 rule 5(1), HK Rules of the High Court. Ibid. 251 Order 73, rule 5(4), HK Rules of the High Court. 252 Order 73 rule 5(5), HK Rules of the High Court. 253 Section 4(3)(a), Schedule 2, HK Arbitration Ordinance. 254 Section 4(3)(b), Schedule 2, HK Arbitration Ordinance. 255 Section 4(3)(c), Schedule 2, HK Arbitration Ordinance. 256 Section 4(5), Schedule 2, HK Arbitration Ordinance. 257 Section 4(4), Schedule 2, HK Arbitration Ordinance. 258 Section 4(6), Schedule 2, HK Arbitration Ordinance. 259 See section 6, Schedule 2, HK Arbitration Ordinance. 260 Section 6(2), Schedule 2, HK Arbitration Ordinance. 261 Order 73, rule 1, HK Rules of the High Court. 262 Order 73 rule 5(2) HK Rules of the High Court. 263 Practice Direction 6.1, para. 11 (supra fn. 231). 264 Order 73 rule 5 (4)(b)(i), HK Rules of the High Court. 250

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consent of the other parties or the tribunal, a copy of every permission or agreement given in writing must be served with the originating summons or summons.265 The application must contain a succinct statement of each ground upon which the party contends that the arbitral tribunal erred in law.266 The application shall refer to the paragraph or passage of the award and provide with reasons where each error is to be found.267 A copy of the award and reasons forming part of the award and any documents expressly incorporated in the award of such reasons should be lodged with the application.268 Any respondent who contends that the award should be upheld on grounds not expressed, or not fully expressed must provide a succinct statement to the applicant and to the court, no later than 7 days before the application for leave is to be heard. The statement must include the grounds in numbered paragraphs, with reference where appropriate to any relevant paragraph or passage of the award and reasons.269 Where the applicant contends that any question of law arising out of an award concerns a term of contract or an event which is not a one-off clause or event, he shall serve on the respondent with his application, and lodge with the Court, an affidavit setting out the facts relied on in support of his contention.270 A respondent who challenges that contention shall provide to the applicant and to the court, no later than 7 days before the application is to be heard, an affidavit setting out the facts upon which he relies.271 Unless it appears to the court that a hearing is required, the court will decide an application for leave to appeal without a hearing.272 A party may only appeal from the decision of the court to grant (or not to grant) leave to appeal on a question of law, with the leave of the High Court or the Court of Appeal.273 The Court or Court of Appeal will only grant leave to appeal from such decision of the Court if (i) the question is one of general importance; or (ii) the question is one that should be considered by the court for some other special reason.274

(2) Remedies. Leave will be granted if the court is satisfied that: (i) the decision of the question will substantially affect the rights of one or more of the parties; (ii) the question is one which the tribunal was asked to decide; and (iii) on the basis of the findings of facts in the award, the decision of the tribunal is obviously wrong; or the question is one of general importance and the decision of the tribunal is at least open to serious doubt.275 116 If leave to appeal against the award is granted, the court may, on hearing the appeal, give an order to (i) confirm the award; (ii) vary the award; (iii) remit the award to the tribunal in whole or in part for reconsideration; (iv) set aside the award in whole or in part.276 The court must not set aside an award, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration.277 Leave from the court or the court of appeal is required for further 115

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Order 73 rule 5 (4)(b)(ii), HK Rules of the High Court. Practice Direction 6.1, para. 17 (supra fn. 231). 267 Ibid. 268 Ibid. 269 Ibid., para. 18. 270 Ibid., para. 19. 271 Ibid. 272 Section 6(3), Schedule 2, HK Arbitration Ordinance. 273 Section 6(5), Schedule 2, HK Arbitration Ordinance. 274 Section 6(6), Schedule 2, HK Arbitration Ordinance. 275 Section 6(4), Schedule 2, HK Arbitration Ordinance. 276 Section 5(5), Schedule 2, HK Arbitration Ordinance. 277 Section 5(7), Schedule 2, HK Arbitration Ordinance. 266

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appeal against such decision of the court.278 Leave to further appeal will not be granted unless (i) the question is one of general importance; or (ii) the question is one which should be considered by the court of appeal for some other special reason.279 (3) Amended award. Where an award is remitted by the court, the tribunal must 117 make its award within 3 months of the date of the order of the court remitting the award, unless the order provides otherwise.280 dd) Indemnity costs orders for unsuccessful challenges. In line with the present 118 policy of the Courts following the introduction of the Civil Justice Reform, if a party unsuccessfully makes an application to challenge an award, costs will be ordered against the losing party on an indemnity basis, unless special circumstances can be shown.281 b) Grounds for setting aside an arbitral award. aa) Overview. The HK Arbitration 119 Ordinance gives effect to the principles of finality and comity by prohibiting recourse to a court against arbitral award, except under the circumstances as stipulated under section 81 of the HK Arbitration Ordinance (and Schedule 2, if applicable). These grounds for setting aside arbitral awards are exhaustive. As these grounds for setting aside are adopted from article 34 ML, case law from other jurisdictions would provide valuable guidance in this area.282 The courts have a residual discretion not to set aside an award, despite the proven existence of a valid ground.283 bb) Lack of jurisdiction of the arbitral tribunal. Whilst the tribunal may rule on its 120 own jurisdiction, the tribunal’s decision on its jurisdiction is neither exclusive nor final.284 The tribunal’s decision may be considered in an application to set aside the award under section 81 of the HK Arbitration Ordinance (which gives effect to article 34 ML). Like the English courts, the Hong Kong courts will not be bound by the tribunal’s decision to assume jurisdiction, and only the courts can definitively rule on issues relating to jurisdiction of the arbitrators.285 cc) Unlawful composition of the tribunal and other procedural irregulari- 121 ties. (1) Unlawful composition of tribunal. An award may be set aside if the party making the application proves that the composition of the tribunal or the arbitral 278

Section 5(8), Schedule 2, HK Arbitration Ordinance. Section 5(9), Schedule 2, HK Arbitration Ordinance. 280 Section 4, Schedule 2, HK Arbitration Ordinance. 281 See, for example, A v. R [2010] 3 HKC 67 at 79: “Applications by a party to appeal against or set aside an award…should be exceptional events. Where a party unsuccessfully makes such application, he should in principle expect to have to pay costs on a higher basis. this is because a party seeking to enforce an award should not have had to contend with such type of challenge.” In A v. R, the Court held that “in the absence of special circumstances, when an award is unsuccessfully challenged, the Court will henceforth normally consider awarding costs against a losing party on an indemnity basis.” The decision is affirmed by Gao Jaiyan v. Keeneye Holdings Ltd (CACV 79/2011, 12 January 2012), where the Court observed that “Since the Civil Justice Reform (“CJR”), costs have been awarded, in connection with proceedings arising out of or in connection with arbitral proceedings, on an indemnity basis.” 282 See, for example, the overview on the Model Law supra A and the country reports for England, Germany and Switzerland (supra H, J and infra R). 283 See section 81 of the HK Arbitration Ordinance which adopts article 34 ML. As observed by the court in Shanghai Fusheng Soya-Food Co. Ltd v. Pulmuone Holdings Co. Ltd [2014] HKEC 825, article 34 (2) ML “only provides for the grounds on which an arbitral award “may be set aside”. The courts have a residual discretion to enforce an award despite the proven existence of a valid ground.” 284 As discussed by Kaplan J in Fung Sang Trading Ltd v. Kai Sun Sea Products & Food Co. Ltd [1992] 1 HKLR 40 at 50. 285 See section 34, HK Arbitration Ordinance. See also Harbour Assurance Company (UK) Ltd v. Kansa General International Insurance Company Ltd, 31 July 1991 (unreported), as referred to by the Hong Kong court in Fung Sang Trading Ltd v. Kai Sun Sea Products & Food Co. Ltd [1992] 1 HKLR 40 at 50. 279

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procedure adopted by the tribunal was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the UNCITRAL Model Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with the UNCITRAL Model Law.286 In other words, in order to succeed under this ground, it must be shown that the composition of the tribunal is not in accordance with (a) the mandatory provisions of the HK Arbitration Ordinance;287 or (b) the parties’ agreement; or (c) the non-mandatory provisions of the HK Arbitration Ordinance.288 This order of priority differs from the corresponding ground under the New York Convention, as the New York Convention appears to give precedence to the parties’ agreement (rather than the mandatory provisions under the HK Arbitration Ordinance/ML The approach adopted by the Hong Kong courts can be summarized as follows: (a) the presumption in favour of finality of the award laid down in article 34 ML may only be rebutted where the conduct of the tribunal or a party appears to raise a “real risk of injustice”;289 (b) the court will not grant an order to set aside an award unless the applicant can show that the proper presentation of his case was prejudiced;290 (c) the court will not entertain purely technical objections;291 (d) a party is under a duty of good faith in prosecuting its case and will be taken to have waived any objection under this ground where the applicant deliberately took no part in those proceedings.292 122

(2) Inability to present case. An award may be set aside if the person making the application proves that he was not given proper notice of the appointment of the tribunal, or the arbitral proceedings, or was otherwise unable to present his case.293 This ground deals with violations of due process of law which include: (a) failure to serve a party with adequate notice of a hearing; (b) denial to a party of a reasonable opportunity to attend the hearing; (c) denial to a party of a reasonable opportunity to present argument and evidence; (d) denial of one’s right to be present throughout the hearing; and (e) denial of one’s right to controvert its opponent’s case.294 In order to make good a submission under this ground, the applicant must show that it has been “prejudiced to a significant degree” in not being allowed to present its case, such that the proceedings, or an important part thereof, have been conducted unfairly.295 The lack of fairness and equality is the key to this ground.296

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(3) Incapacity of party or invalidity of arbitration agreement. An award may be set aside if the party making the application proves that a party to the arbitration agreement was under some incapacity or that the agreement is invalid under the law to which the parties 286

Section 81(1)(2)(a)(iv), HK Arbitration Ordinance. See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.183. 288 Chow/Cheng, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 20.058 –20.059. 289 See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 15.185. 290 Ibid. 291 Ibid. For example, objections relating to change in the name of the appointing authority, or of an edition of the arbitral institution’s procedural rules. 292 Ibid. The court may draw adverse inference from a party’s behaviours, such as a party’s failure to argue before the tribunal a legal point based on known and undisputed facts, if the party attempts to rely on that point in a setting aside application. Note, however, Kaplan J.’s comments in Paklito Investment Ltd v. Klockner East Asia Ltd [1993] 2 HKLR 39 at 48 that a defendant is not obliged to apply to set aside an award in the country where it has made, as a condition of opposing enforcement elsewhere. 293 See section 81(1)(2)(a)(ii), HK Arbitration Ordinance. 294 See Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.146. 295 Shangdong Textiles Import and Export Corp. v. Da Hua Non-Ferrous Metals Co. Ltd [2002] 2 HKLRD 844 at 855. 296 Ibid. See also Paklito Investment Ltd v. Klockner East Asia Ltd [1993] 2 HKLR 39 at 47. 287

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have subjected it or, failing any indication thereon, under the law of Hong Kong.297 This ground covers both the situations where an arbitration agreement is claimed to be invalid or non-existent, as well as where a party claims that it was never a party to an arbitration agreement which would otherwise be valid.298 Where fraud or forgery is alleged as the basis of a claim of invalidity of an arbitration agreement, a very heavy burden rests on the party making such allegation.299 dd) Public policy. An award may be set aside if it is in conflict with the public policy 124 of Hong Kong. This is a ground that the court may examine on its own motion. “Contrary to public policy” means “contrary to the fundamental conceptions of morality and justice of the forum”.300 In line with international practice, this ground has been narrowly construed by the courts in Hong Kong. The court in Qingdao Tongda Enterprise Development301 pointed out that this ground “must not be seen as a catch-all provision to be used whenever convenient. It is limited in scope and is to be sparingly applied”.302 The court will refuse to enforce an arbitral award on this ground, only when there is a “substantial injustice” arising out of an award which is “so shocking to the Court’s conscience as to render enforcement repugnant”.303 Where the “good part” of an award can be severed from the bad, the court may treat the “bad part” alone as being contrary to public policy, and refuse to set aside the rest of the award.304 ee) Subject matter not arbitrable. An award may be set aside if the court finds that 125 the subject matter of the dispute is not capable of settlement by arbitration under the law of Hong Kong.305 Arbitrability is a subset of public policy and thus the court may raise this objection of its own motion.306

3. Enforcing arbitral awards a) Overview. The enforcement regime under the HK Arbitration Ordinance consists 126 of three parts: (a) enforcement of awards made in Hong Kong and awards made in a foreign country that is not a party to the New York Convention and under the UNCITRAL Model Law (Non-Convention awards made overseas); and (b) enforcement of awards made in a foreign country that is a party to the New York Convention (Convention awards); and (c) enforcement of awards made in the Mainland China (Mainland awards) and Macao (Macao awards). aa) Awards made in Hong Kong. The HK Arbitration Ordinance provides that an 127 award is enforceable in the same manner as a judgment of the courts of Hong Kong that 297

Section 81(1), (2)(a)(i), HK Arbitration Ordinance. Chow/Cheng, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 20.043–20.048. 299 See Chongqing Machinery Import & Export Co. Ltd v. Yiu Hoi (unreported, HCCT 19/2001, 11 October 2001). 300 Per Sir Anthony Mason NPJ in Hebei Import & Export Corp. v. Polytek Engineering Co. Ltd (1999) 2 HKCFAR 111 at 130F. 301 [1993] 1 HKLR 173. 302 Ibid., at 178. 303 A v. R (Arbitration: Enforcement) [2009] 3 HKLRD 389. 304 See JJ Argo Industries (P) Ltd (a firm) v. Texuna International Ltd [1992] 2 HKLR 391. 305 Section 81(1)(2)(b)(i), HK Arbitration Ordinance. For disputes which are not capable of settlement by arbitration, see supra mns 22–23. 306 The HK Arbitration Ordinance does not provide for a list of matters that are not arbitrable. For a useful discussion on non-arbitrable matters and case law, see Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.003. See also Chow/Cheng, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, para. 20.064 where it was suggested that as a general rule, matters involving public interest elements may not be arbitrable. 298

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has the same effect, but only with the leave of the court.307 If leave is granted, the court may enter judgment in terms of the award.308 Leave of the court is required for any appeal from a decision of the court to grant or refuse leave to enforce an award under section 84.309 In relation to enforcement of awards made in Hong Kong, the court will grant leave to enforce the award, unless the party against whom the award is invoked can prove that (a) a party to the arbitration agreement was (under the applicable law) under some incapacity; or (b) the arbitration agreement was invalid either under the law to which the parties subjected it; or (if there was no indication of the law to which the arbitration agreement was subjected) under the law of the country where the award was made; or (c) the person was not given proper notice of the appointment of the tribunal or of the arbitral proceedings; or was otherwise unable to present his case; or (d) the award deals with a difference not contemplated by or not within the terms of the submission to arbitration; or (e) the award contains decisions on matters beyond the scope of the submission to arbitration; or (f) the composition of the tribunal or the procedure adopted was not in accordance with the parties’ agreement, or the law of the country where the arbitration took place; or (g) the award has not yet become binding on the parties; or (h) the award has been set aside or suspended by a competent authority in the country in which, or under the law of which it was made.310 Meanwhile, enforcement of awards may also be refused if (a) the award is in respect of a matter not capable of settlement by arbitration under the laws of Hong Kong; or (b) it would be contrary to public policy to enforce the award; or (c) for any other reason the court considers it just to do so.311 As mentioned above, the enforcement of an arbitral award has been refused for contrary to public policy for failing to state adequate reasons. The applicant is required to produce the following documents as evidence for enforcement: (a) the duly authenticated original award or a duly certified copy of it; and (b) the original arbitration agreement or a duly certified copy of it.312 The Hong Kong courts may, in appropriate circumstances, grant leave to enforce international or domestic awards that are made in Hong Kong summarily, without the need to bring fresh proceedings.313 If such leave is granted, the award may be enforced in the same manner as a judgment of the courts of Hong Kong. Alternatively, the applicant wishing to enforce an award may commence a separate action in the Hong Kong courts. It is well settled that at common law there is an implied undertaking in every arbitration agreement that the parties will perform the award. If a party to an arbitration agreement fails to comply with the award, the other party can 307

Section 84, HK Arbitration Ordinance. See section 84(2), HK Arbitration Ordinance. 309 Ibid., section 84(3). For more details supra mns 92 et seq. 310 See section 86 of the HK Arbitration Ordinance in relation to “Refusal of enforcement of arbitral awards” 311 Section 86(3), HK Arbitration Ordinance. 312 Section 85, HK Arbitration Ordinance. 313 Section 84, HK Arbitration Ordinance. This is an attractive avenue to enforce an award made in Hong Kong as it will be much faster and cheaper. The procedure for summary enforcement is governed by Order 73 rule 10 of the HK Rules of the High Court. The initial application for leave to enforce should be made ex parte and an inter partes summons should be issued only if the court so directs. The application must be supported by affidavit, exhibiting the original award and the arbitration agreement (or a copy thereof). The applicant is required to make full and frank disclosure of the points which are for and against him. Failure to do so would deprive him of the benefit of the order. For more details in relation to the procedure relating to summary enforcement, see Brock/Knapton/Kurian, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 19.012–19.022. 308

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bring an action before a court of competent jurisdiction to enforce the implied promise.314 The applicant is entitled to claim judgment for the amount of the award, a declaration that the award is binding, specific performance (where appropriate), damages for failure to perform the award, or an injunction restraining the unsuccessful party form disobeying the award.315 bb) Non-Convention awards made overseas. In general, a party wishing to enforce 132 an award which is neither a Convention award nor a Mainland or Macao award can rely on section 84(1) of the HK Arbitration Ordinance.316 If a settlement agreement is reached between the parties, it will be treated as an arbitral award under section 66(2) of the HK Arbitration Ordinance for the purposes of enforcement.317 cc) Convention awards. After the handover of Hong Kong to the PRC in 1997, the 133 PRC extended its membership in the New York Convention to Hong Kong. Accordingly the New York Convention continues to apply in Hong Kong and awards obtained in another contracting state to the Convention are enforceable in Hong Kong.318 A “Convention award” means “an award made in a State or the territory of a State, other than China or any part of China, which is a party of the New York Convention”.319 The HK Arbitration Ordinance provides that a Convention award is enforceable in Hong Kong either (a) by action in the Court;320 or (b) in the same manner as an award of a tribunal is enforced under the HK Arbitration Ordinance (i.e. by way of summary enforcement under section 84).321 The procedure for enforcing a Convention award is essentially the same as that of 134 enforcing an award made in Hong Kong.322 Enforcement of a Convention award may not be refused, except under the limited circumstances set out in section 89 of the HK

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See for example, Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.176. See ibid. for a helpful summary of this method of enforcement and the relevant case law. In an action on the award, the plaintiff bears the burden of proof and must prove (a) the making of the contract which contains the submission; (b) that the dispute arose within the terms of the submission; (c) that the tribunal was duly appointed; (d) the making of the award; (e) that the amount awarded has not been satisfied or that the award has not been otherwise performed. 316 Ibid., section 84(1), which provides that “an award, whether made in or outside Hong Kong, in arbitral proceedings by an arbitral tribunal is enforceable in the same manner as a judgment of the Court that has the same effect, but only with the leave of the Court” 317 See section 66(2) of the HK Arbitration Ordinance. According to section 66(2), the settlement agreement must be in writing. 318 See Division 2 of Part 10 of the HK Arbitration Ordinance which gives effect to the New York Convention. 319 See section 2, HK Arbitration Ordinance. Under the same section, “New York Convention” means the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards done at New York on 10 June 1958” 320 See HK Arbitration Ordinance, section 87. 321 Ibid., see also HK Arbitration Ordinance, sections 61 and 84 regarding enforcement of orders, directions and awards. 322 HK Arbitration Ordinance, section 88. See also order 73 rule 10 of the HK Rules of the High Court. To enforce a Convention award a party must produce: (a) the duly authenticated original award or a duly certified copy of it; (b) the original arbitration agreement or a duly certified copy of it; and (c) if the award or agreement is not in either or both of the official languages (i.e. English or Chinese), a translation of it in either official language certified by an official or sworn translator or by a diplomatic or consular agent. An ex parte application can be made to a judge of the Construction and Arbitration List for leave to enforce the award. The application should be supported by affidavit exhibiting the documents required under section 88. Note also that the defendant may not rely on the defences against enforcement of domestic awards made in Hong Kong to resist enforcement of a Convention award (Brock/Knapton/Kurian, in: Ma/ Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, paras 20.027–19.031). 315

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Arbitration Ordinance.323 These grounds are exhaustive and the courts have no residual discretion to refuse enforcement on other grounds not stipulated in the HK Arbitration Ordinance.324 As in other countries that are signatories of the New York Convention, such as England and Germany, the courts in Hong Kong have no general power to review the merits of an award,325 but may set aside or refuse to enforce an award on public policy grounds.326 However, the court has overriding discretion to allow enforcement, even if a ground is made out.327 It is generally accepted the Hong Kong courts have an excellent record in enforcing foreign arbitral awards with the New York Convention. Leave to enforce Convention awards is rarely refused.328 135 A party against whom the enforcement of an award is invoked may, within 14 days after service of the order giving leave to enforce the award (where the party is out of the jurisdiction, within such period as the court may direct), apply to set aside the order.329 Such setting aside application must be made by way of summons with a supporting affidavit.330 If leave to enforce the award is not set aside, or the period within which a setting aside application has expired, the party enforcing the award may enter judgment in terms of the award.331 136

dd) Mainland awards. The HK Arbitration Ordinance provides a separate regime for the enforcement of “Mainland awards”.332 This regime incorporates the “Arrangement 323 Ibid., section 89(3). Enforcement may only be refused if (a) the person against whom an award is invoked proves that a party to the arbitration agreement was under some incapacity (under the law applicable to that party); (b) the arbitration agreement was invalid; (c) the party against whom the award is invoked was not given proper notice of the appointment of the tribunal, or of the proceedings or was otherwise unable to present his case; (d) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matter beyond the scope of the submission to arbitration; (e) the composition of arbitral authority or arbitral procedure was not in accordance with the arbitral agreement or the law of the country where the arbitration took place; or (f) 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, it was made. Enforcement may also be refused if (a) the award concerns a matter which is incapable of settlement by arbitration under the laws of Hong Kong; or (b) it would be contrary to public policy to enforce the award. 324 See Heibei Import & Export Corp. v. Polytek Engineering Co. Ltd [1999] 1 HKLRD 665. 325 See, for example, Pacific China Holdings Ltd (in liq) v. Grand Pacific Holdings Ltd [2011] 4 HKLRD 188 at 208–209, per Saunders J, “It is well established that the court, whether an enforcing court, or a court that is asked to set aside an award, will not consider the substantive merits of the dispute, or the correctness of the award, whether concerning errors of fact or law.” 326 See Heibei Import & Export Corp v. Polytek Engineering Co. Ltd [1999] 1 HKLRD 665 at 669–670 where the Court of Final Appeal narrowly interpreted the meaning of “contrary to public policy” under section 44(3) of the repealed Arbitration Ordinance (Cap. 341) (equivalent to article V(2)(b) NYC and section 89(3) of the current HK Arbitration Ordinance): “The expression public policy as it appears …is a multi-faceted concept. Woven into this concept is the principle that courts should recognize the validly of decisions of foreign arbitral tribunals as a matter of comity, and give effect to them, unless to do so would violate the most basic notions of morality and justice.” Note also the comments of Kaplan J in Qinhuangdao Tongda Enterprise Development Co. v. Million Basic Co. Ltd [1993] 1 HKLR 173 “In arguing now that a plaintiff misled the Tribunal, the defendant wants another chance to argue the merits of the case. It is too late for that. The New York Convention is clear that it is not for the enforcing court to rehear the case on the merits. It makes no difference that the defendant couches his submissions in terms of public policy and an attempt to mislead the arbitral tribunal. He is trying to appeal the merits of the case and that is not allowed.” 327 See Heibei Import & Export Corp. v. Polytek Engineering Co. Ltd, supra fn. 326. 328 See Brock/Knapton/Kurian, in: Ma/Brock (eds), Arbitration in Hong Kong: a Practical Guide, 4th ed., 2017, para. 19.027. 329 Order 73 rule 10(6), HK Rules of the High Court. 330 Ibid., rule 10(7). 331 HK Arbitration Ordinance, sec. 87(1). 332 See HK Arbitration Ordinance, Part 10, Division 3, sections 92 to 98. A Mainland award is defined, under section 2 of the HK Arbitration Ordinance, as “an arbitral award made in the Mainland by a

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between the Mainland and the Hong Kong Special Administrative Region on the Mutual Enforcement of Arbitration Awards 1999”333 (the Arrangement), which is based largely on the provisions of the New York Convention. A Mainland award is enforceable in Hong Kong either (a) by action in the court; or (b) in the same manner as an award of a tribunal is enforceable under the HK Arbitration Ordinance. If a Mainland award is not fully satisfied by way of enforcement proceedings taken in the Mainland of the PRC, or in any other place other than Hong Kong, that part of the award which is not satisfied is enforceable in Hong Kong under the HK Arbitration Ordinance.334 The procedures and principles in relation to enforcement of a mainland award are similar to those applicable to the enforcement of Convention awards.335 The enforcement of a Mainland award may not be refused, except under the circumstances stipulated in section 95 of the HK Arbitration Ordinance. Enforcement may be refused if the person against whom the enforcement of an award is invoked proves that: (a) a party to the arbitration agreement was under some incapacity (under the law applicable to that party); or (b) the arbitration agreement was invalid; or (c) the person was not given proper notice of the appointment of the tribunal or arbitral proceedings, or was otherwise unable to present his case; or (d) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matter beyond the scope of the submission to arbitration; or (e) the composition of the arbitral authority or arbitral procedure was not in accordance with the parties’ agreement or the law of the Mainland; or (f) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the Mainland or under the law of the Mainland.336 Enforcement may also be refused if the award concerns a matter which cannot be settled by arbitration under the law of Hong Kong; or if it would be contrary to public policy to enforce the award.337 If a Mainland award contains decisions on matter not submitted to arbitration (referred to as “unrelated decisions” in the HK Arbitration Ordinance), in addition to decisions on matters submitted to arbitration (referred to as “arbitral decisions” in the HK Arbitration Ordinance), then the award may be enforced only in so far as it relates to the arbitral decisions that can be separated from the unrelated decisions.338 It is to be noted that the applicant is not entitled to file simultaneous applications in both Hong Kong and the PRC.339 This is so even if the respondent has assets in both Hong Kong and the PRC. The applicant must complete enforcement in one jurisdiction recognized Mainland arbitral authority in accordance with the Arbitration Law of the People’s Republic of China”. 333 The “Arrangement between the Mainland and the Hong Kong Special Administrative Region on the Mutual Enforcement of Arbitration Awards 1999” is a juridical assistance agreement reached on 20 June 1999 pursuant to article 95 of the Basic Law of the HKSAR, following mutual consultations among government officials of the Hong Kong Special Administrative Region and the PRC. An English translation of the same is available at https://www.doj.gov.hk/eng/topical/pdf/mainlandmutual2e.pdf (accessed 1 August 2020). 334 Section 93(2), HK Arbitration Ordinance. 335 Ibid., section 94. Accordingly, the party who seeks to enforce a Mainland award must produce (a) the duly authenticated original award or a duly certified copy of it; (b) the original arbitration agreement or a duly certified copy of it; and (c) if the award or settlement agreement is not in either or both of the official languages, a translation of it in either official language certified by an official or sworn translator or by a diplomatic or a consular agent. 336 Ibid., section 95(2). 337 Ibid., section 95(3). 338 Ibid., section 95(4). 339 See article 2 of the Arrangement and section 93, HK Arbitration Ordinance.

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before commencing another set of proceedings in another jurisdiction.340 In CL v. SCG341, the claimant sought enforcement of the arbitral award in Mainland China. The enforcement proceedings were unsuccessful in the end, and by that time any enforcement action in Hong Kong would have become time-barred under section section 4 of the Limitation Ordinance. Therefore, enforcement claimants in Hong Kong arbitration may have to watch the time and consider withdrawing enforcement proceedings in Mainland China if necessary to proceed with enforcement in Hong Kong. 141 The time limit for an applicant to apply to the relevant court for enforcement shall be governed by the law on limitation periods in the place of enforcement.342 This is an important point to note because there is a significant difference between the limitation periods for enforcement of awards under Hong Kong law and PRC law. The limitation period for enforcement of an award in Hong Kong is 6 years from the date the award has been dishonoured343 whilst the limitation period for enforcement of an award in the Mainland is two years.344 ee) Macao awards. The enforcement of Macao awards is governed by Part 10 Division 4 of the HK Arbitration Ordinance.345 The enforcement regime is similar to that for Mainland awards. A Macao award means “an arbitral award made in Macao in accordance with the arbitration law of Macao”.346 A Macao award is enforceable either (a) by action in the court; or (b) in the same manner as an award of a tribunal is enforceable under the HK Arbitration Ordinance.347 143 If a Macao award is not fully satisfied by way of enforcement proceedings taken in Macao, or in any other places other than Hong Kong, that part of the award which is not satisfied in those proceedings is enforceable under Part 10 Division 4 of the HK Arbitration Ordinance.348 The principles, procedures and policies applicable to the enforcement (and refusal of enforcement) of Mainland awards apply also to Macao awards349 and are not repeated here. 142

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b) Defences to enforcement. aa) Overview. The defences to enforcement of Convention awards under section 89(2) and (3) of the HK Arbitration Ordinance correspond to those under article V NYC (supra B mns 177–332). As regards non-Convention awards, section 84(1) and (2) the HK Arbitration Ordinance contains exactly the same list of defences and one additional defence: non-Convention awards can be refused enforcement whenever the court “considers it just to do so” (section 84(2)(c), HK Arbitration Ordinance). The defences under section 89(2)(a)–(e), (3) of the HK Arbitration Ordinance correspond to the grounds for setting aside arbitral awards which are explained in more detail supra mns 119–125. In addition, under section 89(2)(f) of the HK Arbitration Ordinance an award may be refused enforcement if it has

340 As a result, if an application has been made for enforcement in Hong Kong, the applicant cannot make another application for enforcement in the Mainland (unless the award has been partially satisfied in Hong Kong in which case an application can be made in the Mainland to enforce payment of the balance under section 93(2)). 341 [2019] HKCFI 398. 342 Article 5 of the Arrangement. 343 See section 4(1) of the Limitation Period Ordinance (Cap. 347). 344 See article 239 of Chapter XX of the Civil Procedure Law of the PRC. 345 Ibid., sections 98A to 98D. 346 Ibid., section 2. 347 Ibid., section 98A. 348 Ibid., section 98B. 349 See sections 98C (evidence to be produced for enforcement of Macao awards) to 98D (refusal of enforcement of Macao awards) of the HK Arbitration Ordinance.

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not yet become binding on the parties; or if it has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made (infra mns 145–147). bb) Enforcement of awards that were set aside. It is well-established at common law 145 that an award that has been set aside is deprived of all legal effect, and can no longer be enforced. This applies to the enforcement of domestic awards as well as foreign awards. The Hong Kong courts can suspend enforcement pending setting aside proceedings but will take into account the prospects of the setting aside application and allow enforcement to proceed if it is unlikely that the award will be set aside.350 It is clear that a domestic award that has been set aside by a Hong Kong court cannot be enforced in Hong Kong. The situation is less clear when it comes to enforcement of foreign awards that were set 146 aside. Both the HK Arbitration Ordinance and the New York Convention give effect to the principles of finality and comity.351 The Convention distinguishes between proceedings to set aside an award in the court of supervisory jurisdiction and proceedings in the court of enforcement.352 Proceedings to set aside are governed by the law under which the award was made or the law of the place where it was made, while proceedings in the court of enforcement are governed by the law of that forum. Under the Ordinance and the Convention, the primary supervisory function in respect of arbitrations rests with the court of supervisory jurisdiction as distinct from the enforcement court. In the premises, it is likely that an award that has been set aside by a foreign court 147 (which is also the supervisory jurisdiction) will not be enforced by the Hong Kong courts. Theoretically, if an award is set aside by a foreign court (which is the enforcement court rather than the supervisory jurisdiction), the Hong Kong court (being another enforcement court) will not bound by the judgment of the foreign court.353 Moreover, The Hong Kong court in Dana Shipping and Trading SA v. Sino Channel Asia Ltd354 confirmed that even where a ground for setting aside an award is made out within the terms of s.89(2)(f)(ii) of the HK Arbitration Ordinance (i.e. that the award has been set aside by a competent authority of the country in which it was made), the Hong Kong court as an enforcement court has residual discretion to permit or refuse enforcement of an award, subject to recognized legal principles.355 In practice, however, the Hong Kong courts will generally refuse to enforce a Convention award if it has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made.356

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Section 86(4), HK Arbitration Ordinance. See HK Arbitration Ordinance, section 73 and article VI NYC. 352 Article VI NYC. See also Westacre Investments Inc. v. Jugoimport-SPDR Holdings Co. Ltd [1998] 3 WLR 770 at 808 and supra H mns 152 et seq. 353 This corresponds to the general view that only a setting aside decision by the courts at the seat of the arbitration will create a defence under article V(1)(e) NYC: supra B mn. 286. 354 HCCT47/2015. 355 Ibid., paras 14–15. The learned judge emphasized that under such circumstances, enforcement of the award “may (and not shall)” be refused by the Hong Kong court, and noted that such discretion has to be exercised on recognized legal principles set out in Hebei Import & Export Corp v. Polytek Engineering Co. Ltd (1999) 2 HKCFAR 111. Further, the learned judge adopted the approach in Yukos Capital Sarl v. OJSC Oil Co. Rosneft [2014] 2 CLC 162 and ruled that there is no principle of ex nihilo nil fit under English law. In other words, the Hong Kong court ruled that a party has no automatic right by virtue of a foreign judgment given by a foreign supervisory court at the seat of arbitration (which sets aside an arbitral award) to resist enforcement of an arbitral award in Hong Kong. 356 Pursuant to section 89(2)(f)(ii) of the HK Arbitration Ordinance, the Hong Kong courts are entitled to refuse to enforce an award if it has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made. 351

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cc) Set-off. It is generally accepted that a party can set off at the enforcement stage with a claim that has already been adjudicated.357 In enforcement proceedings, the Hong Kong courts, like the courts of other Convention jurisdictions, will take into account a defence put forward on the basis that the award debtor has already fulfilled part of whole of the award.

4. Preclusion of grounds for challenge and defences to enforcement 149

As a matter of general principle, a party must put forward its objection as soon as possible, or it will bear the risk of being precluded from raising such challenge at a later stage. This becomes relevant in enforcement and setting aside proceedings in Hong Kong.

a) Preclusion due to failure to object in the arbitral proceedings. A party is deemed to have waived its right to object to a non-compliance with an arbitration agreement or a derogable provision of the HK Arbitration Ordinance, if it knew of the non-compliance, but nevertheless proceeded with the arbitration without stating its objection to such non-compliance within the time limit provided for, or otherwise without undue delay.358 151 A party is taken to have waived the irregularity in question unless it can show that it could not have discovered the same even with reasonable diligence. It is to be noted that knowledge of the breach or error in question is required for such waiver,359 and that a party cannot rely upon an objection on one matter in order to set aside based on another matter.360 150

b) Preclusion due to failure to bring a setting-aside application. Whether a party would be precluded from bringing a setting aside application because of its failure to file a setting aside application at the seat of the arbitration depends very much on its conduct after the award is made.361 For example, if a party indicates to the other party that it is not going to challenge the award, it may be prevented from doing so.362 Waiver may also be by conducts indicating acceptance of the award, such as receiving benefits under an award (including one’s costs or substantive sum) or enforcing or honouring the award.363 In all cases there can be a finding of waiver only if the applicant was aware of the errors in the award. 153 However, as mentioned supra mn. 41, where the respondent has raised objection to the jurisdiction of the arbitral tribunal, and the arbitral tribunal has given a preliminary ruling that it has jurisdiction, the Court of Appeal has held that the respondent has a “choice of remedies”: it may either challenge the preliminary ruling before the supervisory court, or reserve the position and resist the enforcement of the final award without breaching good faith. Similarly, failure by that party to raise a public policy 152

357 This is not expressly provided within the HK Arbitration Ordinance. However, it is well established that a defendant in a civil action has the right to set-off or counterclaim in the same action. Note also that in an action on the award a plaintiff bears the burden of proof, inter alia, that the amount awarded has not been paid or that the award has not otherwise been performed (see Halsbury’s Laws of Hong Kong, 2016 Reissue, para. 25.176). 358 See section 11 of the HK Arbitration Ordinance which adopts article 4 ML. 359 Banner Industrial & Commercial Properties v. Clark Paterson [1990] 47 EG 64. Cf. supra mns 39–41 regarding preclusion of jurisdictional defences. 360 For example, a party cannot rely on an objection as to lack of jurisdiction to show that it has not lost its right to object, where the challenge in question related to improper conduct of the arbitral proceedings. (See Conder Structures v. Kvaerner Construction Ltd [1999] ADRLJ 305). 361 See Merkin, Arbitration Law (Service Issue No. 82), para. 20.51. 362 AA Amram Ltd v. Bremer Co. Ltd [1996] 1 Lloyd’s Rep 494. 363 For a detailed discussion on this issue, please refer to Merkin, Arbitration Law (Service Issue No. 82), para. 20.51, fn. 3–6.

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objection does not automatically preclude it from resisting enforcement, as the supervisory court and the enforcing court have their own public policy.364 It is, however, possible that a party may be precluded by its failure to raise a point before a court of supervisory jurisdiction from raising that point before the court of enforcement. Failure to raise such a point may amount to want of bona fides such as to justify the court of enforcement in enforcing an award.365 The court will have regard to the full circumstances why an active remedy is not pursued and other relevant considerations (such as a clear reservation of rights) as ultimately, the principles of “good faith” and of “choice of remedies” are not mutually exclusive but complementary.366 c) Effect of decisions in setting aside and enforcement proceedings outside Hong 154 Kong. When considering enforcement applications, the Hong Kong courts generally afford deference to decisions of the supervisory court at the arbitral seat. There must be special circumstances for a Hong Kong court to ignore a supervisory court’s decision and render a judgment in conflict with such supervisory court’s decision. In a recent case, Madam Justice Mimmie Chan stated that the Hong Kong court as enforcement court would give “due weight” to the decision of the supervisory court in the arbitral seat in mainland China with regard to a party’s application in mainland China to set aside an award. If the supervisory court accedes to the application, the award is set aside, and enforcement in Hong Kong may be refused under section 95(2)(f)(ii) of the Arbitration Ordinance. The learned judge went on to note that if the supervisory court does not set aside the award, the Hong Kong court, acting as enforcement court, “may still refuse to enforce the award in Hong Kong, if to do so is against public policy in Hong Kong”367. As to foreign awards that were refused enforcement by a foreign court (rather than 155 having been set aside by a foreign court), it was held in a Court of Final Appeal case that refusal by a court of supervisory jurisdiction at the seat of the arbitration does not automatically debar the unsuccessful applicant from resisting enforcement of the award in the court of enforcement.368

V. Immunity 1. State immunity “State immunity” is a concept of public international law, based on the mutual 156 recognition of equality among individual sovereign states, which reflects the maxim of “par in parem non habet imperium” (equals have no authority over one another). Under the doctrine, one sovereign state cannot assert its judicial authority over another and Heibei Import & Export Corp. v. Polytek Engineering Co. Ltd, [1999] 1 HKLRD 665 at 689. Ibid. 366 Astro Nusantara International B.V. v. PT Ayunda Prima Mitra, supra fn. 87. 367 Per the Honourable Madam Justice Mimmie Chan in U v. S [2018] HKCFI 2086, at para. 13. See also Dana Shipping and Trading SA v. Sino Channel Asia Ltd, supra fn. 243. In Dana, the Hong Kong court dismissed the existence of ex nihilo nit fit under English law and adopted the approach established by the English courts of applying the ordinary principles for recognizing foreign judgments to a foreign judicial decision setting aside an arbitral award. 368 See Heibei Import & Export Corp. v. Polytek Engineering Co. Ltd, [1999] 1 HKLRD 665 at 688–689 where the Hong Kong Court of Final Appeal refers to Firm P v. Firm F (YCA II (1997), 247) where a German Court of Appeal refused to enforce an award which had been declared to be enforceable by a United States District Court. The Court of Final Appeal did, however, added that the proposition should be subject to some limitations. 364 365

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cannot by its judicial process make the other sovereign state a party to the legal proceedings against its will. Where sovereign immunity is applicable in its “absolute” form, the national court of a state has no jurisdiction to exercise its judicial authority over another state. Whilst the doctrine is still evolving, some countries adopt the policy of “restrictive immunity”, under which immunity is only granted to a state’s acts in its sovereign capacity (acta jure imperii). Such immunity from suit does not prevail in relation to acts of a foreign state which are within the scope of private law, or are of a commercial character (acta jure gestionis) (commonly referred to as “commercial exception”). Like the PRC, Hong Kong now adopts the policy of “absolute immunity”. This was not the case before the handover, when Hong Kong adopted the policy of “restrictive immunity”. In Democratic Republic of the Congo v. FG Hemisphere Associates LLC (No. 1)369 (“the Congo case”), however, the Court of Final Appeal confirmed that after the handover, the law of state immunity of Hong Kong is that of “absolute immunity”. In the Congo case, the Court of Final Appeal noted that when a state entered into an arbitration agreement with a private individual or a company, it involved merely the assumption of contractual obligations vis-a-vis the other party to the agreement.370 Such arrangement did not constitute a submission to any other state’s jurisdiction under common law, and, unlike some jurisdictions with enacted statutes deeming submission to arbitration to be an implied waiver of state immunity in that state’s courts,371 there was no legislation in Hong Kong which so deemed. As the rationale of state immunity remained the mutual recognition of equality among states, an impleaded state should only be regarded as having waived state immunity when it had unequivocally submitted to the jurisdiction of the forum state when the forum state’s jurisdiction was invoked before the Hong Kong courts. It is now clear that foreign states enjoy absolute immunity and the “commercial exception” no longer applies in Hong Kong, unless there is very unequivocal waiver by the state. The Court of Final Appeal has ruled that an arbitration agreement by itself would not be regarded as such waiver.372 Foreign states therefore enjoy absolute immunity, irrespective of the nature of the claim or the underlying transaction, unless such immunity is unequivocally waived.373 On 26 August 2011, the Standing Committee of the National People’s Congress issued an Interpretation on articles 13 and 19(3) of the Basic Law which was consistent with the views of the majority of the Court of Final Appeal in the Congo case. The Court of Final Appeal judgment in the Congo case was therefore declared final.374 369

(2011) 14 HKCFAR 95. Ibid., at 225. 371 Ibid., at 226–227. As an example, the Court of Final Appeal referred to s.9 the State Immunity Act in England, which provides that “Where a State has agreed in writing to submit a dispute which has arisen, or may arise, to arbitration, the State is not immune as respects proceedings in the courts of the United Kingdom which relate to arbitration.” Similar legislation can also be found in Australia and the US. 372 Ibid., at 227, the court referred to Lopes LJ’s observations in Mighell v. Sultan of Johore [1894] 1 QB 149 at 161, that “the only mode in which a sovereign can submit to the jurisdiction is by a submission in the face of the Court, as, for example, by appearance to a writ.” 373 Per Chan PJ, Ribeiro PJ and Sir Anthony Mason NPJ, at para. 386, “The HKSAR has no such legislation. The common law rules therefore apply and they are very chary about implying any waiver. They require there to be no doubt that a submission to the court’s jurisdiction is actually what the impleaded State intends before jurisdiction is assumed.” The Court of Final Appeal further referred to Lopes LJ’s observations in Mighell v. Sultan of Johore [1894] 1 QB 149 at 161, that “the only mode in which a sovereign can submit to the jurisdiction is by a submission in the face of the Court, as, for example, by appearance to a writ.” 374 See Democratic Republic of the Congo v. FG Hemisphere Associates LLC (No. 2) (2011) 14 HKCFAR 395. 370

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2. Crown immunity The concept of “state immunity” should be distinguished from that of “Crown 162 immunity”. In Hua Tian Long (No. 2),375 the court clarified that in Hong Kong, “state immunity” does not apply to the PRC and its entities. In particular, the court dismissed the defendant’s “modified sovereign claim” that sovereign immunity could be applied inter-provincially within the same state. Noting that the concept of “sovereign immunity” as generally understood was a “logical misnomer”, the court concluded that state immunity was fundamentally premised upon considerations of comity and mutual respect for the dignity of foreign states and therefore should not apply in any form within the same state.376 By contrast, the concept of “Crown immunity” is a common law concept originated 163 from the “inequality of the ruling and the ruled”, as represented by the maxim “the sovereign can do no wrong”. As a result, the Crown was not bound by statute, unless named expressly or by necessary implication and at common law, it enjoyed immunity from being sued in its own courts.377 The Crown Proceedings Ordinance (Cap. 300) in Hong Kong (enacted by the British government in 1957 to modify the common law rule) permitted proceedings to be brought against the government of Hong Kong. The Hong Kong court in the Hua Tian Long case confirmed that the establishment of the new constitutional order upon the handover did not alter this position and held that after the handover, the PRC in turn enjoyed the like “Crown immunity” accorded to the British Crown in the colonial times and that “Crown immunity” still subsisted. Thus, Crown immunity could be invoked as a matter of Hong Kong law.378 It is therefore clear that the PRC government and its entities cannot be sued in the courts of Hong Kong, unless such immunity is waived.379 There were uncertainties as to whether a state-owned enterprise (SOE) of the PRC 164 may claim crown immunity. In TNB Fuel Services SDN BHD v. China National Coal Group Corporation [2017] HKCFI 1016, the Court denied China Coal’s claim for crown immunity, relying on a letter from the Hong Kong and Macao Affairs Office of the State Council of the Central People’s Government, which stated that an SOE, is “an independent legal entity, which carries out activities of production and operation on its own, independently assumes legal liabilities and there is no special legal person status or legal interests superior to other enterprises”, and that, save in certain “extremely extraordinary circumstances where the conduct was performed [by the SOE] on behalf of the state via appropriate authorisation, etc.”, the SOE would not be able to claim crown immunity.

3. Conclusion Finally, it is a matter of fact that the law on immunity in the Hong Kong Special 165 Administrative Region (as well as that in the PRC) is still evolving. When dealing with arbitration provisions involving Hong Kong, practitioners are advised to take into account the specific circumstances in each case. 375

[2010] 3 HKLRD 611. Ibid., at 624. 377 Ibid., at 625. 378 Ibid., at 633–634. 379 Note, however, that the court will take into account conduct and timing of the party raising an immunity claim. In the Hua Tian Long case, it was held that the defendant had effectively waived its right to claim Crown immunity by its subsequent conduct in the proceedings (i. e. it was aware of its rights to claim immunity but did not raise an immunity claim in good time). 376

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L. International Arbitration in India Bibliography: Ahuja/Mal, The 2019 Indian arbitration reforms: one step forwards and two steps backwards, (2019) 22 Int’l Arb. L. Rev. 224–240; Anukaran, Scope of Arbitrability of Disputes from the Indian Perspective, (2018) 14 Asian Int’l Arb. J. 71–88; Avinash, A Comparative Analysis of the Law Relating to Anti-Aribtration Injunctions, (2014) Bharati L. Rev. 173; Biswas, Introduction to Arbitration in India – The Role of the Judiciary, Kluwer Law International 2014; Born/Spears, International Arbitration and India: “A Truly Excellent Judgment!”, (2012) 1 Indian Journal of Arbitration Law 4–8; Chawla, Legislation Update: India, (2018) 14 Asian Int’l Arb. J. 215–222; Goldsmith/Taylor, The Opportunities for Post-Brexit International Arbitration in London and India, (2017) 4 NLUJ Law Rev. 1–20; Gupta, A New Dawn for India – Reducing Court Intervention in Enforcement of Foreign Awards, (2013) 2 Indian Journal of Arbitration Law 10–23; Jain, Pathological Arbitration Clauses and Indian Courts, (2008) 25 J. Int’l Arb. 433–448; Kachwaha, Enforcement of Arbitration Awards in India, (2008) 4 Asian Int’l Arb. J. 64–82; Kämpf/Kautz, India, in: Conrad/Münch/Black-Branch (eds), International Commercial Arbitration, 2013, 553–641; Knoll/Pathak, The Amendments to the Indian Arbitration and Conciliation Act of 1996: A view from Abroad, (2018) 199 ICA Arbitration Quarterly 7–18; Kumar et al., Interpretation and Application of the New York Convention in India, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445–476; Kwatra, Arbitration and Conciliation Law of India, 7th ed., Universal Law Publ. 2008; Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, Kluwer Law International 2003; Maragulia, The Continuing Pro-Arbitration Trend in India: A New Global Hub?, (2016) 8 Y.B. Arb. & Mediation 252–267; Moonka/Mukherjee, Impact of the recent Reforms on Indian Arbitration Law, (2017) Brics Law J. 58–71; Motiwal, Alternative Dispute Resolution in India, (1998) 15 J. Int’l Arb. 117–127; Mukhopadhaya, India, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, Oxford University Press 2014, 217–241; Nair, Surveying a Decade of the ‘New’ Law of Arbitration in India, (2007) 23 Arb. Int’l 699–739; Nariman, National Report for India (2015 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 104, February 2019; Nariman, India and International Arbitration, (2009) 41 George Wash. Int’l L. Rev. 367–379; Nariman, Ten Steps to Salvage Arbitration in India: The First LCIA-India Arbitration Lecture, (2011) 28 Arb. Int’l 115–127; Nelson, International Commercial Arbitration in Asia: Hong Kong, Australia and India Compared, (2014) 10 Asian Int’l Arb. J. 105–136; Pathak/Panjwani, (2017) 34 J. Int’l Arb. 509–544; Prasanth, Arbitration Clause in the Articles of Association of a Company: Scope and Ambit, (2012) 1 Indian Journal of Arbitration Law 75–79; Rakhecha, The Curious Case of Arbitration of Trust Disputes, (2013) 2 Indian Journal of Arbitration Law 165–189; Ramaswamy, Enforcement of Annulled Awards – An Indian Perspective, (2002) 19 J. Int’l Arb. 461–472; Reddy/Nagaraj, Arbitrability: The Indian Perspective, (2002) 19 J. Int’l Arb. 117–149; Rewari, From Bhatia to Kaiser: Testing the Indian Judiciary’s Self-Restraint, (2013) 9 Asian Int’l Arb. J. 97–146; Reyes/Gu, The Developing World of Arbitration: A Comparative Study of Arbitration Reform in the Asia Pacific, Hart Publishing 2018; Sharma, Public Policy under the Indian Arbitration Act – In Defence of the Indian Supreme Court’s Judgment in ONGC v. Saw Pipes, (2009) 26 J. Int’l Arb. 133–147; Sharma, Bhatia International v. Bulk Trading S.A.: Ambushing International Commercial Arbitration Outside India?, (2009) 26 J. Int’l Arb. 357–372; Sinha/Gupta, Arbitrability of Consumer Disputes: Excavating The Hinterland, (2018) 7 Indian Journal of Arbitration Law 120–140; Srinivasan, Arbitrability of Claims Relating to Fraud – Recent Developments in India (2010), available at http://ssrn.com/abstract=1530182 (accessed 1 August 2020); Steinbrück, Jurisdiction to Set Aside Foreign Arbitral Awards in India, (2011) 13 Yearbook of Private International Law 481–495; Zaiwalla, Commentary on the Indian Supreme Court Judgment in Venture Global Engineering v. Satyam Computers Services Ltd, (2008) 25 J. Int’l Arb. 507–511. National legislation: The Arbitration and Conciliation Act 1996 (ACA 1996), available online at https://indiacode.nic.in/handle/123456789/1978?sam_handle=123456789/1362 (accessed 1 August 2020), amended by The Arbitration and Conciliation (Amendment) Act 2015 (ACA 2015) and by The Arbitration and Conciliation (Amendment) Act 2019 (ACA 2019), both available online, inter alia, at www.indiacode.nic.in; Indian Contract Act 1872, available online at https://indiacode.nic.in/handle/ 123456789/2187?view_type=browse&sam_handle=123456789/1362 (accessed 1 August 2020). International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, 330 UNTS 3, ratification status available at https://treaties.un.org.

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L. International Arbitration in India Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of Indian arbitration law................................ II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz ................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... d) Anti-suit and anti-arbitration injunctions....................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal................................................................................... a) Appointment of the arbitral tribunal ............................................... b) Qualifications, impartiality and independence of the arbitrator c) Grounds for challenge, procedural aspects and preclusion of grounds for challenge........................................................................... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) Overview ................................................................................................. b) The request for arbitration ................................................................. c) Equality of arms, fair trial principles and the right to be heard d) Confidentiality ....................................................................................... e) The arbitral award ................................................................................ f) Termination of the arbitration without an award......................... g) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute ................................................................ a) Choice of law and domestic cases..................................................... b) Choice of law and international cases.............................................. 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ...................................

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Part 3. Country Reports 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards ....................................... aa) Overview .......................................................................................... bb) Public policy.................................................................................... 3. Enforcing arbitral awards ......................................................................... a) Overview ................................................................................................. b) Defences to enforcement of foreign awards.................................... aa) Overview .......................................................................................... bb) Lack of jurisdiction........................................................................ cc) Breach of public policy ................................................................. dd) Enforcement of awards that have been set aside.................... 4. Preclusion of grounds for challenge and defences to enforcement a) Failure to object..................................................................................... b) Effect of foreign decisions and res judicata ....................................

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I. Introduction India has a long tradition of arbitration.1 It is said that the basic idea of arbitration, i. e. the final and binding settlement of disputes by third persons chosen by the parties, was already well-known to Hindus in ancient India.2 During the era of British law, the first “modern” arbitration law was introduced by the Bengal Regulations in 1772. In 1899, an Indian Arbitration Act, which was closely modelled on English arbitration law, was enacted but applied only to the presidency towns of Bombay (now Mumbai), Madras (now Chennai), and Calcutta (now Kolkata).3 Beginning in 1908, also the revised Civil Procedure Code contained provisions relating to arbitration. In order to consolidate both statutory regimes, a new Arbitration Act was enacted in 1940. Although the act was considered to represent a progress in the development of domestic arbitration, it allowed for and indeed required substantial court intervention in practice.4 2 Furthermore, in 1937 the Arbitration (Protocol and Convention) Act 1937 was enacted to give effect to the Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Awards of 1927, which had been signed by India. In 1961, the Foreign Awards (Recognition and Enforcement) Act 1961 was enacted to give effect to the New York Convention of 1958. In addition, India has signed many bilateral investment treaties (but not the ICSID Convention) which provide for arbitration as a method of dispute resolution. 3 In 1996, the Arbitration Act 1940 was replaced by the Arbitration and Conciliation Act (ACA 1996) in order to reduce excessive court intervention in the arbitral process. The 1996 Act is based on the UNCITRAL Model Law and, therefore, provides a unified legal framework for the fair and efficient settlement of disputes. However, despite the modernization of the arbitration law, the Indian judiciary has proven to be rather reluctant in applying the new provisions in a pro-arbitration spirit.5 Thus, many Indian 1

1 Cf. the historical overview in Rautray, Master Guide to Arbitration in India, 2008, 1 et seq.; Kämpf/Kautz, in: Conrad/Münch/Black-Branch (eds), International Commercial Arbitration, 2013, mns 12.10 et seq. 2 Biswas, Introduction to Arbitration in India, 2014, § 1.04. 3 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.12. 4 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mns 9.16 et seq. 5 It is, however, recognized that decisions rendered under the Arbitration Act 1940 or under the Foreign Awards Act 1961 should be considered with caution as the 1996 Act is said to have brought a new approach to arbitration, cf. Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155;

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practitioners remain skeptical whether India will be able to compete with established arbitration locations such as Dubai, Singapore, and Malaysia.6 In recent years, the Indian government introduced several amendments to the 1996 Act to further minimize the extent of judicial intervention in arbitration. In 2016, a number of changes were implemented by the Arbitration and Conciliation (Amendment) Act 2015 (2015 Act). In 2019, further reforms were enacted by the Arbitration and Conciliation (Amendment) Act 2019 (2019 Act). So far, however, the 2019 Act has been proclaimed in force only in part (cf. section 1(2) 2019 Act). One of the new sections of the 2019 Act, which have not yet been put into operation, is part IA of the Arbitration Act establishing, inter alia, the new Arbitration Council of India (ACI), a government-appointed body which shall regulate the institutionalization of arbitration in India – a development that commentators have described as “alarming” as the Council will in all likelihood become a “de facto regulator of arbitral proceedings in India” without, however, being neutral and independent.7 This latest legislative reform is also perceived as creating an accreditation system for arbitrators that de facto restricts accreditation (and appointments) to Indian nationals.8 It remains to be seen whether and, if so, when the Central Government will publish the required notification to put these new provisions into force.

1. The legal framework In principle, the legal framework for arbitration proceedings set by Part I and Part II 4 of the 1996 Act is arbitration-friendly. Indian arbitration law is easily accessible to foreign arbitration practitioners since its general rules and principles are very similar to other national arbitration laws based on the UNCITRAL Model Law like German law or arbitration statutes following the same guiding principles such as the English Arbitration Act of 1996. Due to its historical ties to England and the English legal system, Indian courts also take particular note of English case law as well as publications of English practitioners and academics when interpreting the 1996 Act.9 a) Domestic and international arbitration. At a general level, Indian arbitration law 5 does not distinguish between domestic and international arbitration but only between Indian-seated and foreign-seated arbitration. Part I of the 1996 Act applies to all arbitrations which have their seat in India, whereas Part II deals with the recognition and enforcement of foreign arbitral awards in accordance with the New York Convention (Chapter 1) and the Geneva Convention of 1927 (Chapter 2). Since 2015, certain provisions in Part I also apply to international commercial arbitration with the place of arbitration outside India, unless otherwise agreed by the parties.10 However, at a more distinct level the procedural mechanisms vary depending on whether both parties are Indian or not. For example, in domestic arbitrations the “court” as defined in section 2 means either the principal Civil Court or the High Court, whereas in the case of international commercial arbitration the competent state court is always the High Centrotrade Minerals and Metal Inc. v. Hindustan Copper Ltd, (2006) 11 SCC 245; cf. also Rautray, Master Guide to Arbitration in India, 2008, 13. 6 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.52; Rewari, (2013) 9 Asian Int’l Arb. J. 97, 145; foreign lawyers have expressed similar doubts, see, e.g. Chawla, (2018) 14 Asian Int’l Arb. J. 215, 222; Nelson, (2014) 10 Asian Int’l Arb. J. 105, 136; for a more optimistic view see Goldsmith/Taylor, (2017) 4 NLUJ Law Rev. 1, 20. 7 Ahuja/Mal, (2019) 22 Int’l Arb. L. Rev. 224, (232–234). 8 Ahuja/Mal, (2019) 22 Int’l Arb. L. Rev. 224 (237). 9 Regular references are made, inter alia, to Redfern and Hunter on International Arbitration, Russell on Arbitration, or Dicey & Morris on the Conflict of Laws. 10 Section 2(2) ACA 1996.

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Court. Moreover, in domestic arbitrations the substitute appointment of an arbitrator pursuant to section 11 ACA 1996 is made by the High Court, whereas in the case of international commercial arbitration the arbitrator is appointed by the Supreme Court (section 11(12) ACA 1996).11 Furthermore, section 28(1)(a) stipulates that in domestic arbitrations the parties may not derogate from Indian law as the law governing the substance of the dispute. Only in international commercial arbitration may a conflictof-laws analysis take place (section 28(1)(b)). 6

b) Commercial and non-commercial arbitration. Part I of the 1996 Act governs both commercial and non-commercial arbitration, thereby departing from article 1(1) ML, which restricts the application of the UNCITRAL Model Law to “international commercial arbitration”.12 Part II, in contrast, applies only to foreign arbitral awards relating to disputes arising out of legal relationships which are considered as commercial under Indian law (section 44 ACA 1996). This restriction follows from India’s declaration under article I(3) of the New York Convention that India will apply the New York Convention only to “commercial” arbitrations. Thus, section 1(f) ACA 1996 reflects the wording of article I(3) NYC rather than reproducing the Model Law definition of the term “commercial”. Apart from this limited commercial reservation, the 1996 Act does not contain any special rules for non-commercial arbitration.

c) Ad hoc and institutional arbitration. The 1996 Act does not differentiate between ad hoc and institutional arbitration. Section 2(1)(a) expressly states that “arbitration” means “any arbitration whether or not administered by a permanent arbitral institution”. As a result, the 1996 Act is equally applicable to ad hoc and institutional arbitration proceedings. Like the UNCITRAL Model Law and most national arbitration laws, the 1996 Act recognizes the principle of party autonomy by accepting and giving effect to the parties’ agreements relating to the arbitration process. For example, the parties are free to determine the number of arbitrators,13 the procedure for appointing the arbitrators14 and the procedure for challenging an arbitrator,15 as well as the procedure to be followed by the arbitral tribunal in conducting the proceedings.16 Thus, the default rules of the 1996 Act do not apply in case of an institutional arbitration where the institutional arbitration rules contain more specific provisions governing the arbitration. In all other cases where the parties have chosen arbitration without agreeing on special arrangements for initiating the proceedings, selecting the arbitrators and determining the procedural rules, the 1996 Act provides for subsidiary provisions. 8 Several arbitration institutions such as the Indian Council of Arbitration (ICA)17 and the Federation of Indian Chambers of Commerce and Industry Arbitration and Conciliation Tribunal18 offer administrative and secretarial services and provide rules, facilities, arbitrator panels, and educational training. The growing importance of India as a place of arbitration is also demonstrated by the establishment of a new liaison office 7

11 Pursuant to the new provisions of the 2019 Act (not yet in force), the substitute appointment in international commercial arbitrations will be made by the arbitral institution designated by the Supreme Court. Yet no deadline is prescribed for the designation of arbitral institutions, and pending such designation, the procedural rules are unclear. Ahuja/Mal, (2019) 22 Int’l Arb. L. Rev. 224 (226), argue that the procedure under the 2015 amendment would continue to apply. 12 Section 2(1)(a) ACA 1996. 13 Section 10(1) ACA 1996. 14 Section 11(2) ACA 1996. 15 Section 13(1) ACA 1996. 16 Section 19(2) ACA 1996. 17 See http://www.icaindia.co.in (accessed 1 August 2020). 18 See http://www.ficci.in/sector.asp?sectorid=48 (accessed 1 August 2020).

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of the Singapore International Arbitration Centre (SIAC) in Mumbai in 2013.19 In 2017, a second SIAC representative office was opened in GIFT City, Gujarat. d) The territoriality principle, the seat of the arbitration and the lex arbitri. Indian 9 arbitration law follows the territoriality principle enshrined in article 1(2) ML. Pursuant to section 2(1), Part I of the 1996 Act only applies “where the place of arbitration is India”. Whereas the 1996 Act did not provide for any extraterritorial application of Part I (in contrast to article 1(2) of the UNCITRAL Model Law), the new section 2(2) as amended in 2015 stipulates that section 9 (interim relief) and section 27 (judicial assistance in the taking of evidence) also apply to arbitrations seated outside India. Consequently, Indian states courts now have the power to grant interim measures and to give assistance in the taking of evidence to foreign arbitration. Indian arbitration law has thus caught up with the general international trend that national courts are empowered to assist not only domestic but also foreign arbitrations.20 As regards the enforcement of arbitration agreements, section 2(1) is supplemented by section 45 ACA 1996 which implements article II(3) of the New York Convention and obliges the court to refer the parties to arbitration if there exists an arbitration agreement providing for a foreign arbitration seat. In 2002, however, the Indian Supreme Court extended the scope of application of the 10 1996 Act in its landmark decision Bhatia International v. Bulk Trading.21 In this decision, the Supreme Court permitted the Indian courts to issue cross-border interim measures in support of foreign arbitrations. The Supreme Court noted that the 1996 Act was not well-drafted and contained a “lacunae” as parties to a foreign arbitration would be remediless in cases where the properties and assets are in India. The Supreme Court therefore held that Part I of the 1996 Act applies to all arbitrations, including foreign arbitration, unless the parties by agreement exclude all or any of its provisions.22 Based on this decision, the Indian Supreme Court went even further in the case of 11 Venture Global Engineering v. Satyam Computer Services, ruling that the Indian courts were competent to review and set aside foreign arbitral awards pursuant to section 34 ACA 1996 unless the Parties by explicit or implied agreement had excluded Part I of the 1996 Act.23 The underlying rationale of this decision was the court’s view that India was the proper forum for annulment proceedings although the parties had chosen London as the seat of the arbitration.24 The Supreme Court argued that, despite a choice-of-law clause in favour of the law of Michigan, the main contract had an “intimate and close nexus to India and its laws” as the parties had agreed on a non-obstante clause which obliged the parties to act at all times in accordance with the Companies Act and other applicable Acts or Rules in force in India at any time. In the Supreme Court’s view, this clause had effectively overridden the parties’ choice of the lex causae and granted the parties the right to challenge the award in the Indian courts. Although the judgments in Bhatia and Venture Global Engineering were widely regarded as a major setback for

19 See https://www.siac.org.sg/2014-11-03-13-33-43/about-us/siac-india-representative-offices (accessed 1 August 2020). 20 Cf., e.g., § 1025(2) German ZPO; § 577(2) Austrian ZPO; section 2(3) AA 1996; 28 USC § 1782. 21 (2002) 4 SCC 105. 22 Bhatia International v. Bulk Trading, (2002) 4 SCC 105, para. 32. 23 Venture Global Engineering v. Satyam Computer Services, (2008) 4 SCC 190; for a critical commentary cf. Steinbrück, (2011) 13 Yearbook of Private International Law 481; for a more positive assessment of the judgment in light of the facts of the case, see Zaiwalla, (2008) 25 J. Int’l Arb. 507 et seq. 24 Under the old arbitration law, the Supreme Court had already taken the same view in National Thermal Power Corporation v. The Singer Company YCA XVIII (1993), 403, reasoning that due to the application of Indian law to the contract, the Indian courts had jurisdiction for the challenge of the award.

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India’s efforts to modernize its arbitration law,25 the Supreme Court confirmed its position in the case of Phulchand Exports Ltd v. OOO Patriot.26 12 One year later, however, in Bharat Aluminium v. Kaiser Aluminium the Supreme Court adopted a different view, holding that Part I of the 1996 Act applies “only” to arbitrations which take place in India.27 The court expressly stated that the 1996 Act had accepted the territoriality principle adopted in the UNCITRAL Model Law and concluded that Part I does not apply to international commercial arbitrations governed by Part II. However, the Supreme Court curtailed the positive effects of this judgment by stating that it would only apply prospectively to arbitration agreements entered into after 6 September 2012. 13 In 2012, the Supreme Court confirmed the Bharat Aluminium judgment in Reliance Industries Limited v. Union of India,28 although it could not apply it since the arbitration agreement had been concluded before 2012 and, therefore, the court was bound by the Bhatia decision. However, the Supreme Court held that the parties had excluded the application of Part I of the 1996 Act by choosing London as the seat of the arbitration and English law as the governing law of the arbitration agreement.29 The Court in particular emphasized that the seat of the arbitration as chosen by the parties refers to the “juridical seat” which, in the absence of an express agreement, has to be regarded as a “strong prima facie presumption” that the law of the seat is the curial law of the arbitration. This choice necessarily implies the exclusion of Part I of the 1996 Act.30 In 2015, the Supreme Court confirmed this new approach in another decision relating to the same dispute.31 14 As a result, Indian courts have no power to render any decision with respect to foreign arbitral awards.32 As regards the courts’ limited jurisdiction for annulment proceedings, the decision in Bharat Aluminium has brought Indian arbitration law in line with most other national arbitration regimes which only permit the review and annulment of domestic awards.33 15

e) Arbitration and other ADR mechanisms (mediation, expert determination). The 1996 Act does not only offer a modern legal framework for arbitration but, in Part III, also contains a comprehensive set of procedural rules for conciliation proceedings which are based on the UNCITRAL Conciliation Rules of 1980. These rules address the procedural aspects of the entire conciliation process, including the selection and appointment of conciliators (sections 63 and 64), the commencement (section 62) and termination (section 76) of conciliation, the conduct of the conciliation (sections 66 et seq.), settlement agreements (sections 73 and 74), confidentiality (section 75) and

25 Cf., e. g. Gupta, (2013) 2 Indian Journal of Arbitration Law 10; Sharma, (2009) 26 J. Int’l Arb. 357; Nariman, (2011) 37 Arb. Int’l 115; Nariman, (2009) 41 George Wash. Int’l L. Rev. 367, 375 et seq.; Steinbrück, (2011) 13 Yearbook of Private International Law 481. 26 (2011) 10 SCC 300. 27 Bharat Aluminium v. Kaiser Aluminium, (2012) 9 SCC 552, para. 63. 28 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014. 29 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014, para. 41. 30 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014, para. 68 (quoting a passage from Mustill and Boyd, Law and Practice of Commercial Arbitration in England, 2nd ed.). 31 Union of India v. Reliance Industries Ltd, Special Leave Petition (Civil) No. 11396 of 2015; see also Eitzen Bulk A/S v. Ashapura Minechem Limited, Supreme Court, Civil Appeal Nos. 5131–5133 of 2016, para. 32. 32 Cf. also Indus Mobile Distribution Private Limited v, Datawind Innovations Private Limited, Civil Appeal Nos. 5370–5371 of 2017, paras 20, 21. 33 Cf. Born/Spears, (2012) 1 Indian Journal of Arbitration Law 4.

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admissibility of evidence in other proceedings (section 81), and post-conciliation issues, such as the conciliator acting as arbitrator (section 80). By virtue of the Code of Civil Procedure (Amendment) Act 1999, section 89 and 16 Order X, Rules 1-A to 1-C were inserted into the Code of Civil Procedure, dealing with the settlement of disputes outside the courts such as conciliation, mediation, or settlement through Lok Adalat (“People’s court”), i. e. a non-adversarial ADR system with mock courts where the parties themselves plead their case in order to reach a compromise. Arbitration institutions also offer rules for other ADR mechanisms.34 The Indian 17 Institute of Arbitration & Mediation (IIAM), for example, is providing a number of alternative dispute resolution services, including negotiation, mediation, conciliation, and settlement conferences. The Delhi Mediation Centre of the District Courts in Delhi has developed a unique method of alternative dispute resolution which is described as “judicial mediation”. This form of dispute resolution was initiated by a Committee appointed by the Chief Justice of India and is offered to litigants free of charge. On the conclusion of a successful mediation the plaintiff is even entitled to a refund of the court fees.

2. The guiding principles of Indian arbitration law Like in most other national legal systems, the history of Indian arbitration law has 18 been marked by recurring efforts to reduce court intervention in the arbitral process. Also the 1996 Act endorses the idea that party autonomy rather than judicial intervention should be the hallmark of a progressive arbitration law, as is indicated by various provisions stating “unless otherwise agreed by the parties …”35 or “the parties are free to agree …”.36 In line with this principle, section 5 of the 1996 Act states that “notwithstanding anything contained in any other law for the time being in force, in matter governed by this Part, no judicial authority shall intervene except where so provided in this Part”. Although section 5 starts with a non-obstante clause not contained in the UNCITRAL Model Law, it demonstrates that one of the key concepts of the 1996 Act is the restriction of state court intervention.37 However, although the UNCITRAL Model Law has been adopted almost to the letter 19 with the clear intent to restrict the extent of judicial intervention during the course of arbitration proceedings, the Indian judiciary has not given full effect to the 1996 Act’s provisions.38 Rather, it has rendered a number of decisions which subjected Indianseated arbitrations as well as certain foreign-seated arbitrations to the close scrutiny of the courts, in particular by broadly construing the public policy ground for setting aside arbitral awards.39 Thus, the pronounced pro-arbitration approach of the 1996 Act has 34

For an overview on ADR mechanisms in India, cf. Motiwal, (1998) 15 J. Int’l Arb. 117 et seq. Cf. sections 3(1), 11(1), 15(4). 21, 23(3), 24(1), 25, 26(1), 29(1), ACA 1996. 36 Cf. sections 10(1), 13(1), 19(2), 20(1), 22(1) ACA 1996. 37 Cf. Konkan Railway Corp. Ltd v. M/S Mehul Construction, (2000) 7 SCC 201; Union of India v. Popular Construction Co., 2001 Supp(3) SCR 619. 38 Since the judiciary is the final interpreter of the laws pursuant to article 141 of the Indian constitution, any interpretation of the 1996 Act given by the Indian Supreme Court is binding and final until overruled by the Supreme Court itself. As regards judgments of the Supreme Court itself, the settled position of Indian law is that the judgment of a larger bench is binding on a smaller bench. Thus, where a single judge or a smaller bench doubts the correctness of a decision of a larger bench, it can only refer the matter to the Chief Justice of the concerned court and request that the matter be placed before a larger bench, cf., e. g. Siddharam Satlingappa Mhetre v. State of Maharashta, (2011) 1 SCC 694, para. 138. 39 Bhatia International v. Bulk Trading, (2002) 4 SCC 105; Venture Global Engineering v. Satyam Computer Services, (2008) 4 SCC 190; Phulchand Exports Ltd v. OOO Patriot, (2011) 10 SCC 300. 35

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not always been confirmed by the Indian judiciary that, as a prominent Indian commentator has put it, “had become accustomed to supervising arbitral awards”.40 However, the latest series of Supreme Court decisions indicates that the general attitude of the courts with respect to arbitration is on the verge of changing.

II. The arbitration agreement 20

Like the UNCITRAL Model Law, the 1996 Act offers a definition of an arbitration agreement. Pursuant to section 7(1), an “arbitration agreement” within the meaning of the Act is an “agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not”. This definition comprises both submission agreements with respect to existing disputes as well as agreements dealing with future disputes, which prevail by far in modern practice. Being the cornerstone of arbitration, arbitration agreements often give rise to satellite litigation relating to their existence, validity, and interpretation.

1. The doctrine of separability The doctrine of separability is accepted in Indian law and has been explicitly codified in section 16(1)(a) ACA 1996, which states that an “arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract”. Thus, also under Indian law the arbitration clause is legally distinct from the main contract and, therefore, empowers the arbitral tribunal to declare the main contract null and void without, at the same time, invalidating the arbitration clause as the basis of its jurisdiction (section 16(1)(b) ACA 1996).41 Moreover, being considered a collateral term of the main contract, it will survive after the main contract has been terminated.42 22 The Supreme Court has confirmed and clarified the effects of the doctrine of separability in several decisions.43 In Enercon (India) Limited v. Enercon GmbH, for example, the Supreme Court observed that the concept of separability of the arbitration agreement from the underlying contract is “a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract”.44 21

2. The law applicable to the arbitration agreement 23

Like the UNCITRAL Model Law, the 1996 Act does not stipulate expressly which law governs the arbitration agreement. Section 7 ACA 1996 only sets forth form requirements but does not deal with other issues such as the personal capacity to conclude an arbitration agreement, arbitrability, and the formation and interpretation of an arbitration agreement. 40

Nariman, (2009) 41 George Wash. Int’l L. Rev. 367 (378). Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014. 42 M/S P. Manohar Reddy and Bros v. Maharashtra Krishna Valley Development Corporation, (2009) 2 SCC 494; DHV BV v. Tahal Consulting Engineers Ltd, [2007] INSC 913 (SC). 43 Cf. Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014, paras 60 et seq.; Enercon (India) Limited v. Enercon GmbH, Civil Appeal No. 2086 of 2014, paras 79 et seq.; Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155; Reva Electric Car Company P. Ltd v. Green Mobil, (2012) 2 SCC 93. 44 Enercon (India) Limited v. Enercon GmbH, Civil Appeal No. 2086 of 2014, para. 80. 41

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In line with general conflict-of-law principles and most modern arbitration laws, 24 the parties are free to agree on the governing law of the arbitration agreement.45 It is also recognized that the law applicable to the arbitration agreement is distinct from the law governing the substance of the dispute.46 If there is no express or implied choice of the law governing the main contract or the arbitration agreement, it is presumed that the parties have intended that the proper law of the arbitration agreement is the law of the seat of the arbitration. However, if there is an express choice of the law applicable to the main contract and no clear indication that the arbitration agreement should be governed by another law, the chosen law also applies to the arbitration agreement.47 The proper law of the arbitration agreement governs the validity, effect, and inter- 25 pretation of the arbitration agreement, i. e. such law will decide whether the arbitration agreement covers the dispute between the parties, whether the arbitration agreement binds the parties even when one of them alleges that the contract is void or has been discharged by breach or frustration, and whether the arbitration clause would equally apply to a different contract between the same parties or between one of those parties and a third party.48

3. The validity of the arbitration agreement (capacity, arbitrability, form) The intention of the parties to submit certain disputes to arbitration must be 26 expressed in their contract. To constitute an arbitration agreement, the wording must clearly indicate a determination and obligation for arbitration, i. e. the parties’ willingness to refer disputes to an arbitral tribunal for adjudication in an impartial manner and to be bound by the award as a final decision on the merits.49 In contrast, a clause that permits either party who is not satisfied with the decision to file a civil suit will not be considered an arbitration agreement.50 a) Capacity to conclude arbitration agreements. The capacity to conclude arbitra- 27 tion agreements is regulated in sections 10 to 12 of the Indian Contract Act 1872 where it is stipulated that every person (including a foreigner) who is competent to contract can also enter in an arbitration agreement, provided that he has attained the age of majority according to the law to which he is subject and that he is of sound mind and not disqualified from contracting under the law by which he is governed. Accordingly, like in most other countries, any person being capable to enter into a contractual relationship may conclude an arbitration agreement.51 However, the effect of an arbitration agreement may be restricted by special legislation such as the Consumer Protection Act 1986, which provides for specific remedies before the Redressal Agency

45 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014; National Thermal Power Corporation v. Singer Company, (1992) 3 SCC 551. 46 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014; Sumitomo Heavy Industries Ltd v. Ongc Ltd, (1998) 1 SCC 305; National Thermal Power Corporation v. Singer Company, (1992) 3 SCC 551. 47 National Thermal Power Corporation v. Singer Company, (1992) 3 SCC 551; Nirma Ltd v. Lurgi Energie und Entsorgung GmbH, AIR 2003 Guj 145. 48 National Thermal Power Corporation v. Singer Company, (1992) 3 SCC 551, para. 6. 49 In State of Orissa v. Damodar Das, (1996) 2 SCC 216; M/s Nandan Biomatrix Limited v. D 1 Oils Limited, (2009) 4 SCC 495, para. 19; cf. also Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 11. 50 Fuerst Day Lawson Ltd v. Jindal Exports Ltd, (2011) 8 SCC 333. 51 Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 10.

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that are not barred by a valid arbitration agreement.52 Where a party was under some incapacity, the final award may be challenged for this reason.53 b) Arbitrability. The issue of arbitrability is addressed in section 2(3) ACA 1996, which states that Part I of the act does not affect any other (then) valid law by virtue of which certain disputes may not be submitted to arbitration. The 1996 Act itself, however, does not contain a catalogue of disputes that are not arbitrable. In principle, it is recognized that any commercial matter can be referred to arbitration, including an action in tort if it arises out of or relates to a contract. Thus, disputes about property, money, or damages payable for breach of contract can be referred to arbitration.54 However, matters involving morality, status, and public policy such as matrimonial, guardianship, criminal, and insolvency matters as well as employment contracts or matters related to disputes involving rights in rem cannot be submitted to arbitration.55 Also anti-competition matters56 and consumer disputes are held to be non-arbitrable.57 29 With respect to allegations of fraud, the Supreme Court appears to distinguish between domestic and foreign arbitrations. In N Radhakrishnan v. Maestro Engineers, the Supreme Court held that when a case involves substantial questions relating to facts where detailed material evidence needs to be produced by either parties, and serious allegations pertaining to fraud and malpractice are raised, then the matter must be tried in court and arbitrators would not be competent to deal with such matters.58 However, in World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) Pte Ltd, a case where the seat of the arbitration was abroad, the Supreme Court referred to section 45 ACA 1996 and ruled that the allegation of fraud, even if proven, did not render the arbitration agreement invalid, as the arbitration agreement is separable from the main contract and unless it is found that the agreement is “null and void, inoperative or incapable of being performed”, the parties are to be referred to arbitration.59 In 2016, the Supreme Court confirmed that disputes are not arbitrable if a party raises “serious allegations of fraud”; in contrast, “mere allegations of fraud” shall not affect the arbitrability of the dispute.60 It remains to be seen, however, whether this is really a meaningful distinction that can be applied in practice or whether it will only lead to further protracted satellite litigations. 28

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c) Form of the arbitration agreement. The form requirements set forth by section 7 ACA 1996 are closely modelled along the lines of the UNCITRAL Model law and many other modern arbitration laws. In essence, an arbitration agreement has to be “in writing”. This requirement is fulfilled if the agreement is contained in a document signed by the parties or an exchange of letters, telex, telegrams, or other means of 52

Skypak Couriers Ltd v. Tata Chemical, (2000) 5 SCC 294. Section 34(2)(a)(i) ACA 1996. 54 Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, (2011) 5 SCC 532, para. 22; cf. also Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 9. 55 Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, (2011) 5 SCC 532, para. 22; cf. also Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 9 et seq. 56 Cf. Reddy/Nagaraj, (2002) 19 J. Int’l Arb. 117; Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 9. 57 A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386, para. 8; cf. also Sinha/Gupta, (2018) 7 Indian Journal of Arbitration Law 120, 128. 58 (2010) 1 SCC 72; for comment, cf., e. g. Srinivasan, Arbitrability of Claims Relating to Fraud – Recent Developments in India (2010), available at http://ssrn.com/abstract=1530182 (accessed 1 August 2020). 59 Civil Appeal No. 895 of 2014, para. 29. 60 A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386, para. 51; cf. also Anukaran, (2018) 14 Asian Int’l Arb. J. 71, 76. For a critical review, arguing that fraud claims should be treated as arbitrable, whether serious or not, see Chawla, (2017) 20 Int. A.L.R. 35 (41). 53

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telecommunication that provide a record of the agreement, such as fax or electronic mail.61 The Indian Supreme Court has confirmed the enforcement of an award, which was based on an unsigned charter-party, holding that, on the basis that article II NYC and the law governing the charter-party, no signature was required.62 The 2015 Act has clarified that an agreement contained in communication by electronic means also constitutes an agreement in writing. Pursuant to section 7(4)(c) ACA 1996, even an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other suffices. An arbitration agreement may also be incorporated in a contract by reference if the other contract is in writing and the reference is such as to make that arbitration clause part of the contract.63 Section 7 ACA 1996 does not require the arbitration agreement to be an original, i. e. 31 the parties are neither required to stamp the agreement nor do they have to sign every page of the agreement.64 The Supreme Court expressly declined to read any additional formal requirements into section 7 as this would be “improper and undesirable” and contrary to the legislative intention.65 d) Termination of the arbitration agreement. Neither the death of a party nor the 32 initiation of insolvency proceedings necessarily terminates an arbitration agreement. Section 40 ACA 1996 expressly states that an arbitration agreement is not discharged by the death of any party but shall in such event be enforceable by or against the legal representative of the deceased, i. e. the person who in law represents the estate of the deceased person.66 Pursuant to section 41(1) ACA 1996, an insolvency receiver is bound by an arbitration clause in a contract concluded by the insolvent if the receiver adopts the contract. In other cases, the receiver or any other party may also apply to the court having jurisdiction in insolvency proceedings for an order referring a dispute to arbitration although such dispute is required to be determined in connection with, or for the purposes of, the insolvency proceedings. However, the insolvency court is not obliged to refer the dispute to arbitration but has discretion to determine whether the matter at issue should be dealt with in arbitration proceedings.

4. The scope and the interpretation of the arbitration agreement Indian courts still tend to view arbitration as an ouster of the courts’ jurisdiction and, 33 therefore, are often inclined to construe arbitration agreements strictly. However, there appears to be a growing consensus among Indian lawyers that arbitration agreements should be interpreted like any other contract with a view to fathom the true intention of the parties. a) Personal scope of the arbitration agreement. Indian law recognizes the inter- 34 nationally accepted rule that arbitration agreements only bind the parties and not third persons.67 It is only in exceptional cases that third parties can be subject to an arbitration agreement. In international commercial arbitration, for example, arbitra61

Section 7(4)(a), (b) ACA 1996. PEC Ltd v. Austbulk Shipping Sdn Bhd, Supreme Court, 14 November 2018, Civil Appeal No. 4834 of 2007, YCA XLIV (2019) 558. 63 Section 7(5) ACA 1996. 64 Great Offshore v. Iranian Offshore Engineering & Construction Company, (2008) 14 SCC 240, para. 66. 65 Great Offshore v. Iranian Offshore Engineering & Construction Company, (2008) 14 SCC 240, para. 72. 66 Cf. the definition in section 2(1)(g) ACA 1996. 67 Deutsche Post Bank Home Finance Ltd v. Taduri Sridhar, (2011) 11 SCC 375, para. 13; Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, para. 65. 62

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tion agreements can also be enforced by “any person claiming through or under” one of the parties, i. e. the rights and obligations arising from the agreement to arbitrate can be vested in such a person. In Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., the Supreme Court held that the expression “any person” in section 45 ACA 1996 clearly refers to the legislative intent of enlarging the scope of application of the agreement to arbitrate beyond “the parties” who are signatory to the arbitration.68 35 Hence, as a matter of principle, non-signatories such as third party beneficiaries, guarantors, or assignees can be bound to an arbitration agreement.69 In a recent decision, for example, the Bombay High Court held that a guarantor would also be subject to an arbitration agreement contained in a loan agreement even if he is not a party to the loan agreement and the deed of guarantee does not contain an arbitration clause.70 However, trust beneficiaries are considered third parties who are not bound by an agreement to arbitrate contained in the trust deed.71 Other accepted legal doctrines which may expand the scope of an arbitration agreement include the doctrine of implied consent, agentprincipal relations, apparent authority, piercing the veil (“alter ego”), joint venture relations, succession, and estoppel.72 Indian law also recognizes the “group of companies” doctrine, under which an arbitration agreement entered into by a company within a group of companies can bind its non-signatory affiliates if the circumstances demonstrate that the mutual intention of the parties was to bind both the signatory as well as the nonsignatory parties.73 Shareholders of a company or members of an association are bound by an arbitration clause in the articles of association with respect to disputes between them relating to their company relationship.74 36

b) Substantive scope of the arbitration agreement. Indian courts are usually inclined to construe arbitration agreements broadly. The classic wording “disputes arising under or in connection with that agreement” is interpreted as expanding the scope of the disputes under the respective agreement both in its operation and effect. Thus, a remote connection can be sufficient as long as it is not fanciful or marginal.75 For example, in Enercon (India) Limited v. Enercon GmbH, the Supreme Court held that a widely worded arbitration agreement would include all disputes arising in respect of the main contract with regard to its validity, interpretation, construction, performance, enforcement, or its alleged breach.76 If the arbitral tribunal decides on issues which do not fall within the scope of the arbitration agreement, the award can be challenged and set aside; if such a decision can be separated from decisions on matters covered by the arbitration agreement, the application for setting aside the award can be limited to that part of the award.77

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c) Pathological arbitration clauses. There exists a substantial body of Indian caselaw on pathological arbitration clauses, i. e. arbitration clauses containing defects which 68

(2013) 1 SCC 641, para. 64. Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, para. 100. 70 Sahyadri Earthmovers v. L&T Finance Ltd, 2013(2) Mh. L. J. 302. 71 Rakhecha, (2013) 2 Indian Journal of Arbitration Law 165. 72 Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, para. 100. 73 Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, para. 101. 74 Cf. Prasanth, (2012) 1 Indian Journal of Arbitration Law 75 et seq. with further references. 75 Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, paras 146 et seq. 76 Civil Appeal No. 2086 of 2014, para. 79; cf. also M/S. Magma Leasing & Fin. Ltd v. Potluri Madhavilata, (2009) 10 SCC 103. 77 Section 34(2)(a)(iv) ACA 1996. 69

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might render the clause “null and void, inoperative or incapable of being performed”.78 Indian courts have ruled upon, inter alia, errors in designating the arbitration institution, institutional rules, or the arbitrators; they have also dealt with errors relating to the number of arbitrators, failures to exercise options, and clauses which refer disputes both to arbitration and to the courts.79 In principle, Indian courts attempt to cure defective arbitration clauses by interpreta- 38 tion, giving due consideration to the circumstances of each case. The canons of interpretation are similar to those used for contractual interpretation in general, which require the courts to give effect to the intention of the parties as evidenced by the agreement itself without being “overly technical in its interpretation”.80 In this respect, the courts should have regard to, inter alia, the principle of harmonious construction which calls for an interpretation that allows two potentially conflicting clauses to coexist harmoniously,81 or the principle of effective interpretation or business efficacy, which requires the courts to prefer the meaning which supports the contract rather than that which renders it nugatory.82 Contrary to many other legal systems, however, Indian arbitration law does not explicitly recognize the principle of in favorem validates,83 although it seems that the courts have discarded the traditional view that arbitration agreements, as an exception to the principle of state court jurisdiction, should be construed strictly.84

5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) Enforcing arbitration clauses and Kompetenz-Kompetenz. Like in most national 39 arbitration laws, the existence of an arbitration agreement by itself does not bar state court proceedings under Indian law. If court proceedings are initiated in breach of an arbitration agreement, the other party has to invoke the arbitration agreement and petition the court to refer the parties to arbitration in accordance with section 8 ACA 1996. In this case the court is obliged to stay its proceedings and refer the parties to arbitration, “unless it finds that prima facie no valid arbitration agreement exists” (section 8(1) ACA 1996, as amended by the 2015 Act). It is then up to the arbitral tribunal to determine whether a valid and binding arbitration agreement exists.85 The same prima facie threshold applies in the context of international arbitration pursuant to section 45 ACA 1996, as amended by the 2019 Act. In the context of international arbitration, the Supreme Court also observed that the right to foreign arbitration is “an indefeasible right in which the court does not have any kind of discretion”. As a result, section 8 (in Indian-seated arbitrations) and section 45 (in foreign-seated arbitrations)

78 Cf. section 45 ACA 1996, which applies to international commercial arbitration agreements. Section 8 ACA 1996, in contrast, does not contain a similar wording but merely refers to an “arbitration agreement”. 79 Cf. the overview in Jain, (2008) 25 J. Int’l Arb. 433 (434 et seq.). 80 Union of India v. Janki Prasad Agarwal, 1986 AIR (All.) 15, para. 18; cf. also Jain, (2008) 25 J. Int’l Arb. 433 (441 et seq.). 81 Mallikarjun v. Gulbarga University, 2003 Supp(5) SCR 272; cf. also Jain, (2008) 25 J. Int’l Arb. 433 (443) with further references. 82 Union of India v. D.N. Revri & Co., (1976) 4 SCC 147; cf. also Jain, (2008) 25 J. Int’l Arb. 433 (443 et seq.) with further references. 83 Jain, (2008) 25 J. Int’l Arb. 433 (446). 84 Cf., e. g. Union of India v. D.N. Revri & Co., (1976) 4 SCC 147, where it was held that courts should adopt a “commonsense approach” rather than “a narrow pedantic and legalistic interpretation”; a similar view was taken in Enercon (India) Limited v. Enercon GmbH, Civil Appeal No. 2086 of 2014, para. 83. 85 Knoll/Pathak, (2018) 199 ICA Arbitration Quarterly 7, 11.

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are mandatory provisions which oblige the court to decline the exercise of jurisdiction in favour of arbitration. 40 While an application pursuant to section 8(1) ACA 1996 is still pending, the arbitration may already be commenced or continued.86 In the past, however, this provision was hardly resorted to, since courts have been inclined to issue interim injunction restraining the arbitration from proceeding.87 It remains to be seen whether the new prima facie standard established by the 2015 Act and the 2019 Act will change this approach. 41 This principle of Kompetenz-Kompetenz is explicitly recognized in section 16(1) ACA 1996. Thus, when both parties participate in the arbitration proceedings, the arbitral tribunal is empowered to rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement. However, the scope of application of the Kompetenz-Kompetenz doctrine has been restricted by the Supreme Court’s decision in SBP & Co. v. Patel Engineering Ltd,88 where it was held that the Chief Justice’s power to appoint an arbitrator pursuant to section 11 ACA 1996 is judicial and not administrative in nature and, accordingly, any issue as to the existence or the validity of the arbitration agreement invoked by the applicant has to be finally decided by the court and could not thereafter be raised before the arbitral tribunal.89 Effectively, the principle of Kompetenz-Kompetenz only applies when the arbitral tribunal is appointed by the parties. However, if the state courts have to determine whether to refer a matter to arbitration, they may not engage in a full judicial review of the arbitration agreement but are confined to a mere prima facie scrutiny (section 8(1) ACA 1996, as amended by the 2015 Act). In this respect, Indian arbitration law is now in line with other prima facie jurisdictions such as France, Switzerland, Hong Kong and Canada.90 42

b) Preclusion of jurisdictional defences. The application pursuant to section 8(1) ACA 1996 has to be filed with the court not later than when the first submissions on the substance of the dispute are made. If a party fails to make this request within the specified time frame, it will be deemed to have waived its right to invoke the arbitration agreement. The filing of a detailed affidavit opposing an interim relief application was not considered to be a statement of defence “on the substance of the dispute”.91

c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. When a law suit is initiated and the respondent has invoked the defence of an arbitration agreement or an application for state court support is filed, Indian courts may only determine on a prima facie basis whether a valid arbitration exists or not (section 8(1) ACA 1996, as amended by the 2015 Act). The same standard now applies to international arbitration agreements as well (section 45 ACA 1996, as amended by the 2019 Act). 44 In other instances, too, the scope of the court’s scrutiny now more restricted than in the past. For example, if a request for the appointment of an arbitrator is filed pursuant to section 11 ACA 1996, the competent court is no longer allowed to rule upon the question whether there is a live claim, i.e. a claim not barred by limitation, as permitted 43

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Section 8(3) ACA 1996. Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.60. 88 (2005) 8 SCC 618. 89 Cf. also Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641, paras 129 et seq. 90 Cf. Born, International Commercial Arbitration, 2nd ed., 2014, p. 1110. 91 Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, (2011) 5 SCC 532, para. 17. 87

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by the Supreme Court in 2009.92 Section 6A ACA 1996, as amended by the 2015 Act, now expressly confines the court’s power to the examination of the existence of an arbitration agreement, thereby codifying a Supreme Court’s decision of 2011, which held that the arbitral tribunal should also exclusively decide on an objection that the claim was barred by res judicata.93 d) Anti-suit and anti-arbitration injunctions. Like other common law systems, 45 Indian law empowers the state courts to issue anti-suit injunctions for actions brought in breach of an arbitration agreement.94 In exceptional cases, this remedy may also be used to enjoin arbitration proceedings, although the 1996 Act does not contain any provision to that effect. However, the Supreme Court has decided that international arbitrations should not ordinarily be enjoined and, if so, the matter should be disposed of with utmost dispatch.95 Where arbitral proceedings are considered to be “oppressive and vexatious” and would constitute an abuse of the process of law, Indian courts may also issue an anti-arbitration injunction.96

III. The arbitral tribunal and the conduct of the arbitral proceedings 1. The arbitral tribunal a) Appointment of the arbitral tribunal. The rules on the constitution of the arbitral 46 tribunal are mainly modelled along the lines of article 8 ML. Pursuant to section 10 ACA 1996, the parties are free to determine the number of arbitrators, provided that the number is uneven; failing such determination, the tribunal consists of a sole arbitrator. Likewise, section 11(2) ACA 1996 allows the parties to agree on the procedure for the appointment of the arbitrators. The 2019 Act has introduced several amendments to the appointment procedure, which aim to strengthen the role of the arbitral institutions in international commercial arbitrations.97 Where the tribunal is to consist of three arbitrators and the default procedure under 47 section 11(3) or the agreed appointment procedure do not lead to an appointment, the other party may request the competent High Court (in domestic cases) or the Supreme Court (in international commercial arbitration) to appoint the arbitrator.98 In case of a sole arbitrator and failing any party agreement on the appointment procedure, the parties have to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree on the appointment. If no such agreement can be reached, the appointment shall be made, upon request of a party, by the Supreme Court in international commercial arbitration, or the High Court in domestic cases (section 11(5) ACA 1996).99 92

See National Insurance Co. Ltd v. Boghara Polyfab Pvt Ltd, (2009) 1 SCC 267, para. 17. Indian Oil Corporation Ltd v. SPS Engineering Ltd, (2011) 3 SCC 507, para. 13. 94 Avinash, (2014) Bharati L. Rev. 173, 188 et seq. 95 Dresser Rand SA v. KG Khosla Compressors Ltd, [1995] Supp (3) SCC 181. 96 Union of India v. Dabhol Power Co, IA No. 6663/2003 Suit No. 1268/2003 (Delhi High Court 2004), para. 15. 97 The respective amendments refer to the arbitral institutions which shall be graded by the newly established Arbitration Council of India. Yet the changes to the relevant provisions have not yet been put into operation by the Central Government (cf. section 1(2) of the 2019 Act). 98 Section 11(4), (6) ACA 1996, as amended by the 2019 Act. 99 Section 11(3A) ACA 1996 allows designation of an arbitral institution only if it has been “graded” by the new Arbitration Council of India under section 43-I ACA 1996. So far, no designation has been made, and it has been suggested that pre-reform appointment rules would apply (supra fn. 8). 93

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Before 2015, the judicial power to assist in the appointment of the arbitral tribunal was considered to be judicial and not administrative in nature.100 As a result, the court’s ruling on the existence and validity of the arbitration agreement were final and binding on both the parties and the arbitral tribunal.101 However, Section 11(6B), now stipulates that the designation of a person or (arbitral) institution by the competent court (Supreme Court or High Court) shall not be regarded as a delegation of judicial power. Thus, the case of Patel Engineering, in which the Supreme Court characterized the courts’ power under section 11 as judicial, is no longer good law.102

b) Qualifications, impartiality and independence of the arbitrator. According to section 11(1) ACA 1996, a person of any nationality may be an arbitrator, unless otherwise agreed by the parties. However, the accreditation system introduced by the recent reforms may de facto limit accreditation as arbitrator to Indian nationals (supra mn. 3). 50 Indian arbitration law requires arbitrators to be impartial and independent. Therefore, section 12(1) ACA 1996 stipulates that a person who is approached to be an arbitrator shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality. This duty to disclose also applies after the appointment and throughout the arbitral proceedings.103 Before 2015, there existed no clear rules on what constitutes relevant information to be disclosed, but it seemed that Indian courts used to apply the same test like courts in other countries and, setting a high standard, required disclosure of any dealings that might create an impression of bias. For example, the High Court of Bombay observed in 2004 that the basis for assessing whether “justifiable doubts” as to the independence or impartiality of an arbitrator exist is whether the party to the dispute would have reasonable apprehension in his mind about the independence of the arbitrator and not whether the arbitrator thinks that he is capable of being impartial.104 For example, indebtedness to a party is usually considered as a disqualification justifying the removal of an arbitrator from the tribunal.105 As amended by the 2015 Act, section 12(1)(a) now clarifies that an arbitrator has to disclose the existence of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind. The 2019 Act has introduced further guidelines as to the independence and impartiality of an arbitrator which are based on the IBA Guidelines on Conflicts of Interest in International Arbitration.106 51 A rather peculiar feature of Indian arbitration law is “employee arbitration”. In particular, government or public sector contracts often contain arbitration clauses providing for an employee of the governmental or public sector body to be the (sole) arbitrator. Although Indian courts acknowledge that provisions for a serving officer of one party being appointed as arbitrator usually lead to considerable resistance from the other party, it has been held that a party that has entered “with open eyes” and full 49

SBP & Co. v. Patel Engineering, (2005) 8 SCC 618, para. 46. Cf. supra mn. 44. 102 Pathak/Panjwani, (2017) 34 J. Int’l Arb. 509, 513 et seq.; cf. also Law Commission of India, Report No. 246 – Amendments to the Arbitration and Conciliation Act 1996, p. 18 et seq. 103 Section 12(2) ACA 1996. 104 Murlidhar Roonga v. S. Jagannath Tibrewala (2005) 57 SCL 128 (Bom), para. 13. 105 Biswas, Introduction to arbitration in India, 2014, § 5.03 with further references. 106 Cf. Explanation 1 to section 12(1) which refers to the Fifth Schedule; the Seventh Schedule contains additional examples of close relationships with the parties or counsel or the subject-matter of the dispute, cf. also Law Commission of India, Report No. 246 – Amendments to the Arbitration and Conciliation Act 1996, p. 30 et seq. 100 101

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knowledge and comprehension into such an arbitration clause is bound by it.107 This position has been confirmed by the Supreme Court in Indian Oil Corporation Ltd v. Raja Transport (P) Ltd108, where it was emphasized that no party could claim to be bound by only one part of the agreement and not the other part. However, as regards the appointment of an employee of a private company or a state officer as arbitrators, the Supreme Court noted that there might be “a valid and reasonable apprehension of bias in view of his position and interest” which might allow the court not to appoint such a person as arbitrator.109 Commentators are skeptical whether this distinction is justified, arguing that contractors trying to secure contracts from the government or other public sector undertakings usually do not consent freely to employee arbitration.110 c) Grounds for challenge, procedural aspects and preclusion of grounds for 52 challenge. Section 12(3) ACA 1996 sets forth limited grounds for challenge: An arbitrator may be challenged “only” if there are justifiable doubts as to his independence or impartiality, or if he does not possess the qualifications agreed to by the parties. Section 12(4) states that where a party has appointed the arbitrator himself or has participated in the appointment, this party can lodge a challenge only for reasons which he becomes aware of after the appointment has been made. The parties are free to agree on a procedure for challenging an arbitrator.111 Failing 53 such agreement, the challenge has to be made in writing within fifteen days after the party who intends to challenge an arbitrator has become aware of the constitution or of any grounds for challenge as stipulated in section 12(3). The written statement has to be sent to the arbitral tribunal and must contain the reasons for the challenge. The arbitral tribunal will decide on the challenge unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge. The challenged arbitrator participates in this decision.112 If the challenge is not successful, the tribunal may continue the proceedings and 54 make an award.113 The party who has made an unsuccessful challenge may seek to have the award set aside pursuant to section 34 ACA 1996 (section 13(5) and infra mn. 95). Thus, an unsuccessful challenge cannot be appealed immediately after the tribunal has decided on the challenge (rather, the tribunal shall continue the arbitral proceedings and make an award: section 13(4)). In this respect, the Indian legislator has deliberately departed from the UNCITRAL Model Law which allows for a judicial decision on the challenge before the final award is made. d) Failure or impossibility to act. Section 14(1) ACA 1996 states that the mandate 55 of an arbitrator shall be terminated if he becomes de jure or de facto unable to perform his functions or for other reasons fails to act with undue delay and withdraws from his office or the parties agree to the termination of his mandate. Section 14(2) also provides for court assistance with respect to the termination of an arbitrator’s mandate as it grants the parties the right to apply to the court to decide on the termination of the mandate if a dispute arises concerning the aforementioned grounds of termination. There is a controversy among the lower courts whether this provision can be used to have the mandate terminated after an unsuccessful challenge of an arbitrator. While the 107

Cf. Ace Pipeline Contract Pvt Ltd v. Bharat Petroleum Corporation Ltd, (2007) 5 SCC 304. (2009) 8 SCC 520. 109 (2009) 8 SCC 520, para. 15. 110 Biswas, Introduction to arbitration in India, 2014, § 5.05. 111 Section 13(1) ACA 1996. 112 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.75. 113 Section 13(4) ACA 1996. 108

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Delhi High Court and the Calcutta High Court have taken the view that section 14 does not empower the court to terminate the arbitrator’s mandate when a section 13 has failed,114 the Punjab and Haryana High Courts as well as the Division Bench of the Guwahati High Court have found that a party may file a petition under section 14(2) to have the court declare the arbitrator’s mandate as terminated.115 56 In addition, the mandate of an arbitrator terminates where he withdraws voluntarily from his office or if the parties so agree.116 In such a case, a substitute arbitrator has to be appointed in accordance with the applicable procedural rules. Hearings previously held may be repeated at the discretion of the arbitral tribunal, unless otherwise agreed by the parties.117 However, orders or rulings of the arbitral tribunal made prior to the replacement of the arbitrator remain unaffected by such replacement.118

2. The arbitral proceedings 57

a) Overview. In general, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.119 The parties may determine, inter alia, the place (or seat) of arbitration,120 the language of the arbitration,121 the conduct of oral hearings or written proceedings,122 and the appointment of experts.123 Failing any such agreement, the arbitral tribunal may conduct the proceedings in the manner it considers appropriate, provided that it follows the mandatory rules of the 1996 Act.124

b) The request for arbitration. Like the UNCITRAL Model Law, the 1996 Act does not contain any detailed rules with respect to the commencement of arbitral proceedings. Section 21 ACA 1996 merely states that, unless otherwise agreed by the parties, the proceedings commence on the date on which a request for a particular dispute to be referred to arbitration is received by the other party. The request for arbitration is deemed to have been received if it has been delivered to the respondent personally or at his place of business, habitual residence, or mailing address, or, if no such place can be found, to the last known place of business, habitual residence, or mailing address of the respondent.125 59 Since the provision of section 21 is subject to party autonomy, its practical scope of application is rather limited, as institutional rules usually contain very detailed provisions with respect to the request for arbitration. Article 1 of the LCIA India Arbitration Rules, for example, requires that the request for arbitration be sent to the institution’s Registrar and stipulates that the arbitration shall be deemed to have commenced on the date the Registrar receives the request for arbitration and the fee prescribed in the 58

114 Progressive Career Academy Pvt Ltd v. FIIT JEE Ltd, (2011) 180 DLT 714; Jas Enterprises v. Karanpara Development Co. Ltd, (1997) 2 CLT 277. 115 State of Arunachal Pradesh v. Subhash Projects and Marketing Ltd, (2007) 1 ArbLR 564; OPBK Construction Pvt Ltd v. Punjab Small Industries & Export Corp. Ltd, (2008) 3 ArbLR 189. 116 Section 15(1) ACA 1996. 117 Section 15(3) ACA 1996. 118 Section 15(4) ACA 1996. 119 Section 19(2) ACA 1996. 120 Section 20(1) ACA 1996; for a discussion of the terms “place” and “seat” in contrast to one or more “venues” of the arbitration, see Bgs Sgs Soma Jv v. Nhpc Ltd, 2019, Civil Appeal No. 9307 of 2019. 121 Section 22(1) ACA 1996. 122 Section 24(1) ACA 1996. 123 Section 26(1) ACA 1996. 124 Section 19(3) ACA 1996. 125 Section 3(1) ACA 1996.

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Schedule of Costs. Furthermore, article 1.1 of the LCIA India Arbitration Rules prescribes in eight subsections the exact content of the request for arbitration. Section 43(2) ACA 1996 states that an arbitration shall be deemed to have com- 60 menced on the date referred to in section 21, which includes the parties’ freedom to agree on a different date of commencement. Hence, parties to Indian-seated arbitrations are well-advised to strictly abide by the legal requirements for the request for arbitration, especially in cases to which the Indian Limitation Act 1963 applies. c) Equality of arms, fair trial principles and the right to be heard. Section 18 ACA 61 1996 includes the procedural “magna carta” of arbitration proceedings: The arbitral tribunal has to treat the parties “with equality and each party shall be given a full opportunity to present his case”. If the right to be heard has been violated, the arbitral award can be challenged and set aside.126 Apart from explicitly granting the general right to a fair trial, the 1996 Act provides 62 for several specific rules which implement the principle of fair trial in practice. Like in the UNCITRAL Model Law, provisions such as section 23 (concerning the statements of claim and defence), section 24 (concerning hearings and written proceedings), and section 26 (concerning expert reports) ensure that fundamental procedural guarantees are complied with. Section 24(3), for example, stipulates that all statements, documents or other information supplied to the arbitral tribunal must be communicated to the other party. The same rule applies to any expert report or evidentiary document on which the arbitral tribunal may rely in the award. Likewise, section 26(3) requires an appointed expert, upon the request of a party, to make available to that party for examination all documents, goods, or other property in the possession of the expert with which he was provided in order to prepare his report. Due to these procedural safeguards, the parties are able to respond to and comment on any relevant document or information before the arbitral tribunal makes the award. According to the newly introduced section 23(4) the statement of claim and defence shall be completed within a period of six months from the date the arbitrators received notice in writing of their appointment. It appears that neither the parties nor the arbitrators can extend this strict time limit. In international arbitration cases with an Indian seat, the presentation of factual and 63 legal arguments by foreign practitioners might be impaired by the Indian Advocates Act 1961 which places certain restrictions on foreign lawyers practising law in India.127 Since foreign parties to Indian-seated arbitrations will usually be represented by foreign practitioners, the question arises whether the Indian Advocates Act 1961 prevents foreign lawyers from appearing in Indian-seated arbitrations.128 Some Indian lawyers have argued that foreign practitioners may not practice law in India without a licence issued by the Bar Council under the Bar Council Act and Rules, a view shared by the Bombay High Court with respect to liaison offices of foreign law firms.129 The Madras High Court, in contrast, has held that there are no restrictions on foreign practitioners appearing in international arbitrations seated in India, whether as counsel or arbitrator, at least on a “fly in and fly out” basis.130 The court pointed out that if foreign law firms are not allowed to conduct arbitrations in India, this would have a “counter-productive effect on the aim of the Government to make India a hub of International Arbitration”. 126

Section 34(2)(a)(iii) ACA 1996. Cf. Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 30. 128 The same question arises with respect to arbitrators of a foreign nationality. 129 Lawyers’ Collective v. Bar Council of India, [2010] 2 Bom LR 32. 130 AK Balaji v. The Government of India, [2012] Mad 124. 127

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d) Confidentiality. According to section 42A ACA 1996 (which was introduced by the 2019 Act) the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except the arbitral award where its disclosure is necessary for the purpose of implementation and enforcement of award. However, this reform is perceived to be in contradiction with the new section 43K (which has not yet been put in force), as section 43K would require the new Arbitration Council of India to maintain an electronic depository of arbitral awards made in India, even without the parties’ consent.131 65 Further, according to section 126 of the Indian Evidence Act 1872, no barrister, attorney, or pleader is permitted to disclose any communication, advice or contents of a document made available in the course and for the purpose of employment, unless with the client’s express consent. In addition, party representatives must respect their general professional duties of confidentiality. 64

e) The arbitral award. An arbitral award must be made in writing and be signed by the members of the arbitral tribunal.132 The signature of the majority of the members of the tribunal is sufficient, provided that the reason for the omitted signature is stated.133 Furthermore, the award must state its date and the place of arbitration since the award is deemed to have been made at that place.134 After the award has been made, a signed copy thereof has to be delivered to each party. It is important to note that service has to be effected on the party itself and not an agent of that party, including its legal representative. Therefore, if the award is served only on the party’s lawyer, the period of limitation to challenge the award (three months, section 34(3) ACA 1996) would not begin to run.135 Arbitral awards in domestic arbitration shall be made within a period of twelve months from the date of completion of pleadings (section 29A(1)). In international commercial arbitration, the ACA merely stipulates that the award should be made as expeditiously as possible. Section 29A(2) even provides for the option of additional fees if the award is made within a period of six months from the date the arbitral tribunal enters upon the reference. These rules are supplemented by section 12(1)(b) which sets out the duty of arbitrators to disclose any circumstances that might prevent them from devoting sufficient time for arbitration. Since 2015, parties of an arbitration agreement can also opt for a “fast track procedure” pursuant to section 29B ACA 1996. 67 The arbitral award has to state the reasons unless the parties have agreed otherwise or the award records the settlement of the dispute as an award on agreed terms pursuant to section 30(2) ACA 1996.136 If an award on agreed terms is made, it has to comply with the formal requirements of section 31 ACA 1996.137 It will have the same status and effect as ordinary awards on the substance of the dispute,138 i. e. it can be enforced under the Code of Civil Procedure 1908 in the same manner as if it were a decree of the court.139 66

131 Ahuja/Mal, (2019) 22 Int’l Arb. L. Rev. 224 (234, 239). It remains to be seen whether the Central Government will implement further changes due to the critical assessment of the reforms before issuing the required notification to put the new rules into operation (cf. section 1(2) of the 2019 Act). 132 Section 31(1) ACA 1996. 133 Section 31(2) ACA 1996. 134 Section 31(4) ACA 1996. 135 Benarsi Krishna Committee v. Karmyogi Shelters Pvt Ltd, (2012) 9 SCC 496, para. 15. 136 Section 31(3) ACA 1996. 137 Section 30(3) ACA 1996. 138 Section 30(4) ACA 1996. 139 Section 36 ACA 1996.

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Enforcement of a domestic award in India requires, however, that it is stamped in 68 accordance with the Indian Stamp Act 1899.140 Each Indian state has its own rates of stamp duty. Arbitrators sitting in India usually issue the award on a stamp paper of INR 100 and usually direct the winning party to have the award adjudicated by the Collector of Stamps and to have it stamped accordingly.141 f) Termination of the arbitration without an award. If no final award is rendered, 69 the arbitral tribunal may terminate the proceedings only if the claimant withdraws his claim and the respondent does not object to the termination order, if the parties agree on the termination of the proceedings, or if the tribunal finds that the continuation of the proceedings has become unnecessary or impossible; if the respondent objects to the withdrawal of the claim by the claimant, the arbitral tribunal may terminate the proceedings only if it does not recognize a legitimate interest of the respondent in obtaining a final settlement of the dispute.142 g) The costs of the arbitration. In its award, the arbitral tribunal will also decide on 70 the costs of the arbitration. Unless otherwise agreed by the parties, it has to specify the party entitled to costs, the party who shall pay the costs, the amount of costs, and the method of determining that amount as well as the manner in which the costs shall be paid.143 Costs within the meaning of the 1996 Act are “reasonable costs relating to the fees and expenses of the arbitrators and witnesses, legal fees and expenses, administration fees of the arbitral institution (if any) and any other expenses incurred in connection with the arbitration”.144 Since the old 1996 Act did not provide for any rules on the allocation of costs, the 71 practice varied from tribunal to tribunal. In 2016, specific rules on the allocation of costs were introduced: section 31A now provides for a regime for costs for any arbitration proceeding or an ancillary court proceeding under any of the provisions of the 1996 Act pertaining to the arbitration. Courts or arbitral tribunals have to take into account the conduct of all the parties, their relative success or failure in the case and their endeavour to settle the dispute (section 31A(3) ACA 1996). Arbitration institutions have similar rules. For example, the LCIA India Arbitration Rules also require the tribunal to reflect in their cost decision the parties’ relative success and failure in the award or arbitration as well as their conduct and cooperation during the arbitration.145

3. Evidence, discovery, disclosure The provisions in the 1996 Act on evidence are very similar to the rules contained in 72 the UNCITRAL Model Law, i. e. the arbitral tribunal has ample discretion in determining the procedural aspect of the taking of evidence. Section 19(1) explicitly states that the tribunal is not bound by the evidence rules of the Indian Code of Civil Procedure 1908 or the Indian Evidence Act 1872. Therefore, rules for the swearing in of witnesses are informal and vary from tribunal to tribunal. In practice, arbitral tribunals usually

140 Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 29 et seq. By contrast, foreign awards are not subject to stamp duty: Shriram EPC Ltd v. Rioglass Solar SA, Supreme Court, 13 September 2018, Civil Appeal No. 9515 of 2018, YCA XLIV (2019) 556. 141 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.89. 142 Section 32(2) ACA 1996. 143 Section 31A ACA 1996. 144 See the explanatory note at the end of section 31 ACA 1996. 145 LCIA India Arbitration Rules article 28.4.

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swear in a witness only upon the request of one of the parties.146 However, it is an established practice in India to examine and cross-examine witnesses.147 73 In addition, section 19(4) stipulates that the arbitral tribunal has the power to determine the admissibility, relevance, materiality, and weight of the evidence submitted by the parties. The arbitral tribunal may also freely decide whether to hold an oral hearing for the presentation of evidence or whether the proceedings will be conducted on the basis of documents and other material.148 If authorized by the parties or all the members of the tribunal, procedural issues may be decided by the presiding arbitrator alone.149 74 The arbitral tribunal may also, at its discretion, appoint one or more experts to clarify certain issues that are disputed between the parties. In this case, the parties are obliged to give the expert any relevant information and to produce, or to provide access to, any relevant documents, goods, or other property for inspection.150 Upon the request of a party or if the tribunal considers it necessary, the expert can participate in the oral hearing in order to respond to questions or expert testimony presented by the parties.151 75 Pursuant to section 27 ACA 1996, the Indian courts are also empowered to grant judicial assistance in the taking of evidence, including the production of documents and the inspection of property. Such assistance may become necessary with respect to securing the attendance of witnesses or persons who possess relevant information but are not willing to testify in the oral hearing or to produce the requested document. The application can only be made by the arbitral tribunal or by a party with the approval of the arbitral tribunal, which allows the tribunal to keep control of the process of taking of evidence. Due to the new section 2(2) ACA 1996, as amended by the 2015 Act, section 27 also applies to foreign arbitrations unless otherwise agreed by the parties. This new pro-arbitration approach is in line with other national arbitration laws, which also empower their state courts to support foreign arbitrations as well.152

4. The law governing the dispute 76

a) Choice of law and domestic cases. In Indian domestic arbitrations, party autonomy with respect to the governing law is restricted as in these cases the application of Indian law is mandatory, i. e. the parties are not allowed to designate a foreign law as the applicable substantive law.153 As a result, the parties can only deviate from Indian law by drawing up the terms of the contract to meet their individual needs and interests, provided that they respect the boundaries of Indian mandatory law. Such contractual agreements have to be respected and enforced by the arbitral tribunal.154

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b) Choice of law and international cases. In international commercial arbitration the parties are free to choose the law applicable to the substance of the dispute. Thus, like the UNCITRAL Model Law and all modern arbitration laws, Indian law recognizes party autonomy with respect to the determination of the applicable law. Where there is no 146 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.86. 147 Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 25. 148 Section 24(1) ACA 1996. 149 Section 29(2) ACA 1996. 150 Section 26(1) ACA 1996. 151 Section 26(2) ACA 1996. 152 Cf. §§ 1025(2), 1050 German ZPO; §§ 577(2), 602 Austrian ZPO; section 2(3), 43, 44 AA 1996; 28 USC § 1782. 153 Section 28(1)(a) ACA 1996. 154 Section 28(3) ACA 1996.

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express or implied choice of law, the arbitral tribunal applies the “rules of law” it considers to be appropriate.155 In line with internationally recognized conflict-of-law principles the settled legal presumption is that the law of the place with which the contract has the closest connection will be the substantive law applicable to the contract.156 A decision “ex aequo et bono” is only possible with the express authorization of the parties.157

5. Interim relief in arbitration a) Interim relief before state courts. All modern arbitration laws empower the state 78 courts to grant interim relief in support of arbitration proceedings. The old view that an arbitration agreement also ousts the courts’ jurisdiction for interim measures is no longer accepted even in legal systems like the US federal regime where some courts had held that, upon a request for provisional measures, courts are generally obliged to refer the parties to arbitration.158 Also Indian law has adopted the predominant position which is reflected in article 9 of the UNCITRAL Model Law and allows the parties to an arbitration agreement to seek interim relief from a court before or during the arbitral proceedings, or at any time after making the arbitral award but before it is enforced.159 Such interim relief may include the preservation of any property or any goods which are the subject matter of arbitration, measures securing the amount in dispute in the arbitration, interim injunctions, and the appointment of a receiver.160 However, the courts are not limited to the measures listed in section 9 and may order any interim measure of protection as may appear to the court to be “just and convenient”.161 If a court issues an order for interim relief prior to the commencement of arbitration 79 proceedings, the arbitral proceedings muss be initiated within ninety days from the date of such order or within such further time as determined by the court (section 9(2) ACA 1996, as amended by the 2015 Act). Once the arbitral tribunal has been constituted, the courts’ powers to grant interim relief are more restricted. In these cases, the court may only grant interim relief if the arbitral tribunal’s powers under Art. 17 of the 1996 Act are insufficient (section 9(3) ACA 1996, as amended by the 2015 Act.). In principle, a state court has the same power for making interim orders as it has for 80 the purpose of and in relation to any proceedings before it, i. e. the general procedural rules for granting interim relief apply. In this respect, courts are split on the question as to whether the special conditions of attachment before judgment stipulated by Order 38, Rule 5 of the Code of Civil Procedure govern applications for security relating to the amount in dispute. While the Delhi High Court held that the provisions of the Code of Civil Procedure were to be applied,162 the Bombay High Court ruled that section 9 ACA 1996 was self-operative and that therefore the provisions of the Code of Civil Procedure were not applicable.163 155

Section 28(1)(b) ACA 1996. Kwatra, Arbitration and Conciliation Law of India, 7th ed., 2008, 14. 157 Section 28(2) ACA 1996. 158 Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, mns 23–101 et seq.; as regards the former position under US law, cf. McCreary Tire & Rubber Co. v. Ceat SpA, 501 F.2d 1032 (3rd Cir., 1974); today, also the Court of Appeal for the 3d Circuit follows the prevailing view that courts may grant interim relief in support of arbitration, see Ortho Pharmaceutical Corp. v. Amgen Inc., 882 F.2d 806 (3rd Cir., 1989). 159 Section 9 ACA 1996. 160 See section 9(1)(ii) ACA 1996. 161 See section 9(1)(ii)(e) ACA 1996. 162 Global Company v. National Fertilizers Ltd, AIR 1998 Delhi 397. 163 Pushpa P-Mulchandani (Mrs.) v. Admiral Radhakrishin Talihali (Retd.), [2001] 1 Bom LR 169; National Shipping Company of Saudi Arabia v. Sentrans Industries Ltd, AIR 2004 Bom 136. 156

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Since the 2015 reforms, Indian arbitration law empowers state courts to grant interim relief in support of foreign arbitration proceedings as well. Section 2(2) now stipulates that section 9 shall also apply to international commercial arbitration, even if the place of arbitration is outside India unless otherwise agreed by the parties.164 With this amendment the legislator put an end to the former debate whether section 9 applies to foreign arbitrations.165

b) Interim relief before the arbitral tribunal. Under the 1996 Act, interim measures in respect of the subject matter of the dispute may also be ordered by the arbitral tribunal.166 Thus, once the tribunal has been constituted there is concurrent jurisdiction of the state courts and the arbitral tribunal to grant interim relief, i. e. during that period the power conferred on the arbitral tribunal and the court overlap to some extent. However, the arbitral tribunal can only order interim measures against the parties themselves and not against third persons. Moreover, contrary to state court measures under section 9 ACA 1996, the arbitral tribunal’s orders are not enforceable as the arbitral tribunal has only coercive power in relation to the parties. Since the 2015 reforms the Arbitration Act provides for a special enforcement regime which is based on the UNCITRAL Model Law as amended in 2006.167 Section 17(2) now stipulates that the arbitral tribunal’s orders are deemed to be an order of the court and therefore enforceable under the Code of Civil Procedure. 83 Orders issued under section 17 ACA 1996 are appealable to the court pursuant to section 37 ACA 1996. If the tribunal’s order is confirmed, it could theoretically be considered an order of the court and, in this case, non-compliance could trigger contempt-of-court proceedings. However, the Supreme Court disagreed with this view and held that an order pursuant to section 17 ACA 1996 is not enforceable.168 The Supreme Court’s decision led to the problem that neither the arbitral tribunal nor the state courts could enforce interim measures pursuant to section 17 ACA 1996.169 The 2015 amendments solved this problem by clarifying that interim measures ordered by the arbitral tribunal shall be deemed to be an order of the Court for all purposes and shall be thus enforceable (section 17(2)). 84 Once an application for interim relief is pending before the arbitral tribunal, Indian courts, as a matter of principle, are required to use their power to order interim measures with caution. In SBP & Co. v. Patel Engineering Ltd, the Supreme Court held that the High Courts would not interfere with orders issued by the arbitrators during the course of the proceedings and that the parties could approach the courts only in terms of section 34 or section 37 ACA 1996.170 It is not clear, however, whether this judicial restraint follows from a strict primacy of section 17 over section 9 ACA 1996. The better view appears to be that there is usually no urgent need for state court measures as long as the arbitral tribunal can effectively protect the rights of the 82

164 See for an analysis of the 2015 amendment Moonka/Mukherjee, (2017) Brics Law J. 58, 60; also Maragulia, (2016) 8 Y.B. Arb. & Mediation 252, 260. 165 Cf. Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105, where the Supreme Court held that all provisions of Part I of the 1996 Act would apply to foreign arbitrations. The decision Bhatia International was overruled in 2012 in Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc., (2012) 9 SCC 552 paras 69 et seq. 166 Section 17 ACA 1996. 167 Cf. article 17 H and 17 I; similar regimes have been implemented in German and Austrian arbitration law, see § 1041 German ZPO, cf. supra J mn. 79; § 593 Austrian ZPO. 168 MD, Army Welfare Housing Organisation v. Sumangal Services (P) Ltd, (2004) 9 SCC 619; see also Intertoll ICS Cecons O&M Pvt Ltd v. National Highways Authority of India, 197 (2013) DLT 473, para. 42. 169 Cf. Aragaki, in: Reyes/Gu (eds.), The Developing World of Arbitration, 235. 170 2005 (3) ArbLR 285 (SC), para. 46.

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applicant, which means that the state courts are still empowered to order interim measures in cases where the arbitral tribunal’s competence to grant interim relief proves insufficient.171

6. Multi-party arbitration a) Arbitration agreement involving several parties. Indian law does not deal 85 specifically with multi-party arbitrations, but it is recognized that, as a matter of principle, a person who is not a party to an arbitration agreement cannot be referred to arbitration or joined as a party.172 In multi-party cases where only some of the parties are bound by an arbitration agreement, the Supreme Court even held that parties who are otherwise bound by an arbitration agreement cannot be referred to arbitration if the suit is also filed against parties who are not subject to the arbitration agreement.173 This principle, however, is restricted to domestic arbitration, since in Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., the Supreme Court ruled that in international arbitration seated abroad the parties bound by an arbitration agreement would have to be referred to arbitration.174 To avoid a splitting of the proceedings, the Supreme Court even held that also those parties who are not subject to the arbitration agreement could be referred to arbitration. b) Equality of arms and appointment of the arbitrators. In cases where several 86 parties are bound by an arbitration agreement, the issue arises how the parties on one side of the proceedings appoint their co-arbitrator if they cannot agree on one person. In such a case, most modern institutional rules stipulate that all three arbitrators shall be appointed by the institution, irrespective of any party nomination, in order to guarantee the principle of equality of arms.175

IV. The control and the enforcement of arbitral awards Indian as well as foreign arbitral awards (governed by the New York and the Geneva 87 Conventions) are final and binding on the parties and, as such, enforceable in the same manner as if they were a decree of the court.176

1. Correction and amendment of arbitral awards Under section 33 ACA 1996, the arbitral tribunal may correct computation, clerical, 88 typographical errors, or any error of a similar nature upon the request of one of the parties. Such request has to be filed within thirty days from the receipt of the arbitral award.177 The arbitral tribunal may also be requested to give an interpretation of a specific point or part of the award, provided that both parties agree.178 The tribunal is not obliged to correct or interpret the award but enjoys discretion as to whether such a 171 Cf., e. g. National Highways Authority of India (NHAI) v. China Coal Construction Group Corporation, AIR 2006 Delhi 134, where it was held that even during arbitral proceedings, interim measures could be ordered by the court. 172 Pawan Kumar Jain v. Parduman Jain, [2005] ILR Delhi 397; J.L. Kapur v. Burmah Shell Cooperative Housing Society (DB), [2008] (103) DRJ (103) 527. 173 Sukanya Holdings (P) Ltd v. Jayesh H Pandya, (2003) 5 SCC 351. 174 (2013) 1 SCC 641. 175 Cf., e.g, LCIA India article 8. 176 Section 35, 36, 46, 49 ACA 1996. 177 Section 33(1) ACA 1996. 178 Section 33(1)(b) ACA 1996.

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request is justified.179 The power to correct the award is strictly limited to formal errors and does not extend to errors of substance or content.180 89 Each party may also request the arbitral tribunal to make an additional award as to claims presented in the proceedings but omitted from the arbitral award.181 Also in this respect, the tribunal is only bound to make an additional award if it considers the request to be justified.182 Any correction or interpretation of the award or any additional award has to comply with the form requirements of section 31 ACA 1996.183

2. Review of arbitral awards before the state courts 90

Arbitral awards are final and not appealable under Indian law.184 Parties can challenge the award only on a limited number of grounds expressly stated in section 34 ACA 1996. Like in most other jurisdictions, parties cannot derogate from section 34 as it is a mandatory provision. In principle, the grounds for setting aside an award as stipulated in section 34 are exhaustive. Two other provisions, however, specify that in certain cases a section 34 petition can be filed. First, section 13(5) expressly states that also an arbitral award that has been made after an unsuccessful challenge of an arbitrator can be challenged under section 34 on the same grounds on which the arbitrator was challenged. Such a ground for challenge therefore qualifies as a plea that the composition of the arbitral tribunal was not in accordance with the agreement of parties or in accordance with the provisions of Part I ACA 1996. Second, section 16(6) ACA 1996 grants either party the right to challenge the award if the award incorrectly rejects the objection of that party during the proceedings that the tribunal lacks jurisdiction or is exceeding the scope of its authority.

a) Procedural framework (time limits, competent court, appeal). Pursuant to section 34(3) ACA 1996, an application for setting aside the award has to be made within three months from receipt of the award. The party challenging the award has to state and prove the specific grounds for annulment.185 In addition, an application for setting aside the award requires a prior notice to the other party.186 However, the Supreme Court held that a breach of the notification obligation has no further consequences.187 It is only if the subject matter is not arbitrable or the award is in conflict with public policy that the competent court can set aside the award ex officio.188 The court is not empowered to correct errors in law but may only quash the award allowing the party to restart the arbitration.189 92 Since the Supreme Court’s 2012 landmark decision in Bharat Aluminium v. Kaiser Aluminium,190 Indian arbitration law finally recognizes the territoriality principle enshrined in section 2(2) ACA 1996 and limits the competence of its state courts for annulment proceedings to Indian arbitral awards, i. e. awards where the place of 91

179

Section 33(2) ACA 1996. Instrumentation Ltd v. E. Kuttappan [1992] ArbLR (1) 284; McDermott International Inc. v. Burn Standard Co. Ltd, 2006 (5) ALD 84 (SC). 181 Section 33(4) ACA 1996. 182 Section 33(5) ACA 1996. 183 Section 33(7) ACA 1996. 184 Section 35 ACA 1996; cf. also section 37 which states that orders by a court or the arbitral tribunal can be appealed only in those cases which are expressly enumerated in this provision. 185 Section 34(2)(a) ACA 1996. 186 Section 34(5) ACA 1996. 187 State of Bihar v. Bihar Rajya Bhumi Vijas Bank Samiti, 2018, Civil Appeal No. 7314 of 2018. 188 Section 34(2)(b) ACA 1996. 189 McDermott International Inc. v. Burn Standard Co. Ltd, 2006 (5) ALD 84 (SC). 190 Bharat Aluminium v. Kaiser Aluminium, (2012) 9 SCC 552. 180

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arbitration was in India. The 2008 ruling in Venture Global Engineering v. Satyam Computer Services, where it had been held that the Indian courts were competent to review and set aside foreign arbitral awards unless the Parties had excluded Part I ACA 1996 by express or implied agreement,191 has been explicitly overruled and is therefore no longer good law, at least with respect to awards based on arbitration agreements which were entered into after 6 September 2012.192 The court in whose judicial district the seat of the arbitration is located has 93 jurisdiction to set aside the award. In the case Bgs Sgs Soma Jv v. Nhpc Ltd, the Supreme Court has ruled that the designation of the seat of the arbitration confers exclusive jurisdiction upon the courts at the place of arbitration agreed on.193 In presidency towns and Delhi, the High Courts have original jurisdiction for annulment proceedings under section 34, provided that the amount in dispute exceeds certain values In practice, the courts usually do not dismiss an application to set aside the award on the basis that no ground under section 34 has been established but give the respondent an opportunity to reply to the application. The time for annulment proceedings vary from court to court. Indian practitioners report that, depending on the courts involved, the proceedings can last three to five years, whereas the Delhi High Court typically disposes of section 34 petitions within a few months.194 Court orders under section 34 ACA 1996 are appealable according to section 37(1) 94 (c).195 The appeal court is the court authorized by law to hear appeals from original decrees of the court issuing the order. In principle, no second appeal lies from an order issued on appeal under section 37 except where a “special leave appeal” is made to the Supreme Court. The Supreme Court usually grants leave to hear the appeal if the stakes are sufficiently high, unless both lower courts have dismissed the petition under section 34.196 If an appeal is filed against an order dismissing a section 34 application in respect of a monetary award, the appeal court will usually require that the awarded sum be deposited in court and made available for withdrawal by the other party pending the appeal if sufficient security is provided.197 b) Grounds for setting aside arbitral awards. aa) Overview. The grounds for setting 95 aside an award rendered in India, as provided in section 34 of the Act, do not differ much from the internationally accepted standards for annulment proceedings. Similar to article 34 of the UNCITRAL Model Law, an award can be set aside if, first, a party was under some incapacity, second, the arbitration agreement was not valid under the governing law, third, a party was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings, fourth, the award deals with a dispute not covered by the arbitration agreement, fifth, the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, sixth,

191 Venture Global Engineering v. Satyam Computer Services, (2008) 4 SCC 190; for a commentary see Steinbrück, (2011) 13 Yearbook of Private International Law 481. 192 Supra mn. 9. 193 Bgs Sgs Soma Jv v. Nhpc Ltd, 2019, Civil Appeal No. 9307 of 2019. 194 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.101. 195 However, a court order, which merely transfers the section 34 proceedings from one court to another is not appealable under section 37, since such a transfer order is not tantamount to a refusal to set aside the award, see. Bgs Sgs Soma Jv v. Nhpc Ltd, 2019, Civil Appeal No. 9307 of 2019. 196 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.103. 197 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.102.

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the subject matter of the dispute is not capable of settlement by arbitration, and, seventh, the arbitral award is in conflict with the public policy of India. bb) Public policy. The ACA 1996 does not offer a comprehensive definition of “public policy”. However, in Explanation 1 at the end of section 34(2), the ACA 1996 sheds some light on this issue by specifying that an award is in conflict with the public policy of India only if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81 ACA 1996, the award is in contravention with the fundamental policy of Indian law or the award is in conflict with the most basic notions of morality or justice. While fraud and corruption are internationally recognized categories of public policy violations, the references to the confidentiality obligation in conciliation proceedings pursuant to section 75 and the evidential inadmissibility of certain information disclosed in conciliation proceedings are distinctive features of the ACA 1996.198 Explanation 2 further specifies that a contravention with the fundamental policy of Indian Law shall not entail a review on the merits of the dispute. For domestic arbitrations, section 34(2A), as amended by the 2015 Act, now stipulates that an arbitral award may be set aside if the court finds that the award is vitiated by patent illegality. Before 2015, patent illegality was recognized as a case of a conflict with the public policy. 97 Already before the 2015 reform, Indian courts interpreted the public policy ground narrowly, thereby following internationally accepted standards.199 For example, in 2005 the Supreme Court observed that the doctrine of public policy should only be applied to “clear and undeniable cases of harm to the public”.200 However, two years earlier in Oil & Natural Gas Corporation Ltd v. SAW Pipes Ltd, the Supreme Court held that the public policy ground in section 34 ACA 1996 should be given a wider meaning so as “to prevent frustration of legislation and justice”.201 Accordingly, the Supreme Court took the view that an award could be set aside if it is contrary to the fundamental policy of Indian law, the interests of India, or justice and morality, or if it is “patently illegal”.202 The Supreme Court clarified that illegality must go to the root of the matter, i. e. illegalities which are of trivial nature would not allow for the annulment of the award. The court added that an award could also be set aside if it is so unfair and unreasonable that it “shocks the conscience of the Court”.203 This interpretation of “public policy” gave the courts considerable discretion in reviewing and setting aside arbitral awards as it allowed them to review the application of the substantive law by the arbitral tribunal.204 In Oil & Natural Gas Corp. Ltd v. Western Geco International Ltd, the Supreme Court held that the “justice and morality” test proposed in Saw Pipes includes protection against “arbitrary, capricious or whimsical” conduct of an adjudicating body and against decisions that are “perverse or so irrational that no reasonable person would have arrived at the same”.205 In practice, the majority of arbitral awards were challenged 96

198

Cf. also Kachwaha, (2008) 4 Asian Int’l Arb. J. 64 (67). Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.95; Biswas, Introduction to arbitration in India, 2014, § 7.03, both with further references. 200 Zoroastrian Cooperative Housing Society Ltd v. District Registrar, Cooperative societies (Urban), AIR 2005 SC 2306, para. 32. 201 (2003) 5 SCC 705. 202 The wording of this decision became later the blueprint for the 2015 amendments. 203 Ssangyong Engineering & Construction Co. Ltd v. National Highways Authority of India (NHAI), Civil Appeal No. 4779 of 2019, para. 48. 204 For a positive assessment of the judgment cf. Sharma, (2009) 26 J. Int’l Arb. 133 et seq.; for a more critical view cf. Mukhopadhaya, in: Ostrove/Salomon/Shifman, Choice of Venue in International Arbitration, 2014, mns 9.95 et seq.; Nair, (2007) 23 Arb. Int’l 699, 730 et seq. 205 (2014) 9 SCC 263, paras 26 and 29. 199

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on the public policy ground under section 34 ACA 1996, which was considered by arbitration practitioners as undermining the purpose of section 34 ACA 1996.206 It remains to be seen whether this practice will change due to the amendment of section 34(2) ACA 2019.

3. Enforcing arbitral awards a) Overview. Domestic awards can be enforced after the time for making an 98 application to set aside the arbitral award under section 34 ACA 1996 has expired. Contrary to past practice, an application to set aside the arbitral award does not automatically render the award unenforceable under the 2015 Act. Only when a separate application concerning the enforcement has been filed, the court can grant an order to stay the enforcement proceedings. However, it was unclear whether the 2015 amendments would also apply to arbitrations and enforcement proceedings that were already pending when the 2015 was enacted. In BCCA v. Kochi Cricket Private,207 the Supreme Court decided that the amendments would have prospective effect only, i.e. only enforcement proceedings can be stayed which were commenced on or after the 2015 Act’s Commencement Date 23 October 2015. The date of the commencement of the arbitration is irrelevant. In contrast to the 2015 amendment, the 2019 Act introduced section 87, which provided that the 2015 Amendments would only apply to arbitral proceedings (and ancillary court proceedings) commenced on or after the Commencement Date. In Hindustan Construction Company Limited v. Union of India,208 however, the Supreme Court struck down section 87 of the 2019 Act, holding that this provision would violate Article 14 of the Constitution of India, which enshrines the fundamental right to equality. Thus, the BCCA v. Kochi Cricket Private ruling is still good law. The enforcement procedure of the Code of Civil Procedure 1908 applies in the same manner as if the award were a decree of the court19.209 The detailed procedure for the execution of the award is laid down in Order XXI of the Code of Civil Procedure. At the execution stage, domestic awards can no longer be challenged. Foreign awards can be enforced under Part II of the 1996 Act.210 Foreign awards 99 which are enforceable under Part II are also deemed to be a decree of the courts and enforced as such pursuant to the Code of Civil Procedure, 1908.211 A “foreign award” is an award from a country that is a signatory to the New York Convention or the Geneva Convention and that has been “notified” by the government of India. With respect to the New York Convention, however, section 44(b) ACA 1996 further stipulates that the respective foreign country must be “notified” in the Official Gazette of the Central Government as one of the countries to which the New York Convention applies. To date, only about a third of the more than 150 countries which have signed the New York Convention have been “notified” in the Official Gazette of India, including the US, the UK, France, Australia, and Singapore. In 2012, India added China, including Hong Kong and Macao, to its Official Gazette. In 2015, the Republic of Mauritius was added.

206 Mukhopadhaya, in: Ostrove/Salomon/Shifman, Choice of Venue in International Arbitration, 2014, mn. 9.97. 207 (2018) 6 SCC 287. 208 Writ Petition (Civil) No. 1074 of 2019. 209 Section 36 ACA 1996. 210 Cf. Kumar et al., in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445–476. 211 Section 49, section 58 ACA 1996.

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The ACA 1996 does not prescribe any time limit within which an application to enforce a foreign award must be filed with the court.212 However, it has been held that the limitation period of twelve years set forth by the Limitation Act 1963 would apply.213

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b) Defences to enforcement of foreign awards. aa) Overview. Enforcement of a foreign award may be refused only at the request of the party against whom it is invoked, provided the party satisfies one of the grounds enumerated in section 48 ACA 1996. These grounds are more or less the same as those in section 34 for setting aside awards (supra mns 96–98). Commentators argue that Indian courts retain discretion to enforce an award even where a defence to enforcement exists.214

bb) Lack of jurisdiction. Under section 48 ACA 1996, a foreign award cannot be challenged successfully on the ground that the arbitral tribunal had no jurisdiction to make the award since Part II does not contain a provision similar to section 16(6) ACA 1996, which expressly allows a party to challenge the award when the party’s earlier objection to the tribunal’s jurisdiction was rejected.215 Under section 48 ACA 1996, enforcement of a foreign award can only be refused on the ground that the said arbitration agreement is invalid under the applicable law.216 As a result, a party cannot challenge the enforcement of an award under section 48 on the ground that the arbitral tribunal ruled upon counterclaims that were allegedly not subject to the arbitration agreement. 103 The unlawful composition of the arbitral tribunal or other procedural irregularities are a ground to refuse enforcement of a foreign award only if the party against whom the award is to be enforced proves that the composition of the tribunal or the arbitral procedure was not in accordance with the law of the seat of the arbitration.217 102

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cc) Breach of public policy. As regards public policy, it is important to note that this defence to the enforcement of foreign awards used to be construed broadly. In Phulchand Export Ltd v. OOO Patriot, the Supreme Court held that the enforcement of foreign awards can also be refused on the ground of “patent illegality” of the award.218 However, this decision was perceived by commentators to be at odds with the Convention.219 It had, in any event, only a limited effect in practice since Indian courts have rarely refused enforcement of foreign awards.220 The approach of limiting judicial scrutiny of foreign arbitral awards was confirmed in 2013 when the Supreme Court overruled its Phulchand decision in Shri Lal Mahal Ltd v. Progetto Grano Spa, holding that the public policy doctrine under section 48 ACA 1996 is narrower than under section 34 as it only comprises the categories “fundamental policy of India”, “interests of India”, and “justice and morality”.221 212 Kumar et al., Interpretation and Application of the New York Convention in India, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445 (472). 213 Cf. Noy Vallesina Engineering Spa v. Jindal Drugs Ltd, (2006) 3 ArbLR 510 (Bom). 214 Kumar et al., in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445 (457). 215 Noy Vallesina Engineering Spa v. Jindal Drugs Ltd, (2006) 3 ArbLR 510 (Bom). 216 Cf., e. g. Goldcrest Exports v. Swissgen N.V., (2005) 3 ArbLR 58 (Bom). 217 Transocean Shipping Agency (P) Ltd v. Black Sea Shipping, (1998) 2 SCC 281. 218 (2011) 10 SCC 300; see also Biswas, Introduction to arbitration in India, 2014, § 7.04. 219 Kumar et al., in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445 (468). 220 Mukhopadhaya, in: Ostrove/Salomon/Shifman (eds), Choice of Venue in International Arbitration, 2014, mn. 9.99. 221 (2014) 2 SCC 433, paras 25 et seq. For a comment cf., e. g. Gupta, (2013) 2 Indian Journal of Arbitration Law 10. Also see the statutory explanations added to section 48(2)(b) ACA.

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dd) Enforcement of awards that have been set aside. Section 48(1)(e) ACA 1996 105 stipulates that enforcement of a foreign award may be refused if it has been set aside by a court in the country in which, or under the law of which, that award was made. Since the Supreme Court’s decision in Bharat Aluminium, it is recognized that the country of origin within the meaning of this provision is the country whose law is the governing law of the arbitration, i. e. the law of the place or seat of the arbitration.222 If the court is satisfied that the arbitral award has been set aside by the courts of the 106 seat of the arbitration, Indian courts would usually recognize such annulment as a valid defence.223 It is unclear, however, whether the courts are bound by a foreign annulment decision or whether they may review the foreign annulment decision like any other foreign court decision and, consequently, enforce the award if the annulment decision is not recognized. It has been argued that Indian courts are in principle entitled to enforce an award that has been annulled abroad because foreign awards do not merge with the judgments on these awards under Indian law.224 But foreign judgments will operate in India as res judicata if they meet the requirements set forth in section 13 of the Code of Civil Procedure 1908, which usually means that the Indian courts will have to refuse enforcement of the foreign award if the annulment decision is brought to its attention.225 If an application for the setting aside of the foreign award is pending in the country 107 of origin, the court may adjourn its decision on the enforcement of the award. In such a case, it may order the party refusing enforcement to provide security upon the application of the party claiming enforcement.

4. Preclusion of grounds for challenge and defences to enforcement a) Failure to object. Pursuant to section 4 ACA 1996, a party who is aware of either a 108 violation of a non-mandatory provision or the non-compliance with a requirement under the arbitration agreement is obliged to object to such non-compliance without undue delay. Otherwise, the party will be deemed to have waived its right to object. As a result, a party challenging the enforcement of an arbitral award is precluded from raising such non-compliance as a defence if the party has not done so during the arbitral proceedings unless the ground for challenge is based upon a breach of mandatory law.226 For example, in Prasun Roy v. Calcutta Metropolitan Development Authority,227 the court had appointed another arbitrator in place of the arbitrator named in the arbitration agreement based on an allegation of bias, and the parties subsequently participated in the proceedings before the new arbitrator without any objection. Only after the arbitral award had been rendered was the award challenged on the ground that the appointment of the arbitrator was flawed. The Supreme Court rejected that objection, holding that the principle of waiver and estoppel precludes a party from challenging an award where it has participated in the arbitration proceedings without objection and thus acquiesced to the appointment.

222

Bharat Aluminium v. Kaiser Aluminium, (2012) 9 SCC 552. Bharat Aluminium v. Kaiser Aluminium, (2012) 9 SCC 552. 224 Ramaswamy, (2002) 19 J. Int’l Arb. 461 (468 et seq.). 225 Ramaswamy, (2002) 19 J. Int’l Arb. 461 (469). 226 Inder Sain Mittal v. Housing Board Haryana, (2002) 3 SCC 175 (“there is no estoppel against statute”); cf. also M/s. Neelakantan & Bros. Construction v. Superintending Engineer, National Highways, Salem, (1988) 4 SCC 462. 227 (1987) 4 SCC 217. 223

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b) Effect of foreign decisions and res judicata. There appears to be limited case law on the effect of foreign decisions, but occasionally Indian courts have held that parties cannot raise in Indian enforcement proceedings a defence that had already been raised, and rejected, in setting aside proceedings abroad.228 228 Kumar et al., in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 445 (458).

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M. International Arbitration in the Netherlands Bibliography: Barten/Krestin, State Immunity from Enforcement in The Netherlands: Will Creditors be Left Empty-Handed?, Kluwer Arbitration Blog, 25 April 2017; Born, International Commercial Arbitration, 2nd ed., Kluwer 2014; De Ly, Internationale Arbitrage, (2006) TvA 27; De Ly, Netherlands Arbitration Institute, 30 March 2007, (2008) TvA 34; De Ly, Het Wetvoorstel Modernisering van het Arbitragewet en de Internationale Arbitrage, (2013) TvA 38; Ernste, Bindend Advies, Kluwer 2012; Ernste/ Vermeulen, The Netherlands Commercial Court – An Attractive Venue for International Commercial Disputes, (2016) 4 TCR 127; Franx, Het Ontwerp Boek IV van het Wetboek van Burgerlijke Rechtsvordering, W.E.J. Tjeenk Willink 1985; Hondius, Contractenrecht VII, No. 115, Kluwer 1989; Hugenholtz, Hoofdlijnen van Nederlands Burgerlijk Procesrecht, Reed Business 2006; Josephus Jitta, Reactie op ‘Het tijdigheidsvereiste van artikel 1022c en artikel 1074d Rv in het kort geding’, (2016) TvA 68; Klaassen/ Meijer/Schleijpen (eds), Going Dutch: ADR in Nederland, in het bijzonder bij het NAI, Kluwer 2019; Knigge/Ribbers, Arbitrage, Afstand van Recht en art. 6 EVRM, (2017) TvA 20; Korthals Altes, in: Sanders/Van den Berg (eds), The Netherlands Arbitration Act, Kluwer 1986; Kuijpers, The Netherlands Commercial Court, Ars Aequi 2019; Lazić, Arbitration Law Reform in the Netherlands: Formal and Substantive Validity of an Arbitration Agreement, (2007) 11 Electronic Journal of Comparative Law 1; Lazić, Interpretation and Application of the New York Convention in The Netherlands, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 689–731; Lazić, Insolvency Proceedings and Commercial Arbitration, Kluwer 1998; Lazić, Using the ‘Group of Companies’ Doctrine to Extend Arbitration Agreements to ‘Third-Parties’, (2013) 6 Nederlands Tijdschrift voor Handelsrecht 332; Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 631–707; Meerdink, Symposium Herziening Arbitragerecht, (2005) TvA 75; Meijer, De Overeeenkomst tot Arbitrage volgens het Wetsvoorstel Modernisering Arbitragerecht (2013) TvA 33; Meijer, in: Nairn/Heneghan (eds), Arbitration World, Thomson Reuters 2012; Meijer, in: Snijders (ed.), Tot Persistit! 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Snijders, Gouda Quint, 1992; Meijer, Overeenkomst tot Arbitrage, Kluwer 2011; Meijer, in: Van Mierlo/Van Nispen (eds), Burgerlijke Rechtsvordering Tekst & Comentaar, Kluwer 2018; Meijer/Van Mierlo/Hoebeke/Krzemiński, Parlementaire Geschiedenis Arbitragewet, Kluwer 2015; Meijer/Paulsson, in: Bosman (ed.), National Report for The Netherlands (2012 through 2014), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 78, March 2014; Oranje, The Coming into Being of the Netherlands Commercial Court, (2016) 4 TCR 122; Paulsson, Enforcement of Annulled Awards: A Restatement for the New York Convention?, Kluwer Arbitration Blog, 21 December 2017; Peters, Drie Jaar Nieuwe Arbitragewet: Tien Suggesties voor Verbetering, (2018) 4 TCR 101; Peters, IPR, Proces & Arbitrage: Over grondslagen en rechtspraktijk, Maku 2016; Sanders, Het Nederlandse Arbitragerecht, Kluwer 2001; Sanders, Het Nieuwe Arbitragerecht, Kluwer 1996; Sanders, Quo Vadis Arbitration? Sixty Years of Arbitration Practice, Kluwer 1999; Sanders/Klaassen/Meijer, Nederlands burgerlijk procesrecht, Kluwer 2017; Sanders/Van den Berg, The Netherlands Arbitration Act, Kluwer 1986; Snijders, Arbitrage, vertrouwlijkheid of openbaar mixtum daarvan, (2014) TvA 1; Snijders, NCC en arbitrage, (2018) TvA 1; Snijders, Nederlands Arbitragerecht, Kluwer 2011; Snijders, Nederlands Arbitragerecht, Kluwer 2018; Snijders, 5 jaar Arbitragewet 2015 én andere ontwikkelingen in het afgelopen lustrum, (2020) TvA 1; Stouten/Stevens, Het tijdigheidsvereiste van artikel 1022c en artikel 1074d in kort geding, (2016) TvA 25; Strik/Hoefnagel, Uitsluitingsovereenkomsten en het Consultatie-Wetsontwerp Herziening Arbitragewetgeving: Een Gemiste Kans?, (2012) TvA 20; Uilenbroek, De terugverwijzing van een arbitraal vonnis wegens strijd met de openbare orde, (2019) TvA 64; Van den Berg, Hoe Gastvrij is Nederland voor International Arbitrage, Lecture given at the Erasmus University Rotterdam – 11 April 1990, Kluwer 1990; Van den Berg, in: Van den Berg (ed.), International Handbook on Commercial Arbitration, Kluwer 1987; Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, Kluwer 1993; Van Dunné, Verbintenissenrecht Deel 1, Kluwer 2004; Van de Hel-Koedoot, De (kosten)veroordeling in arbitrage. Een overzicht aan de hand van het NAI Arbitrage Reglement, (2009) TvA 13; Van den Nieuwendijk, Aanvulling van Arbitrale Vonnissen, (2002) TvA 1; Van Hezewijk, HR 24 november 2017 (Maximov) en HR 15 juni 2018 (Diag), (2019) TvA 48; Van Houte, Wat is de Betekenis van een Onherroepelijk Rechterlijk Vonnis voor een Posterieure Toetsing van een Arbitraal Vonnis?, (2006) 6 NJB 318; Van Rossum, Vaststellingsovereenkomst, Kluwer 2001; Van Mierlo/Meijer, Aantasting van arbitrale vonnissen, (2014) WPNR 60–71; Van Schaick, Mr. C. Assers Handleiding tot de beoefening van het Nederlands Burgerlijk Recht. 7. Bijzondere overeenkomsten. Deel VIII. Bewaarneming, borgtocht,

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Part 3. Country Reports vaststellingsovereenkomst, bruikleen, altijddurende rente, spel en weddenschap, Kluwer 2018; Van Zelst, Dissenting Opinions in Arbitrage, (2015) TvA 21; Voulgarakis, EU Law and Arbitration from a Procedural Law Perspective (in Greek), Sakkoulas 2018. National legislation: Dutch Constitution (Grondwet); Dutch Civil Code (Burgerlijk Wetboek, BW); articles 254, 238, 438, 990, 1020–1076 Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering, Rv), as reflected in the 2014 Dutch Arbitration Act (Wet van 2 juni 2014) and the law establishing the Netherlands Commercial Court (Wet van 12 december 2018); Law of 15 November 2012 implementing Directive 2008/52/EC on Certain Aspects of Mediation in Civil and Commercial Matters (Wet van 15 november 2012 tot Implementatie van de Richtlijn Betreffende Bepaalde Aspecten van Bemiddeling/Mediation in Burgerlijke en Handelszaken). All of the abovementioned laws are published online in Dutch by the Dutch Government (Overheid) at wetten.overheid.nl. Unofficial English translations can be found online. International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (Stb. 1963, 417), ratification status available at https://treaties.un.org; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (Stb. 1966, 339), ratification status available at https://icsid.worldbank.org; Energy Charter Treaty, Lisbon, 17 December 1994 (Stb. 1996, 282), ratification status available at https:// www.energycharter.org/process/energy-charter-treaty-1994/energy-charter-treaty/signatories-contractingparties/ (accessed 1 August 2020).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of Dutch arbitration law ................................ II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Arbitration agreements in general terms and conditions and with consumers...................................................................................... e) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................

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M. International Arbitration in the Netherlands 2. The arbitral proceedings ........................................................................... 66 a) The request for arbitration ................................................................. 67 b) Equality of arms, fair trial principles and the right to be heard 69 c) Confidentiality ....................................................................................... 72 d) The arbitral award ................................................................................ 74 e) Termination of the arbitration without an award......................... 80 f) The costs of the arbitration ................................................................ 82 3. Evidence, discovery, disclosure................................................................ 87 4. The law governing the dispute and lois de police ............................... 90 a) Choice of law and domestic public policy ...................................... 91 b) Choice of law and foreign lois de police........................................... 93 5. Interim relief in arbitration ...................................................................... 94 a) Interim relief before state courts ....................................................... 94 b) Interim relief before the arbitral tribunal ........................................ 95 6. Multi-party arbitration .............................................................................. 96 a) Arbitration agreement involving several parties ............................ 97 b) Equality of arms and appointment of the arbitrators .................. 98 IV. The control and the enforcement of arbitral awards ............................. 100 1. Correction and amendment of arbitral awards ................................... 101 2. Review of arbitral awards before the state courts ............................... 105 a) Procedural framework (time limits, competent court, appeal) .. 106 b) Grounds for setting aside arbitral awards ....................................... 109 aa) Overview .......................................................................................... 109 bb) Lack of jurisdiction of the arbitral tribunal ............................. 112 cc) Unlawful composition of the tribunal and other procedural irregularities..................................................................................... 114 dd) Public policy.................................................................................... 119 3. Enforcing arbitral awards ......................................................................... 120 a) Overview ................................................................................................. 120 aa) Domestic awards ............................................................................ 120 bb) Foreign awards ............................................................................... 122 b) Defences to enforcement ..................................................................... 124 aa) Overview .......................................................................................... 124 bb) Enforcement of awards that were set aside.............................. 125 4. Preclusion of grounds for challenge....................................................... 128

I. Introduction Arbitration has for many years now played an important role as a mechanism for the 1 settlement of disputes in the Netherlands.1 Within the last century, the use of arbitration in the Netherlands has increased significantly.2 Over the past 10 to 15 years, the number of arbitral proceedings initiated has been relatively steady.3 It is argued that the expansion of arbitral institutions for specific industry sectors has had a positive effect on the total number of arbitrations conducted in the Netherlands.4 Moreover, the prominence of the Hague-based Permanent Court of Arbitration in the administration of inter-state and investor-state arbitration proceeding has also contributed to this 1 Statutory arbitration provisions in the Netherlands can be found in legislation dating back to 1838; see Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, 631. 2 Snijders, Nederlands Arbitragerecht, 2018, 52. 3 An average of approximately 978 arbitration proceedings were initiated per year at the Court of Arbitration for the Building Industry and an average of 130 arbitration proceedings per year were initiated at the Netherlands Arbitration Institute (Statistics Netherlands, Rechtspleging en Civiel Bestuur, 2017). 4 Meijer/Paulsson, in: Bosman (ed.), International Handbook on Commercial Arbitration, 2014, 3.

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trend. Other noteworthy recent developments include the establishment of the Englishspeaking Netherlands Commercial Court (NCC)5 as well as the opening of The Hague Hearing Centre (THHC),6 both in 2018.

1. The legal framework The Dutch arbitration law, as amended by the 2014 Dutch Arbitration Act (Wet van 2 juni 2014 tot wijziging van Boek 3, Boek 6 en Boek 10 van het Burgerlijk Wetboek en het vierde Boek van het Wetboek van Burgerlijke Rechtsvordering in verband met de modernisering van het Arbitragerecht), is for a large part included in Book IV of the Dutch Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering, Rv).7 Book IV of the Dutch Code of Civil Procedure is divided into two Titles. Title One relates to arbitration with a seat in the Netherlands,8 whereas Title Two deals with arbitration with a seat outside the Netherlands.9 The Dutch arbitration law, in its current form, entered into force on 1 January 2015.10 it is applicable to arbitrations commenced on or after 1 January 2015.11 3 Before the entry into force of the 2014 Dutch Arbitration Act, and the revisions it introduced to (inter alia) articles 1020–1076 Rv, the Dutch arbitration law was based on the 1986 Dutch Arbitration Act. The development of the latter was influenced by international treaties, other arbitration laws and jurisprudence.12 The 1986 Dutch Arbitration Act was considered to be a success.13 Nonetheless, certain drawbacks were revealed through practice.14 This fact led practitioners to put forward proposals for amendments to the law, which were eventually picked up in the 2014 Dutch Arbitration 2

5 Wet van 12 december 2018 tot wijziging van het Wetboek van Burgerlijke Rechtsvordering en de Wet griffierechten burgerlijke zaken in verband met het mogelijk maken van Engelstalige rechtspraak bij de internationale handelskamers van de rechtbank Amsterdam en het gerechtshof Amsterdam. The NCC consists of the NCC District Court and the NCC Court of Appeal. The NCC has jurisdiction in civil and commercial matters within the parties’ autonomy; the matter concerns an international dispute; the Amsterdam District Court or the Amsterdam Court of Appeal is the competent court; and the parties have expressly agreed to proceedings before the NCC in English. In proceedings before the NCC, separate rules of procedure apply alongside Dutch statutory rules of civil procedure. These rules of procedure contain provisions tailored to international commercial cases, such as the possibility to submit documents electronically and make use of case management conferences as well as court reporters during hearings. Cassation proceedings concerning NCC decisions take place before the Supreme Court (in Dutch). It is possible for parties to an arbitration to agree to setting aside proceedings in English before the NCC (see infra 108). The NCC rendered its first judgment in March 2019 in NCC, 8 March 2019, 19/003 (Elavon Financial Services DAC vs IPS Holding B.V. and others). See also Oranje, (2016) 4 TCR 122; Ernste/ Vermeulen, (2016) 4 TCR 127; Kuijpers, The Netherlands Commercial Court, 2019; Snijders, (2018) TvA 1. 6 See https://www.thehaguehearingcentre.com (accessed 1 August 2020). 7 Articles 1020–1076 Rv. 8 Articles 1020–1073 Rv. 9 Articles 1074–1076 Rv. 10 Besluit 30 June 2014 (Stb. 2014, 254). For an informal, unofficial English translation of the Dutch arbitration law, please see http://kluwerarbitrationblog.com/blog/2014/05/28/new-dutch-arbitration-lawadopted (accessed 1 August 2020). 11 Wet van 2 juni 2014, article IV. Minor amendments have been introduced to article 1064a Rv since 1 January 2015 (please see Wet van 12 december 2018, article I.B). 12 The laws of France and Switzerland, as well as the 1976 UNCITRAL Arbitration Rules and the 1985 UNCITRAL Model Law on International Commercial Arbitration and other international treaties are noteworthy examples. See MvT, (1984) TvA 4A, 19–20; MvA, (1986) TvA 2, 57–58; Korthals Altes, in: Sanders/Van den Berg, (eds) The Netherlands Arbitration Act, 1986; Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 1; Snijders, Nederlands Arbitragerecht, 2018, 59–61; Franx, Het ontwerp Boek IV van het Wetboek van Burgerlijke Rechtsvordering, 1985, 73. 13 Van den Berg, Hoe Gastvrij is Nederland voor International Arbitrage?, 1990. 14 Toelichting op Voorstel tot Wijziging van Arbitragewet, (2005) TvA 37, 126.

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Act.15 It was perceived that, while the basic principles of the UNCITRAL Model Law had been incorporated into the 1986 Dutch Arbitration Act,16 a further streamlining with the UNCITRAL Model Law would make the Netherlands an even more attractive venue for arbitral proceedings. In addition, amendments made to arbitration laws in various other jurisdictions, along with revisions of institutional rules highlighted the need for an updated arbitration law and for more efficient arbitral procedures. All in all, an updated arbitration law was deemed necessary in order to keep up with modern trends.17 In terms of international instruments, the Netherlands is signatory to the New York 4 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which was ratified on 14 October 1963.18 Apart from the reciprocity reservation, no other reservations were made by the Netherlands when ratifying the New York Convention.19 Furthermore, the Netherlands is also party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), which was ratified in 1966.20 In addition, the Netherlands has signed and ratified a significant amount of Bilateral Investment Treaties,21 and has been leading the Energy Charter Treaty (the ECT) initiative, which is currently the most prominent multilateral investment treaty.22 Finally, EU law has also influenced Dutch arbitration law.23 a) Domestic and international arbitration. Dutch arbitration law does not distin- 5 guish between domestic and international arbitration as such (i.e., in terms of the nationality/residence of the parties and/or the cross-border nature of the dispute). The main distinction is drawn between arbitrations seated in the Netherlands and those seated abroad. Articles 1020–1073 Rv apply to any arbitration, provided that the seat of arbitration is in the Netherlands, whereas articles 1074–1076 Rv apply to arbitration seated abroad.24 Such an approach was adopted in order to avoid disputes as to whether 15 The necessity for an amendment to the arbitration law was expressed while amendments to Book I Rv were under consideration. See Nota naar aanleiding van het Eindverslag, Kamerstukken II 1999/00, 26855, nr. 5, 3 in Toelichting fn. 14, 126. 16 Lazić, Arbitration Law Reform in the Netherlands: Formal and Substantive Validity of an Arbitration Agreement, (2007) 11 Electronic Journal of Comparative Law 1 (2). 17 Meerdink, Symposium Herziening Arbitragerecht, (2005) TvA 75, 162; Kamerstukken II 2013/14, 33611, nr. 3, 1–2. See Meijer/Van Mierlo/Hoebeke/Krzemiński, Parlementaire Geschiedenis Arbitragewet, 2015 for more information regarding the travaux préparatoires of the 2014 Dutch Arbitration Act. Since the entry into force of the 2014 Dutch Arbitration Act, suggestions for further improvements to the Dutch arbitration law have emerged; see Peters, (2018) 4 TCR 101. See also Snijders, (2020) TvA 1. For more information on latest topics of interest in the Dutch Arbitration scene, see also Klaassen/Meijer/ Schleijpen (eds), Going Dutch: ADR in Nederland, in het bijzonder bij het NAI, 2019. 18 Rijkswet 14 October 1963 (Stb. 1963, 417). The instrument of ratification was deposited with the Secretary-General of the United Nations on 24 April 1964, in accordance with article VIII(2) New York Convention and the Convention entered into force on 23 July 1964, pursuant to article XII(2) New York Convention. 19 On the reciprocity reservation, see supra B mns 74–76. 20 Rijkswet 21 July 1966 (Stb. 1966, 339). The instrument of ratification was deposited with the World Bank on 14 September 1966, in accordance with articles 68(2) and 73 of the Convention, and the Convention entered into force on 14 October 1966, pursuant to article 68(2) of the same Convention. 21 For a list of the Bilateral Investment Treaties signed by the Netherlands, see http://www.rijksoverheid.nl/onderwerpen/internationaal-ondernemen/documenten-en-publicaties/rapporten/2010/02/22/ibolandenlijst.html (accessed 1 August 2020). For a commentary on investor protection under such treaties, see supra chapter C. 22 Rijkswet 15 May 1996 (Stb. 1996, 282). The instrument of ratification was deposited with the Government of the Portuguese Republic on 16 December 1997, in accordance with articles 39 and 49 of the Treaty and the Treaty entered into force on 16 April 1998, pursuant to article 44(1) of the same Treaty. 23 Meijer, in: Nairn/Heneghan (eds), Arbitration World, 2012, 595. 24 Article 1073(1) Rv.

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cases are domestic or international, as a distinction between the two may not be necessarily be straightforward.25 It was also considered that a properly drafted framework should suit both domestic and international arbitral proceedings.26 6

b) Commercial and non-commercial arbitration. Dutch arbitration law does not only cover commercial arbitration. Parties may submit disputes to arbitration that arise out of a defined legal relationship, whether contractual or not.27 Certain types of disputes may, however, not be arbitrable (infra mn. 26).

c) Ad hoc and institutional arbitration. Dutch arbitration law applies both to institutional and ad hoc arbitration. Most arbitrations in the Netherlands are institutional. The most prominent institutions are the Netherlands Arbitration Institute (NAI) 28 and the Arbitration Institute for the Construction Industry (Raad van Arbitrage voor de Bouw). Other noteworthy ones include Foundation TAMARA, which recently changed its name to Unum and deals with maritime and transport arbitration, PRIME Finance, which is of particular interest to the financial sector, and finally, the Permanent Court of Arbitration in The Hague, which mainly administers international inter-state and investor-state arbitrations (and also arbitrations under the PRIME Finance Arbitration Rules). The list of arbitral institutions is extensive and delves into various industries such as potato, grain and feed trade, flower bulbs, road forwarding transport, the metal industry, dried semi-tropical fruits and spices, automation and football. 8 While not as popular as institutional arbitration, ad hoc arbitration is still available in the Netherlands, with Dutch arbitration law including fall-back provisions that can assist with the process of ad hoc arbitration. 7

d) The territoriality principle, the seat of the arbitration and the lex arbitri. The Netherlands applies the so-called territoriality principle, which is also applicable in a number of other jurisdictions. The majority of the provisions of Dutch arbitration law are only applicable if the seat of arbitration is in the Netherlands.29 Only articles 1074–1076 Rv deal with arbitrations seated outside the Netherlands. 10 The parties are free to decide on the seat of arbitration. Failing such agreement, the tribunal can select the seat of arbitration.30 If the seat of arbitration has not been determined either by the parties or the tribunal, the seat is deemed to be the place where the award is made, as stated by the tribunal in the award.31 As the seat is a legal concept, this does not bar the tribunal from holding hearings, deliberating, and hearing witnesses 9

25 MvT, (1984) TvA 4A, 19; Snijders, Nederlands Arbitragerecht, 2018, 68; Hugenholtz, Hoofdlijnen van Nederlands Burgerlijk Procesrecht, 2006, 212; Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 120. 26 Meijer/Paulsson, in: Bosman (ed.), International Handbook on Commercial Arbitration, 2014, 2; Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 120; Van den Berg, Hoe Gastvrij is Nederland voor International Arbitrage?, 1990, 4. 27 Article 1020(1) Rv. 28 In order to bring its arbitration rules in line with the new Dutch arbitration law, the NAI decided to amend its arbitration rules and published the 2015 NAI Arbitration Rules (NAI Rules). Only proceedings initiated on or after 1 January 2015 are covered by this set of rules. Nevertheless, the provision on consolidation of pending arbitral proceedings, along with the provision which provides that the arbitral tribunal will decide in accordance with the rules of law and the provision allowing the tribunal to decide as amiable compositeur only apply to arbitration agreements concluded on or after 1 January 2015, unless the parties agree otherwise. In respect of arbitration agreements concluded prior to 1 January 2015, the 2010 NAI Rules shall continue to apply. 29 Article 1073(1) Rv. 30 Article 1037(1) Rv. 31 Article 1037(2) Rv.

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and experts at any other place in the Netherlands or abroad, whenever necessary, unless the parties to the arbitration have agreed otherwise.32 The seat of arbitration determines, among other things, the President (voorzienin- 11 genrechter) of which District Court shall be competent to grant leave for enforcement of the arbitral award,33 as well as the court that shall examine any potential application for the setting aside of the award.34 Certain rules found in Dutch arbitration law also apply to arbitrations where the 12 parties have not determined the seat of arbitration or to arbitrations seated abroad. First, where the parties have not reached a decision on the seat of arbitration, the appointment or challenge of the arbitrator(s) or the secretary of the tribunal may take place according to the rules prescribed by Dutch arbitration law,35 if at least one of the parties is domiciled or has its actual residence in the Netherlands.36 Secondly, in case an arbitration agreement has been concluded, pursuant to which arbitration shall take place outside the Netherlands, Dutch arbitration law requires Dutch courts to decline jurisdiction.37 In such case, Dutch courts are not precluded from granting interim measures38 or assisting with evidence.39 e) Arbitration and other ADR mechanisms (mediation, expert determination). 13 Dutch law does not (yet) contain any specific statutory provisions in relation to domestic mediation. The only state regulation of mediation relates to cross-border mediation in the EU, based on the Mediation Directive (2008/52/EC).40 Several attempts have been made to create a statutory basis for domestic mediation in Dutch law. A parliamentary legislative proposal pertaining to the registration and improvement of mediators and mediation was tabled in 2013, but has not been adopted to date.41 In the meantime, the Netherlands Mediation Institute (NMI), established in 1993, fills the void with its 2008 Mediation Rules. A notable development is the entry into force of the NAI Mediation Rules as of 1 January 2017. These provide an opportunity to parties to file a request for mediation with the NAI. The Netherlands is not a party to the United Nations Convention on International Settlement Agreements Resulting from Mediation (also known as the Singapore Mediation Convention; this was adopted on 20 December 2018 by resolution 73/198 during the seventy-third session of the General Assembly of the United Nations. It has entered into force on 12 September 2020). Another ADR mechanism available in the Netherlands is the one of binding advice 14 (bindend advies) by an independent third party.42 It was developed in practice for matters that were not arbitrable, as a mechanism of informal private dispute resolution. This ADR mechanism has been incorporated (since 1 September 1993) in the Dutch 32

Article 1037(3) Rv. Article 1062(1) Rv. 34 Article 1064a(1) Rv. 35 Articles 1023–1035a Rv. 36 Article 1073(2) Rv. 37 Article 1074 Rv. 38 Article 1074a Rv. 39 Articles 1074b–c Rv. 40 Law of 15 November 2012 implementing Directive 2008/52/EC on Certain Aspects of Mediation in Civil and Commercial Matters (Wet van 15 november 2012 tot Implementatie van de Richtlijn Betreffende Bepaalde Aspecten van Bemiddeling/Mediation in Burgerlijke en Handelszaken) (Stb. 2012, 570). This law entered into force on 21 November 2012. 41 See https://mfnregister.nl/brief-aan-minister-dekker-aanbevelingen-voor-wetsontwerp-mediation (accessed 1 August 2020). 42 For more information on binding advice under Dutch law, cf. Snijders, Nederlands Arbitragerecht, 2018, 75 et seq.; Meijer, in: Snijders (ed.): Tot persistit!, 1992, 51–67; Van Rossum, Vaststellingsovereenkomst, 2001; Sanders/Klaassen/Meijer, Nederlands burgerlijk procesrecht, 2017, 554 et seq. 33

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Civil Code (Burgerlijk Wetboek, BW) in the form of a settlement agreement (vaststellingsovereenkomst) that can be concluded between the parties to a dispute, without prescribing any procedural rules.43 15 Binding advice resembles arbitration, with two important differences. First, binding advice decisions do not result in an award or judgment as such. Binding advice decisions are contractually binding on the parties. Hence, the only remedy when a party does not comply with a binding advice decision is claiming specific performance of the agreement before a court. Secondly, the merits of binding advice decisions are subject to a more (limited) review than arbitral awards. This review is based on the principles of reasonableness and fairness. Parties agreeing to submit their differences to binding advice cannot refer matters to arbitration or litigation before the state courts. Yet, this does not preclude them from requesting injunctive relief from the President of the District Court in summary proceedings.44 The most important institutes offering binding advice proceedings in the Netherlands are the NAI, which in 2015 introduced new binding advice rules,45 as well as the Stichting Geschillencommissies voor Consumentenzaken (SGC) and the Klachteninstituut Financiële Dienstverlening (KiFiD).46

2. The guiding principles of Dutch arbitration law 16

Article 17 of the Dutch Constitution (Grondwet) provides that no one can be prevented against his or her will from being heard by a court which is entitled to hear his or her case. Hence, it is understood that any waiver of this right in favour of arbitration must be based on the consent of the parties. For this reason, the principle of party autonomy is of fundamental importance in Dutch arbitration law. This principle provides that the arbitral proceedings shall be carried out in such manner as agreed between the parties (without prejudice to the mandatory provisions found in the law).47 Other guiding principles for arbitration in the Netherlands are the principle of equality of the parties and the right to be heard.48

II. The arbitration agreement 17

As mentioned above, the importance of consent to arbitration is fundamental. This is why the arbitration agreement is the cornerstone of any arbitration. It records the consent of the parties. Without it, state courts will have jurisdiction over the dispute.49 The importance of the arbitration agreement is evident in Dutch arbitration law, as the lack of a valid arbitration agreement constitutes a ground for the setting aside of an arbitral award.50 43 Articles 7:900–7:906 BW. See also Van Schaick, Mr. C. Assers Handleiding tot de beoefening van het Nederlands Burgerlijk Recht. 7. Bijzondere overeenkomsten. Deel VIII. Bewaarneming, borgtocht, vaststellingsovereenkomst, bruikleen, altijddurende rente, spel en weddenschap, 2018, Chapter 3. 44 Rb. Amsterdam, 7 October 1982, KG 1982, 183 (Dijsselhofkliniek). 45 See https://www.nai-nl.org/downloads/NAI%20Binding%20Advice%20Rules.pdf (accessed 1 August 2020). 46 Ernste, Bindend Advies, 2012, 4–5. 47 Article 1036(1) Rv. 48 Article 1036(2) Rv. 49 In the reverse version, the existence of a valid arbitration agreement has to lead state courts to decline jurisdiction (article 1022 Rv). 50 Article 1065(1)(a) Rv.

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1. The doctrine of separability The doctrine of separability allows a tribunal to consider an arbitration agreement as 18 a separate agreement from the contract in which it is contained. It is explicitly provided for in Dutch arbitration law, and has also been recognized by the Dutch Supreme Court.51 The 2014 Dutch Arbitration Act has clarified that the doctrine of separability does 19 not only apply to the validity, but also to the existence of the arbitration agreement (through an amendment to article 1053 Rv). This was contested under the 1986 Arbitration Act, with legal scholars Gerbrandy and Sanders arguing that in case the parties appear not to have reached any agreement whatsoever on the essentials of the underlying contract, the arbitration agreement had to share the fate of the underlying contract, leading the arbitrators to declare that they lack jurisdiction. On the other hand, Hartkamp and Snijders suggested that an arbitration agreement is always separable even in cases of non-existence of the underlying contract to which it relates or in which it is contained.52

2. The law applicable to the arbitration agreement Various issues relating to the arbitration agreement may be governed by different 20 laws. The capacity of the parties to enter into an arbitration agreement is determined by the law applicable to them.53 The form and content requirements of the arbitration agreement are governed by Dutch law, if the seat of arbitration is in the Netherlands.54 As far as the substantive validity of an arbitration agreement is concerned, the substantive law applicable to it is the law which the parties to the arbitration agreement have chosen.55 Since an explicit choice of the law governing the arbitration agreement is uncommon in Dutch arbitral practice,56 Dutch arbitration law provides for the situation in which the parties did not make such an explicit choice of law.57 In that case, either the law of the seat of arbitration or the law applicable to the underlying legal relationship which is governed by the arbitration agreement shall be deemed applicable with regards to the validity of the arbitration agreement. There is no order of precedence between these laws, as long as the arbitration agreement is considered to be valid according to one of them.58 In principle, the criteria applicable to the interpretation of a “regular” contract also 21 apply to the interpretation of an arbitration agreement.59 51

Article 1053 Rv; HR, 27 December 1935, NJ 1936, 442 (Verhoeven/Veugelers). Cf. Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 85–86. For a comparative analysis, see supra A mn. 23. 53 For the capacity of Dutch (legal) persons to enter into an arbitration agreement please see infra mns 22 et seq. 54 See infra mns 32 et seq. 55 Article 10:166 BW. 56 Meijer, (2013) TvA 33; see also Peters, IPR, Proces & Arbitrage: Over grondslagen en rechtspraktijk, 2016, 295. 57 Article 10:166 BW. 58 Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, 631 (637). 59 HR, 13 March 1981, NJ 1981, 635 (Godefridus Ermes, Bartholomeus Johannes Cornelis Langerwerf/ Haviltex B.V.); HR, 20 February 2004, NJ 2005, 493 (Stichting Pensioenfonds DSM-Chemie/W. Chr. Fox); HR, 5 March 2004, NJ 2005, 494 (B/S); HR, 19 January 2007, NJ 2007, 575 (Meyer Europe B.V./PontMeyer B.V.); HR, 29 June 2007, NJ 2007, 576 (G.J. Derksen, J.M. Derksen, Beleggingsmaatschappij Josephine D B. V., L’Orage Projecten B.V., Artema Corporation N.V./R. Homburg, Uni-Invest Prioriteit B.V., Uni-Invest Holdings (NL) B.V., Jetnet Fleet B.V., Capa City Realty B.V., Uni-Invest Holland Limited, Uni-Invest 52

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3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. General Dutch law provisions on legal capacity are applicable when it comes to the question of who has capacity to conclude an arbitration agreement. These can be found in the Dutch Civil Code and other Dutch law statutes. Parties must have legal capacity to conclude a contract or an arbitration agreement. This means that minors can only conclude an agreement if represented by their legal representatives. The same applies to a person under guardianship that has to be represented by their legal guardians. Companies are to be represented in accordance with Dutch company law. The capacity of people holding other nationalities has to be determined according to the law applicable to them. 23 As for states and state entities, they can also conclude arbitration agreements. The 2014 Dutch Arbitration Act has included a provision in Book 10 of the Dutch Civil Code in relation to those. Under that provision, a state, a state-owned entity or any other legal entity covered by public law that is a party to an arbitration agreement may not rely upon limitations of authority such as its legislation or regulations for the purpose of contesting its capacity or power to enter into the arbitration agreement or the susceptibility to submit the dispute to arbitration against counterparties that were not familiar with such limitations.60 Counterparties concluding an arbitration agreement with a state or a state entity in good faith are protected against invocations of limitations of authority by such state or state entity. 24 The principle of sovereign immunity from jurisdiction is recognized under Dutch law, in principle, but such immunity is limited to acta iure imperii, i.e., pure sovereign acts.61 The Dutch Supreme Court has ruled in 2017 that Dutch courts must determine ex officio whether or not a state or state entity that did not appear in the proceedings enjoys immunity from jurisdiction.62 25 With regard to sovereign immunity from execution, the Dutch Supreme Court ruled in a judgment of 30 September 201663 that assets of foreign states located in the Netherlands cannot be subject to attachment and enforcement, unless those assets are used for non-governmental purposes. In its judgments of 14 October 2016,64 the Dutch Supreme Court confirmed this general presumption of sovereign immunity from enforcement of judgments and arbitral awards against a state’s assets. It also made clear that a possible waiver of state immunity must be made expressly and cannot be implied from the general provisions contained in bilateral or multilateral arbitration agreements between states.65 22

Nederland Limited, Vigor Beheer B.V.); HR, 5 April 2013, NJ 2013, 214 (Lundiform B.V./Mexx Europe B. V.); HR, 2 November 1990, NJ 1991, 123 (Van der Kloof/CSU), HR, 21 March 1997, NJ 1998, 219 (Meijer/ OTM); HR, 2 February 2001, NJ 2001, 200 (Petermann/Maas); Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, Article 1020, note 1(g). See also infra mn. 39. 60 Article 10:167 BW; see also HR, 28 January 2005, NJ 2006, 469 (Defence Industries Organisation of the Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran/International Military Services Limited). 61 See Rb. ‘s-Gravenhage, 18 October 2017, NJF 2018, 22 (Crystallex International Corp./Petróleos de Venezuela S.A.). 62 HR, 1 December 2017, NJ 2019, 137 (Republic of Iraq; Central Bank of Iraq/X). 63 HR, 30 September 2016, NJ 2017, 190 (Morning Star International Corp./The Gabonese Republic). 64 HR, 14 October 2016, NJ 2017, 191 (Dutch State/Servaas Inc.); HR, 14 October 2016, NJ 2017, 192 (N.N./Dutch State). 65 Barten/Krestin, Kluwer Arbitration Blog, 25 April 2017.

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b) Arbitrability. Dutch arbitration law contains a mandatory provision that determines in broad terms which disputes are non-arbitrable.66 It stipulates that the arbitration agreement shall not serve to determine legal consequences that may not be freely determined by the parties (for instance, family law issues are, in general, not arbitrable67). Matters of a public policy nature are, generally, not arbitrable, as they relate to erga omnes decisions.68 The fact that a statutory provision provides for exclusive jurisdiction of the courts in certain cases could be indicative of a matter of a public policy nature that would be non-arbitrable, but this is not necessarily the case.69 A mere reference to the jurisdiction of the courts in a statute does not confer exclusive jurisdiction to that court, as it is necessary that the subject matter itself must be exclusively conferred upon a specific court for such matter to be non-arbitrable.70 For instance, the validity of patents falls under the exclusive jurisdiction of the District Court of The Hague (pursuant to the Patents Act) and it is argued that such matters are not arbitrable.71 However, other claims related to patents (damages claims alleging patent infringement) are arbitrable, as well as disputes related to licences.72 Competition law issues can be resolved by means of arbitration, even though competition law is a matter of public policy.73 However, the tribunal may not ignore or violate mandatory laws of a fundamental nature. The application of these laws will be subject to court review. Any violation can lead to the setting aside of an arbitral award.74 As far as bankruptcy-related issues are concerned, a party may not be declared bankrupt in arbitral proceedings.75 Certain corporate law issues cannot form the subject matter of arbitral proceedings. Issues arising strictly from the validity of corporate resolutions are not arbitrable.76 However, broader contractual claims pertaining to the validity of these resolutions are arbitrable.77 A dispute arising in case of a tie in votes in a general shareholders’ meeting is also arbitrable.78 Torts, ownership rights, rights in rem as well as disputes related to the law of succession, matrimonial property, and employment contracts are all arbitrable.79 Parties can also submit the following issues to arbitration: (a) the determination only of the 66 Article 1020(3) Rv; Snijders, Nederlands Arbitragerecht, 2018, 112 et seq.; Lazić, Insolvency Proceedings and Commercial Arbitration, 1998, 140–154. 67 Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, Article 1020, note 6. 68 HR, 10 June 1955, NJ 1955, 570 and HR, 10 November 2006, NJ 2007, 561 (P.J.M. Spee, W. Werensteijn, W.E.H. Peijer, F.A.J. Horsman, Groenselect Management N.V/C.J.A. Van den Boogaard). By contrast, in most jurisdictions the mere fact that a dispute requires the application of norms of public policy does not affect arbitrability: see supra A mn. 31. 69 Sanders, Het Nieuwe Arbitragerecht, 1996, 36. 70 Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, 631 (643). 71 Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, Article 1020, note 6(a). 72 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 33. 73 Meijer/Paulsson, in: Bosman (ed.), International Handbook on Commercial Arbitration, 2014, 20. 74 Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, Article 1065, note 7(a). See also infra mn 119. 75 Meijer/Van Mierlo/Hoebeke/Krzemiński, Parlementaire Geschiedenis Arbitragewet, 2015, 20. 76 HR, 10 November 2006, NJ 2007, 561 (P.J.M. Spee, W. Werensteijn, W.E.H. Peijer, F.A.J. Horsman, Groenselect Management N.V/C.J.A. Van den Boogaard); Rb. Utrecht, 17 March 2010, (2011) TvA 11. 77 HR, 26 November 2010, NJ 2011, 55 (Silver Lining Finance S.A./Perstorp Waspik B.V.). 78 Sanders, Het Nederlandse Arbitragerecht, 2001, 46–48. 79 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 33.

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quality or condition of goods; (b) the determination only of the quantum of damages or a monetary debt; and (c) the filling of gaps in, or modification of, the legal relationship between the parties.80 c) Form of the arbitration agreement. The law provides that an arbitration agreement must be proven by an instrument in writing.81 This is a matter of evidence (ad probationem).82 There is no requirement for an exchange of documents. 33 An instrument in writing is necessary in case one of the two parties denies the existence of an arbitration agreement. If a plea for the non-existence or invalidity of an arbitration agreement is raised, the other party must show evidence of an instrument in writing that provides for arbitration or refers to general terms and conditions which provide for arbitration, subject to this instrument being expressly or impliedly accepted by or on behalf of the other party.83 Dutch law is, therefore, less stringent on this issue than the New York Convention or the UNCITRAL Model Law.84 Witness evidence (in the form of a testimony or a statement) does, however, not suffice to prove the existence of an arbitration agreement.85 Article 1021 Rv was amended on 30 June 200486 in order to implement the European Directive on Electronic Commerce.87 Dutch law since provides that an arbitration agreement may also be evidenced by electronic means. 32

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d) Arbitration agreements in general terms and conditions and with consumers. As just mentioned, an instrument in writing that refers to general terms and conditions which provide for arbitration satisfies the requirements imposed by article 1021 Rv, provided that this instrument is expressly or impliedly accepted by or on behalf of the other party.88 An example of an implicit acceptance is a sales confirmation. There is no need to refer specifically to the arbitration clause in the general terms and conditions in the instrument in writing that refers to them.89 The Dutch Supreme Court has also ruled that arbitration agreements contained in general terms and conditions are not necessarily unreasonably onerous, but for exceptional circumstances.90 Courts will have to take into consideration all particular circumstances of the case in order to determine whether such exceptional circumstances exist.91 As far as consumers are concerned, they are not bound by arbitration clauses included in general terms and condition, unless 80

Article 1020(4) Rv. Article 1021 Rv. 82 Meijer/Paulsson, in: Bosman (ed.), International Handbook on Commercial Arbitration, 2014,11,. 83 Article 1021 Rv. 84 Sanders, Quo vadis arbitration? Sixty Years of Arbitration Practice, 1999, 157. 85 HR, 7 May 1993, NJ 1993, 655 (Johannes Hubertus Meulen/Bernardus Joannes Keijsers). 86 Wet 13 May 2004 (Stb. 2004, 210). 87 Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’), [2000] OJ L178/1–16. 88 Article 1021 Rv. See also HR, 17 January 2003, NJ 2004, 280 (ABN AMRO Bank N.V./Richardus Antonius Teisman): it is not necessary that the parties accept an arbitration clause found in general terms and conditions separately. 89 HR, 2 February 2001, NJ 2001, 200 (Hans Ulrich Petermann Beratungs- und Vertriebs-GmbH/Frans Maas Rotterdam B.V.). See also HR, 24 April 2015, NJ 2015, 222 (Forfarmers B.V.and HDI-Gerling Verzekeringen N.V./defendant) regarding the problem about agreements between the parties referring to two sets of general terms and conditions; cf. HR, 28 November 1997, NJ 1998, 705 (Haring Wouterus Visser/Avéro Schadeverzekeringen N.V.). Cf. HR, 7 May 1993, NJ 1993, 655 (Johannes Hubertus Meulen/ Bernardus Joannes Keijsers): a reference to general terms and conditions does not meet the requirements of article 1021 Rv, in case such reference only concerns a certain part of general terms and conditions, which does not contain an arbitration clause. 90 Article 6:233 BW. HR, 23 March 1990, NJ 1991, 214 (Botman/Van Haaster). See also HR, 21 September 2012, (2014) TvA 14. 91 HR, 21 September 2012, (2014) TvA 14 (Van Marrum/Wolff). 81

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such clauses offer them a period of at least one month (after their counterparty invoked an arbitration clause) to opt for court litigation.92 e) Termination of the arbitration agreement. There is no specific provision in 35 Dutch arbitration law referring to the termination of an arbitration agreement. The prevailing opinion in Dutch doctrine is that an arbitration agreement is an obligatory agreement.93 Accordingly, this question falls within the purview of general contract law, which itself does not contain one general provision on the termination of agreements, as there can be various distinct forms of termination.94 Grounds for termination can be found in multiple legal provisions. For example, an arbitration clause that does not comply with the general principle 36 of reasonableness and fairness under Dutch law can be subject to nullification. Examples of contrariety with the principle of reasonableness and fairness include non-accessibility of the place where the arbitration is to be held,95 or binding a person with limited means to an arbitration clause, thereby depriving this person of juridical protection.96 Furthermore, arbitration clauses that can be found in general terms and conditions can be annulled if they are unreasonably onerous to the counterparty.97 Another means of termination is dissolution (ontbinding), which may be invoked in case of default of the counterparty. However, due to the nature of arbitration agreements, dissolution in case of non-performance of the arbitration agreement does not readily apply; it is assumed that arbitral proceedings can proceed as normal in case a party refuses to cooperate, with the intervention of a judge, if necessary.98 Finally, the principle of separability may also be applicable with regard to an arbitration agreement, in case an arbitral tribunal decides that there is no main contract between the parties whatsoever.99

4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. In principle, only parties that have 37 agreed to arbitration will be bound by an arbitration agreement.100 However, Dutch law provides for certain situations in which third parties are bound by an arbitration agreement. This is the case with assignment of claims.101 An assignee acquires all the

92 Article 6:236(n) BW. Arbitration agreements fall within the scope of article 6:236 BW, if concluded after 1 January 2015. As of 1 January 2016, all arbitration agreements in general terms are bound by this rule (Kamerstukken II 2013/14, 33611, nr. 3, 7–8; article 191(1) Overgangswet nieuw Burgerlijk Wetboek). See also ECJ Case C-168/05 Mostaza Claro v Centro Movil Milenium SL, [2006] ECR I-10421; ECJ Case C-40/08 Asturcom Telecomunicaciones v Nogueira, [2009] ECR I-9579 and Snijders, Nederlands Arbitragerecht, 2018, 157–161. See also HR, 8 November 2019, (2020) TvA 12 (Intermaris/X), ground 2.10, where it was determined that in consumer cases, a judge assessing a request for leave to enforce an arbitral award is obliged to examine ex officio whether a consumer has been granted an one-month period to opt out of the arbitration clause. 93 Meijer, Overeenkomst tot Arbitrage, 2011, 210. 94 Van Dunné, Verbintenissenrecht Deel 1, 2004, 823. 95 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 37. 96 Ktr. Zierikzee, 19 February 1988, (1988) TvA 147; cf. HR, 21 March 1997, NJ 1998, 219 (Meijer/ OTM). 97 Article 6:233 BW. 98 Meijer, Overeenkomst tot Arbitrage, 2011, 212. 99 Article 1053 Rv. See Hof ‘s-Hertogenbosch, 17 March 2009, NJF 2009, 285. 100 HR, 20 January 2006, NJ 2006, 77 (ASB Grünland, Helmut Aurenz Gmbh + Co Kg and ASB Greenworld B.V./Sagro Aannemingsmaatschappij Zeeland B.V.). 101 Articles 6:142–145 BW.

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rights accessory to the transferred claim.102 The same applies in relation to a transfer of contract103 or debt takeover.104 38 It has also been accepted that in case a surety fulfils an obligation of the principal debtor, the surety can invoke an arbitration clause that the creditor can invoke against the principal debtor.105 It is not clear whether the surety can also invoke an arbitration clause against a creditor.106 In addition, it is uncertain whether an arbitration clause found in a charter party can bind the holder of a bill of lading: a mere reference to the charter party in case there is no explicit reference to the arbitration clause has been considered to be insufficient to bind the holder of the bill of lading.107 Insurers that are subrogated in the rights of insured parties are considered to be bound by arbitration agreements accepted by the insured parties.108 Also, partners in a general partnership are considered to be bound by arbitration clauses agreed to by the partnership.109 Finally, it should be noted that the “group of companies” doctrine has not been incorporated into Dutch law.110 39

b) Substantive scope of the arbitration agreement. The application of the arbitration agreement is confined to what the parties have agreed to submit to arbitration.111 Interpretation of the arbitration agreement will determine its substantive scope.112 If Dutch law applies to the arbitration agreement, its interpretation is governed by the general rules on contract interpretation under Dutch law.113 If the parties agree on the scope, their mutual interpretation will generally be followed.114 The question as to how a written contract governs the relationship between parties, and if this agreement leaves a gap that must be filled, cannot be answered solely on the basis of a purely linguistic interpretation of the contract. In answering this question, it is relevant what meaning both parties could reasonably attach to the provisions under the given circumstances, and what they could reasonably expect from each other.115 Nonetheless, primary importance is attached to the wording of the arbitration agreement,116 and in case of 102

Article 6:142 BW. Article 6:159 BW. 104 Article 6:157(1) BW; Rb. Groningen, 22 May 1992, (1992) TvA 194. 105 Article 7:850(3) BW. 106 Rb. Amsterdam, 13 June 1979, NJ 1980, 254; Hof Amsterdam, 27 November 1931, W12, 485. 107 Snijders, Nederlands Arbitragerecht, 2018, 132; Sanders, Het Nederlandse arbitragerecht, 2001, 18–19. 108 Rb. Noord-Holland, 12 July 2017, (2017) TvA 71. 109 RvA, 20 April 2017, (2017) TvA 41. 110 See Lazić, (2013) 6 Nederlands Tijdschrift voor Handelsrecht 332, 339. Under the “group of companies” doctrine, the application of an arbitration agreement can extend to other companies of the same group that did not sign an arbitration agreement. See Born, International Commercial Arbitration, 2nd ed., 2014, 1444 and supra A mn. 46. 111 Article 1020(1) Rv. 112 Meijer, Overeenkomst tot Arbitrage, 2011, 96–97. 113 Ibid. 114 HR, 16 February 1996, NJ 1997, 186 (Zürich Versicherungsgesellschaft/Siemen B.V.). State courts have the ultimate say in the determination of the scope of arbitration, either if a case involving an arbitration agreement is brought before the state court, and the state court has to rule on its jurisdiction, or at the stage of the setting aside or enforcement proceedings. Courts will only deviate from following the parties’ mutual understanding of the agreement if the established facts necessitate a different interpretation in a legal ruling. 115 HR, 13 March 1981, NJ 1981, 635 (Godefridus Ermes, Bartholomeus Johannes Cornelis Langerwerf/ Haviltex B.V.). 116 Meijer, Overeenkomst tot Arbitrage, 2011, 98–101; HR, 20 February 2004, NJ 2005, 493 (Stichting Pensioenfonds DSM-Chemie/W. Chr. Fox); HR, 19 January 2007, NJ 2007, 575 (Meyer Europe B.V./ PontMeyer B.V.); HR, 29 June 2007, NJ 2007, 576 (G.J. Derksen, J.M. Derksen, Beleggingsmaatschappij Josephine D B.V., L’Orage Projecten B.V., Artema Corporation N.V./R. Homburg, Uni-Invest Prioriteit B. 103

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institutional arbitration, regard is to be had to the entire set of arbitration rules.117 In the Netherlands, there is a (rebuttable) “presumption in favour of one-stop arbitration”, i.e., the presumption that all disputes arising from or related to the legal relationship fall within the substantive scope of the arbitration agreement.118 c) Pathological arbitration clauses. Pathological arbitration clauses refer to clauses 40 that are ambiguous, unclear or contradictory as to whether disputes are to be submitted to arbitration, which institution is selected or as to aspects regarding the arbitral procedure.119 The consequence of arbitration clauses being deficient can be significant, as they may lead a tribunal to consider that it has no jurisdiction.120 An arbitration clause will be considered pathological if it refers to the rules of a non-existing arbitration institute.121 In principle, the choice of an (existing) arbitration institute is considered essential.122 Therefore, the Court of Arbitration for the Building Industry held an arbitration agreement referring to the “Court of Arbitration of the Architecture” incapable of being performed.123 On the other hand, the reference to the former name of an arbitration institution was considered a reference to its successor.124 Reference of a dispute to an institution that only deals with other, specific disputes does not nullify the arbitrators’ jurisdiction to rule on the dispute.125 Where an arbitration agreement contains unclear provisions as to the institution, the state courts can appoint arbitrators (if the parties to an arbitration cannot jointly decide) for the purposes of an ad hoc arbitration, if it is shown that institutional arbitration was not essential to the parties.126 An arbitration agreement stating that “all disputes […] will be settled in Turkmenistan Arbitration” was regarded as ineffective.127

5. The effect of the arbitration agreement and Kompetenz-Kompetenz An arbitration agreement gives an arbitral tribunal jurisdiction to settle a dispute. In 41 this respect, various issues can arise. A court before which a dispute is brought has to determine that it lacks jurisdiction if a party timely invokes the existence of an applicable valid arbitration agreement.128 At the same time, a party in arbitral proceedings can raise the defence that the tribunal has no jurisdiction based on the argument V., Uni-Invest Holdings (Nl.) B.V., Jetnet Fleet B.V., Capa City Realty B.V., Uni-Invest Holland Limited, Uni-Invest Nederland Limited, Vigor Beheer B.V.). 117 Snijders, Nederlands Arbitragerecht, 2018, 96–99. 118 Meijer, Overeenkomst tot Arbitrage, 2011, 739–742. Although it can be assumed that this presumption carries less weight if parties opted for arbitration as regards specific disputes, contracts or claims. 119 Cf. inter alia: Born, International Commercial Arbitration, 2nd ed., 2014, 770–776; Snijders, Nederlands Arbitragerecht, 2018, 40–42, 97–98; De Ly, (2006) TvA 26, 76–78. 120 See article 1052 Rv; see infra mns 41 et seq. 121 E. g. Pres. Rb. Assen, 9 May 1995, (1996) TvA 33. 122 Meijer, Overeenkomst tot Arbitrage, 2011, 780–781. 123 Court of Arbitration for the Building Industry, 9 June 1997, (1997) TvA 74. 124 Court of Arbitration for the Building Industry, 24 January 2006, (2006) TvA 43. Cf. Hof Amsterdam, 16 February 2016, (2016) TvA 54, where it was held that the fact that an arbitration clause referred to the non-existent “International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Netherlands” in itself does not mean that this arbitration clause is not valid; Rb. Gelderland, 19 April 2017, (2017) TvA 52 where a reference to the non-existent “German International Economic and Trade Arbitration Commission” was interpreted as a reference to the German Institution of Arbitration. See also Rb. Oost-Brabant, 28 March 2018, (2018) TvA 63; Netherlands Arbitration Institution, 2 October 2008, (2011) TvA 58. 125 Hondius, Contractenrecht VII, No. 115, 1989, 130; Snijders, Nederlands Arbitragerecht, 2018, 40–42. 126 Meijer, Overeenkomst tot Arbitrage, 2011, 780–781. The same applies where parties have referred to a non-existing arbitral agreement. 127 Hof Amsterdam, 27 October 2005. For a commentary on this case, see De Ly, (2006) TvA 27, 76–78. 128 Article 1022 Rv.

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that there is no valid arbitration agreement prior to raising any other defence,129 with the tribunal having the power to decide on such defence.130 Any decision in which the arbitral tribunal declares that it has jurisdiction can be challenged only by an application for setting aside or revocation in conjunction with the challenge of a subsequent final or partial final award.131 If the tribunal considers that it has no jurisdiction on the ground that there is no valid arbitration agreement, then the (competent) courts will have jurisdiction to hear the dispute. However, if the tribunal finds that it has no jurisdiction on another ground, such as due to the fact that the composition of the tribunal was not in accordance with the rules agreed therefor, the arbitration agreement remains valid and a new tribunal can be constituted that will have jurisdiction to hear the dispute.132 Finally, a decision by the arbitral tribunal that it lacks jurisdiction is considered to be an arbitral award that can be set aside.133 a) Enforcing arbitration clauses and Kompetenz-Kompetenz. An arbitral tribunal is competent to rule on its own jurisdiction under the Kompetenz-Kompetenz principle.134 The arbitral tribunal’s decision that it is competent is a preliminary judgment,135 as it can at a later stage be reviewed in both enforcement proceedings and proceedings to set aside the award before the state courts.136 State courts, therefore, have the ultimate and decisive say on questions of jurisdiction,137 and are not bound by an earlier decision of the arbitral tribunal. Under Dutch law, the negative effect of the Kompetenz-Kompetenz principle does not apply.138 Therefore, the state courts may fully review the arbitration clause for the purposes of answering the question of jurisdiction, without restraint.139 43 State courts cannot issue “anti-arbitration injunctions” if the arbitral proceedings are pending.140 If arbitral proceedings are not (yet) pending, state courts will only do so with the outmost discretion.141 In general, it can be assumed that an arbitration agreement does not give rise to an action for specific performance. As such, a party’s breach of the arbitration agreement by reverting to a state court does not serve as a basis for a claim for damages.142 42

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b) Preclusion of jurisdictional defences. In the Netherlands, the right to invoke a jurisdictional defence is constrained by procedural deadlines, after which they can no longer be successfully invoked. If the claimant brings a dispute before the state courts in spite of the parties having concluded an arbitration agreement, the defendant can only successfully repel state court proceedings if it invokes the arbitration agreement before 129

Article 1052(2) Rv. Article 1052(1) Rv. 131 Article 1052(4) Rv; see Hof ‘s-Gravenhage, 18 July 2017, (2017) TvA 62. 132 Article 1052(5) Rv; Meijer, (2013) TvA 33. 133 Article 1052(6) Rv. 134 See article 1052(1) Rv. 135 Meijer, Overeenkomst tot Arbitrage, 2011, 957. 136 HR, 26 September 2014, NJ 2015, 318 (Chevron/Ecuador). See articles 1052(4), 1063(1) and 1065(1) (a) Rv. The tribunal’s decision that it lacks jurisdiction on the ground that there is no valid arbitration agreement closes the door to arbitration and will transfer jurisdiction over a dispute to the state courts (1052(5) Rv). 137 Sanders, Het Nederlandse Arbitragerecht, 2001, 22–23; HR, 26 September 2014, NJ 2015, 318 (Chevron/Ecuador); also cf. HR, 27 March 2009, NJ 2010, 170 (Smit Bloembollen B.V., C. Smit t V.O.F., C.J.P. Smit, C.P.M. Smit/Ruwa Bulbs B.V.). 138 Meijer, Overeenkomst tot Arbitrage, 2011, 958. 139 HR, 26 September 2014, NJ 2015, 318 (Chevron/Ecuador). 140 Meijer, Overeenkomst tot Arbitrage, 2011, 966. 141 Ibid., 968, see also article 3:296(1) BW. An injunction is more likely to be awarded, although still only in exceptional cases, in summary proceedings. 142 Ibid., 212, 215–216. 130

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submitting a defence, unless the agreement is invalid.143 If the defendant fails to raise such defence in time, it will forfeit its right to have the dispute resolved by arbitration.144 Similarly, a party who has appeared in arbitral proceedings can raise a defence that 45 the arbitral tribunal lacks jurisdiction on the ground that there is no valid arbitration agreement, but must do so before submitting any other defence,145 otherwise it loses its right to this jurisdictional defence.146 The defence must clearly convince the arbitrators of their lack of jurisdiction.147 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. In 46 principle, state court decisions on the jurisdiction of the arbitral tribunal have res judicata effect and are binding in relation to subsequent decisions of Dutch courts.148 Therefore, such decisions that have acquired the force of res judicata and decline jurisdiction in favour of arbitration149 will bind state courts in setting-aside proceedings that follow the arbitral proceedings.150 In relation to decisions on jurisdiction by foreign courts it is important to note that 47 judicial decisions rendered in another EU-member state or a state signatory to the Lugano Convention are generally recognized in the Netherlands under the Brussels I Regulation or the Lugano Convention151 without review of the court of origin’s jurisdiction. However, Recital 12 of the Brussels I Recast Regulation provides that a decision by an EU court on an arbitration clause is not recognized under that instrument. This would, equally, apply to the Lugano Convention, which is interpreted consistently with the Brussels I Regulation.

III. The arbitral tribunal and the conduct of the arbitral proceedings The conduct of the arbitral proceedings will largely depend on the agreement made 48 by the parties to the arbitration. The procedure described in this section is based on the general rules of Dutch arbitration law, as applicable to arbitrations seated in the Netherlands. Parties to such arbitrations, however, can subject their arbitral proceedings to different procedural rules, by opting, for example, for institutional arbitration (e.g., arbitration under the NAI Rules). Moreover, issues such as the composition of the arbitral tribunal, can be provided for in an arbitration clause. 143

Article 1022 Rv. Snijders, Nederlands Arbitragerecht, 2018, 173. The defendant could have the default removed or lodge an objection, and still invoke the arbitration agreement if done in a timely manner. 145 Article 1052(2) Rv. See Snijders, Nederlands Arbitragerecht, 2018, 416; Sanders, Het Nederlandse arbitragerecht, 2001, 24. 146 Pursuant to article 1065(2) in conjunction with article 1052(2) Rv, an arbitral award cannot be set aside on the ground of absence of a valid arbitration agreement if a jurisdictional defence has not been raised in a timely manner. Also see Meijer, Overeenkomst tot Arbitrage, 2011, 862–863, 873. Note that non-arbitrability provides a general exception to this rule (article 1020(3) Rv; Meijer, Overeenkomst tot Arbitrage, 2011, 877). 147 Architectural Arbitration Institute, 21 March 2000, BR 2001, 43; HR, 6 November 1992, NJ 1993, 191 (V.O.F. G. Bakkum en Zonen/V.O.F. Brandsen-Visser). 148 Article 236(1) Rv. 149 See article 1022 Rv; Van Houte, (2006) 6 NJB 318–319. 150 Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, article 1065, note 2(a); Van Houte, (2006) 6 NJB 316–320. 151 Regulation (EC) No 1215/2012 of 12 December 2012, OJ 2012 L 351/1 (in force as of 10 January 2015) and Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, OJ 2007 L 339/3; OJ 2009 L 147/5; see also Voulgarakis, EU Law and Arbitration from a Procedural Law Perspective (in Greek), 2018. 144

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1. The arbitral tribunal, impartiality and independence of the arbitrator 49

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Disputes referred to arbitration are to be heard by tribunals composed of an uneven number of arbitrators or even a sole arbitrator.152 The parties can agree on the number of arbitrators. If they fail to reach an agreement or the agreed method of determining that number is not followed and the parties are unable to reach an agreement on the number of arbitrators, the President of the competent District Court will determine such number, at the request of one of the parties.153 There is no right of appeal against this decision.154 If the parties decide on an even number of arbitrators, these arbitrators would need to appoint one additional arbitrator, who shall act as the chairman of the tribunal,155 and, failing that, it falls within the competence of the President of the District Court to appoint the additional arbitrator.156 Finally, if a Dutch arbitral award is rendered by an even number of arbitrators, such an award can be set aside, on the basis of grounds regarding violations of rules pertaining to the composition of the arbitral tribunal and public policy.157 On the other hand, where a foreign arbitral award is rendered by an even number of arbitrators, it can be enforced in the Netherlands, provided that the award is valid under the law of the country in which it was made.158 As far as the appointment of the arbitrators is concerned, the parties can decide on any method they consider appropriate. They can even entrust a third party (for instance an arbitral institution) to appoint the arbitrators.159 If no method of appointment is agreed upon, the arbitrators are appointed by the parties jointly.160 Dutch arbitration law does not provide for a party appointment mechanism, whereby each party appoints one arbitrator and then these arbitrators together appoint a chairman. At the same time, it does not exclude or forbid such a possibility, if the parties agree.161 The appointment(s) must be made within three months after the commencement of the arbitration,162 unless the arbitrator(s) has/have already been appointed.163 In case such an appointment has not been made within this three-month period, the President of the District Court can be requested to appoint the missing members of the arbitral tribunal.164 When a third party is entrusted to appoint the arbitrators165 or if the President of the

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Article 1026(1) Rv. Article 1026(2) Rv; this is applicable in ad hoc proceedings. In arbitration proceedings under the NAI Rules, article 12(1) NAI Rules provides that the number of arbitrators shall be an odd number. Article 12(2) NAI Rules provides that in case the parties fail to reach an agreement on the number of arbitrators, the NAI Administrator will determine the number of arbitrators to be three, keeping in mind the preferences of the parties, the scope and complexity of the dispute and the parties’ interest in efficient dispute resolution. 154 Article 1070 Rv; cf. HR, 21 October 2011, NJ 2013, 23 (Hasfeld/Cohen). 155 Article 1026(3) Rv. 156 Article 1026(4) Rv. 157 Articles 1065(1)(b) and (e) Rv, respectively. 158 Hof ‘s-Gravenhage, 3 May 1962, S&S 1963, 42; Hof ‘s-Hertogenbosch, 14 July 1995, (1995) TvA 4, 240. 159 Article 1027(1) Rv. 160 Ibid. 161 Sanders, Het Nederlandse Arbitragerecht, 2001, 61; Snijders, Nederlands Arbitragerecht, 2018, 216–217. 162 For the determination of the commencement of the arbitration, see infra mns 67 et seq. 163 Article 1027(2) Rv. 164 Article 1027(3) Rv. 165 Article 1027(1) Rv. 153

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District Court is requested by the parties to do so,166 the appointment(s) is/are made without examination of the validity of the arbitration agreement.167 The only limit to party autonomy in the selection of arbitrators is the requirement 54 not to give one of the parties to the arbitration agreement a privileged position in respect of such appointment.168 Examples of a privileged position include the possibility for only one party to select the arbitrator(s) or the exclusive right for one of the parties to compile a list of arbitrators, out of which the arbitral tribunal will be selected.169 In such a case, the other (disadvantaged) party can request the President of the District Court to appoint the arbitrator(s) within three months after the commencement of the arbitration, thereby replacing the previously agreed method of appointment.170 Apart from the requirements for the appointment of arbitrators agreed between the 55 parties, there are no formal requirements regarding an arbitrator’s qualifications. The only requirements imposed by law are the following: only natural persons with legal capacity may be appointed as arbitrators.171 Such a requirement excludes minors (below the age of 18 years) and persons under guardianship. Moreover, arbitrators are required to be independent and impartial.172 Such standards may be interpreted by reference to the standards applicable to the Dutch judiciary (Leidraad onpartijdigheid voor de rechter 2004) and international norms (IBA Guidelines on Conflicts of Interest in International Commercial Arbitration 2004). a) Duty to disclose. Persons approached to be engaged as arbitrators, who have 56 reason to suspect that they could be challenged, should disclose this in writing (together with the possible grounds for a challenge) to the party that intends to appoint them.173 Similarly, a person that has been appointed as an arbitrator has to immediately notify the parties of any possible grounds of challenge upon his/her appointment, in case the parties have not yet been notified.174 An arbitrator who, during the arbitral proceedings, presumes that he could be challenged, must disclose in writing the existence of the possible grounds for such challenge to the parties and, if the arbitral tribunal is composed of more than one arbitrator, his/her co-arbitrators.175 b) Grounds for challenge. Arbitrators can be challenged where circumstances exist 57 that may give rise to justifiable doubts about their impartiality or independence.176 The possibility of succeeding with such a challenge depends on the facts of each case. A mere appearance of partiality may be considered sufficient to challenge an arbitrator.177 Whether an appearance of partiality is present must be assessed from the objective point of view of the challenging party, not that of the arbitrator in question.178 The 166

Article 1027(3) Rv. Article 1027(4) Rv. Cf. HR, 21 October 2011, (2012) TvA 26. 168 Article 1028 Rv. 169 Meijer/Paulsson, in: Bosman (ed.), International Handbook on Commercial Arbitration, 2014, 26. 170 Article 1028(2) Rv. Parties can agree to extend the three-month time limit, but not shorten it. See Meijer/Van Mierlo/Hoebeke/Krzemiński, Parlementaire Geschiedenis Arbitragewet, 2015, 54. 171 Article 1023 Rv. 172 Article 1033(1) Rv. 173 Article 1034(1) Rv. 174 Article 1034(2) Rv. 175 Article 1034(3) Rv. 176 Article 1033(1) Rv. 177 HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens); HR, 29 June 2007, NJ 2008, 177; Rb. Rotterdam 1 May 1987, (1987) TvA 152; Rb. Amsterdam 3 June 1988, (1989) TvA 105; Rb. NoordHolland, 23 June 2015, (2015) TvA 84. 178 Snijders, Nederlands Arbitragerecht, 2018, 262–263. 167

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applicable test is what conclusion a ‘reasonable third person having knowledge of the relevant facts and circumstances’ would reach.179 Cases where challenges have been successful include one where the arbitrators was representing one of the parties to the arbitration in court proceedings concerning the same subject matter.180 In a similar fashion, the fact that an arbitrator was counsel in another case dealing with the same issues led to a successful challenge of that arbitrator.181 Other issues that could give rise to a challenge include arbitrators being employed by one of the two parties or arbitrators having family ties with one of the parties to the arbitration.182 The fact that an arbitrator was a board member of an arbitral institution has not led to a successful challenge.183 Moreover, arbitrators cannot carry out investigations or gather evidence in the case that they are arbitrating.184 58 A party that has reasons to challenge an arbitrator must invoke those reasons as part of a challenge request in accordance with the provisions of article 1035 Rv, on pain of forfeiture of the right to invoke them later in the arbitral proceedings or in court.185 Once an award is rendered, the impartiality or independence of the arbitrator concerned can no longer be challenged.186 The possibility remains, however, to request setting aside of the award on grounds of public policy.187 The threshold for setting aside an award on the basis of lack of independence or partiality of the arbitrator is higher than the level of justifiable doubts that must be raised to challenge an arbitrator pending the arbitral proceedings.188 In general, courts are required to exercise great restraint when applying the grounds for setting aside an arbitral award.189 To ensure that settingaside proceedings do not amount to an appeal in disguise, awards will only be considered contrary to public policy under extraordinary circumstances.

179 This so-called ‘informed third party test’ is also mentioned in the IBA-Guidelines on Conflicts of Interest in International Arbitration 2014 (article 2c). 180 Rb. Rotterdam, 8 January 1993, (1993) TvA 104. 181 Rb. ‘s-Gravenhage, 18 October 2004, (2005) TvA 106. 182 Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, 631 (652). 183 Rb. Leeuwarden, 4 November 1988, (1989) TvA 29. See also Rb. Midden-Nederland, 2 May 2017, (2017) TvA 54, which determined that the fact that an arbitrator has acted as an arbitrator in past arbitrations involving one of the parties to the arbitration at hand could not lead to a successful challenge. 184 HR, 29 June 2007, NJ 2008, 177 (N/Aegon). In case arbitrators proceed with their investigations, then certain safeguards should be given to the parties. In other words, the parties should agree on allowing the arbitrator to carry out its own investigation, given that they will have the opportunity to be heard in relation to the evidence gathered. See Lazić/Schluep, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., 2019, 631 (653). 185 Article 1035(8) Rv. See also HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens)and Rb. Breda, 30 December 2008, NJF 2009, 43. 186 HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens). 187 Article 1065(1)(e) Rv. 188 HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens); Rb. Rotterdam, 1 May 1987, (1987) TvA 152; Rb. Rotterdam, 11 May 2011, (2014) TvA 28; Rb. ‘s-Gravenhage, 12 February 2014, (2014) TvA 31. 189 HR, 17 January 2003, NJ 2004, 384 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran); HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.); HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran).

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c) Procedural aspects and preclusion of grounds for challenge. Dutch arbitration law sets out the relevant procedure for challenges of arbitrators.190 As a first step, the challenging party shall give written notice of the reasons for challenge to the challenged arbitrator, the other members of the tribunal (if any) and the other party.191 Such notice shall be given within four weeks after the day of the receipt of a disclosure (as per article 1034 Rv) or, in the absence of such a disclosure, within four weeks after the day on which the challenging party has become aware of the reasons for challenge.192 The tribunal has the discretionary power to suspend the proceedings. However, if a challenge is clearly unjustified prima facie, the tribunal will most likely not order a suspension.193 From the day after the receipt of a timely notice, as referred to in article 1035(1) Rv, or afterwards, pending the challenge procedure, from the moment that the arbitral tribunal considers appropriate,194 the challenged arbitrator has a period of two weeks during which he can withdraw voluntarily from the tribunal.195 Once that period has lapsed, either of the parties can request the President of the District Court to decide on the challenge.196 The request to the President of the District Court can be made within two weeks after the day of the receipt of a written notice from the challenged arbitrator stating that he does not withdraw from the tribunal or, failing which, within six weeks after the day of receipt of the notice of the challenge.197 A party who has reasons to challenge an arbitrator shall base its challenge on these reasons, on pain of forfeiture of the right to invoke them later in the arbitral proceedings or in court.198 In any case, the parties may alter the abovementioned deadlines pertaining to challenges of arbitrators by agreement.199 Moreover, the 2014 Dutch Arbitration Act gives parties the right to agree that, instead of the President of the District Court, an independent third party, e.g., an arbitral institution, will hear and decide on the challenge of an arbitrator.200 In case an arbitrator withdraws voluntarily or if the President of the District Court decides favourably on a challenge, the arbitrator in question will be replaced in accordance with the rules governing his/her initial appointment, unless the parties have agreed otherwise.201

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d) Failure or impossibility to act. An arbitrator may only be released from his/her 64 mandate as follows: If an arbitrator requests so (usually due to reasons, such as serious illness or extended absence abroad),202 he can be released from his or her mandate, either with the consent of the parties or by a third person designated by the parties, or, 190

Article 1035 Rv. Article 1035(1) Rv. 192 Article 1035(1) Rv. 193 Article 1035(5) Rv; Sanders/Van den Berg (eds), The Netherlands Arbitration Act, 1986, article 1035, 20, note 30. In any event, the tribunal may not render an award before a decision on a challenge becomes available (Hof ‘s-Hertogenbosch, 8 December 2015, (2016) TvA 35). 194 Article 1035(5) Rv. 195 Article 1035(2) Rv. 196 Ibid. 197 Ibid. 198 Article 1035(8) Rv. 199 Article 1035(6) Rv. 200 Article 1035(7) Rv. See Rb. Rotterdam, 28 September 2017, (2018) TvA 21, where the court determined that a third party that will hear and decide on the challenge of an arbitrator, as per the parties’ agreement, can be removed if it is not independent. 201 Article 1035(3) Rv. 202 Snijders, Nederlands Arbitragerecht, 2018, 244–245. 191

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in the absence thereof, by the President of the District Court.203 Moreover, parties are also able to release an arbitrator from his/her mandate, by mutual agreement.204 This provision can apply, for instance, in case an arbitrator cannot make a request to be released him- or herself due to serious illness.205 In addition, an arbitrator that has become de jure or de facto unable to perform his or her mandate, can be released from his or her mandate by a third person designated by the parties or, in case no third person has been designated, by the President of the District Court, following a request of either party.206 This provision can be applicable where one of the two parties does not agree on the release of an arbitrator from his or her mandate. Such requests are limited to de jure or de facto incapacity of the arbitrator to fulfil his or her mandate, in order to ensure that parties will be prevented from bringing frivolous requests for the release of arbitrators from their mandate. 65 Finally, an arbitral tribunal that has accepted its mandate may, upon request of one of the parties, be released from its mandate by a third party designated by the parties or, in the absence thereof, by the President of the District Court, if, taking into account all circumstances, it carries out its mandate in an unacceptably slow manner, despite being repeatedly summoned.207

2. The arbitral proceedings 66

Arbitral proceedings are based on the principle of party autonomy. Parties can conduct their arbitration in a manner agreed between them.208 Failing such agreement, the determination of the procedural rules falls to the arbitral tribunal.209 The parties can also elect to conduct the arbitration under the procedural rules of an arbitral institution. Party autonomy is only limited by certain mandatory provisions210 that pertain mainly to the basic principles of due process, such as the requirement to treat both parties with equality and to allow them to present their case.211

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a) The request for arbitration. Arbitral proceedings can be commenced in two ways. This would be on the basis of either a submission agreement, that covers existing disputes between the parties, or an arbitration clause, which covers future disputes.212 If the parties have agreed on arbitration on the basis of a submission agreement, the conclusion of the submission agreement qualifies as the date of commencement of the arbitral proceedings between the parties, unless the parties have agreed otherwise.213 In the event of an arbitration clause, the arbitral proceedings shall be deemed to have commenced on the day of receipt of a notice in writing in which a party informs the other that it is commencing arbitration. This notice must contain a description of the

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Article 1029(2) Rv. Article 1029(3) Rv. 205 Snijders, Nederlands Arbitragerecht, 2018, 244–245. 206 Article 1029(4) Rv. 207 Article 1029(5) Rv. 208 Article 1036(1) Rv. See article 1047 Rv: “With the exception of the provisions of Articles 1037 and 1048, the provisions of this Section [Articles 1036–1048a Rv] shall not apply to arbitrations concerning the matters referred to in Article 1020(4)(a). In that event the proceedings shall be conducted in the manner agreed by the parties or, insofar as the parties have not made provision for this, as determined by the arbitral tribunal.” 209 Article 1036(1) Rv. 210 Ibid. 211 Article 1036(2) Rv. 212 Article 1020(2) Rv. 213 Article 1024(2) Rv. 204

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matters which the party commencing the arbitration wishes to submit to arbitration.214 Also in this case, the parties may agree that the arbitration shall be commenced in another manner.215 The NAI Rules prescribe a different system for the commencement of arbitral 68 proceedings. Both in the case of an arbitration clause and a submission agreement, arbitral proceedings shall be deemed to have commenced on the day the request for arbitration is received by the NAI administrator.216 The request for arbitration has to contain the following elements: the name and contact details of the parties, a brief description of the dispute, a description of the claim(s), a reference to the arbitration agreement, the names and contact details of the arbitrators (if they have been appointed already), the method of appointments of the arbitrators (if the parties have agreed on a special procedure), the number of arbitrators (if agreed by the parties), the place and language of arbitration (if agreed by the parties), or the preference of the claimant, if any, for the number of arbitrators as well as concerning the place and language of arbitration, and any other particulars in relation to the procedure.217 b) Equality of arms, fair trial principles and the right to be heard. Pursuant to 69 Dutch arbitration law, the parties must be treated with equality.218 This means that parties should be given the opportunity to fully express their views, to substantiate their claims and present their case, and no party should be given a privileged position. Parties cannot derogate from this mandatory provision of Dutch arbitration law. If 70 arbitrators violate this principle, leave for enforcement of the award may be refused219 and the award can be set aside on the basis of a violation of the rules of public policy.220 The requirement for the arbitral tribunal of giving each party an opportunity to 71 present its case is not applicable to arbitrations related to the determination of the quality or condition of goods.221 However, it is perceived that if the arbitrators need clarifications in such an arbitration, they should give both parties equal opportunities to present their case.222 It is also suggested that any exchange of views or any communication between the arbitrator and one of the two parties cannot be accepted in the absence of the other party.223 c) Confidentiality. While the consultation document on the 2014 Dutch Arbitration 72 Act included a proposal to include an explicit provision in the law providing for confidentiality of arbitral proceedings, such proposal did not feature in the text that was finally adopted.224 It is still possible, however, for the parties to provide for confidentiality through use of a separate confidentiality agreement that can be incorpo-

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Article 1025(1) Rv. Article 1025(2) Rv. 216 Article 7(1) NAI Rules. 217 Article 7(2) NAI Rules. 218 Article 1036(2) Rv. 219 Article 1063(1) Rv; HR, 8 November 1963, NJ 1964, 139. 220 Article 1065(1)(e) Rv. See HR, 12 July 2013, (2014) TvA 61 (X/Slotervaartziekenhuis); Hof ‘sGravehage, 31 March 2015, (2015) TvA 55; HR, 18 June 1993, NJ 1994, 449 (Van der Lely/VDH); HR, 25 May 2007, NJ 2007, 294 (Spaanderman/Anova). 221 Article 1020(4)(a); see also article 1047 Rv. 222 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 14. 223 Ibid. 224 See Kamerstukken II 2013/14, 33611, nr. 5, 8; Kamerstukken I 2013/14, 33611, nr. B, 2; Kamerstukken I 2013/14, 33611, nr. C, 2–4. This development has been seen by commentators as a missed opportunity: see De Ly, (2013) TvA 38. 215

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rated in an order issued by the tribunal. That said, it is considered that arbitral proceedings in the Netherlands are – in principle – covered by confidentiality.225 73 Institutional rules may contain explicit provisions on confidentiality. For example, under the NAI Rules, arbitration is confidential.226 Unless a party objects within two months of the date of an award, the NAI shall be authorized to publish an anonymized version of the award (without mentioning the names of the parties and deleting any further details that might disclose the identity of the parties).227 d) The arbitral award. Under Dutch arbitration law, a tribunal can render a final award, a partial final award or an interim award.228 A final award is an award where all claims submitted to the tribunal are settled in its operative part. A partial final award, on the other hand, is an award where only a number of the claims submitted to the tribunal are settled in its operative part, while other claims remain pending. For instance, a tribunal may decide on liability, but leave the question of damages to be decided in a further final award. 75 Awards can be rendered by the majority of arbitrators, if the tribunal consists of more than one arbitrator.229 However, parties may agree that the arbitrators decide unanimously or that the chairman of the tribunal will have the authority to decide in case there is no majority. If the arbitral tribunal is composed of more than one arbitrator, procedural matters of minor importance can be decided by the chairman of the tribunal if empowered thereto by the other arbitrators, unless otherwise agreed by the parties.230 76 As far as the form and contents of the awards are concerned, Dutch arbitration law provides that the award must be in writing and signed by the arbitrator(s).231 Moreover, the award must contain the names and addresses of the arbitrator(s), the names and addresses of the parties, the date on which the award was made, the place where the award was made, as well as the reasons for the decision.232 There is a requirement to state reasons in case an arbitration pertains to the determination of the quality or condition of goods,233 the recording of a settlement234 or in cases where the parties, while arbitral proceedings are ongoing, agree in writing that the award shall not state the reasons for the decision.235 In any other case, a tribunal is obliged to state the reasons for its decision, if an award is made in the Netherlands. Lack of reasoning constitutes a setting aside ground, pursuant to article 1065(1)(d) Rv. An allegation that the award is insufficiently or inadequately reasoned (e.g., in case of an error in law or in fact) cannot lead to it being set aside.236 However, in case the reasoning of an arbitral award is so flawed it can be equated to a complete lack of reasoning, this can also lead to the setting aside of the relevant arbitral award.237 In case an award is made outside the Netherlands and does not contain reasons for the decision, it may still be 74

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Snijders, (2014) TvA 1. Article 6 NAI Rules. 227 Article 51 NAI Rules. 228 Article 1049 Rv. 229 Article 1057(1) Rv. 230 Ibid. 231 Article 1057(2) Rv. 232 Article 1057(4) Rv. 233 As provided in article 1020(4)(a) Rv. 234 As provided in article 1069(2)(b) Rv. 235 Article 1057(5) Rv. 236 HR, 25 February 2000, NJ 2000, 508 (Benetton International N.V./Eco Swiss China Time Ltd, Bulova Corporation). 237 HR, 9 January 2014, NJ 2005, 190 (Nannini/SFT Bank); HR, 22 December 2006, NJ 2008/4 (Kers/ Rijpma). 226

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enforceable in the Netherlands, provided that it is valid under the law of the country in which it was made.238 In case an arbitrator does not attend a hearing in spite of having been duly 77 informed about it, this is not sufficient to lead to the setting aside of the award. This is due to the fact that there is no provision in Dutch arbitration law obliging arbitrators to hold any kind of hearing. In this respect, the Court of Appeal of The Hague has ruled that if an arbitrator fails to attend a hearing, the other arbitrators shall make mention thereof in the award signed by them.239 The same applies if a minority in the tribunal refuses to sign the award.240 A similar mention shall be made if a minority is incapable of signing and it is unlikely that this impediment will cease to exist within a reasonable time. A mention of such fact after the date on which the award was made is not sufficient and this cannot be resolved by providing a dissenting opinion after the date of the award.241 As far as dissenting opinions are concerned, Dutch arbitration law contains no 78 relevant provisions. These are not common in domestic arbitrations, but may well be considered in international cases. A minority opinion would not form part of the award.242 The NAI Rules state that no mention shall be made in the award of the opinion of a minority of the arbitrators. However, a minority may express its opinion to the co-arbitrators and the parties in a separate written document. This document shall not be considered to be a part of the award.243 Once the award is made, it is the responsibility of the tribunal to ensure without delay 79 that the original of the award, or a copy thereof certified by an arbitrator or a third party designated by the parties, is sent to the parties. It is also the responsibility of the tribunal to ensure that the original of a final or partial final award is deposited with the Registry of the District Court within whose district the seat of arbitration is located, if the parties have so agreed.244 Whereas the 1986 Dutch Arbitration Act required the deposit of the arbitral award with the Registry of the District Court, this has become an opt-in provision under the 2014 Dutch Arbitration Act. A final or final partial award has the force of res judicata in other legal proceedings between the same parties from the day on which it is rendered.245 e) Termination of the arbitration without an award. Dutch arbitration law does not 80 include a provision on withdrawing a request for arbitration. The NAI Rules provide that the claimant may withdraw its request for arbitration as long as the respondent has not submitted a statement of defence or, in case the arbitration does not take place on the basis of written submissions, as long as a hearing has not been held. Thereafter, 238

Sanders/Van den Berg (eds), The Netherlands Arbitration Act, 1986, article 1057, 33, note 74. Hof ‘s-Gravehage, 17 December 1998, (1999) TvA 108. 240 Article 1057(3) Rv. See also HR, 30 September 2016, (2017) TvA 7 (QNOW B.V./X), where a presiding arbitrator had deposited an award, which did not include the signatures of his two coarbitrators, with the registry of the District Court. This led to the setting aside of the award and confirmed that the presiding arbitrator was personally liable due to the setting aside of the award. 241 HR, 5 December 2008, NJ 2009, 6 (Bursa Büyüksehir Belediyesi/Güris Insaat Ve Mühendislik A.S., Siemens Aktiengesellschaft, Siemens Sanayi Ve Ticaret A.S., Tüvasas Türkiye Vagon Sanayi A.S.). 242 Van den Berg, in: Van den Berg (ed.), International Handbook on Commercial Arbitration, 1987, 21; HR, 5 December 2008, NJ 2009, 6 (Bursa Büyüksehir Belediyesi/Güris Insaat Ve Mühendislik A.S., Siemens Aktiengesellschaft, Siemens Sanayi Ve Ticaret A.S., Tüvasas Türkiye Vagon Sanayi A.S.). See also Hof Amsterdam, 25 April 2017, (2017) TvA 48 (The Swatch Group Ltd/Tiffany and Company) and HR, 23 November 2018, RvdW 2018, 1302 (Tiffany and Company/The Swatch Group Ltd) and Van Zelst, (2015) TvA 21. 243 Article 43(4) NAI Rules. 244 Article 1058(1)b Rv. 245 Article 1059 Rv. 239

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withdrawal of a request for arbitration shall be possible only with the express consent of the respondent.246 The consequence of a withdrawal of the request for arbitration is that the arbitral proceedings will be considered as never having been commenced. 81 In case the claimant fails to submit or sufficiently substantiate its claim, without providing valid reasons, despite having had sufficient opportunity to do so, the arbitral tribunal may, by issuing an award or in another manner it deems appropriate, terminate the arbitral proceedings.247 82

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f) The costs of the arbitration. Dutch arbitration law does not contain any explicit provision on costs.248 The only reference to costs is made in relation to consolidation of arbitral proceedings, where a nominated third party or the President of the District Court shall decide on the remuneration for the work already carried out by the arbitrator(s) whose mandate is terminated by reason of consolidation.249 As a rule of thumb, the costs of arbitration are awarded against the losing party. However, the tribunal may choose to deviate from such practice and divide the costs between the parties in cases where the claims of the parties are only partially granted.250 Costs, apart from the fees of the arbitrators, may include costs of experts appointed by the tribunal, recording transcripts of hearings, administrative costs of the arbitral institution, witness fees, and the cost of legal representation of the parties. The NAI Rules provide some guidance as to how arbitrators’ fees can be determined. Criteria include the time the arbitrators spent on the case, the amount in dispute and/or the complexity of the case. In NAI arbitrations, the fees are determined by the NAI Administrator after consultation with the arbitrators.251 The determination of fees is included in the award, and no provision in Dutch arbitration law addresses the possibility of renegotiation of fees. A decision on costs can most usually be found in the final award.

3. Evidence, discovery, disclosure 87

Under Dutch arbitration law, the arbitral tribunal has discretion to determine the rules of evidence, the admissibility of evidence, the division of the burden of proof and the assessment of evidence, unless otherwise agreed by the parties to the arbitration.252 Statutory provisions concerning evidence also bind the tribunal, to the extent that these provisions may not be deviated from (marriage contracts, wills and deeds of gifts).253 An exception to the discretion of the tribunal relates to questions pertaining to the validity of the arbitration agreement. A decision of a tribunal on its own jurisdiction should be supported by an instrument in writing,254 which will be evidenced according to the same rules of evidence that Dutch courts have to apply.255 The tribunal is also limited in its

246

Article 33 NAI Rules. Article 1043a(1) Rv. 248 See Van de Hel-Koedoot, (2009) TvA 13 for a broader discussion on arbitration costs under Dutch law. 249 Article 1046(4) Rv. 250 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 101. 251 Articles 54(1) and (4) NAI Rules. 252 Article 1039(1) Rv; HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/ Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran). 253 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 59–60. 254 Article 1021 Rv. 255 Van den Berg/Van Delden/Snijders, Netherlands Arbitration Law, 1993, 60. 247

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discretion when accepting or refusing evidence if such would conflict with the principles of due process of law.256 The tribunal may, at the request of one of the parties or on its own initiative, order 88 the inspection of, a copy or excerpt of certain records relating to the dispute from the party that has these records at its disposal, unless otherwise agreed by the parties,257 or order parties to provide evidence by means of hearing witnesses and experts, unless otherwise agreed by the parties.258 In addition, and unless otherwise agreed by the parties, the arbitral tribunal may appoint one or more experts to render advice.259 Moreover, the arbitral tribunal may, at the request of one of the parties or on its own initiative, conduct a site visit or inspect objects in or outside of the Netherlands, unless otherwise agreed by the parties.260 As far as the assistance of the local courts is concerned, if a witness does not appear 89 voluntarily or, having appeared, refuses to make a statement, the arbitral tribunal may allow the party which so requests, within a period of time determined by the arbitral tribunal, to request the President of the District Court to appoint an examining judge before whom the witness will be examined. The examination shall take place in the same manner as in ordinary court proceedings. After the examination, the clerk of the District Court shall transmit the record of the examination to the arbitral tribunal and the parties.261

4. The law governing the dispute and lois de police In principle, the tribunal must render its award in accordance with the rules of law.262 90 A tribunal can also decide the substance of a dispute as amiable compositeur, if the parties have, by agreement, authorized it to do so.263 If a choice of law has been made by the parties, the arbitral tribunal shall decide in accordance with the rules of law designated by the parties. Failing such designation of law, the arbitral tribunal shall decide in accordance with the rules of law which it considers appropriate.264 a) Choice of law and domestic public policy. Based on the principle of party 91 autonomy, parties are free to decide on the law applicable to the merits of the dispute. Dutch arbitration law does not set any limitations for this freedom.265 Nevertheless, the arbitral tribunal will have to set aside the choice of law made by the parties to the extent that a Dutch rule of public policy is deemed to be applicable.266 In such case, the arbitral tribunal should apply this rule ex officio. Otherwise, the arbitral tribunal runs the risk that its award may not be enforceable or be set aside.267 Whether arbitral tribunals must comply with Dutch mandatory laws (not being rules 92 of public policy) is less clear,268 although it can generally be assumed that both 256 HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.); HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran). 257 Article 1040(2) Rv. 258 Article 1041(1) Rv. 259 Article 1042(1) Rv. 260 Article 1042a Rv. 261 Article 1041a Rv. 262 Article 1054(1) Rv. 263 Article 1054(3) Rv. 264 Article 1054(2) Rv. 265 Ibid. 266 Meijer, Overeenkomst tot Arbitrage, 2011, 357. 267 Ibid. See articles 1063(1) and 1065(1)(e) Rv, respectively. 268 Snijders, Nederlands Arbitragerecht, 2018, 427–431.

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arbitrators ruling on an ex aequo et bono basis and those ruling in accordance with rules of law are bound to apply rules of mandatory law. In case fundamental mandatory provisions, i.e., rules of public policy, are not applied, this can lead to the setting aside of the award if the violation was deliberate.269 This might, however, be different if the tribunal, in its award, states reasons why it has chosen to deviate from the mandatory provisions in question.270 93

b) Choice of law and foreign lois de police. It should be noted that certain rules of priority (lois de police, lois d’application immediate or règles d’ordre public) – i.e., substantive legal standards which should apply directly in international legal relationships regardless of whether or not these standards are part of the applicable law – may exist.271 These rules of priority are scarce in the Netherlands. However, there may be foreign rules of priority which, notwithstanding the choice of applicable law, should be applied in court proceedings in the Netherlands.272 In Dutch doctrine, the applicability of foreign rules of priority by an arbitral tribunal is not necessarily ruled out.

5. Interim relief in arbitration 94

a) Interim relief before state courts. An arbitration agreement does not preclude a party from requesting the state courts to order a conservatory interim measure, or from applying to the President of the District Court or the Subdistrict Court for a decision in summary proceedings in accordance with article 254 Rv.273 The same applies in case the arbitration agreement provides for arbitration outside the Netherlands.274 However, courts should be reluctant to assume jurisdiction once an arbitral tribunal has been or is about to be constituted.275 In that respect, Dutch arbitration law provides that if a party timely invokes the existence of an arbitration agreement, the court can only declare that it has jurisdiction if the requested decision (i.e., interim relief) cannot, or not in a timely manner, be obtained in arbitral proceedings.276 This is the case, for example, for conservatory measures such the levying of prejudgment attachments, which can only be ordered by the competent state courts.

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b) Interim relief before the arbitral tribunal. An arbitral tribunal can, at the request of one of the parties, order interim measures, except for certain conservatory measures.277 The interim measures should relate to the claim or counterclaim in the pending

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Snijders, Nederlands Arbitragerecht, 2018, 429–430. Ibid. For example, adhering to mandatory law would violate the principles of reasonableness and fairness (articles 6:2(2) and 6:248(2) BW). 271 Meijer, Overeenkomst tot Arbitrage, 2011, 357–359. 272 One may think, in particular, of foreign rules that protect an important public interest of that country. It is argued that, in light of the duties of the Dutch state towards other states, under certain circumstances Dutch courts cannot lightly ignore such rule which is of great importance to another country. 273 Article 1022a Rv. 274 Article 1074a Rv. 275 MvT, (1984) TvA 4A, 10. 276 Article 1022c Rv. See Rb. Amsterdam, 28 January 2015, (2015) TvA 36; Rb. Amsterdam, 9 April 2015, (2015) TvA 64 and 75; Rb. Midden-Nederland, 30 September 2015, (2016) TvA 19; Rb. Amsterdam, 7 January 2016, (2016) TvA 42; Rb. ‘s-Gravehage, 12 June 2015, (2015) TvA 83; Rb. Rotterdam, 7 August 2015, (2015) TvA 86; Rb, Rotterdam, 18 September 2015, (2106) TvA 18; Hof ‘s-Gravehage, 24 January 2017, (2017) TvA 31; Rb. Amsterdam, 19 April 2017, (2017) TvA 51; Rb. Midden-Nederland, 7 June 2017, (2017) TvA 55; Rb. Limburg, 27 July 2017, (2017) TvA 75; Stouten/Stevens, (2016) TvA 25; Josephus Jitta, (2016) TvA 68. 277 Article 1043b(1) Rv. 270

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arbitral proceedings.278 The interim measures ordered by the tribunal can take the form of either an order or an award. Unless the tribunal determines otherwise, the interim measures ordered by an arbitral tribunal are considered to be an award.279

6. Multi-party arbitration Arbitral proceedings in the Netherlands can involve more than two opposing parties. 96 This can relate to situations where more than two parties agree to multi-party arbitration in advance.280 Furthermore, third parties may also become involved in pending arbitral proceedings. This can occur willingly, by joinder, or involuntarily, by intervention281 and, alternatively, by consolidation282 of pending arbitral proceedings. Absent a specific multi-party arbitration agreement, the ability of third parties to become party to pending proceedings will depend upon factors such as the parties’ agreement,283 but also on the permission of the arbitral tribunal in case of joinder or intervention,284 and a designated third party285 or the President of the District Court in case of consolidation.286 a) Arbitration agreement involving several parties. The principle of party auton- 97 omy requires an agreement to arbitrate between the parties to an arbitration. Parties can conclude a multi-party arbitration agreement to this effect287 to cover certain legal relationships between them. In multi-party arbitrations, two or more parties288 usually combine their forces in their claims or defence. It is to be noted that in case of a joinder or intervention, the third party will have to become party to the arbitration agreement.289 Furthermore, in case of a joinder, it is also possible that a third party acts as a separate claimant, disputing both respective positions.290 b) Equality of arms and appointment of the arbitrators. The involvement of third 98 parties can cause significant problems in relation to the composition of the arbitral tribunal and the parties’ right of “equality of arms”.291 Parties should, in principle, have an equal right to nominate arbitrators.292 If more than two parties are involved in the arbitration, it is advisable to designate a third party for the purposes of nominating the arbitrator(s). Some arbitral institutions have provided for a solution in this

278

Ibid. Article 1043b(4) Rv. 280 Meijer, Overeenkomst tot Arbitrage, 2011, 552. 281 Article 1045 Rv. 282 Article 1046 Rv; it is important to distinguish between informal and formal consolidations. The former entails a mere common handling of similar but separate proceedings, the latter proper consolidation into one procedure, causing complex legal issues (Snijders, Nederlands Arbitragerecht, 2018, 384–385). 283 Parties can agree to exclude the possibility of joinder, intervention or consolidation under the new law. 284 See article 1045(1) Rv; Snijders, Nederlands Arbitragerecht, 2018, 370–374. 285 The possibility to designate a third party for the purposes of deciding on the consolidation request is a novelty of the 2014 Dutch Arbitration Act. 286 See articles 1046(1) and (3) Rv; Snijders, Nederlands Arbitragerecht, 2018, 381–393. 287 Meijer, Overeenkomst tot Arbitrage, 2011, 552, 557. 288 It is conceivable (and possible) that not all parties to a multiple party arbitration agreement will actually be involved in the proceedings. 289 Snijders, Nederlands Arbitragerecht, 2018, 384–385. Also Meijer, Overeenkomst tot Arbitrage, 2011, 571–572. 290 Meijer, Overeenkomst tot Arbitrage, 2011, 558. 291 Sanders, Het Nederlandse Arbitragerecht, 2001, 153–155. 292 MvT, (1984) TvA 4A, 24–25. 279

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respect.293 Dutch arbitration law provides that if by agreement or otherwise one party (or equally a group of claimants or respondents) is given a privileged position with regard to the appointment of the arbitrator or arbitrators, either party may, in derogation of the agreed method of appointment, request the President of the competent District Court to appoint the arbitrator or arbitrators.294 99 In case of consolidation of pending arbitral proceedings, the parties shall appoint the arbitrator(s) in consultation with each other. If they cannot reach an agreement thereon, the President of the District Court or the third party designated thereto shall appoint the arbitrator(s).295

IV. The control and the enforcement of arbitral awards 100

Arbitral awards relating to the legal relationship which is in dispute have the force of res judicata from the day on which they are made.296 They can only be challenged in an agreed arbitral appeal, if applicable, or in setting-aside proceedings before the Dutch courts.

1. Correction and amendment of arbitral awards 101

Within a time period as agreed upon by the parties, or until three months after the day of the sending of the award,297 any of the parties to an arbitration can request in writing that the tribunal corrects a manifest computing, clerical or any other manifest error that is easily repairable.298 The same applies if one of the necessary elements of an award299 is mentioned incorrectly or is partially or wholly absent from the award.300 The tribunal is also allowed to proceed on its own initiative with the corrections to the award within the same timeframe.301 This request does not suspend the possibility of enforcement of the award, unless the President of the District Court deems that there are serious reasons to do so while a request for correction is pending.302 If the request for correction is successful, the correction will be recorded and signed on the original award and its copies, or set out in a separate document signed by the tribunal, which document will be treated as forming part of the award.303 The absence of the signature of one of the arbitrators cannot be rectified in the manner described above, given the fact that the signature of the arbitrators is an essential element of the award.304 An award that does not comply with the signature requirements of article 1057 Rv is

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See, for example, article 12(8) ICC Rules 2021. Article 1028(1) Rv. 295 Article 1046(4) Rv. 296 Article 1059(1) Rv. 297 See article 1058(2) Rv: “The award shall be deemed to have been sent if four weeks have lapsed after the date of the award”. Cf. Rb. Amsterdam, 19 November 2019 (Korbusiness/[X] Belastingadviseur B.V.) (2020) TvA 19; Hof Arnhem-Leeuwarden, 8 October 2019 (Stichting Amphia) (2020) TvA 13. 298 Article 1060(1) Rv. See also HR, 13 February 2004, NJ 2004, 459 (ABN AMRO Bank and ING Bank/ Zanders q.q. and Berghs q.q.). 299 As referred to in article 1057(4)(a)–(d). See also supra mns 74 et seq. 300 Article 1060(2) Rv. 301 Article 1060(4) Rv. 302 Article 1060(8) Rv. 303 Article 1060(6) Rv. 304 HR, 5 December 2008, NJ 2009, 6 (Bursa Büyüksehir Belediyesi/Güris Insaat Ve Mühendislik A.S., Siemens Aktiengesellschaft, Siemens Sanayi Ve Ticaret A.S., Tüvasas Türkiye Vagon Sanayi A.S.); see also HR, 30 September 2016, NJ 2017, 141 (QNOW/B). 294

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susceptible to setting aside on the grounds of article 1065(1) Rv. In the same way, correction is not possible where the tribunal has not complied with its mandate.305 If the request for correction of the award is not made within the time period as 102 agreed upon by the parties, or until three months after the day of the sending of the award, the parties can request the correction of the award in summary proceedings.306 Where the tribunal has failed to decide on a certain claim or counterclaim made by 103 the parties, either party may, within a period of time as agreed upon by the parties, or until three months after the day on which the award was sent, request the tribunal to render an additional award.307 However, in cases where the tribunal has not decided on an essential defence of one of the parties, rendering an additional award might not be the most appropriate remedy. In this case, setting-aside proceedings might be more appropriate. Arbitral appeal is also possible if the parties have agreed thereto. This agreement 104 must comply with the requirements of articles 1020 and 1021 Rv.308 Such an appeal can be lodged within a time period as agreed by the parties or until three months after the date of the sending of the award.309 An award can be declared immediately enforceable notwithstanding any arbitral appeal, either by the tribunal of first instance or by the arbitral tribunal in arbitral appeal proceedings.310 An arbitral award rendered in first instance which has not been declared immediately enforceable can only be enforced after the period for arbitral appeal has lapsed unused, or if and to the extent that the arbitral award is upheld in arbitral appeal, or prior to that, at the moment that the arbitral appeal is terminated prematurely.311 The setting aside or revocation of an arbitral award rendered in arbitral appeal implies by operation of law the setting aside or revocation of the arbitral award rendered in first instance, unless the court determines that the arbitral award rendered in first instance remains unaffected.312 The only means of recourse against a final or partial final award rendered in first instance are setting aside and revocation if the period for arbitral appeal has lapsed unused, or if and to the extent that the arbitral award is upheld in arbitral appeal, or prior to that, if the parties have waived their right to arbitral appeal in writing. By way of derogation from article 1064a(2) Rv, the right to make an application for the setting aside of such arbitral award lapses three months after the day on which the period for arbitral appeal has lapsed.313

2. Review of arbitral awards before the state courts The possibilities of submitting a request for correction of clerical errors in the award 105 to the arbitral tribunal or proceeding with arbitral appeal have been described above. However, apart from these options (together with remission; see below), the only further possible means of recourse against an award are setting aside and revocation before the Dutch courts.314 Setting aside is the recourse provided by law with regard to flaws or errors in (i) the arbitration agreement, (ii) the arbitral process as conducted by 305

HR, 23 April 2010, NJ 2011, 475 (A.R. Berntsen, Areb Holding B.V./M.A. Goedkoop, Ameg B.V.). Article 438(2) Rv. Meijer, in: Van Mierlo/Van Nispen (eds) Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, article 1060, note 3. 307 Article 1061(1) Rv; see also van den Nieuwendijk, (2002) TvA 1. 308 Article 1061b Rv. 309 Article 1061c Rv. 310 Article 1061i Rv. 311 Article 1061k(2) Rv. 312 Article 1061l(2) Rv. 313 Article 1061l(3) Rv. 314 Article 1064 Rv. 306

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the tribunal or (iii) the award,315 while revocation is a legal remedy concerning party misrepresentations. An award can be revoked when it is wholly or partially based on (a) fraud discovered after the award was made and committed during the arbitration by or with the knowledge of one of the parties, (b) documents, which, after the award was made, are discovered to have been forged, or when (c) after the award was made, a party obtains documents which would have had an influence on the decision of the tribunal and which were withheld by one of the parties.316 For the revocation of an award, the ground in question must have only come to light once the proceedings have come to an end.317 A successful revocation on any of those grounds will result in the setting aside of the award.318 For the purposes of this publication, only the most common recourse (i.e., setting-aside) will be analysed in more detail below. a) Procedural framework (time limits, competent court, appeal). An application to set aside an arbitral award has to be made within three months after the day on which the award was sent,319 or three months after the deposit of the award with the competent District Court, if the parties have agreed to such deposit (pursuant to article 1058(1)b Rv).320 However, if the award together with leave for enforcement is officially served on the other party, the latter party may then make an application for the setting aside of the award within three months after said service has taken place, irrespective of whether the period of three months mentioned in the preceding sentence has lapsed.321 Moreover, the claim for setting aside an interim award may only be presented together with the claim for setting aside a final or partial final award.322 A claim for setting aside shall not automatically suspend the enforcement of an award.323 However, a setting-aside court may, at the request of a party, suspend enforcement until a final decision has been made on the claim for setting aside.324 107 The 2014 Dutch Arbitration Act has reduced the number of possible instances in setting-aside proceedings from three to two with the aim of limiting the duration and costs of these proceedings. The application for the setting aside of the award should be brought before the Court of Appeal of the district of the seat of arbitration.325 Appeal in cassation can be lodged against the decision of the Court of Appeal before the Dutch Supreme Court.326 Setting-aside proceedings before the Court of Appeal and the Dutch Supreme Court can take between three and four years.327 Unless one of the parties is a natural person not acting in the course of his or her professional practice or business, 106

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Article 1065 Rv. Article 1068(1) Rv. 317 This may not concern circumstances which have already been discovered during the arbitration proceedings or which “could have been discovered in a reasonably foreseeable investigation of the deceived person”. See also HR, 20 June 2003, NJ 2004, 569 (Regge en Dinkel/Milieutech). 318 Article 1068(3) Rv. 319 See article 1058(2) Rv: “The award shall be deemed to have been sent if four weeks have lapsed after the date of the award”. Cf. Rb. Amsterdam, 19 November 2019 (Korbusiness/[X] Belastingadviseur B.V.) (2020) TvA 19; Hof Arnhem-Leeuwarden, 8 October 2019 (Stichting Amphia) (2020) TvA 13. 320 Article 1064a(2) Rv. 321 Ibid. 322 Article 1064a(3) Rv. 323 Article 1066(1) Rv. 324 Article 1066(2) Rv. See also Hof ‘s-Gravenhage, 11 June 2019, NJF 2019, 386 (Russian Federation/ Everest Estate LLC et al.). 325 Article 1064a(1) Rv; see also Kamerstukken II 2012/13, 33611, nr. 3, 2. See also Hof Amsterdam, 10 July 2018, (2018) TvA 31 regarding the procedure before the Court of Appeal: the proceedings must be conducted as far as possible in accordance with the provisions applicable to the writ of summons procedure at first instance. 326 Article 1064a(5) Rv. 327 See Peters, (2018) 4 TCR 101. 316

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the parties can agree to exclude the right of appeal in cassation,328 thereby further limiting the duration of the proceedings, although such option is not frequently exercised. Nor do the main arbitral institutions include such opt-out in their model arbitration clauses. Dutch arbitration law now also provides the opportunity to parties to an arbitration 108 to have challenges to arbitral awards heard in English by the Netherlands Commercial Court of Appeal. This requires the seat of arbitration to be in Amsterdam. Also, the parties must explicitly have agreed to the possibility of challenging an award before the NCC – either in the arbitration agreement itself or in a separate agreement.329 b) Grounds for setting aside arbitral awards. aa) Overview. In setting-aside pro- 109 ceedings before the Dutch courts, only a limited set of grounds is available, which does not include a review of the merits of the case.330 The possible grounds for setting aside are the following: (a) non-existence of a valid arbitration agreement; (b) the arbitral tribunal was composed in violation of the applicable rules; (c) the arbitral tribunal did not comply with its mandate; (d) the award was not signed or did not contain reasons in accordance with the provisions of article 1057; and (e) the award, or the manner in which it was made, violates public policy. Unlike other arbitration laws, the provisions regarding setting aside under Dutch arbitration law are of a mandatory nature. For this reason, it is not possible for parties to an arbitration agreement to contractually opt out of the right to challenge an award.331 Pursuant to the amendments made to the Dutch arbitration law in 2014, the Court of 110 Appeal may, at the request of a party or on its own initiative, suspend the setting-aside proceedings for such period as may be determined by the Court of Appeal to allow the arbitral tribunal to cure a ground for setting aside by re-opening the arbitral proceedings or by taking another measure that the arbitral tribunal deems appropriate (this is known as remission).332 A decision of the Court of Appeal to that effect is not subject to appeal. If the arbitral tribunal deems it possible to cure the ground for setting aside, it shall render an arbitral award accordingly which shall replace the arbitral award against which an application for setting aside has been made.333 After suspension of the settingaside proceedings, the Court of Appeal shall, taking into account the circumstances, render a judgment as it deems appropriate.334 328

Article 1064a(5) Rv. Article 1064a(1) Rv. 330 Article 1065 Rv. 331 Article 1065(1) Rv; Kamerstukken II, 2013/14, 33611, nr. 5, 18; Kamerstukken II, 2012/13, 33611, nr. 3, 38. However, in De Raad v Wagemaker, (HR, 9 January 1981, NJ 1981, 203 (Exploitatiemaatschappij De Raad B.V./Jan Wagemaker)), the Dutch Supreme Court claimed that an exclusion of a challenge under article 1065(1)b Rv is possible. See also HR, 1 May 2015, NJ 2015, 454 (Çukurova/Sonera) = YCA XLI (2016), 517; Knigge/Ribbers, (2017) TvA 20; Strik/Hoefnagel, (2012) TvA 20. See also article 1057(5)(c), under which parties may agree in writing that the tribunal shall give no reasons for its decision. 332 Article 1065a Rv. This provision is based on article 34(4) UNCITRAL Model Law on International Commercial Arbitration. However, this UNCITRAL Model Law provision does not allow courts to refer a case back to the arbitral tribunal ex officio, but only at the request of a party. For jurisprudence on remission, see Hof Amsterdam, 27 November 2018, (2019) TvA 14 (Combinatie MNO Vervat Wegen -Boskalis et al/Provincie Noord-Holland); Hof Amsterdam, 10 December 2019, (2019) TvA 27 (Combinatie MNO Vervat Wegen -Boskalis et al/Provincie Noord-Holland); Hof ‘s-Gravenhage, 16 October 2018, (2019) TvA 10 (BPD ASR Vastgoedontwikkeling V.O.F.) and Hof ‘s-Gravenhage, 21 May 2019, ECLI:NL: GHDHA:2019:1132 (BPD ASR Vastgoedontwikkeling V.O.F.). An award challenged on the ground of non-existence of a valid arbitration agreement or public policy cannot be subject to remission (see Snijders, Nederlands Arbitragerecht, 2018, 575). See also Uilenbroek, (2019) TvA 64. 333 Article 1065a(3) Rv. Please note that before the arbitral tribunal makes a decision, it shall give the parties an opportunity to be heard; article 1065a(2) Rv. 334 Article 1065a(4) Rv. 329

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Under Dutch arbitration law, all grounds for setting aside the award must be presented in the initial writ of summons at the risk of forfeiting the right to do so thereafter.335 A further elaboration of the grounds presented in the writ of summons or the introduction of new factual statements is permissible.336

bb) Lack of jurisdiction of the arbitral tribunal. The tribunal will lack jurisdiction in cases where there is no valid arbitration agreement. In case a tribunal finds jurisdiction while no valid arbitration agreement exists, an arbitral award rendered by such tribunal shall be set aside.337 The parties can participate in the appointment of the arbitrators, without being precluded from challenging the validity of the arbitration agreement.338 113 A party that has appeared in the arbitral proceedings and has not raised the defence that the tribunal lacks jurisdiction on the ground of lack of a valid arbitration agreement, before submitting any other defence, shall not be able to invoke this ground for setting aside the arbitral award before the Dutch courts,339 unless the plea is made on the ground that the dispute is not arbitrable.340 Dutch courts examining setting-aside applications concerning allegations with regard to a lack of a valid arbitration agreement should apply no restraint when examining an allegation concerning lack of a valid arbitration agreement.341 The burden of proof with regard to setting-aside applications based on this ground lies with the party asserting the existence of a valid arbitration agreement.342 112

cc) Unlawful composition of the tribunal and other procedural irregularities. The parties are free to determine the rules applicable to the composition of the tribunal. However, if the parties have not agreed on the procedure applicable to the composition of the tribunal, the rules prescribed in Dutch arbitration law will be applicable (as mentioned supra mns 49 et seq.).343 A violation, therefore, either of the agreed rules or, in the absence of such agreement, the rules of the Dutch arbitration law can lead to the setting aside of the award.344 115 However, where a party has not filed a request to the President of the District Court to appoint the arbitrators (in case one of the parties is, by agreement or otherwise, given a privileged position with regard to the appointment of the arbitrator(s)), such party is barred from claiming in setting-aside proceedings that the tribunal was improperly constituted. The same equally applies (i) when a party participated in the appointment of the tribunal; or (ii) if a party participated in the arbitral proceedings, but did not 114

335

Article 1064a(4) Rv. HR, 27 March 2009, RvdW 2009, 460 (Hendrix Poultry Breeders B.V./Burshan); HR, 27 March 2009, NJ 2010, 170 (Smit Bloembollen B.V. v Ruwa Bulbs B.V.); see also HR, 22 March 2013, NJ 2013, 189 (Bursa Büyüksehir Belediyesi/Güris Insaat Ve Mühendeslik A.S.). See also Hof ‘s-Gravenhage, 18 February 2020 (2020) TvA 31, (Veteran Petroleum Limited, Yukos Universal Limited and Hulley Enterprises Limited/Russian Federation): in this case, against which appeal in cassation proceedings before the Dutch Supreme Court are currently pending, the Court of Appeal of The Hague found that a defendant in setting aside proceedings may, in principle, present arguments not earlier put forward in order to support the tribunal’s decision that it has jurisdiction. 337 Article 1065(1)(a) Rv. 338 Article 1027(4) Rv. 339 Articles 1052(2) and 1065(2) Rv. 340 See article 1020(3) Rv. See also Meijer, Overeenkomst tot Arbitrage, 2011, 877. 341 HR, 26 September 2014, NJ 2015, 318 (Chevron/Ecuador). 342 HR, 21 February 1913 (Offermeier/Portheine); Rb. Rotterdam, 18 May 2011 (Cimcool). 343 Articles 1023, 1026 and 1027 Rv. 344 Article 1065(1)(b) Rv. 336

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participate in the composition of the tribunal, and did not assert its objections to such composition prior to submitting its defence.345 Another ground for setting aside an award is the tribunal’s non-compliance with its 116 mandate.346 This has to be seen from both procedural and substantive perspectives. With regard to the procedure, the following is noted: if a tribunal does not comply with mandatory procedural rules under Dutch arbitration law (or non-mandatory rules, to the extent the parties have not agreed otherwise), this can constitute a ground for setting aside.347 Moreover, from a substantive point of view, a tribunal has not complied with its 117 mandate if it made an award in excess of what was claimed, or when it awards something not claimed (ultra petita). In this case, the award may be partially set aside.348 Similarly, an award can be set aside for non-compliance in case it did not reach a decision on one or more claims or counterclaims submitted to it (infra petita). In such case, a party must, before engaging in setting-aside proceedings, request the arbitral tribunal to render an additional award.349 Non-compliance with the tribunal’s mandate shall not constitute a ground for setting aside if the deviation from the mandate is not of a serious nature. Nor shall it constitute a ground for setting aside if the party advancing this ground has failed to make an objection in accordance with article 1048a Rv.350 Incorrect application of substantive rules does not constitute a ground for setting aside an award. Finally, an award may be set aside on the ground that the award was not signed or 118 does not contain reasons.351 dd) Public policy. The last ground for setting aside an arbitral award is conflict with 119 public policy. Courts should, in principle, apply such ground with restraint,352 for a setting aside procedure should not be an appeal in disguise.353 Public policy pertains to both procedural as well as substantive issues. As far as procedural issues are concerned, these regard due process considerations.354 With regard to substantive issues, this ground for setting aside can, for instance, be successfully invoked by a party where the award at hand violates mandatory laws of a fundamental nature.355 Furthermore, if the 345

Articles 1028(2) Rv, 1052(3) and 1065(3) Rv. Article 1065(1)(c) Rv. 347 Van Mierlo/Meijer, (2014) WPNR 60, 63. 348 Article 1065(5) Rv. 349 Article 1065(6)-(7) Rv. 350 See articles 1048a and 1065(4) Rv. 351 See articles 1057 and 1065(1)(d) Rv. Cases where the reasoning of an arbitral award is so flawed it can be equated to a complete lack of reasoning can also lead to the setting aside of the relevant arbitral award (HR, 9 January 2014, NJ 2005, 190 (Nannini/SFT Bank); HR, 22 December 2006, NJ 2008/4 (Kers/ Rijpma). See also supra mns 74 et seq. 352 Alleged violations of public policy relating to the parties’ right to be heard are exceptionally examined by the courts without restraint (HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.); HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran)). 353 See HR, 17 January 2003, NJ 2004, 384 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran); HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.); HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran): cases regarding the parties’ right to be heard, exceptionally, ask for application of no restraint by the setting-aside courts. 354 See, for example, HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.). 355 HR, 21 March 1997, NJ 1998, 207 (Eco Swiss China Time Ltd./Benetton International N.V.). According to this decision, a mandatory rule of law of fundamental nature is considered to be European Competition Law (in particular article 101 TFEU, in that case). 346

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circumstances reveal that an arbitrator has not been impartial or independent, or if there are serious doubts about the impartiality of an arbitrator, then the award can be set aside on the grounds of violation of rules of public policy.356 Also, an arbitral award that attaches legal consequences to an agreement that has come about under the influence of corruption, may be set aside for being contrary to public policy.357

3. Enforcing arbitral awards a) Overview. aa) Domestic awards. Dutch arbitral awards can be enforced in the Netherlands, after the granting of leave for enforcement by the President of the District Court of the district of the seat of arbitration.358 In principle, such procedure is conducted ex parte.359 The President of the District Court can only refuse the enforcement of a domestic award if its examination on a prima facie basis leads him to believe that the award will be set aside or revoked, or if a penalty is ordered.360 The leave for enforcement has to be recorded on the original arbitral award, if the parties have agreed to deposit the award with the registry of the District Court.361 Otherwise, the leave for enforcement will be recorded in a separate court decision.362 In cases where leave for enforcement is granted, there is no possibility of appeal and the only recourse available to the losing party in the arbitration is an application for setting aside or revocation of the underlying Dutch arbitral award.363 If such application for setting aside/revocation is successful, the leave for enforcement is set aside/revoked respectively by operation of law.364 121 By contrast, if a request for a leave for enforcement is refused by the President of the District Court, an appeal can be lodged before the competent Court of Appeal.365 If the request for leave for enforcement is also rejected on appeal, an appeal in cassation is available.366 120

122

bb) Foreign awards. The enforcement procedure for arbitral awards rendered outside the Netherlands (i.e., foreign awards) is set out in articles 1075–1076 Rv. Unlike with Dutch arbitral awards, the Court of Appeal (instead of the District Court) has jurisdiction to decide on requests for recognition and enforcement of foreign arbitral awards.367 Article 1075 Rv pertains to the enforcement of foreign awards under inter356 In this case, the relevant standard of review would be stricter than in challenge proceedings pending the arbitration proceedings. See Meijer, in: Van Mierlo/Van Nispen (eds), Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, article 1065, note 7(b) and HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B. V., Mr. W.E. Merens). 357 Hof ‘s-Gravenhage, 22 October 2019, RBP 2020, 5 (Bariven S.A./Wells Ultimate Service LLC). 358 Article 1062(1) Rv; see Rb. Noord-Nederland, 17 June 2019, NJF 2019, 417 refusing leave for enforcement, taking into consideration that a decision by Soil Movement Arbitrator cannot be considered an arbitral award. 359 Meijer, in: Van Mierlo/Van Nispen (eds), Burgerlijke Rechtsvordering Tekst & Comentaar, 2018, Article 1062, note 3(c). 360 Article 1063(1) Rv. 361 Article 1062(2) Rv; see supra mns 74 et seq., 79. 362 Article 1062(2) Rv. 363 A decision granting a leave for enforcement cannot be appealed. This follows from article 1062(3) in conjunction with article 1064 Rv; see also regarding New York Convention awards HR, 25 June 2010, (2011) TvA 9 (Rosneft/Yukos Capital) = YCA XXXV (2010), 423. 364 Article 1062(4) Rv. 365 Article 1063(4) Rv. 366 Article 1063(5) Rv. 367 Articles 1075(2) and 1076(6) Rv. The provisions of articles 985–991 Rv shall apply to the procedure concerning enforcement of foreign arbitral awards mutatis mutandis (with some modifications).

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national treaties, while article 1076 Rv concerns the enforcement of foreign awards under Dutch law when no treaty is applicable. As the New York Convention allows parties to take advantage of “more favourable” national rules,368 enforcement can be sought on the basis of both the New York Convention and article 1076 Rv.369 It is questionable whether an exequatur granted in one EU member state can be 123 recognized and enforced in another EU member state, so that the arbitral award could be enforced anywhere within the EU.370 b) Defences to enforcement. aa) Overview. With regard to domestic awards, the 124 grounds for refusal of enforcement correspond to the grounds for setting aside (explained in detail supra mns 109–119) or revocation (see supra mn 105) or otherwise relate to the situation where a penalty for non-compliance has been imposed contrary to article 1056 Rv. The defences available against enforcement under article 1076(1) Rv are the following: (a) no valid arbitration agreement under the applicable law; (b) the arbitral tribunal was composed in violation of the applicable rules; (c) the arbitral tribunal did not comply with its mandate; (d) the arbitral award is open to appeal to arbitrators or the courts in the country in which the award was made; (e) the arbitral award was set aside by a competent authority of the country in which that award was made; or if (f) recognition or enforcement would be contrary to public policy. In the case of the New York Convention, the defences available against enforcement can be found in its article V. bb) Enforcement of awards that were set aside. As described supra mn. 120, the 125 setting aside of an arbitral award made in the Netherlands implies, by operation of law, the setting aside of its leave for enforcement.371 As far as foreign awards are concerned, article V(1)(e) New York Convention states that enforcement may be refused and leave for enforcement will not be granted if the award has been set aside at the seat of arbitration.372 However, there have been cases where the Dutch courts have enforced arbitral awards set aside at the seat. A prime example of such enforcement of a foreign arbitral award that had previously 126 been set aside at the seat is the case of Rosneft/Yukos Capital before the Amsterdam Court of Appeal (the decision of that Court of Appeal was subsequently upheld by the Dutch Supreme Court).373 The Amsterdam Court of Appeal enforced a number of related arbitral awards that had previously been set aside in Russia. It declared that the New York Convention dealt with the enforcement and recognition of arbitral awards and not with the recognition of foreign court judgments. Dutch courts may recognize foreign court decisions that set aside arbitral awards under the New York Convention,374 but a violation of due process is a specific ground for refusal of recognition under Dutch conflict-of-law rules. Hence, the Amsterdam Court of Appeal examined the Russian judgments setting aside the arbitral awards and determined that these judgments were partial and lacking independence. It found, therefore, that the setting

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Article VII(1) New York Convention. Snijders, Nederlands Arbitragerecht, 2018, 662–664. 370 Snijders, Nederlands Arbitragerecht, 2018, 664. 371 Article 1062(4) Rv. 372 Article V(1)(e) New York Convention. 373 Hof Amsterdam, 28 April 2009, LJN BI2451 = YCA XXXIV (2009), 703; HR, 25 June 2010, (2011) TvA 9 = YCA XXXV (2010), 423; cf. Hof Amsterdam, 18 September 2012, (2013) TvA 51 = YCA XXXVIII (2013) 427; see also HR, 24 November 2017, NJ 2019, 223 (Maximov/OJSC Novolipetsky Metallurgichesky Kombinat) = YCA XLIII (2018), 529. 374 Meijer, Overeenkomst tot Arbitrage, 2011, 245. 369

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aside of the awards could not be recognized in the Netherlands and decided to enforce the awards. 127 Despite criticism against the Yukos decision,375 the Dutch Supreme Court in its 2017 judgment in the Maximov case376 confirmed that a court may refuse to enforce an award if that award had been set aside by a competent authority in the country where the award was rendered. It held that the annulment of a foreign arbitral award does not per se bar a court from granting enforcement of such annulled award. This is due to the discretionary power allocated to the court on the basis of the word “may” in article V(1) of the New York Convention, albeit in exceptional cases only. The court further stated that one of those exceptional cases presents itself if the judgment setting aside the award is based on grounds that do not align with article V(1)(a-d) of the New York Convention or if the grounds for setting aside are not acceptable on the basis of internationally acceptable standards.377

4. Preclusion of grounds for challenge Under Dutch arbitration law,378 a party shall make an objection to the arbitral tribunal as soon as it is aware of, or reasonably should have been aware of, any act in violation of or omission to act in accordance with the provisions regarding the arbitral proceedings (articles 1036–1048 Rv), the arbitration agreement or an order, decision or measure of the arbitral award. Failure to do so will result in forfeiture of the right to make such objection at a later stage in the arbitral proceedings of before the court.379 Jurisdictional challenges are also governed by preclusion rules. In setting-aside proceedings, the ground of absence of a valid arbitration agreement to set aside an arbitral award can no longer be successfully invoked if the party raising such jurisdictional defence failed to do so before submitting a defence, unless the plea is made on the ground that the dispute is non-arbitrable.380 Also, a party who has cooperated in the composition of the arbitral tribunal may not, in the arbitral proceedings or before the court, raise the plea that the arbitral tribunal does not have jurisdiction on the ground that the arbitral tribunal was composed in violation of the applicable rules. A party that has appeared in the arbitral proceedings and that has not cooperated in the composition of the arbitral tribunal shall raise the plea that the arbitral tribunal does not have jurisdiction on the ground that the arbitral tribunal was composed in violation of the applicable rules before submitting a defence, on pain of forfeiting its right to rely on this later, in the arbitral proceedings or before the court.381 129 Additionally, a party which has grounds to challenge an arbitrator382 must give notification of the challenge within four weeks after it has become aware of the grounds of the challenge.383 If the arbitrator refuses to withdraw from the tribunal after notification of the challenge, the challenging party must within two weeks challenge the arbitrator before the President of the District Court if the arbitrator 128

375 See, e.g., Lazić, in: Bergmann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 689 (719–720). 376 HR, 24 November 2017, NJ 2019, 223 (Maximov/OJSC Novolipetsky Metallurgichesky Kombinat) = YCA XLIII (2018), 529. 377 Ibid. Also see Paulsson, Kluwer Arbitration Blog, 21 December 2017; Van Hezewijk, (2019) TvA 48. 378 Article 1048a Rv. 379 See also article 1065(4) Rv. 380 Article 1065(2) in conjunction with article 1052(2) Rv. 381 Articles 1052(3) and 1065(3) Rv. See also article 1028(2) Rv. 382 The same equally applies for secretaries (see article 1035a Rv). 383 Article 1035(1) Rv.

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gives notification that he will not withdraw from the tribunal, or within six weeks if no notification is given.384 A failure to challenge an arbitrator timely during the arbitral proceedings will preclude a party from invoking the argument that the arbitral award conflicts with public policy in setting-aside proceedings.385 384

Article 1035(2) Rv. HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens). The only exception to this strict rule is when a party neither was nor should have been aware of the circumstances (allegedly) affecting the arbitrator’s impartiality or independence. 385

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N. International Arbitration in the Russian Federation Bibliography: Асосков/Муранов/Ходыкин, Новые горизонты международного арбитража: Сборник статей выступающих на конференции “Российский арбитражный день – 2018” (выпуск 4), Ассоциация исследователей международного частного и сравнительного права 2018 [Asoskov/Muranov/Khodykin, New Horizons Of International Arbitration: Collection of Articles of Speakers at Conference “Russian Arbitration Day – 2018” (Edition 4), Association of Researchers of International Private and Comparative Law 2018]; Грешников, Международный коммерческий арбитраж и вопросы частного права: Сборник статей, Статут 2019 [Greshnikov, International Commercial Arbitration and Issues of Private Law: Collection of Articles, Statut 2019]; Karabelnikov, National Report for Russian Federation (2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 104, February 2019; Курочкин, Международный коммерческий арбитраж и третейское разбирательство, Инфотропик Медиа 2013 [Kurochkin, International Commercial Arbitration and Arbitral Proceedings, Infotropik Media 2013]; Курочкин, Третейское разбирательство и международный коммерческий арбитраж, Статут 2017 [Kurochkin, Arbitral Proceedings and International Commercial Arbitration, Statut 2017]; Лунаева, Международный коммерческий арбитраж: Учебник (выпуск 9), Редакция журнала “Третейский суд”, Статут 2018 [Lunaeva, International Commercial Arbitration: Textbook (Edition 9), magazine “Arbitration Court”, Statut 2018]; Минина, Арбитрабильность: теория и практика международного коммерческого арбитража, Инфотропик Медиа 2014 [Minina, Arbitrability: Theory and Practice of International Commercial Arbitration, Infotropik Media 2014]; Николюкин, Международный гражданский процесс и международный коммерческий арбитраж: Учебник, Юстиция 2017 [Nikolyukin, International Civil Proceedings and International Commercial Arbitration: Textbook, Yustitsiya 2017]; Решетников, Практика применения Арбитражного процессуального кодекса Российской Федерации, Юрайт 2018 [Reshetnikov, Practice in the application of Arbitration procedural code of the Russian Federation, Uright 2018]; Скворцов/Савранский, Комментарий к Федеральному закону “Об арбитраже (третейском разбирательстве) в Российской Федерации”, Статут 2016 [Skvortsov/Savranskiy, Commentary on the Federal Law “On Arbitration (arbitral proceedings) in the Russian Federation”, Statut 2016]; Spiegelberger, Russia report: The enforcement of foreign arbitral awards in 2016, (2016) Am. Rev. Int’l Arb. 437–449; Russia report: The enforcement of foreign arbitral awards in 2015; (2016) Am. Rev. Int’l Arb. 41–62; Зыков, Признание и приведение в исполнение иностранных арбитражных решений в России и странах бывшего СССР, Арбитражная Ассоциация 2019 [Zykov, Recognition and Enforcement of International Arbitral Awards in Russia and Countries of Former USSR, Arbitration Association 2019]. National legislation: Constitution of the Russian Federation of 12 December 1993 (as amended and supplemented); Arbitrazh Procedure Code of the Russian Federation dated 24 July 2002 No. 95-FZ (as amended and supplemented); Civil Code of the Russian Federation (parts one to four) (as amended and supplemented); Federal Law “On alternative procedure to resolve disputes with participation of mediator (mediation procedure)” dated 27 July 2010 No. 193-FZ (as amended and supplemented); Federal Law “On Arbitration (arbitral proceedings) in the Russian Federation” dated 29 December 2015 No. 382-FZ (as amended and supplemented); Federal Law “On International Commercial Arbitration” dated 7 July 1993 No. 5338-1 (as amended by Federal Law No. 409-FZ “On Amendments to Certain Legislative Acts of the Russian Federation” dated 29 December 2015 and as further amended and supplemented); Federal Law “On State Registration of Immovable Property” dated 13 July 2015 No. 218-FZ (as amended and supplemented); Federal Law “On Foreign Investment into Strategic Enterprises” dated 29 April 2008 No. 57-FZ; Statute on the procedure of resolution of proprietary disputes between state institutions and enterprises, published by the All-Russian Central Executive Committee and the Council of the People’s Commissars of the Russian Socialist Federated Soviet Republic, dated 21 September 1922; Practice Note of the Supreme Court of the RF of 22 June 2016; Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019 No. 53; Decision of the Presidium of the Supreme Arbitration Court of 27 February 1996 No. 5278/95; Information Letter of the Presidium of the Supreme Arbitrazh Court of the Russian Federation dated 9 July 2013 No. 158 “On Overview of practice dealing with arbitrazh courts of cases involving foreign parties”; Information Letter of the Presidium of the Supreme Arbitrazh Court of the Russian Federation No. 78 of 7 July 2004 “On Review of the Practices of Arbitrazh regarding preliminary injunctions”; Information Letter of the Presidium of the Supreme Arbitrazh Court of the Russian Federation dated 22 December 2005 No. 96; Information letter of the Presidium of the Supreme Arbitrazh Court of the Russian Federation No. 156 dated 26 February 2013.

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N. International Arbitration in the Russian Federation International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958, ratification status and full text at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (accessed 1 August 2020); European Convention on International Commercial Arbitration, Geneva, 21 April 1961, ratification status and full text available at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-2&chapter=22&clang=_en (accessed 1 August 2020).

Contents I. Introduction ..................................................................................................... 1. Arbitrazh courts and arbitral tribunals ................................................. 2. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 3. The guiding principles of Russian arbitration law.............................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Non-arbitrability.................................................................................... aa) Arbitrability of disputes connected with immovable property............................................................................................ bb) Arbitrability of corporate disputes............................................. d) Form of the arbitration agreement ................................................... e) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Scope of the arbitration agreement................................................... b) The interpretation of the arbitration agreement............................ c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Challenges to the jurisdiction of the arbitral tribunal .................. b) Challenges to the jurisdiction of state courts ................................. III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration without an award......................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................

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Part 3. Country Reports 4. The law governing the dispute and lois de police ............................... a) Choice of law and domestic cases..................................................... b) Choice of law and lois de police......................................................... 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards ....................................... aa) Invalidity of arbitration agreement............................................ bb) Violation of due process and absence of proper notice about the proceedings ................................................................... cc) Lack of authority of the arbitral tribunal ................................. dd) Unlawful composition of the tribunal and other procedural irregularities................................................................ ee) The non-arbitrability of the original dispute........................... ff) Public policy.................................................................................... 3. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... b) Grounds for refusing enforcement.................................................... aa) Overview .......................................................................................... bb) Enforcement of awards that were set aside.............................. cc) Fulfilment, set-off and similar defences.................................... 4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

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I. Introduction In the current political and legal environment the popularity of arbitration and especially international arbitration grows fast in Russia. Along with the world wide practice Russian participants recognize arbitration as convenient, fast and confidential method of dispute resolution comparing with state courts. The basics of the domestic and international arbitration in Russia is derived from the consent of the parties to the arbitration agreement within the framework of conflict of laws rules in Russia as well as Russian domestic legislation on domestic and international arbitration. 2 Russia has quite long history of arbitration. Back in 1922 with introduction of the monopoly of foreign trade for Russia, Soviet authorities created several arbitration institutions to settle commercial disputes1 between state enterprises and commercial parties. Those institutions were neither state courts nor conventional arbitrations, but quasi-judicial panels of adjudicators2. Subsequently disputes involving foreign parties should have been referred to newly established International Commercial Arbitration 1

1 Statute on the procedure of resolution of proprietary disputes between state institutions and enterprises, published by the All-Russian Central Executive Committee and the Council of the People’s Commissars of the Russian Socialist Federated Soviet Republic, dated 21 September 1922. See Sobranie uzakoneniy i rasporyazheniy Rabochego i krestyanskogo Pravitelsva 1922, No. 60, s 769. 2 Each commission was a three-member panel consisting of a lawyer, an executive member of the trade relevant to the dispute and a third-party neutral. Commissions rulings were based on the premise that all disputes should be resolved for the benefit of all State-owned enterprises.

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Court (“ICAC”)3 for all commercial disputes involving foreign parties except for maritime disputes. For disputes with foreign participation the Maritime Arbitration Commission (“MAC”) was created. Nowadays ICAC is one of the most reputable and popular Russian arbitration institutions. As noted, the popularity of arbitration grew fast in Russian within the last 10 years. In 3 2006 the ICAC received 120 claims4. Back in 2010 the ICAC received 299 claims involving counterparts from 30 various countries5. In 2018 the ICAC considered 454 cases (however it shall be noted that after arbitration law reform in 2015 the ICAC modified its statistics and this number includes both international and domestic arbitrations comparing to exclusively international arbitrations reflected in the statistics of the previous years)6. It shall be noted that the ICAC currently is the most popular venue to resolve 4 disputes involving Russian parties7. Other popular venues for the consideration of disputes with Russian elements are the London Court of International Arbitration and the Arbitration Institute of the Stockholm Chamber of Commerce. It is worth to note that values of the vast majority of cases considered by the ICAC in 2018 do not exceed USD 200,000 – 49 % of the considered disputes8. This is caused by moderate arbitration expenses and fees structure of the ICAC as well as overall costs of legal services in Russia allowing referring even minor disputes to arbitration. Besides this allocation reflects certain prejudice in respect of the Russian international arbitration comparing to foreign arbitral institutions.

1. Arbitrazh courts and arbitral tribunals As established by the Russian Arbitration Procedure Code, which came into force on 5 1 September 2002, economic disputes involving legal entities, individuals engaged in business activity and disputes between legal entities and its participants (shareholders) are dealt with by the “arbitrazhniy” courts (арбитражные суды), i.e., commercial arbitration courts. These are sometimes referred to, rather misleadingly, as “arbitration courts”. However, the arbitrazhniy court system is state run and must not be confused with conventional independent arbitration before arbitral tribunals (третейский суд). In the arbitrazh court system, the court of last resort used to be the Supreme Arbitrazh Court (Высший Арбитражный суд Российской Федерации). Following reform of the judicial system, the court of last instance is now the Supreme Court of the Russian Federation (Верховный Суд Российской Федерации). Case law of the arbitrazh courts and the Supreme Court is available online.9 On 26 December 2018, the Presidium of the Supreme Court published a review of case law in relation to domestic and international arbitration, containing decisions on arbitration matters of the last five years and providing guidance as to the resolution of similar disputes,10 and on 10 December

3 ICAC has been in existence since 1932 when the Foreign Trade Arbitration Commission was set up. In 1987 it was renamed the Arbitration Court of the USSR Chamber of Trade and Commerce and in 1993 the entity became known as ICAC. 4 See https://mkas.tpprf.ru/ru/Stat/stat2012.php (accessed 1 August 2020). 5 See https://mkas.tpprf.ru/ru/Stat/stat2010.php (accessed 1 August 2020). 6 See https://mkas.tpprf.ru/ru/Stat/page.php (accessed 1 August 2020). 7 See supra fn. 6. 8 See supra fn. 6. 9 See http://kad.arbitr.ru and http://www.supcourt.ru. 10 Обзор практики рассмотрения судами дел, связанных с выполнением функций содействия и контроля в отношении третейских судов и международных коммерческих арбитражей, available at http://www.supcourt.ru/documents/all/27518/ (accessed 1 August 2020).

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2019, its Plenum issued a Resolution on the exercise of the supervisory jurisdiction of the courts of the Russian Federation in relation to arbitration.11 6 For the sake of clarity it also has to be noted that the Russian civil court system has two branches: the arbitrazh (commercial) courts, which handle commercial disputes involving legal entities and have exclusive jurisdiction over corporate matters, and the courts of common jurisdiction, which handle other types of cases mostly involving individuals including criminal cases.

2. The legal framework Russian Constitution establishes priority of international legislation including international treaties and conventions Russia is a party to over Russian domestic legislation12. Therefore provisions of international treaties Russia is a party to prevail over Russian domestic legislation. Russia is a party to the New York Convention On Recognition and Enforcement of Foreign Arbitral Awards of 1958 (“NYC”). On the basis of the provisions of the NYC Russian legislature implemented respective provisions on enforcement of foreign arbitral awards into the Arbitrazh Procedure Code of the Russian Federation (“APC RF”) of 2002 and Civil Procedure Code of the Russian Federation (“CPC RF”) of 2002. Further, Russia as a successor of the USSR is a party to the European Convention on International Commercial Arbitration of 1961. Respective provisions of this Convention were scattered through various Russian domestic legislative acts. 8 On 14 August 1993, the Law of the Russian Federation on International Commercial Arbitration (International Commercial Arbitration Act, “ICAA”) came into force.13 The ICAA was introduced to make international commercial arbitration in Russia more acceptable to foreign parties, with particular regard to investment and foreign trade disputes. The ICAA is based on the internationally recognized standard of the UNCITRAL Model Law on International Commercial Arbitration (1985) (“Model Law”). An unofficial English translation has been prepared by the Russian Arbitration Association.14 9 On 29 December 2015 two laws – the Federal Law “On Arbitration in the Russian Federation”15 (“New Law on Arbitration”) No. 382-FZ and the Federal Law “On Amendments to Certain Legislative Acts of the Russian Federation”16 (“Law No. 409”) were adopted. Their provisions, with a number of exceptions, entered into force on 1 September 2016 substantially reforming the organization and operation of arbitration including international arbitration in Russia as well as amending the legislation on the judicial system of the Russian Federation. The New Law on Arbitration entirely replaced the former law on domestic arbitration from 200217 and from 1 September 2016 regulates domestic arbitration in the Russian Federation and, in certain aspects as well as with regard to the ICAA, the international arbitration with the seat of the arbitration 7

11 О выполнении судами Российской Федерации функций содействия и контроля в отношении третейского разбирательства, международного коммерческого арбитража, available at http://www. supcourt.ru/documents/own/28587/ (accessed 1 August 2020). 12 Constitution of the Russian Federation of 1993, article 15(3). 13 Federal Law “On International Commercial Arbitration” No. 5338-1 dated 7 July 1993, as amended by Federal Law No. 409-FZ dated 29 December 2015. 14 Available at http://www.newyorkconvention.org/national+arbitration+law+russian+federation (accessed 1 August 2020). 15 Federal Law No. 382-FZ “On Arbitration in the Russian Federation” dated 29 December 2015. 16 Federal Law No. 409-FZ “On Amendments to Certain Legislative Acts of the Russian Federation” dated 29 December 2015. 17 Federal Law “On Treaty (Arbitration) Courts in the Russian Federation” No. 102-FZ dated 24 July 2002, as amended by Federal Law No. 194-FZ dated 27 July 2010 and Federal Law No. 8-FZ dated 7 February 2011.

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in the Russian Federation. Law No. 409 significantly amended the ICAA as well as a number of other Russian laws. The adopted legislation was predominantly based on the Model Law, though certain parts of the Laws differ from it. On 27 December 2018 a new series of amendments to the Law on Arbitration were adopted and came into force on 29 March 2019. Such amendments were adopted to address various problems appearing in course of implementation of the reform. Most of the amendments were addressing regulations for permanent arbitration institutions and issues in respect of arbitrability of corporate disputes. – Pursuant to the New Law on Arbitration, permanent arbitration institution may be established only by a non-profit organization approved by the decision of the Government of the Russian Federation on the basis of recommendation made by the Council on Improvement of Arbitration Procedures under the Ministry of Justice of the Russian Federation.18 As of the adoption of New Law on Arbitration, all existing arbitration institutions could continue administering arbitration disputes till 1 November 2018, however after this date all awards rendered by such institutions should have been deemed invalid and non-enforceable through the Russian court systems. – Foreign arbitration institution to administer arbitrations in Russia shall be registered in Russia as a permanent arbitration institution in the same manner as described above for Russian permanent arbitration institutions – pursuant to the decision of the Government of the Russian Federation on the basis of recommendation made by the Council on Improvement of Arbitration Procedures under the Ministry of Justice of the Russian Federation.19 As one of the pre-requisites to issue the recommendation by the Council on Improvement of Arbitration Procedures for foreign arbitration court is “widely recognized international reputation”.20 Arbitration agreements referring to foreign arbitral institutions that do not qualify as “permanent” within the meaning of Russian law will be treated as ad hoc arbitration agreements.21 Prior to the arbitration reform there were more than 1500 permanent arbitration institutions in Russia. Upon completion of the reform there were only four arbitration institutions: – ICAC; – MAC; – Arbitration Center of the Russian Union of Industrialists and Entrepreneurs (Decision of the Government of the RF of 27 April 2017 No. 798-R);22 and – Arbitration Center of Autonomous Non-Profit Organization the Russian Institute of Modern Arbitration (Decision of the Government of the RF of 27 April 2017 No. 799-R).23 In 2019 the National Center of Sport Arbitration was registered as a permanent arbitration institution to administer sport disputes.24 So far only two foreign arbitration institutions registered in Russia: – Hong Kong International Arbitration Centre (HKIAC) as of 25 April 2019; and – Vienna International Arbitral Centre (VIAC) as of 4 July 2019.25

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New Law on Arbitration, article 44. Ibid., article 44. 20 Ibid., article 44. 21 See article 44(3) New Law on Arbitration. 22 See https://arbitration-rspp.ru/en/ (accessed 1 August 2020). 23 See https://centerarbitr.ru/en/main-page/ (accessed 1 August 2020). 24 See http://sportarbitrage.ru/ (accessed 1 August 2020). 25 See https://minjust.ru/ru/deyatelnost-v-sfere-treteyskogo-razbiratelstva/perechen-inostrannyh-arbitrazhnyh-uchrezhdeniy (accessed 1 August 2020). 19

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It shall be noted that current procedures are quite strict and aimed at precluding creating of non-reputable and non-trustworthy arbitration institutions in order to increase prestige and reputation of arbitration. Starting from 21 December 2017 till 29 March 2019 there were five meetings the Council on Improvement of Arbitration Procedures under the Ministry of Justice of the Russian Federation where 14 applications of Russian institutions to become permanent arbitration institutions were considered. All of them were rejected mostly due to the lack of “reputation”. Moreover 39 applications were rejected at initial stage due to failures to comply with formal application requirements.

a) Domestic and international arbitration. Russian legislation distinguishes international and domestic arbitration. The ICAA governs only international arbitration as provided by its article 1. As noted the New Law on Arbitration (Federal Law on Arbitration (Arbitration Proceedings) in the Russian Federation No. 382-FZ of 29 December 2015) governs domestic arbitration rules and procedures in Russia. The ICAA does not apply to purely domestic arbitrations, which are governed by the New Law on Arbitration. This chapter on Arbitration in the Russian Federation will focus primarily on international commercial arbitration under the ICAA, as currently in force. It will also highlight some important provisions of the New Law on Arbitration related to international arbitration as well as new ICAC Regulations and Rules. 16 The mere agreement between the parties is not enough for a dispute to qualify as “international” and the ICAA regime to apply. Rather, application of the ICAA will depend on whether the subject matter of the dispute or the contract or the place of business of the parties contain international elements: under article 1(3) ICAA, an arbitration qualifies as international if it relates to disputes arising out of civil law relationships in the course of carrying out foreign trade and other types of international economic relations, if the place of business of at least one of the parties is abroad, or any place where a substantial part of the obligations out of the relationship of the parties is to be performed or the place with which the subject-matter of the dispute is most closely connected are located abroad, as well as disputes arisen in connection with making foreign investments in the territory of the Russian Federation or Russian investments abroad. 15

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b) Commercial and non-commercial arbitration. Article 1 of the ICAA states that it regulates issues relating only to commercial arbitration. Potentially domestic arbitration institutions may resolve non-commercial disputes (such as sport disputes resolved by the National Center of Sport Arbitration) but only if such disputes are not referred to exclusive competence of the Russian state court system.

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c) Ad hoc and institutional arbitration. ICAA contemplates that international arbitration in Russia may be ad hoc and institutional.26 New Law on Arbitration has similar provisions.27 However, as noted above mns 11–14, arbitral institutions require a government registration to be recognized as a “permanent” arbitration institution, and arbitration agreements referring to an arbitral institution in Russia without such a registration will be invalid, while arbitration agreements referring to foreign arbitral institutions that do not qualify as “permanent” will be treated as agreements for ad hoc arbitration. The most reputable and well established arbitration instructions in Russia are the ICAC and the MAC (for maritime disputes). It follows from the wide definition of “arbitration” in the ICAA that the provisions apply not only in relation to ICAC or 26 27

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MAC administered arbitrations, but may also be applied to ad hoc arbitrations as well as arbitrations organized under the rules of other permanent arbitration institutions.28 Under article 7(13) ICAA, a reference to institutional rules would not include rules on matters on which the parties can only agree by way of a “direct” agreement. The model clauses proposed by ICAC29 reflect this requirements as to agreement on the finality of awards and interlocutory decisions on jurisdiction. In a much debated decision in the case Dredging and Maritime Management SA v. JSC 19 Inzhtransstroy, Russian courts held the ICC standard arbitration agreement to be unenforceable because it only contains a reference to the ICC Rules but not the specific institution that will administer the arbitration.30 However, according to the subsequent Supreme Court Practice Note of 26 December 2018, an arbitration clause that complies with the recommendation of the arbitral institution chosen by the parties is enforceable.31 d) The territoriality principle, the seat of the arbitration and the lex arbitri. The 20 ICAA applies to international commercial arbitrations that are seated within the Russian Federation.32 However, the following provisions of the ICAA also apply to disputes where the seat of the arbitration is outside the Russian Federation: – article 8 (stay of court proceedings in favour of arbitration); – article 9 (court applications for interim protective measures in support of arbitral proceedings); and – articles 35 and 36 (recognition and enforcement of awards). Parties to the arbitration may select the seat of the arbitration by their agreement or 21 agree on the way to define it including by reference to applicable arbitration rules. In absence of such agreement the seat shall be defined by the arbitration court considering circumstances of the case and convenience33 of such seat for the parties to the dispute. Unless parties agrees otherwise, an arbitral tribunal may decide on other seat for providing consultations between the arbitrators, hearing of witnesses, experts or parties or for examination of goods, other property or documents.34 Russian courts have held that an award rendered in an arbitration outside Russia may be treated as domestic and, accordingly, only be enforced in accordance with the regime applying to domestic awards, if the hearings took place in Russia.35 e) Arbitration and other ADR mechanisms (mediation, expert determination). It 22 shall be noted that ADR procedures and mechanisms have extremely limited use in Russia. Russia has a special law “On alternative procedure to resolve disputes with participation of mediator (mediation procedure)” No. 193-FZ adopted on 27 July 2010. The Law governs mediation procedures for civil law disputes and commercial disputes.36 However mediation is not widely used as the legislation does not provide for valid and reliable enforcement procedures for mediation, requiring further litigation in case a party does not comply with the mediation findings. Despite of numerous efforts 28

ICAA, article 2. See https://mkas.tpprf.ru/en/arbitrazhnye-soglasheniya/ (accessed 1 August 2020). 30 Arbitrazh Court Moscow, 8 February 2018, Case No. A40-176466/2017, ultimately confirmed by the Supreme Court, 26 September 2018 (reference no. 305-ЭС18-1193). 31 Practice Note (supra fn. 9), section 5. 32 ICAA, article 1. 33 ICAA, article 20(1). 34 Ibid., article 20(2). 35 Federal Arbitrazh Court for the Moscow Region, 19 July 2017, Case No. A40-219464/16, Common Legal Property LLC v. Techno-Art LLC. 36 Article 1 of the Law “On alternative procedure to resolve disputes with participation of mediator (mediation procedure)”. 29

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of Russian authorities to promote mediation, we have to note that mediation is not a popular ADR tool in Russia at all. For example in 2014 only 0.01 % of the total number of disputes considered by the courts of common jurisdiction were resolved with involvement of the mediation; in 2015 this figure is even lower – 0.007 %.37

3. The guiding principles of Russian arbitration law 23

The ICAA reflects a number of governing principles for international arbitration in Russia. Needless to say that they are the same as major international arbitration principles: independence and impartiality of arbitrators38, procedural equality of parties39, freedom of choice of the language for arbitration40, etc. The ICAA provides that: – no court interference in the arbitral process may take place except as provided for by the ICAA (principle of non-intervention by the courts);41 – prior to their appointment, and subsequently at any stage of the arbitration, arbitrators must disclose any information that may give rise to justifiable doubts as to their impartiality or independence and they may be challenged if such doubts exist (principle of impartiality and independence of the arbitral tribunal);42 – the parties to a dispute must be treated equally and without preference and each party must be provided with an opportunity to present its case (principle of equality of the parties, fairness and due process);43 and – the parties to a dispute may decide on particular issues relating to the arbitral procedure to be followed and thereby deviate from the provisions of the ICAA (where so permitted) and the New Law on Arbitration as it relates to international arbitration (where so permitted) (principle of party autonomy).44

II. The arbitration agreement The ICAA defines an arbitration agreement as: “An agreement by the parties to submit all or certain disputes which have arisen or may arise between them in respect of a defined legal relationship (or a part thereof), whether contractual or not, to arbitration. An arbitration agreement may be in the form of an arbitration clause in the main agreement or in the form of a separate agreement.”45 25 The ICAA46 and the New Law on Arbitration47 also stipulate that certain issues may be agreed only by way of “express agreement” of the parties. It means that to be valid, the parties’ agreement on such an issue must be expressly set out in the text of the parties’ arbitration clause, rather than addressed in the arbitration rules to which the arbitration clause refers. Issues which may be addressed only by parties’ “express agreement” include: – excluding the possibility of referring to the state courts for assistance with formation of a tribunal and challenging the tribunal’s ruling on jurisdiction in the state courts; 24

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Practice Note of the Supreme Court of the RF of 22 June 2016. ICAA, article 12. 39 Ibid., article 18. 40 Ibid., article 22. 41 Ibid., article 5. 42 Ibid., article 12. 43 Ibid., article 18. 44 Ibid., article 19. 45 Ibid., article 7. 46 Ibid., article 7. 47 New Law on Arbitration article 2(13), article 7(12). 38

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– conducting arbitration without an oral hearing; and – excluding the possibility of setting aside the final award.

1. The doctrine of separability The ICAA provides that an arbitration clause that forms part of a contract shall be 26 treated as an agreement independent of the other terms of the contract for the purposes of determining the jurisdiction of the arbitral tribunal and the validity of the arbitration agreement. The fact that the main contract may be invalid does not invalidate the arbitration clause as a matter of law.48 This is an important precondition for the arbitral tribunal’s power to rule on its own jurisdiction.

2. The law applicable to the arbitration agreement As stated, Russian arbitration regulation is generally applicable to international 27 commercial arbitration with the seat in the territory of Russia. Article 7(9) ICAA specifically requires that in case of doubt, an arbitration agreement must be interpreted in favour of its validity and capability of being performed. As regards the law applicable to the merits of the dispute, see infra mns 78–83.

3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. Capacity to enter into arbitration 28 agreements is defined by general legal capacity requirements under applicable Russian laws (i.e. ability to enter into civil law transactions). Thus only capable individuals and legal entities may enter into arbitration agreements as otherwise there is a substantial risk of the arbitration agreement to be recognized as null and void. b) Arbitrability. Under the ICAA, the parties may refer the following disputes to 29 international commercial arbitration in their agreement: – foreign trade disputes, resulting from contractual or other civil law relationships and disputes arising from other forms of international economic relationships, if the place of business of at least one of the parties (or the place of performance of the significant part of the obligation arising from the parties’ relationship or the place mostly associated with the subject matter of the dispute) is located outside of the Russian Federation; and – disputes arising from foreign investments on the territory of the Russian Federation or Russian investments abroad.49 However, some disputes may be non-arbitrable in Russia as noted below. c) Non-arbitrability. As noted, by default civil law disputes are deemed arbitral in 30 Russia with some exceptions. Along with the amendments to the ICAA and implementation of the arbitration reform as noted above, certain amendments were made to the CPC RF and APC RF introducing specific exceptions to the general principle of arbitrability of civil law disputes. Thus, current Russian legislation introduces a two stage approach to define arbitrability of disputes: by default civil law disputes are arbitrable50, but certain legislative acts stipulate non-arbitrable disputes51.

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Article 22.1 CPC RF and article 33 APC RF specifically stipulate non-arbitrable disputes. Such disputes include: – Bankruptcy disputes; – Certain types of corporate disputes as defined below; – Disputes with state authorities in connection of state registration of legal entities; – Certain intellectual property disputes; – Dispute in respect of administrative and other public law matters; – Class actions; – Privatization disputes; – Employment disputes; – Family law disputes; – Inheritance disputes, etc. This list is non-exhaustive as additional statutes may provide additional nonarbitrable categories of disputes. In addition, Russian courts have recently taken the view that disputes with a concentration of public elements, e.g., based on contracts for public purposes or involving state funding – may be declared non-arbitrable although there is no specific statutory provision to that effect.52

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aa) Arbitrability of disputes connected with immovable property. Legislative acts adopted within the arbitration reform fixed the previous approach of the Russian court practice in respect of arbitrability of the real estate disputes. Overall such disputes are arbitrable, but current Russian legislation53 establishes that records to the state register of immovable property may be made only pursuant to “court” decisions. The current legislation and court interpretation is that only the decisions of Russian state courts may serve as grounds for changing the title to real estate, which essentially requires recognition of arbitral awards by Russian state courts.

bb) Arbitrability of corporate disputes. Russian legislation recognizes “corporate disputes” as disputes in connection with the creation of a legal entity, management of such legal entity and/or participation in such legal entity if such legal entity is a commercial organization or a non-commercial organization created by commercial organizations54. 34 The arbitration reform completely changed the approach to arbitrability of corporate disputes. Prior to the reform (i.e. prior to 1 February 2017) Russian court practice tended to recognize corporate disputes as non-arbitrable, though the reform confirmed arbitrability of corporate disputes with exceptions directly specified by the legislation. It is worth noting that arbitration agreements for corporate disputes are valid in Russia if concluded after 1 February 2017 and all prior agreements referring corporate disputes to arbitration are deemed invalid. 35 As of 1 February 2017 the New Law on Arbitration and the new version of the Arbitration Procedure Code introduced a new regime for corporate disputes with detailed rules applicable to the arbitrability of such disputes. Generally corporate disputes may be submitted to arbitration only if such arbitration is administered by a permanent arbitration institution.55 33

52 Moscow City Arbitrazh Court, 24 July 2015, Case No. A40/188599/2014, OJSC Special Economic Zones v. OJSC Federal Grid Company of Unified Energy System, confirmed by Supreme Court, 28 July 2017 (reference no. 305-ЭС15-20073). 53 Article 58 of the Federal Law “On State Registration of Immovable Property” No. 218-FZ of 13 July 2015 (as amended and supplemented). 54 APC RF, article 225.1. 55 New Law on Arbitration, article 45, APC RF, article 225.1(5).

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A permanent arbitration institution is a non-governmental institution empowered to 36 administer arbitrations on a permanent basis. According to the New Law on Arbitration, the right to administer arbitrations on a permanent basis is granted by the Russian Government, although the International Commercial Arbitration Court and the Maritime Arbitration Commission are permitted to do so pursuant to the New Law on Arbitration. Other Russian arbitration institutions must go through a special procedure and 37 comply with a set of robust requirements set forth in the New Law on Arbitration to be granted the right to administer arbitrations on a permanent basis. Foreign arbitration institutions having a “widely recognized reputation” may also apply for the right to administer arbitrations in Russia on a permanent basis but they do not have to satisfy the numerous requirements set forth for domestic arbitration institutions. If a foreign arbitration institution does not obtain this right, all arbitrations administered by it with venue in Russia will be deemed to be ad hoc arbitrations. Consequently, unless a foreign arbitration institution is registered as a permanent arbitration institution in Russia, an award rendered with respect to a corporate dispute under the auspices of such institution will be unenforceable in the Russian Federation and may be contested on such grounds outside Russia. For the purpose of arbitrability, all corporate disputes are divided into three groups: 38 (i) corporate disputes involving “public interest” which are completely non-arbitrable56 (these include any disputes challenging decisions of state authorities (e.g. registration of share issuance, etc.), disputes regarding convocation of general shareholders meetings, disputes arising out from notarial certification if interest transfer in limited liability companies, disputes arising from voluntary, mandatory and competitive tender offers, disputes in respect of purchase and buy-back by a company of its own shares, disputes in respect of expulsion of participants from limited liability companies, disputes involving “strategic enterprises” (i.e. enterprises playing “strategic role in ensuring state security and defence capacity of the state).57 (ii) Corporate disputes not requiring a special procedural form (these include disputes in respect of the title to the shares, pledge of the shares, sale-purchase of the shares as well as the disputes in respect of the registrar of the shares58. The only procedural requirement for such disputes is that they shall be considered by the arbitration administered by a permanent arbitration institution59. (iii) Corporate disputes requiring a special procedural form established by the New Law on Arbitration. These include disputes in respect of corporate decisions, disputes for compensation of damages to a legal entity initiated by its shareholders, disputes in respect of creation, reorganization and liquidation of a legal entity, disputes arising out of management and foundation agreements, dispute of shareholders claiming invalidation of transactions made by the legal entity. In order to submit such disputes to arbitration, the following requirements shall be observed: • The dispute shall be considered by arbitration administered by a permanent arbitration institution; • The place of arbitration shall be territory of the Russian Federation; • The permanent arbitration institution shall approve, deposit with the Russian Ministry of Justice and place at its website special rules on arbitration of 56

APC RF, article 225.1. Article 1 of the Federal Law “On Foreign Investment into Strategic Enterprises” No. 57-FZ of 29 April 2008. 58 APC RF, article 225.1. 59 New Arbitration Law, article 45, APC RF, article 225.1(5). 57

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corporate disputes which shall correspond to the mandatory rules of the New Law on Arbitration; • The legal entity and all its shareholders as well as other participants being party to potential dispute must agree to submit the dispute to such arbitration institution. • Such rules apply only to legal entities registered in Russia and do not apply to foreign legal entities, registered or incorporated outside of Russia. 39

d) Form of the arbitration agreement. The arbitration agreement must be in writing.60 The following will satisfy the formal requirement for the agreement to be in writing: – an agreement in the form of a document signed by the parties; – an exchange of letters, telexes, or other means of telecommunication that provides a record of the parties agreement for further use;61 – an agreement in the form of an electronic mail given that the information contained therein is available for further use and that the arbitration agreement is concluded in accordance with requirements of law for a contract entered into by means of exchange of documents via electronic form;62 – an assertion by one party in its statement of claim or defence that there is an agreement between the parties to refer any dispute between them to arbitration that is not denied by the other party;63 – a reference in an agreement to a separate document containing an arbitration clause, provided that the agreement is executed in writing and that the reference to the arbitration clause in the separate document expressly makes that clause part of the underlying agreement;64 – an agreement included in the rules of a trading platform or clearing rules;65 – an agreement included in the company’s charters and corporate (shareholders’) agreements (with a number of exceptions).66

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e) Termination of the arbitration agreement. An arbitration agreement is considered by the Russian legal system as the agreement of the parties. Therefore it may be terminated on the basis of the grounds for termination of agreements as provided by the Civil Code of the Russian Federation. The most obvious reason for terminating the arbitration agreement is the express agreement of the parties. The Russian Civil Code prohibits unilateral termination of an agreement, except as provided by the Code or other legislative acts. These may include essential change of circumstances, substantial breach of the agreement by one party or bankruptcy of debtor under the agreement.

4. The scope and the interpretation of the arbitration agreement 41

a) Scope of the arbitration agreement. Russian law treats an arbitration agreement as the agreement of the parties. Thus, it shall determine the intention of the parties to refer the dispute to arbitration, establish the relevant forum, exclude the possibility of objection due to the jurisdiction of the arbitration court and minimise any enforcementrelated problems. 60

ICAA, article 7(2). Ibid., article 7(3). 62 Ibid., article 7(4). 63 Ibid., article 7(5). 64 Ibid., article 7(6). 65 Ibid., article 7(7). 66 Ibid., article 7(8). 61

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The ICAA identifies non-mandatory provisions through wording such as “unless 42 otherwise agreed by the parties” or “the parties are free to agree.” This language indicates that the parties to an arbitration agreement have the discretion to make their own arrangements on procedural matters. Express provisions in the arbitration agreement between the parties will take precedence over the non-mandatory provisions of the ICAA. However, where provisions are mandatory, the parties have no discretion to amend them or exclude their application by agreement. Non-mandatory provisions include: 43 – the power of the arbitral tribunal to order interim protective measures;67 – the seat, date of the commencement and language of proceedings;68 – the number and the procedure for the appointment of arbitrators;69 and – the procedure for the conduct of the arbitral proceedings provided it complies with the requirements of the ICAA and the New Law on Arbitration (in part applicable to international arbitration).70 In addition, the ICAA provides that where a provision of the ICAA (other than in 44 respect of the law applicable to the substance of the dispute) affords the parties discretion to agree on a particular issue, they may authorize a third party to exercise that discretion.71 This relates, in particular, to institutional arbitration, where the parties may confer discretion on the arbitral institution (e.g. the right to appoint the arbitral tribunal on their behalf) by adopting the institutional rules in the arbitration agreement. The ICAA further clarifies that, where the parties are free to agree on a particular issue, they may do so by incorporating specific (institutional or ad hoc) arbitration rules into their agreement by reference, which are then regarded as containing the agreement of the parties.72 b) The interpretation of the arbitration agreement. Review of the Russian court 45 practice in respect of interpretation of arbitration agreements shows that Russian courts generally interpret the provisions of the arbitration agreements literally (i.e. the courts directly interpret the wording of the clause pursuant to the provisions of the Russian Civil Code73). In practice, this means that the parties should directly indicate the selected arbitration 46 institution, applicable rules, etc., as Russian courts most likely will avoid interpreting the will of the parties in case of any ambiguities of the arbitration clause. Thus, the parties should directly and unequivocally indicate the selected arbitration institution, the applicable set of rules as well as any other issues agreed. Otherwise the Russian court will most likely not reconstruct the agreement of the parties but instead rule on the invalidity of the arbitration agreement.74 c) Pathological arbitration clauses. Generally arbitration agreements with material 47 gaps leading to their invalidity are referred to as pathological arbitration clauses.75 As 67

ICAA, article 17. Ibid., articles 20–22. 69 Ibid., articles 10–11. 70 Ibid., article 19. 71 Ibid., article 2. 72 Ibid., article 2. 73 Civil Code of the RF, article 431. 74 Moscow City Arbitrazh Court, 8 February 2018, Case No. A40-176466/2017, Dredging and Maritime Management SA v. JSC Inzhtranstroy, ultimately confirmed by the Supreme Court, 26 September 2018 (reference no. 305-ЭС18-1193). 75 Bruntseva, International Commercial Arbitration, 2001; Vinogradova, in: Yarkov (ed.), Arbitration Procedure, 2005, 164. 68

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noted, under the Russian current court practice an arbitration agreement may be deemed invalid if: (i) it does not define directly and unambiguously all material provisions in respect of the arbitration; (ii) if the agreement was concluded not in compliance with the mandatory form established by law; (iii) if it was concluded in relation to issues outside the competence of arbitration established by applicable rules; (iv) if it does not comply with the mandatory provisions of arbitration law; (v) it was concluded with any defect of the will of any party; or (vi) if it was concluded by a person lacking proper powers or legal capacity. In Russia, alternative arbitration clauses (allowing parties to select several options for arbitration) have been subject to discussion, in particular with regard to the decision of the Supreme Arbitrazh Court in Russian Telephone Company v. LLC Sony Ericsson Mobile Communications Rus,76 and a number of decisions have deemed such clauses to be pathological and thus void.77 According to a Supreme Court Resolution of 2019, unilateral option clauses that provide a choice between arbitration and litigation only for one party will be held to be invalid only to the extent that it deprives the other party of the same option, i.e., the optionality will be extended to the other party as well.78

5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) Challenges to the jurisdiction of the arbitral tribunal. Under the ICAA, an arbitral tribunal has the power to rule on its own jurisdiction including any objections to the existence or the validity of the arbitration agreement.79 The ICAA requires that objections to the arbitral tribunal’s jurisdiction must be raised no later than the submission of the statement of defence on the merits regardless of whether the objecting party has appointed or participated in the appointment of an arbitrator,80 and failure to raise a timely challenge will preclude a party from relying on it at a later stage.81 49 Equally, any argument that the arbitral tribunal is exceeding the scope of its authority should be raised as soon as the arbitral tribunal exceeds the scope of its authority.82 An arbitral tribunal may, however, admit an objection later if it considers the delay in raising the objection justified.83 If a challenge to jurisdiction is not made during the course of the arbitral proceedings, an application to set aside a resulting award may be dismissed.84 48

76 Supreme Arbitrazh Court, 29 June 2012, Case No. A40-49223/11-112401 (Supreme Arbitrazh Court ref. No. 1831/12). 77 Supreme Arbitrazh Court, 27 February 1996, Case No. 5278/95; Rostov Arbitrazh Court, 27 November 2014, Case No. A53-17338/2014, Agrofirma Razdoliye LLC v. Deutsche Bank AG, London Branch, YCA XLII (2017) 502. 78 Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019, No. 53 (supra fn. 11), para. 24. Clauses that provide the “claimant” (rather than a named party) with an option (e.g., choice between arbitration and litigation, or between different arbitral institutions), would be valid. 79 ICAA, article 16(1) and ICAC Rules, article 2(4). 80 ICAA, article 16(2). 81 Federal Arbitrazh Court of the Moscow Region, 7 August 2017, Case No. A40-32661/2017, YCA XLIV (2019) 908. 82 Ibid. 83 Ibid. 84 Federal Arbitrazh Court of the Moscow Region, 7 August 2017, Case No. A40-32661/2017, YCA XLIV (2019) 908; Federal Arbitrazh Court of the Moscow Region, 31 July 2008, Case No KG-A40/6468-08, OOO

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An arbitral tribunal may rule on the challenge to its jurisdiction either as a 50 preliminary issue by an award on jurisdiction or in its final award on the merits.85 If the arbitral tribunal determines the issue of jurisdiction by an interim award, either party may, within 30 days of receipt of notice of the ruling, request the competent court to rule on jurisdiction. Parties to arbitration administered by an institutional arbitration can expressly exclude this option in their arbitration agreement. An application to the competent state court to decide on the jurisdiction of the arbitration does not preclude the arbitral tribunal from continuing the proceedings and rendering an award.86 b) Challenges to the jurisdiction of state courts. Where a party brings an action 51 before the state courts in breach of an arbitration agreement, the courts must refer the parties to arbitration if the defendant so requests. However, a party to an arbitration agreement will be precluded from objecting to the jurisdiction of the state courts if it does not raise that challenge in a timely manner.87

III. The arbitral tribunal and the conduct of the arbitral proceedings Under the ICAA, an arbitration agreement must provide for an arbitrational institu- 52 tion or ad hoc arbitration, which is competent to settle the dispute, the range of disputes that are subject to arbitration, applicable law, the composition of the arbitral tribunal and the language of arbitration. In this section we will consider not only the general rules of the Russian legislation in respect of arbitration, but also the ICAC Arbitration rules (the “ICAC Rules”), as the most popular and reputable arbitration institution in Russia which generally reflects the mechanics of applicable Russian rules.

1. The arbitral tribunal, impartiality and independence of the arbitrator As noted, the parties may agree on the number and the procedure for the appoint- 53 ment of arbitrators88. Unless otherwise stipulated by applicable regulations, the number of arbitrators must be uneven89. The parties are free to agree on the procedure for appointing the arbitrator or arbitrators.90 If one of the parties fails to comply with the agreed procedure then the ICAA provisions regarding arbitral appointments would apply. The ICAA also provides that, unless otherwise agreed by the parties, nationality cannot be used as grounds for disqualifying a potential arbitrator.91 It is therefore possible to appoint foreign nationals as arbitrators for the purpose of international arbitral proceedings in Russia. The ICAA sets out the following appointment procedure to be followed in the 54 absence of agreement by the parties. If the arbitral tribunal is comprised of three arbitrators, each party shall appoint one arbitrator and the two party-appointed arbitrators shall jointly appoint the third arbitrator. If a party fails to appoint its partyappointed arbitrator within 30 days of receipt of a request from the other party to do so, Intercare v. Berlin-Chemie/Minarini Pharma GmbH; and the earlier decision in the proceedings Moscow City Arbitrazh Court, 19 May 2008, Case No. A40-4877/08-40-44. 85 ICAA, article 16(3). 86 Ibid. 87 Federal Arbitrazh Court of the Moscow Region, 28 May 2018, Case No. A40-165835/2014, OJSC Investbank v. LLC Baltiyas Aviatsiays Sistemas. 88 Ibid., articles 10–11. 89 Ibid., article 11. 90 Ibid., article 11. 91 Ibid., article 11(1).

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or if the two party-appointed arbitrators fail to agree on the appointment of the third arbitrator within 30 days of their appointment, then the competent state court will make the requisite appointment subject to the request of any of the parties. The competent state court will also make the appointment subject to the request of any of the parties if the parties fail to agree on the appointment of a sole arbitrator.92 55 The ICAA provides for a number of situations where the parties may fail to follow the appointment procedure, including: – where the parties have agreed an appointment procedure in their arbitration agreement but one of the parties does not comply with the agreed procedure; – where the parties, or the two party-appointed arbitrators, fail to reach agreement on the identity of the third arbitrator; or – where a third party (including an arbitral institution) does not fulfil the functions delegated to it in accordance with the agreed procedure.93 In these instances, any party may request that the competent state court assumes the necessary measures to complete the appointment of the arbitrators, unless the arbitration agreement provides another mechanism for securing an appointment.94 Where parties agree on administration of an arbitration by a permanent arbitration institution, they may by direct agreement exclude state courts from resolving issues relating to the appointment of arbitrators; in that case, where issues are not resolved by the institution, the arbitral proceedings terminate and the dispute may be submitted to the competent state courts (article 11(5) ICAA). 56

a) Duty to disclose. Arbitrators are required to disclose any circumstances occurring prior to their appointment and throughout the arbitral proceedings that may give rise to reasonable doubts as to their impartiality or independence.95 Arbitrators are required to disclose circumstances such as participation in conferences sponsored by either party (or its counsel) to the arbitration.96

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b) Grounds for challenge. Arbitrators may only be challenged if grounds exist, which give rise to justifiable doubt as to their impartiality or independence or if the arbitrators do not have the qualifications required by the agreement of the parties.97 The parties are free to agree on additional grounds for challenge to those expressed in the ICAA.

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c) Procedural aspects and preclusion of grounds for challenge. The parties are free to agree on the procedure for the challenge of arbitrators.98 In the absence of an agreed procedure, the ICAA requires the challenging party to inform the arbitral tribunal of the reasons for the challenge in writing within 15 days of the constitution of the arbitral tribunal, or within 15 days of the date on which the challenging party learned of the circumstances giving rise to the right of challenge. If a challenged arbitrator does not step down voluntarily or if the other party to the arbitration objects to his/her removal, the challenge will be decided by the arbitral tribunal.99 92

ICAA, article 11(3). Ibid., article 11(4). 94 Ibid., article 11(4). 95 Ibid., article 12(1). 96 Federal Arbitrazh Court of the Moscow Region, 13 August 2007, Case No. KG-A40/6775-07, Yukos Capital S.a.r.l. v. NK Rosneft; the earlier decisions of the Moscow City Arbitrazh Court, Case Nos A404577/07-8-46 and A40-4582/07-8-47; and the subsequent decision of the Supreme Arbitrazh Court, 10 December 2007, Case No. BAC-14955/07. 97 ICAA, article 12(2) and ICAC Rules, article 17(1). 98 ICAA, ch. 3, article 13(1). 99 Ibid., ch. 3, article 13(2). 93

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If an arbitrator is challenged in accordance with either the procedure agreed by the 59 parties or that provided by the ICAA and such challenge is not successful, the ICAA provides that a party may, within 30 days of receiving notice of the decision rejecting the challenge, apply to the competent state court to decide the challenge. Parties to arbitration administered by institutional arbitration can expressly exclude this option in their arbitration agreement. An application to the competent state court to decide on the challenge does not preclude the arbitral tribunal (including the challenged arbitrator) from continuing the proceedings and rendering an award.100 Given the popularity of ICAC arbitration for international arbitral proceedings with 60 their seat in the Russian Federation, it is worth mentioning that § 17 ICAC Rules makes specific provision for the procedure of challenging arbitrators. A challenge that remained unsuccessful before the arbitral tribunal will be dealt with by the ICAC Nomination Committee, without further recourse to the state courts (although arguably, the grounds for challenging an arbitrator might be taken up in subsequent setting aside or enforcement proceedings). d) Failure or impossibility to act. If an arbitrator can no longer perform their 61 functions, or, if for any other reason an arbitrator fails to fulfil their duties, the ICAA provides that the arbitrator’s mandate terminates upon resignation or if the parties agree to remove the arbitrator.101 If the parties fail to agree on the removal of the arbitrator and the situation remains unresolved in this regard, either party may request the competent state court to decide on the termination of the arbitrator’s mandate. Parties to arbitration administered by institutional arbitration can expressly exclude this option in their arbitration agreement or agree upon a different procedure for the arbitrator’s removal.102

2. The arbitral proceedings The arbitral proceedings depend on party autonomy (article 19(1) ICAA). Where 62 there is no agreement between the parties on procedural aspects, the tribunal may conduct the proceedings in the way it considers to be appropriate (article 19(2) ICCA) a) The request for arbitration. Subject to the agreement of the parties, arbitral 63 proceedings in respect of a particular dispute are deemed to commence on the date on which the respondent receives the claimant’s request for arbitration.103 There are no particular requirements and pre-requisites for the request of arbitration, however, the request for arbitration shall generally include the names of the parties, a brief description of the dispute and reference to the arbitration agreement, under which the dispute is initiated. According to the Supreme Court Practice Note, delivery of the request to the last known address of the respondent is sufficient for the arbitral tribunal to make an enforceable award.104 By comparison, under the ICAC Rules, an arbitration will commence at the time the 64 claimant files its statement of claim.105 In ICAC arbitral proceedings, the actual date of commencement is either the date on which the statement of claim is delivered to ICAC or, if sent by post, the date on which the statement of claim is recorded as having been posted.106 100

Ibid., ch. 3, article 13(2). Ibid., ch. 3, article 14(1). 102 Ibid. 103 Ibid., article 21. 104 Practice Note (supra fn. 9), section 17, Plenum Resolution (supra fn. 11), section 48. 105 ICAC Rules, § 8(1). 106 Ibid., article 8(2). 101

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b) Equality of arms, fair trial principles and the right to be heard. The two key procedural principles under the ICAA are that: – the parties shall be treated equally (without preference) and each party shall be given a full opportunity to present its case;107 and – subject to the mandatory provisions of the ICAA, the parties have autonomy to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. In the absence of such agreement, the arbitral tribunal may, subject to the mandatory provisions of the ICAA, conduct the proceedings in a manner it considers appropriate.108 Under the ICAC Rules, the parties are free to agree on the procedure of the arbitration. However, if such agreement is not reached, the arbitral tribunal shall conduct the proceedings in such a manner as it considers appropriate, ensuring that the parties are treated with equality and that each party is given a fair opportunity to protect its interests.109

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c) Confidentiality. The ICAA does not contain an express confidentiality provision. In ICAC proceedings, however, there is an obligation on the arbitrators, ICAC staff and experts to keep confidential any information that they become aware of by virtue of the arbitral proceedings.110 Importantly, unless otherwise expressly agreed by the parties, this obligation of confidentiality extends to the parties in dispute. However, decisions of the Russian arbitrazh courts exercising supervisory jurisdiction in relation to arbitral proceedings (e.g., appointments or challenges of arbitrators, setting aside applications) will be published with the names of the parties,111 which limits the confidentiality parties can expect.

d) The arbitral award. The arbitral award is an act of the arbitral tribunal, which is based on clearly identified facts, and which decides the case on the merits in accordance with the rules of procedural and substantive laws. Article 31(1) ICAA provides that an award shall be made in writing and shall be signed by the arbitrator(s). If the arbitral tribunal consists of more than one arbitrator the signatures of a majority of the arbitrators will suffice, provided that an explanation is provided for the omission of any signatures. The award must state the reasons on which it is based, whether the claim is allowed or disallowed, the amount of the arbitration fees and costs and their allocation between the parties.112 The ICAA further requires the award to be dated and to state the seat of arbitration as agreed by the parties or determined by the arbitral tribunal.113 The award will be deemed to have been made at that seat. The parties shall receive a signed copy of the award,114 and the award and the entire file of the arbitration has to be sent by the sole arbitrator or the chairperson of the arbitral tribunal to the permanent institution administering the dispute, or, in all other cases, to the permanent institution agreed between the parties for keeping the award, and failing such agreement, to the court having jurisdiction to rule on enforcement.115 68 The award under the ICAC Rules shall be made in a closed session of the arbitral tribunal and decided by a majority of votes. If a majority cannot be reached, the chair of 67

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ICAA, article 18. Ibid., article 19. 109 ICAC Rules, § 26(2). 110 Ibid., article 45(3). 111 The database is available online and free of charge (see supra fn. 9). 112 ICAA, article 31(2). 113 Ibid. 114 Ibid., article 31(4). 115 New Law on Arbitration, article 39. 108

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the arbitral tribunal shall make the award.116 The ICAC Rules also provide for content of the award in detail (i.e. indicating the list of requisites and structure of the award).117 If the parties settle their dispute while the arbitral proceedings are pending, the 69 arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms (article 30(1) ICAA). Such an award has the same effect and is enforceable as any other award on the merits of the case (article 30(2) ICAA). e) Termination of the arbitration without an award. Under the ICAA, the arbitral 70 proceedings are terminated either by a final award or by an order of the arbitral tribunal.118 Furthermore, the arbitral tribunal is required to make an order terminating the arbitral proceedings when: – the claimant withdraws its claim, unless the respondent objects and the arbitral tribunal recognizes that the respondent has a legitimate interest in obtaining a final settlement of the dispute; – the parties agree to terminate the proceedings; or – for any other reason, the arbitral tribunal finds that the continuation of the proceedings has become unnecessary or impossible.119 f) The costs of the arbitration. Under the ICAA the fees and costs of the arbitration 71 must be assessed and allocated as between the parties in a costs order forming part of the award.120 Currently, there is no established practice in ad hoc arbitral proceedings pursuant to which the winning party may claim reimbursement of all or part of its legal costs and other expenses. However, arbitral tribunals will, in practice, exercise their discretion in relation to such claims upon an application of a party and may make an award for reimbursement of costs and expenses. By contrast, in ICAC proceedings the arbitration fees and other additional costs (such 72 as expert witness or translators’ fees, travelling expenses, etc.) shall be borne by the losing party121 or, if a claim or counterclaim succeeds only in part, apportioned between the parties pro rata depending upon their respective success or failure.122 In addition, the winning party is entitled to reimbursement of its reasonable legal costs and expenses (including the cost of legal representation) from the losing party.123 The ICAC Rules also require that the arbitral tribunal includes in its award the amount of the arbitration costs and fees in the case and the apportionment of such costs as between the parties.124

3. Evidence, discovery, disclosure The ICAA contains only limited provisions on the subject of evidence, and under 73 article 19 ICAA the arbitrators have full discretion to determine the admissibility, relevance, materiality and weight of evidence submitted by the parties. Evidence is considered as being legally obtained information about the facts constituting the claims and objections of the parties, as well as other circumstances that are important for the correct examina-

ICAC Rules, § 36. Ibid., article 39. 118 ICAA, article 32(1). 119 Ibid., article 32(2). 120 Ibid., article 31(2). 121 ICAC Rules, Schedule of Arbitration Fees and Costs, § 8(1). 122 Ibid., article 8(2). 123 Ibid., article 11. 124 ICAC Rules, § 37. 116 117

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tion and resolution of the case. Generally, each party is required to prove the facts on which it relies in support of its claim or defence by the usual means of evidence as – explanations by the parties or third persons; – testimony of witnesses; – written or material evidence; – audio and video materials; and – expert examination. 74 There is no mandatory disclosure per se in Russian legislation. Russian procedural legislation does not provide any special regulation similar to the discovery or disclosure procedure in the United Kingdom or the United States because of fundamental differences in procedure law. 75 The ICAC Rules expressly require that each party prove the circumstances on which it relies in support of its pleaded case. The arbitral tribunal may request a party to submit additional evidence. The arbitral tribunal may also, at its discretion, order the conduct of an expert examination, request the submission of evidence by third parties and summon and hear witnesses.125 In ICAC arbitrations, the arbitrators are free to evaluate the evidence at their discretion.126 76 The ICAA allows the arbitral tribunal or a party to an arbitration (with the approval of the arbitral tribunal) to request assistance from a competent court in the Russian Federation in taking evidence. The court may execute the request, in accordance with its rules on taking evidence.127 However, under article 27 ICAA, court assistance is limited to arbitral proceedings administered by an arbitral institution that qualifies as a “permanent” institution under the revised arbitration law (supra mns 12–14).

4. The law governing the dispute and lois de police In 2002, the third part of the Russian Civil Code containing rules on conflict of laws was introduced.128 The Civil Code provides rules for defining the governing law where relations involve a “foreign element”.129 Under the Civil Code, the relevant existing legislation is used to establish the governing law to be applied by international commercial arbitrators (i.e. Russian international treaties and the ICAA).130 Furthermore, the Civil Code defines the procedure for construction of foreign law and sets out the principal conflict of laws rules. 78 The ICAA sets out how the arbitral tribunal is to determine the law applicable to the substance of the dispute.131 It requires the arbitral tribunal to decide the dispute in accordance with the law chosen by the parties as applicable to the substance of their dispute. Any reference to the law or legal system of a state shall be construed as directly referring to the substantive law of that state and not to its conflict of laws rules.132 77

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a) Choice of law and domestic cases. The New Law on Arbitration states that arbitration courts shall consider domestic disputes in accordance with the Russian law unless the Russian legislation allows parties to the dispute select different law.133 ICAC Rules, § 29(1). Ibid., article 29(3). 127 ICAA, article 27. 128 The third part of the Civil Code was adopted by Federal Law No 146-FZ dated 26 November 2001 and came into force on 1 March 2002. 129 Civil Code, part 3, article 1186. 130 Ibid. 131 ICAA, article 28. 132 Ibid., article 28(1). 133 New law on Arbitration, article 31. 125 126

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b) Choice of law and lois de police. Russian legislation follows the principle of party 80 autonomy in choosing the applicable law for the transaction. At the conclusion of the contract or later on parties may agree the set of laws applicable to their contract.134 Russian legislation also introduces some limitations to party autonomy in selecting an applicable set of laws to the contract, namely: – public order rules;135 and – rules of the immediate application.136 In each case, there are situations in which the law chosen by the parties cannot be applied. Public order rules limit the application of a foreign law in the territory of Russia if it 81 contradicts the basic principles of Russian legislation (i.e. contradicts the public policy). The public policy exception will only be applicable when the application of foreign law leads to the violation of basic principles of Russian legislation. Rules of immediate application state that some special rules of Russian legislation 82 should be applicable to the transaction regardless of the chosen law because of their special significance for protection of the rights and lawful interests of participants of civil transactions.

5. Interim relief in arbitration a) Interim relief before state courts. Even if the parties agree to arbitrate, state 83 courts retain the power to grant interim measures (including preliminary interim measures) to a party of arbitration.137 An appropriate Russian state court may adopt interim measures upon application of a party to the arbitration at the location of arbitration tribunal, or at the place of registration of the debtor, or at the place of debtor’s property location subject to the requirements of the applicable legislation.138 The state court may grant the following interim measures: 84 – arrest of monetary funds (including incoming funds to a bank account) or other property; – prohibition to commit certain actions (injunctions) in respect of subject of the dispute; – oblige the defendant to commit certain actions for the purpose of preventing damage to, or deterioration of the condition of, disputable property; – transfer of disputable property to the claimant or other person to safeguard it; – suspend recovery on the basis of an executive or other document disputed by the claimant, under which recovery is effected in the indisputable (non-acceptance) procedure; – suspend the sale of property in the event of filing a claim for releasing arrested property;139 or – order securing evidence.140 In ICAC arbitral proceedings, the ICAC Rules provide that if a party has requested a 85 competent court to order interim protective measures and the court has granted such measures, then that party shall immediately inform ICAC of such measures.141 134

Civil Code, part 3, article 1210. Ibid., article 1193. 136 Ibid., article 1192. 137 APC RF, article 90(3). 138 Ibid. 139 Ibid., article 91. 140 Ibid., article 72. 141 ICAC Rules, § 34(5). 135

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b) Interim relief before the arbitral tribunal. The ICAA provides that, unless otherwise agreed by the parties, the arbitral tribunal may at the request of either party order interim measures of protection that it deems necessary for securing the claim concerning the subject matter of the proceedings. The arbitral tribunal may require any party to provide adequate security in connection with such measures.142 Russian arbitration law does not provide for recognition or enforcement measures of arbitral tribunals by state courts, however each party seeking interim relief may petition respective state arbitration court to grant the relief pursuant to general rules of APC.

6. Multi-party arbitration 87

Russian legislation does not have any specific provisions in respect of multi-party disputes and thus such situations are governed by fundamental principles of arbitration: namely, the principles of party autonomy and equality of arms.

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a) Arbitration agreement involving several parties. The principle of party autonomy requires that there is an arbitration agreement between all parties to arbitration. This issue is resolved by execution of the arbitration agreement by each party to the contract. The ICAA contains no express provision on the participation of third parties in the proceedings. It follows that joinder of third parties will only be possible if all parties agree to do so, whether in ad hoc or ICAC arbitral proceedings. The ICAC Rules contain an express provision for the joinder of third parties to the arbitral proceedings. Such joinder is possible only with the consent of the parties and the written consent of the third party proposed to be joined to the proceedings. The request for joinder of a third party must be made before the deadline for the submission of the respondent’s defence.143

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b) Equality of arms and appointment of the arbitrators. The principle of equality of arms requires that each party has equal influence on the composition of the arbitral tribunal. Under ICAC Rules if an arbitral tribunal is to be composed of three arbitrators to arbitrate between multiple claimants and multiple respondents, the multiple claimants and the multiple respondents shall each choose one arbitrator.144 If the agreement of the parties in respect of the arbitrator is not reached, the ICAC may appoint itself an arbitrator selected from the list of international arbitrators for international commercial disputes held by the ICAC.145

IV. The control and the enforcement of arbitral awards 90

The ICAA does not draw a distinction between the recognition and enforcement of domestic and foreign awards or the grounds on which recognition or enforcement may be refused. The ICAA provides that regardless of the country in which the award was rendered, the award shall be recognized as binding and, upon application in writing to the competent court, shall be enforced in Russia.146 The ICAA requires the application to be supported by the authenticated original award and arbitration agreement or by certified copies thereof. If either of these documents is made in a foreign language, certified translations into Russian must also be provided.147 142

Ibid., article 17. ICAC Rules, § 14. 144 Ibid., article 17. 145 Ibid. 146 ICAA, article 35(1). 147 Ibid., article 35(2). 143

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The Commercial Procedural Code contains a rule that foreign court decisions and 91 awards are to be recognized and enforced in Russia if one of Russia’s international treaties or federal laws requires it. Russia is a signatory to the New York Convention148 and the 1961 European Convention. Therefore, recognition and enforcement of foreign awards in Russia is conducted in accordance with these conventions. It is more difficult to enforce or seek recognition of foreign commercial judgments (than awards) due to the fact that Russia has still not ratified or entered into bilateral treaties for enforcement of foreign commercial judgments with some leading economies (e.g. Great Britain, the USA, Canada, etc.). This is yet another reason for referring disputes to international arbitration rather than to the courts of the relevant foreign state.

1. Correction and amendment of arbitral awards Under the ICAA, each party may (within 30 days of receipt of the award)149 request 92 that the arbitral tribunal corrects any errors in computation, any clerical or typographical errors, or any errors of a similar nature.150 If so agreed by the parties, the arbitral tribunal may also provide an interpretation on a specific point or part of the award. The request for correction or interpretation of the award must be made with notice to the other party in reasonable term. The ICAA also empowers the arbitral tribunal to correct an award on its own initiative within 30 days of the date of the award.151 If the arbitral tribunal considers the request to be justified, it shall make the 93 correction or give the interpretation within 30 days of receipt of the request. Any such correction or interpretation shall form part of the original award.152 The ICAA gives the arbitral tribunal discretion to extend the time period within which to make the correction, interpretation or supplemental award, if necessary.153

2. Review of arbitral awards before the state courts The ICAA highlights the important principle of non-intervention by the courts (i.e. 94 that the courts shall not intervene in arbitral proceedings except where expressly permitted by the ICAA).154 a) Procedural framework (time limits, competent court, appeal). An arbitral award 95 of an international arbitration court with a seat in Russia may be set aside in a competent Russian court within three months of the challenging party receiving a copy of the arbitral award. It is worth mentioning that an application to have an award set aside may not only be filed by the award debtor, but also by third parties whose interests are affected by the arbitral award, and a state prosecutor where the award affects public interest (articles 230(3), (5) APC). The competent court is a state arbitrazh court of the region of the Russian Federation where the arbitral tribunal had its seat.155 A ruling of the competent arbitrazh court regarding the setting aside of an arbitral award may be challenged by filing a cassation appeal with a cassation court within one

148 For the full text of the New York Convention (1958) see https://www.uncitral.org/pdf/english/texts/ arbitration/NY-conv/New-York-Convention-E.pdf (accessed 1 August 2020). 149 The parties may set a different time limit. 150 ICAA, article 33(1). 151 Ibid., article 33(2). 152 Ibid., article 33(1). 153 Ibid., article 33(4). 154 Ibid., article 5. 155 APC RF, article 230(3).

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month after arbitral award is rendered in full.156 The cassation court shall to consider such appeal within two months after the matter is transferred to the cassation court.157 96 Under article 34 ICAA, parties to an arbitration clause providing for administration of an arbitration by a permanent arbitration institution may agree that the award is final, and a final award may not be set aside. However, the award debtor will still be able to resist enforcement if one of the grounds for refusing enforcement exists.158 97

b) Grounds for setting aside arbitral awards. An award may only be set aside if the party making the application brings evidence that: – one of the parties to the arbitration agreement was under some legal incapacity, or the arbitration agreement was invalid under the law chosen by the parties as the governing law of the agreement, or, in the absence of such choice, under the laws of the Russian Federation; – a party was not given proper notice of the appointment of an arbitrator, or of the arbitral proceedings, or was for some other reasons unable to present its case; – the award was made with respect to a dispute which was not covered by the arbitration agreement, or does not fall within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the arbitration agreement; however, if the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or – the constitution of the arbitral tribunal or the arbitral procedure was inconsistent with the arbitration agreement between the parties (unless such agreement was in conflict with a mandatory provision of the ICAA), or in the absence of an agreement, was not in accordance with the provisions of the ICAA;159 or if the court finds that: – the subject matter of the dispute was not capable of settlement by arbitral proceedings under the laws of the Russian Federation; or – the award is inconsistent with the public policy of the Russian Federation.160 Review of the merits of an award is prohibited under article 420 CPC RF and article 232(6) APC RF, and this is also confirmed by the Supreme Court.161

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aa) Invalidity of arbitration agreement. As noted, the arbitration agreement will be deemed invalid if one of the parties did not have legal capacity, or the arbitration agreement was invalid under the law chosen by the parties as the governing law of the agreement, or, in the absence of such choice, under the laws of the Russian Federation. To be valid, the arbitration agreement must be executed in writing as indicated above.

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bb) Violation of due process and absence of proper notice about the proceedings. The arbitral award may be set aside if a party to arbitration was not given proper notice of the appointment of an arbitrator, or of the arbitral proceedings, or was for some other reason unable to present its case. This will also include principles of fair trial and due process: for example, a consent award containing only parts of the settlement between the parties will not be enforceable.162 156

Ibid., article 234(5). Ibid., article 285(1). 158 Practice Note (supra fn. 9), section 20. 159 ICAA, article 34(2)(1). 160 Ibid., article 34(2)(2). 161 Practice Note (supra fn. 9), section 18. 162 Federal Arbitrazh Court of the North-West Region, 7 October 2015, Case No. A56-14627/2015, YCA XLII (2017) 776. 157

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cc) Lack of authority of the arbitral tribunal. The award may be set aside if it was 100 made with respect to a dispute which was not covered by the arbitration agreement, it does not fall within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the arbitration agreement. However, if the decision on matters that were submitted to arbitration can be separated from those that were not submitted, only that part of the award which contains decisions on matters that were not submitted to arbitration may be set aside. dd) Unlawful composition of the tribunal and other procedural irregularities. The 101 Russian court may set aside an arbitration award if the constitution of the arbitral tribunal or the arbitral procedure was inconsistent with the arbitration agreement between the parties (unless such agreement was in conflict with a mandatory provision of the ICAA), or in the absence of an agreement, was not in accordance with the provisions of the ICAA. Procedural irregularities may, for these purposes, include breaches concerning the agreed language of the arbitral proceedings, any rules on the collection and presentation of evidence, procedural inequality, and the tribunal’s failure to act impartially. The courts regard any bias, direct or indirect, of a particular arbitrator as a serious 102 breach of the law. Similarly, the courts regard the composition of an arbitral tribunal as unlawful, and deny recognition and enforcement of a domestic arbitral award, if a Russian state official is appointed as an arbitrator in violation of the mandatory provisions of Russian law which forbid state officials from being engaged in activities outside of a scientific, pedagogic or other creative nature. ee) The non-arbitrability of the original dispute. Russian courts may set aside an 103 arbitral award if the subject matter of the dispute was not capable of settlement by arbitral proceedings under the laws of the Russian Federation. Non-arbitrability issues were described in detail at supra mns 30 et seq. ff) Public policy. Russian court practice defines the “public policy” of the Russian 104 Federation as fundamental legal principles having the highest imperative and universal character, a unique social and public significance, and which form the basis of the economic, political and legal system of the Russian Federation.163 As a result, the courts can set aside or refuse to enforce arbitral awards on the ground of breach of public order only when the following two criteria are met: (i) there is a violation of the fundamental principles that form the basis of the economic, political and legal system of the Russian Federation; and (ii) such a violation can result in any one of the following: infringing the sovereignty or security of the state; affecting interests of a substantial social group; violating constitutional rights and freedoms of individuals or legal entities.164 In a 2018 decision, the Supreme Court confirmed an earlier dictum of the Supreme 105 Arbitrazh Court that public policy includes the principle of the parties’ equality in civil law relations, good faith and proportionality of civil liability to the damage suffered, and on that basis, held that an arbitral award awarding a penalty for breach of contract breaches public policy if the penalty is disproportionate to the damage suffered.165 Likewise, an award containing excessive interest rates was held to be a breach of public 163 Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019, No. 53 (supra fn. 11), para. 51. 164 Ibid. 165 Supreme Court, 11 January 2018, Case No. A45-4214/2017, (Supreme Court ref. no. 304-ЭС1720756), Federal Grid Co. of the Unified Energy System v. LLC CenterEnergoStroyProject, referring to the Information Letter of the Supreme Arbitrazh Court of 22 December 2005, No. 96.

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policy.166 Moreover, under Russian law, the public policy defence includes a prohibition of activities that could harm state interests, and on that basis, an arbitral award harming budgetary interests of the state has been considered as breaching public policy.167 Russian courts have also found a breach of public policy in case of an award made on the basis of a contract that had been declared in valid by Russian state courts in separate proceedings brought a shareholders of one of the parties to the arbitration.168 However, according to the 2019 resolution of the Supreme Court, the mere fact that an arbitral tribunal applied foreign laws that have no equivalent in Russian law; that the defendant did not participate in the arbitral proceedings or the award debtor’s failure to object to enforcement would not as such be considered to be a breach of public policy, and a public policy defence should only be allowed in exceptional circumstances.169

3. Enforcing arbitral awards a) General framework. The ICAA does not draw a distinction between the recognition and enforcement of domestic and foreign awards or the grounds on which recognition or enforcement may be refused. The Commercial Procedural Code contains a rule that foreign court decisions and awards are to be recognized and enforced in Russia if one of Russia’s international treaties or federal laws requires it. Russia is a signatory to the New York Convention170 and the 1961 European Convention. Therefore, recognition and enforcement of foreign awards in Russia is conducted in accordance with these conventions. It is more difficult to enforce or seek recognition of foreign commercial judgments (than awards) due to the fact that Russia has still not ratified or entered into bilateral treaties for enforcement of foreign commercial judgments with some leading economies (e.g. Great Britain, the USA, Canada, etc.). This is yet another reason for referring disputes to international arbitration rather than to the courts of the relevant foreign state. 107 The enforcement of international arbitral awards falls within the jurisdiction of the state arbitrazh court of the region of the Russian Federation where the defendant is located or has his residence. If the defendant is a foreign person, or if it is impossible to locate the defendant, the application may be filed with the arbitrazh court of the region where the defendant’s property or assets are located.171 108 The APC RF states that the court of first instance considers the application for recognition and enforcement of an international arbitral award within one month of the claim being filed. A ruling on the recognition and enforcement of the international arbitral award enters into legal force as soon as it is issued.172 A ruling on the recognition and enforcement of an international arbitral award may be appealed by filing a cassation appeal with a cassation district court within one month after its issue in full written form. Normally, it takes about four to six months to get the binding and enforceable order of enforcement. 106

166 Federal Arbitrazh Court of the Moscow Region, 11 May 2018, Case No. A40-201473/2016, PJSC Sumskoye Mashinostroitelnoye Nauchno-Proizvpdstvennoye Obyedineniye v. CJSC Uralstroienergomontazh. 167 Moscow City Arbitrazh Court, 16 January 2019, Case No. A40-117331/20, Banwell International Limited v. Roshelf LLC, YCA XLIV (2019) 664, confirmed by resolution of the Supreme Court, 23 April 2019 (ref. no. 305-ЭС18-20885). 168 Moscow City Arbitrazh Court, 11 December 2015, Case No. A40-50778/15, YCA XLI (2016) 550. 169 Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019, No. 53 (supra fn. 11), para. 51. 170 For the full text of the New York Convention (1958) see supra fn. 133. 171 APC RF, article 242. 172 Ibid., article 243.

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The applicant has three years to submit an application for recognition and enforce- 109 ment of an international arbitral award after the award comes into force. The applicant may apply for reinstatement of this period in order to avoid refusal to grant recognition and enforcement if the period expires. The period may be reinstated by the court, which enjoys substantial discretion in this regard, provided that there are grounds to do so. After the ruling on recognition and enforcement of an international arbitral award, the applicant has three years to apply to the bailiffs for the mandatory enforcement of it. b) Grounds for refusing enforcement. aa) Overview. The Grounds for refusing 110 enforcement include to the grounds for setting aside arbitral awards described supra mns 98–106. Moreover, recognition and enforcement can also be refused where an award did not become valid and binding or was set aside (infra mn. 111). Where a ground for refusing enforcement affects only part of the award, enforcement remains possible for the remaining parts.173 bb) Enforcement of awards that were set aside. One of the grounds to refuse the 111 enforcement of an arbitral award is that such award did not became valid and binding on the parties to the arbitration or it was set aside or suspended by competent authorities of the country where the award was rendered or by authorities of the country whose laws were used.174 Russian courts may deny enforcement if it is not proved that the decision became valid and binding to the parties of the arbitration.175 cc) Fulfilment, set-off and similar defences. The ICAC Rules specifically addresses 112 set off procedures. According to the rules, the respondent must within 30 days after receipt of the arbitration claim file a counter-claim and claim for set-off. Such claim will be accepted if (i) it is covered by the same arbitration agreement; or (ii) it is covered by other arbitration agreement, referring dispute to the ICAC and both claims are materially connected.

4. Preclusion of grounds for challenge and defences to enforcement Russian legislation contemplates the situations where failure to undertake certain 113 actions or raise legal arguments in due course precludes failing party from objecting or raising such arguments at later stage of proceedings. a) Preclusion due to failure to object in the arbitral proceedings. If a party to the 114 arbitration knows that any of the applicable provisions of the ICAA or any requirement of the arbitration agreement was not complied with but nevertheless such party continues its participation in the arbitration without objecting and without undue delay (or if a specific term is provided – within such term), such party is deemed to have waived its right to object.176 If a party to arbitration believes that an arbitration tribunal has gone beyond its 115 competence and does not object as soon as the relevant question is raised in course of the arbitral proceedings, it loses its right to subsequently object to the arbitration tribunal’s competence.177 The party also loses its right to raise such objections in the

173 Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019, No. 53 (supra fn. 11), para. 52. 174 ICAA, article 36. 175 Case No. А73-12888/2009, Oil and Natural Gas Corporation v. AO Amurskiy Sudostroitelnyi Zaod. 176 ICAA, article 4. 177 ICAA, article 16.

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course of proceedings on enforcement or setting aside the arbitral award.178 Similarly, an arbitration agreement may be deemed to have been made if an arbitration claim is filed alleging the existence of an arbitration agreement and the other party does not object to such claim but instead files its statement of defence.179 116

b) Preclusion due to failure to bring a setting-aside application. In its several decisions, the SAC RF has stated that objections to the enforcement of foreign arbitral awards can be refused due to the fact that a debtor has not filed an application to set aside an award before the state courts at the seat of the arbitration where such ability exists.180 Therefore, it is important to file a setting-aside application in time if one of the parties wants to challenge the enforcement of a foreign arbitral award. 178 Resolution of the Plenum of the Supreme Court of the Russian Federation of 10 December 2019 No. 53 (supra fn. 11). 179 ICAA, article 7(5). 180 Supreme Arbitrazh Court, 12 December 2011, Case No. ВАС-11800/2011; Supreme Arbitrazh Court, 14 June 2011, Case No. 1787/11.

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O. International Arbitration in Singapore1 Bibliography: Ali, International Commercial Arbitration in Asia, 3rd ed., Juris Publishing 2013; Binder, International commercial arbitration and mediation in UNCITRAL model law jurisdictions, 4th ed., Kluwer Law International 2019; Blackaby/Partasides/Redfern/Hunter, Redfern and Hunter on international arbitration, 6th ed., Oxford University Press 2015; Born, International Arbitration: Law and Practice, 2nd ed., Wolters Kluwer 2016; Chan, Singapore Law on Arbitral Awards, Academy Publishing 2011; Choong/ Mangan/Lingard, A guide to the SIAC arbitration rules, 2nd ed., Oxford University Press 2018; Greenberg/ Kee/Weeramantry, International Commercial Arbitration: An Asia-Pacific Perspective, Cambridge University Press 2011; Hirst, SIAC Rules – An Annotation, LexisNexis 2014; Ho, Interpretation and Application of the New York Convention in Singapore, in: Bermann (ed.), Recognition and Enforcement of Arbitral Awards, Springer 2017, 813–833; Hwang/Boo/Han, National Report for Singapore, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Supplement 99, ICCA & Kluwer Law International June 2018; Hwang/Chan/Selvaraj, Singapore, in: Moser (ed.), Arbitration in Asia, 2nd ed., Juris Publishing 2018; Kolkey, Practitioner’s Handbook on International Arbitration & Mediation, 3rd ed., JurisNet 2012; McConnaughay, International Commercial Arbitration in Asia, 2nd ed. JurisNet 2006; Merkin/Hjalmarsson, Singapore Arbitration Legislation Annotated, 2nd ed., Informa 2016; ICC Guide to National Procedures for Recognition and Enforcement of Awards under the New York Convention 2012, 2nd ed., ICC 2012; Yeo/Lim, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 708–765. National Legislation: International Arbitration Act (Cap. 143A, 2002 Rev. Ed.); Arbitration Act (Cap. 10, 2002 Rev. Ed.); Foreign Limitation Periods Act (Cap. 111A); Arbitration (International Investment Disputes) Act (Cap. 11); Rules of Court (Cap. 322). International Conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965.

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and International Arbitrations ........................................ b) Commercial and non-commercial arbitration ............................... c) Ad hoc and Institutional Arbitration................................................ d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR Mechanisms (Mediation, Expert Determination) ...................................................................................... 2. The guiding principles of Singapore arbitration law.......................... II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses .........................................................

1 2 2 7 10 14 18 24 26 26 28 29 29 31 34 36 38 38 40 41

1 The authors would like to record their appreciation for Ms. Zara Fung and Mr. Daniel Seow for their contributions to this chapter.

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Part 3. Country Reports 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... 43 a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... 44 b) Preclusion of jurisdictional defences ................................................ 45 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... 47 III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 49 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... 50 a) Duty to disclose ..................................................................................... 52 b) Grounds for challenge.......................................................................... 53 c) Procedural aspects and preclusion of grounds for challenge...... 54 d) Failure or impossibility to act ............................................................ 56 2. The arbitral proceedings ........................................................................... 57 a) The request for arbitration ................................................................. 58 b) Equality of arms, fair trial principles and the right to be heard 60 c) Confidentiality ....................................................................................... 62 d) Expedited procedure............................................................................. 65 e) Early dismissal of claims and defences ............................................ 67 f) The arbitral award ................................................................................ 69 g) Termination of the arbitration........................................................... 71 h) The costs of the arbitration ................................................................ 72 3. Evidence, discovery, disclosure................................................................ 74 4. The law governing the dispute and lois de police ............................... 78 a) Choice of law ......................................................................................... 78 b) Law governing the dispute absent a choice of law........................ 80 c) Impact of mandatory law and lois de police ................................... 81 5. Interim relief in arbitration ...................................................................... 84 a) Interim relief before Singapore courts.............................................. 84 b) Interim relief before the arbitral tribunal ........................................ 87 6. Multi-party arbitration .............................................................................. 89 a) Arbitration agreement involving several parties ............................ 90 b) Equality of arms and appointment of the arbitrators .................. 92 7. Third-party funding................................................................................... 93 IV. The control and the enforcement of arbitral awards ............................. 97 1. Correction and amendment of arbitral awards ................................... 98 2. Review of arbitral awards before the state courts ............................... 99 a) Procedural framework (time limits, competent court, appeal) .. 99 b) Grounds for setting aside arbitral awards ....................................... 101 aa) General framework ........................................................................ 101 bb) Lack of jurisdiction of the arbitral tribunal ............................. 103 cc) Unlawful composition of the tribunal and other procedural irregularities..................................................................................... 106 dd) Public policy.................................................................................... 109 3. Enforcing arbitral awards ......................................................................... 112 a) General framework ............................................................................... 112 aa) Enforcement of awards made under the IAA ......................... 113 bb) Enforcement of foreign arbitral awards.................................... 114 b) Enforcement of awards that were set aside..................................... 116 c) Fulfilment, set-off and similar defences........................................... 117 4. Preclusion of grounds for challenge and defences to enforcement 120 a) Preclusion due to failure to object in the arbitral proceedings .. 121 b) Preclusion due to failure to bring a setting-aside application .... 123

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I. Introduction Situated at the heart of South-East Asia, Singapore’s geographical location and trade 1 links have paved the way for it to market itself as an arbitration hub in Asia. This is coupled with a legal regime and legislative framework that is pro-arbitration and proenforcement and more fundamentally, fiercely observant of the rule of law. Singapore’s legal regime is further supported by world-class arbitration infrastructure in the shape of Maxwell Chambers, an integrated dispute resolution complex which features state of the art facilities and which houses a number of world-class arbitral institutions and leading sets of chambers.2 Since in its inception in 1991 as a neutral, efficient and reliable dispute resolution institution, the Singapore International Arbitration Centre (SIAC) (which is itself housed at the Maxwell Chambers) has seen a remarkable growth in the number of cases that it has administered, particularly over the last ten years.3 Singapore is today widely perceived as one of the leading venues for international commercial arbitration.

1. The legal framework a) Domestic and International Arbitrations. Singapore has a dual-track arbitration 2 regime to oversee international and domestic arbitrations. The two principal Acts governing arbitrations in Singapore are the International Arbitration Act (Cap. 143A) (the “IAA”), which applies to international commercial arbitrations, and the Arbitration Act (Cap. 10) (the “AA”), which applies solely to domestic arbitrations that are noninternational in nature.4 This chapter deals only with the IAA and international arbitrations. Aspects of domestic (i. e. non-international) arbitration have been alluded to where relevant. Part II of the IAA sets out the substantive provisions governing the conduct of 3 international commercial arbitrations in Singapore and save for some modifications, Part II of the IAA substantively adopts the UNCITRAL Model Law on International Commercial Arbitration dated 21 June 1985.5 While Part II of the IAA only applies to international arbitrations, parties may agree in writing that Part II shall also apply to an arbitration which is not an international arbitration.6 Conversely, section 15(1) of the

2 See generally, http://www.maxwell-chambers.com (accessed 1 August 2020). The SIAC has since relocated to Maxwell Chambers after its establishment. Today, Maxwell Chambers also houses other world class alternate dispute resolution institutes, such as the International Court of Arbitration of the International Chamber of Commerce, and the International Centre for Dispute Resolution (the international sub-division of the American Arbitration Association). 3 For instance, the active caseload of the SIAC totalled an impressive 650 cases as of 31 March 2017. See statistics set out in https://siac.org.sg/index.php?option=com_content&view=category&layout=blog&id=64&Itemid=140 (accessed 1 August 2020). In 2008, the total number of new cases handled by the SIAC totalled 99 and this number has grown exponentially over the next ten years to 402 in 2018. 4 Sections 5(1), 5(4) and 15(1), IAA. See also, section 3, AA. The bright-line distinction between the two regimes has historically been justified on the premise that domestic arbitrations require a greater level of judicial supervision. See for instance, the Second Reading of the International Arbitration Bill, Singapore Parliamentary Reports dated 31 October 1994 (Volume 63, Column 625) and also, the Law Reform Committee’s Sub-Committee Report on the Review of Arbitration Laws (August 1993), which stated that judicial intervention is more appropriate in situations “to reflect public policy considerations and national interests involved in purely domestic disputes” (at [12]). 5 Section 3, IAA. On the UNCITRAL Model Law, see supra A. 6 Section 5(1), IAA.

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IAA provides that parties to an international arbitration may expressly choose to opt out of Part II of the IAA and/or the ML 1985, and to have the AA apply instead.7 4 An arbitration is “international” when the following requirements prescribed by section 5(2) of the IAA are met: (a) at least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business8 in any State other than Singapore; or (b) one of the following places is situated outside the State in which the parties have their places of business: (i) the place of arbitration if determined in, or pursuant to, the arbitration agreement; (ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or (c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country. 5 Section 5(3) further provides that for the purposes of section 5(2) of the IAA: (a) if a party has more than one place of business, the place of business shall be that which has the closest relationship to the arbitration agreement; and (b) if a party does not have a place of business, a reference to his place of business shall be construed as a reference to his habitual residence. For the purpose of section 5(3)(a), where a party has more than one place of business, the Singapore High Court has clarified that an important factor to be taken into account in deciding which of the two places has a closer relationship to the arbitration agreement is to determine “the place” where a substantial part of the obligations of the specific party was to be performed.9 “The” place of a party’s substantial performance is distinguished from “any” place where a party’s obligations are substantially performed as the latter is not confined to performance by the parties of the arbitration agreement: The latter can be performed by a non-party on behalf of a party of the arbitration agreement as long as that performance constitutes a substantial part of a party’s obligations under the contract that is in dispute.10 The following are useful factors for 7 Section 15(2) of the IAA further provides that a provision in an arbitration agreement referring to or adopting any rules of arbitration shall not of itself be sufficient to exclude the application of Part II of the IAA and/or the ML 1985 to the arbitration concerned. Section 15A of the IAA was later introduced to ensure that where parties agree to adopt any rules of arbitration, this shall be given effect, but only to the extent that this is not inconsistent with Part II of the IAA and/or the ML 1985. See further, Dermajaya Properties Sdn Bhd v. Premium Properties Sdn Bhd and CFE Holdings (Malaysia) Sdn Bhd [2002] 2 SLR 164 and the Attorney General’s Chambers Law Reform and Revision Division Report entitled ‘Proposed Amendment to the International Arbitration Act on Rules of Arbitration’ dated 2 October 2002, LRRD No. 11/2002. 8 A “place of business” is used in contradistinction from other familiar concepts such as a company’s place of incorporation and/or its registered office. Section 5(2) recognizes that many companies today have more than one place of business or operation, none of which may be its place of incorporation or for that matter, its registered office. 9 Mitsui Engineering & Shipbuilding Co. Ltd v. PSA Corporation Limited [2003] 1 SLR(R) 446. This often involves a preliminary exercise to determine the actual obligations to be performed by the parties: see Hua Xin Innovation Incubator Pte Ltd v. IPCO International Ltd [2012] SGHCR 18 at [23] to [27]. 10 Therefore, the High Court was of the view that “even if the place of the substantial performance by Mitsui [i. e. the plaintiff in the case] were to be say, Singapore, a substantial part of the performance by Mitsui could still be in Japan [and] [c]onversely, if a substantial part of performance by Mitsui was in Japan, it did not necessarily mean that Japan was the place of substantial performance by Mitsui” (emphasis added). Mitsui, supra fn. 9 at [28]. The High Court’s approach does not render section 5(2)(b) (ii) otiose, as there is no overlap in requirements between the two provisions. Section 5(2)(b)(ii) specifies that an arbitration is international where “any place” of substantial performance of the obligations is situated outside Singapore.

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determining the place of substantial performance: (a) place of business (i. e. address) that any formal communication between parties was sent to; (b) place of execution and negotiation of the arbitration agreement; and (c) person in charge of the negotiations and his corresponding place of business (i. e. address).11 Where the AA is applicable (i. e. where a non-international arbitration is involved 6 and Part II of the IAA does not apply), it applies only to arbitrations commenced on or after 1 March 2002.12 The date of commencement of the arbitration is determined by reference to the date on which the respondent receives the request to refer the dispute to arbitration.13 b) Commercial and non-commercial arbitration. The AA does not distinguish 7 between commercial and non-commercial arbitrations, although the ML 1985 – and by extension, the IAA by substantively adopting the ML 1985 – applies specifically to only international commercial arbitration, which is broadly defined in the footnotes of article 1 of the ML 1985 as including all arbitrations involving relationships of a commercial nature.14 Although arbitrations in Singapore are predominantly commercial in nature, in the 8 sense that they involve disputes between two private commercial parties, arbitrations concerning investor-state treaties and aspects of international law are on the rise. In this regard, it bears noting that Singapore is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of other States.15 The domestic legislation in Singapore giving effect to this Convention is the Arbitration (International Investment Disputes) Act (Cap. 11). As part of Singapore’s efforts to promote itself as a choice venue for investment treaty 9 arbitrations, as well as to broaden the ambit of SIAC’s remit for the same, rule 3.1(d) of the SIAC 2016 Rules (the “SIAC 2016 Rules”) provides for references in a Notice of Arbitration to the SIAC to include, in addition to contracts out of which the dispute arise, any other “instruments” such as an “investment treaty”.16 Branches of international arbitral institutions have also set up offices in Singapore to facilitate the resolution of disputes involving aspects of international law, such as the World Intellectual Property Organization, the International Centre for Dispute Resolution and the Permanent Court of Arbitration.

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Mitsui, supra fn. 9 at [39]. Section 65(3), AA. The former arbitration act applies to domestic arbitrations commenced prior to 1 March 2002. Parties may agree in writing to have arbitrations governed by the former arbitration act fall under the present AA instead: see section 65(2), AA. 13 Section 65(4), AA. 14 The term “commercial” is defined in the footnotes of article 1 as covering matters “arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road” 15 Singapore ratified the Convention on the Settlement of Investment Disputes between States and Nationals of other States on 14 October 1968. Singapore is to date party to approximately 43 bilateral investment treaties and has entered into 18 free trade agreements. On the protection afforded by investment treaties, see supra C. 16 Rule 3.1(d) of the SIAC 2016 Rules reads: “A party wishing to commence an arbitration (The “Claimant”) shall file with the Registrar a Notice of Arbitration which shall include a reference to the contract (or other instrument e. g. investment treaty) out of or in relation to which the dispute arises and where possible, a copy of the contract or other instrument.” 12

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c) Ad hoc and Institutional Arbitration. Arbitration rules provide the framework necessary for the arbitration process. By and large, parties have the freedom to choose the procedure that governs the conduct of the arbitration.17 In this regard, parties can either subject themselves to institutional arbitration, that is, arbitration conducted in accordance with the rules and under the auspices of an arbitration institution, or ad hoc arbitration, which is premised on rules derived and determined by parties themselves. 11 The primary institution for arbitration in Singapore is the SIAC, which has its own rules and procedure. The SIAC’s rules are now in their 6th edition, and the latest version is the SIAC 2016 Rules.18 The SIAC also provides specific arbitration rules for the derivatives sector, mainly the SIAC SGX-DT Arbitration Rules and the SIAC SGX-DC Arbitration Rules, for derivatives trading and derivatives clearing respectively. More recently, the SIAC has also introduced the first edition of the SIAC Investment Rules 2017, which is a specialized set of rules designed to address the unique issues present in the conduct of international investment arbitration. 12 The SIAC 2016 Rules introduced a range of changes to reflect the developing needs of commercial arbitration. For one, the SIAC 2016 Rules introduced new multi-contract and multi-party provisions which contain mechanisms for regulating (i) disputes arising out of multiple contracts; (ii) the joinder of additional parties; and (iii) the consolidation of several arbitral proceedings.19 The SIAC 2016 Rules have also included a new provision to allow for the early dismissal of claims and defences.20 This is in addition to the mechanisms in Rule 28.1 that allows for a party (prior to the constitution of the tribunal) to object to the arbitration proceedings on account of an objection to the existence or validity of the arbitration agreement or to the competence of SIAC to administer an arbitration. Further, Rule 28.3 allows for a party (after the tribunal has been constituted) to file jurisdictional objections within 14 days after the matter is alleged to be beyond the scope of the tribunal’s jurisdiction arises during the arbitral proceedings, or no later than in a Statement of Defence or Statement of Defence to a Counterclaim. The third key amendment under the SIAC 2016 Rules is the delocalization of the seat of arbitration via the removal of Singapore as the default seat,21 which is targeted at giving the SIAC a more global reach. 13 Apart from these key changes, the SIAC 2016 Rules also includes enhancements to the existing emergency arbitration process and expedited procedure in order to further increase the speed and efficiency at which such proceedings are dealt with. Specially, with respect to the emergency arbitration process, the SIAC 2016 Rules now require that an emergency arbitrator be appointed within one day of receipt by the SIAC Registrar of the application (as opposed to one business day), and also requires that the emergency arbitrator issue the order or award for interim relief within a maximum of 14 days from his appointment.22 To ensure that emergency arbitration proceedings are cost-effective for cases of any quantum, the fees of an emergency arbitrator are also now fixed at S$25,000 (unless the SIAC Registrar determines otherwise).23 10

17 Article 19, First Schedule, IAA. See further, Halsbury’s Laws of Singapore, Vol. 1(2), 2017 Reissue, at [20.073]–[20.075]. 18 The SIAC 2016 Rules can be downloaded at http://www.siac.org.sg/our-rules/rules/siac-rules-2016 (accessed 1 August 2020). 19 See Rules 6 to 8 of the SIAC 2016 Rules. 20 See Rule 29 of the SIAC Rules 2016. 21 See Rule 21 of the SIAC Rules 2016. 22 See Rule 30 and Schedule 1 of the SIAC Rules 2016. 23 See the SIAC Schedule of Fees at http://www.siac.org.sg/estimate-your-fees/siac-schedule-of-fees (accessed 1 August 2020).

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d) The territoriality principle, the seat of the arbitration and the lex arbitri. The seat or place of an arbitration is where the arbitration is held and it is the seat that determines the lex arbitri or curial law, viz., the law governing the arbitration.24 The seat of an arbitration is to be distinguished from the venue of the arbitration hearings. Specifically, the seat or place of an arbitration, where it is agreed by parties, does not change merely because the arbitration tribunal hears witnesses or conducts its proceedings in venues and/or locations other than the agreed place of arbitration.25 Insofar as the territoriality principle is concerned, the IAA generally only applies where the place of arbitration is Singapore26 even though section 5(2)(b)(i) of the IAA appears to suggest otherwise by providing that an arbitration is “international” where the place of arbitration is situated outside the “State” in which the parties have their place of business (i.e. outside Singapore as “State” is defined as “Singapore and any country other than Singapore”).27 In this regard, notwithstanding what appears to be two possible interpretations, the Singapore High Court has since observed that should parties choose to arbitrate in a foreign state, the IAA should not have any extraterritorial reach.28 The High Court referred to the UNCITRAL explanatory notes as well as the parliamentary reports concerning the International Arbitration Bill, and came to the conclusion that “the scheme of the IAA … [wa]s intended to apply to arbitrations in Singapore” and where parties choose a place of arbitration in a foreign country, “the comity of nations and reciprocity dictate[d] that a foreign country’s own substantive laws and procedures governing the conduct of arbitration within their own territory must be respected”.29 Notwithstanding the above, selected provisions of the IAA (as adopted from the ML 1985) may potentially still apply to an international arbitration that does not have its place of arbitration in Singapore. For example, articles 830 and 931 ML 1985 may still apply regardless of whether parties have chosen Singapore as the place of arbitration as they are fundamental to all international arbitrations, regardless of their place of arbitration.32 They “preserve the bargain of the parties to an international arbitration agreement”33 by ensuring that regardless of where the place of arbitration might be, a Singapore court would not usurp the jurisdiction of an arbitration tribunal by deciding a dispute that is subject to arbitration, but that the court would refer the matter to arbitration instead (article 8 ML 1985). If this is to be achieved, a Singapore Court is to

24 As opposed to the law governing the dispute or the proper law of the contract. See generally, infra mn. 28. 25 PT Garuda Indonesia v. Birgen Air [2002] 1 SLR(R) 401 at [23]. See also BNA v. BNB [2019] SGHC 142 at [97]. 26 Article 1(2), First Schedule, IAA. 27 Section 3(2), IAA. 28 Coop International Pte Ltd v. Ebel SA [1998] 1 SLR(R) 615 at [128] to [131] and also, [139] to [141]. 29 Coop, supra fn. 28 at [131]. 30 Article 8 ML 1985 provides that a National Court would not deal with a dispute that is the subject of an arbitration agreement but would refer the dispute to arbitration if so requested by a party. 31 Article 9 ML 1985 empowers a National Court with the necessary powers to afford parties interim measures before or during the arbitral proceedings, such as through interim injunctions and/or preservation orders. 32 Article 1(2) ML 1985 provides that all provisions of the ML 1985, except articles 8, 9, 35 and 36, shall apply only if the place of arbitration is in the territory of the enacting state (i. e. in this case, Singapore). In other words, articles 8, 9, 35 and 36 have been expressed to possess extraterritorial reach. However, section 3 of the IAA now excludes articles 35 and 36 from forming part of Singapore law as there is separate legislation under Part III of the IAA to deal with the recognition and enforcement of foreign arbitral awards. 33 Coop, supra fn. 28 at [135].

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be vested with the necessary powers to provide interim relief and/or interim protection to parties before and during the arbitral process (article 9 ML 1985). 18

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e) Arbitration and other ADR Mechanisms (Mediation, Expert Determination). Apart from arbitration, other recognized forms of Alternate Dispute Resolution (“ADR”) in Singapore include, inter alia, mediation and expert determination. Singapore’s status as a mediation hub has been established through the United Nations Convention on International Settlement Agreements Resulting from Mediation – otherwise known as the “Singapore Convention on Mediation” – signed on 7 August 2019.34 As a United Nations treaty, the Singapore Convention on Mediation is intended to facilitate international trade and the promotion of mediation as an alternative and effective method of resolving trade disputes by providing an efficient and harmonized framework for the enforcement of international settlement agreements amongst its signatory countries. Under article 3(1) of the Singapore Convention, a settlement is enforceable in a Convention State if it fulfils the conditions of article 4(1), i.e. if it is signed by the parties and if there is evidence that it results from mediation. Enforcement can be refused in case of incapacity of one of the parties (article 5(1)(a)), if the settlement is null and void or has been performed (article 5(1)(b), (c)), if enforcement is sought in contrast to the terms of the settlement (article 5(1)(d)) or if there has been a breach of mediation rules or if the mediator failed to disclose a conflict of interest (article 5(1)(e), (f)). Consumer contracts are excluded from the scope of the Convention as are family, inheritance and employment law (article 1(2)). Within Singapore, most mediations are conducted under the auspices of the Singapore Mediation Centre (“SMC”), which was set up on 8 August 1997.35 The mediation process in Singapore may be initiated either by direct referral from the Singapore Courts or through request by the parties themselves. As is usually the case, parties sign SMC’s agreement to mediate, which binds parties to the SMC’s rules and procedures, and mediations are held at the SMC to ensure neutrality of proceedings. The SMC maintains a quality panel of mediators and other neutrals. Notably, the SMC and the SIAC have designed a unique SMC-SIAC Med-Arb Procedure,36 which draws on the strengths of both the SMC’s mediation services and the SIAC’s arbitration services. A unique feature of the Med-Arb procedure is that parties may choose to record any settlement reached in the mediation process as an arbitral award on agreed terms.37 Under section 18 of the IAA, such arbitral awards are treated as an award on an arbitration agreement and may by leave of the High Court or Judge thereof, be enforced in the same manner as a judgment or an order to the same effect.38 An expert determination, on the other hand, is a form of ADR whereby disputing parties to a contract submit their dispute for determination by an independent expert. The main advantage of an expert determination is that it allows a technical dispute to be decided directly by an expert, and avoids the need for a judge and/or arbitrator to do likewise with the added assistance of experts. Parties can agree in writing that the expert’s determination shall be binding and final. 34 Resolution 73/198 adopted by the General Assembly of the UN on 20 December 2018 on the report of the Sixth Committee (A/73/496). As of 12 March 2020, the Convention has been ratified in just two jurisdictions, so its relevance remains to be tested. The current status is available online at https://treaties. un.org/Pages/showDetails.aspx?objid=080000028054826c&clang=_en (accessed 1 August 2020). 35 See http://www.mediation.com.sg/ (accessed 1 August 2020). 36 Parties who wish to avail themselves of the Med-Arb Procedure may incorporate a Med-Arb clause into their contracts. 37 If agreed by parties, the same mediator appointed for the mediation may thereafter also be appointed as the arbitrator for the purpose of recording the terms of settlement in the arbitral award. 38 Section 18, IAA.

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Where parties agree that an expert determination would be binding and final, the 23 Singapore Courts have held that the determination is not subject to challenge on the merits, save only in the following situations: (i) fraud; (ii) corruption; (iii) collusion and dishonesty; (iv) bad faith; (v) bias; and (vi) where the expert materially departed from his instructions; and (vii) where there is manifest error in the expert’s determination that justly requires judicial intervention.39

2. The guiding principles of Singapore arbitration law Many of the key differences between litigation and arbitration underscore the guiding 24 principles of Singapore arbitration law. Unlike litigation, which does not require the consent and/or agreement of parties before disputes are adjudicated by the national Courts, party autonomy remains an important cornerstone of Singapore arbitration law. Its effects are most keenly seen in international arbitrations in Singapore where there is clear judicial support for the principle of party autonomy, especially where the ML 1985 is concerned.40 The ethos of respecting party autonomy and the parties’ chosen mode of arbitral 25 process gives rise to a more fundamental attitude of minimalist intervention by the national Courts.41 However, the Singapore Courts have increasingly been more willing to interfere where the principle of fairness is under siege,42 but even then, the Singapore Courts have been careful to affirm its judicial policy of minimal intervention.43

II. The arbitration agreement 1. The doctrine of separability Most arbitration agreements exist in the form of an arbitration clause in an under- 26 lying contract and an entirely separate pre-dispute arbitration agreement remains relatively uncommon.44 The doctrine of separability affirms the independent existence of an arbitration clause in a contract.45 Much like the “blue-pencil test”46 under the 39 See The Oriental Insurance Co. Ltd v. Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385. The issue of what constitutes a “manifest error” was also discussed in Aik Heng Contracts and Services Pte Ltd v. Deshin Engineering & Construction Pte Ltd [2015] SGHC 293. 40 ABC Co. v. XYZ Co. Ltd [2003] 3 SLR 546 at [2], where the High Court observed that “the principle of party autonomy is one that is central to the Model Law [and] it is a principle that must be respected by the courts wherever they have cause to deal with any issues arising in relation to an international arbitration” 41 For instance, the Singapore Court of Appeal decision of AJU v. AJT [2011] SGCA 41 which affirmed Singapore’s continued support of the autonomous nature of arbitration. The Court of Appeal clarified that it was “consonant with the legislative policy” of the IAA to give “primacy to the autonomy of arbitral proceedings”: see [60]. 42 See the leading cases of Soh Beng Tee & Co. Pte Ltd v. Fairmount Development Pte Ltd [2007] 3 SLR (R) 86 and LW Infrastructure Pte Ltd v. Lim Chin San Contractors Pte Ltd [2012] SGCA 57. 43 LW Infrastructure, supra fn. 42 at [54], where the Court of Appeal observed that the purpose of examining whether the rules of natural justice have been breached is to assess if the complainant has suffered “actual or real prejudice”, and in so doing, “it is never in the interest of the court, much less its role, to assume the function of the arbitral tribunal.” 44 Article 7(1), First Schedule, IAA, provides that an arbitration agreement may either take the form of an arbitration clause in a contract, or as an entirely separate agreement. 45 Article 16(1), First Schedule, IAA, affirming that an arbitration clause, which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. 46 Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Ltd [1894] AC 535, which has been accepted and applied as part of Singapore law.

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common law doctrine of restraint of trade, an arbitration clause may survive the rest of the underlying contract notwithstanding the termination or death of the remaining parts of the agreement. The doctrine of separability is widely recognized by the rules of many arbitral institutions and also forms part of Singapore law.47 27 However, the doctrine of separability is inapplicable where the main underlying contract is held to be void ab initio. In such a situation, there is no contract at the outset, and there is no issue as to whether the arbitration clause may survive the rest of the contract.48 In this regard, the Singapore High Court has held that the agreement on the wording of an arbitration clause of a draft agreement was “subject to contract” and accordingly only binding upon execution of the entire agreement.49 In the event of any challenges as regards the arbitration clause and/or agreement, the IAA expressly provides that an arbitration tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement.50

2. The law applicable to the arbitration agreement 28

Parties are free to choose the applicable law governing the arbitration (i. e. the curial law) and the contract itself (i. e. the proper law of the contract). The choice of law for the main contract also implies a choice of law for the arbitration agreement.51 However, the applicable law sometimes depends on the type of issue in dispute. For instance, the capacity of parties to enter into the arbitration agreement is determined by the personal law(s) of the parties (i. e. the law of the individual’s domicile (lex domicilii)). Where issues of arbitrability are concerned, Singapore Courts have accepted that it is the law of the seat of arbitration (i. e. lex arbitri) that forms the applicable law.52 The formal validity or form of the arbitration agreement is also governed by the lex arbitri.53

3. The validity of the arbitration agreement (capacity, arbitrability, form) 29

a) Capacity to conclude arbitration agreements. A person domiciled in Singapore has the capacity to enter into arbitration agreements as long as he has the capacity to enter into commercial contracts.54 In this regard, minors and parties with mental incapacity have generally no capacity to conclude contracts, including arbitration agreements. Prior to the Civil Law (Amendment) Act 2009, the age of majority in Singapore was 21, and pursuant to the amendments introduced in 2009, the age of contractual capacity has since been reduced to 18.55 The test for whether a person lacked mental capacity to enter a contract and/or transaction was whether the party had the requisite ability to understand the contract that he was entering into.56

47 See Government of the Republic of the Phillipines v. Phillipine International Air Terminals Co., Inc. [2006] SGHC 206. 48 Woh Hup (Pte) Ltd v. Property Development Ltd [1991] 3 MLJ 82; BCY v. BCZ [2016] SGHC 249 at [1]. 49 BCY v. BCZ [2016] SGHC 249. 50 Article 16(1), First Schedule, IAA. 51 BCY v. BCZ [2016] SGHC 249 at [49]–[66], overruling FirstLink Investments Corp. Ltd v. GT Payment Pte Ltd [2014] SGHCR 12. However, as regards a freestanding arbitration agreement (outside the main contract), BCY held that the law governing the arbitration agreement would be the law of the seat (at [67]). 52 Navigator Investment Services Ltd v. Acclaim Insurance Brokers Pte Ltd [2010] 1 SLR 25 at [41]. 53 Navigator Investment Services, supra fn. 52 at [41]. 54 Halsbury’s Laws, supra fn. 17 at [20.019]. 55 Section 35 of Civil Law Act (Cap. 43). 56 Che Som bte Yip v. Maha Pte Ltd [1989] 2 SLR(R) 60 at [24]. A contract which has been concluded pursuant to mental incapacity is voidable and not void.

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Where a bankrupt is a party to a contract containing an arbitration agreement before 30 the commencement of his bankruptcy, the arbitration agreement shall be enforceable by or against the Official Assignee if the Official Assignee adopts the contract subsequently.57 The Official Assignee is deemed to be an officer of the Court in Singapore and its role is to expeditiously distribute to creditors the bankrupt’s assets as well as to investigate the bankrupt’s conduct in bankruptcy. Where government proceedings are concerned, the Singapore Government is bound by any arbitration agreement it concludes, but only if the agreement was concluded with proper authority. In this regard, the IAA expressly provides that provisions in the IAA shall similarly apply to the Singapore Government.58 b) Arbitrability. The subject matter of the arbitration must be arbitrable, viz., the 31 dispute must be capable of being resolved by arbitration. The fact that any written law confers jurisdiction in respect of any matter on any court of law but does not refer to the determination of that matter by arbitration shall not, of itself, indicate that a dispute over that matter is not capable of determination by arbitration.59 As a general rule then, most disputes that parties agree to resolve by arbitration are 32 arbitrable unless it is contrary to public policy to do so.60 The IAA does not define what constitutes matters of public policy. Notwithstanding this, Singapore Courts have held the following as potential subjects which may raise issues of public interest: “citizenship or legitimacy of marriage, grants of statutory licences, validity of registration of trademarks or patents, copyrights [and] winding-up of companies”.61 Separately, it has also been suggested that disputes relating to the law of champerty62 and/or the operation of the insolvency regime also involve issues of public interest that may not be arbitrable.63 Legislative reform of 2019 introduced a new part IIA into the IAA, specifying that intellectual property disputes are arbitrable.64 The Singapore Court of Appeal has held that minority oppression claims under 33 section 216 of the Companies Act (Cap. 50) are arbitrable under Singapore law.65 The Court of Appeal held that a claim for relief under section 216 of the Companies Act was on a different footing from the liquidation of an insolvent company or avoidance claims that arise upon insolvency, and generally did not engage the public policy considerations involved in the latter two situations such that the resolution of such a minority oppression claim by way of arbitration was contrary to public policy.66 c) Form of the arbitration agreement. Under Singapore law, the arbitration agree- 34 ment must be in writing. However, Singapore has departed from the ML 198567 by 57

Section 148A, Bankruptcy Act (Cap. 20). Section 34, IAA. 59 Section 11(2), IAA. 60 Section 11(1), IAA. 61 Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd [2006] 3 SLR(R) 174 at [72]. 62 Otech Pakistan Pvt Ltd v. Clough Engineering Ltd [2007] 1 SLR 989 and Bevan Ashford v. Geoff Yeandle (Contractors) Ltd [1999] Ch 239. 63 Larsen Oil and Gas Pte Ltd v. Petropod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21. See further, Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) v. Larsen Oil and Gas Pte Ltd [2010] SGHC 186 where the High Court examined the arbitrability of disputes concerning avoidance provisions in Singapore insolvency law. 64 Section 26B, IAA. 65 Tomolugen Holdings Ltd v. Silica Investors Ltd [2016] 1 SLR 373; L Capital Jones Ltd v. Maniach Pte Ltd [2017] 1 SLR 312. 66 Tomolugen Hodlings, supra fn. 65 at [84] and [88]. See also BTY v. BUA [2019] 3 SLR 786 at [148] to [161]. 67 Article 7(2) ML 1985 specifies that an agreement is in writing if it is contained in (i) a document signed by the parties; or (ii) in an exchange of letters, telex, telegrams or other means of telecommunica58

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adopting a more expansive definition of what constitutes a written arbitration agreement. In Singapore, an arbitration agreement is deemed to be in writing as long as its contents were recorded in any form, whether or not the arbitration agreement had been concluded orally, by conduct or by other means.68 Further, the requirement that an arbitration agreement shall be in writing is satisfied by an electronic communication if the information contained therein may be accessed thereafter so as to be useable for subsequent reference by any party.69 35 In addition, in any arbitral or legal proceedings, where a party asserts the existence of an arbitration agreement in a pleading, statement of case or any other document in circumstances in which the assertion calls for a reply and the assertion is not denied, it shall be deemed that an effective arbitration agreement exists as between the parties to the proceedings.70 Insofar as the wording of the arbitration agreement is concerned, no particular words or phrases need to be used although the intention to arbitrate should be unequivocal. In this regard, where parties are ambiguous as to the preferred mode of dispute resolution (for instance, either litigation or arbitration), the Singapore High Court has held that there would be no agreement to arbitrate as the dispute was not one which was required to be referred to arbitration.71 d) Termination of the arbitration agreement. An arbitration agreement, like any other type of contract, may be terminated by consent or with cause. However, the mere termination of an agreement containing an arbitration clause does not necessarily render the arbitration clause inoperative.72 In this regard, the termination of the underlying contract containing the arbitration agreement and/or clause is itself an arbitrable issue.73 37 The AA expressly provides that an arbitration agreement shall not be discharged by the death of any party to the agreement but shall continue to be enforceable by or against the personal representative of the deceased party.74 While there is no corresponding provision to this effect in the IAA, there is no reason why this should not also be the position under the IAA. In this regard, the death of an arbitrator should not, as a matter of general principle, terminate and/or render the arbitration agreement inoperable. The SIAC 2016 Rules, for instance, expressly provide for the nomination and replacement of an arbitrator in the event of death, resignation or removal.75 36

tion which provide a record of the agreement; or (iii) in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. 68 Section 2A(4), IAA, which was introduced in 2012 through the International Arbitration (Amendment) Act 2012. 69 Section 2A(5), IAA. In the context of bills of ladings, a reference in a bill of lading to a charter-party or other document containing an arbitration clause shall constitute an arbitration agreement in writing if the reference is such as to make that clause part of the bill of lading. See section 2A(8), IAA. Similarly, a reference in a contract to any document containing an arbitration clause shall constitute an arbitration agreement in writing if the reference is such as to make that clause part of the contract: see section 2A(7), IAA. 70 Section 2A(6), IAA. 71 The “Dai Yun Shan” [1992] 1 SLR(R) 461 at [15]. In this case, the arbitration clause offered a choice between court proceedings and arbitration: “All disputes arising under or in connection with this bill of lading shall be determined by Chinese law in the courts of, or by arbitration in, the People’s Republic of Singapore”. The High Court declined to stay the Court proceedings in Singapore as the intention to arbitrate was not clear, and hence the dispute was not one that was required to be referred to arbitration. 72 Mancon (BVI) Investment Holding Co. Ltd v. Heng Holdings SEA (Pte) Ltd [2000] 3 SLR 220 at [28] to [29]. 73 Woh Hup, supra fn. 48 at [32], citing the English decision of Heyman v. Darwin Ltd [1942] AC 356. 74 Section 5(1), AA. 75 Rule 17.1, SIAC 2016 Rules.

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4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. Generally, the arbitration agree- 38 ment binds only the parties to the agreement. While the parties are usually the signatories to the arbitration agreement, the agreement may also bind the parties’ assignees, personal representatives and successors in title. In this regard, section 6(5) (a) of the IAA provides that any party or “any person claiming through or under such party” may seek to enforce the arbitration agreement.76 In the context of third party contract rights, the Contract (Rights of Third Parties) 39 Act (Cap. 53B) also provides that a third party beneficiary of a contract may enforce a substantive contractual term against the promissor in arbitration if the contract is subject to a term providing for the submission of disputes to arbitration.77 In such cases, for the purpose of the IAA, the third party beneficiary is treated, for all intents and purposes, as if he were a party to the arbitration agreement.78 Likewise, where a principal makes a contract through an agent acting with authority (actual or otherwise), the principal is bound by the terms of the contract as agreed by the agent, including any arbitration clause or agreement to the same.79 b) Substantive scope of the arbitration agreement. The substantive scope of the 40 arbitration agreement depends on an interpretation of the precise wording of the agreement. The Singapore Court of Appeal has expressed preference for the general rule that arbitration clauses should be construed broadly, such that all manner of claims (whether statutory or common law) should be regarded as falling within the ambit of the arbitration clause unless there are good reasons to conclude otherwise.80 While some decisions in the past have drawn a distinction between the arbitral scope of phrases such as “arising under” and “arising out of” or even “arising out of and in connection with”,81 it appears that the modern approach is to put aside previous authorities on the various forms of words used in arbitration agreements. Rather, the Singapore Courts tend to assume that parties had entered into the arbitration agreement with a rational commercial purpose, and as best as it is able to, to give effect to such an aim.82 Consequently, it appears that greater emphasis is placed by Singapore Courts on principles such as party autonomy; the underlying commercial purpose of the contract; and the intention of parties. For example, the Singapore Court of Appeal held that a dispute resolution clause that gives only one party the right to elect for arbitration was a valid arbitration clause, and that upon the election to litigate, the subject matter would fall outside the scope of reference.83 c) Pathological arbitration clauses. Pathological arbitration clauses (i. e. defective 41 arbitration clauses) create problems of interpretation for the Singapore Courts because 76

Section 6(5)(a), IAA. Section 9, Contract (Rights of Third Parties) Act (Cap. 53B). 78 Ibid. 79 Overseas Union Insurance Ltd v. Turegum Insurance Co. [2001] 2 SLR(R) 285. 80 Larsen Oil and Gas Pte Ltd v. Petropod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21 at [19]. 81 Previously, Singapore Courts have held that the phrase “arising out of” seemed to be more restrictive than the phrase “arising in connection with”, which therefore appeared to require a more direct connection between the dispute and the underlying contract: see Sabah Shipyard (Pakistan) Ltd v. Government of the Islamic Republic of Pakistan [2004] 3 SLR(R) 184 at [18]. 82 Rals International Pte Ltd v. Cassa di Risparmio di Parma e Piacenza SpA [2016] 5 SLR 455 at [30][34]. 83 Wilson Taylor Asia Pacific Pte Ltd v. Dyna-Jet Pte Ltd [2017] SGCA 32. 77

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they are inherently uncertain, which makes interpretation of such clauses difficult. Examples of some defects could be incomplete particulars, ambiguity of the clause or inconsistency in its terms. As a general rule, Singapore Courts seek to give effect to parties’ intention to arbitrate, and will therefore prefer an interpretation of a pathological clause which does so over one which does not, so long as the arbitration can be carried out without prejudice to the rights of either party and so long as giving effect to such intention does not result in an arbitration that is not within the contemplation of either party.84 42 The Singapore High Court has also upheld hybrid arbitration clauses which required an arbitration to be conducted in accordance with ICC Rules as administered by the “Arbitration Committee of Singapore”.85 Notwithstanding the non-existence of such an arbitral institution in Singapore, the High Court held that the arbitration clause was enforceable so long as parties could secure the agreement of an arbitral institution in Singapore to conduct a hybrid arbitration in accordance with ICC Rules.86 Even though parties had committed themselves to be bound by a hybrid arbitration clause, they are free to depart from this and agree as between themselves to thereinafter submit their arbitration to an entirely different form of arbitration, such as a conventional SIAC arbitration as opposed to a hybrid arbitration.87

5. The effect of the arbitration agreement and Kompetenz-Kompetenz 43

An arbitral tribunal’s jurisdiction is derived from the parties’ agreement to arbitrate and this gives rise to potential jurisdictional challenges, which may be raised at various stages of the arbitral process. While a party has the discretion as to when he wishes to make such objections, any failure to do so earlier rather than later could lead to estoppel-type arguments that the party has waived his rights to raise such jurisdictional objections (infra mns 45–46).

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a) Enforcing arbitration clauses and Kompetenz-Kompetenz. The doctrine of Kompetenz-Kompetenz is entrenched as part of Singapore law.88 The IAA provides that an arbitral tribunal shall have the competence to rule on its own jurisdiction, including any objections as to the existence or validity of the arbitration clause,89 and under the IAA, on request of a party courts must stay litigation and direct the parties to proceed to arbitration unless “the arbitration agreement is null and void, inoperative or incapable of being performed”.90 Singapore courts will refer parties to arbitration as soon as they are satisfied “on a prima facie basis” that an arbitration agreement exists.91 However,

84 Insigma Technology Co. Ltd v. Alstom Technology Ltd [2009] 3 SLR(R) 936; Ling Kong Henry v. Tanglin Club [2018] 5 SLR 871. 85 HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd [2013] SGHCR 5 (“HKL”). See further, HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd [2013] SGHCR 8. 86 HKL, supra fn. 85 at [28] and [29]. 87 HKL, supra fn. 85 at [38]. However, the High Court in HKL conceded that while this was a “practical solution which avoids the procedural gymnastics of having the SIAC conduct a hybrid arbitration by applying the ICC rules”, the likelihood of parties opting for such a solution would probably remain rare and few. 88 See for instance, The “Titan Unity” [2014] SGHCR 4 and Aloe Vera, supra fn. 61. 89 Article 16, First Schedule, IAA. 90 Section 6(2), IAA. As regards domestic arbitration, the court has discretion whether to grant a stay: Hwang/Boo/Han, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Supplement No. 99, June 2018, p. 14. 91 Malini Ventura v. Knight Capital Pte Ltd [2015] SGHC 225, [36]–[37]; Tomolugen Holdings Ltd v. Silica Investors Ltd [2015] SGCA 57, [2016] 1 SLR 373, [65]–[70].

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where an arbitrator rules on his own jurisdiction, such decisions are not always final and binding, and appeals may be lodged with the courts within certain time limits.92 b) Preclusion of jurisdictional defences. There are certain prescribed time limits 45 within which jurisdictional defences must be brought, whether challenging the jurisdiction of an arbitral tribunal or a state court before which proceedings were brought in breach of an arbitration agreement. An application for a stay in favour of arbitration will be refused if a party has already submitted pleadings or taken steps in the proceedings (section 6(1), IAA). Conversely, a plea that the arbitral tribunal has no jurisdiction shall be raised no later than the submission of the statement of defence,93 and an arbitral tribunal may rule on such a plea either as a preliminary matter or in an award on the merits.94 Where an arbitral tribunal rules as a preliminary issue that it has jurisdiction95 or on a plea at any stage of the arbitral proceedings that it has no jurisdiction,96 an appeal to the Singapore High Court on the tribunal’s ruling on jurisdiction is permissible within thirty (30) days97 of receiving notice of that ruling. A failure to appeal within thirty (30) days does not necessarily preclude a party from 46 raising a jurisdictional challenge when the award is being enforced later. In this regard, the Singapore Court of Appeal has previously held that it is integral to a party’s “choice of remedies” that he may choose when to make a jurisdictional challenge: either “actively” at the outset by challenging the jurisdiction of the arbitral tribunal, or “passively”, at the stage when the arbitral award is being enforced.98 The Singapore Court of Appeal was of the view that it was not consistent with the intention and philosophy of the ML 1985 (as evidenced by the travaux préparatoires of the ML 1985)99 that a party should be time barred from raising a jurisdictional defence when resisting the enforcement of an arbitral award by mere failure to mount such a challenge when it had the chance to do so earlier. c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. 47 Singapore court decisions on an arbitral tribunal’s jurisdiction are generally binding on the parties inter se as well as the arbitral tribunal itself since an arbitral tribunal only derives jurisdiction from the parties’ agreement to arbitrate. Within the hierarchy of state courts in Singapore, section 10 of the IAA provides that 48 if an arbitral tribunal rules that it has jurisdiction as a preliminary question or that it has no jurisdiction subsequently at any stage of the arbitral proceedings, then there can be an appeal to the High Court,100 and subsequently the Court of Appeal if the High Court grants leave.101 If the High Court declines to grant leave, this is final and binding and there shall be no appeal against the High Court’s refusal to grant leave.102 It should 92

Kempinski Hotels SA v. PT Prima International Development [2011] 4 SLR 633 at [58]. Article 16(2), First Schedule, IAA. 94 Article 16(3), First Schedule, IAA. 95 Section 10(3)(a), IAA read with article 16(3), First Schedule, IAA. In PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2007] 1 SLR 597, the Singapore Court of Appeal held that no appeal could be brought where the tribunal rules as a preliminary issue that it has no jurisdiction. In other words, recourse to state courts is precluded in the context of negative jurisdictional rulings, viz., where the arbitral tribunal decides on a plea as a preliminary question that it has no jurisdiction. 96 Section 10(3)(b), IAA. 97 Section 10(3), IAA. 98 PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v. Astro Nusantara International BV [2014] 1 SLR 372. 99 PT First Media, supra fn. 98 at [53] to [55] and [65] to [71]. 100 Section 10(3), IAA. 101 Section 10(4), IAA. 102 Section 10(5), IAA. 93

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be noted that the jurisdiction of the court to decide on the jurisdiction of the arbitration tribunal is an original jurisdiction and not an appellate one, and the state court is empowered to hear the matter de novo, i. e. afresh, to take into account any issues of fact and to examine any witnesses, if necessary.103

III. The arbitral tribunal and the conduct of the arbitral proceedings 49

The parties are generally free to agree on the manner of conduct of the arbitral proceedings. This includes agreeing on provisions as regards the appointment and composition of the arbitral tribunal or whether the arbitral procedure should be ad hoc or institutional in nature. In the absence of any such agreement, the regime under the IAA is liberal, and reserves substantial discretion to the arbitral tribunal.104

1. The arbitral tribunal, impartiality and independence of the arbitrator Under the IAA, where the number of arbitrators is not pre-stipulated by the parties, there shall be a single arbitrator.105 In an arbitration of three arbitrators, each party shall appoint one arbitrator, and the parties shall by agreement appoint the third arbitrator.106 Where the parties are unable to agree on the appointment of the third arbitrator within thirty (30) days of the receipt of the first request by either party to do so, the appointment shall be made, upon the request of a party, by the appointing authority, which the IAA has deemed to be the President of the Court of Arbitration of the SIAC.107 51 Insofar as the qualifications of the arbitrators are concerned, while there are no special qualifications required of arbitrators, parties are free to specify any special qualifications for the particular dispute at hand.108 However, the chosen arbitrator must be impartial and independent. 50

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a) Duty to disclose. Under the IAA, the arbitrator is required to disclose any potential circumstances, which could likely give rise to justifiable doubts of his impartiality and/or independence.109 In this regard, it has been held that the duty of disclosure is a continuing one until the conclusion and/or termination of the arbitral proceedings. In other words, the duty of disclosure is not just present at the commencement of the arbitration but also continues throughout the entire arbitration proceeding up and until the handing or recording of the arbitral award.110

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b) Grounds for challenge. The IAA specifies three grounds for challenging the appointment of an arbitrator, viz., (i) the lack of impartiality of the arbitrator; (ii) the arbitrator’s lack of independence; and (iii) the arbitrator’s lack of the qualifications specified by parties.111 Insofar as impartiality and independence are concerned, the Singapore Courts have in the past removed an arbitrator on the basis that there was a 103

Insigma Technology, supra fn. 84 at [21] to [22]. Article 19, First Schedule, IAA. 105 Section 9, IAA. 106 Section 9A, IAA. 107 Sections 8(2) and 8(3), IAA. 108 For a further discussion, see Halsbury’s Laws, supra fn. 17 at [20.055]. 109 Article 12, First Schedule, IAA. 110 Dato’ Dr Muhammad Ridzuan bin Mohd Salleh v. Syarikat Air Terengganu Sdn Bhd [2012] 3 MLJ 737. 111 Article 12, First Schedule, IAA. 104

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real likelihood of bias.112 It has also been said that if there is a reasonable suspicion of bias present, an arbitrator ought not be allowed to continue to act in the matter.113 It appears therefore that at the very least, a party challenging an arbitrator must show that a “reasonable and fair-minded person sitting in court and knowing all the relevant facts have a reasonable suspicion that a fair trial for the applicant was not possible”.114 In all such challenges, mere speculation is insufficient and the Singapore Courts have emphasized the need for proof and evidence of bias.115 Common scenarios that could give rise to a likelihood of bias include personal, business and/or professional relationships with a party in the arbitration.116 c) Procedural aspects and preclusion of grounds for challenge. Parties are free to 54 agree on a procedure for challenging the appointment of an arbitrator.117 Failing such agreement, a party intending to challenge an arbitrator shall do so within fifteen (15) days of becoming aware of either of the following: (i) the constitution of the arbitral tribunal; or (ii) any circumstances set out in article 12(2) ML 1985 suggesting that the arbitrator should not act in the matter.118 In such a case, unless the arbitrator who has been challenged withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.119 The IAA also provides that parties may further bring the challenge to the Singapore 55 High Court within thirty (30) days after having received notice of the decision challenging the appointment of the arbitrator.120 The decision of the High Court is not subject to further appeals.121 While an appeal to the High Court is pending, the arbitral tribunal, including the arbitrator who has been challenged, may continue with the arbitral proceedings, including making an award.122 d) Failure or impossibility to act. In accordance with the ML 1985, the IAA 56 provides that where an arbitrator becomes de jure or de facto unable to perform his duties, his mandate to act as arbitrator terminates if he withdraws from office or if the parties agree on his termination.123 Where there is any controversy as regards his termination, parties may request the High Court to decide on the termination of the arbitrator’s mandate, and the decision is non-appealable.124 In the event of such termination, a substitute arbitrator may be appointed in the same manner that applied to the appointment of the arbitrator that was removed.125

112 Turner (East Asia) Pte Ltd v. Builders Federal (HK) Ltd (No. 2) [1988] 1 SLR(R) 483. See also, Jeyaretnam Joshua Benjamin v. Lee Kuan Yew [1992] 2 SLR 310. 113 In Turner, although there was a real likelihood of bias on the facts, the Court held that in most cases, it should suffice if there is a reasonable suspicion of bias, and that the arbitrator is therefore unable to act impartially or independently. 114 Supra, Turner, fn. 112 at [71]. 115 Supra, Turner, fn. 112 at [95]. 116 See Halsburys Laws, supra fn. 17 at [20.056] and the cases cited therein. 117 Article 13(1), First Schedule, IAA. 118 Article 13(2), First Schedule, IAA. Article 12(2) ML 1985 provides: “An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence or if he does not possess qualifications agreed to by the parties” 119 Article 13(2), First Schedule, IAA. 120 Articles 13(3) and 6, First Schedule, IAA, read with section 8(1), IAA. 121 Article 13(3), First Schedule, IAA. 122 Article 13(3), First Schedule, IAA. 123 Article 14(1), First Schedule, IAA. 124 Article 14(1), First Schedule, IAA read with section 8(1), IAA. 125 Article 15, First Schedule, IAA.

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2. The arbitral proceedings 57

The arbitral proceedings are conducted in accordance with the procedure chosen by parties, but the IAA also provides for the following default procedures, where parties are unable to agree as to the same.

a) The request for arbitration. An arbitral proceeding is initiated by a request for arbitration and is deemed to commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.126 Where the SIAC Rules are adopted, the rules also provide that a party wishing to commence an arbitral proceeding shall file a Notice of Arbitration with the SIAC which shall comprise, inter alia, a demand that the dispute be referred to arbitration.127 59 Following the filing of the request for arbitration, the IAA provides that within the period of time agreed by the parties or as otherwise determined by the arbitral tribunal, the claimant and the respondent shall submit their respective statements of claim and defence.128 Where the respondent fails to deliver his statement of defence, the arbitral tribunal may proceed with the arbitration,129 but the mere failure to do so shall not be in itself an admission of the claimant’s allegations.130 The foregoing applies equally under the SIAC Rules.131 58

b) Equality of arms, fair trial principles and the right to be heard. The IAA provides that all parties shall be treated with equality and shall be afforded a full opportunity to present their case, in accordance with the fair hearing rule.132 The fair hearing rule provides that all parties have the right to be heard. On a party’s right to be heard, the Singapore Court of Appeal has recognized that while a party has the right to be heard on every relevant issue, the overriding concern remains that of fairness.133 In this regard, the Court of Appeal recognized that fairness was a “multidimensional concept” and it would equally be unfair if a successful party was deprived of the fruits of its labour as a result of a dissatisfied party raising a multitude of technical challenges after an arbitral award is made.134 In all cases, the dissatisfied party has thus to demonstrate that it suffered actual or real prejudice.135 61 The fair hearing rule forms part of the principles of natural justice. In a decision of the High Court, the Court, while recognizing that the content of such rules were generally lacking in precision, nonetheless offered guidance on what would constitute the “sub-rules” of the rules of natural justice that may be applicable in an arbitration, viz., the duty of an arbitrator to (a) give reasons and explanations; (b) attempt to understand the parties’ submissions; (c) deal with arguments presented; and (d) not look beyond the parties’ submissions.136 The IAA provides for the setting aside of an arbitral award on the basis of a breach of the rules of natural justice.137 A bare allegation 60

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Article 21, First Schedule, IAA. Rule 3.1, SIAC 2016 Rules. 128 Article 23 (1), First Schedule, IAA. 129 Article 25(b), First Schedule, IAA. 130 Article 25(b), First Schedule, IAA. 131 Rules 3, 4 and 20.0, SIAC 2016 Rules. 132 Article 18, First Schedule, IAA. 133 Soh Beng Tee, supra fn. 42. See further, LW, supra fn. 42. 134 Soh Beng Tee, supra fn. 42 at [65]. 135 Soh Beng Tee, supra fn. 42 at [86] to [91]. 136 TMM Division Maritima SA De CV v. Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972. See further, BLB v. BLC [2013] 4 SLR 1169. 137 Section 24(b), IAA. 127

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of a breach of natural justice is insufficient, and a party should be clear in its allegations on exactly which rule of natural justice was contravened.138 c) Confidentiality. Although confidentiality has long been assumed a feature in 62 arbitration, the IAA does not expressly provide that arbitration proceedings shall remain confidential. However, the Singapore High Court has held that confidentiality is an implied obligation on any party participating in arbitration.139 The implied duty is however, subject to certain exceptions: for instance, the disclosure of documents is allowed where the other party consents to the disclosure or where a Singapore Court orders for such disclosure in situations where disclosure is reasonably necessary or where disclosure is in the interests of justice.140 Confidentiality may also be lost where the confidential information enters the public 63 domain. For instance, where an arbitration award is registered as a Singapore judgment, the award would be deemed to have entered the public domain and no privacy could attach to enforcement proceedings that are subsequently attendant on the judgment.141 Where the SIAC Rules are adopted, a party or any arbitrator shall not without the 64 prior written consent of all the parties, disclose to a third party any matter relating to the arbitration proceedings, save in certain exceptions, such as pursuant to the order of a court of a competent jurisdiction or in compliance with the request of any regulatory body.142 d) Expedited procedure. Where the SIAC Rules are adopted, a party to the arbitral 65 proceedings may apply, prior to the constitution of the tribunal, to the SIAC Registrar for the arbitral proceedings to be conducted in accordance with an expedited procedure if (a) the amount in dispute does not exceed S$6 million, (b) the parties agree, or (c) the case is of exceptional urgency.143 Under the expedited procedure, the following procedure shall apply: (a) the SIAC 66 Registrar may abbreviate any time limits under the SIAC Rules, (b) the case shall be referred to a sole arbitrator, unless otherwise determined by the President of the Court of Arbitration of the SIAC, (c) the tribunal may, in consultation with the parties, decide if the dispute is to be decided on the basis of documentary evidence only, or if a hearing is required for the examination of any witness as well as for any oral argument, (d) the final award shall be made within six months from the date when the tribunal is constituted, unless the SIAC Registrar extends the time in exceptional circumstances only, and (e) the tribunal may state the reasons upon which the final award is based in summary form, unless the parties have agreed that no reasons are to be given.144 e) Early dismissal of claims and defences. Included in the SIAC 2016 Rules is a new 67 provision allowing for the early dismissal of claims and defences on the basis of (a) a claim or defence being manifestly without legal merit, or (b) a claim or defence is manifestly outside the jurisdiction of the tribunal.145 An application for the early dismissal of a claim or defence will have to state in detail 68 the supporting facts and legal basis.146 An order or award on the application, with 138

PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation [2010] 4 SLR 672 at [42]. Myanma Yaung Chi Oo Co. Ltd v. Win Win Nu [2003] 2 SLR(R) 547. 140 Myanma Yaung Chi Oo, supra fn. 139 at [9]. 141 International Coal Pte Ltd v. Kristle Trading Ltd [2009] 1 SLR(R) 945 at [85]. 142 Rule 39, SIAC 2016 Rules. 143 Rule 5.1, SIAC 2016 Rules. 144 Rule 5.2, SIAC 2016 Rules. 145 Rule 29.1, SIAC 2016 Rules. 146 Rule 29.2, SIAC 2016 Rules. 139

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reasons, may be made in summary form and shall be made within 60 days of the date of filing of the application, unless the SIAC Registrar extends the time in exceptional circumstances.147 f) The arbitral award. The IAA defines an arbitral award as a “decision of the arbitral tribunal on the substance of the dispute and includes any interim, interlocutory or partial award.”148 The definition however excludes procedural directions and/or orders an arbitral tribunal might make to regulate the conduct of the arbitration.149 As the award is a decision on the substance of the dispute, it should contain all matters in dispute.150 An arbitrator who fails to consider all such matters in his award is arguably in breach of his duties to consider all essential matters before him in the dispute. 70 In terms of form, arbitral awards shall be in writing and shall also be signed by the arbitrator(s).151 Further, the award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given or if the award is on agreed terms.152 The award shall also state its date and the place of arbitration153 and a copy signed by the arbitrator(s) shall be delivered to each party after the award is made.154 69

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g) Termination of the arbitration. When a final arbitral award is delivered, the arbitral proceedings are deemed terminated.155 Alternatively, the arbitration may also be terminated without an award in the following instances: (a) when the claimant withdraws his claim, unless the respondent objects thereto and the arbitral tribunal recognizes a legitimate interest on the respondent’s part in obtaining a final settlement of the dispute;156 (b) where the parties agree on the termination of the proceedings;157 or (c) where the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.158 The termination of the arbitration does not, however, terminate the tribunal’s mandate to make any necessary typographical or clerical amendments to the award.159

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h) The costs of the arbitration. The costs of the arbitration are awarded usually at the discretion of the arbitral tribunal. In line with a party’s right to be heard, a tribunal should afford parties an opportunity to address the tribunal on the issue of costs. In this regard, a Singapore court would rarely interfere with the discretion of the tribunal where the issue of costs is concerned. It has been said that there is generally no public interest concerns warranting the intervention of state courts in the legal costs of parties to a one-off and private dispute resolution process, such as arbitration.160 Notwithstand-

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Rule 29.4, SIAC 2016 Rules. Section 2, IAA. 149 Section 2, IAA read with Section 12, IAA. 150 Official Assignee v. Chartered Industries of Singapore Ltd [1978] 2 MLJ 99. 151 Article 31(1), First Schedule, IAA. 152 Article 31(2), First Schedule, IAA. 153 Article 31(3), First Schedule, IAA. 154 Article 31(4), First Schedule, IAA. 155 Article 32(1), First Schedule, IAA. 156 Article 32(2)(a), First Schedule, IAA. 157 Article 32(2)(b), First Schedule, IAA. 158 Article 32(2)(c), First Schedule, IAA. 159 Article 32(3), First Schedule, IAA. 160 VV v. VW [2008] 2 SLR(R) 929. See further, Dexia Bank, supra fn. 95 and John Holland Pty Ltd v. Toyo Engineering Corp. (Japan) [2001] 1 SLR(R) 443. These decisions highlight the uphill task that any party to an international arbitration would face in seeking to set aside an award of costs on the ground of breach of public policy. Public policy challenges must entail some clear injury to the public good and/or an apparent violation of the forum’s morality and justice. 148

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ing this, the costs awarded by the arbitrator must not be excessive.161 Further, in deciding the quantum of costs to be awarded, an arbitrator may take into account all defences and set-offs that were raised by the respondent.162 The assessment of costs is an exercise in estimating an amount of reasonable fees and is 73 not a determination of fact.163 The rules of evidence therefore do not apply in a manner such as to preclude the arbitrator from having regard to matters and/or information that he possesses but which were not adduced in evidence by either party.164

3. Evidence, discovery, disclosure An arbitral tribunal is not bound by the common law rules of evidence as the Evidence Act (Cap. 97) expressly provides that its provisions shall not govern proceedings in arbitrations.165 Parties therefore have the discretion to agree on any procedure of evidence.166 There will, however, be instances where specific legislation (not the Evidence Act) imposes specific rules of evidence to arbitral proceedings. These include, for example, the admissibility of instruments chargeable with stamp duty in arbitration proceedings.167 Where there is no pre-agreed rule between parties as to whether a particular document is relevant and therefore discoverable, the tribunal may also decide for itself, after hearing submissions from the parties, what procedure it is to adopt.168 As a general rule, an arbitration tribunal has broad discretion to determine the relevance and admissibility of all evidence as it deems fit, including the power to determine the admissibility, relevance, materiality and weight of any evidence.169 In this regard, arbitrators may have recourse to either the principles applied in Singapore court proceedings, viz., the Rules of Court, or the principles set out in the International Bar Association Rules on Taking of Evidence in International Commercial Arbitration. Due to the fundamental differences between arbitrations and court proceedings, the former is seldom applied or adopted by arbitrators. The IAA also provides that an arbitral tribunal shall have the power to make the following orders where necessary: (a) the discovery of documents and interrogatories; (b) the giving of evidence by affidavit; and (c) the preservation and interim custody of evidence.170 As a general rule, an arbitral tribunal has no jurisdiction or power to order discovery from non-parties. Nevertheless, it is open to parties to apply to the Singapore courts to invoke its assistance in taking evidence from non-parties.171 However,

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VW, supra fn. 160 at [28] to [31]. VW, supra fn. 160 at [45]. 163 VW, supra fn. 160 at [52] to [59]. 164 VW, supra fn. 160 at [52] to [59]. 165 Section 2(1) of the Evidence Act provides that save for Part IV of the Evidence Act, provisions in the Evidence Act have no general application to arbitral proceedings. 166 Article 19(1), First Schedule, IAA. 167 Section 52(1) of the Stamp Duties Act provides that “subject to this section, no instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless the instrument is duly stamped.” 168 Dongwoo Mann+Hummel Co. Ltd v. Mann+Hummel GmbH [2008] 3 SLR(R) 871 at [82] to [87]. 169 Article 19(2), First Schedule, IAA. 170 Section 12(1), IAA. 171 Sections 13 and 14(1)(repealed)of the IAA provide that writs of subpoena may be issued to witnesses pursuant to an order of court for the purpose of compelling witness attendance before the arbitral tribunal and/or for the production of relevant documents. In this regard, see further, The Lao People’s Democratic Republic v. Sanum Investments Ltd [2013] 4 SLR 947. 162

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Singapore courts will generally refrain from interfering with the arbitral tribunal’s discretion to decide on the scope of discovery.

4. The law governing the dispute and lois de police a) Choice of law. The IAA provides that the law governing the dispute or the “proper law of the contract” may either be agreed by the parties or in the absence of such agreement be determined by the rules governing the conflict of laws.172 Notwithstanding parties’ express choice of governing law, there may be mandatory laws (lois de police) which apply to the arbitration as a matter of public policy (ordre public). 79 The Singapore Courts, generally, defer to the parties’ express choice of substantive law.173 In the absence of any express choice of law, the Singapore Courts have regarded the nominated place of arbitration as the best evidence of an implied choice of law for the law of the contract.174 The choice of law is, however, subject to certain caveats, such as that the application of the chosen law must not be contrary to public policy and the choice of substantive law must be bona fide and legal.175 78

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b) Law governing the dispute absent a choice of law. Where there is no clear choice of law (whether express or implied) and an arbitrator has to decide the proper law of the contract based on the applicable conflict of laws rules, the arbitrator applies the law which has the “most real” and “substantial” connection to the dispute.176 Relevant factors include, inter alia, the chosen place of arbitration,177 the place where the contract was formed,178 the place of substantial performance of the contract, and to a lesser extent, the language of the contract. Where only Singapore law applies as the proper law of the contract, it is unlikely that parties would be able to, by consent, exclude parts of Singapore law from applying, particularly if the result of doing so may be against public policy.179

c) Impact of mandatory law and lois de police. Lois de police or mandatory rules are rules that apply to arbitrations irrespective of the chosen governing law. It is often the case that such mandatory rules are foreign and therefore absent in the legal system of the chosen law. 82 Such mandatory rules, which may relate to areas of public concern, such as criminal law, corruption or competition law, apply only if they (i) represent a fundamental aspect of international public policy, and (ii) are of sufficient connection and nexus to the underlying dispute and/or transaction.180 It has been observed that mandatory rules are 81

172 Article 28, First Schedule, IAA, which provides that failing any express choice of governing law by the parties, the arbitral tribunal shall apply the substantive law of the contract as determined by the conflict of laws rules which it considers applicable. 173 Peh Teck Quee v. Bayerische Landesbank Girozentrale [1999] 3 SLR(R) 842 at [12], viz., where parties have expressed their intention as to the law governing the contract, their expressed choice of governing law would generally determine the proper law of the contract. See further, Pacific Electric Wire & Cable Co. Ltd v. Neptune Orient Lines Ltd [1993] 2 SLR(R) 102. 174 Re An Arbitration between Hainan Machinery Import and Export Corp. and Donald & McArthy Pte Ltd [1995] 3 SLR(R) 354 at [41]. 175 Peh Teck Quee, supra fn. 173 at [12]. 176 Rickshaw Investments Ltd v. Nicolai Baron von Uexkull [2007] 1 SLR(R) 377. 177 Minoutsi Shipping Corp. v. Trans Continental Shipping Services (Pte) Ltd [1971–1973] SLR(R) 21. 178 Pacific Recreation Pte Ltd v. SY Technology Inc. [2008] 2 SLR(R) 491. 179 Considerations of public policy remain important and relevant as regards the arbitrability of a dispute: see for example, Section 11, IAA. It would be curious if parties are permitted to exclude parts of Singapore governing law where the effect of doing so is contrary to public policy in Singapore. 180 Greenberg/Kee/Weeramantry, International Commercial Arbitration, 2011, at 3.99 and 3.119.

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seldom applied in the Asia-Pacific region,181 and appears to be the case in Singapore as well. Although Singapore is not bound by the recent European Community Regulation on the Law Applicable to Contractual Obligations, viz., the Rome I Regulation,182 article 9 of the Rome I Regulation may provide a useful working definition of what constitutes lois de police.183 Insofar as foreign legislation or rules are concerned, it bears highlighting that the IAA 83 expressly provides that the Foreign Limitation Periods Act (which was passed in 2012) applies to international arbitrations.184 It appears at least that where Singapore law is the proper law chosen, there remains some scope for the application of foreign limitation periods.185

5. Interim relief in arbitration a) Interim relief before Singapore courts. The Singapore High Court is empowered 84 to provide interim relief to assist in international arbitrations, irrespective of whether the seat/place of arbitration is in Singapore.186 Such interim relief includes interim injunctions and/or orders to freeze assets. However, the High Court may refuse to make such interim orders if in the opinion of the Court, the fact that the place of arbitration is outside Singapore makes it inappropriate to make such an order.187 In an exceptional case, the Singapore High Court may make an order of interim relief 85 to preserve evidence or assets on the application of a proposed party to the arbitral proceedings.188 However, where the case is not exceptional and/or urgent, the High Court shall make an interim order only on the application of a party (not proposed party) to the arbitral proceedings, and which is made (i) with the permission of the arbitral tribunal or the agreement in writing of the other parties, and (ii) upon notice to the other parties and to the arbitral tribunal.189 In every case, however, the High Court shall only provide interim relief to the extent 86 that the arbitral tribunal has no power or is unable for the time being to act effectively.190 It has therefore been observed that the Singapore Courts would only intervene and grant interim relief in narrow circumstances, such as where the arbitral tribunal cannot be constituted expediently or where the arbitral tribunal has no jurisdiction to grant the relief sought.191 181

Greenberg/Kee/Weeramantry, International Commercial Arbitration, 2011, 3.112. Regulation No. 593/2008 of the European Parliament and of the Council dated 17 June 2008. 183 Greenberg/Kee/Weeramantry, International Commercial Arbitration, 2011, 3.102. 184 Section 8A, IAA. 185 Sections 3 and 4, Foreign Limitation Periods Act, 2012. 186 Section 12A, IAA. See also, article 9, First Schedule, IAA, which expressly provides that it is not incompatible with an arbitration agreement for a party to request an interim measure from a National Court before or during the arbitral proceedings, and for a National Court to grant such a measure. However, this was not always the case. Prior to the International Arbitration (Amendment) Bill, Bill No. 20 of 2009, which introduced section 12A, IAA, there was some controversy over whether a Singapore Court could grant interim relief in aid of a foreign arbitration. See for instance, Swift-Fortune Ltd v. Magnifica SA [2007] 1 SLR 629. See also, Chan/Crasta, (2008) SAcLJ 769. 187 Section 12A(3), IAA. On the exercise of the Court’s discretion as regards the appropriateness to make such an order, see further, Solvadis Commodity Chemicals GmbH v. Affert Resources Pte Ltd [2014] 1 SLR 174. 188 Section 12A(4), IAA. See further, Maldives Airport Co. Ltd v. GMR Male International Airport Pte Ltd [2013] 2 SLR 449 where the Singapore Court of Appeal granted an injunction pre-arbitration over assets in relation to certain contractual rights. 189 Section 12A(5), IAA. 190 Section 12A(6), IAA. 191 NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565 at [51] to [53]. 182

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b) Interim relief before the arbitral tribunal. The IAA provides that an arbitral tribunal is empowered to grant the following interim reliefs: (a) security for costs, (b) discovery of documents and interrogatories, (c) giving of evidence by affidavit, (d) the preservation, interim custody or sale of any property which is the subject-matter of the dispute, (e) the taking of samples, or any observation to be made of or experiment conducted upon, any property which is or forms part of the subject matter of the dispute; (f) the preservation and interim custody of any evidence for the purposes of the arbitral proceedings; (g) securing the amount in dispute, (h) ensuring that any award which may be made in the arbitral proceedings is not rendered ineffectual by the dissipation of assets by a party, and (i) an interim injunction or any other interim measures.192 88 Where parties adopt the SIAC Rules, the rules provide for the appointment of emergency arbitrators who may provide emergency relief before the constitution of the arbitral tribunal. These would include the power to order any interim relief as the emergency arbitrator deems necessary.193 However, once the arbitral tribunal is constituted, the tribunal may reconsider or vary such interim relief, which shall in any event cease to be binding if the arbitral tribunal is not constituted within ninety (90) days of such interim order.194 87

6. Multi-party arbitration 89

In the same manner as regular arbitrations, multi-party arbitrations are also based on party autonomy and consent. In both a joinder scenario (where existing parties bring in a new third party) or an intervention scenario (where a new third party intrudes into an existing arbitration), the arbitral tribunal has to therefore satisfy itself whether consent has been given by all parties (including the additional parties) for the arbitration to proceed as a multi-party arbitration.

a) Arbitration agreement involving several parties. Where the SIAC Rules are adopted, the rules expressly provide that one or more third parties may be joined in the arbitration but only if such person is a party to the arbitration agreement and only with the written consent of such third party.195 As such, an arbitral tribunal has no power to forcibly bind or join a third party who is not a party to the arbitration agreement.196 91 As to whether a third party to the arbitration is a party to the arbitration agreement and therefore bound by the same, the Singapore Court of Appeal has expressed the view that the rule that an express reference to an arbitration clause was necessary before it could be incorporated into another contract did not always apply.197 The issue of whether an arbitration clause was incorporated satisfactorily and whether a third party 90

192 Section 12(1), IAA. See also Credit Agricole Indosuez v. Rekasaran BI Ltd [2001] SGHC 81 as a case illustrating the granting of various interim remedies. 193 Rule 30.2, SIAC 2016 Rules, read together with Schedule 1 of the SIAC 2016 Rules. 194 Paragraph 10, Schedule 1, SIAC 2016 Rules. 195 Rule 7, SIAC 2016 Rules. 196 See further, PT First Media, supra fn. 98, where the Singapore Court of Appeal interpreted section 24(b) of the 2007 SIAC Rules which reads “a tribunal shall have the power to …allow other parties to be joined in the arbitration with their express consent”, as referring to other parties of the arbitration agreement who were not involved in the arbitration proceedings. The SIAC 2016 Rules have since made clear that a joinder of other parties is permitted where such other parties are parties to the arbitration agreement. 197 International Research Corp. PLC v. Lufthansa Systems Asia Pacific Pte Ltd [2014] 1 SLR 130.

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was bound as such was a matter of contractual interpretation to be assessed having regard to the relevant context and the objective circumstances.198 b) Equality of arms and appointment of the arbitrators. The IAA generally 92 recognizes that each party shall have an equal say in appointing the panel of arbitrators to constitute the tribunal.199 In the context of multi-party arbitrations, the SIAC Rules provide that where there are more than two parties in the arbitration, and three arbitrators are to be appointed, the Claimant(s) shall jointly appoint one arbitrator and the Respondent(s) shall jointly nominate one arbitrator.200 Unless parties have agreed on the procedure of appointing the third arbitrator, the third arbitrator who shall also act as the presiding arbitrator, shall be appointed by the President of the Court of Arbitration of the SIAC.201 Where there are more than two parties in the arbitration and one arbitrator is to be appointed, all parties are to agree on an arbitrator.202

7. Third-party funding Previously prohibited, third-party funding is now permitted for the following “prescribed dispute resolution proceedings”: (a) international arbitration proceedings, (b) court and mediation proceedings arising from or out of or in any way connected with international arbitration proceedings, (c) applications for a stay of proceedings under section 6 of the IAA and any other applications for the enforcement of an arbitration agreement, and (d) proceedings for or in connection with the enforcement of an award under the IAA.203 In order for a third-party funding contract to not be contrary to public policy or otherwise illegal by reason that it is a contract for maintenance or champerty, it must be a contract under which “a qualifying Third-Party Funder provides funds to any party for the purpose of funding all or part of the costs of that party in prescribed dispute resolution proceedings”. A “qualifying Third-Party Funder” carries on the business of funding all or part of the costs of dispute resolution proceedings to which it is not a party, and must satisfy specified requirements set out under the Civil Law (Third-Party Funding) Regulations 2017.204 In conjunction with the above legislative developments, the Legal Profession (Professional Conduct) Rules 2015 was amended to require, inter alia, solicitors with a practising certificate in Singapore and regulated foreign lawyers to disclose to the court or tribunal (and to every other party to those proceedings) (a) the existence of any third-party funding contract related to the costs of those proceedings, and (b) the identity and address of any qualifying third-party funder involved in funding the costs of those proceedings.205 In relation to SIAC arbitrations, the SIAC has issued a practice note (PN-01/17) setting out standards of practice and conduct to be observed by arbitrators in respect of 198 International Research, supra fn. 197 at [34]. See further, the general principles laid down in Zurich Insurance (Singapore) Pte Ltd v. B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 on contractual interpretation and the incorporation of terms. 199 For instance, see article 9A of the IAA, which states that in an arbitration with 3 arbitrators, each party shall appoint one arbitrator, and the parties shall by agreement appoint the third arbitrator. 200 Rule 12.1, SIAC 2016 Rules. 201 Rule 11.3, SIAC 2016 Rules. 202 Rule 12.2, SIAC 2016 Rules. 203 Section 5B of the Civil Law Act and Regulation 3 of the Civil Law (Third-Party Funding) Regulations 2017. 204 Section 5B(2) and (10) of the Civil Law Act, and Regulation 4 of the Civil Law (Third-Party Funding) Regulations 2017. 205 Rule 49A of the Legal Profession (Professional Conduct) Rules 2015.

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arbitration proceedings administered by the SIAC under the SIAC Rules where the involvement of a third-party funder (or “External Funder”) is permissble. The practice note is intended to supplement an arbitrator’s obligations under the SIAC Rules, and requires arbitrator(s) to, inter alia, disclose any relationship with an external funder that may give rise to justifiable doubts as to his impartiality or independence. In addition, the arbitrator(s) has the power to order disclosure of the existence of any funding relationship, and may also take into account the existence of any external funder in apportioning the costs of the arbitration.206

IV. The control and the enforcement of arbitral awards 97

The IAA provides that the only recourse to Singapore Courts against arbitral awards made in Singapore is by way of an application to set aside the award. In other words, an arbitral award is non-appealable and the failure of an arbitral tribunal to make certain findings cannot be grounds for setting aside an award as these are matters pertaining to the merits of the award and there is no appeal against the determination of a tribunal on the merits.207

1. Correction and amendment of arbitral awards 98

After the award has been delivered, each party may within thirty (30) days of receipt of the award, request that the arbitrator(s) correct any clerical and/or typographical errors in the award.208 Save for clerical and/or typographical amendments, the arbitral tribunal may not vary, amend, correct, review, add to or revoke the arbitral award.209 If so agreed by the parties, a party may also request the arbitral tribunal to interpret a specific point or ruling in the award, which may not be entirely clear.210 The interpretation would thereafter also form part of the award.211

2. Review of arbitral awards before the state courts 99

a) Procedural framework (time limits, competent court, appeal). A party requesting the setting aside of an award under the IAA must do so within three months from the date of receipt of the arbitral award or the corrected award.212 The three month period has been described as a strict provision that has to be complied with beyond which the Singapore Courts have no power to extend time for a party to file an application to set aside an international arbitral award.213 This has been justified on the basis that a setting aside application is not equivalent to an appeal, and the same principles that apply to an appeal do not apply necessarily to a setting aside application.214 206

Paragraphs 1 and 4 to 11 of the SIAC Practice Note PN-01/17. Luzon Hydro Corp. v. Transfield Philippines Inc. [2004] 4 SLR 705 at [11]. 208 Article 33(1)(a), First Schedule, IAA. 209 Section 19B, IAA. See further, Tang Boon Jek Jeffrey v. Tan Poh Leng Stanley [2001] 3 SLR 237 and Tan Poh Leng Stanley v. Tang Boon Jek Jeffrey [2001] 1 SLR 624. 210 Article 33(1)(b), First Schedule, IAA. 211 Article 33(1), First Schedule, IAA. 212 Article 34(3), First Schedule, IAA read with Order 69A Rule 2(d) of the Rules of Court (Cap. 322). 213 ABC v. XYZ, supra fn. 40 at [9]. 214 ABC v. XYZ, supra fn. 40 at [19] and [20]. Flowing from this, a proposed amendment of a setting aside application would only be allowed if the proposed new ground to set aside the award arose out of the same facts or substantially the same facts as the grounds originally pleaded in the setting aside application. 207

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The application to set aside an award must take the form of an originating summons 100 pursuant to Order 69A Rule 2(d) of the Rules of Court. The application should be supported by an affidavit, stating the grounds of the application as well as exhibiting the arbitration agreement, the award and any other documents relied upon by the applicant.215 Pursuant to the territoriality jurisdiction of the Singapore High Court, the High Court may only set aside arbitral awards that are made in Singapore.216 b) Grounds for setting aside arbitral awards. aa) General framework. The grounds 101 for setting aside an arbitral award are set out in article 34(2) ML 1985 and adopted by the IAA.217 The article 34(2) grounds are broadly as follows: (a) Lack of jurisdiction of the arbitral tribunal: (i) a party to the arbitration agreement is under some incapacity, or the said agreement is invalid under the law which the parties have subjected it to or failing any indication thereon, under the law of Singapore;218 or (ii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration.219 (b) Unlawful composition of the tribunal and other procedural irregularities: the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties220 or the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case.221 (c) Public policy: the subject matter of the dispute is not arbitrable under the law of Singapore or the award is in conflict with the public policy of Singapore.222 The foregoing grounds for setting aside an arbitral award are similar to the grounds 102 for resisting enforcement of an arbitral award under the New York Convention and decisions dealing with either are applicable vice versa.223 While the language of article 34 (2) suggests that the foregoing grounds are exhaustive,224 section 24 of the IAA makes clear that in addition to these grounds, there are two further grounds for setting aside an arbitral award: in fact, under the IAA, an award may further be set aside if (a) the making of the award was induced or affected by fraud or corruption; or (b) there was a breach of the rules of natural justice in connection with the making of the award by which the rights of parties have been prejudiced.225 The Court retains a discretion to confirm an arbitral award even where a ground for setting aside has been made out under article 34(2) ML 1985 or section 24 of the IAA.226 bb) Lack of jurisdiction of the arbitral tribunal. Since it is the arbitration agreement 103 which confers jurisdiction upon the arbitral tribunal, any inadequacies that affect the 215

Order 69A Rule 2 (4A) of the Rules of Court (Cap. 322). Article 1(2), First Schedule, IAA. In PT Garuda Indonesia, supra fn. 25, the Singapore Court of Appeal also noted that Article 34(1) ML 1985 and section 24 of the IAA only applied where the place of arbitration is in Singapore. 217 Article 34(2), First Schedule, IAA. 218 Article 34(2)(a)(i), First Schedule, IAA. 219 Article 34(2)(a)(iii), First Schedule, IAA. 220 Article 34(2)(a)(iv), First Schedule, IAA. 221 Article 34(2)(a)(ii), First Schedule, IAA. 222 Article 34(2)(b), First Schedule, IAA. 223 For case law on article V of the New York Convention, see supra B mns 177–332. 224 Article 34(2), First Schedule, IAA provides that an arbitral award may be set aside “only if” the specified grounds for setting aside are met. 225 Sections 24(a) and (b) of IAA respectively. 226 Under both article 34(2) ML 1985 and section 24 of the IAA, the Singapore Court “may” set aside an arbitral award if the relevant grounds are made out. 216

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capacity of a party to the agreement and/or the validity of the agreement itself would impact the jurisdiction of the arbitral tribunal, and provide a ground for setting aside an award for want of proper jurisdiction. 104 The validity of the arbitration agreement is determined in accordance with the applicable law chosen by the parties. In the absence of a chosen law, the IAA provides that Singapore law should apply.227 Under Singapore law, the fact that the written contract containing the arbitration agreement was not signed does not preclude parties being bound by the arbitration agreement if they had signified a clear intention to be so bound.228 Where the terms of submission to arbitration are concerned,229 the Singapore Courts consider not only what has been expressly submitted to arbitration, but also what would be implicit to such a reference and/or submission to arbitration.230 105 Separately, a party who of his own accord chooses not to cross-examine an expert on foreign law cannot thereafter allege that an arbitral tribunal has exceeded its jurisdiction for failing and/or refusing to apply the foreign law and/or assert that the application of such foreign law would have led to a different outcome.231 Further, if an issue is clearly within the scope of parties’ submission to arbitration, it cannot be brought outside the scope of the submission merely because the arbitral tribunal came to a wrong decision on the merits.232 cc) Unlawful composition of the tribunal and other procedural irregularities. Pursuant to the principle of party autonomy, the composition of the arbitral tribunal as well as any agreement as to the applicable law, arbitral rules or procedure must be strictly observed. 107 Before a party may challenge an award on the basis of the composition of the tribunal, the burden falls upon him to first avail himself of the proper opportunities to appoint the arbitrator(s) in accordance with the agreed procedures between parties.233 Similarly, a party may not set aside an award on the ground that he was unable to present his case234 if he fails to avail himself of the opportunities available to him to rebut a contrary allegation and/or argument, such as in witness statements when he had the chance to.235 108 A disagreement with the tribunal’s interpretation of the choice of law clause is not an irregularity for challenging the award on the basis that the tribunal had failed to apply the chosen rules to the dispute.236 Further, a tribunal’s ruling on the rules of arbitration after having heard parties would, as a matter of course, disadvantage one party, and 106

227

Article 34(2)(a)(i), First Schedule, IAA. See further, Hainan Machinery, supra fn. 174 at [41]. Jiangsu Overseas Group Co. Ltd v. Concord Energy Pte Ltd [2016] 4 SLR 1336. 229 Singapore Courts generally adopt a two stage test: (i) first, to examine what matters were within the scope of submission to the arbitral tribunal; and (ii) second, to ascertain whether the arbitral tribunal award involved such matters within the scope or whether it involved a new difference outside the scope of the submission to arbitration and therefore irrelevant to the issues requiring determination. See further, Dexia Bank, supra fn. 95 at [44]. 230 Ahong Construction (S) Pte Ltd v. United Boulevard Pte Ltd [1994] 3 SLR(R) 669, where it was found that it is implicit in a reference or submission to arbitration that parties had conferred power on the arbitrator to award interest. 231 Sobati General Trading LLC v. PT Multistrada Arahsarana [2010] 1 SLR 1065 at [29]. 232 Sui Southern Gas Co. Ltd v. Habibullah Coastal Power Co. (Pte) Ltd [2010] 3 SLR 1 at [37] to [40]. 233 Strandore Invest A/S v. Soh Kim Wat [2010] SGHC 151 at [29]. 234 It has been observed that this ground, viz., setting aside an award on the basis of a failure to present one’s case, overlaps with section 24(b) of the IAA. See for instance, Government of the Republic of the Philippines v. Philippine International Air Terminals Co., Inc. [2007] 1 SLR(R) 278 at [18]. 235 Sobati, supra fn. 231 at [25] to [28]. 236 Quarella SpA v. Scelta Marble Australia Pty Ltd [2012] 4 SLR 1057 at [37] to [40]. 228

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cannot without more, be sufficient evidence that the party disadvantaged was unable to present his case.237 dd) Public policy. The arbitrability of a dispute has been considered at some length 109 above, as also, the public policy concerns that are applicable in Singapore.238 In this regard, there is some overlap between the public policy grounds for setting aside an award under article 34(2) ML 1985, and the two additional grounds introduced by section 24 of the IAA, particularly, the ground of setting aside an award on the basis of fraud and/or corruption.239 It has therefore been observed that public policy is broadly framed and includes all “egregious circumstances” such as “corruption, bribery or fraud” which violate basic notions of morality.240 In this regard, it appears that where an award is tainted by illegality, this would 110 amount to a breach of public policy in Singapore,241 although it is important to consider the underlying intention and/or purpose of the applicable statute before deciding whether the relevant agreement and/or conduct is illegal.242 On an allegation of suppression of evidence that is tantamount to fraud, the applicant must demonstrate that the new evidence could not be uncovered with reasonable diligence during the arbitration proceedings, and such suppressed evidence would have prompted the arbitrator to decide in favour of the applicant instead.243 It has also been said that public policy concerns may extend to breaches of 111 fundamental rules of natural justice.244 The Singapore Courts have declined to set aside an award where the alleged breach is merely speculative.245 A party alleging that the arbitral tribunal has failed to address its claim adequately must point to an actual claim and/or argument that has not been addressed. As such, a party wishing to pursue an alternative claim must make it clear in its own statement of case and post hearing briefs that it was pursuing such a claim, especially when such claims are clearly foreseeable.246 In this regard, an arbitral tribunal has the latitude to decide what was essential, and does not need to deal with every issue raised in the award, as long as the essential issues were dealt with.247 A successful application on this ground must show that the breach of natural justice is not a technical breach, and that it would reasonably have made a difference to the arbitrator and the final decision.248

3. Enforcing arbitral awards a) General framework. There are two regimes for the enforcement of arbitral awards: 112 the first for enforcing awards made in Singapore under the IAA or the AA (as the case may be); and the second for enforcing foreign awards. aa) Enforcement of awards made under the IAA. Under section 19 of the IAA, an 113 award made in Singapore pursuant to an international arbitration is enforceable by 237

Dongwoo Mann, supra fn. 168 at [55]. See supra mn. 32. 239 Section 24(a), IAA. 240 BLB, supra fn. 136 at [100]. 241 See generally, AJU v. AJT [2011] 4 SLR 739. 242 In the context of the Securities and Futures Act (Cap. 289), see Rockeby biomed Ltd v. Alpha Advisory Pte Ltd [2011] SGHC 155. 243 Swiss Singapore Overseas Enterprises Pte Ltd v. Exim Rajathi India Pte Ltd [2010] 1 SLR 573 at [30]. 244 Merkin/Hjalmarsson, Annotated Singapore Arbitration Legislation, 2nd ed., 2016, at 75 to 76. 245 Luzon Hydro Corp. v. Transfield Philippines Inc. [2004] 4 SLR 705. 246 Dongwoo Mann, supra fn. 168 at [100] to [101]. 247 TMM Division, supra fn. 136 at [72], [74] and [77]. 248 LW, supra fn. 42 at [54]. 238

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leave of the High Court or a Judge thereof, in the same manner as a judgment or an order to the same effect of the High Court.249 Where leave is given, judgment may also be entered in the terms of the award.250 Where an award is enforced on its own (and not as a High Court judgment) the suggestion is that the Singapore Courts have no power to amend or rectify any deficiencies in the award, including the awarding of interest.251 However, where an award is enforced as a judgment in the terms of the High Court, it is the High Court which gives the judgment, which entitles it to award interest in accordance with the Rules of Court.252 An award made under the International Arbitration Act may only be refused enforcement if the grounds for setting aside (explained supra mns 101–102) exist. A party seeking to object to an arbitral award may opt to challenge an award either actively through a setting aside application or passively through resisting its enforcement (infra mn. 123). bb) Enforcement of foreign arbitral awards. The enforcement of foreign awards is governed by Part III of the IAA, and sections 29 and 31 of the same part, which are modelled after article V of the New York Convention. Section 29 provides that a foreign award from a Convention country253 shall be recognized and enforced as if it was a Singapore award enforced under section 19 of the IAA. Section 31 of the IAA provides grounds for a Singapore Court to refuse the enforcement of a foreign award, and is similar to the same grounds of setting aside a Singapore award under the IAA pursuant to article 34 ML 1985. Decisions considered supra mns 101–111 dealing with these grounds of setting aside a Singapore award apply equally here. 115 A plain reading of section 31 of the IAA suggests that the Singapore Courts have no residual discretion to refuse enforcement of a foreign award, save where a statutory ground under section 31 is satisfied.254 In this regard, the Singapore High Court has also construed section 31 as being exhaustive and final.255 114

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b) Enforcement of awards that were set aside. It seems straightforward that the effect of an award which has been set aside is that it is rendered null and void, and cannot thereinafter be enforced. This appears to be the case for Singapore awards under the IAA, but is less certain for foreign awards under Part III of the IAA. However, the better view is that an award which has been set aside is void ab initio, and there is no award to enforce thereinafter. In this regard, the plain words of section 31(5) appears to support this view as the section expressly provides that the High Court may adjourn the enforcement proceedings or order the other party to give suitable security where it is so satisfied that an application for the setting aside of the award has been made to a competent authority of the foreign country.256 The adjournment and/or provision of security would be unnecessary if a foreign award that has been set aside may still be 249

Section 19, IAA. Section 19, IAA. 251 Merkin/Hjalmarsson, Annotated Singapore Arbitration Legislation, 2nd ed., 2016, 51. 252 Merkin/Hjalmarsson, Annotated Singapore Arbitration Legislation, 2nd ed., 2016, 52. 253 For countries that are not considered a Convention country under the New York Convention, parties can consider relying on section 46 of the AA, which could potentially allow the enforcement of such non-convention awards in Singapore. The AA is not territorially confined to arbitration awards from territories that are parties to the New York Convention, and is prima facie wide enough to enforce arbitration awards from countries that are not signatories to the New York Convention. Particularly, section 46 of the AA “shall apply to an award irrespective of whether the place of arbitration is Singapore or elsewhere”: see section 46(3) of the AA. 254 Section 31, IAA plainly provides that an enforcement of a foreign award may be refused on any of the specified grounds in the section “but not otherwise”. 255 Aloe Vera, supra fn. 61 at [46]. 256 Section 31(5), IAA. 250

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enforced in Singapore nonetheless. Although only obiter dicta, the Singapore Court of Appeal has recently observed that the erga omnes effect of a successful setting aside application is that there is simply no award to enforce.257 c) Fulfilment, set-off and similar defences. An application for leave to enforce an 117 award (including foreign awards) must be supported by an affidavit under Order 69A Rule 6 of the Rules of Court,258 stating either that the award has not been complied with or to the extent to which it has not been complied with.259 Although it stands to reason that a party resisting enforcement of the award should 118 therefore be permitted to resist enforcement on the basis that the award has been fulfilled and/or complied with, the Singapore Courts appear to favour a “mechanistic” as opposed to a “substantive” approach to the enforcement of foreign awards under section 31 of the IAA.260 The Singapore Courts would refrain from engaging in any form of “judicial investigation” as to the arbitral award and enforce the award on its terms.261 On a plain reading of this, it appears that where Order 69A Rule 6 is concerned, a party may not be permitted to resist enforcement of a foreign award on the basis that the award has been fully and/or partially complied with. However, Section 19 of the IAA is silent as to the discretion a Singapore Court ex- 119 ercises in the enforcement of Singapore awards under the IAA, and there appears to be some scope for a party to make the argument at the enforcement stage that the award has been fulfilled.

4. Preclusion of grounds for challenge and defences to enforcement As a general rule, a party has to put forth any grounds for challenge or defences as 120 soon as possible or it could be barred from doing so at a later stage. a) Preclusion due to failure to object in the arbitral proceedings. A party who 121 knows that there is non-compliance of either (i) any provision of the ML 1985 which parties may derogate from; or (ii) any requirement under the arbitration agreement, and yet proceeds with the arbitration and does not object without undue delay or, if a timelimit is provided therefor, within such period of time, shall be deemed to have waived his right to object later.262 Where a party objected to the tribunal’s jurisdiction but did not participate in the arbitral proceedings (and did not challenge the tribunal’s jurisdiction under article 16 ML 1985), the Singapore Court of Appeal has held that such a party is nonetheless entitled to subsequently seek to set aside the arbitral award before the supervisory court.263 However, the foregoing only applies to provisions that parties may derogate from and 122 this means that deemed waivers cannot apply to provisions that are non-derogable. There is no exhaustive list in Singapore as to what such non-derogable provisions might be, although it has been suggested that such a list is not long, and pertains to matters

257 PT First Media, supra fn. 98 at [76] and [77]. See further Halsbury’s Laws, supra fn. 17 at [20.148], and see further the authorities cited in footnote 3 therein, in particular, Cass. civ. 1ère, 9 October 1984, no. 83-11.355, Pabalk v. Norsolor YCA X (1986), French Cour de Cassation, where an award vacated in its primary jurisdiction was nonetheless enforced in France. For a comparative review of enforcement of awards set aside in the primary jurisdiction see supra A mns 133–135. 258 Order 69A Rule 6, Rules of Court. 259 Order 69A Rule 6(c), Rules of Court. 260 Aloe Vera, supra fn. 61 at [39] to [42]. 261 Aloe Vera, supra fn. 61 at [42]. 262 Article 4, First Schedule, IAA. 263 Rakna Arakshaka Lanka Ltd v. Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131.

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that are core and fundamental to the conduct of arbitration.264 Further, it is also noteworthy that the relevant party must “know” and in other words, possess actual knowledge of such non-compliance, and it appears that wilful blindness and/or imputed knowledge of such non-compliance would not be sufficient to amount to a waiver.265 b) Preclusion due to failure to bring a setting-aside application. Absent any issues of waiver, insofar as Singapore awards under the IAA are concerned, the Singapore Court of Appeal has expressed a preference not to bar a party from relying on defences to enforcement merely because he fails to actively attack the award at an earlier stage, such as the bringing of a setting aside application.266 As considered earlier, this is part of a party’s “choice of remedies” under the ML 1985.267 This overrules earlier authorities that an unsuccessful party may not remain passive and resist the enforcement of an award only at the enforcement stage.268 124 As far as foreign awards are concerned, there are Singapore authorities indicating that the failure of a setting aside application in the foreign jurisdiction where the award was made precludes the unsuccessful party from bringing a subsequent application to set aside the granting of leave to enforce the award in Singapore.269 This regards the right of an unsuccessful party to set aside a foreign award at its primary jurisdiction as alternative, and not cumulative, to his right of enforcement in Singapore.270 There has been some suggestion that this holding is incorrect, since the scheme of the New York Convention clearly envisages that parties may attempt to set aside the award in the primary jurisdiction prior to enforcement proceedings elsewhere, and the failure of the former should not preclude the unsuccessful party from resisting the latter.271 123

264

Hwang/Chan/Selvaraj, in: Moser (ed.), Arbitration in Asia, 2018, 14. Article 4, First Schedule, IAA. 266 PT First Media, supra fn. 98. 267 See supra mn. 46. 268 Astro Nusantara International BV v. PT Ayunda Prima Mitra [2013] 1 SLR 636. 269 Newspeed International Ltd v. Citus Trading Pte Ltd [2003] 3 SLR(R) 1. 270 Ibid. at [26] to [28]. 271 Hwang/Chan/Selvaraj, in: Moser (ed.), Arbitration in Asia, 2018, 89, and see further, Boo Geok Seng, (2001) 2 SAL Ann. Rev. 24. 265

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P. International Arbitration in Spain Bibliography: Aguado, in: Loercher/Pendell/Wilson (eds), CMS Guide to Arbitration, Spain, version 4 December 2012; Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, Editorial Aranzadi 2005; Cairns, The Spanish application of the UNCITRAL Model Law on International Commercial Arbitration, (2006) 22 Arb. Int’l 573; Correa Delcasso, Développements récents de la jurisprudence espagnole en matière d’arbitrage, Rev. Arb. 2017, 867; Cremades/Cairns, National Report for Spain (2018 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Supplement No. 105, ICCA & Kluwer Law International April 2019; De Miguel Asensio, Iura Novit Curia and Commercial Arbitration In Spain, Juris 2018; Gómez Jene (ed.), International Commercial Arbitration in Spain, Wolters Kluwer 2019; González-Bueno, The Spanish arbitration act: A commentary, Dykinson 2016; Hendel, Arbitration in Spain: Changed Law and Changing Perceptions, (2011) 29 ASA Bull. 205; Lew/ Mistelis/Kröll (eds), Comparative International Commercial Arbitration, 2003; Lopez de Argumendo Piñeiro/Roger, Interpretation and Application of the New York Convention in Spain, in: Bermann (ed.), Recognition and Enforcement of Arbitral Awards, Springer 2017, 855–885; Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, https://www.ibanet.org/LPD/Dispute_Resolution_Section/Arbitration/Arbcountryguides.aspx (accessed 1 August 2020). National legislation: Spanish Arbitration Act (Ley 60/2003, de 23 de diciembre, de Arbitraje), published online in Spanish through the State Bulletin (Boletín Oficial del Estado) at https://www.boe.es/buscar/act. php?id=BOE-A-2003-23646 and in English by the Ministry of Justice (Ministerio de la Justicia) at https:// www.mjusticia.gob.es/cs/Satellite/Portal/1292426982249?blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadervalue1=attachment%3B+filename%3DAct_on_arbitration_% 28Ley_60_2003__de_arbitraje%29.PDF (both accessed 1 August 2020). Please note that the English translation is updated only occasionally so may not reflect latest legislative changes. International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (BOE of 11 July 1977), ratification status available at https://treaties.un. org; European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (BOE of 4 October 1975), ratification status available at https://treaties.un.org; Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (BOE of 13 September 1994), ratification status available at https://icsid.worldbank.org.

Contents I. Introduction ..................................................................................................... 1. Legal framework ......................................................................................... a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration................................................. d) The territoriality principle, the seat of the arbitration, and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms ........................................ 2. The guiding principles of Spanish arbitration law.............................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement............................................. a) Capacity to conclude arbitration agreements ................................. b) Bankruptcy.............................................................................................. c) Arbitrability ............................................................................................ d) Form of the arbitration agreement ................................................... e) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses .........................................................

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Part 3. Country Reports 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose conflicts of interest ................................................ b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ e) Liability of arbitrators .......................................................................... 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Parties’ right to defence and the principle of equality ................. c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration without an award......................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute ................................................................ a) Choice of law and domestic cases..................................................... b) Choice of law and international lois de police................................ 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards: An overview.............. c) Lack of jurisdiction of the arbitral tribunal .................................... d) Composition of the tribunal and procedural irregularities ......... e) Public policy ........................................................................................... 3. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... aa) Enforcement of domestic awards ............................................... bb) Enforcement of foreign awards................................................... b) Enforcement of awards that were set aside..................................... c) Fulfilment, set-off and similar defences........................................... 4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

38 39 40 43 44 45 47 48 49 50 51 52 53 54 55 56 57 58 60 62 64 65 66 67 69 70 70 71 72 74 75 76 79 80 82 86 92 92 93 95 98 101 102 103 105

I. Introduction 1

Since the modernization of its arbitration law in 2003 in line with the UNCITRAL Model Law, Spain has successfully laid the ground for the development of an arbitral culture, and in recent years, arbitral institutions in Spain have been particularly active in promoting Spain as an attractive seat and a point of reference for arbitrations involving especially Latin American parties. Consequently, and nurtured by the remarkable 668

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opening and internationalization of the Spanish economy, Spain has seen a rapidly increasing number of arbitration cases with a seat in the country, conducted under the Spanish arbitration law, with a reference to arbitration rules of Spanish arbitration institutions or with Spanish as the language of the arbitration. The Spanish Arbitration Act (Ley 60/2003, de 23 de diciembre, de Arbitraje, LA) came 2 into force on 26 March 2004 and was modified in 2009 and 2011. It is based on the 1985 text of the UNCITRAL Model Law on International Commercial Arbitration (“ML”)1 although some amendments were made2 including the following: Express provisions for testamentary3 and corporate arbitration,4 single arbitrator unless otherwise agreed,5 in general, at least one arbitrator must be trained as a lawyer,6 provision for the appointment of arbitrators in a multi-party arbitration,7 judicial review of an unsuccessful challenge to an arbitrator only after the award,8 liability of arbitrators and mandatory arbitrator insurance,9 confidentiality of information received in the arbitration,10 provisions for the language of the arbitration,11 time limit for issuing the award,12 limited obligation of the arbitrators to conserve the documentation after an arbitration,13 and different enforcement procedures for domestic and foreign awards.14 Spain has not implemented the 2006 amendments to the UNCITRAL Model Law. 3 However, two of these amendments had already been incorporated by the Spanish legislator in 2003, namely the validity of arbitration agreements made by electronic means,15 and the extension of the rules on setting aside and enforcing awards to interim measures of the tribunal16.17

1. Legal framework a) Domestic and international arbitration. Many arbitration laws provide more 4 restrictive rules for purely domestic than for international arbitrations.18 This is not the case in Spain. The Arbitration Act is aligned with the monistic approach and generally does not distinguish between domestic and international arbitrations.19 For international arbitrations – as defined by article 3(1) LA – there are only a few modifications that take account of the international dimension of the dispute. These modifications refer to the form and the content of the arbitration agreement,20 the rules applicable to the substance of the dispute,21 and the correction, clarification, and issuing of a supplement to the award.22 1

Preamble I LA. Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration. 3 Article 10 LA. 4 Article 11 bis, 11 ter LA. 5 Article 12 LA. 6 Article 15(1) LA. 7 Article 15(2) (b) subpara. 2 LA. 8 Article 18(3) LA. 9 Article 21(1) LA. 10 Article 24(2) LA. 11 Article 28 LA. 12 Article 37(2) LA. 13 Article 38(3) LA. 14 Titles VIII and IX LA. 15 Article 9(3)LA. 16 Article 23(2) LA. 17 Preamble I LA. 18 Article 1(1) ML, an approach followed, e.g. in France: supra, I mn. 6. 19 Preamble II, article 1(1) LA. 20 Article 9(6) LA. 21 Article 34(2) LA. 22 Article 39(5) LA. 2

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b) Commercial and non-commercial arbitration. Unlike article 1(1) ML, the scope of the Arbitration Act is not limited to commercial arbitration. Except for labour disputes,23 the Arbitration Act applies to all types of arbitrations. However, the Arbitration Act is of a merely supplementary nature.24 According to its article 1(1), international treaties or special provisions on arbitration are granted precedence over the Arbitration Act.25 Such special provisions exist, e.g. in the field of consumer protection26 and intellectual property.27

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c) Ad hoc and institutional arbitration. The Arbitration Act provides for ad hoc as well as institutional arbitration,28 where the parties submit to the rules and case administration of an arbitral institution. Although most arbitration proceedings are institutional, the number of ad hoc arbitrations is increasing in order to allow a more flexible case management.29 The main arbitral institutions in Spain are the Court of Arbitration of the Official Chamber of Commerce of Madrid,30 the Civil and Commercial Court of Arbitration,31 and the Barcelona Arbitral Tribunal.32 These institutions administer both domestic and international arbitrations. For linguistic reasons, the international focus is more on Latin America than the English-speaking business community.33 In December 2017, these three institutions signed a memorandum of understanding aimed at creating a unified arbitration court for international disputes.34 In October 2019, the Court of Arbitration of the Official Chamber of Commerce of Madrid, the Civil and Commercial Court of Arbitration and the Spanish Court of Arbitration signed an agreement for the creation of the Madrid International Arbitration Centre (MIAC). MIAC will administer international arbitrations, arising from: (i) arbitration agreements designating MIAC as the administering institution; and (ii) arbitration agreements designating any of the founding entities as the administering institution. The centre will begin its operations in 2020.35 In 2019, the largest institution, the Court of Arbitration of the Official Chamber of Commerce of Madrid, administered 106 cases with an aggregate amount of 1.4 billion euros in dispute; 20 % of these cases were international and 56 % were adjudicated within less than one year.36 On a final 23

Article 1(4) LA. Aguado, in Loercher/Pendell/Wilson (eds), CMS Guide to Arbitration, Spain, version 4 December 2012, para. 3.1.3. 25 Article 1(1) and (3) LA. 26 Ley 26/1984, de 19 de julio, General para la Defensa de los Consumidores y Usuarios, article 31, https://www.boe.es/buscar/doc.php?id=BOE-A-1984-16737 (accessed 1 August 2020); cf. also Sole Additional Provision to the Arbitration Act. 27 Ley 17/2001, de 7 de diciembre, de Marcas, article 28, http://www.boe.es/buscar/doc.php?id=BOE-A2001-23093 (accessed 1 August 2020); Ley 20/2003, de 7 de julio, de Protección Jurídica del Diseño Industrial, article 42, http://www.boe.es/buscar/act.php?id=BOE-A-2003-13615 (accessed 1 August 2020). 28 Article 14 LA. 29 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 3. 30 Corte de Arbitraje de la Camara oficial de Comercio e Industria de Madrid, https://www.camaramadrid.es/servicios-empresariales/solucion-de-controversias-empresariales (accessed 1 August 2020). 31 Corte Civil y Mercantil de Arbitraje, http://cimaarbitraje.com/ (accessed 1 August 2020). 32 Tribunal Arbitral de Barcelona, http://www.tab.es/ (accessed 1 August 2020). 33 Aguado, in Loercher/Pendell/Wilson (eds), CMS Guide to Arbitration, Spain, version 4 December 2012, para. 3.1.3. 34 La Cámara de Comercio de España, la Cámara de Comercio de Madrid y CIMA ponen las bases para crear una única Corte de Arbitraje Internacional, 18 December 2017, Empresa Exterior, https://empresaexterior.com/art/64536/la-camara-de-comercio-de-espana-la-camara-de-comercio-de-madrid-y-cimaponen-las-bases-para-crear-una-unica-corte-de-arbitraje-internacional (accessed 1 August 2020). 35 See http://arbitramadrid.com/documents/20181/22826/Nota+banner+ENG/6a9eb6a8-72cc-4ad2-90d0de85d62184a7 (accessed 1 August 2020). 36 See http://www.arbitramadrid.com/estadisticas-2017 (accessed 1 August 2020). 24

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note, the Spanish Arbitration Club37 should be mentioned, in which over 1,000 arbitration practitioners from thirty-four countries are organized.38 Among others, the Club publishes a Code of Best Practices in Arbitration, the latest edition of which was launched in June 2019.39 d) The territoriality principle, the seat of the arbitration, and the lex arbitri. 7 Spanish arbitration law follows the territoriality principle of article 1(2) ML. In principle, it only applies to arbitrations where the seat or place of arbitration is located in Spain.40 The choice of the seat of the arbitration therefore determines the procedural law applicable to the arbitral proceedings (lex arbitri) as well as the competent court to support and supervise the arbitration41 (e.g. appointment and challenge of arbitrators, setting-aside proceedings). As a result, this choice is one of the main decisions in the arbitral process. The seat of the arbitration is determined by the parties or, failing agreement, by the 8 arbitrators.42 It should be noted that the seat of the arbitration does not prevent the arbitrators to hold the proceedings at any place they deem appropriate.43 There are a few exceptions to the territoriality principle. As governed by article 1(2) 9 LA, some of its provisions apply to arbitrations irrespective of their seat, for instance, the rule requiring state courts to decline jurisdiction if a party invokes an arbitration agreement44 or the provisions allowing courts to order interim measures.45 Besides, there is a specific set of rules on the recognition of foreign arbitral awards,46 which reflect Spain’s ratification of the New York Convention (“NYC”). e) Arbitration and other ADR mechanisms. Spain enacted a Mediation Law on 10 Civil and Commercial Matters (“Mediation Law”) in 2012.47 The law draws on the UNCITRAL Model Law on Commercial Conciliation,48 and implements the European Mediation Directive49.50 It contains general provisions such as the suspension of limitation periods during the mediation,51 the principles of mediation (voluntariness,52 equality of the parties,53 neutrality of the mediator,54 and confidentiality of the mediation55) as well as rules on the status of the mediator,56 the mediation proceedings57 and 37

Club Español del Arbitraje, https://www.clubarbitraje.com (accessed 1 August 2020). See https://www.clubarbitraje.com/quienes-somos/ (accessed 1 August 2020). 39 See https://www.clubarbitraje.com/wp-content/uploads/2019/06/cbbpp-cea.pdf (accessed 1 August 2020); see also Maravela/Stanescu, The Brave New and Old World of Arbitration: CEA’s Code of Best Practices, Kluwer Arbitration Blog, 12 July 2019, http://arbitrationblog.kluwerarbitration.com/2019/07/12/ the-brave-new-and-old-world-of-arbitration-ceas-code-of-best-practices (accessed 1 August 2020). 40 Article 1(1) LA. 41 Article 8 LA. 42 Article 26(1) LA. 43 Article 26(2) LA. 44 Article 11 LA. 45 Article 8(3) LA. 46 Title IX LA. 47 Ley 5/2012, de 6 de julio, de mediación en asuntos civiles y mercantiles https://www.boe.es/buscar/pdf/ 2012/BOE-A-2012-9112-consolidado.pdf (accessed 1 August 2020). 48 See http://www.uncitral.org/pdf/english/texts/arbitration/ml-conc/03-90953_Ebook.pdf (accessed 1 August 2020). 49 Directive 2008/52/CE of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters, [2008] OJ L136/3. 50 Preamble II to the Mediation Law. 51 Article 4 Mediation Law. 52 Article 6 Mediation Law. 53 Article 7 Mediation Law. 54 Article 8 Mediation Law. 55 Article 9 Mediation Law. 56 Chapter 3 of the Mediation Law. 57 Chapter 4 of the Mediation Law. 38

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the enforcement of mediation agreements.58 In 2013 the Mediation Law was complemented with a Royal decree59 providing rules on the qualification60 and registration61 of mediators, their obligatory liability insurance,62 and simplified proceedings through electronic means.63

2. The guiding principles of Spanish arbitration law 11

Arbitration as a dispute resolution mechanism enables parties to submit their disputes to privately appointed arbitrators rather than the state courts that would have jurisdiction otherwise. The possibility to choose arbitration as a dispute resolution mechanism builds on personal freedom and party autonomy as these also are general principles of the UNICTRAL Model Law. At the same time, it has to be considered that the right to the ordinary judge predetermined by law is guaranteed by the constitution.64 Therefore, the jurisdiction of an arbitral tribunal is only in line with the constitution if the parties voluntarily agreed on arbitration. Moreover, the most fundamental procedural guarantees to equal treatment, full opportunity to present the case and the right of defence cannot be derogated from in arbitration.65 These procedural guarantees are of paramount importance throughout the entire arbitral process from the arbitration agreement,66 the appointment of the arbitrators,67 the arbitral proceedings68 to the enforcement of an arbitral award.69

II. The arbitration agreement 12

The parties’ willingness to submit their dispute to arbitration is the very foundation of the arbitral proceedings.70 The arbitration agreement gives rise to the jurisdiction of the arbitral tribunal and, conversely, bars state courts from hearing the dispute if a party invokes the agreement to arbitrate in a timely manner.71 Without a valid arbitration agreement, an award can be set aside and be refused enforcement.72 As a result, the arbitration agreement is a crucial issue even beyond the arbitral proceedings.

1. The doctrine of separability 13

The arbitration agreement can be concluded as a separate contract, even after the dispute has arisen.73 In practice, however, the agreement to arbitrate will generally be 58

Chapter 5 of the Mediation Law. Real Decreto 980/2013, de 13 de diciembre, por el que se desarrollan determinados aspectos de la Ley 5/ 2012, de 6 de julio, de mediación en asuntos civiles y mercantiles http://www.boe.es/diario_boe/txt.php? id=BOE-A-2013-13647 (accessed 1 August 2020). 60 Chapter 2 of the Royal Decree. 61 Chapter 3 of the Royal Decree. 62 Chapter 4 of the Royal Decree. 63 Chapter 5 of the Royal Decree. 64 Article 24(1) Constitución Española. 65 Article 24(1) LA. 66 Infra mns 12 et seq. 67 Infra mns 44 et seq.; article 15(2) LA. 68 Infra mn. 53. 69 Article V(1) NYC, article 41 LA. 70 Article 9(1) LA. 71 Article 11(1) LA. 72 Article 41(1) (a) LA; article V(1) NYC. 73 Article 9(1) LA. 59

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included in the main contract as an additional clause. Either way, the arbitration clause will be treated as an agreement independent of the other terms of the contract.74 The arbitrators’ decision that the main contract is null and void will, therefore, not automatically imply the invalidity of the arbitration clause.75

2. The law applicable to the arbitration agreement As a consequence of their separate nature,76 the arbitration agreement will not 14 necessarily be governed by the same rules as the main contract.77 For international arbitrations,78 the Arbitration Act expressly acknowledges that the parties can choose separate rules for the arbitration agreement.79 Therefore, the choice of the law applicable to the substance of the contract does not automatically affect the choice of law applicable to the arbitration clause. While article II(3) NYC does not provide a rule as to which law is applicable,80 article VI(2) of the 1961 European Convention provides that, unless otherwise agreed by the parties, the law of the country in which the award shall be made applies,81 even where neither one of the parties nor the dispute itself has any connection with the agreed place of arbitration.82

3. The validity of the arbitration agreement The Spanish Arbitration Act provides a particularly favourable framework for 15 international arbitrations. In international proceedings the arbitration agreement will be valid if the requirements of either the rules chosen to govern the arbitration agreement, the rules applicable to the merits of the dispute, or Spanish law are met.83 When there is an arbitration clause, its validity is presumed. Thus, the burden of proof for the invalidity of the agreement lies with the party objecting to the jurisdiction of the arbitral tribunal.84 74 Article 22(1) s. 2 LA, see also Audiencia Provincal de Málaga, 36/2013, 5 June 2013, Banco Bilbao Vizcaya Argentaria S.A. v. Don Pablo. 75 Article 22(1) s. 3 LA, see also Audiencia Provincial de Asturias, 10 December 2012, Hostelería Valdeolmillos S.A. v. Caja de Ahorros Pensiones Barcelona. 76 Article 22(1) s. 3 LA. 77 Audiencia Provincial de Barcelona, 86/2009, 29 April 2009, Licensing Projects SL v. Pirelli & C. SpA, YCA XXXV (2010), 452–453. 78 As defined in article 3 LA. 79 Article 9(6) LA. 80 On the application of article V(1)(a) NYC in the pre-award phase, supra A mn. 24. 81 Audiencia Provincial Barcelona, 86/2009, 29 April 2009, Licensing Projects SL v. Pirelli & C. SpA, YCA XXXV (2010), 452–453. 82 Tribunal Supremo, 23 July 2001, Kern Electrónica, S.A. v. Goldstar Company Limited, YCA XXXI (2006), 825–833. 83 Article 9(6) LA. 84 Tribunal Supremo, 3536/1998, 11 April 2000, Union Générale de Cinéma, SA v. X Y Z Desarrollos, SA, YCA XXXII (2007), 525–531: “Una vez sentada la existencia del contrato suscrito entre las partes aquí en liza, comprensivo de la cláusula de sumisión a arbitraje -que permite tener por satisfecho el requisito impuesto en el art. IV,1.b), en relación con el art. II del Convenio , tal y como se ha señalado en el Fundamento de Derecho II de esta resolución- correspondía a la parte oponente acreditar, conforme a las reglas distributivas de la carga de la prueba que contiene el texto convencional, que el acuerdo arbitral era nulo, inválido, ineficaz o inexistente conforme a la Ley a la que apunta el art. V, 1.a) del Convenio de Nueva York -aquí convertido en auténtica norma de conflicto-, bien por razones de forma “ad solemnitatem”, bien por falta o vicio en sus elementos esenciales; como asimismo le correspondía acreditar, en el marco de la causa de oposición al exequatur que esgrime, que la cláusula de sumisión al arbitraje constituía una condición impuesta por la otra parte contratante, limitativa, por ello, de la libertad contractual y de la igualdad de las partes en el contrato, y que no fuera comúnmente aceptada en el tráfico mercantil conforme a los usos y prácticas que rigen su desarrollo.”

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a) Capacity to conclude arbitration agreements. As regards Spanish law itself, the Arbitration Act does not provide any limits to the capacity to submit to arbitration. In general, even States and State entities may resort to arbitration under the Arbitration Act. In such cases, a foreign public body is barred from invoking its own laws in order to circumvent an obligation arising under the arbitration agreement.85 17 Unlike in countries such as Germany,86 however, there are some specific provisions limiting the capacity of the Spanish State or its entities to enter into arbitration agreements.87 For instance, public administrations (“Administraciones Públicas”) are prohibited from submitting their contractual disputes to arbitration.88 In addition, disputes relating to the rights and assets of the Spanish State (“bienes y derechos del Patrimonio del Estado”) can only be submitted to arbitration following a procedure that requires a Royal decree from the Council of Ministers.89 18 An agent can conclude an arbitration agreement for his representative90 if he is expressly authorized or empowered to agree to arbitration.91 Consequently, when an agent has signed an arbitration agreement, the party relying on the arbitration clause has to prove the authorization of that agent.92 16

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b) Bankruptcy. Under the Spanish Insolvency Law, the insolvency of one of the parties per se will not have effects on arbitration agreements concluded by that party.93 Arbitrations in course at the time of the insolvency declaration will continue supervised by the administrator and the insolvency judge.94 Decisive for the determination whether an arbitration has commenced for the purpose of the Insolvency Law is the date on which the respondent received a request for arbitration, unless the parties have agreed otherwise.95 Nevertheless, if the court finds that the existence of an arbitration agreement may adversely affect the conduct of the insolvency proceedings, it may order a suspension of the effects of the agreement, without prejudice to the provisions of international treaties.96 Final awards issued either before or after the declaration of insolvency are binding on the insolvency judge.97

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c) Arbitrability. The Arbitration Act provides that “disputes on all matters regarded by law to involve free choice are apt for settlement by arbitration”.98 Therefore, arbitration is excluded in mandatory matters of which the parties cannot dispose, e.g. 85

Article 2(2) LA. Supra J mn. 20. 87 Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 8. 88 Real Decreto Legislativo 3/2011, 14 noviembre 2011, por el que se aprueba el texto refundido de la Ley de Contratos del Sector Público, article 50, http://www.boe.es/diario_boe/txt.php?id=BOE-A-2011-17887 (accessed 1 August 2020). 89 Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 8; ley 33/2003, de 3 de noviembre, del Patrimonio de las Administraciones Públicas, article 31, http://www.boe. es/diario_boe/txt.php?id=BOE-A-2003-20254 (accessed 1 August 2020). 90 Tribunal Supremo, 1148/2002, 29 November 2002, Rederij Empire CV v. Arrocerías Herba, SA, YCA XXXII (2007), 567–570. 91 Audiencia Provincial de Burgos, 180/2009, 27 April 2009, Abonos y Cereales, S.L. v. Granit Negoce, S.A., YCA XXXV (2010), 450–451. 92 Tribunal Supremo, 2009/2001, 1 April 2003, Satico Shipping Company Limited v. Maderas Iglesias, YCA XXXII (2007), 582–590. 93 Ley 22/2003, de 9 de julio, Concursal, article 52, https://www.boe.es/buscar/act.php?id=BOE-A-200313813 (accessed 1 August 2020). 94 Articles 51(2), 51(3) and 52(2) Insolvency Law. 95 Article 27 LA; Audiencia Provincial de Barcelona, 69/2016, 19 April 2016. 96 Article 52(2) Insolvency Law. 97 Article 53(1) Insolvency Law. 98 Article 2(1) LA. 86

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criminal issues, the legal status of a person, adoption, and questions related to marriage and alimony.99 This does not mean, however, that the mere relevance of mandatory provisions renders a dispute inarbitrable, as was explained by the Madrid Court of Appeal on the subject of mandatory competition law provisions. As long as the subject matter itself can be arbitrated, Spanish law vests the arbitral tribunal with the task to apply the mandatory provisions in the first place, although the final award might be subject to a public policy challenge.100 In addition to matters which do not involve “free choice”, the Arbitration Act explicitly does not cover labour arbitrations.101 Furthermore, there are also special provisions on the arbitrability of disputes on registered trademarks102 and industrial designs.103 A dispute over the system operator and carrier’s refusal to renounce the capacity reserved in its contract to transport gas has been recently held to be non-arbitrable by the Superior Court of Justice of Madrid on the basis that the default jurisdiction of the Comisión Nacional de los Mercados y la Competencia in disputes of that type exists in the interest of the general public and thus cannot be derogated from by an agreement to arbitrate.104 These restrictions do not necessarily apply to international arbitrations. For interna- 21 tional proceedings the Arbitration Act provides a sort of most-favored nation clause, stipulating that the dispute can be submitted to arbitration, if it is arbitrable either under the rules chosen for the arbitration agreement, the rules applicable to the substance of the dispute, or Spanish law.105 99

Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 9. Audiencia Provincial Civil de Madrid, 147/2013, 18 October 2013; Tribunal Superior de Justicia de Madrid, 56/2015, 13 July 2015, Enagas Transporte SAU v. Gas Comercializadora SA: “En el bien entendido -hoy comúnmente admitido- de que no cabe identificar, sin distingos ni matices, materia indisponible con presencia de normas imperativas en su ordenación: no pocas materias son disponibles, perfectamente susceptibles de arbitraje, pese a que aspectos de su ordenación estén regulados por normas imperativas, lo que no excusa el deber de los árbitros de aplicar dichas normas, so pena de infringir el orden público -v.gr., por todas, la reciente Sentencia de esta Sala nº 23/2015, de 24 de marzo (ROJ STSJ M 3275/2015). Y al contrario, tampoco cabe postular, con la generalidad con que a veces se hace, que una materia sustancialmente regida por normas imperativas -y se suele citar el Derecho de la Competencia, tras la tan conocida Sentencia Eco Swiss del TJUE (S. 1.6.1999, asunto C-126/1997)- es arbitrable, siendo la única obligación del Tribunal arbitral aplicar el referido ordenamiento imperativo para no incurrir en la causa de anulación del art. 41.1.f) LA: que el sometimiento a arbitraje signifique disponer del cauce procesal para la elucidación del Derecho no puede servir de excusa, insistimos, con la generalidad con que a veces se pretende -y como de hecho pretende el Laudo impugnado-, para desechar de un modo total y absoluto que la imperatividad de la normativa reguladora de una materia pueda ser indiciaria de su carácter indisponible, y mucho menos para excluir la necesidad de esa ponderación por el propio Tribunal arbitral o por esta Sala, justificando tal exclusión en el deber del árbitro de aplicar dicha normativa.” See also Draguiev, Arbitrability of Competition Law Issues Reinforced, Kluwer Arbitration Blog, 10 January 2014, http://kluwerarbitrationblog.com/blog/ 2014/01/10/arbitrability-of-competition-law-issues-reinforced/ (accessed 1 August 2020). 101 Article 1(4) LA. 102 Ley 17/2001, de 7 de diciembre, de Marcas, article 28. 103 Ley 20/2003, de 7 de julio, de Protección Jurídica del Diseño Industrial, article 42. 104 Tribunal Superior de Justicia de Madrid, 56/2015, 13 July 2015, Enagas Transporte SAU v. Gas Comercializadora SA: “Toda la normativa expuesta revela, a juicio de la Sala, que las competencias atribuidas a la CNMC en resolución de conflictos son distintas e inconciliables, por su naturaleza, con las funciones arbitrales que le confiere el art. 5 LCNCM, mediando sometimiento voluntario de las partes… Y son distintas e inconciliables porque, en la resolución de conflictos entre los operadores (por falta de acuerdo sobre problemas de compartición de redes, de interconexión o similares), ‘se ejercen funciones públicas que atienden a la necesidad de preservar los intereses generales subyacentes en la regulación de cada sector, cuyo ejercicio se traduce en una decisión estrictamente administrativa, con fuerza de obligar, impugnable ante la jurisdicción contencioso-administrativa’.” See also Perales Viscasillas, Is a Uniform Arbitrability Rule Needed at an International Level?, Kluwer Arbitration Blog, 5 January 2016, http://arbitrationblog. kluwerarbitration.com/2016/01/05/is-a-uniform-arbitrability-rule-needed-at-an-international-level (accessed 1 August 2020). 105 Article 9(6) LA. 100

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d) Form of the arbitration agreement. The arbitration agreement may adopt the form of a separate agreement or be incorporated into the main contract as an arbitration clause.106 Either way, the agreement must express the intention of the parties to submit to arbitration all or some of the disputes that have arisen or that could arise in respect of a determined legal relationship, whether contractual or noncontractual in nature.107 A generic short-form clause which is imprecise and vague is unsatisfactory and, thus, cannot cause derogation from the jurisdiction of national courts.108 The Arbitration Act generally requires the arbitration agreement to be in writing, in a document signed by the parties, or an exchange of letters, telegrams, telexes, faxes or any other telecommunication method that ensures a record of the agreement is kept.109 This prerequisite is met when the arbitration agreement is permanently accessible through electronic, optical, or other media, including email.110 The reference in the main contract to general terms including an arbitration agreement is sufficient as it equally expresses the intention of the signatories to the contract.111 With regard to letters of confirmation containing an arbitration clause or making reference to it, several Spanish courts have held that a signature of the buyer was required to form a valid arbitration agreement.112 In general, however, Spanish courts will try to explore the will of the parties and not adhere too strictly to the form requirement if the parties’ mutual consent to submit a dispute to arbitration can be established otherwise.113 In this context, also the commercial practice and relations between the parties will be taken into account when determining the existence of an arbitration agreement.114 Form aside, an arbitration agreement will be deemed to exist if it is invoked by the claimant and not challenged by the respondent in its statement of defence.115 Consequently, the agreement to arbitrate can also be evidenced by the behaviour of a party, which, for instance, participates in the arbitration without objecting to the jurisdiction of the arbitral tribunal116 or if the intention to refer disputes to arbitration appears in other communications.117 106

Article 9(1) LA. Article 9(3) LA; see also Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 6; Gómez Jene, in: Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, 2005, Art. 9 para. 7. 108 Tribunal Supremo, 1148/2002, 29 November 2002, Rederij Empire CV v. Arrocerías Herba, SA, YCA XXXII (2007), 567–570. The arbitration clause in that case read: “Arbitraje: El Arbitraje, en su caso, o la avería gruesa, en su caso, tendrán lugar en Londres y de acuerdo con Derecho Inglés.” (“The arbitration, if any, or the general average, if any, shall take place in London and in accordance with English law.”). 109 Article 9(3) subpara. 1 LA; Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540–549. 110 Article 9(3) subpara. 2 LA; Tribunal Superior de Justicia de Catalunya, 6 May 2016, Elbana di Navigazione SpA v. Biotrading 2007 SLNE, XLII YCA (2017), 514–516. 111 Tribunal Supremo, 743/03, 31 May 2005, Pueblo Film Distribution Hungary KFT v. Laurenfilm, SA, YCA XXXII (2007), 608–615; see also Gómez Jene, in: Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, 2005, Art. 9 para. 9. 112 Further references in Lew/Mistelis/Kröll, Comparative International Commercial Arbitration, 2003, Chapter 26, footnote 86, p. 703. 113 Gómez Jene, in: Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, 2005, Art. 9 para. 8.1. 114 Ibid. 115 Article 9(5) LA. 116 Tribunal Supremo, 2065/01, 4 March 2003, Saroc, S.p.A. v. Sahece, S.A., YCA XXXII (2007), 571–581. 117 Tribunal Supremo, 1724/1998, 28 March 2000, Kil Management A/S v. J. García Carrión, SA, YCA XXXII (2007), 518–524. 107

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An arbitration agreement can also be contained in general conditions and will be 27 governed by the rules applicable to such adhesion contacts.118 In international arbitration, the law applicable to the arbitration agreement also applies to the validity of the standard clause.119 Especially within the scope of the New York Convention a nonformalistic approach prevails.120 The Arbitration Act particularly provides for the principle of equality,121 which (and hereby public policy) may exceptionally be broken by extreme contractual imbalances which necessitate the protection of the weak party. When both parties are enterprises, usually no party to the agreement can be said to have been in an inferior or weaker negotiating position, which the other party could abuse or of which it could take advantage.122 e) Termination of the arbitration agreement. Just as arbitration arises out of an 28 agreement, the parties may terminate it by mutual consent, be it express or tacit. In this respect, the Arbitration Act expressly provides that the arbitration agreement shall be deemed discharged if a complaint is filed before a state court and the defendant does not raise lack of jurisdiction as a defence.123 Leaving aside mutual consent, an arbitration agreement can be terminated unilater- 29 ally for absence of intent, e.g. in the case of error, intimidation or force. Unlike in other countries that allow a party without sufficient means to pay for the costs of the proceedings before state courts to rescind an agreement to arbitrate,124 in Spain no such fall back to the state courts’ jurisdiction is discussed or subject to a Spanish court’s published decision. A respondent before state courts who wants to discuss the merits of the case 30 without being precluded from arbitration can do so by raising the arbitration objection in a preliminary manner while discussing the merits of the claimant’s case only preventively.125 Also, Spanish courts have held that a party requesting interim measures of protection from state court does not waive its right to arbitrate.126 This decision complies with article VI(4) of the 1961 European Convention. Article 11(1) LA prevents courts from hearing a dispute submitted to arbitration but does not have the opposite effect where parties waive their right to arbitrate by bringing an action to state courts.127 By refusing to pay the advance on his share of the costs during a first arbitration, a claimant implicitly waives his right to arbitrate the dispute in another arbitration.128 118

Article 9(2) LA. Tribunal Supremo, 1724/1998, 28 March 2000, Kil Management A/S v. J. García Carrión, SA, YCA. XXXII (2007), 518–524. 120 Tribunal Superior de Justicia de Catalunya, 51/12, 29 March 2012, MS Amazon River I CV v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 459–461. 121 Article 24(1) LA. 122 Tribunal Supremo, 1467/1998, 8 February 2000, Vinalmar, SA v. Gaspar Peral y Cía, SL, YCA XXXII (2007), 512–517; Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540–549. 123 Article 11(2) LA. 124 Supra J mn. 26. 125 Tribunal Supremo, 1219/07, 14 November 2007, Limber, S.A. v. Cutisin, A.S., YCA XXXIII (2008), 703–709; Tribunal Supremo, 1148/02, 29 November 2002, Rederij Empire CV v. Arrocerías Herba, SA, YCA XXXII (2007), 567–570. 126 Article 11(2), (3), Preamble III LA; Tribunal Supremo, 1876/01, 8 October 2002, Scandlines, AB v. Ferrys del Mediterráneo, S.L., YCA XXXII (2007), 555–566. 127 Audiencia Provincial de Barcelona, 158/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A. 128 Tribunal Superior de Justicia del País Vasco, 5/2012, 13 June 2012, Coro y Herminio v. Inés, Manuel, Pedro, Segundo y Natalia. 119

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4. The scope and the interpretation of the arbitration agreement 31

As stated above, the arbitration agreement is of fundamental importance to the arbitral proceedings. Most disputes regarding the validity of an agreement do not arise on form requirements or arbitrability, but rather on its scope and interpretation.

a) Personal scope of the arbitration agreement. In principle, the jurisdiction of the judge predetermined by law129 can only be derogated from by the parties’ voluntary submission to an arbitral tribunal. Consequently, the general rule is that only parties to this agreement can be parties to arbitration. 33 Agency aside,130 the arbitration clause may also bind non-signatories, which are closely tied to a signing party or have been crucial in the performance of the contract. Third parties’ tacit acceptance of an arbitration clause is not automatic but may only be deduced from unequivocal and conclusive facts of the case.131 In this line, Spanish courts have determined an escrow agent holding certain funds as security for the performance of a contract to be bound by an arbitration clause between the two contract parties.132 An arbitration agreement included in a company’s by-laws binds all present and future stakeholders of the company.133 34 Insolvency of one of the parties does not have an ipso jure effect on the arbitration agreement. When insolvency is declared, on-going arbitration proceedings will continue under supervision of the administrator and the insolvency judge, but if the court administrating the insolvency considers the arbitration agreement to potentially cause damage to the insolvency proceedings, it may suspend its effects.134 This, however, applies only to domestic arbitration but not to international arbitration,135 because international conventions do not contain a provision comparable to article 52 Spanish Insolvency Act and because Spanish Insolvency Law is not part of international public policy.136 32

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b) Substantive scope of the arbitration agreement. Like any other contract, an arbitration agreement has to be interpreted in order to determine its substantive scope. Party autonomy as the basis of every arbitration agreement is to be considered by interpreting the agreement according to the true intentions of the parties. The essential question to be answered is which disputes are “out of or in connection with” the main contract. For example, an arbitration clause submitting all disputes “arising out of the interpretation of the terms of the contract” does not embrace issues of performance of the contract.137 Claims relating to the arbitrator’s fees and arbitration costs also fall 129

Article 24(1) Constitución Española. Supra mn. 18. 131 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 9. 132 Audiencia Provincial de Madrid, 96/2013, 26 February 2013, EBN Banco de Negocios S.A. v. Lackberg Corporate, S.L. 133 Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar. 134 Article 52(1) Spanish Insolvency Act. 135 As defined in article 3 LA. 136 Audiencia Provincial de Barcelona, 86/2009, 29 April 2009, Licensing Projects SL v. Pirelli & C. SpA, YCA XXXV (2010), 452–453. 137 Audiencia Provincial de Madrid, 289/2009, 13 July 2009, Erg Petroleos, S.A. v. Realesser, S.L. However, Audiencia Provincial de Barcelona, 158/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A., held an arbitration clause covering “all disputes or differences that might exist in the interpretation of the present contract” (“Todas las desavenencias o divergencias que […] pudieran derivarse en la interpretación del presente contrato”) not to be limited to issues of interpretation, but to also cover issues of performance and non-performance of the contract. 130

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outside of the scope of the arbitration agreement.138 If the arbitration agreement was incorporated by general terms, the specific rules on their interpretation have to be taken duly into account.139 Spanish courts confirmed that arbitration agreements are to be interpreted broadly, as extending to issues intimately linked to the agreement and necessary to decide the dispute in question.140 c) Pathological arbitration clauses. There are several reasons why an arbitration 36 clause may be defective. The most important examples are clauses that are either unclear about whether the parties are bound to arbitration or about which arbitration rules or institutions are referenced in the arbitration agreement. Arbitration clauses, which do not refer to the correct name of a court of arbitration 37 have to be interpreted. If there is only one court that could possibly be referred to by the clause, this court shall have jurisdiction.141 In case there are several courts coming into question, the parties used to have to litigate before the state courts.142 This, however, is subject to a major change, as it has increasingly become more common to retain the arbitration clause by having a court of justice appoint a new arbitrator. This notion is based on article 15(3) LA according to which, if arbitrators cannot be appointed by the procedure agreed on by the parties, either of those parties may apply for the competent court to appoint arbitrators or, as applicable, to take the necessary measures for this. However, this development is not without controversy as it regards the commitment to arbitration as something abstract from the arbitral institution chosen, although it may be argued that for many contracting parties the arbitration institution chosen is of importance even if it was not described correctly.143

5. The effect of the arbitration agreement and Kompetenz-Kompetenz The jurisdiction for the arbitral tribunal is created by the arbitration agreement. As 38 the lack of jurisdiction of the arbitral tribunal is a ground to set aside the award,144 arbitrators have to review the arbitration agreement cautiously. At the same time, an arbitration agreement can also be of paramount importance in state court proceedings as a party can object to the jurisdiction of the state court in case the parties have validly agreed to submit the dispute to arbitration.145 a) Enforcing arbitration clauses and Kompetenz-Kompetenz. Unlike many other 39 international arbitration laws, the Arbitration Act expressly recognizes the principle of “Kompetenz-Kompetenz”. Consequently, the arbitral tribunal may rule on its own 138 Audiencia Provincial de Las Palmas, 348/2012, 29 June 2012, Daorje, S.L.U. Daorje Medioambiente, S.A. v. Canarias de Limpieza Urbana, S.A. 139 Article 9(2) LA. 140 Tribunal Superior de Justicia de Madrid, 54/2017, 26 September 2017, Inversiones Berindi SL v. Corporación Villanueva S.A. y D. Higinio. 141 Audiencia Provincial de Barcelona, 158/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A., holding that an arbitration agreement providing for arbitration on accordnace with the arbitration rules of the “Cámara de Comercio de Barcelona (España)” could only be interpreted to refer Cambra Oficial de Comerç, Indústria i Navegació de Barcelona, the only Commercial Chamber of the city of Barcelona. 142 Audiencia Provincial de Palencia, 156/2000, 10 April 2000, AMFIT CAD-CAM Orthotics Fabrication Systems S.L. v. Juan Ignacio; Audiencia Provincial de Madrid, 183/2005, 31 May 2005, Knorr Bremse Systeme für Schienenfahrzeuge v. Albatros, S.L. 143 Málaga, Defective arbitration clauses, Kluwer Arbitration Blog, 25 February 2014, http://arbitrationblog.kluwerarbitration.com/2014/02/25/defective-arbitration-clauses/ (accessed 1 August 2020). 144 Article 41(1)(a) LA. 145 Article 11(1) LA.

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jurisdiction, including any pleas with respect to the existence or validity of the arbitration agreement or any others whose acceptance would prevent consideration of the merits of the case.146 For that purpose, the doctrine of separability expressly provides147 that the validity of the arbitration agreement does not depend on the validity of the contract and that arbitrators are competent to judge the validity of the arbitration agreement itself.148 Even if the arbitrators’ jurisdiction is, either incidentally or within the application to set aside the award, subject matter of a proceeding before a state court, the arbitral proceedings are not suspended.149 Until the arbitral tribunal has rendered a decision concerning its jurisdiction, this question is excluded from the competence of state courts.150 b) Preclusion of jurisdictional defences. In order to streamline the proceedings, the Arbitration Act provides rules that jurisdictional defences have to be raised in a timely manner. Most importantly, an arbitration agreement will be regarded to exist, if it is invoked by the claimant in an arbitration and not challenged by the respondent in its statement of defence.151 Moreover, a party is deemed to have waived the right to challenge an award based on a non-compliance with the Arbitration Act or the arbitration agreement if it was aware of the issue but failed to object in a timely fashion.152 41 Consequently, a respondent that fails to raise the defence of a lack of the arbitration agreement in the arbitral proceedings cannot object to enforcement of an award based on the same grounds.153 Likewise, a party that fails to object to the appointment of an arbitrator although it has been notified thereof is precluded from challenging the award because of a violation of due process.154 42 In case a state court proceeding has been initiated where an arbitration agreement is applicable, the interested party has to invoke its existence and challenge the state court’s jurisdiction by means of declinatory plea of jurisdiction (declinatoria). To that end, the party has to bring the plea within the first ten days of the deadline for answering the statement of claim.155 After having requested the referral to arbitral jurisdiction during state court proceedings, a party is estopped from challenging the validity of the arbitration agreement.156 40

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c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. Although the Arbitration Act closely follows the provisions of the Model Law, it does not contain a stipulation comparable to article 8(1) ML clarifying that state courts may perform a full review of the validity of the arbitration agreement with binding effect. 146 Article 22(1) LA; see also Tribunal Superior de Catalunya, 51/2012, 29 March 2012, MS Amazon River I CV v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 459–461. 147 Article 22(1) LA. 148 Preamble V LA. 149 Article 11(2), 22(3) LA. 150 Gómez Jene, in: Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, 2005, Art. 22 paras 4, 12. 151 Article 9(5) LA. 152 Article 6 LA, see also Montero Muriel, in: Arias Lozano (ed.), Comentarios a la Ley de Arbitraje de 2003, 2005, Art. 6 para. 19. 153 Tribunal Supremo, 3536/1998, 11 April 2000, Union Générale de Cinéma, SA v. X Y Z Desarrollos, SA, YCA XXXII (2007), 525–531. 154 Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540–549. 155 Article 11 (1) LA. 156 Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar.

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However, Spanish courts have generally taken the view that a full review of the arbitration agreement is required in order to determine whether an arbitration agreement exists and is valid.157

III. The arbitral tribunal and the conduct of the arbitral proceedings In the arbitration clause the parties can set the course of the arbitral proceedings. 44 Among other things, they may agree on the seat of the arbitration and hereby on the applicable procedural law. The language as well as the choice between ad hoc arbitration and institutional arbitration may also be freely determined by the parties.

1. The arbitral tribunal, impartiality and independence of the arbitrator The parties are free to determine the number of arbitrators, subject only to appoint- 45 ing an odd number thereof. Unless otherwise agreed, a single arbitrator will be appointed.158 The procedure for appointing the arbitrator or arbitrators also lies with the parties as long as the principle of equality is honoured.159 Failing an agreement, article 15(2) LA states that the following rules will apply: a) In arbitration with a sole arbitrator, he will be appointed by the court at the request of a party. b) In arbitration with three arbitrators, each party will appoint one arbitrator, and the arbitrators thus will appoint the third arbitrator, who will preside the proceedings. If a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within thirty days of the latest acceptance, the appointment will be made by the court at the request of a party. Where more than one claimant or respondent is involved, the latter will appoint one arbitrator and the former another. If claimants or respondents cannot agree on the appointment, all arbitrators will be appointed by the court at the request of a party. c) In arbitration with more than three arbitrators, they will be appointed by the court at the request of the party. Where state courts are requested to appoint an arbitrator, they will not conduct a full review of the validity and the scope of the arbitration agreement and will refuse an appointment only where on the face of the documents submitted an arbitration agreement does not exists.160 157 Tribunal Supremo, 409/2017, 27 June 2017, Banco Popular Español S.A. v. Agrumexport S.A.: “Este tribunal considera que no existen razones para sostener la tesis fuerte del principio kompetenzkompetenz en nuestro ordenamiento jurídico y limitar el ámbito del conocimiento del juez cuando resuelve la declinatoria de jurisdicción por sumisión a arbitraje. […] Al regular cómo puede alegarse la existencia de un convenio arbitral en un litigio judicial ya iniciado, el art. 11 de la Ley de Arbitraje y los arts. 39 y 63.1 de la Ley de Enjuiciamiento Civil prevén que tal cuestión se decida mediante declinatoria jurisdicción. Estos preceptos no establecen limitación alguna del ámbito de enjuiciamiento por el juez de su propia jurisdicción y competencia que lo diferencie de otros supuestos en que ha de realizar tal enjuiciamiento en una declinatoria, como son los de falta de competencia internacional, falta de jurisdicción por causa distinta de la existencia de un convenio arbitral y falta de competencia objetiva o territorial.” In that case, the Tribunal Supremo applied the contra proferentem rule to an arbitration clause contained in a contract of adhesion to dismiss an arbitration defence, and refused to refer the parties to arbitration. 158 Article 12(1) LA. 159 Article 15(2) LA. 160 Article 15(5) LA. This is an exception to the principle explained supra mn. 43 that state courts will fully review the existence and the validity of an arbitration agreement: Tribunal Supremo, 409/2017, 27 June 2017, Banco Popular Español S.A. v. Agrumexport S.A.

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Choosing an arbitrator requires diligence as an arbitrator may be challenged if there is justifiable doubt as to his impartiality or independence, or if he does not possess the qualifications agreed to by the parties.161 The challenging party may submit an unsuccessful challenge as grounds for objecting to the award.162

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a) Duty to disclose conflicts of interest. Persons proposed to act as arbitrators must disclose any circumstances likely to give rise to justifiable doubts as to their impartiality or independence. From the time of their appointment, arbitrators have to disclose any such circumstances without undue delay. At any time during arbitration, a party may ask arbitrators to clarify their relationships with any of the other parties.163

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b) Grounds for challenge. An arbitrator may be challenged only where circumstances are forthcoming that give rise to justifiable doubts as to his impartiality or independence or if he lacks the necessary qualifications agreed to by the parties.164 Such circumstances might include any professional or commercial relationship between an arbitrator and the parties, even if the level of business was not significant.165 However, it is not sufficient to demonstrate a mere link between the arbitrator and the party. Rather, something more is needed, suggesting that the arbitrator may act in favor or against one party.166

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c) Procedural aspects and preclusion of grounds for challenge. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.167 The parties are free to agree on a procedure for challenging arbitrators.168 In the absence of such agreement, a party that intends to challenge an arbitrator has to raise the grounds for the challenge within 15 days after becoming aware of the acceptance or of any circumstance that may give rise to justified doubts about the arbitrator’s impartiality or independence. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitrators will decide on the challenge.169

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d) Failure or impossibility to act. If an arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay, his mandate terminates if he withdraws from his office or if the parties agree on the termination. If no agreement is reached on termination and the parties have stipulated no procedure to settle the difference proceedings for termination of mandate will be the object of an oral hearing. In arbitrations with several arbitrators, the other arbitrators will decide the issue.170 If the challenge remains unsuccesful, it may be raised again in the context of a setting aside application against the award (article 18(3) LA).

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e) Liability of arbitrators. Arbitrators are under a duty to comply faithfully with their responsibilities. If they do not do so, they are liable for the damage and losses they cause by reason of bad faith, recklessness or fraud.171 In order to hold an arbitrator 161

Article 17(3) LA. Article 18(3) LA. 163 Article 17(2) LA. 164 Article 17(3) LA. 165 Tribunal Superior de Justicia de Madrid, 70/2016, 4 November 2016, Bajoz Eólica S.L. v. Caixabank, S.A. 166 Audiencia Provincial de Madrid, 506/2011, 30 June 2011, Delforca 2008, Sociedad De Valores S.A. v. Banco De Santander, S.A. 167 Article 17(3) LA. 168 Article 18(1) LA. 169 Article 18(2) LA. 170 Article 19(1) LA. 171 Article 21(1) LA. 162

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liable for the damage caused, certain prerequisites must be met, including the causation of the damage by gross negligence, and exhausting other possible remedies prior to commencing proceedings against the arbitrator.172 Recently, the Supreme Court held two arbitrators liable for the costs of an arbitration, after it found that they had excluded the third arbitrator from their final deliberations, which also led to the annulment of the award on public policy grounds.173

2. The arbitral proceedings The arbitral proceedings are also shaped by the principle of party autonomy. There- 52 fore, the parties may freely agree on the procedure to be followed by the arbitrators in conducting the proceedings. Failing such agreement, the arbitrators will decide in such manner as they deem appropriate.174 a) The request for arbitration. An arbitration is initiated by a request for arbitration. 53 The arbitration commences on the date on which the respondent receives the request for arbitration.175 b) Parties’ right to defence and the principle of equality. As the Arbitration Act 54 stands on the premise of free choice, there are only two limitations to the conduct of the arbitral proceedings, defined as the fundamental values of arbitration: the parties’ right to defence and the principle of equality.176 In order to provide the right to defence as granted in the Spanish Constitution,177 every party has the right to present its case.178 The principle of equality has to be honoured by the parties, in particular, when agreeing on a procedure for appointing the arbitrators.179 c) Confidentiality. Article 24(1) LA binds arbitrators, parties and arbitral institu- 55 tions, as appropriate, to honour the confidentiality of the information received on the occasion of arbitration. This includes any kind of document and information provided during the arbitration (submissions, award etc.).180 However, it must be kept in mind that the Spanish Constitution generally demands judicial proceedings to be public.181 Consequently, proceedings before state courts such as interim measures, annulment or enforcement, are, unlike the arbitration itself, public.182 d) The arbitral award. Unless otherwise agreed by the parties, the arbitrators will 56 rule on the dispute in a single award or in as many partial awards as deemed necessary.183 All awards must be issued in writing and signed by the arbitrators, who may specify how they voted.184 This opportunity for an arbitrator to record his 172

Tribunal Supremo, 429/2009, 22 June 2009. Tribunal Supremo, 102/2017, 15 February 2017, Puma S.A. v. M. Temboury Redondo y L.J. Ramallo García; see also Morel de Westgaver/Kotick, Improper Deliberations in International Arbitration as a Ground for Annulment, Kluwer Arbitration Blog, 5 May 2017, http://arbitrationblog.kluwerarbitration. com/2017/05/05/improper-deliberations-in-international-arbitration-as-a-ground-for-annulment (accessed 1 August 2020). 174 Article 25(1) LA. 175 Article 27 LA. 176 Preamble, VI LA. 177 Article 24(1) Constitución Española. 178 Article 24(1) LA. 179 Article 15(2) LA. 180 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 9. 181 Article 120(1) Constitución Española. 182 Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 20. 183 Article 37(1) LA. 184 Article 37(3) LA. 173

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dissenting vote was added by the 2011 reform of the Arbitration Act. The award has to state its date and the place of arbitration185 as well as the grounds upon which it is based, except for awards delivered on agreed terms pursuant to article 36 LA.186 The requirement to give reasons for the award being a mandatory part of the rule of law, an award without reasons or irrational reasons may be annulled on public policy grounds.187 The arbitrators’ decision on arbitration costs will also be included in the award,188 that may be notarized.189 The arbitrators must deliver the award within six months of the date of submission of the defence referred to in Article 29 LA or the expiration of the deadline therefor unless the parties agreed otherwise.190 For example, the parties may agree that days in August are not considered business days.191 However, failure to deliver the award within the time limit will not affect the validity of the arbitration agreement or of the award delivered, without prejudice to the liability that may be incurred by the arbitrators.192 57

e) Termination of the arbitration without an award. According to article 38(2) LA, the arbitral proceedings may also be terminated without an award if (a) the claimant withdraws his claim, unless the respondent takes exception thereto and the arbitrators acknowledge a legitimate interest on his part in obtaining a final settlement of the dispute; (b) the parties agree on the termination of the proceedings; (c) the arbitrators find that continuation of the proceedings is unnecessary or impossible. Furthermore, the arbitrator may terminate the arbitration if the parties do not provision funds deemed necessary to cover the expenses of the arbitrator or the arbitral institution.193

f) The costs of the arbitration. It is stipulated in article 37(6) LA that the arbitrators decide on arbitration costs, which will include their own fees and expenses of the parties’ defence or representatives, the cost of service rendered by the institution conducting the arbitration and all other expenses incurred in the arbitral proceedings. However, there is no fixed rule deciding on who has to bear these costs. Therefore, the arbitrators are absolutely free in their decision unless there is an agreement by the parties. Generally, they take into account the outcome of the arbitration as well as the behaviour of the parties during the proceedings.194 While the arbitrators may decide on costs, claims relating to the arbitrator’s fees and arbitration costs fall outside of the scope of the arbitration agreement as the issue of fees affects a third party (the arbitrator).195 59 Unless otherwise agreed, both arbitrators and the arbitral institution may require the parties to provision the funds deemed necessary to cover their fees and expenses and any others incurred during the proceedings. If no funds are provisioned, the arbitrators may suspend or terminate the arbitration proceedings. If one of the parties fails to 58

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Article 37(5) LA. Article 37(4) LA. 187 Tribunal Superior de Justicia de Galicia, 18/2012, 2 May 2012, Viza Automoción S.A.U. v. Inser Robótica, S.A.: “un pilar básico del Estado de Derecho y por lo tanto, cuestión de orden público constitucional”. In that case, an award was set aside for insufficient assessment of evidence and lack of a legal basis that goes beyond a generic reference to provisions of the Civil Code. 188 Article 37(6) LA. 189 Article 37(8) LA. 190 Article 37(2) LA. 191 Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar. 192 Article 37(2) LA. 193 Article 21(2) LA. 194 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 20. 195 Article 37(2) LA. Cf. Audiencia Provincial de Las Palmas, 348/2012, 29 June 2012, Daorje, S.L.U. Daorje Medioambiente, S.A. v. Canarias de Limpieza Urbana, S.A. 186

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provision funds within the time limit, prior to deciding to terminate or suspend the proceedings, the arbitrators will notify the other parties accordingly, affording them the opportunity to make payment of the amount owed by the new time limit, if they wish.196 A party refusing to pay the advance on his share of the costs during a first arbitration implicitly waives his right to arbitrate the dispute in another arbitration.197

3. Evidence, discovery, disclosure Unless the parties agreed otherwise, the arbitrators may determine the admissibility, 60 relevance, materiality, taking (even ex officio) and evaluation of the evidence.198 The arbitrators199 as well as the parties200 may appoint one or more experts to report on specific issues. The arbitrators may call upon any of the parties to furnish the expert with all relevant information, display thereto all relevant documents or goods or afford him access to such documents or goods for examination.201 Unless otherwise agreed, the parties have the right to put questions to the expert witness.202 Pursuant to article 33(1) LA, the arbitrators and any of the parties may request a 61 competent court to furnish assistance in taking evidence.203 This assistance may consist of taking evidence by the competent court or adoption thereby of any specific measures needed to enable the arbitrators to do so.204

4. The law governing the dispute The Arbitration Act provides that the parties may authorize the arbitrators to decide 62 merely based on equitable considerations (“ex aequo et bono”) not only in international but also in domestic arbitrations.205 In international arbitration206 the parties are free to choose the law applicable to the 63 substance of the dispute.207 Any designation of the law or legal system of a State is generally to be construed as directly referring to the substantive law of that State and not to its conflict of laws rules.208 Failing any indication by the parties, the arbitrators are empowered to apply the rules they deem appropriate209 as long as the terms of the contract and standard practices are observed.210 a) Choice of law and domestic cases. Whereas article 34(2) LA allows parties to 64 international arbitration to choose the law governing the dispute there is no such provision for domestic arbitration. In accordance with the definition contained in article 3 LA, an arbitration is international in any of the following circumstances: (a) The places of business of the parties are located in different States at the time when the arbitration agreement is concluded. (b) Any of the following are located outside the State in which 196

Article 21(2) LA. Tribunal Superior de Justicia del País Vasco, 5/2012, 13 June 2012, Coro y Herminio v. Inés, Manuel, Pedro, Segundo Natalia. 198 Article 25(2) LA. 199 Article 32(1) LA. 200 Article 32(3) LA. 201 Article 32(1) LA. 202 Article 32(2) LA. 203 Article 33(1) LA. 204 Article 33(1) LA. 205 Article 34(1) LA. 206 The term “international arbitration” is defined in article 3 LA. 207 Article 34(2) subpara. 1 s. 1 LA. 208 Article 34(1) subpara. 1 s. 2 LA. 209 Article 34(2) subpara. 2 LA. 210 Article 34(3) LA. 197

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the parties have their places of business: The place of arbitration, determined in the agreement or pursuant thereto, the place where a substantial portion of the obligations of the legal relationship from which the dispute stems are to be performed, or the place to which the subject matter of such dispute is most closely related. (c) The legal relationship from which the dispute stems affects the interest of international trade. This means that for purely domestic arbitrations without any connection to another country, two Spanish parties cannot choose the applicability of a foreign law. 65

b) Choice of law and international lois de police. There has not been specific debate over the question, whether Spanish arbitral tribunals have to regard mandatory provisions of third countries. However, there has been a decision that a party facing enforcement in Spain is not required to invoke a breach of Spanish public policy before foreign courts in order not to be estopped from raising such objection in the enforcement procedure before a Spanish court.211 It is unclear whether this decision allows the conclusion that Spanish arbitral tribunals are not expected to take into account foreign mandatory provisions.

5. Interim relief in arbitration 66

Irrespective of the difficulties to enforce interim measures, be it by state courts or arbitral tribunals, these can have an impact on the relationship between the parties and on the arbitral proceedings as such from a purely practical point of view. Therefore, and in response to the call for shorter duration of the proceedings, many major arbitration institutions have adopted rules for emergency arbitrators or interim relief in the recent past so that interim measures before arbitral tribunals are at least close to becoming a real alternative to interim relief before state courts.

a) Interim relief before state courts. An arbitration agreement does not prevent either party, prior or during the arbitral proceedings, from applying to a court for interim measures, or the court from granting such measures.212 This rule applies even when the place of arbitration is not on Spanish soil.213 Interim measures can also be requested prior to the commencement of the arbitral proceedings if the claimant proves to be party to an arbitration agreement. Notwithstanding any special rules set forth in treaties and conventions, interim measures can be sought from a Spanish court when the arbitration proceedings are conducted in a foreign country.214 68 A party requesting interim measures of protection from state courts does not waive its right to arbitrate the issue.215 The court in the place where the award is to be enforced has jurisdiction regarding interim measures. In the absence of such court, the court in the place where the measures are to carry legal consequences shall have jurisdiction.216 Interim measures may also be granted by courts when the claimant intends to enforce them against third parties.217 67

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b) Interim relief before the arbitral tribunal. Unless otherwise agreed by the parties, the arbitrators may, at the request of a party, grant any interim measures deemed 211 Tribunal Superior de Justicia de Catalunya, 97/2012, 30 May 2012, IMFC Licensing, B.V. v. R.C.D. Espanyol de Barcelona, S.A.D., YCA XXXVIII (2013), 462–464. 212 Article 11(3) LA. 213 Article 1(2) LA. 214 Article 722 Civil Procedure Act. 215 Tribunal Supremo, 1876/2001, 8 October 2002, Scandlines, AB v. Ferrys del Mediterráneo, S.L., YCA XXXII (2007), 555–566. 216 Article 8(3) LA, article 724 Civil Procedure Act. 217 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 13.

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necessary in the connection with the object of the dispute. The claimant may be asked to furnish sufficient security.218 As there are no special form requirements, the provisions on setting aside and enforcement of awards apply irrespective of the form of the tribunal’s decision on interim measures.219

6. Multi-party arbitration a) Arbitration agreement involving several parties. With respect to the guiding 70 principle of party autonomy, a multi-party arbitration requires an arbitration agreement between all parties. This can easily be reached in a multilateral contract that contains an arbitration agreement. However, this is far more problematic when nonsignatories shall be bound by an arbitration agreement. As there are only few cases in which the requirements of an arbitration agreement binding third parties are met,220 this is still the exception. b) Equality of arms and appointment of the arbitrators. In multi-party arbitration, 71 the number of parties increases while the number of arbitrators remains constant. Therefore, in order to maintain the principle of the equality of arms there is a need for rules regarding the appointment of arbitrators. Article 15(2) LA provides that where there are multiple claimants or respondents, the claimants shall appoint one arbitrator and the respondents another. If claimants or respondents cannot agree on the appointment, all arbitrators will be appointed by the court at the request of a party (article 15(2)(b) LA).

IV. The control and the enforcement of arbitral awards The arbitral award has res judicata effect221 and is not appealable. Therefore, a party 72 that fails to amend or supplement their case during the proceedings in spite of being able to do so, is barred from raising these claims before a new arbitral tribunal.222 The burden of proof regarding defences against enforcement lies with the party 73 resisting enforcement. Recognition proceedings must start from an assumption that the arbitration agreement underlying the award is valid and that the award is enforceable because the New York Convention favours recognition and enforcement.223

1. Correction and amendment of arbitral awards Within ten days of the notification of the award, any party may request the arbitrators 74 to correct any errors in the award in computation, clerical, typographical or similar 218

Article 23(1) LA. Article 23(2) LA. 220 Supra mns 32–34. 221 Article 43 LA. 222 Tribunal Superior de Justicia de Andalucía, Ceuta y Melilla, 12/2013, 24 June 2013, Marimar González S.L. v. Construcciones Juan Mata. 223 Tribunal Superior de Justicia de Catalunya, 46/2013, 25 March 2013, Sierra-Affinity, LLC v. Wide Pictures, S.L., YCA XXXVIII (2013), 465–467 (“Con tal disposición se quiso superar los inconvenientes derivados de la prueba que imponían al solicitante para la acreditación de un numeroso grupo de requisitos previos para su homologación, desplazando hacia la contraparte (extremo fundamental en la interpretación del CNY) la carga de la prueba de la concurrencia o no de los motivos de oposición que se esgrimen y que no deban ser apreciados de oficio por el Tribunal, con la clara finalidad de constituir un instrumento eficaz para el desarrollo de las relaciones comerciales internacionales”); Tribunal Supremo, 1876/2001, 8 October 2002, Scandlines, AB v. Ferrys del Mediterráneo, S.L., YCA XXXII (2007), 555–566 (“Se ha de resaltar cómo el sistema diseñado por el Convenio de Nueva York desplaza la carga de la prueba de tales extremos a la parte que quiere oponerse al exequatur […]”). 219

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errors. The parties can also apply for an interpretation of a specific point or part of the award and the extension of the award to claims presented in the proceedings but omitted from the award or to correct a partial excess of powers when the award covered questions not submitted to the arbitrators or questions on a matter not subject to arbitration.224 However, article 39 LA does not authorize arbitrators to modify the essential elements or reasoning of an award even if they discover that the award is flawed225 or to extend the award to claims not raised in arbitration by making an addendum.226

2. Review of arbitral awards before the state courts 75

Since an arbitral award is not appealable and can only be corrected in very limited circumstances, the only practicable action that can be brought against the award is the application to set aside the award under the conditions set out in article 41 LA.

a) Procedural framework (time limits, competent court, appeal). An application for setting aside an award must be made within two months after the notification of the award or after the notification of the decision on the request made for correction, interpretation or an additional award.227 The parties cannot waive their right to challenge an arbitration award, but if a party was aware of a non-compliance with the LA or a requirement of the arbitration agreement and failed to object within the time limit or otherwise without undue delay, it will be deemed to have waived his right to challenge the award on this ground.228 Also, a claimant that has referred to arbitral jurisdiction during court proceedings and then requests to set aside the arbitral award based on the alleged invalidity of the arbitration agreement, is estopped from this objection pursuant to the principle of venire contra factum proprium.229 77 It depends on the ground on which the application relies, whether the applicant has to indicate and prove the grounds or whether these may be raised by the court on its own motion. The exceptions of proper notice of appointment, arbitrability of the subject matter and public policy are to be examined by the court ex officio, while the remaining grounds have to be invoked and proven by the party relying on them.230 78 The application to set aside an award follows the procedure for oral proceedings as laid down in the Spanish Civil Procedure Act.231 Spanish courts have no jurisdiction to set aside foreign awards.232 For awards, the High Court of Justice (Tribunal Superior de Justicia) of the region where the award is delivered will be competent to rule on the application to set aside.233 The court’s judgment cannot be appealed234 and it is not sent back to the arbitral tribunal for amendment so the arbitral tribunal 76

224

Article 39(1) LA. Audiencia Provincial de Madrid, 3/2010, 13 January 2012, Hijos de Domingo Martín, S.L. v. Sistel Castilla S.L. 226 Tribunal Superior de Justicia de Andalucía, Ceuta y Melilla, 12/2013, 24 June 2013, Marimar González S.L. v. Construcciones Juan Mata. 227 Article 41(4) LA. 228 Article 6 LA; Audiencia Provincial de Barcelona, 158/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A. 229 Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar. 230 Article 41(2) LA. 231 Article 42(1) LA. 232 Tribunal Superior de Justicia de Madrid, 8/2012, 1 February 2012, Aviation Consulting Management S.L. v. SAS Cargo Group A.S. 233 Article 8(5) LA. 234 Article 42(2) LA; Tribunal Supremo, 1221/2005, 21 February 2006, Construcciones MJ, S.A v. Not indicated, YCA XXXVIII (2013), 462–464. 225

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may not address the dispute again. The average duration for setting aside procedures is six to nine months.235 b) Grounds for setting aside arbitral awards: An overview. The enumeration of 79 grounds for setting aside arbitral awards in article 41(1) LA is exhaustive. Thus, state courts are not empowered to review the merits of the case. There are only six scenarios in which an award can be set aside: First, if the arbitration agreement does not exist or is not valid. Second, if no proper notice of the appointment of an arbitrator or of the arbitral proceedings was given, or if the party was otherwise unable to present its case. Third, if the arbitrators have decided questions not submitted to their decision. Fourth, if the appointment of the arbitrators or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with the LA, or failing such agreement, was not in accordance with the LA. Fifth, if the arbitrators have decided questions not capable of arbitration and sixth if the award is in conflict with Spanish public policy. c) Lack of jurisdiction of the arbitral tribunal. The grounds listed in article 41(1) 80 (a), (c) and (e) LA deal with the jurisdiction of the arbitral tribunal. During the proceedings, the arbitral tribunal may decide on its own jurisdiction (KompetenzKompetenz)236. Therefore, the power of judges during the arbitral proceedings is very limited. If, for example, the judges are requested to appoint arbitrators, they can only dismiss this request where, exceptionally, no arbitration agreement is in place, i.e. when they can prima facie deem the non-existence of such an agreement.237 Judges may not, however, evaluate the requirements relating to the validity of the agreement at this stage of the proceedings.238 Consequently, when there is an application to set aside the award, the existence of a valid arbitration agreement is not reviewed by the court on its own initiative.239 If, however, the claimant relies in his application on the invalidity of the arbitration agreement, the court will decide on the merits of the jurisdicitonal defence as it is also stipulated in article 22(3) LA. This also applies to objections based on the grounds that the arbitrators decided questions not submitted to arbitration.240 In terms of jurisdiction, courts review on their own initiative only whether the 81 subject-matter of the dispute is apt for settlement by arbitration.241 If the court finds that a part of the subject-matter of the dispute was either not submitted to arbitration or not apt for arbitration, only these parts of the decision in the award will be set aside, providing they can be separated from the others.242 d) Composition of the tribunal and procedural irregularities. The grounds listed in 82 article 41(1)(b) and (d) LA deal with the appointment of the arbitrator and the party’s ability to present its case. As equality between the parties is a fundamental principle of arbitration,243 it is of paramount importance that both parties have the opportunity to have an equal impact on the appointment of arbitrators. Therefore, the absence of a proper notice of the appointment of an arbitrator is a ground to set aside the award. 235

Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 22. Article 22(1) LA; supra mn. 38. 237 Article 15(5) LA; Tribunal Superior de Justicia de la Comunidad Valenciana, 15/2013, 16 December 2013, Zurich Insurance Plc and Barcelonesa de Drogas and Productos Químicos Medifer Liquids S.L. 238 Preamble, Para. IV LA. 239 Article 41(2) LA. 240 Article 41(1)(c) LA. 241 Article 41(1)(e), (2) LA. 242 Article 41(3) LA. 243 Preamble, Para. IV, article 24(1) LA. 236

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The appointment does not have to be notified personally or by registered mail with acknowledgement of receipt.244 83 Further and in order to grant the parties their right to be heard, they must be able to present their case and, therefore, must be notified of the arbitration.245 Given the importance of these fundamental rights, courts review grounds to set aside the award based on these principles on their own initiative.246 However, the absence of a notification does not serve as a ground to set aside the award if the party received further communications by which it is granted a time period to contest the claim247 or if there is other evidence that the defendant was properly and fully aware of the arbitration.248 On the opposite, a registered letter with acknowledgment of receipt sent to the defendant that is returned undelivered to the arbitration institute cannot serve as a proper notification unless the claimant can prove that the notification was made at the respondent’s correct seat or that the respondent was otherwise effectively informed of the arbitration.249 84 As a consequence of the importance of the appointment procedure, the appointment of the arbitrators must comply with the agreement between the parties and the law.250 Whether this is the case is only reviewed by the courts if indicated by the claimant and not on their own initiative.251 A party cannot base a request to set aside the award on the composition of the arbitral tribunal if it has failed to raise a timely objection during the arbitral proceedings although it was given notification of the appointment.252 85 The principle that the tribunal has to be composed of an odd number of arbitrators is amongst imperative legal norms which have to be observed while appointing the tribunal.253 Agreements to the contrary are void and awards issued by a tribunal composed of an even number of arbitrators can be set aside pursuant to Article 41(1)(d).254 86

e) Public policy. Finally, an award may be set aside if it is in conflict with Spanish public policy. This ground can be raised by the courts on their own motion.255 The scope of public policy is very limited as it shall not serve as a basis for reopening the substance of the matter by reviewing the merits of the arbitral decision as opposing to a normal Spanish judicial appeal proceeding.256 244 Tribunal Superior de Justicia de Catalunya, 37/2012, 15 March 2012, Starlio Shipping Company Limited v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 456–458; Tribunal Superior de Justicia de Catalunya, 51/2012, 29 March 2012, MS Amazon River I CV v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 459–461. 245 Article 41(1)(b) LA; cf. article 24(1) LA. 246 Article 41(2) LA. 247 Tribunal Supremo, 332/2000, 31 July 2000, Ionian Shipping Line Co. Ltd v. Transhipping, SA, YCA XXXII (2007), 532–539. 248 Tribunal Supremo, 3536/1998, 11 April 2000, Union Générale de Cinéma, SA v. X Y Z Desarrollos, SA, YCA XXXII (2007), 525–531; Tribunal Supremo, 3340/1998, 1 February 2000, Project XJ220 Ltd v. Mohamed Yassin D., YCA XXXII (2007), 507–511. 249 Audiencia Provincial de Burgos, 180/2009, 27 April 2009, Abonos y Cereales, S.L. v. Granit Negoce, S.A., YCA XXXV (2010), 450–451. 250 Article 41(1)(d) LA. 251 Article 41(2) LA. 252 Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540–549. 253 Article 12 LA. 254 Tribunal Superior de Justicia de Madrid, 11/2016, 28 September 2016, Orange Middle East and Africa, S.A. v. Republic of Equatorial Guinea, YCA XLIII (2018), 555–561; Tribunal Superior de Justicia de Madrid, 14/2016, 9 February 2016, Maria Dolores v. Mail Boxes ETC-Ritcom 2003 S.L. 255 Article 41(2) LA. 256 Tribunal Constitucional, 54/1989 and 132/1991; Hendel, (2011) 29 ASA Bulletin 205–211.

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Therefore, not every breach of law constitutes a violation of public policy. The 87 unwritten rules of public policy embrace rather only the constitutional principles and values protected by article 24 of the Spanish Constitution, which are the right to effective judicial protection and to due process, as well as the other fundamental principles upon which the Spanish legal system is built.257 The court must ascertain that these guarantees are complied with, but at the same time take into account that it is not authorized to review the merits of the case.258 Therefore, courts cannot review the arbitrator’s evaluation of evidence but only set aside the award based on public policy if it disregards all evidence.259 A violation of the mandatory norms relating to the freedoms guaranteed by European law might also amount to a breach of public policy.260 However, in its recent controversial rulings, the Superior Court of Justice of Madrid appeared to extend the notion of public policy. For example, it set aside an award on public policy grounds due to the “unreasonable” assessment of the evidence and the applicable law by the arbitral tribunal.261 In other annulment decisions, the Court has applied a concept of “economic public policy” to set aside awards rendered in domestic arbitrations regarding the sale of financial products. In the eyes of the Court, this concept is tantamount to the general principle of good faith in the context of asymmetry between the parties in view of the complexity of certain financial products.262 When assessing an alleged breach of procedural public policy, courts are cautious 88 because the procedural guarantees of article 24 of the Spanish Constitution require a material, concrete and real violation, not a merely formal one. Therefore alleged violations caused by negligence, passivity or simply the unjustified inactivity of the party alleging the violation does not breach public policy.263 As merely formal violations do not violate the party’s right to defend its case, irregularities or omissions relating to the production of evidence only breaks public policy if they affect crucial evidence for demonstrating facts alleged by the party, and said facts would have altered the outcome of the case.264 Accordingly, an award is not set aside because of a violation of due process when the challenging party argues that the language of the arbitration prevented 257 Cremades/Cairns, in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, 32; Tribunal Superior de Justicia de Catalunya, 14/2016, 15 December 2016, Mr. Millán v. FCC Construcción SA, YCA XLII (2017), 520–523; Tribunal Superior de Justicia de Madrid, 11/2016, 28 September 2016, Orange Middle East and Africa, S.A. v. Republic of Equatorial Guinea, YCA XLIII (2018), 555–561; Audiencia Provincial de Barcelona, 58/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A. 258 Tribunal Superior de Justicia de Catalunya, 97/2012, 30 May 2012, IMFC Licensing, B.V. v. R.C.D. Espanyol de Barcelona, S.A.D., YCA XXXVIII (2013), 462–464. 259 Tribunal Supremo, 3340/1998, 1 February 2000, Project XJ220 Ltd v. Mohamed Yassin D., YCA XXXII (2007), 507–511. 260 Tribunal Superior de Justicia de Madrid, 13/2015, 28 January 2015, Repos i Repàs, S.L v. Banco Bilbao Vizcaya Argentaria S.A. 261 Tribunal Superior de Justicia de Madrid, 15/2018, 5 April 2018, Engasa Eólica SAU v. Vestas Eólica SAU, see also Spinillo, Madrid High Court of Justice and the Setting Aside of Arbitral Awards, Kluwer Arbitration Blog, 11 September 2018, http://arbitrationblog.kluwerarbitration.com/2018/09/11/madridhigh-court-of-justice-and-the-setting-aside-of-arbitral-awards/ (accessed 1 August 2020); Morales, New Ruling by the Madrid High Court of Justice: Arbitration and Public Policy, Kluwer Arbitration Blog, 2 August 2018, http://arbitrationblog.kluwerarbitration.com/2018/08/02/new-ruling-madrid-high-courtjustice-arbitration-public-policy/ (accessed 1 August 2020). 262 Cairns, Judicial Activism and Spanish Arbitration, Kluwer Arbitration Blog, 14 June 2017, http:// arbitrationblog.kluwerarbitration.com/2017/06/14/judicial-activism-spanish-arbitration (accessed 1 August 2020). 263 Tribunal Supremo, 332/2000, 31 July 2000, Ionian Shipping Line Co. Ltd v. Transhipping, SA, YCA XXXII (2007), 532–539. 264 Tribunal Superior de Justicia de Catalunya, 6/2014, 23 January 2014, Management Proyecto Inmuebles, S.L. v. Hayley Conference Centres, L.T.D.

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it from fully and effectively presenting its case without stressing which specific procedural rule is alleged to be violated, especially when the party was obviously aware of the contents of the arbitration as it had discussed the merits of the claim in the arbitration.265 The same also applies to a party that objects an award based on an alleged breach of due process because it has not received the award but has obviously been aware of the award.266 89 The right to due process is, inter alia, violated if an award is inconsistent because it is extra petita, e.g. if it awards more or other than what is claimed; this, however, is not the case if the arbitrators grant a claim that the claimant did not request directly but in the alternative.267 A strict correspondence between what is sought and what is decided is not required. It suffices if the award is rationally adapted to the claims of the parties and the facts on which they are based. Additional determinations of the tribunal are acceptable if they aim at facilitating execution of the award or avoid new disputes.268 90 The impartiality of an arbitrator may also be a violation to the right to due process.269 The court may question the impartiality on its own motion but obviously in order to set aside the award there has to be enough evidence to overcome the presumption of the arbitrator’s impartiality.270 However, a party cannot challenge an award because it was not aware that the sole arbitrator, who was proposed by the Spanish Court of Arbitration after an appropriate proceeding, participated as an arbitrator in other proceedings involving the other party in many of which he had ruled in favour of this party when the challenging party has failed to investigate the arbitrator’s previous relationship to the other party.271 91 An award on costs may violate the right to effective judicial protection and due process if an arbitral tribunal ignores or arbitrarily interprets an agreement between the parties on cost allocation.272 Public policy may also be breached by extreme contractual imbalances which necessitate the protection of the weak party.273

3. Enforcing arbitral awards 92

a) General framework. Enforcement of an arbitral award is the litmus test for the effectiveness of arbitration, in particular in an international context where state court decisions are not enforceable (at least from a practical point of view) in the country where the other party has most of its assets. The enforcement procedure is dependent 265 Tribunal Supremo, 1467/1998, 8 February 2000, Vinalmar, SA v. Gaspar Peral y Cía, SL, YCA XXXII (2007), 512–517. 266 Tribunal Supremo, 1943/2001, 14 October 2003, Fashion Ribbon Company, Inc. v. Iberband, S.L., YCA XXX (2005), 627–632. 267 Tribunal Superior de Justicia de Catalunya, 97/2012, 30 May 2012, IMFC Licensing, B.V. v. R.C.D. Espanyol de Barcelona, S.A.D., YCA XXXVIII (2013), 462–464. 268 Tribunal Superior de Justicia de Catalunya, 34/2016, 14 April 2016, Construcciones Leon Rabadan S.L. v. Banco Bilbao Vizcaya Argentaria S.A. 269 Tribunal Superior de Justicia de Catalunya, 13 December 2012, Ana María v. Maspla Comunicaciones, S.L.; see also Tribunal Supremo, 743/2003, 31 May 2005, Pueblo Film Distribution Hungary KFT v. Laurenfilm S.A., YCA XXXII (2007) 608–615. 270 Tribunal Superior de Justicia de Catalunya, 46/2013, 25 March 2013, Sierra-Affinity, LLC v. Wide Pictures, S.L., YCA XXXVIII (2013), 465–467; Tribunal Superior de Justicia de Catalunya, 13 December 2012, Ana María v. Maspla Comunicaciones, S.L. 271 Audiencia Provincial de Madrid, 4/2011, 23 January 2012, Pegayco, S.L. v. Cesce, S.A. 272 Tribunal Superior de Justicia de Catalunya, 3/2014, 7 January 2014, Carlos Alberto v. Landon Investment, S.C.R. de Régimen Simplificado. 273 Tribunal Supremo, 743/2003, 31 May 2005, Pueblo Film Distribution Hungary KFT v. Laurenfilm S.A., YCA XXXII (2007) 608–615.

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on whether the award is domestic (awards rendered in Spain) or foreign as defined in article 46 LA. aa) Enforcement of domestic awards. The enforcement of domestic awards is in 93 accordance with the provisions of the Spanish Civil Procedure Rules (Ley de Enjuiciamiento Civil, LEC).274 Therefore, it follows the general enforcement procedure as set out in articles 517 et seq. Spanish Civil Procedure Law. All awards rendered in Spain (regardless of whether they are international or domestic) do not require additional leave for enforcement. The application to enforce an award may not be filed before 20 days have expired since the award was notified to the enforcement debtor.275 Enforcement action expires if the claim is not lodged within five years following the arbitration award.276 The court of the first instance of the place where the award was issued has jurisdiction. Its decision is appealable.277 The mere fact that an award is rendered against a sovereign state does not constitute 94 an impediment to its enforcement. The new Spanish Immunity Act278 encompasses the customary principle of restricted immunity. In line with this principle, states are immune from the jurisdiction of the courts of another state unless they have expressly or tacitly consented thereto, or in respect of acts iure gestionis. Under article 16 of the Act, a foreign state cannot invoke immunity in recognition proceedings when it has agreed to submit commercial disputes with a party of another state to arbitration.279 bb) Enforcement of foreign awards. Foreign awards (i.e. any award which has been 95 issued outside Spanish territory280) can be enforced once they are recognized. The recognition is pursuant to the New York Convention without prejudice to the provisions of other more favourable international conventions, and the requisite procedural steps will be performed as set out in the Civil Procedure Rules for sentences delivered by foreign courts.281 As of 2011, Superior Courts of Justice are competent to hear requests for recognition of foreign awards.282 Spain has signed the New York Convention without limiting its application to awards originating from other signatory countries or to awards of commercial arbitration. Thus, any foreign award falling within the scope of the New York Convention will be subject to it if the party seeks enforcement in Spain283 unless there is a multilateral or bilateral agreement concerning the enforcement of arbitral awards entered into by the Contracting States.284 If there is doubt whether the Treaty or the Convention shall apply, the conflict must be resolved in accordance with 274

Article 44 LA. Article 548 LEC. 276 Article 518 LEC. 277 Article 561(3) LEC. 278 Ley Orgánica 16/2015, de 27 de octubre, sobre privilegios e inmunidades de los Estados extranjeros, las Organizaciones Internacionales con sede u oficina en España y las Conferencias y Reuniones internacionales celebradas en España, https://www.boe.es/buscar/act.php?id=BOE-A-2015-11545 (accessed 1 August 2020). 279 Tribunal Superior de Justicia de Madrid, 12/2016, 14 November 2016, Commercial Bank Guinea Ecuatorial v. Republic of Equatorial Guinea, YCA XLIII (2018), 562–566; Tribunal Superior de Justicia de Madrid, 11/2016, 28 September 2016, Orange Middle East and Africa, S.A. v. Republic of Equatorial Guinea, YCA XLIII (2018), 555–561. 280 Article 46(1) LA. 281 Article 46(2) LA. 282 Tribunal Superior de Justicia de Catalunya, 21/2017, 22 February 2017, Olive Mine Action Limited v. HERA AG Ambiental, S.L., YCA XLII (2017), 524–525; Tribunal Superior de Justicia de Catalunya, 106/ 2014, 19 September 2014, Hochtief Solutions, AG v. Equip Tecnic Santandreu, SA, YCA XLI (2016), 558–559. 283 Preamble X LA; Tribunal Superior de Justicia de Catalunya, 106/2014, 19 September 2014, Hochtief Solutions, AG v. Equip Tecnic Santandreu, SA, YCA XLI (2016), 558–559. 284 Article VII(1) NYC. 275

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the principle of specialty – that is a preference for the specific over the generic (regarding the contents) norm – and the principle of greater favourability to the recognition of foreign awards.285 96 The defences to enforcement pursuant to the New York Convention are limited to the defences in article V NYC which are almost identical to the grounds stipulated in article 41 LA to set aside an award. Thus, circumstances that would justify setting aside of an award under Spanish Arbitration law (supra mns 79–91) also constitute defences against its enforcement. Furthermore, article V(1)(e) NYC requires the award to be binding and final. A binding decision within the meaning of the NYC is a decision against which no ordinary means of recourse is available. The finality, however, does not depend on an exequatur by the courts of the State of rendition because the binding character of the arbitral decision cannot be equated to the purposes of its enforcement.286 Nevertheless, in a recent decision, the Superior Court of Justice of Madrid found that the law applicable to determine the binding nature of an award is the law of the legal system of the rendition. As such, it refused to recognize an award issued under the law of Québec, due to the fact that the award was not homologated as required by the law of that jurisdiction.287 The requirement of a foreign award also requires compliance with Spanish public policy288 which is, however, not violated by enforcing an arbitral award while Spanish court proceedings that commenced after commencement of foreign arbitration was pending. Otherwise commencing court proceedings could effectively prevent enforcement of all foreign awards.289 Similarly, res judicata can constitute a ground for refusing recognition within the context of the public policy exception, but only if the violation of public policy is manifest. In that vein, Spanish courts have confirmed that the NYC contains a regime favourable to recognition.290 The court recognizing the foreign arbitral award may also award post-judgement interest even if the foreign award does not provide for such interest.291 97 Enforcement courts may on their own initiative refuse the enforcement of an award due to the non-arbitrability of the subject matter or because of the public policy exception.292 The remaining grounds for enforcement refusal have to be invoked and proven by the party relying on them.293 98

b) Enforcement of awards that were set aside. The application to set aside an award does generally not prevent it from being enforceable. However, in domestic arbitration, the party concerned may apply to the competent court for suspension of enforcement, providing that the party offers security for the value of the sentence plus any damages that may arise from delayed enforcement.294 The court 285 Tribunal Supremo, 129/2002, 20 July 2004, Antilles Cement Corporation v. Transficem, YCA XXXI (2006), 846–852. 286 Tribunal Supremo, 129/2002, 20 July 2004, Antilles Cement Corporation v. Transficem, YCA XXXI (2006), 846–852. 287 Tribunal Superior de Justicia de Madrid, 3/2017, 14 February 2017, IDAC v. GECI España, S.A., YCA XLIII (2018), 571–573. 288 Article V(2) NYC. 289 Tribunal Supremo, 491/1999, 20 March 2001, Angel v. Bernardo Alfageme, S.A., YCA XXXI (2006), 821–824. 290 Tribunal Superior de Justicia de Catalunya, 36/2015, 19 December 2016, Banca per le Imprese v. ROS ROCA Group SL, YCA XLIII (2018), 567–570. 291 Audiencia Provincial de Zamora, 89/2009, 27 November 2009, Genaro v. Carmelo, Agraria del Tormes SA, YCA XXXV (2010), 454–455. 292 Article V(2) NYC. 293 Article V(1) NYC; Tribunal Superior de Justicia de Catalunya, 71/2016, 19 May 2016, Premiere Entertainment Group, LLC v. Savor Ediciones, S.A., YCA XLII, (2017), 517–519. 294 Article 45(1) LA.

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will hear the executant and deliver a non-appealable decision on the suspension and the security to be furnished.295 While setting aside proceedings of a foreign award are pending, Spanish courts can 99 suspend the enforcement proceedings pursuant to article VI NYC. If the same award is sought to be enforced in different countries, the decisions of enforcement courts only have effect in their respective jurisdictions. Therefore, an automatic suspension of the award in France or in Italy does not justify refusal or suspension of its enforcement in Spain.296 Likewise, a pending annulment action in the country of origin of the award is in itself not a sufficient ground to grant a stay of the recognition and enforcement proceedings.297 The approach from Spanish Courts towards enforcing foreign awards that have been 100 set aside by the courts at the seat of the arbitration is somewhat unclear. In principle, Spanish courts do not recognize annulled awards. However, there are isolated decisions from which one could conclude that also the enforcement of vacated awards could be possible.298 c) Fulfilment, set-off and similar defences. The enforcement debtor can object to 101 the enforcement within ten days after receiving the notice of enforcement.299 The different grounds on which such objection may be based on are listed in articles 7, 559 LEC. Among other grounds, the enforcement debtor can rely his objection on – Payment he can prove with documentary evidence,300 – Expiry of the maximum period to enforce the award (see above: 5 years after notification),301 – Debt relief with documentary evidence302 or settlement, provided it is recorded in a public document,303 – Lack of capacity or representation of the enforcing party or the enforcement debtor,304 – Absolute nullity of the award if it does not contain a ruling,305 – The lack of authenticity of an award not officially recorded with a Notary Public.306

4. Preclusion of grounds for challenge and defences to enforcement Spanish arbitration law generally requires defences to be put forward as soon as 102 possible – otherwise, the party in default runs the risk of being precluded from raising these defences at a later stage in the proceedings. a) Preclusion due to failure to object in the arbitral proceedings. A party is 103 deemed to have waived the right to challenge an award based on a non-compliance with the Arbitration Act (or the arbitration agreement) if it was aware of the issue but failed to object in a timely fashion.307 Consequently, a respondent that fails to reject the 295

Article 45(1) LA. Juzgado de Primera Instancia e Instrucción de Rubí, 584/2006, 11 June 2007, Pavan s.r.l. v. Leng d’Or, SA, YCA XXXV (2010), 444–447. 297 Tribunal Superior de Justicia de Catalunya, 14/2016, 15 December 2016, Millán v. FCC Construcción SA, YCA XLII (2017), 520–523. 298 Santos, in: IBA (ed.), Arbitration Country Guides, Spain, January 2018, 24. 299 Article 556(1) LEC. 300 Article 557(1)(A) LEC. 301 Articles 557(1)(D), 518 LEC. 302 Article 557(1)(E) LEC. 303 Article 557(1)(F) LEC. 304 Article 559(1)(i), (ii) LEC. 305 Article 559(1)(iii) LEC. 306 Article 559(1)(iv) LEC. 307 Article 6 LA. 296

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arbitration agreement in the arbitral proceedings cannot object to enforcement based on the alleged lack of an arbitration agreement.308 A party that has been notified of the appointment of an arbitrator but chose not to object to the appointment is precluded from challenging the award because of a violation of due process.309 An objection concerning payment – and not the calculation leading thereto – of the sum of a foreign award should be raised at the moment of execution of the foreign decision after it has been recognized rather than in the enforcement proceeding.310 104 A Spanish court enforcing a foreign award will deny an objection based on the alleged impartiality of the arbitral tribunal if the challenging party has failed to raise this objection during the arbitral proceedings and before the foreign court which confirmed the award.311 105

b) Preclusion due to failure to bring a setting-aside application. There appears to be no discussion around the question whether the award debtor can raise a jurisdictional defence against the enforcement of a foreign award even if the award debtor has not filed an application to set aside the award before the courts at the seat of the arbitration. In principle, failure to raise an objection in a timely manner precludes the award debtor from relying on this objection at a later stage. Against that background and in order to safeguard his position, an award debtor should generally consider making use of any challenge that the law of the seat of the arbitration provides. However, a party is not estopped from opposing the recognition of a foreign award pursuant to the New York Convention on the ground of the non-compliance with Spanish public policy by the foreign arbitrator because it is unreasonable to require that public policy of the country where the arbitral decision must produce its effects has to be invoked previously before courts of other countries.312 308 Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar; Tribunal Supremo, 3536/1998, 11 April 2000, Union Générale de Cinéma, SA v. X Y Z Desarrollos, SA, YCA XXXII (2007), 525–531. 309 Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540–549. 310 Tribunal Supremo, 2065/2001, 4 March 2003, Saroc, S.p.A. v. Sahece, S.A., YCA XXXII (2007), 571–581. 311 Tribunal Supremo, 743/2003, 31 May 2005, Pueblo Film Distribution Hungary KFT v. Laurenfilm, SA, YCA XXXII (2007), 608–615. 312 Tribunal Superior de Justicia de Catalunya, 97/2012, 30 May 2012, IMFC Licensing, B.V. v. R.C.D. Espanyol de Barcelona, S.A.D., YCA XXXVIII (2013), 462–464.

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Q. International Arbitration in Sweden Bibliography: Andersson et al., Arbitration in Sweden, Jure 2011; Edlund, Värderingsklausuler och tillträdesbokslut, Svensk Juristtidning 2007, 311–320; Ewerlöf/Jarvin/Shaugnessy, Interpretation and Application of the New York Convention in Sweden, in: Bermann (ed.), Recognition and Enforcement of Arbitral Awards, Springer 2017, 887–910; Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, Kluwer Law International 2013; Franke, National Report for Sweden (2018 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, ICCA & Kluwer Law International 2019, Supplement No. 105, April 2019; Heuman, Arbitration Law of Sweden: Practice and Procedure, Juris Publishing 2003; Hobér, International Commercial Arbitration in Sweden, Oxford University Press 2011; Lindell, Civilprocessen: rättegång samt skiljeförfarande och medling, 4th ed., Iustus Förlag 2017; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., Norstedts Juridik 2012; Madsen, Påståendedoktrin eller anknytningsdoktrin, Svensk Juristtidning 2013, 730–750; Madsen, Commercial arbitration in Sweden, 4th ed., Jure Förlag 2016; Neway Herrman, Skiljeförfaranden: en introduktion, Norstedts Juridik 2019; Oldenstam/von Pachelbel, Sweden, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 766–825; Öhrström, Stockholms Handelskammares Skiljedomsinstitut: En handbok och regelkommentar för skiljeförfaranden, Norstedts Juridik 2009; Walin et al., Utsökningsbalken: En kommentar, 5th ed., Wolters Kluwer 2017. National legislation: Swedish Arbitration Act (Lag om skiljeförfarande, SFS 1999:116, updated as per SFS 2018:1954 with entry into force on 1 March 2019). International treaties: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958 (330 UNTS 38); Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, 18 March 1965 (575 UNTS 159); Energy Charter Treaty (2080 UNTS 100).

Contents I. Introduction ..................................................................................................... 1. Legal framework ......................................................................................... a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of Swedish arbitration law ............................. II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................

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Part 3. Country Reports c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrator a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration........................................................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police .............................. 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party and multi-contract arbitration .......................................... a) Arbitration agreement involving several parties, consolidation and joinder.............................................................................................. b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for review of arbitral awards: An overview ................... c) Grounds for invalidity under section 33 LSF ................................. aa) Non-arbitrable dispute.................................................................. bb) Public policy.................................................................................... cc) Award not made in writing or not signed by the arbitrators d) Grounds for setting aside under section 34 LSF............................ aa) Lack of valid arbitration agreement........................................... bb) Expiration of the time limit and excess of mandate.............. cc) Arbitral proceedings should not have taken place in Sweden dd) Improper appointment of arbitrators........................................ ee) Unauthorized arbitrator ............................................................... ff) Other procedural irregularities ................................................... 3. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... b) Enforcement of awards that have been set aside........................... c) Fulfilment, set-off and similar defences........................................... 4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

38 39 40 42 43 44 46 47 48 51 53 54 56 57 59 61 64 64 65 66 67 68 69 70 71 73 75 79 79 80 82 83 83 84 86 87 88 89 91 91 93 94 95 95 98

I. Introduction 1

Arbitration has for a long time been the preferred dispute resolution mechanism for settling commercial disputes in Sweden and today most commercial contracts include an arbitration clause.1 The Swedish legal framework has also proved to be well adapted to the 1 The first Swedish Arbitration Act was adopted in 1887 and there is reference to arbitration in legislation as early as the fourteenth century, SOU 1994:81, 55.

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needs in international commercial dispute resolution. Since the later part of the twentieth century, Sweden has emerged as one of the preferred venues for international arbitration, and the SCC Institute, the main arbitration body in Sweden, is today one of the leading arbitration institutes in the world.2

1. Legal framework Sweden has an arbitration-friendly legislative framework. Sweden is a member state 2 of the New York Convention of 1958 (NYC), and the Swedish Arbitration Act (Lag om skiljeförfarande, LSF, SFS 1999:116), originally enacted in 1999 and revised in 2018, was drafted in close consideration of the UNCITRAL Model Law.3 As a result, Swedish law is well aligned with international standards of arbitration practice: disputes concerning matters in respect of which the parties may reach a settlement may by agreement be referred to an arbitral tribunal for resolution;4 the arbitral tribunal will make a decision, the arbitral award, which has the effect of a final judgment between the parties;5 the arbitral award can only be set aside in very limited circumstances;6 and an arbitral award can as a main rule be enforced in the same manner as a Swedish court judgment.7 Some general principles of Swedish procedural law, such as the principles of 3 immediacy, concentration and orality, have not been made applicable to arbitrations, thereby enabling a more flexible procedure.8 Furthermore, certain provisions in the LSF are non-mandatory, thereby giving the parties the opportunity to agree on how the proceedings shall be conducted.9 The SCC Institute has published translations of the LSF into nine languages online, 4 together with translations into English of Swedish court decisions on arbitration issues, thereby making Swedish legislation and case law on international and domestic arbitrations accessible to, inter alia, international arbitrators, parties and counsel that conduct arbitrations in Sweden.10 a) Domestic and international arbitration. The LSF is applicable to both domestic 5 and international arbitral proceedings seated in Sweden.11 The provisions of the LSF have been considered to be aligned with international standards, and therefore well adapted for international disputes. Only a few provisions of the LSF are exclusively applicable to international disputes, inter alia section 51 that stipulates that where none of the parties is domiciled or has its place of business in Sweden, such parties may exclude or limit the application of the grounds for setting aside an award. While there is no separate law for international arbitral disputes, as may be found in 6 some other jurisdictions, the arbitrators can follow different procedural courses in domestic and international disputes. For example, in domestic disputes the arbitrators will normally consider basic principles of Swedish civil procedural law if the LSF or the 2 152 new cases were filed with the SCC Institute during 2018, with 50 per cent being international cases in the sense that they involve at least one non-Swedish party, see https://sccinstitute.com/statistics/ (accessed 1 August 2020). 3 SOU 1994:81, 73 et seq.; Govt. bill 1998/99:35, 47. 4 Section 1, para. 1 LSF. 5 Section 27, para. 1 LSF. 6 Sections 33–34 LSF. 7 Chapter 3, section 1, point 4 and sections 15–18 of the Swedish Enforcement Code (Utsökningsbalken, SFS 1981:774). 8 SOU 1994:81, 68; Govt. bill 1998/99:35, 41. 9 Govt. bill. 1998/99:35, 44. 10 See www.arbitration.sccinstitute.com (accessed 1 August 2020). 11 Section 46 LSF; SOU 1994:81, 71 et seq.; Govt. bill 1998/99:35, 44 et seq.

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parties’ agreement does not provide an answer to the question at hand. If the parties are instead domiciled outside Sweden, potentially in different countries representing various cultures of law, other considerations are normally made to adapt the proceedings to the will, and background, of the parties.12 7

b) Commercial and non-commercial arbitration. The application of the LSF is not limited to commercial disputes. However, special requirements may apply to noncommercial arbitration. For example, as regards arbitration agreements involving consumers, section 6 LSF stipulates that where a dispute between a business enterprise and a consumer concerns goods, services, or any other products supplied principally for private use, an arbitration agreement may not, as a general rule, be invoked where such agreement was entered into prior to the dispute.

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c) Ad hoc and institutional arbitration. Swedish arbitration law allows for both ad hoc and institutional arbitral proceedings. By far the most important arbitration body in Sweden is the SCC Institute. The SCC Institute has adopted two sets of rules that the parties can choose to govern the arbitral proceedings. These are the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC Rules) and the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce. The Rules for Expedited Arbitrations aim to foster speedy and cost-efficient proceedings. The main characteristics of the Rules for Expedited Arbitrations include that the final award shall be made no later than three months from the date upon which the case was referred to the arbitrator,13 the arbitration is decided by a sole arbitrator,14 and the proceedings only allow for a limited number of written submissions from the parties.15 Additional details as regards individual provisions in the arbitration rules adopted by the SCC Institute are commented upon further throughout the text below. A unique feature of SCC arbitration worth mentioning is that, since September 2019, all new SCC arbitrations are administered on a secure digital platform.16

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d) The territoriality principle, the seat of the arbitration and the lex arbitri. The LSF is applicable to arbitral proceedings seated in Sweden.17 Consequently, the choice of the seat of the arbitration determines the procedural law applicable to the arbitral proceedings, lex arbitri. The choice of the seat will also give jurisdiction to the courts in Sweden for decisions in support of the arbitration, inter alia, appointments and challenges of arbitrators. If the parties do not determine the seat of arbitration, this shall according to the LSF be determined by the arbitrators.18 It shall be noted that even though the agreed seat of the arbitration is Sweden, hearings can take place elsewhere.19 12

Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 3. Article 43 of the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce. 14 Article 17 of the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce. 15 Article 30(1) of the Rules for Expedited Arbitrations of the Arbitration Institute of the Stockholm Chamber of Commerce. 16 See https://sccinstitute.com/scc-platform (accessed 1 August 2020). The SCC Platform provides participants with a secure and efficient way of communicating and filing all case materials in the arbitration, such as procedural orders, submissions and exhibits, and will constitute the forum through which the SCC communicates with the parties, counsel and arbitrators throughout the proceedings. 17 Section 46 LSF. 18 Section 22, para. 1 LSF. If the SCC Arbitration Rules are applicable, the board of the SCC will pursuant to article 25(1), unless agreed upon by the parties, decide the seat of the arbitration. 19 Section 22, para. 2 LSF. 13

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e) Arbitration and other ADR mechanisms (mediation, expert determination). 10 Two other common forms of alternative dispute resolution methods used in Sweden, in addition to arbitration, are mediation and expert determination. Mediation is regulated by a particular statute, which e. g. contains provisions to 11 ensure confidentiality of the mediation process and provides that settlement agreements following mediations can be enforced.20 Also, the SCC Institute has adopted the Mediation Rules of the Arbitration Institute of Stockholm Chamber of Commerce, which e. g. stipulate that the parties may, subject to the consent of the mediator, agree to appoint the mediator as an arbitrator and request that the settlement agreement shall be confirmed in an arbitral award.21 Expert determination is normally used to determine a specific question, where for 12 example technical or audit expertise is required. The legal status of the outcome of the expert determination will depend upon what has been agreed between the parties. If the parties’ agreement stipulates that the expert shall not act as an arbitrator, but that the determination shall be binding between the parties, it is generally considered that whilst the determination does not have the legal status of an arbitral award it is, as a general rule, only possible for a court or an arbitral tribunal to deviate from the expert determination if the expert has exceeded his or her authority, if procedural irregularities have occurred, or by application of legal grounds which would be applicable to challenge provisions in the commercial contract between the parties.22

2. The guiding principles of Swedish arbitration law Arbitration, as an exception to the state monopoly of administration of justice, 13 derives from the principle of party autonomy and freedom of contract. In the travaux préparatoires to the LSF it is stated that since the law allows the parties to regulate their dealings through agreements, the law should also respect the parties’ agreement to let a third party settle their dispute.23 Consequently, party autonomy is said to be a ‘central ingredient’ of the Swedish legislation regarding arbitration.24 At the same time, in order for the legal system to acknowledge arbitration agreements and the finality of arbitral awards, the procedure has to satisfy fundamental principles of due process, such as the right to be heard and the impartiality and independence of the arbitrators.25 In order to uphold those fundamental procedural requirements in relation to arbitral proceedings, certain judicial control by the courts is needed. However, under Swedish arbitration law this judicial control does not go so far as to include a right to appeal on the merits or on a point of law.26

II. The arbitration agreement The arbitration agreement is the cornerstone of the arbitral proceedings and as such 14 has many important legal implications. In the travaux préparatoires it is emphasized 20 The Law on Mediation of Certain Private Disputes (Lag om medling i visa privaträttsliga tvister, SFS 2011:860). 21 Article 14 of the Mediation Rules of the Arbitration Institute of Stockholm Chamber of Commerce. 22 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 31 et seq.; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 48 et seq.; Edlund, Svensk Juristtidning 2007, 311 (317 et seq.). 23 Govt. bill 1998/99:35, 40. 24 Ibid., 43. 25 Ibid., 42. 26 Ibid., 139.

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that, for instance, the arbitral tribunal derives its jurisdiction from the arbitration agreement, the agreement has the effect of excluding jurisdiction of the courts if the arbitration agreement is duly pleaded as a bar to court proceedings,27 the arbitration agreement is supported by legislation that prevents obstruction of the arbitral proceedings,28 and the arbitral award can be enforced subject to a valid arbitration agreement.29 Conversely, if an arbitration agreement is not valid, the arbitral award can be set aside and enforcement refused.30 As a result, the legal framework for determining the validity and scope of the arbitration agreement is of central importance.

1. The doctrine of separability 15

While Swedish arbitration law acknowledges that an arbitration agreement can be concluded both before and after a dispute has arisen, the arbitration agreement normally forms part of the main contract and in advance regulates the handling of future disputes relating to the main contract. In accordance with the doctrine of separability, the main contract and the arbitration clause shall be considered as two separate agreements.31 The doctrine of separability has been codified in section 3 LSF, which provides that where the validity of an arbitration agreement which constitutes part of another agreement must be determined in conjunction with a determination of the jurisdiction of the arbitrators, the arbitration agreement shall be deemed to constitute a separate agreement. Under Swedish arbitration law the doctrine of separability has a wide scope of application and is applicable, for instance, when the validity of the main contract is contested with reference to the claim that the main contract (i) never came into force, (ii) was invalid from the outset (ab initio), (iii) later became invalid, or (iv) has been terminated for cause or by consent.32

2. The law applicable to the arbitration agreement Where an arbitration agreement has international connections, the starting point under Swedish arbitration law is that the arbitration agreement shall be governed by the law of the country agreed upon by the parties.33 According to statements in the travaux préparatoires, the parties’ agreement must relate specifically to the arbitration agreement and a general choice of law clause is not sufficient.34 If the parties have not reached such an agreement, the arbitration agreement shall according to section 48 para. 1 LSF be governed by the law of the country in which, by virtue of the agreement, the arbitration had or shall have its seat. 17 The law governing the arbitration agreement will be applicable to determine, inter alia, if an arbitration agreement has been entered into, whether it is valid, and if the agreement has ceased to be effective.35 The interpretation of the agreement, including the determination of its scope, will be governed by the same law. According to the second paragraph of section 48 LSF, the rule in the first paragraph shall not 16

27

Ibid., 42, 48; sections 4 and 49 LSF. Govt. bill 1998/99:35, 42. 29 Ibid. 30 Sections 34, para. 1 point 1 and 54 point 1 LSF. 31 Govt. bill 1998/99:35, 75 et seq. 32 Govt. bill 1998/99:35, 76; Andersson et al., Arbitration in Sweden, 2011, 39 et seq.; Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 53 (72); Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 44. 33 Section 48, para. 1 LSF. 34 Govt. bill 1998/99:35, 193. 35 Govt. bill 1998/99:35, 242. 28

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apply to the issue of whether a party was authorized to enter into an arbitration agreement or was duly represented. These questions are instead as a main rule to be decided by the applicable law as determined in accordance with Swedish conflict of law rules.36

3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. Under Swedish law, there are no 18 specific limits as to the capacity to enter into arbitration agreements. General principles regarding capacity to enter into binding agreements apply also in relation to arbitration agreements, and the parties entering into the agreement must have the right to dispose over the matter in dispute.37 It is considered that under Swedish law states cannot, as a general rule, avoid being bound by an arbitration agreement by pleading sovereign immunity.38 b) Arbitrability. Swedish arbitration law allows for arbitration if the dispute con- 19 cerns a matter in respect of which the parties may reach a settlement.39 An award that includes determination of an issue which in accordance with Swedish law may not be decided by arbitrators is invalid according to section 33, para. 1, point 1 LSF. The defect cannot be waived and the arbitral tribunal must, ex officio, declare that they do not have jurisdiction over the matter.40 While the law has not based arbitrability on the concept of public policy, due to the lack of a clear definition of the concept of public policy under Swedish law, an award which is manifestly incompatible with basic principles of the Swedish legal system will be invalid.41 If the dispute concerns substantive issues which are arbitrable under Swedish law, but not under foreign law which is to be applied to the arbitration agreement, the award will not be invalid but can be set aside after challenge proceedings according to section 34, para. 1, point 1 LSF.42 c) Form of the arbitration agreement. Swedish law, unlike most national arbitration 20 laws, does not prescribe that an arbitration agreement must be in writing in order to be valid.43 Instead, general contract law principles apply to the formation of arbitration agreements.44 This means that, while a written arbitration agreement is strongly recommended e. g. to enable enforcement under the NYC, arbitration agreements can be entered into inter alia orally or by conduct.45 The general rule in Swedish contract law is that there needs to be unanimous 21 declarations of intent to be bound, in order for an agreement to be concluded.46 Case law and statements in legal literature indicate that in order for an arbitration agreement 36

Ibid. Cf. Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 94 et seq. 38 Ibid. 39 Section 1, para. 1 LSF. For an overview of non-arbitrable matters, see e. g. Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 53 (68 et seq.). 40 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 140. 41 Section 33, para. 1, point 2 LSF; Govt. bill 1998/99:35, 49, 141; SOU 1994:81, 78, 172; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 142 et seq. 42 Govt. bill 1998/99:35, 234. 43 SOU 1994:81, 95; Govt. bill 1998/99:35, 67. 44 Andersson et al., Arbitration in Sweden, 2011, 41; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 96. 45 Govt. bill. 1998/99:35, 212; Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A practitioner’s Guide, 2013, 53 (54 et seq.); Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 95. 46 See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 33 and 39 et seq. on the question whether a party, under Swedish law, can be bound to an arbitration agreement by passiveness. 37

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to be concluded, it has to be sufficiently clear that the parties have agreed to arbitration as the relevant dispute resolution method.47 Furthermore, the subject of the arbitration agreement must be specified as to concern a particular legal relationship.48 Consequently, an arbitration agreement referring all future disputes between certain parties to arbitration is not valid.49 22 If standard terms, containing an arbitration clause, are included in a contract or added as a supplement to the main contract, the arbitration agreement will be binding between the parties.50 The parties will normally also be bound by an arbitration agreement concluded through the use of a reference to standard terms, a so called reference clause, provided that the standard terms were easily accessible to the parties before the agreement was entered into.51 However, it has been suggested in the legal literature that slightly higher requirements might apply in order for an arbitration agreement to be concluded through a reference clause if one or all parties are nonSwedish.52 23

d) Termination of the arbitration agreement. According to statements in the travaux préparatoires, an arbitration agreement can be terminated in accordance with general principles of Swedish contract law.53 This means that the arbitration agreement can be terminated e. g. for cause if the other party is in material breach of the agreement. Conversely, the arbitration agreement cannot, without an express agreement between the parties, be terminated unilaterally for convenience. In accordance with the doctrine of separability, a termination clause in the main contract is, as a main rule, not applicable to the arbitration agreement, and a termination of the main contract does not automatically constitute a termination of the arbitration agreement. If an award is set aside or declared invalid, the main rule is that the arbitration agreement continues to be valid, except when the award is set aside due to the lack of a valid arbitration agreement.54 The arbitration agreement will cease to be effective, in respect of the existing dispute, if an award has not been rendered within the agreed time period.55 The agreement will also cease to apply to a certain dispute, if the dispute has been decided through a binding award.56 In addition, a party will, in relation to the issue in dispute, be deemed to have waived its right to assert the arbitration agreement as a bar to court proceedings where the party has opposed a request for arbitration, failed to appoint an arbitrator in due time, or fails in due time to provide security for the costs of the arbitration.57 Also, a party who initiates litigation will as a main rule be deemed to have waived the right to invoke the arbitration agreement with respect to the issue in dispute.58 47 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 27, 33; Alingsås Kommun v. Luftteknik Mellin & Selling, RH 1982:102. 48 Cf. section 1, para. 1 LSF. 49 Govt. bill. 1998/99:35, 212. 50 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 33. 51 Tureberg – Sollentuna Lastbilcentral ekonomisk förening v. Byggnadsfirman Rudolf Asplund AB, NJA 1980, 46. See also Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 33 et seq. 52 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 37; Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 53 (58 et seq.). 53 SOU 1994:81, 109. 54 Ibid., 109 et seq. 55 SOU 1994:81, 110; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 120; Andersson et al., Arbitration in Sweden, 2011, 78. 56 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 122. 57 Section 5 LSF. 58 SOU 1994:81, 99; Govt. bill 1998/99:35, 68; Andersson et al., Arbitration in Sweden, 2011, 77 et seq.; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 123 et seq.

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4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. The general principle of Swedish contract law, applicable also to arbitration agreements, is that the agreement is only binding on those who are parties to it. One important situation where a third party can become party to an arbitration agreement is following assignment of rights and obligations under a contract. As a main rule, an arbitration clause is freely assignable unless the main contract prohibits such assignment.59 The Supreme Court has in the Emja case established that an assignee is bound by the arbitration agreement to the same extent as the assignor, even though only certain rights are assigned and irrespective of whether the assignee knew or ought to have known about the arbitration agreement.60 In the same case, the Supreme Court obiter dicta stated that the remaining party (the debtor) is bound by the arbitration agreement vis-à-vis the assignee except in the event of special circumstances, such as inability by the assignee to pay the arbitrators’ fee.61 With respect to universal succession, whereby all the rights and obligations (including assets and liabilities) pass to a new legal subject, the main rule is that the successor is bound by an arbitration agreement entered into between the original parties.62 Under Swedish law, the main rule as regards bankruptcy is that the bankruptcy estate is bound by an arbitration agreement, entered into by the debtor before the bankruptcy, if the dispute concerns a question on which the estate would have been bound by a settlement agreement entered into between the debtor and creditor prior to the bankruptcy.63 This means that the bankruptcy estate is not bound by an arbitration agreement as regards e. g. issues concerning rights in rem.64 If a contract between a debtor and creditor contains an arbitration clause, a guarantor is in dubio considered to be bound by the arbitration clause regarding disputes which relate to the liability of the debtor according to the underlying agreement.65 However, if the dispute relates to the guarantee itself, the arbitration agreement in the underlying contract will as a main rule not be applicable.66 Under Swedish law there is no group of companies doctrine that would render a party to become bound by an arbitration agreement solely due to it being a member of the same group as a corporate entity having entered into the arbitration agreement.67 Such an affiliated company may however, under general Swedish contract law principles, become bound to the arbitration agreement, e.g. by way of conduct.68

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b) Substantive scope of the arbitration agreement. As set out above, the substantive 28 scope of the arbitration agreement will be determined under the law governing the 59

Andersson et al., Arbitration in Sweden, 2011, 73. MS “Emja” Braack Schiffahrts KG v. Wärtsilä Diesel AB, NJA 1997, 866. 61 For an alternative view, see Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 154 et seq. 62 SOU 1994:81, 91; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 159. 63 The Bankruptcy Estate of Svenska Kreditförsäkringsaktiebolaget v. certain (41) reinsurers, NJA 2003, 3; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 162 et seq. 64 As regards other examples of excluded issues, see Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 53 (75). 65 Andersson et al., Arbitration in Sweden, 2011, 74 et seq.; Reldén/Nilsson, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 53 (74); Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 174 et seq. 66 Andersson et al., Arbitration in Sweden, 2011, 75; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 177 et seq. 67 Andersson et al., Arbitration in Sweden, 2011, 75 et seq. 68 Ibid. 60

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arbitration agreement. Under Swedish arbitration law, the arbitration agreement will be considered to comprise all matters which may be interpreted to fall within its scope. In case law, it has been confirmed that there is a strong presumption that all arbitrable disputes concerning the legal relationship to which the arbitration agreement is linked shall be considered to fall within the jurisdiction of the arbitrators.69 Hence, an arbitration clause which has not been clearly restricted will be given maximum scope.70 Moreover, the Supreme Court has concluded that the arbitrators are typically best suited to determine their jurisdiction and that there should therefore be a presumption that the arbitrators’ determination as to which issues that are covered by the arbitration agreement is correct.71 29 As previously noted, it is stipulated in section 1, para. 1 LSF that an arbitration agreement can only cover disputes pertaining to legal relationships specified in that agreement. When determining whether a particular dispute pertains to a legal relationship specified in the arbitration agreement, the material facts and the legal label invoked by the claimant will according to the doctrine of assertion be relied upon for the determination.72 In case law, arbitration clauses have in addition been considered to cover disputes regarding promissory notes and bills of exchange issued under the main contract (where the arbitration clause has been included),73 and also under special circumstances to cover non-contractual issues where there has been a close connection with contractual claims or legal grounds.74 c) Pathological arbitration clauses. If an arbitration agreement is impossible to perform, it follows from general principles of Swedish contract law that such agreement may be unenforceable. However, the scope for determining an arbitration clause unenforceable is, particularly in relation to international arbitration, considered to be limited.75 Pathological clauses can be remedied e. g. through contract interpretation, or by adhering to the common intention of the parties which will prevail over the wording of the clause. If the application of the pathological clause would be unfair, taking into account circumstances at the time of the entering into the agreement and subsequent events, the clause may possibly also be adjusted with the application of section 36 of the Swedish Contract Act (Lag om avtal och andra rättshandlingar på förmögenhetsrättens område, SFS 1915:218). 31 According to article 11, point (i) and article 12, point (i) of the SCC Rules, the board of directors of the SCC Institute shall following exchange of written submissions, if necessary, decide whether the SCC Institute manifestly lacks jurisdiction over the dispute. A number of principles for interpretation of arbitration clauses can be identified in the SCC Institute’s published decisions. For instance, where the parties 30

69 Tupperware Nordic A/S v. The Bankruptcy Estate of Facht Distribution AB, NJA 2010, 734; the Supreme Court in Joint Stock Company Belgorkhimprom v. Koca Inşaat Sanayi Ihracat Anonim Şirketi on 20 March 2019, T 5437-17. 70 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 55. 71 The Supreme Court in Joint Stock Company Belgorkhimprom v. Koca Inşaat Sanayi Ihracat Anonim Şirketi on 20 March 2019, T 5437-17. 72 Petrobart Ltd v. The Republic of Kyrgyzstan, NJA 2008, 406; Concorp Scandinavia AB v. Xcaret Confectionery Sales AB, NJA 2012, 183; Andersson et al., Arbitration in Sweden, 2011, 55 et seq.; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 56 et seq. 73 Hans Schröder AB v. Svenska AB Lebam, NJA 1964, 2; Byggnadsaktiebolaget Lennart Hultenberger v. Bostadsrättsföreningen Hytten, NJA 1972, 458. 74 Birger Perjos v. Gatu och Väg AB, NJA 2007, 475; The Kingdom of Denmark through BornholmsTrafikken v. Ystad Hamn Logistik AB, NJA 2008, 120; I.H. Lidmalm Consulting AB and B.S. v. Kemisten AB and L.M.L., NJA 2017, 226. Cf. also Madsen, Svensk Juristtidning 2013, 730. 75 Andersson et al., Arbitration in Sweden, 2011, 47 et seq.

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have referred to a non-existing arbitration institute in Stockholm or Sweden, it has been presumed that the parties have intended to refer to the SCC Institute.76

5. The effect of the arbitration agreement and Kompetenz-Kompetenz The arbitration agreement forms the foundation for the arbitral proceedings and 32 creates jurisdiction for the arbitral tribunal.77 A valid arbitral award requires that the arbitral tribunal has jurisdiction. Without a valid arbitration agreement creating jurisdiction for the arbitral tribunal an award can be set aside and enforcement of the award be refused.78 Under Swedish law, the question of jurisdiction can become relevant at different stages of the arbitral process: (i) it may arise in court proceedings if the respondent objects that an arbitration agreement constitutes a bar to judicial proceedings,79 (ii) following a request for arbitration, the respondent may refuse to appoint an arbitrator and allege that the District Court, in the absence of a valid arbitration agreement, shall omit to appoint an arbitrator at the claimant’s request,80 (iii) either of the parties may, subject to certain restrictions, bring a claim for a declaratory judgment before state courts on the question of jurisdiction,81 (iv) after the arbitral tribunal has been formed, the respondent may raise an objection in the arbitral proceedings as to the jurisdiction of the arbitral tribunal,82 and (v) finally, after an award has been rendered, the respondent may under certain circumstances initiate challenge proceedings to have the award set aside,83 or with regard to a foreign award claim that enforcement of the award shall be refused.84 a) Enforcing arbitration clauses and Kompetenz-Kompetenz. Under Swedish law, 33 jurisdictional questions are as a main rule finally decided by state courts. However, while arbitral tribunals do not have the ultimate power to decide on their authority, the question of jurisdiction may still be brought before the arbitrators. According to section 2, para. 1 LSF, the arbitrators may rule on their own jurisdiction to decide the dispute (the principle of “Kompetenz-Kompentenz”). This determination by the arbitrators of their authority includes the question of the validity of the arbitration agreement, but also, inter alia, the questions whether the dispute falls within the scope of the arbitration agreement and whether the dispute is arbitrable.85 However, the arbitral tribunal does, as a general rule, not have an obligation to examine the question of jurisdiction unless a party has requested it to do so.86 The arbitrators’ determination of the question of jurisdiction is not legally binding 34 under Swedish arbitration law.87 Accordingly, the fact that the arbitration tribunal has 76

Ibid., 65 et seq. Section 1, para. 1 LSF. 78 Cf. sections 34 and 54 LSF. 79 Section 4, para. 1 LSF. 80 Section 18 LSF. The District Court shall only reject a claim to appoint an arbitrator if it is manifest that no valid arbitration agreement exists. 81 Sections 2, para. 2 and 4a, para. 1 LSF. Cf. footnote 89. 82 According to section 2, para. 1 LSF the arbitrators may rule on their own jurisdiction to decide the dispute. Cf. in this regard article 11(i) and 12(i) in the SCC Rules according to which the board shall dismiss a case, in whole or in part, if the SCC Institute manifestly lacks jurisdiction over the dispute. 83 Section 34 LSF. 84 Section 54, point 1 LSF. 85 SOU 1994:81, 258; Govt. bill 1998/99:35, 213; Elf Neftegaz S.A v. Interneft OOO, Regionen Saratov och Regionen Volgograd i Ryska Federationen, NJA 2016, 264. See in this regard also Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 348 et seq. and Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 273 et seq. 86 The arbitrators are to ex officio examine grounds for invalidity stipulated in section 33 LSF, e. g. if the dispute is arbitrable, see SOU 1994:81, 258 and Govt. bill 1998/99:35, 214. 87 Section 2, para. 2 LSF. 77

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ruled on the question of jurisdiction does not hinder courts from later determining the issue of jurisdiction differently from the arbitrators.88 When making its determination, a Swedish court will be bound by the facts invoked by the parties.89 If a party initiates a court action during the arbitration proceedings, this does not hinder the arbitral tribunal from proceeding with the arbitration proceedings pending the outcome of the determination by the court.90 In this context it shall be noted that Swedish law does not recognize the concept of anti-suit injunctions, and that, accordingly, Swedish courts will not issue any such orders directed against future or ongoing arbitration proceedings.91 b) Preclusion of jurisdictional defences. Under Swedish law, a party can under different circumstances be precluded from raising a jurisdictional defence. As a general rule, a party will be deemed to have accepted the arbitrators’ jurisdiction if the party participates in the proceedings without making an objection.92 An objection as to the arbitral tribunal’s jurisdiction shall, according to the waiver rule in section 34, para. 2 LSF, be included in the respondent’s first submission to the arbitral tribunal, or as soon thereafter as the respondent becomes aware of the circumstances relied upon for the objection,93 in order for a subsequent action to challenge the award on this ground not to be barred.94 Consequently, a party shall not be deemed to have accepted the arbitrators’ jurisdiction solely by having appointed an arbitrator.95 36 If the arbitrators, following a jurisdictional objection, find that they lack jurisdiction to try the dispute, they shall dismiss the dispute in the form of an arbitral award.96 Such an award can, unless the parties have agreed otherwise, be appealed to a Swedish Court of Appeals within two months.97 If the award is not appealed, it will gain binding legal effect.98 Conversely, if the arbitral tribunal, following its determination, finds that it has jurisdiction, and the respondent does not request the Court of Appeal to review the decision, the respondent should make a formal protest against the decision within the arbitration proceedings.99 By adhering to this requirement of “dual protests”, the respondent avoids forfeiting its rights to later challenge the arbitral award based on the same ground. In this regard it can be noted that invocations that an award is invalid because the dispute is not arbitrable under Swedish law cannot be precluded.100 37 The right to invoke the arbitration agreement as a bar to court proceedings can also be precluded under certain circumstances. An invocation of an arbitration agreement as 35

88 According to section 2, para. 2 LSF, any party that disagrees with a decision by the arbitrators finding that they have jurisdiction to adjudicate the dispute may request the Court of Appeal to review the decision. Such a request shall be brought within thirty days from when the party was notified of the decision. Section 4 a, para. 1 LSF stipulates that as a general rule a court may not, over the objections of a party, try the issue of the arbitrators’ jurisdiction in a certain arbitration in a way other than as provided for in section 2 LSF, if the request is brought after the commencement of the arbitration. 89 Andersson et al., Arbitration in Sweden, 2011, 153. 90 Section 2, para. 2 LSF. 91 Andersson et al., Arbitration in Sweden, 2011, 156 et seq. 92 Section 34, para. 2 LSF; SOU 1994:81, 292. 93 This could become relevant e. g. if claims are amended or new claims are presented. 94 SOU 1994:81, 292. According to article 29(2)(i) of the SCC Rules, any objections concerning the existence, validity or applicability of the arbitration agreement shall be included in the statement of defence. 95 Section 34, para. 2 LSF. 96 Section 27, para. 1 LSF. 97 Section 36, para. 1 LSF. 98 SOU 1994:81, 259; Govt. bill 1998/99:35, 215. 99 Govt. bill 2017/18:257, 27; Öhrström, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 81 (84); Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 293. 100 Section 33 LSF.

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a procedural impediment must, as a main rule, be made the first time the party pleads his case on the merits in the court.101 In this context it shall be noted that a party shall be considered to have forfeited its right to invoke the arbitration agreement as a bar to court proceedings where it has opposed a request for arbitration.102 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. A 38 final judgment by a Swedish court on the issues of arbitrability, validity or applicability of the arbitration agreement is binding on the arbitrators in a pending arbitration as well as in future arbitration and court proceedings.103 A determination by a court that an arbitration agreement constitutes a bar to court proceeding will likely be binding in a subsequent arbitration or challenge proceedings.104 However, where the court has rejected a jurisdictional objection, the extent of the legal effect has been the subject of discussions in the legal literature.105 The Supreme Court has stated that a declaratory action concerning the validity or applicability of the arbitration agreement does fall under the arbitration exception in article 1(2)(d) of the Brussels I Regulation.106, 107

III. The arbitral tribunal and the conduct of the arbitral proceedings The question how the arbitral proceedings are to be conducted is answered foremost 39 by the application of the provisions in the LSF, some of which are mandatory, and the content of the arbitration agreement and other agreements between the parties. In the travaux préparatoires the principle of party autonomy is emphasized as a basic principle for arbitration conducted under the LSF.108 The arbitration agreement often contains provisions concerning, for instance, the seat of the arbitration, whether the parties have opted for ad hoc or institutional arbitration, the language of the arbitration and the composition of the tribunal.

1. The arbitral tribunal, impartiality and independence of the arbitrator Unless the parties have agreed otherwise, the arbitral tribunal shall according 40 to the LSF consist of three arbitrators.109 The LSF stipulates that each party shall appoint one arbitrator and the arbitrators so appointed shall appoint the third 101

Section 4, para. 2 LSF. Section 5, point 1 LSF. 103 Andersson et al., Arbitration in Sweden, 2011, 156; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 350. 104 See Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 321; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 168; Andersson et al., Arbitration in Sweden, 2011, 154. A binding legal effect requires that the actions in the two proceedings are identical. Also, new circumstances may lead to different outcomes. 105 See Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 321; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 167 et seq.; Andersson et al., Arbitration in Sweden, 2011, 154. 106 Regulation (EC) No. 44/2001 of 22 December 2000, [2001] OJ L12/1. 107 RosInvestCo UK Ltd v. The Russian Federation, NJA 2010, 508 = YCA XXXVI (2011), 334. The same might apply also to a decision where the court has declined jurisdiction due to an arbitration agreement, see Andersson et al., Arbitration in Sweden, 2011, 155. 108 Govt. bill 1998/99:35, 43 et seq. It shall be noted that the LSF is not based on the presumption that the rules are peremptory, see Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 255. 109 Sections 12 and 13 LSF. Cf. article 16 in the SCC Rules which stipulates that where the parties have not agreed on the number of arbitrators, the board shall decide whether the arbitral tribunal shall consist of a sole arbitrator or three arbitrators, having regard to the complexity of the case, the amount in dispute and any other relevant circumstances. 102

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arbitrator.110 Under certain circumstances the District Court can assist in the appointment of arbitrators, e. g. when a party omits to appoint an arbitrator.111 If the SCC Rules are applicable, and the tribunal is to consist of more than one arbitrator, each party shall appoint an equal number of arbitrators and the chairman shall be appointed by the board of the SCC.112 41 According to the LSF any person who possesses full legal capacity in regard to his actions and his property may act as arbitrator.113 In addition, the parties may by agreement prescribe further requirements regarding the arbitrators’ qualifications.114 Such requirements, as well as the statutory requirement for impartiality and independence of the arbitrators, are essential to observe, as a rendered award otherwise may be set aside following challenge proceedings.115 42

a) Duty to disclose. For arbitrations seated in Sweden, it is a fundamental requirement that all arbitrators shall be impartial and independent.116 This requirement is safeguarded throughout the proceedings. A person who is asked to accept an appointment as arbitrator is obliged to immediately disclose all circumstances which might be considered to prevent the person from serving as an arbitrator.117 This includes circumstances relating to the person’s impartiality and independence, as well as the person’s legal capacity. If the SCC Rules are applicable, each appointed arbitrator shall also submit a signed statement of impartiality and independence disclosing any circumstances which may give rise to justifiable doubts as to the person’s impartiality or independence.118 Moreover, in the course of the proceedings, each arbitrator is required to immediately inform the parties and the other arbitrators as soon as that person has learned of any new circumstances which might prevent the person from serving as an arbitrator.119 If it is uncertain whether a circumstance is disqualifying, a decision by the arbitrator not to disclose the information may according to statements in the travaux préparatoires be one factor that could lead to the circumstance being considered disqualifying.120

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b) Grounds for challenge. An arbitrator can be challenged and discharged if there exists any circumstance which may diminish confidence in the arbitrator’s impartiality 110 Section 13 LSF. If the parties have not agreed otherwise, the arbitrator appointed by the party appointed arbitrators shall be the chairman, see section 20 LSF. 111 Section 12, para. 3 and sections 14–15 LSF. If the SCC Rules apply the SCC Institute can assist to make such appointment as provided in article 17. 112 Article 17(4) of the SCC Rules. Article 17(6) provides that if the parties are of different nationalities, the sole arbitrator or the chairperson of the arbitral tribunal shall be of a different nationality than the parties unless parties have agreed otherwise or the board of the SCC Institute otherwise deems it appropriate. 113 Section 7 LSF. 114 Govt. bill 1998/99:35, 217. 115 Section 34, para. 1 point 5 and 6 LSF. 116 Cf. section 8, para. 1 LSF and article 18(1) of the SCC Rules. The word ‘impartial’, as used in the LSF, is intended and understood to include the concept of independence as laid down e. g. in the Model Law, see Govt. bill 1998/99:35, 83; Schöldström, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 115 (116); Andersson et al., Arbitration in Sweden, 2011, 84; and Hobér, International Commercial Arbitration in Sweden, 2011, 162. 117 Section 9 LSF. As soon as all arbitrators have been appointed, the arbitrators must immediately inform the parties and the other arbitrators of those circumstances. According to article 18(2) of the SCC Rules, the arbitrator must, before being appointed, disclose any information which may give rise to a justifiable doubt as to his/her impartiality or independence. 118 Article 18(3) of the SCC Rules. 119 Section 9 LSF. See also article 18(4) of the SCC Rules. 120 Govt. bill 1998/99:35, 219. See in this regard also Korsnäs AB v. Fortum Värme, NJA 2010, 317 and Schöldström, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 115 (120).

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or independence. The LSF lists certain circumstances which shall always be considered to be disqualifying, namely: (i) the arbitrator or a person closely associated to the arbitrator is a party, or otherwise may expect noteworthy benefit or detriment as a result of the dispute; (ii) the arbitrator or a person closely associated with the arbitrator is a director of a company or any other association which is a party, or otherwise represents a party or any other person who may expect benefit or detriment worth attention as a result of the outcome of the dispute; (iii) the arbitrator has taken a position in the dispute, as an expert or otherwise, or has assisted a party in the preparation or conduct of his case in the dispute; or (iv) the arbitrator has received or demanded compensation which has not been jointly agreed by the parties.121 The four situations thus listed in the LSF are not aimed to be exhaustive, and other circumstances may also lead to disqualification.122 The Supreme Court has stated that international standards such as the IBA Guidelines, the ICC Rules and the practice of the SCC Institute can be considered when determining whether an arbitrator shall be disqualified.123 Grounds for disqualification also constitute grounds for challenge of an award.124 c) Procedural aspects and preclusion of grounds for challenge. A challenge of an 44 arbitrator must be presented within fifteen days commencing on the date on which the challenging party became aware both of the appointment of the arbitrator and of the existence of the relevant circumstance.125 Unless the parties have agreed otherwise, the challenge shall be adjudicated by the arbitrators.126 The arbitral tribunal will decide as a whole, thus including also the arbitrator who is being challenged.127 If the challenge is successful, the arbitral tribunal’s decision stands and cannot be appealed.128 If the challenge is unsuccessful, a party may, within thirty days commencing on the date on which the party received the decision, file an application with the relevant District Court requesting that the arbitrator shall be removed.129 The arbitral tribunal may according to section 10, para. 3 LSF continue the arbitral proceedings while the District Court is handling the application. A decision by the District Court to remove the arbitrator cannot be appealed.130 If a challenge of the arbitrator is not made within fifteen days as prescribed in 45 section 10, para. 1 LSF, the relevant circumstance cannot be invoked in a subsequent challenge proceeding to have the award set aside.131 The circumstance will also be 121

Section 8, para. 2 LSF. Govt. bill 1998/99:35 p. 218. Cf. Schöldström, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 115 (116 et seq.). 123 A. Jilkén v. Ericsson AB, NJA 2007, 841. 124 Section 34, para. 1, point 6 LSF. 125 Section 10, para. 1 LSF and article 19(3) of the SCC Rules. 126 Section 10, para. 1 LSF. According to article 20(1)(ii) of SCC Rules, the board of the SCC Institute shall release an arbitrator from appointment where a challenge to the arbitrator under article 19 is sustained. 127 Govt. bill 1998/99:35, 219. 128 Section 10, para. 2 LSF. 129 Section 10, para. 3 LSF. If the SCC Rules are applicable, the decision by the board of the SCC Institute will be final according to article 19(5). Cf. section 11 LSF. According to section 51, para. 1 LSF, if none of the parties is domiciled or has its place of business in Sweden, they may agree to exclude the question of impartiality of the arbitrators from judicial control by the courts in a proceeding to set aside the award. The parties shall, by such an exclusion agreement, also be deemed to have waived the right to have the disqualification of an arbitrator tried by the District Court pursuant to section 10 para. 3 LSF, see Govt. bill 1998/99:35, 220. 130 Section 44, para. 3 LSF. 131 Section 34, para. 2 LSF; Govt. bill 1998/99:35, 219. 122

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precluded in such a challenge proceeding if the party has not made an application to the District Court within thirty days or if the District Court or an arbitral institution has conclusively determined the question.132 A party may also with binding force waive a known circumstance which disqualifies the arbitrator. Consequently, a party may not, to remove an arbitrator appointed by it, invoke a circumstance known to the party at the time of the appointment of the arbitrator.133 46

d) Failure or impossibility to act. The LSF prescribes that an arbitrator can be removed if he delays the proceedings.134 In the event that an arbitrator delays the proceedings, the District Court shall, upon request by a party, discharge the arbitrator and appoint another arbitrator.135 An arbitrator can also resign voluntarily or the parties can agree to remove the arbitrator.136 If an arbitrator resigns or is discharged for some other reason than delay of the proceedings, the District Court shall, upon request by a party, appoint a new arbitrator. However, where the arbitrator cannot fulfil his duties due to circumstances which arise after his appointment, the party who originally was required to make the appointment shall instead appoint a new arbitrator. The arbitrator shall be appointed within thirty days, calculated from the date on which the person who shall appoint the arbitrator became aware thereof.137 If the SCC Rules are applicable, the board of the SCC will release the arbitrator from appointment if the arbitrator is unable or fails to perform his functions.138

2. The arbitral proceedings 47

Under Swedish law the arbitral proceedings are largely subject to party autonomy, and the arbitral tribunal is as a main rule obligated to conduct the proceedings in accordance with decisions of the parties. Where there are no applicable provisions in the LSF, or any procedural instructions from the parties, the tribunal has discretionary powers to decide on the most appropriate manner to conduct the proceedings.139 However, the tribunal must at all times comply with the overriding procedural principles of equal treatment of the parties and the right for the parties to plead their cases.140

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a) The request for arbitration. Arbitral proceedings are, unless otherwise agreed between the parties, initiated by the respondent receiving a request for arbitration from the claimant.141 The request for arbitration must be in writing and include: (i) an express and unconditional request for arbitration, (ii) a statement of the issue which is covered by the arbitration agreement and which is to be resolved by the 132

Govt. bill 1998/99:35, 220, 235 et seq. Govt. bill 1998/99:35, 217. 134 Section 17 LSF. 135 Section 17 LSF. 136 Govt. bill 1998/99:35, 222. It can be noted that the general rule is that an arbitrator cannot resign from his mission without a valid excuse, see Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 239. 137 Section 16 LSF. 138 Article 20(1)(iii) of the SCC Rules. If the arbitrator being replaced was appointed by a party, that party shall appoint the new arbitrator, unless otherwise deemed appropriate by the board of the SCC Institute, article 21(1). If the arbitral tribunal consists of three or more arbitrators, the board may, however, decide that the remaining arbitrators shall proceed with the arbitration, article 21(2). 139 According to section 21 LSF the arbitrators shall handle the dispute in an impartial, practical and speedy manner. 140 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 264 et seq.; Andersson et al., Arbitration in Sweden, 2011, 103. 141 Section 19, para. 1 LSF. 133

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arbitrators,142 and (iii) a statement of the party’s choice of arbitrator where the party is required to appoint an arbitrator.143 The service of the request must be effected personally.144 It is the claimant that bears 49 the burden of proof to show that proper service has taken place. It is therefore of great importance that the claimant obtains a written certificate from a person authorized to represent the respondent confirming when the respondent received the request for arbitration.145 Where the parties have agreed that the SCC Rules shall apply, the arbitration is 50 commenced on the date when the SCC receives the request for arbitration.146 Upon filing the request for arbitration, the claimant shall pay the prescribed registration fee to the SCC Institute.147 Having received the request for arbitration, the SCC Institute will send the request for arbitration to the respondent.148 b) Equality of arms, fair trial principles and the right to be heard. The principle of 51 equal treatment is a fundamental principle under Swedish arbitration law. The principle is recognized in section 21 LSF, which states that the arbitrators shall handle the dispute in an impartial manner. From the principle of equal treatment follows that the parties shall be afforded the same procedural rights and duties.149 An agreement that affords one party, but not the other, a procedural right may be held invalid.150 Also, the application of such agreement in violation of equal treatment may render an award invalid or result in the award being set aside.151 Other due process requirements according to the LSF include that the arbitrators shall 52 afford the parties, to the extent necessary, an opportunity to present their respective cases in writing or orally. Where a party so requests, and provided that the parties have not agreed otherwise, an oral hearing shall be held prior to the determination of an issue referred to the arbitrators for resolution.152 Moreover, the parties shall be given an opportunity to review all documents and all other materials pertaining to the dispute which are supplied to the arbitrators by the opposing party or another person.153 If these fundamental procedural rights are not upheld, the award may be set aside.154 142 The request does not have to include the request for relief or the legal grounds, which according to section 23 LSF are to be presented in a later submission. However, in practice a preliminary statement of the relief is often included in the request for arbitration. See regarding the requirement to include a statement of the issue in dispute Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 300 et seq. and Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 153 (157 et seq.). 143 Section 19, para. 2 LSF. 144 Scanax AB v. Svensk Filmtjänst AB, NJA 1996, 330. 145 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 306 et seq.; Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 153 (161 et seq.). 146 Article 8 of the SCC Rules. Article 6 sets out the information which must be included in the request for arbitration. Contrary to the requirements under the LSF, a request for arbitration must include a preliminary request for relief, see article 6(iii) of the SCC Rules. 147 Article 7(1) of the SCC Rules. 148 Cf. article 4 and 9(1) of the SCC Rules. See regarding proper service under the SCC Rules, Öhrström, Stockholms Handelskammares Skiljedomsinstitut: En handbok och regelkommentar för skiljeförfaranden, 2009, 126 et seq., 133. 149 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 260 et seq.: Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 538, 600. 150 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 261. 151 Ibid. 152 Section 24, para. 1 LSF. 153 Section 24, para. 2 LSF. 154 Section 34, para. 1 point 7 LSF; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 630 et seq.

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c) Confidentiality. The arbitral proceedings are not public and no third parties can attend hearings without the consent of the parties.155 However, the Supreme Court has held that under Swedish law there is no implied duty of confidentiality for the parties under an arbitration agreement.156 Hence, where confidentiality is important, specific confidentiality obligations should be agreed. As regards the arbitrators, the general view is that a duty of confidentiality follows as a consequence of their assignment.157 Such duty of confidentiality is codified in the SCC Rules, which state that the arbitrators, any administrative secretary of the arbitral tribunal and the SCC Institute shall maintain the confidentiality of the arbitration and the award, unless otherwise agreed between the parties.158

d) The arbitral award. The issues which have been referred to the arbitrators shall be decided in an arbitral award.159 An arbitral award shall be made in writing, be signed by the arbitrators, state the seat of the arbitration and the date when the award is made.160 The opinion agreed upon by the majority of the arbitrators participating in the determination shall prevail, unless the parties have agreed otherwise.161 If an arbitrator fails, without valid cause, to participate in the determination of the issue, the other arbitrators may still rule on the matter.162 While, in practice, awards are normally reasoned, there is no such statutory requirement under the LSF.163 55 An award must include instructions regarding the possibility to bring an action against the award as regards the compensation to the arbitrators.164 If the parties reach a settlement, the arbitral tribunal may, at the request of the parties, confirm the settlement in an award.165 The award shall be delivered by the arbitral tribunal to the parties immediately following the rendering of the award.166 54

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e) Termination of the arbitration. The arbitral tribunal may under certain circumstances terminate the arbitral proceedings without rendering an award which determines the issues referred to the tribunal for resolution. The arbitrators may, inter alia, terminate the proceedings where the requested security has not been provided by the parties.167 A decision to terminate the proceedings shall under Swedish arbitration law, as a general rule, be made in the form of an award.168 However, if the arbitrators have 155

Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 17. Bulgarian Foreign Trade Bank Ltd v. A.I. Trade Finance Inc., NJA 2000, 538. 157 See e. g. Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 14 and Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden, 2013, 153 (203). However, it has been determined in case law from the Supreme Court that an arbitrator who is called as a witness to testify in challenge proceedings is obliged to answer questions concerning the tribunal’s deliberations if this is relevant to the case, see Partrederiet för M/S Red Sea v. Götaverken Sölvesborg Aktiebolag, NJA 1990, 419. 158 Article 3 of the SCC Rules. 159 Section 27, para. 1 LSF. 160 Section 31, para. 1 and 2 LSF. It suffices that a majority of the arbitrators has signed the award, provided that the reason why all of the arbitrators have not signed the award is noted therein. Also, the parties may agree that the chairman of the tribunal alone shall sign the award. 161 Section 30, para. 2 LSF. If no majority is attained, the opinion of the chairman shall prevail. 162 Section 30, para. 1 LSF. 163 Cf. Govt. bill 1998/99:35, 233 and Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 153 (222 et seq.). According to article 42(1) of the SCC Rules, the award shall state the reasons upon which the award is based, unless otherwise agreed by the parties. 164 Section 41, para. 1 LSF. The Supreme Court has found that this provision is applicable also when an arbitration institution has made the decision on compensation to the arbitrators, see Soyak International Construction & Investment Inc. v. Werner Melis, Kaj Hobér and Steffen Kraus, NJA 2008, 1118. 165 Section 27, para. 2 LSF. 166 Section 31, para. 3 LSF. 167 Section 38, para. 1 LSF. 168 Section 27, para. 1 LSF. 156

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dismissed the proceedings, for instance following the withdrawal of claim, the determination shall according to Section 27 para. 3 LSF be made through a decision.169 The award or decision to conclude the arbitration without ruling on the issues submitted to the arbitrators for resolution must contain clear instructions as to what must be done by a party who wishes to appeal the award or decision.170 f) The costs of the arbitration. The costs of the arbitration may include the fees and 57 expenses of the arbitral tribunal, costs incurred by the parties, and, if applicable, fees and expenses of the arbitration institution. The LSF stipulates that, unless otherwise agreed between the parties, the arbitrators are entitled to reasonable compensation for their work and expenses.171 The parties are, as a main rule, jointly and severally liable for the compensation to the arbitrators, and the parties may be ordered to pay compensation to the arbitrators in the final award.172 The arbitral tribunal is, if the parties have not agreed otherwise, entitled to request security in advance for their compensation.173 If the SCC Rules are applicable, the fees to the arbitrators are decided by the SCC Institute based upon value of the dispute according to a set table, save for exceptional circumstances.174 A party or an arbitrator may, within two months, bring an action in the District Court against an award regarding the amount of the tribunal’s fees and expenses.175 While the parties are jointly liable to compensate the arbitrators, the arbitral 58 tribunal may, upon a request by a party and unless otherwise agreed by the parties, allocate the costs of the arbitration between the parties.176 The tribunal may order a party to compensate the opposing party also for the opposing party’s own costs,177 which can include e. g. costs for legal representation, costs for evidence and compensation for the party’s own expenditure of work and time.178 The main rule is that responsibility for costs is allocated based on the outcome of the dispute, each party’s contribution to the efficiency and expeditiousness of the arbitration and any other relevant circumstances, so that the losing party shall bear all costs reasonably incurred by the winning party.179

3. Evidence, discovery, disclosure Under Swedish law, the parties are responsible to supply the evidence in the arbitral 59 proceedings. The only exception to the rule is that the arbitral tribunal is allowed to appoint experts, unless both parties object.180 There are no statutory limitations with 169 The provisions of the LSF that concern arbitral awards shall according to Section 27, para. 3 to the extent applicable also apply to such decisions. 170 Section 36, para. 1 LSF. 171 Section 37, para. 1 LSF. In the case NEMU Mitt i Sverige AB v. Jan H, Gunnar B and Bo N, NJA 1998, 574, the Supreme Court stated that essential factors to consider include the amount of work performed by the arbitrators, the compensation usually paid for similar services and the competence of the arbitrator. 172 Section 37, para. 1 and 2 LSF. 173 Section 38, para. 1 LSF. See as regards advance on costs in arbitrations under the SCC Rules, article 51 of the SCC Rules. 174 See Appendix IV to the SCC Rules. 175 Section 41, para. 1 LSF. 176 Section 42 LSF and article 49(6) of the SCC Rules. 177 Section 42 LSF and article 50 of the SCC Rules. 178 Govt. bill 1998/99:35, 241. 179 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 567 et seq.; Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 153 (212). Cf. article 43(5) of the SCC Rules. 180 Section 25, para. 1 LSF.

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respect to what evidence is admissible. However, the arbitrators have the right to refuse to admit evidence supplied by the parties, where such evidence is manifestly irrelevant to the case or where the evidence has been supplied at a late stage of the proceedings.181 60 The arbitral tribunal has the authority to order the production of documents upon a request by a party.182 A party requesting document production must identify the documents or the category of documents which are to be produced, and explain why the documents are relevant to the case.183 With the consent of the arbitral tribunal, a party may also apply to the District Court to have a witness or expert testify under oath, or to have the court order the production of certain documents or an object as evidence.184

4. The law governing the dispute and lois de police Under Swedish law, the parties are entitled to agree on the substantive law applicable to the contract, the lex contractus.185 A reference to the laws of a certain jurisdiction will imply that the lex contractus of that jurisdiction shall apply, and not its conflict of laws rules.186 If the parties have not agreed on the applicable substantive law, the arbitrators have the explicit mandate to determine the applicable substantive law.187 The arbitrators may determine which law is to be applied by taking into account for example the conflict of law rules, or by considering which law the matters in dispute are closest related to.188 In comparison, the SCC Rules stipulate that the arbitral tribunal, in the absence of an agreement, shall apply the law or rules of law which it considers to be most appropriate.189 Only if the parties expressly authorize it, can the tribunal decide the dispute ex aequo et bono.190 62 While the scope of party autonomy as to the choice of law for arbitration cases with an international connection has not been conclusively determined, the prevailing view is that the arbitrators shall apply mandatory provisions of the lex contractus, save for where the parties have chosen the applicable law and explicitly excluded the mandatory provisions from application.191 However, it is not clear whether mandatory provisions should be relied on by the arbitrators if they have not been invoked by either party. 63 As regards mandatory provisions of the laws of other jurisdictions than the lex contractus, the general view is that, as a starting point, there is no general obligation for arbitrators to apply such provisions.192 However, the arbitrators may in certain situa61

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Section 25, para. 2 LSF. Brocker/Löf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 153 (190 et seq.); Hobér, International Commercial Arbitration in Sweden, 2011, 225. In international arbitrations taking place in Sweden, the IBA Rules of Evidence often serve as guidance. 183 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 447 et seq. 184 Section 26, para. 1 LSF. 185 Govt. bill 1998/99:35, 123; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 683. 186 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 685; Section 27 a, para. 1 LSF. 187 Section 27 a, para. 2 LSF. 188 Govt. bill 2017/18:257, 77. 189 Article 27(1) of the SCC Rules. 190 Section 27 a, para. 3 LSF. Cf. article 27(3) of the SCC Rules. 191 Cf. Danielsson, in: Franke et al. (eds), Fundamental Principles of International Arbitration in Sweden: A Practitioner’s Guide, 2013, 137 (144 et seq.); Hobér, International Commercial Arbitration in Sweden, 2011, 53 et seq. For an alternative position as regards the possibility to agree to exclude the application of mandatory provisions, see Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 1110. 192 Cf. Danielsson, in: Franke et al. (eds), Fundamental Principles of International Arbitration in Sweden: A Practitioner’s Guide, 2013, 137 (145); Hobér, International Commercial Arbitration in Sweden, 2011, 54 et seq. 182

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tions have to take into account such mandatory provisions, e.g. due to the fact that the arbitral tribunal shall on its own motion examine whether the dispute is arbitrable and whether a claim violates Swedish public policy.193 Also, if the application of certain contract provisions would be deemed to violate international public policy, for example contract clauses facilitating bribery or corruption, the provisions shall typically be held invalid.194

5. Interim relief in arbitration a) Interim relief before state courts. Prior to, or during the pendency of, arbitration 64 proceedings, a court may, irrespective of the arbitration agreement, issue decisions in respect of interim measures.195 A party may apply for interim measures to the court also where the party has applied for, and even been granted, interim measures before the arbitral tribunal.196 A Swedish court will apply the ordinary rules set out in the Code of Judicial Procedure, and may, inter alia, order provisional attachment or prohibitions subject to a default fine. Interim measures will, as a main rule, only be granted if the applicant provides full and adequate security. If a delay places the applicant’s claim at risk, the court order may be granted ex parte. When an interim measure is granted prior to the initiation of the arbitral proceedings, the arbitral proceedings must be initiated within one month or the measure shall be rescinded immediately. One of the major advantages of a court decision on interim measures, compared to a decision made by the arbitral tribunal, is that court orders regarding interim measures are enforceable.197 b) Interim relief before the arbitral tribunal. Unless otherwise agreed by the 65 parties, the arbitral tribunal may, at the request of a party, decide that during the proceedings the opposing party must undertake a certain interim measure in order to secure the claim which is to be adjudicated by the arbitrators.198 However, such decisions are generally not enforceable, and cannot be made enforceable by a Swedish court.199 The arbitral tribunal may prescribe that the party requesting the interim measure must provide security for the damage which may be incurred by the opposing party as a result of the interim measure.200 Under the SCC Rules, a party may apply for the appointment of an emergency arbitrator, which can decide on interim measures before arbitration has been commenced or the case has been referred to the arbitral tribunal.201

193 Govt. bill 1998/99:35, 214; Hobér, International Commercial Arbitration in Sweden, 2011, 54 et seq. Regarding the application of mandatory provisions of third countries, see Moscow City Golf Club OOO v. Nordea Bank AB, NJA 2012, 790. In the case the Supreme Court stated, as part of its determination, that it shall be taken into account whether the provision concerns an interest that is limited to the other country or if there is an interest also from a Swedish perspective that the provision is upheld. 194 Danielsson, in: Franke et al. (eds), Fundamental Principles of International Arbitration in Sweden: A Practitioner’s Guide, 2013, 137 (145 et seq.); Hobér, International Commercial Arbitration in Sweden, 2011, 59 et seq. 195 Section 4, para. 3 LSF. 196 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 333. 197 SOU 1994:81, 101, 285; Govt. bill 1998/99:35, 73 et seq., 228. 198 Section 25, para. 4 LSF and article 37 of the SCC Rules. 199 SOU 1994:81, 101, 285; Govt. bill 1998/99:35, 73 et seq., 228. See also Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 333. 200 Section 25, para. 4 LSF and article 37(2) of the SCC Rules. 201 Article 37(4) and Appendix II of the SCC Rules.

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6. Multi-party and multi-contract arbitration 66

With a couple of exceptions,202 the LSF does not contain any provisions which address the issues that typically can arise in multi-party arbitration, such as appointment of arbitrators, consolidation, joinder and requests by third parties to intervene in the proceedings. These issues will instead have to be resolved contractually between the parties.

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a) Arbitration agreement involving several parties, consolidation and joinder. If more than two parties have signed a contract containing a standard arbitration clause, a party can choose to initiate proceedings against one or several of the contracting parties. However, absent an arbitration agreement binding all parties, if the claimant initiates arbitral proceedings against several respondents, the claimant will need to initiate separate proceedings against each opposing party, unless all parties involved agree that the disputes shall be consolidated in one proceeding. According to section 23 a LSF, an arbitration may be consolidated with another arbitration provided that the parties agree to the consolidation, it benefits the administration of the arbitration, and the same arbitrators have been appointed in both cases. It is not possible for additional parties to join or for a third party to intervene in the proceedings, unless all parties involved agree. The necessary consent for consolidation, joinder and intervention can be given in the arbitration agreement or when the question arises. If the parties have agreed that the SCC Rules shall apply, consolidation of new claims with pending proceedings between the same parties may upon request by a party be decided by the SCC Institute if the parties agree to consolidate, all the claims are made under the same arbitration agreement, or where the claims are made under more than one arbitration agreement, the claims arise out of the same transaction or series of transactions and the SCC Institute considers the arbitration agreements to be compatible.203

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b) Equality of arms and appointment of the arbitrators. The basic principle of equal treatment requires that all parties have equal influence when it comes to the appointment of the arbitrators to the arbitral tribunal.204 Hence, it is not possible to waive the right to appoint an arbitrator in advance, if this means that one party has a right to appoint an arbitrator but another party does not.205 In order to maintain the principle of equal treatment, the parties can agree that all arbitrators are to be appointed by the District Court206 or an arbitral institution. According to section 14, para. 2 LSF, if the opposing party fails to appoint an arbitrator within the specified time, the District Court shall appoint an arbitrator upon the request of the first party. Moreover, if arbitration has been requested against several parties and these parties are unable to jointly appoint an arbitrator, the district court shall, upon the request of a respondent party within the time specified in section 14, para. 1 LSF, appoint arbitrators on behalf of all parties, and simultaneously also release any arbitrator already appointed.207 In comparison, the SCC Rules stipulate that in multi-party arbitrations, the claimants, jointly, and the respondents, jointly, shall appoint an equal number of arbitrators. If 202 Cf. section 23 a LSF concerning consolidation and section 12, para. 3 LSF which gives the District Court general jurisdiction to appoint arbitrators provided that the parties have so agreed. 203 Article 15(1) of the SCC Rules. 204 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 186. 205 Ibid.; Schöldström, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 115 (128 et seq.); Andersson et al., Arbitration in Sweden, 2011, 46 et seq. 206 Section 12, para. 3 LSF. 207 Section 14, para. 3 LSF.

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either side fails to make such joint appointment, the SCC Institute shall appoint the entire arbitral tribunal.208

IV. The control and the enforcement of arbitral awards An arbitral award has the effect that the dispute has been determined with legal force, 69 i. e. with res judicata effect,209 and the award can be enforced like a court judgment. It may not be reviewed on the merits, and may only under limited circumstances be challenged and set aside due to procedural irregularities.210 If a party brings an action before the Court of Appeal claiming that the arbitrators lack jurisdiction or that the arbitral award should be invalid, challenged or amended, the Court of Appeal may at the request of a party accept oral evidence in English without interpretation into Swedish.211

1. Correction and amendment of arbitral awards The arbitrators may amend an award only under limited circumstances.212 An 70 arbitral award may according to section 32 LSF be corrected or supplemented by the arbitrators on their own motion if they find that the award contains any obvious inaccuracies as a consequence of a typographical, computational, or other similar mistake, or if the arbitrators by oversight have failed to decide an issue which should have been dealt with in the award. The award must be corrected or supplemented within thirty days of the announcement of the award. The arbitrators may also correct or supplement an award, or interpret the decision in an award, following a request by a party. Such a request must be made by the party within thirty days of receipt of the award. If the arbitrators decide to correct the award, or interpret the decision in the award, it shall take place within thirty days from the party’s request. If the arbitrators, following a request from a party, decide to supplement the award, it shall take place within sixty days. Before any decision to correct or supplement the award is made, the parties should, as a main rule, be afforded an opportunity to express their views with respect to the prospective measure.213 It shall also be noted that the tribunal is authorized, but not obligated, to take such measures.214

2. Review of arbitral awards before the state courts An arbitral award is final and can only be set aside in certain limited situations where 71 serious procedural irregularities have occurred. The LSF distinguishes between grounds which render the award invalid ab initio,215 and grounds on which the award may be challenged and set aside upon request by a party.216 The grounds for invalidity are based on considerations of public interest and the interest of third parties, while the grounds for setting aside the award foremost aim to safeguard the interests of the parties in the arbitration.217 208

Article 17(5) of the SCC Rules. Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 536. 210 Sections 33 and 34 LSF. 211 Section 45 a LSF. 212 See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 538 et seq. 213 Section 32, para. 3 LSF. 214 SOU 1994:81, 168, 287; Govt. bill 1998/99:35,137, 233. 215 Section 33 LSF. 216 Section 34 LSF. 217 Govt. bill 1998/99:35, 139, 141. 209

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Where none of the parties are domiciled or have their place of business in Sweden, the parties may in a commercial relationship exclude or limit the application of the grounds for challenging an award as set forth in section 34 LSF.218 In order for such an exclusion agreement to be valid, it must be explicit and made in writing.219

a) Procedural framework (time limits, competent court, appeal). There is no time limit within which a party has to initiate proceedings on account of grounds for invalidity according to section 33 LSF. By contrast, an action to have an award wholly or partially set aside pursuant to section 34 LSF, or an application to amend an award that has been rendered without ruling on the merits pursuant to section 36 LSF, must be brought within two months from the date upon which the party received the award, or within two months from the date upon which the party received the award in its final wording if it has been corrected, supplemented or interpreted.220 It can be noted that the court may under certain circumstances stay proceedings concerning the invalidity or setting aside of an award, in order to provide the arbitrators with an opportunity to resume the arbitral proceedings or take some other measure which will eliminate the ground for the invalidity or setting aside.221 74 An action against an award pursuant to sections 33, 34 and 36 LSF must be brought before the Court of Appeal within the jurisdiction where the arbitration had its seat. If the seat of arbitration is not determined, nor stated in the award, the action may be brought before the Svea Court of Appeal.222 As a main rule, the determination of the Court of Appeal is final and may not be appealed. However, the Court of Appeal may grant leave to appeal where it is of importance as a matter of precedence that the appeal is considered by the Supreme Court. Leave of appeal by the Supreme Court is also required for the Supreme Court to review the Court of Appeal’s determination.223 73

b) Grounds for review of arbitral awards: An overview. Pursuant to section 33 LSF, an award is invalid under the following circumstances: (i) the award includes determination of an issue that is non-arbitrable under Swedish law, (ii) the award, or the manner in which the award arose, is clearly incompatible with the basic principles of the Swedish legal system, and (iii) the award is not made in writing or has not been signed by the arbitrators. An award can be declared invalid in part or as a whole.224 76 According to section 34, para. 1 LSF, an award can be challenged under the following circumstances: (i) the award is not covered by a valid arbitration agreement between the parties, (ii) the award was issued after the expiration of the time limit set by the parties, (iii) the arbitrators have exceeded their mandate in a manner that probably influenced the outcome, (iv) the arbitral proceedings should not have taken place in Sweden, (v) an arbitrator has been appointed contrary to the agreement between the parties or the LSF, (vi) an arbitrator was unauthorized due to the provisions in the LSF, and (vii) without fault of the party, there otherwise occurred an irregularity in the course of the proceedings which probably influenced the outcome of the case. 77 According to section 36, para. 1 LSF, an award whereby the arbitrators concluded the proceedings without ruling on the issues submitted to them for resolution may be 75

218 Section 51, para. 1 LSF. The ECtHR confirmed in Tabbane that an express waiver is compliant with article 6 ECHR (supra A mn. 119). 219 Ibid; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 716. 220 Section 34, para. 3 LSF. The claimant must according to this provision invoke all grounds in support of the claim within the stipulated time frame. 221 Section 35, para. 1 LSF. 222 Section 43, para. 1 LSF. 223 Section 43, para. 2 LSF. 224 Section 33, para. 2 LSF.

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amended by the relevant Court of Appeal upon application of a party. This includes, inter alia, the right to appeal awards where the arbitral tribunal has declined jurisdiction. Contrary to the court’s review under sections 33 and 34 LSF, the court may, depending on whether it determines that the procedural question has been correctly assessed and handled, amend the award.225 In the sections below, the grounds for invalidity and setting aside will be described in 78 further detail. c) Grounds for invalidity under section 33 LSF. aa) Non-arbitrable dispute. 79 According to section 33, point 1 LSF, an award is invalid if it includes determination of an issue which, in accordance with Swedish law, may not be decided by arbitrators. It shall be noted that an award will not be invalid according to this provision if the dispute is non-arbitrable according to foreign law applicable to the arbitration agreement. Such an award can instead be set aside following challenge proceedings due to lack of a valid arbitration agreement between the parties.226 bb) Public policy. Under section 33, point 2 LSF, an award is invalid if the award, or 80 the manner in which the award arose, is clearly incompatible with the basic principles of the Swedish legal system. The scope of application of this provision is very limited and it is only to be applied if fundamental principles of substantive or procedural nature have been violated.227 It can be noted that the Swedish Courts of Appeal have never declared an award invalid as a result of a breach of Swedish public policy.228 According to statements in the travaux préparatoires, the following situations could 81 constitute grounds to declare an award invalid due to a violation of Swedish public policy: determinations of claims that are founded on criminal behaviour, e. g. an obligation to pay an agreed bribe, awards which obligates someone to perform an action which is prohibited by law, determinations where the tribunal has not applied important mandatory statutory provisions which safeguard public interest or interests of third parties, and awards which are the result of a crime, e. g. when an arbitrator has been threatened or bribed.229 Other examples include gross procedural irregularities in violation of fundamental principles of due process,230 and where there has been a breach of EU competition law.231 cc) Award not made in writing or not signed by the arbitrators. The last ground 82 for invalidity is set out in section 33, point 3 LSF and stipulates that the award is invalid if it does not fulfil the requirements that it shall be made in writing and signed by the arbitrators.232 d) Grounds for setting aside under section 34 LSF. aa) Lack of valid arbitration 83 agreement. An award can according to section 34, para. 1, point 1 LSF be challenged and set aside if it is not covered by a valid arbitration agreement between the parties. 225

Govt. bill 1998/99:35, 238; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 522. Govt. bill 1998/99:35, 234. SOU 1994:81, 173, 289; Govt. bill 1998/99:35, 142, 234. 228 Hobér, International Commercial Arbitration in Sweden, 2011, 303. 229 Govt. bill 1998/99:35, 141 et seq., 234. 230 Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 848 et seq., Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 261, 587 et seq. 231 Govt. bill 1998/99:35, 234. See Knuts, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 237 (243). 232 According to section 31 LSF it is sufficient that a majority of the arbitrators has signed the award, provided that the reason why all of the arbitrators have not signed the award is noted therein. Furthermore, the parties may agree that the chairman of the tribunal alone shall sign the award. 226 227

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This provision is applicable, for instance, if the parties have not concluded an arbitration agreement, if the arbitrators have determined an issue which fall outside the scope of a valid arbitration agreement, or an arbitration agreement has become inoperative, e. g. because it has been terminated.233 An award can be set aside with application of this provision also if the dispute is non-arbitrable according to foreign law applicable to the arbitration agreement.234 bb) Expiration of the time limit and excess of mandate. According to section 34, para. 1, point 2 LSF an award can be challenged and set aside where the arbitrators have made the award after the expiration of the time limit decided on by the parties. Further, it is stipulated in section 34, para. 1, point 3 LSF that the award can be set aside if the arbitrators have otherwise exceeded their mandate in a manner that probably influenced the outcome. The Supreme Court has clarified that the impact of a procedural error has to be of reasonable importance to the challenging party in order for the award to be set aside.235 The arbitrators’ mandate is based on the parties’ joint requests,236 and is thus limited e. g. by the arbitration agreement and subsequent agreements, arrangements and instructions by the parties.237 85 There could be an excess of mandate, inter alia, if the arbitral tribunal has granted any other relief than the relief requested by the parties,238 if the tribunal has based the decision on ultimate facts not duly invoked by the parties,239 if the substantive law applied by the tribunal is different from the law validly chosen by the parties,240 or if the tribunal has filled gaps in the contract without proper authorization from the parties.241 84

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cc) Arbitral proceedings should not have taken place in Sweden. Under section 34, para. 1, point 4 LSF an award can be challenged and set aside if the arbitral proceedings, according to section 47 LSF, should not have taken place in Sweden. In section 47 LSF it is prescribed that arbitration proceedings may be conducted in Sweden in the following situations: if the arbitration agreement so prescribes, if the arbitrators or an arbitration institution pursuant to the arbitration agreement have determined that the proceedings shall be seated in Sweden, if the opposing party has consented thereto, or if the respondent is domiciled in Sweden or otherwise is subject to jurisdiction of the Swedish courts with regard to the matter in dispute, unless the arbitration agreement provides that the arbitral proceedings shall be seated abroad.

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dd) Improper appointment of arbitrators. An award can according to section 34, para. 1, point 5 be challenged and set aside if an arbitrator has been appointed contrary to the agreement between the parties or the provisions in the LSF. This ground for challenge can, inter alia, be applied where an arbitrator is not appointed by the person 233

Govt. bill 1998/99:35, 235. Ibid. 235 The Supreme Court in Joint Stock Company Belgorkhimprom v. Koca Inşaat Sanayi Ihracat Anonim Şirketi, on 20 March 2019, T 5437-17. 236 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 604; Knuts, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 237 (247). 237 Hobér, International Commercial Arbitration in Sweden, 2011, 312 et seq. 238 SOU 1994:81, 175. 239 See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 605 et seq. with comments that a different standard might apply in international arbitration. Cf. in this regard the ruling by the Supreme Court in Systembolaget AB v. V&S Vin & Sprit AB, where an award following an arbitration between Swedish parties was set aside on this ground, NJA 2015, 438. 240 Govt. bill 1998/99:35, 123. See in this regard Hobér, International Commercial Arbitration in Sweden, 2011, 320 et seq. 241 Andersson et al., Arbitration in Sweden, 2011, 171; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 874 et seq. 234

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or institution stipulated in the arbitration agreement,242 where an arbitrator lacks qualifications required under the arbitration agreement,243 and where an arbitrator has been appointed after a prescribed time limit.244 ee) Unauthorized arbitrator. According to section 34, para. 1, point 6 an award can 88 be challenged and set aside if an arbitrator was unauthorized due to any circumstance set forth in sections 7 or 8 LSF, i.e. due to either lack of legal capacity or disqualification as a result of circumstances which may diminish confidence in the arbitrator’s impartiality. As questions regarding disqualification are in most instances finally decided during the arbitral proceedings, this provision foremost becomes relevant when the party has received knowledge of the circumstance which makes the arbitrator disqualified after the arbitration.245 ff) Other procedural irregularities. According to section 34, para. 1, point 7 LSF an 89 award can be challenged and set aside if, without fault of the party, there otherwise occurred an irregularity in the course of the proceedings which probably influenced the outcome of the case. Accordingly, there is only a ground for challenge under this rule if the procedural irregularity has not been caused by the challenging party.246 Moreover, there is a requirement of causality in the meaning that it must be likely that the irregularity influenced the outcome of the case.247 Thus, the Court of Appeal shall consider how the tribunal would have judged the dispute in the absence of the procedural irregularity.248 The award shall only be set aside in those parts which are affected by the irregularity.249 Procedural irregularities which constitute ground for challenge include, inter alia, if the 90 arbitrators have determined the dispute on the merits, even though they should have dismissed the action e. g. because of lis pendens,250 if a party has not been afforded due opportunity to present its case,251 and if the tribunal incorrectly has refused to accept evidence.252 The irregularity has to pertain to a procedural error, and consequently a mere incorrect assessment of a substantive issue will not constitute ground for challenge.253

3. Enforcing arbitral awards a) General framework. Swedish arbitral awards are enforced in a similar manner as 91 Swedish court judgments.254 This means that the award creditor shall, under the 242

Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 618. Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 616. 244 Govt. bill 1998/99:35, 146. 245 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 621. 246 See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 628 et seq. and Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 889 et seq. 247 The burden of proof for this requirement is on the challenging party, Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 891. Serious procedural irregularities can entail a presumption that the outcome was affected, Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 625. 248 No ground for setting aside exists if the irregularity only affects the wording of the rationale behind the decision, Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 624. 249 Govt. bill 1998/99:35, 148. 250 Govt. bill 1998/99:35, 236. 251 Knuts, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 237 (255); Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 895. 252 Hobér, International Commercial Arbitration in Sweden, 2011, 329; Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 630; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 898. 253 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 629. 254 An award is according to section 52 LSF deemed Swedish if it was rendered in Sweden. See regarding the distinction between Swedish and foreign awards Ewerlöf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 267 (270). It shall be noted that, if the award is 243

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Enforcement Code (utsökningsbalken), apply directly to the Swedish Enforcement Authority (Kronofogdemyndigheten) to have the award enforced. The Enforcement Authority is only to conduct a summary review prior to enforcing the award. Enforcement shall, following the summary review, be refused if the award does not meet the requirements for written form and signature, or the arbitration agreement contains a reservation concerning the right to challenge the award on the merits and the time limit for such challenge has not expired.255 Moreover, if the Enforcement Authority has reason to believe that an award is invalid, the Enforcement Authority shall order the applicant to institute court proceedings, if such proceedings are not already pending, in the matter against the respondent.256 After such court proceedings have been initiated by a party, it is for the court to decide on enforcement.257 By contrast, enforcement cannot be prevented by invoking grounds for setting aside an award in proceedings before the Enforcement Authority, as these grounds can only be asserted in challenge proceedings in court.258 92 Foreign awards can be enforced in Sweden only after a procedure of exequatur before the Svea Court of Appeal.259 As Sweden has ratified the NYC without making a reciprocity proviso, the main rule is that a foreign award which is based on an arbitration agreement can be recognized and enforced in Sweden, irrespective of where the arbitration has taken place.260 The grounds for refusing enforcement are set out in sections 54 and 55 LSF, which are modelled after article V NYC.261 The grounds set out in section 54 LSF, which correspond to article V(1) NYC, can only be taken into consideration by the Court of Appeal if invoked by a party.262 In contrast, the court shall according to section 55 LSF on its own motion refuse to enforce an award if the award includes determination of an issue which in accordance with Swedish law may not be decided by arbitrators or if it would violate Swedish public policy to enforce the award. With the exception of article V(1)(e), the defences under the NYC correspond substantially to the grounds for setting aside under sections 33 and 34 LSF explained supra mns 79–90. In respect of enforcement of foreign as well as Swedish awards, the respondent shall always be given an opportunity to comment on the application for enforcement before it is granted.263 According to section 58 LSF, the Court of Appeal may postpone its decision on enforcement pending the outcome of challenge proceedings when the opposing party has requested a stay of enforcement proceedings.264 subject to a valid exclusion agreement where the parties have limited or excluded the application of the grounds for setting aside an award, the award shall be recognized and enforced in accordance with the rules applicable to foreign awards, section 51 LSF. 255 Chapter 3, section 15 of the Enforcement Code. 256 Chapter 3, section 16 of the Enforcement Code. See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 660. 257 Chapter 3, section 18, para. 2 of the Enforcement Code. 258 Regarding the possibility to request a suspension of enforcement in challenge proceedings before the Court of Appeal, see Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 654 et seq. 259 See sections 56–59 LSF. If the Court of Appeal grants the application, the award can, according to section 59 LSF, be enforced as a final judgment of a Swedish court, unless otherwise determined by the Supreme Court following an appeal of the Court of Appeal’s decision. 260 Section 53 LSF. 261 Govt. bill 1998/99:35, 199 et seq., 247. 262 Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 1175. 263 Section 57 LSF and Chapter 3, section 15, para. 3 of the Enforcement Code. 264 If the opposing party has made such claim, the Court of Appeal can order the opposing party to provide reasonable security in default of which enforcement might otherwise be ordered. It can be noted that an enforcement will probably not be postponed unless the opposing party can show that the challenge is likely to succeed, Andersson et al., Arbitration in Sweden, 2011, 187; Datema AB v. Fornede Cresco Finans AS, NJA 1992, 733 = YCA XIX (1994), 712; Republic of Latvia v. Swembalt AB, NJA 2002, C 62.

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However, such requests for postponement in enforcement proceedings are reluctantly granted.265 b) Enforcement of awards that have been set aside. A Swedish arbitral award can 93 no longer be enforced if it has been set aside or declared invalid through a binding court judgment. Similarly, foreign awards shall not be enforced if the opposing party proves that the award has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made.266 c) Fulfilment, set-off and similar defences. Enforcement shall be refused if the 94 respondent can show that he has satisfied an obligation to pay or any other obligation to which the application concerning enforcement relates.267 Other impediments to enforcement can be set-off objections,268 which are not included in the res judicata effect in the award,269 and other circumstances involving the substantive legal relationship of the parties, e. g. that the parties have agreed on extension of time for payment.270

4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings. The grounds for 95 invalidity as set out in section 33 LSF are not precluded due to failure to object in the arbitral proceedings and can be asserted without any time limit.271 In comparison, the grounds for setting aside an award in section 34 LSF can be precluded if a party has participated in the proceedings without making an objection, or in any other manner may be deemed to have waived the right to rely upon a certain circumstance.272 Generally, a party is only deemed to have waived circumstances of which the party had knowledge.273 A party shall however not be regarded as having accepted the arbitrators’ jurisdiction solely by having appointed an arbitrator.274 Swedish law entails no specific time limit within which objections have to be made to 96 the arbitral tribunal. It has been suggested in the legal literature that, in accordance with the requirement in article 4 ML, a party is to protest against a decision without undue 265 Ewerlöf, in: Franke et al. (eds), International Arbitration in Sweden: A Practitioner’s Guide, 2013, 267 (279). 266 Section 54, point 5 LSF. Section 54 prescribes that recognition and enforcement “shall” be refused under the stipulated circumstances. It has been argued that the provision shall be interpreted in accordance with article V(1)(e) of the NYC, which prescribes that enforcement of the award “may” be refused, see further Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 724; Andersson et al., Arbitration in Sweden, 2011,185. This is in line with statements by the Supreme Court, that the Swedish provisions shall be interpreted in line with the main objective of the New York Convention to facilitate enforcement, Planavergne S.A. v. K.B. i Stockholm AB, NJA 2003, 379. See also Götaverken Arendal Aktiebolag v. General National Maritime Transport Company, NJA 1979, 527 = YCA VI (1981), 237 and Datema AB v. Fornede Cresco Finans AS, NJA 1992, 733 = YCA XIX (1994), 712. 267 Chapter 3, section 21 of the Enforcement Code. 268 Provided that the respondent refers to a claim which has been judicially confirmed or which is based on a promissory note or other written evidence of debt, and the general preconditions for set-off exist, Chapter 3 section 21 of the Enforcement Code. 269 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 746. 270 Walin et al., Utsökningsbalken: En kommentar, 5th ed., 2017, 104. 271 Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 287, 584. 272 Section 34, para. 2 LSF. 273 Cf. Govt. bill 1998/99:35, 149; Lindskog, Skiljeförfarande: En kommentar, 2nd ed., 2012, 909 et seq. The Supreme Court has stated that a party who has reason to believe that a ground for setting aside exists, may be deemed to have waived the circumstance if the party decides not to investigate the issue, Joint Stock Company Technopromexport v. Mir’s Limited, NJA 2013, 578. 274 Section 34, para. 2 LSF.

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delay.275 According to a statement in the travaux préparatoires, a party loses the right to challenge the award if the party takes part in the proceedings without stating an objection immediately.276 97 Further, the Supreme Court has concluded that the right to invoke the grounds for refusal of enforcement in section 54 point 1–4 LSF may be precluded if the party has not made an objection during the arbitral proceedings.277 b) Preclusion due to failure to bring a setting-aside application. As mentioned above, an action to have an award set aside must be brought within two months from the date of receipt by a party of the award or, where correction, supplementation or interpretation has taken place pursuant to section 32 LSF, within two months from the date the award was received in its final wording.278 Consequently, an omission to bring setting aside proceedings of a domestic award within the stipulated time frame will entail that the grounds for setting aside cannot impede enforcement. 99 As for foreign awards, Swedish law does not expressly require that a setting-aside application has been filed at the seat of the arbitration in order for relevant defences to evade preclusion in enforcement proceedings in Sweden, and statements in the legal literature indicate that such a requirement does not exist.279 98

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Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 274. SOU 1994:81, 292; Govt. bill 1998/99:35, 236. This is not to say that the respondent does not have a reasonable respite, see Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 273 et seq. 277 Adelina Gross AB v. Promlinus D.O.O. Prokuplje, NJA 2018, 504. 278 Section 34, para. 3 LSF. 279 See Heuman, Arbitration Law of Sweden: Practice and Procedure, 2003, 721. 276

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R. International Arbitration in Switzerland Bibliography: Arroyo (ed.), Arbitration in Switzerland – The Practitioner’s Guide, 2nd ed., Wolters Kluwer 2018; Balthasar/Richers, Europäisches Verfahrensrecht und das Ende der anti-suit injunction, RIW 2009, 351–357; Berger, Insolvenz und Schiedsvereinbarung in der Schweiz, (2018) 36 ASA Bull. 834–845; Berger/ Kellerhals, International and Domestic Arbitration in Switzerland, 3nd ed., C.H. Beck Verlag 2015; Blessing, Introduction to Arbitration – Swiss and International Perspectives, Helbing & Lichtenhahn 1999; Bonomi/ Reymand-Eniaeva, Interpretation and Application of the New York Convention in Switzerland, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 911–944; Casey, Individualarbeitsrechtliche Streitigkeiten im Schiedsverfahren, (2017) 35 ASA Bull. 266–279; Dasser, Schiedsgerichtsbarkeit, in: Oberhammer/Domej/Haas (ed.), Schweizerische Zivilprozessordnung, Art. 353–399 ZPO, 2nd ed., Helbing Lichtenhahn Verlag 2014; Dasser, International Arbitration and Setting Aside Proceedings in Switzerland – An Updated Statistical Analysis, (2010) 28 ASA Bull. 82–100; Dasser, Selected Charts for Online Publication, 2014, ASA website; Dasser/Wojtowicz, Challenges of Swiss Arbitral Awards – Updated Statistical Data as of 2017, (2018) 36 ASA Bull. 276–294; Girsberger/Voser, International Arbitration: Comparative and Swiss Perspectives, 3rd ed., Schulthess 2016; Graf/Umbach-Spahn, Berücksichtigung ausländischer Schiedsurteile in der Insolvenz – Lehren aus den Bundesgerichtsentscheiden in Sachen Swissair, (2018) 36 ASA Bull. 822–833; Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., Helbing Lichtenhahn Verlag 2013; Karrer, Switzerland, in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 826–885; KaufmannKohler/Rigozzi, International Arbitration: Law and Practice in Switzerland, Oxford University Press 2015; Kunz, Fact or Fiction? How to Deal with Allegations of Simulation Case Note on Swiss Supreme Court Decision of 1 October 2018, 4A_550/2017, (2019) 37 ASA Bull. 111–116; Leemann, Challenging International Arbitration Awards in Switzerland on the Ground of a Lack of Independence and Impartiality of an Arbitrator, (2011) 29 ASA Bull. 10–32; Mabillard/Briner, Art. 177, in: Magliana, Review of the Recent Case Law of the Swiss Federal Supreme Court, in: Müller/Rigozzi (eds), New Developments in International Commercial Arbitration, Schulthess 2012, 109–194; Müller, Extension of arbitration agreements to third parties under Swiss law, in: PLC Cross-border Arbitration Handbook, PLC 2009/10; Müller/Pearson, Swiss Case Law in International Arbitration, 3rd ed., Schulthess 2019; Müller/Pearson, Waving the Green Flag to Emergency Arbitration under the Swiss Rules: the Sauber Saga, (2015) 33 ASA Bull. 808–824; Müller-Chen/ Widmer/Lüchinger (eds), ZürcherKomm-IPRG, 3rd ed., Schulthess 2018; Naegeli, The Capacity of a Bankrupt Party to Be or Remain a Party to International Arbitral Proceedings, (2013) 31 ASA Bull. 372–382; Oetiker/Walz, Non-Compliance with Multi-Tier Dispute Resolution Clauses in Switzerland, (2017) 35 ASA Bull. 872–887; Patocchi, National Report for Switzerland (2018 through 2019), in: Bosman (ed.), ICCA International Handbook on Commercial Arbitration, Kluwer Law International 2019; Pfisterer, The arbitrator as a settlement facilitator, Am. Rev. Int’l Arb. 2013, 649–679; Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., Sweet & Maxwell 2007; Stojiljkovic, Arbitral Jurisdiction and Court Review: Three Swiss Federal Supreme Court Decisions to Reconsider, (2016) 34 ASA Bull. 897–913; Stutzer, Settlement Facilitation: Does the Arbitrator have a Role? The “Referentenaudienz” – the “Zurich-Way” of settling the Case, (2017) 35 ASA Bull. 589–608; Wenger, Polyvalente Schieds(gutachtens)klauseln – Anmerkungen zu BGE 142 III 220, (2016) 34 ASA Bull. 914–923. National legislation: Chapter 12 of the Private International Law Act (Bundesgesetz über das Internationale Privatrecht (IPRG)) International treaties: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958 (330 UNTS 38); Convention on the Settlement of Investment Disputes between States and Nationals of Other States (575 UNTS 159); Energy Charter Treaty (2080 UNTS 100); United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, 11 December 2014 (signed, but not yet in force).

Contents I. Introduction ..................................................................................................... 1 1. Switzerland’s position in international arbitration ............................. 1 2. Legal framework ......................................................................................... 3 a) Domestic and international arbitration ........................................... 3 b) Commercial and non-commercial arbitration ............................... 10

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Part 3. Country Reports c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 3. The guiding principles of Swiss international arbitration law ......... II. The arbitration agreement ............................................................................ 1. The doctrine of separability ..................................................................... 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ...... a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) The principle of Kompetenz-Kompetenz: Examination of jurisdiction by the arbitral tribunal................................................... b) Examination of jurisdiction by the state courts............................. c) Parallel proceedings in particular...................................................... d) Judicial review........................................................................................ e) Burden of proof ..................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal: impartiality and independence of the arbitrator....................................................................................................... a) Duty to disclose conflicts of interest ................................................ b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration other than by final award .......... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police ............................... 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party arbitration .............................................................................. a) Arbitration agreement involving several parties ............................ b) Equality of arms and appointment of the arbitrators .................. IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards: ...................................... aa) Overview .......................................................................................... bb) Lack of jurisdiction of the arbitral tribunal ............................. cc) Composition of the tribunal and procedural irregularities .. dd) Public policy....................................................................................

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R. International Arbitration in Switzerland 3. Enforcing arbitral awards ......................................................................... a) General framework ............................................................................... b) Enforcement of awards that were set aside..................................... c) Fulfilment, set-off and similar defences........................................... 4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

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I. Introduction 1. Switzerland’s position in international arbitration Switzerland’s position as a preeminent place of arbitration can be traced back to 1 the Middle Ages. While the second half of the 19th century saw the birth of public law arbitration with the Alabama Arbitration held in Geneva, it was not until international trade markedly increased in the 20th century that international commercial arbitration became the standard dispute resolution method for international transactions.1 With Geneva and Zurich, Switzerland today has two leading arbitration venues in which disputes of a predominantly international nature are arbitrated.2 Switzerland’s success as a preferred place of arbitration is also reflected by the fact that Swiss arbitrators are in very high demand, as is the choice of Swiss law in international commercial contracts.3 A key reason for Switzerland’s success as a place of arbitration is its liberal, 2 arbitration-friendly tradition. Not only does the legal framework allow the parties to structure their proceedings according to their needs, but it also respects the parties’ wish for finality by permitting only limited grounds upon which to challenge an arbitral award and providing that any challenges be brought directly before the Supreme Court, which generally renders its decisions within approximately 6–8 months of the award having been rendered.4 In short, the state only becomes involved where necessary to assist the arbitral process or to ensure fundamental justice.5 In addition, Swiss law is frequently chosen as a trustworthy and predictable “neutral” legal system, making a Swiss seat of arbitration a natural choice.6

2. Legal framework a) Domestic and international arbitration. International arbitration proceedings are 3 as a general rule governed by the provisions of Chapter 12 of the Private International Law Act (Bundesgesetz über das Internationale Privatrecht, IPRG).7 Despite forming part of the IPRG, the provisions of Chapter 12 governing arbitration are independent from the rest of the IPRG and thus form an actual arbitration act.8 At the time of its drafting, the IPRG was a fairly controversial statute. It took nearly 4 20 years from the first steps until it eventually entered into force in 1989. The provisions Blessing, Introduction to Arbitration – Swiss and International Perspectives, 1999, 63 et seq. Dasser/Wójtowicz, (2018) 36 ASA Bull. 276 et seq., 283. In numbers, Lausanne has even more arbitration cases than Geneva or Zurich, although they are almost exclusively CAS cases. 3 See ICC Dispute Resolution 2018 Statistics. 4 See infra mns 121 et seq. 5 Blessing, Introduction to Arbitration – Swiss and International Perspectives, 1999, 65 et seq.; Berger/ Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 146. 6 See ICC Dispute Resolution 2018 Statistics; Berger/Kellerhals, ibid. 7 Articles 176 to 194 IPRG. 8 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 87 et seq. 1 2

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on international arbitration were particularly disputed and required substantial redrafting by the parliamentary commission of the National Council. In order not to jeopardize the already difficult work on the arbitration provisions of the IPRG, Swiss legislators decided not to wait for the finalization of the Model Law – which was under discussion at the same time – and implemented an independent, modern arbitration act.9 While the IPRG does not follow the Model Law, there are no truly fundamental substantive differences between the two. The provisions of the IPRG are more concise than other arbitration acts, and are limited to addressing the essential cornerstones of an arbitral proceeding. What was initially the result of the need to reach a political compromise, with hindsight turned out to be a blessing: The brevity of the IPRG follows a very liberal concept that grants the parties far-reaching autonomy to determine the composition of the arbitral tribunal and to tailor the arbitral procedure to their exact needs while at the same granting the arbitral tribunal broad powers, and limiting any state interference to the minimum necessary to support the arbitral tribunal and the parties where required.10 In 2020, the IPRG was revised, after a draft bill had been published by the Swiss Federal Council on 24 October 2018 (the “Revised IPRG”).11 The purpose of the revision was not to overhaul the law, but instead merely to modernize and update it, including with a view to reflecting the case law of the Swiss Supreme Court.12 While international arbitrations are as a general rule subject to the IPRG, domestic arbitrations are in principle subject to the provisions of the Code of Civil Procedure (Zivilprozessordnung, ZPO).13 Consolidation of the rules on domestic and international arbitration into a code unique was considered when the ZPO was drafted. However, this approach was rejected, among other reasons due to reservations concerning the suitability of the IPRG’s liberal approach for domestic arbitrations.14 Hence, domestic arbitration is still subject to its own – more restrictive – rules. However, domestic parties wishing to conduct their arbitration under the more liberal regime of the IPRG may opt out of the provisions of the ZPO and agree on the applicability of Chapter 12 of the IPRG.15 Conversely, the parties to an international arbitration can decide to conduct their proceedings under the rules of the ZPO, although this seems a less obvious choice given the benefits of the wide flexibility that the IPRG offers.16 Such an agreement may be made in the initial arbitration agreement or at a later time. It must be explicit and should conform to the form requirements of the arbitration agreement.17 9 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 20, 85 et seq.; Blessing, Introduction to Arbitration – Swiss and International Perspectives, 1999, 164 et seq. 10 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 89 et seq. 11 Draft Bill dated 24 October 2018; Explanatory remarks regarding the modification of the IPRG of 24 October 2018 at BBl 2018, 7163 et seq final Bill accepted on June 19, 2020, BBl 2020, 5654 et seq. 12 ASA Statement of 19 November 2018 on Chapter 12 Draft Bill, available at https://www.arbitrationch.org/en/asa/asa-news/details/1010.asa-observations-on-the-chapter-12-revision.html (accessed 1 August 2020). 13 Articles 353 et seq. ZPO. 14 Dasser, in: Oberhammer/Domej/Haas (eds), Schweizerische Zivilprozessordnung, 2nd ed., 2014, Vor Art. 353–399, mn. 19. 15 Article 353(2) IPRG. See Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 111 et seq. An opting out is valid if, first, the application of Part III of the CPC is expressly excluded, second, the exclusive application of the provisions of Chapter 12 of the IPRG is agreed, and third, the express declaration of the parties is in written form; see BGer. 4A_540/2018 of 7 May 2019, consid. 1.3 (English translation at http:// www.swissarbitrationdecisions.com/atf-4a-540-2018?search=4A_540%2F2018, accessed 1 August 2020). 16 Article 176(2) IPRG. See Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 107 et seq. 17 See article 353(2) ZPO; Pfiffner/Hochstrasser, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKommIPRG, 3rd ed., 2013, Art. 176, mn. 45.

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In this respect it is important to note that an arbitration is “international” within the 9 meaning of the IPRG where at least one party to the arbitration agreement had its domicile or habitual residence in Switzerland at the time the arbitration agreement was entered into.18 However, the Supreme Court has held that the IPRG does not apply to cases in which the foreign party to an arbitration agreement does not participate in the proceedings, i. e. where only parties having their domicile or seat in Switzerland effectively participate in the arbitration.19 In order to avoid any uncertainty regarding the applicability of the IPRG, parties are best advised to include an “opt-in” clause pursuant to article 353(2) ZPO, based on which the provisions of Chapter 12 apply exclusively in any event.20 b) Commercial and non-commercial arbitration. International arbitration under 10 the IPRG is not limited to commercial disputes, although commercial arbitration is, of course, its main scope of application. Article 177(1) IPRG provides that any “economic claims” may be subject to arbitration. The Supreme Court has interpreted the term “economic claim” broadly, holding that any claim with a pecuniary value to the parties, or in which the parties have an interest that can be expressed in monetary terms, qualifies as an economic claim.21 c) Ad hoc and institutional arbitration. Articles 182(1) and (2) IPRG grant the 11 parties the freedom to choose between ad hoc arbitration, in which the parties determine the procedural rules themselves, and institutional arbitration, in which the procedure is administered and supervised by an arbitral institution.22 In practice, institutional arbitration predominates due to its predictability, not least with respect to costs. The most frequently chosen rules of arbitration in Switzerland are the Rules of Arbitration of the International Chamber of Commerce (ICC Rules) and the Swiss Rules of International Arbitration of the Swiss Chambers of Commerce (Swiss Rules). The Swiss Rules replaced the former arbitration rules of the Chambers of Commerce 12 and Industry of Basel, Bern, Geneva, Lausanne, Lugano, Neuchâtel and Zurich in 2004. They are based on the UNCITRAL Arbitration Rules of 1976, but were converted into institutional rules and updated to take modern arbitral practice into account. In substance they focus on short proceedings, cost efficiency and light administration. Upon entering into force they were well received by the arbitration community and in turn influenced the revision of the UNCITRAL Arbitration Rules 2010.23 In 2012, the Swiss Rules were revised to take into account the changes of the UNCITRAL Arbitration Rules 2010 as well as other developments such as the ICC Rules 2012.24 Further, the Swiss Chambers’ Arbitration Institution was founded and the Arbitration Court introduced for administrating the cases.25 18

Article 176(1) IPRG. BGer. 4P.54/2002 of 24 June 2002, consid. 3. 20 The revision of the IPRG clarified that it is the parties to the original arbitration agreement that are relevant to determining whether the IPRG applies, and not the parties to the proceedings themselves; see Revised IPRG article 176(1); Explanatory remarks regarding the modification of the IPRG of 24 October 2018, p. 7187. 21 BGE 118 II 353 consid. 3 b; infra mn. 41. 22 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 22. 23 Brunner, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 437 et seq. 24 Key points of the revision included new rules for complex multi-party arbitrations, consolidation and joinder, interim measures and the introduction of the emergency arbitrator; see Brunner, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 438, et seq. Regarding emergency arbitration, see Müller/ Pearson, (2015) 33 ASA Bull. 808 et seq. 25 Swiss Rules 2012, Introduction. 19

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For domestic arbitrations, the Swiss Rules of 2012 also replaced the former arbitration rules of the Chambers of Commerce and Industry of Basel, Bern, Geneva, Lausanne, Lugano, Neuchâtel and Zurich, thus ensuring that a uniform set of rules applies to all arbitrations conducted under the auspices of the Swiss Chambers’ Arbitration Institution.26

d) The territoriality principle, the seat of the arbitration and the lex arbitri. Pursuant to article 176(1) IPRG, the provisions of the IPRG apply to arbitral tribunals with their seat in Switzerland. It is primarily up to the parties to determine the seat of the arbitration, either in their arbitration agreement or in a separate agreement thereafter. They can also leave the designation of the seat to one of the parties27 or to a third party such as an arbitral institution.28 Absent an agreement by the parties, it is for the arbitral tribunal – assuming that the arbitral tribunal has been duly constituted – to determine the place of arbitration.29 Where the parties are unable to agree on the appointment of the arbitral tribunal, they may seek state court assistance in doing so pursuant to article 179(2) IPRG.30 15 Whether the parties have validly designated Switzerland as the seat of arbitration where they refer only to “arbitration in Switzerland” – and not to any specific location in Switzerland – is controversial. Such a designation is problematic above all where the parties are unable to agree on the constitution of the arbitral tribunal and require state court assistance pursuant to article 179(2) IPRG.31 Because it is the state court at the seat of the arbitration (the juge d’appui) that has jurisdiction to assist the parties with the appointment of the arbitral tribunal, the absence of a specific designation prevents identification of the competent juge d’appui. Arguably, in such circumstances any Swiss court may be seized to appoint the arbitral tribunal.32 16 The IPRG constitutes the lex arbitri for tribunals with their seat in Switzerland and thus provides the procedural framework for Swiss arbitration proceedings, including for access to the state courts where their intervention in support of the arbitration is required.33 The lex arbitri is further of particular importance to the extent that it contains mandatory provisions, in particular regarding the validity of arbitration agreements, the right to challenge an arbitrator, the mandatory rules governing arbitration proceedings and the provisions addressing the procedure for setting aside arbitral awards.34 Apart from such mandatory provisions the parties are however free to choose 14

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Article 1(1) Swiss Rules 2012. Decisions of the Zurich High Court of 8 May 1998, p. 4 et seq., and 13 August 1990, p. 3, both cited in Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 25. 28 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 98, 762. In practice, it also occurs that other third parties are tasked with appointing the arbitral tribunal (or members of the arbitral tribunal), such as the president of a commercial court or an arbitral institution; see Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 762. 29 Article 176(3) IPRG. However, this arguably also constitutes a generally recognized principle. See Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 764 et seq. 30 See infra mn. 80. 31 See infra mn. 80. 32 Peter/Legler, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 179, mn. 3; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 754 et seq. The issue is, however, controversial with notable practitioners arguing that such an arbitration clause is unenforceable, see Pfiffner/Hochstrasser, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 176, mn. 29. This has been addressed in the Revised IPRG, which now specifically provides that where no juge d’appui can be identified, whether because the arbitration clause fails to specify a city or where the seat is outside of Switzerland, it is the first juge d’appui called upon by the party that has the authority to appoint the arbitrators; see Revised IPRG, article 179(2). 33 Article 185 IPRG; see Pfiffner/Hochstrasser, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKommIPRG, 3rd ed., 2013, Art. 176, mn. 18. 34 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 604. 27

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the law applicable to the arbitration agreement, the arbitral proceedings and the substance of the dispute.35 The fact that an arbitration has a Swiss seat does not preclude the parties and the 17 arbitral tribunal from holding evidentiary hearings or deliberating the award at a different place, including outside of Switzerland.36 e) Arbitration and other ADR mechanisms (mediation, expert determination). In 18 the last years, the range of available alternative dispute resolution mechanisms seems to have grown considerably, to the point where the various subtypes have sometimes become difficult to distinguish. In addition to arbitration, commonly mentioned ADR mechanisms include conciliation, mediation, “med/arb”, expert determination, adjudication, dispute review boards and dispute adjudication boards, and mini-trials. From a practical perspective, conciliation, mediation and expert determination are of particular relevance in connection with arbitration. Conciliation is a well-established process in state-court litigation, where it generally 19 constitutes a prerequisite for the filing of a lawsuit. For certain small claims, the conciliator may even decide the case in the form of a binding judgment. In addition, however, the Swiss legal tradition goes further than this (fairly standard) conciliation mechanism in that state-court judges may also facilitate amicable settlements at any stage of an on-going litigation by acting as a conciliator, including by providing a preliminary assessment of the facts and law of the case. In fact, the majority of the cases pending before the Swiss commercial courts eventually settle as a result of such conciliation attempts, without a judgment being rendered.37 Given this background, it is not surprising that such conciliation is generally accepted in domestic arbitrations, at least to the extent that the parties request or agree with it.38 In international arbitration, a more conservative approach may in many cases be 20 appropriate given that a number of jurisdictions – common law in particular – consider the role of a judge or arbitrator to be essentially incompatible with any activity that could cast doubts on his or her strict impartiality.39 While this does of course not prevent the arbitral tribunal from referring the parties to an external conciliator (or mediator), it may trigger concerns if the arbitral tribunal intends to act itself in a conciliatory role as any activity outside of the actual arbitration proceedings may provide the arbitral tribunal with information that it would not have acquired without the conciliation attempt.40 On the other hand, it should be emphasized that the Swiss tradition also shows that experienced arbitrators are perfectly capable of distinguishing between the two functions and that their detailed knowledge of the dispute also provides them with a unique position to suggest business-oriented amicable solutions.41 It is therefore unsurprising that the gap between the two positions seems to be narrowing in favour of a more active role of arbitrators.42 35

Articles 178(2), 182(1) and 187(1) IPRG. Pfiffner/Hochstrasser, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 176, mn. 19, pointing out, however, that conducting Swiss arbitration proceedings outside of Switzerland carries the risk of inadvertently submitting the arbitration to the arbitration laws applicable at that place. 37 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 169. 38 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 171. 39 Pfisterer, Am. Rev. Int’l Arb. 2013, 649 (652 et seq.). 40 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 157. The Swiss practice of the arbitral tribunal giving the parties a preliminary view on the merits is in particular not accepted in the common law jurisdiction; see Pfisterer, Am. Rev. Int’l Arb. 2013, 649 (654). 41 Pfisterer, Am. Rev. Int’l Arb. 2013, 649 (658 et seq.). 42 Pfisterer, Am. Rev. Int’l Arb. 2013, 649 (655 et seq.). 36

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Notably, where all parties so request, Swiss arbitrators in international arbitrations are generally willing to raise the issue of settlement and even present the parties with their preliminary views of the case before them – for instance, after a first exchange of briefs – in order to assist the parties in reaching a settlement. It is thus not uncommon for such a “preliminary views conference” to be included in the procedural timetable where all parties agree thereto and waive any right to challenge the arbitral tribunal on the basis of the conference or the views expressed therein. The extent to which the arbitral tribunal is willing to actively propose a settlement or assist the parties in finding one, however, depends on the arbitrator(s) in question and the specific wishes of the parties.43 In mediation, the parties attempt to resolve their differences through negotiations that are facilitated by a neutral mediator who does not possess any decision-making powers.44 Despite the fact that a range of mediation techniques exist, a proper mediation process is always highly structured and requires considerable professional training and experience. Similar to arbitration, mediation can be agreed either on an ad hoc basis with rules and proceedings agreed by the parties themselves or by reference to the mediation rules of specialized institutions (such as the recently updated Swiss Rules of Commercial Mediation of the Swiss Chambers’ Arbitration Institution or the ICC Mediation Rules). Under Swiss law, the mediation agreement constitutes a mandate agreement.45 Procedurally, mediation only leads to a binding outcome once an actual settlement is reached on some or all points in dispute.46 Expert determination is a frequently used dispute resolution method by which certain facts (or sometimes legal questions) are determined in a binding manner.47 Expert determination is particularly frequent where specialized technical expertise is required for the determination of facts, e. g. the quality of delivered goods, the value of a business, closing accounts in M&A transactions etc. The factual determinations of the expert in an expert determination are in principle binding in pending or subsequent legal proceedings. Article 189 ZPO specifically states so for litigation in the state courts, but the underlying reasoning is deemed to apply mutatis mutandis to arbitration proceedings.48 Procedurally, the expert must be impartial and independent and act in accordance with the principles of due process; in substance, the expert’s determination must not be manifestly wrong.49 The conclusions reached in the expert determination do not have the legal effect of a judgment or an arbitral award and are not directly enforceable. Should the parties not voluntarily abide by the conclusions arising from the expert determination, it is up to the parties to enforce their respective claims through litigation or arbitration.50 The 43

See Stutzer, (2017) 35 ASA Bull. 589 et seq. Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 175. 45 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 177. 46 Article 217 ZPO provides for the possibility of having the court approve the outcome of a mediation, thus granting it the same effect as a judgment. This provision however only applies to state court proceedings, and no equivalent rule exists for international arbitration. 47 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 150. 48 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 152 et seq. According to the Supreme Court, the expert determination agreement is a contract of substantive civil law, see BGE 129 III 535, consid. 2, and thus expert determination is not subject to the provisions of Chapter 12 IPRG. See also BGE 142 III 220 and 141 III 274 (concerning domestic arbitration); BGer. 4A_428/2015 of 1 February 2016 (English summary: https://www.gabriel-arbitration.ch/en/publications-and-speaking/arbitration-vsprior-expert-determination, accessed 1 August 2020). See further Wenger, (2016) 34 ASA Bull. 914 et seq. 49 Article 189(3)(b), (c) ZPO; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 157, 145 c. 50 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 161. 44

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review of the expert determination in such proceedings is limited, however, to cases where the result is manifestly unfair, arbitrary, incorrect or inequitable to a high degree or is based on false assumptions.51 Frequently one sees what are known as multi-tiered arbitration clauses, i. e. arbitra- 27 tion clauses that call for good faith negotiations or mediation prior to the initiation of the arbitration proceedings. The enforceability of such clauses – and the consequences in the event that a party fails to comply with the pre-arbitral steps – is a topic that is much debated both in Switzerland and internationally. According to the case law of the Supreme Court, in order to give rise to a binding obligation to comply with the pre-arbitral steps, the relevant clauses must be sufficiently precise and clearly indicate that the parties intended compliance with the pre-arbitral steps to be a mandatory prerequisite to the admissibility of the arbitration proceedings.52 The Supreme Court has in particular declined to enforce such clauses where this intention was not reflected in the parties’ clause; the exact procedure to be followed prior to the initiation of arbitration proceedings was not sufficiently described; and where the clause did not contain time limits for the compliance with such procedures.53 On the other hand the Supreme Court has held that the Dispute Adjudication Board Procedure provided for in Article 20 of the 1999 FIDIC Conditions of Contract Constitutes a mandatory pre-arbitral at step.54

3. The guiding principles of Swiss international arbitration law Perhaps the overarching characteristic of Swiss international arbitration law is its 28 liberal approach to arbitration: Under the IPRG, the notion of party autonomy is ubiquitous and both the parties and the arbitral tribunal enjoy wide discretion to tailor the proceedings to their specific needs, and to choose the procedural and substantive law applicable to their dispute.55 This liberal approach does not reflect a disinterest of the state in arbitration; to the 29 contrary: International arbitration is strongly supported by the Swiss judicial system. The Swiss courts, including the Supreme Court, have for more than a century ensured that the necessary legal framework allows arbitration to flourish. This is reflected in the healthy judicial restraint exercised by the state courts, which abstain from undue interference and focus on assisting the arbitration proceedings where necessary and enforcing the procedural safeguards in place to ensure fair proceedings by making the necessary legal remedies available to redress any violations thereof. Moreover, in the interest of efficient dispute resolution, challenges to arbitral awards are heard directly by the Supreme Court, which ensures both expedient proceedings and a high standard of judicial review.56 BGE 129 III 535, consid. 2.1.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 159. The Supreme Court held that the arbitral tribunal has a duty to stay the arbitration pending a mandatory conciliation attempt; see BGE 142 III 296 (English translation at http://www.swissarbitrationdecisions.com/mandatory-pre-arbitration-procedure-not-complied-results-annulment-award, accessed 1 August 2020); Oetiker/Walz, (2017) 35 ASA Bull. 872 et seq. 53 BGer. 4A_46/2011 of 16 May 2011 (English translation at http://www.swissarbitrationdecisions.com/ no-breach-of-pre-arbitral-procedures-failure-to-deal-with-an-arg?search=4a_46 %2F2011, accessed 1 August 2020); 4A_18/2007 of 6 June 2007. 54 BGer. 4A_124/2014 of 7 July 2014, consid. 3.4 (English translation at http://www.swissarbitrationdecisions.com/federal-tribunal-upholds-fidic-pre-arbitration-requirements?search=4a_124%2F2014, accessed 1 August 2020). 55 Hochstrasser/Fuchs, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Einl. 12. Kap., mns 200, 201. 56 See infra mns 123–124. 51 52

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The general acceptance of arbitration as an equivalent form of dispute resolution is also expressed by the fact that Switzerland is a signatory to the NYC and that foreign arbitral awards are in practice also enforced as a matter of course.57

II. The arbitration agreement 1. The doctrine of separability Article 178(3) IPRG expressly provides that an arbitration agreement cannot be challenged on the grounds that the contract in which it is contained is invalid. The provision thus sets forth the principle of autonomy (or separability) that applies to arbitration agreements under Swiss law and according to which the validity of the arbitration agreement – and hence indirectly the arbitral tribunal’s jurisdiction – must be assessed independently from the underlying contract.58 As a consequence of this doctrine, a different law may apply to the arbitration agreement than to the substantive legal issues,59 and the existence, invalidity, illegality or termination of the main contract may be assessed differently than the arbitration clause.60 32 Of course, the doctrine of separability does not prevent a particular defect from rendering both the underlying contract and the arbitration agreement invalid. Nor does it impact the fact that for most other purposes the arbitration agreement is ancillary to the main contract, frequently shares its destiny and above all is binding upon any legal successor to the main contract.61 33 Article 178(3) IPRG further clarifies that an arbitration agreement may also be concluded before a dispute effectively arises; as in most jurisdictions, this has long been beyond dispute in Switzerland.62 31

2. The law applicable to the arbitration agreement As part of its arbitration-friendly approach, article 178(2) IPRG implements the principle of favor validitatis by providing that an arbitration agreement will be considered valid if it is valid under one of the following three laws: the law chosen by the parties to apply to the arbitration agreement, the law applicable to the merits, or Swiss law.63 Notably, any choice of law is construed as a choice of the substantive provisions of the law, i. e. without regard to the conflict of laws rules.64 35 Article 178(2) IPRG applies in particular to the conclusion of the arbitration agreement (e. g. offer, acceptance, incorporation of arbitration agreements by reference, defects in consent such as error or deceit), its interpretation, fulfilment, subjective and objective scope (including the question of legal succession) and its termination.65 On the 34

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See infra mns 141–142. Müller/Riske, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 97; Gränicher, in: Honsell/ Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 90. 59 See articles 178(2) and 197 IPRG and infra mns 34–36. 60 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 90. 61 BGE 128 III 50, 55 concerning an assignment of a contract; BGE 142 III 239 consid. 3.2.1 (English translation at http://www.swissarbitrationdecisions.com/unsigned-arbitration-clause-upheld?search=% 22142+III+239%22, accessed 1 August 2020); Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 90. 62 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 92. 63 Müller/Riske, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 81; Gränicher, in: Honsell/ Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 24. 64 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 24. 65 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 25. 58

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other hand, outside of the scope of article 178(2) IPRG and thus subject to independent conflict of laws rules are issues such as arbitrability, capacity, acting through proxy etc.66 Whether or not an arbitration agreement is valid must be decided based on the 36 requirements of one single national law (although the most favourable law is decisive). It is therefore not permissible to decide different aspects of the validity under separate laws.67

3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. In order for an arbitration agree- 37 ment to be valid, the parties must have the capacity to conclude such agreement. Like in state court litigation, this requires each party to have legal capacity and the capacity to be a party as well as the capacity to act and to conduct legal proceedings. The law applicable to the parties’ legal capacity and capacity to act is not determined 38 pursuant to article 178(2) IPRG, but based on the general conflict of laws rules set forth in articles 35 et seq. and 154 et seq. IPRG.68 Further, capacity to act must not be confused with standing to sue and to be sued (Sachlegitimation), i. e. the question of whether a party is actively or passively entitled to assert the right claimed, which under Swiss law is a question of substantive law.69 The distinction is insofar relevant as a lack of legal capacity or capacity to act results in the inadmissibility of the proceedings, whereas a lack of standing to sue results in the dismissal of the claim with prejudice as it is inextricably linked to the substantive claims in question (so-called doppelrelevante Tatsachen). In arbitration, the capacity to be a party is considered to be directly linked to the question of whether the claimant or respondent is a party to the arbitration agreement.70 The issue of capacity frequently arises where states are parties to an arbitration 39 proceeding. In this respect, article 177(2) IPRG provides that a state, a state-controlled party or a state organization may not invoke its own internal law to contest its capacity. This provision is directly applicable as a substantive provision of the Swiss lex arbitri;71 it is to be interpreted broadly.72 It is controversial whether, in order to invoke article 177 (2) IPRG, a private party must have acted in good faith at the time the arbitration agreement was concluded, i. e. whether a private party that knew or could have known that the arbitration agreement breached the state’s internal law may still rely on article 177(2) IPRG.73 b) Arbitrability. A dispute is arbitrable where, by its very nature, it may be resolved by 40 arbitration and where no mandatory legal provision reserves the exclusive jurisdiction of the state courts over it.74 The clearly prevailing view in Switzerland is that the arbitrability of a dispute is to be decided exclusively based on the provisions of the IPRG as the lex 66 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 25 with further references. 67 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 26. 68 BGer. 4P.161/1992 consid. 4 a; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 348 (arguing that this result should technically be arrived at via article 187(1) IPRG). Also see below mn. 57 regarding the law applicable to issues of capacity. 69 BGE 128 III 50 consid. 2 b; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 354. 70 BGE 128 III 50 consid. 2 b. 71 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 370. 72 BGE 118 II 353 consid. 3 c; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 373. 73 Mabillard/Briner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 177, mn. 27; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 374 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 69–70. 74 BGE 118 II 193 consid. 5 c.

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arbitri and without recourse to the law applicable to the arbitration agreement.75 The Supreme Court has held that the fact that a Swiss arbitral award may not be enforceable abroad due to a lack of arbitrability under the law at the place of enforcement (lex fori executionis) does not impact the arbitrability of that dispute under Swiss law.76 41 Article 177(1) IPRG provides that any dispute concerning “economic claims” may be subjected to arbitration.77 This provision is understood to be a substantive provision of Swiss private international law applicable in any international arbitration with its seat in Switzerland.78 The term “economic claims” is interpreted broadly and includes “all disputes which have a monetary value for the parties, whether they are part of their assets or liabilities, in other words all claims that represent, at least for one of the parties, an interest which is measurable in monetary terms”.79 Disputes falling under article 177(1) IPRG include claims arising under contract and tort law, unjust enrichment, and the conduct of business without a mandate, but may also include monetary claims under family, inheritance or property law.80 Intellectual property claims are in principle arbitrable, with the exception of claims for the registration or deposit of intellectual property rights.81 In practice, however, arbitration agreements only seldom apply to intellectual property claims.82 A claim does not cease to be of an economic nature only because it depends on preliminary questions that does not relate to a financial interest.83 42 Considerable discussion revolves around the impact of mandatory foreign provisions of law and on the arbitrability of such claims, on whether the arbitral tribunal must take such rules into account ex officio and on the availability of remedies against an arbitral award that failed duly to consider such rules.84 Although these issues continue to be controversial, there appears to be a consensus that an arbitral tribunal sitting in Switzerland should not simply ignore mandatory provisions of foreign law, but rather take them into account when deciding the case.85 75 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 190 et seq. It is disputed whether the lex fori or the lex arbitri applies to this question in proceedings before the state courts; see Berger/ Kellerhals, ibid. 76 BGE 118 II 353, consid. 3 d. It goes without saying that this may create enforcement difficulties given that article V(2)(a) NYC permits the refusal of the recognition and enforcement of a foreign arbitral award based on a lack of arbitrability under the lex fori executionis. 77 See supra mn. 9. 78 BGE 118 II 193 consid. 5 c; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 207 et seq. 79 BGE 118 II 353, consid. 3 a, cited in Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 210. 80 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 213, 222 et seq. In particular for domestic cases, certain limitations may exist with regard to tenancy and employment disputes; see e. g. BGer. 4A_7/2018, consid. 2; BGer. 4A_71/2010 of 28 June 2010, consid. 4 (English translation at http:// www.swissarbitrationdecisions.com/decision-did-not-concern-international-arbitration-domestic-arbitration-and-was-consequently-not-7?search=4A_71%2F2010, accessed 1 August 2020); Berger/Kellerhals, loc. cit., 342 et seq. See further Casey, (2017) 35 ASA Bull. 266 et seq. 81 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 213, 225 et seq. 82 Mabillard/Briner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 177, mn. 15. 83 Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 64. 84 BGE 118 II 193; 118 II 353; 132 III 389, 398 consid. 3.2, (2006) 24 ASA Bull. 550–560 (English translation at http://www.swissarbitrationdecisions.com/violation-of-public-policy-notion-of-public-policyexclusion-of-?search=4P.278%2F2005, accessed 1 August 2020); Mabillard/Briner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 177, mns 18 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 227 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 67 et seq. 85 Mabillard/Briner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 177, mns 18 a et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 228 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 67; see infra mns 110–111.

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As with capacity, article 177(2) IPRG provides that a state party or a state- 43 controlled entity or organization may not invoke rules of its own jurisdiction to contest arbitrability. c) Form of the arbitration agreement. According to article 178(1) IPRG, the arbitration agreement must be concluded “in writing, by telegram, telex, telecopier or in another form of transmission that permits it to be evidenced by text”.86 This provision is considered to be a substantive rule of Swiss private international law, i. e. a mandatory provision of the Swiss lex arbitri that cannot be derogated from by reference to a foreign law.87 Beyond the means of communication expressly mentioned in article 178(1) IPRG, other forms of communication such as electronic transmissions by e-mail or text message are equally admissible, provided they can be stored and promptly printed out in text form.88 A signature is thus not required for an arbitration agreement.89 Unlike article II(2) NYC, article 178(1) IPRG does not require an actual exchange of documents referring to the arbitration agreement; it is sufficient if the parties’ consent results from the entirety of their expression of intent evidenced in text form.90 A mere tacit acknowledgment on the other hand is insufficient.91 An arbitration agreement may also be concluded by reference, for instance where the arbitration clause is not contained in the substantive agreement, but rather only in general terms and conditions referred to in the main contract. Whether or not such an arbitration agreement is valid must be examined from two perspectives: First, from a formal perspective to ensure that both the main agreement and the referenced document meet the requirements of article 178(1) IPRG. Notably, as explained further below, the requirements of article 178(1) IPRG only apply to the original parties to the arbitration agreement; they do not prevent the extension of the arbitration agreement to third parties.92 And second from a substantive perspective, to ensure that the scope of the parties’ consent extends to the referenced document.93 Where an arbitration agreement is entered into by proxy, the required power of attorney arguably must meet the same formal requirements of article 178(1) IPRG as the arbitration clause itself.94

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d) Termination of the arbitration agreement. The parties to an arbitration clause 49 may terminate the agreement to arbitrate at any time, even after arbitration proceedings have commenced.95 Contrary to the conclusion of the arbitration agreement, 86 The revision of article 178(1) IPRG streamlines and modernizes this wording, but maintains the requirement that the agreement to arbitrate is evidenced by a text. 87 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 420. 88 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 421; Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 51 et seq. 89 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 422; Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 651 et seq.; BGE 121 III 38 consid. 3 seems to require a signature, but arrived at the same result assuming in casu an abuse of rights. 90 The Revised IPRG confirms in article 178(4) that the same principles apply to arbitration agreements contained in unilateral legal acts such as wills, bylaws or trust deeds. 91 Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 52 with further references; see also BGE 121 III 38. 92 See mns 52 et seq. below. 93 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 453; Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 51. 94 Pro Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 79 et seq.; contra Berger/ Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 449. 95 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 617 et seq.

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the termination is not subject to any formal requirements. This can give rise to difficult questions of interpretation, for example where a party enters an appearance in a state court proceeding despite the existence of an arbitration agreement.96 Similarly, if a contract is terminated by mutual agreement, e. g. by means of a settlement agreement, the question arises whether a former arbitration agreement survives such termination. The Supreme Court has held that this is the case where the termination agreement does not explicitly terminate the arbitration agreement as well.97 However, if a settlement agreement contains its own dispute resolution clause, such new agreement presumably replaces and terminates any prior arbitration agreement.98 50 Further, the parties are free to tailor the arbitration clause to their specific needs and may thus also agree to specific circumstances that lead to the termination of the arbitration agreement. For instance, an arbitration clause may be subject to contractual conditions or time limits leading to its termination.99 The parties may also agree that only a specific arbitrator shall be entitled to decide their dispute, which (depending on the parties’ specific intent) may lead to the termination of the arbitration agreement if the person in question becomes unavailable. An arbitration agreement may also be deemed terminated if its purpose becomes frustrated (e. g. if it prescribes an award by unanimity that cannot be reached).100 Finally, a termination may further be based on a clausula rebus sic stantibus or a termination for cause;101 in practice, such cases are however rare.

4. The scope and the interpretation of the arbitration agreement a) Personal scope of the arbitration agreement. In its case law concerning the interpretation of arbitration agreements, the Supreme Court has developed certain guidelines that it has consistently applied and reaffirmed. According to this case law, due to the significance of a decision to exclude the jurisdiction of the state courts and the restricted rights of appeal available against arbitral awards, the existence of such an agreement should not be lightly assumed.102 Accordingly, in the vast majority of the cases and with only very few exceptions, the arbitration agreement only binds the original contract parties and not any third parties.103 52 That said, however, in its landmark decision BGE 129 III 727, the Court held that the requirement of form set forth in article 178(1) IPRG applies only to the original arbitration agreement and does not prevent that agreement from being extended to and thus binding third parties.104 The Court’s case law on this point has since been confirmed and expanded, with the Court having now identified a series of situations in which an arbitration clause can bind parties other than those that were originally party to it.105 These include, for instance, cases of legal succession and assignment, as well as 51

Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 619. BGE 116 Ia 56, consid. 3 b. 98 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 620. 99 BGE 140 III 75 consid. 3.2 (English translation at http://www.swissarbitrationdecisions.com/receptumarbitrii-does-expire-if-time-has-been-set-beyond-which-arbitrator-loses-jurisdiction?search=%22140+III +75%22, accessed 1 August 2020); Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 623. 100 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 624 et seq. 101 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 632 et seq. 102 BGE 129 III 675, consid. 2.3; 128 III 50, consid. 2c/aa; 116 Ia 56, consid. 5 b. 103 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 538. 104 BGE 129 III 727, consid. 5.3.1. 105 See Berger/Kellerhals, Arbitration in Switzerland (2015), paras 563 et seq.; Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 82 et seq. (with references). 96 97

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situations in which a non-party to the arbitration clause interferes in the negotiation or performance of the contract in which the arbitration clause is contained.106 Legal succession will result in a non-party to the original arbitration clause being bound in cases where a universal succession takes place, e.g. in the case of a merger between two legal entities, or where one or more heirs assume the legal position of the deceased through universal succession under inheritance law.107 An arbitration agreement may also bind a legal successor in the case of a singular succession, such as where an obligation is assigned or a debt or contract assumed. In the case of an assumption of debt or of the entire contract where a contract between the new debtor and the creditor is concluded, the continued validity of the arbitration agreement is largely uncontroversial.108 However, where one party assigns its claim against the other to a third party (without the involvement of the debtor), justifying the continued validity of the arbitration clause is more difficult and the underlying legal theories more controversial. That said, however, the general consensus – acknowledged by the Supreme Court – is that the arbitration clause must continue to apply.109 A more difficult – and also more controversial – category of cases are those in which a party is deemed to be bound by an arbitration clause based on its conduct or the overall circumstances and the principles of good faith and reliance. For instance, according to the case law of the Supreme Court, a non-party may be deemed to be bound by an arbitration agreement where that party intervened in the negotiation or performance of the contract containing the arbitration clause, or otherwise acted in a manner so as to create the impression of intending to be bound by it.110 Moreover, where justified based on the principles of good faith and reliance, the Supreme Court will also consider extending an arbitration clause to a non-signatory member of a group of companies in situations in which the lines between different entities of the group were blurred.111 The Supreme Court has not however accepted the French “group of companies” doctrine, something which is considered by most Swiss legal scholars to go beyond the principles outlined above.112 Finally, Swiss law also recognizes on the concept of piercing the corporate veil in cases where insisting on the separate existence of a legal entity would amount to an abuse of rights; in such circumstances, an arbitration clause may be deemed to bind the person standing behind the legal entity.113 The effects of the insolvency of one of the parties on a pending arbitration proceeding are diverse and complex. This is in particular due to the fact that the legal provisions governing the bankruptcy proceedings, the bankrupt entity’s capacity and the arbitration 106 See, e.g. BGer. 4A_450/2013 of 7 April 2014, (2015) 33 ASA Bull. 160, consid. 3.2 (English translation at http://www.swissarbitrationdecisions.com/extension-arbitral-clause-good-faith-grounds? search=4A_450%2F2013, accessed 1 August 2020); BGE 129 III 727, consid. 5.3.1. 107 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 76; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 538 et seq. 108 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 556 et seq. 109 BGE 103 II 75; BGer. of 13 October 1992, ASA Bull. 1993, 68 et seq.; Gränicher, in: Honsell/Vogt/ Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mn. 77; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 544 et seq. 110 BGer. 4A_450/2013 of 7 April 2014, (2015) 33 ASA Bull. 160, consid. 3.2 (English translation supra fn. 106); BGE 129 III 727, consid. 5.3.1; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2014, mns 565 et seq.; Müller, Extension of arbitration agreements to third parties under Swiss law, in: PLC Cross-border Arbitration Handbook 2009/10, 9 et seq., 11. 111 BGer. 4A_450/2013 of 7 April 2014, (2015) 33 ASA Bull. 160, consid. 3.2 (English translation supra fn. 106). 112 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 574 et seq. with further references. 113 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 565.

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proceedings may be incompatible with one another. In Switzerland, recent discussion has focused in particular on two Supreme Court decisions. In its highly controversial but unpublished “Vivendi” decision, the Supreme Court held that a bankrupt entity’s capacity to be a party to an arbitration proceeding is to be determined not by article 178 IPRG, but rather by the general conflict of laws rules governing legal capacity and the capacity to act.114 According to these rules, a party’s legal capacity is generally governed by the law at the place of its incorporation. Applying this rule, the Supreme Court upheld an award in which the arbitral tribunal concluded that under the applicable (Polish) law, the entity in question had lost its capacity to partake in the arbitration proceedings and discontinued the arbitration proceedings against that party.115 In a subsequent (this time published) decision, the Supreme Court clarified its position, holding that restrictions imposed by the law governing the entity’s incorporation are irrelevant to the arbitration proceedings if they do not impact the relevant party’s legal capacity (Rechtsfähigkeit) as such. Applying the applicable (Portuguese) law in this case, the Supreme Court held that the party had retained its legal capacity as such and upheld the arbitral tribunal’s finding of jurisdiction over that party. In other words, the Supreme Court’s latter decision reaffirmed the underlying theory regarding the law applicable to issues of capacity, but ultimately reversed the outcome of the Vivendi decision.116 58 The effect of arbitration clauses contained in corporate bylaws is controversial. Certain scholars consider that such provisions fall under the general rules of private international law (i. e. article 154 IPRG) and not article 178(2) IPRG. If the law applicable according to such rules grants the bylaws binding effect, an arbitration clause contained therein would be effective.117 Other authors emphasize that according to the jurisprudence of the Supreme Court, the formal requirements for an arbitration clause only apply to the original parties, but not to any party subsequently joining.118 While the underlying reasons vary, a majority of scholars appear to support the binding effect of arbitration clauses contained in bylaws.119 b) Substantive scope of the arbitration agreement. The substantive or objective scope of the arbitral tribunal’s jurisdiction is defined by the parties’ agreement, i. e. the arbitration clause.120 Whether or not the arbitral tribunal has jurisdiction of a particular claim is thus a matter of contract interpretation to which the general principles governing contract interpretation apply.121 60 As explained above, the Supreme Court has held that due to its significance, the existence of such an agreement should not be lightly assumed.122 However, it has also 59

114 Under Swiss international private law, these are the laws governing the entity’s incorporation; see articles 35 et seq. and 154 et seq. IPRG. 115 BGer. 4A_428/2008 of 31 March 2009, (2010) 28 ASA Bull. 104 et seq.; Naegeli, (2013) 31 ASA Bull. 372 et seq. 116 BGE 138 III 714, consid. 3 (English translation at http://www.swissarbitrationdecisions.com/portuguese-partial-reversal-of-vivendi-on-capacity-to-be-a-party?search=4A_50%2F2012, accessed 1 August 2020); Naegeli, (2013) 31 ASA Bull. 372 et seq., 375 et seq. See further Berger, (2018) 36 ASA Bull. 834 et seq.; Graf/Umbach-Spahn, (2018) 36 ASA Bull. 822 et seq. 117 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mns 67 et seq.; Müller, Swiss Case Law in International Arbitration, 3rd ed., 2019, 56 et seq. 118 See supra mn. 51. 119 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mns 67 et seq. with further references; more sceptical Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 467 et seq. Left undecided in BGer. 4A_344/2017, consid. 3.4. The Revised IPRG clarifies that such arbitration clauses are valid; see Revised IPRG article 178(4). 120 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 500 with references. 121 BGE 116 Ia 56, 58, consid. 5 b; 128 III 50, 58, consid. 2c/aa; 129 III 675, consid. 2.3. 122 BGE 129 III 675, consid. 2.3; 128 III 50, consid. 2c/aa; 116 Ia 56, consid. 5 b.

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held that once a valid arbitration clause has been identified, there is no longer any need for a restrictive approach.123 To the contrary, the parties’ desire to submit their disputes to arbitration is to be respected and the scope of the clause broadly interpreted.124 In particular, arbitration clauses that cover “any dispute related to” an agreement are not in any way limited and can even extend to disputes arising from accessory or related contracts unless these contain a diverging dispute resolution clause.125 Similarly, set-off defences are generally considered to be admissible even in the absence of a clear provision in the applicable arbitration rules.126 Extra-contractual claims arising from tort, unjust enrichment or conducting business without mandate may, depending on the specific arbitration clause, fall within the scope of the arbitration agreement intended by the parties, at least to the extent that they are linked to the contract containing the arbitration clause.127 c) Pathological arbitration clauses. Pathological arbitration clauses, i. e. clauses that 61 are incomplete, unclear, or contradictory, are not per se invalid, provided that they convey the parties’ desire to submit their dispute to arbitration. Rather, such clauses must be interpreted and if necessary completed pursuant to general principles of contract interpretation with a view to finding a solution that respects the parties’ fundamental desire to submit their disputes to arbitration. As with all contracts under Swiss law, where no common actual will of the parties can be determined with respect to the arbitration clause, it is to be interpreted objectively, i. e. by inquiring how reasonable persons acting in good faith should or must have understood the clause. Where the interpretation results in the conclusion that the parties wished to refer their disputes to arbitration but where there are differences regarding the modalities of the arbitration proceedings, utilitarian principles should be applied to seek an understanding of the contract that leaves the arbitration agreement intact. An imprecise or erroneous reference to an arbitral tribunal does not necessarily lead to the invalidity of the arbitration clause.128

5. The effect of the arbitration agreement and Kompetenz-Kompetenz a) The principle of Kompetenz-Kompetenz: Examination of jurisdiction by the 62 arbitral tribunal. An arbitration agreement confers jurisdiction on the arbitral tribunal if the subject-matter of the dispute is arbitrable, the arbitration agreement is valid, the parties had the capacity to enter into it, and the subject-matter of the dispute falls within the scope of the arbitration agreement.129 While there is no legal presumption that an arbitration clause confers the arbitral tribunal exclusive jurisdiction, there will frequently be a clear factual presumption to that effect.130 123

BGE 129 III 675, consid. 2.3; 116 Ia 56, 58, consid. 5 b. BGE 116 Ia 56, 58, consid. 5 b; BGer. 4A_103/2011, consid. 3.2.1 (English translation at http://www. swissarbitrationdecisions.com/sites/default/files/20%20septembre%202011%204A%20103%202011.pdf, accessed 1 August 2020); BGE 130 III 66, consid. 3.2 with references. 125 BGer. 4A_103/2011 of 20 September 2011, consid. 3.2.1 (English translation at http://www.swissarbitrationdecisions.com/sites/default/files/20%20septembre%202011%204A%20103%202011.pdf); BGer. 4A_220/2007 of 21 September 2007, consid. 6.2. 126 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 526 et seq. 127 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 511 et seq. 128 BGE 138 III 29, consid. 2.2 (English translation at http://www.swissarbitrationdecisions.com/jurisdiction-of-the-cas-upheld-a-pathological-clause-has-to-be-s?search=4A_246%2F2011, accessed 1 August 2020), citing BGE 130 III 66, consid. 3.1; BGer. 4A_672/2016 of January 24, 2017, consid. 3.1 (English translation at http://www.swissarbitrationdecisions.com/atf-4a-672-2016?search=4A_672%2F2016, accessed 1 August 2020). 129 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 687. 130 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 495 et seq. 124

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Pursuant to article 186(1) IPRG, a properly constituted arbitral tribunal has the power – and a duty – to determine on its own initiative whether or not it has jurisdiction (so-called Kompetenz-Kompetenz).131 It goes without saying, however, that the arbitral tribunal should not without a corresponding objection from one of the parties engage in an actual investigation into the validity of the arbitration agreement.132 A somewhat stricter standard may be applied only in default proceedings if the evidence submitted by the claimant suggests that no valid arbitration agreement exists.133 64 Article 186(2) IPRG obliges the parties to raise any jurisdictional objections before they enter any defence on the merits. The Supreme Court has made it clear that a failure to do so results in a waiver of any jurisdictional objections.134 Similar considerations apply where a party successfully invokes the exceptio arbitri in a state court proceeding, only to then contest the arbitral tribunal’s jurisdiction in subsequent arbitration proceedings. In such a constellation the Supreme Court tends to assume that a manifest abuse of rights exists and denies the jurisdictional objection as incompatible with the principle of good faith.135 65 If the arbitral tribunal denies jurisdiction it will issue a final award to that effect. If, on the other hand, the arbitral tribunal concludes that it has jurisdiction to hear the case, it is generally expected to issue an interim or preliminary award (article 186(3) IPRG) that may be immediately challenged pursuant to article 190(2)(b) IPRG.136 63

b) Examination of jurisdiction by the state courts. The principle of KompetenzKompetenz does not mean that the Swiss state courts will not examine jurisdiction themselves. In particular, where a state court is seized first, it will examine any arbitration objection itself: If the (potential) arbitral tribunal has its seat abroad, a Swiss state court will conduct a full review of the exceptio arbitri; if the seat is located in Switzerland, the review will be limited to a summary examination.137 67 Court-ordered anti-arbitration injunctions are generally considered to be impermissible under Swiss law as they interfere with the arbitral tribunal’s KompetenzKompetenz and have been found by the ECJ to be incompatible with the Brussels I Regulation.138 More controversial are anti-suit injunctions issued by arbitral tribunals. While there have been cases in which arbitral tribunals are known to have issued such injunctions, it remains a matter of dispute whether this reflects an established practice.139 66

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c) Parallel proceedings in particular. Parallel proceedings arise where the same claim is pending before a state court and an arbitral tribunal at the same time. Such situations give rise to complex questions regarding how to proceed, with the answer Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 668, 690. BGE 120 II 155, consid. 3 b. 133 Schott/Courvoisier, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 186, mn. 91; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 692. 134 BGer. 4P.217/1992 of 15 March 1993, consid. 5; see also BGE 128 III 50, consid. 2 c, regarding the level of specificity of the objection. 135 See e.g. BGer. 4P.69/1989 of 23 June 1989, consid. 2 c; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 661 et seq. 136 Infra mns 125 et seq. 137 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 674; see further Stojiljković, (2016) 34 ASA Bull. 897 et seq. The revision of the IPRG does not implement a harmonized review standard. 138 ECJ Case C-185/07 Allianz SpA and Generali Assicurazioni Generali SpA v. West Tankers Inc., [2009] ECR I-663; decision of the Geneva court of first instance of 2 May 2005, (2005) 23 ASA Bull. 728 et seq.; Balthasar/Richers, RIW 2009, 351 et seq. 139 Stacher/Feit, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 2638 et seq. with references. 131 132

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depending on whether the state court or the arbitral tribunal is seized first and on where exactly the various proceedings are underway.140 As a general rule, an international arbitral tribunal with its seat in Switzerland is not permitted to stay its proceedings merely because the same claim was first filed with a state court. While in its 2001 “Fomento” decision the Supreme Court had decided otherwise,141 Swiss legislators swiftly reacted to this decision, introducing article 186 (1bis) IPRG. According to this provision, an arbitral tribunal is to decide on its jurisdiction notwithstanding an action on the same matter between the same parties already pending before a state court or another arbitral tribunal, unless there are serious reasons to stay the proceedings.142 If on the other hand a Swiss state court is seized second, it should stay the state court proceedings until the arbitral tribunal has decided on its jurisdiction. This is addressed specifically in article 372(2) ZPO for Swiss domestic arbitral tribunals, but arguably also applies where an international arbitral tribunal is first seized.143 Parallel proceedings between two international arbitral tribunals fall, in principle, under the wording of article 186(1bis) IPRG, with the result that each arbitral tribunal has to determine its own jurisdiction. There is however an unsettled controversy regarding whether it would not be more appropriate for the arbitral tribunal second seized to respect the lis pendens of the dispute.144 Finally, although it remains controversial, the prevailing view appears to be that one party’s initiation of state court proceedings in breach of an arbitration agreement may entitle the opposing party to damages for any uncovered costs and expenses arising from the breach of contract.145

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d) Judicial review. Regardless of whether a state court or an arbitral tribunal 73 adjudicates the question of the arbitral tribunal’s jurisdiction, the final decision on this matter always lies with the state courts. In other words, even where an arbitral tribunal exercises its Kompetenz-Kompetenz and decides on its own jurisdiction, its decision – if challenged – will ultimately be subject to state court review in setting aside proceedings pursuant to article 190(2)(b) IPRG.146 Further, arbitral awards that are issued by an arbitral tribunal that lacked jurisdiction 74 risk being unenforceable as the transnational enforcement of an arbitral award is regularly subject to scrutiny under article V(1)(a) or (c) or article V(2)(a) NYC.147 Swiss 140 See for an overview of the various constellations Schott/Courvoisier, in: Honsell/Vogt/Schnyder/ Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 186, mns 10 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1032 et seq. 141 BGE 127 III 279, consid. 2c., (2001) 19 ASA Bull. 555–565. 142 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1041 et seq. with further references. 143 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1036 et seq., applying article 372(2) ZPO by analogy to proceedings pending before a Swiss international arbitral tribunal and articles 9 IPRG and 27 Lugano Convention by analogy to proceedings pending before a international arbitral tribunal having their seat abroad. 144 Pro Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1060 et seq.; contra Schott/ Courvoisier, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 186, mns 28 et seq. 145 Gränicher, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 178, mns 4, 79; Müller/Riske, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, 96; Stacher/Feit, in: ibid., 2642; see also BGer. 4A_444/2009 of 11 February 2010, consid. 4.2 (English translation at http://www.swissarbitrationdecisions.com/necessity-to-file-immediate-appeal-against-award-on-jurisdiction, accessed 1 August 2020) (denying a challenge on public policy grounds against an arbitral award which held that the party that initiated state court proceedings had breached the arbitration clause and could be liable for damages). 146 Infra mns 129–130; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 668. Even in the enforcement stage, a state court may refuse the enforcement under the NYC if the arbitral tribunal lacked jurisdiction; Berger/Kellerhals, ibid. 147 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 733 et seq.

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arbitral awards that are enforced in Switzerland, on the other hand, cannot be reviewed in the enforcement stage based on assertions that the arbitral tribunal lacked jurisdiction as they have the legal effect of a state court judgment.148 75

e) Burden of proof. The party relying on an arbitration clause bears the burden of proving its existence, validity and scope. Hence, in jurisdictional disputes before an arbitral tribunal, the claimant has the burden of proof regarding the arbitration agreement. On the other hand, if an arbitration defence is raised in a state court proceeding, the respondent bears the respective burden of proof.149

III. The arbitral tribunal and the conduct of the arbitral proceedings As a key manifestation of the principle of party autonomy upon which Swiss arbitration law is based, the parties have full freedom to regulate the arbitral proceedings and to tailor them to the dispute at issue.150 This general rule is set forth in article 182 IPRG, which provides that the parties may determine the arbitral procedure either directly, by reference to rules of arbitration, or by submitting the procedure to a procedural law of their choice.151 Where the parties do not determine the procedure themselves, the arbitral tribunal is empowered to do so as necessary.152 77 The right of the parties and – subsidiarily – of the arbitral tribunal to determine the arbitral procedure is restricted only by the fundamental procedural guarantees of equal treatment and the right to be heard, the application of which the arbitral tribunal must in any event ensure.153 The freedom granted to the parties and the arbitral tribunal under the IPRG is thus very extensive and goes further than under most modern legal frameworks, including the UNCITRAL Model Law.154 76

1. The arbitral tribunal: impartiality and independence of the arbitrator 78

The parties to international arbitrations in Switzerland have full freedom to agree on the number and qualifications of the arbitrators as well as on the manner in which the arbitral tribunal is to be appointed, removed or replaced.155 The same deference to party autonomy also applies in arbitrations under the ZPO.156 The only requirement is that arbitrators be independent and impartial.157 Although the wording of the IPRG refers only to “independence” and not “impartiality”,158 this distinction does not have any Infra mns 139 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 738. Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 689 with further references. 150 Article 182(1) IPRG; Schneider/Scherer, in: BaslerKomm-IPRG, 3rd ed., 2013, Art. 182, mn. 1; Knoll, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 182 PILS, mn. 1. For domestic arbitration see article 373(1) ZPO. 151 Article 182(1) IPRG. 152 Article 182(2) IPRG. 153 Article 183(3) IPRG; see Schneider/Scherer, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKommIPRG, 3rd ed., 2013, Art. 182, mn. 1; Knoll, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 182 PILS, mn. 1. 154 Schneider/Scherer, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 182, mn. 3. 155 Articles 179(1), 180(1)(a) IPRG; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 773 et seq.; 796 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 179 PILS, mns 12 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 5. 156 Articles 360–361 ZPO. 157 Article 180(2)(c) IPRG. 158 Article 180(2)(c) IPRG; but see article 367(1)(c) ZPO, which refers to both independence and impartiality. 148 149

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practical relevance given that the Supreme Court has held that the guarantees in the Swiss Constitution and the ECHR – which expressly guarantee both independence and impartiality159 – apply equally to international arbitration.160 To the extent that the parties have agreed on the constitution of the arbitral tribunal, 79 whether directly – for instance by designating an arbitrator or identifying required qualifications, setting forth a specific procedure for the appointment, or naming an appointing authority in their arbitration clause – or indirectly by submitting their proceedings to pre-existing rules of arbitration regulating these matters, the parties’ agreement will prevail.161 In the absence of any such agreement, the parties may seek the assistance of the juge 80 d’appui at the seat of the arbitration.162 Because most pre-existing rules of arbitration contain provisions governing the constitution of the arbitral tribunal, including the removal and replacement of arbitrators and how to proceed in the event that one party fails to comply with its obligations, the assistance of the juge d’appui is in practice only sought in ad hoc proceedings.163 In such cases, the juge d’appui will be guided by the provisions of the ZPO regarding the appointment, removal or replacement of arbitrators, which provide for certain default rules in the absence of party agreement.164 Notably, where the parties request the assistance of a state court judge, whether pursuant to article 179(2) IPRG or because they expressly designated such judge to serve as an appointing authority, the state judge is obliged to make such an appointment unless the judge concludes on the basis of a summary examination that no arbitration agreement exists.165 a) Duty to disclose conflicts of interest. Although the IPRG – in contrast to the 81 ZPO166 – does not contain any express duty of disclosure, the obligation to disclose conflicts of interest is inherent in the contractual relationship between the arbitrator and the parties.167 It is thus accepted that arbitrators have a duty to disclose conflicts of interest and that a failure to do so may result in a challenge of the arbitrator pursuant to article 180(1) IPRG.168

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Articles 30(1) Swiss Federal Constitution; Article 6(1) ECHR. BGE 135 I 14 consid. 2; 119 II 271 consid. 3 b; 118 II 359 consid. 3 c; 115 Ia 400, consid. 3 b. Indeed, amending the text of the IPRG in order to refer explicitly to both independence and impartiality is among the changes implemented in the Revised IPRG; see articles 179(6) and 180(1)(c) IPRG. 161 Article 179(1) IPRG. 162 Article 179(2) IPRG; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 179, mns 28 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 811 et seq. 163 Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 179, mn. 30. 164 Article 179(2) IPRG; articles 360–366 ZPO (“Constitution of the Arbitral Tribunal”) and articles 367–371 ZPO (“Challenge, Removal and Replacement of the Members of the Arbitral Tribunal”). 165 Article 179(3) IPRG; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 179, mns 37 et seq. As indicated above, because of the difficulties in identifying the proper juge d’appui in situations in which the arbitration clause does not specify a seat of the arbitration, the Revised IPRG provides that in the absence of a specified seat of arbitration, or where the parties have only specified that the arbitration shall be in Switzerland without specifying any city, the first juge d’appui called upon by the parties has the authority to appoint the arbitrators; see article 179(2) Revised IPRG. 166 Article 363 ZPO. 167 BGE 111 Ia 72, consid. 2 c. 168 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 976 et seq. This principle has been expressly added in the Revised IPRG, which includes a new sub-clause expressly confirming the duty of the arbitrators to disclose any facts that could give rise to legitimate doubts regarding their independence or impartiality, not only at the time of the arbitrator’s nomination but at any time during the course of the proceedings; see article 179(6) Revised IPRG. 160

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b) Grounds for challenge. In addition to any grounds for challenge set forth in the arbitration rules agreed by the parties, if any,169 Article 180(1) IPRG provides that a party may challenge an arbitrator where he or she fails to meet the qualifications agreed upon by the parties or where circumstances exist that give rise to justifiable doubts as to his or her independence.170 However, a party may not challenge an arbitrator that it nominated or was instrumental in appointing based on facts of which the party was aware – or that it could have been discovered in the exercise of reasonable diligence – at the time of such appointment.171 83 According to the Supreme Court, a party’s doubts regarding an arbitrator’s independence are “justifiable” where they are based on concrete facts that objectively and reasonably give rise to questions regarding the arbitrator’s independence.172 Such facts may be present, for example, where the arbitrator has a direct or indirect interest in the outcome of the proceedings;173 on-going professional connections with one of the parties;174 particularly close personal ties to one of the parties or the parties’ counsel;175 or where the arbitrator is acting as counsel in another case in which the same legal questions are at issue.176 Procedural errors or incorrect decisions on the merits only give rise to grounds for challenge where they are particularly severe or frequent and thus constitute a manifest violation of the arbitral tribunal’s obligations.177 In any case, the threshold for demonstrating the existence of such doubts is high.178 82

c) Procedural aspects and preclusion of grounds for challenge. In principle, the parties have the right to challenge a member of the arbitral tribunal at any time during the arbitration proceedings, if and when they become aware of circumstances giving rise to a ground for challenge.179 85 The parties may agree on the specifics of the challenge procedure,180 e. g. by adopting rules of arbitration such as the ICC or Swiss Rules that regulate such procedures – including how and when such challenges must be asserted – in detail.181 In the absence of any such agreement, the IPRG provides that any challenge must be notified to the arbitral tribunal and the other party “without delay”182 and that the juge d’appui is 84

169

Article 180(2) IPRG. Article 180(1) & (3) IPRG; see also article 367 ZPO. This definition has been slightly revised in the Revised IPRG, which provides that an arbitrator may be challenged where a ground for challenge exists under the arbitration rules adopted by the parties or where circumstances give rise to legitimate doubts as to the arbitrator’s independence or impartiality; see article 180(1) Revised IPRG. 171 Article 180(2) IPRG; BGE 129 III 445, consid. 4.2.2.1. 172 BGE 118 II 359, consid. 3 c; BGE 111 Ia 259, consid. 3 a; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 860 et seq. See BGE 136 III 605, consid. 3.3.1 where the Supreme Court indicated that an identical degree of independence is required from each arbitrator, regardless of whether the arbitrator is a party-appointed co-arbitrator, chairman or sole arbitrator; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 9. 173 BGE 111 Ia 72, consid. 2 a. 174 BGE 116 Ia 485, consid. 3 b. 175 BGE 92 I 271. Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 11. 176 BGE 124 I 121, consid. 3. 177 BGE 115 Ia 400, consid. 3 b; 113 Ia 407, consid. 2 a; BGer. 4A_54/2012 of 27 June 2012, consid. 2.2.3 (English translation at http://www.swissarbitrationdecisions.com/federal-tribunal-recalls-that-proceduralmistakes-or-a-decision-?search=4A_54%2F2012, accessed 1 August 2020). 178 For an overview of the case law relating to arbitrator challenges on the grounds of lack of independence see Peter/Brunner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 180, mns 15 et seq.; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mns 11 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 861 et seq. 179 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 869. 180 Article 180(3) IPRG; article 369(1) ZPO. 181 See, e. g. article 14 ICC Rules 2021 (30 days); articles 9–11 Swiss Rules (15 days). 182 Article 180(2) IPRG. 170

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competent to consider the validity of the challenge.183 The prevailing view is that in determining the timeliness of the challenge, the 30-day deadline provided for in the ZPO for domestic arbitration184 should be applied by analogy, such that the parties should have 30 days for the submission of a challenge to the arbitral tribunal and – should this challenge be denied – 30 days to submit the challenge to the competent authority or state court.185 According to the case law of the Supreme Court, the parties have a duty to 86 investigate any potential grounds for challenge and to promptly file a challenge when they suspect an arbitrator’s lack of independence.186 Failure to do so will result in a loss of the right to challenge the arbitrator.187 Similarly, the Supreme Court has repeatedly held that a party may not challenge a subsequent arbitral award on the grounds that the arbitral tribunal lacked independence or impartiality188 where such party – in violation of the principle of good faith – failed to notify the arbitral tribunal and opposing party of the ground for challenge during the arbitral proceedings.189 Notably, the decision of the juge d’appui on the challenge of an arbitrator is final and 87 is not subject to any state court review, whether directly or in the context of setting aside proceedings before the Supreme Court.190 In contrast, decisions by an arbitral institution or private body regarding arbitrator challenges – although also not subject to any direct review – are subject to indirect review in the context of setting aside proceedings brought against a subsequent arbitral award pursuant to article 190(2)(a) IPRG.191 The same applies to the decisions of the arbitral tribunal itself, should they be empowered under the relevant institutional rules to decide on challenges to their members. While the parties may not waive the right to challenge an arbitrator on the grounds 88 of lack of independence or impartiality in advance, they may do so once they have become aware of the relevant grounds for challenge.192 d) Failure or impossibility to act. The parties are free to jointly revoke the 89 arbitrator’s mandate at any stage in the proceedings, regardless of whether the arbitrator 183

Article 180(3) IPRG. Article 369(3) ZPO. 185 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 879; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mns 21 et seq. Indeed, the Revised IPRG has introduced a new article 180a IPRG which codifies this 30-day deadline; see article 180a(1) Revised IPRG. 186 BGE 136 III 605, consid. 3.4.2; BGer. 4A_110/2012 of 9 October 2012, consid. 2.2.2. 187 BGer. 4A_620/2012 of 29 May 2013, consid. 3.6 (English translation at http://www.swissarbitrationdecisions.com/time-limit-challenge-starts-appointment-and-not-confirmation, accessed 1 August 2020); Peter/Brunner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 180, mn. 21; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 23; Girsberger/Voser, International Arbitration: Comparative and Swiss Perspectives, 3rd ed., 2016, mn. 701. 188 See infra mns 131 et seq. regarding challenges to arbitral awards on these grounds. 189 BGer. 4A_173/2016 (English translation at http://www.swissarbitrationdecisions.com/provisional-assessment-merits-case-admissible?search=4A_173%2F2016, accessed 1 August 2020); BGer. 4A_256/2009 and 4A_258/2009, consid. 3.1.2 (English translation at http://www.swissarbitrationdecisions.com/invalidwaiver-of-the-appeal-to-the-federal-tribunal-through-ref1?search=4A_256%2F2009, accessed 1 August 2020); BGE 129 III 445, consid. 3.1; BGE 126 III 249, consid. 3. 190 Article 180(3) IPRG; BGE 138 III 270, consid. 2.2.1 (English translation at http://www.swissarbitrationdecisions.com/an-international-arbitral-tribunal-seating-in-switzerland-is-gen?search=4A_14%2F2012, accessed 1 August 2020). See infra mns 123 et seq. 191 BGE 138 III 270 (English translation at supra fn. 190), discussed in Magliana, in: Müller/Rigozzi (eds), New Developments in International Commercial Arbitration, 2012, 10. 192 Peter/Brunner, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 180, mns 3, 28; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 885 et seq. 184

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was appointed by the parties or by a third party or state court judge.193 In addition, it is generally agreed that an arbitrator may also be removed for cause based on the unilateral request of one party, where serious reasons justify such a removal (e. g. where the arbitrator is unable or unwilling to perform its functions with due care; fails to act with undue delay; or acts in deliberate violation of the arbitration agreement or the agreed rules).194 The revocation and removal procedures are subject to the parties’ agreement or, in the absence of such agreement, the decision of the juge d’appui.195. 90 The IPRG is silent regarding the arbitrator’s ability to resign from his mandate. However it is recognized that the arbitrator may do so for serious reasons, where the arbitrator may no longer reasonably be expected to continue in office.196

2. The arbitral proceedings 91

a) The request for arbitration. In line with its overall goal of maximizing party autonomy, the IPRG does not regulate the manner in which the parties are to initiate the arbitral proceedings. In institutional arbitrations, these details will generally be regulated by the rules of arbitration selected by the parties. In the absence of such rules having been chosen or of any other agreement between the parties, the arbitration will generally be initiated by means of a request for relief together with a corresponding request for the appointment of the arbitral tribunal.197

b) Equality of arms, fair trial principles and the right to be heard. Regardless of whether the arbitral procedure is determined by the parties or by the arbitral tribunal, the arbitral tribunal must ensure that the fundamental principles of equal treatment and the right to be heard are respected.198 These principles are mandatory and in principle cannot be waived; any violation thereof gives rise to grounds to challenge the arbitral award in setting-aside proceedings pursuant to article 190(2)(d) IPRG.199 93 The right to be heard in international arbitration largely mirrors the parties’ rights in state court proceedings pursuant to article 29(2) of the Swiss Constitution.200 This includes a party’s right to express itself on all facts material to the arbitral tribunal’s decision; represent its legal position; prove the relevant factual allegations asserted with (timely and properly submitted) evidence; participate at hearings; and to see the case file.201 The right to be heard also imposes on the arbitrators a minimum obligation to hear and examine the pertinent issues.202 On the other hand, however, the right to be 92

193 Article 179 IPRG; Peter/Legler, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 179, mn. 27; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 8. For domestic arbitration, see article 370 ZPO. 194 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 924 et seq.; Peter/Legler, in: Honsell/ Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 179, mn. 28; Orelli, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 180, mn. 9. For domestic arbitration, see article 371 ZPO. 195 Article 179(1), (2) IPRG; Peter/Legler, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., Art. 179, mns 26 et seq. These principles too have been incorporated into the Revised IPRG; see article 180 b. 196 BGE 140 III 75, consid. 3.2.1; BGE 117 Ia 166, 169; Peter/Legler, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., Art. 179, mn. 29; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 935. 197 Pfisterer, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., Art. 181, mn. 10. 198 Article 182(3) IPRG; article 373(4) ZPO. 199 BGE 130 III 35, consid. 5; Oetiker, Art. 182, in: Müller-Chen/Widmer/Lüchinger (eds), ZürcherKomm-IPRG, 3rd ed., Schulthess 2018, mn. 31. 200 BGE 130 III 35, consid. 5, p. 37 et seq.; 128 III 234, c. 4 b, p. 243; 129 III 576, c. 2 c, p. 578 et seq. 201 BGE 130 III 35, consid. 5; 127 III 576, consid. 2 c (with references). 202 BGE 134 III 186, consid. 6.1 (English translation at: http://www.swissarbitrationdecisions.com/rightto-be-heard-equality-between-the-parties?search=4A_468%2F2007); 133 III 235, consid. 5.2.

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heard has its limitations, for instance with respect to legal matters. In particular, as a result of the principle of jura novit curia, the arbitrator may adjudicate the dispute on the basis of legal considerations not raised or argued by the parties. The only exception to this rule applies where the legal considerations relied upon by the arbitral tribunal could not reasonably have been foreseen by the parties.203 Moreover, the arbitral tribunal remains free to determine the facts based solely on the evidence that it deems to be relevant and suitable and may refuse to consider evidence that it determines to be irrelevant, obviously unsuitable, or unlikely to change its view of the evidence as obtained via a preliminary assessment.204 The right to equal treatment guarantees that the procedure will be organized and 94 conducted in such a manner as to ensure that each party has the same possibilities to present its factual and legal arguments.205 In other words, the arbitral tribunal must treat the parties in a similar manner at all stages of the procedure.206 A party that believes its procedural rights were violated during the arbitral proceed- 95 ings must raise a corresponding objection to the arbitral tribunal without delay and undertake reasonable efforts to remedy the violation.207 Failure to do so results in forfeiture of the right to object to the violation in subsequent setting aside proceedings.208 The Supreme Court has repeatedly held that it is contrary to good faith for a party to allege procedural violations in setting aside proceedings where it could have objected and thereby given the arbitral tribunal the opportunity to remedy the violation during the arbitration proceedings.209 c) Confidentiality. In contrast to state court litigation, arbitration proceedings are a 96 private matter between the parties and are not open to the public.210 Arbitrators have a duty of confidentiality to the parties under Swiss substantive law arising out of their contractual agreement (mandate) that extends to all aspects of the proceedings as well as to persons assisting the arbitrators in their duties.211 Less clear is whether the parties have a duty of confidentiality towards one another. The IPRG does not impose any such duty on the parties, but the parties are free to expressly agree to a duty of confidentiality 203 BGer. 4A_318/2018 of 4 March 2019, consid. 4.1.3; BGE 130 III 35, consid. 5; BGer. 4P.260/2000 of 2 March 2001, consid. 6 a. 204 BGer. 4A_360/2011 of 31 January 2012, consid. 2.1 (English translation at: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-to-be-heard-post-hear?search=4A_360% 2F2011); 4A_600/2010 of 17 March 2011, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/cas-award-allocating-fees-and-costs-in-violation-of-the-right-to?search=4A_600%2F2010); 4P.23/2006 of 27 March 2006, consid. 3.1; 4P.114/2003 of 14 July 2003, consid. 2.2. 205 BGer. 4A_360/2011 of 31 January 2012, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-to-be-heard-post-hear?search=4A_360% 2F2011); BGer. 4A_440/2010 of 7 January 2011, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/claim-of-award-ultra-petita-rejected-claim-of-violation-of-publi?search=4A_440% 2F2010). 206 BGer. 4A_450/2017 of 12 March 2018, consid. 3.2.2; BGer. 4A_360/2011, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-tobe-heard-post-hear?search=4A_360%2F2011); BGE 133 III 139, consid. 6.1. 207 BGE 119 II 386, consid. 1 a. For domestic arbitration, see article 373(6) ZPO. 208 BGE 119 II 386, consid. 1 a; infra mns 143 et seq. 209 BGer. 4A_550/2017 of 1 October 2018, consid. 5.3, discussed in Kunz, (2019) 37 ASA Bull. 111–116; BGer. 4A_450/2017 of 12 March 2018, consid. 3.1. See also BGer. 4A_70/2015 of 29 April 2015, consid. 3.2.1 BGE 119 II 386, consid. 1 a; BGer. 4A_682/2011 of 31 May 2012, consid. 3.1 (English translation at: http://www.swissarbitrationdecisions.com/claim-of-violation-of-due-process-rejected-by-the-federal-tribun?search=4A_682%2F2011). The Revised IPRG contains an express codification of this principle; see article 182(4) IPRG. 210 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 1230. 211 See Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 993 et seq.

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or to adopt rules of arbitration that impose one.212 In the absence of such an agreement or a corresponding confidentiality obligation arising from the parties’ underlying contractual relationship, however, whether or not the parties are under a confidentiality obligation remains controversial.213 d) The arbitral award. Where the parties have not themselves agreed on any procedure or rules for the rendering of arbitral awards, article 189 IPRG provides certain minimum default requirements.214 According to this provision, the arbitral award is to be made by a majority, or – in the absence of a majority – by the chairman of the arbitral tribunal alone. The award must be in writing, supported by reasons, dated and signed.215 Although the award should in principle be signed by all arbitrators – regardless of whether they agree with its contents or not216 – where this is not possible, the signature of the chairman is sufficient. 98 The IPRG is silent regarding dissenting opinions. These are in principle permissible, although they do not form part of the award itself and the dissenting arbitrator may not require that the dissent be joined to or communicated together with the award.217 99 The award must be notified to the parties, at which time it becomes final.218 Where the parties have not agreed on any modalities for the notification of the award, the arbitral tribunal may determine the mode of notification.219 97

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e) Termination of the arbitration other than by final award. The arbitration proceedings may also be terminated for reasons other than the final adjudication of the dispute by the arbitral tribunal. This is frequently the case where the parties settle the dispute. Although the IPRG does not contain any provisions on settlement,220 it is generally accepted that – as provided for by a number of rules of arbitration – the arbitral tribunal may either simply terminate the proceedings, issue an order for the termination of the arbitration proceedings or, where all parties so request, record the settlement in the form of an “award by consent”.221 Proceedings may also be terminated prior to their adjudication where the Claimant withdraws its claims; where the parties agree to terminate the proceedings (without a settlement); where the arbitral tribunal finds that continuation of the proceedings has become unnecessary or impossible (e. g. where the Claimant refuses to submit a statement of claim or where the advance on costs have not been paid in full).222

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f) The costs of the arbitration. Most rules of arbitration contain provisions governing the costs of arbitration, including the payment of cost advances, the assessment of the total costs of the arbitration and the final allocation of the costs among the parties.223 Even where the parties have not selected any rules of arbitration, however, and although the IPRG does not address the question of costs, it is generally recognized 212

See, e. g. article 44 Swiss Rules; article 53, articles 73–76 WIPO Rules. Radjai, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, mns 18 et seq. 214 Similar, although far more detailed, provisions are contained in articles 383–388 ZPO for domestic arbitration. In particular, article 384 sets forth the minimum required contents for the arbitral award. 215 Article 189(2) IPRG. 216 Molina, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 189 PILS, mns 61 et seq. 217 BGer. 4P.23/1991 of 11 May 1992, consid. 2 b, (1992) 10 ASA Bull. 381–401. See also BGer. 4A_319/ 2015 of 5 January 2016, consid. 4.2.2. 218 Article 190(1) IPRG; infra mn. 121. 219 BGer. 4P.273/1999 of 20 June 2000, consid. 5 a. 220 For domestic arbitration see article 385 ZPO which expressly provides that the arbitral tribunal shall issue an arbitral award reflecting the contents of the settlement where a party so requests. 221 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1540 et seq. 222 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1558 et seq. 223 See, e. g. articles 40–43 UNCITRAL Rules; articles 37–38 ICC Rules, articles 38–41 Swiss Rules. 213

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that the arbitral tribunal is both authorized and obliged to render a decision on the arbitration costs and their allocation and – where requested to do so by the parties – on the party costs as well.224 The arbitral tribunal’s determination of the total arbitration costs is binding and enforceable between the parties; it is not, however, a binding decision on the arbitral tribunal’s entitlement to compensation from the parties.225 The costs of the arbitration generally include the arbitration costs and the party costs. 102 The arbitration costs include the fees and expenses of the arbitrators; the costs of expert advice and any other assistance required by the arbitral tribunal; and any fees and administrative charges of the arbitral institution, where relevant. The general practice in Switzerland is that – absent an agreement to the contrary – the costs are to be allocated in accordance with the parties’ success or failure on the merits.226 However, the arbitral tribunal enjoys discretion when evaluating the extent to which a party succeeded or failed and may also take other circumstances, including party conduct, into account when allocating the arbitration costs.227 The arbitral tribunal will only consider and allocate party costs where the parties have 103 made claims relating to such costs.228 Contrary to Swiss state court proceedings, where the parties’ cost claims are based on the amount in dispute, it is accepted that arbitral tribunals award the parties the reasonable costs effectively incurred by the parties for the arbitration proceedings.229 Where the parties have not agreed on which specific items fall within the scope of reimbursable party costs, the arbitral tribunal will be guided by the general practice in international arbitration.230 In allocating the party costs, the same principles generally apply as to the allocation of the arbitration costs.231 The arbitral tribunal’s cost award constitutes an award in the sense of article 190(1) 104 IPRG and is thus only subject to challenge for the limited reasons contained in article 190(2) IPRG.232 Although the Supreme Court has held that it is theoretically conceivable that a cost award could violate public policy, it has through its practice made clear that this would require exceptional circumstances.233

3. Evidence, discovery, disclosure The taking of evidence in international arbitration proceedings in Switzerland is to be 105 conducted by the arbitral tribunal.234 The procedure for the taking of evidence – including the manner in which the parties are to present their evidence; the availability of document production; and the parties’ obligations to disclose evidence – are subject to party agreement as matters of arbitral procedure pursuant to article 182(1) IPRG. In 224 Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, mn. 7; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 1611. 225 BGE 136 III 597, consid. 5.2.1, 5.2.2 (English translation at: http://www.swissarbitrationdecisions. com/procedural-order-of-the-arbitral-tribunal-directing-payment-of-t?search=4A_391%2F2010). 226 Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Costs, mn. 70. 227 Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Costs, mns 71 et seq. This is an approach expressly recognized for the ICC arbitrations pursuant to Article 38(5) of the 2017 ICC Rules. 228 Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Costs, mn. 73. 229 Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Costs, mns 73 et seq. 230 For an overview of the various items that are generally included within the scope of party costs in Switzerland, see Bühler/Stacher, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Costs, mns 73 et seq. 231 Supra mn. 102. 232 See infra mns 125 et seq. 233 See, e. g. BGer. 4A_524/2009 of 5 March 2010, consid. 5.2.6.1 (English translation at: http://www. swissarbitrationdecisions.com/claim-of-issues-omitted-by-arbitral-award-rejected-award-not-inf? search=4A_524%2F2009); 4P.280/2005 of 9 January 2006, consid. 2.2.2. 234 Article 184(1) IPRG. For a similar rule in domestic arbitration, see article 375(1) ZPO.

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the absence of any agreement between the parties on these matters, the arbitral tribunal has full discretion, provided that it respects the principles of equal treatment and the right to be heard.235 Notably, the arbitral tribunal is not bound by the principles on the taking of evidence applicable in state courts.236 In practice, it is common for arbitral tribunals to consult the parties at the outset of the proceedings regarding the procedural aspects of the taking of evidence – including the availability of and prerequisites for document production – and to set these down in a procedural order, ideally based on the parties’ agreement. In this context, it is also not uncommon for the parties to agree in such a procedural order that the IBA Rules on the Taking of Evidence in International Arbitration shall serve as guidelines. 106 In line with the civil law tradition, arbitration proceedings in Switzerland are generally unlikely to involve the production of extensive or broad categories of documents. While document production has become an element to consider in international arbitration proceedings, in the absence of an agreement to the contrary, it is to be expected that – in line with the IBA Guidelines – the parties have to identify the specific documents they are seeking by means of document production as well as to explain their relevance to the outcome of the case. 107 If the assistance of state judiciary authorities is necessary for the taking of evidence, the arbitral tribunal – or a party with the arbitral tribunal’s consent – may request the assistance of the judge d’appui.237 However, article 184(2) IPRG only allows state courts to assist in evidentiary matters for arbitrations seated in Switzerland, meaning that an arbitral tribunal with its seat outside Switzerland must pass through the “channels of international judicial justice” if it requires the assistance of the Swiss state courts.238

4. The law governing the dispute and lois de police The parties are free to choose the rules of law applicable to the merits of their dispute.239 The prevailing opinion is that the parties are not limited to choosing the laws of any particular state, but may also submit their dispute to international legal principles, such as the Intraterms, the Unidroit Principles of International Commercial Contracts, or even to lex mercatoria.240 In the absence of any choice of law, the arbitral tribunal is to decide the case according to the rules of law with which the case has the closest connection.241 109 In addition, the parties may authorize the arbitral tribunal to decide ex aequo et bono, i. e. based on considerations of equity and fairness.242 110 The extent to which an arbitral tribunal must consider mandatory rules of law of a foreign state (lois d’application immediate, Eingriffsnormen) remains controversial. The prevailing opinion – for which there is also support in the case law of the Supreme Court243 – is that under certain circumstances an arbitral tribunal may be required to 108

235

Article 182(2), (3) IPRG; supra mns 92 et seq. Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, mn. 644. 237 Article 184(2) IPRG. For domestic arbitration see 375(2) ZPO. 238 Article 184(2) IPRG; Girsberger/Voser, International Arbitration: Comparative and Swiss Perspectives, 3rd ed., 2016, mn. 1048. Considering the difficulties of this process, the Revised IPRG introduces a provision granting foreign arbitral tribunals and parties direct access to Swiss courts for the taking of evidence; see article 185a Revised IPRG. 239 Article 187(1) IPRG. 240 Karrer, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 187, mns 88 et seq. 241 Article 187(1) IPRG. 242 Article 187(2) IPRG. 243 BGer. 4P.119/1998 of 13 November 1998, consid. 1 a (holding that in deciding on the validity of a contractual agreement affecting the EU market, an arbitral tribunal must consider EU antitrust law (article 81 EC Treaty) despite the parties’ choice of Swiss law to govern their dispute). 236

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consider such foreign mandatory rules regardless of the law applicable to the contract pursuant to article 187 IPRG.244 For instance, it is widely accepted that an arbitral tribunal should consider foreign anti-trust law where the relevant behaviour had effects outside of the country under whose law the contract was concluded.245 On the other hand, an arbitral tribunal need not consider foreign mandatory rules of private law or those serving only to enforce national economic or political interests.246 A different question – although also controversial – is whether or not an arbitral 111 tribunal’s failure to consider the mandatory rules of a foreign state can lead to an annulment of the award in setting aside proceedings pursuant to article 190(2) IPRG. The Supreme Court has held that the arbitral tribunal’s failure to consider or incorrect application of foreign mandatory law does not constitute a breach of public policy within the meaning of article 190(2)(e) IPRG.247

5. Interim relief in arbitration a) Interim relief before state courts. It is widely accepted in Switzerland that – 112 absent an agreement to the contrary by the parties248 – state courts retain the power to grant interim relief despite the broad powers of arbitral tribunals set forth in article 183 IPRG.249 Accordingly, competent state courts retain jurisdiction to grant interim relief despite the existence of an arbitration agreement between the parties, both before and after constitution of the arbitral tribunal. Absent an agreement to the contrary, a party’s application for interim relief to the state courts will thus not constitute a waiver of the arbitration agreement. The parties may agree to restrict or even exclude the jurisdiction of the state courts to grant interim relief, although a full exclusion may be invalid where it denies a party access to justice (e. g. prior to constitution of the arbitral tribunal or where only the state court judge can provide effective relief).250 Swiss state courts are bound to apply their own law, meaning that the state courts 113 may only grant those forms of interim relief that are available under Swiss law. The Civil Procedure Code provides for a wide array of possible interim relief, essentially permitting the court to order whatever is necessary and suitable to prevent imminent harm to the applicant.251 In addition to standard forms of interim relief, this includes the issuance of attachments as provided for under the Debt Enforcement Act (Schuldbefreiungs- und Konkursgesetz, SchKG).252 Certain forms of interim relief foreign to the Swiss legal system, however, such as the freezing orders or Mareva injunctions known in England cannot be obtained from the state courts. Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 1425 et seq. BGer. 4P.119/1998 of 13 November 1998, consid. 1 a; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 1430. 246 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 1430. 247 BGE 132 III 389, consid. 2.2.2 (English translation at: http://www.swissarbitrationdecisions.com/ violation-of-public-policy-notion-of-public-policy-exclusion-of-?search=4P.278%2F2005). 248 The parties may restrict the jurisdiction of the state courts to grant interim relief. The extent to which they may exclude it entirely, however, remains controversial. See Magliana, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 26 Swiss Rules, mns 42 et seq.; Magliana, in op. cit., Art. 28 ICC Rules, mns 13 et seq. 249 Magliana, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 26 Swiss Rules, mns 42 et seq.; Boog, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Interim Measures, mns 66 et seq.; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 230. This is expressly reflected in article 374(1) ZPO for domestic arbitration. 250 Magliana, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 26 Swiss Rules, mns 42 et seq. 251 Article 262 ZPO. 252 Articles 271 et seq. SchKG. 244 245

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b) Interim relief before the arbitral tribunal. Absent an agreement to the contrary by the parties, international arbitral tribunals sitting in Switzerland are empowered to grant interim relief requested by the parties253 and may make such relief subject to the payment of appropriate security by the applicant.254 The arbitral tribunal is not limited by the forms of interim relief available under Swiss law and is thus free to grant measures that could not be granted by state courts. However, arbitral tribunals lack the power to order the attachment of assets, primarily due to their lack of jurisdiction over third parties as well as the Swiss state courts’ exclusive jurisdiction over debt enforcement.255 It is also generally accepted that arbitral tribunals may order interim relief ex parte where necessary, provided that the party against whom the measure is ordered is heard as quickly as possible.256 115 Although voluntary compliance with orders of an arbitral tribunal is generally high, it is well known that one of the disadvantages of obtaining interim relief from the arbitral tribunal is its inability to enforce such relief. The IPRG addresses this difficulty directly by providing that the arbitral tribunal may request the assistance of the juge d’appui where a party fails to voluntarily comply with arbitral tribunal ordered interim relief.257 Accordingly, if the place of arbitration and the place of enforcement of the intended provisional measure are both in Switzerland, the arbitral tribunal or the parties can rely on the assistance of the state courts. On the other hand, if enforcement of interim relief granted by an arbitral tribunal with its seat outside of Switzerland is sought, the rules of international judicial assistance apply.258 116 Article 183(2) specifies that the state court applies its own law. Although the exact meaning of this provision is controversial, it is generally accepted that this means that the state courts must determine their jurisdiction and the applicable procedure pursuant to Swiss law and that only interim measures known under Swiss law can be enforced.259 114

6. Multi-party arbitration 117

It is not uncommon for arbitration proceedings to involve more than two parties. Such proceedings present a number of challenges, both jurisdictional and procedural. While the IPRG does not contain any specific provisions governing multi-party proceedings, the same principles governing the arbitral tribunal’s jurisdiction and arbitral procedure in two-party arbitrations apply to multi-party arbitrations as well.

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a) Arbitration agreement involving several parties. The basis for all arbitration is an agreement to arbitrate. Where all parties are signatories to the same arbitration agreement and agree to arbitrate their disputes together, the arbitral tribunal’s jurisdiction over the proceedings is generally unproblematic. Difficulties may arise, however, where different arbitration agreements are involved (e. g. where the claimant has separate arbitration agreements with various respondents and seeks to initiate one 253

Article 183(1) IPRG. See article 374(3) ZPO for domestic arbitration. Article 183(3) IPRG. 255 Poudret/Besson, Comparative Law of International Arbitration, 2nd ed., 2007, mn. 608; Berger/ Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 1248; see also Magliana, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 26 Swiss Rules, mns 10 et seq. 256 Mabillard, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 183, mn. 12. 257 Article 183(2) IPRG. See article 374 ZPO for domestic arbitration. 258 In an effort to facilitate the enforcement of interim relief by Swiss courts, the Revised IPRG contains a new provision granting foreign arbitral tribunals and parties direct access to the Swiss state courts; article 185a Revised IPRG. 259 Boog, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 183 PILS, mn. 43. 254

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arbitration proceeding against all respondents) or where the claimant seeks to assert claims against non-signatories to the arbitration agreement.260 Whereas the IPRG is silent with regard to multi-party arbitration, the ZPO contains certain provisions governing its permissibility.261 As a general rule any multi-party arbitration requires the consent of all parties. Such 119 consent may be express or implied (such as by reference to rules of arbitration providing for multiparty arbitration) and may be contained in the original arbitration agreement or obtained subsequently.262 In any event, however, only where an interpretation of the arbitration agreement and, where relevant, the parties’ subsequent conduct, leads to the conclusion that all parties agreed to multi-party arbitration with the other relevant parties, may multi-party arbitration take place. Otherwise, any award risks being overturned due to lack of jurisdiction pursuant to article 190(2)(b) IPRG. b) Equality of arms and appointment of the arbitrators. Multi-party arbitrations 120 pose challenges even where there is no dispute regarding their permissibility. These – primarily procedural – challenges result from the need to ensure that all parties are treated equally and are able to participate equally in the appointment of the arbitral tribunal.263 Like in the case of two-party arbitrations, the parties may agree to specific procedures for the appointment of the arbitral tribunal, including indirectly by reference to rules of arbitration.264 Notably, a number of rules of arbitration now include specific provisions addressing the appointment of the arbitral tribunal in multi-party situations.265 In the absence of such an agreement among the parties, the juge d’appui is competent to appoint the arbitral tribunal and shall be guided by the provisions of the ZPO (applicable by analogy),266 which provide that in the case of multi-party arbitrations, the juge d’appui may appoint all members of the arbitral tribunal where it deems appropriate.267

IV. The control and the enforcement of arbitral awards Arbitral awards have the same standing as final and enforceable state court judg- 121 ments.268 According to article 190(1) IPRG, an arbitral award becomes final upon notification to the parties,269 meaning that the arbitral award gains res judicata effect and becomes enforceable both in Switzerland and internationally under the NYC.270 No further proceedings or state court scrutiny is required. Although the award may be challenged in setting aside proceedings pursuant to article 190(2) IPRG, as a general rule such proceedings do not suspend the enforceability of the decision.271 260

Regarding the extension of the arbitration clause to non-signatories see supra mns 56 et seq. Article 376 ZPO. 262 Meier, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Multi-party Arbitrations, mn. 3. 263 Article 182(3) IPRG; BGer. 4P.86/1994 of 11 November 1994, consid. 3. 264 Supra mns 78 et seq. 265 See, e. g. article 12(6)–(8) ICC Rules 2021; article 8 Swiss Rules, article 18 WIPO Rules. 266 Article 179(2) IPRG. 267 Article 362(2) ZPO. The Revised IPRG clarifies this by providing that in the case of failure of the parties to appoint the arbitrators in a multi-party arbitration, the juge d’appui may appoint all members of the tribunal; see article 179(5) Revised IPRG. 268 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 2006; Article 387 ZPO. 269 Article 190(1) IPRG. 270 BGE 117 Ia 166, consid. 5 a; Pfisterer, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 190, mn. 7. 271 Article 77(2) BGG. 261

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1. Correction and amendment of arbitral awards 122

The permissibility of the interpretation and correction or amendment of arbitral awards by the arbitral tribunal is a matter of procedure that the parties are free to agree on within the sense of article 182(1) IPRG. In contrast to the ZPO,272 the IPRG does not expressly provide for such right. Nevertheless, the arbitral tribunal is widely recognized to have the power to interpret its award and to correct any errors, even in the absence of any specific agreement of the parties to this effect.273

2. Review of arbitral awards before the state courts a) Procedural framework (time limits, competent court, appeal). Arbitral awards issued in international arbitration under the IPRG are subject to very limited review: Challenges must be brought directly to the Supreme Court, which is the sole judicial authority competent to review and, where applicable, set aside arbitral awards.274 Moreover, any challenges must be based on one of the five grounds set forth in article 190(2) IPRG.275 While the ZPO also foresees that the Supreme Court has sole jurisdiction over challenges to arbitral awards issued thereunder, the parties may choose to have their appeal decided by the competent cantonal court instead.276 The Supreme Court Act (Bundesgerichtsgesetz, BGG) governs the specifics of the review procedure before the Supreme Court277 and provides that challenges must be filed within 30 days of the award’s notification to the parties.278 Moreover, the Supreme Court will only consider those grounds for annulment that are specifically asserted and substantiated by the applicant.279 124 Setting aside proceedings before the Supreme Court are very efficient, with the Supreme Court’s decision on the challenge generally being rendered within approximately six months from the date of the arbitral award.280 Where an arbitral award is rendered in one of the official Swiss languages, the challenge must be filed in that language. Where the award is rendered in any other language, then the challenge may be filed in any of the official Swiss languages. Challenges may also be filed in English.281 123

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b) Grounds for setting aside arbitral awards: aa) Overview. Under article 190(2) IPRG, arbitral awards may be set aside based on one of the five following grounds: (1) the sole arbitrator was not properly appointed or the arbitral tribunal was not properly constituted; (2) the arbitral tribunal wrongly accepted or declined jurisdiction; (3) the arbitral tribunal’s decision went beyond the claims submitted (ultra petita) or failed to decide one of the issues submitted to it (infra petita); (4) the arbitral tribunal violated the principles of equal treatment or the right to be heard; or (5) the award is 272

Article 388 ZPO. BGE 126 III 524, consid. 2 b. Notably, the Revised IPRG has introduced a provision governing the manner in which requests for rectification and/or interpretation of an arbitral award may be made, specifying that such requests must be filed within 30 days of notification of the arbitral award; see article 189a Revised IPRG. 274 Article 191 IPRG. 275 Article 190(2) IPRG; see infra mn. 125. 276 Articles 389–390 ZPO. 277 Article 191 IPRG, article 77 BGG. 278 Article 100(1) BGG. 279 Article 77(3) BGG; BGer. 4A_90/2014 of 9 July 2014, consid. 3.l and 3.3.2 http://www.swissarbitrationdecisions.com/court-arbitration-sport-may-decide-merits-even-if-jurisdiction-only-issue? search=4A_90%2F2014. 280 Dasser/Wojtowicz, (2018) 36 ASA Bull. 276–394. 281 The Revised IPRG amends the BGG, allowing the possibility of filing challenges to arbitral awards in English; see Revised IPRG; see article 77(2bis) of the Revised Supreme Court Act. 273

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incompatible with public policy. These five grounds are exhaustive282 and correspond largely to those set forth in article V NYC. Notably, with the exception of challenges on the grounds of substantive public policy, which call for a very narrow review of the content of the arbitral award, arbitral awards rendered under the IPRG are not subject to any substantive review, whether by the Supreme Court or any other state court. In contrast, arbitral awards rendered under the ZPO may also be set aside where the arbitral award is arbitrary, based on an obviously incorrect factual determination or an obvious violation of law or equity.283 All final and partial awards – defined as awards in which the arbitral tribunal finally 126 adjudicates all or some of the substantive claims before it, respectively – are subject to challenge upon their notification to the parties.284 Accordingly, such awards must be challenged within the 30-day deadline set forth in the BGG.285 A different rule applies to preliminary or interim awards, i. e. awards in which the arbitral tribunal does not finally adjudicate some or all of the parties’ claims, but merely decides preliminary questions, such as questions relating to the arbitral tribunal’s jurisdiction or the statute of limitations.286 Such decisions may only be directly challenged on the grounds set forth in article 190(2)(a) and (b), i. e. improper constitution of the arbitral tribunal and lack of jurisdiction.287 In connection with such challenges, the parties may however also challenge the factual findings underlying the arbitral tribunal’s award on the grounds that they themselves violate article 190(2) IPRG, to the extent that they were directly relevant to the decision.287a Where no party has its domicile, habitual residence or a business establishment in 127 Switzerland, the parties to an international arbitration may waive even these limited grounds for challenge in advance, whether in the parties’ arbitration agreement or in a subsequent agreement.288 Any such waiver must be express and the wording must clearly convey the parties’ will to waive their right to any recourse against the awards of the arbitral tribunal before the Supreme Court.289 Such a waiver is not available under the ZPO. The Supreme Court is known for its arbitration-friendly approach. This can also be 128 seen in its case law, which reflects the Supreme Court’s reluctance to interfere with arbitration proceedings and the arbitral tribunal’s decision making. As a result of this approach, the success rate of setting aside proceedings in international arbitration proceedings in Switzerland is low: of the 438 decisions rendered on the merits by the Supreme Court between 1989 and 2017, only 34 awards were annulled, resulting in a rate of annulment of approximately 7 %290 That said, however, the statistics and the 282 BGE 134 III 186, consid. 5 (English translation at: http://www.swissarbitrationdecisions.com/rightto-be-heard-equality-between-the-parties?search=4A_468%2F2007). 283 Article 393(e) ZPO. 284 Article 190(1) IPRG; BGE 130 III 76, consid. 3.1.1, 3.1.2. 285 Article 100(1) BGG; supra mns 122 et seq. 286 BGE 130 III 76, consid. 3.1.3. 287 Article 190(3) IPRG; BGE 130 III 76, consid. 3.1.3. 287a BGE 140 III 477, consid. 3.1 (English translation available at: http://www.swissarbitrationdecisions. com/arbitration-clause-not-rescinded-subsequent-%E2%80%9Cshowpiece%E2%80%9D-contract? search=4A_74%2F2014). 288 Article 192 IPRG; BGE 133 III 235, consid. 4.3.1. 289 BGE 143 III 55, consid. 3.1; BGE 134 III 260, consid. 3.1 (English translation at: http://www. swissarbitrationdecisions.com/renunciation-to-appeal-against-the-award?search=4A_500%2F2007); 131 III 173, consid. 4.2.1–4.2.3. 290 A total of 576 challenges were filed with the Supreme Court between 1989–2017, of which 78 were declared inadmissible; 60 were withdrawn, and 438 were decided on the merits. See Dasser/Wojtowicz, (2018) 36 ASA Bull. 276–394.

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Supreme Court’s case law also demonstrate the Court’s willingness to overturn arbitral awards where necessary in order to ensure fair proceedings and maintain the high standards of arbitration for which Switzerland is known. bb) Lack of jurisdiction of the arbitral tribunal. The decision of an arbitral tribunal is subject to annulment where the arbitral tribunal wrongly denied or accepted jurisdiction over the dispute. Lack of jurisdiction may result, inter alia, where the dispute is not arbitrable within the meaning of article 177(2) IPRG or where the arbitration agreement is either invalid or does not extend to the parties or the dispute at issue.291 130 The Supreme Court examines the legal questions forming the basis of the challenge to the arbitral tribunal’s decision on jurisdiction, including any preliminary questions, with full powers of review.292 However, it does so based on the facts as determined by the arbitral tribunal. The Supreme Court will only review the facts upon which the award is based where the applicant alleges that the factual findings upon which the jurisdiction decision are based themselves violate article 190(2) IPRG or where – exceptionally293 – new facts are admissible before the Supreme Court.294 129

cc) Composition of the tribunal and procedural irregularities. The parties in international arbitration proceedings have the same right to an independent and impartial tribunal guaranteed by the Swiss constitution and ECHR as parties to state court proceedings.295 Accordingly, an arbitral award is subject to challenge where the arbitral tribunal was improperly constituted or the sole arbitrator improperly appointed.296 Of particular relevance here are challenges against arbitral awards based on the alleged lack of independence or impartiality of the arbitral tribunal. However, such challenges are rarely successful: In the thirty years that the IPRG has been in force, only two arbitral award have been set aside due to improper composition of the arbitral tribunal.297 132 A more frequent ground for challenge is that the arbitral tribunal violated the parties’ procedural guarantees of equal treatment and the right to be heard.298 The scope of the parties’ right to be heard and right of equal treatment as guaranteed by article 182(3) IPRG is set forth above.299 In essence, however, the parties’ right to be heard is violated where the arbitral tribunal fails to consider the allegations, arguments, evidence or offers 131

291

See supra mns 36 et seq. BGE 129 III 727 consid. 5.2.2 (English translation at: http://www.swissarbitrationdecisions.com/ extension-arbitration-clause-non-signatory). The Supreme Court will only consider and review the specific arguments presented, however, it will not undertake a de novo review of the arbitral tribunal’s jurisdiction. BGer. 4A_90/2014 of 9 July 2014, consid. 3.1 and 3.3.1 (English translation at: http://www. swissarbitrationdecisions.com/court-arbitration-sport-may-decide-merits-even-if-jurisdiction-only-issue? search=4A_90%2F2014). 293 Article 99 BGG. 294 BGE 140 III 477, consid. 3.1 (English translation at: http://www.swissarbitrationdecisions.com/ arbitration-clause-not-rescinded-subsequent-%E2%80%9Cshowpiece%E2%80%9D-contract? search=4a_74%2F2014); BGE 129 III 727 consid. 5.2.2 (English translation at: http://www.swissarbitrationdecisions.com/extension-arbitration-clause-non-signatory). 295 Article 30 Swiss Constitution, Article 6(1) ECHR; BGE 135 I 14 consid. 2; 119 II 271 consid. 3 b; 118 II 359 consid. 3 c; 115 Ia 400, consid. 3 b. 296 Article 190(2)(a). BGE 142 III 521, consid. 3.1.1; BGE 139 III 511, consid. 4; BGer. 4A_282/2013 of 13 November 2013, consid. 5.3.1–5.3.2. See also Müller/Pearson, Swiss Case Law in International Arbitration, 3rd ed., 2019, p. 337. 297 BGer. 4P.129/2002 of 26 November 2002; Dasser/Wojtowicz, (2018) 36 ASA Bull. 281. For an overview of the procedural difficulties associated with challenges based on article 190(2)(a) IPRG, see Leemann, (2011) 29 ASA Bull. 10–32. 298 Article 190(2)(d) IPRG. 299 Supra mns 92 et seq. 292

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of proof presented by one of the parties and relevant to the decision to be made.300 However, the right to be heard only relates to evidence that is legally relevant.301 As a result, the parties’ right to be heard is not violated where the arbitral tribunal disregards evidence that it considers to be irrelevant, obviously unsuitable or unlikely to change its view of the evidence as obtained through a preliminary assessment.302 Arbitral awards have been annulled where the arbitral tribunal failed to address a 133 statute of limitations objection raised by one of the parties303; failed to review and consider the entire post-hearing brief of one of the parties304; failed to address an argument relating to the calculation of the damages owed305; or failed to consider certain arguments raised by one party regarding the applicability of certain contractual limitations of liability.306 In contrast, the arbitral tribunal’s legal assessments only rarely give rise to a grounds for challenge given that the principle of jura novit curia has repeatedly been held by the Supreme Court to apply to arbitral tribunals sitting in Switzerland as well.307 The only exception to this general rule applies where the legal considerations relied upon by the arbitral tribunal for its decision were not foreseeable to the parties, in which case the arbitral tribunal must grant the parties the opportunity to comment in order to avoid a violation of their right to be heard.308 Finally, the Supreme Court has also specifically stated that the right to be heard is not violated where the arbitral tribunal fails to provide a reasoned award309 or where it decides to grant or deny one party’s application to suspend the proceedings.310 All in all, annulments of arbitral awards on this basis remain rare, with only 134 approximately 5.5 % of all challenges on this ground having been successful.311 300

BGE 133 III 235, consid. 5.2. BGE 133 III 235, consid. 5. 302 BGer. 4A_668/2016 of 24 July 2018, consid. 3.2.2 (English translation at: http://www.swissarbitrationdecisions.com/sites/default/files/24%20juillet%202017%204A%20668%202016.pdf); BGer. 4A_544/ 2014 of 24 February 2015, consid. 3. BGer. 4A_360/2011 of 31 January 2012, consid. 2.1 (English translation at: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-tobe-heard-post-hear?search=4A_360%2F2011); 4A_600/2010 of 17 March 2011, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/cas-award-allocating-fees-and-costs-in-violation-of-the-right-to?search=4A_600%2F2010); BGer. 4P.23/2006 of 27 March 2006, consid. 3.1; BGer. 4P.114/2003 of 14 July 2003, consid. 2.2. 303 BGer. 4A_46/2011 of 16 May 2011, consid. 4 (English translation at: http://www.swissarbitrationdecisions.com/no-breach-of-pre-arbitral-procedures-failure-to-deal-with-an-arg?search=4a_46%2F2011). 304 BGer. 4A_360/2011 of 31 January 2012 (English translation at: http://www.swissarbitrationdecisions.com/icc-award-annulled-for-breach-of-the-right-to-be-heard-post-hear?search=4A_360%2F2011), discussed in Magliana, in: Müller/Rigozzi (eds), New Developments in International Commercial Arbitration, 2012, 161–165. 305 BGer. 4A_669/2012 of 17 April 2013 (English translation at: http://www.swissarbitrationdecisions. com/award-can-be-annulled-only-part?search=4A_669%2F2012). 306 BGer. 4A_460/2013 of 4 February 2013. 307 BGE 130 III 35, consid. 5; 120 II 172, consid. 3 a; BGer. 4A_318/2018 of 4 March 2019, consid. 4.1.3; BGer. 4A_424/2018 of 29 January 2019, consid. 5.2.3; BGer. 4A_382/2018 of 15 January 2019, consid. 3.1.2. 308 BGE 130 III 35, consid. 5; BGer. 4A_318/2018 of 4 March 2019, consid. 4.1.3; BGer. 4A_424/2018 of 29 January 2019, consid. 5.2.3; BGer. 4A_382/2018 of 15 January 2019, consid. 3.1.2; BGer. 4A_400/2008 of 9 February 2009. 309 BGE 142 III 360, consid. 4.1.1; BGE 134 III 186, consid. 6 (English translation at: http://www. swissarbitrationdecisions.com/right-to-be-heard-equality-between-the-parties?search=4A_468%2F2007). See also BGer. 4A_540/2018 of 7 May 2019, consid. 2.1. (English translation at: http://www.swissarbitrationdecisions.com/atf-4a-540-2018). 310 BGE 133 III 139, consid. 6.1. 311 Dasser/Wojtowicz, (2018) 36 ASA Bull. 281. For a summary of the relevant case law, see Pfisterer, in: Honsell/Vogt/Schnyder/Berti, BaslerKomm-IPRG, 3rd ed., 2013, Art. 190, mns 60 et seq.; Arroyo, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 190, mns 83 et seq. 301

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Despite the formal nature of the right to be heard, in order to annul an arbitral award, the Supreme Court requires that the party seeking annulment demonstrate that the violation of the right to be heard had an impact on the outcome of the case.312 136 Other procedural irregularities, such as breaches of the applicable procedural rules, whether specifically agreed by the parties or set forth in the rules of arbitration chosen by the parties do not give rise to a basis to challenge the arbitral award unless they amount to a violation of the right to equal treatment, the right to be heard, or of public policy in the sense of article 190(2)(e).313 135

dd) Public policy. The parties may also challenge arbitral awards on the grounds of incompatibility with public policy.314 Public policy in the sense of Article 190(2)(e) includes both procedural and substantive public policy.315 According to the Supreme Court, procedural public policy guarantees the right to an independent decision rendered in accordance with fundamental and generally accepted principles of procedural law. A challenge on these grounds is justified where the alleged conduct results in a violation of principles of justice such that the award appears to be incompatible with the recognized values of legal systems that are based on the rule of law.316 On the other hand, an award violates substantive public policy where it disregards fundamental legal principles and is thus inconsistent with the essential, generally recognized values that – according to the prevailing view in Switzerland – should form the foundation of any legal order.317 Among the non-exhaustive list of principles identified by the Supreme Court as constituting substantive public policy are pacta sunt servanda; the principle of good faith; and abuses of rights, expropriation without compensation, discrimination, corruption and forced labour.318 138 The Supreme Court has to date only annulled two arbitral awards pursuant to article 190(2)(e) IPRG,319 one relating to procedural and the other to substantive public policy. Both decisions concerned arbitral awards rendered in sports arbitrations administered by the CAS. The first decision concerned a violation of the principle of res judicata and thus concerned procedural public policy.320 In the second decision, the Supreme Court held that the relevant arbitral award, which upheld a decision of the FIFA Disciplinary Committee threatening a lifetime professional ban against the foot137

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See BGer. 4A_424/2018 of 29 January 2019, consid. 5.7. BGE 126 III 249, consid. 3 c); BGE 117 II 346, consid. 1 a. 314 Article 190(2)(e) IPRG. BGer. 4A_125/2018 of 26 July 2018, discussed in von Segesser/Rihar, Swiss Federal Supreme Court Confirms the Principles for the Admissibility of a Success Fee, 2018. 315 BGE 144 III 120, consid. 5.1; BGE 138 III 322, consid. 4.1 (English translation at: http://www. swissarbitrationdecisions.com/landmark-decision-of-the-swiss-supreme-court-international-arbit? search=4A_558%2F2011); 132 III 389, consid. 2.2.1 (English translation at: http://www.swissarbitrationdecisions.com/violation-of-public-policy-notion-of-public-policy-exclusion-of-?search=4P.278%2F2005). 316 BGE 132 III 389, consid. 2.2.1 (English translation at: http://www.swissarbitrationdecisions.com/ violation-of-public-policy-notion-of-public-policy-exclusion-of-?search=4P.278%2F2005); 136 III 345, consid. 2.1 (English translation at: http://www.swissarbitrationdecisions.com/setting-aside-of-award-forviolation-of-public-policy-principle-?search=4A_490%2F2009+). 317 BGE 144 III 120, consid. 5.1; BGE 138 III 322, consid. 4.1 (English translation at: http://www. swissarbitrationdecisions.com/landmark-decision-of-the-swiss-supreme-court-international-arbit? search=4A_558%2F2011). 318 BGE 144 III 120, consid. 5.1; BGE 138 III 322, consid. 4 (English translation at: http://www. swissarbitrationdecisions.com/landmark-decision-of-the-swiss-supreme-court-international-arbit? search=4A_558%2F2011); 132 III 389, consid. 2.2.1 (English translation at: http://www.swissarbitrationdecisions.com/violation-of-public-policy-notion-of-public-policy-exclusion-of-?search=4P.278%2F2005). 319 Dasser/Wojtowicz, (2018) 36 ASA Bull. 281. 320 BGer. 4A_490/2009 of 13 April 2010 (English translation at: http://www.swissarbitrationdecisions. com/setting-aside-of-award-for-violation-of-public-policy-principle-?search=4A_490%2F2009+). For a summary, see Arroyo, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 190, mns 209 et seq. 313

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ball player Francelino da Silva Matuzalem violated substantive public policy. The court held that the threat constituted an obvious and grave infringement of Matuzalem’s personality rights and violated the fundamental limitations on a party’s ability to contractually limit its personal freedom engrained in Swiss substantive law.321

3. Enforcing arbitral awards a) General framework. Arbitral awards rendered in Switzerland have the same effect as final and enforceable state court judgments. Although the IPRG – in contrast to the ZPO322 – does not expressly state this principle, it is well accepted that a final award rendered by domestic and international arbitral tribunals sitting in Switzerland can be enforced throughout Switzerland like a state court judgment.323 For monetary claims, this means that the prevailing party may directly initiate debt enforcement proceedings. The relevant procedures as well as the defences available to the respondent in enforcement proceedings are governed by the SchKG. Similarly, in the case of non-monetary claims (e. g. for specific performance), the prevailing party may also directly initiate enforcement proceedings, although such proceedings are governed by the ZPO rather than the SchKG. Notably, article 193 IPRG – like article 386 ZPO324 – provides that the parties may deposit a copy of the award with the Swiss court at the seat of the tribunal for safekeeping. Similarly, either party may also request that the court at the seat of the tribunal certify the enforceability of the award.325 Both of these procedures are voluntary and are not requirements for the enforceability of the arbitral award. In fact, given that arbitral awards are directly enforceable in Switzerland and in states party to the NYC, these provisions are of limited relevance in practice. The recognition and enforcement of foreign arbitral awards in Switzerland is governed by the NYC.326 The procedures for enforcing foreign arbitral awards are similar to those for domestic arbitral awards: in principle, the prevailing party may seek direct enforcement of the award, either pursuant to the SchKG (for monetary claims) or the ZPO (for non-monetary claims). The requirements of the NYC will be examined as a preliminary question in the context of these proceedings. The NYC applies to the enforcement of all arbitral awards rendered outside of Switzerland, regardless of whether the award was rendered in the territory of a contracting state or not.327 With the exception of article V(1)(e) NYC, the defences to enforcement correspond to the grounds for setting aside explained supra mns 125–138. The Supreme Court has repeatedly confirmed that the grounds for refusing enforcement of an arbitral award must be interpreted narrowly in order to facilitate the enforcement of arbitral awards.328 This was confirmed in a decision addressing the requirements for enforcement under the NYC, in which the Court held that the requirements set forth in 321 BGE 138 III 322, consid. 4.1 (English translation at: http://www.swissarbitrationdecisions.com/ landmark-decision-of-the-swiss-supreme-court-international-arbit?search=4A_558%2F2011), discussed in Magliana, in: Müller/Rigozzi (eds), New Developments in International Commercial Arbitration, 2012, 46 et seq. 322 Article 387 ZPO. 323 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 2007. 324 Articles 386(2), (3) ZPO. 325 Article 193(1), (2) IPRG. 326 Article 194 IPRG. 327 Bühler/Cartier, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Art. 194, mn. 4. 328 BGE 135 III 136, consid 3.3 (English translation see: http://www.swissarbitrationdecisions.com/ binding-character-of-an-award-enforcement-of-an-award-stayed-in-?search=4A_403%2F2008). See also Kunz, (2016) 34 ASA Bull. 836–865.

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article IV(2) NYC – and in particular the requirement that a certified translation of the complete arbitral award be submitted – should not be too formally interpreted.329 Thus the court rejected a challenge to the enforcement of a decision where only the relevant portions of the decision had been translated and where the translations were not all certified. 143

b) Enforcement of awards that were set aside. An arbitral award may not be recognized or enforced under the NYC where the award has not become binding, or where the competent authority set it aside or suspended it.330 According to the Supreme Court, whether or not an award has become binding is to be determined according to the parties’ agreement or – subsidiarily, in the absence of such an agreement – according to the lex arbitri.331 Where a binding award has been set aside or suspended by the competent authority, it may not be enforced.332 According to the recent case law of the Supreme Court, however, the suspension only hinders enforcement where it was expressly and formally ordered by a judicial authority in the relevant state; by contrast, the automatic suspension of an award does not suffice within the meaning of article V(1)(e) NYC.333 Where setting aside proceedings are pending (without a formal suspension), the Swiss court has the options contained in article VI NYC. How to proceed will be determined on a case by case basis, taking into account the particular circumstances of the case, the likelihood that the setting aside proceedings will be successful and the personal and financial circumstances of the parties.334

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c) Fulfilment, set-off and similar defences. Both under the SchKG and the ZPO, and regardless of whether the award at issue is domestic or international, the award will not be enforced where the respondent party can offer documentary evidence that the award was already performed or that the payment obligation was suspended or forgiven by the prevailing party.335 In addition, the debtor may also settle the award by set-off with a corresponding claim, provided that the relevant claim has been adjudicated and the relevant decision presented or that it is at least evidenced by a written acknowledgment of debt.336

4. Preclusion of grounds for challenge and defences to enforcement 145

A party’s failure to raise defences or objections during the course of the arbitral proceedings or in setting aside proceedings may result in their forfeiture.

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a) Preclusion due to failure to object in the arbitral proceedings. The Supreme Court has repeatedly held that a party believing itself to have been disadvantaged as a result of a violation of its procedural rights forfeits its right to object to such violation in subsequent setting aside proceedings where it failed to object during the arbitral 329 BGE 138 III 520, consid. 5.5 (English translation at: http://www.swissarbitrationdecisions.com/ federal-tribunal-holds-that-swiss-courts-are-sufficiently-famili?search=5A_754%2F2011), discussed in Magliana, in: Müller/Rigozzi (eds), New Developments in International Commercial Arbitration, 2012, 63 et seq. 330 See article V(1)(e) NYC. 331 BGE 108 Ib 85, consid. 4 b. 332 Article V(1)(e) NYC; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 2077 et seq. 333 BGE 135 III 136, consid. 3.2, 3.3 (English translation at: http://www.swissarbitrationdecisions.com/ binding-character-of-an-award-enforcement-of-an-award-stayed-in-?search=4A_403%2F2008). 334 Bühler/Cartier, in: Arroyo (ed.), Arbitration in Switzerland, 2nd ed., 2018, Article 194 IPRG, mn. 81. 335 Article 81(1) SchKG; Article 341(3) ZPO. 336 BGE 115 III 97, consid. 4; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 2012.

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proceedings and to undertake reasonable efforts to remedy the violation.337 Holding on to a procedural objection in order to raise it in setting aside proceedings in the event of an adverse decision violates the principle of good faith inherent in Swiss law.338 With respect to the plea of lack of jurisdiction, this principle is expressly set forth in article 186(2) IPRG, which provides that any jurisdictional objection must be made before the party enters any defence on the merits.339 Accordingly, a party seeking to set aside an arbitral award on the grounds of the 147 incorrect constitution of the arbitral tribunal (including the lack of independence or impartiality of an arbitrator)340; lack of jurisdiction341; or alleged violations of the principles of equal treatment or the right to be heard342 must demonstrate that it raised a corresponding objection during the arbitral proceedings or was unable to do so. Otherwise, the party will be barred from relying on such objection both in the setting aside proceedings pursuant to article 190(2) IPRG as well as in subsequent enforcement proceedings.343 b) Preclusion due to failure to bring a setting-aside application. As a general rule, 148 a party’s failure to exhaust all possible means of recourse against the arbitral award does not prevent it from objecting to enforcement on the grounds set forth in article V NYC.344 However, a failure to challenge the award where such proceedings would have been available may be held against a party in enforcement proceedings.345 337 BGer. 4A_550/2017 of 1 October 2018, consid. 5.3, discussed in Kunz, (2019) 37 ASA Bull. 111–116. See also BGE 119 II 386, consid. 1 a; BGer. 4A_476/2012 of 24 May 2013, consid 3.1 (English translation at: http://www.swissarbitrationdecisions.com/procedural-good-faith-requires-objections-be-raised-immediately?search=4A_476%2F2012). 338 BGE 119 II 386, consid. 1 a. 339 Article 186(3) IPRG; see also article 359(2) ZPO. This principle is now codified in the Revised IPRG; see article 182(4) Revised IPRG. 340 BGE 126 III 249, consid. 3 c; supra mn. 87; BGer. 4A_282/2013 of 13 November 2013, consid. 4. 341 BGE 128 III 50, consid. 2 c; 342 BGer. 4A_450/2017 of 12 March 2018, consid. 3.1; BGE 119 II 386, consid. 1 a; BGer. 4A_682/2011 of 31 May 2012, consid. 3.1 (English translation at: http://www.swissarbitrationdecisions.com/claim-of-violation-of-due-process-rejected-by-the-federal-tribun?search=4A_682%2F2011). See also BGer. 4A_550/2017 of 1 October 2018, consid. 5; discussed in Kunz, (2019) 37 ASA Bull. 111–116. 343 BGer. 4A_450/2017 of 12 March 2018, consid. 3.1; BGE 130 III 125, consid. 2.1.2; 130 III 66, consid. 4.3; BGer. 5A_ 409/2014 of 15 September 2014, consid. 5.2.1; Patocchi/Jermini, in: Honsell/Vogt/ Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 194, mn. 58; Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mns 2053, 2062, 2066, 2076. 344 Berger/Kellerhals, Arbitration in Switzerland, 3rd ed., 2015, mn. 2054. 345 Patocchi/Jermimi, in: Honsell/Vogt/Schnyder/Berti (eds), BaslerKomm-IPRG, 3rd ed., 2013, Art. 194, mn. 59; see also BGE 130 III 125, consid. 2.1.2.

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S. International Arbitration in the U.S.1 Bibliography: Born, International Commercial Arbitration, 2nd ed., Kluwer Law International 2014 (new edition in preparation); Carbonneau, The Law and Practice of Arbitration, 6th ed., Juris 2018; Del Duca/ Welsh, Interpretation and Application of the New York Convention in the United States, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, Springer 2017, 995–1052; Niedermaier, Arbitration Agreements between Parties of Unequal Bargaining Power, (2014) 1 ZDAR 12; Reisberg, Objections to the Jurisdiction of the Arbitration Tribunal Under the US Federal Arbitration Act: How to Preserve the Right to Judicial Review, (2010) 13 Int’l Arb. L. Rev. 148; Rutledge/Kent/Henel, United States (Country Report), in: Weigand/Baumann (eds), Practitioner’s Handbook on International Commercial Arbitration, 3rd ed., Oxford University Press 2019, 886–950; Strong, International Commercial Arbitration: A Guide for U.S. Judges, Federal Judicial Center 2012; Wilner/Domke/Edmonson, Domke on Commercial Arbitration (The law and practice of commercial arbitration), 3rd ed., Thomson/West 2003. National legislation: 9 USC §§ 1–14 (Pub. L. 68–401, 43 Stat. 883, first enacted 12 February 1925; Chapter 2 added 31 July 1970, 84 Stat. 692; Chapter 3 added 15 August 1990; PL 101–369; Federal Arbitration Act, FAA); Uniform Arbitration Act revised in 2000 (Revised Uniform Arbitration Act; RUAA), enactment status available at http://www.uniformlaws.org. International conventions: Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (21 UST 2518), https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&clang=_en (accessed 1 August 2020); Inter-American Convention on International Commercial Arbitration, Panama City, 30 January 1975 (Pub. L. No. 101–369, 104 Stat. 448; Panama Convention; IAICA), ratification status available at http://www.oas.org/juridico/english/sigs/b-35. html (accessed 1 August 2020); Convention on the Settlement of Investment Disputes between States and Nationals of Other States (17 UST 1720, 575 UNTS 159; ICSID Convention), ratification status available at https://icsid.worldbank.org/en/Pages/icsiddocs/List-of-Member-States.aspx (accessed 1 August 2020); United Nations Convention on Transparency in Treaty-based Investor-State Arbitration, New York, 11 December 2014, ratification status available at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-3&chapter=22&clang=_en (accessed 1 August 2020).

Contents I. Introduction ..................................................................................................... 1. The legal framework .................................................................................. a) Domestic and international arbitration ........................................... b) Commercial and non-commercial arbitration ............................... c) Ad hoc and institutional arbitration ................................................. d) The territoriality principle, the seat of the arbitration and the lex arbitri................................................................................................. e) Arbitration and other ADR mechanisms (mediation, expert determination) ....................................................................................... 2. The guiding principles of U.S. arbitration law .................................... II. The arbitration agreement ............................................................................ 1. The doctrine of separability (severability) ............................................ 2. The law applicable to the arbitration agreement ................................ 3. The validity of the arbitration agreement (capacity, arbitrability, form).............................................................................................................. a) Capacity to conclude arbitration agreements ................................. b) Arbitrability ............................................................................................ c) Form of the arbitration agreement ................................................... d) Termination of the arbitration agreement ...................................... 4. The scope and the interpretation of the arbitration agreement ......

1 2 6 10 12 17 20 22 23 26 27 28 28 31 35 36 37

1 I wish to thank Marcus Weiler, LL.M. (associate, CMS Germany) for his invaluable assistance in the preparation of the second edition of this report. Furthermore, I am grateful to Jessica Foley, LL.M. (associate, CMS UK), who supported me in preparing the first edition.

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S. International Arbitration in the U.S. a) Personal scope of the arbitration agreement .................................. b) Substantive scope of the arbitration agreement ............................. c) Pathological arbitration clauses ......................................................... 5. The effect of the arbitration agreement and KompetenzKompetenz .................................................................................................... a) Enforcing arbitration clauses and Kompetenz-Kompetenz .......... b) Preclusion of jurisdictional defences ................................................ c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal...................................................................................... III. The arbitral tribunal and the conduct of the arbitral proceedings ..... 1. The arbitral tribunal, impartiality and independence of the arbitrators ..................................................................................................... a) Duty to disclose ..................................................................................... b) Grounds for challenge.......................................................................... c) Procedural aspects and preclusion of grounds for challenge...... d) Failure or impossibility to act ............................................................ 2. The arbitral proceedings ........................................................................... a) The request for arbitration ................................................................. b) Equality of arms, fair trial principles and the right to be heard c) Confidentiality ....................................................................................... d) The arbitral award ................................................................................ e) Termination of the arbitration without an award......................... f) The costs of the arbitration ................................................................ 3. Evidence, discovery, disclosure................................................................ 4. The law governing the dispute and lois de police ............................... 5. Interim relief in arbitration ...................................................................... a) Interim relief before state courts ....................................................... b) Interim relief before the arbitral tribunal ........................................ 6. Multi-party and multi-contract arbitration .......................................... a) Arbitration agreement involving several parties ............................ b) Equality of the parties and appointment of the arbitrators ........ IV. The control and the enforcement of arbitral awards ............................. 1. Correction and amendment of arbitral awards ................................... 2. Review of arbitral awards before the state courts ............................... a) Procedural framework (time limits, competent court, appeal) .. b) Grounds for setting aside arbitral awards: An overview.............. c) Lack of jurisdiction of the arbitral tribunal .................................... d) Unlawful composition of the tribunal and other procedural irregularities............................................................................................ e) Public policy ........................................................................................... 3. Enforcing arbitral awards ......................................................................... a) General .................................................................................................... b) Defences against enforcement............................................................ aa) Overview .......................................................................................... bb) Enforcement of awards that were set aside.............................. cc) Fulfilment, set-off and similar defences.................................... 4. Preclusion of grounds for challenge and defences to enforcement a) Preclusion due to failure to object in the arbitral proceedings .. b) Preclusion due to failure to bring a setting-aside application ....

37 38 39 41 43 50 53 55 56 60 62 66 67 69 70 72 73 75 80 82 86 93 97 98 101 105 106 108 109 110 114 118 120 124 127 131 132 132 134 134 135 136 137 138 140

I. Introduction Arbitration as a private dispute resolution mechanism is widely popular in the United 1 States. In contrast to many other jurisdictions, the use of arbitration is not predominantly reserved for B2B transactions. At the domestic level in particular, the use of arbitration clauses has expanded to all kinds of relationships outside the usual comNiedermaier

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mercial realm.2 The importance of arbitration is illustrated in part by the steadily increasing number of arbitration-related decisions made by the U.S. circuit courts.3 Furthermore, the U.S. Supreme Court, whose decisions are typically reserved for issues of substantial political significance, has been taking an ever increasing interest in arbitration.4

1. The legal framework Despite this broad acceptance of arbitration as a dispute resolution mechanism, regulation of international arbitration in the United States is relatively sparse. At the federal level, arbitration is governed by the Federal Arbitration Act 1925 (FAA). Chapter 2 of the FAA incorporates the New York Convention of 1958 (NYC) into federal law. Chapter 3 does so with the Inter-American Convention on International Commercial Arbitration of 1975 (IAICA), which in many ways resembles the NYC.5 3 Arbitration is also regulated at the state level. Several states have adopted the Revised Uniform Arbitration Act (RUAA), which does not specifically address international arbitration, while other states have adopted individual arbitration acts, some of which do also address international arbitration. Eight states, namely California, Connecticut, Florida, Georgia, Illinois, Oregon, Louisiana and Texas, have adopted the UNCITRAL Model Law on International Commercial Arbitration (UNCITRAL Model Law).6 4 Despite this diversity of legal instruments, arbitration at the federal and state level is almost exclusively governed by the FAA and, in the case of international arbitration, by the NYC as implemented by Chapter 2 of the FAA. The reason for this is that the U.S. Supreme Court has construed the FAA as applying in federal courts as well as in state courts.7 By contrast, state arbitration law has a narrow application. As it is subject to the federal pre-emption doctrine, state law applies only to the extent that it is consistent with federal arbitration law or where inter-state commerce is not concerned.8 Notwithstanding the broad scope of default application of federal law, the parties, as a matter of freedom of contract,9 can agree that the arbitration is governed by state law.10 2

2 Arbitration clauses are typically found in standard form contracts used by banks, brokers, insurance companies, hospitals and nursing homes, as well as in all kinds of employment, franchise and consumer contracts. 3 In respect of international arbitration, see Strong, (2012) J. Disp. Resol. 1 (2), according to whom the U.S. federal courts rendered, in respect of the NYC, 30 decisions in the 1970 s, 105 decisions in the 1980 s, 268 decisions in the 1990 s and 544 decision between 2000 and 2009. 4 See the list of decisions referred to in Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 246 et seq. In 2014, the U.S. Supreme Court rendered, for the first time, a decision in a case relating to a bilateral investment treaty: BG Group plc v. Republic of Argentina, 572 U.S. 25, 134 S. Ct. 1198 (2014). 5 § 201 FAA. Chapter 2 was added on 31 July 1970 (84 Stat. 692). § 301 FAA. Chapter 3 was added on 15 August 1990 (PL 101–369). Congress has indicated that the NYC and the IAICA are to be construed harmoniously and consistently, House Report No. 501, 101st Cong., 2 d Sess. 4 (1990). A particularity of the IAICA is that, pursuant to its article 3, arbitrators are to adopt the procedural rules of the InterAmerican Commercial Arbitration Commission in any case in which the parties have not made an express agreement regarding the governing procedural rules. 6 For the ratification status, cf. https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/status (accessed 1 August 2020). 7 Southland Corp. v. Keating, 465 U.S. 1, 16 (1985); Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 281 (1995). 8 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 1747–1748 (2011); Marmet Health Care Center Inc. v. Brown, 565 U.S. 530, 132 S. Ct. 1201, 1203–1204 (2012). See also Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 90. 9 Infra mn. 24. 10 Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478 (1989).

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The FAA (1925) and the NYC (1958), as compared with modern arbitration laws 5 such as the UNCITRAL Model Law, are meagre in the detail of their provisions. The interpretation of these texts by the U.S. Supreme Court and the U.S. circuit courts is therefore of paramount importance for the understanding of U.S. arbitration law.11 The American Law Institute is currently undertaking the task of drafting the Restatement of the U.S. Law of International Commercial Arbitration and Investor-StateArbitration.12 a) Domestic and international arbitration. The FAA differentiates between domes- 6 tic and international arbitration. Chapter 1 indicates that the FAA applies both to domestic and international arbitrations.13 Following the additions of Chapters 2 and 3 however, Chapter 1 applies primarily to domestic arbitrations, while Chapters 2 and 3 govern international arbitrations. The scope of application of Chapter 2 is comprehensive;14 only arbitration agree- 7 ments or awards that are “entirely between citizens of the United States shall be deemed not to fall under the [NYC] unless [the relevant] relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states.”15 The IAICA takes precedence where a majority of the parties to the arbitration agreement are from countries that have ratified or acceded to the IAICA and are also members of the Organization of American States.16 In both instances, Chapter 1 has residual application to international disputes to the extent that it “is not in conflict with” Chapters 2 or 3.17 The precise scope of the residual application of Chapter 1 to international disputes is highly controversial however, and must be analysed on a case by case basis. Federal district courts have original jurisdiction over litigation relating to any international arbitration falling within Chapters 2 and 3, regardless of the amount in controversy.18 Because the U.S. legal standards for enforcement of international arbitral awards 8 vary to some degree depending on where the award is rendered, it is sometimes necessary to differentiate between two categories of international arbitrations: those arbitrations where the place of arbitration is within the territory of the United States and those where the place of arbitration is outside the United States. Arbitral awards rendered in international arbitrations within the United States are often described as non-domestic, as opposed to foreign awards rendered outside the United States.19 As the United States has made the reservation under article I(3)1 NYC, the NYC applies on the basis of reciprocity only, i. e. the foreign award must be made in a contracting state of the NYC.20 11 Allied-Bruce Terminix Cos., Inc., 513 U.S. 265, 283 (O’Connor, J., concurring) (“[T]he Court has abandoned all pretense of ascertaining congressional intent with respect to the Federal Arbitration Act, building instead, case by case, an edifice of its own creation.”). 12 The Proposed Final Draft was approved by the members of The American Law Institute at the 96th Annual Meeting on 20 May 2019. For further information see http://www.ali.org. 13 § 1 FAA (“[…] commerce among the several States or with foreign nations […]”). 14 § 202 FAA, sentence 1. 15 § 202 FAA, sentence 2. 16 § 305 FAA. 17 §§ 208, 307 FAA. 18 §§ 203, 302 FAA. Pursuant to §§ 205 and 302 FAA, an action or proceeding pending in a state court can be removed to a federal court if the matter relates to an international arbitration covered by Chapter 2 or 3. 19 Cf. article I(1) NYC. See Bergesen v. Joseph Muller Corp., 710 F.2d 928, 932 (2nd Cir. 1983). 20 Del Duca/Welsh, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 995 (997).

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The U.S. Supreme Court takes a very favourable approach towards international arbitration. The Court has expressly recognized the need for predictability in the resolution of disputes within the international commercial system.21 This approach has been followed by the lower courts, where it has been held that there is a “very specific interest of the federal government in ensuring that its treaty obligation to enforce arbitration agreements covered by the [NYC] finds reliable, consistent interpretation in our nation’s courts.”22

b) Commercial and non-commercial arbitration. The FAA applies only to commercial and maritime matters.23 The United States has made the corresponding reservation in respect of awards resolving commercial disputes under article I(3)2 NYC. However, the U.S. Supreme Court has construed the phrase “involving commerce” broadly, so as to mean “affecting commerce”. According to the Court, this signals” an intent to exercise Congress’ commerce power to the full.”24 Construed this way, the FAA covers not only typical commercial relationships but also disputes involving consumers, shareholders, foreign state actors and foreign regulatory authorities, and antitrust, insurance and civil rights issues. The U.S. Supreme Court has held that it is for courts and not arbitrators to determine whether the FAA applies.25 11 Pursuant to § 1, the FAA does not apply to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” However, the U.S. Supreme Court has rigorously narrowed down this exception to cover only interstate transportation workers, independent of whether they are employees or independent contractors.26 As such, the FAA applies to disputes involving all other employees.27 The impact of the exception is even further watered down by the fact that U.S. courts apply the NYC to relationships that are expressly excluded from the scope of Chapter 1 of the FAA.28 10

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c) Ad hoc and institutional arbitration. Parties in the United States can choose between ad hoc arbitration and institutional arbitration. In the latter case, the parties mandate an arbitral institution with the administration of the arbitral proceedings. There are several institutions in the United States that offer their services in this respect. 21

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627–629 (1985). Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571, 579 (7th Cir. 2007). See also Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15 (1974). 23 §§ 2, 202, 302 FAA. See also Diag Human SE v. Czech Republic – Ministry of Health, No. 13-0355 (D.C. 2014), in which the D.C. District Court refused enforcement of an arbitral award against the Czech Republic under the NYC because the dispute was not commercial in nature. 24 Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 277 (1995); Legacy Wireless Services, Inc. v. Human Capital, LLC, 314 F. Supp. 2 d 1045, 1052 (D. Or. 2004). 25 New Prime Inc. v. Oliveira, 586 U.S. ___, 139 S. Ct. 532 (2019). 26 Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); New Prime Inc. v. Oliveira, 586 U.S. ___, 139 S. Ct. 532 (2019). In a recent decision, the Third Circuit found that the exception may also apply to Uber drivers “who transport passengers, so long as they are engaged in interstate commerce or in work so closely related thereto as to be in practical effect part of it” (Singh v. Uber Technologies, Inc., Case No. 171397 (3rd Cir. Sept. 11, 2019)). 27 California recently enacted A.B. 51, a statute effectively prohibiting the formation and use of predispute arbitration agreements in the employment setting. A.B. 51 prohibits employers from requiring applicants or employees to waive any right, forum, or procedure established by the California Fair Employment and Housing Act and the state Labor Code. The law applies to “contracts for employment entered into, modified, or extended on or after January 1, 2020”. The law, which is scheduled to take effect on 1 January 2010, is challenged by business groups in the U.S. District Court for the Eastern District of California. 28 Cf. Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009); Lindo v. NCL (Bahamas), Ltd, 652 F.3d 1257 (11th Cir. 2011). 22

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At the domestic level, the most important institution is the American Arbitration Association (AAA), which is a non-profit organization headquartered in New York City with regional offices in a number of U.S. cities. The AAA administers cases in various areas both within and outside the commercial realm, and provides for specifically adapted sets of rules.29 The international branch of the AAA is the International Centre for Dispute Resolution (ICDR), which offers institutional rules on international arbitration, namely the International Dispute Resolution Procedures (IDRP).30 There are further arbitral institutions that operate in the United States on a nationwide basis. JAMS has headquarters in Irvine, California, as well as centres in a number of U.S. cities, and specializes inter alia in complex, multi-party and class arbitrations and provides for specifically adapted sets of rules.31 The International Institute for Conflict Prevention & Resolution (CPR), which has its address in New York City, also has its own sets of rules.32 The National Arbitration Forum (NAF), with its seat in Minneapolis, Minnesota, provides a Code of Procedure modelled on a judicial trial, providing inter alia for discovery.33 In addition, there are various local and specialized institutions such as the dispute resolution forum operated by the Financial Industry Regulatory Authority (FINRA),34 the Society of Maritime Arbitrators (SMA)35 and the Chicago International Dispute Resolution Association (CIDRA).36 At the international level, the ICC has recently opened an office in New York City to administer ICC arbitrations in North America.37 As regards investment arbitration, the International Centre for Settlement of Investment Disputes (ICSID) – an autonomous international institution established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States – is headquartered in Washington D.C.38 ICSID is the leading arbitration institution devoted to investor-state dispute settlement.39

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d) The territoriality principle, the seat of the arbitration and the lex arbitri. 17 According to the interpretation provided by the U.S. Supreme Court, the FAA applies in both federal and state courts.40 The application of the FAA as such is also not strictly limited to arbitrations seated within the United States. While several provisions of the FAA do apply only where the arbitration is seated in the United States, some provisions apply irrespective of the place of arbitration. For example, § 206 FAA provides that U.S. 29 For an overview, cf. http://www.adr.org. Particular sets of rules exist inter alia for commercial, construction, securities, labour consumer and sports arbitration. 30 The amended IDRP became effective on 1 June 2014. According to the ICDR International Arbitration Reporter September 2013, Vol. 4, (3) the number of international cases has increased from approximately 600 cases in 2007 to approximately 1000 in 2012. 31 Cf. http://www.jamsadr.com; JAMS International Arbitration Rules (effective 1 September 2016) (JAMS Rules). 32 Cf. http://www.cpradr.org. These rules include the Rules for Non-Administered Arbitration of International Disputes (effective 1 March 2018) (CPR Rules) and the Rules for Administered Arbitration of International Disputes (effective 1 March 2019). 33 Cf. http://www.adrforum.com. 34 Cf. http://www.finra.org/ArbitrationAndMediation. Arbitration under FINRA is governed by the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes. 35 Cf. http://www.smany.org. The Maritime Arbitration Rules are effective from 10 February 2016. 36 Cf. http://www.cidra.org. Where the parties have agreed to submit their dispute to arbitration under CIDRA, the Arbitration Rules of CIDRA (Revised and Effective as of 1 July 2005) will apply. 37 Cf. http://www.iccwbo.org; ICC Arbitration Rules (in force as from 1 January 2021) (ICC Rules). 38 Cf. https://icsid.worldbank.org. 39 On substantive protection under investment treaties cf. supra C. 40 Supra mn. 5.

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courts can direct that the arbitration be held in accordance with the arbitration agreement even if the place of arbitration is outside the United States. 18 The law applicable to the arbitration (lex arbitri) is sometimes sub-divided into rules relating to “internal” aspects of the arbitration on the one hand and “external” aspects on the other. Internal aspects relate to the arbitration as such (e. g. the number of arbitrators or the availability of provisional relief or discovery in arbitration). External aspects, by contrast, concern the competence of national courts, e. g. in respect of the availability of provisional relief, judicial aid in the gathering of evidence or the setting aside (vacation) of arbitral awards. The courts at the place of the arbitration have primary jurisdiction over these external aspects. 19 The parties may choose a law other than that of the seat as the law governing the arbitration.41 If they do so, the arbitral seat retains competence over external matters (i. e. the relationship between the courts and the arbitration), while the law that has been chosen to control procedural issues governs any internal matters.42 In most cases, both internal and external matters are governed by the law of the seat of the arbitration. If the parties have not chosen the seat of the arbitration (or arbitral rules that provide for a mechanism to determine the seat), the FAA only provides guidance for arbitrations within the ambit of the Panama Convention but remains silent on arbitrations under the NYC.43 Some US courts have held that they have the power to order that arbitration be conducted in their own district even for arbitrations under the NYC.44 e) Arbitration and other ADR mechanisms (mediation, expert determination). Most arbitration institutions, such as the AAA, JAMS and NAF, provide alternative dispute resolution (ADR) mechanisms, in particular mediation services. The AAA arbitration rules even provide that the parties must attempt to mediate their dispute.45 21 Many U.S. companies refer to dispute resolution programmes in their standard contracts with customers and employees. They provide for various forms of ADR, commonly including mediation, non-binding arbitration, expert determination or appraisals. Some U.S. courts have directly applied the FAA to agreements providing for mediation and other ADR mechanisms.46 In more recent decisions however, courts have distinguished arbitration from other forms of ADR on the basis of the adjudicatory character of arbitration, and have held that the FAA applies only to arbitration leading to a final and binding award.47 20

41 Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 479 (1989). 42 Cf. Bermann, Ascertaining the Parties’ Intentions in Arbitral Design, 113 Penn St. L. Rev. 1013–1029 (2009). 43 Freyer, (2006) IPBA Journal 29, 32; Sahani, Comparing the Federal Arbitration Act and the UNCITRAL Model Law on International Commercial Arbitration, in: Shore et al. (eds), International Arbitration in the United States, 2017, 15, 26. 44 Bauhinia Corp. v. China National Machinery & Equipment Import & Export Corp., 819 F.2d 247 (9th Cir 1987); Clarendon Nat. Ins. Co. v. Lan, 2001 WL 849383 (S.D.N.Y. 2001). 45 Rule 9 of the AAA Commercial Arbitration Rules and Mediation Procedures (Rules amended and effective 1 October 2013). 46 Cf. Wolsey, Ltd v. Foodmaker, Inc., 144 F.3d 1205 (9th Cir. 1998) and Fisher v. GE Medical Systems, 276 F. Supp. 2 d 891 (M.D. Tenn. 2003) in respect of non-binding AAA arbitration; CB Richard Ellis, Inc. v. American Environ. Waste Management, 98-CV-4183, 1998 WL 903495 (E.D.N.Y. Dec. 4, 1998); Holick v. Cellular Services of N.Y., 559 F. App’x 40 (2nd Cir. 2014) all in respect of mediation. 47 Omni Tech Corp. v. MPC Solutions Sales LLC, 432 F.3d 797, 800 (7th Cir. 2005) in respect of binding expert determination; Publishing Co., LLC v. Management Planning, Inc., 390 F.3d 684, 690 (10th Cir. 2004) in respect of an appraisal procedure that is not binding in all circumstances; Harrison v. Nissan Motor Corp., 111 F.3d 343, 350 (3rd Cir. 1997) in respect of an informal dispute resolution procedure.

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2. The guiding principles of U.S. arbitration law Over the past few decades, the U.S. Supreme Court has adopted a highly favourable 22 approach towards arbitration and taken the view that, in enacting the FAA, “Congress declared a national policy favouring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.”48 The U.S. Supreme Court has thereby emphasized that “courts must place arbitration agreements on an equal footing with other contracts”49 and that the FAA “requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms.”50 Accordingly, the U.S. Supreme Court has found that the FAA pre-empts any legal rules “hinging on the primary characteristic of an arbitration agreement”.51 Under this approach, party autonomy is the primary legal concept on which arbitration is based. Under the FAA, arbitration is a matter of “consent, not coercion.”52 The parties determine the scope of the arbitration agreement and are generally free to structure the arbitral procedure as they see fit.53

II. The arbitration agreement The arbitration agreement is the basis of the arbitral proceedings and vests the arbitral 23 tribunal with the power to decide the dispute submitted to it. The parties can either submit an existing dispute to arbitration or agree that future disputes be arbitrated. A valid arbitration agreement divests the courts of the jurisdiction that they would 24 otherwise have over matters falling within the scope of the arbitration agreement. If a claim covered by a valid arbitration agreement is brought to court, the court must, on the application of a party, stay the court proceedings until completion of the arbitration in accordance with the terms of the agreement.54 If an arbitral award is rendered without a valid arbitration agreement, the arbitral 25 award can be set aside (vacated) and can be refused enforcement.55

1. The doctrine of separability (severability) If the arbitration agreement were not treated as separate from the main contract in 26 which it is contained, the jurisdiction of the arbitral tribunal would stand and fall with the enforceability of the main contract. This would provide parties opposing arbitration with an effective tool with which to obstruct the arbitral process, by merely alleging that 48 Southland Corp. v. Keating, 465 U.S. 1, 10 (1985). Cf. also Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983). 49 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 1745; Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006); DIRECTV, Inc. v. Imburgia, 577 U.S. __, 136 S. Ct. 463 (2015). 50 Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478 (1989). 51 Kindred Nursing Centers, L. P. v. Clark, 581 U.S. __, 137 S. Ct. 1421 (2017). In this case, the U.S. Supreme Court has found Kentucky’s “clear statement rule” to be incompatible with the FAA. According to the rule, a valid power of attorney to enter into an arbitration agreement required that the “agent’s authority to waive his principal’s constitutional right to access the courts and to trial by jury must be clearly expressed by the principal” (see Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015) at 331). 52 Volt Information Sciences, Inc., 489 U.S. 468, 479. 53 This is illustrated by several U.S. Supreme Court decisions on the availability of class arbitrations. Cf. Stolt-Nielsen SA v. Animal Feeds International Corp., 559 U.S. 662 (2010); American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 133 S. Ct. 2304 (2013); see also below at mn. 107. 54 § 3 FAA; article II(3) NYC. 55 § 10(a)(4) FAA; article V(1)(a) NYC. Infra mn. 124.

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the main contract is unenforceable. In order to shield the arbitral process from such manoeuvres, the courts have developed the doctrine of separability (or severability), pursuant to which the agreement to arbitrate is independent of the main contract in the sense that allegations of the invalidity of the main contract do not necessarily affect the arbitration clause. Rather, the party opposing arbitration must direct its challenge specifically to the arbitration clause.56

2. The law applicable to the arbitration agreement 27

Pursuant to § 2 FAA, an arbitration agreement “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Arbitration agreements are hence governed by the general principles of contract law. In the United States, contract law is a matter of state law. There is no nationwide federal statutory contract law.

3. The validity of the arbitration agreement (capacity, arbitrability, form) a) Capacity to conclude arbitration agreements. The FAA does not, in principle, limit the capacity to conclude arbitration agreements (subjective arbitrability) beyond the requirements of the respective state law applicable to any contract. To the extent that state law is not of a general nature, but specifically limits the capacity to conclude arbitration agreements, such limitations are pre-empted by the FAA. 29 § 1 FAA creates one exception to the above principle. It provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce”. However, as stated above, this exception is strictly limited to interstate transportation workers and is not applicable within the scope of the NYC.57 30 Public bodies, government agencies and publicly held companies are in principle bound by arbitration agreements in the same way as private parties. Foreign states, agencies, and instrumentalities may not evade an arbitration agreement entered into with a private party merely by relying on the concept of sovereign immunity.58 28

b) Arbitrability. Generally speaking, (subject-matter or objective) arbitrability establishes which disputes can be submitted to arbitration. In the United States however, the term arbitrability has an additional connotation: it relates to the broader question whether the parties have submitted a particular dispute to arbitration. It thus not only comprises questions of arbitrability, but also, among others, the validity and enforceability of the arbitration agreement. 32 The term arbitrability in the United States is closely related to the question who – the courts or the arbitral tribunal – decides the so-called gateway matters – in particular whether or not the arbitral tribunal has jurisdiction. In the absence of a clear and unmistakable agreement by the parties, the courts decide on these matters,59 in which case the procedural remedy is typically a motion to compel arbitration pursuant to § 4 FAA. 31

56 Cf. Prima Paint Corp. v. Flood & Conklin Mfg Co., 388 U.S. 395, 402–403 (1967); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 449 (2006); Huffman v. The Hilltop Cos., LLC, 747 F.3d 391, 398 (6th Cir. 2014). It is, however, sufficient to argue that no contract has been made at all, see LoRoad, LLC v. Global Expedition Vehicles, LLC, No. 14-2636 (8th Cir. 1 June, 2015). 57 Supra mn. 12. 58 Cf. Foreign Sovereign Immunities Act of 1976, 28 USC, § 1605(6). 59 Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). On 15 June 2020, the Supreme Court granted certiorari in Henry Schein v. Archer & White Sales, Docket No. 19–963, to decide whether, under the FAA, a “carve out” in an arbitration agreement exempting certain claims from the scope of the agreement negates a provision clearly delegating questions of arbitrability to the arbitrator.

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Pursuant to the interpretation provided by the U.S. Supreme Court, the FAA does not 33 contain any implied limitation of the arbitrability of statutory rights.60 Rather, it falls to the party opposing arbitration to show that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue. The intent must be “discernible from the text, history, or purposes of the statute.”61 In respect of bankruptcy related claims, it has been held that, insofar as “core proceedings”62 arising under the Bankruptcy Code63 are concerned, a bankruptcy court could override an arbitration agreement if it found that the proceedings were based on provisions of the Bankruptcy Code that “inherently conflict” with the FAA or that arbitration of the claim would “necessarily jeopardize” the objectives of the Bankruptcy Code.64 Where referral of the matter to arbitration is not excluded as such, the party 34 opposing arbitration must present “well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds ‘for the revocation of any contract’”65 and would operate “as a prospective waiver of a party’s right to pursue statutory remedies.”66 This liberal approach to arbitrability has been heavily criticized by various interest groups. In the different versions of the Arbitration Fairness Act (AFA) introduced in Congress between 2007 and 2013, repeated attempts were made to amend the FAA and limit the scope of disputes capable of being submitted to arbitration.67 So far, however, these legislative initiatives have not been successful, and there is currently virtually no limitation to subject-matter arbitrability.68 c) Form of the arbitration agreement. Both the FAA and the NYC provide that 35 arbitration agreements must be made in writing,69 however the arbitration agreement 60 Cf. Scherk v. Alberto-Culver Company, 417 U.S. 506 (1974) in respect of claims under the Securities Exchange Act of 1934, 15 USC § 78 a et seq.; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 650 (1985) in respect of antitrust claims under the Sherman Antitrust Act of 1890, 15 USC § 1–7; Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987) in respect of the Racketeer Influenced and Corrupt Organizations Act 18 USC 96 §§ 1961–1968 (RICCO): Epic Systems Corp. v. Lewis, 584 U.S. ___, 138 S. Ct. 1612 (2018) in respect of individual arbitrations between employers and employees under the National Labor Relations Act of 1935. 61 Shearson/American Express, Inc., 482 U.S. 220, 227. In this respect, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Pub. L. 111–203, H.R. 4173; 124 Stat. 1326) (Dodd-Frank Act) excludes pre-dispute arbitration agreements in respect of certain mortgage and credit contracts and excludes the arbitrability of certain disputes related to whistle-blowing. Furthermore, the newly created Consumer Financial Protection Bureau (CFBP) is investigating whether to expand these limitations. The impact of these limitations on international arbitration is, if at all, limited. 62 28 USC § 157(b)(1). 63 11 USC §§ 101–1532. 64 Cf. MBNA America Bank v. Hill, 436 F.3d 104, 108 (2nd Cir. 2006); In re U.S. Lines, Inc., 197 F.3d 631, 640 (2nd Cir. 1999). Cf. also In re White Mountain Mining Co., 403 F.3d 164, 169 (4th Cir. 2005); Hays and Co. v. Merrill Lynch, 885 F.2d 1149, 1161 (3rd Cir. 1989); In re National Gypsum, 2002 WL 1359715 (N.D.Tex. 2002). For reasoning against a different standard for “core” and “non-core” matters, see Mintze v. Am. Gen. Fin. Serv. (In re Mintze), 434 F.3d 222, 229 (3rd Cir. 2006). 65 Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 483 (1989) citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 650 (1985). 66 American Express Company v. Italian Colors Restaurant, 570 U.S. 228, 133 S. Ct. 2304, 2310 (2013), citing Mitsubishi. 67 Under the currently introduced bill, namely S. 630 – 116th Congress (2019–2020) (Arbitration Fairness for Consumers Act), pre-dispute arbitration agreements in respect of future consumer financial product or service disputes as well as agreements and practices that interfere with the right of individuals and small businesses to participate in a joint, class, or collective action related to a consumer financial product or service dispute would be prohibited. 68 Niedermaier, (2014) 1 ZDAR 12 (15). 69 § 2 FAA; article II NYC; article 1 IAICA.

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need not necessarily be signed in order to be enforceable.70 According to the predominant view, an enforceable arbitration agreement can be made by way of email or other electronic communication.71 An arbitration agreement cannot, however, be implied in fact or law.72 The U.S. Supreme Court has held that, to the extent that state laws provide for stricter form requirements, such requirements violate the FAA and are therefore pre-empted by federal law.73 36

d) Termination of the arbitration agreement. Under U.S. law, the question whether the arbitration agreement can be terminated is a matter of the general principles of the respective state contract law. The parties may at any time mutually agree to terminate the arbitration agreement. By contrast, a unilateral termination of the arbitration agreement will only be available where the arbitration agreement as such is vitiated by “grounds as exist at law or in equity for the revocation of any contract” such as mistake, duress, undue influence or oppression.74 In recent years, parties opposing arbitration have increasingly invoked the doctrine of unconscionability.75

4. The scope and the interpretation of the arbitration agreement 37

a) Personal scope of the arbitration agreement. As mentioned above, the U.S. Supreme Court has repeatedly emphasized that arbitration is a matter of contract and that “a party cannot be required to submit to arbitration a dispute which he has not agreed to submit.”76 In principle therefore, only the signatories to an arbitration agreement are bound to arbitrate. There are exceptions to this principle however, where the courts have found that non-signatories can be bound by an arbitration agreement:77 – Agency: As a matter of general principles of contract law, an arbitration agreement signed by an agent on behalf of the principal only binds the latter.78 – Incorporation by reference: Parties can incorporate an arbitration agreement into their contract by reference.79 U.S. courts apply a two-prong test by asking whether (i) the arbitration agreement has been validly incorporated and (ii) the referenced arbitration agreement covers the dispute, including the non-signa70 Cf. Tinder v. Pinkerton Sec., 305 F.3d 728, 736 (7th Cir. 2002). For a strict signing requirement on the basis of a textual analysis of article II(2) NYC, see Kahn Lucas Lancaster, Inc. v. Lark International Ltd, 186 F.3d 210, 214–215 (2nd Cir. 1999). 71 Cf. Campbell v. Gen. Dynamics Govt. Sys. Corp., 407 F.3d 546, 559 (1st Cir. 2005) (“We caution that this holding should not be read as a general denunciation of e-mail as a medium for contract formation in the workplace. This is a close case, and our holding here is tied to its specific facts.”) and Glencore Ltd v. Degussa Engineered Carbons L.P., 848 F.Supp. 2d 410 (436–437) (S.D.N.Y. 2012), holding “back-andforth email” exchange to be “in writing”. See also Electronic Signatures in Global and National Commerce Act of 2000 (E-Sign Act) 15 USC 96 § 7001(a). 72 Cf. Maritima De Ecologia, S.A. de C.V. v. Sealion Shipping Ltd, 2011 WL 2671541 *4–5 (S.D.N.Y.). 73 Doctors Associates, Inc. v. Casarotto, 517 U.S. 681, 683 (1996). 74 § 2 FAA. The party opposing arbitration must direct its challenge specifically to the arbitration clause, see supra mn. 28. 75 Niedermaier, (2014) 1 ZDAR 12 (16); Rent-A-Center v. Jackson., 561 U.S. 63 (2010); Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005); DiMercurio v. Sphere Drake Ins. plc, 202 F.3d 71 (1st Cir. 2000); Torres v. Simpatico, Inc., 2015 WL 1314863 (8th Cir. 25 Mar. 2015). 76 United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960); Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 478 (1989). 77 There is disagreement as to whether these exceptions are based on the application of a federal arbitration policy or the respective state law, cf. R.J. Griffin & Co. v. Beach Club II Homeowners Ass’n, 384 F.3d 157, 160 n. 1 (4th Cir. 2004). 78 Cf. Restatement (Second) of Agency, § 1(1) (1958). 79 Upstate Shredding, LLC v. Carloss Well Supply Co., 84 F.Supp. 2d 357, 366 (N.D.N.Y. 2000); Ford v. Antwerpen Motorcars, Ltd, 2015 WL 3937607 (Md. 29 June 2015).

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tories.80 Where the non-signatory’s agreement is not clearly incorporated by reference, courts will be reluctant to compel the non-signatory to arbitrate.81 – Assumption: Where a non-signatory assumes a contract containing an arbitration clause or receives the assignment of such a contract, U.S. courts typically compel the non-signatory assignee to arbitrate. Some courts require a manifestation of intent by the assignee to be bound by the arbitration agreement.82 – Alter ego/piercing the corporate veil: U.S. courts have pierced the corporate veil by applying the alter ego doctrine so as to bind corporations by arbitration agreements entered into by their subsidiaries when their conduct demonstrates a virtual abandonment of separateness.83 – Estoppel: Persons claiming a benefit from a contract containing an arbitration agreement may be equitably estopped from refusing to arbitrate.84 There is a circuit split as to whether the NYC permits a non-signatory to an arbitration agreement to compel arbitration based on the doctrine of equitable estoppel.85 In a recent decision, the U.S. Supreme Court has held that the NYC does not conflict with domestic equitable estoppel doctrines that permit the enforcement of arbitration agreements by non-signatories.86 b) Substantive scope of the arbitration agreement. In accordance with the princi- 38 ple of party autonomy, the parties determine the substantive scope of their arbitration agreement. Where there is uncertainty as to whether a dispute is covered by the arbitration agreement, this issue must be resolved by way of interpretation of the arbitration agreement. The U.S. Supreme Court has held in several instances that, particularly in an international context, the parties to an arbitration agreement do not normally intend to have their disputes resolved in multiple fora, and that extensive judicial litigation on the scope of arbitration would undermine the effectiveness of arbitration.87 Consequently, U.S. courts regularly find, when there is no indication to the contrary, that arbitral tribunals have the power to decide not only on contractual claims, but also on statutory claims arising out of or in connection with the transaction.88 80 JS&H Const. Co. v. Richmond County Hospital Authority, 473 F.2d 212, 214–215 (5th Cir. 1973); Tillman v. Macy’s, Inc., 735 F.3d 453 (6th Cir. 2013). 81 Grundstad v. Ritt, 106 F.3d 201 (7th Cir. 1997); Dakota Foundry, Inc. v. Tromley Indus. Holdings, Inc., 737 F.3d 492 (8th Cir. 2013); Walker v. Builddirect.com Technologies, Inc., WL 3429364 (10th Cir. 2015). 82 Thomson-CSF, SA v. Am. Arbitration Ass’n, 64 F.3d 773, 777 (2nd Cir. 1995); Fyrnetics (Hong Kong) Ltd v. Quantum Group, Inc., 293 F.3d 1023, 1029 (7th Cir. 2002). 83 Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347, 358–359 (5th Cir. 2003); JJ. Ryan & Sons v. Rhone Poulenc Textile, SA., 863 F.2d 315, 320 et seq. (4th Cir. 1988); Thomson-CSF, SA., 64 F.3d 777; Carte Blanche (Singapore) Pte Ltd v. Diners Club Intl, Inc., 2 F.3d 24, 26 (2nd Cir. 1993). 84 JJ. Ryan & Sons 863 F.2d 315, 320–21; Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir. 1993). 85 In favour of applying equitable estoppel to arbitration agreements under the NYC: Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., 526 F.3d 38 (1st Cir. 2008); Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355 (4th Cir. 2012); Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000). Against the doctrine’s application to arbitration agreements under the NYC: Yang v. Majestic Blue Fisheries, LLC, 876 F.3d 996 (9th Cir. 2017); Outokumpu Stainless USA, LLC v. Converteam SAS, No. 17-10944 (11th Cir. 2018). Regarding the applicability of estoppel doctrine in the context of class actions, see O’Hanlon v. Uber Techs., Inc., No. 2:19-cv-00675, 2019 BL 434840 (W.D. Pa. Nov. 12, 2019). 86 GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 590 U.S. ____ (2020). 87 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985). 88 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985); Scherk v. AlbertoCulver Company, 417 U.S. 506 (1974); In re Remicade (Direct Purchaser) Antitrust Litigation (2019 WL 4383407 (3d Cir. Sep. 13, 2019) with respect to statutory antitrust claims.

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c) Pathological arbitration clauses. Where it is clear that the parties have agreed to submit their dispute to arbitration instead of court litigation, U.S. courts are keen to enforce arbitration agreements even if the wording of an arbitration agreement is unclear in respect of certain aspects of the arbitration. For example, where the arbitration agreement does not provide for a place of arbitration, U.S. courts regularly compel arbitration in the district where the motion to compel arbitration has been filed.89 Similarly, uncertainties deriving from imprecise references to arbitral institutions can, in most cases, be remedied by way of interpretation. The situation, in principle, is different, however, when it is not evident that the parties intended to submit to final and binding arbitration.90 40 Time consuming and costly disputes arising from pathological clauses can largely be avoided by drafting the arbitration agreement on the basis of model arbitration clauses.91 Many U.S. arbitral institutions provide arbitration rules and corresponding model clauses that are adapted to particular industry needs. 39

5. The effect of the arbitration agreement and Kompetenz-Kompetenz The arbitration agreement vests the arbitral tribunal with the jurisdiction to decide disputes falling under the agreement (prorogation) and deprives the otherwise competent courts of jurisdiction (derogation). If the arbitral tribunal lacks jurisdiction, the award can be set aside (vacated) and enforcement of the award can be refused.92 The question whether the arbitral tribunal has jurisdiction is therefore of utmost importance. 42 In the United States, matters related to the question of jurisdiction of the arbitral tribunal are referred to as gateway matters. In this respect a distinction can be drawn between those matters that are properly within the jurisdiction of the arbitrators and those that are properly within the jurisdiction of the courts. 41

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a) Enforcing arbitration clauses and Kompetenz-Kompetenz. Arbitration agreements can be enforced upon so-called motions to compel. Pursuant to § 4 FAA, a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate may petition the competent courts for an order directing that an arbitration proceed in the manner provided for in the agreement.93 As regards arbitrations within the scope of the NYC or the IAICA, §§ 206 and 303 FAA provide that the courts may direct that the arbitration be held in accordance with the arbitration agreement “at any place therein provided for, whether that place is within or without the United States.” While a motion to compel arbitration can thus be made regardless of the place of arbitration,94 U.S. courts, 89 Jain v. de Méré, 51 F.3d 686 (7th Cir. 1995); Control Screening LLC v. Technological Application & Production Co., 687 F.3d 163 (3rd Cir. 2012). 90 See however Travelport Global Distribution Systems B.V. v. Bellview Airlines Ltd, No. 12 Civ. 3483 (DLC) 2012 WL 3925856 (S.D.N.Y. Sep. 12, 2012) (construing an arbitration agreement pursuant to which the dispute “may be submitted to arbitration in the United States” as to provide for binding arbitration). 91 Patocchi/Niedermaier, in: Schütze (ed.), Institutional Arbitration, 2013, Introduction, mn. 23. 92 Infra mn. 133. 93 A decision denying a motion to compel arbitration can be appealed, § 16(a)(1)(B) FAA. The standard of review depends on whether the lower court made a summary judgment or held a bench or jury trial. 94 The technical requirements in Chapter 1 of the FAA apply to international proceedings by virtue of the residual application provisions of Chapters 2 and 3. When an order to arbitrate has been issued for all claims brought before a court, courts are split as to whether the filed action should be dismissed or stayed pending the outcome of the arbitration. For a (discretionary) dismissal, see Choice Hotels International, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707 (4th Cir. 2001); Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th Cir. 1992); Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635 (9th Cir. 1988). For a stay of proceedings, see Katz v. Cellco Partnership, 2015 WL 4528658 (2nd Cir. July 28, 2015); Lloyd v. Hovensa, LLC, 369 F.3d 263 (3rd Cir. 2004); Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953 (10th Cir. 1994).

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referring to the reciprocity declaration made by the United States, have refused to compel arbitration in the territory of non-contracting states.95 The mirror image of the motion to compel is the motion to stay the proceedings. Pursuant to § 3 FAA, “[i]f any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.”96 This is in line with article II(3) NYC which provides that “[t]he court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.” The FAA does not contain a provision providing for motions to stay arbitration proceedings, however U.S. courts have accepted that they have such authority to order a stay where appropriate.97 Under the above framework, it is not evident who finally decides whether the arbitral tribunal has jurisdiction – the court or the arbitral tribunal. In First Option Chicago, Inc. v. Kaplan, the U.S. Supreme Court held that questions of arbitrability (in its wider sense, i. e. including the question whether the dispute falls within the scope of a valid arbitration agreement)98 are to be resolved by courts rather than arbitral tribunals unless the agreement to arbitrate provides that the arbitral tribunal has the authority to decide the matter.99 According to the Court, there must be “clear and unmistakable” evidence that the parties intended to refer the decision to an arbitral tribunal (Kompetenz-Kompetenz).100 An incorporation by reference of the UNCITRAL Arbitration Rules has been considered as sufficiently clear evidence for the delegation of jurisdiction to the arbitral tribunal.101 Most modern arbitration rules contain delegation provisions that meet this threshold.102 The U.S. Supreme Court has further held that where a party directly challenges the enforceability of the arbitration agreement, the delegation clause is to be seen as separate and independent from the rest of the arbitration agreement.103 Therefore, unless the delegation clause is directly challenged, it will be enforced, leaving the 95 Article I(3) NYC; Cf. DaPuzzo v. Globalvest Mgmt. Co., 263 F.Supp. 2d 714, 726 (S.D.N.Y. 2003); National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326, 331 (5th Cir. 1987). 96 This provision is also applicable in international disputes through the residual application clauses of Chapters 2 and 3. To the extent that a party files an action that involves both arbitrable and nonarbitrable claims, the court may compel the arbitration of some disputes and stay litigation of the remaining issues pending the outcome of the arbitration. Similarly, where a plaintiff brings claims against multiple parties but only some of the defendants are subject to an arbitration agreement, the court may compel the arbitration of some disputes while staying the remaining claims. A decision refusing any stay of action pursuant to § 3 FAA can be appealed, § 16(a)(1)(A) FAA. 97 Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2003); Satcom Int’l Group PLC v. Orbcomm Int’l Partners, L.P., 49 F.Supp. 2 d 331, 342 (S.D.N.Y. 1999); Farrell v. Subway Int’l, B.V., No. 11 Civ. 08 (JFK), 2011 WL 1085017 at *2 (S.D.N.Y. Mar. 23, 2011). 98 Supra mns 33 et seq. 99 First Option Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995). 100 First Option Chicago, 514 U.S. 938, 944. 101 Oracle America, Inc. v. Myriad Group A. G., 724 F.3d 1069 (9th Cir. 2013) referring to article 23(1) of the UNCITRAL Arbitration Rules. 102 Article 19(1) IDRP; article 6(3) and (5) ICC Rules; article 18.1 JAMS Rules; Rule 8.1 CPR Rules. 103 Rent-A-Center v. Jackson, 561 U.S. 63 (2010).

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decision on the challenge of the arbitration agreement as a whole to the arbitral tribunal.104 In a recent decision, the U.S. Supreme Court rejected the approach of some circuit courts to “decide the arbitrability question themselves if the argument that the arbitration agreement applies to the particular dispute is ‘wholly groundless’”.105 Case law is split, however, as to whether, in the absence of a delegation clause, it is for the arbitral tribunal or the court to decide the questions whether (i) the parties have waived the right to arbitrate, (ii) a party is estopped from relying on the right to arbitrate or (iii) there was proper notice of arbitration.106 According to the majority view, these questions of procedural arbitrability are to be decided by the arbitral tribunal. This also applies to the question whether the claim is barred by res judicata.107 The U.S. Supreme Court has not yet decided whether the availability of class arbitration is a matter of arbitrability.108 In a recent decision relating to an investment arbitration, the U.S. Supreme Court held that the above principles also apply where the arbitration is based on a bilateral investment treaty requiring the investor to submit its dispute to the local courts and wait 18 months before seeking arbitration. Accordingly, the Court held that the question whether arbitration could be commenced was for the arbitrator to decide.109 48 In order to prevent an opposing party from commencing or continuing parallel proceedings in breach of an arbitration clause, parties in the United States have the possibility of applying for anti-suit injunctions directed against the opposing party, not the foreign court.110 In order to obtain an anti-suit injunction from a U.S. court, an applicant must generally show that: – the parties to the foreign litigation are the same as those bound by the agreement to arbitrate;111 – the foreign litigation involves the same issues as would be resolved under the arbitration agreement; – irreparable injury or grave hardship would occur absent the injunction; and – the public policy of the U.S. forum warrants a grant of injunctive relief.112 In light of the substantial weight given to the principle of international comity, U.S. courts grant applications for anti-suit injunctions “only with care and great restraint.”113 104

Rent-A-Center, 561 U.S. 63, 72–73. Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. ___, 139 S. Ct. 524 (2019). 106 Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 260 et seq. 107 Chiron v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 1130 (9th Cir. 2000); National Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129 (2nd Cir. 1996); John Hancock Mutual Life Ins. Co. v. Olick, 151 F.3d 132 (3rd Cir. 1998). 108 Cf. Green Tree Financial Corp v. Bazzle, 539 U.S. 444, 452–453 (2003); left open in Lamps Plus Inc. v. Varela, 586 U.S. ___, 139 S. Ct. 1407 (2019); see also infra mn. 228. 109 BG Group plc v. Republic of Argentina, 572 U.S. 25, 134 S. Ct. 1198, 1210 (2014). Cf. Johnson v. Western & Southern Life Ins. Co., No. 14-3183 (7th Cir. April 14, 2015) for an opinion of the 7th Circuit confirming the presumption that the timeliness of an arbitration demand is for the arbitrator to decide. 110 Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Technologies, Inc., 369 F.3d 645, 652 (2nd Cir. 2004); China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35 (2nd Cir. 1987). 111 Cf. LAIF X SPRL v. Axtel, SA de CV, 390 F.3d 194, 199–200 (2nd Cir. 2004); Paramedics Electromedicina Comercial, Ltda., 369 F.3d 645, 652–53. 112 The precise threshold as to the factors to be applied, however, differs among the different Circuits, see Bailey Shipping Ltd v. American Bureau of Shipping, No. 12 Civ. 5959 (KPF), 2013 WL 5312540 (S.D. N.Y. Sep. 23, 2013). 113 China Trade and Dev. Corp., 837 F.2d 33, 37. See also Ibeto v. Petrochem. Indus. Ltd v. M/T “Beffen”, 475 F.3d 56, 64–65 (2nd Cir. 2007); Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 363–4 (5th Cir. 2003); Bailey Shipping Ltd, No. 12 Civ. 5959. Under very limited conditions, a party may seek an ‘anti-anti-suit injunction’ prohibiting the other party from seeking an anti-suit injunction in parallel proceedings, see Teck Metals, Ltd v. Certain Underwriters at Lloyd’s, London, No. 05-411, 2010 WL 252804, at *1 (E.D. Wash. Jan. 19, 2010). 105

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Failure to comply with an anti-suit injunction may be treated as contempt of court and sanctioned by way of a fine.114 On very few occasions, U.S. courts have granted anti-arbitration injunctions prevent- 49 ing the initiation or continuation of an arbitration where there was no valid and binding arbitration agreement in existence.115 b) Preclusion of jurisdictional defences. The FAA does not indicate until what point 50 in time parties may invoke the remedies in §§ 3 and 4 FAA, i. e. until when they can request a state court to stay litigation and compel arbitration or until when they can request an arbitral tribunal to decline jurisdiction in favour of courts.116 § 3 FAA merely states that the applicant for the stay may not be “in default in proceeding with such arbitration.” Article II(3) NYC does not contain any time limit either and defers instead to the national laws of the contracting states. In view of the strong policy favouring arbitration, there is a heavy burden on the non- 51 moving party to prove default.117 A determining factor is whether the moving party “so substantially utilizes the litigation machinery that to subsequently permit arbitration would prejudice the party opposing the stay.”118 Some courts have reached similar conclusions by applying the doctrine of waiver.119 By the same token, it is widely accepted that a party who participated in the 52 arbitration and did not object to the jurisdiction of the arbitral tribunal is precluded from invoking the lack of jurisdiction at a later stage, in particular in enforcement proceedings.120 Beyond this basic principle however, no uniform threshold has evolved thus far.121 It has been held that a party may not wait until the arbitral tribunal has rendered the arbitral award, even if it did not participate in the arbitration.122 However, it has also been held that a party need not apply to the courts “to try to enjoin or stay an arbitration proceeding in order to preserve its objection to jurisdiction.”123 c) Binding effect of state court decisions on jurisdiction of the arbitral tribunal. 53 Where a party to court proceedings invokes an arbitration agreement and the court then refers the parties to arbitration, the party relying on the arbitration agreement is American Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 714 (5th Cir. 2002). American Express Financial Advisors Securities Litigation, 672 F.3d 113, 140 (2nd Cir. 2011); Société Géneralé de Surveillance, S.A. v. Raytheon European Management and System Co., 643 F.2d 863, 867–868 (1st Cir. 1981); Certain Underwriters at Lloyd’s v. Bristol-Myers Squibb Co., 51 F.Supp. 2d 756, 758 (E.D. Tex. 1999). Due to the limited amount of case law, the precise threshold remains unclear. 116 For a detailed discussion, see Reisberg, 13 Int’l Arb. L. Rev. 148 (2010). 117 Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690, 702 (4th Cir. 2012); Stedor Enters., Ltd v. Armtex, Inc., 947 F.2d 727, 730 (4th Cir. 1991). 118 Rota-McLarty, 700 F.3d 727, 730 (no prejudice where the motion to compel arbitration was 6.5 months delayed and the applicant had participated in discovery); Louisiana Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626 F.3d 156, 159 (2nd Cir. 2010). 119 Healy v. Cox Communications, Inc., 790 F.3d 1112 (10th Cir. 2015); Garcia v. Wachovia Corp., 699 F.3d 1273 (11th Cir. 2012) (waiver where motion to compel arbitration was more than one year delayed and applicant had substantially participated in discovery); SuperMedia v. Affordable Electric, Inc., 565 F. App’x 144 (3rd Cir. 2014); In re Pharmacy Benefit Managers Antitrust Litig., 700 F.3d 109 (3rd Cir. 2012). 120 Jones Dairy Farm v. Local No. P-1236, United Food and Commercial Workers International Union, AFL-CIO, 760 F.2d 173, 175–176 (7th Cir. 1985); Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1105 (2nd Cir. 1991). See infra mns 147 et seq. 121 Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1279 et seq. (9th Cir. 2006). See also ConnTech Dev. Co. v. Univ. of Conn. Educ. Props., Inc., 102 F.3d 677, 685 (2nd Cir. 1996) (waiver where a party objected after participating in 45 days of arbitration hearings). 122 Nagrampa v. MailCoups, Inc.; Comprehensive Accounting Corp. v, Rudell, 760 F.2d 138, 140 (7th Cir. 1985). 123 Cf. Kaplan v. First Options of Chicago Inc., 19 F.3d 1503, 1510 (3rd Cir. 1994). 114 115

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generally prevented from subsequently disputing the validity of the arbitration agreement, on the basis of equitable estoppel. 54 Where a foreign court has made a decision on the jurisdiction of an arbitral tribunal, this does not preclude a U.S. court from examining jurisdiction de novo. Wherever a jurisdictional dispute arises out of an arbitration agreement, U.S. courts, by default, will examine the dispute on an independent and de novo basis without regard, inter alia, to the existence of foreign judicial proceedings considering the same jurisdictional issue.124

III. The arbitral tribunal and the conduct of the arbitral proceedings 55

As the FAA contains very few provisions regarding procedural matters,125 particular importance is placed upon the parties’ agreement on these matters, be it in the arbitration agreement or, as will more often be the case, by reference to arbitration rules. In cases in which the parties have not addressed a particular issue one way or the other, the gap must be filled by the arbitral tribunal or the courts on the basis of the scarce legal framework set by the lex arbitri. A similar situation arises where a provision agreed by the parties is incompatible with mandatory rules.

1. The arbitral tribunal, impartiality and independence of the arbitrators One of the few aspects of the arbitral procedure that is expressly addressed in the FAA is the constitution of the arbitral tribunal. Pursuant to § 5 FAA, which also applies to international arbitration,126 the method by which the arbitral tribunal is constituted depends primarily on the parties’ agreement. There are no mandatory requirements as to the number or qualification of arbitrators.127 In the event that the parties have not agreed on the number of arbitrators, § 5 FAA provides for the appointment of a single arbitrator. 57 Where the parties fail to constitute the arbitral tribunal in accordance with the agreed procedure128 or have not agreed on a particular procedure in this regard,129 any party may file a motion for designating and appointing the arbitrator(s) with the competent court, which in international arbitrations is the court at the seat of the arbitration.130 58 It is widely accepted in the United States today that arbitrators, including partyappointed arbitrators, must be neutral and impartial, both at the time of their appointment and throughout the arbitration.131 The practice of having partisan arbitrators refereed by a neutral arbitrator, which can still be found in the domestic setting, is in decline.132 56

Born, International Commercial Arbitration, 2nd ed., 2014, Chapter 7, 1198. Supra mn. 6. 126 In combination with § 206 FAA, which provides that the competent court “may also appoint arbitrators in accordance with the provisions of the agreement.” 127 However, if the parties agree on certain qualifications as a requirement for appointment, they must be respected. 128 Cf. Farrell v. Subway International., B.V., No. 11 Civ. 08, 2011 WL 1085017, at *5 (S.D.N.Y. Mar. 23, 2011). 129 Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571, 578–579 (7th Cir. 2007). 130 Cf. article V(1)(d) NYC; article 5(1)(d) IAICA. 131 Cf. Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 172; article 13.1 and 13(3) IDRP; article 9.1 JAMS Rules; Canon I and II of the AAA/ABA Code of Ethics. 132 Cf. Preamble and Canon I, paras B. and C. of the AAA/ABA Code of Ethics. For exceptions to this principle, cf. Canons IX and X of the AAA/ABA Code of Ethics. See also Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 24. See further Positive Software Solutions, Inc. v. New Century Mortgage Corp., 436 F.3d 495 (5th Cir. 2006). For a different perspective on the role of party-appointed 124 125

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Under § 10(a)(2) FAA, an award may be challenged “where there was evident 59 partiality […] in the arbitrators, or either of them.” In interpreting this threshold, some U.S. courts have referred by analogy to the rules on the disqualification of federal judges.133 Most courts, however, apply an independent and more relaxed standard to arbitration, pursuant to which the threshold is met where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration. The burden of proof lies with the party alleging partiality.134 Proof of actual bias is not required; the appearance of bias is sufficient.135 a) Duty to disclose. In an early decision, the U.S. Supreme Court held that an 60 arbitrator’s non-disclosure of facts that “might create an impression of possible bias” creates evident partiality even where no actual bias is present.136 In the aftermath of this ruling, the prevailing view is that parties, rather than courts, should be the judges of partiality. In order to put the parties in a position to make informed judgements, persons asked to accept appointment as arbitrators are required to disclose possible conflicts of interest prior to accepting appointment or, as the duty to disclose is a continuing duty, as soon as practicable thereafter.137 There is no consensus as to the precise scope of disclosure duties.138 The AAA/ABA 61 Code of Ethics for Arbitrators in Commercial Disputes provides that the following points require disclosure: (i) “any known direct or indirect financial or personal interest in the outcome of the arbitration”; (ii) “any known existing or past financial, business, professional or personal relationships which might reasonably affect impartiality or lack of independence in the eyes of any of the parties. (…)”; (iii) “the nature and extent of any prior knowledge they may have of the dispute”; and (iv) “any other matters, relationships, or interests which they are obligated to disclose by the agreement of the parties, the rules or practices of an institution, or applicable law regulating arbitrator disclosure.”139 The mere fact that disclosure is made does not remedy any lack of independence or impartiality.140 b) Grounds for challenge. The FAA does not contemplate the possibility of a party 62 challenging an arbitrator during the proceedings. If the parties have not agreed on a challenge procedure,141 U.S. courts are reluctant to remove an arbitrator before the arbitrators, see Sphere Drake Ins. Ltd v. All American Life Ins. Co., 307 F.3d 617, 620, 623 (7th Cir. 2002); Burlington Northern Railroad Co. v. TUCO, Inc., 960 S.W.2d 629 (Tx. 1997). 133 Sphere Drake Ins. Ltd, 307 F.3d 617, 620 and 623. 134 Cf. Scandinavian Reins. Co. v. St. Paul Fire & Marine Ins. Co., 668 F. 3 d 60 (2nd Cir. 2012). 135 Olson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 51 F.3d 157, 159 (8th Cir. 1995). This interpretation is in line with the common standards in international arbitration. See Part 1, General Standard II of the IBA Guidelines. 136 Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145 (1968). See Tenaska Energy Inc. v. Ponderosa Pine Energy, 437 S.W.3d 518, 529 (Tex. 2014) for a recent decision by the Texas Supreme Court annulling an arbitral award due to undisclosed dealings by an arbitrator which “might yield a reasonable impression of the arbitrator’s partiality to an objective observer”. 137 Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 24. 138 Article V Arbitrators Ethics Guidelines (JAMS); Canon II of the Code of Ethics for Arbitrators in Commercial Disputes (CPR). In a recent majority decision, the Court of Appeal for the 9th Circuit held that the arbitrator’s failure to disclose he was a co-owner of the arbitral institution administering the arbitration, coupled with the fact that the institution had administered 97 arbitrations for one of the parties involved over the past five years, created a “reasonable impression of bias” that justified setting the award aside, Monster Energy Company v. City Beverages, LLC, D.C. No. 5:17-cv-00295-RGK-KK (9th Cir. 2019). 139 Canon I, para. A. of the AAA/ABA Code of Ethics. 140 Thomas Kinkade Co. v. White LLC, 711 F.3d 719, 720 (6th Cir. 2013). 141 E. g. article 14 ICC Rules; article 10 JAMS Rules; article 14 IDRP; Rule 7.5 CPR Rules.

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arbitral award has been rendered.142 As one of the few exceptions to this general rule, an arbitrator has been removed prior to the rendering of the final award where the court concluded that “the unmistakable partiality of the arbitrator will render the arbitration a mere prelude to subsequent litigation.”143 63 After the arbitral award is rendered, it can be challenged on the basis of “evident partiality”. In this regard, some courts have held that the duties to investigate and disclose any dealings that might create the impression of bias must be enforced, even if a court later finds that no actual bias was present.144 Other courts have been more reluctant to enforce disclosure duties where, from a reasonable perspective, no appearance of actual bias was warranted.145 64 When investigating the appearance of bias, courts inter alia take the following factors into consideration: (i) the extent and character of the personal interest of the arbitrator in the arbitration; (ii) the directness of the relationship between the arbitrator and the party they are alleged to favour; (iii) the connection of that relationship to the arbitration; and (iv) the proximity in time between the relationship and the arbitration proceeding.146 The IBA Guidelines on Conflicts of Interest in International Arbitration have been referred to as persuasive authority in this regard.147 65 The FAA is silent on the question whether arbitrators may encourage or even participate in settlement negotiations between the parties. According to the prevailing view, arbitrators risk stepping out of their roles as neutral arbitrators when participating in settlement negotiations without an express mandate from the parties.148 66

c) Procedural aspects and preclusion of grounds for challenge. In the absence of a statutory challenge procedure, this issue is governed primarily by the parties’ agreement or the applicable arbitration rules.149 It is disputed to what extent a challenge can preempt a prospective or appointed arbitrator from serving on the panel in the absence of an agreed challenge procedure.150 In principle, judicial review of the arbitrators’ impartiality and independence can only be made at the enforcement stage. If made at all, challenges are most effective at the outset of the proceedings.151 In the event that an 142 In re Sussex, 781 F.3d 1065, 1075–76 (9th Cir. 2015); Aviall, Inc. v. Ryder System, Inc., 110 F.3d 892, 895 (2nd Cir. 1997). 143 Fleming Co. v. FS Kids, LLC, No. 02-CV-0059E(F), 2003 WL 21382895, at *4 (W.D.N.Y. May 14, 2003). 144 Schmitz v. Zilveti, 20 F.3d 1043, 1048–49 (9th Cir. 1994); Crow Construction Co. v. Jeffrey M. Brown Associates, Inc., 264 F.Supp. 2d 217 (E.D. Pa. 2003). 145 Sphere Drake Ins. Ltd v. All American Life Ins. Co., 307 F.3d 617 (7th Cir. 2002); Lifecare International, Inc. v. CD Medical, Inc., 68 F.3d 429 (11th Cir. 1995). 146 See ANR Coal Co., Inc. v. Cogentrix of North Carolina, Inc., 173 F.3d 493, 500 (4th Cir. 1999). Courts in California apply the state’s strict conflict of interest and disclosure standards (which are considered not to be preempted by the FAA). See Ovitz v. Schulman, 133 Cal. App. 4th 830 (Cal. Ct. App. 2005). However, these standards do not apply to international arbitrations. See Judicial Council of California, Ethics Standards for Neutral Arbitrators in Contractual Arbitration (Amended and effective January 1, 2003), Standard 3. 147 See New Regency Prod. Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101, 1110 (9th Cir. 2007); Applied Indus. Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132, 136 (2nd Cir. 2007). 148 Cf. Canon IV, para. F. of the AAA/ABA Code of Ethics. 149 Article 14 ICC Rules; article 10 JAMS Rules; article 14 IDRP; Rule 7.5 CPR Rules. 150 Born, International Commercial Arbitration, 2nd ed., 2014, Chapter 12, 1927. See also Larry’s United Super, Inc. v. Werries, 253 F.3d 1083, 1085 (8th Cir. 2001); Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2nd Cir. 1984); Certain Underwriters at Lloyd’s, London v. Argonaut Ins. Co., 264 F.Supp. 2d 926, 935 (N.D. Cal. 2003). 151 Carbonneau, The Law and Practice of Arbitration, 5th ed., 2014, 568. See also Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476, 490 (5th Cir. 2002); Smith v. Am. Arbitration Ass’n, 233 F.3d 502, 506 (7th Cir. 2000).

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arbitrator, upon being challenged, decides to withdraw prior to the completion of the arbitration, he or she should take all reasonable steps to protect the interests of the parties.152 d) Failure or impossibility to act. Arbitrators have an “unqualified right” to resign if 67 they believe it is in the best interests of the parties.153 Where an arbitrator is to be compensated for his or her services, he or she may withdraw if the parties fail or refuse to provide for payment of the compensation as agreed.154 In the event of death or resignation of an arbitrator, the courts have held that unless 68 the parties have agreed otherwise, as a rule, the entire arbitral tribunal loses jurisdiction to decide the case and a new arbitral tribunal must be constituted to hear the proceedings anew.155 The resignation of an arbitrator can therefore seriously impact the arbitration and should only be tendered for good cause.156

2. The arbitral proceedings The arbitral proceedings follow the procedure agreed upon by the parties and, in the 69 absence of such agreement, the directions provided by the arbitral tribunal to the parties in the exercise of its broad discretion. a) The request for arbitration. The arbitration is usually initiated by a request for 70 arbitration. The content of the request for arbitration and the manner in which it is to be brought to the attention of the other party or parties is dealt with in the various arbitration rules in varying degrees of detail. Many rules provide that the request for arbitration is to be sent to the arbitral institution, which then forwards it to the other party.157 Most institutions require the payment of an advance on costs before processing the request for arbitration.158 There are no legal requirements, however, concerning the request for arbitration or 71 other written submissions made by the parties in the arbitral proceedings. For evidentiary purposes, it is recommended that the request for arbitration be brought to the attention of the other party in a manner that later allows it to be determined whether and at precisely what point the other party received the request. b) Equality of arms, fair trial principles and the right to be heard. The FAA does 72 not expressly state which due process requirements the arbitral tribunal must respect during the course of the arbitral proceedings. It does so indirectly, however, by providing in § 10 FAA the grounds on which an arbitral award, once it is made, can be set aside.159 Prior to the rendering of the arbitral award, U.S. courts have invalidated arbitration clauses for being overly one-sided, in contracts that had been concluded between parties of unequal bargaining power in take-it-or-leave-it situations and that provided only one party with a procedural right, e. g. the right to choose between litigation and arbitration or the right to appeal the arbitral award.160 152

Cf. Canon I, para. I. of the AAA/ABA Code of Ethics. Florasynth, Inc. v. Pickholz, 750 F.2d 171, 174 (2nd Cir. 1984). 154 Cf. Canon I, para. H of the AAA/ABA Code of Ethics. 155 Marine Products Exports Corp. v. M.T. Globe Galaxy, 977 F.2d 66, 68 (2nd Cir. 1992). 156 Cf. Canon I., para. H. of the AAA/ABA Code of Ethics. 157 Article 4(5) ICC Rules; article 2(5) IDRP; article 2.3 JAMS Rules. 158 Article 36 ICC Rules; article 36 IDRP; article 2.3 JAMS Rules; Rule 17.4 CPR Rules. 159 See infra mn. 129. 160 See Beynon v. Garden Grove Medical Group, 100 Cal.App. 3 d 698 (1980). See also Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1285 et seq.; Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938 (4th Cir. 1999). 153

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c) Confidentiality. U.S. arbitration law does not recognize a general principle of confidentiality.161 Parties are therefore subject to confidentiality obligations only to the extent that they are expressly agreed or can be found in the applicable arbitration rules. 74 Most arbitration rules provide that hearings are private unless the parties agree otherwise.162 The U.S. system adheres to the principle that arbitrator deliberations should be secret and conducted in private. The deliberations should further be “inviolate”, subject to review by the courts in only the most serious and extraordinary of circumstances.163 73

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d) The arbitral award. The FAA does not provide for specific requirements regarding the form or content of the arbitral award. In particular, unless the parties have agreed otherwise, the award need not be reasoned, signed or rendered within a specific time period. In international arbitration, it is nevertheless common practice that the arbitrators provide reasons and sign the award. Contemporary U.S. arbitration rules reflect this practice.164 For evidentiary purposes, it is recommended that the arbitrators indicate in the arbitral award when and where the award was made. These points may become relevant in situations in which U.S. arbitration law distinguishes between non-domestic and foreign arbitral awards.165 In accordance with international practice, the FAA expressly recognizes two types of arbitral awards, namely partial and final awards.166 In addition, it is generally accepted that arbitral tribunals can issue interim awards. Although the terminology is not always consistent, interim awards are considered to sustain the rendering and/or protect the enforcement of the final award, whereas partial awards dispose of one or more issues while reserving the arbitral tribunal’s decision on other issues. Whether an arbitral award will be confirmed by U.S. courts and be subject to judicial review in the United States depends on whether it is final in the sense that it finally disposes of the issue(s) in dispute.167 The arbitral award must be rendered by the majority of the arbitrators. Unless the parties agree otherwise, a unanimous decision is not required. In the event that an arbitrator refuses to participate in the deliberations or refuses to sign the award, the majority of the arbitral tribunal may nevertheless proceed with issuing the award.168 An arbitrator who disagrees with the majority vote may issue a dissenting opinion.169 Once the arbitral tribunal has issued a final award, the tribunal is functus officio and jurisdiction reverts to the courts for the purposes of confirmation and enforcement.170 A number of U.S. circuit courts recognize an exception to this principle in 161 USA v. Panhandle Eastern Corp., 118 FRD 346 (D.Del. 1988); Contship Containerlines, Ltd v. PPG Industries, Inc., No. 00 Civ. 0194 RCCHBP, 2003 WL 1948807 (S.D.N.Y. April 23, 2003). The U.S. District Court for the Southern District of New York recently confirmed that U.S. courts are not bound, nor inclined, to respect the confidentiality rules applicable to international arbitration proceedings in foreign jurisdictions where such proceedings relate to a U.S. lawsuit; even the principle of international comity does not alter the fact that the U.S. is fundamentally a “country dedicated to open proceedings”, see Veleron Holding, BV v. Morgan Stanley, 117 F. Supp. 3d 404 (S.D.N.Y. 2014). 162 Article 20(4) IDRP; 24.4 JAMS Rules; article 26(3) ICC Rules. 163 Fosfatados Mexicanos, S.A. and Fertilizantes Mexicanos, S.A. v. Chemical Carriers, Inc. (formerly Energy Chemical Marine Inc.), 751 F. Supp. 467 (S.D.N.Y. 1990). 164 Article 30(1), (2) IDRP; article 31(2), 32(2), 35(1) ICC Rules; article 35.2, 35.4 JAMS Rules. 165 See supra mn. 9. 166 Cf. § 16(a)(1)(d) FAA. 167 International Shipping Agency, Inc. v. Union Empleados de Muelles de Puerto Rico, 21 F.Supp. 2d 100 (D.P.R. 1998). 168 Article 32(1) ICC Rules; article 12.1 JAMS Rules; article 29(2) IDRP. 169 Article 34.4 JAMS Rules. 170 Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008); Local 2322, International Brotherhood of Electrical Workers v. Verizon New England, Inc., 464 F.3d 93 (1st Cir. 2006).

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cases where the arbitral award is ambiguous.171 Under this exception, arbitrators retain jurisdiction to clarify and construe the award. e) Termination of the arbitration without an award. The reaching of a settlement 80 between the parties terminates the arbitration and the arbitrators become functus officio. Upon the request of the parties, the arbitral tribunal can fix the terms of the settlement in an award on agreed terms.172 If the continuation of the proceedings becomes unnecessary or impossible for any 81 other reason, most arbitration rules provide that the arbitral tribunal can terminate the proceedings by a procedural order upon consultation with the parties.173 f) The costs of the arbitration. The FAA does not regulate the costs of the arbitration and defers instead to the parties’ agreement in this respect. The costs of the arbitration comprise in particular the administrative costs of the arbitral institution, if any, the arbitrators’ fees and expenses, expenses for the proceedings (room hire, court reporters, tribunal-appointed experts, etc.) as well as the parties’ attorneys’ fees and expenses. These matters, as well as the allocation of costs, are generally dealt with in detail in arbitration rules.174 In respect of the expenses of witnesses summoned by the arbitral tribunal, § 7 FAA provides that “[t]he fees for such attendance shall be the same as the fees of witnesses before masters of the United States courts.” In recent decisions regarding domestic arbitration, the U.S. Supreme Court has held that a party may resist an arbitration on the basis that the costs are prohibitive. It is uncertain to what extent these rulings have an impact upon international arbitration. In any event, the threshold applied by the Court is very high.175 The arbitral tribunal can decide on the costs of the arbitration in the award on the merits or in a separate award on costs. Separate awards on costs are subject to the same grounds for vacatur as an award on the merits. If so agreed by the parties or, as is generally the case, provided in the arbitration rules, the arbitral tribunal may fix the arbitrators’ fees and expenses in the arbitral award. As regards the allocation of costs, under the so-called American rule generally applied in U.S. civil procedure, each party must bear its own costs and expenses. A shifting of the parties’ costs requires a statutory or contractual basis. In the absence of a statutory provision, some U.S. courts have held that arbitral tribunals have no authority to order the reimbursement of costs and expenses to the prevailing party unless the parties have expressly authorized the arbitral tribunal to do so.176 In the international context however, the prevailing view is that arbitral tribunals have the inherent power to award reimbursement of the parties’ costs and expenses, at least to the extent that they are reasonable, unless the parties have agreed otherwise.177 171 General Re Life Corp. v. Lincoln National Life Insurance, 909 F.3d 544 (2nd Cir. 2018); Sterling China Co. v. Glass, Molders, Pottery, Plastics & Allied Workers Local No. 24, 357 F.3d 546, 554 (6th Cir. 2004); Brown v. Witco Corp., 340 F.3d 209, 219 (5th Cir. 2003); Glass, Molders, Pottery, Plastics & Allied Workers Int’l Union v. Excelsior Foundry Co., 56 F.3d 844, 847 (7th Cir. 1995); Colonial Penn. Ins. Co. v. Omaha Indem Co., 943 F.2d 327, 334 (3rd Cir. 1991); McClatchy Newspapers v. Central Valley Typographical Union No. 46, 686 F.2d 731, 734 n.1 (9th Cir. 1982). 172 Article 32(1) IDRP; article 33 ICC Rules; article 39.1 JAMS Rules. 173 Article 32(3) IDRP. 174 Article 38 ICC Rules; article 34 IDRP; article 37 JAMS Rules; Rule 17.2 CPR Rules. 175 Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740 (2011); American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 133 S. Ct. 2304 (2013). See also Muriithi v. Shuttle Express, Inc., 712 F.3d 173 (4th Cir. 2013). 176 Prudential-Bache Securities, Inc. v. Depew, 814 F.Supp 1081, 1082 (M.D.Fla. 1993). 177 Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021 (7th Cir. 2013).

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The FAA does not contain any mandatory requirements regarding the administration of evidence. The parties may therefore provide for the procedure to be followed by the arbitral tribunal in this respect. In the absence of an agreement between the parties, arbitral tribunals have broad discretion to administer the gathering and evaluation of evidence. In so doing, the arbitral tribunal is not required to apply the rules of evidence applicable in court litigation.178 Unless the parties provide otherwise, arbitration proceedings are adversarial, i. e. each party bears the burden of proof in respect of the facts on which it relies in support of its claim or defence.179 However, arbitral tribunals may request, upon their own motion, the production of evidence if they consider it to be necessary for the decision of the case.180 As regards the standard of proof, arbitral tribunals seated in the United States may consider a fact to be proven where there is a preponderance of evidence, unless the parties have agreed on a different standard.181 § 7 FAA deals with the administration of witness evidence and also applies in international arbitrations.182 Pursuant to this provision, the arbitral tribunal “may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case.” § 7 FAA further sets out the formal requirements that a summons of the arbitral tribunal must meet.183 Any person who possesses relevant information may serve or be called as a witness. In particular, there is no limitation as to whether a party or its representative may testify as a witness. Arbitral tribunals have the right to hear witnesses under oath. If a witness refuses to comply with the summons to appear before the arbitral tribunal, the tribunal can make an application to the U.S. district court for the district in which the arbitration is seated in order to compel the attendance of the witness or to punish the person for “contempt of court”.183a Even though cross-examination is common in arbitrations with seat in the United States, there is no absolute right to it.184 There is a split among U.S. courts as to whether, under § 7 FAA, the production of documents by third parties can be sought prior to a hearing.185 According to a narrow reading, “[d]ocuments are only discoverable in arbitration when brought before arbi178

See Supreme Oil Co. v. Abondolo, 568 F. Supp. 2 d 401, 408 (S.D.N.Y. 2008). Cf. paragraph 2 of the ICDR Guidelines for Arbitrators Concerning the Exchange of Information. 180 Cf. paragraph 3 of the ICDR Guidelines for Arbitrators Concerning the Exchange of Information. 181 It is disputed whether the standard of proof is a question of procedural law or a question of the law applicable to the merits. 182 §§ 208, 307 FAA. 183 “Said summons shall issue in the name of the arbitrator or arbitrators, or a majority of them, and shall be signed by the arbitrators, or a majority of them, and shall be directed to the said person and shall be served in the same manner as subpoenas to appear and testify before the court”. Arbitrators can only require summonsed non-parties to appear in the physical presence of the arbitrator, which excludes examination by way of a video-conference, Managed Care Advisory Group, LLC v. CIGNA Healthcare, Inc., 2019 WL 4464301 (11th Cir. Sept. 18, 2019). 183a See Washington National Insurance Co. v. Obex Group LLC, No. 19-225-cv, 2020 U.S. App. LEXIS 14062 (2nd Cir. May 1, 2020). 184 Alexander v. Gardener-Denver Co., 415 U.S. 36, 57 (1974). However, see also § 15(d) RUAA. 185 Life Receivables Trust v. Syndicate 102 at Lloyd’s of London, 549 F.3d 210 (2nd Cir. 2008); Hay Group Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404, 406–10 (3rd Cir. 2004); COMSAT Corp. v. NSF, 190 F.3d 269, 276 (4th Cir. 1999). 179

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trators by a testifying witness.”186 According to the opposite view, § 7 FAA provides for pre-trial discovery.187 Whether § 28 USC 1782188 allows U.S. courts to provide judicial assistance to arbitral tribunals seated outside the United States is highly controversial. The provision provides a mechanism for parties to obtain discovery from a U.S. federal court in relation to proceedings “in a foreign or international tribunal”. Following the U.S. Supreme Court decision in Intel Corp. v. Advanced Micro Devices, Inc.,189 a split of authority has emerged as to whether a “foreign tribunal” under Section 1782 includes arbitral tribunals.190 District courts have ruled both ways since the Intel decision.191 The Sixth Circuit, however, is the first192 federal appellate court that has authoritatively ruled on the issue and permitted discovery for use in private commercial arbitrations in foreign countries.193 Decisions of other circuits have followed recently.194 Irrespective of this circuit split still to be solved, the Intel decision has provided for clarity in two regards: first, it clarified that the foreign proceeding for which discovery is sought must be within reasonable contemplation but need not be pending or imminent. Second, while U.S. courts have broad discretion in deciding on such requests,195 the Intel decision has established four discretionary factors to be considered by the federal courts: (1) Whether the person from whom discovery is sought is not a participant in the foreign proceeding and therefore cannot be ordered to produce evidence by the foreign 186

Life Receivables Trust, 549 F.3d 210, 216 (emphasis added). In re Security Life Ins Co., 228 F.3d 865, 870 (8th Cir. 2000). 188 The provision allows a “district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal […].” 189 542 U.S. 241 (2004). 190 Prior to the Intel decision, the 2nd and 5th Circuits had rejected the applicability of the provision to arbitral tribunals (National Broadcasting Co. v. Bear Stearns & Co., 165 F.3d 184, 190–91 (2nd Cir. 1999); In re Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880 (5th Cir. 1999)). While the Intel decision itself did not deal with discovery in support of foreign arbitrations, it cited with approval an academic source stating that “[t]he term ‘tribunal’ […] includes administrative and arbitral tribunals”. 191 In favour of Section 1782’s application to foreign arbitrations: see e.g. In re Roz Trading Ltd, 469 F. Supp. 2d 1221 (N.D. Ga. 2006); In re Babcock Borsig AG, 583 F. Supp. 2d 233, 238–40 (D. Mass. 2008); In re the Children’s Inv. Fund Found. (UK), No. 18-MC-104 (VSB), 2019 U.S. Dist. LEXIS 14862, at 10 (S.D. N.Y. Jan. 30, 2019). Against the application to foreign arbitrations: see e.g. In re Servotronics, Inc., No. 2:18-mc-00364-DCN, 2018 U.S. Dist. LEXIS 189423, at 12 (D.S.C. Nov. 6, 2018); In re Application of Government of Lao People’s Democratic Republic, No. 1:15-MC-0018, 2016 WL 1389764, at 5, 6 (D.N. Mar. Is. Apr. 7, 2016). 192 Apart from the recent decisions of the Sixth and Fourth Circuits, there has so far only been an unpublished opinion of the 5th Circuit (El Paso v. La Comission Ejecutiva Hidroelectrica Del Rio Lempa, 341 Fed. App’x 31 (5th Cir. 2009)), a vacated opinion of the 11th Circuit (Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 685 F.3d 987, 990 (11th Cir. 2012) holding that the foreign arbitral tribunal in the case was “likely within the purview of section 1782”; Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262, 1265 (11th Cir. 2014) vacating the prior holding and affirming the judgment on different grounds) and an opinion of the Third Circuit limited to investment arbitration (In re Chevron Corp., 633 F.3d 153, 161 (3rd Cir. 2011) holding that “use of the evidence uncovered in a section 1782 application in the BIT arbitration […] unquestionably would be ‘for a use in a proceeding in a foreign or international tribunal’”). 193 Abdul Latif Jameel Transportation Company Ltd v. Fedex Corporation, Case No. 19-5315 (6th Cir. Sept. 19, 2019). 194 A 2018 decision dismissing an application to take depositions in support of a London-seated arbitral tribunal (In re Servotronics, Inc., No. 2:18-mc-00364-DCN (D.S.C. Nov. 6, 2018)) was reversed on appeal by the Court of Appeals for the 4th Circuit, holding that the arbitral panel in the U.K. was a foreign tribunal for the purposes of section 1782 (Servotronics, Inc. v. The Boeing Co., 954 F.3d 209, 210 (4th Cir. 2020)). 195 In re Oxus Gold PLC, MISC No. 06-82-GEB., 2007 WL 1037387 (D.N.J. April 2, 2007); In re Roz Trading Limited, 469 F.Supp. 2 d 1221 (N.D. Ga. 2006); In re Hallmark Capital Corp., 534 F.Supp. 2d 951 (D. Minn. 2007); In re Babcock Borsig AG, 583 F.Supp. 2d 233 (D. Mass. 2008). 187

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tribunal itself; (2) The nature of the foreign tribunal and its receptivity to judicial assistance by U.S. federal courts; (3) Whether the request conceals an attempt to circumvent foreign evidence-gathering restrictions; (4) Whether the request is unduly intrusive or burdensome.196 92 Expert evidence may be presented by party-appointed experts or commissioned by the arbitral tribunal from tribunal-appointed experts.197 Tribunal-appointed experts must be independent and impartial.

4. The law governing the dispute and lois de police In contrast to most modern arbitration laws, the FAA does not provide for conflict of laws provisions to be applied by arbitral tribunals. There are no uniform conflict of laws provisions applicable in arbitrations with seat in the United States. Under U.S. arbitration law, the parties have broad discretion when choosing the law applicable to the merits. They can agree on a national law or on non-national sets of rules or principles such as the UNIDROIT Principles of International Commercial Contracts. Presumably, choosing the un-codified law of a non-national legal system, such as the lex mercatoria, would also be valid, even though it would be open to interpretation precisely what such choice would constitute in terms of actual content. 94 The parties can also grant the arbitral tribunal the power to decide the case ex aequo et bono or as amiable compositeur, i. e. in accordance with principles of equity.198 At least in the international context however, this is not frequently seen.199 95 Where parties do not explicitly agree on a particular law to govern the merits of the case, they nevertheless often do so indirectly by reference to arbitration rules that include conflict of laws provisions to be applied by the arbitral tribunal. In the absence of any conflict of laws provisions chosen directly or indirectly by the parties, arbitral tribunals have broad discretion to determine the law applicable to the merits. The Restatement (Second) of Conflict of Laws200 may be used as a guideline. 96 The role of (overriding) mandatory rules or lois de police in international arbitration is controversial. As a general rule, when confronted with the question whether to apply certain rules that are not part of the law otherwise applicable to the merits, arbitral tribunals should pay particular attention to the grounds for the setting aside of the arbitral award at the seat of the arbitration and the grounds for refusal at the place of enforcement, if known.201 In this respect, when deciding upon motions to compel, U.S. courts have stated that enforcement of the arbitral award may be refused under the NYC on the basis of violation of public policy, if U.S. statutory provisions for the protection of public policy have been ignored.202 Unless there is a clear indication to the contrary, arbitration agreements may not be invalidated ex ante on the assumption that the arbitral tribunal will not (correctly) apply statutory law.203 93

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Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) at 264–265. Cf. article 25(3), (4) ICC Rules; article 25 IDRP; article 27.7 JAMS Rules; article 12.3 CPR Rules. Island Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313 (2nd Cir. 1973). 199 Born, International Commercial Arbitration, 2nd ed., 2014, Chapter 19, 2770–2771. 200 Restatement (Second) of Conflict of Laws (1971). 201 Sachs/Niedermaier, in: Liber Amicorum von Hoffmann, 2011, 1025 et seq. 202 Singh v. Carnival Corp., 550 Fed.App’x 683, 685 (11th Cir. 2013); Lindo v. NCL (Bahamas), Ltd, 652 F.3d 1257, 1280–1281 (11th Cir. 2011) (Jones Act). 203 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627–629 (1985) (antitrust law); Vimar Seguros y Reaseguros v. M/V Sky Reefer, 515 U.S. 528, 539–541 (1995) (COGSA); 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 273 (2009). For an ex ante invalidation of the arbitration agreement, see Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009) (Seaman’s Wage Act). 197 198

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5. Interim relief in arbitration As regards the availability of interim relief in arbitral proceedings, one must 97 distinguish between interim relief before courts, on the one hand, and interim relief before arbitral tribunals, on the other. a) Interim relief before state courts. The FAA does not address the authority of state 98 courts to grant interim measures relating to international arbitral proceedings. The parties may expressly provide for or exclude in their arbitration agreement the power of state courts to grant such measures.204 Some U.S. courts have refused to provide interim relief in the presence of a valid 99 arbitration agreement on the basis that doing so would be inconsistent with their obligation under article II(3) NYC to refer the parties to arbitration.205 Some have at least been reluctant to do so where a tribunal has already been constituted.206 However, in general, U.S. courts are favourable to preliminary relief related to arbitral proceedings and are willing to hear applications for interim relief unless the arbitration agreement or the applicable arbitration rules provide otherwise.207 The types of interim measures available include injunctions (both anti-suit and 100 anti-arbitration injunctions)208 attachments, liens, posting of bonds, etc. In order to receive interim relief, a party must generally show (i) that without the interim measure it would suffer irreparable harm; (ii) that such harm outweighs the prejudice to the party against whom the interim measure is directed; and (iii) a likelihood of success in the proceedings on the merits.209 Under U.S. civil procedure, interim relief can, if necessary to prevent serious harm, be sought from courts in ex parte proceedings.210 b) Interim relief before the arbitral tribunal. Arbitral tribunals have an inherent 101 power to grant interim measures of protection and they have broad discretion in doing so.211 The parties may provide for more detailed requirements in the arbitration agreement or by reference to arbitration rules.212 For example, the parties may provide that, where the arbitral tribunal has not yet been constituted, a request for preliminary relief may be referred to a specially appointed arbitrator.213 Interim measures are typically directed at preserving the status quo, securing 102 satisfaction of an eventual award or promoting the fairness and efficacy of the arbitral proceedings. Arbitral tribunals may also issue anti-suit or anti-arbitration injunctions or 204

Cf. article 28(2) ICC Rules; article 24(3) IDRP; article 26.3 JAMS Rules; Rule 13.2 CPR Rules. McCreary Tire & Rubber Co. v. CEAT, 501 F.2d 1032, 1038 (3rd Cir. 1974). 206 Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 725–726 (9th Cir. 1999). 207 See Borden, Inc. v. Meiji Milk Products Co., Ltd, 919 F.2d 822, 826 (2nd Cir 1990). 208 See supra mns 51 et seq. 209 Teradyne, Inc. v. Mostek Corp., 797 F.2d 43, 51 (1st Cir. 1986); Roso-Lino Beverage Dist., Inc. v. CocaCola Bottling Co., 749 F.2d 124 (2nd Cir. 1984); Sauer-Getriebe KG v. White Hydraulics, Inc., 715 F.2d 348 (7th Cir. 1983). See also Rules 64 and 65 of the Federal Rules of Civil Procedure (FRCP). 210 See Carolina Power & Light Co. v. Uranex, 451 F. Supp 1044 (D.C.Cal. 1977). See also Rule 65(b)(1) FRCP. 211 AT&T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 651 (1986); Banco de Seguros del Estado v. Mutual Marine Office, Inc., 344 F.3d 255, 262 (2nd Cir. 2003); Yasuda Fire & Marine Ins. Co. of Europe, Ltd v. Continental Cas. Co., 37 F.3d 345, 351 (7th Cir. 1994); Certain Underwriters at Lloyds, London v. Argonaut Ins Co., 264 F Supp. 2d 926, 937 (N.D. Cal. 2003). 212 Cf. article 28(1) ICC Rules; article 24 IDRP; article 32.1 JAMS Rules; Rule 13.1 CPR Rules. See also Banco de Seguros del Estado, 344 F.3d 255, 262. 213 See, for example, article 37 IDRP and article 29 ICC Rules. 205

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order security for costs for potential harm suffered by the party due to the interim measure or for the costs of the proceedings.214 103 Arbitral tribunals generally apply standards in respect of interim relief similar to those of courts.215 Unless the parties have provided otherwise, ex parte proceedings are in principle not available in arbitration. 104 In order to enhance the enforceability of a decision on interim relief, it is recommended that arbitral tribunals designate these decisions as final awards on interim relief so as to indicate that the decision finally disposed of the matter.216

6. Multi-party and multi-contract arbitration 105

While multi-party litigation in the form of class actions has a long-lasting tradition in the United States, the FAA does not contain specific provisions for multi-party situations. In fact, the availability of class-wide relief in litigation has been one of the main drivers for companies to include arbitration clauses in their contracts, as these were considered to be an effective shield against class actions. However, this perception has changed since the U.S. Supreme Court held in Green Tree Financial Corp. v. Bazzle that arbitration agreements do not exclude class-wide relief per se. Today, the discussion centres on the interpretation of arbitration agreements and the question of the extent to which express class arbitration waivers are valid.217 Other routes to multi-party arbitrations are the consolidation of proceedings and the joinder of third parties. In all instances, the admissibility of such procedural mechanisms needs to be answered primarily by recourse to general contract principles.

a) Arbitration agreement involving several parties. As arbitration must be understood as a matter of contract, in principle an arbitration agreement needs to be in place between all parties to the arbitration. Unless stipulated in the arbitration agreement or the arbitration rules, a third party is not permitted to intervene in an arbitration without the consent of the parties.218 This also applies to the participation of amici curiae.219 Under U.S. law, consolidation of arbitral proceedings or joinder of a third party accordingly requires the consent of all parties concerned,220 even though consent need not necessarily be express.221 107 As regards class arbitration, the U.S. Supreme Court has consistently held that it is a question of contractual interpretation whether or not an arbitration agreement provides for class-wide relief.222 In cases where the arbitration agreement is either silent223 or ambiguous224 on the availability of such relief, the Court has held that the arbitration agreement does not provide the necessary contractual basis required under the FAA for 106

214 See Certain Underwriters at Lloyd’s, London v. Argonaut Ins. Co., 264 F.Supp. 2d 926, 937 (N.D. Cal. 2003). 215 Cf. Banco de Seguros del Estado v. Mutual Marine Office, Inc., 344 F.3d 255, 262 (2nd Cir. 2003). 216 Supra mn. 77. 217 See supra mn. 24. 218 Born, International Commercial Arbitration, 2nd ed., 2014, Chapter 18, 2575–2577. 219 See Levine, (2011) 29 Berkeley J. Int’l Law. 200. 220 Government of the United Kingdom v. Boeing Co., 998 F.2d 68 (2nd Cir. 1993); American Centennial Ins. Co. v. National Casualty Co., 951 F.2d 107, 108 (6th Cir. 1991); Stolt-Nielsen SA v. Animal Feeds International Corp., 559 U.S. 662, 664 (2010). 221 Connecticut General Life Ins. v. Sun Life Assur. Co. of Canada, 210 F.3d 771 (7th Cir. 2000); Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (5th Cir. 2004). 222 Stolt-Nielsen SA, 559 U.S. 662 (2010); Oxford Health Plans LLC, 569 U.S. 564 (2013); American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 133 S. Ct. 2304 (2013). 223 Stolt-Nielsen SA, 559 U.S. 662 (2010). 224 Lamps Plus Inc. v. Varela, 586 U.S. ___, 139 S. Ct. 1407 (2019).

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concluding that the parties agreed to class arbitration. Moreover, the Court has in recent times repeatedly rejected arguments that (federal or state) statutory provisions prohibit arbitration agreements providing for individualized proceedings and excluding class actions.225 The U.S. Supreme Court has thus far not finally decided whether the admissibility of class arbitration is to be decided by the arbitrators or the courts.226 The circuit courts that have so far ruled on the issue agree that class arbitrability is a gateway issue that is presumptively decided by the courts absent any agreement by the parties to delegate all issues of arbitrability to the arbitrators (delegation clause).227 Yet, there is a circuit split over the question whether general delegation clauses (either in the arbitration agreement or in the agreed arbitration rules) that do not specifically refer to class arbitration are sufficient to delegate the issue to the arbitrators: while some circuit courts have considered general delegation clauses (such as the one contained in the AAA Rules228) to extend to the issue of class arbitrability,229 other circuit courts have held that general delegation clauses are insufficient to demonstrate the parties’ clear and unmistakable intent to delegate the particular question of class arbitration to the arbitrators.230 However, where the parties have clearly and unmistakably delegated the issue to the arbitrators, the arbitrators’ decision is subject only to limited review.231 In light of the Supreme Court’s most recent guidance on the interpretation of arbitration agreements, parties who wish to have the possibility of class-wide relief should expressly provide so in the arbitration agreement. They should also expressly stipulate that it is for the arbitrators to decide whether the arbitration can proceed on a class-wide basis. 225 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131. S. Ct. 1740; DIRECTV, Inc. v. Imburgia, 577 U.S. ___, 136 S. Ct. 463 (2015); Epic Systems Corp. v. Lewis, 584 U.S. ___, 138 S. Ct. 1612 (2018). 226 Cf. Green Tree Financial Corp v. Bazzle, 539 U.S. 444, 452–453 (2003) holding that whether an arbitration agreement is silent on or forbids class arbitrations is a matter of contract interpretation to be resolved by the arbitrators and not a gateway matter to be decided by the courts. The Court has effectively disavowed this finding in subsequent decisions; see Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013); Stolt-Nielsen SA, 559 U.S. 662 (2010) (confirming that the Court is yet to decide whether the availability of class arbitration is a question of arbitrability); Lamps Plus Inc. v. Varela, 586 U.S. ___, 139 S. Ct. 1407 (2019) (reaffirming that “[t]his Court has not decided whether the availability of class arbitration is a so-called ‘question of arbitrability,’ which includes these gateway matters”). 227 The 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th and 11th Circuits agree in this regard; see Wells Fargo Advisors, LLC v. Sappington, 2018 WL 1177230 (2nd Cir. 2018); Opalinksi v. Robert Half Int’l, Inc., 761 F.3d 326 (3rd Cir. 2014); Del Webb Cmtys., Inc. v. Carlson, 817 F.3d 867 (4th Cir. 2016); 20/20 Communications, Incorporated v. Crawford, 2019 WL 3281412 (5th Cir. 2019); Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013); Herrington v. Waterstone Mortg. Corp., 907 F.3d 502 (7th Cir. 2018); Catamaran Corp. v. Towncrest Pharmacy, 864 F.3d 966 (8th Cir. 2017); Eshagh v. Terminix Int’l Co., L.P., 588 F. App’x 703 (9th Cir. 2014) (unpublished); Dish Network v. Ray, 2018 WL 3978537 (10th Cir. 2018) (assuming “without deciding that one of these gateway matters is whether an arbitration clause authorizes class arbitration”); JPay, Inc. v. Kobel, 904 F.3d 923 (11th Cir. 2018). 228 Rule 7(a) of the AAA Commercial Arbitration Rules and Mediation Procedures reads: “The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.” 229 The 2nd, 10th and 11th Circuits have adopted this approach; see Wells Fargo Advisors, LLC v. Sappington, 2018 WL 1177230 (2nd Cir. 2018); Dish Network v. Ray, 2018 WL 3978537 (10th Cir. 2018); JPay, Inc. v. Kobel, 904 F.3d 923 (11th Cir. 2018). 230 The 3rd, 4th, 5th, 6th and 8th Circuits have followed this approach; see Opalinksi v. Robert Half Int’l, Inc., 761 F.3d 326 (3rd Cir. 2014); Del Webb Cmtys., Inc. v. Carlson, 817 F.3d 867 (4th Cir. 2016); 20/20 Communications, Inc. v. Crawford, 2019 WL 3281412 (5th Cir. 2019); Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013); Catamaran Corp. v. Towncrest Pharmacy, 864 F.3d 966 (8th Cir. 2017). 231 Stolt-Nielsen SA v. Animal Feeds International Corp., 559 U.S. 662, 677–679; Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (holding that the sole question on judicial review is whether the arbitrator interpreted the parties’ contract when allowing or disallowing class arbitration, not whether he construed it correctly).

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Most U.S. arbitration institutions provide for arbitration rules specifically designed for class arbitrations.232 108

b) Equality of the parties and appointment of the arbitrators. The principle of equality of the parties requires that each party has equal influence on the composition of the arbitral tribunal. Depending on the particular multi-party situation, this result can be achieved in different ways. Difficulties arise in situations where several parties on one side cannot agree on a joint nomination. In a case concerning consolidation, the Second Circuit ordered each party to appoint an arbitrator, whereupon the three appointed arbitrators would jointly appoint two neutral arbitrators, resulting in a five-member panel.233 Alternatively, equality of the parties can also be guaranteed where all the arbitrators are appointed by the arbitral institution or the competent court.234

IV. The control and the enforcement of arbitral awards 109

Under U.S. law, an arbitral award has legal effect on the parties immediately upon being rendered. When the parties are willing to comply with the award, no further intervention by the courts is required. However, if the prevailing party needs to seek enforcement of the arbitral award in the United States, the arbitral award must first be confirmed by a competent court and reduced to judgment through a summary procedure.235 The losing party, in turn, can seek the setting aside (vacatur) of the arbitral award by the court. Review of the arbitral award by the courts is limited in both instances. In addition, any party can apply for a correction or amendment to the arbitral award on limited statutory grounds.

1. Correction and amendment of arbitral awards § 11 of the FAA addresses only the modification or correction of an arbitral award by the courts, not by the arbitral tribunal that issued the award or the arbitral institution that administered the arbitration. The parties can, however, provide for such authority. Under many arbitration rules, the arbitral tribunal has the power to modify or correct the arbitral award on its own motion and/or upon application by a party, within certain time limits.236 111 Unless the parties have provided otherwise, the court for the district in which the award was made may in its discretion make an order modifying or correcting the award upon the application of any party to the arbitration, on any of the following grounds: – Evident material miscalculation of figures or evident material mistake in the description of any person, thing, or property referred to in the award – Decision by the arbitral tribunal on a matter not submitted to it, unless it is a matter not affecting the merits of the decision; or – Defect in form not affecting the merits of the controversy. 110

232 AAA Supplementary Rules for Class Arbitrations (8 October 2010); JAMS Class Action Procedures (1 May 2009). The NAF used to have its own Arbitration Class Procedures, but these are only applicable to arbitrations filed prior to August 2009. See also Niedermaier, (2014) 1 ZDAR 12 (16 et seq.). 233 Compania Española de Petroleus, S.A. v. Nereus Shipping, S.A., 527 F.2d 966, 975 (2nd Cir. 1975). 234 Cf. article 12(8) ICC Rules; article 12(6) IDRP; article 8.5 JAMS Rules; Rule 6.4 CPR Rules. 235 Cf. § 9 FAA and § 207 FAA (in respect of arbitral awards falling within the scope of the NYC or the IAICA). See also Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 89 n. 2 (2nd Cir. 2005). According to some authors, confirmation is not needed for arbitral awards rendered under the NYC, see Mosk/Nelson, (2001) 18 J. Int’l Arb. 463 (470). 236 Article 36 ICC Rules; article 33 IDRP; article 38 JAMS Rules.

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In these instances, the court “may modify and correct the award, so as to effect the intent thereof and promote justice between the parties.” For this purpose, courts have remanded the arbitral award to the arbitral tribunal for clarification irrespective of the functus officio concept.237 § 11 FAA does not allow for a review of the merits. Courts therefore may not correct 112 erroneous findings.238 It is sometimes difficult to draw a distinction between correction of clerical errors and a review of the merits, in particular where the calculation of damages is concerned. The notice of a motion to modify or correct an arbitral award must be served upon 113 the other party or its attorney within three months of the arbitral award being filed or delivered.239 This time limit also applies to international arbitrations. § 13 FAA sets out the documents that need to be filed with the motion.240 The decision on the motion to modify or correct an arbitral award can be appealed.241

2. Review of arbitral awards before the state courts Under § 10 FAA, the court in and for the district in which the award was made may, 114 upon the application of any party to the arbitration, make an order setting aside (vacating) the award, on limited grounds. U.S. courts refuse to vacate arbitral awards rendered outside the United States. 115 According to the majority view, this follows from article V(1)(e) NYC, pursuant to which enforcement of the arbitral award can be refused if it 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, as far as arbitral awards rendered under the NYC are concerned.242 In contrast to many modern arbitration laws,243 the FAA does not mirror the grounds 116 upon which the enforcement of an arbitral award can be refused under article V NYC. Nevertheless, some U.S. courts have held that motions to vacate non-domestic arbitral awards made in the United States under the NYC can be based only on the grounds for non-enforcement of foreign arbitral awards under article V NYC.244 By contrast, other M&C Corp. v. Erwin Behr GmbH & Co. KG, 326 F.3d 772 (6th Cir. 2003). Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 288 (5th Cir. 2004); Coutinho Caro & Co. USA, Inc. v. Marcus Trading, Inc., 2000 WL 435566, at *12 (March 14, 2000. D. Conn.); San Martine Compania De Navegacion, SA v. Saguenay Terminals Limited, 293 F.2d 796 (9th Cir. 1961). 239 § 12 FAA. 240 These documents are: (a) the arbitration agreement, the selection or appointment, if any, of an additional arbitrator and each written extension of the time, if any, within which to make the award; (b) the arbitral award and (c) each notice, affidavit, or other paper used upon an application to confirm, modify, or correct the award, and a copy of each order of the court upon such an application. 241 § 16(a)(1)(E) FAA. 242 Cf. Gulf Petro Trading v. Nigerian National Petroleum Corp., 512 F.3d 742, 753 (5th Cir. 2008); Karaha Bodas Co. LLC, 364 F.3d 274, 287 (5th Cir. 2004); M&C Corp. v. Erwin Behr GmbH & Co., 87 F.3d 844, 848 (6th Cir. 1996); International Standard Elec. Corp. v. Bridas Sociedad Anonima Petrolera Industrial y Comercial, 745 F.Sup 172, 178 (S.D.N.Y. 1990). The authority to set aside the arbitral award is sometimes described as “primary jurisdiction” as compared to “secondary jurisdiction” in respect of the recognition and enforcement of foreign arbitral awards. In the highly exceptional situation in which the parties to an arbitration outside the United States have chosen U.S. law to govern the arbitral procedure, U.S. courts have primary jurisdiction to vacate the arbitral award. 243 Cf. article 34 ML. See also article 190(2) IPRG (Switzerland); article 1520 CPC (France); section 68 AA 1996 (England & Wales). 244 Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434 (11th Cir. 1998); Nicor Int’l Corp. v. El Paso Corp., 318 F.Supp. 2d 1160, 1168 n.7 (S.D. Fla. 2004); RZS Holdings AVV v. PDVSA Petroleos S.A., 598 F.Supp. 2d 762 (E.D. Va. 2009); FIAT S.p.A. v. Ministry of Fin. & Planning, 1989 U.S. Dist. LEXIS 11995 (S.D.N.Y. Oct. 12, 1989). 237 238

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courts have taken the view that the NYC does not impose any limits on the grounds on which an arbitral award may be set aside at the seat of the arbitration and that parties may seek the setting aside of any arbitral award rendered in the United States on the basis of the principles applying to domestic arbitral awards.245 In practice, the two approaches seem to lead to congruent results. 117 This is because, irrespective of which grounds for vacatur are deemed applicable, U.S. courts consistently follow a strong pro-enforcement policy.246 According to the U.S. Supreme Court, a party “must clear a high hurdle” in order to obtain vacatur of an arbitral award under the FAA.247 Challenges to arbitral awards that the court considers frivolous bear the risk of sanctions.248 a) Procedural framework (time limits, competent court, appeal). A court reviewing an arbitral award under the FAA can confirm and/or vacate the arbitral award, either in whole or in part.249 The court has discretion to remand the case to the arbitral tribunal if the agreed time limit, if any, for rendering the arbitral award has not expired.250 119 Just as for the notice of a motion to modify or correct an arbitral award, the notice of a motion to vacate an arbitral award must be served upon the other party or its attorney within three months of the arbitral award being filed or delivered.251 This time limit also applies in international arbitrations. § 13 FAA sets out the documents that must be filed with the motion.252 The decision on the motion to vacate an arbitral award can be appealed.253 118

b) Grounds for setting aside arbitral awards: An overview. § 10(a) FAA provides for the following grounds for vacatur: (1) Where the award was procured by corruption, fraud, or undue means; (2) Where there was evident partiality or corruption in the arbitrators, or either of them; (3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. 121 The U.S. Supreme Court has held that the parties cannot contractually expand the grounds of vacatur.254 Pursuant to the majority view, a contractual limitation of the grounds for vacatur is equally excluded.255 120

245 Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15 (2nd Cir. 1997); Karaha Bodas Co. LLC, 364 F.3d 274 (5th Cir. 2004); Jacada, Ltd v. Int’l Mktg. Strategies, Inc., 401 F.3d 701 (6th Cir. 2005); Gulf Petro Trading Co., Inc., 512 F.3d 742 (5th Cir. 2008); Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277 (3rd Cir. 2010). See also Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021 (7th Cir. 2013). 246 See Roberson v. Charles Schwab & Co., 339 F.Supp. 2d 1337, 1339 (S.D. Fla. 2003); Riccard v. Prudential Insurance Co., 307 F.3d 1277, 1288 (11th Cir. 2002). 247 Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 671 (2010). 248 Johnson Controls, Inc., 712 F.3d 1021(7th Cir. 2013). 249 D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2nd Cir. 2006). 250 § 10(b) FAA. 251 Pursuant to § 12 FAA. See also Webster v. A.T. Kearney, Inc., 507 F.3d 568, 571–572 (7th Cir. 2007). 252 I.e. (a) the arbitration agreement, the selection or appointment, if any, of an additional arbitrator and each written extension of the time, if any, within which to make the award; (b) the arbitral award and (c) each notice, affidavit, or other paper used upon an application to confirm, modify, or correct the award, and a copy of each order of the court upon such an application. 253 § 16(a)(1)(E) FAA. 254 Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576 (2008). 255 In re Wal-Mart Wage and Hour Employment Practices Litig., 737 F.3d 1262 (9th Cir. 2013).

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Uncertainty exists as to whether, in addition to the statutory grounds, there exist 122 non-codified common law grounds for vacatur. Some U.S. courts have taken this view and have vacated arbitral awards inter alia on the basis that the arbitral award was “arbitrary and capricious or irrational”,256 in violation of “public policy”257 or, most relevantly, that it reflected a “manifest disregard of the law”.258 It remains unclear whether these common law grounds are reconcilable with the pro-enforcement policy underlying the FAA.259 The most controversial common law ground for vacatur is “manifest disregard”. To 123 the extent that it is accepted as a valid ground,260 the courts take a very restrictive approach. In principle, a party must show that (i) the arbitral tribunal knew of the governing legal principle; (ii) the governing legal principle was explicit, certain and clearly applicable to the instant facts; and (iii) the arbitral tribunal deliberately refused to apply that governing principle.261 c) Lack of jurisdiction of the arbitral tribunal. An arbitral award may be set aside if 124 the arbitrators exceeded their powers.262 On a narrow reading, this is the situation where the decision is not covered by the scope of the arbitration agreement or where there is no valid arbitration agreement at all.263 However, courts tend broadly to construe the phrase “excess of arbitral authority” so as to cover any sort of arbitrator misconduct.264 The courts will fully review the existence and validity of the arbitration agreement 125 upon motions to compel or stay arbitration,265 unless the parties have vested the arbitral 256

This ground is particularly relevant in the domestic labour arbitration context. This ground is also particularly relevant in the domestic labour arbitration context. See United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987). 258 “Manifest disregard” is sometimes referred to as a sub-category of “excess of arbitral authority”, Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 442. 259 Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 440 et seq. 260 As regards “manifest disregard”: a circuit split arose because in its decision in Stolt Nielsen SA v. Animal Feeds International Corp., 559 U.S. 662, 672 fn. 3 (2010), the U.S. Supreme Court did not decide whether “manifest disregard” survived its Hall Street decision “as an independent ground for review or as a judicial gloss on the enumerated grounds for vacatur set forth at 9 U.S.C. § 10.” The following circuits have considered the doctrine to form a valid basis for vacating an arbitral award: Tully Constr. Co., Inc. v. Canam Steel Corp., 684 F. App’x. 24, 26 (2nd Cir. 2017); Frye v. Wild Bird Ctrs. of Am., Inc., 714 F. App’x 211, 213 (4th Cir. 2017); Arabian Motors Group v. Ford Motor Co., 2019 WL 2305313 (6th Cir. 2019); Renard v. Ameriprise Fin. Servs., Inc., 778 F.3d 563, 567–69 (7th Cir. 2015); Sanchez v. Elizondo, 878 F.3d 1216, 1221–22 (9th Cir. 2018); THI of NM at Vida Encantada, LLC v. Lovato, 864 F.3d 1080, 1084 (10th Cir. 2017). The following circuits have held that “manifest disregard” is no longer a valid basis for vacating an arbitral award: McKool Smith, P.C. v. Curtis Int’l, Ltd, 650 F. App’x 208, 211–12 (5th Cir. 2016); Medicine Shoppe Intern., Inc. v. Turner Invs., Inc., 614 F.3d 485, 489 (8th Cir. 2010); Campbell’s Foliage, Inc. v. Federal Crop Ins. Corp., 562 Fed. Appx. 828, 831 (11th Cir. 2014). The following circuits have held that the issue is undecided: Mountain Valley Prop., Inc. v. Applied Risk Servs., Inc., 863 F.3d 90, 95 (1st Cir. 2017); Anoruo v. Tenet Health System Hahnemann, 697 F. App’x. 110, 111, n.1 (3rd Cir. 2017); Schafer v. Multiband Corp., 551 Fed. Appx. 814, 818–19 (6th Cir. 2014). In a recent decision, the NY Supreme Court, Appellate Division reversed its previous decision to vacate an arbitral award for “manifest disregard” under the FAA, holding that this ground for vacatur “cannot be justified under the ‘emphatic federal policy in favour of arbitral dispute resolution’ embodied in the FAA” (Daesang Corp. v. NutraSweet Co., 2018 NY Slip Op 06331 (App. Div. 1st Dept. 2018)). More recently, the Second Circuit decided to remand an arbitral award to the arbitrator for clarification, rather than to vacate it, as it was unable to ascertain whether the award was issued in manifest disregard of the law on the basis of the arbitrator’s reasons (Weiss v. Sallie Mae, Inc., No. 18-2362 (2nd Cir. Sept 12, 2019)). 261 Hoeft v. MVL Group, Inc., 343 F.3d 57, 69 (2nd Cir. 2003); D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 111 (2nd Cir. 2006). 262 § 10(a)(4) FAA. 263 See Comprehensive Accounting Corp. v. Rudell, 760 F.2d 138, 140 (7th Cir. 1985). 264 See Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 466 et seq. 265 §§ 3, 4, 206 FAA. See supra mns 44 et seq. 257

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tribunal with Kompetenz-Kompetenz. The decision of a court upon a motion to compel arbitration will normally not be reviewed at the enforcement stage.266 126 If the decision on the validity and scope of the arbitration agreement was made by the arbitral tribunal, the courts will generally take a deferential approach at the enforcement stage.267 Courts will review the validity and scope of the arbitration agreement de novo only if the decision on the validity and scope of the arbitration agreement was referred to the arbitral tribunal and the party seeking vacatur of the arbitral award specifically objected to the arbitral tribunal’s Kompetenz-Kompetenz during the arbitration proceedings.268 d) Unlawful composition of the tribunal and other procedural irregularities. With regard to the composition of the arbitral tribunal, an arbitral award can be set aside “where there was evident partiality or corruption in the arbitrators, or either of them.”269 As stated above, judicial review of “evident partiality”, in the absence of a contractual challenge mechanism usually only takes place at the enforcement stage.270 128 So far as procedural irregularities in general are concerned, the principle is that while arbitral tribunals have broad discretion in conducting the arbitration, they must follow the parties’ express stipulations, e. g. in respect of the taking of evidence, the conduct of the hearing or the making of the arbitral award. They otherwise run the risk that the arbitral award will be vacated for “arbitrator misconduct”271 or “excess of arbitral authority.”272 In particular, arbitrators may not refuse “to postpone the hearing, upon sufficient cause shown” or “to hear evidence pertinent and material to the controversy.” An arbitral award will only be vacated, however, if the exclusion of evidence impaired the “fundamental fairness” of the proceeding.273 129 Finally, an arbitral award may be set aside where the arbitrators so imperfectly executed their powers that a mutual, final, and definite arbitral award upon the subject matter submitted was not made.274 On this basis, an arbitral award may be set aside if the arbitral tribunal must have failed to exercise the power conferred upon it because there is no other possible way to explain the outcome of the arbitral award.275 130 Irrespective of which ground of vacatur is applied, the courts have emphasized that informality is a hallmark of arbitration and that the discretion of arbitral tribunals in conducting the arbitration is limited only by the parties’ right to a fair trial and their express stipulations in the arbitration agreement. 127

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e) Public policy. In contrast to most modern arbitration laws,276 § 10 FAA does not provide for an all-encompassing public policy basis for setting aside an arbitral award. Rather, it mentions specific instances that would typically fall within such a general public policy provision. An arbitral award can notably be vacated if it was procured by Comedy Club Inc. v. Improv W. Assocs., 553 F.3d 1277,1283 (9th Cir. 2009). See supra mns 44 et seq. First Option Chicago, Inc. v. Kaplan., 514 U.S. 938, 943 (1995); VRG Linhas Aereas S.A. v. MatlinPatterson Global Opportunities Partners II L.P., 717 F.3d 322 (2nd Cir. 2013). See also Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013); Stolt-Nielson S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010). 268 First Option Chicago, Inc., 514 U.S. 938, 946; Arbitration between Halcot Navigation Ltd Partnership & Stolt-Nielsen Transp. Group, 491 F.Supp. 2d 413, 419 (S.D.N.Y. 2007). 269 § 10(a)(2) FAA. 270 See supra mn. 69. 271 § 10(a)(3) FAA. See Wise v. Wachovia Securities, LLC, 450 F.3d 265 (7th Cir. 2006). 272 See supra mn. 133 et seq. 273 LJL 33rd Street Assocs. LLC v. Pitcairn Props. Inc., 725 F.3d 184, 195 (2nd Cir. 2013). 274 § 10(a)(4) FAA. 275 Johnson Controls, Inc. v. Edman Controls, Inc. 712 F.3d 1021 (2013); Teamsters Local Union No. 436 v. The J.M. Smucker Co., 541 Fed. App’x. 529 (6th Cir. 2013). 276 Article 34(2)(b)(ii) ML. 266 267

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“corruption, fraud, or undue means”,277 whereby the term “undue means” is restrictively construed as addressing immoral behaviour similar to corruption or fraud.278 By the same token, an arbitral award may be set aside if the arbitrators committed corruption or fraud.279 The threshold to be met by the party applying for vacatur in either of these cases is very high.280

3. Enforcing arbitral awards a) General. As stated above, under U.S. law, the enforcement of arbitral awards, i. e. 132 the coercive effectuation or carrying out of the arbitral award, requires prior confirmation of the arbitral award.281 This requirement applies to domestic, non-domestic and foreign arbitral awards.282 While § 9 FAA, in respect of domestic arbitral awards, makes confirmation depen- 133 dent on the parties having agreed “that a judgment of the court shall be entered upon the award made pursuant to the arbitration”,283 such requirement does not apply to non-domestic and foreign arbitral awards made under the NYC or the IAICA. Pursuant to § 207 FAA, any party can apply for confirmation of the arbitral award within three years of the award being made.284 However, arbitral awards need not be confirmed in a domestic court prior to their enforcement in the United States. Even if the award is confirmed in a foreign jurisdiction, making it enforceable as a foreign judgment, it is still enforceable as an award under the NYC.285 b) Defences against enforcement. aa) Overview. Confirmation may only be refused 134 on the limited grounds provided in article V NYC as regards arbitral awards made under the NYC and the IAICA286 and in §§ 10 and 11 FAA as regards other arbitral awards (on §§ 10, 11 FAA, see supra mns 110–131).287 As explained supra mn. 116, the § 10(a)(1) FAA. Conoco, Inc. v. Oil, Chemical & Atomic Workers Intern. Union, 26 F.Supp. 2d 1310 (N.D. Okla. 1998). See also Carbonneau, The Law and Practice of Arbitration, 6th ed., 2018, 466. 279 § 10(a)(1), (2) FAA. 280 Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2nd Cir. 2013) (“evidence of corruption must be abundantly clear.”). 281 Supra mn. 118. 282 Cf. § 9 FAA and §§ 207, 302 FAA. See also McLaughlin/Genevro, (1986) 3 Berkeley J. Int’l L. 249 (250). For a position against the requirement of confirmation for non-domestic and foreign arbitral awards under the NYC, see Mosk/Nelson, (2001) 18 J. Int’l Arb. 463 (469–470). 283 The agreement need not be express. In particular, the use of the words “final” or “finally” will be sufficient to communicate this intent. If an express or implied agreement exists, the application for confirmation can be filed within one year after the award was made with the court specified by the parties or, if the parties have not specified any court, with the court in and for the district within which such award was made, see I/S Starbory v. National Metal Converters, Inc., 500 F.2d 424, 425–427 (2nd Cir. 1974). 284 This means within three years of the award being rendered by the arbitrators, not when it becomes final, Seetransport Wiking Trader Schiffahrtsgesellschaft MBH & Co. v. Navimpex Centrala Navala, 989 F.2d 572, 581 (2nd Cir. 1993). See also Phoenix Aktiengesellschaft v. Ecoplas, Inc., 391 F.3d 433, 435–436 (2nd Cir. 2004). Article IV NYC details the documents that need to be submitted with the application for confirmation. 285 Mosk/Nelson, (2001) 18 J. Int’l Arb. 463 (459); In a recent decision, it was held that where the threeyear limitation period for confirmation had run out, § 207 FAA did not preempt the court from enforcing a foreign judgment that had itself previously enforced the award. The court noted the distinction between arbitral awards and court judgments enforcing awards and held that the longer limitation period applying to judgments “would not frustrate the overriding purpose of [Chapter 2, FAA] to facilitate international commercial arbitration”, Commissions Import Export S.A. v. Republic of the Congo, No. 13-7004, 2014 WL 3377337 (D.C. Cir. 2014). 286 §§ 207, 302 FAA. On defences under article V NYC, see supra B mns 177–332. 287 § 9 FAA. 277 278

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defences to enforcement under article V NYC are not mirrored in §§ 10, 11 FAA, but in practice, lead to comparable results. Within the applicable time limits, the party opposing enforcement may file a counterclaim for vacatur, correction or modification of the arbitral award. The decision confirming or denying confirmation of an arbitral award can be appealed.288 135

bb) Enforcement of awards that were set aside. The question whether a foreign arbitral award that was set aside at the place of arbitration may nevertheless be enforced in the United States is not finally settled.289 In Chromalloy Aeroservices v. The Arab Republic of Egypt,290 the D.C. District Court confirmed for enforcement in the United States an arbitral award that had previously been set aside in Egypt. The court stressed the individual circumstances of the case and based its decision on article VII NYC, stating that refusing confirmation of the arbitral award would be contrary to U.S. public policy. In the cases that followed, U.S. courts were reluctant to confirm arbitral awards that had been set aside abroad, holding that the recognition of such arbitral awards would undermine a “principal precept” of the NYC.291 In Termorio S.A. E.S.P. v. Electranta, S.P., the D.C. Circuit Court distinguished Chromalloy on the basis that it had concerned an express contract provision that was violated by pursuing an appeal to vacate the arbitral award. In a recent decision, the Second Circuit, leaving aside such theoretical explanations, confirmed an arbitral award that had been set aside in Mexico, on the basis that the Mexican judgment setting aside the arbitral award had violated basic notions of justice by retroactively applying Mexican law.292 In the subsequent case of Thai-Lao Lignite, the Second Circuit, confirming and applying this high threshold, upheld the district court’s decision to deny enforcement of an award that had been set aside by a Malaysian court nine months after the time limit for challenging the award had arguably expired.293 In similar vein, the D.C. Circuit held that it can only disregard an annulment decision at the seat of the arbitration “if it violates this country’s ‘most basic notions of morality and justice’”.294 In a recent decision, the U.S. District Court for the Southern District of New York refused enforcement of an award set aside at the seat of the arbitration in Nigeria on the grounds that “[d]espite the seemingly anomalous rulings by the Nigerian courts […] this case does not raise the concerns animating the Second Circuit’s decision in Pemex”.295

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cc) Fulfilment, set-off and similar defences. The FAA does not contain a provision dealing with the situation in which a party asserts the fulfilment of the claim, a set-off, counterclaim or similar defence after the arbitral award has been rendered. Under §§ 9 § 16(a)(1)(D) FAA. For a details analysis, see Del Duca/Welsh, in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 995 (1011–1014). 290 Chromalloy Aeroservices v. The Arab Republic of Egypt, 939 F.Supp. 907 (D.D.C. 1996). 291 Termorio S.A. E.S.P. v. Electranta, S.P., 487 F.3d 928, 936 (D.C. Cir. 2007). See also Baker Marine (Nig.) Ltd v. Chevron (Nig.) Ltd & Chevron Corp., Inc.; Baker Marine (Nig.) Ltd v. Danos Curole Marine Contractors, Inc., 191 F.3d 194 (2nd Cir. 1999); Martin Spier v. Calzaturificio Technica S.p.A., 71 F. Supp. 2d 279 (S.D.N.Y. 1999). 292 Corporación Mexicana de Matenimiento Integral, S. de R.L. de C.V. v. Pemex-Exploración y Producción, No. 13-4022 (2nd Cir. 2016) holding that the enforcement of a vacated award was “appropriate only to vindicate ‘fundamental notions of what is decent and just’ in the United States”. 293 Thai-Lao Lignite (Thail) Co., Ltd v. Gov’t of the Lao People’s Democratic Republic, 864 F.3d 172, 186 (2nd Cir. 2017), a decision that Del Duca/Welsh describe as “typical of US courts’ general deference to the annulment of awards by courts exercising primary jurisdiction” (in: Bermann (ed.), Recognition and Enforcement of Foreign Arbitral Awards, 2017, 995 (1014)). 294 GETMA Int’l v. Republic of Guinea, No. 16-7087 (D.C. Cir. 2017). 295 Esso Exploration and Production Nigeria Limited v. Nigerian National Petroleum Corporation, Case 1:14-cv-08445-WHP, Document 250 (S.D.N.Y. Sep. 4, 2019). 288 289

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and 207 FAA, a motion to confirm an arbitral award can be denied only on limited grounds. Courts have therefore held that a party cannot invoke a set-off claim or similar defence to escape the recognition or confirmation of an arbitral award in summary proceedings.296 However, some courts have made exceptions to this principle for equitable reasons.297 In a recent decision, the D.C. District Court refused enforcement of an arbitral award against India as the award’s order of specific performance against a sovereign state would be in violation of the Foreign Sovereign Immunities Act and U.S. public policy under article V(2)(b) NYC.298 In another recent decision, the D.C. District Court confirmed the ICSID award in the matter of Micula v. Romania holding that the European Court of Justice‘s ruling on the incompatibility of intra-EU bilateral investment treaties with EU law in the Achmea case does not deprive the district court of its jurisdiction under the arbitration exception to the Foreign Sovereign Immunities Act and does not bar enforcement of the award.299 The decision has recently been affirmed by the D.C. Circuit.300

4. Preclusion of grounds for challenge and defences to enforcement As a rule, defences must be put forward as soon as possible, otherwise the party 137 concerned risks being precluded from raising them at a later stage. This becomes relevant in particular in enforcement and setting aside proceedings. a) Preclusion due to failure to object in the arbitral proceedings. A party may seek 138 to vacate or oppose confirmation of an award on jurisdictional grounds, provided that it objected to the arbitrator’s authority to decide that specific issue during the arbitration.301 If a party participates in the arbitration without timely “questioning the arbitrator’s authority to resolve the dispute”, that party cannot challenge the authority of the arbitrator to have ruled on such issue or claim at a later date.302 In order to preserve its objection to jurisdiction, a party is not required to try to enjoin or stay an arbitration proceeding in the courts.303 296 Tokura Construction Co. v. Corporacion Raymond, 533 F.Supp. 1274 (S.D.Tex. 1982); Audi NSU Auto Union A. G. v. Overseas Motors, Inc., 418 F.Supp. 982 (D.C. Mich); Fertilizer Corp of India v. IDI Management Corp., 517 F. Supp. 948 (S.D. Ohio. 1981); Mangistaumunaigaz Oil Production Association v. United World Trade, Inc., No. 96-WY-1290-WD (D.Colo. June 17, 1997). 297 Jugometal v. Samincorp, 78 F.R.D. 504 (S.D.N.Y. 1978) (court stroke the net balance between uncontested claims and counterclaims in recognition proceedings notwithstanding the fact that the arbitral tribunal, because of its own procedures, was unable to do so); Hellman v. Program Printing, Inc. 400 F. Supp. 915, 918 (S.D.N.Y. 1975) (court stayed the enforcement of the arbitral award following its confirmation); Middleby Corp. v. Hussmann Corp. 962 F.2d 614 (7th Cir. 1992) (court of first instance stayed the confirmation proceedings as to await a decision on the claim on the basis of which a set-off was declared). 298 Hardy Exploration & Production (India), Inc. v. Government of India, Ministry of Petroleum & Natural Gas, Civ. Action No. 16-140 (D.D.C. June 7, 2018). 299 Ioan Micula v. Government of Romania, Case 1:17-cv-02332-APM, Document 86 (D.D.C. Sep. 11, 2019). In another recent decision, the D.C. District Court granted Spain’s motion to stay the enforcement proceedings until the set-aside proceedings in Sweden have been concluded; see Novenergia II – Energy & Env’t (SCA) v. Kingdom of Spain, 2020 WL 417794 (D.D.C.). 300 Ioan Micula v. Government of Romania (D.C. Cir. May 19, 2020). 301 Opals on Ice Lingerie v. Body Lines, Inc., 320 F.3d 362, 368 (2nd Cir. 2003); Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1277–80 (9th Cir. 2006). 302 OMG, L.P. v. Heritage Auctions, Inc., 2015 WL 2151779 (5th Cir. May 8, 2015); Jones Dairy Farm v. Local No. P-1236, United Food and Commercial Workers Int’l Union, AFL-CIO, 760 F.2d 173, 175–76 (7th Cir. 1985); Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1105 (2nd Cir. 1991). See also supra mn. 53 et seq. 303 Kaplan v. First Options of Chicago, Inc., 19 F.3d 1503, 1510 (3rd Cir. 1994). See however Comprehensive Accounting Corp. v. Rudell, 760 F.2d 138, 141 et seq. (7th Cir. 1985).

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A waiver of the right to challenge an arbitral award on jurisdictional grounds generally does not prohibit review of the arbitrator’s conduct pursuant to Section 10(a) of the FAA.304

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b) Preclusion due to failure to bring a setting-aside application. The FAA provides for a shorter time limit for motions to vacate than for those to confirm an arbitral award. There are older decisions stating that if a party does not move to vacate the arbitral award, it loses the right to rely on vacatur defences in subsequent confirmation proceedings.305 However, pursuant to the majority view, a party is not obliged to seek vacatur of the arbitral award in order to resist enforcement of the arbitral award.306 304 Hoeft v. MVL Grp., Inc., 343 F.3d 57, 64–65 (2nd Cir. 2003) (“Since federal courts are not rubber stamps, parties may not, by private agreement, relieve them of their obligation to review arbitration awards for compliance with Section 10(a).”). 305 Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851 (11th Cir. 1989); Florasynth, Inc. v. Pickholz, 750 F.2d 171 (2nd Cir. 1983). 306 Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123 (7th Cir. 1997); Hartford Fire Ins. Co. v. Lloyd’s Syndicate 0056 ASH, No. CIV397CV00009AVC, 1997 WL 33491787 (July 2, 1997 D. Conn.); Jamaica Commodity Trading Co. Ltd v. Connell Rice & Sugar Co., Inc., 1991 WL 123962 (S.D.N.Y. July 3, 1991).

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Table of Cases Albania CA Tirana, YCA XLIII (2018), 413 Argentina Cámara Nacional de Apelaciones en lo Comercial, Revista La Ley 2003-C-676 Australia Antclizo Shipping Corp. v. The Food Corp. of India, [1998] WASC 342 Brali v. Hyundai Corp., 84 ALR 176 (1988), YCA XV (1990), 360 Coeclerici Asia (Pte) Ltd v. Gujarat NRE Coke Ltd, [2013] FCA 882, CLOUT Case No. 1763 Comandate Marine Corp. v. Pan Australia Shipping Pty Ltd, 157 FCR 45, YCA XXXII (2007), 224 Commonwealth Development Corp. v. Montague, [2000] QCA 252, YCA XXVV (2001), 744 Corvetina Technology Ltd v. Clough Engineering Ltd, 183 FLR 317 Electra Air Conditioning BV v. Seeley Int’l Pty Ltd, [2008] FCAFC 169 Gujarat NRE Coke Ltd v. Coeclerici Asia (Pte) Ltd, [2013] FCAFC 109 Hallen v. Angledal, YCA XXIX (2004), 520 HIH Casualty & General Insurance Ltd v. R.J. Wallace, 204 FLR 297 John Francis Davies v. Peter Hodgetts, YCA XXIII (1998), 619 ML Ubase Holdings Co. Ltd v. Trigem Computer Inc., [2005] NSWSC 224, YCA XXXI (2006), 537 Recyclers of Australia Pty Ltd v. Hettinga Equipment Inc., [2000] FCA 547 Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty Ltd, (1993) 118 ALR 655, YCA XX (1995), 628 Stericorp. Ltd v. Stericycle Inc., [2005] VSC 700, YCA XXXI (2006), 549 TCL Air Conditioner (Zhongshan) Co. Ltd v. Castel Electronics Pty Ltd, [2014] FCAFC 83, CLOUT Case No. 1756 Toyo Engineering Corp. and John Holland Pty Ltd, YCA XXVI (2001), 750 Transpac Capital Pte Ltd v. Buntoro, [2008] NSWSC 671, YCA XXXIII (2008), 349 Traxys Europe SA v. Balaji Coke Industry Ltd (No. 2), 201 FCR 535 Uganda Telecom Ltd v. Hi-Tech Telecom Pty Ltd, [2011] FCA 131, YCA XXXVI (2011), 252 Walter Rau Neusser Oel und Fett AG v. Cross Pacific Trading, Ltd, [2005] FCA 1102, YCA XXXI (2006), 559

B mn. 165 B mn. 68

B mn. 345 B mn. 279 A mn. 154; B mn. 203 B mn. 95 B mns 66, 104 B mn. 332 B mn. 93 A mn. 154; B mn. 203 B mn. 334 B mn. 115 B mn. 150 B mn. 341 B mn. 129 B mns 62, 68, 272 B mn. 301 A mns 2, 117, 129, 130, 131, 135 B mn. 334 B mn. 206 B mn. 307 B mn. 179 B mn. 137

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Table of Cases Austria OGH, 3 May 1899, GlUNF 603 OGH, 27 October 1926, ZBl 1927/60 OGH, 20 November 1934, Rsp 1935/17/10 OGH, 4 September 1936, SZ 18/151 OGH, 11 June 1969, 3 Ob 62/69, SZ 42/87, YCA II (1977), 232 OGH, 17 November 1971, 8 Ob 233/71, JBl 1974, 629, YCA I (1976), 183 OGH, 11 April 1972, 4 Ob 18/72 OGH, 21 February 1978, 3 Ob 120/77, SZ 51/18, YCA X (1985), 418 OGH, 18 November 1982, 8 Ob 520/82, IPRax 1984, 97, YCA IX (1984), 159 OGH, 11 May 1983, YCA X (1985), 421 OGH, 3 September 1986, 1 Ob 545/86 OGH, 11 July 1990, 3 Ob 79/90 OGH, 6 September 1990, 6 Ob 572/90, ecolex 1991, 86 OGH, 14 November 1990, 1 Ob 711/89 OGH, 22 May 1991, SZ 64, no. 61, 323, YCA XXI (1996), 521 OGH, 23 October 1991, 3 Ob 88/91, ZfRV 1992, 234 OGH, 25 June 1992, 7 Ob 545/92, SZ 65/95, IPRax 1994, 138, YCA XXII (1997), 619 OGH, 12 December 1992, 7 Ob 612/91, IPRax 1992, 331 OGH, 20 October 1993, ÖJZ 1994, 513, YCA XXIV (1999), 919 OGH, 20 October 1993, SZ 66/131, Rev. Arb. 1998, 419, YCA XX (1995), 1051 OGH, 14 December 1994, 7 Ob 604/94 OGH, 13 June 1995, 4 Ob 533/95 OGH, 31 August 1995, 3 Ob 566/95 OGH, 23 February 1998, 3 Ob 115/95, SZ 71/26, ZRVgl 1999, 24, Rev. Arb. 1999, 385, YCA XXIV (1999), 919 OGH, 5 August 1999, 1 Ob 163/99y OGH, 13 July 2000, 8 Ob 93/00k OGH, 27 February 2001, 1 Ob 273/00d OGH, 21 March 2001, 3 Ob 172/00s, SZ 74/50 OGH, 17 August 2001, 1 Ob 300/00z OGH, 4 September 2001, 5 Nd 510/01, IPRax 2003, 64 OGH, 19 January 2003, 7 Ob 310/02t OGH, 29 April 2003, 10 Ob 22/03x OGH, 9 February 2004, SchiedsVZ 2005, 52, YCA XXX (2005), 416 OGH, 19 February 2004, 6 Ob 151/03 OGH, 21 April 2004, 9 Ob 39/04g OGH, 26 January 2005, 3 Ob 221/04b, SZ 2005/9, JBl 2005, 661, IPRax 2006, 496, YCA XXX (2005), 421 OGH, 31 March 2005, YCA XXXI (2006), 583 OGH, 24 August 2005, 3 Ob 65/05p, IPRax 2006, 268, YCA XXXII (2007), 254

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D mn. 88 D mn. 79 D mn. 79 D mn. 39 B mn. 165 B mn. 83 D mn. 41 B mns 104, 107, 111 B mn. 249 B mn. 332 D mn. 47 D mn. 48 D mn. 79 A mn. 50 B mn. 206 B mn. 175 A mn. 120; B mns 12, 24, 42, 65, 66, 286 B mn. 225 B mn. 293 B mn. 293 D mn. 19 A mn. 45 D mn. 114 B mns 293, 311 D mn. 40 D mn. 16 D mn. 110 B mns 344, 346; D mn. 118 D mn. 16 D mn. 98, J mn. 77 D mn. 45 D mn. 26 B mns 96, 123 D mn. 28 D mn. 26 A mn. 136; B mns 179, 194, 195, 199, 221, 293, 307, 330 B mn. 236 B mns 131, 206

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Table of Cases OGH, 26 April 2006, 7 Ob 236/05i OGH, 26 April 2006, 3 Ob 211/05h, SZ 2006/65, YCA XXXII (2007), 259 OGH, 7 August 2007, 4 Ob 142/07x OGH, 23 October 2007, YCA XXXIII (2008), 354 OGH, 1 April 2008, 5 Ob 272/07x OGH, 3 September 2008, 3 Ob 35/08 f, SZ 2008/124, IPRax 2009, 352, YCA XXXIV (2009), 409 OGH, 30 March 2009, 7 Ob 266/08 f OGH, 30 June 2010, 7 Ob 111/10i OGH, 1 September 2010, RdW 2011, 92, YCA XXXVI (2011), 256 OGH, 13 April 2011, 3 Ob 154/10h, JBl 2011, 603 OGH, 24 August 2011, 3 Ob 65/11x, SZ 2011, no. 106, 163, YCA XXXVIII (2013), 317, CLOUT Case No. 1573 OGH, 18 April 2012, 3 Ob 38/12b, CLOUT Case No. 1572 OGH, 19 April 2012, 6 Ob 42/12p OGH, 18 September 2012, 4 Ob 30/12h OGH, 16 April 2013, wbl 2013, 621, YCA XXXIX (2014), 347 OGH, 7 May 2013, 2 Ob 65/13t OGH, 8 May 2013, 6 Ob 47/12z OGH, 17 June 2013, 2 Ob 112/12b, SZ 2013/57 OGH, 16 December 2013, 6 Ob 43/13m OGH, 17 February 2014, 4 Ob 197/13v OGH, 5 August 2014, 18 ONc 1/14p OGH, 5 August 2014, 18 ONc 2/14k OGH, 13 August 2014, 18 ONc 3/14g (18 ONc 4/14d) OGH, 10 October 2014, 18 OCg 2/14i OGH, 13 November 2014, 18 ONc 5/14a OGH, 18 February 2015, 3 Ob 191/14 f, YCA LX (2015), 377 OGH, 23 June 2015, 18 OCg 1/15v OGH, 19 August 2015, 18 OCg 2/15s OGH, 18 November 2015, 3 Ob 24/15y OGH, 17 February 2016, 3 Ob 208/15g, ecolex 2016, 393, YCA XLI (2016), 398 OGH, 23 February 2016, 18 OCg 3/15p OGH, 22 March 2016, 5 Ob 30/16x OGH, 19 April 2016, 18 ONc 3/15h OGH, 28 September 2016, 18 OCg 2/16t OGH, 28 September 2016, 18 OCg 3/16i OGH, OGH, OGH, 348 OGH,

19 October 2016, YCA XLII (2017), 346 6 December 2016, 18 OCg 5/16h 1 March 2017, 5 Ob 72/16y, SZ 2017/30, YCA XLII (2017), 2 March 2017, 18 OCg 6/16 f

D mn. 28 B mn. 166 D mn. 26 B mns 218, 231, 232 D mn. 78 B mns 168, 172 D mn. 41 A mn. 79; D mn. 79 B mns 227, 228 B mn. 261 A mn. 143, B mns 165, 168, 179, 190, 201, 273–275, 307, 316 A mn. 131 D mn. 32 D mn. 65 B mn. 275 D mns 44, 45 D mn. 46 D mn. 69 D mn. 35 D mns 66, 69 D mns 67, 70 D mns 67, 70 D mn. 70 D mn. 79 D mns 67, 70 D mn. 115 D mns 26, 33, 55 D mn. 79 D mn. 82 B mns 165, 168; D mn. 115 D mn. 79 A mn. 99; D mn. 69 D mn. 70 D mns 79, 89 A mns 136, 141; D mns 79, 89, 114 B mn. 142 D mns 79, 89 A mn. 37; B mns 127, 135, 154, 301, 331; D mn. 114 D mn. 79

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Table of Cases OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH,

7 June 2017, 3 Ob 10/17t, YCA XLIII (2018), 415 7 September 2017, 18 ONc 2/17i 21 December 2017, 6 Ob 104/17p 17 January 2018, 6 Ob 195/17w 6 February 2018, 18 ONc 4/17h 28 March 2018, 6 Ob 19/18i 19 April 2018, 4 Ob 28/18w 8 May 2018, 18 ONc 1/18v 30 November 2018, 18 OCg 5/18m 30 November 2018, 18 ONc 2/18s 19 December 2018, 3 Ob 153/18y, SchiedsVZ 2019, 154

OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH, OGH,

15 May 2019, 18 OCg 1/19z 15 May 2019, 18 ONc 1/19w 1 October 2019, 18 OCg 5/19p RIS-Justiz RS0004281 RIS-Justiz RS0021668 RIS-Justiz RS0033744 RIS-Justiz RS0044991 RIS-Justiz RS0045026 RIS-Justiz RS0045337 RIS-Justiz RS0045359 RIS-Justiz RS0045375 RIS-Justiz RS0045073 RIS-Justiz RS0045079 RIS-Justiz RS0045085 RIS-Justiz RS0045092 RIS-Justiz RS0045949 RIS-Justiz RS0046052 RIS-Justiz RS0046087 RIS-Justiz RS0053109 RIS-Justiz RS0053103 RIS-Justiz RS0075366 RIS-Justiz RS0110743 RIS-Justiz RS0117294 RIS-Justiz RS0119996 RIS-Justiz RS0126434 RIS-Justiz RS00445092 RIS-Justiz RS010937947 RIS-Justiz RS012968546

Belgium Const. Court, 16 February 2017, no. 21/2017, www.const-court.be Cass., 4 October 1963, RW 1963–64, 765 Cass., 9 February 1973, RCJB 1974, 187

806

B mns 179, 254; D mn. 114 D mn. 63 A mn. 2 A mn. 33; D mn. 24 D mn. 75 D mn. 26 D mn. 33 D mn. 63 D mn. 83 A mn. 45; D mn. 43 B mns 172, 179, 201, 211, 233, 261, 307; D mn. 78 D mn. 79 A mn. 69; D mn. 67 A mn. 70 D mn. 17 D mn. 65 D mn. 56 D mn. 21 D mn. 49 D mn. 45 D mn. 88 D mn. 28 D mn. 16 D mn. 37 D mn. 107 D mn. 79 D mn. 68 D mn. 68 D mn. 68 D mn. 42 D mn. 42 D mn. 79 D mn. 114 D mn. 78 D mn. 69 D mn. 69 D mn. 79 D mn. 68 D mn. 67 E mn. 122 E mn. 61 E mn. 37

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Table of Cases Cass., 28 June 1979, Arr. Cass. 1978–79, 1303; Pas. 1979, I, 1260; RW 1980–81, 539 Cass., 5 September 1980, JT 1981, 518 Cass., 8 December 1988, YCA XV (1990), 121 Cass., 12 November 1997, Arr. Cass. 1997, 1115 Cass., 5 June 1998, J.T. 1998, 701, Rev. Arb. 1998, 715, YCA XXIV (1999), 603 Cass., 21 January 1999, Arr. Cass. 1999, 69 Cass., 2 September 2004, Arr. Cass. 2004, afl. 9, 1271 Cass., 15 October 2004, NjW 2005, 630; RW 2004–05, 1063; TBH 2005, 488 and [email protected] 2004, Vol. 5, 23, YCA XXXI (2006), 587 Cass., 10 November 2005, RW 2005–06, 1104 Cass., 16 November 2006, TBH 2007, 889 Cass., 25 May 2007, RCJB 2010, 453 Cass., 5 March 2009, c.08.0028.G/52, unpublished Cass., 14 January 2010, C.08.0503.N, Sebastian International Inc. v. Common Market Cosmetics NV, Pas. 2010, 119, RABG 2011, 303, RW 2010–11, 1087 Cass., 23 March 2010, www.cass.be Cass., 7 November 2013, b-Arbitra 2014, 211 Cass., 26 October 2015, b-Arbitra 2017, 149 Cass., 15 March 2019, RW 2019–20, 744 Cass., 3 October 2019, www.cass.be Cass., 7 November 2019, www.cass.be CA Antwerp, 14 October 1987, Pas. 1988, II, 31 CA Antwerp, 15 September 1997, TBH 1998, 132 CA Antwerp, 8 June 1998, P&B 1999, 181 CA Antwerp, 26 June 2000, P&B 2001, 183 CA Antwerp, 13 November 2000, P&B 2001, 261 CA Antwerp, 26 June 2000, TPB 2001, 183 CA Antwerp, 17 December 2001, NjW 2005, 630 CA Antwerp, 22 December 2003, 2002/AR/25, unpublished CA Antwerp, 13 December 2005, 2004/AR/540, unpublished CA Antwerp, 19 December 2005, 2003/A.R./1909 CA Brussels, 9 September 1959, Pas. 1961, II, 59 CA Brussels, 14 June 1960, JT 1960, 719 CA Brussels, 25 June 1982, TBH 1983, 186 CA Brussels, 4 October 1985, JT 1985, 93 CA Brussels, 4 October 1985, RDIDC 1987, 296, YCA XIV (1989), 618 CA Brussels, 25 February 1987, Ann. Liège 1988, 59 CA Brussels, 21 February 1990, TvA 1990, 162 CA Brussels, 4 November 1991, JT 1992, 60 CA Brussels, J.T. 1997, 319, Rev. Arb. 1998, 181, YCA XXII (1997), 643

E mns 31, 33 E mn. 95 E mn. 68 E mn. 83 B mns 267, 273, 275, 277 E mn. 16 E mn. 82 B mn. 129; E mn. 32

E mn. 120 E mn. 32 E mn. 120 E mn. 118 A mn. 37; E mn. 32

E mn. 83 E mn. 53 E mns 73, 118 E mn. 115 E mn. 115 E mn. 112 E mns 37, 42 E mn. 32 E mns 118, 120 E mn. 120 E mn. 118 E mn. 121 E mn. 32 E mn. 37 E mn. 118 E mns 120, 121 E mns 47, 104, 121 E mn. 47 E mn. 32 E mn. 32 B mn. 129 E mn. 118 E mn. 47 E mns 37, 47 B mns 189, 270, 272, 325, 334; E mns 37, 47

807

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Table of Cases CA Brussels, 8 January 2002, JT 2002, 792 CA Brussels, 27 February 2003, TBH 2005/9, 929 CA Brussels, 5 March 2013, JT 2014, 119 CA Brussels, 29 August 2018, YCA XLIV (2019), 456 CA Ghent, 19 January 2004, 2002/A.R./1503, unpublished CA Ghent, 6 January 2005, 2003/A.R./565, unpublished CA Ghent, 9 September 2005, 2004/A.R./1511, unpublished CA Ghent, 19 November 2007, RW 2009–10, Vol. 15, 635 CA Ghent, 30 April 2009, 2008/AR/1375, TBH 2009/9, 985 CA Liège, 26 March 1973, Jur. Liège, 1972–73, 281 CA Liège, 20 February 1987, JLMB 1987, 837 CA Liège, 17 November 1993, RRD 1994, 89 CA Liège, 28 April 2003, JT 2003, 811 CA Liège, 28 April 2003, Cah. Arb. 2011, 847 CA Liège, 3 March 2015, JT 2015, 506 CA Mons, 22 June 1982, Pas. 1983, II, 8 CA Mons, 15 June 1995, JT 1996, 80 Comm. Antwerp (Hasselt), 13 July 2017, RW 2018–19, 1067 Comm. Brussels, 29 October 1991, TBH 1993, 1118 Comm. Brussels, 6 May 1993, RW 1993–94, 474 Comm. Brussels, 5 October 1994, Rev. Arb. 1995, 311, YCA XXII (1997), 637 Comm. Brussels, 31 May 2001, DCCR 53, 2001, 407 Comm. Ghent, 8 November 1995, TGR 1996, 17 Comm. Ghent, 18 September 1997, TBH 1999, 43 Comm. Ghent, 21 December 2000, DAOR 2001, Vol. 60, 324 Comm. Hainaut (Tournai), 21 December 2016, TBH 2017, 1006 Comm. Hasselt, 15 February 1999, TBH 1999, 872 Comm. Hasselt, 14 June 2000, RW 2000–01, 1283 Comm. Kortrijk, 9 October 1975, YCA XX (1995), 1057 Comm. Leuven, 19 September 1989, TBH 1990, 1022 Comm. Leuven, 24 March 1992, TBH 1993, 1131 Comm. Leuven, 14 September 1999, RW 1999–2000, 1302 Comm. Liège, 17 March 1975, BRH 1977, 186 Comm. Tongeren, 18 March 1976, Rechtspraak in Handelszaken 1976, 501 Comm. Verviers, 13 June 1977, Jur. Liège 1977–78, 79 Court of First Instance Antwerp, 14 October 1987, Pas. 1988, II, 31 Court of First Instance Antwerp, 11 February 1991, Pas. 1991, II, 108 Court of First Instance Bruges, 3 January 2001, TWVR 2001, 161 Court of First Instance Brussels, 14 June 1901, Pas. 1902, II, 8 Court of First Instance Brussels, 29 June 1959, Pas. 1961, II, 55 Court of First Instance Brussels, 9 September 1959, Pas. 1961, II, 59 Court of First Instance Brussels, 24 January 1962, JT 1962, 157 Court of First Instance Brussels, 30 December 1969, Pas. 1970, II, 73

808

E mn. 120 E mn. 32 E mn. 55 E mn. 20 E mn. 32 E mn. 47 E mn. 121 E mn. 32 E mn. 54 E mn. 47 E mn. 47 E mns 47, 104 E mn. 32 E mn. 115 E mn. 61 E mn. 46 E mns 47, 104 E mn. 34 E mn. 32 E mn. 42 B mns 105, 129; E mn. 32 E E E E E E E E E E E E E

mn. 47 mn. 28 mn. 20 mn. 32 mn. 34 mn. 37 mns 35, 47 mns 35, 47 mns 47, 104 mn. 32 mn. 32 mn. 32 mn. 46

E E E E E E E E E

mn. 47 mns 37, 42 mns 47, 104 mns 35, 47 mn. 47 mn. 120 mns 47, 104, 121 mn. 69 mn. 118

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Table of Cases Court of First Instance Brussels, 15 October 1975, JT 1976, 493 Court of First Instance Brussels, 20 February 1990, JT 1990, 744 Court of First Instance Brussels, 13 March 1992, Act. Dr. 1992, 1377 Court of First Instance Brussels, 23 June 1992, Res Jur. Imm. 1993, 87 Court of First Instance Brussels, 25 January 1996, JT 1997, 6, YCA XXII (1997), 643 Court of First Instance Brussels, 25 October 1996, JT 1997, 394 Court of First Instance Brussels, 4 April 2001, RG 00/10.507/A and 00/10.611/A, unpublished Court of First Instance Brussels, 5 October 2006, JT 2007, 37 Court of First Instance Brussels, 14 December 2006, JT 2007, 207 Court of First Instance Brussels, 25 September 2009, JT 2010, Vol. 6383, 112 President Court of First Instance Brussels, 18 December 2009, JLMB 2010/1, 17 Court of First Instance Brussels, 10 November 2011, JT 2012, 334 Court of First Instance Charleroi, 1 December 1978, RRD 1979, 935 Court of First Instance Dinant, 13 December 1962, Jur. Liège 1962–63, 133 Court of First Instance Hasselt, 24 December 1996, RW 1997–98, 682 Court of First Instance Hasselt, 13 May 2000, RG 00/1258/A, TBBR 2004, Vol. 4, 235 Court of First Instance Ghent, 6 March 1997, 1995/AR/129 Court of First Instance Liège, 10 November 1976, JT 1978, 137 Court of First Instance Liège, 13 October 1988, JLMB 1988, 1511 Court of First Instance Liège, 23 February 1996, JLMB 1996, 1319 Court of First Instance Liège, 14 September 1998, DAOR 1999, 226 Court of First Instance Mechelen, 16 April 1985, Pas. 1985, I, 50 President of the Court of First Instance Mechelen, 27 June 1996, EJ 1997, 11 Court of First Instance Mons, 4 October 1984, RRD 1984, 295 Court of First Instance Mons, 22 March 1999, Rev. not. b. 1999, 564 Court of First Instance Namur, 2 October 1996, JT 1997, 276 Court of First Instance Oudenaarde, 5 January 1984, RW 1984–85, 1098 Court of First Instance Tongeren, 2 November 2001, AR 00/789/A and 01/694/A, unpublished Justice of the Peace Berchem, 26 November 1996, Tijdschrift voor Appartements- en Immorecht 1997, 34 Justice of the Peace Ghent, 9 March 1998, DCCR 1998, 59 Justice of the Peace Hasselt, 16 March 1999, DCCR 1999, 70 Justice of the Peace Nieuwpoort, 18 January 2000, RW 2000–01, 490

E mn. 47 E mns 47, 104 E mn. 47 E mns 47, 104 B mn. 270 E mn. 120 E mn. 120 E mns 53, 54 E mn. 53 E mn. 120 E mn. 53 E mn. 55 E mn. 121 E mn. 47 E mn. 32 E mn. 120 E E E E E E E

mn. 120 mn. 47 mn. 47 mn. 37 mns 35, 47 mn. 47 mn. 47

E mn. 120 E mn. 47 E mn. 42 E mns 47, 104 E mns 47, 120 E mn. 47 E mns 47, 104 E mn. 37 E mn. 47

809

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Table of Cases Justice of the Peace Nivelles, 18 October 1978, T. Vred. 1979, 260 Justice of the Peace Verviers, 26 June 1982, JDF 1983, 318 Labour CA Brussels, 29 July 1974, JTT 1974, 276 Labour CA Brussels, 8 March 1982, JTT 1982, 268 Labour CA Ghent, 28 March 1986, RW 1987–88, 817 Labour CA Hasselt, 24 June 1974, RW 1975–76, 372 Labour Court Hasselt, 22 November 1974, Limb. Rechtsl. 1975, 82

E E E E E E E

Bosnia and Herzegovina Constitutional Court, YCA XXXVII (2012), 166 Supreme Court, YCA XLI (2016), 403

B mn. 300 B mn. 300

Brazil STJ, 12 November 1991, REsp 15231/RS, DJ 9 December 1991 p. 18043 STJ, 13 March 1995, REsp 33200/SP, DJ 15 May 1995 p. 13407 STJ, 25 October 2005, REsp 612439/RS, DJ 14 September 2006 p. 299 STJ, 3 August 2005, SEC 856/EX (2005/0031430-2), DJ 27 June 2005 p. 203, L’Aiglon S/A v. Têxtil União S/A STJ, 17 August 2005, Thales Geosolutions Inc. v. Fonseca Almeida Representações e Comércio Ltda. – FARCO, YCA XXXII (2007), 271 STJ, 18 August 2005, REsp 712566/RJ, DJ 5 September 2005 p. 407 STJ, 11 October 2005, REsp 778154/BA, DJ 24 October 2005 p. 221 STJ, 15 February 2006, SEC 967/EX, DJ 20 March 2006 p. 175, Plexus Cotton Ltd v. Santana Têxtil S/A STJ, 17 May 2006, SEC 866/GB, DJ 16 October 2006 p. 273, Oleaginosa Moreno Hermanos SA v. Moinho Paulista Ltda STJ, 19 June 2006, Tremond Alloys and Metals Corporation v. Metaltubos Indústria e Comércio de Metais Ltda, YCA XXXVII (2012), 175 STJ, 20 June 2007, SEC 1210/GB, DJ 6 August 2007 p. 444 STJ, 3 October 2007, SEC 831/FR, DJ 19 November 2007 p. 177 STJ, 19 August 2008, Resp 804306/SP, IPRax 2012, 170 STJ, 20 August 2008, SEC 894/UY, DJe 09/10/2008 STJ, 17 December 2008, SEC 978/GB, DJ 5 March 2009 STJ, 28 May 2009, Devcot S/A v. Ari Giongo, YCA XXXVII (2012), 187 STJ, 19 August 2009, SEC 3035/FR (2008/0044435-0), DJe 31 August 2009, Atecs Mannesmann GmbH v. Rodrimar S/A Transportes Equipamentos Industriais e Armazéns Gerais STJ, 29 June 2010, SEC 4415/US, DJe 19 August 2010 STJ, 21 March 2012, Louis Dreyfus Commodities Brasil S.A. v. Leandro Volter Laurindo De Castilhos, YCA XXXVIII (2013), 334 STJ, 18 April 2012, Kanematsu USA Inc. v. ATS – Advanced Telecommunications Systems do Brasil Ltda, YCA XXXVIII (2013), 338 STJ, 12 June 2012, 1297974/RJ, DJe 19 June 2012

810

mn. 37 mn. 120 mn. 42 mns 29, 47 mns 29, 47 mn. 29 mn. 47

F mn. 77 F mn. 77 F mn. 37 F mns 23, 84 B mn. 307

F mn. 37 F mn. 22 F mns 79, 84 F ms 23, 84 B mns 179, 325

F mn. 17 F mn. 28 A mn. 15 F mn. 28 F mn. 84 B mn. 230 F mn. 86, 87

F mn. 23 B mns 177, 179 B mn. 325

F mn. 64

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Table of Cases STJ, 19 March 2013, REsp 1355831/SP, DJe 22 April 2013 STJ, 8 May 2013, CC 111230/DF (2010/0058736-6), DJe 3 April 2014 STJ, 21 May 2013, REsp 1278852/MG, DJe 19 June 2013 STJ, 19 June 2013, SEC 4213/EX, DJe 26 June 2013, Weil Brothers Cotton Inc. v. Estate of Pedro Ivo de Freitas, YCA XXXIX (2014) 361 STJ, 7 August 2013, SEC 6753/EX, DJe 19 August 2013 STJ, 7 August 2013, SEC 4024/EX (2010/0073632-7), Keytrade AG v. Ferticitrus Indústria e Comércio de Fertilizantes Ltda, YCA XXXIX (2014) 364 STJ, 16 October 2013, SEC 4516/EX, DJe 30 October 2013 STJ, 20 November 2013, SEC 8847/EX, DJe 28 November 2013, Paladin PM Holmes Brazil Investors LLC v. Molnar Construtora e Incorporadora Ltda, YCA XXXIX (2014), 372 STJ, 21 May 2014, SEC 9880/EX 2013/0296479-3, DJ 27 May 2014, CIMC Raffles Offshore (Singapore) Ltd v. Schahin Holding SA, YCA XL (2015), 383 STJ, 2 December 2015, SEC 5782/EX (2011/0129084-7), DJ 16 December 2015, EDF International S/A v. Endesa Latinoamérica S/A, YCA XLI (2016), 415 STJ, 16 December 2015, SEC 11593/EX (2014/0148674-1), DJ 18 December 2015, Biglift Shipping BV v. Transdata Transportes Ltda, YCA XLI (2016), 418 STJ, 17 December 2015, Resp. 1331100/BA (2012/0100301-4), DJe 22 February 2016 STJ, 15 September 2016, REsp. 1602076/SP (2016/0134010-1), DJe 30 September 2016 STJ, 23 November 2016, CC 146939/PA (2016/0145422-2), DJe 30 November 2016 STJ, 19 April 2017, SEC 9412/US (2013/0278872-5), DJ 30 September 2017, ASA Bioenergy Holding AG v. Adriano Giannetti Dedini Ometto, YCA XLIII (2018), 426 STJ, 7 June 2017, SEC 14679/EX (2015/0265413-8), Empresa de Investigação e Desenvolvimento de Electrônica S.A. v. INACE, YCA XLIV (2019), 460 STJ, 6 September 2017, SEC 15977/EX (2016/0210574-9), DJe 15 September 2016 STJ, 11 October 2017, CC 139519/RJ (2015/0076635-2), DJe 10 November 2017, Petróleo Barsileira S.A. v. Agencia Nacional de Petróleo, Gás Natural e Biocombustíveis, CLOUT Case No 1764 STJ, 20 November 2017, SEC 16016/FR (2016/0222227-6), Winterthur Gas & Diesel AG v. Nuclébras Equipamentos Pesados SA, YCA XLIV (2019), 467 STJ, 29 November 2017, SEC 16208/EX (2016/0281131-9), Ecodiesel Colombia S/A v. Dedini S/A Indústrias de Base, YCA XLIV (2019), 470 STJ, 5 December 2017, REsp 1586383/MG (2014/0236615-2), DJe 14 December 2017 STJ, 27 February 2018, REsp 1628819/MG (2016/0255310-1), DJe 15 March 2018

F mn. 33 F mn. 35 F mn. 35 F mn. 79

F mn. 82 F mn. 79

F mn. 82 F mn. 82

F mn. 83

F mn. 88

F mn. 23

F mn. 33 F mns 8, 25, 33 F mn. 35 F mns 79, 83, 87

F mn. 61

F mn. 82 A mn. 53; F mn. 35

F mns 11, 79

F mn. 19

F mn. 63 F mn. 25

811

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Table of Cases STJ, 8 May 2018, REsp 1698730/SP (2016/0146726-1), DJe 21 May 2018 STJ, 23 May 2018, AgInt no CC 153.498/RJ (2017/0181737-7), DJe 14 June 2018 STJ¸ 26 June 2018, REsp 1614070/SP (2016/0186006-8), DJe 29 June 2018 STJ, 15 August 2018, SEC 14.385/EX (2015/0206738-2), YCA XLIV (2019), 473, Edmund Burke v. Carlos Alberto Resende Sobral STJ, 22 August 2018, AgInt no CC 156133/BA (2017/0334832-7), DJe 21 September 2018 STJ, 18 September 2018, REsp 1639035/SP (2015/0257748-2), DJe 15 October 2018 STJ, 10 October 2018, CC 150830/PA (2017/0024975-1), DJe 16 October 2018 STJ, 10 October 2018, CC 157099/RJ (2018/0051390-6), DJe 30 October 2018 STJ, 27 November 2018, AgInt no AREsp 1192648/GO (2017/ 0274999-3), DJe 4 December 2018 STJ, 9 April 2019, REsp 1656643/RJ (2015/0243634-0), DJe 12 April 2019 STJ, 15 May 2019, SEC 14930/EX (2015/0302344-0), DJe 27 June 2019 TJMG, 1 December 2006, 1.0024.06.206390-4/001 TJMG, 9 August 2011, 1.0027.04.005585-0/001 TJMG, 20 June 2017, 1.0000.16.049435-7/004 TJRJ, 27 March 2018, 0329761-15-2011.8.19.0001 TJSP, 3 April 2014, 0014578-23.2004.8.26.0100, DJe 3 April 2014 TJSP, 23 June 2008, 9036759-73.2001.8.26.0000 TJSP, 20 September 2010, 9145778-38.2006.8.26.0000 TJSP, 19 June 2012, 0037936-45.2012.8.26.0000 TJSP, 4 October 2012, 9194361-49.2009.8.26.0000, DJe 5 October 2012 TJSP, 17 October 2012, 0130332-32.2012.8.26.0100, DJe 19 October 2012 TJSP, 19 April 2012, 0304979-49.2011.8.26.0000, DJe 21 April 2012 TJSP, 4 February 2013, 0225451-25.2009.8.26.0100, DJe 6 February 2013 TST, 14 September 2005, 1650/1999-003-15-00.3, DJ 30 September 2005 TST, 15 October 2008, 1475/2000.193-05-00 TST, 5 August 2009, 79500-61.2006.5.05.0028 Bulgaria SC of App., YCA XXV (2000), 678 Canada Achilles (USA) v. Plastics Dura Plastics (1977) Itée Ltd, 2006 QCCA 1523 Adamas Management & Services Inc. v. Aurado Energy Inc., YCA XXX (2005), 479

812

F mn. 29 F mn. 35 F mn. 34 A mn. 113; F mn. 82 F mn. 21 F mn. 31 F mn. 35 F mn. 22 F mn. 8 F mn. 34 F mn. 28 F mn. 26 F mn. 36 F mn. 92 F mn. 28 F mn. 32 F mn. 37 F mn. 25 F mn. 35 F mn. 37 F mn. 64 A mns 24, 55 F mn. 36 F mn. 22 F mn. 22 F mn. 22 B mn. 165 B mn. 211 B mn. 206

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Table of Cases B.F. Jones Logistics Inc. v. Rolko, 2004 CarswellOnt 3478, 72 O.R. (3d) 355 (Ont. S.C.J.) Compania Maritima Villa Nova SA, see Northern Sales Co. Consolidated Contractors Group S.A.L. (Offshore) v. Ambatovy Minerals S.A., 2016 ONSC 7171, CLOUT Case No. 1649 Corporacion Transnacional de Inversiones, SA de C.V. v. STET International, S.p.A., 45 OR (3d) 183, YCA XXVI (2001), 323 Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, YCA XXXIII (2008), 446 Desputeaux v. Editions Chouette (1987) Inc., 2003 SCC 17, [2003] 1 SCR 178 EMS Technologies Canada Ltd (Honeywell International Inc.) v. Advantech Satellite Networks Inc., [2013] QCCS 4333 Europcar Italia SpA v. Alba Tours International Inc., 23 OTC 376, YCA XXVI (2001), 311 Food Services of America Inc. v. Pan Pacific Specialties Ltd, (1997) 32 BCLR (3d) 225, YCA XXIX (2004), 581 Habitations d’Angoulème Inc. v. Létourneau, [2005] CanLII 12888 Jardine Lloyd Thompson Canada Inc. v. SJO Catlin, [2006] ABCA 18, CLOUT Case No. 1247 Javor v. Francoeur, 2003 BCSC 350, YCA XXX (2005), 156 Javor v. Fusion-Crete, YCA XXIX (2004), 596 Kaverit Steel and Crane Ltd v. Kone Corp., 87 D.L.R. (4th) 129, CLOUT Case No. 586 Lafarge Canada Inc. v. Edmonton (City), 2015 ABQB 56 Mango Boulevard Pty Ltd v. Mio Art Pty Ltd, [2018] QCA 39, CLOUT Case No. 1755 Murphy v. Amway Canada Corp., 2013 FCA 38 Northern Sales Co. Ltd v. Compania Maritima Villa Nova SA, [1992] 1 F.C. 550, YCA XVIII (1993), 363 Powerex Corp. v. Alcan Inc., [2004] BCSC 876, YCA XXX (2005), 466 Proctor v. Schellenberg, 2002 MBCA 170, YCA XXVIII (2003), 745 Quintette Coal Ltd v. Nippon Steel Corp., (1990) 50 BCLR (2d) 207 Re Carter and McLaughlin, (1996), 27 O.R. (3rd) 792, CLOUT Case No. 390 Resin Systems Inc. v. Industrial Service & Machine Inc., 2008 ABCA 104 Schreter v. Gasmac Inc., 7 O.R. (3d) 608 Seidel v. TELUS Communications Inc., 2011 SCC 15 Smart Systems Technologies Inc. (US) v. Domotique Secant Inc. (Canada), 2008 QCCA 444, YCA XXXIII (2008), 464 Société d’investissments l’Excellence Inc. v. Rhéaume, 2010 QCCA 2269 Subway Franchise Systems of Canada Ltd v. Laich, 206 ACWS (3d) 655 Sum Trade Corp. v. Agricom Int’l Inc., 2017 BCSC 2213, YCA XLIII (2018), 439 Telestat Canada v. Juch-Tech Inc., 3 BLR (5th) 282

A mn. 88

A mn. 142 B mns 177, 223 B mn. 154 A mns 31, 134 A mn. 70 B mn. 181 B mns 190, 261 A mn. 70 A mns 84, 88 B mn. 181 B mn. 240 A mn. 5 A mn. 76 A mn. 131 B mn. 301 B mns 278, 338, 345 B mn. 334 B mns 115, 170 B mn. 242 A mn. 5 A mn. 39 B mns 279, 318, 325 B mns 154, 305 B mns 195, 204, 325 B mn. 181 B mn. 330 B mn. 154 B mn. 251

813

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Table of Cases TELUS Communications Inc. v. Avraham Wellman, 2019 SCC 19 The Gazette v. Rita Blondin, [2003] RJQ 2090 TMR Energy Ltd v. State Property Fund of Ukraine & Aviation Scientific Technical Complex Named After O.P., 2003 FC 1517, YCA XXIX (2004), 607 Trans-Pacific Shipping Co. v. Atlantic & Orient Shipping Corp., [2006] 1 F.C. 154, YCA XXXI (2006), 601 United Mexican States v. Cargill, Inc., 107 OR (3d) 528 Yugraneft Corp. v. Rexx Management Corp., 2010 SCC 19, [2010] 1 SCR 19, YCA XXXV (2010), 343, CLOUT Case No. 1009 Chile Corte Suprema, 8 September 2011, (2012) 5 Revista de Arbitraje Comercial y de Inversiones 915, YCA XLI (2016), 441 Corte Suprema, 29 November 2016, 24.348-2016, Bakalland SA v. Agroprodex Internacional SA, YCA XLIV (2019), 493 Corte Suprema, 30 November 2017, 82.442-2016, Almendra y Miel SA v. Gonzalo Luis Gallegos Davico, YCA XLIV (2019), 496 China Beifang Wanbang Logistics Co., Ltd v. JMT Mining SPRL Ltd & JIAYA Group Ltd, Supreme People’s Court (22 January 2013), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Beijing Chaolaixinsheng Sports and Leisure Co. Ltd v. Beijing Suowangzhixin Investment Consulting Co. Ltd, Supreme People’s Court (2014) Beijing Kang Wei Pharmaceutical Consultation Centre Co. Ltd v. Asia Medical Resources Development (Holdings) Ltd, Supreme People’s Court (19 December 2012), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Beijing Zhihua Jiayi Technology Co., Ltd v. Beijing Gaochu Advertisement and Communication Co., Ltd, Preliminary Civil Ruling No. 21719 (2009) of the People’s Court of Chaoyang District, Beijing Chengdu Youbang Stationery Co., Ltd and Wang Guojian v. Yau Bong Polybags Printing Company Ltd, Supreme People’s Court (20 March 2013), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Dae Sung G-3 Co., Ltd of Korea v. Changchun Yuanda Automotive Engineering & Trading Co., Ltd, Supreme People’s Court (21 October 2008), in: Fan, Foreign-Related Arbitration in China: Commentary and Cases (2015), Part IV Ennead Architects International LLP v. Fuli Nanjing Dichan Kaifa Youxian Gongsi, Nanjing Intermediate People’s Court, (2016) Su 01 RenGang No. 1 (13 December 2016) Fujian Production Company v. Jinge Shipping Co. Ltd, Supreme People’s Court, Fa Han [1995] No. 135

814

A mn. 51 A mn. 120 B mn. 340

B mn. 172 B mn. 242 A mn. 145; B mn. 345

B mn. 291 A mn. 75 A mn. 82

G mn. 40

G mns 19, 20

G mns 44, 138

G mn. 57

G mn. 140

G mn. 161

G mn. 152

G mn. 30

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Table of Cases Guangdong JDB Beverage & Food Co. v. Guangzhou Pharmaceutical Holdings Ltd, (2014) Min San Zhong Zi No. 10 Guizhou X Technology Development Co. Ltd v. Li, (2009) Chang Li Min Zhong Zi No. 50 Hemofarm DD v. Yongning Pharmaceutical Co., Ltd, YCA XXXIV (2009), 478 Higher People’s Court of Zhejiang, YCA XXXVIII (2013), 347 HK Heung Chun Cereal & Oil Food Co. Ltd v. Anhui Cereal & Oil Food Import & Export Co., YCA XXXI (2006), 620 Hong Kong Water Solutions v. Shenzhen Tall & Stout, Shenzhen Intermediate People’s Court, (2016) Yue 03 Min Chu No. 366 Jiangsu HangTianWanYuan Wind Power Manufacturing Co. Ltd v. LM Wind Power, Supreme People’s Court (2012) Jiangsu Materials Group Light Textile Corporation v. (Hong Kong) Top Capital Holdings Ltd and (Canada) Prince Development Ltd (SPC Gazette, Issue 3, 1998) Ka Kiu Enterprises Ltd v. Xi’an Automobile Industrial Co., Supreme People’s Court (12 October 2010), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Luoding Electricity Supply Bureau v. Huien Co., Min Si Ta Zi No. 47 (SPC ruling, 1 March 2006), reprinted in 12 Guide on Foreign-Related Commercial and Maritime Trials 58–61 (No. 1, 2006) People’s Insurance Company of China, Guangzhou v. Guanghope Power, Supreme People’s Court, [2003] Min Si Zhong Zi No. 29 Schroeder KG GmbH (Germany) v. China Dandong Junao Food Co. Ltd, (2012) Dandong Civil Special No. 00001, 14 October 2014 Siemens International Trading (Shanghai) Co., Ltd v. Shanghai Golden Landmark Co. Ltd, Shanghai First Intermediate People’s Court (2013), Hu Yizhong Minren (Waizhong) Zi No. 2, 27 November 2015 Supreme People’s Court, The Response of the Supreme People’s Court to Gansu Higher People’s Court on Issues relating to the Validity of Cooperation Agreement, Fa Jing [1995] No. 273 Xu Jianwen v. Zhongwei Urban-Rural Comprehensive Development Corporation, Supreme People’s Court (30 July 2012), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Yabaili Company Shenzhen Overseas Chinese Tutorial School v. X (2000) Shen Zhong Fa Jing Er Chu Zi No. 108 Yichang Hongxing Industrial Development Co., Ltd v. Wu Yalun, Supreme People’s Court (25 July 2008), in: Yang, Foreign-related Arbitration in China: Commentary and Cases, 2016, Part IV Colombia Corte Suprema, YCA XXVI (2001), 755 Corte Suprema, YCA XXXVII (2012), 205 Corte Suprema, YCA XLII (2017), 370

G mn. 60 G mn. 70 B mn. 327 B mn. 192 A mn. 26 G mn. 157 G mns 18, 20 G mns 54, 63

G mn. 140

G mn. 141

G mn. 30 G mn. 138 G mn. 21

G mn. 63

G mn. 154

G mn. 143 G mn. 140

B mn. 66 B mn. 63 B mn. 307

815

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Table of Cases Denmark Højesteret, 22 June 2012, 210/2011, Dregg v. Chr. Jensen Shipping A/S, CLOUT Case No. 1432 Egypt Cour Cass., Rev. Arb. 1994, 757 England and Wales A v. B [2006] EWHC 2006 (Comm) A v. B [2007] 1 Lloyd’s Rep. 237 (Comm) A v. B [2007] EWHC 54 (Comm) A v. B [2010] EWHC 3302 (Comm) A v. B [2017] EWHC 3417 (Comm) A v. B [2017] EWHC 596 (Comm) ABB AG v. Hochtief Airport GmbH [2006] EWHC 388 (Comm), [2006] 2 Lloyd’s Rep. 1 (Comm) Abdullah M. Fahem & Co. v. Mareb Yemen Insurance Co., [1997] 2 Lloyd’s Rep. 738 Abuja International Hotels Limited v. Meridien SAS [2011] EWHC 87 (Comm) Aeroflot Russian Airlines (Joint Stock Company) v. Berezovsky [2012] EWHC 1610 (Ch) African Fertilizers v. BD Shipsnavo [2011] EWHC 2452 (Comm) AIC Ltd v. The Federal Airports Authority of Nigeria [2019] EWHC 2212 (TCC) Air India v. Caribjet Inc. [2002] 1 Lloyd’s Rep. 314 (Comm) Airbus Industrie v. Patel [1999] 1 AC 119 (HL) Albon v. Naza Motor Trading SDN BHD [2007] EWHC 665 (Ch) Alexandros T, The, [2014] EWCA Civ 1010 Ali Shipping Corp. v. Shipyard Trogir [1998] 2 All ER 136 (CA) Allianz Insurance and Sirius International Insurance Corporation v. Tonicstar Limited [2018] EWCA Civ 434 Al-Naimi (t/a Buildmaster Construction Services) v. Islamic Press Agency Inc. [1999] CLC 212 (Comm), affirmed [2000] 1 Lloyd’s Rep. 522 (CA) Alphapoint Shipping Ltd v. Rotem Amfert Negev Ltd [2005] 1 Lloyd’s Rep. 23 (Comm) Amec Civil Engineering Ltd v. Secretary of State for Transport [2005] EWCA Civ 291 Anangel Peace Compania Naviera SA v. Bacchus International Commerce Corp. [1991] 1 Lloyd’s Rep. 452 (Comm) Angelic Grace, The [1995] 1 Lloyd’s Rep. 87 (CA) Arab National Bank v. El Sharif Saoud Bin Masoud Bin Haza’a ElAbdali [2004] EWHC 2381 (Comm) Arsanovia v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm) Ascot Commodities NV v. Olam International Ltd [2002] CLC 277 (Comm) Asghar v. Legal Services Commission [2004] EWHC 1803 (Ch)

816

A mn. 47

B mn. 135 H mn. 20 H mn. 51 H mn. 55 H mns 121, 123 A mns 59, 111 H mn. 133 H mn. 128 H mns 108, 137 H mn. 23 H mn. 50 H mns 54, 145 A mn. 157; H mn. 152 H mn. 155 H mn. 51 H mn. 50 A mn. 57; H mn. 55 H mn. 93 A mn. 67; H mn. 76 H mn. 20

H mn. 132 H mn. 126 H mn. 98 A mn. 44; H mn. 51 H mn. 10 H mn. 23 H mns 98, 132 H mn. 42

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Table of Cases ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm) AT & T Corp. v. Saudi Cable Co. [2000] 2 All ER 625 (Comm) Atkins Ltd v. Secretary of State for Transport [2013] EWHC 139 (TCC) Aughton Ltd v. MF Kent Services Ltd [1991] 57 BLR 1 (CA) Axa Re v. Ace Global Markets Ltd [2006] EWHC 216 (Comm) B v. A [2010] EWHC 1626 (Comm) Baytur SA v. Finagro Holding SA [1992] QB 610 (CA) BDMS Ltd v. Rafael Advanced Defence Systems [2014] EWHC 451 (Comm) BEA Hotels NV v. Bellway LLC [2007] EWHC 1363 (Comm) Beijing Jianlong Heavy Industry Group v. Golden Ocean Group [2013] EWHC 1063 (Comm) Bell v. Lever Bros [1932] AC 161 Benaim (UK) Ltd v. Davies, Middleton & Davies Ltd [2005] EWHC 1370 (TCC) Bernuth Lines Ltd v. High Seas Shipping Ltd [2005] EWHC 3020 (Comm) Bevan Ashford v. Geoff Yeandle (Contractors) Ltd [1999] Ch 239 BNP Paribas v. Deloitte and Touche LLP [2003] EWHC 2874 (Comm) Bremer Handelsgesellschaft GmbH v. Westzucker GmbH (No 2) [1981] 2 Lloyd’s Rep. 130 (CA) Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd [1981] AC 909 (HL) Brockton Capital LLC v. Atlantic-Pacific Capital, Inc. [2014] EWHC 1459 (Comm) Broda Agro Trade v. Alfred C Toepfer International GmbH [2010] EWCA Civ 1100 Bromley Park Garden Estates Ltd v. Mallen [2009] EWHC 609 (Ch) C v. D [2007] EWCA Civ 1282 C v. D [2007] EWHC 1541 (Comm) Capital Trust Investments Ltd v. Radio Design TJ AB [2002] EWCA Civ 135 Carus-Wilson v. Green, Re (1886) 18 QB 7 (CA) Celtic Explorer, The [2015] EWHC 1810 (Comm) Cetelem SA v. Roust Holding Ltd [2005] EWCA Civ 618 Chalbury McCouat v. PG Foils [2010] EWHC 2050 (Comm) Channel Island Ferries Ltd v. Cenargo Navigation Ltd [1994] 2 Lloyd’s Rep. 161 (Comm) Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1992] QB 656 (CA) Channel Tunnel Group Ltd v. Balfour Beatty Construction Ltd [1993] AC 334 (HL) Chantiers de l’Atlantique SA v. Gaztransport & Technigaz SAS [2011] EWHC 3383 (Comm)

H mns 75, 77, 79 H mn. 75 H mn. 133 H mn. 34 H mn. 46 A mn. 96; H mn. 128 H mn. 39 A mn. 39 H mn. 35 H mn. 20 K mn. 30 H mn. 140 H mn. 31 O mn. 32 A mn. 88 H mn. 100 H mn. 50 A mns 72, 129 H mn. 121 H mn. 132 H mns 9, 23 H mns 9, 23 H mns 42, 50 H H H H H

mn. 13 mn. 133 mns 110, 112 mn. 11 mn. 104

B mn. 150 H mns 23, 50 A mns 10, 154

817

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Table of Cases Checkpoint Ltd v. Strathclyde Pension Fund [2003] EWCA Civ 84 China Agribusiness Development Corp. v. Balli Trading [1998] 2 Lloyd’s Rep. 76 (Comm) Christian Kruppa v. Alessandro Benedetti and Bertrand des Pallières [2014] EWHC 1887 (Comm) City & General (Holborn) Ltd v. AYH Plc [2005] EWHC 2494 (Comm) Claxton Engineering Services v. TXM [2010] EWHC 2567 (Comm) CMA CGM SA v. Beteiligungs-Kommanditgesellschaft MS ‘Northern Pioneer’ Schiffahrtgesellschaft mbH & Co. [2002] EWCA Civ 1878 Compagnie Tunisienne de Navigation SA v. Compagnie d’Armement Maritime SA [1971] AC 572 (HL) Compania Sud-Americana de Vapores SA v. Nippon Yusen Kaisha [2009] EWHC 1606 (Comm) Cosemar SA v. Marimarna Shipping Co. Ltd (The Mathew) [1990] 2 Lloyd’s Rep. 323 (Comm) Crystal Palace v. Pulis [2016] EWHC 2999 (Comm) Cukurova Holding A.S. v. Sonera Holding B.V. [2014] UKPC 15, YCA XXXIX (2014), 516 Dallah Real Estate and Tourism Holding Co. v. the Ministry of Religious Affairs of the Government of Pakistan [2010] UKSC 46, [2011] 1 AC 763, [2010] 3 WLR 1472 Dallah v. Ministry of Religious Affairs, Government of Pakistan [2009] EWCA Civ 755 Dardana Ltd v. Yukos Oil Co. [2002] EWCA Civ 543 David Wilson Homes Ltd v. Survey Services Ltd (in liquidation) [2001] 1 All ER 449 (Comm) Demco Investments & Commercial SA v. SE Banken Forsakring Holding AB [2005] EWHC 1398 (Comm) Deutsche Bank v. Sebastian Holdings [2010] EWCA Civ 998 Deutsche Schachtbau- und Tiefbaugesellschaft mbH v. R’as Al Khaimah National Oil Co., [1987] 2 All E.R. 769, [1987] 3 WLR 1023 Deutsche Schachtbau- und Tiefbohrgesellschaft mbH v. Ras AlKhaimah National Oil Corp. [1990] 1 AC 295 (HL) Diag Human SE v. Czech Republic [2014] EWHC 1639 (Comm) Discount Co. Ltd v. Zoller [2001] EWCA Civ 1755 Dolling-Baker v. Merret [1991] 2 All ER 891 Dolphin Tanker SRL v. Westport Petroleum Inc. [2010] EWHC 2617 (Comm) Donohue v. Armco Inc. [2002] 1 All ER 749 (HL) Double K Oil Products v. Neste Oil [2009] EWHC 3380 (Comm) Dowans Holding SA v. Tanzania Electric Supply Co. Ltd [2011] EWHC 1957 (Comm), YCA XXXVI (2011), 363 Downing v. Al Tameer [2002] EWCA Civ 721 Dubai Islamic Bank v. Paymentech Merchant Services Inc. [2001] 1 Lloyd’s Rep. 65 (Comm) E.D. & F. Man (Sugar) Ltd v. Haryanto (No. 2) [1991] IL Pr. 393

818

H mn. 132 B mns 181, 182; H mn. 156 A mns 29, 48; H mns 44, 46 H mn. 115 H mn. 50 H mn. 139

H mn. 23 H mn. 132 H mn. 139 H mn. 133 A mn. 117; B mns 179, 236 A mns 25, 46, 153; H mns 62, 121, 123, 148, 150 H mns 62, 153, 159 H mns 121, 148, 150, 152 H mn. 13 H mn. 140 H mn. 43 B mns 211, 250; H mn. 23

H mn. 23 A mn. 154; B mns 204, 275 H mn. 55 K mn. 60 H mns 140, 141 H mns 51, 55 H mns 128, 132, 134 B mns 181, 275 H mn. 50 H mn. 10 B mn. 327

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Table of Cases Ecom Agroindustrial Corp. Ltd v. Mosharaf Composite Textile Mill Ltd [2013] EWHC 1276 (Comm) Econet Satellites Services Ltd v. Vee Network Ltd [2006] EWHC 1664 (Comm) Egon Oldendorff v. Liberia Corporation [1996] 1 Lloyd’s Rep. 380 (Comm) Ekran OAO v. Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm), YCA XLIII (2018), 576 El Nasharty v. J. Sainsbury Plc, [2008] 1 Lloyd’s Rep. 360 Elektrim SA v. Vivendi Universal SA (No 2) [2007] EWHC 571 (Comm) Elektrim SA v. Vivendi Universal SA [2007] EWHC 11 (Comm) Emirates Trading Agency LLC v. Prime Mineral Exports Private Ltd [2014] EWHC 2104 (Comm) Emmott v. Michael Wilson & Partners Ltd [2008] EWCA Civ 184 Essar Oilfield Services Ltd v. Norscot Rig Management Pvt Ltd [2016] EWHC 361 (Comm) Et Plus SA v. Welter [2005] EWHC 2115 (Comm) Eurosteel Ltd v. Stinnes AG [2000] CLC 470 (Comm) Evison Holdings Ltd v. International Co. Finvision Holdings, Orient Express Bank Public Joint Stock Co. [2019] EWHC 3057 (Comm) F v. M [2009] 2 All ER 519 (Comm) Far Eastern Shipping Co. v. AKP Sovocomflot [1995] 1 Lloyd’s Rep. 520, YCA XXI (1996), 699 Fence Gate Ltd v. NEL Construction Ltd [2001] 82 Con LR 41 (TCC) Fidelity Management SA v. Myriad International Holdings [2005] 2 Lloyd’s Rep. 508 (Comm) Fiona Trust & Holding Corp. v. Privalov, reported as Premium Nafta Products Ltd v. Fili Shipping Co. Ltd, [2007] UKHL 40, [2007] 2 CLC 553, YCA XXXII (2007), 654 Fiona Trust & Holding Corp. v. Yuri Privalov [2007] EWCA Civ 20 Galaxy Energy International v. Eurobunker [2001] 2 Lloyd’s Rep. 725 (Comm) Gatoil International Inc. v. National Iranian Oil Company, YCA XVII (1992), 587 Geogas S.A. v. Trammo Gas Limited (The Baleares) [1993] 1 Lloyd’s Rep. 215 (CA) Gerald Metals SA v. Timis [2016] EWHC 2327 (Ch) Glidepath BV v. Thompson [2005] EWHC 818 (Comm) Good Challenger Navegante SA v. Metalexportimport SA [2003] EWCA Civ 1668, [2004] 1 Lloyd’s Rep. 67 Great Western Trains Co. Ltd v. Network Rail Infrastructure Ltd [2010] EWHC 117 (Comm) Groundshire v. VHE Construction [2001] BLR 395 (Comm) Guangzhou Dockyards Co. Ltd v. ENE Aegiali I. [2010] EWHC 2826 (Comm) Guardcliffe Properties Ltd v. City & St James [2003] EWHC 215 (Ch)

H mn. 51 A mn. 50 H mn. 23 A mns 75, 231 B mns 99, 142 H mn. 115 H mns 35, 139 A mn. 49 A mn. 18; H mn. 93 A mn. 103; H mns 102, 104, 143 A mns 31, 44; H mn. 42 H mn. 39 H mn. 51

H mn. 128 B mns 334, 348 H mn. 140 H mn. 133 A mns 2, 23, 31, 44; B mns 99, 137; H mns 20, 42, 50; K mn. 28 A mns 23, 44; H mns 42, 59 H mn. 13 B mn. 140 H mn. 140 A mn. 107 H mn. 50 B mn. 345; K mn. 44 H mn. 141 H mn. 133 H mn. 140 H mn. 140

819

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Table of Cases Habas Sinai Ve Tibbi Gazlar Isthsal Endustri AS v. Sometal SAL [2010] EWHC 29 (Comm) Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi AS v. VSC Steel Company Ltd [2013] EWHC 4071 (Comm) Halki Shipping Corp. v. Sopex Oils Ltd [1998] 1 WLR 726 Halliburton v. Chubb [2018] EWCA Civ 817 Halpern v. Halpern [2006] 2 Lloyd’s Rep. 83 (Comm) Halpern v. Halpern [2007] 2 Lloyd’s Rep. 56 (CA) Hamlyn & Co. v. Talisker Distillery [1894] AC 202 (HL) Heyman v. Darwins [1942] AC 356 Hiscox v. Outhwaite [1992] 1 AC 562 Hitachi Shipbuilding and Engineering Co. Ltd v. Viafiel Cia Naviera SA [1981] 2 Lloyd’s Rep. 498, CA Hobbs Padgett & Co. (Reinsurance) Ltd v. JC Kirkland Ltd [1969] 2 Lloyd’s Rep. 547 (CA) Honeywell International Middle East Ltd v. Meydan Group LLC [2014] EWHC 1344 (TCC) House of Fraser Ltd v. Scottish Widows plc [2011] EWHC 2800 (Ch) Hume v. AA Mutual International Insurance [1996] LRLR 19 (Comm) Integral Petroleum SA v. SCU-Finanz AG [2015] EWCA Civ 144 Interprods Ltd v. De La Rue International Ltd [2014] EWHC 68 (Comm) IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2005] EWHC 726 (Comm), [2005] 1 CLC 613, YCA XXXI (2006), 853 IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2008] EWCA 1157, [2009] 1 All E.R. (Comm) 611 IPCO (Nigeria) Ltd v. Nigerian National Petroleum Corp. [2017] UKSC 16 Janos Paczy v. Haendler & Natermann GmbH [1981] 1 Lloyd’s Rep. 302 (CA) JF Finnegan Ltd v. Sheffield City Council (1988) 43 BLR 124 Joint Stock Company Aeroflot see Aeroflot JSC Zestafoni see Zestafoni K v. P [2019] EWHC 589 (Comm) K v. S [2019] EWHC 2386 (Comm) Kabab-Ji SAL v. Kout Food Group [2020] EWCA Civ 6 Kazakhstan, see Republic of Kazakhstan Kruppa, see Christian Kruppa Kyla Shipping Company Limited v. Bunge SA [2013] EWCA Civ 734 Kyrgyz Mobil Tel Ltd v. Fellowes International Holdings Ltd [2005] EWHC 1314 (Comm) Latvian Shipping Co. v. Russian People’s Insurance Company (Rosno) [2012] EWHC 1412 (Comm) Law Debenture Trust Corp. PLC v. Elektrim Finance B.V. [2005] EWHC 1412 (Ch)

820

H mn. 34 A mns 24–26 A mn. 51; B mn. 150 H mn. 75 H mn. 10 H mn. 10 H mn. 23 K mn. 20; O mn. 36 B mns 27, 286 K mn. 35 H mn. 45 A mn. 137 H mn. 140 H mn. 50 H mn. 26 A mn. 31 A mn. 157; B mns 281, 334; H mn. 152 B mn. 199 A mn. 137 B mn. 142; H mn. 50 K mn. 30

H mn. 133 H mn. 121 A mns 24, 25

H mn. 139 H mn. 55 H mn. 128 H mn. 125

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Table of Cases Leibinger v. Stryker Trauma GmbH [2006] EWHC 690 (Comm) Lemanda Trading Co. v. African Middle East Petroleum Co. [1988] QB 448 Lesotho Highlands Development Authority v. Impregilo SpA [2005] UKHL 43 Locabail v. Bayfield Properties [2000] QB 451 (CA) Lombard-Knight v. Rainstorm Pictures Inc. [2014] EWCA Civ 356 London Underground Limited v. Citylink Telecommunications Ltd [2007] EWHC 1749 (TCC) Lorand Shipping Ltd v. Davof Trading (Africa) BV [2014] EWHC 3521 (Comm) Mace (Russia) Ltd v. Rentansel Enterprises Ltd [2016] EWHC 1209 (Comm) Malicorp Ltd v. Egypt [2015] EWHC 361 (Comm), YCA XLI (2016), 585 Mangistaumunaigaz Oil Production Association v. United World Trading Inc. [1995] 1 Lloyd’s Rep. 617 (Comm) Mantovani v. Carapelli [1980] 1 Lloyd’s Rep. 375 Mark Dallal v. Bank Mellat [1986] QB 441 Maximov v. Novolipetsky Metallurgichesky Kombinat [2017] EWHC 1911 (Comm), YCA XLII (2017), 558 Medicaments & Related Classes of Goods, Re [2001] 1 WLR 700 (Ch) Metal Scrap Trade Corporation Ltd v. Kate Shipping Co. Ltd [1990] 1 WLR 115 Microsoft Mobile OY Ltd v. Sony Europe Ltd [2017] EWHC 374 (Ch) Midgulf International Ltd v. Groupe Chimique Tunisien [2010] EWCA Civ 66 Mighell v. Sultan of Johore [1894] 1 QB 149 Milan Nigeria Ltd v. Angeliki B Maritime Co. [2011] EWHC 892 (Comm) Ministry of Defence of the Republic of Iran v. International Military Services Ltd [2020] EWCA Civ 145 Minmetals Germany GmbH v. Ferco Steel Ltd [1999] 1 All E.R. (Comm) 315, [1999] CLC 647 Monde Petroleum SA v. Westernzagros Ltd [2015] EWHC 67 (Comm) National Iranian Oil Co. v. Crescent Petroleum [2016] EWHC 510 (Comm), CLOUT Case No. 1698 National Navigation Co. v. Endesa Generacion SA [2009] EWCA Civ 1397 National Westminster Bank Plc v. Rabobank Nederland (No. 3) [2007] EWHC 1742 (Comm) Naviera Amazonica Peruana SA v. Compania Internacional de Seguros del Peru [1988] 1 Lloyd’s Rep. 116 (CA)

A mn. 154 B mn. 332 H mns 42, 128, 143 H mn. 75 A mns 2, 146 H mn. 140 A mn. 129 H mn. 51 A mn. 129; B mns 237, 292 H mn. 45 H mn. 55 H mn. 48 A mn. 149; B mns 291, 292; H mn. 153 H mn. 75 B mn. 91

A mn. 44 H mn. 51

K mn. 160 H mn. 132 A mns 37, 98, 135 B mns 195, 227; H mn. 156 A mn. 38 A mns 136, 137 A mn. 62; B mn. 94; H mns 53, 66 H mn. 55 H mn. 23

821

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Table of Cases NB Three Shipping Ltd v. Harebell Shipping Ltd [2004] EWHC 2607 (Comm) Nestor Maritime SA v. Sea Anchor Shipping Co. Ltd [2012] EWHC 996 (Comm) Nisshin Sipping Co. Ltd v. Cleaves & Co. Ltd [2003] EWHC 2602 (Comm) NML Capital Limited v. Republic of Argentina [2011] UKSC 31 Norbrook Laboratories Co. v. Tank [2006] 2 Lloyd’s Rep. 485 (Comm) Nori Holdings Ltd v. Bank Otkritie Financial Corp. [2018] EWHC 1343 (Comm) Norscot Rig Management PVT Ltd v. Essar Oilfields Services Ltd [2010] EWHC 195 (Comm), 2010 WL 442409 (EWHC (Comm) 2010) OAO Northern Shipping Co. v. Remolcadores de Marin Sl [2007] EWHC 1821 (Comm) Oldham v. QBE Insurance [2017] EWHC 3045 (Comm) Omnium de Traitement et de Valorisation SA v. Hilmarton Ltd [1999] 2 Lloyd’s Rep. 222 (Comm) OMV Petrom SA v. Glencore International AG [2014] EWHC 242 (Comm) Oxford Shipping Co. Ltd v. Nippon Yusen Kaisha [1984] 3 All ER 835 (Comm) Pace Shipping v. Churchgate Nigeria Ltd [2009] EWHC 1975 (Comm) Paczy v. Haendler & Natermann GmbH [1981] 1 Lloyd’s Rep. 302 Paul Smith Ltd v. H&S International Holdings Inc. [1991] 2 Lloyd’s Rep. 127 (Comm) Pencil Hill Ltd v. US Città Di Palermo S.p.A. [2016] EWHC 71 (QB), CLOUT Case No. 1723 Peterson Farms Inc. v. C & M Farming Ltd [2003] EWHC 2298 (Comm) Peterson Farms Inc. v. C & M Farming Ltd [2004] EWHC 121 (Comm), [2004] 1 Lloyd’s Rep. 603 Petrochemical Industries Company (K.S.C.) v. The Dow Chemical Co. [2012] EWHC 2739 (Comm) Petroships Pte Ltd of Singapore v. Petec Trading [2001] 2 Lloyd’s Rep. 348 (Comm) Porter v. Magill [2001] UKHL 67 Premium Nafta Products Ltd, see Fiona Trust Primera Marime (Hellas) Ltd v. Jiangsu Eastern Jeavy Industry Co. Ltd [2013] EWHC 3066 (Comm) Primetrade AG v. Ythan Ltd [2005] EWHC 2399 (Comm) Profilati Italia Srl v. Paine Webber Inc. [2001] 1 Lloyd’s Rep. 715 R v. Gough [1993] AC 646 (HL) RBRG Trading (UK) Ltd v. Sinocore International Co. Ltd [2018] EWCA Civ 838 Re Carus Wilson, see Carus-Wilson

822

B mn. 125 H mn. 134 H mn. 38 A mn. 158 H mns 75, 132 A mn. 55; H mn. 51 B mn. 137; H mn. 42

A mn. 129 H mn. 132 H mn. 156 A mn. 112 H mn. 93 H mn. 133 B mn. 142; H mn. 50 H mns 42, 45 A mn. 136 H mn. 121 A mn. 24; H mns 23, 41, 123 H mn. 133 H mn. 133 A mn, 69; H mn. 75 A mn. 131 H mns 123, 125 H mn. 134 H mn. 75 A mns 136, 137

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Table of Cases Re Medicaments, see Medicaments Rena K, The [1978] 1 Lloyd’s Rep. 545 Republic of Kazakhstan v. Istil Group [2006] EWHC 448 (Comm) Republic of Kazakhstan v. Istil Group Ltd [2007] 2 Lloyd’s Rep. 548 (CA) Richard James Philpoot & Mark Jermey Orton v. Lycée Français Charles de Gaulle [2015] EWHC 1065 (Ch) Rosseel N.V. v. Oriental Commercial Shipping (UK) Ltd [1991] 2 Lloyd’s Rep. 625, YCA XVI (1991), 615 Roussel-Uclaf v. GD Searle & Co. Ltd [1978] 1 Lloyd’s Rep. 225 Rustal Trading v. Gill & Duffus SA [2000] 1 Lloyd’s Rep. 14 (Comm) Ryanair Ltd v. Esso Italiana Srl [2013] EWCA Civ 1450 S.L. Sethia Liners Ltd v. State Trading Corp. of India Ltd [1986] 1 WLR 1398 Sabbagh v. Khoury [2019] EWCA Civ 1219 Sabmiller Africa BV v. East African Breweries Inc. [2009] EWHC 2140 (Comm) Sanghi Polyesters Ltd v. The International Investor KCFC (Kuwait) [2000] 1 Lloyd’s Rep. 480 (Comm) Satyam Computer Services Ltd v. Upaid Systems Ltd [2008] EWCA Civ 487 Schiffahrtsgesellschaft Detlev Von Appen GmbH v. Voest Alpine Intertrading GmbH [1997] 2 Lloyd’s Rep. 279 (CA) Schwebel v. Schwebel [2010] EWHC 3280 (TCC) Sea Trade Maritime Corp. v. Hellenic Mutual War Risks Association (Bermuda) Ltd [2006] EWHC 2530 (Comm) Secretary of State for the Environment v. Euston Centre Investments Ltd [1995] 1 All ER 269, CA Sennar No. 2, The [1985] 1 WLR 499 Shagang South-Asia (Hong Kong) Trading Co. Ltd v. Daewoo Logistics [2015] EWHC 194 (Comm) Shashoua v. Sharma [2009] EWHC 957 (Comm) Shell Egypt West Manzala GmbH v. Dana Gas Egypt Ltd [2009] EWHC 2097 (Comm) Shell International Petroleum Co. Ltd v. Coral Oil Co. Ltd [1999] 1 Lloyd’s Rep. 72 (Comm) Sierra Fishing Company v. Farran [2015] EWHC 140 (Comm) Sinocore International Co. Ltd v. RBRG Trading (UK) Ltd [2017] EWHC 251 (Comm), CLOUT Case 1696 Sir Frederick Snow & Partners v. Minister of Public Works of the Government of the State of Kuwait, [1984] AC 426, YCA X (1985), 508 Skype Technologies SA v. Joltid Ltd [2009] EWHC 2783 (Comm) Socadec SA v. Pan Afric Impex Co. Ltd [2003] EWHC 2086 (Comm) Société Commerciale de Reassurance v. ERAS (Internationale) Ltd [1992] 1 Lloyd’s Rep. 570 (CA)

B mn. 111 H mn. 39 H mn. 126 A mn. 45 B mns 177, 186, 341 H mn. 50 H mn. 77 A mn. 44 B mn. 150 H mn. 51 H mn. 110 H mn. 140 H mn. 42 H mn. 39 H mns 133, 140 H mn. 34 K mn. 102 K mn. 44 A mns 10, 132 A mn. 10; H mn. 51 H mn. 137 H mn. 35 A mns 68, 69 A mn. 136 B mn. 19

H mn. 51 H mn. 145 H mn. 42

823

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Table of Cases Société Nationale Industrielle Aerospatiale v. Lee Kui Jak [1987] AC 871 (PC) Soeximex SAS v. Agrocorp International Pte Ltd [2011] EWHC 2743 (Comm) Soinco SACI v. Novokuznetsk Aluminium Plant (No. 2), YCA XXIII (1998), 795 Soleh Boneh International Ltd v. Government of the Republic of Uganda [1993] 2 Lloyd’s Rep. 208 (CA) Sonatrach Petroleum Corp. (BVI) v. Ferrell International Ltd [2002] 1 All E.R. (Comm) 627 Sonatrach v. Statoil Natural Gas LLC [2014] EWHC 875 (Comm) St. George’s Investment Co. v. Gemini Consulting Ltd [2004] EWHC 2353 (Ch) Starlight Shipping v. Allianz, see Alexandros T Starlight Shipping Co. v. Tai Ping Insurance Co. Ltd [2007] EWHC 1893 (Comm) Stati v. Republic of Kazakhstan [2017] EWHC 1348 (Comm), CLOUT Case No. 1694 Sterling v. Rand [2019] EWHC 2560 (Ch) Sul América CIA Nacional de Seguros SA v. Enesa Engenharia SA [2012] 1 Lloyd’s Rep 275 (Comm) Sul América CIA Nacional de Seguros SA v. Enesa Engenharia SA [2012] EWCA Civ 638 Sun Life Assurance Co. of Canada v. CX Reinsurance Co. Ltd [2003] EWCA Civ 283 Sunrock Aircraft Corp. Ltd v. Scandinavian Airlines System [2007] EWCA Civ 882 Svenska Petroleum Exploration AB v. Government of the Republic of Lithuania [2005] EWHC 2437 (Comm), [2005] 2 CLC 965 Svenska Petroleum v. Government of the Republic of Lithuania (No 2) [2006] EWCA Civ 1529 Swiss Bank Corporation v. Novorossiysk Shipping [1995] 1 Lloyd’s Rep. 202 (Comm) Sylvia Shipping Co. Ltd v. Progress Bulk Carriers Ltd [2010] EWHC 542 (Comm) Symbion Power LLC v. Venco Imtiaz Construction Co. [2017] EWHC 348 (TCC) Syska v. Vivendi Universal SA [2009] EWCA Civ 677, [2009] Bus. L.R. 1494 Tajik Aluminium Plant v. Hydro Aluminium AS [2005] EWCA Civ 1218 Tajik Aluminium Plant v. Hydro Aluminium AS [2006] EWHC 1135 (Comm) Tamil Nadu Electricity Board v. ST-CMS Electric Company Private Ltd [2007] EWHC 1713 (Comm) Terna Bahrain Holding Company WLL v. Al Shamsi [2012] EWHC 3283 (Comm) The Alexandros T, see Alexandros T The Angelic Grace, see Angelic Grace The Celtic Explorer, see Celtic Explorer

824

H mn. 51 H mn. 133 B mn. 338 H mn. 152 B mn. 124 A mn. 117; H mn. 133 H mn. 132

H mns 39, 110 A mn. 154 H mn. 145 H mns 44, 46 A mns 24, 25, 49, 55; B mn. 211; H mns 23 H mn. 50 H mn. 55 B mn. 124 H mns 23, 156, 159 H mn. 45 H mns 139, 141 H mns 133, 136 B mn. 304 H mn. 106 H mn. 121 H mn. 23 H mn. 132

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Table of Cases The Rena K, see Rena K The Sennar (No. 2), see Sennar (No. 2) Three Shipping Ltd v. Harebell Shipping Ltd [2005] 1 All ER 200 (Comm) Tokumaru Kaiun Company Ltd v. Petredec Ltd, 1995, unreported Tongyuan (USA) International Trading Group v. Uni-Clan Ltd, YCA XXVI (2001), 886 Torch Offshore LLC v. Cable Shipping Inc. [2004] 2 Lloyd’s Rep. 446 (Comm) Town & City Properties v. Wiltshier Southern Ltd and Gilbert Powell (1988) 44 BLR 109 Toyota Tsusho Sugar Trading Ltd v. Prolat S.R.L. [2014] EWHC 3649 (Comm) Travis Coal Restructuring Holdings LLC v. Essar Global Fund Limited [2014] EWHC 2510 (Comm) Tritonia Shipping Inc v. South Nelson Forest Products Corporation [1966] Lloyd’s Rep. 114 (CA) Trustees of Edmond Stern Settlement v. Levy [2007] EWHC 1187 (TCC) Turner v. Grovit [2002] 1 WLR 107 (HL) UBS AG v. HSH Nordbank AG [2009] EWCA Civ 585 UMS Holding Ltd v. Great Station Properties SA [2017] EWHC 2398 (Comm) UR Power GmbH v. Kuok Oils and Grains Pte [2009] EWHC 1940 (Comm) Ust-Kamenogorsk Hydropower Plant JSC v. AES Ust-Kamenogorsk Hydropower Plant LLP [2013] UKSC 35 Uttam Galva Steels Ltd v. Gunvor Singapore Pte Ltd [2018] EWHC 1098 (Comm) Veba Oil v. Petrotrade Inc. [2002] 1 Lloyd’s Rep. 295 (CA) Vee Networks Ltd v. Econet Wireless International Ltd [2004] EWHC 2909 (Comm.), [2005] 1 Lloyd’s Rep. 192 (Comm) Vinava Shipping Co. Ltd v. Finelvet AG (The Chrysalis) [1983] 1 Lloyd’s Rep. 503 Vita Food Products Inc. v. Unus Shipping Co. Ltd [1939] AC 277 W Limited v. M SDN BHD [2016] EWHC 422 (Comm) Wall v. Royal Bank of Scotland Plc [2016] EWHC 2460 (Comm) Warborough Investments Ltd v. S Robinson & Sons [2003] EWCA Civ 751 West Tankers Inc v. RAS Riunione Adriatica di Sicurta SpA [2007] UKHL 4 West Tankers Inc. v. Allianz SpA [2012] EWHC 854 (Comm) West Tankers v. Allianz [2011] EWHC 829 (Comm) H mns 54, 66, 145 West Tankers v. Allianz [2012] EWCA Civ 27 Westacre Investments Inc. v. Jugoimport SDPR Holding Co. Ltd [1999] QB 740, [1998] 3 WLR 770 Westacre Investments Inc. v. Jugoimport-SDRP Holding Co. Ltd [1999] EWCA Civ 1401, [2000] QB 288 (CA) Wood v. Sureterm Direct Ltd [2017] UKSC 24

H mn. 107 H mn. 45 B mns 261, 346; H mn. 132 H mn. 133 B mn. 42 A mn. 26 A ms 21, 157; H mn. 88 H mn. 45, K mn. 30 H mn. 139 H mn. 51 H mn. 43 A mn. 92, H mns 132, 133 H mn. 132 A mn. 54; B mn. 91; H mns 51, 110 H mn. 42 H mn. 13 H mns 85, 132 H mn. 140 K mns 73, 75 A mn. 69 A mn. 102 H mns 87, 98 H mn. 51 A mn. 35; H mn. 55 A mn. 57; H mns 54, 66, 145 B mn. 332; H mn. 154; K mn. 146 A mn. 137; B mn. 316; H mn. 154 H mn. 108

825

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Table of Cases XL Insurance Ltd v. Owens Corning [2000] 2 Lloyd’s Rep. 500 (Comm) Yukos Capital Sarl v. OJSC Rosneft Oil Company [2011] EWHC 1461 (Comm), [2011] 2 CLC 129 Yukos Capital Sarl v. OJSC Rosneft Oil Company [2012] EWCA Civ 855, [2012] 2 CLC 549 Yukos Capital Sarl v. OJSC Rosneft Oil Company [2014] EWHC 2188 (Comm), [2014] 2 CLC 162, YCA XXXIX (2014), 526 Yukos Oil Co. v. Dardana Ltd [2002] EWCA Civ 543, [2002] CLC 1120, YCA XXVII (2002), 570 Zambia Steel & Building Supplies Ltd v. James Clark & Eaton Ltd [1986] 2 Lloyd’s Rep. 225 Zavod Ekran OAO v. Magneco Metrel UK Ltd [2017] EWHC 2208 (Comm) ZCCM Investment Holdings PLC v. Kansanshi Holdings PLC [2019] EWHC 1285 (Comm) Zermalt Holdings v. Nu-Life Upholstery Repairs [1985] 2 EGLR 14 Zestafoni G Nikoladze Ferroalloy Plant JSC v. Ronly Holding Ltd [2004] EWHC 245 (Comm) European Court of Human Rights Mutu and Pechstein v. Switzerland, 2 October 2018, 40575/10, 67474/10, ECLI:CE:ECHR:2018:1002JUD004057510 Tabbane v. Switzerland, 1 March 2016, 41069/12, ECLI:CE: ECHR:2016:0301DEC004106912 European Court of Justice Achmea B.V. v. Slovak Republic (C-284/16), ECLI:EU:C:2018:158 Allianz SpA and Generali Assicurazioni Generali SpA v. West Tankers Inc. (C-185/07), [2009] ECR I-663 Asturcom Telecomunicaciones SL v. Cristina Rodríguez Nogueira (C-40/08), [2009] ECR I-9579, Rev. Arb. 2009, 813 Cartel Damage Claims Hydrogen Peroxide SA v. Evonik Degussa GmbH (C-352/13), ECLI:EU:C:2015:335 CDC, see Cartel Damage Claims Deutsche Milch-Kontor v. Hauptzollamt Hamburg-Jonas (C-136/ 04), [2005] ECR I-10095 Eco Swiss China Time Ltd v. Benetton International NV (C-126/ 97), [1999] ECR I-3055 Elisa María Mostaza Claro v. Centro Móvil Milenium SL (C-168/ 05), [2006] ECR I-10421 Gazprom OAO c/Lietuvos Respublika (C-536/13), ECLI:EU: C:2015:316 Gothaer Allgemeine Versicherung AG v. Samskip (C-456/11), ECLI:EU:C:2012:719 Horst Ludwig Martin Hoffmann v. Adelheid Krieg (145/86), [1988] ECR 645

826

H mn. 23 B mn. 292 A mn. 104; B mn. 292, H mn. 154 A mn. 150; B mn. 292; H mn. 153; K mn. 147 B mn. 206; H mns 121, 148, 150, 152 B mn. 109 A mn. 75; B mn. 231 A mn. 120; H mn. 121 H mn. 147 H mn. 35

A mns 19, 22, 74; B mn. 52 A mns 119, 159

A mn. 26; B mn. 135; C mn. 101 A mns 55, 62; H mn. 51; R mn. 67 B mns 127, 305; I mn. 28; M mn. 34 A mns 31, 44

A mn. 62 A mn. 98; B mns 301, 331; D mn. 32; H mns 109, 134, 154 B mns 127, 305; D mn. 32; H mn. 109; I mn. 28; J mn. 24; M mn. 34 A mns 55, 56; H mn. 51; I mn. 42 J mn. 40 B mn. 160

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Table of Cases Mostaza Claro see Elisa María Mostaza Claro Nipponkoa Insurance Co. (Europe) Ltd v. Inter-Zuid Transport BV (C-452/12), ECLI:EU:-C:2013:858 Nordsee v. Reederei Mond (102/81), [1982] ECR 1095 Finland Korkein oikeus, 19 December 2019, S2018/745, ECLI:FI: KKO:2019:111 France Cass. civ. 1ère, 7 May 1963, JCP 1963 II 13405, Dalloz 1963, 545, Rev. Crit. DIP 1963, 615, JDI 1964, 82 Cass. civ. 1ère, 2 May 1966, Trésor public c/Galakis, JDI 1966, 648, Rev. Crit. DIP 1967, 553, Dalloz 1966, 575 Cass. civ. 1ère, 4 July 1972, no. 70-14.163, Hecht c/Société Buisman’s, Rev. crit. DIP 1974, 82 Cass. civ. 1ère, 6 June 1978, no. 77-10.835, Société British Leyland International Services S.A. Suisse c/Société d’Exploitation des Etablissements Richard, Bulletin I no. 214 p. 171 Cass. civ. 2ème, 30 November 1978, Rev. Arb. 1979, 355 Cass. civ. 2ème, 28 April 1980, Rev. Arb. 1982, 424 Cass. civ. 2ème, 9 December 1981, Rev. Arb. 1982, 183 Cass. soc., 19 March 1981, Rev. Arb. 1982, 44 Cass. civ. 1ère, 9 October 1984, 83-11.355, Pabalk v. Norsolor, Rev. Arb. 1985, 431, YCA XI (1986), 484 Cass. soc., 5 November 1984, Société H c/Charles de T, Rev. Arb. 1986, 47 Cass. civ. 1ère, 18 November 1986, Rev. Arb. 1987, 149 Cass. civ. 1ère, 6 January 1987, No. 84-17.274, Rev. Arb. 1987, 469, YCA XIII (1988), 152 Cass. civ. 1ère, 8 March 1988, No. 87-11.520, Sociétés Sofidif c/O.I. A.E.T.I., Bull. 1988 I No. 64 p. 42, Rev. Arb. 1989, 481 Cass. civ., 11 October 1989, JDI 1990, 633, Rev. Arb. 1990, 134, YCA XV (1990) 447 Cass. civ. 1ère, 4 December 1990, Rev. Arb. 1991, 81 Cass. civ. 1ère, 11 June 1991, No. 90-12.966, Orri c/société des Lubrifiants Elf Aquitaine, Rev. Arb. 1992, 73 Cass. civ. 1ère, 22 October 1991, Rev. Arb. 1992, 457, Rev. crit. DIP 1992, 113 Cass. civ. 1ère, 7 January 1992, No. 89-18.708, BKMI Industrienlagen GmbH & Siemens AG c/Dutco Construction, Rev. Arb. 1992, 470, YCA XVIII (1993), 140 Cass. civ. 1ère, 10 March 1993, No. 91-16.041, Rev. Arb. 1993, 255, YCA XIX (1994), 662 Cass. civ. 1ère, 9 November 1993, No. 91-15.194, Bomar Oil N.V. c/ETAP, Bull. 1993 I No. 313 p. 218, Rev. Arb. 1994, 108, YCA XX (1995) 660 Cass. civ. 1ère, 20 December 1993, No. 91-16.828, Municipalité de Khoms El Mergeb c/Dalico, Rev. Arb. 1994, 116, JDI 1994, 432 and 690, Rev. Crit. DIP 1994, 663

A mn. 62; J mn. 40 D mn. 32 A mn. 46

I mn. 20 I mn. 24 I mn. 8 I mn. 40

B B B B B

mn. 229 mn. 242 mn. 242 mn. 327 mn. 250; O mn. 116

I mn. 27 B mns 35, 53 B mn. 316 I mn. 55 B mns 105, 111 I mn. 95 I mn. 31 B mn. 250; I mn. 70 B mns 52, 323; I mn. 76

B mn. 291 B mn. 112; I mn. 29

B mn. 123; I mns 21, 29

827

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Table of Cases Cass. civ. 2ème, 9 February 1994, No. 92-17.645, Gautier c/Astra plastique, Rev. Arb. 1995, 127 Cass. civ. 1ère, 23 March 1994, No. 92-15.137, Société Hilmarton c/ société OTV, Rev. Arb. 1994, 327, YCA XX (1995), 663 Cass. civ. 1ère, 15 June 1994, No. 92-15.098, Communauté urbaine de Casablanca c/Degremont, Bull. 1994 I No. 209 p. 152 Cass. civ. 1ère, 21 May 1997, No. 95-11.427, Renault c/société V 2000 (Jaguar France), Rev. Arb. 1997, 537 Cass. civ. 1ère, 3 June 1997, No. 95-17.603, Société Prodexport c/ société FMT productions, Rev. Arb. 1998, 537 Cass. civ. 1ère, 10 June 1997, No. 95-18.402, Société OTV c/société Hilmarton, Rev. Arb. 1997, 376, YCA XXII (1997), 696 Cass. civ. 1ère, 24 March 1998, No. 95-17.285, Excelsior Film TV v. UGC-PH, Bull. 1998, I No. 121 p. 80, Rev. Arb. 1999, 255, YCA XXIV (1999), 643 Cass. civ. 1ère, 5 January 1999, No. 96-20.202, Banque Worms c/ Bellot, Rev. Arb. 2000, 85 Cass. civ. 1ère, 5 January 1999, No. 96-21.430, M. Zanzi c/J. de Coninck, Rev. Arb. 1999, 260 Cass. civ. 2ème, 18 February 1999, No. 97-12.770 Cass. com., 29 June 1999, Bull. 1999 IV No. 147 p. 122 Cass. civ. 1ère, 6 July 2000, 98-19068, Creighton v. Qatar, JDI 2000, 1054 Cass. civ. 1ère, 17 October 2000, Rev. Arb. 2000, 648, YCA XXVI (2001), 767 Cass. civ. 1ère, 20 December 2000, No. 98-21.548, Prodexport c/ FMT Productions, Rev. Arb. 2003, 1341 Cass. civ. 1ère, 6 February 2001, No. 98-20.776, Peavey Company c/Organisme général pour les fourrages, Rev. Arb. 2001, 765 Cass. civ. 2ème, 22 November 2001, No. 99-21.662, Thuillier c/ Michelez, Rev. Arb. 2002, 371 Cass. civ. 2ème, 20 December 2001, No. 00-10.806, Société Quille le Trident c/Société CEE Euro Isolation, Rev. Arb. 2002, 379 Cass. civ. 1ère, 29 January 2002, No. 00-12.173 Cass. civ. 1ère, 30 March 2004, No. 01-14.311, Société Uni-Kod c/ Société Ouralkali, Rev. Arb. 2005, 959 Cass. civ. 1ère, 30 March 2004, No. 02-12.259, Rado c/Société Painewebber, Bulletin 2004 I No. 97 p. 78, Rev. Arb. 2005, 115 Cass. civ. com., 2 June 2004, 02-18.700, Industry SA v. Alstom Power Turbomachines SA, Bull. 2004 IV No. 110, p. 114 Cass. civ. 1ère, 6 July 2005, No. 01-15.912, Golshani c/Gouvernement de la République islamique d’Iran, Rev. Arb. 2005, 993 Cass. civ. 1ère, 25 October 2005, No. 02-13.252, Société Omenex c/ M. Hugon, Dalloz 2006, 199, Rev. Arb. 2006, 103, JDI 2006, 996 Cass. civ. 1ère, 25 April 2006, Bull. 2006 I No. 196 p. 172 Cass. civ. 1ère, 7 June 2006, No. 03-12.034, Copropriété maritime Jules Verne c/American Bureau of Shipping (ABS), Rev. Arb. 2006, 945, YCA XXXII (2007), 290, Bull. 2006 I No. 287 p. 251

828

I mn. 11 B mn. 291; I mn. 105 I mn. 96 I mn. 28 I mn. 29 B mn. 327; I mn. 105 A mns 70, 135; B mn. 324; I mn. 46 B mn. 134 I mn. 21 I mn. 30 I mn. 72 A mn. 158 B mn. 291 I mn. 29 I mn. 32 I mn. 40 I mn. 32 I mn. 50 I mn. 21 I mn. 28 A mn. 45 I mn. 107 I mn. 20 I mn. 33 B mn. 13; I mn. 21

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Table of Cases Cass. civ. 1ère, 11 July 2006, No. 05-18.681, Generali France Assurances v. Universal Legend, Bull. 2006 I No. 365 p. 313, Rev. Arb. 2006, 977 Cass. civ. 1ère, 11 July 2006, No. 03-11.983, Banque populaire Loire et lyonnais c/Société Sangar, Bull. civ. 2006 I No. 368 p. 315, RTD Com 2006, 773 Cass. civ. 1ère, 11 July 2006, No. 03-19.838, Société PT Andhika Lines c/Société Axa corporate solutions assurance, Bulletin 2006 I No. 366 p. 314, Rev. Arb. 2006, 979 Cass. civ. 1ère, 30 October 2006, Dalloz 2006, 3026 Cass. civ. 1ère, 21 November 2006, No. 05-21.818, Société Groupama transports c/Société MS Regine Hans und Klaus Heinrich KG, Bull. 2006 I No. 502 p. 447, YCA XXXII (2007), 294 Cass. civ. 1ère, 23 January 2007, No. 06-10.652, Sociétés Cofief et Codix c/Société Alix, Rev. Arb. 2007, 290 Cass. civ. 1ère, 20 February 2007, No. 06-14.107, Société Prodim c/ Painchaud, Bull. 2007 I No. 62 p. 56 Cass. civ. 1ère, 6 March 2007, No. 06-16.423, Société Prodim c/ Société Distribution Casino France, Rev. Arb. 2007, 143 Cass. civ. 1ère, 13 March 2007, No. 04-10.970, Société Chefaro International c/Barrère, Rev. Arb. 2007, 499 Cass. civ. 1ère, 27 March 2007, No. 04-20.842, Alcatel Business Systems (ABS) c/Amkor Technology, Bulletin 2007, I, No. 129, Rev. Arb. 2007, 785 Cass. civ. 1ère, 29 June 2007, No. 05-18.053, Société PT Putrabali Adyamulia c/Société Rena Holding et Société Mnogutia Est Epices, Rev. Arb. 2007, 507, YCA XXXII (2007), 299 Cass. civ. 1ère, 9 January 2008, No. 07-12.349, Société HGL c/ société Spanghero, YCA XXXIII (2008), 478 Cass. civ. 1ère, 4 June 2008, No. 06-15.320, Société SNF c/Société Cytec Industries BV, Rev. Arb. 2008, 473, YCA XXXIII (2008), 489 Cass. civ. 1ère, 6 May 2009, No. 08-10.281, Société MJA c/Société International Company For Commercial Exchanges Income, Bull. 2009 I No. 86, D. 2009, 1422, Rev. Arb. 2009, 437, YCA XXXV (2010), 353 Cass. civ. 1ère, 8 July 2009, No. 08-16.025, Société d’études et représentations navales et industrielles (Soerni) c/société Air Sea Broker Ltd (ASB), Rev. Arb. 2009, 529, YCA XXXV (2010), 356 Cass. civ. 1ère, 3 February 2010, 09-13.618, Les Terres froides (SCI) c/Robert Porcher Cass civ. 1ère, 14 April 2010, No. 09-12.477, TECA c/société Baudin Châteauneuf, Rev. Arb. 2010, 495 Cass. civ. 1ère, 8 July 2010, No. 09-67013, Société Doga c/société HTC Sweden AB, Rev. crit. DIP 2010, 743, Rev. Arb. 2010, 513 Cass. civ. 1ère, 6 October 2010, No. 08-20563, Fondation Albert Abela Family Foundation (AAFF) c/Fondation Joseph Abela Family Foundation (JAFF), JCP G 2010, 1028, Rev. Arb. 2010, 813 Cass. civ. 1ère, 20 Octobre 2010, No. 09-68.997, Société Somoclest Bâtiment c/société DV Construction, Bull. 2010, I, No. 204, Rev. Arb. 2011, 669

A mn. 35; B mn. 154

A mm. 45; I mn. 32

I mn. 37

I mn. 93 A mn. 37; B mn. 154

I mn. 45 I mn. 34 I mn. 33 I mns 7, 79 I mns 31, 32

B mn. 291; I mn. 105

I mn. 32 B mn. 310; I mn. 100 B mns 192, 228; I mn. 25

I mn. 21

I mn. 40 I mn. 40 I mn. 25 I mns 38, 92

I mn. 49

829

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Table of Cases Cass. civ. 1ère, 15 December 2010, No. 09-16.943, General Motors France c/société Champs de Mars automobile (CMA), Bulletin 2010, I, No. 260, Rev. Arb. 2011, 435 Cass. civ. 1ère, 26 January 2011, No. 09-10.198, Institut national de la santé et de la recherche médicale (Inserm) c/Fondation Letten F. Saugstad, Rev. Arb. 2011, 284 Cass. civ. 1ère, 29 June 2011, No. 10-23.321, Overseas Mining Investments Ltd (OMI) c/Commercial Caribbean Niquel, Bull. 2011, I, No. 125, Rev. Arb. 2011, 678 Cass. civ. 1ère, 12 October 2011, No. 09-72.439, Bulletin 2011, I, No. 164, Rev. Arb. 2012, 86 Cass. com., 30 November 2011, No. 11-12.905, Société Deloitte conseil v M. E. Serant, Rev. Arb. 2012, 333 Cass. civ. 1ère, 11 May 2012, Société Ekato Ruhr Und Mischtechnik Gmbh c/société Nipponkoa Insurance Company Europe Limited, Rev. Arb. 2012, 561 Cass. civ., 26 September 2012, Rev. crit. DIP 2013, 256 Cass. civ. 1ère, 10 October 2012, No. 11-20.299, Société Neoelectra Group SAS c/Société Tecso EURL, Rev. Arb. 2013, 129 Cass. civ. 1ère, 28 March 2013, No. 11-27-770, Société Pirelli & Cie Spa c/société Licensing Projects, Bull. I 2013 No. 59, Rev. Arb. 2013, 746 Cass. civ. 1ère, 15 January 2014, No. 11-17.196 Cass. civ. 1ère, 12 February 2014, Cah. Arb. 2014 No. 3 p. 385 Cass. civ., 5 March 2014, No. 12-29.112, Diag Human SE v. Czech Republic, Rev. Arb. 2014, 718, YCA XXXIX (2014), 386 Cass civ. com., 2 June 2014, Bull. 2014 IV No. 112 p. 115 Cass. civ. 1ère, 25 June 2014, No. 11-26.529, Avax v. Tecnimont, Bull. 2014, I, No. 115 Cass. civ. 1ère, 5 November 2014, No. 13-11.745, Société Yukos capital c/Société Oktrytoye aktsionernoye obshestvo tomskneft vostochnoi neftyanoi kompanii, Rev. Arb. 2014, 1040, YCA XL (2015), 413, ECLI:FR:CCASS:2014:C101281 Cass. civ. 1ère, 18 December 2014, No. 14-11.085, Dukan de Nitya v. VR Services Cass. civ. 1ère, 18 March 2015, No. 14-13.336 Cass. civ. 1ère, 1 April 2015, No. 14-14552, SER Ducros v. GFC Construction, Bull. 2015, I, No. 76 Cass. civ. 1ère, 8 July 2015, No. 13-25.846, Société Ryanair Ltd c/ Syndicat Mixte des Aéroports de Charente (SMAC), Rev. Arb. 2015, 966 Cass. civ. 1ère, 21 October 2015, 14-25.080, Scamark c/Société Conserveries des cinq oceans, Bull. 2016 No. 838, Rev. Arb. 2015, 1229 Cass. civ. 1ère, 16 December 2015, No. 14-26.279, Société Columbus acquisitions Inc. c/Société Auto-Guadeloupe investissement, Rev. Arb. 2016, 348 Cass. civ. 1ère, 24 February 2016, 14-26.964, Société Weissberg c/ société Subway international BV, Rev. Arb. 2016, 636, YCA XLI (2016), 463

830

I mn. 14

I mn. 7

I mn. 97

I mns 59, 74, 88 I mn. 27 I mn. 29

B mn. 125 I mn. 47 I mn. 30

I mn. 57 I mn. 100 B mn. 275 A mn. 45 A mn. 70; I mn. 49 A mn. 151; I mn. 64

A mn. 68 I mn. 94 A mn. 45 I mn. 24

I mn. 25

I mns 47, 49

I mn. 37

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Table of Cases Cass. civ. 1ère, 31 March 2016, No. 14-20.396, Association Chambre arbitrale maritime de Paris c/Société Cool Carriers, Rev. Arb. 2017, 167 Cass. Civ. 3ème, 19 May 2016, No. 15-14.464, Société Thales architectures v. société Copvial, Rev. Arb. 2016, 1094 Cass. 1ère civ., 25 May 2016, No. 14-20.532, Novolipetski Matellurgicheski Kombinat v. Maximov Cass. civ. 3ème, 16 June 2016, No. 15-16.309, Société Tecta v. M. G. Gully Cass. civ. 1ère, 30 June 2016, No. 15-13.755, Société Groupe Bernard Tapie c/Société CDR créances, Rev. Arb. 2016, 1123, ECLI:FR: CCASS:2016:C100932 Cass. civ. 1ère, 6 July 2016, No. 15-19.521, Société Football Club Sochaux Montbéliard c/Association Fédération internationale de football (FIFA), Rev. Arb. 2016, 961 Cass. civ. 1ère, 13 July 2016, No. 15-19.389, Société MJA c/Société Airbus Helicopters, Rev. Arb. 2016, 963 Cass. civ. 1ère, 21 September 2016, No. 15-22.338, Société Finamur c/société Spie Sud-Ouest, Rev. Arb. 2016, 1208 Cass. civ. 1ère, 21 September 2016, No. 15-28.941, Société BK Medical APS c/M. D. Cardon, Rev. Arb. 2016, 1209 Cass. civ. 1ère, 9 November 2016, No. 15-25.554, Société Vanille et produits c/société Monapro BV, Rev. Arb. 2016, 1216 Cass. com., 1 March 2017, No. 15-22.675, Cabinet maîtrise d’oeuvre (CMO) v. SNC Lavalin international, RTD civ. 2017, 391 Cass. civ. 1ère, 20 April 2017, No. 16-11.413; Société Carrefour proximité France c/Société Distri Dorengts, Rev. Arb. 2017, 763 Cass. civ. 1ère, 20 April 2017, No. 16-18.093, Société Inthemix c/ Société Dia France, Société Ed Franchise, Rev. Arb. 2018, 618 Cass. civ. 1ère, 4 May 2017, No. 16-16.853, Société Brisard Dampierre c/Société Demathieu Bard Construction, Rev. Arb. 2018, 765 Cass. civ. 1ère, 4 May 2017, No. 16-17.358, Société Route de Magny c/Société Coredif, Rev. Arb. 2017, 770 Cass. com, 24 May 2017, No. 15-25457 Cass. civ. 1ère, 1 June 2017, No. 16-11.487, Holding Financière Céleste c/Société Federal State Unitary Enterprise Russian Satellite Communications Compagnie, Rev. Arb. 2018, 234 Cass. civ. 1ère, 1 June 2017, No. 16-13.729, Société Egyptian General Petroleum Corporation c/Société National Gas Company, Rev. Arb. 2017, 1073, YCA XLII (2017), 382 Cass. civ. 1ère, 15 June 2017, No. 16-17.108, République de Guinée Equatoriale c/Société Orange Middle East and Africa, Rev. Arb. 2017, 1074 Cass. civ. 1ère, 13 September 2017, No. 16-16.468, Société Orion Satellite Communications Inc. c/Société Federal State Unitary Enterprise Russian Satellite Communications Company, Rev. Arb. 2018, 221 Cass. civ. 1ère, 13 September 2017, No. 16-22.326, Société Oc’Via c/Groupement solidaire Guintoli/EHTP/NGE génie civil, Rev. Arb. 2017, 1079 Cass. civ. 1ère, 13 September 2017, No. 16-25.657, Société Indagro c/société Ancienne Maison Marcel Bauche, Rev. Arb. 2017, 900

I mn. 52

I mn. 94 A mn. 149 I mn. 94 A mn. 118; I mn. 85

I mn. 37

I mn. 30 I mn. 107 I mn. 37 I mn. 29 A mns 31, 44 I mns 30, 40 I mn. 35 I mns 21, 39 I mn. 96 I mn. 94 I mn. 31

B mn. 134; I mns 38, 92

I mn. 53

I mn. 84

I mn. 37

I mn. 99

831

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Table of Cases Cass. civ. 1ère, 10 January 2018, No. 16-21.391 Cass. civ. 1ère, 28 March 2018, No. 16-16568, Société Komstroy c/ République de Moldavie, Rev. Arb. 2018, 561 Cass. civ. 1ère, 24 May 2018, No. 17-18.796, F. Parienty c/Société Carrosserie peinture system, Rev. Arb. 2018, 476 Cass. com., 30 May 2018, No. 16-26403, Société NRJ c/Société Spéciaux transports aériens Roissy (STAR), Rev. Arb. 2018, 479 Cass. com., 4 July 2018, No. 17-13.674, Société Banque Delubac et Cie c/Société Mayerhofer Agrarhandel GmbH, Rev. Arb. 2018, 691 Cass. civ. 1ère, 5 September 2018, No. 17-13.837, Société RSUI Indemnity Company c/Société Tenergie Développement, Rev. Arb. 2018, 692 Cass. com., 10 October 2018, No. 16-22.215, M. L. Gherardi c/ Société civile des Mousquetaires, Rev. Arb. 2019, 239 Cass. civ. 1ère, 19 December 2018, No. 16-18.349, Société J&P Avax c/Société Tecnimont SPA, Rev. Arb. 2018, 848 Cass. civ. 1ère, 19 December 2018, No. 17-28.951, Les voies navigables de France c/Société Cedecel, Rev. Arb. 2019, 296 Cass. civ. 1ère, 3 October 2019, No. 18-15.756, Saad Buzwair Automotive Co. v. Audi Volkswagen Middle East FZE LLC Conseil d’Etat, Avis, 6 March 1986, Rev. Arb. 1992, 397 Tribunal des Conflits, 17 May 2010, INSERM c/Fondation Letten F. Sausgstad, Bull. 2010, Tribunal des conflits, No. 11 (Inserm) CA Dijon, 19 January 2000, Blanchetete c/Cornement, Rev. Arb. 2001, 199 CA Lyon, 15 May 1997, Parodi c/société Annecy et France Boissons, Rev. Arb. 1997, 402 CA Paris, 28 September 1979, Rev. Arb. 1980, 506 CA Paris, 12 February 1980, Rev. Arb. 1980, 524, YCA VI (1981), 221 CA Paris, 9 June 1983, Rev. Arb. 1983, 497 CA Paris, 18 January 1983, Rev. Arb. 1984, 87 CA Paris, 21 October 1983, Rev. Arb. 1984, 98 CA Paris, 15 March 1984, Rev. Arb. 1985, 285, J. Int. Arb. 2 (1985), No. 4, 103 CA Paris, 20 January 1987, Rev. Arb. 1987, 482, YCA XIII (1988), 466 CA Paris, 19 March 1987, Rev. Arb. 1987, 498 CA Paris, 27 November 1987, Rev. Arb. 1989, 62 CA Paris, 28 April 1988, Rev. Arb. 1989, 280 CA Paris, 16 June 1988, Rev. Arb. 1989, 309 CA Paris, 5 April 1990, Société Courrèges Design c/société André Courrèges, Rev. Arb. 1992, 110 CA Paris, 29 March 1991, Société Ganz c/société nationale des Chemins de fer tunisiens, Rev. Arb. 1991, 478 CA Paris, 17 December 1991, société Gatoil c/National Iranian Oil Company, Rev. Arb. 1993, 281 CA Paris, 7 July 1992, Laiguède c/Ahsen Inox, 1994, Rev. Arb. 1994, 728

832

I mn. 94 I mn. 92 I mn. 70 I mn. 35 I mn. 33 I mn. 32

I mns 14, 25 A mn. 70; I mns 47, 49, 52, 53 I mns 32, 86 A mn. 70 I mn. 24 I mn. 24 I mns 69, 97 I mn. 32 B mn. 327 B mn. 22 B mn. 327 B mn. 229 H mn. 41 B mn. 249 B mn. 108 B mn. 145 B mn. 223 B mns 199, 249 B mn. 325 I mn. 7 I mn. 25 B mn. 216; I mn. 24 I mn. 30

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Table of Cases CA Paris, 19 May 1993, Société Labinal c/Sociétés Mors et Westland Aerospace, Rev. Arb. 1993, 645 CA Paris, 30 September 1993, Société European Gas Turbines SA c/société Westman International Ltd, Rev. Arb. 1994, 359, YCA XX (1995), 198 CA Paris, 14 October 1993, Société Aplix c/société Velcro, Rev. Arb. 1994, 164 CA Paris, 24 February 1994, Ministère tunisien de l’Equipement c/ société Bec Frères, Rev. Arb. 1995, 277, YCA XXII (1997), 682 CA Paris, 25 March 1994, Société Sardisud c/société Technip, Rev. Arb. 1994, 391 CA Paris, 23 March 1995, Société Maec et a. c/P. Mumbach, Rev. Arb. 1996, 446 CA Paris, 13 June 1996, Société KFTCIC c/société Icori Estero, JDI 1997, 151, Rev. Arb. 1997, 251 CA Paris, 28 October 1997, Société Procédés de préfabrication pour le béton c/Libye, Rev. Arb. 1998, 399 CA Paris, 25 November 1997, Société VRV c/Pharmachim, Rev. Arb. 1998, 684 CA Paris, 3 March 1998, Consorts de Coninck c/Zanzi et Société Torelli ès qual., Rev. Arb. 2003, 207 CA Paris, 3 December 1998, Société ITP Interpipe c/Hunting Oilfield Services (HOS), Rev. Arb. 1999, 601 CA Paris, 15 December 1998, Consorts Attali c/Lecourt, Rev. Arb. 2001, 151 CA Paris, 1 July 1999, Rev. Arb. 1999, 834, YCA XXIV (1999), 296 CA Paris, 29 March 2001, SARL Carthago Films c/SARL Babel Productions, Rev. Arb. 2001, 543 CA Paris, 14 June 2001, SA Compagnie commerciale André c/SA Tradigrain France, Rev. Arb. 2001, 773 CA Paris, 28 November 2002, Voith Turbo GmbH AG et Co c/ Société Nationale des Chemins de Fer Tunisiens (SNCFT), Rev. Arb. 2003, 445 CA Paris, 4 December 2002, Rev. Arb. 2003, 1286, YCA XXIX (2004), 657 CA Paris, 16 January 2003, Société des télécommunications internationales du Cameroun (Intelcam) c/SA France Télécom, Rev. Arb. 2004, 369 CA Paris, 22 May 2003, SA Ess Food c/Société Caviartrade, Rev. Arb. 2003, 1252 CA Paris, 26 June 2003, Baba Ould Ahmed Miske c/Société AVC Shipping, Rev. Arb. 2006, 143 CA Paris, 4 March 2004, Rev. Arb. 2005, 143 CA Paris, 18 March 2004, Sarl Synergie c/Société SC Conect SA, Rev. Arb. 2004, 917 CA Paris, 7 October 2004, Rev. Arb. 2005, 737 CA Paris, 7 October 2004, Société Otor Participations c/Société Carlyle Holdings 1, Rev. Arb. 2004, 982 CA Paris, 18 November 2004, SA Thalès Air Défense c/GIE Euromissile, Rev. Arb. 2005, 751

I mn. 25 B mns 316, 332; I mn. 98

I mn. 25 B mns 15, 259; I mn. 24 I mn. 59 I mn. 49 I mns 8, 24, 53 B mn. 28; I mn. 11 I mn. 249 I mn. 30 I mn. 69 I mn. 13 B mn. 62 I mn. 7 I mns 7, 98 I mn. 50

B mns 13, 154 I mns 60, 97

I mn. 93 I mn. 93 A mn. 60 I mn. 107 B mn. 68 I mn. 74 I mn. 100

833

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Table of Cases CA Paris, 18 November 2004, Rev. Arb. 2004, 987 CA Paris, 3 March 2005, Malquin c/Société Afac, Rev. Arb. 2006, 446 CA Paris, 23 March 2006, YCA XXXII (2007), 282 CA Paris, 4 May 2006, No. 04/22975, Société Matel Group SAS c/ Société Fart SPA, Rev. Arb. 2006, 488 CA Paris, 15 June 2006, No. 04/21652, Gouvernment de la République de Djibouti c/Société Cotecna Inspection SA, Rev. Arb. 2006, 864, YCA XXXI (2006), 635 CA Paris, 15 June 2006, Legal Department du Ministère de la Justice de la République d’Irak c/Sociétés Fincantieri Cantieri Navali Italiani, Finmeccanica et Armamenti e Aerospazio, Rev. Arb. 2007, 90 CA Paris, 18 January 2007, YCA XXXII (2007), 297 CA Paris, 20 September 2007, Société Baste SA c/société Lady Cake Feine Kuchen GmbH, Rev. Arb. 2008, 325 CA Paris, 10 January 2008, Rev. Arb. 2008, 161, YCA XXXIII (2008), 480 CA Paris, 31 January 2008, Société Thimonnier c/société Inner Mongolia Yili Industrial Group Co. Ltd, Rev. Arb. 2008, 487 CA Paris, 4 December 2008, RTD Com 2009, 537 CA Paris, 18 December 2008, société Avelines Conseil v/M. Jean Masuy, Rev. Arb. 2011, 683 CA Paris, 12 February 2009, SA J&P Avax SA c/société Tecnimont SPA, Rev. Arb. 2009, 186 CA Paris, 22 October 2009, Sté Linde Aktiengesellschaft c/sté Halyvourgiki – AE, Rev. Arb. 2010, 124 CA Paris, 9 September 2010, Dalloz 2010, 2934 CA Paris, 28 October 2010, Rev. Arb. 2011, 691 CA Paris, 17 February 2011, 09/28533, Gouvernement du Pakistan v. Dallah Real Estate and Tourism Holding, JDI 2011, 395, Rev. Arb. 2011, 286 CA Paris, 10 March 2011, No. 09/28537, EURL Tecso c/SAS Neoelectra Group, Rev. Arb. 2011, 569 CA Paris, 7 April 2011, No. 10/09268, SAS Merial c/société Klocke Verpackungs – Service GmbH, Rev. Arb. 2011, 575 CA Paris, 7 April 2011, République de Guinée Equatoriale c/Fitzpatrick Equatorial Guinea Ltd, Rev. Arb. 2011, 747, 750 CA Paris, 20 November 2011, Rev. Arb. 2012, 134 CA Paris, 21 February 2012, Etat du Cameroun c/SPRL Projet Pilote Garoube, Rev. Arb. 2012, 587 CA Paris, 15 January 2013, Rev. Arb. 2013, 295, YCA XXXVIII (2013), 373 CA Paris, 19 February 2013, No. 12/09983, République populaire démocratique du Laos v. Thai Lao Lignite (Thailand) Co. Ltd, YCA XXXVIII (2013) 376 CA Paris, 26 February 2013, M. J. Sprecher c/M. K. A. Bughsan, Rev. Arb. 2014, 82 CA Paris, 26 February 2013, No. 12/12953, SARL Lola fleurs c/ société Monceau fleurs, Rev. Arb. 2013, 527

834

B mn. 310 I mn. 53 B mn. 179 I mn. 107 B mn. 154; I mn. 24

I mn. 41

I mns 29, 105 I mn. 107 B mns 179, 236 B mn. 192; I mn. 107 I mn. 14 I mn. 49 I mn. 49 I mn. 100 I mn. 49 I mn. 52 A mn. 46

I mns 48, 49 I mn. 60 I mn. 21 B mn. 291 I mn. 51 B mn. 341 A mns 53, 149

I mn. 100 I mn. 30

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Table of Cases CA Paris, 4 March 2014, No. 12/17681 CA Paris, 9 September 2014, No. 13/01333, M. Faisal Bin Fayyadh Al Gobain c/SA Crédit Foncier de France, Rev. Arb. 2014, 1021 CA Paris, 12 October 2014, No. 13/03410 CA Paris, 14 October 2014, S.A. Auto Guadeloupe Investissements c/Société Colombus Acquisitions Inc., Rev. Arb. 2015, 151 CA Paris, 4 November 2014, 13/10256, SAS Man Diesel & Turbo France c/Société Al Maimana General Trading Company Ltd, Rev. Arb. 2015, 543 CA Paris, 29 January 2015, No. 14/21103, Bolivarian Republic of Venezuela v. Gold Reserve Inc. CA Paris, 17 February 2015, No. 13/13278, JCP 2015, 289 CA Paris, 17 March 2015, ThyssenKrupp and Société M.A.N. c/ Gouvernement de la République d’Irak, (2015) 33 ASA Bull. 924 CA Paris, 7 April 2015, No. 14/00480, SARL Fairtrade c/SAS Façonnable, Rev. Arb. 2015, 640 CA Paris, 12 April 2016, No. 14/14884, Société J&P Avax c/Société Tecnimont, Rev. Arb. 2017, 234 CA Paris, 12 April 2016, République de Moldavie c/Société Komstroy, Rev. Arb. 2016, 833 CA Paris, 28 June 2016, No. 15/03504, Société Vijay Construction Ltd c/Société Eastern European Engineering Ltd, Rev. Arb. 2016, 1153 CA Paris, 29 November 2016, État d’Ukraine c/Société Pao Tatneft, Rev. Arb. 2017, 500 CA Paris, 7 February 2017, République bolivarienne du Venezuela c/Société Gold Reserve Inc., Rev. Arb. 2017, 566 CA Paris, 21 February 2017, République du Kirghizistan c/M. Belokon, Rev. Arb. 2017, 915 CA Paris, 28 February 2017, No. 15/06036, Société Dresser-Rand Group Inc. c/Société Diana Capita I FCR, Rev. Arb. 2017, 1060 CA Paris, 14 March 2017, Rev. Arb. 2017, 1213 CA Paris, 21 March 2017, No. 15/17234, Yemen v. Gujarat State Petroleum Corp. Ltd (India), Rev. Arb. 2018, 587 CA Paris, 30 May 2017, République du Niger c/Société A.D Trade Ltd Belgium, Rev. Arb. 2018, 765 CA Paris, 25 April 2017, Société Damietta International Port Comany S.A.E c/Société Archirodon Construction (Overseas) Co. S. A., Rev. Arb. 2017, 1201 CA Paris, 16 May 2017, No. 15/22848, M. Alain Guérard c/SAS Matisco Développement, Rev. Arb. 2018, 612 CA Paris, 16 May 2017, République Démocratique du Congo c/ Société Customs and Tax Consultancy LLC, Rev. Arb. 2018, 248, JDI 2017, 1361 CA Paris, 5 December 2017, No. 15/24961, République Togolaise c/ SAS Accor Afrique, Rev. Arb. 2018, 624 CA Paris, 16 January 2018, No. 15/21703, Société MK Group c/ SARL Onix, Rev. Arb. 2018, 401 CA Paris, 16 January 2018, No. 16/05996, Legal Department du Ministère de la Justice de la République d’Irak c/Société Fincantieri Cantieri Navali Italiani Spa, Rev. Arb. 2018, 296

I mn. 100 I mns 46, 51 I mn. 100 I mn. 49 I mn. 97

A mn. 157 I mn. 85 I mn. 63 I mn. 107 I mn. 49 I mn. 92 I mns 35, 94, 98

I mn. 92 I mn. 92 A mn. 137; I mn. 100 I mn. 68 B mn. 327 A mn. 84 I mns 21, 39 I mn. 94

I mn. 91 A mn. 136; I mns 99, 100

I mn. 21 I mns 71, 86 I mn. 71

835

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Table of Cases CA Paris, 23 January 2018, No. 16/12618, M. Christian Cabiron c/ SA ITM Entreprises, Rev. Arb. 2018, 297 CA Paris, 23 January 2018, No. 16/15258, SA Sovarex c/SA Cargill SLU, Rev. Arb. 2018, 298 CA Paris, 27 February 2018, No. 16/01358, Société Riseria Prodotti del Sole c/SAS Scamark, Rev. Arb. 2018, 299 CA Paris, 6 March 2018, No. 15/23711, Autorité pour l’administration des actifs de l’Etat de Roumanie c/Société Arcelormittal Holding AG, Rev. Arb. 2018, 471 CA Paris, 27 March 2018, No. 16/09386, Société Saad Buzwair Automotive Co. c/Société Audi Volkswagen Middle East Fze Llc., Rev. Arb. 2018, 472 CA Paris, 10 April 2018, Société Alstom Transport SA c/Société Alexander Brothers Ltd, Rev. Arb. 2018, 574 CA Paris, 29 May 2018, No. 15/20168, Société Elcir c/SA Bouygues Bâtiment Ile de France, Rev. Arb. 2018, 477 CA Paris, 16 October 2018, No. 16/18843, M. Ahmed Saeed Mohamed Albad Aldhaheri c/Société Cerner Middle East Ltd, Rev. Arb. 2018, 838 CA Paris, 23 October 2018, No. 16/24374, SAS Cabinet Maîtrise d’oeuvre CMO c/Société Lavalin International, Rev. Arb. 2018, 840 CA Paris, 20 November 2018, No. 16/10379, Ministère des Finances d’Irak c/Société Instrubel NV, Rev. Arb. 2018, 844 CA Paris, 18 December 2018, No. 16/24924, Société New Europe Corporate Advisory Ltd c/Innova 5/LP ès qualités de liquidateur de la Société Twelve Hornbeams SARL, Rev. Arb. 2018, 847 CA Paris, 20 December 2018, No. 16/25484, Etat du Cameroun c/ SPRL Projet Pilote Garoubé, Rev. Arb. 2018, 849 CA Paris, 22 January 2019, No. 16/23370, SARL DGM Autos c/ Mme D. Martinez, Rev. Arb. 2019, 296 CA Paris, 2 April 2019, No. 16/24358, Monsieur Vincent J. Ryan, Sociétés Schooner Capital et Atlantic Investment Partners LLC c/ République de Pologne, Rev. Arb. 2019, 304 CA Paris, 2 April 2019, No. 17/03739, Monsieur Osama El Badrawi c/Société Synthes GmbH, Rev. Arb. 2019, 304 CA Paris, 21 May 2019, No. 17/19850, Société Egyptian General Petroleum Corporation v. Société National Gas Company (NATGAS) CA Paris, 21 May 2019, No. 17/12.238, upholding TGI Paris, 22 May 2017, Rev. Arb. 2017, 977 CA Paris, 28 May 2019, No. 16/11182, Société Alstom Transport SA c/Société Alexander Brothers Ltd, Gaz. Pal. 2 July 2019, No. 354z1, p. 22 CA Reims, 2 November 2011, Avax c/Tecnimont, Rev. Arb. 2012, 112 CA Rouen, Société Jean Lion c/société Etablissements Gortzounian, 28 October 1988, Rev. Arb. 1999, 368 CA Versailles, 30 June 2016, No. 15/03050 and No. 15/03639 TGI Strasbourg, Rev. Arb. 1970, 166, YCA II (1977), 244 TGI Paris, 15 January 1988, Rev. Arb. 1988, 316 TGI Paris, 13 December 1988, Rev. Arb. 1990, 521

836

I mn. 70 I mn. 88 I mn. 86 I mn. 71

I mns 47, 49

I mn. 99 I mn. 7 I mn. 31

I mn. 97 I mn. 98 I mn. 31

I mns 71, 98 I mns 32, 86 I mns 97, 98

I mns 97, 98 A mns 130, 149

I mn. 57 I mn. 99

I mn. 49 I mn. 49 I mn. 94 B mns 272, 273 I mn. 49 I mn. 34

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Table of Cases TGI Paris, 22 November 1989, Rev. Arb. 1990, 693, YCA XVI (1991), 543 TGI Paris, 13 July 1999, Société Pangee c/société Francefert, Rev. Arb. 1999, 625 TGI Paris, 22 January 2010, Rev. Arb. 2010, 571 TGI Paris, 28 May 2018, No. 17/00253, Société Kraydon c/Chambre de commerce internationale, Rev. Arb. 2018, 835 Germany BVerfG, 3 November 2015, 2 BvR 2019/09, WM 2016, 51 BGH, 23 January 1957, V ZR 132/55, BGHZ 23, 138 BGH, 30 January 1957, V ZR 80/55, BGHZ 23, 198 BGH, 27 February 1957, V ZR 134/55, BGHZ 24, 1, NJW 1957, 791 BGH, 12 May 1958, VII ZR 436/56, BGHZ 27, 249 BGH, 23 April 1959, VII ZR 2/58, BGHZ 30, 89, NJW 1959, 1438 BGH, 17 December 1959, VII ZR 198/58, BGHZ 31, 367 BGH, 28 November 1963, VII ZR 112/62, BGHZ 40, 320, NJW 1964, 591 BGH, 30 January 1964, VII ZR 5/63, BGHZ 41, 104 BGH, 25 October 1966, KZR 7/65, BGHZ 46, 365, NJW 1967, 1178 BGH, 28 June 1968, V ZR 77/65, NJW 1968, 1928 BGH, 27 February 1969, KZR 3/68, NJW 1969, 978 BGH, 27 February 1970, VII ZR 68/68, BGHZ 53, 315, NJW 1970, 1046 BGH, 22 June 1972, II ZR 113/70, BGHZ 59, 82, NJW 1972, 1575 BGH, 26 October 1972, VI ZR 232/71, NJW 1973, 98 BGH, 10 June 1976, III ZR 71/74, WM 1976, 910 BGH, 12 February 1976, III ZR 42/74, NJW 1976, 1591, YCA II (1977), 242 BGH, 5 May 1977, III ZR 177/74, BGHZ 68, 356 BGH, 9 March 1978, III ZR 78/76, BGHZ 71, 131, NJW 1978, 1744, YCA IV (1979), 264 BGH, 8 October 1981, III ZR 42/80, NJW 1982, 1224, YCA VIII (1983), 365 BGH, 2 December 1981, III ZR 42/80, NJW 1983, 1267, YCA XV (1990), 660 BGH, 25 April 1983, II ZR 141/82, VersR 1983, 776 BGH, 29 September 1983, III ZR 213/82, WM 1983, 1207 BGH, 27 March 1984, IX ZR 24/83, NJW 1984, 2765, YCA X (1985), 426 BGH, 10 May 1984, III ZR 206/82, NJW 1984, 2763, YCA X (1985), 427 BGH, 3 April 1985, I ZR 101/83, NJW-RR 1987, 227 BGH, 26 September 1985, III ZR 16/84, BGHZ 96, 47, NJW 1986, 1436, RIW 1985, 972 BGH, 15 May 1986, III ZR 192/84, BGHZ 98, 70, NJW 1986, 3027, YCA XII (1987), 489

B mn. 338 I mn. 7 B mn. 141 I mn. 9

J mn. 71 J mn. 60 J mn. 26 J mn. 11 B mn. 201; J mn. 98 B mn. 331 B mn. 331 J mn. 31 J mn. 26 B mns 181, 331; J mn. 98 B mn. 139 B mn. 311 J mns 13, 31 A mn. 99; J mn. 76 B mn. 332 B mn. 42 B mns 111, 136, 254 J mn. 28 B mn. 322 B mns 19, 39, 40, 70 B mns 109, 141; J mn. 67 B mn. 133 A mn. 137; B mn. 316; J mn. 98 B mn. 350 B mns 111, 279 J mn. 32 A mns 96, 129; B mns 22, 199, 248, 249; J mns 53, 55, 61, 74 B mns 238, 262, 307, 313, 318

837

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Table of Cases BGH, 2 April 1987, III ZR 76/86, NJW-RR 1987, 1194 BGH, 15 June 1987, II ZR 124/86, NJW 1987, 3193, YCA XIX (1994), 653 BGH, 12 November 1987, II ZR 124/86, BGHZ 102, 199, NJW 1988, 1215 BGH, 14 April 1988, III ZR 12/87, BGHZ 104, 178, NJW 1988, 3090, YCA XV (1990), 450 BGH, 18 January 1990, III ZR 269/88, BGHZ 110, 104, NJW 1990, 2199, YCA XVII (1992), 503 BGH, 12 July 1990, III ZR 174/89, NJW 1990, 3210 BGH, 12 November 1990, II ZR 249/89, NJW-RR 1991, 423 BGH, 14 May 1992, III ZR 169/90, NJW 1992, 2299 BGH, 4 June 1992, IX ZR 149/91, BGHZ 118, 312, NJW 1992, 3096, (1993) 32 I.L.M. 1327 BGH, 4 March 1993, IX ZB 55/92, BGHZ 122, 16, NJW 1993, 1801 BGH, 20 January 1994, III ZR 143/92, BGHZ 125, 7, NJW 1994, 1008 BGH, 29 March 1996, II ZR 124/95, BGHZ 132, 278, NJW 1996, 1753 BGH, 2 October 1997, III ZR 2/96, NZG 1998, 63 BGH, 23 April 1998, III ZR 194/96, NJW 1998, 2452, YCA XXIV (1999), 928 BGH, 24 September 1998, III ZR 133/97, NJW 1999, 282 BGH, 18 November 1998, VIII ZR 344/97, NJW 1999, 647 BGH, 4 March 1999, III ZR 72/98, BGHZ 141, 90, MDR 1999, 755 BGH, 15 July 1999, III ZB 21/98, BGHZ 142, 204, NJW 1999, 2974, MDR 1999, 1281 BGH, 3 March 2000, II ZR 373/98, BGHZ 144, 146, NJW 2000, 1713, CLOUT Case No. 406 BGH, 3 May 2000, XII ZR 42/98, NJW 2000, 2346 BGH, 17 August 2000, III ZB 43/99, NJW 2000, 3650, YCA XXVI (2001), 771 BGH, 14 September 2000, III ZR 33/00, BGHZ 145, 116, NJW 2000, 3720, YCA XXVII (2002), 265 BGH, 2 November 2000, III ZB 55/99, BGHZ 145, 376, NJW 2001, 373, YCA XXVII (2002), 269 BGH, 16 January 2001, XI ZR 113/00, NJW 2001, 1065 BGH, 1 February 2001, III ZR 332/99, NJW-RR 2001, 1059, YCA XXIX (2004), 700 BGH, 22 February 2001, III ZB 71/99, NJW 2001, 1730, YCA XXIX (2004), 724 BGH, 10 May 2001, III ZR 262/00, BGHZ 147, 394 BGH, 27 June 2001, VIII ZR 235/00, NJW 2001, 3775 BGH, 31 October 2001, VIII ZR 60/01, BGHZ 149, 113, NJW 2002, 370 BGH, 4 October 2001, III ZR 281/00, NJW-RR 2002, 387 BGH, 6 June 2002, III ZB 44/01, BGHZ 151, 79, NJW 2002, 3031, SchiedsVZ 2002, 39, CLOUT Case No. 560

838

J mn. 37 B mn. 135 B mn. 137; J mn. 26 B mns 22, 254, 273–275 B mns 233, 237, 238, 267, 275, 307, 318 B mn. 326; J mn. 54 J mns 28, 30 J mns 46, 55, 92 B mn. 330 B mn. 330 B mn. 50 B mn. 323; J mn. 83 J mn. 29 B mn. 212 A mn. 37; B mn. 125 J mn. 26 B mn. 324; D mn. 69; J mns 48, 94 B mn. 179; J mn. 97 J mns 10, 27 A mn. 45; J mn. 29 B mns 50, 172, 173 B mn. 142; J mn. 26 J mn. 98 J mn. 76 B mns 172, 186, 262, 310, 320; J mns 47, 109 B mns 32, 168, 172, 275, 282 J mn. 37 J mn. 9 J mn. 26 J mn. 137 J mns 33, 89, 91, 97

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Table of Cases BGH, 1 August 2002, III ZB 66/01, NZG 2002, 955 BGH, 27 March 2003, III ZB 83/02, SchiedsVZ 2003, 133 BGH, 25 September 2003, III ZB 68/02, SchiedsVZ 2003, 281, YCA XXIX (2004), 767 BGH, 27 May 2004, III ZB 53/03, NJW 2004, 2226, SchiedsVZ 2004, 205 BGH, 19 July 2004, II ZR 65/03, BGHZ 160, 127, ZIP 2004, 1616 BGH, 13 January 2005, III ZR 265/03, BGHZ 162, 9, NJW 2005, 1125 BGH, 29 June 2005, III ZB 65/04, SchiedsVZ 2005, 259 BGH, 21 September 2005, III ZB 18/05, SchiedsVZ 2005, 306, YCA XXXI (2006), 679 BGH, 12 January 2006, III ZR 214/05, BGHZ 165, 376, NJW 2006, 779, SchiedsVZ 2006, 101 BGH, 23 February 2006, III ZB 50/05, BGHZ 166, 278, NJW 2007, 772, SchiedsVZ 2006, 161 BGH, 18 January 2007, III ZB 35/06, NJW-RR 2007, 1008, YCA XXXIII (2008), 506 BGH, 25 January 2007, VII ZR 105/06, SchiedsVZ 2007, 273 BGH, 1 March 2007, III ZB 7/06, BGHZ 171, 245, SchiedsVZ 2007, 160 BGH, 1 March 2007, III ZR 164/06, SchiedsVZ 2007, 163 BGH, 8 November 2007, III ZB 95/06, SchiedsVZ 2008, 40 BGH, 17 April 2008, III ZB 97/06, SchiedsVZ 2008, 196 BGH, 21 May 2008, III ZB 14/07, NJW 2008, 2718, YCA XXXIV (2009), 504 BGH, 31 May 2007, III ZR 22/06, SchiedsVZ 2007, 215 BGH, 30 October 2008, III ZB 17/08, NJW 2009, 1215, SchiedsVZ 2009, 66 BGH, 15 January 2009, III ZB 83/07, SchiedsVZ 2009, 126 BGH, 29 January 2009, III ZB 88/07, BGHZ 179, 304, NJW 2009, 1747 BGH, 6 April 2009, II ZR 255/08, BGHZ 180, 221, NJW 2009, 1962 BGH, 30 April 2009, III ZB 91/07, NJW-RR 2009, 1582, SchiedsVZ 2009, 287 BGH, 2 July 2009, IX ZR 152/06, NJW 2009, 2826, SchiedsVZ 2009, 285, YCA XXXV (2010), 374 BGH, 9 March 2010, XI ZR 93/09, BGHZ 184, 365, IPRax 2011, 497 BGH, 20 May 2010, IX ZR 121/07, WM 2010, 1522 BGH, 8 June 2010, XI ZR 349/08, NJW-RR 2011, 548, SchiedsVZ 2011, 46, YCA XXXVII (2012), 216 BGH, 29 July 2010, III ZB 48/09, SchiedsVZ 2010, 275, YCA XXXVI (2011), 277 BGH, 30 September 2010, III ZB 57/10, SchiedsVZ 2010, 330, YCA XXXVI (2011), 279

A mn. 45; J mn. 29 A mn. 60, J mn. 36 B mns 14, 15, 176 J mn. 11 J mn. 31 J mns 25, 34 J mn. 99 B mns 111, 124, 220; J mn. 18 J mn. 32 B mns 14, 15, 310; J mns 33, 101 B mn. 66; J mn. 64 A mn. 48 J mn. 85 J mn. 24 J mn. 93 B mns 147, 196, 197, 286, 290, 291, 341 J mn. 94 B mn. 119 A mn. 134; J mns 3, 97, 98 B mns 238, 261; J mn. 96 A mn. 45; J mns 3, 36 J mns 22, 27, 83 J mn. 37 B mn. 350; J mn. 101 B mn. 97 J mn. 99 B mns 13, 83, 104, 124, 126, 148, 156, 215; J mn. 15, 17, 18 A mn. 50; J mn. 105 B mns 219, 220, 346; J mn. 105

839

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Table of Cases BGH, 30 September 2010, III ZB 69/09, BGHZ 187, 126, SchiedsVZ 2010, 332, YCA XXXVI (2011), 282 BGH, 16 December 2010, III ZB 100/09, BGHZ 188, 1, SchiedsVZ 2011, 105, YCA XXXVI (2011), 273 BGH, 25 January 2011, XI ZR 350/08, SchiedsVZ 2011, 157, YCA XXXVII (2012), 223 BGH, 8 February 2011, XI ZR 168/08, MDR 2011, 717 BGH, 22 March 2011, XI ZR 197/08, NJW-RR 2012, 49 BGH, 12 April 2011, XI ZR 341/08, NJW-RR 2011, 1287 BGH, 3 May 2011, XI ZR 373/08, NJW-RR 2011, 1350 BGH, 19 May 2011, III ZR 16/11, SchiedsVZ 2011, 227 BGH, 30 June 2011, III ZB 59/10, SchiedsVZ 2011, 281 BGH, 14 July 2011, III ZB 70/10, SchiedsVZ 2011, 284 BGH, 30 November 2011, III ZB 19/11, SchiedsVZ 2012, 41 BGH, 28 March 2012, III ZB 63/10, BGHZ 193, 38, NJW 2012, 1811 BGH, 19 July 2012, III ZB 66/11, SchiedsVZ 2012, 281 BGH, 17 January 2013, III ZR 10/12, NJW 2013, 1296 BGH, 30 January 2013, III ZB 40/12, SchiedsVZ 2013, 110, YCA XXXVIII (2013), 384 BGH, 23 April 2013, III ZB 59/12, SchiedsVZ 2013, 229, YCA XXXIX (2014), 394 BGH, 25 April 2013, IX ZR 49/12, WM 2013, 1514 BGH, 6 June 2013, I ZB 56/12, NJW-RR 2013, 1336 BGH, 19 September 2013, III ZB 37/12, SchiedsVZ 2013, 333 BGH, 3 March 2014, IV ZB 4/14, NJW 2014, 1597, SchiedsVZ 2014, 98 BGH, 8 May 2014, III ZR 371/12, SchiedsVZ 2014, 151, BeckRS 2014, 11030, YCA XXXIX (2014), 401 BGH, 30 April 2014, III ZB 37/12, SchiedsVZ 2014, 200 BGH, 24 July 2014, III ZB 83/13, BGHZ 202, 168, NJW 2014, 3652, SchiedsVZ 2014, 303 BGH, 18 June 2014, III ZB 89/13, NJW 2014, 3655, SchiedsVZ 2014, 254 BGH, 11 December 2014, I ZB 23/14, NJW-RR 2015, 1087, SchiedsVZ 2016, 41 BGH, 21 January 2015, VIII ZR 352/13, NJW 2015, 1118 BGH, 16 April 2015, I ZB 3/14, NJW 2015, 3234 BGH, 7 May 2015, I ZB 83/14, SchiedsVZ 2016, 42 BGH, 28 January 2016, I ZB 37/15, SchiedsVZ 2016, 163 BGH, 10 March 2016, I ZB 99/14, NJW-RR 2016, 892 BGH, 31 March 2016, I ZB 76/15, SchiedsVZ 2016, 343 BGH, 21 April 2016, I ZB 7/15, SchiedsVZ 2016, 339 BGH, 7 June 2016, KZR 6/15, BGHZ 210, 292, NJW 2016, 2266, SchiedsVZ 2016, 218 and 26 BGH, 9 August 2016, I B 1/15, NJW 2017, 488, SchiedsVZ 2017, 103, BeckRS 2016, 15081

840

B mns 115, 219, 220, J mns 18, 23 A mn. 153; B mns 194–196, 320; J mn. 109 B mns 104, 126, 156 J mn. 37 B mn. 126; J mn. 18 B mn. 97, 126 B mns 124, 126, 148, 211 J mn. 24 J mn. 29 A mn. 47; B mn. 140; J mn. 32 B mn. 179 J mn. 65 J mn. 42 J mn. 9 A mn. 158 B mns 287, 291–293; J mn. 104 J mn. 29 J mn. 105 J mn. 33 A mn. 134; J mns 97, 98 B mns 115, 133–136, 156, 220; J mn. 30 J mn. 36 J mns 23, 34 J mns 38, 61 B mn. 262; J mns 48, 94, 96 A mn. 16 J mns 22, 108 J mns 19, 29 J mn. 53 J mn. 95 J mn. 105 J mns 38, 99 A mn. 37; B mns 52, 123; 135, 331; J mns 4, 19 J mns 13, 31, 33, 36, 88

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Table of Cases BGH, 7 July 2016, I ZB 45/15, SchiedsVZ 2017, 107 BGH, 6 October 2016, I ZB 13/15, SchiedsVZ 2018, 53, YCA XLIII (2018), 445 BGH, 25 October 2016, X ZR 27/15, SchiedsVZ 2017, 144 BGH, 2 March 2017, I ZB 42/16, SchiedsVZ 2017, 200, YCA XLIII (2018), 451 BGH, 16 March 2017, I ZB 49/16, SchiedsVZ 2018, 37, WM 2017, 1111 BGH, 16 March 2017, I ZB 50/16, NJW 2017, 2115, SchiedsVZ 2018, 42 BGH, 6 April 2017, I ZB 23/16, NJW-RR 2017, 876, SchiedsVZ 2017, 194 BGH, 2 May 2017, I ZB 1/16, NJW 2018, 70, SchiedsVZ 2017, 317 BGH, 11 May 2017, I ZB 3/16, WM 2018, 817 BGH, 29 June 2017, I ZB 60/16, SchiedsVZ 2018, 127 BGH, 27 July 2017, I ZB 93/16, NZI 2018, 106 BGH, 11 October 2017, I ZB 12717, NJW 2018, 869, SchiedsVZ 2018, 271 BGH, 19 April 2018, I ZB 52/17, NJW-RR 2018, 1331, SchiedsVZ 2019, 41 BGH, 7 June 2018, I ZB 70/17, SchiedsVZ 2018, 318 BGH, 11 October 2018, I ZB 9/18, NJW-RR 2019, 762, SchiedsVZ 2019, 150, WM 2019, 36 BGH, 31 October 2018, I ZB 17/18, BeckRS 2018, 31390 BGH, 31 October 2018, I ZB 2/15, WM 2018, 2294 BGH, 8 November 2018, I ZB 24/18, SchiedsVZ 2019, 355 BGH, 31 January 2019, I ZB 46/18, WM 2019, 875 BGH, 14 February 2019, I ZB 33/18, SchiedsVZ 2019, 287 BGH, 28 March 2019, BeckRS 2019, 8071 BGH, 18 July 2019, I ZB 90/18, WM 2019, 1973, SchiedsVZ 2020, 46 BGH, 17 October 2019, III ZR 42/19, NJW 2020, 399 BGH, 14 November 2019, I ZB 54/19, SchiedsVZ 2020, 92 BGH, 27 November 2019, VIII ZR 285/18, NJW 2020, 208 BayObLG, BB 1999, 1948 BayObLG, 17 September 1998, 4Z Sch 1/98, NJW-RR 1999, 644, YCA XXIV (1999), 645 BayObLG, 24 February 1999, 4Z Sch 17/98, NJW-RR 2000, 360 BayObLG, 15 December 1999, BB 2000, Beilage Nr. 12, 16, YCA XXVI (2001), 330 BayObLG, 28 February 2000, 4Z Sch 13/99, BayObLGZ 2000, 57 BayObLG, 16 March 2000, 4Z Sch 50/99, NJW-RR 2001, 431, YCA XXVII (2002), 445 BayObLG, 22 November 2002, 4Z Sch 13/02, SchiedsVZ 2003, 142, YCA XXIX (2004), 754 BayObLG, 12 December 2002, 4Z Sch 16/02, BayObLGZ 2002, 392, RIW 2003, 383, NJW-RR 2003, 719, YCA XXIX (2004), 761

J mn. 26 B mns 307, 310 J mn. 31 B mns 199, 307, 310; J mns 3, 65 J mns 37, 110 J mn. 27 J mns 22, 93 J mns 45, 48, 52, 70, 94, 108 A mn. 26; J mn. 16 J mn. 29 J mn. 89 A mn. 144; J mn. 46 J mn. 5 A mn. 131; J mns 55, 88, 92 B mn. 327; J mns 97, 99 J J J J J J J

mn. 13 mn. 26 mn. 15 mn. 45 mn. 50 mn. 31 mns 55, 88

A mns 35, 57 J mn. 51 A mn. 104 B mn. 339 B mn. 111 J mn. 47 B mn. 189 J mn. 19 B mns 224, 230 B mns 71, 273, 274 B mn. 109; J mn. 23

841

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Table of Cases BayObLG, 20 November 2003, 4Z Sch 17/03, IHR 2004, 81, YCA XXIX (2004), 771 BayObLG, 16 January 2004, 4Z Sch 22/03, SchiedsVZ 2004, 163 BayObLG, 5 July 2004, IPRspr 2004, no. 194, 441, YCA XXX (2005), 563 BayObLG, 23 September 2004, YCA XXX (2005), 568 KG, 13 August 2001, 2 W 8057/99, SchiedsVZ 2003, 239 KG, 18 May 2006, 20 Sch 13/04, NJW-RR 2007, 1438, SchiedsVZ 2007, 100, YCA XXXII (2007), 347 KG, 10 August 2006, 20 Sch 7/04, SchiedsVZ 2007, 108, YCA XXXII (2007), 363 KG, 17 April 2008, IPRspr 2008, 638, YCA XXXIV (2009), 510 KG, 7 July 2010, 20 SchH 2/10, SchiedsVZ 2010, 225 KG, 23 April 2012, 20 SchH 3/09, SchiedsVZ 2012, 218 KG, 3 September 2012, 20 SchH 2/12, SchiedsVZ 2012, 337 KG, 4 June 2012, 20 Sch 10/11, SchiedsVZ 2013, 112, YCA XXXVIII (2013), 384 KG, 8 September 2016, 20 Sch 3/16, BeckRS 2016, 115227 KG, 12 February 2018, 13 SchH 2/17, BeckRS 2018, 3961 KG, 7 February 2019, BeckRS 2019, 5992 OLG Brandenburg, 22 September 1999, BB 2001, Beil. zu Nr. 31, 21, YCA XXIX (2004), 697 OLG Brandenburg, 21 February 2013, BeckRS 2013, 4179 OLG Brandenburg, 24 July 2015, 11 Sch 2/13, SchiedsVZ 2016, 43 OLG Bremen, 30 September 1999, BB 2000, Beilage Nr. 12, 18, BB 2000, Beilage Nr. 50, 18, YCA XXXI (2006), 640 OLG Bremen, 29 June 2006, OLGR 2006, 650 OLG Bremen, BeckRS 2015, 2552 OLG Celle, YCA VII (1982), 322 OLG Celle, 2 October 2001, YCA XXXII (2007), 303 OLG Celle, 4 September 2003, 8 Sch 11/02, SchiedsVZ 2004, 165, YCA XXX (2005), 528 OLG Celle, 6 October 2005, IPRspr 2005, no. 188, 518, YCA XXXII (2007), 322 OLG Celle, 31 May 2007, OLGR 2007, 664, IPRspr 2007, no. 218, 614, YCA XXXIII (2008), 524 OLG Celle, 14 December 2006, YCA XXXII (2007), 372 OLG Celle, 18 November 2010, 8 Sch 4/10, BeckRS 2011, 14113 OLG Dresden, 13 January 1999, YCA XXIX (2004), 679 OLG Dresden, 27 January 2005, 11 SchH 2/04, SchiedsVZ 2005, 159 OLG Dresden, 31 January 2007, SchiedsVZ 2007, 327, YCA XXXIII (2008), 510 OLG Dresden, 7 December 2007, IPRax 2010, 241, YCA XXXIII (2008), 549 OLG Dresden, 6 August 2008, 11 Sch 2/08, SchiedsVZ 2008, 309, YCA XXXIV (2009), 522 OLG Düsseldorf, 10 January 1996, 3 VA 11/95, RIW 1996, 237

842

B mn. 307 J mn. 36 B mns 44, 72 B mns 147, 192, 261 B mn. 142 B mn. 203; J mn. 39 B mns 286, 333, 337, 341 B mn. 230 J mn. 45 J mn. 29 J mn. 32 B mn. 334 A mn. 35; J mn. 25 J mns 6, 46 A mn. 136; J mn. 98 B mn. 227 A mn. 45 B mns 185, 186 B mns 235, 257, 258, 316 J mn. 66 J mn. 105 B mn. 221 B mn. 231 B mns 131, 201, 206, 218; J mns 16, 34 B mn. 271 B mns 230, 231, 236, 323; J mn. 107 B mn. 230 J mn. 76 B mn. 330 J mn. 46 B mn. 340; J mn. 103 A mn. 37; B mn. 211 J mns 95, 103 J mn. 78

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Table of Cases OLG Düsseldorf, 23 May 1996, 6 U 114/95, NJW-RR 1997, 372 OLG Düsseldorf, 18 July 1997, 22 U 271/96, RIW 1998, 967 OLG Düsseldorf, 21 July 2004, IPRspr 2004, no. 195, 443, YCA XXXII (2007), 315 OLG Düsseldorf, 19 January 2005, I-26 Sch 5/03, SchiedsVZ 2005, 214, YCA XXXI (2006), 663 OLG Düsseldorf, 21 May 2007, OLGR 2007, 704 OLG Düsseldorf, 15 November 2017, VI-U (Kart) 8/17, BeckRS 2017, 140328 OLG Frankfurt, 26 October 1983, 21 U 2/83, RIW 1984, 400 OLG Frankfurt, 10 November 1993, RIW 1994, 686, YCA XXII (1997), 699 OLG Frankfurt a. M., 25 September 2002, 17 Sch 3/01, OLGR 2003, 186 OLG Frankfurt a. M., 24 November 2005, 26 Sch 13/05, SchiedsVZ 2006, 220 OLG Frankfurt, 26 June 2006, 26 Sch 28/05, IPRax 2008, 517, YCA XXXII (2007), 351 OLG Frankfurt, 10 May 2007, 26 Sch 20/06, SchiedsVZ 2007, 278 OLG Frankfurt a. M., 4 October 2007, 26 Sch 8/07, NJW-RR 2008, 801 OLG Frankfurt, 16 October 2008, IPRspr 2008, no 203, 646, YCA XXXIV (2009), 527 OLG Frankfurt a. M., 29 October 2009, 26 Sch 12/09, SchiedsVZ 2010, 52 OLG Frankfurt a. M., 17 February 2011, 26 Sch 13/10, SchiedsVZ 2013, 49 OLG Frankfurt a. M., 14 June 2011, 11 U 36/10 (Kart.), BeckRS 2011, 21503 OLG Frankfurt a. M., 13 February 2012, 26 SchH 15/11, juris OLG Frankfurt a. M., 16 January 2014, 26 Sch 2/13, SchiedsVZ 2014, 206, YCA XLI (2016), 480 OLG Frankfurt a. M., 2 February 2017, 26 Sch 6/16, SchiedsVZ 2017, 150 OLG Frankfurt, BeckRS 2017, 105025 OLG Frankfurt a. M., 24 January 2019, 26 SchH 2/18, BeckRS 2019, 848 OLG Frankfurt a.M., 16 January 2020, 26 Sch 14/18, BeckRS 2020, 4606 OLG Hamburg, 1 October 1954, 1 U 66/54, NJW 1955, 390 OLG Hamburg, 3 April 1975, 6 U 70/74, RIW 1975, 432, YCA II (1977), 241 OLG Hamburg, YCA IV (1979), 266 OLG Hamburg, 22 September 1978, 14 U 76/77, RIW 1979, 482, YCA V (1980), 262 OLG Hamburg, 6 September 1984, 6 U 50/84, RIW 1985, 490 OLG Hamburg, 26 January 1989, RIW 1991, 152, YCA XVII (1992), 491

A mn. 37 J mn. 40 B mns 186, 316, 331 B mn. 40; J mn. 105 A mn. 62; J mn. 40 J mn. 18 B mn. 248 B mn. 335 J mn. 107 J mn. 98 B mn. 192 B mn. 65 A mn. 69; J mn. 46 B mns 189, 277 J mns 46, 47 A mns 83, 133; J mn. 95 J mn. 9 J mn. 44 B mn. 320; J mn. 47 J mn. 46 J mn. 72 J mn. 44, 46, 48 J mn. 60 fn. 247 B mn. 272 B mns 19, 227 B mns 192, 223, 228 B mn. 79 B mns 229, 234 B mn. 330

843

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Table of Cases OLG Hamburg, 17 February 1989, 1 U 86/87, RIW 1989, 574, YCA XV (1990), 455 OLG Hamburg, BeckRS 1998, 06221 OLG Hamburg, 12 March 1998, IPRspr 1999, no. 178, 425, YCA XXIX (2004), 663 OLG Hamburg, 30 July 1998, 6 Sch 3/98, NJW-RR 1999, 1738, YCA XXV (2005), 714 OLG Hamburg, 11 March 2003, 6 Sch H 3/02, SchiedsVZ 2003, 191 OLG Hamburg, 24 January 2003, 11 Sch 6/01, SchiedsVZ 2003, 284, YCA XXX (2005), 509 OLG Hamburg, 10 May 2012, 6 U 131/07, BeckRS 2013, 2608 OLG Hamburg, 22 April 2013, 6 Sch 21/12, BeckRS 2015, 2549 OLG Hamm, 26 May 1983, 24 U 239/82, RIW 1983, 698 OLG Hamm, 2 November 1983, 20 U 57/83, IPRax 1985, 218, YCA XIV (1989), 629 OLG Hamm, 28 December 1993, 20 W 19/93, NJW-RR 1995, 189 OLG Hamm, 15 November 1994, 29 U 70/92, RIW 1995, 681, YCA XXII (1997), 707 OLG Hamm, 26 June 1997, 1 U 1/96, RIW 1997, 962 OLG Hamm, 7 March 2000, 15 W 355/99, DB 2000, 1118 OLG Hamm, 27 September 2005, 29 Sch 1/05, SchiedsVZ 2006, 107, Bull. ASA 2006, 153 OLG Hamm, 28 November 2008, 25 Sch 8/08, IHR 2010, 84, IPRspr 2008, no. 208, 654, YCA XXXIV (2009), 536 OLG Hamm, 13 July 2012, I-25 Sch 3/11, SchiedsVZ 2013, 182 OLG Jena, 10 March 2004, YCA XXXIII (2008) 495 OLG Jena, 8 August 2007, 4 Sch 3/06, SchiedsVZ 2008, 44, YCA XXXIII (2008), 534 OLG Karlsruhe, 13 March 1973, 8 U 129/72, DB 1974, 184, YCA II (1977), 239 OLG Karlsruhe, 27 March 2006, 9 Sch 2/05, SchiedsVZ 2006, 335, YCA XXXII (2007), 342 OLG Karlsruhe, 14 September 2007, 9 Sch 2/07, SchiedsVZ 2008, 47, YCA XXXIII (2008), 541 OLG Karlsruhe, 27 March 2009, 10 Sch 8/08, BeckRS 2011, 08009 OLG Karlsruhe, 4 January 2012, 9 Sch 2/09, SchiedsVZ 2012, 101, YCA XXVIII (2013), 379 OLG Koblenz, 28 July 2005, 2 Sch 4/05, SchiedsVZ 2005, 260, YCA XXXI (2006), 673 OLG Koblenz, 27 November 2012, 2 Sch 2/12, WM 2013, 1327 OLG Köln, 9 November 1960, 2 U 65/60, NJW 1961, 1312 OLG Köln, 10 June 1976, 1 U 192/74, ZZP 91 (1978), 318, YCA IV (1979), 258 OLG Köln, 18 May 1992, 19 U 22/92, EuZW 1992, 711, YCA XIX (1994), 856 OLG Köln, 16 December 1992, 16 W 43/92, IPRax 1993, 399, YCA XXI (1996), 535

844

B mns 134, 137; J mn. 31 J mn. 76 B mns 316, 332 B mns 108, 145 A mn. 69 J mn. 15; B mns 124, 204 J mn. 9 J mn. 89 B mns 270, 272 B mns 31, 298, 318 B mn. 94 B mns 83, 208; J mn. 67 B mns 165, 234, 235 J mn. 21 B mn. 201 B mns 232, 320 J mns 67, 88 J mn. 20 B mns 203, 307, 331; J mns 98, 109 B mn. 45 B mns 234, 235 B mns 262, 324 J mns 92, 97 A mn. 125; B mns 61, 254, 310, 312; J mns 29, 66, 95, 109 B mn. 99 B mn. 254 J mn. 30 B mns 229, 239 B mn. 104 B mn. 208, 221

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Table of Cases OLG Köln, 12 April 2002, OLGR 2002, 392 OLG Köln, 23 April 2004, 9 SCh 1/03, SchiedsVZ 2005, 163, YCA XXX (2005), 557 OLG Köln, 5 July 2005, OLGR 2006, 28 OLG Köln, 28 June 2011, 19 Sch 11/10, SchiedsVZ 2012, 161 OLG Köln, 21 February 2014, IPRspr 2014, no. 266, 713, (2015) XL YCA 425 OLG Köln, 26 February 2014, 19 Sch 12/13, SchiedsVZ 2014, 203, YCA XLI (2016), 484 OLG Köln, 7 August 2015, I-1 U 76/14, SchiedsVZ 2015, 295 OLG München, 7 April 1989, IPRspr 1989, no. 240, 531, YCA XVII (1992), 500 OLG München, 13 February 1995, OLGR München 1995, 57 OLG München, 8 March 1995, 7 U 5460/94, NJW-RR 1996, 1532 OLG München, 13 February 1997, 29 U 4891/96, NJW-RR 1998, 198 OLG München, 22 June 2005, 34 Sch 10/05, SchiedsVZ 2005, 308 OLG München, 28 November 2005, 34 Sch 19/05, SchiedsVZ 2006, 111, YCA XXXI (2006), 722 OLG München, 20 December 2006, OLGR 2007, 361 OLG München, 29 January 2007, 34 Sch 23/06, NJW 2007, 2129 OLG München, 23 February 2007, OLGR 2007, 684, YCA XXXIII (2008), 517 OLG München, 22 June 2009, 34 Sch 26/08, SchiedsVZ 2010, 169, YCA XXXV (2010), 371 OLG München, 12 October 2009, 34 Sch 20/08, SchiedsVZ 2009, 340, YCA XXXV (2010), 383 OLG München, 23 November 2009, 34 Sch 13/09, SchiedsVZ 2010, 50, YCA XXXVI (2011), 273 OLG München, 3 February 2010, 34 Sch 24/09, SchiedsVZ 2010, 336 OLG München, 2 March 2011, 34 Sch 6/11, SchiedsVZ 2011, 167 OLG München, 14 March 2011, 34 Sch 8/10, SchiedsVZ 2011, 159 OLG München, 12 April 2011, 34 Sch 28/10, SchiedsVZ 2011, 230 OLG München, 11 July 2011, 34 Sch 15/10, SchiedsVZ 2011, 337 OLG München, 14 November 2011, 34 Sch 10/11, SchiedsVZ 2012, 43, YCA XXXVII (2012), 231 OLG München, 29 February 2012, 34 SchH 6/11, SchiedsVZ 2012, 96 OLG München, 29 March 2012, 34 SchH 12/11, SchiedsVZ 2012, 159 OLG München, 11 April 2012, 34 Sch 21/11, SchiedsVZ 2012, 156, openJur 2012, 122347, YCA XXXIX (2014), 389 OLG München, 12 June 2012, SchiedsVZ 2012, 217 OLG München, 21 June 2012, 34 Sch 4/12, SchiedsVZ 2012, 287 OLG München, 23 July 2012, 34 Sch 19/11, SchiedsVZ 2012, 282

J mn. 77 A mn. 129; B mns 233, 318; J mn. 99 J mn. 19 A mn. 135; J mn. 97 B mn. 175 J mns 50, 95, 108 J mn. 98 B mn. 136 B mn. 341 B mn. 111 J mn. 30 A mn. 97; J mn. 74 B mn. 307 J mn. 61 J mn. 99 J mn. 98 A mn. 154; B mns 203, 225, 233, 235, 261; J mns 92, 93, 109 B mns 109, 111, 201, 206 B mn. 155 B mn. 28 J mn. 61 J mn. 72 J mn. 92 B mns 108, 205, 271; H mn. 13 B mns 25, 179, 222, 225, 233, 237; J mns 55, 56, 70, 92, 99 J mn. 26 B mn. 99 B mns 61, 179; J mn. 65 J mn. 61 B mn. 61 J mn. 65

845

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Table of Cases OLG München, 30 July 2012, 34 Sch 18/10, SchiedsVZ 2012, 339 OLG München, 19 November 2012, 34 Sch 7/11, SchiedsVZ 2013, 62 OLG München, 25 February 2013, 34 Sch 12/12, SchiedsVZ 2013, 231 OLG München, 27 March 2013, 34 Sch 27/10, SchiedsVZ 2013, 179 OLG München, 10 July 2013, 34 SchH 8/12, NJOZ 2014, 1779 OLG München, 18 December 2013, 34 Sch 14/12, BeckRS 2014, 1197 OLG München, 16 June 2014, 34 Sch 15/13, SchiedsVZ 2014, 257 OLG München, 7 July 2014, 34 SchH 18/13, SchiedsVZ 2014, 262, openJur 2014, 13939 OLG München, 1 October 2014, 34 SchH 11/14, WM 2015, 949 OLG München, 15 January 2015, U 1110/14 Kart., SchiedsVZ 2015, 40 OLG München, 25 February 2015, 34 SchH 21/13, SchiedsVZ 2016, 51 OLG München, 19 May 2015, 34 Sch 24/14, SchiedsVZ 2016, 118 OLG München, 6 August 2015, 34 SchH 3/15, GWR 2016, 295 OLG München, 31 August 2015, 34 Sch 11/13, NJOZ 2016, 327 OLG München, 9 November 2015, 34 Sch 27/14, SchiedsVZ 2015, 303 OLG München, 24 November 2015, 34 SchH 5/15, SchiedsVZ 2015, 309, NJW 2016, 881 OLG München, 23 December 2015, 34 SchH 10/15, SchiedsVZ 2016, 165, NJW 2016, 1964 OLG München, 24 March 2016, 23 U 3886/15, BeckRS 2016, 6179 OLG München, 4 July 2016, 34 Sch 29/15, SchiedsVZ 2017, 40 OLG München, 17 November 2016, 34 SchH 13/16, BeckRS 2016, 20169 OLG München, 24 November 2016, 34 SchH 5/16, BeckRS 2016, 20281 OLG München, 20 September 2017, 34 SchH 14/17, BeckRS 2017, 125333 OLG München, 29 January 2018, 34 Sch 31/15, BeckRS 2018, 1172 OLG München, 18 June 2018, 34 SchH 7/17, BeckRS 2018, 11663 OLG München, 26 June 2019, 34 SchH 6/18, SchiedsVZ 2019, 283 OLG Naumburg, 21 February 2002, 10 Sch 8/01, NJW-RR 2003, 71 OLG Naumburg, 4 March 2011, 10 Sch 4/10, SchiedsVZ 2011, 228, YCA XXXVII (2012), 226 OLG Nürnberg, 30 November 2004, 12 U 2881/04, SchiedsVZ 2005, 50 OLG Rostock, 28 October 1999, IPRspr 1999, no. 183, 443, YCA XXV (2000), 717 OLG Rostock, 22 November 2001, 1 Sch 3/00, IPRax 2002, 401, YCA XXIX (2001), 732 OLG Saarbrücken, 29 October 2002, 4 Sch 2/02, SchiedsVZ 2003, 92

846

B mn. 315 B mns 104, 192, 193 J mn. 61 B mn. 346; J mn. 105 J mn. 46 J mn. 89 J mns 46, 47, 55 A mn. 31; J mns 17, 31 J mn. 32 B mn. 52 J mn. 49 J J J J

mn. 105 mn. 32 mn. 95 mns 53–55

J mns 6, 46 J mn. 9 J mn. 19 J mn. 65 J mn. 46 J mn. 33 J mn. 37 A mn. 131; J mns 55, 92 J mn. 15 J mn. 49 A mn. 79, B mn. 109 B mns 203, 225, 233; J mns 54, 55 J mn. 77 B mn. 282 B mn. 109 B mn. 262

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Table of Cases OLG Saarbrücken, 27 February 2007, 4 Sch 1/07, OLGR 2007, 426 OLG Saarbrücken, 30 May 2011, 4 Sch 3/10, SchiedsVZ 2012, 47 OLG Saarbrücken, 23 November 2017, 4 U 44/16, SchiedsVZ 2019, 290 OLG Schleswig, 30 March 2000, 16 SchH 5/99, RIW 2000, 706, IPRspr 2000, no. 185, 409, YCA XXXI (2006), 652 OLG Schleswig, 16 June 2008, YCA XXXIV (2009), 516 OLG Stuttgart, 9 November 1990, 2 U 16/90, IPRax 1992, 86 OLG Stuttgart, 16 July 2002, 1 Sch 8/02, SchiedsVZ 2003, 84 OLG Stuttgart, 30 July 201, 1 Sch 3/10, SchiedsVZ 2011, 49 OLG Stuttgart, 5 November 2013, 1 Sch 2/11, SchiedsVZ 2014, 307 OLG Thüringen, 13 January 2011, IPRspr 2011, no. 293, 781, YCA XXXVII (2012), 220 OLG Thüringen, 8 August 2007, 4 Sch 3/06, SchiedsVZ 2008, 44, YCA XXXIII (2008), 534 LG Dortmund, 13 September 2017, 8 O 30/16 (Kart), NZKart 2017, 604 LG Düsseldorf, BeckRS 2008, 19891 LG Köln, 8 February 2012, 91 O 97/11, SchiedsVZ 2018, 275 LG München I, 26 February 2014, 37 O 28331/12, SchiedsVZ 2014, 100 LG München I, 7 February 2020, 37 O 18934/17, NZKart 2020, 145 Greece Areios Pagos, YCA XXXIII (2008), 565 Areios Pagos, YCA XXXVI (2011), 284 CA Athens, YCA XIV (1989), 637 CA Athens, YCA XIV (1989), 638 CA Piraeus, YCA XIV (1989), 641 CA Piraeus, YCA XXXIII (2008), 555 Polimeles Protodikio, YCA XXXIII (2008), 552 Hong Kong A v. R (Arbitration: Enforcement) [2009] 3 HKLRD 389 A v. R [2010] 3 HKC 67 AA Amram Ltd v. Bremer Co. Ltd [1996] 1 Lloyd’s Rep 494 AIG Insurance Hong Kong Ltd v. Lynn McCullough [2019] HKCFI 1649 American Int’l Group, Inc., v. X Co. [2016] HKCFI 1530 Apex Tech Investment Ltd v. Chuang’s Development (China) Ltd [1996] 2 HKLR 155 Argowiggins HKK2 Ltd v. Shandong Chenming Paper Holdings Ltd [2018] HKCFI 93 Ashville Investments Ltd v. Elmer Contractors Ltd [1989] QB 488 Astro Nusantara Int’l B.V. v. PT Ayunda Prima Mitra [2016] HKCA 595 Astro Nusantara International B.V. v. PT Ayunda Prima Mitra [2018] HKCFA 12

J mn. 79 A mn. 136; B mns 237, 307, 313, 316, 318; J mn. 98 J mns 15, 28 B mns 170, 192, 193, 201, 232 J mn. 103 A mn. 44 J mns 52, 97, 98, 107 J mns 54, 98 A mn. 99 B mn. 211 B mns 63, 65, 179, 203, 307, 331; J mns 98, 109 A mn. 44; J mn. 31 J mn. 31 J mn. 22 B mn. 160 A mn. 104 B B B B B B B

mn. 325 mns 312, 331 mn. 325 mn. 192 mn. 91 mn. 123 mn. 124

K mn. 124 K mn. 118 K mn. 152 A mn. 45 A mns 96, 117 B mns 237, 238 K mn. 37 K mn. 28 A mn. 153 K mn. 41

847

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Table of Cases Astro Nusantara International B.V. v. PT Ayunda Prima Mitra [2012] SGHC 212 Astro Nusantara International B.V. v. PT Ayunda CACV 272/2015 Prima Mitra86Banner Industrial & Commercial Properties v. Clark Paterson [1990] 47 EG 64 Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Industrial Co. Ltd [2009] HKCFI 94 Chan Chi Keung v. Delmas Hong Kong Ltd (unreported, 7 June 2004, HCCL 40/2003) China Nanhai Oil Joint Service Corp. Shenzhen Branch v. Gee Tai Holdings Co. Ltd, YCA XX (1995), 671 China Nanhai Oil Joint Service Corp. v. Gee Tai Holdings [1995] 2 HKLR 215 Chiu Siu Chung v. Yu Yan Yan [1993] 1 HKLR 225 Chongqing Machinery Import & Export Co. Ltd v. Yiu Hoi (unreported, HCCT 19/2001, 11 October 2001) CL v. SCG [2019] HKCFI 398 Conder Structures v. Kvaerner Construction Ltd [1999] ADRLJ 305 Dana Shipping and Trading SA v. Sino Channel Asia Ltd, HCCT 47/2015, 14 March 2016, YCA XLII (2017), 385 Democratic Republic of the Congo v. FG Hemisphere Associates LLC (No. 1) (2011) 14 HKCFAR 95 Democratic Republic of the Congo v. FG Hemisphere Associates LLC (No. 2) (2011) 14 HKCFAR 395 Dow MBF Ltd v. Detrick Ltd [1988] 1 HKLR 344 Edward Mayers v. Brian Dlugash [1994] 1 HKLR 442 Ever Judger Holding Co. Ltd v. Kroman Celik Sanayii Anonim Sirketi [2015] 3 HKC 246 Firm P v. Firm F YCA II (1997), 247 First Laser Ltd v. Fujian Enterprises (Holdings) Co. Ltd [2011] 2 HKLRD 45 Fung Sang Trading Ltd v. Kai Sun Sea Products & Food Co. Ltd [1992] 1 HKLR 40 Fustar Chemicals Ltd v. Sinochem Liaoning Hong Kong Ltd [1996] 2 HKC 407 Gao Jaiyan v. Keeneye Holdings Ltd (CACV 79/2011, 12 January 2012) Giorgio Armani SPA v. Elan Clothes Co. Ltd [2019] HKCFI 530 Grandeur Electrical Co. Ltd v. Cheung Kee Fung Cheung Construction Co. Ltd [2006] HKCA 305 Guangdong New Technology Imp. & Exp. Corporation Jiangmen Branch v. Chiu Shing trading as B.C. Property & Trading Co., YCA XVIII (1993), 385 Guo Shun Kai v. Wing Shing Chemical Co. Ltd [2013] 3 HKLRD 484 Harbour Assurance Company (UK) Ltd v. Kansa General International Insurance Company Ltd, 31 July 1991 (unreported) Hebei Import & Export Corp v. Polytek Engineering Co. Ltd (1999) 2 HKCFAR 111, [1999] 2 HKC 205, YCA XXIV (1999), 652, [1999] 1 HKLRD 665

848

B mn. 203 K mn. 41 K mn. 151 A mn. 141, 142 K mn. 73 B mn. 181 K mn. 40 K mn. 100 K mn. 123 K mn. 140 K mn. 151 B mn. 292; K mns 103, 147, 154 K mn. 158 K mn. 161 K mn. 75 K mn. 16 A mn. 54 K mn. 155 K mn. 73 K mn. 120 A mn. 76 K mn. 118 K mn. 37 A mn. 48 B mn. 238

K mn. 103 K mn. 120 B mn. 192; K mns 124, 134, 153, 155

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Table of Cases Hua Tian Long (No. 2) [2010] 3 HKLRD 611 Hyundai Engineering & Construction Co. Ltd v. Vigour Ltd [2004] 3 HKLRD 1 J.J. Agro Industries (P) Ltd v. Texuna International Ltd, YCA XVIII (1993), 396 JJ Argo Industries (P) Ltd (a firm) v. Texuna International Ltd [1992] 2 HKLR 391 Jung Science Information Technology Co. Ltd v. Zte. Corporation [2008] HKCFI 606 Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, YCA XXXIII (2008), 574 Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (unreported, HCCT 28/2002, dated 27 March 2003) Karaha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (2009) 12 HKCFAR 84 Karaha Bodas Co. LLC v. Persusahaan Pertambangan Minydak Dan Gas Bumi Negara (unreported, CACV 121/2003, dated 18 March 2008, [2003] 380 HKCU 1) KB v. S, HCCT 13/2015 (15 September 2015) Klöckner Pentaplast GmbH & Co. KG v. Advance Technology (H.K.) Co. Ltd, 14 July 2011, HCA 1526/2010, [2011] 4 HKLRD 262 L v. B, HCCT 41/2015, 5 May 2016, YCA XLI (2016), 490 Lucky-Goldstar International (HK) Ltd v. Ng Moo Kee Engineering Ltd [1993] 2 HKLR 73 Medison Co., Ltd v. Victor (Far East) Ltd, YCA XXVI (2001), 774 Ng Fung Hong Ltd v. ABC [1998] 1 HKC 213 Pacific China Holdings Ltd (in liq) v. Grand Pacific Holdings Ltd [2011] 4 HKLRD 188, [2011] HKCFI 424, YCA XXXVI (2011), 262 Pacific China Holdings Ltd v. Grand Pacific Holdings Ltd [2012] HKCA 200, YCA XXXVIII (2013), 577 Pacific Crown Engineering Ltd v. Hyundai Engineering & Construction Co. Ltd [2003] 3 HKC 659 Paklito Investment Ltd v. Klockner East Asia Ltd [1993] 2 HKLR 39, YCA XIX (1994), 664 Paquito Lima Buton v. Rainbow Joy Shipping Ltd Inc. (2008) 11 HKCFAR 464 PCCW Global Ltd v. Interactive Communications Service Ltd [2007] 1 HKLRD 309 Polytek Engineering Co. Ltd v. Hebei Import & Export Corp., YCA XXIII (1998), 666 Private Company “Triple V” Inc. v. Star (Universal) Co. Ltd [1995] 3 HKC 129 Qinhuangdao Tongda Enterprise Development Co. v. Million Basic Co. Ltd [1993] 1 HKLR 173 R v. F [2012] 5 HKLRD 278 Re Shui On Construction Co. Ltd and Schindler Lifts (HK) Ltd [1986] HKLR 1177

K mns 162, 163 K mn. 36 B mn. 199 K mn. 124 A mns 68, 69 B mn. 179 K mn. 40

K mn. 101 K mn. 44

K mn. 100 K mn. 20 A mn. 156, K mn. 103 K mn. 30 B mn. 172 K mn. 14 B mn. 238; K mn. 134 B mn. 227 K mn. 34 A mns 77, 153; B mns 223, 227, 237, 238; K mns 121, 122 K mn. 23 K mn. 34 B mns 181, 237 K mn. 34 K mns 124, 134 K mn. 64 K mn. 82

849

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Table of Cases Shangdong Textiles Import and Export Corp. v. Da Hua NonFerrous Metals Co. Ltd [2002] 2 HKLRD 844 Shanghai Fusheng Soya-Food Co. Ltd v. Pulmuone Holdings Co. Ltd [2014] HKEC 825 Société Nationale d’Opérations Pétrolières de la Côte d’Ivoire – Holding v. Keen Lloyd Resources Ltd, YCA XXIX (2004), 776 Sun Tian Gang v. Hong Kong & China Gas (Jilin) Ltd [2016] HKCFI 1611 Sunglow Supplies & Engineering Limited v. Shing Hing Construction Company Limited (unreported) (DCCJ 1005/2013, 15/1/2014) T v. C, [2016] HKCFI 559, HCCT 23/2015 (14 March 2016), YCA XLI (2016), 487 Tai Hing Cotton Mill Ltd v. Glencore Grain Rotterdam BV [1995] HKCA 626 The Hua Tian Long see Hua Tian Long Tommy CP Sze & Co. v. Li & Fung (Trading) Ltd [2003] 1 HKC 418 U v. S [2018] HKCFI 2086, YCA XLIV (2019), 527 UDL Contracting & Holdings Corpn v. Apple Daily Printing Ltd [2008] 2 HKC 534 Werner A. Bock K. G. v. The N’s Co. Ltd [1978] HKLR 281 Z v. A [2015] HKEC 289 Z v. Y [2018] HKCFI 2342

K mn. 30 A mn. 29 K mn. 64

ICC Awards ICC Case No. 5971, ASA Bull. 1995, 728 ICC Case No. 12363, ASA Bull. 2006, 462

B mn. 137 B mn. 137

India A. Ayyasamy v. A. Paramasivam, (2016) 10 SCC 386 Ace Pipeline Contract Pvt Ltd v. Bharat Petroleum Corporation Ltd, (2007) (5) SCC 304 AK Balaji v. The Government of India, [2012] Mad 124 Avitel Post Studioz Ltd v. HSBC Pi Holdings (Mauritius) Ltd (Bombay High Court, appeal no. 196 of 2014) BCCA v. Kochi Cricket Private (2018) 6 SCC 287 Benarsi Krishna Committee v. Karmyogi Shelters Pvt Ltd, (2012) 9 SCC 496 Bgs Sgs Soma Jv v. Nhpc Ltd, 2019, Civil Appeal No. 9307 of 2019 Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552, YCA XXXVII (2012), 244 Bhatia International v. Bulk Trading S.A., (2002) 4 SCC 105 Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd, (2011) 5 SCC 532 Brace Transport Corp. of Monrovia (Liberia) v. Orient Middle East Lines Ltd, AIR 1994 SC 1715, YCA XXI (1996), 552 Brahmani River Pellets Ltd v. Kamachi Industries Ltd, Supreme Court of India, Civil Appeal No. 5850 of 2019, 25 July 2019

850

K mn. 122 K mn. 119 B mns 267, 275 A mns 76, 118 K mn. 34 K mns 100, 101 A mn. 51

K mn. 34 A mn. 154; K mn. 154 K mn. 28

A mn. 6; L mns 28, 29 L mn. 51 L mn. 63 A mn. 106 L mn. 98 L mn. 66 L mns 57, 93, 94 B mns 31, 284, 308; L mns 12, 81, 92, 105, 106 L mns 10, 19, 81 L mns 28, 42 B mn. 340 A mn. 10

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Table of Cases Canara Nidhi ltd v. M. Shashikala, Civil appeal No. 7544-5 of 2019 arising out of SLP(C) Nos 35673-4 of 2014, judgment of 23 September 2019 Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd, 15 December 2016, (2017) 2 SCC 228, CLOUT Case No. 1758 Centrotrade Minerals and Metal Inc. v. Hindustan Copper Ltd, (2006) 11 SCC 245 Chloro Controls (I) Pvt Ltd v. Severn Trent Water Purification Inc., (2013) 1 SCC 641 COSID Inc. v. Steel Authority of India Ltd, YCA XI (1986), 502 Deutsche Post Bank Home Finance Ltd v. Taduri Sridhar, (2011) 11 SCC 375 DHV BV v. Tahal Consulting Engineers Ltd, [2007] INSC 913 (SC) Dresser Rand SA v. KG Khosla Compressors Ltd, [1995] Supp (3) SCC 181 Eitzen Bulk A/S v. Ashapura Minechem Limited, Supreme Court, Civil Appeal Nos. 5131–5133 of 2016 Enercon (India) Limited v. Enercon GmbH, Civil Appeal No. 2086 of 2014 European Grain & Shipping Ltd v. Seth Oil Mills Ltd, YCA IX (1984), 411 Firm Ashok Traders v. Gurumukh Das Saluja, (2004) 3 SCC 155 Fuerst Day Lawson Ltd v. Jindal Exports Ltd, (2011) 8 SCC 333 Gas Authority of India, Ltd v. SPIE-CAPAG, SA, YCA XXIII (1998), 688 General Electric Co. v. Renusagar Power Co., YCA XV (1990), 465 Global Company v. National Fertilizers Ltd, AIR 1998 Delhi 397 Goldcrest Exports v. Swissgen N.V., (2005) 3 ArbLR 58 (Bom) Great Offshore v. Iranian Offshore Engineering & Construction Company, (2008) 14 SCC 240 Hindustan Construction Company Limited v. Union of India, Writ Petition (Civil) No. 1074 of 2019 IMAX Corp. v. E-City Entertainment (I) Pvt. Ltd, (2017) 5 SCC 331 Inder Sain Mittal v. Housing Board Haryana, (2002) 3 SCC 175 Indian Oil Corporation Ltd v. Raja Transport (P) Ltd (2009) 8 SCC 520 Indian Oil Corporation Ltd v. SPS Engineering Ltd, (2011) 3 SCC 507 Indus Mobile Distribution Private Limited v, Datawind Innovations Private Limited, Civil Appeal Nos. 5370–5371 of 2017 Instrumentation Ltd v. E. Kuttappan [1992] ArbLR (1) 284 International Investor KCSC v. Sanghi Polyesters Ltd, YCA XXX (2005), 577 Intertoll ICS Cecons O&M Pvt Ltd v. National Highways Authority of India, 197 (2013) DLT 473 J.L. Kapur v. Burmah Shell Co-operative Housing Society (DB), [2008] (103) DRJ (103) 527

A mns 113, 117

A mn. 113 L mn. 3 A mn. 109; L mns 34–36, 41, 85 B mn. 331 L mn. 34 L mn. 21 L mn. 45 L mn. 13 A mn. 9; L mns 22, 36, 38 B mn. 331 L mns 3, 22 L mn. 26 B mns 83, 84 B mn. 166 L mn. 80 L mn. 102 L mn. 31 L mn. 98 B mn. 31 L mn. 108 L mn. 51 L mn. 44 L mn. 14 L mn. 88 B mn. 203 L mn. 83 L mn. 85

851

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Table of Cases Jas Enterprises v. Karanpara Development Co. Ltd, (1997) 2 CLT 277 Konkan Railway Corp. Ltd v. M/S Mehul Construction, (2000) 7 SCC 201 Lal Mahal Ltd v. Progetto Grano Spa, YCA XXXVIII (2013), 397 Lawyers’ Collective v. Bar Council of India, [2010] 2 Bom LR 32 Linde Heavy Truck Division Ltd v. Container Corporation Of India Ltd (2012) 195 DLT 366 M/S Canara, see Canara (etc.) Magma Leasing & Fin. Ltd v. Potluri Madhavilata, (2009) 10 SCC 103 Neelakantan & Bros. Construction v. Superintending Engineer, National Highways, Salem, (1988) 4 SCC 462 Mallikarjun v. Gulbarga University, 2003 Supp(5) SCR 272 Marriott International Inc. v. Ansal Hotels Ltd, AIR 2000 Del. 377, YCA XXVI (2001), 788 McDermott International Inc. v. Burn Standard Co. Ltd, 2006 (5) ALD 84 (SC) MD, Army Welfare Housing Organisation v. Sumangal Services (P) Ltd, (2004) 9 SCC 619 Mehta v. Mehta, (1999) 5 SCC 108, YCA XXV (2000), 721 Murlidhar Roonga v. S. Jagannath Tibrewala (2005) 57 SCL 128 (Bom) N. Radhakrishnan v. Maestro Engineers, (2010) 1 SCC 72 Nandan Biomatrix Limited v. D 1 Oils Limited, (2009) 4 SCC 495 National Highways Authority of India (NHAI) v. China Coal Construction Group Corporation, AIR 2006 Delhi 134 National Insurance Co. Ltd v. Boghara Polyfab Pvt Ltd, (2009) 1 SCC 267 National Shipping Company of Saudi Arabia v. Sentrans Industries Ltd, AIR 2004 Bom 136 National Thermal Power Corp. v. The Singer Company, (1992) 3 SCC 551, AIR 1993 S.C. 998, YCA XVIII (1993), 403 NBCC Ltd v. J.G. Engineering Pvt. Ltd (2010) 2 SCC 385 Nirma Ltd v. Lurgi Energie und Entsorgung GmbH, AIR 2003 Guj 145 Noy Vallesina Engineering Spa v. Jindal Drugs Ltd, (2006) 3 ArbLR 510 (Bom) Oil & Natural Gas Corp. Ltd v. Western Geco International Ltd (2014) 9 SCC 263 Oil & Natural Gas Corporation Ltd v. SAW Pipes Ltd (2003) 5 SCC 705 OPBK Construction Pvt Ltd v. Punjab Small Industries & Export Corp. Ltd, (2008) 3 ArbLR 189 P. Manohar Reddy and Bros v. Maharashtra Krishna Valley Development Corporation, (2009) 2 SCC 494 Pawan Kumar Jain v. Parduman Jain, [2005] ILR Delhi 397

852

L mn. 55 L mn. 18 L mn. 203 L mn. 63 A mn. 48

L mn. 36 L mn. 108 L mn. 38 B mn. 68 L mn. 88 L mn. 83 B mns 44, 279 L mn. 50 L mn. 29 L mn. 26 L mn. 84 L mn. 44 L mn. 80 B mns 31, 136, 284; L mns 11, 24, 25 A mn. 125 L mn. 24 L mns 100, 102 L mn. 97 L mn. 97 L mn. 55 L mn. 21 L mn. 85

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Table of Cases PEC Ltd v. Austbulk Shipping Sdn Bhd, Supreme Court, 14 November 2018, Civil Appeal No. 4834 of 2007, YCA XLIV (2019) 558 Penn Racquet Sports v. Mayor International Ltd, YCA XXXVI (2011), 293 Phulchand Exports Ltd v. OOO Patriot, (2011) 10 SCC 300 Prasun Roy v. Calcutta Metropolitan Development Authority (1987) 4 SCC 217 Progressive Career Academy Pvt Ltd v. FIIT JEE Ltd, (2011) 180 DLT 714 Pushpa P-Mulchandani (Mrs.) v. Admiral Radhakrishin Talihali (Retd.), [2001] 1 Bom LR 169 Reliance Industries Limited v. Union of India, Civil Appeal No. 5765 of 2014 Renusagar Power Co. Ltd v. General Electric Co., (1984) 4 SCC 679, YCA X (1985), 431 Renusagar Power Co. Ltd v. General Electric Co., YCA XX (1995), 681 Reva Electric Car Company P. Ltd v. Green Mobil, (2012) 2 SCC 93 RM Investment & Trading Co. Pvt. Ltd v. Boeing Co., YCA XXII (1997), 710 Sahyadri Earthmovers v. L&T Finance Ltd, 2013(2) Mh. L. J. 302 SBP & Co. v. Patel Engineering Ltd (2005) 8 SCC 618, 2005 (3) ArbLR 285 (SC) Shashoua v. Sharma, (2017) 14 SCC 722, YCA XLIII (2018), 832 Shin Satellite Public Co. Ltd v. Jain Studios Ltd (2006) 2 SCC 628 Shin-Etsu Chemical Co. Ltd v. Aksh Optifibre Ltd, (2005) 7 SCC 234, YCA XXXI (2006), 747 Shriram EPC Ltd v. Rioglass Solar SA, Supreme Court, 13 September 2018, Civil Appeal No. 9515 of 2018, YCA XLIV (2019) 556 Siddharam Satlingappa Mhetre v. State of Maharashta, (2011) 1 SCC 694 Skypak Couriers Ltd v. Tata Chemical, (2000) 5 SCC 294 Ssangyong Engineering & Construction Co. Ltd v. National Highways Authority of India (NHAI), Civil Appeal No. 4779 of 2019 State of Arunachal Pradesh v. Subhash Projects and Marketing Ltd, (2007) 1 ArbLR 564 State of Bihar v. Bihar Rajya Bhumi Vijas Bank Samiti, 2018, Civil Appeal No. 7314 of 2018 State of Orissa v. Damodar Das, (1996) 2 SCC 216 Sukanya Holdings (P) Ltd v. Jayesh H Pandya, (2003) 5 SCC 351 Sumitomo Heavy Industries Ltd v. Ongc Ltd, (1998) 1 SCC 305 Transocean Shipping Agency (P) Ltd v. Black Sea Shipping, (1998) 2 SCC 281 Union of India v. D.N. Revri & Co., (1976) 4 SCC 147 Union of India v. Dabhol Power Co, IA No. 6663/2003 Suit No. 1268/2003 (Delhi High Court 2004)

L mn. 30

B mn. 179 L mns 11, 19, 104 L mn. 108 L mn. 55 L mn. 80 L mns 13, 21, 22, 24 B mn. 137 B mn. 330 L mn. 22 B mns 12, 77 L mn. 35 L mns 84, 41, 48 B mn. 31 A mn. 119 B mn. 154 L mn. 68

L mn. 19 L mn. 27 L mn. 97 L mn. 55 L mn. 91 L mn. 26 L mn. 85 L mn. 24 L mn. 103 L mn. 38 L mn. 45

853

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Table of Cases Union of India v. Hardy Exploration and Production (India) Inc., FAO (OS) 59/2016 and CM Nos 7062-63/2016 and 7066/2016 Union of India v. Janki Prasad Agarwal, 1986 AIR (All.) 15 Union of India v. Popular Construction Co., 2001 Supp(3) SCR 619 Union of India v. Reliance Industries Ltd, Special Leave Petition (Civil) No. 11396 of 2015 Venture Global Engineering v. Satyman Computer Services Ltd, (2008) 4 SCC 190, YCA XXXIII (2008), 239 Vinod Bhaiyalal Jain v. Wadhwani Parmeshwari Cold Storage Pty Ltd, Supreme Court, Civil Appeal No. 6960 of 2011 dated 24 July 2019 Wellington Associates Ltd v. Kirit Mehta 7 (2004) 4 SCC 272 World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) Pte Ltd (2010) 1 SCC 72 World Sport Group (Mauritius) Ltd v. MSM Satellite (Singapore) Private Ltd, Civil Appeal No. 895 of 2014, (2014) 11 SCC 639 Zoroastrian Cooperative Housing Society Ltd v. District Registrar, Cooperative societies (Urban), AIR 2005 SC 2306 International Investment Authorities Amco Asia Corp. v. Republic of Indonesia, YCA XIV (1989), 92 South America Silver Ltd v. Plurinational State of Bolivia, PCA Case No. 2013-15, Procedural Order No. 10, 11 January 2016 Abaclat v. Argentina, ICSID, Decision on Jurisdiction and Admissibility and Dissenting Opinion of Abi-Saab of 4 August 2011 Accession Mezzanine Capital v. Hungary, ICSID, Award of 17 April 2015 AES Summit Generation v. Hungary, ICSID, Award of 23 September 2010 Aguas del Tunari v. Bolivia, ICSID, Decision on Jurisdiction of 21 October 2005 Al Warraq v. Indonesia, UNCITRAL, Final Award of 15 December 2014 Alemanni v. Argentina, ICSID, Decision on Jurisdiction and Admissibility of 17 November 2014 Alpha v. Ukraine, ICSID, Award of 8 November 2010 Ambiente Ufficio v. Argentina, ICSID, Decision on Jurisdiction and Dissenting Opinion of Torres Bernárdez of 8 February 2013 Amco v. Indonesia, ICSID, Decision on Annulment of 16 May 1986 Ampal-American Israel Corp. v. Egypt, ICSID, Decision on Jurisdiction of 1 February 2016 Ampal-American Israel Corp. v. Egypt, ICSID, Decision on Liability and Heads of Loss of 21 February 2017 AMTO v. Ukraine, SCC, Award of 26 March 2008 Anderson v. Costa Rica, ICSID, Award of 19 May 2010 Anglia Auto Accessories v. Czech Republic, SCC, Final Award of 10 March 2017 Ansung Housing v. China, ICSID, Award of 9 March 2017

854

A mn. 10 L mn. 38 L mn. 18 L mn. 13 B mn. 308; L mns 11, 19, 92 A mn. 68

A mn. 48 L mn. 29 A mns 23, 31; L mn. 29 L mn. 97

B mn. 160 A mn. 102 C mns 18, 20, 21, 34, 39, 45, 46, 50, 51 C mn. 15 C mn. 70 C mn. 27 C mn. 23 C mn. 21 C mn. 18 C mns 18, 20, 21, 27, 37, 46, 50, 51 C mn. 6 C mn. 49 C mn. 57 C mn. 98 C mn. 22 C mn. 90 C mn. 90

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Table of Cases Apotex Holdings v. United States, ICSID/AF, Award of 25 August 2014 Arif v. Moldova, ICSID, Award of 8 April 2013 Asian Agricultural Products v. Sri Lanka, ICSID, Award of 27 June 1990 Austrian Airlines v. Slovak Republic, ad hoc arbitration, Final Award of 9 October 2009 Autopista Concesionada v. Venezuela, ICSID, Decision on Jurisdiction of 27 September 2001 Azurix v. Argentina, ICSID, Award of 14 July 2006 Azurix v. Argentina, ICSID, Decision on Annulment of 1 September 2009 Azurix v. Argentina, ICSID, Decision on Jurisdiction of 8 December 2003 Bayindir v. Pakistan, ICSID, Award of 27 August 2009 Bayindir v. Pakistan, ICSID, Decision on Jurisdiction of 14 November 2005 Bear Creek Mining v. Peru, ICSID, Award of 30 November 2017 Beijing Urban Construction Group v. Yemen, ICSID, Decision on Jurisdiction of 31 May 2017 Berkowitz v. Costa Rica, UNCITRAL, Award of 25 October 2016 Berschader v. Russia, SCC, Award and Separate Opinion of Weiler of 21 April 2006 BG Group v. Argentina, UNCITRAL, Final Award of 24 December 2007 Biwater Gauff v. Tanzania, ICSID, Award of 24 July 2008 Blue Bank International v. Venezuela, ICSID, Award of 26 April 2017 Blue Bank International v. Venezuela, ICSID, Decision on the Parties’ Proposals to Disqualify a Majority of the Tribunal of 12 November 2013 Blusun v. Italy, ICSID, Award of 27 December 2016 Brandes Investment v. Venezuela, ICSID, Award of 2 August 2011 Camuzzi v. Argentina II, ICSID, Decision on Objections to Jurisdiction of 10 June 2005 CCL v. Kazakhstan, SCC, Jurisdictional Award of 2003, (2005) 1 S.I.A.R. 128 Cementownia “Nowa Huta” v. Turkey, ICSID/AF, Award of 17 September 2009 Cemex v. Venezuela, ICSID, Decision on Jurisdiction of 30 December 2010 Champion Trading v. Egypt, ICSID, Decision on Jurisdiction of 21 October 2003, (2004) 19 ICSID Rev. 291 Chevron and Texaco Petroleum v. Ecuador, UNCITRAL, Second Partial Award on Track II of 30 August 2018 Churchill Mining v. Indonesia, ICSID, Decision on Jurisdiction of 24 February 2014 CME v. Czech Republic, UNCITRAL, Partial Award of 13 September 2001

C mn. 86 C mn. 14 C mns 29, 80 C mn. 90 C mn. 12 C mns 29, 60, 62, 81, 98 C mn. 29 C mn. 28 C mns 6, 67, 69, 89, 90 C mns 17, 22 C mn. 22 C mn. 90 C mn. 56 C mns 28, 29 C mns 29, 45, 46, 81 C mns 18, 43, 67, 69, 80, 81, 94 C mn. 28 C mn. 9

C mn. 77 C mn. 5 C mn. 6 C mn. 50 C mn. 27 C mn. 5 C mn. 48 C mn. 71 C mns 25, 31 C mns 29, 81

855

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Table of Cases CMS Gas Transmission v. Argentina, ICSID, Decision on Objections to Jurisdiction of 17 July 2003 CMS Gas Transmission v. Argentina, ICSID, Award of 12 May 2005 ConocoPhillips v. Venezuela, ICSID, Decision on Jurisdiction and the Merits of 3 September 2013 Consortium L.E.S.I. – DIPENTA v. Algeria, ICSID, Decision on Jurisdiction of 10 January 2005 Consortium RFCC v. Morocco, ICSID, Award of 22 December 2003 Consortium RFCC v. Morocco, ICSID, Decision on Jurisdiction of 16 July 2001 Continental Casualty v. Argentina, ICSID, Award of 5 September 2008 Corn Products v. Mexico, ICSID/AF, Decision on Responsibility of 15 January 2008 Cortec Mining Kenya and others v. Kenya, ICSID, Award of 22 October 2018 Crystallex v. Venezuela, ICSID/AF, Award of 4 April 2016 Daimler Financial Services v. Argentina, ICSID, Award of 22 August 2012 Dede v. Romania, ICSID, Award of 5 September 2013 Desert Line Projects v. Yemen, Award of 6 February 2008 Duke Energy v. Ecuador, ICSID, Award of 18 August 2008 EDF v. Romania, ICSID, Award of 8 October 2009 El Paso v. Argentina, ICSID, Award of 31 October 2011 El Paso v. Argentina, ICSID, Decision on Jurisdiction of 27 April 2006 Electrabel v. Hungary, ICSID, Award of 25 November 2015 Elettronica Sicula SpA (ELSI) (US v. Italy), Judgment of 20 July 1989, ICJ Reports (1989) Eli Lilly v. Canada, UNCITRAL, Final Award of 16 March 2017 Emmis International Holding v. Hungary, ICSID, Award of 16 April 2014 EnCana v. Ecuador, UNCITRAL, Award of 3 February 2006 Enron v. Argentina, ICSID, Award of 22 May 2007 Enron v. Argentina, ICSID, Decision on Jurisdiction of 14 January 2004 Enron v. Argentina, ICSID, Decision on Jurisdiction (Ancillary Claim) of 2 August 2004 Erhas Dis Ticaret v. Turkmenistan, UNCITRAL, unpublished Award of 8 June 2018 Eskosol v. Italy, ICSID, Decision on Italy’s Request for Immediate Termination and Italy’s Jurisdictional Objection Based on Inapplicability of the Energy Charter Treaty to Intra-EU Disputes of 7 May 2019 Ethyl Corporation v. Canada, UNCITRAL, Award of 24 June 1998 Eureko v. Poland, UNCITRAL, Partial Award of 19 August 2005

856

C mns 29, 48 C mns 59, 93 C mn. 27 C mns 12, 39 C mn. 62 C mn. 39 C mns 97, 98 C mn. 85 C mn. 23 C mn. 67 C mns 6, 26, 28, 45 C C C C C C

mn. 45 mn. 23 mns 6, 50, 69, 75, 78 mns 70, 76, 98 mns 29, 77, 82 mns 39, 96

C mn. 77 C mn. 70 C mn. 76 C mn. 15 C mns 4, 57 C mn. 97 C mns 29, 30, 43, 48 C mn. 29 C mn. 51 C mn. 101

C mn. 43 C mn. 57

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Table of Cases Eureko v. Slovak Republic, UNCITRAL, Award on Jurisdiction of 26 October 2010 Fakes v. Turkey, ICSID, Award of 14 July 2010 Fedax v. Venezuela, ICSID, Decision on Jurisdiction of 11 July 1997 Feldman v. Mexico, ICSID/AF, Award of 16 December 2002 Fraport v. Philippines, ICSID, Award of 16 August 2007 Frontier Petroleum v. Czech Republic, UNCITRAL, Final Award of 12 November 2010 Funnekotter v. Zimbabwe, ICSID, Award of 22 April 2009 GAMI Investments v. Mexico, UNCITRAL, Award of 15 November 2004 Garanti Koza v. Turkmenistan, ICSID, Decision on the Objection to Jurisdiction for Lack of Consent of 3 July 2013 Gas Natural v. Argentina, ICSID, Decision on Preliminary Objections to Jurisdiction of 17 June 2005 Gavrilovic v. Croatia, ICSID, Award of 26 July 2018 Genin v. Estonia, ICSID, Award of 25 June 2001 Glamis Gold v. United States, UNCITRAL, Award of 8 June 2009 Global Trading v. Ukraine, ICSID, Award of 1 December 2010 Goetz v. Burundi, ICSID, Award of 10 February 1999 Grand River v. United States, UNCITRAL, Award of 12 January 2011 Greentech Energy Systems and others v. Italy, SCC, Award of 23 December 2018 Gruslin v. Malaysia, ICSID, Award of 27 November 2000 Guaracachi America v. Bolivia, UNCITRAL, Award of 31 January 2014 H&H Enterprises Investments v. Egypt, Award of 6 May 2014 Hamester v. Ghana, Award of 18 June 2010 HICEE B.V. v. Slovak Republic, UNCITRAL, Partial Award of 23 May 2011 Hochtief v. Argentina, ICSID, Decision on Jurisdiction of 24 October 2011 Hochtief v. Argentina, ICSID, Decision on Liability of 29 December 2014 Iberdrola v. Guatemala, ICSID, Award of 17 August 2012 İçkale İnşaat Limited Şirketi v. Turkmenistan, ICSID, Award of 8 March 2016 ICS Inspection and Control Services v. Argentina, UNCITRAL, Award of 10 February 2012 Impregilo v. Argentina, ICSID, Award of 21 June 2011 Impregilo v. Pakistan, ICSID, Decision on Jurisdiction of 22 April 2005 Inmaris v. Ukraine, ICSID, Decision on Jurisdiction of 8 March 2010 Inmaris v. Ukraine, ICSID, Award of 1 March 2012

C mn. 32 C mns 14, 17, 18, 23 C mns 18, 20 C mn. 86 C mns 22, 23 C mn. 69 C mns 50, 56 C mn. 29 C mn. 91 C mn. 29 C C C C C C

mn. 23 mn. 85 mn. 66 mn. 17 mns 28, 30, 50, 72 mn. 57

C mn. 97 C mn. 25 C mns 29, 43, 50, 56 C mn. 48 C mn. 98 C mns 28, 29 C mns 45, 90, 91 C mn. 23 C mn. 37 C mn. 89 C mn. 45 C mns 28, 29, 45, 64 C mns 21, 26, 39, 40, 62, 98, 99 C mn. 18 C mn. 59

857

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Table of Cases International Thunderbird v. Mexico, UNCITRAL, Award of 26 January 2006 Ioan Micula v. Romania, see Micula Italy v. Cuba, ad hoc arbitration, Preliminary Award of 15 March 2005 Italy v. Cuba, ad hoc arbitration, Award of 15 July 2008 Jan de Nul v. Egypt, ICSID, Decision on Jurisdiction of 16 June 2006 Jan de Nul v. Egypt, ICSID, Award of 6 November 2008 Joy Mining v. Egypt, ICSID, Award on Jurisdiction of 6 August 2004 Kardassopoulos v. Georgia, ICSID, Decision on Jurisdiction of 6 July 2007 Kilic Insaat v. Turkmenistan, ICSID, Award of 2 July 2013 Kim v. Uzbekistan, ICSID, Decision on Jurisdiction of 8 March 2017 KT Asia Investment Group v. Kazakhstan, ICSID, Award of 17 October 2013 L.E.S.I. and ASTALDI v. Algeria, ICSID, Decision on Jurisdiction of 12 July 2006 Lanco v. Argentina, ICSID, Preliminary Decision on Jurisdiction of 8 December 1998 Lao Holdings v. Laos, ICSID/AF, Decision on Jurisdiction of 21 February 2014 Lauder v. Czech Republic, UNCITRAL, Award of 3 September 2001 Lemire v. Ukraine, ICSID, Decision on Jurisdiction and Liability of 14 January 2010 Levy and Gremcitel v. Peru, ICSID, Award of 9 January 2015 Levy de Levi v. Peru, ICSID, Award of 26 February 2014 LG&E v. Argentina, ICSID, Decision on Objections to Jurisdiction of 30 April 2004 LG&E v. Argentina, ICSID, Decision on Liability of 3 October 2006 Maffezini v. Spain, ICSID, Decision on Objections to Jurisdiction of 25 January 2000 Malaysian Historical Salvors v. Malaysia, ICSID, Decision on Annulment of 16 April 2009 Malicorp v. Egypt, ICSID, Award of 7 February 2011 Mamidoil v. Albania, ICSID, Award of 30 March 2015 Marfin Investment v. Cyprus, ICSID, Award of 26 July 2018 Menzies Middle East and Africa v. Senegal, ICSID, Award of 5 August 2016 Mera Investment Fund v. Serbia, ICSID, Decision on Jurisdiction of 30 November 2018 Merrill & Ring v. Canada, UNCITRAL, Award of 31 March 2010 Metalclad v. Mexico, ICSID, Award of 30 August 2000 Metal-Tech v. Uzbekistan, ICSID, Award of 4 October 2013 Methanex v. United States, Award of 3 August 2005

858

C mn. 85

C mn. 19 C mn. 19 C mn. 17 C mn. 39 C mns 17, 39 C mn. 23 C mns 45, 91 C mn. 23 C mns 13, 17–19 C mn. 39 C mns 29, 36 C mn. 27 C mn. 29 C mns 50, 67, 75, 77, 93 C mn. 27 C mn. 86 C mn. 29 C mns 59, 60, 97 C mns 45, 90, 91 C mns 18, 19 C C C C

mn. 39 mns 23, 58, 75 mn. 77 mn. 90

C mn. 13 C C C C

mn. 66 mns 59, 68, 71 mns 23, 90 mn. 60

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Table of Cases Micula v. Romania, ICSID, Decision on Jurisdiction and Admissibility of 24 September 2008 Micula v. Romania, ICSID, Award of 11 December 2013 Middle East Cement v. Egypt, ICSID, Award of 12 April 2002 Millicom International Operations v. Senegal, ICSID, Decision on Jurisdiction of 16 July 2010 Minnotte and Lewis v. Poland, ICSID/AF, Award of 16 May 2014 Mitchell v. Congo, ICSID, Decision on Annulment of 1 November 2006 MNSS and Recupero Credito Acciaio v. Montenegro, ICSID/AF, Award of 4 May 2016 Mobil v. Venezuela, ICSID, Decision on Jurisdiction of 10 June 2010 Mobil v. Venezuela, ICSID, Award of 9 October 2014 Mondev International v. United States, ICSID/AF, Award of 11 October 2002 MTD Equity v. Chile, ICSID, Award of 25 May 2004 Mytilineos Holdings v. Serbia, UNCITRAL, Partial Award on Jurisdiction of 8 September 2006 National Grid v. Argentina, UNCITRAL, Award of 3 November 2008 Neer v. Mexico, Mexico-US General Claims Commission, Decision of 15 October 1926, United Nations Reports of International Arbitral Awards, Vol. IV, 60 Noble Energy v. Ecuador, ICSID, Decision on Jurisdiction of 5 March 2008 Noble Ventures v. Romania, ICSID, Award of 12 October 2005 Nordzucker v. Poland, UNCITRAL, Partial Award of 10 December 2008 Novenergia II v. Spain, SCC, Final Award of 15 February 2018 Nykomb v. Latvia, SCC, Award of 16 December 2003 Occidental Exploration v. Ecuador, UNCITRAL, Final Award of 1 July 2004 Occidental Petroleum v. Ecuador, ICSID, Decision on Jurisdiction, 9 September 2008 Olguín v. Paraguay, ICSID, Award of 26 July 2001 Olin Holdings v. Libya, ICC, Award of 25 May 2018 Oostergetel and Laurentius v. Slovak Republic, UNCITRAL, Decision on Jurisdiction of 30 April 2010 Orascom TMT Investments v. Algeria, ICSID, Award of 31 May 2017 Pac Rim Cayman v. El Salvador, ICSID, Decision on Preliminary Objections of 2 August 2010 Pac Rim Cayman v. El Salvador, ICSID, Decision on Jurisdictional Objections of 1 June 2012 Pan American v. Argentina, ICSID, Decision on Preliminary Objections of 27 July 2006 Pantechniki v. Albania, ICSID, Award of 30 July 2009

C mn. 14 C mn. 97 C mns 48, 57 C mns 31, 50 C mn. 22 C mn. 17 C mns 37, 39 C mns 5, 28, 50 C mns 59 C mns 26, 29 C mn. 90 C mns 19, 23, 25 C mn. 92 C mn. 65

C mns 6, 30 C mns 64, 80, 82, 97, 98 C mn. 40 C mns 77, 97 C mn. 29 C mns 48, 79 C mn. 43 C mn. 14 C mn. 59 C mns 12, 14, 19, 29 C mn. 49 C mn. 50 C mns 5, 27 C mns 28, 30, 39, 48, 96 C mns 18, 48, 80

859

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Table of Cases Parkerings-Compagniet v. Lithuania, ICSID, Award of 11 September 2007 Paushok v. Mongolia, UNCITRAL, Award on Jurisdiction and Liability of 28 April 2011 Perenco Ecuador v. Ecuador, ICSID, Decision on Remaining Issues of Jurisdiction and Liability of 12 September 2014 Pey Casado v. Chile, ICSID, Award of 8 May 2008 Philip Morris Asia v. Australia, UNCITRAL, Award of 17 December 2015 Philip Morris v. Uruguay, ICSID, Decision on Jurisdiction of 2 July 2013 Philip Morris v. Uruguay, ICSID, Award of 8 July 2016 Phoenix Action v. Czech Republic, ICSID, Award of 15 April 2009 Ping An Life Insurance v. Belgium, ICSID, Award of 30 April 2015 Plama Consortium v. Bulgaria, ICSID, Decision on Jurisdiction of 8 February 2005 Plama Consortium v. Bulgaria, ICSID, Award of 27 August 2008 PSEG v. Turkey, ICSID, Award of 19 January 2007 Quiborax v. Bolivia, ICSID, Award of 16 September 2015 Railroad Development Corporation v. Guatemala, ICSID, Second Decision on Objections to Juridiction of 18 May 2010 Renta 4 v. Russia, SCC, Award on Preliminary Objections of 20 March 2009 RFCC v. Morocco, ICSID, Award of 22 December 2003 Romak v. Uzbekistan, UNCITRAL, Award of 26 November 2009 Rompetrol Group v. Romania, ICSID, Decision on Jurisdiction of 18 April 2008 RosInvestCo v. Russia, SCC, Award on Jurisdiction of 1 October 2007 RosInvestCo v. Russia, SCC, Final Award of 12 September 2010 RREEF v. Spain, ICSID, Decision on Jurisdiction of 6 June 2016 Rumeli Telekom v. Kazakhstan, ICSID, Award of 29 July 2008 Rusoro Mining v. Venezuela, ICSID/AF, Award of 22 August 2016 Saipem v. Bangladesh, ICSID, Award of 30 June 2009 Saipem v. Bangladesh, ICSID, Decision on Jurisdiction of 21 March 2007 Salini Costruttori v. Jordan, ICSID, Decision on Jurisdiction of 29 November 2004 Salini Costruttori v. Morocco, ICSID, Decision on Jurisdiction of 23 July 2001 Saluka Investments v. Czech Republic, UNCITRAL, Partial Award of 17 March 2006 Sanum Investments v. Laos, UNCITRAL, Award on Jurisdiction of 13 December 2013 SAUR International v. Argentina, ICSID, Decision on Jurisdiction and Liability of 6 June 2012 SD Meyers v. Canada, UNCITRAL, Partial Award of 13 November 2000

860

C mns 72, 80, 84, 86, 88 C mns 29, 40, 67 C mn. 77 C mns 14, 26 C mn. 27 C mns 18, 45 C C C C

mn. 77 mns 18, 22, 27 mn. 40 mns 45, 90

C C C C

mns 18, 22 mn. 64 mn. 55 mn. 23

C mns 6, 90 C mns 62, 78, 39 C mn. 19 C mn. 13 C mn. 90 C C C C C C

mn. 28 mn. 18 mns 66, 67 mn. 54 mns 6, 57 mn. 17

C mn. 91 C mns 18, 19, 22, 36, 90 C mn. 19 C mns 49, 90 C mn. 22 C mns 85, 86

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Table of Cases Sedelmayer v. Russia, SCC, Award of 7 July 1998 Sempra v. Argentina, ICSID, Award of 28 September 2007 SGS v. Pakistan, ICSID, Decision on Jurisdiction of 6 August 2003 SGS v. Paraguay, ICSID, Award of 10 February 2012 SGS v. Paraguay, ICSID, Decision on Jurisdiction of 12 February 2010 SGS v. Philippines, ICSID, Decision on Objections to Jurisdiction of 29 January 2004 Siag v. Egypt, ICSID, Award of 1 June 2009 Siemens v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2004 Siemens v. Argentina, ICSID, Award of 6 February 2007 Société Générale v. Dominican Republic, UNCITRAL, Decision on Jurisdiction of 19 September 2008 Soufraki v. United Arab Emirates, ICSID, Award of 7 July 2004 South American Silver v. Bolivia, UNCITRAL, Award of 22 November 2018 Standard Chartered Bank v. Tanzania, ICSID, Award of 2 November 2012 Suez and Interaguas v. Argentina, ICSID, Decision on Jurisdiction of 16 May 2006 Suez and Vivendi v. Argentina, ICSID, Decision on Jurisdiction of 3 August 2006 Suez and Vivendi v. Argentina, ICSID, Decision on Liability of 30 July 2010 Supervision y Control v. Costa Rica, ICSID, Award of 18 January 2017 Tecmed v. Mexico, ICSID/AF, Award of 29 May 2003 Teinver v. Argentina, ICSID, Decision on Jurisdiction of 21 December 2012 Teinver v. Argentina, ICSID, Award of 21 July 2017 Telenor Mobile Communications v. Hungary, ICSID, Award of 13 September 2006 Tidewater v. Venezuela, ICSID, Decision on Jurisdiction of 8 February 2013 Tidewater v. Venezuela, ICSID, Award of 13 March 2015 Tokios Tokeles v. Ukraine, ICSID, Decision on Jurisdiction of 29 April 2004 Total v. Argentina, ICSID, Decision on Objections to Jurisdiction of 25 August 2006 Total v. Argentina, ICSID, Decision on Liability of 27 December 2010 Toto Costruzioni v. Lebanon, ICSID, Decision on Jurisdiction of 11 September 2009 Tradex Hellas v. Albania, ICSID, Decision on Jurisdiction of 24 December 1996, 5 ICSID Reports (2002), 52 Transglobal Green Energy v. Panama, ICSID, Award of 2 June 2016 TSA Spectrum v. Argentina, ICSID, Award of 19 December 2008

C C C C C

mn. 29 mns 64, 81, 99 mns 39, 96 mn. 99 mns 39, 78, 96

C mns 36, 39, 96, 99 C mns 67, 71, 93 C mns 28, 29 C mns 39, 62, 81, 96, 98 C mns 27, 29, 30 C mns 12, 14 C mns 23, 29 C mn. 30 C mns 37, 50, 91 C mns 29, 50, 91 C mns 7, 79, 81 C mns 48, 98 C mns 58, 59, 60, 68, 74 C mns 43, 45, 91 C mn. 90 C mn. 57 C mn. 27 C mn. 54 C mns 13, 23 C mn. 28, 29 C mn. 77 C mn. 39 C mn. 50 C mn. 27 C mn. 37

861

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Table of Cases Tulip Real Estate v. Turkey, ICSID, Decision on Bifurcated Jurisdictional Issue of 5 March 2013 Tulip Real Estate v. Turkey, ICSID, Award of 10 March 2014 Tza Yap Shum v. Peru, ICSID, Decision on Jurisdiction of 19 June 2009 United Utilities and Aktsiaselts Tallinna Vesi v. Estonia, ICSID, Award of 21 June 2019 UP and CD Holding Internationale v. Hungary, ICSID, Award of 9 October 2018 Urbaser v. Argentina, ICSID, Decision on Claimants’ Proposal to Disqualify Professor McLachlan of 12 August 2010 Vanessa Ventures v. Venezuela, ICSID, Award of 16 January 2013 Victor Pey Casado v. Chile, ICSID, Award of 8 May 2008 Vigotop v. Hungary, ICSID, Award of 1 October 2014 Vivendi v. Argentina, ICSID, Decision on Annulment of 3 July 2002 Von Pezold and others v. Zimbabwe, ICSID, Award of 28 July 2015 Waste Management v. Mexico II, ICSID/AF, Award of 30 April 2004 Wena Hotels v. Egypt, ICSID, Award of 8 December 2000 White Industries Australia v. India, UNCITRAL, Final Award of 30 November 2011 Wintershall v. Argentina, ICSID, Award of 8 December 2008 WNC Factoring v. Czech Republic, UNCITRAL, Award of 22 February 2017 Yaung Chi Oo Trading v. Myanmar, ASEAN, Award of 31 March 2003 Ireland Brostrom Tankers AB v. Factorias Vulcano SA [2004] IEHC 198, YCA XXX (2005), 591 Kastrup Trae-Aluvinduet A/S v. Aluwood Concepts Ltd YCA XXXV (2010), 404 Patrick Ryan v. Kevin O’Leary (Clonmel) Ltd [2018] IEHC 660 Persona Digital Telephony Ltd v. Minister for Public Enterprise [2017] IESC 27 Snoddy v. Mavroudis [2013] IEHC 285 Israel hotels.com v. Zuz Tourism Ltd and Hotels Online Ltd, YCA XXXI (2006), 791 Teva Pharmaceutical Industries Ltd (Israel) v. Proneuron Biotechnologies, Inc., YCA XXXV (2010), 407 Zeevi Holdings Ltd v. The Republic of Bulgaria, YCA XXXIV (2009), 632 Italy Cass., RDIPP 1970, 585, YCA I (1976), 192 Cass., RDIPP 1972, 563, YCA I (1976), 190 Cass., RDIPP 1976, 133, YCA II (1977), 247

862

C mn. 43 C mn. 78 C mns 14, 90 C mns 75, 76, 101 C mn. 55 C mn. 9 C C C C

mns 62, 90 mn. 26 mn. 62 mns 37, 48

C mn. 80 C mns 29, 62 C mns 59, 80 C mn. 19 C mn. 45 C mn. 98 C mns 25, 26

B mn. 315 B mns 201, 232 B mn. 185 A mn. 104 B mn 242 B mn. 154 B mn. 135 B mn. 177

B mn. 82 B mn. 19 B mns 19, 25, 131

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Table of Cases Cass., YCA IV (1979), 286 Cass., YCA IV (1979), 296 Cass., YCA V (1980), 267 Cass., RDIPP 1979, 565, YCA VI (1981), 229 Cass., RDIPP 1981, 903, YCA VI (1981), 233 Cass., RDIPP 1983, 854, Foro Italiano 1983, 736, YCA IX (1984), 428 Cass., Foro It. 1983, 736, YCA IX (1984), 429 Cass., YCA IX (1984), 431 Cass., Foro It 1983, 2200, YCA X (1985), 464 Cass., Dir. mar. 1986, 407, YCA XI (1986), 518 Cass., RDIPP 1986, 707, YCA XII (1987), 497 Cass., YCA XIII (1988), 504 Cass., YCA XIV (1989), 675 Cass., YCA XVI (1991), 588 Cass., Foro Pad. 1991, 289, YCA XVII (1992), 545 Cass., Corriere giuridico 1991, 637, YCA XVII (1992), 554 Cass., YCA XVIII (1993), 419 Cass., YCA XVIII (1993), 427 Cass., Riv. arb. 1993, 237, YCA XIX (1994), 685 Cass., Foro It. 1995 I, 942, YCA XX (1995), 739 Cass., YCA XXI (1996), 602 Cass., Riv. dir. int. 1995, 823, YCA XXI (1996), 607 Cass., RDIPP 1995, 104, YCA XXII (1997), 715 Cass., RDIPP 1996, 523, YCA XXII (1997), 727 Cass., YCA XXIV (1999), 709 Cass., Foro It. 2000 I, 2226, YCA XXVI (2001), 816 Cass., Foro It. 2002, 2299, YCA XXIX (2004), 784 Cass., YCA XXXI (2006), 798 Cass., RDIPP 2005, 107, YCA XXXI (2006), 802 Cass., Foro It. 2007, 1460 Cass., Riv. dir. proc. 2007, 1293, YCA XXXIII (2008), 596 Cass., Sez. I Civile, 14 June 2007, no. 13916 Rudston Products Limited v. Conceria F.lli Buongiorno, YCA XXXIV (2009), 639 Cass., Sez. I Civile, 8 October 2008, no. 24856, Globtrade Italiana srl v. East Point Trading Ltd, YCA XXXIV (2009), 644 Cass., Sez. Un., 19 May 2009, No. 11529, Louis Dreyfus SpA v. Cereal Mangimi srl, RDIPP 2010, 443, YCA XXXIV (2009), 649, CLOUT Case No. 1785 Cass., Sez. I Civile, 16 June 2011, Del Medico di Giovina Giuliana Del Medico & C sas v. Iberprotein S.L., Riv. arb. 2012, 835, YCA XXXVII (2012), 255 Cass., 8 February 2012, No. 1781, RDIPP 2013, 134 Cass., Sez. Un., 24 November 2015, No. 23893, Republic of Iraq v. Armamenti e Aerospazio SpA, CLOUT Case No. 1837 Cass., Sez. VI Civile, 13 October 2016, n. 20673, (2017) 27 Riv. Arb. 733

B B B B B B

mns 19, 93, 105 mn. 71 mn. 104 mn. 129 mn. 273 mns 39, 145

B B B B B B B B B B B B B B B B B B B B B B B B B B

mns 71, 104, 145 mn. 83 mns 71, 131 mn. 134 mn. 208 mn. 151 mn. 234 mns 145, 148 mn. 228 mn. 109 mn. 172 mns 71, 337 mn. 273 mn. 109 mn. 192 mns 165, 172 mns 104, 106, 229 mns 39, 179, 206, 253 mn. 218 mn. 104 mn. 71 mn. 338 mn. 247 mn. 330 mns 151, 154 mn. 108

B mn. 172 A mn. 35; B mn. 111

B mn. 111

B mn. 330 A mns 37, 38 A mn. 44

863

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Table of Cases Cass., Sez. I Civile, 4 January 2017, n. 81 Cass., Sez. Un., 15 June 2017, No. 14861, Club Med s.a.s. (formerly Club Méditerranée sa) v. Ability Real Estate s.r.l, YCA XLIII (2018), 477 Cass., Sez. Un., 14 July 2017, No. 17549, Carnival Cruise Lines v. Arcadi Claudio, YCA XLIII (2018), 479 Cass., Sez. Un., 18 September 2017, No. 21550, Bridgestone Europe NV/SA v. s.r.l. Futura Enterprise, YCA XLIII (2018), 481 Cass., Sez. VI Civile, 19 September 2017, No. 21655, Kenobi International Ltd v. Comaco SpA, CLOUT Case No. 1836 Cass., Sez. I Civile, 31 August 2018, No. 21536 CA Brescia, RDIPP 1981, 781, YCA VIII (1983), 383 CA Firenze, Riv. arb. 2006, 127, YCA XXXII (2007), 403 CA Firenze, YCA IV (1979), 294 CA Firenze, Dir. mar. 1982, 73, YCA X (1985), 454 CA Genova, RDIPP 1981, 166, YCA VIII (1983), 380 CA Genova, Foro Pad. 1991, 168, YCA XVII (1992), 542 CA Genoa, Riv. arb. 1994, 505, YCA XXI (1996), 594 CA Milano, RDIPP 1980, 615, YCA XII (1982), 338 CA Milano, YCA II (1977), 247 CA Milano, YCA XXIII (1998), 723 CA Milano, YCA XXIII (1998), 727 CA Rome, 27 February 2019, 1490/2019, Kazakhstan v. Anatolie Stati, YCA XLIV (2019), 562 CA Salerno, RDIPP 1992, 115, YCA XXI (1996), 576 CA Trento, YCA VIII (1983), 386 CA Venezia, RDIPP 1976, 851, YCA III (1978), 277 Trib. Milano, Il Foro Padano 1991, 169, YCA XVII (1992), 539

A mns 29, 35 B mn. 305

B mn. 305 B mn. 97 A mn. 35 A mn. 125 B mn. 234 B mn. 334 B mn. 258 B mn. 111 B mn. 24 B mn. 123 B mns 129, 298 B mn. 165 B mns 19, 25, 131 B mn. 338 B mn. 347 A mn. 154 B B B B

mns 134, 141 mn. 201 mn. 259 mn. 83

Japan Supreme Court, Jap. Ann. Int’l L. 41 (1998), 109 District Court Okayama, 14 July 1993, YCA XXII (1997), 744 District Court Yokohama, YCA XXVII (2002), 515 District Court Yokohama, YCA VIII (1983), 394

B B B B

mn. 136 mn. 278 mn. 232 mn. 105

Jordan Cour cass., Rev. Arb. 1993, 137, YCA XVIII (1993), 437

B mn. 350

Kenya Glencore Grain Ltd v. TSS Grain Millers Ltd, YCA XXXIV (2009), 666 Tanzania National Roads Agency v. Kundan Singh Construction Ltd, YCA XXXIX (2014), 431

B mn. 332 B mn. 308

Korea Supreme Court, YCA XVII (1992), 568

B mn. 141

Lithuania Supreme Court, YCA XXXVIII (2013), 414

B mn. 52

864

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Table of Cases Luxemburg CA, YCA XXIV (1999), 714

B mn. 253

Malaysia Harris Adacom Corp. v. Perkom Sdn Bhd, YCA XXII (1997), 753

B mn. 331

Mauritius Supreme Court, YCA XXXIX (2014), 447

B mn. 315

Mexico Trib. Sup. Just., YCA IV (1979), 301 Trib. Sup. Just., YCA IV (1979), 302

B mns 165, 230 B mn. 230

Netherlands HR, 21 February 1913 (Offermeier/Portheine) HR, 27 December 1935, NJ 1936, 442 (Verhoeven/Veugelers) HR, 10 June 1955, NJ 1955, 570 HR, 8 November 1963, NJ 1964, 139 HR, Rev. Arb. 1974, 318, YCA I (1976), 195 HR, 9 January 1981, NJ 1981, 203 (Exploitatiemaatschappij De Raad B.V./Jan Wagemaker) HR, 13 March 1981, NJ 1981, 635 (Godefridus Ermes, Bartholomeus Johannes Cornelis Langerwerf/Haviltex B.V.) HR, 2 November 1990, NJ 1991, 123 (Van der Kloof/CSU) HR, 6 November 1992, NJ 1993, 191 (V.o.f. G. Bakkum en Zonen/ V.o.f. Brandsen-Visser) HR, 7 May 1993, NJ 1993, 655 (Johannes Hubertus Meulen/Bernardus Joannes Keijsers) HR, 18 June 1993, NJ 1994, 449 (Van der Lely/VDH) HR, 18 February 1994, NJ 1994, 765 (Aira Nordström-Lehtinen, Van Immo-Ragnar Nordström, Lila Nordström-Janzon/Nievelt Goudriaan & Co B.V., Mr. W.E. Merens) HR, 16 February 1996, NJ 1997, 186 (Zürich Versicherungsgesellschaft/Siemen B.V.) HR, 21 March 1997, NJ 1998, 207 (Eco Swiss China Time Ltd/ Benetton International N.V.) HR, 21 March 1997, NJ 1998, 219 (Meijer/OTM) HR, 28 November 1997, NJ 1998, 705 (Haring Wouterus Visser/ Avéro Schadeverzekeringen N.V.) HR, 25 February 2000, NJ 2000, 508 (Benetton International N.V./ Eco Swiss China Time Ltd, Bulova Corporation) HR, 2 February 2001, NJ 2001, 200 (Hans Ulrich Petermann Beratungs- und Vertriebs-GmbH/Frans Maas Rotterdam B.V.) HR, 17 January 2003, NJ 2004, 280 (ABN AMRO Bank N.V./ Richardus Antonius Teisman) HR, 17 January 2003, NJ 2004, 384 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran) HR, 20 June 2003, NJ 2004/569 (Regge en Dinkel/Milieutech)

M mn. 113 M mn. 18 M mn. 27 M mn. 70 B mns 19, 35 M mn. 109 M mns 21, 39 M mn. 21 M mn. 45 M mns 33, 34 M mn. 70 M mns 57, 58, 119, 129

M mn. 39 M mn. 119 M mns 21, 36 M mn. 34 M mn. 76 M mns 21, 34 M mn. 34 M mns 58, 119

M mn. 105

865

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Table of Cases HR, 20 February 2004, NJ 2005, 493 (Stichting Pensioenfonds DSM-Chemie/W. Chr. Fox) HR, 5 March 2004, NJ 2005, 494 (B/S) HR, 20 January 2006, NJ 2006, 77 (ASB Grünland, Helmut Aurenz Gmbh + Co Kg and ASB Greenworld B.V./Sagro Aannemingsmaatschappij Zeeland B.V.) HR, 10 November 2006, Groenselect Management N.V./C.J.A. Van den Boogaard, NJ 2007, 561 HR, 22 December 2006, NJ 2008/4 (Kers/Rijpma) HR, 19 January 2007, NJ 2007, 575 (Meyer Europe B.V./PontMeyer B.V.) HR, 25 May 2007, NJ 2007, 294 (P.J. Spaanderman/Anova Food B.V.) HR, 29 June 2007, NJ 2007, 576 (G.J. Derksen, J.M. Derksen, Beleggingsmaatschappij Josephine D B.V., L’Orage Projecten B.V., Artema Corporation N.V./R. Homburg, Uni-Invest Prioriteit B.V., Uni-Invest Holdings (NL) B.V., Jetnet Fleet B.V., Capa City Realty B.V., Uni-Invest Holland Limited, Uni-Invest Nederland Limited, Vigor Beheer B.V.) HR, 29 June 2007, NJ 2008, 177 (N/Aegon) HR, 5 December 2008, NJ 2009, 6 (Bursa Büyüksehir Belediyesi/ Güris Insaat Ve Mühendislik A.S., Siemens Aktiengesellschaft, Siemens Sanayi Ve Ticaret A.S., Tüvasas Türkiye Vagon Sanayi A.S.) HR, 27 March 2009, NJ 2010, 170 (Smit Bloembollen B.V., C. Smit t v.o.f., C.J.P. Smit, C.P.M. Smit/Ruwa Bulbs B.V.) HR, 27 March 2009, RvdW 2009, 460 (Hendrix Poultry Breeders B.V./Burshan) HR, 24 April 2009, NJ 2010, 171 (International Military Services Limited/Ministry of Defence and Support for Armed Forces of the Islamic Republic of Iran, Islamic Republic of Iran) HR, 23 April 2010, NJ 2011, 475 (A.R. Berntsen, Areb Holding B.V./M.A. Goedkoop, Ameg B.V.) HR, 25 June 2010, OAO Rosneft v. Yukos Capital s.a.r.l., NJ 2012/ 55, (2011) TvA 9, YCA XXXV (2010), 423 HR, 26 November 2010, NJ 2011, 55 (Silver Lining Finance S.A./ Perstorp Waspik B.V.) HR, 21 October 2011, NJ 2013, 23, (2012) TvA 26 (Hasfeld/Cohen) HR, 21 September 2012, (2014) TvA 14 HR, 5 April 2013, NJ 2013, 214 (Lundiform B.V./Mexx Europe B.V.) HR, 12 July 2013, (2014) TvA 61 (X/Slotervaartziekenhuis) HR, 9 January 2014, NJ 2005, 190 (Nannini/SFT Bank) HR, 26 September 2014, NJ 2015, 318 (Chevron/Ecuador) HR, 17 April 2015, ECLI:NL:HR:2015:1077 HR, 24 April 2015, NJ 2015, 222 (Forfarmers B.V.and HDI-Gerling Verzekeringen N.V./defendant) HR, 1 May 2015, ECLI:NL:HR:2015:1194, NJ 2015, 454 (Çukurova/ Sonera), YCA XLI (2016), 517 HR, 30 September 2016, NJ 2017, 141 (QNOW/B)

866

M mns 21, 39 M mn. 21 M mn. 37

M mns 27, 30 M mns 76, 118 M mns 21, 39 M mns 58, 70, 87, 119 M mns 21, 39

M mn. 57 M mns 78, 101

M mns 42, 111 M mn. 111 M mns 58, 87, 119

M mn. 101 B mns 291, 347; M mns 120, 126 M mn. 30 M mns 49, 53 M mn. 34 M mn. 21 M mn. 70 M mns 76, 118 M mns 42, 113 A mn. 145 M mn. 34 M mn. 109 M mns 77, 101

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Table of Cases HR, 30 September 2016, NJ 2017, 190 (Morning Star International Corp./The Gabonese Republic) HR, 14 October 2016, NJ 2017, 191 (Dutch State/Servaas Inc.) HR, 14 October 2016, NJ 2017, 192 (N.N./Dutch State) HR, 31 March 2017, Nelux Holdings International N.V., NJB 2017, 857, NJ 2017, 343, YCA XLII (2017), 452 HR, 24 November 2017, Maximov/OJSC Novolipetsky Metallurgichesky Kombinat, NJB 2017, 2296, ECLI:NL:HR:2017:2992, NJ 2019, 223, YCA XLIII (2018), 529 HR, 1 December 2017, NJ 2019, 137 (Republic of Iraq; Central Bank of Iraq/X) HR, 15 June 2018, Diag Human SE v. Czech Republic, NJB 2018, 1246, YCA XLIV (2019), 598 HR, 23 November 2018, RvdW 2018, 1302 (Tiffany and Company, Tiffany (NJ) Inc., Tiffany & Co./The Swatch Group Ltd, Look and Feel AG) Hof Amsterdam, 27 November 1931, W12, 485 Hof Amsterdam, 27 October 2005 Hof Amsterdam, 28 April 2009, LJN BI2451, Rev. Arb. 2009, 557, YCA XXXIV (2009), 703 (Rosneft/Yukos) Hof Amsterdam, 18 September 2012, Nikolai Viktorovich Maximov v. OJSC Novolipetsky Metallurgichesky Kombinat, (2013) TvA 51, YCA XXXVIII (2013), 427 Hof Amsterdam, 16 February 2016, (2016) TvA 54 Hof Amsterdam, 27 September 2016, YCA XLII (2017), 461 Hof Amsterdam, 21 February 2017, YCA XLIII (2018), 523 Hof Amsterdam, 25 April 2017, (2017) TvA 48 (The Swatch Group Ltd, Look and Feel AG/Tiffany and Company, Tiffany (NJ) Inc., Tiffany & Co.) Hof Amsterdam, 10 July 2018, (2018) TvA 31 Hof Arnhem-Leeuwarden, 8 October 2019 (Stichting Amphia) (2020) TvA 13 Hof Den Haag, see Hof ‘s-Gravenhage Hof ‘s-Gravenhage, 3 May 1962, S&S 1963, 42 Hof ‘s-Gravenhage, 28 April 1998, Rice Trading (Guyana) Ltd v. Nidera Handelscompagnie BV, YCA XXIII (1998), 731 Hof ‘s-Gravehage, 17 December 1998, (1999) TvA 108 Hof ‘s-Gravenhage, 24 March 2005, Marketing Displays International Inc. v. VR Van Raalte Reclame B.V., YCA XXXI (2006), 808 Hof ‘s-Gravehage, 31 March 2015, (2015) TvA 55 Hof ‘s-Gravehage, 24 January 2017, (2017) TvA 31 Hof ‘s-Gravenhage, 18 July 2017, (2017) TvA 62 Hof ‘s-Gravenhage, 22 October 2019, ECLI:NL: GHDHA:2019:2677, NTHR 2020, afl. 1, p. 22, RBP 2020, 5 (Bariven S.A./Wells Ultimate Service LLC). Hof ‘s-Hertogenbosch, 14 July 1995, (1995) TvA 4, 240 Hof ‘s-Hertogenbosch, 8 December 2015, (2016) TvA 35 Rb. ‘s-Gravenhage, 18 October 2004, (2005) TvA 106 Rb. ‘s-Gravenhage, 12 February 2014, (2014) TvA 31

M mn. 25 M mn. 25 M mn. 25 B mn. 347 A mns 149, 156; B mns 181, 291–293; M mns 126, 127 M mn. 24 B mns 275, 323 M mn. 78

M mn. 38 M mn. 40 B mn. 291; M mn. 126 B mn. 291; M mn. 126

M mn. 40 B mn. 291 B mn. 275 M mn. 78

B mn. 275 M mns 101, 106

M mn. 51 B mn. 237 M mn. 77 B mn. 331 M mn. 70 M mn. 94 M mn. 41 A mn. 136; M mn. 119

M mn. 51 M mn. 60 M mn. 57 M mn. 58

867

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Table of Cases Rb. ‘s-Gravehage, 12 June 2015, (2015) TvA 83 Rb. ‘s-Gravenhage, 18 October 2017, NJF 2018, 22 (Crystallex International Corp./Petróleos de Venezuela S.A.) Rb. Amsterdam, 13 June 1979, NJ 1980, 254 Rb. Amsterdam, 7 October 1982, KG 1982, 183 (Dijsselhofkliniek) Rb. Amsterdam, YCA X (1985), 487 Rb. Amsterdam 3 June 1988, (1989) TvA 105 Rb. Amsterdam, 18 June 2009, LoJack Equipment Ireland Ltd v. A, YCA XXXIV (2009), 715 Rb. Amsterdam, 17 November 2011, Nikolai Viktorovich Maximov v. OJSC Novolipetsky Metallurgichesky Kombinat, YCA XXXVII (2012), 274 Rb. Amsterdam, 28 January 2015, (2015) TvA 36 Rb. Amsterdam, 4 March 2015, ECLI:NL:RBAMS:2015:1181 Rb. Amsterdam, 9 April 2015, (2015) TvA 64 and 75 Rb. Amsterdam, 7 January 2016, (2016) TvA 42 Rb. Amsterdam, 19 April 2017, (2017) TvA 51 Rb. Amsterdam, 19 November 2019 (Korbusiness/[X] Belastingadviseur B.V.) (2020) TvA 19 Rb. Assen (Pres.), 9 May 1995, (1996) TvA 33 Rb. Gelderland, 19 April 2017, (2017) TvA 52 Rb. Groningen, 22 May 1992, (1992) TvA 194 Rb. Leeuwarden, 4 November 1988, (1989) TvA 29 Rb. Limburg, 27 July 2017, (2017) TvA 75 Rb. Midden-Nederland, 2 May 2017, (2017) TvA 54 Rb. Midden-Nederland, 30 September 2015, (2016) TvA 19 Rb. Midden-Nederland, 7 June 2017, (2017) TvA 55 Rb. Noord-Holland, 12 July 2017, (2017) TvA 71 Rb. Noord-Nederland, 17 June 2019, NJF 2019, 417 Rb. Oost-Brabant, 28 March 2018, (2018) TvA 63 Rb. Rotterdam, 1 May 1987, (1987) TvA 152 Rb. Rotterdam, 8 January 1993, (1993) TvA 104 Rb. Rotterdam, 11 May 2011, (2014) TvA 28 Rb. Rotterdam, 18 May 2011 (Cimcool) Rb. Rotterdam, 26 July 2012, YCA XXXVII (2012), 282 Rb. Rotterdam, 28 March 2013, YCA XXXVIII (2013), 434 Rb. Rotterdam, 22 January 2015, YCA XL (2015), 471 Rb. Rotterdam, 3 April 2015 and 5 August 2015, YCA XLI (2016), 522 Rb. Rotterdam, 7 August 2015, (2015) TvA 86 Rb. Rotterdam, 18 September 2015, (2106) TvA 18 Rb. Utrecht, 17 March 2010, (2011) TvA 11 RvA, 20 April 2017, (2017) TvA 41 NCC, 8 March 2019, 19/003, Elavon Financial Services DAC vs IPS Holding B.V.

868

M mn. 94 M mn. 24 M mn. 38 M mn. 15 B mns 175, 275 M mn. 57 B mn. 172 B mn. 291

M mn. 94 A mn. 43 M mn. 94 M mn. 94 M mn. 94 M mns 101, 106 M mn. 40 M mn. 40 M mn. 37 M mn. 57 M mn. 94 M mn. 57 M mn. 94 M mn. 94 M mn. 38 M mn. 120 M mn. 40 M mns 57, 58 M mn. 57 M mn. 58 M mn. 113 B mn. 234 B mn. 236 B mn. 175 B mn. 175 M mn. 94 M mn. 94 M mn. 30 M mn. 38 M mn. 1

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Table of Cases New Zealand New Zealand (The Government of) v. Mobil Oil New Zealand Ltd, YCA XIII (1988), 638 Roose Industries Ltd v. Ready Mixed Concrete Ltd [1974] 2 NZLR 246 Paraguay Corte Suprema de Justicia del Paraguay, Sala Constituciona, 28 March 2019, Ac. y Sent. No. 156, Yvu Poty SA v. PABENSA, CLOUT Case No. 1842

B mn. 301 K mn. 28

A mn. 122

Peru Corte Suprema, YCA XXXIII (2008), 616 Supreme Court, YCA XLIV (2019), 1

B mn. 338 B mn. 318

Poland Supreme Court, YCA XLI (2016), 538

B mn. 172

Portugal Supr. Trib., YCA XLII (2017), 484 Supr. Trib., YCA XLII (2017), 488 CA Lisbon, YCA XXXVIII (2013), 443 Tribunal da Relação de Lisboa, 10 October 2019, 1667/18.9YRLSBB-2 Tribunal Central Administrativo Sul, No. 20011/16.3BCLSB, 16 February 2017 Russian Federation Supreme Court, Judicial Board on Economic Disputes, 12 July 2017, Redius-T LLC v. GSE Krass LLC, YCA XLIII (2018), 542 Supreme Court, 11 January 2018, Case No. A45-4214/2017, (Supreme Court ref. no. 304-ЭС17-20756), Federal Grid Co. of the Unified Energy System v. LLC CenterEnergoStroyProject Supreme Court, 23 April 2019 (ref. no. 305-ЭС18-20885) Supreme Arbitrazh Court, 27 February 1996, Case No. 5278/95 Supreme Arbitrazh Court, 22 June 2004, Forever Maritime Ltd v. State Unitary Enterprise Foreign Trade Enterprise Mashinoimport, YCA XXXIII (2008), 650 Supreme Arbitrazh Court, 10 December 2007, Case No. BAC14955/07 Supreme Arbitrazh Court, 5 October 2010, AB Living Design v. Sokos Hotels Saint Petersburg, YCA XXXVI (2011), 317 Supreme Arbitrazh Court, 14 June 2011, Case No. 1787/11 Supreme Arbitrazh Court, 13 January 2011, OJSC Efirnoe v. LLC Delta Villmar CIS, Case No. BAC-11861/10 Supreme Arbitrazh Court, 12 December 2011, Case No. ВАС11800/2011 Supreme Arbitrazh Court, 29 June 2012, Case No. A40-49223/11112401

B mns 307, 310, 331 B mns 25, 307, 310, 312, 313, 330 B mn. 179 A mn. 136 A mn. 2

B mns 97, 142 N mn. 165

N mn. 165 N mn. 47 B mn. 235

N mn. 56 N mn. 68 N mn. 116 A mn. 96 N mn. 116 N mn. 47

869

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Table of Cases Supreme Arbitrazh Court of the Russian Federation, 27 August 2012, Ciments Français v. Holding Company Sibirskiy Cement OJSCYCA XXXVIII (2013), 453 Federal Arbitrazh Court of the Moscow Region, 13 August 2007, Case No KG-A40/6775-07, Yukos Capital S.a.r.l. v. NK Rosneft Federal Arbitrazh Court of the Moscow Region, 31 July 2008, Case No KG-A40/6468-08, OOO Intercare v. Berlin-Chemie/Minarini Pharma GmbH Federal Arbitrazh Court of the Moscow Region, 19 July 2017, Case No. A40-219464/16, Common Legal Property LLC v. Techno-Art LLC Federal Arbitrazh Court of the Moscow Region, 7 August 2017, Case No. A40-32661/2017, YCA XLIV (2019) 908 Federal Arbitrazh Court of the Moscow Region, 11 May 2018, Case No. A40-201473/2016, PJSC Sumskoye Mashinostroitelnoye Nauchno-Proizvpdstvennoye Obyedineniye v. CJSC Uralstroienergomontazh Federal Arbitrazh Court of the Moscow Region, 28 May 2018, Case No. A40-165835/2014, OJSC Investbank v. LLC Baltiyas Aviatsiays Sistemas Federal Arbitrazh Court, Northwestern District, 9 December 2004, Dana Feed A/S v. OOO Arctic Salmon, YCA XXXIII (2008), 658 Federal Arbitrazh Court, North-Western District, 7 October 2015, Case No. A56-14627/2015, YCA XLII (2017) 776 Federal Arbitrazh Court, Urals District, 12 October 2005, O & Y Investments Ltd v. OAO Bummash, YCA XXXIII (2008), 687 Arbitrazh Court, Kemerovskaya Region, 20 July 2011, Ciments Français v. Holding Company Sibirskiy Cement OJSC, YCA XXXVI (2011), 325 Arbitrazh Court, Moscow City, 19 May 2008, Case No A40-4877/ 08-40-44 Arbitrazh Court, Moscow City, Case Nos A40-4577/07-8-46 and A40-4582/07-8-47 Arbitrazh Court, Moscow City, 11 December 2015, Case No. A4050778/15, YCA XLI (2016) 550 Arbitrazh Court, Moscow City, 24 July 2015, Case No. A40/ 188599/2014, OJSC Special Economic Zones v. OJSC Federal Grid Company of Unified Energy System, confirmed by Supreme Court, 28 July 2017 (reference no. 305-ЭС15-20073) Arbitrazh Court, Moscow City, 8 February 2018, Case No. A40176466/2017, Dredging and Maritime Management SA v. JSC Inzhtranstroy, ultimately confirmed by the Supreme Court, 26 September 2018 (reference no. 305-ЭС18-1193) Arbitrazh Court, Moscow Region, 16 January 2019, Case No. A40117331/20, Banwell International Limited v. Roshelf LLC, YCA XLIV (2019) 664 Arbitrazh Court, Rostov, 27 November 2014, Case No. A53-17338/ 2014, Agrofirma Razdoliye LLC v. Deutsche Bank AG, London Branch, YCA XLII (2017) 502 Case No. А73-12888/2009, Oil and Natural Gas Corporation v. AO Amurskiy Sudostroitelnyi Zaod

870

B mn. 332

N mn. 56 N mn. 49

N mn. 21

N mns 48, 49 N mn. 105

N mn. 51

B mns 179, 330 N mn. 99 B mn. 327 B mn. 293

N mn. 49 N mn. 56 N mn. 105 N mn. 31

N mns 19, 46

A mn. 136, N mn. 105

N mn. 47

N mn. 111

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Table of Cases Moscow District Court (Civil Department), 31 October 1995 (Kotraco, Inc. v. V/O Rosvneshtorg), YCA XXIII (1998), 735 Singapore ABC Co. v. XYZ Co. Ltd [2003] 3 SLR 546 Ahong Construction (S) Pte Ltd v. United Boulevard Pte Ltd [1994] 3 SLR(R) 669 Aik Heng Contracts and Services Pte Ltd v. Deshin Engineering & Construction Pte Ltd [2015] SGHC 293 AJU v. AJT [2011] SGCA 41 Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd, [2006] 3 SLR(R) 174, YCA XXXII (2007), 489 AQZ v. ARA [2015] SGHC 49, CLOUT Case No. 1535 Astro Nusantara International BV v. PT Ayunda Prima Mitra [2013] 1 SLR 636 BCY v. BCZ [2016] SGHC 249 BLB v. BLC [2013] 4 SLR 1169 BLC v. BLB [2014] SGCA 40 BNA v. BNB [2019] SGCA 84 BNA v. BNB [2019] SGHC 142 BQP v. BQQ [2018] SGHC 55 BTY v. BUA [2019] 3 SLR 786 Che Som bte Yip v. Maha Pte Ltd [1989] 2 SLR(R) 60 Coop International Pte Ltd v. Ebel SA [1998] 1 SLR(R) 615 Credit Agricole Indosuez v. Rekasaran BI Ltd [2001] SGHC 81 CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK [2011] SGCA 3 Dai Yun Shan, The, [1992] 1 SLR(R) 461 Dato’ Dr Muhammad Ridzuan bin Mohd Salleh v. Syarikat Air Terengganu Sdn Bhd [2012] 3 MLJ 737 Dermajaya Properties Sdn Bhd v. Premium Properties Sdn Bhd and CFE Holdings (Malaysia) Sdn Bhd [2002] 2 SLR 164 Dongwoo Mann+Hummel Co. Ltd v. Mann+Hummel GmbH [2008] SGHC 67, [2008] 3 SLR(R) 871 Dyna-Jet Pte Ltd v. Wilson Taylor Asia Pacific Pte Ltd [2017] 3 SLR 267 FirstLink Investments Corp. Ltd v. GTPayment Pte. Ltd [2014] SGHCR 12, YCA XXXIX (2014), 493 Front Carriers Ltd v. Atlantic & Orient Shipping Corp. [2006] SGHC 127, [2006] 3 SLR(R) 854 Galsworthy Ltd of the Republic of Liberia v. Glory Wealth Shipping Pte Ltd [2010] SGHC 304 Government of the Republic of the Philippines see Philippines Hainan Machinery Import and Export Corp. v. Donald & McArthy Pte Ltd, [1995] 3 SLR(R) 354, YCA XXII (1997), 771 HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd [2013] SGHCR 5

B mn. 307

O mn. 24 O mn. 104 O mn. 23 A mn. 134; O mn. 25 A mns 31, 151; B mn. 115; O mns 32, 44, 115, 118 A mns 12, 33 O mn. 123 A mns 23, 25; B mn. 211; O mns 27, 28 O mn. 36 A mns 117, 131 A mn. 25 O mn. 14 A mns 80, 81 O mn. 33 O mn. 29 O mn. 16 O mn. 87 A mns 113, 144 O mn. 35 O mn. 52 O mn. 3 A mn. 147; O mns 75, 108 A mns 38, 41 A mn. 25; B mns 97, 211; O mn. 28 A mn. 107 A mn. 140

B mn. 310; O mns 79, 104 O mn. 42

871

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Table of Cases HKL Group Co. Ltd v. Rizq International Holdings Pte Ltd [2013] SGHCR 8 Hua Xin Innovation Incubator Pte Ltd v. IPCO International Ltd [2012] SGHCR 18 Insigma Technology Co. Ltd v. Alstom Technology Ltd [2009] 3 SLR(R) 936, [2009] SGCA 24 International Coal Pte Ltd v. Kristle Trading Ltd [2009] 1 SLR(R) 945 International Research Corp. PLC v. Lufthansa Systems Asia Pacific Pte Ltd [2013] SGCA 55, [2014] 1 SLR 130 Jeyaretnam Joshua Benjamin v. Lee Kuan Yew [1992] 2 SLR 310 Jiangsu Overseas Group Co. Ltd v. Concord Energy Pte Ltd [2016] 4 SLR 1336 John Holland Pty Ltd v. Toyo Engineering Corp. (Japan) [2001] 1 SLR(R) 443 K.V.C. Rice Intertrade Co. Ltd v. Asian Mineral Resources Pte Ltd [2017] SGHC 32 Kempinski Hotels SA v. PT Prima International Development [2011] 4 SLR 633 L Capital Jones Ltd v. Maniach Pte Ltd [2017] 1 SLR 312 Lao People’s Democratic Republic v. Sanum Investments Ltd [2013] 4 SLR 947 Larsen Oil and Gas Pte Ltd v. Petropod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21 Ling Kong Henry v. Tanglin Club [2018] 5 SLR 871 Luzon Hydro Corp. v. Transfield Philippines Inc. [2004] SGHC 204, [2004] 4 SLR 705 LW Infrastructure Pte Ltd v. Lim Chin San Contractors Pte Ltd [2012] SGCA 57 Maldives Airport Co. Ltd v. GMR Malé International Airport Pte Ltd [2013] SGCA 16 Malini Ventura v. Knight Capital Pte Ltd [2015] SGHC 225 Mancon (BVI) Investment Holding Co. Ltd v. Heng Holdings SEA (Pte) Ltd [2000] 3 SLR 220 Marty Ltd v. Hualon Corporation (Malaysia) Sdn Bhd [2018] SGCA 63 Minoutsi Shipping Corp. v. Trans Continental Shipping Services (Pte) Ltd [1971–1973] SLR(R) 21 Mitsui Engineering & Shipbuilding Co. Ltd v. PSA Corporation Limited [2003] 1 SLR(R) 446 Myanma Yaung Chi Oo Co. Ltd v. Win Win Nu [2003] 2 SLR(R) 547 Navigator Investment Services Ltd v. Acclaim Insurance Brokers Pte Ltd [2010] 1 SLR 25 NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] 2 SLR(R) 565 Newspeed International Ltd v. Citus Trading Pte Ltd [2003] 3 SLR (R) 1

872

A mn. 47; O mn. 42 O mn. 5 O mn. 41 O mn. 63 A mn. 49; O mn. 91 O mn. 53 O mn. 104 O mn. 72 A mn. 41; O mn. 9 O mn. 44 O mn. 33 O mn. 77 O mns 32, 40

O mn. 41 A mn. 381; O mns 97, 111 O mns 25, 60, 111 A mn. 107; O mn. 85 A mns 2, 38, 53; O mn. 44 O mn. 36 A mn. 38 O mn. 80 O mn. 5 O mn. 62 O mn. 28 O mn. 86 O mn. 124

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Table of Cases Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. Ltd [1894] AC 535 Official Assignee v. Chartered Industries of Singapore Ltd [1978] 2 MLJ 99 Oriental Insurance Co. Ltd v. Reliance National Asia Re Pte Ltd [2009] 2 SLR(R) 385 Otech Pakistan Pvt Ltd v. Clough Engineering Ltd [2007] 1 SLR 989 Overseas Union Insurance Ltd v. Turegum Insurance Co. [2001] 2 SLR(R) 285 Pacific Electric Wire & Cable Co. Ltd v. Neptune Orient Lines Ltd [1993] 2 SLR(R) 102 Pacific Recreation Pte Ltd v. SY Technology Inc. [2008] 2 SLR(R) 491 Peh Teck Quee v. Bayerische Landesbank Girozentrale [1999] 3 SLR(R) 842 Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) v. Larsen Oil and Gas Pte Ltd [2010] SGHC 186 Philippines v. Philippine International Air Terminals Co., Inc. [2007] 1 SLR(R) 278, [2006] SGHC 206 PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA [2007] 1 SLR 597, [2006] SGCA 41 PT First Media TBK v. Astro Nusantara International BV [2014] 1 SLR 372, [2013] SGCA 57 PT Garuda Indonesia v. Birgen Air [2002] 1 SLR(R) 401, [2002] 1 SLR 393 PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation (Indonesia) [2014] SGHC 146 PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation [2010] 4 SLR 672 Quarella SpA v. Scelta Marble Australia Pty Ltd [2012] 4 SLR 1057, [2012] SGHC 166 Rakna Arakshaka Lanka Ltd v. Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 Rals International Pte Ltd v. Cassa di Risparmio di Parma e Piacenza SpA [2016] 5 SLR 455 Re An Arbitration between Hainan Machinery, see Hainan Machinery Rickshaw Investments Ltd v. Nicolai Baron von Uexkull [2007] 1 SLR(R) 377 Rockeby biomed Ltd v. Alpha Advisory Pte Ltd [2011] SGHC 155 Sabah Shipyard (Pakistan) Ltd v. Government of the Islamic Republic of Pakistan [2004] 3 SLR(R) 184 Sembawang Engineers and Constructors Pte Ltd v. Covec (Singapore) Pte Ltd [2008] SGHC 229 Sobati General Trading LLC v. PT Multistrada Arahsarana [2010] 1 SLR 1065 Soh Beng Tee & Co. Pte Ltd v. Fairmount Development Pte Ltd [2007] 3 SLR(R) 86

O mn. 26 O mn. 69 O mn. 23 O mn. 32 O mn. 39 O mn. 79 O mn. 80 O mn. 79 O mn. 32

O mn. 107 A mns 128, 134; O mn. 45 A mns 60, 153; J mn. 36; O mns 46, 90, 116, 123 A mns 10, 118; O mns 14, 100 A mn. 144 O mn. 61 A mn. 96; O mn. 108 O mn. 121 O mn. 40

O mn. 80 O mn. 110 O mn. 40 A mn. 38 O mn. 105 A mn. 65; O mns 25, 60

873

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Table of Cases Solvadis Commodity Chemicals GmbH v. Affert Resources Pte Ltd [2014] 1 SLR 174 Strandore Invest A/S v. Soh Kim Wat [2010] SGHC 151 Sui Southern Gas Co. Ltd v. Habibullah Coastal Power Co. (Pte) Ltd [2010] 3 SLR 1 Swift-Fortune Ltd v. Magnifica SA [2007] 1 SLR 629 Swiss Singapore Overseas Enterprises Pte Ltd v. Exim Rajathi India Pte Ltd [2010] 1 SLR 573 Tan Poh Leng Stanley v. Tang Boon Jek Jeffrey [2001] 1 SLR 624 Tang Boon Jek Jeffrey v. Tan Poh Leng Stanley [2001] 3 SLR 237, [2001] SGCA 46 The “Dai Yun Shan” see Dai Yun Shan The “Titan Unity” see Titan Unity The Lao People’s Democratic Republic see Lao People’s Democratic Republic The Oriental Insurance Co. Ltd see Oriental Insurance Co. Ltd Titan Unity, The, [2014] SGHCR 4 TMM Division Maritima SA De CV v. Pacific Richfield Marine Pte Ltd [2013] SGHC 186, [2013] 4 SLR 972 Tomolugen Holdings Ltd v. Silica Investors Ltd [2015] SGCA 57, [2016] 1 SLR 373 Triulziu Cesare SRL v. Xinyi Group (Glass) Co. Ltd [2014] SGHC 220 Turner (East Asia) Pte Ltd v. Builders Federal (HK) Ltd (No. 2) [1988] 1 SLR(R) 483 VV v. VW [2008] 2 SLR 929, [2008] SGHC 11 Wilson Taylor Asia Pacific Pte Ltd v. Dyna-Jet Pte Ltd [2017] SGCA 32 Woh Hup (Pte) Ltd v. Property Development Ltd [1991] 3 MLJ 82 Zurich Insurance (Singapore) Pte Ltd v. B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 South Africa Laconian Maritime Enterprises Ltd v. Agromar Lineas Ltd, SALR 1984 (3) 233, YCA XVII (1987), 499 Spain Tribunal Constitucional, 54/1989 and 132/1991 Tribunal Supremo, YCA IX (1984), 435 Tribunal Supremo, YCA X (1985), 493 Tribunal Supremo, 30 January 1986, Rev. C. Esp. Arb. 1986, 249, YCA XIII (1988), 512 Tribunal Supremo, 16 April 1996, Rep. Jurispr. 1998 II, no. 2919, 4268, Actial Internactional SA v. Conservas El Pilar SA, YCA XXVII (2002), 528 Tribunal Supremo, 7 July 1998, Unión de Cooperativas Agrícolas Epis-Centre v. Aguicersa SL, YCA XXVII (2002), 546 Tribunal Supremo, 14 July 1998, Thyssen Haniel Logistic International GmbH v. Barna Consignataria SL, YCA XXVI (2001), 851

874

O mn. 84 O mn. 107 O mn. 105 O mn. 84 O mn. 110 O mn. 98 A mn. 103; O mn. 98

O mn. 44 A mns 2, 147; O mns 61, 111 A mns 2, 53; O mns 33, 44 A mn. 120 O mn. 53 A mn. 103; O mn. 72 A mn. 38; O mn. 40 O mns 27, 36 O mn. 91

B mn. 341

P mn. 86 B mns 229, 234 B mn. 111 B mn. 105 B mn. 109

B mn. 109 B mn. 108

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Table of Cases Tribunal Supremo, 6 October 1998, Delta Cereales Espana SL v. Barredo Hermanos SA, YCA XXVI (2001), 854 Tribunal Supremo, 3340/1998, 1 February 2000, Project XJ220 Ltd v. Mohamed Yassin D., YCA XXXII (2007), 507 Tribunal Supremo, 1467/1998, 8 February 2000, Vinalmar, SA v. Gaspar Peral y Cía, SL, YCA XXXII (2007), 512 Tribunal Supremo, 1724/1998, 28 March 2000, Kil Management A/ S v. J. García Carrión, SA, YCA XXXII (2007), 518 Tribunal Supremo, 3536/1998, 11 April 2000, Union Générale de Cinéma, SA v. X Y Z Desarrollos, SA, YCA XXXII (2007), 525 Tribunal Supremo, 332/2000, 31 July 2000, Ionian Shipping Line Co. Ltd v. Transhipping, SA, YCA XXXII (2007), 532 Tribunal Supremo, 2658/1999, 28 November 2000, Precious Stones Shipping Limited v. Querqus Alimentaria, SL, YCA XXXII (2007), 540 Tribunal Supremo, 491/1999, 20 March 2001, Angel v. Bernardo Alfageme, S.A., YCA XXXI (2006), 821 Tribunal Supremo, 23 July 2001, Kern Electrónica, S.A. v. Goldstar Company Limited, YCA XXXI (2006), 825 Tribunal Supremo, 13 November 2001 Centrotex, S.A. v. Agencia Gestora de Negocias, S.A. (Agensa), YCA XXXI (2006), 834 Tribunal Supremo, 1876/01, 8 October 2002, Scandlines, AB v. Ferrys del Mediterráneo, S.L., YCA XXXII (2007), 555 Tribunal Supremo, 1148/2002, 29 November 2002, Rederij Empire CV v. Arrocerías Herba, SA, YCA XXXII (2007), 567 Tribunal Supremo, 2065/01, 4 March 2003, Saroc, S.p.A. v. Sahece, S.A., YCA XXXII (2007), 571 Tribunal Supremo, 2009/2001, 1 April 2003, Satico Shipping Company Limited v. Maderas Iglesias, YCA XXXII (2007), 582 Tribunal Supremo, 1943/2001, 14 October 2003, Fashion Ribbon Company, Inc. v. Iberband, S.L., YCA XXX (2005), 627 Tribunal Supremo, 27 January 2004, Rosso e Nero GaststättenbetriebsgmbH v. Almendrera Industrial Catalana, SA (ALICSA), YCA XXXII (2007), 597 Tribunal Supremo, 129/2002, 20 July 2004, Antilles Cement Corporation v. Transficem, YCA XXXI (2006), 846 Tribunal Supremo, 743/03, 31 May 2005, Pueblo Film Distribution Hungary KFT v. Laurenfilm, SA, YCA XXXII (2007), 608 Tribunal Supremo, 1221/2005, 21 February 2006, Construcciones MJ, S.A v. Not indicated, YCA XXXVIII (2013), 462 Tribunal Supremo, 1219/07, 14 November 2007, Limber, S.A. v. Cutisin, A.S., YCA XXXIII (2008), 703 Tribunal Supremo, 429/2009, 22 June 2009 Tribunal Supremo, 102/2017, 15 February 2017, Puma S.A. v. M. Temboury Redondo y L.J. Ramallo García Tribunal Supremo, 409/2017, 27 June 2017, Banco Popular Español S.A. v. Agrumexport S.A. Tribunal Superior de Justicia de Andalucía, Ceuta y Melilla, 12/ 2013, 24 June 2013, Marimar González S.L. v. Construcciones Juan Mata

B mn. 109 P mns 83, 87 P mns 27, 88 B mn. 206; P mns 26, 27 B mn. 192; P mns 15, 41, 83, 103 B mns 206, 223, 228; P mns 83, 88 P mns 23, 27, 41, 84, 103

P mn. 96 P mn. 14 B mn. 338 B mn. 238; P mns 30, 68, 73 B mn. 141; P mns 18, 22, 30 P mns 26, 103 P mn. 18 B mn. 232; P mn. 88 B mn. 238

B mns 267, 273, 275; P mns 95, 96 B mns 228, 230; P mns 24, 104 P mns 65, 78, 87, 89, 105 B mn. 13; P mn. 30 P mn. 51 A mn. 92; P mn. 51 P mns 43, 45 P mns 72, 74

875

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Table of Cases Tribunal Superior de Justicia de Catalunya, 37/2012, 15 March 2012, Starlio Shipping Company Limited v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 456 Tribunal Superior de Justicia de Catalunya, 51/12, 29 March 2012, MS Amazon River I CV v. Eurocondal Shipping S.A., YCA XXXVIII (2013), 459 Tribunal Superior de Justicia de Catalunya, 97/2012, 30 May 2012, IMFC Licensing, B.V. v. R.C.D. Espanyol de Barcelona, S.A.D., YCA XXXVIII (2013), 462 Tribunal Superior de Justicia de Catalunya, 13 December 2012, Ana María v. Maspla Comunicaciones, S.L. Tribunal Superior de Justicia de Catalunya, 46/2013, 25 March 2013, Sierra-Affinity, LLC v. Wide Pictures, S.L., YCA XXXVIII (2013), 465 Tribunal Superior de Justicia de Catalunya, 3/2014, 7 January 2014, Carlos Alberto v. Landon Investment, S.C.R. de Régimen Simplificado Tribunal Superior de Justicia de Catalunya, 6/2014, 23 January 2014, Management Proyecto Inmuebles, S.L. v. Hayley Conference Centres, L.T.D. Tribunal Superior de Justicia de Catalunya, 106/2014, 19 September 2014, Hochtief Solutions, AG v. Equip Tecnic Santandreu, SA, YCA XLI (2016), 558 Tribunal Superior de Justicia de Catalunya, 34/2016, 14 April 2016, Construcciones Leon Rabadan S.L. v. Banco Bilbao Vizcaya Argentaria S.A. Tribunal Superior de Justicia de Catalunya, 6 May 2016, Elbana di Navigazione SpA v. Biotrading 2007 SLNE, YCA XLII (2017), 514 Tribunal Superior de Justicia de Catalunya, 71/2016, 19 May 2016, Premiere Entertainment Group, LLC v. Savor Ediciones, S.A., YCA XLII, (2017), 517 Tribunal Superior de Justicia de Catalunya, 14/2016, 15 December 2016, Mr. Millán v. FCC Construcción SA, YCA XLII (2017), 520 Tribunal Superior de Justicia de Catalunya, 36/2015, 19 December 2016, Banca per le Imprese v. ROS ROCA Group SL, YCA XLIII (2018), 567 Tribunal Superior de Justicia de Catalunya, 21/2017, 22 February 2017, Olive Mine Action Limited v. HERA AG Ambiental, S.L., YCA XLII (2017), 524 Tribunal Superior de Justicia de la Comunidad Valenciana, 15/ 2013, 16 December 2013, Zurich Insurance Plc and Barcelonesa de Drogas and Productos Químicos Medifer Liquids S.L. Tribunal Superior de Justicia de Galicia, 18/2012, 2 May 2012, Viza Automoción S.A.U. v. Inser Robótica, S.A. Tribunal Superior de Justicia de Madrid, 8/2012, 1 February 2012, Aviation Consulting Management S.L. v. SAS Cargo Group A.S. Tribunal Superior de Justicia de Madrid, 13/2015, 28 January 2015, Repos i Repàs, S.L v. Banco Bilbao Vizcaya Argentaria S.A. Tribunal Superior de Justicia de Madrid, 56/2015, 13 July 2015, Enagas Transporte SAU v. Gas Comercializadora SA Tribunal Superior de Justicia de Madrid, 14/2016, 9 February 2016, Maria Dolores v. Mail Boxes ETC-Ritcom 2003 S.L.

876

B mns 108, 115; P mn. 82

B mns 185, 186, 228; P mns 27, 39, 82 P mns 65, 78, 87, 89, 105

P mn. 90 P mns 73, 90

P mn. 91

P mn. 88

P mn. 95

P mn. 89

P mn. 23 P mn. 97

B mns 179, 242; P mns 87, 99 P mn. 96

P mn. 95

P mn. 80

P mn. 56 P mn. 78 P mn. 87 P mn. 20 P mn. 85

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Table of Cases Tribunal Superior de Justicia de Madrid, 11/2016, 28 September 2016, Orange Middle East and Africa, S.A. v. Republic of Equatorial Guinea, YCA XLIII (2018), 555 Tribunal Superior de Justicia de Madrid, 70/2016, 4 November 2016, Bajoz Eólica S.L. v. Caixabank, S.A. Tribunal Superior de Justicia de Madrid, 12/2016, 14 November 2016, Commercial Bank Guinea Ecuatorial v. Republic of Equatorial Guinea, YCA XLIII (2018), 562 Tribunal Superior de Justicia de Madrid, 3/2017, 14 February 2017, IDAC v. GECI España, S.A., YCA XLIII (2018), 571 Tribunal Superior de Justicia de Madrid, 54/2017, 26 September 2017, Inversiones Berindi SL v. Corporación Villanueva S.A. y D. Higinio Tribunal Superior de Justicia de Madrid, resolution no. 15/2018, recourse no. 6/2017, 5 April 2018, Engasa Eólica SAU v. Vestas Eólica SAU Tribunal Superior de Justicia Madrid, 22 March 2019, 38/2018, Aguas de las Cuencas del Mediterraneo SA v. UTE IV Ingenieros Consultores SA Tribunal Superior de Justicia del País Vasco, 5/2012, 13 June 2012, Coro y Herminio v. Inés, Manuel, Pedro, Segundo y Natalia Tribunal Superior de Justicia del País Vasco, 7/2012, 25 September 2012, Crescencia, Juan Manuel, Guillerma, Nicolasa, Augusto, Visitación, Apolonia, Donato, Gabino Joaquín v. Óscar Audiencia Provincial de Asturias, 10 December 2012, Hostelería Valdeolmillos S.A. v. Caja de Ahorros Pensiones Barcelona Audienca Provincial de Barcelona, 86/2009, 29 April 2009, Licensing Projects SL v. Pirelli & C. SpA, YCA XXXV (2010), 452 Audiencia Provincial de Barcelona, 158/2012, 26 April 2012, Laboratorios Pasteur S.A. v. Laboratorios Kin S.A. Audiencia Provincial de Barcelona, 69/2016, 19 April 2016 Audiencia Provincial de Burgos, 180/2009, 27 April 2009, Abonos y Cereales, S.L. v. Granit Negoce, S.A., YCA XXXV (2010), 450 Audiencia Provincial de Las Palmas, 348/2012, 29 June 2012, Daorje, S.L.U. Daorje Medioambiente, S.A. v. Canarias de Limpieza Urbana, S.A. Audiencia Provincial de Madrid, 183/2005, 31 May 2005, Knorr Bremse Systeme für Schienenfahrzeuge v. Albatros, S.L. Audiencia Provincial Madrid, 2 February 2007, 94/2007, ECLI:ES: APM:2007:1255 Audiencia Provincial de Madrid, 289/2009, 13 July 2009, Erg Petroleos, S.A. v. Realesser, S.L. Audiencia Provincial de Madrid, 10 June 2011, 200/2011, Puma AG RDS v. Estudio 2000, S.A., ECLI: ES:APM:2011:7542, CLOUT Case No. 1789 Audiencia Provincial de Madrid, 506/2011, 30 June 2011, Delforca 2008, Sociedad De Valores S.A. v. Banco De Santander, S.A. Audiencia Provincial de Madrid, 3/2010, 13 January 2012, Hijos de Domingo Martín, S.L. v. Sistel Castilla S.L. Audiencia Provincial de Madrid, 4/2011, 23 January 2012, Pegayco, S.L. v. Cesce, S.A.

P mns 85, 87, 94

P mn. 48 P mn. 94

P mn. 96 P mn. 35

A mn. 136; P mn. 87

A mn. 89

P mns 30, 59 P mns 33, 42, 56, 76, 103

P mn. 13 P mns 14, 34 P mns 30, 35, 37, 76, 87 P mn. 19 P mns 18, 83 P mns 35, 58

P mn. 37 A mn. 141 P mn. 35 A mn. 92

P mn. 48 P mn. 74 P mn. 90

877

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Table of Cases Audiencia Provincial de Madrid, 96/2013, 26 February 2013, EBN Banco de Negocios S.A. v. Lackberg Corporate, S.L. Audiencia Provincial de Madrid, 147/2013, 18 October 2013 Audiencia Provincal de Málaga, 36/2013, 5 June 2013, Banco Bilbao Vizcaya Argentaria S.A. v. Don Pablo Audiencia Provincial de Palencia, 156/2000, 10 April 2000, AMFIT CAD-CAM Orthotics Fabrication Systems S.L. v. Juan Ignacio Audiencia Provincial de Zamora, 89/2009, 27 November 2009, Genaro v. Carmelo, Agraria del Tormes SA, YCA XXXV (2010), 454 Juzgado de Primera Instancia e Instrucción de Rubí, 584/2006, 11 June 2007, Pavan s.r.l. v. Leng d’Or, SA, YCA XXXV (2010), 444 Sweden A. Jilkén v. Ericsson AB, NJA 2007, 841 Adelina Gross AB v. Promlinus D.O.O. Prokuplje, NJA 2018, 504 Advadis S.A. v. Royal Unibrew A/S, Svea Hovrätt, 20 March 2015, T 8043-13 Aeroflot Russian Airlines v. Russo International Venture Inc. and MGM Productions Group Inc., Svea Hovrätt, 21 February 2005, T 1164-03 AFO Entreprenader AB v. Infratek Sverige AB, Svea Hovrätt, 25 August 2016, Case T 391-16 Alingsås Kommun v. Luftteknik Mellin & Selling AB, RH 1982:102 Belaya Ptitsa v. Robot Grader AB, Högsta Domstolen, 4 May 2018, Case No. Ö 3626-17 Belgorkhimprom v. Koca Inşaat Sanayi Ihracat, Högsta Domstolen, 20 March 2019, Case No. T 5437-17 Birger Perjos v. Gatu och Väg AB, NJA 2007, 475 Bulgarian Foreign Trade Bank Ltd v. A.I. Trade Finance Inc., NJA 2000, 538 Byggnadsaktiebolaget Lennart Hultenberger v. Bostadsrättsföreningen Hytten, NJA 1972, 458 Concorp Scandinavia AB v. Xcaret Confectionery Sales AB, NJA 2012, 183 Czech Republic v. CME Czech Republic, Svea Hovrätt, 15 May 2003, T 8735-01 Datema AB v. Fornede Cresco Finans AS, NJA 1992, 733, YCA XIX (1994), 712 Denmark (Kingdom of) through BornholmsTrafikken v. Ystad Hamn Logistik AB, NJA 2008, 120 Elf Neftegaz S.A v. Interneft OOO, Regionen Saratov och Regionen Volgograd i Ryska Federationen, NJA 2016, 264 Götaverken Arendal Aktiebolag v. General National Maritime Transport Company, NJA 1979, 527, Rev. Arb. 1980, 555, YCA VI (1981), 237 Hans Schröder AB v. Svenska AB Lebam, NJA 1964, 2 I.H. Lidmalm Consulting AB and B.S. v. Kemisten AB and L.M.L., NJA 2017, 226 Korsnäs AB v. AB Fortum Värme, NJA 2010, 317

878

P mn. 33 P mn. 20 P mns 13, 87, 89 P mn. 37 P mn. 96

P mn. 99

Q mn. 43 Q mn. 97 A mn. 110 A mn. 96

A mn. 101 Q mn. 21 A mn. 130 A mn. 130; Q mns 28, 84 Q mn. 29 Q mn. 53 Q mn. 29 Q mn. 29 A mn. 96 Q mns 92, 93 Q mn. 29 Q mn. 33 B mns 35, 267, 276, 277, 281; Q mn. 93 Q mn. 29 Q mn. 29 Q mn. 42

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Table of Cases Lenmorniiproekt OAO v. Arne Larsson & Partner Leasing AB, Högsta Domstolen, 16 April 2010, Ö 13-09, YCA XXXV (2010), 456 Moscow City Golf Club OOO v. Nordea Bank AB, NJA 2012, 790 MS “Emja” Braack Schiffahrts KG v. Wärtsilä Diesel AB, NJA 1997, 866 NEMU Mitt i Sverige AB v. Jan H, Gunnar B and Bo N, NJA 1998, 574 Partrederiet för M/S Red Sea v. Götaverken Sölvesborg Aktiebolag, NJA 1990, 419 Petrobart Ltd v. The Republic of Kyrgyzstan, NJA 2008, 406 Planavergne S.A. v. K.B. i Stockholm AB, NJA 2003, 379 Profura AB v. Stig Blomgren, Hovrätten för Västra Sverige, 19 March 2008, T 2863-07 Republic of Latvia v. Swembalt AB, NJA 2002, C 62 RosInvestCo UK Ltd v. The Russian Federation, NJA 2010, 508, YCA XXXVI (2011), 334 Russian Federation (Government of) v. I.M. Badprim SRL, Svea Hovrätt, 23 January 2015, Case No. T 2454-14 Scanax AB v. Svensk Filmtjänst AB, NJA 1996, 330 Soyak International Construction & Investment Inc. v. Werner Melis, Kaj Hobér and Steffen Kraus, NJA 2008, 1118 Systembolaget AB v. V&S Vin & Sprit AB, NJA 2015, 438 Technopromexport v. Mir’s Limited, Högsta Domstolen, 14 June 2013, Case T 2104-12, NJA 2013, 578 Svenska Kreditförsäkringsaktiebolaget (Bankruptcy Estate) v. certain (41) reinsurers, NJA 2003, 3 The Government of the Russian Federation, see Russian Federation The Kingdom of Denmark through BornholmsTrafikken, see Denmark Tupperware Nordic A/S v. The Bankruptcy Estate of Facht Distribution AB, NJA 2010, 734 Tureberg – Sollentuna Lastbilcentral ekonomisk förening v. Byggnadsfirman Rudolf Asplund AB, NJA 1980, 46 Switzerland BGer., 12 February 1958, BGE 84 I 56 BGer., 5 May 1959, BGE 85 II 103 BGer., 26 October 1966, BGE 92 I 271 BGer., 3 May 1967, BGE 93 I 265, YCA I (1976), 199 BGer., 10 August 1971, BGE 97 I 488 BGer., 12 December 1975, BGE 101 Ia 521 BGer., 25 January 1977, BGE 103 II 75 BGer., 26 February 1982, BGE 108 Ib 85, YCA IX (1984), 437

BGer., 7 February 1984, BGE 110 II 54, YCA XI (1986), 532 BGer., 14 March 1984, BGE 110 Ib 191, YCA XI (1986), 536 BGer., 14 March 1985, BGE 111 Ia 72

A mns 76, 151

Q mn. 63 Q mn. 24 Q mn. 57 Q mn. 53 Q mn. 29 Q mn. 93 A mn. 33 Q mn. 92 Q mn. 38 A mn. 47 Q mn. 49 Q mn. 55 Q mn. 85 A mn. 60; Q mn. 95 Q mns 25, 93

Q mn. 28 Q mn. 22

B mns 52, 323 A mn. 50 R mn. 83 B mn. 323 B mn. 52 B mn. 325 R mn. 54 B mns 36, 257, 258, 260, 267, 270, 273, 277; R mn. 143 B mns 104, 112 B mns 25, 219 R mns 81, 83

879

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Table of Cases BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer.,

8 November 1985, BGE 111 Ia 259 5 November 1985, BGE 111 Ib 253, YCA XII (1987), 511 22 May 1985, BGE 111 II 62, YCA XII (1987), 509 26 January 1987, Sem. Jud. 1987, 230, YCA XV (1990), 505 17 November 1987, BGE 113 Ia 407 12 January 1989, YCA XV (1990), 509 23 June 1989, 4P.69/1989 23 October 1989, ASA Bull. 1990, 51 20 December 1989, BGE 115 Ia 400 7 April 1989, BGE 115 II 102 23 May 1989, BGE 115 III 97 15 March 1990, BGE 116 Ia 56 20 December 1990, BGE 116 Ia 485 14 November 1990, BGE 116 II 634, YCA XVII (1992), 279 19 December 1990, BGE 116 II 639 30 April 1991, BGE 117 Ia 166 1 July 1991, BGE 117 II 346 28 April 1992, BGE 118 II 193, YCA XVIII (1993), 143

BGer., 11 May 1992, 4P.23/1991, (1992) 10 ASA Bull. 381 BGer., 23 June 1992, BGE 118 II 353, ASA Bull. 1993, 58, YCA XX (1995), 766 BGer., 18 August 1992, BGE 118 II 359 BGer., 13 October 1992, ASA Bull. 1993, 68 BGer., 22 December 1992, 4P.161/1992 BGer., 22 December 1992, ASA Bull. 1996, 646 BGer., 15 March 1993, 4P.217/1992, BGE 119 II 271 BGer., 2 September 1993, BGE 119 II 380 BGer.,7 September 1993, BGE 119 II 386 BGer., 30 September 1993, ASA Bull. 1994, 46 BGer., 19 April 1994, BGE 120 II 155 BGer., 19 April 1994, BGE 120 II 172 BGer., 11 November 1994, 4P.86/1994 BGer., 21 March 1995, ASA Bull. 1996, 255, YCA XXII (1997), 800 BGer., 9 January 1995, YCA XXII (1997), 789 BGer., 16 January 1995, BGE 121 III 38, YCA XXI (1996), 690 BGer., 29 April 1996, BGE 122 III 139, ASA Bull. 1996, 527 BGer., 24 March 1997, ASA Bull. 1997, 329 BGer., 25 July 1997, ASA Bull. 2000, 96 BGer., 9 April 1998, BGE 124 I 121 BGer., 19 December 1997, BGE 124 III 83, YCA XXIVa (1999), 727 BGer., 9 March 1998, BGE 124 III 207 BGer., 13 November 1998, 4P.119/1998 BGer., 28 April 2000, BGE 126 III 249

880

R mn. 83 B mns 107–109, 112 B mn. 151 B mn. 91 R mn. 83 B mns 104, 111, 227, 228 R mn. 64 B mn. 237 R mns 78, 83, 131 B mn. 326 R mn. 144 R mns 49, 51, 59–60 R mn. 83 B mns 289, 326 B mn. 237 R mns 90, 121 B mn. 237; R mn. 136 B mns 297, 301; R mns 40–42 R mn. 98 B mn. 298; R mns 10, 39, 40–42 R mns 78, 83, 131 R mn. 54 R mn. 38 B mn. 131 R mns 64, 78, 131 B mn. 99 R mns 95, 146, 147 B mn. 43 B mn. 311, R mn. 63 R mn. 133 R mn. 120 B mns 123, 136 B mns 179, 330 B mns 83, 96, 107, 108, 113, 115, 147, 153; R mns 45, 46 B mns 83, 112, 154 B mn. 28 B mn. 225 R mn. 83 B mn. 94 A mn. 50 R mn. 110 R mns 136, 147

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Table of Cases BGer., BGer., BGer., BGer., BGer., BGer.,

20 June 2000, 4P.273/1999 2 November 2000, BGE 126 III 524 2 March 2001, 4P.260/2000 14 May 2001, BGE 127 III 279, (2001) 19 ASA Bull. 555 10 September 2001, BGE 127 III 576 16 October 2001, BGE 128 III 50

BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer.,

1 February 2002, BGE 128 III 234 3 May 2002, ASA Bull. 2003, 364, YCA XXVIII (2003), 835 24 June 2002, 4P.54/2002 26 November 2002, 4P.129/2002 27 May 2003, BGE 129 III 445 16 May 2003, BGE 129 III 535 19 May 2003, ASA Bull. 2004, 344 8 July 2003, BGE 129 III 675 14 July 2003, 4P.114/2003 16 October 2003, BGE 129 III 727

BGer., BGer., BGer., BGer., 834 BGer., BGer., BGer., BGer.,

30 September 2003, BGE 130 III 35 21 November 2003, BGE 130 III 66 18 September 2003, BGE 130 III 76 8 December 2003, ASA Bull. 2005, 119, YCA XXIX (2004),

BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., BGer., 810 BGer., BGer., BGer., BGer., BGer., BGer., BGer.,

27 March 2006, 4P.23/2006 19 February 2007, BGE 133 III 139 22 March 2007, BGE 133 III 235 6 June 2007, 4A_18/2007 21 September 2007, 4A_220/2007 9 January 2008, ASA Bull. 2008, 329 22 January 2008, BGE 134 III 186 6 March 2008, BGE 134 III 260 6 October 2008, BGE 135 I 14 9 December 2008, BGE 135 III 136, YCA XXXIV (2009),

9 December 2003, BGE 130 III 125 4 February 2005, BGE 131 III 173 21 February 2005, YCA XXXII (2007), 619 8 March 2006, BGE 132 III 389, Rev. Arb. 2006, 763

9 February 2009, 4A_400/2008 31 March 2009, YCA XXXIV (2009), 286 31 March 2009, 4A_428/2008, (2010) 28 ASA Bull. 104 11 January 2010, 4A_256/2009 and 4A_258/2009 11 February 2010, 4A_444/2009 5 March 2010, 4A_524/2009 13 April 2010, 4A_490/2009, BGE 136 III 345

R mn. 99 R mn. 122 R mn. 93 R mn. 69 R mn. 93 R mns 32, 38, 51, 59, 60, 64, 147 R mn. 93 B mn. 206 R mn. 9 R mn. 131 R mns 82, 86 R mns 25, 26 B mn. 137 R mns 51, 59, 60 R mns 93, 132 H mn. 41, R mns 52, 55, 130 R mns 92, 93, 133 R mns 60, 61, 147 R mn. 126 B mns 267, 275 R mns 147, 148 R mn. 127 B mn. 230 B mns 311, 331; R mns 111, 137 R mns 93, 132 R mns 94, 133 R mns 92, 93, 127, 132 R mn. 27 R mn. 60 R mn. 84 R mns 93, 125, 133 R mn. 127 R mns 78, 131 B mns 267, 275, 281; R mns 142, 143 A mn. 129; R mn. 133 B mn. 304 R mn. 57 R mn. 86 R mn. 72 R mn. 104 R mns 137, 138

881

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Table of Cases BGer., 28 June 2010, 4A_71/2010 BGer., 28 July 2010, YCA XXXVI (2011), 337 BGer., 4 October 2010, Bull. ASA 2012, 76, YCA XXXVI (2011), 340 BGer., 25 October 2010, ASA Bull. 2011, 129, YCA XXXVI (2011), 343 BGer., 29 October 2010, BGE 136 III 605 BGer., 10 November 2010, BGE 136 III 597 BGer., 7 January 2011, 4A_440/2010 BGer., 7 February 2011, 4A_482/2010 BGer., 17 March 2011, 4A_600/2010 BGer., 19 April 2011, 4A_44/2011 BGer., 16 May 2011, 4A_46/2011, ASA Bull. 2011, 643 BGer., 20 September 2011, 4A_103/2011 BGer., 10 October 2011, ASA Bull. 2013, 404, YCA XXXVII (2012), 300 BGer., 7 November 2011, BGE 138 III 29 BGer., 31 January 2012, 4A_360/2011 BGer., 27 March 2012, BGE 138 III 322 BGer., 2 May 2012, BGE 138 III 270 BGer., 31 May 2012, 4A_682/2011 BGer., 27 June 2012, 4A_54/2012 BGer., 2 July 2012, BGE 138 III 520 BGer., 2 July 2012, ASA Bull. 2013, 156, YCA XXXVII (2012), 305 BGer., 9 October 2012, 4A_110/2012 BGer., 16 October 2012, 4A_50/2012, BGE 138 III 714 BGer., 4 February 2013, 4A_460/2013 BGer., 17 April 2013, 4A_669/2012 BGer., 24 May 2013, 4A_476/2012 BGer., 29 May 2013, 4A_620/2012 BGer., 26 July 2013, ASA Bull. 2014, 326 BGer., 30 September 2013, 4A_232/2013 BGer., 13 November 2013, 4A_282/2013, BGE 139 III 511 BGer., 28 January 2014, BGE 140 III 75 BGer., 4 February 2014, ASA Bull. 2014, 356 BGer., 27 March 2014, 4A_362/2013 BGer., 7 April 2014, 4A_450/2013, (2015) 33 ASA Bull. 160 BGer., 27 May 2014, BGE 140 III 278 BGer., 11 June 2014, 4A_178/2014, ASA Bull. 2014, 782 BGer. 30 June 2014, BGE 140 III 367 BGer., 9 July 2014, 4A_90/2014 BGer., 28 August 2014, BGE 140 III 477 BGer., 15 September 2014, 5A_ 409/2014, ASA Bull. 2016, 1015

882

R mn. 41 B mns 238, 310, 324 B mns 172, 192, 193, 195 B mns 82, 141, 154 R mns 83, 86 R mn. 101 R mn. 94 A mn. 50 R mns 93, 132 A mn. 45 A mn. 131; R mns 27, 133 R mn. 60 B mn. 172 R mn. 61 R mns 93, 94, 132, 133 R mns 137, 138 R mn. 87 R mns 95, 147 R mn. 83 R mn. 142 B mn. 175 R mn. 86 A mns 29, 45; R mn. 57 R mn. 133 A mn. 131; R mn. 133 R mn. 146 R mn. 86 B mn. 227 A mn. 57 R mns 131, 147 R mns 50, 90 B mn. 238 A mn. 81 A mn. 46; R mns 52, 55 A mns 135, 137; B mns 94, 327 A mn. 40 A mns 29, 48 R mn. 123 A mns 53, 120; R mns 126, 130 B mns 227, 230; R mn. 147

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Table of Cases BGer., 25 September 2014, ASA Bull. 2015, 393, YCA XLI (2016), 564 BGer., 29 January 2015, 4A_532/2014 BGer., 24 February 2015, 4A_544/2014 BGer., 26 Feburary 2015, ASA Bull. 2015, 576, YCA XLI (2016), 567 BGer., 29 April 2015, 4A_70/2015 BGer., 29 May 2015, 4A_633/2014, BGE 141 III 229 BGer., 20 May 2015, BGE 141 III 274 BGer., 21 May 2015, 4A_709/2014 BGer., 3 June 2015, 4A_676/2014 BGer., 17 August 2015, ASA Bull. 2016, 134 BGer., 5 January 2016, 4A_319/2015 BGer., 1 February 2016, 4A_428/2015 BGer., 4 February 2016, ASA Bull. 2016, 482, YCA XLI (2016), 573 BGer., 18 February 2016, BGE 142 III 239 BGer., 25 February 2016, BGE 142 III 220 BGer., 16 March 2016, BGE 142 III 296 BGer., 26 April 2016, BGE 142 III 360 BGer., 20 June 2016, 4A_173/2016 BGer., 7 September 2016, BGE 142 III 521 BGer., 3 November 2016, 4A_136/2016, ASA Bull. 2017, 129 BGer., 18 January 2017, BGE 143 III 55 BGer., 24 January 2017, 4A_672/2016 BGer., 21 December 2017, 4A_344/2017 BGer., 20 February 2018, BGE 144 III 120 BGer., 12 March 2018, 4A_450/2017 BGer., 24 July 2018, 4A_668/2016 BGer., 26 July 2018, 4A_125/2018 BGer., 1 October 2018, 4A_550/2017 BGer., 18 April 2018, 4A_7/2018 BGer., 15 January 2019, 4A_382/2018 BGer., 29 January 2019, 4A_424/2018 BGer., 4 March 2019, 4A_318/2018 BGer., 17 April 2019, 4A_646/2018, BGE 145 III 199 BGer., 7 May 2019, 4A_540/2018 BGer., 27 May 2019, 4A_663/2018 AppG Basel-Stadt, BJM 1991, 144, YCA XVII (1992), 581 AppG Basel-Stadt, IPRax 1985, 44 AppG Basel-Stadt, SJZ 1968, 378, YCA I (1976), 200 AppG Zug, Bull. ASA 2000, 363, YCA XXIX (2004), 805 BezG Affoltern am Albis, SJZ 1997, 223, YCA XXIII (1998), 754 BezG Zürich, YCA XXIX (2004), 819 CA Geneva, Bull. ASA 2000, 786, YCA XXVI (2001), 863 OG Basel-Land, BJM 1973, 193, YCA IV (1979), 309

B mn. 318 A mns 89, 137 R mn. 132 B mns 52, 227, 177 R mn. 95 A mn. 135; B mn. 327 R mn. 25 A mns 129, 131, 136 A mn. 29 B mn. 192 R mn. 98 R mn. 25 B mns 147, 175 A mns 23, 33; R mn. 32 R mn. 25 A mn. 49; R mn. 27 R mn. 133 R mn. 86 A mn. 69; R mn. 131 A mn. 137 R mn. 127 R mn. 61 R mn. 58 R mn. 137 R mns 94, 95, 147 R mn. 132 R mn. 137 R mns 95, 146, 147 R mn. 41 R mn. 133 R mns 133, 135 R mns 93, 133 A mns 33, 46 R mns 8, 133 A mns 70, 137, 154 B mns 232, 238 B mn. 254 B mn. 272 B mn. 175 B mn. 239 B mns 267, 271, 273 B mns 172, 175, 206 B mns 234, 235

883

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Table of Cases OG Basel-Land, BJM 1995, 254, YCA XXI (1996), 685 Trib. cant. vaudois, ASA Bull. 1995, 64 Trib. prem. inst. Genève, 2 May 2005, (2005) 23 ASA Bull. 728 United States of America 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009) 20/20 Communications, Incorporated v. Crawford, 2019 WL 3281412 (5th Cir. 2019) AAOT Foreign Economic Association (VO) Technostroyexport v. International Development and Trade Services, Inc., 139 F.3d 980 (2nd Cir. 1998) Abdul Latif Jameel Transportation Company Ltd v. Fedex Corporation, Case No. 19-5315 (6th Cir. Sept. 19, 2019) Acceleration Bay LLC v. Activision Blizzard, Inc., 2018 WL 798731 (D. Del. 9 Feb. 2018) Ackerman v. Levine, 788 F.2d 830 (2nd Cir. 1986) Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953 (10th Cir. 1994) Admart A. G. v. Stephen and Mary Birch Found., Inc., 457 F.3d 302 (3rd Cir. 2006) Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 660 F.3d 281 (7th Cir. 2011) Aggarao v. MOL Ship Mgmt. Co., 675 F.3d 355 (4th Cir. 2012) Al Haddad Bros. Enterprises, Inc. v. M/S AGAPI, 635 F. Supp. 205 (D.Del. 1986) Al Raha Group for Technical Services v. PKL Services, Inc., No. 1:18-cv-04194-AT (N.D.Ga., 5 Sep. 2019) Alexander v. Gardener-Denver Co., 415 U.S. 36, 57 (1974) Alfa Laval U.S. Treasury Inc. v. National Union Fire Ins. Co. of Pittsburgh, PA, 857 F. Supp. 2d 404 (S.D.N.Y. 2012) Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161 (5th Cir. 1992) Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15 (2nd Cir. 1997), YCA XXIII (1998), 1058 Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265 (1995) Alto Mar Girassol v. Lumbermens Mutual Casualty Co., 2005 WL 947126 (N.D.Ill. 2005), YCA XXX (2005), 1152 American Centennial Ins. Co. v. National Casualty Co., 951 F.2d 107, 108 (6th Cir. 1991) American Construction Machinery & Equipment Corp. Ltd v. Mechanised Construction of Pakistan Ltd, 659 F. Supp. 426 (S.D.N. Y. 1987) American Express Co. v. Italian Colors Restaurant, 570 U.S. 228, 133 S. Ct. 2304 (2013) American Express Financial Advisors Securities Litigation, 672 F.3d 113 (2nd Cir. 2011) American Heritage Life Ins. Co. v. Orr, 294 F.3d 702 (5th Cir. 2002) Amoco Overseas Oil Co. v. Astir Navigation Co., Ltd, 490 F. Supp. 32 (S.D.N.Y. 1979) Andros Compania Maritima SA v. André & Cie., 430 F. Supp. 88 (S.D.N.Y. 1977)

884

B mns 104, 106, 111 B mn. 82 R mn. 67 S mn. 96 S mn. 107 B mns 192, 320

S mn. 91 A mn. 85 B mn. 307 S mn. 43 B mn. 177 B mn. 248 B mns 93, 135; S mn. 37 B mn. 259 A mn. 106 S mn. 90 B mn. 211 S mns 32, 43 B mns 33, 34, 177, 284, 287, 326, S mn. 116 S mns 4, 5, 10 B mns 281, 334 S mn. 106 B mn. 270

S mns 22, 34, 83, 107 S mn. 49 S mn. 48 B mn. 33 B mn. 85

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Table of Cases Anoruo v. Tenet Health System Hahnemann, 697 F. App’x 110 (3rd Cir. 2017) ANR Coal Co., Inc. v. Cogentrix of North Carolina, Inc., 173 F.3d 493 (4th Cir. 1999) Answers in Genesis of Kentucky, Inc. v. Creation Ministries International, Ltd, 556 F.3d 459 (6th Cir. 2009) Apple & Eve LLC v. Yantai N. Andre Juice Co., 610 F. Supp. 2d 226 (E.D.N.Y. 2009) Application of York Hannover Holding A. G. v. American Arbitration Ass’n, 1993 WL 159961 (S.D.N.Y. 1993), YCA XX (1995), 856 Applied Indus. Materials Corp. v. Ovalar Makine Ticaret Ve Sanayi, A.S., 492 F.3d 132 (2nd Cir. 2007) Arabian Motors Group v. Ford Motor Co., 2019 WL 2305313 (6th Cir. 2019) Arbitration between Halcot Navigation Ltd Partnership & StoltNielsen Transp. Group, 491 F. Supp. 2d 413, 419 (S.D.N.Y. 2007) Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277 (3rd Cir. 2010) AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740 (2011) AT&T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643 (1986) Audi NSU Auto Union A. G. v. Overseas Motors, Inc., 418 F. Supp. 982 (D.C. Mich) August Aasma v. American Steamship Owners Mutual Protection and Indemnity, 238 F. Supp. 2d 918 (N.D.Ohio 2003) Aviall, Inc. v. Ryder System, Inc., 110 F.3d 892 (2nd Cir. 1997) Bailey Shipping Ltd v. American Bureau of Shipping, No. 12 Civ. 5959 (KPF), 2013 WL 5312540 (S.D.N.Y. Sep. 23, 2013) Baker Marine (Nig.) Ltd v. Chevron (Nig.) Ltd & Chevron Corp., Inc., 191 F.3d 194 (2nd Cir. 1999) Balkan Energy Ltd v. Republic of Ghana, 302 F. Supp. 3d 144 (D.D.C. 2018), CLOUT Case No. 1835 Bamberger Rosenheim, Ltd v. OA Development, Inc., 862 F.3d 1284 (11th Cir. 2017), CLOUT Case No. 1728 Banco de Seguros del Estado v. Mutual Marine Office, Inc., 344 F.3d 255 (2nd Cir. 2003) Base Metal Trading v. OJSC “Novokuznetsky Aluminum Factory”, 283 F.3d 208 (4th Cir. 2002) Bauhinia Corp. v. China National Machinery & Equipment Import & Export Corp., 819 F.2d 247 (9th Cir 1987) Bautista v. Star Cruises, 396 F.3d 1289 (11th Cir. 2005) Baxter International, Inc. v. Abbott Laboratories, 315 F.3d 829 (7th Cir. 2003) Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39 (3rd Cir. 1978), YCA V (1980), 272 Belize Soc. Dev. Ltd v. Goverment of Belize, 5 F. Supp. 3d 25 (D.D.C. 2013) Belize Social Development Ltd v. Government of Belize, 10-7167 (D.C. Cir. 2012)

S mn. 123 S mn. 64 B mn. 149 B mns 95, 123 B mn. 324 S mn. 64 S mn. 123 S mn. 126 B mns 34, 211; S mn. 116 S mns 4, 22, 83, 107 S mn. 101 S mn. 136 B mn. 61 S mn. 62 S mn. 48 B mn. 291; S mn. 135 A mns 25, 127, 151 A mn. 72 B mn. 68; S mns 101, 103 B mn. 340 S mn. 19 B mn. 96; S mn. 36 B mn. 331 B mns 97, 105, 136 B mn. 172 A mn. 157

885

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Table of Cases Bensadoun v. Jobe-Riat, 316 F.3d 171 (2003) Bergesen v. Joseph Muller Corp., 710 F.2d 928 (2nd Cir. 1983) Best Concrete Mix Corp. v. Lloyd’s of London Underwriters, 413 F. Supp. 2d 182 (E.D.N.Y. 2006) Beynon v. Garden Grove Medical Group, 100 Cal.App. 3d 698 (1980) BG Group plc v. Republic of Argentina, 572 U.S. 25, 134 S. Ct. 1198 (2014) Borden, Inc. v. Meiji Milk Products Co., Ltd, 919 F.2d 822 (2nd Cir 1990) Borsack v. Chalk & Vermilion Fine Arts Ltd, 974 F. Supp. 293 (S.D.N.Y. 1997) Bridas S.A.P.I.C. v. Gov’t of Turkmenistan, 345 F.3d 347 (5th Cir. 2003) Broemmer v. Abortion Services of Phoenix, Ltd, 840 P.2d 1013 (Ariz. 1992) Brown v. Witco Corp., 340 F.3d 209 (5th Cir. 2003) Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) Builders Federal (Hong Kong) Ltd v. The Turner Construction, 655 F. Supp. 1400 (S.D.N.Y. 1987) Burlington Northern Railroad Co. v. TUCO, Inc., 960 S.W.2d 629 (Tx. 1997) Calbex Mineral Ltd V. ACC Resources Co., L.P., 90 F. Supp. 3d 442 (W.D.Pa. 2015) Campbell v. Gen. Dynamics Govt. Sys. Corp., 407 F.3d 546 (1st Cir. 2005) Campbell’s Foliage, Inc. v. Federal Crop Ins. Corp., 562 Fed. Appx. 828 (11th Cir. 2014) Cara’s Notions, Inc. v. Hallmark Cards, Inc., 140 F.3d 566 (4th Cir. 1998) Carolina Power & Light Co. v. Uranex, 451 F. Supp. 1044 (D.C.Cal. 1977) Carte Blanche (Singapore) Pte Ltd v. Diners Club Intl, Inc., 2 F.3d 24 (2nd Cir. 1993) Castro v. Tri Marine Fish Co., 17-35703, 921 F.3d 766 (9th Cir. 2019), CLOUT Case No. 1834 Catamaran Corp. v. Towncrest Pharmacy, 864 F.3d 966 (8th Cir. 2017) Catz American Co. v. Pearl Grange Fruit Exchange Inc., 292 F. Supp. 549 (S.D.N.Y. 1968) CB Richard Ellis, Inc. v. American Environ. Waste Management, 98-CV-4183, 1998 WL 903495 (E.D.N.Y. Dec. 4, 1998) CBF Indústria de Gusa, S/A v. AMCI Holdings, Inc., 15-1133-cv (L), (2nd Cir., 2 March 2017), cert. den. CCP Systems AG v. Samsung Electronics Corp., Ltd, 2010 WL 2546074, 1 (D.N.J. 2010) Ceeg (Shanghai) Solar Science & Technology Co. v. LUMOS LLC, 829 F.3d 1201 (10th Cir. 2016) Cerner Middle East Ltd v. iCapital, LLC, 939 F.3d 1016 (9th Cir. 2019)

886

S mn. 45 B mn. 33; S mn. 8 B mn. 133 S mn. 72 A mn. 53 S mn. 99 B mn. 133 S mn. 37 B mn. 126 S mn. 79 B mn. 99; S mns 22, 26 B mn. 91 S mn. 58 B mns 238, 261 S mn. 35 S mn. 123 B mn. 303 S mn. 100 S mn. 37 A mn. 94; B mn. 46 S mn. 107 A mn. 80 S mn. 21 A mn. 143 B mn. 133 A mn. 75; B mns 177, 223, 231 B mn. 203

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Table of Cases Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571 (7th Cir. 2007) Certain Underwriters at Lloyd’s v. Bristol-Myers Squibb Co., 51 F. Supp. 2d 756 (E.D. Tex. 1999) Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 264 F. Supp. 2d 926 (N.D. Cal. 2003) China Minmetals Materials Import and Export Co., Ltd v. Chi Mei Corp., 334 F.3d 274 (3rd Cir. 2003) China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33 (2nd Cir. 1987) Chinmex Med. Sys., Inc. v. Alere San Diego, Inc., 2011 WL 2135350 (S.D. Cal. 2011) Chiron v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126 (9th Cir. 2000) Chloe Z Fishing Co. Inc. v. Odyssey Re (London) Ltd, 109 F. Supp. 2d 1236 (S.D.Cal. 2000) Choice Hotels International, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707 (4th Cir. 2001) Chromalloy Aeroservices v. The Arab Republic of Egypt, 939 F. Supp. 907 (D.D.C. 1996) Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001) Clarendon Nat. Ins. Co. v. Lan, 2001 WL 849383 (S.D.N.Y. 2001) Colonial Penn. Ins. Co. v. Omaha Indem Co., 943 F.2d 327 (3rd Cir. 1991) Comedy Club Inc. v. Improv W. Assocs., 553 F.3d 1277 (9th Cir. 2009) Commissions Import Export S.A. v. Republic of the Congo, No. 137004, 2014 WL 3377337, 757 F.3d 321 (D.C. Cir. 2014) Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145 (1968) Compagnie des Bauxites de Guinee v. Hammermills Inc., 1992 WL 122712 (D.D.C. 1992), YCA XVIII (1993), 566 Compagnie Noga d’Importation et d’Exportation SA v. Russian Federation, 2002 WL 31106345, 1 (S.D.N.Y. 2002) Compania Española de Petroleus, S.A. v. Nereus Shipping, S.A., 527 F.2d 966 (2nd Cir. 1975) Comprehensive Accounting Corp. v, Rudell, 760 F.2d 138 (7th Cir. 1985) COMSAT Corp. v. NSF, 190 F.3d 269 (4th Cir. 1999) Connecticut General Life Ins. v. Sun Life Assur. Co. of Canada, 210 F.3d 771 (7th Cir. 2000) ConnTech Dev. Co. v. Univ. of Conn. Educ. Props., Inc., 102 F.3d 677 (2nd Cir. 1996) Conoco, Inc. v. Oil, Chemical & Atomic Workers Intern. Union, 26 F. Supp. 2d 1310 (N.D. Okla. 1998) Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 685 F.3d 987 (11th Cir. 2012) Consorcio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 747 F.3d 1262 (11th Cir. 2014)

S mns 9, 57 S mn. 49 S mns 66, 102 B mns 205, 206 S mn. 48 B mn. 68 S mn. 47 B mn. 115 S mn. 43 B mns 15, 181, 189, 277, 290, 291; S mn. 135 S mn. 11 S mn. 19 S mn. 79 S mn. 125 A mn. 145; B mn. 350; S mn. 133 S mn. 60 B mn. 261 B mn. 346 S mn. 108 S mns 52, 124, 138 S mn. 91 S mn. 106 S mn. 52 S mn. 131 S mn. 91 S mn. 91

887

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Table of Cases Consorcio Rive, SA de C.V. v. Briggs of Cancun, Inc., 82 Fed.Appx. 359 (5th Cir. 2003) Control Screening LLC v. Technological Application & Production Co., 687 F.3d 163 (3rd Cir. 2012) Contship Containerlines, Ltd v. PPG Industries, Inc., No. 00 Civ. 0194 RCCHBP, 2003 WL 1948807 (S.D.N.Y. April. 23, 2003) Corcoran v. Ardra Ins. Co. Ltd, 77 N.Y.2d 225 (N.Y. 1990) Corporación Mexicana de Mantenimiento Integral v. PEMEX-Exploración y Producción, 962 F. Supp. 2d 642 (S.D.N.Y. 2013), confirmed by 832 F.3d 92 (2nd Cir. 2016, No. 13-4022), cert. denied 137 S.Ct. 1622 Costa v. Celebrity Cruises, Inc., 768 F. Supp. 2d 1237 (S.D.Fla. 2011) Cox v. Fremont Country Pub Building Auth., 415 F.2d 882 (10th Cir. 1969) Crow Construction Co. v. Jeffrey M. Brown Associates, Inc., 264 F. Supp. 2d 217 (E.D. Pa. 2003) Crystallex International Corp. v. Venezuela, 244 F. Supp. 3d 100 (D.D.C. 2017) Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851 (11th Cir. 1989) Czarina, LLC v. W.F. Poe Synd., 358 F.3d 1286 (11th Cir. 2004) D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 104 (2nd Cir. 2006) Daesang Corp. v. NutraSweet Co., 2018 NY Slip Op 06331 (App. Div. 1st Dept. 2018), 85 N.Y.S. 3d 6 (N.Y.A.D. 2018) Dakota Foundry, Inc. v. Tromley Indus. Holdings, Inc., 737 F.3d 492 (8th Cir. 2013) DaPuzzo v. Globalvest Mgmt. Co., 263 F. Supp. 2d 714 (S.D.N.Y. 2003) David L. Threlkeld & Co., Inc. v. Metallgesellschaft Ltd, 923 F.2d 245 (2nd Cir. 1991) Del Webb Cmtys., Inc. v. Carlson, 817 F.3d 867 (4th Cir. 2016) Diag Human S.E. v. Czech Republic, No. 13-0355, 64 F. Supp. 3d 22 (D.D.C. 2014), reversed and remanded by 824 F.3d 131 (D.C. Cir. 2016), 279 F. Supp. 3d 114 (D.D.C. 2017), affirmed by 907 F.3d 606 (D.C. Cir. 2018) DiMercurio v. Sphere Drake Ins. plc, 202 F.3d 71 (1st Cir. 2000) DIRECTV, Inc. v. Imburgia, 577 U.S. __, 136 S. Ct. 463 (2015) Dish Network v. Ray, 2018 WL 3978537 (10th Cir. 2018) Doctors Associates, Inc. v. Casarotto, 517 U.S. 681 (1996) Dworkin-Cosell Interair Courier Services, Inc. v. Avraham, 728 F. Supp. 156 (S.D.N.Y. 1989) Ecopetrol S.A. v. Offshore Exploration and Production LLC, 46 F. Supp. 3d 327 (S.D.N.Y. 2014) Edstrom Industries, Inc. v. Companion Life Ins. Co., 516 F.3d 546 (7th Cir. 2008) El Paso v. La Comission Ejecutiva Hidroelectrica Del Rio Lempa, 341 Fed. App’x 31 (5th Cir. 2009) Empresa Constructora Contex Limitada v. Iseki, Inc., 106 F. Supp. 2d 1020 (S.D.Cal. 2000)

888

B mns 227, 235 S mn. 39 S mn. 73 B mn. 129 A mn. 104; B mns 291, 292; J mn. 150; S mn. 135

B mn. 34 B mn. 150 S mn. 163 B mn. 307 S mn. 140 B mns 101, 103, 172, 206 S mns 118, 123 A mn. 136; B mn. 289; S mn. 123 S mn. 37 S mn. 43 B mn. 237 S mn. 107 B mn. 275; S mn. 10

B mn. 154; S mn. 36 S mns 22, 107 S mn. 107 S n. 35 B mn. 34 B mns 65, 68 B mn. 248 S mn. 91 B mn. 235

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Table of Cases Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85 (2nd Cir. 2005) Enterprise Field Services, LLC v. Toc-Rocky Mountain, Inc., 405 S.W.3d 767 (Tex.App. 2013) Epic Systems Corp. v. Lewis, 584 U.S. ___, 138 S. Ct. 1612 (2018) Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279 (11th Cir. 2015) Eshagh v. Terminix Int’l Co., L.P., 588 F. App’x 703 (9th Cir. 2014) Esso Exploration and Production Nigeria Limited v. Nigerian National Petroleum Corporation, Case 1:14-cv-08445-WHP, Document 250 (S.D.N.Y. Sep. 4, 2019) Europcar Italia S.p.A. v. Maiellano Tours Inc., 156 F.3d 310 (2nd Cir. 1998) Exportkhleb v. Maistros Corporation, 790 F. Supp. 70 (S.D.N.Y. 1992) Extendicare Homes, Inc. v. Whisman, 478 S.W.3d 306 (Ky. 2015) Exxon Neftegas Ltd v. Worleyparsons Ltd, 2014 (WL 9873313) (NY Sup.) Farrell v. Subway Int’l, B.V., No. 11 Civ. 08 (JFK), 2011 WL 1085017 (S.D.N.Y. Mar. 23, 2011) Fertilizer Corp. of India v. IDI Management Corp., 517 F. Supp. 948 (S.D. Ohio. 1981) Fetinia Basargin v. Shipowners’ Mutual Protection and Indemnity Assoc., 1995 AMC 1463 (D.Alaska 1995), YCA XXII (1997), 894 FIAT S.p.A. v. Ministry of Fin. & Planning, 1989 U.S. Dist. LEXIS 11995 (S.D.N.Y. Oct. 12, 1989) Figueireido v. Republic of Peru, 665 F.3d 384 (2nd Cir. 2011) Filanto SpA v. Chilewich International Corp., 789 F. Supp. 1229 (S. D.N.Y. 1992) First Citizens Mun. Corp. v. Pershing Div. of Donaldson, Lufkin & Jenrette Sec. Corp., 546 F. Supp. 884 (N.D.Ga. 1982) First Investment Corp. v. Fujian Mawei Shipbuilding Ltd, 703 F.3d 742 (5th Cir. 2012, revised 2013) First Option Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) Fisher v. GE Medical Systems, 276 F. Supp. 2d 891 (M.D. Tenn. 2003) Fleming Co. v. FS Kids, LLC, No. 02-CV-0059E(F), 2003 WL 21382895 (W.D.N.Y. May 14, 2003) Florasynth, Inc. v. Pickholz, 750 F.2d 171 (2nd Cir. 1984) Ford v. Antwerpen Motorcars, Ltd, 2015 WL 3937607 (Md. 29 June 2015) Fosfatados Mexicanos, S.A. and Fertilizantes Mexicanos, S.A. v. Chemical Carriers, Inc. (formerly Energy Chemical Marine Inc.), 751 F. Supp. 467 (S.D.N.Y. 1990) Fotochrome Inc. v. Copal Co. Ltd, 517 F.2d 512 (2nd Cir. 1975) Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (5th Cir. 2004) Frontera Res. Azerbaijan Corp. v. State Oil Co. of the Azerbaijan Republic, 582 F.3d 393 (2nd Cir. 2009)

S mn. 109 B mn. 137 S mns 33, 107 B mns 97, 135 S mn. 107 S mn. 135

B mns 99, 181, 185 B mn. 192 S mn. 22 A mn. 47 S mns 45, 57 B mn. 75, 252, 267, 270, 274, 276, 334, 346; S mn. 136 B mn. 151 S mn. 116 B mn. 342 B mn. 140 B mn. 145 A mn. 145; B mn. 340 A mn. 127; S mns 46, 126 S mn. 21 S mn. 62 S mns 66, 67, 140 S mn. 37 S mn. 74

B mn. 19 B mns 84, 123 B mns 340, 342

889

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Table of Cases Frye v. Wild Bird Ctrs. of Am., Inc., 714 F. App’x 211 (4th Cir. 2017) Fyrnetics (Hong Kong) Ltd v. Quantum Group, Inc., 293 F.3d 1023 (7th Cir. 2002) Gabriel Capital, L.P. v. Caib Investmentbank Aktiengesellschaft, 814 N.Y.S. 2 d 66 (N.Y.App.Div. 2006) Garcia v. Wachovia Corp., 699 F.3d 1273 (11th Cir. 2012) GE Energy Power Conversion France SAS v. Outokumpu Stainless USA, LLC, 590 U.S. ___ (2020) General Re Life Corp. v. Lincoln National Life Insurance, 909 F.3d 544 (2nd Cir. 2018) Generica Ltd v. Pharmaceutical Basics, 125 F.3d 1123 (7th Cir. 1997) Genesco Inc. v. T. Kakiuchi & Co. Ltd, 815 F.2d 840 (2nd Cir. 1987) Geotech Lizenz AG v. Evergreen Systems Inc., 697 F. Supp. 1254 (E.D.N.Y. 1988) GETMA Int’l v. Republic of Guinea, 862 F.3d 4, No. 16-7087 (D.C. Cir. 2017) Glass, Molders, Pottery, Plastics & Allied Workers Int’l Union v. Excelsior Foundry Co., 56 F.3d 844 (7th Cir. 1995) Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114 (9th Cir. 2002) Glencore Ltd v. Degussa Engineered Carbons L.P., 848 F. Supp. 2d 410 (S.D.N.Y. 2012) Gold Reserve Inc. v. Bolivarian Republic of Venezuela, 146 F. Supp. 3d 112 (D.D.C. 2015) Government of the United Kingdom, see United Kingdom Green Tree Financial Corp v. Bazzle, 539 U.S. 444 (2003) Grundstad v. Ritt, 106 F.3d 201 (7th Cir. 1997) GSS Group Ltd v. National Port Authority, 680 F.3d 805 (D.C. Cir. 2012, No. 11-7093) Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476 (5th Cir. 2002) Gulf Petro Trading Co., Inc. v. Nigerian Nat’l Petroleum Corp., 288 F. Supp. 2d 783 (N.D.Tex. 2003) Gulf Petro Trading Co. v. Nigerian National Petroleum Corp., 512 F.3d 742 (5th Cir. 2008) Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100 (2nd Cir. 1991) Hall Street Associates, LLC v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008) Hardy Exploration & Production (India), Inc. v. Government of India, Ministry of Petroleum & Natural Gas, Civ. Action No. 16140 (D.D.C. June 7, 2018) Harold Leonel Pineda Lindo, see Lindo Harrison v. Nissan Motor Corp., 111 F.3d 343 (3rd Cir. 1997) Hartford Fire Ins. Co. v. Lloyd’s Syndicate 0056 ASH, No. CIV397CV00009AVC, 1997 WL 33491787 (July 2, 1997 D. Conn.) Hay Group Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3rd Cir. 2004)

890

S mn. 123 S mn. 37 B mn. 108 S mn. 51 S mn. 37 S mn. 79 B mns 227, 233, 235, 236; S mn. 140 B mns 128, 136 B mn. 346 B mn. 292; S mn. 135 S mn. 79 B mn. 340 S mn. 35 B mn. 237

S mn. 47, 83, 105 S mn. 37 A mn. 145 S mn. 66 B mn. 345 B mn. 34; S mns 115, 116 S mns 52, 138 A mn. 136; B mn. 289; S mns 79, 121, 123 S mn. 136

S mn. 21 S mn. 140 S mn. 91

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Table of Cases Hays and Co. v. Merrill Lynch, 885 F.2d 1149 (3rd Cir. 1989) Healy v. Cox Communications, Inc., 790 F.3d 1112 (10th Cir. 2015) Hellman v. Program Printing, Inc. 400 F. Supp. 915 (S.D.N.Y. 1975) Henry Schein, Inc. v. Archer and White Sales, Inc., 586 U.S. 480, 139 S. Ct. 524 (2019) Herrington v. Waterstone Mortg. Corp., 907 F.3d 502 (7th Cir. 2018) Hoeft v. MVL Group, Inc., 343 F.3d 57 (2nd Cir. 2003) Holick v. Cellular Services of N.Y, 559 F. App’x 40 (2nd Cir. 2014) Hooters of Am., Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999) Hoteles Condado Beach, La Concha and Convention Center v. Union De Tronquistas Local 901, 763 F.2d 34 (1st Cir. 1985) Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) Hudson v. ConAgra Poultry Co., 484 F.3d 496 (8th Cir. 2007) Huffman v. The Hilltop Cos., LLC, 747 F.3d 391 (6th Cir. 2014) I/S Starbory v. National Metal Converters, Inc., 500 F.2d 424 (2nd Cir. 1974) Ibeto v. Petrochem. Indus. Ltd v. M/T “Beffen”, 475 F.3d 56 (2nd Cir. 2007) Ieyoub, Attorney General ex rel. State of Louisiana v. American Tobacco Company, et al., YCA XXIII (1998), 1068 (W.D.La. 1997) In re Application of Government of Lao People’s Democratic Republic, No. 1:15-MC-0018, 2016 WL 1389764, at 5, 6 (D.N. Mar. Is. Apr. 7, 2016) In re Babcock Borsig AG, 583 F. Supp. 2d 233 (D. Mass. 2008) In re Chevron Corp., 633 F.3d 153 (3rd Cir. 2011) In re Hallmark Capital Corp., 534 F. Supp. 2d 951 (D. Minn. 2007) In re National Gypsum, 2002 WL 1359715 (N.D.Tex. 2002) In re Oxus Gold PLC, MISC No. 06-82-GEB., 2007 WL 1037387 (D.N.J. April 2, 2007) In re Pharmacy Benefit Managers Antitrust Litig., 700 F.3d 109 (3rd Cir. 2012) In re Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880 (5th Cir. 1999) In re Roz Trading Ltd, 469 F. Supp. 2d 1221 (N.D. Ga. 2006) In re Security Life Ins. Co., 228 F.3d 865 (8th Cir. 2000) In re Servotronics, Inc., No. 2:18-mc-00364-DCN, 2018 U.S. Dist. LEXIS 189423 (D.S.C. Nov. 6, 2018) In re Sussex, 781 F.3d 1065 (9th Cir. 2015) In re the Children’s Inv. Fund Found. (UK), No. 18-MC-104 (VSB), 2019 U.S. Dist. LEXIS 14862 (S.D.N.Y. Jan. 30, 2019) In re Turner Bros. Trucking Co., Inc., 8 S.W.3d 370 (Tex. App. 1999) In re U.S. Lines, Inc., 197 F.3d 631 (2nd Cir. 1999) In re Wal-Mart Wage and Hour Employment Practices Litig., 737 F.3d 1262 (9th Cir. 2013) In re White Mountain Mining Co., 403 F.3d 164 (4th Cir. 2005)

S mn. 33 S mn. 51 S mn. 136 A mn. 53; B mn. 154; S mn. 47 S mn. 107 S mns 129, 132 S mn. 21 S mn. 72 A mn. 81 S mn. 32 B mn. 137 S mn. 26 S mn. 133 S mn. 48 B mn. 150 S mn. 91

S S S S S

mn. 91 mns 91, 135 mn. 91 mn. 33 mn. 91

S mn. 51 S mn. 91 S mn. 91 S mn. 91 S mn. 91 S mn. 62 S mn. 91 B mn. 126 B mn. 304; S mn. 33 S mn. 121 S mn. 33

891

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Table of Cases In the matter of an arbitration between Marco Barbier and Shearson Lehman Hutton Inc., 752 F. Supp. 151 (S.D.N.Y. 1990) Industrial Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434 (11th Cir. 1998) Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411 (4th Cir. 2000) Int’l Shipping Agency, Inc. v. Union Empleados de Muelles de Puerto Rico, 21 F. Supp. 2d 100 (D.P.R. 1998) Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003) International Chartering Services, Inc. v. Eagle Bulk Shipping Inc., 138 F. Supp. 3d 629 (S.D.N.Y. 2015) International Standard Electric Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F. Supp. 172 (S.D.N.Y. 1990) International Trading and Industrial Investment Co. v. DynCorp Aerospace Technology AS, 763 F. Supp. 2d 12 (D.D.C. 2011) Invista S.a.r.l. v. Rhodia SA, 503 F. Supp. 2d 195 (D.D.C. 2007) Ioan Micula v. Government of Romania, Case 1:17-cv-02332-APM, Document 86 (D.D.C. Sep. 11, 2019) Ipitrade Intern., S. A. v. Federal Republic of Nigeria, 465 F. Supp. 824 (D.D.C. 1978) Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141 (2nd Cir. 1992) Iran, also see Ministry of Defence Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046 (6th Cir. 1984) Island Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313 (2nd Cir. 1973) Jacada (Europe), Ltd v. International Marketing Strategies, Inc., 401 F.3d 701 (6th Cir. 2005) Jain v. de Méré, 51 F.3d 686 (7th Cir. 1995) Jamaica Commodity Trading Co. Ltd v. Connell Rice & Sugar Co., Inc., 1991 WL 123962 (S.D.N.Y. July 3, 1991) Japan Sun Oil Co., Ltd v. M/V Maasdijk, 864 F. Supp. 561 (E.D.La. 1994) JJ. Ryan & Sons v. Rhone Poulenc Textile, SA., 863 F.2d 315 (4th Cir. 1988) JLM Industries, Inc. v. Stolt-Nielsen SA, 387 F.3d 163 (2nd Cir. 2004) John Hancock Mutual Life Ins. Co. v. Olick, 151 F.3d 132 (3rd Cir. 1998) Johnson Controls, Inc. v. Edman Controls, Inc., 712 F.3d 1021 (7th Cir. 2013) Johnson v. Western & Southern Life Ins. Co., 2015 No. 14-3183 (7th Cir. April, 2015) Jones Dairy Farm v. Local No. P-1236, United Food and Commercial Workers International Union, AFL-CIO, 760 F.2d 173 (7th Cir. 1985) Jones v. Dancel, 792 F.3d 395 (4th Cir. 2015

892

B mn. 330 B mns 33, 34, 177 S mn. 37 S mn. 77 S mn. 91 B mn. 149 B mn. 211 B mns 192, 229, 285, 286, 326, 330 B mn. 286 B mn. 133 S mn. 136 B mn. 53 B mns 50, 223, 227, 233, 236 B mn. 68 B mn. 279; S mn. 94 B mns 33, 34; S mn. 116 S mn. 39 S mn. 140 B mn. 97 S mn. 37 A mn. 44 S mn. 47 A mn. 117; B mn. 289; S mns 85, 116, 117, 129 S mn. 47 S mns 52, 138

B mn. 289

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Table of Cases Jorf Lasfar Energy Co., S.C.A. v. AMCI Export Corp., 2005 WL 3533128 (W.D.Pa. 2005), YCA XXXI (2006), 1370 Jorf Lasfar Energy Co., S.C.A. v. AMCI Export Corp., 2006 WL 1228930 (W.D.Pa. 2006), YCA XXXII (2007), 713 JPay, Inc. v. Kobel, 904 F.3d 923 (11th Cir. 2018) JS&H Const. Co. v. Richmond County Hospital Authority, 473 F.2d 212 (5th Cir. 1973) Jugometal v. Samincorp, 78 F.R.D. 504 (S.D.N.Y. 1978) Kahn Lucas Lancaster, Inc. v. Lark Intern. Ltd, 1997 WL 458785 (S.D.N.Y. 1997), YCA XXIII (1998), 1029 Kahn Lucas Lancaster, Inc. v. Lark International Ltd, 186 F.3d 210 (2nd Cir. 1999) Kaliroy Produce Co., Inc. v. Pacific Tomato Growers, Inc., 730 F. Supp. 2d 1036 (D.Ariz. 2010) Kaplan v. First Options of Chicago Inc., 19 F.3d 1503 (3rd Cir. 1994) Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357 (5th Cir. 2003) Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (5th Cir. 2004)

Karen Maritime Ltd v. Omar Int’l Inc., 322 F. Supp. 2d 224 (E.D.N.Y. 2004) Katz v. Cellco Partnership, 2015 WL 4528658 (2nd Cir. 28 July, 2015) Khan v. Parsons Global Sers. Ltd, 480 F. Supp. 2d 327 (D.D.C. 2007) Kindred Nursing Centers, L. P. v. Clark, 581 U.S. __, 137 S. Ct. 1421 (2017) Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729 F.3d 99 (2nd Cir. 2013) Kwong Kam Tat Trading Co., Ltd v. Comsup Commodities, Inc., YCA XIX (1994), 797 (D.N.J. 1992) LAIF X SPRL v. Axtel, SA de CV, 390 F.3d 194 (2nd Cir. 2004) Laminoirs-Trefilieries-Cableries de Lens, SA v. Southwire Co., 484 F. Supp. 1063 (N.D.Ga. 1980) Lamps Plus Inc. v. Varela, 586 U.S. ___, 139 S. Ct. 1407 (2019) Lander Co. v. MMP Investments, 107 F.3d 476 (7th Cir. 1997) Larry’s United Super, Inc. v. Werries, 253 F.3d 1083 (8th Cir. 2001) Legacy Wireless Services, Inc. v. Human Capital, LLC, 314 F. Supp. 2d 1045 (D. Or. 2004) Life Receivables Trust v. Syndicate 102 at Lloyd’s of London, 549 F.3d 210 (2nd Cir. 2008) Lifecare International., Inc. v. CD Medical, Inc., 68 F.3d 429 (11th Cir. 1995) Lindo v. NCL (Bahamas), Ltd, 652 F.3d 1257 (11th Cir. 2011) LJL 33rd Street Assocs. LLC v. Pitcairn Props. Inc., 725 F.3d 184 (2nd Cir. 2013) Lloyd v. Hovensa, LLC, 369 F.3d 263 (3rd Cir. 2004)

B mn. 334 B mn. 276 S mn. 107 S mn. 37 B mn. 346; S mn. 136 B mns 103, 109 S mn. 35 B mn. 307 S mns 52, 138 B mn. 181; S mn. 48 A mns 84, 118, 137, 148; B mns 12, 192, 223, 225, 236, 238, 285; S mns 106, 112, 115, 116 B mn. 331 S mn. 43 B mn. 96 S mn. 22 S mn. 131 B mn. 346 S mn. 48 B mns 199, 330 S mns 47, 107 B mns 33, 76 S mn. 66 S mn. 10 S mn. 91 S mn. 63 B mn. 135; S mns 11, 96 S mn. 128 S mn. 43

893

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Table of Cases Local 2322, International Brotherhood of Electrical Workers v. Verizon New England, Inc., 464 F.3d 93 (1st Cir. 2006) LoRoad, LLC v. Global Expedition Vehicles, LLC, No. 14-2636 (8th Cir., June 1, 2015) Louis Dreyfus Negoce SA v. Blystad Shipping & Trading, Inc., 252 F.3d 218 (2nd Cir. 2001) Louisiana Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626 F.3d 156 (2nd Cir. 2010) M&C Corp. v. Erwin Behr GmbH & Co. KG, 87 F.3d 844 (6th Cir. 1996) M&C Corp. v. Erwin Behr GmbH & Co. KG, 326 F.3d 772 (6th Cir. 2003) Ledee v. Ceramiche Ragno, 528 F. Supp. 243 (D.C. Puerto Rico 1981) Management & Technical Consultants SA v. Parsons-Jurden International Corp., 820 F.2d 1531 (9th Cir. 1987) Mangistaumunaigaz Oil Production Association v. United World Trade, Inc., No. 96-WY-1290-WD (D.Colo. June 17, 1997) Marine Products Exports Corp. v. M.T. Globe Galaxy, 977 F.2d 66 (2nd Cir. 1992) Maritima De Ecologia, S.A. de C.V. v. Sealion Shipping Ltd, 2011 WL 2671541 (S.D.N.Y.) Marmet Health Care Center Inc. v. Brown, 565 U.S. 530, 132 S. Ct. 1201 (2012) Martin Spier, see Spier Matter of Arbitration Between Trans Chemical Ltd and China Nat. Machinery Import and Export Corp., 978 F. Supp. 266 (S.D.Tex. 1997) MBC Financial Services Ltd v. Boston Merchant Financial, Ltd, 704 F. App’x 14 (2nd Cir. 2017) MBNA America Bank v. Hill, 436 F.3d 104, 108 (2nd Cir. 2006) McClatchy Newspapers v. Central Valley Typographical Union No. 46, 686 F.2d 731 (9th Cir. 1982) McCreary Tire & Rubber Co. v. CEAT, 501 F.2d 1032 (3rd Cir. 1974) McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017) McGovern v. U.S. Bank N.A., 362 F. Supp. 3d 850 (S.D.Cal. 2019) McKool Smith, P.C. v. Curtis Int’l, Ltd, 650 F. App’x 208 (5th Cir. 2016) Meadows Indemnity Company Limited v. Baccala & Shoop Insurance Services, Inc., 760 F. Supp. 1036 (E.D.N.Y 1991) Medicine Shoppe Intern., Inc. v. Turner Invs., Inc., 614 F.3d 485 (8th Cir. 2010) Middleby Corp. v. Hussmann Corp. 962 F.2d 614 (7th Cir. 1992) Miller UK Ltd v. Caterpillar, Inc., 17 F. Supp. 3d 711 (N.D. Ill. 2014) Minera Alumbrera Ltd v. Fluor Daniel, Inc., 1999 WL 269915 (S.D.N.Y. 1999)

894

S mn. 79 S mn. 26 A mn. 35; B mn. 137 S mn. 51 B mns 285, 326; S mn. 115 S mn. 111 B mn. 85 B mn. 242 B mn. 136 S mn. 68 S mn. 35 S mn. 4

B mn. 338

A mn. 2 S mn. 33 S mn. 79 B mns 93, 149; L mn. 78; S mn. 99 B mn. 305 B mn. 305 S mn. 123 B mn. 129 S mn. 123 S mn. 136 A mn. 85 B mn. 133

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Table of Cases Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems, Inc., 29 F. Supp. 2d 1168 (S.D.Cal. 1998) Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Systems, Inc., 665 F.3d 1091 (9th Cir. 2011) Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., 887 F.2d 1357 (9th Cir. 1989) Mintze v. Am. Gen. Fin. Serv. (In re Mintze), 434 F.3d 222 (3rd Cir. 2006) Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) Monegasque de Reassurances S.A. M. v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2nd Cir. 2002) Monster Energy Company v. City Beverages, LLC, D.C. No. 5:17cv-00295-RGK-KK (9th Cir. 2019) Moscow Dynamo v. Ovechkin, 412 F. Supp. 2d 24 (D.D.C 2006) Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) Motorola Credit Corp. v. Kemal Uzan, 388 F.3d 39 (2nd Cir. 2004) Mountain Valley Prop., Inc. v. Applied Risk Servs., Inc., 863 F.3d 90 (1st Cir. 2017) Muriithi v. Shuttle Express, Inc., 712 F.3d 173 (4th Cir. 2013) Nagrampa v. MailCoups, Inc., 469 F.3d 1257 (9th Cir. 2006) Nat’l Dev. Co. v. Khashoggi, 781 F. Supp. 959 (S.D.N.Y. 1992), YCA XVIII (1993), 506 National Broadcasting Co. v. Bear Stearns & Co., 165 F.3d 184 (2nd Cir. 1999) National Football League Management Council v. National Football League Players Association, 125 F. Supp. 3d 449 (S.D.N.Y. 2015) National Iranian Oil Co. v. Ashland Oil, Inc., 817 F.2d 326 (5th Cir. 1987) National Oil Corp. v. Libyan Sun Oil Co., 733 F. Supp. 800 (D.Del. 1990) National Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129 (2nd Cir. 1996) New Prime Inc. v. Oliveira, 586 U.S. ___, 139 S. Ct. 532 (2019) New Regency Prod. Inc. v. Nippon Herald Films, Inc., 501 F.3d 1101 (9th Cir. 2007) Nghiem v. NEC Electronic, Inc., 25 F.3d 1437 (9th Cir. 1994) Nicor Int’l Corp. v. El Paso Corp., 318 F. Supp. 2d 1160 (S.D. Fla. 2004) Olson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 51 F.3d 157 (8th Cir. 1995) OMG, L.P. v. Heritage Auctions, Inc., 2015 WL 2151779 (5th Cir. May 8, 2015) Omni Tech Corp. v. MPC Solutions Sales LLC, 432 F.3d 797 (7th Cir. 2005)

B mns 50, 242

B mn. 50

B mns 31, 50 S mn. 33 A mns 31, 37; B mns 129, 135, 137, 296, 301, 310, 331; S mns 9, 33, 34, 38, 96 B mn. 341 S mn. 61 B mn. 52 B mn. 97; S mn. 22 B mns 124, 211 S mn. 123 S mn. 83 A mn. 37; S mns 52, 72, 138 B mn. 235 S mn. 91 B mn. 237

B mn. 85; S mn. 43 B mn. 330 S mn. 47 S mns 10, 11 S mn. 64 B mn. 301 S mn. 116 S mn. 59 S mn. 138 S mn. 21

895

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Table of Cases Opalinksi v. Robert Half Int’l, Inc., 761 F.3d 326 (3rd Cir. 2014) Opals on Ice Lingerie v. Body Lines, Inc., 320 F.3d 362 (2nd Cir. 2003) Oracle America, Inc. v. Myriad Group A. G., 724 F.3d 1069 (9th Cir. 2013, No. 11-17186), CLOUT Case No. 1727 Oriental Commercial & Shipping Co., Ltd v. Rosseel, N.V., 769 F. Supp. 514 (S.D.N.Y. 1991) Ortho Pharmaceutical Corp. v. Amgen Inc., 882 F.2d 806 (3rd Cir. 1989) Oscanyan v. Arms Co., 103 U.S. 261 (1980) Outokumpu Stainless USA, LLC v. Converteam SAS, 902 F.3d 1316 (11th Cir. 2018, No. 17-10944), certiorari granted 139 S.Ct. 2776 (2019) Outokumpu Stainless USA, also see GE Energy Power Conversion France SAS Overseas Cosmos, Inc. v. NR Vessel Corp., 1997 WL 757041, 1 (S.D.N.Y. 1997), YCA XXIII (1998), 1096 Oxford Health Plans LLC v. Sutter, 568 U.S. 1065 (2013) Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) P.T. Reasuransi Umum Indonesia v. Evanston Insurance Co., 1992 WL 400733 (S.D.N.Y. 1992), YCA XIX (1994), 788 Pacific Reinsur. Mgmt. Corp. v. Ohio Reinsur. Corp., 935 F.2d 1019 (9th Cir. 1991) Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Technologies, Inc., 369 F.3d 645 (2nd Cir. 2004) Parsons & Whittemore Overseas Co. Inc. v. Société Générale de L’industrie du Papier, 508 F.2d 969 (2nd Cir. 1974) Phoenix Aktiengesellschaft v. Ecoplas, Inc., 391 F.3d 433 (2nd Cir. 2004) Podar Brothers v. ITAD Associates Ltd, 636 F.2d 75 (4th Cir. 1981) PoolRe Insurance Corp. v. Organizational Strategies, Inc., 783 F.3d 256 (5th Cir. 2015) Positive Software Solutions, Inc. v. New Century Mortgage Corp., 436 F.3d 495 (5th Cir. 2006) Pre-Paid Legal Services, Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015) Prima Paint Corp. v. Flood & Conklin Mfg, 388 U.S. 395 (1967) Productos Mercantiles e Industriales, SA v. Fabergé USA, Inc. and others, 23 F.3d 41 (2nd Cir. 1994) Prudential-Bache Securities, Inc. v. Depew, 814 F. Supp. 1081 (M.D.Fla. 1993) Publicis Communication v. Publicis SA, True North Communications Inc., 206 F.3d 725 (7th Cir. 2000) Publishing Co., LLC v. Management Planning, Inc., 390 F.3d 684 (10th Cir. 2004) Puliyurumpil Mathew Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009) R.J. Griffin & Co. v. Beach Club II Homeowners Ass’n, 384 F.3d 157 (4th Cir. 2004)

896

S mn. 107 S mn. 138 A mn. 127; S mn. 46 B mn. 279 L mn. 78 B mn. 332 B mn. 133; S mn. 37

B mns 172, 228 S mn. 107 A mn. 127; S mns 107, 126 B mn. 261 B mn. 68 S mn. 48 B mns 12, 181, 223, 225, 234, 236, 242, 252, 307, 310, 326 S mn. 133 B mn. 95 A mns 29, 132 S mn. 58 A mn. 39 A mn. 31; S mn. 26 B mn. 76 S mn. 85 B mns 62, 65 S mn. 21 B mn. 135 S mn. 37

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Table of Cases Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013) Renard v. Ameriprise Fin. Servs., Inc., 778 F.3d 563 (7th Cir. 2015) Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 130 S. Ct. 2772 (2010) Republic of Argentina v. BG Group PLC, 764 F. Supp. 2d 21 (D.C. Cir. 2011) Rhone Mediterranee Compagnia Francese di Assicurazioni e Riassicurazioni v. Lauro, 712 F.2d 50 (3rd Cir. 1983) Riccard v. Prudential Insurance Co., 307 F.3d 1277 (11th Cir. 2002) Riley v. Kingsley Underwriting Agencies, Ltd, 969 F.2d 953 (10th Cir. 1992) Rintin Corp., SA v. Domar, Ltd, No. 05-14092, (11th Cir. 2007), CLOUT Case No. 1726 Roberson v. Charles Schwab & Co., 339 F. Supp. 2d 1337 (S.D. Fla. 2003) Rodriguez de Quijas v. Shearson/American Express Inc., 490 U.S. 477 (1989) Roso-Lino Beverage Dist., Inc. v. Coca-Cola Bottling Co., 749 F.2d 124 (2nd Cir. 1984) Ross Dress for Less, Inc. v. VIWY, LP, 570 F. App’x 123 (3rd Cir. 2014) Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690 (4th Cir. 2012) RZS Holdings AVV v. PDVSA Petroleos, SA, 598 F. Supp. 2d 762 (E.D.Va. 2009) San Martine Compania De Navegacion, SA v. Saguenay Terminals Limited, 293 F.2d 796 (9th Cir. 1961) Sanchez v. Elizondo, 878 F.3d 1216 (9th Cir. 2018) Satcom Int’l Group PLC v. Orbcomm Int’l Partners, L.P., 49 F. Supp. 2d 331 (S.D.N.Y.1999) Sauer-Getriebe KG v. White Hydraulics, Inc., 715 F.2d 348 (7th Cir. 1983) Scandinavian Reins. Co. v. St. Paul Fire & Marine Ins. Co., 668 F.3d 60 (2nd Cir. 2012) Schafer v. Multiband Corp., 551 Fed. Appx. 814 (6th Cir. 2014) Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974) Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994) SCL Basilisk AG v. Agribusiness United Savannah Logistics LLC, 14 November 2017, 875 F.3d 609 (11th Cir. 2017), CLOUT Case No. 1725 Sea Bowld Marine Group LDC v. Oceanfast Pty, Ltd, 432 F. Supp. 2d 1305 (S.D.Fla. 2006) Seacoast Motors of Salisbury, Inc. v. DaimlerChrysler Motors Corp., 271 F.3d 6 (1st Cir. 2001) Sedco, Inc. v. Petroleos Mexicanos – Mexican National Oil Co., 767 F.2d 1140 (5th Cir. 1985) Seed Holdings, Inc. v. Jiffy International AS, 5 F. Supp. 3d 565 (S.D.N.Y. 2014)

S mn. 107 S mn. 123 A mns 53, S mns 36, 47 B mn. 307 B mn. 181 S mn. 117 B mns 96, 97 A mn. 125 S mn. 117 B mn. 302; S mn. 34 S mn. 100 A mn. 48 S mn. 51 B mns 33, 34; S mn. 116 S mn. 112 S mn. 123 S mn. 45 S mn. 100 B mns 33, 34; S mn. 59 S mn. 123 B mns 296, 302; S mns 9, 33, 38 S mn. 63 A mn. 107

B mn. 96 B mn. 301 B mn. 95 B mns 42, 43

897

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Table of Cases Seetransport Wiking Trader Schiffahrtsgesellschaft mbH & Co., Kommanditgesellschaft v. Navimpex, 793 F. Supp. 444 (S.D.N.Y. 1992) Seetransport Wiking Trader Schiffahrtsgesellschaft MBH & Co. v. Navimpex Centrala Navala, 989 F.2d 572 (2nd Cir. 1993) Seetransport Wiking Trader Schiffahrtsgesellschaft mbH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala and Unzinexportimport, 28 F.3d 79 (2nd Cir. 1994), YCA XX (1995), 988 Sembawang Shipyard, Ltd v. Charger, Inc., 955 F.2d 983 (5th Cir. 1992) Servotronics, Inc. v. The Boeing Co., No. 18-2454 (4th Cir. 2020) Sharp Corp. v. Hisense USA Corp., 292 F. Supp. 3d 157 (D.D.C. 2017) Shearson/American Express, Inc. v. McMahon, 482 U.S. 220 (1987) Sherrock Brothers Inc. v. Daimler Chrylser Motors Co. LLC, 260 F. App’x 497 (3rd Cir. 2008) Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) Singh v. Carnival Corp., 550 Fed.App’x 683 (11th Cir. 2013) Singh v. Uber Technologies, Inc., Case No. 17-1397 (3rd Cir. Sept. 11, 2019) Slaney v. The International Amateur Athletic Federation, 244 F.3d 580 (7th Cir. 2001) Smith v. Am. Arbitration Ass’n, 233 F.3d 502 (7th Cir. 2000) Smith/Enron Cogeneration Ltd Partnership, Inc. v. Smith Cogeneration Intern., Inc., 198 F.3d 93 (2nd Cir. 1999) Société Géneralé de Surveillance, S.A. v. Raytheon European Management and System Co., 643 F.2d 863 (1st Cir. 1981) Société Nationale Algérienne pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbures v. Distrigas Corp, 80 B.R. 606 (D.Mass. 1987) Sonera Holding B.V. v. Cukurova Holding A.S., 895 F. Supp. 2d 513 (S.D.N.Y. 2012) Sourcing Unlimited, Inc. v. Asimco Int’l, Inc., 526 F.3d 38 (1st Cir. 2008) Southland Corp. v. Keating, 465 U.S. 1 (1985) Spahr v. Secco, 330 F.3d 1266 (10th Cir. 2003) Sparling v. Hoffman Constr. Co., Inc., 864 F.2d 635 (9th Cir. 1988) Spector v. Torenberg, 852 F. Supp. 201 (S.D.N.Y. 1994) Sphere Drake Ins. Ltd v. All American Life Ins. Co., 307 F.3d 617 (7th Cir. 2002) Sphere Drake Ins. plc v. Marine Towing, Inc., 1992 WL 404345 (E.D.La. 1992), YCA XIX (1994), 792 Sphere Drake Insurance plc v. Marine Towing, Inc., 16 F.3d 666 (5th Cir. 1994) Spier v. Calzaturificio S.p.A., 663 F. Supp. 871 (S.D.N.Y. 1987) Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440 (3rd Cir. 2003) Stedor Enters., Ltd v. Armtex, Inc., 947 F.2d 727 (4th Cir. 1991)

898

B mn. 338

B mn. 345; S mn. 133 B mn. 350

B mn. 338 S mn. 91 B mns 68, 285, 338 A mn. 31; B mn. 302; S mn. 33 A mn. 21 A mn. 93; S mn. 99 S mn. 96 S mn. 11 B mns 52, 147, 225 S mn. 66 B mn. 82 S mn. 49 B mn. 304

B mns 236, 342 S mn. 37 S mns 4, 22 A mn. 23 S mn. 43 B mns 326, 335 S mns 58, 59, 63 B mn. 107 B mn. 103 B mns 31, 270, 291, 334, S mn. 135 B mns 103, 107, 111 S mn. 51

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Table of Cases Stemcor USA Inc. v. CIA Siderurgica do Para Cosipar, 927 F.3d 906 (5th Cir. 2019) Sterling China Co. v. Glass, Molders, Pottery, Plastics & Allied Workers Local No. 24, 357 F.3d 546 (6th Cir. 2004) Stolt-Nielsen SA v. Animal Feeds International Corp., 559 U.S. 662 (2010) Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir. 1993) SuperMedia v. Affordable Electric, Inc., 565 F. App’x 144 (3rd Cir. 2014) Supreme Oil Co. v. Abondolo, 568 F. Supp. 2d 401 (S.D.N.Y. 2008) Sylvain Ledee, see Ledee Tatneft v. Ukraine, 301 F. Supp. 3d 175 (D.D.C. 2018) Teamsters Local Union No. 436 v. The J.M. Smucker Co., 541 Fed. App’x. 529 (6th Cir. 2013) Technetronics, Inc. v. Leybold-Graeus GmbH et al., 1993 WL 197028 (E.D.Pa. 1993), YCA XIX (1994), 843 Teck Metals, Ltd v. Certain Underwriters at Lloyd’s, London, No. 05-411, 2010 WL 252804, (E.D. Wash. Jan. 19, 2010) Telecom Italia SpA v. Wholesale Telecom Corp., 248 F.3d 1109 (11th Cir. 2001) Telecordia Tech Inc. v. Telkom SA Ltd, 458 F.3d 172 (3rd Cir. 2006) Telenor Mobile Communications AS v. Storm LLC, 584 F.3d 396 (2nd Cir. 2009), CLOUT Case No. 1730 Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16 (2nd Cir. 1997) Tenaska Energy Inc. v. Ponderosa Pine Energy, 437 S.W.3d 518 (Tex. 2014) Teradyne, Inc. v. Mostek Corp., 797 F.2d 43 (1st Cir. 1986) Termorio SA E.S.P. v. Electrificadora Del Atlantico S.A. E.S.P., 421 F. Supp. 2d 87 (D.D.C. 2006) Termorio S.A. E.S.P. v. Electranta, S.P., 487 F.3d 928 (D.C. Cir. 2007) Thai-Lao Lignite (Thailand) Co., Ltd v. Government of the Lao People’s Democratic Republic, 997 F. Supp. 2d 214 (S.D.N.Y. 2014) Thai-Lao Lignite (Thailand) Co., Ltd v. Government of the Lao People’s Democratic Republic, 864 F.3d 172 (2nd Cir. 2017) THI of NM at Vida Encantada, LLC v. Lovato, 864 F.3d 1080 (10th Cir. 2017) Thomas Kinkade Co. v. White LLC, 711 F.3d 719 (6th Cir. 2013) Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009) Thomson-CSF, SA v. Am. Arbitration Ass’n, 64 F.3d 773 (2nd Cir. 1995) Tillman v. Macy’s, Inc., 735 F.3d 453 (6th Cir. 2013) Tinder v. Pinkerton Sec., 305 F.3d 728 (7th Cir. 2002) Tokura Construction Co. v. Corporacion Raymond, 533 F. Supp. 1274 (S.D.Tex. 1982) Torres v. Simpatico, Inc., 2015 WL 1314863 (8th Cir. 25 Mar. 2015) Toyo Tire Holdings of Americas Inc. v. Cont’l Tire N. Am., Inc., 609 F.3d 975 (9th Cir. 2010)

B mns 84, 93 S mn. 79 A mns 22, 127; S mns 22, 106, 107, 117, 123, 126 S mn. 37 S mn. 51 S mn. 86 B mn. 342 S mn. 129 B mn. 134 S mn. 48 B mn. 137 B mn. 340 A mns 135, 151, B mns 211, 307 A mn. 81; B mn. 236 S mn. 60 S mn. 100 B mn. 342 S mn. 135 B mns 291, 292 B mn. 291; S mn. 135 S mn. 123 S mn. 61 B mn. 135; S mns 11, 96 S mn. 37 S mn. 37 S mn. 35 S mn. 136 S mn. 36 B mn. 93

899

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Table of Cases Transocean Offshore Gulf of Guinea VII v. Erin Energy Corp., YCA XLIII (2018), 722 (S.D. Tex. 2018) Transrol Navegacao v. Redirekommanditselskaber Merc Scandia XXIX, 782 F. Supp. 848 Travelport Global Distribution Systems B.V. v. Bellview Airlines Ltd, No. 12 Civ. 3483(DLC) 2012 WL 3925856 (S.D.N.Y. Sep. 12, 2012) Tully Constr. Co., Inc. v. Canam Steel Corp., 684 F. App’x. 24 (2nd Cir. 2017) Ukrvneshprom State Foreign Economic Enterprise v. Tradeway, Inc., 1996 WL 107285 (S.D.N.Y. 1996), YCA XXII (1997), 958 United Kingdom (Government of the) v. Boeing Co., 998 F.2d 68 (2nd Cir. 1993) United Paperworkers International Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987) United Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574 (1960) Upstate Shredding, LLC v. Carloss Well Supply Co., 84 F. Supp. 2d 357 (N.D.N.Y. 2000) US Ship Management, Inc. v. Maersk Line, Ltd, 188 F. Supp. 2d 358 (S.D.N.Y. 2002) USA v. Panhandle Eastern Corp., 118 FRD 346 (D.Del. 1988) Veleron Holding, BV v. Morgan Stanley, 117 F. Supp. 3d 404 (S.D.N.Y. 2014) Victrix Steamship Co., SA v. Salen Dry Cargo A.B., 825 F.2d 709 (2nd Cir. 1987) Vimar Seguros y Reaseguros v. M/V Sky Reefer, 515 U.S. 528 (1995) Visiting Nurse Ass’n of Florida, Inc. v. Jupiter Medical Center, Inc., 154 So.3d 1115 (Fla. 2014) Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468 (1989) VRG Linhas Aereas S.A. v. MatlinPatterson Global Opportunities Partners II L.P., 717 F.3d 322 (2nd Cir. 2013) VRG Linhas Aereas S/A v. MatlinPatterson Global Opportunities Partners II L.P., 605 F. App’x 59 (2nd Cir. 2015) Wachovia Securities, LLC v. Brand, 671 F.3d 472 (4th Cir. 2012) Walker v. Builddirect.com Technologies, Inc., WL 3429364 (10th Cir. 2015) Waterside Ocean Nav. Co., Inc. v. International Nav. Ltd, 737 F.2d 150 (2nd Cir. 1984) Weirton Medical Center Inc. v. Community Health Systems Inc., Civ. Action No. 5:15CV132 (N.D.W. Va. 12 Dec. 2017) Weiss v. Sallie Mae, Inc., No. 18-2362 (2nd Cir. Sept 12, 2019) Wells Fargo Advisors, LLC v. Sappington, 2018 WL 1177230 (2nd Cir. 2018) Willis v. Shearson/American Express, Inc., 569 F. Supp. 821 (M.D. N.C. 1983) Willman Suazo v. NCL (Bahamas), Ltd, 822 F.3d 543 (11th Cir. 2016)

900

A mn. 144 B mn. 147 A mn. 48; S mn. 39

S mn. 123 B mn. 315 S mn. 106 S mn. 122 S mn. 37 S mn. 37 A mn. 67 S mn. 73 S mn. 73 B mn. 315 S mn. 96 B mn. 289 A mn. 22; S mns 4, 19, 22, 37 A mn. 127; S mn. 126 A mn. 53 B mn. 289 S mn. 37 B mn. 318 A mn. 121 A mn. 136; S mn. 123 S mn. 107 B mn. 330 B mn. 97

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Table of Cases Wise v. Wachovia Securities, LLC, 450 F.3d 265 (7th Cir. 2006) Wolsey, Ltd v. Foodmaker, Inc., 144 F.3d 1205 (9th Cir. 1998) Yang v. Majestic Blue Fisheries, LLC, 876 F.3d 996 (9th Cir. 2017) Yasuda Fire & Marine Insurance Company of Europe v. Continental Casualty Company, 37 F.3d 345 (7th Cir. 1994) Yukos Capital s.a.r.l. v. OAO Samaraneftegaz, 963 F. Supp. 2d 289 (S.D.N.Y. 2013) Yusuf Ahmed Alghanim, see Alghanim Zeiler v. Deitsch, 500 F.3d 157 (2nd Cir. 2007) Zurich American Insurance Co. v. Team Tankers A.S., 811 F.3d 584 (2nd Cir. 2016) Venezuela Trib. Supr., YCA XXXVI (2011), 496

S mn. 128 S mn. 21 B mns 103, 132; S mn. 37 B mns 62, 68; S mn. 101 B mn. 231

B mns 34, 65 B mns 33, 34, 289

B mn. 154

901

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Index A AAA U.S.: S mns 13, 20 AAA Code of Ethics U.S.: S mn. 61 ad hoc arbitration Introduction/ML: A mns 12, 64; NYC: B mn. 51 adjournment of enforcement, see enforcement (stay) advance on costs, see costs advantages and disadvantages compared to litigation Introduction/ML: A mns 14–21 agency, see arbitration agreement (agency); arbitration agreement (form for power of attorney); power of attorney alter ego doctrine Introduction/ML: A mn. 46; France: I mn. 31; India: L mn. 35; U.S.: S mn. 37 amiable compositeur, see arbitral award (ex aequo et bono) amicus curiae intervention in arbitral proceedings Belgium: E mn. 103; U.S.: S mn. 106 annulment proceedings, see setting aside applications anti-arbitration injunctions Introduction/ML: A mn. 55; Hong Kong: K mn. 38; India: L mn. 45; Netherlands: M mn. 43; Switzerland: R mn. 67; U.S.: S mns 49, 102 anti-suit injunctions – in general Introduction/ML: A mns 54–56; NYC: B mn. 91; Austria: D mn. 54; England: H mns 51–52, 110; Germany: J mns 35, 78; Hong Kong: K mn. 37; India: L mn. 45; Sweden: Q mn. 34; Switzerland: R mn. 67; US: S mn. 48 – under the Brussels Ia Regulation, see Brussels Ia Regulation (anti-suit injunctions) anti-trust disputes, see arbitrability (competition law disputes) and cartel damage claims appeal on a point of law, see arbitral award (appeal on a point of law) appearance of bias, see challenge of arbitrators (appearance of bias) appointment, see arbitral tribunal (constitution) arbitrability (objective) Introduction/ML: A mns 31, 32, 37; NYC: B mns 128–129, 217, 294–306; Austria: D mns 30–32; Belgium: E mns 27–34; Brazil: F mn. 22; China: G mns 53–55; England: H mn. 28; France: I mns 25–28; Germany: J mns 17, 21–22; Hong Kong: K mns 22–23; India: L mns 28–29; Netherlands: M mns 26–31;

Russian Federation: N mns 29–38; Singapore: O mns 31–33; Spain: P mns 20–21; Sweden: Q mn. 19; Switzerland: R mns. 40–43; U.S.: S mns 31–34 – competition law disputes Introduction/ML: A mn. 31; NYC: B mn. 301; Austria: D mn. 32; France: I mn. 25; India: L mn. 28; Netherlands: M mn. 28; U.S.: S mn. 33 fn. 60 also see cartel damage claims – corporate disputes Austria: D mn. 32; Brazil: F mn. 3; Netherlands: M mn. 30; Russian Federation: N mns 33–38 – consumer disputes, see consumer disputes – employment disputes NYC: B mn. 305; Austria: D mn. 6; Brazil: F mn. 22; France: I mn. 27; Germany: J fn. 76; India: L mn. 28; Netherlands: M mn. 31; Russia: N mn. 31; U.S.: S mn. 29 – insolvency-related claims Introduction/ML: A mn. 45 also see insolvency – law governing arbitrability Introduction/ ML: A mns 27, 31; NYC: B mns 129, 298 – public policy, see public policy (arbitrability) arbitrability (subjective), see capacity to arbitrate arbitral award – appeal on a point of law England: H mns 137–142; Hong Kong: K mns 109–117 – consent awards: – in general Introduction/ML: A mn. 94; Austria: D mn. 84; France: I mn. 65; Germany: J mn. 62; Switzerland: R mn. 100 – enforceable under NYC NYC: B mn. 44 also see Singapore Convention – correction, interpretation of arbitral awards Introduction/ML: A mn. 116; Austria: D mn. 105; Belgium: E mns 105–108; Brazil: F mn. 69; China: G mn. 133; England: H mns 117–119; France: I mns 82–84; Germany: J mn. 86; Hong Kong: K mns 94–98; India: L mns 88–89; Netherlands: M mns 101–104; Russian Federation: N mn. 92–93; Singapore: O mn. 98; Spain: P mn. 74; Sweden: Q mn. 70; Switzerland: R mn. 122; U.S.: S mns 110–113 – costs of arbitral proceedings, see costs – enforcement of arbitral awards, see enforcement – ex aequo et bono awards Introduction/ML: A mns 97, 85; NYC: B mns 249–250; Austria: D mn. 95; Belgium: E mns 91, 118;

903

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Index Brazil: F mn. 61; England: H mn. 108; France: I mn. 70; Germany: J mn. 74; Hong Kong: K mn. 74; India: L mn. 77; Netherlands: M mn. 90; Spain: P mn. 62; Sweden: Q mn. 61; Switzerland: R mn. 109; U.S.: S mn. 94 – form of arbitral awards Introduction/ML: A mn. 92; Austria: D mn. 81; Belgium: E mn. 72; Brazil: F mn. 54; China: G mn. 105; England: H mn. 97; France: I mn. 61; Germany: J mn. 61; Hong Kong: K mn. 64; India: L mn. 66; Netherlands: M mn. 76; Russian Federation: N mn. 67; Singapore: O mn. 70; Spain: P mn. 56; Sweden: Q mns 75, 82; Switzerland: R mns 97–99; U.S.: S mns 75, 76 – infra petita Introduction/ML: A mn. 125; NYC: B mns 251–253; Switzerland: S mn. 125 – interim award NYC: B mns 64–66 – interpretation, see arbitral award (correction and interpretation) – law governing the dispute Introduction/ ML: A mns 96–100; Austria: D mns 91–97; Belgium: E mns 90–95; Brazil: F mns 61–62; China: G mns 116–120; England: H mns 108–109; France: I mns 70–71; Germany: J mns 74–76; Hong Kong: K mns 73–75; India: L mns 76–77; Netherlands: M mns 90–93; Russian Federation: N mns 77–82; Singapore: O mns 78–73; Spain: P mns 62–65; Sweden: Q mns 61–63; Switzerland: S mns 108–111; U.S.: S mns 93–96 – partial award NYC: B mn. 63 – reasons – requirement to state reasons in award Introduction/ML: A mn. 92; Belgium: E mn. 72; India: M mn. 67; Netherlands: M mn. 76; Russian Federation. N mn. 67; Singapore: O mns 66, 70; Switzerland: R mn. 97; U.S.: S mn. 75 – setting aside/refusal of enforcement for failure to state reasons or insufficient reasons NYC: B mn. 325; Belgium: E mn. 72 fn. 201; France: I mn. 98; Hong Kong: K mn. 129; Netherlands: M mns 76, 109, 118; Sweden: Q mn. 56 – res judicata effect of arbitral awards, see res judicata and public policy (res judicata) – review, see setting aside application – ultra petita Introduction/ML: A mns 125, 135; NYC: B mn. 251; Austria: D mn. 113; Belgium: E mn. 118; France: I mn. 96; Switzerland: R mn. 125 arbitral institutions Introduction/ML: A mns 11–13 arbitral tribunal

904

– appointment, see arbitral tribunal (constitution) – challenge, see challenge of arbitrators – constitution Introduction/ML: A mn. 66; NYC (improper constitution as defence): B mns 255–263; Austria: D mns 63–66; Belgium: E mns 46–47; China: G mns 84–85; England: H mns 71–73; France: I mns 47–46; Germany: J mn. 42; Hong Kong: K mns 46–50; India: L mns 46–48; Netherlands: M mns 48–55; Russian Federation: N mns 52–55; Singapore: O mns 49–51; Spain: P mn. 44; Sweden: Q mns 40–41; Switzerland: R mns 78–80; U. S.: S mns 56–59 – discretion as to arbitral proceedings Introduction/ML: A mns 72, 80; Austria: D mns 73–74; Brazil: F mn. 47; England: H mn. 80; France: I mns 55, 67; Germany: J mn. 50; Singapore: O mn. 49; Sweden: Q mn. 47; U.S.: S mns 69, 128 also see evidence (discretion) – failure or impossibility to act Austria: D mn. 72; Belgium: E mns 58–59; Brazil: F mn. 46; France: I mn. 54; Germany: J mn. 49; Hong Kong: K mn. 56; India: L mns 55–56; Netherlands: M mns 64–65; Russian Federation: N mn. 61; Singapore: O mn. 56; Spain: P mn. 50; Sweden: Q mn. 46; Switzerland: R mns 89–90; U.S.: S mns 67–68 – functus officio U.S.: S mns 79, 111 arbitrariness, arbitrary award Introduction/ ML: A mn. 136; NYC: B mns 245, 326; Germany: J mn. 98; Spain: P mn. 88; Switzerland: R mn. 124; U.S.: S mn. 122 arbitration agreement – advantages and disadvantages compared to litigation Introduction/ML: A mns 14–21 – alter ego, see alter ego doctrine – agency Introduction/ML: A mn. 26; NYC: B mns 131, 205 – arbitrability, see arbitrability; capacity – assignee, assignment Introduction/ML: A mns 33, 45; NYC: B mn. 134; Brazil: F mn. 28; England: H mn. 39; Germany: J mn. 29; Hong Kong: K mn. 27; India: L mn. 35; Netherlands: M mn. 37; Singapore: O mn. 38; Sweden: Q mn. 24; Switzerland: R mns 53–54; U.S.: S mn. 37 – capacity, see capacity – construction, see arbitration agreement (interpretation) – corporate by-laws and statutes NYC: B mn. 48; Austria: D mn. 46; Germany: J mns 27, 30; India: L mn. 35; Spain: P mn. 33; Switzerland: R mn. 58 also see arbitrability (corporate disputes)

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Index – damages for breach, see damages – defence to litigation, see exceptio arbitri – drafting checklist Introduction/ML: A mns 63–64 – email Introduction/ML: A mn. 33; NYC: B mns 113–118; China: G mn. 56; Hong Kong: K mn. 24; Spain: P mn. 23; U.S.: S mn. 35 – form requirements Introduction/ML: A mns 33–34; NYC: B mns 100–118; Austria: D mns 33–36; Belgium: E mns 35–37; Brazil: F mns 23–25; China: G mn. 56; England: H mn. 29–33; France: I mn. 29; Germany: J mns 23–25; Hong Kong: K mns 24–25; India: L mns 30–31; Netherlands: M mns 32–33; Russian Federation: N mn. 39; Singapore: O mns 34–35; Spain: P mns 22–27; Sweden: Q mns 20–22; Switzerland: R mns 44–48; U.S.: S mn. 35 – form requirements for power of attorney: Introduction/ML: A mn. 33; Switzerland: R mn. 48 – governing law Introduction/ML: A mns 24–27; NYC: B mn. 122–125; Austria: D mn. 28; Belgium: E mns 22; Brazil: F mn. 20; England: H mns 22–25; France: I mn. 21; Germany: J mns 14–18; Hong Kong: K mn. 20; India: L mns 23–25; Netherlands: M mns 20–21; Russian Federation: N mn. 27; Singapore: O mn. 28; Spain: P mn. 14; Sweden: Q mns 16–17; Switzerland: R mns 34–36; U.S.: S mn. 27 – group of companies doctrine, see group of companies doctrine – incorporation by reference NYC: B mns 110–112; Austria: D mn. 33; Belgium: E mn. 37; England: H mn. 34; Switzerland: R mn. 47; U.S.: S mn. 37 – interpretation Introduction/ML: A mns 42–50; NYC: B mns 136–137; Austria: D mns 40–50; Belgium: E mns 39–43; England: H mns 36–47; France: I mns 31–34; Germany: J mns 28–32; Hong Kong: K mns 27–30; India: L mns 33–38; Netherlands: M mns 37–40; Russian Federation: N mns 41–47; Singapore: O mns 38–42; Spain: P mns 31–37; Sweden: Q mns 24–31; Switzerland: R mns 51–61; U.S.: S mns 37–40 – interpretation in favorem validitatis Introduction/ML: A mn. 29; NYC: B mns 97, 141; Belgium: E mn. 42; Russian Federation: N mn. 27 – invalid, inoperative, incapable of being performed Introduction/ML: A mns 36–41; NYC: B mns 138–148; Austria: D mn. 47–50; Belgium: E mns 41–43; Brazil: F mn. 32–33; England: H mns 44–47; France:

I mn. 34; Germany: J mns 26, 32; Hong Kong: K mns 29–30; India: Netherlands: M mn. 40; Russian Federation: N mn. 47; Singapore: O mns 41–42; Spain: P mns 36–37; Sweden: Q mns 30–31; Switzerland: R mn. 61; U.S.: S mns 39–40 – multi-tier clauses Introduction/ML: A mn. 49; England: H mn. 46; France: I mn. 35; Switzerland: R mn. 27 – pathological arbitration clauses Introduction/ML: A mns 47–48; NYC: B mns 143–148; Austria: D mns 47–50; Belgium: E mns 41–43; Brazil: F mns 32–33; England: H mns 44–46; France: I mn. 34; Germany: J mn. 32; Hong Kong: K mns 29–30; India: L mns 37–39; Netherlands: M mn. 40; Russian Federation: N mn. 47; Singapore: O mns 41–42; Spain: P mns 36–37; Sweden: Q mns 30–31; Switzerland: R mn. 61; U.S.: S mn. 39–40 – scope Introduction/ML: A mns 43–46; NYC: B mns 136–137; Austria: D mns 40–50; Belgium: E mns 39–40; Brazil: F mns 28–31; England: H mns 36–43; France: I mns 31–34; Germany: J mns 28–31; Hong Kong: K mns 27–30; India: L mns 34–36; Netherlands: M mns 37–39; Russian Federation: N mns 41–44; Singapore: O mns 38–42; Spain: P mns 32–35; Sweden: Q mns 24–31; Switzerland: R mns 51–60; U.S.: S mns 37–38 – termination Introduction/ML: A mns 38–40; Austria: D mns 37–39; Belgium: E mn. 38; Brazil: F mn. 26; England: H mn. 35; France: I mn. 30; Germany: J mn. 26; Hong Kong: K mn. 26; India: L mn. 32; Netherlands: M mn. 35; Russian Federation: N mn. 40; Singapore: O mns 36–37; Spain: P mns 28–30; Sweden: Q mn. 23; Switzerland: R mns 49–50; U.S.: S mn. 36 – third parties bound by arbitration agreement, see alter ego doctrine; group of companies doctrine – tort claims Introduction/ML: A mn. 44; NYC: B mn. 137; England: H mn. 42; France: I mn. 33; Germany: J mn. 31; Switzerland: R mn. 60 – unilateral option to litigate Introduction/ ML: A mn. 37; Russian Federation: N mn. 47 arbitration clause, see arbitration agreement arbitration defence, see exceptio arbitri arbitrator, see arbitral tribunal arbitrazh courts and Russian commercial courts system Russia: N mn. 5

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Index articles of association, see arbitration agreement (corporate by-laws and statutes) assignee, assignment, see arbitration agreement (assignee) B bankruptcy, see insolvency bias, see challenge of arbitrators bilateral investment treaties, see investment treaties bribery Introduction/ML: A mns 23, 87, 136; NYC: B mn. 332; Germany: J mns 76, 98; Singapore: O mn. 109; Sweden: Q mn. 63 Brussels Ia Regulation – anti-suit injunctions Introduction/ML: A mn. 55; England: H mns 51–52 – enforcement regime compared to New York Convention: Introduction/ML: A mns 19, 62 – enforcing arbitration agreements England: H mns 51–54 – New York Convention, see New York Convention (Brussels Ia Regulation) – recognition – judgments in breach of arbitration agreement Introduction/ML: A mn. 62; England: H mns 66–67; Germany: J mns 39–40 – judgments dismissing in favour of arbitration Germany: J mn. 39; Netherlands: M mn. 47 burden of proof – agreement to arbitrate Introduction/ML: A mn. 151; NYC B mns 97, 206; Spain: P mn. 15; Switzerland: R mn. 75 – arbitral proceedings U.S.: S mn. 87 – defences to enforcement Introduction/ML: A mn. 151; NYC: B mns 185–186, 242, 316; England: H mn. 148; Spain: P mn. 73 C capacity to arbitrate Introduction/ML: A mn. 30; NYC: B mn. 130; Austria: D mn. 29; Belgium: E mns 24–26; Brazil: F mn. 21; England: H mn. 27; France: I mns 23–24; Germany: J mn. 20; Hong Kong: K mn. 21; India: L mn. 27; Netherlands: L mns 22–25; Russian Federation: N mn. 28; Singapore: O mns 29–30; Spain: P mns 16–18; Sweden: Q mn. 18; Switzerland: R mns 37–39; U.S.: S mns 28–30 cartel damage claims – arbitrability Introduction/ML: A mn. 31; NYC: B mn. 301 – scope of arbitration agreement Introduction/ML: A mn. 44; Germany: J mn. 31 CEPANI Belgium: E mns 10, 67

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challenge of arbitral awards, see setting aside application challenge of arbitrators – in general Introduction/ML: A mns 67–70; Austria: D mns 68–71; Belgium: E mns 54–57; Brazil: F mns 43–45; China: G mns 88–91; England: H mns 75–89; France: I mns 48–53; Germany: J mns 43–48; Hong Kong: K mns 52–55; India: L mns 52–54; Netherlands: M mns 57–63; Russian Federation: N mns 57–60; Singapore: O mns 53–55; Spain: P mns 48–49; Sweden: Q mns 43–45; Switzerland: R mns 82–88; U. S.: S mns 59, 62–66 – appearance of bias sufficient for challenge Introduction/ML: A mn. 69; Belgium: E mn. 53; Netherlands: M mn. 57; U.S.: S . mn. 59 – duty to disclose conflicts of interests Austria: D mn. 67; Belgium: E mns 52–53; Brazil: F mns 41–42; China: G mn. 88; France: I mn. 48; Germany: J mns 44–45; Hong Kong: K mn. 51; India: L mn. 50; Netherlands: M mn. 56; Russian Federation: N mn. 56; Singapore: N mn. 53; Spain: P mn. 47; Sweden: Q mn. 42; Switzerland: R mn. 81; U.S.: S mns 60–61 – ex parte communication of arbitrator England: H mn. 75 – grounds for challenge known after making of award Introduction/ML: A mn. 70 – impartiality, independence and other qualifications Introduction/ML: A mns 67–69; Austria: D mns 68, 69; Belgium: E mn. 54; Brazil: F mns 40, 43; China: G mn. 88; England: H mn. 74; France: I mn. 46; Germany: J mns 43, 46; Hong Kong: K mn. 52; India: L mn. 52–54; Netherlands: M mns 57–58; Russian Federation: N mn. 57; Singapore: O mn. 53; Spain: P mn. 48; Sweden: Q mn. 43; Switzerland: R mns 82–83; U.S.: S mns 58–59 – preliminary view as ground for challenge Germany: J mn. 46 – repeated appointment as ground for challenge Belgium: E mn. 53 – settlement moderation as ground for challenge Introduction/ML: A mn. 69; Germany: J mn. 6; Switzerland: R mns 20–21 – unilateral communication of arbitrator, see arbitral tribunal (ex parte communication) also see arbitral tribunal (failure or impossibility to act) choice of law in arbitration, see arbitral award (law governing the dispute) choice of remedies doctrine, see preclusion (choice of remedies doctrine)

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Index CIArb England: H mn. 6 CIETAC China: G mns11, 29 class arbitration waiver U.S.: S mn. 105 also see multi-party arbitration CLOUT Introduction/ML: A mn. 8 comparative law analysis – benefits of comparative approach in arbitration practice Introduction/ML: A mns 2–3, 159 – challenge of arbitrators post-award Introduction/ML: A mn. 70 – confidentiality of arbitral proceedings Introduction/ML: A mn. 18 – enforcement of arbitral awards set aside at the seat Introduction/ML: A mns 148–150 – group of companies doctrine Introduction/ ML: A mn. 46 – public policy Introduction/ML: A mns 136–137 – right to be heard Introduction/ML: A mn. 131 – scope of review of arbitral tribunal’s jurisdiction Introduction/ML: A mn. 53 – scope of review of due process requirements Introduction/ML: A mn. 131 – standards of proof Introduction/ML: A mn. 86 competence-competence, see Kompetenz-Kompetenz competition law, see arbitrability (competition law) conciliation efforts by arbitrators as ground for challenge, see arbitral tribunal (settlement) confidentiality Introduction/ML: A mn. 18; Austria: D mn. 80; Belgium: E mn. 67; Brazil: F mn. 51; China: G mns 101–103; England: H mns 93–94; Germany: J mn. 60; Hong Kong: K mns 60–61; India: L mns 64–65; Netherlands:M mns 72–73; Russian Federation: N mn. 66; Singapore: O mns 62–64; Spain: P mn. 55; Switzerland: R mn. 96; U.S.: S mns 73, 74 conflict of interest, see challenge of arbitrators (duty to disclose conflicts of interest); IBA Guidelines on Conflicts of Interest conflict of law rules – review of arbitral tribunal’s conflict of law analysis in enforcement proceedings NYC: B mns 246–248 also see arbitral award (law governing the dispute); arbitration agreement (governing law) consent award, see arbitral award (consent award) consolidation of arbitral proceedings Austria: D mn. 102; China: G mn. 130; England: H mn. 115; Germany: J mn. 84; Hong Kong: K mn. 82; Netherlands: M mns 96, 97; Singapore: O mn. 12; Sweden: Q mns. 66, 67;

US: S mns 105, 106, 108 also see multi-contract arbitration constitution of arbitral tribunal, see arbitral tribunal (constitution) construction, see arbitration agreement (interpretation) consumer disputes – arbitrability Introduction/ML: A mns 30–31; NYC: B mns 126, 305; Austria: D mn. 32; France: I mn. 28; Hong Kong: K mn. 9; India: L mn. 27; Spain: P mn. 5; Sweden: Q mn. 7 – form of arbitration agreement Austria: D mn. 34; Germany: J mns 18, 24 – unfair terms and arbitration agreement Introduction/ML: A mn. 37; NYC: B mn. 126; Belgium: E mn. 37; France: I mn. 28; Germany: J mn. 24; Netherlands: M mn. 34 cooling off period as requirement of admissibility Investment arbitration: C mns 42–43 corporate by-laws, see arbitration agreement (corporate by-laws) corporate veil, see group of companies doctrine; piercing the corporate veil correction of arbitral awards, see arbitral awards (correction, interpretation) corruption, see bribery costs of arbitral proceedings – advance on costs (failure to pay) Introduction/ML: A mns 39, 101 – general Introduction/ML: A mns 101–104; Austria: D mn. 86; Belgium: E mns 78–83; Brazil: F mns 57–58; China: G mns 110–111; England: H mns 102–104; France: I mn. 66; Germany: J mns 64–66; Hong Kong: K mns 66–68; India: L mns 70–71; Netherlands: M mns 82–86; Russian Federation: N mns 71–72; Singapore: O mns 72–73; Spain: P mns 58–59; Sweden: Q mns 57– 58; Switzerland: R mns 101–104; U.S.: S mns 82–85 – security for costs Introduction/ML: A mn. 102 costs of arbitral proceedings, see arbitral award (costs) curial law of arbitral proceedings, see lex arbitri D damages for breach of agreement to arbitrate Introduction/ML: A mn. 57; England: H mn. 55; Switzerland: R mn. 72 data protection and GDPR Introduction/ML: A mn 91 default of parties in arbitral proceedings Introduction/ML: A mn. 78; NYC: B mn. 228; Austria: D mns 75–76; China: G

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Index mn. 96; France: I mn. 64; Germany: J mn. 58; Hong Kong: 11 mn. 25 defence to enforcement, see enforcement of arbitral awards (defences to enforcement) denial of jurisdiction, see erroneous denial of jurisdiction DIS (German Institution of Arbitration) Germany: J mns 5–6 disclosure discovery, evidence (document production) discovery, see evidence (discovery) dissenting opinion Brazil: F mn. 52; Germany J mn. 60; China: G mns 104–105 document production, see evidence (document production) drafting checklist, see arbitration agreement (drafting checklist) due process Introduction/ML: A mns 74, 114, 129–130, 135; NYC: B mns 222–239; Austria: D mns 78–79, 112; Belgium: E mns 51, 66, 120–121; Brazil: F mn. 15; France: I mns 16, 57, 64, 97; Hong Kong: K mns 59, 122; Russian Federation: N mns 65, 99; Spain: P mns 54, 83, 89–91; Sweden: Q mns 13, 52, 81; Switzerland: R mns 92–95 also see equality of arms, fair trial, natural justice duty to disclose, see arbitral tribunal (duty to disclose grounds for challenge) E emergency arbitrator, emergency award see interim relief enforcement of arbitral awards – awards that were set aside Introduction/ ML: A mns 148–150; NYC: B mns 280–293; Austria: D mn. 117; Belgium: E mn. 127; Brazil: F mn. 88; England: H mns 151–153; France: I mn. 105; Germany: J mns 103–104; Hong Kong: K mns 145–147; Netherlands: M mns 125–127; Russian Federation: N mn. 111; Singapore: O mn. 116; Spain: Q mns 98–100; Sweden: Q mn. 93; Switzerland: R mn. 143; U.S.: S mn. 135 – defences to enforcement Introduction/ML: A mns 147–150; Austria: D mns 115–118; Belgium: E mns 126–129; Brazil: F mns 84–91; China: G mns 148 (foreign-related award), 150 (foreign award); England: H mns 144–154; France: I mn. 104; Germany: J mns 102–104; Hong Kong: K mns 144–148; India: L mns 101–107; Netherlands: M mns 124–127; Russian Federation: N mns 110–112; Singapore: O mns 112–119; Spain: P mns 92–101; Sweden: Q mns 91–92; Switzerland: R mns 139–144; U.S.: S mns 134–136

908

– discretion to enforce Introduction/ML: A mn. 156; NYC: B mns 180–184, 290; Belgium: E mn. 127; England: H mns 148, 156; Hong Kong: K fn. 84 – emergency award, see interim relief (emergency award) – final and binding requirement: NYC B mns 56–72 – forum non conveniens NYC: B mns 340–343 – interim award NYC: B mns 64–66 – no révision au fond Introduction/ML: A mn. 113; NYC: B mn. 179 – partial award NYC: B mn. 63 – partial enforcement Introduction/ML: A mn. 155 – procedure Introduction/ML: A mns 143–146; NYC: B mns 336–348; Austria: D mns 115–116; Belgium: E mns. 123–125; Brazil: F mns 80–83; China: G mns 147–152; England: H mns 144–149; France: I mns 102–104; Germany: J mns 100–101; Hong Kong: K mns 126–143; India: L mns 98–100; Netherlands: M mns 120–123; Russian Federation: N mns 106–109; Singapore: O mns 112–115; Spain: P mns 92–97; Sweden: Q mns 91, 92; Switzerland: R mns 139–142; U.S.: S mns 132–133 – pro-enforcement bias Introduction/ML: A mns 113, 147 – set-off as defence, see set-off – stay of enforcement Introduction/ML: A mn. 157; NYC: B mns 333–335; England: H mns 145, 152; France: I mn. 81; Hong Kong: K mn. 103; India: L mn. 107; Singapore: O mn. 116; Sweden: Q mn. 92 – time limits for enforcement, see time limits equality of arms Introduction/ML: A mn. 74; NYC: B mns 227, 260, 323; Austria: D mns 78–79, 103; Belgium: E mns 64–66, 104; Brazil: F mns 49, 66–67; England: H mn. 85–87; France: I mns 57, 76; Germany: J mns 52–56; Hong Kong: K mn. 59; India: L mns 61–63; Netherlands: M mns 69–71; Russian Federation: N mn. 65; Singapore: O mns 60–61, 111; Spain: P mns 54, 71; Sweden: Q mns 51, 68; Switzerland: R mns 92–95, 120; U.S.: S mn. 72 also see arbitration agreement (unilateral option to litigate) equity, see arbitral award (ex aequo et bono) erroneous denial of jurisdiction Introduction/ ML: A mn. 128; Austria: D mns 109, 111; Switzerland: R mn. 128 error in fact or law no defence to enforcement NYC: B mns 179, 245; Germany: J mn. 97

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Index estoppel, see preclusion European Convention on Human rights and fair trial in arbitration Introduction/ML: A mns 18, 22, 119 European Convention on International Commercial Arbitration NYC: B mn. 16 evidence – admissibility Introduction/ML: A mn. 81; Austria: D mn. 87 – criminal investigation Introduction/ML: A mn. 89 – discovery in support of arbitration abroad U.S.: S mn. 91 also see evidence (document production) – discretion of arbitral tribunal NYC: B mn. 236; Austria: D mns 87–88; France: I mn. 67; Germany: J mn. 67; Hong Kong: K mns 70, 71; India: L mn. 72, 74; Netherlands: M mn. 87; Singapore: O mn. 75; Switzerland: R mn. 105; U.S.: S mn. 86 – document production, discovery Introduction/ML: A mns 84–85; Austria: D mn. 90; Belgium: E mn. 87; Brazil: F mn. 59; England: H mns 106–107; France: I mn. 68; Germany: J mn. 71; Hong Kong: K mns 70–72; Singapore: O mns 75, 77; Sweden: Q mn. 60; Switzerland: R mn. 106; U. S.: S mn. 91 – experts Introduction/ML: A mn. 83 – no review of arbitral tribunal’s evaluation of evidence NYC: B mns 237, 316 – support from state courts Introduction/ ML: A mn. 88; Belgium: E mn. 88; Brazil: F mn. 60; China: G mns 113, 114; England: H mns 106–107, 110; France: I mn. 68; Germany: J mn. 73; India: L mn. 75; Netherlands: M mn. 89; Russian Federation: N mn. 76; Singapore: O mn. 77; Spain: P mn. 61; Sweden: Q mn. 60; Switzerland: R mn. 107; U.S.: S mn. 91 – witnesses: Introduction/ML: A mn. 82 also see burden of proof; IBA Rules on the Taking of Evidence, Prague Rules ex aequo et bono, see arbitral award (ex aequo et bono) ex parte communication, see arbitral tribunal (ex parte communication of arbitrator) excess of mandate Introduction/ML: A mn. 125; NYC: B mns 236–250 also see arbitral award (ultra petita) and time limit (for making of awards) exceptio arbitri – and good faith Switzerland: R mn. 64 – and Kompetenz-Kompetenz Belgium: E mn. 44; Switzerland: R mn. 66 – and referral to arbitration NYC: B mns 149–154

expedited arbitral proceedings, see summary proceedings expert determination Austria: D mn. 16; Belgium: E mn. 16; England: H mn. 13; France: I mn. 14; Germany: J mn. 9; Hong Kong: K mn. 15; Singapore: O mns 22–23; Sweden: Q mn. 12 expert evidence Introduction/ML: A mn. 83; Belgium: E mn. 89; India: L mn. 74; U.S.: S mn. 92 expropriation Investment arbitration: C mns 54–62 F failure or impossibility to act, see arbitral tribunal (failure or impossibility to act) fair and equitable treatment Investment arbitration: C mns 63–78 fair trial Introduction/ML: A mns 74, 92, 129–131; England: H mns 85–87; Germany: J mns 52–56, 92–93; Singapore: O mns 60–61, 111; U.S.: S mns 72, 130 also see due process, European Convention on Human Rights favor validitatis, see arbitration agreement (interpretation in favorem validitatis) final and binding, see arbitral award (final and binding requirement) fork in the road provisions Investment Arbitration: C mns 47–48 form, see arbitral award (form of award), arbitration agreement (form requirements) forum non conveniens, see enforcement of arbitral awards (forum non conveniens) functus officio, see arbitral tribunal (functus officio) G General Data Protection Regulation, see data protection Geneva Convention of 1927 NYC: B mn. 5 Geneva Convention of 1961, see European Convention on International Commercial Arbitration Geneva Protocol of 1923 NYC: B mn. 5 good faith – and arbitration agreement NYC: B mns 112, 138–142, 147–148 – and investment treaty protection Investment treaties: C mns 18, 67, 69 – and preclusion of defences NYC: B mns 147–148, 187, 191, 196; Hong Kong: K mn. 40; Switzerland: R mns 64, 86, 95, 145 also see venire contra factum proprium governing law, see arbitral award (law governing the dispute), arbitration agreement (governing law) grounds for challenge, see challenge of arbitrators

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Index group of companies doctrine Introduction/ ML: A mn. 46; Austria: D mn. 40; Brazil: F mn. 39; England: H mn. 41; France: I mn. 31; Germany: J mn. 30; India: L mn. 35; Netherlands: M mn. 38; Sweden: Q mn. 27; Switzerland: R mn. 55 also see alter ego doctrine guarantor, whether bound by arbitration agreement between debtor and creditor Introduction/ML: A mn. 46; India: L mn. 35 H HKIAC Hong Kong: K mns 10–12 I IBA Guidelines for Drafting Arbitration Clauses Introduction/ML: A mn. 64 IBA Guidelines on Conflicts of Interest Introduction/ML: A mn. 69; Austria: D mn. 69; England: H mns 75, 79; Germany: J mn. 44; Hong Kong: K mn. 51; India: L mn. 50; Netherlands: M mn. 55; U.S.: S mn. 64 IBA Rules on the Taking of Evidence Introduction/ML: A mns 80–82; Austria: D mn. 89; England: H mns 80, 88; France: I mn. 68; Germany: J mn. 67; Switzerland: R mn. 105 ICA India: L mn. 8 ICAC Russia: N mns 2–4 ICC Introduction/ML: A mn. 13; France: I mn. 9 – and New York Convention NYC: B mn. 6 ICSID Convention, see Washington Convention immunity Introduction/ML: A mn. 158; Hong Kong: K mns 156–165; Spain: P mn. 94 impartiality, see challenge of arbitrators (impartiality, independence and other qualifications) incorporation by reference, see arbitration agreement (incorporation by reference) independence, see challenge of arbitrators (impartiality, independence and other qualifications) infra petita, see arbitral award (infra petita) injunctions, see anti-arbitration injunctions, anti-suit injunctions, interim relief insolvency – arbitrability Introduction/ML: A mn. 45; NYC: B mn. 304; Austria: D mn. 31; France: I mn. 25; India: L mn. 28; Singapore: O mn. 32; Spain: P mn. 19; Switzerland: R mn. 57; U.S.: S mns 33, 34 – lack of resources of party to arbitration Introduction/ML: A mn. 40; Germany: J mn. 26

910

– scope of arbitration agreement Introduction/ML: A mn. 45; Austria: D mn. 43; Germany: J mn. 29; Spain: P mn. 34; Switzerland: R mn. 54 institutional arbitration Introduction/ML: A mns 11–13 Inter-American Convention on International Commercial Arbitration, see Panama Convention interim award, see arbitral award (interim award) interim relief – arbitral tribunals Introduction/ML: A mn. 105; Austria: D mn. 99; Belgium: E mns 97–102; Brazil: F mn. 64; China: G mns 126–127; England: H mns 111, 112; France: I mn. 74; Germany: J mns 79–80; Hong Kong: K mns 79–80; India: K mns 82–84; Netherlands: M mn. 95; Russia: N mn. 86; Singapore: O mns 87–88; Spain: P mn. 69; Sweden: Q mn. 65; Switzerland: R mns 114–116; U.S.: S mns 101–104 – emergency arbitrators Introduction/ML: A mn. 106; Germany: J mn. 80; Singapore: O mn 88; Spain: P mn. 66; Sweden: Q mn. 65; Switzerland: R fn. 24 – emergency award (enforcement of): Introduction/ML: A mn. 106; NYC: B mn. 68 – state courts Introduction/ML: A mn. 107; Austria: D mn. 98; Belgium: E mn. 96; Brazil: F mn. 63; China: G mns 122–125; England: H mns 110, 112; France: I mns 72–73; Germany: J mns 77–78; Hong Kong: K mns 76–78; India: L mns 78–81; Netherlands: M mn. 94; Russia: N mns 83–85; Singapore: O mns 84–86; Spain: P mns 67–68; Sweden: Q mn. 64; Switzerland: R mns 112–113; U.S.: S mns 98–100 international sanctions Introduction/ML: A mns 37, 38, 98, 135; France: I mn. 71; Germany: J mns 76, 98 interpretation, see arbitration agreement (interpretation) arbitral awards (correction, interpretation) investment treaties – arbitrary measures Investment treaties: C mns 67, 70–71, 94 – discrimination Investment treaties: C mns 92–94 – EU law – intra-EU investment treaties C mn. 101 – no bar to enforcement of investment awards outside EU: US. S mn. 136 – fair and equitable treatment Investment treaties: C mns 63–78

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Index – investor-state arbitration Investment treaties: C mns 31–51 – jurisdiction – ratione personae Investment treaties: C mn. 34 – ratione materiae Investment treaties: C mns 35–39 – ratione temporis Investment treaties: C mn. 40 also see cooling-off; fork-in-theroad – most-favoured nation treatment Investment treaties: C mns 87–91 – unreasonable measures Investment treaties: C mns 92–94 – scope of investment treaties – investments covered Investment treaties: C mns 15–30 – nationality of investors Investment treaties: C mns 12–13 – shareholders, indirect investors and standing Investment Treaties: C mns 28–30 – substantive protection Investment treaties: C mns 52–100 also see cooling off periods; expropriation; fair and equitable treatment; fork in the road provisions; Salini test iura novit curia, see jura novit curia J juge d’appui France: I mn. 12; Switzerland: R mn. 15 jura novit curia, see right to be heard (jura novit curia) K Kompetenz-Kompetenz Introduction/ML: A mn. 53; NYC: B mns 152, 201; Austria: D mns 51–57; Belgium: E mn. 44; Brazil: F mns 34–35; China: G mns 72–73; England: H mns 20, 59–63; France: I mns 36–40; Germany: J mns 33–35; Hong Kong: K mns 31–36; India: L mns 39–41; Netherlands: M mns 41–43; Russian Federation: N mns 48–51; Singapore: O mns 43–44; Spain: P mns 38–39; Sweden: Q mns 32–34; Switzerland: R mns 62–72; U.S.: S mn. 43–49 L lack of independence and impartiality, see challenge of arbitrators (impartiality, independence) lack of jurisdiction – recognition and enforcement of arbitral awards NYC: B mns 205–221 – setting aside application Introduction/ML: A mns 123–128; Austria: D mns 110–111; Belgium: E mn. 118; Brazil: F mn. 75; China: G mns 140–141; England: H

mns 123–126; France: I mns 92–94; Germany: J mns 90–91; Hong Kong: K mns 120, 123; India: L mn. 95; Netherlands: M mns 112–113; Russian Federation: N mns 98, 100; Singapore: O mns 103–105; Spain: P mns 80–81; Sweden: Q mns 79, 83; Switzerland: R mns 129–130; U.S.: S mns 124–126 language of arbitral proceedings Introduction/ ML: A mns 16, 64, 65, 75; NYC: B mns 231–323; Austria: D mn. 74; France: I mn. 55; Germany: J mns 50, 93, 108; India: L mn. 57; Russian Federation: N mns 43, 101; Spain: P mns 44, 88 Las LeArialñas Protocol Brazil: F mn. 5 LCIA England: H mn. 6 lex arbitri Introduction/ML: A mn. 9; Austria: D mns 11–13; France: I mn. 10; Germany: J mns 7–8; Hong Kong: K mn. 13; Singapore: O mns 14–17, 28; Spain: P mns 7–9; Sweden: Q mn. 9; Switzerland: R mns 14–17; U.S.: S mns 17–19 lex mercatoria NYC: B mn. 250; Austria: D mn. 94 lis pendens Introduction/ML: A mns 58, 62, 89; Sweden: Q mn. 90; Switzerland: R mns 68–72 LMAA England: H mn. 7 lodo irrituale NYC: B mns 70–71 lois d’application immédiate, see lois de police lois de police Introduction/ML: A mns 98–100; Austria: D mn. 97; Belgium: E mn. 95; Brazil: F mn. 62; England: H mns 108, 109; France: I mn. 71; Germany: J mns 75–76; Hong Kong: K mn. 75; Netherlands: M mn. 93; Russian Federation: N mns 80–82; Singapore: O mns 81–83; Spain: P mn. 65; Sweden: Q mns 61–63; Switzerland: R mns 108–111; U.S.: S mn. 96 Lugano Convention England: H mn. 66; Netherlands: M mn. 47 M mandatory law, see lois de police manifest disregard of the law, see public policy (manifest disregard) mediation NYC B mns 45–46; Austria: D mns 14–15; Belgium: E mns 14–15; Brazil: F mns 12–13; China: G mns 37–38; England. H mn. 12; France: I mn. 13; Germany: J mn. 9; Hong Kong: K mn. 15; India: L mns 15–17; Netherlands. M mn. 13; Russian Federation: N mn. 22; Singapore: O mns 19–21; Spain: P mn. 10; Sweden: Q mns 10–11; Switzerland: R mns 22–23; U. S.: S mns 20–21 also see arbitration agreement (multi-tier clauses) MIAC Spain: P mn. 6

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Index multi-contract arbitration Introduction/ML: A mns 108–111 also see consolidation of arbitral proceedings; multi-party arbitration multi-party arbitration – class arbitration, class-wide relief U.S.: S mn. 105 – equality of arms Introduction/ML: A mn. 110–111; Austria: D mn. 103; Belgium: E mn. 104; Brazil: F mns 66, 67; England: H mns. 114; France: I mns 76–77; Germany: J mns 83; Hong Kong: K mn. 85; India: L mn. 86; Netherlands: M mns 98–99; Russian Federation: N mns 89; Singapore: O mns 60–61, 111; Spain: P mn. 71; Sweden: Q mn. 68; Switzerland: R mn. 120; U.S.: S mn. 108 – institutional rules Introduction/ML: A mn. 108 – scope of arbitration agreement Introduction/ML: A mns 20, 109; Austria: D mns 101–102; Belgium: E mn. 103; Brazil: F mn. 65; England: H mns 113–115; France: I mn. 75; Germany: J mn. 82; Hong Kong: K mns 81–84; India: L mn. 85; Netherlands: M mns 96–97; Russian Federation: N mns 87–88; Singapore: O mns. 89–91; Spain: P mn. 70; Sweden: Q mn. 67; Switzerland: R mns 117–119; U.S.: S mns 106–107 also see consolidation of arbitral proceedings multi-tier clauses, see arbitration agreement (multi-tier clauses) N natural justice Introduction/ML: A mns 86, 87, 97; Singapore: O mns 60–61, 111 also see due process; fair trial New York Convention – Brussels Ia Regulation NYC: B mn. 94 – form requirements for arbitration agreement NYC: B mns 100–118 – history NYC: B mns 5–7 – interpretation NYC: B mns 9–12 – more favourable laws NYC B mns 176, 219–221 – reciprocity reservation NYC: B mns 74–76 – recognition and enforcement of arbitral awards – discretion to enforce despite grounds for refusal NYC B mns 180–184 – formal requirements NYC: B mns 163–176 – grounds for refusal – award not yet or no longer binding NYC: B mns 264–293 – excess of submission NYC: B mns 240–254

912

– improper composition of arbitral tribunal and improper proceedings NYC: B mns 255–263 – invalid arbitration agreement NYC: B mns 205–221 – lack of arbitrability NYC: B mns 294–306 – violation of due process NYC: B mns 222–239 – violation of public policy NYC: B mns 307–332 – enforcement procedure NYC: B mns 336–348 – prohibition of révision au fond NYC B mns 179, 237 – recognition and enforcement of arbitration agreements NYC: B mns 86–156 – scope NYC: B mns 18–84 also see arbitration agreement; enforcement of arbitral awards no review of the merits principle, see enforcement (no révision au fond); setting aside application (no review of the merits) notice of arbitral proceedings and arbitrator appointment NYC B mns 229–232 NYC, see New York Convention O objective arbitrability, see arbitrability oral hearing Introduction/ML: A mn. 79; NYC: B mn. 235; Austria: D mn. 79; China: G mns 97–98; Germany: J mn. 59; India: L mn. 57; Sweden: Q mn. 52 ordre public, see public policy P Panama Convention NYC: B mn. 16; Brazil: F mn. 4; U.S.: S mn. 19 parallel proceedings, see lis pendens party autonomy and authority of arbitral tribunal B mns 48–50 pathological arbitration clauses, see arbitration agreement (pathological arbitration clauses) piercing the coporate veil India: L mn. 35; Switzerland: R mn. 56; U.S.: S mn. 37 also see alter ego; group of companies doctrine place of arbitration Introduction/ML: A mns 9–10, 75; Austria: D mns 11–13; Belgium: E 11–13; Brazil: F mns 10, 11; China: G mns 34–36; England: H mns 9–11; France: I mns 10–12; Germany: J mns 7–8; Hong Kong: K mn. 13; India: L mns 9–14; Netherlands: M mns 9–12; Russia: N mns 20–21; Singapore: O mns 14–17; Spain: P mns 7–8; Sweden: Q mn. 9; Switzerland: R mn. 14–17; U.S.: S mn. 17–19 power of attorney to conclude arbitration agreement Introduction/ML: A mn. 26 Prague rules Introduction/ML: A mns 28, 80, 84

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Index preclusion – choice of remedies doctrine Introduction/ ML: A mns 60, 139; Germany: J mn. 36; Hong Kong: K mns 41, 153; Singapore: O mns 46, 123 – failure to apply to have award set aside Introduction/ML: A mn. 153; NYC: B mns 195–197; Belgium: E mn. 131; Brazil: F mn. 92; England: H mn. 159; Germany: J mn. 109; Hong Kong: K mns 152–153; Russian Federation: N mn. 116; Singapore: O mns 123–124; Spain: P mn. 105; Sweden: Q mns 98–99; Switzerland: R mn. 148; U.S.: S mn. 140 – failure to object in arbitral proceedings Introduction/ML: A mn. 152; NYC: B mns 191–194; Austria: D mn. 119; Belgium: E mns 113, 130; England: H mns 82, 125, 156, 158; France: I mn. 107; Germany: J mns 107–108; Hong Kong: K mns 150–151; India: L mn. 108; Netherlands: M mns 128–129; Russian Federation: N mn. 114; Singapore: O mns 121–122; Spain: P mns 42, 76, 103–104; Sweden: Q mns 95–97; Switzerland: R mns 146–147; U. S.: S mns 138–139 – good faith NYC: B mns 147–148, 198 – jurisdictional defences Introduction/ML: A mns 59–60, 139–140; NYC: B mns 146, 191–198; Austria: D mns 58, 59; Belgium: E mns 45, 46; Brazil: F mn. 36; England: H mn. 125; France: I mns 39–40; Germany: J mns 36–37; Hong Kong: K mns 39–41; India: L mn. 42; Netherlands: M mns 44–45; Russian Federation: N mn. 48; Singapore: O mns 54–55; Spain: P mns 40–42; Sweden: Q mns 35–37; Switzerland: R mns 146–148; U.S.: S mns 50–52 – waiver NYC: B mns 188–190 preliminary measures, see interim relief preliminary view of arbitral tribunal – as ground for challenge Germany: J mn. 6; Switzerland: R mn. 20 also see arbitral tribunal (settlement moderation as ground for challenge) – obligation to communicate preliminary views Germany: J mn. 54 pro-arbitration bias, pro-enforcement bias Introduction/ML: A mns 113, 147; NYC: B mn. 97; U.S.: S mn. 117 public policy – in general Introduction/ML: A mns 134–137; NYC: B mns 307–332; Austria: D mn. 114; Belgium: E mn. 121; Brazil: F mns 78–79; China: G mns 144–146; England: H mns 131, 134, 154; France: I mns 98–100; Germany: J mns 97–99; Hong Kong: K mn. 124; India: L mns 96–97;

– – – – –

– –

–

–

Netherlands: M mn. 119; Russian Federation: N mns 104–105; Singapore: O mns 109–111; Spain: P mns 86–91; Sweden: Q mns 80–81; Switzerland: R mns 137–138; U.S.: S mn. 131 antitrust/competition law NYC: B mn. 331 arbitrability (objective) France: I mn. 25; Netherlands: M mn. 27; Singapore: O mn. 32 arbitrator bias as breach of public policy NYC: B mn. 325 corruptive practices NYC: B mn. 332 EU law as part of domestic public policy Introduction/ML: A mn. 331; Austria: D mn. 32; England: H mns 109, 134; Germany: J mn. 98 interest rates NYC: B mn. 330 manifest disregard of the law Introduction/ ML: A mn. 136; NYC: B mn. 326; U.S.: S mns 122–123 also see arbitrariness, arbitrary award res judicata effect (disregard as breach of public policy) Introduction/ML: A mn. 135; NYC: B mn. 327; Germany: J mn. 85 review of arbitral tribunal’s factual findings as to public policy Introduction/ML: A mn. 137; NYC: B mn. 316

Q qualification of an arbitrator, see challenge of arbitrators (impartiality, independence and other qualifications) R repeated appointment by same party, as grounds for challenge of arbitrator, see challenge of arbitrators (repeated appointments) reasons, see arbitral award (reasons) recognition of foreign decisions – allowing/refusing enforcement of awards Introduction/ML: A mn. 154 – rejecting setting aside application Introduction/ML: A mn. 154 – setting aside arbitral awards, see enforcement of arbitral awards (awards that were set aside) Redfern schedule Introduction/ML: A mn. 84 reference, see arbitration agreement (incorporation by reference) referral to arbitration NYC: B mns 149–154 also see exceptio arbitri removal of arbitrator, see challenge of arbitrators reporting mechanism China: G mns134–137 request for arbitration Introduction/ML: A mn. 76 res judicata effect of award Introduction/ML: A mns 112–115; Belgium: E mn. 109; Bra-

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Index zil: F mn. 68; France: I mn. 79; Netherlands: M mns 79, 100; Spain: P mn. 72; Switzerland: R mn. 121 also see public policy (res judicata), recognition of foreign decisions review of arbitral awards, see setting aside application right to be heard Introduction/ML: A mns 71, 114, 130–131; Austria: D mns 78, 79; Belgium: E mns 64–66; Switzerland: R mns 92–95 also see due process, natural justice – failure to address parties’ arguments Introduction/ML: A mn. 131; Germany: J mns 55, 56; Switzerland: R mns 132–133 – failure to take evidence Introduction/ML: A mn. 129; Germany: J mn. 56 – jura novit curia Introduction/ML: A mn. 129; Switzerland: R mn. 93 – oral hearing Introduction/ML: A mn. 79; Germany: J mn. 59 S Salini test Investment Arbitration: C mns 18–19 sanctions, see international sanctions SCC Sweden: Q mn. 8 seat of arbitral tribunal, see place of arbitration security for costs, see costs separability doctrine Introduction/ML: A mn. 23; NYC: B mn. 99; Austria: D mns 25–27; Belgium: E mn. 21; Brazil: F mn. 19; China: G mns 46–47; England: H mns 19–21; France: I mn. 20; Germany: J mn. 13; Hong Kong: K mn. 19; India: L mns 21, 22; Netherlands: M mns 18–19; Singapore: O mns 26–27; Spain: P mn. 13; Switzerland: R mns 31–33; U.S.: S mn. 26 serious irregularity (of arbitral awards) England: H mns 127–136; Hong Kong: K mns 104–108 set-off – as defence against enforcement NYC: B mn. 346; Austria: D mn. 118; Brazil: F mn. 91; England: H mn. 155; Germany: J mn. 105; Hong Kong: K mn. 148; Sweden: Q mn. 94; Switzerland: R mns 144; U.S.: S mn. 136 – scope of arbitration clause and set-off as defence in arbitration Introduction/ML: A mn. 50; NYC: B mn. 346; England: H mn. 42; Switzerland: R mn. 60 setting aside application – discretion not to set aside Introduction/ ML: A mn. 142; Hong Kong: K mn. 119 – grounds for setting aside arbitral awards Introduction/ML: A mns 122–142; Austria: D mns 109–114; Belgium: E mns 114–121; Brazil: F mns 72–79; China: G

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mns 139–146; England: H mns 122–142; France: I mns 91–100; Germany: J mns 89–99; Hong Kong: K mns 119–126; India: L mns 95–97; Netherlands: M mns 109–119; Russian Federation: N mns 97–105; Singapore: O mns 101–111; Spain: P mns 79–91; Sweden: Q mns 75–90; Switzerland: R mns 125–138; U.S.: S mns 120–131 – no review of the merits Introduction/ML: A mn. 117; Austria: D mn. 109; France: I mn. 86; Germany: J mn. 89; Hong Kong: K mn. 99; Netherlands: M mn. 109; Switzerland: R mn. 125; U.S.: S mn. 109 – partial annulment Introduction/ML: A mn. 141 – partial award, preliminary award Introduction/ML: A mn. 120 – procedure Introduction/ML: A mns 118–121; Austria: D mns 107–108; Belgium: E mns 109–113; Brazil: F mn. 71; China: G mn. 138; England: H mn. 121; France: I mns 88–90; Germany: J mns 87–88; Hong Kong: K mns 100–118; India: L mns 90–94; Netherlands: M mns 106–108; Russian Federation: N mns 94–96; Singapore: O mns 99–100; Spain: P mns 76–78; Sweden: Q mns 73–74; Switzerland: R mns 123–124; U.S.: S mns 118–119 – time limits, see time limits (setting-aside applications) – waiver Introduction/ML: A mn. 119; Austria: D mn. 106; Belgium: E mn. 112; France: I mn. 87; Germany: J mn. 87; Spain: P mns 76, 78; Sweden: Q mn. 72; U. S.: S mn. 121 SIAC India: L mn. 8; Singapore: O mns 1, 9, 11 Singapore Convention Introduction/ML: A mn. 94; NYC: B mn. 46; Singapore: O mns 19–20 sovereign immunity, see immunity standard of proof Introduction/ML: A mns 86–87 stay of enforcement, see enforcement (stay) subjective arbitrability, see capacity to arbitrate summary proceedings in arbitration Introduction/ML: A mn. 21; Singapore: O mns 65–66; Sweden: Q mn. 8 Swiss Rules 2012 Switzerland: R mns 12–13 T termination, see arbitration agreement (termination) terms of reference – general Introduction/ML: A mn. 77

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Index – breach of terms of reference as ground for annulment of award France: I mn. 96 fn. 246; Germany: J mn. 95 – implicit waiver of jurisdictional challenges NYC B mn. 145 territoriality principle Introduction/ML: A mns 9–10; Austria: D mn. 11; Belgium: E mns 11–13; Brazil: F mns 10, 11; Germany: J mns 7–8; Hong Kong: K mn. 13; Switzerland: R mns 14–17; U.S.: S mns 17–19 third party funding – in general: Hong Kong: K mns 86–91; Singapore: O mns 93–96 – disclosure: Introduction/ML: A mn. 104 – recoverability of costs of third party funding England: H mn. 102 – security for costs Introduction/ML: A mn. 102 time limits – challenging arbitrators Introduction/ML: A mn. 70; Austria: D mns 70–71; Belgium: E mn. 55; Brazil: F mn. 44; England: H mn. 79; France: I mn. 53; Germany: J mn. 47; Hong Kong: K mn. 53; India: L mn. 53; Netherlands: M mn. 59; Russian Federation: N mn. 58; Singapore: O mn. 54 Spain: P mn. 49; Sweden: Q mn. 44; Switzerland: R mn. 85 – enforcing an award Introduction/ML: A mn. 145; NYC: B mns 278, 344–345 – making an award Introduction/ML: A mn. 93; NYC: B mn. 254; Brazil: F mn. 54 Spain: P mn. 56 – setting-aside applications Introduction/ML: A mn. 118; Austria: D mn. 107; Belgium: E mn. 111; Brazil: F mn. 71; China: G mn. 138; England: H mn. 121; France: I mn. 89; Germany: J mn. 88; Hong Kong: K mn. 100; India: L mn. 91; Netherlands: M mn. 106; Russian Federation: N mn. 95; Singapore: O mn. 99; Spain: P mn. 76; Sweden: Q mn. 73; Switzerland: R mn. 123; U.S.: S mn. 119 tort claims, see arbitration agreement (tort claims)

U ultra petita, see arbitral award (ultra petita) UN Convention on International Settlement Agreements Resolution from Mediation, see Singapore Convention UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, see New York Convention UN sanctions, see international sanctions UNCITRAL Arbitration Rules Introduction/ ML: A mn. 12 – expedited procedure Introduction/ML: A mn. 21 – HKIAC Hong Kong: K mn. 10 – Swiss Rules Sitzerland: R mn. 12 UNCITRAL Conciliation Rules 1980 India: L mn. 15 UNCITRAL Model Law Introduction/ML: A mn. 7 unilateral option to litigate, see arbitration agreement (unilateral option to litigate) V vacatur, see setting aside application venire contra factum proprium and jurisdictional defences NYC: B mn. 147; Spain: P mn. 76; Switzerland: R mn. 64 also see good faith venue for hearings (as opposed to place/seat of arbitral proceedings) Introduction/ML: A mns 10, 75; Switzerland: R mn. 17 also see place of arbitration VIAC Austria: D mns 1–2, 7–9 W waiver, see preclusion; setting aside proceedings Washington Convention Introduction/ML: A mns 1, 7; NYC: B mns 16, 55; Investment Treaties: C mn. 7 Z Zurich (arbitration clause referring to “International Chamber of Commerce in Zurich”) Introduction/ML: A fn. 144

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