TheCase: Foreign arbitral awards enforcement: Obstacles
Our previous article touched on recognizing foreign arbitral awards by taking an overview of the principle and mechanisms of application. In today’s article, we will review some of the shortcomings and obstacles that may affect the mechanism of application of these awards.
Concerning the obstacles that have arisen from the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, researchers and experts have drawn several conclusions on some defects related to the nature of non-enforcement in the use of the word “may” in Article V of the New York Convention. The term “may” was used to indicate that the application for recognition and enforcement of the arbitration award may be refused at the respondent’s request, provided that the latter submits to the authority to which it was requested evidence of some facts.
These include parties that did not have the legal capacity as stated in the agreement or under the country’s law in which the award was made. It also consists of the party against whom the award was made who has not been notified of the award, either of the appointment of the arbitrator or the arbitral proceedings, or if the foreign arbitral award that deals with a dispute is outside the scope of the terms under which that dispute was referred to arbitration in the first place. Another reason would be if the composition of the arbitral tribunal (or arbitration proceedings in general) were not made with the parties’ consent, or in the absence of such agreement, or if the procedures were not per the country’s law in which the arbitration took place.
Perhaps the lack of clarity here is summed up in the absence of a unified evaluation mechanism for the reasons that led to the invalidation of these foreign arbitral awards, as the New York Convention places the burden of proof on the defendant, and authorizes national courts to reject a request to implement a foreign arbitral award.
In addition to the above, each country adopting different laws, regulations, and procedures when implementing foreign arbitral awards has contributed to many delays and sometimes rejection and unclear reconsideration.
To be more precise, the different mechanisms of local courts’ evaluation of foreign arbitral awards and the varying periods associated with these mechanisms have created a blurring that local courts in other countries can address in several ways.
Such as limiting and organizing the process of evaluating judges for foreign arbitral awards at a particular time, and allocating departments in various executive departments (according to the subject matter of the arbitral award) is concerned, this can only be with the application of foreign arbitral awards, as this will undoubtedly contribute to accelerating the process of implementation and implementation.
• Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif