enforcing arbitral awards: the position in england & wales mark brown partner 25 january 2010
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ENFORCING ARBITRAL AWARDS: THE POSITION IN ENGLAND & WALES Mark Brown Partner 25 January 2010. Legal effect of the award. The Arbitration Act 1996 (“The Act”). - PowerPoint PPT PresentationTRANSCRIPT
ENFORCING ARBITRAL AWARDS: THE POSITION IN ENGLAND & WALES
Mark BrownPartner 25 January 2010
Email: [email protected]
Legal effect of the award
• The Arbitration Act 1996 (“The Act”).
• Section 58(1) of the act: unless otherwise agreed by the parties, an award made by the tribunal pursuant to an arbitration agreement is final and binding on the parties.
• “arbitration agreement” = an agreement to submit to arbitration present or future disputes (whether contractual or not), such agreement to be evidenced in writing (whether or not signed by the parties) or by exchange of communications in writing.
• “final and binding”:
• Does not affect the right to challenge the award by any arbitral process of appeal or review.
• Includes partial or interim awards, but not provisional awards.
Email: [email protected]
Recognition and Enforcement
• If the award is enforced it must necessarily be recognised by the court ordering the enforcement.
• But an award may be recognised without being enforced.
• “Recognition” = the acceptance of a foreign award as having the same effects as a domestic award and may be relied on by way of defence or set-off in any English legal proceedings.
• Distinction between permission to enforce an award and entering judgment in terms of the award: failure to honour the award may be contempt of Court in the case of the latter but not the former.
Email: [email protected]
The Four Means of Enforcing in England & Wales
1. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 – “the New York Convention”.
• Enacted in English law in Part III of the Arbitration Act, Sections 100 to 103.
2. The summary procedure under Section 66 of the Arbitration Act applying to all domestic or foreign arbitral awards.
3. An action on the award based, not on the Arbitration Act, but on English common law.
4. The Geneva Convention on the Execution of Foreign Arbitral Awards 1927.
• Enacted under Section 99 of the Arbitration Act.
Email: [email protected]
A. Enforcement under the New York Convention
• By far the most likely, effective and easiest route for enforcement.
• Some 144 countries have signed up, agreeing that they will recognise and enforce arbitral awards made in other states.
• Much easier to enforce an award from any Convention country than a Court judgment in any of those countries.
• Subject to two specific limited reservations:
1. The “reciprocity reservation” – limited to awards made in other Contracting States.
2. The “commercial reservation” – limited to awards relating to commercial matters.
• The juridical seat of the arbitration determines the country the award is deemed to be made.
Email: [email protected]
English Court Procedure for Enforcement of a New York Convention Award • The enforcement process requires the Court to give judgment “in terms of the
award” itself and does not permit a review of the award.
• Must apply for the Court’s permission to enforce an award by filing at Court:
• An Arbitration Claim Form supported by written evidence exhibiting the original or certified copy of the award and the original arbitration agreement, with a certified translation if not in English.
• A Certificate of Interest setting out details of any interest awarded.
• Two copies of the draft Order granting permission to enforce.
• The Court will either:
1. Make the Order sought on a without notice basis, in which case the Order must state the right of the award debtor to apply to set the Order aside; or
2. If the Court wishes to hear submissions from the award debtor, specify the parties to the arbitration on whom the Arbitration Claim Form must be served.
Email: [email protected]
Service of the Arbitration Claim Form
• Must be served on the Defendant within one month of the date of issue.
• Must file a Certificate of Service within 7 days of service of the Arbitration Claim Form.
• The Arbitration Claim Form may be served out of the jurisdiction with the Court’s permission, irrespective of where the award is made.
• The Defendants must acknowledge service and the enforcement proceedings will then continue.
Email: [email protected]
The Order giving permission to enforce an award
• Within 14 days after service of the Order or, if served out of the jurisdiction, within such other period as the Court may set, the Defendant may apply to set aside the Order.
• The award must not be enforced until after the end of that period or any application made by the Defendant within that period has been finally disposed of.
• Once the Court gives its permission to enforce the award, an English Court judgment may be entered in the terms of the award and the award then enforced.
Email: [email protected]
B. Section 66 of the Arbitration Act
• An alternative means of enforcing a foreign arbitral award, whether or not emanating from a New York Convention country.
• Broadly mirrors Section 101 Arbitration Act (New York Convention Recognition and Enforcement) in that it provides for enforcement of an arbitral award with the Court’s permission as you would a judgment or order of the Court in the same terms. Once permission is obtained, the award creditor may enter an English Court judgment in the terms of the award and proceed to enforce.
• The procedure is similar to the New York Convention enforcement procedure.
• But, the legal grounds for challenging enforcement are broader than NYC enforcement.
Email: [email protected]
C. An Action on the Award
• Right to sue on the award in English Court proceedings based on English common law (i.e. case law).
• Award creditor is not enforcing on the award itself: it is an action for breach of an implied promise to pay, creating a fresh cause of action, i.e., an “action to enforce a contract”.
• Two main circumstances for an action on the award:
1. Where the arbitration agreement has been made orally rather than in writing, or
2. Where there is a defect in the form or substance of the award, so that it does not comply with the requirements of the Arbitration Act.
Email: [email protected]
D. Enforcement under the Geneva Convention 1927
• Section 99 of the Arbitration Act provides for enforcement of arbitral awards made in certain countries under the Geneva Convention which are not also signatories to the New York Convention.
• Little used.
• More procedurally cumbersome: necessary for the award to have been made the subject of a Court Order or enforcement proceedings in the country of the seat of the arbitration before enforcing in the Geneva Convention country (i.e. double exequatur – enforcement proceedings).
• But can be useful:
• Very limited grounds on which enforcement of a Geneva Convention award can be resisted.
• Might be the only legal avenue for enforcement.
Email: [email protected]
Limitation Period for Enforcement
• 6 years from the date on which the cause of action accrued.
• Cause of action accrues from the date of the failure to honour the award.
• That enforcement of an award may be time barred overseas will not affect enforceability in England and Wales.
Thank you for your attention
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