Chapter 11 Enforcement of Arbitral Awards

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Chapter 11Enforcement of Arbitral Awards
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Remedies for Ints Awards

• Set aside (??)
• Refusing enforcement(????)
• General principle National courts are entitled
  to set aside their own awards. As to foreign
  awards, the courts may only decide whether to
  enforce or not.

3
Conditions for refusing enforcement under NYC

• General principle procedure issues instead of
  merits of the case
• Invalid arbitration agreement
• Lack of due procedure
• Tribunal beyond authority
• Impropriate composition of the tribunal
• Non-arbitrability of the dispute
• Award in conflict with the public policy

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Invalid arbitration agreement

• ELF Aquitaine Iran(France) v. National Iranian
  Oil Co. (Iran) 135
• Tibor Varady,223-228
• Nationalization of oil industry in Iran
• Arbitration agreement was void.
• Dispute is settled by the Special Committee of
  Iran.
• Sole arbitrator declared its competence.

5
Lack of due procedure

• Paklito Investment Ltd. v. Klockner East Asia
  Ltd. 251
• Sales K between the parties
• Dispute on the defects of the goods
• Expert opinions and review
• Award in favor of the buyer
• Refusing enforcement

6
Tribunal beyond its authority

• Norsolor S. A. (France) v. Pabalk Ticaret Sirketi
  S.A. (Turkey) 381
• Agency agreement b/w French and Turkey co.
• ICC Arbitration award made in Vienna.
• Tribunal beyond its authority via amicable
  compositeur.

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Improper composition of the tribunal

• Commercial man as arbitrator
• Engineer of the servant of the parties during the
  construction work

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R. A. Sally(Fin.) v. S.R.L. Termarea (Italy) p.455

• Yearbk. Comm. Arbn 294(1979)
• C/P between Sally and Termarea
• Arbitration clause (ad hoc)
• Demurrage claim from Sally
• Award by two chosen arbitrators
• Refusing enforcement by the Italian court due to
  improper composition of the tribunal

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Arbitrability matters

• Wilko v. Swan (1953)
• Sherk v. Alberto-Culver Co. (1974)
• Rodriguez v. Shearson/American Express (1989)

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Public policy consideration

• Julius A. Furer in the USA(1978 3 Yearbook
  Commercial Arbitration. 290
• Army ship wreckaged
• near Netherlands in 1974
• Lloyds open form salvage agreement
• Dispute could not be arbitrated under US Public
  Vessel Act,
• Commercial matters reservation

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US Latest Cardegna Case

• Buckeye Check Cashing, INC. v. Cardegna Et
  Al.(US, Feb.21,2006)
• Agreement for deferred payment transaction b/w
  the parties
• Cardegna sued that Buckeye charged usurious
  interest rates and the agreement violated various
  Florida laws
• Trial court denied Buckeyes motion to compel
  arbitration because the contract is illegal and
  void ab initio

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Cardegna Case (2)

• State appellate court reversed
• in turn was reversed by the Florida Supreme
  Court enforcing an arbitration agreement in a
  contract challenged as unlawful would violate
  state public policy and contract law
• Reversed by the US Supreme Ct.the challenge
  should be decided by the arbitrator instead of
  the court.

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Chinese Practices

• Domestic awards (????)
• Foreign-related awards(FRA, ????)
• Foreign awards(????)

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Foreign Related Awards(FRA)

• Art.260 CPL award made by the Foreign-related
  Arbitration Institutions in the PRC (CIETAC,
  CMAC)
• Set aside and refusing enforcement in Art. 71,
  Art. 72(????)CAL (Art. 260 CPL applied)
• Jurisdiction of domestic international
  arbitration institutions since 1996

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Awards Classification by the Place of Arbitration

• Domestic awards are those that were made in the
  State where the arbitration is taken place.
• Foreign awards are those that were made outside
  of the State where the arbitration is taken place.

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International Awards

• Awards made in China under the administration of
  the Chinese arbitration institutions based on the
  international arbitration agreement
• Awards made in China under the administration of
  foreign arbitration institution (ICC, LCIA, AAA)
  in accordance with the Rules of such arbitration
  institutions
• Foreign awards made out of China

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Court Supervision on the Intl Commercial
Arbitral Awards

• Intl award made in China by Chinese Arbitration
  Institutions
• Intl award made in China by Foreign Arbitration
  Institutions
• Foreign award made outside China

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Draft Provisions by the Supreme Court in 2003

• Foreign-related arbitral awards refer to those
  involving foreign element made by the CIETAC,
  CMAC and other arbitration commissions (domestic
  arb. commissions) reorganized under CAL.
• How about awards made in China by foreign
  arbitration institutions, such as ICC, AAA, LCIA?

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Grounds Refusing Enforcing Domestic Awards
Art.217,CPL

• No arbitration agreement
• Tribunal beyond the authority
• Tribunal improperly composed
• Main evidence insufficient
• Definite error in application of the law
• Arbitrators have committed embezzlement, accepted
  bribes or done malpractice for personal benefits
  or perverted the law.

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Grounds for Refusing Enforcement FRA

• CAL 71 Art.260, CPL (1991, Art.258 in 2007)
• No arbitration agreement
• Lack of due process
• Improper composition of tribunal
• Tribunal beyond authority
• Burden of proof by respondent

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Public Interest

• Art.58(2), CAL
• If the People's Court determines that the award
  is contrary to the public interest, it shall rule
  to vacate the award.
• CIETAC awards on US co. v. Chinese Travel co.

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Remedies for Foreign Awards

• NYC awards
• Non- NYC awards

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Obligations under NYC

• China acceded NYC in 1986 with the following two
  reservations
• reciprocal reservation (??????)
• Commercial reservation (??????)

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Reciprocal Reservation

• China applies NYC only to recognition and
  enforcement of awards made in the territory of
  another NYC Contracting State.
• Territoriality standard to decide the nationality
  of the arbitral awards

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Commercial Reservation

• China applies NYC only to differences arising out
  of legal relationships whether contractual or not
  which are considered as commercial under the
  national law.

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Commercial Matters in China

• Notice by the Supreme Court on Apr. 10 1987
  Commercial legal relationship of contractual or
  non-contractual matters refers to such economic
  rights and obligations under contract and torts
  as the sale, leasing, CJV, EJV, insurance,
  credit, agency, consultancy, all types
  transportation, product liability, environments
  pollution, etc. excluding dispute b/t the
  government and foreign investors.

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Competent Court for Enforcement

• Intermediate Peoples Court where the place of
  business of the respondent or his executing
  property is located.