1. ENFORCEMENT of ARBITRAL AWARDS under the NEW YORK CONVENTION 1958: RECENT ISSUES and EMERGING TRENDS a presentation by HEW R. DUNDAS Chartered Arbitrator DipICArb International Arbitrator & Mediator 27 th June 2007

2. OVERVIEW of PRESENTATION  Introduction  Dispute Resolution in International Context  International Commercial Arbitration  New York Convention 1958  Enforcement Issues  Related Issues  Conclusions

3. DISPUTE RESOLUTION OPTIONS  Litigation  Arbitration Domestic/International  NB significant distinctions  Expert Determination  Adjudication  Mediation  Other ADR  ENE/Mini-Trials/Med-Arb/Arb-Med etc

4. LITIGATION  Difficulties of Litigating  Local Laws – are they adequate ?  Courts – Good, Bad and Ugly  Litigation against States  Timescales - long and VERY long  Finality  Enforceability  Costs

5. INTL. COMM. ARBITRATION (1) OVERVIEW  What Is It ?  “International”  “Commercial”  “Arbitration”  Profusion of Relevant/Applicable Laws  Institutions and Tribunals  Finality  Enforceability

6. INTL. COMM. ARBITRATION (2) INSTITUTIONS  UNCITRAL  ICSID/NAFTA/ECT  ICC/LCIA  Chartered Institute of Arbitrators  Regional Institutions incl. CIETAC/AAA  LMAA  GAFTA/FOSFA/LME/RSA  Other

7. INTL. COMM. ARBITRATION (3) PROFUSION of LAWS  Law of the Contract (Lex Causae)  Law of the Arbitration Agreement  Law of the Arbitration (Lex Arbitri)  Law governing Capacity of Parties  Law of Seat (Lex Curiae)  Law of Place of Enforcement  Other Potentially Applicable Laws

8. INTL. COMM. ARBITRATION (4) SOME KEY LEGAL ISSUES  Arbitrability  Capacity  Substantive vs Procedural Laws  Arbitrations against States  State Immunity  Interface with Courts  Appeals  Enforcement  Protectionism

9. INTL. COMM. ARBITRATION (5) AWARDS & ENFORCEMENT  Appeals  Jurisdiction  Procedural Failures  Issues of Law  Exequatur  Enforcement  New York Convention 1958

10. NEW YORK CONVENTION (1)  142 Contracting States @ 22/6/07  Recent additions include Afghanistan, Brazil, Gabon, Iceland, Iran, Liberia, Montenegro, Pakistan, Qatar, UAE  Non-parties - Ethiopia, Iraq, Libya, North Korea, Yemen  Taiwan cannot accede (not a State)

11. NEW YORK CONVENTION (2)  Recognition of Arbitration Agreements  Enforcement:  Art. V(1)  Capacity/Invalidity  Failure of Due Process/other Procedural Failure  Outwith Jurisdiction  Award Not Binding/Set Aside at seat  Art. V(2)  Dispute not Arbitrable  Award Contrary to Public Policy  Court MAY, not “shall”, refuse enforcement

12. NEW YORK CONVENTION (3)  Reservations  Reciprocity  Commerciality  Vietnam  Applicability  USA disapplies NYC to awards with US party  E&W applies NYC to foreign domestic awards [see IPCo]  Enforcement other than via NYC58

13. NEW YORK CONVENTION (4) Art. V(1)(a)  Common occurrence  Incapacity  PRC + Russian cases  Foreign Exchange Controls/Licenses/Permits  Arbitration Agreement Invalid  Lex Causae  Lex Arbitri  Examples  Oral contract – enforcement refused in Germany  “Arbitration Hamburg” [coffee case]  Contradiction of previous conduct  Form Requirements

14. NEW YORK CONVENTION (5) Art. V(1)(b), (c) & (d)  Art. V(1))(b) (Due Process) – rare  Generally high standards in international arbitration  Failures in some jurisdictions (inexperience/ignorance)  Effect of Institutional Rules  Quality Counsel  Fully-trained arbitrators e.g. CIArb’s “Chartered Arbitrator”  Art. V(1)(c) (Jurisdiction) – common  What was/was not submitted to arbitration  Award of costs/interest in cases with US claimant  Set-off Defences

15. NEW YORK CONVENTION (6) Art. V(2)  Art. V(2)(a) cases rare  India – technology transfer contracts  IP Issues  State entities/public bodies  Matrimonial/family matters (NB Jewish Law)  Art. V(2)(b) – cases common (often last resort)  “Fundamental notions and principles of justice”  Wide/narrow definitions of public policy  International vs domestic public policy  Enforcement “injurious to public good”  Enforcement “wholly offensive” to civilised values  Westacre/Hilmarton cases

16. NEW YORK CONVENTION (7) Art. V(2)(b) continued  Foreign perceptions of India/PRC/Vietnam  Examples  PRC – “social and public interest”  Switzerland – breach of competition law  USA – award of legal costs  England – Westacre/Hilmarton

17. CURRENT ISSUES AFFECTING ENFORCEMENT  The 8 th and 9 th Grounds  Public policy/public interest  State Immunity  Form Requirements  Success rates in certain countries

18. NEW YORK CONVENTION 8 th /9 th GROUNDS for REFUSAL  8 th Ground – Jurisdiction  USA – Court must have jurisdiction over person or property [US Constitution]  Attachment of ships/aircraft/cargoes  9 th Ground – Manifest Disregard of the Law  Argued as extension of “public policy” ground  Differs from E&W/NZ Error of Law  Court’s different result ≠ manifest disregard  Luzon v Transfield (Philippines)

19. STATE IMMUNITY  Distinction between State/commercial assets  Central Banks  Embassy property  Ships, Aircraft  Exhibits at Trade Fair [Sedelmeyer]  Art Collection [NOGA]  UK State Immunity Act 1978  Examples  AIG v Kazakhstan  Svenska v Lithuania  USA Foreign Sovereign Immunities Act 1976  Dole v Patrickson

20. EMERGING TRENDS  Erroneous decisions by certain Courts  NYC not always understood/recognised  Manipulation of public policy exception  Bad losers losing badly  Effect of awards against States

21. CONCLUSIONS (1)  Relatively small number of contentious cases  Overall state-of-play reasonably strong  NYC still a major success  One of the UN’s greatest success stories  10 th June 2008 – the next 50 years

22. CONCLUSIONS (2) THANK YOU for your ATTENTION