Court Interventions in Arbitrations From a common law point of view Ajmalul Hossain QC Senior Advocate, Bangladesh

International Arbitrations And National Court The desired objectives of arbitrations What approach is taken by courts in practice What consequences may flow with too much intervention We will consider:

International arbitrations are normally disputes involving parties and arbitrators of different nationalities Some basic principles Party autonomy – choice of forum and applicable law Flexible procedures Speedy resolution Confidentiality Parties choice of language applies

National Courts Do not normally allow jurisdiction of courts to be excluded Follow rigid and formal procedures Dispute comes into public domain and gets publicity Language of the national court Possibility of executive influence on decisions in favour of local parties

Desired objectives: The ideal and expectation is for international arbitration to be established and concluded according to internationally accepted practices, free from control of parochial laws, and without the interference of the local courts. Arbitration agreements and awards should be recognised and given effect, with little or no complication or review, by national courts. Dr. Julian Lew Therefore, the national courts should: Provide greater effectiveness to arbitral proceedings Support arbitral proceedings where needed Assist the arbitral proceedings Do not interfere or derail the arbitration proceedings

Sometimes it is said that there is a thin line between helpful assistance and unhelpful interference. ADR can be Additional Dispute Resolution Seat of arbitration – legal place of arbitration which parties or tribunal agree Seat dictates the lex arbitri or the law of the arbitration Seat gives curial or supervisory jurisdiction to the local courts

Court Assistance -Pre Arbitration: Grant injunctions or stay court proceedings brought in breach of the arbitration agreement – obligation under NY Convention (Art. 2(3)) and part of the UNCITRAL Model Law (Art. 8) Assist with the appointment of arbitral tribunal as a default mechanism Assist with any change of the constitution of the tribunal Issue interim preservatory orders before formation of Tribunal

During arbitration: Preserve evidence or subject matter of dispute Issue procedural orders relating to security for costs, disclosure and inspection of documents, summoning and attendance of witnesses Interim injunctions, appointment of receiver, making of attachment order

Post award: Deal with challenges to and setting aside of awards Give recognition to the award Enforce the award

Sometimes the supportive role of the courts is overshadowed by the abuse of the supervisory powers of the court. The reasons are: Courts place a narrow and parochial interpretation on modern arbitration laws to limit their application and to interfere in the arbitration process. Chauvinism of judges Ignorance of generally accepted principle of private international law

Two types of interference by the courts: Interference with the arbitral proceedings Interventions preventing enforcement of arbitral awards

Arbitral Proceedings: Interfering with the competence-competence principle, i.e., the tribunal should rule on its own jurisdiction – SBP v Patel Engineering (India) Revoking the authority of the Tribunal – Petrobangla v Saipem (Bangladesh) Granting anti-arbitration injunctions Hub Power Co v Wapda (Pakistan)

Interferences with enforcement of awards Extended meaning of public policy; Saw Pipes v ONGC Limits of national laws to enforce international arbitrations; Bhatia v Bulk Trading London award to be enforced in USA set aside in India; Venture Global v Satyam

What is the risk of too much interference by national courts ? States can be held responsible under international law for the wrongful acts of their judiciary in interfering with arbitration proceedings: Saipem v Bangladesh Undue interference by national courts with a foreign investors contractual right to arbitrate may amount to expropriation under international law.

Conclusions Parties do not get their bargain, ie, dispute resolved by chosen method Risk of further dispute arising out of failed arbitration Good for lawyers – terrible for clients