1. Recognition & enforcement of the award may be refused, at the request of the tiệc ngọt against whom it is invoked, only if that các buổi party furnishes to the competent authority where the recognition & enforcement is sought, proof that:
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (...)
A. Draft Convention on the Recognition & Enforcement of Foreign Arbitral Awards & Comments by Governments và Organizations A.1. ECOSOC: Report of the Committee on the Enforcement of Foreign Arbitral Awards: 18 March 1955 A.2. Comments by Governments and Organisations on the Draft Convention on the Recognition & Enforcement of Foreign Arbitral Awards: January 1956 - March 1958 A.3. Activities of Inter-Governmental and Non-Governmental Organizations in the Field of International Commercial Arbitration: Consolidated Report by the Secretary-General - 24 April 1958 A.4. Comments on the Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards: cảnh báo by the Secretary-General: 6 March 1958 B. United Nations Conference On International Commercial Arbitration: Documents B.2. Amendments lớn the Draft Convention Submitted by Governmental Delegations : 21 -28 May 1958 B.3. Comparison of Drafts Relating lớn Articles III, IV và V of the Draft Convention - 29 May 1958 B.5.Further Amendments to the Draft Convention Submitted by Governmental Delegations - 29 May -3 June 1958 B.7. Text of Articles III, IV & V of the Draft Convention Proposed by Working buổi tiệc ngọt III: 3 June 1958 B.9. Amendments by Governmental Delegations khổng lồ the Drafts Submitted by the Working Parties and Further Suggested Drafts 3-5 June 1958 B.10. Text of Articles Adopted by the Conference: 4-6 June 1958 B.11. Text of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards as Provisionally Approved by Drafting Committee 6-9 June 1958 B.14. Final Act và Convention on the Recognition and Enforcement of Foreign Arbitral Awards C. Summary Records of the United Nations Conference on International Commercial Arbitration, New York, đôi mươi May - 10 June 1958 D. Committee on the Enforcement of International Arbitral Awards D.1. Summary Records of the Committee on the Enforcement of International Arbitral Awards
GENERAL PRINCIPLES APPLICATION B. The requirement that the arbitral procedure accord with the governing rules
1. Article V(1)(d) of the Convention sets out the fourth enumerated defence to lớn the recognition và enforcement of a foreign arbitral award. It enables the courts of a Contracting State to refuse recognition và enforcement where the constitution of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, in the absence of an agreement, with the law of the country where the arbitration took place.
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2. Procedural irregularities under article V(1)(d) have lớn be raised & proven by the party challenging the recognition & enforcement of an award,848 and cannot be raised by a court of its own motion.849
848. See, e.g., Oberlandesgericht
849. Fouchard Gaillard Goldman on International Commercial Arbitration 983, para. 1694 (E. Gaillard, J. Savage eds., 1999); Gary B. Born, International Commercial Arbitration 2731 (2009).
3. Under article V(1)(d) the drafters of the Convention gave priority lớn the parties’ agreement concerning the composition of the tribunal and the arbitral procedure. The law of the country where the arbitration took place plays only a subsidiary role in the sự kiện that the parties have not reached an express or implied agreement on the procedural point at issue.850
850. Report of the Secretary-General: Study on the Application & Interpretation of the Convention on the Recognition và Enforcement of Foreign Arbitral Awards (New York, 1958), A/CN.9/168, in X Yearbook of the United Nations Commission on International Trade Law 106 (1979).
4. Article V(1)(d) may be regarded as an important step forward compared khổng lồ the 1927 Geneva Convention, under which an award had to comply with the parties’ agreement and, cumulatively, the law governing the arbitral procedure, in order to lớn gain recognition & enforcement.851 The novelty of the thành phố new york Convention lies in the supremacy given khổng lồ the parties under article V(1)(d) lớn agree on the composition of the tribunal & the procedure.852 This is consistent with the limited power nguồn of review of awards by enforcing courts under article V(1) of the Convention,853 & reduces the risk that the recognition & enforcement of awards will be refused based on grounds of procedural irregularities in national laws.
851. See article 1(c) of the 1927 Geneva Convention, which provided that the tiệc nhỏ seeking recognition và enforcement had khổng lồ demonstrate “
852. Polimaster Ltd. And NA&SE Trading Co. Ltd. V. Rae Systems, Inc., District Court, Northern District of California, United States of America, 23 January 2009, C 05-1887; Joseph Müller A. G. V. Sigval Bergesen, Federal Tribunal, Switzerland, 26 February 1982; Encyclopedia Universalis S.A. V. Encyclopedia Britannica, Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-CV.
853. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Comments on Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, lưu ý by the Secretary-General, E/CONF.26/2, pp. 5-6.
5. Although article V(1)(d) moves beyond the text of the 1927 Geneva Convention, it is not as liberal as certain arbitration statutes, which attach even less importance than the thủ đô new york Convention to the law of the country where the arbitration took place at the recognition and enforcement stage.854 As explained in the chapter on article VII,855 the Convention sets only a “ceiling”, or the maximum level of control, which courts of the Contracting States may exert over foreign arbitral awards. A court will not breach the thủ đô new york Convention by applying more liberal rules than article V(1)(d), in accordance with article VII(l).
854. For instance, article 1520 of the New French Code of Civil Procedure provides that an award should not be recognized where “the arbitral tribunal was not properly constituted”. Under this provision, as well as the equivalent provision of the former French Code of Civil Procedure, the composition of the arbitral tribunal is measured against the will of the parties. Where the alleged irregularity resulted solely from a violation of the law of the place of the arbitration, recognition & enforcement would not be refused unless that law had been chosen by the parties to govern their procedure. Fouchard Gaillard Goldman on International Commercial Arbitration 989, para. 1701 (E. Gaillard, J. Savage eds., 1999).
855. See the chapter of the Guide on article VII, para. 2.
6. In the vast majority of reported cases, parties have been unsuccessful in proving the grounds for non-enforcement under article V(1)(d). It rarely occurs that the composition of a tribunal deviates from the parties’ agreement or the applicable rules. Further, courts have taken into trương mục the wide discretion vested in arbitral tribunals khổng lồ organize and control the arbitral proceedings.856
856. See, e.g., K Trading Company v. Bayerischen Motoren Werke AG, Bayerisches Oberstes Landesgericht
7. Courts are usually not formalistic in their approach khổng lồ article V(1)(d) và as a result have applied it in a restrictive manner.857 This is consistent with the general discretion of courts to lớn refuse challenges under article V(1) of the Convention, which provides that a court “may” refuse recognition and enforcement.858
857. See, e.g., Al Haddad Bros. Enterprises Inc. V. M/S “Agapi” & Diakan Love S.A., District Court, District of Delaware, United States of America, 9 May 1986, 635 F. Supp. 205; China Nanhai Oil Joint Service Corporation Shenzen Branch v. Gee Tai Holdings Co. Ltd., High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411.
858. Sigvard Jarvin, Irregularity in the Composition of the Arbitral Tribunal và the Procedure, in Enforcement of Arbitration Agreements and International Arbitral Awards: The thủ đô new york Convention in Practice 729, 734 (E. Gaillard, D. Di Pietro eds., 2008).
8. Article V(1)(d) has some interaction và overlap with article V(2)(b) of the Convention, which provides that a court may refuse lớn recognize or enforce an award if the award “would be contrary lớn the public policy of that country.” It is not unusual for parties to raise both provisions in their attempt khổng lồ challenge recognition và enforcement. However, a defence based on article V(1)(d) must be raised by “the các buổi party against whom
859. See, e.g., Oberlandesgericht
9. Article V(1)(d) expressly affirms the supremacy of the parties’ agreement concerning the composition of the tribunal và arbitral procedure, và that the law of the place of arbitration should apply only “failing such agreement.”860 Courts have consistently recognized that the grounds enumerated in article V(1)(d) must be measured, in the first instance, against the agreement of the parties.861
860. Travaux préparatoires, Draft Convention on the Recognition & Enforcement of Foreign Arbitral Awards và Comments by Governments & Organizations, Report by the Secretary-General, Recognition & Enforcement of Foreign Arbitral Awards, E/2822, Annex II, pp. 18-19; Fouchard Gaillard Goldman on International Commercial Arbitration 454, para. 756 (E. Gaillard, J. Savage eds., 1999).
861. See, e.g., Polimaster Ltd., NA&SE Trading Co., Limited v. RAE Systems, Inc., Court of Appeals, Ninth Circuit, United States of America, 28 September 2010, 08-15708, 09-15369; Rederi Aktiebolaget Sally v. S.r.l. Termarea, Court of Appeal of Florence, Italy, 13 April 1978, IV Y.B. Com. Arb. 294 (1979); Deiulemar Compagnia di Navigazione, S.p.A. V. Transocean Coal Company, Inc. And others, District Court, Southern District of New York, United States of America, 30 November 2004, 03 Civ. 2038 (RCC), XXX Y.B. Com. Arb. 990 (2005); Hanseatisches Oberlandesgericht
10. Article V(1)(d) is silent as khổng lồ the khung of the parties’ agreement. Such an agreement includes an oral agreement or one in writing, and can be express or implied.862
862. See Sigvard Jarvin, Irregularity in the Composition of the Arbitral Tribunal và the Procedure, in Enforcement of Arbitration Agreements and International Arbitral Awards: The thủ đô new york Convention in Practice 729, 730 (E. Gaillard, D. Di Pietro eds., 2008); Gary B. Born, International Commercial Arbitration 2771 (2009).
11. Article V(1)(d) does not stipulate any minimum requirements for the nội dung of the parties’ agreement. The parties can agree on a national procedural law or institutional rules lớn govern these matters,863 or can agree on their own rules independent of any system.864
863. See, e.g., Joseph Müller A,G, v. Sigval Bergesen, Federal Tribunal, Switzerland, 26 February 1982; Hanseatisches Oberlandesgericht
864. See, e.g., Encyclopedia Universalis S.A. V. Encyclopedia Britannica, Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-CV; Société Européenne d’Etudes et d’Entreprises (S.E.E.E.) v. Federal Republic of Yugoslavia, Court of Appeal of Rouen, France, 13 November 1984, 982/82.
12. Under the Convention, the choice of a place of arbitration by the parties is not khổng lồ be construed as an agreement khổng lồ adopt the procedural rules of that jurisdiction. Article V(1)(d) itself distinguishes between situations in which procedural rules apply as a result of the agreement of the parties and, as explained below, situations in which they apply as a function of the place of the arbitration.865
865. Fouchard Gaillard Goldman on International Commercial Arbitration 990, para. 1702 (E. Gaillard, J. Savage eds., 1999).
13. Accordingly, courts have rejected arguments that the composition of the tribunal or the procedure did not comply with the law of the place of the arbitration where the parties had agreed on other procedural rules. For instance, a German court enforced an award rendered in Turkey where the parties had agreed to the rules of the Arbitral Commission of the Istanbul Chamber of Commerce và Industry, và rejected a party’s argument that the procedure was not in accordance with the requirements of the Turkish Code of Civil Procedure.866
14. Even where the composition of the tribunal or the procedure was valid under the procedural rules of the country where the arbitration took place, courts have denied recognition và enforcement under article V(1)(d) where those elements deviated from the parties’ agreement. In a 1978 decision, for instance, the Court of Appeal of Florence refused khổng lồ enforce an award rendered in England by only two arbitrators, who had declined lớn appoint a third arbitrator on the basis of the 1950 English Arbitration Act, pursuant to which a clause providing for a three-member tribunal was deemed lớn take effect as if it provided for an umpire. According khổng lồ the Court of Appeal, since the parties had in fact agreed on a three-member tribunal, their agreement was to lớn be given precedence over the requirements of English procedural law.867
867. Rederi Aktiebolaget Sally v. S.r.l. Termarea, Court of Appeal of Florence, Italy, 13 April 1978, IV Y.B. Com. Arb. 294 (1979).
15. Recognition & enforcement may be refused under article V(1)(d) if, “failing” an express or implied agreement between the parties, the composition of the tribunal or the procedure did not accord with the “law of the country where the arbitration took place”. The place of arbitration may result from the choice made by the parties, or by an arbitral institution or the arbitral tribunal. A court that rules on an application for recognition and enforcement in reference lớn the procedural law of the country where the arbitration took place, without first ascertaining the existence of a tiệc nhỏ agreement, will thus violate the Convention.868
868. Rederi Aktiebolaget Sally v. S.r.l. Termarea, Court of Appeal of Florence, Italy, 13 April 1978, IV Y.B. Com. Arb. 294 (1979).
16. Courts have assessed challenges under article V(1)(d) by reference lớn the provisions of the place of the arbitration in very few cases. This may be explained by the circumstances that typically give rise khổng lồ situations covered by article V(1)(d). As one commentator notes, where the parties have not agreed on how the arbitral tribunal should be constituted, this will be determined either by an arbitral institution or a court, which will likely follow the requirements of the law where the arbitration takes place.869
869. Sigvard Jarvin, Irregularity in the Composition of the Arbitral Tribunal and the Procedure, in Enforcement of Arbitration Agreements và International Arbitral Awards: The thành phố new york Convention in Practice 729, 740 (E. Gaillard, D. Di Pietro eds., 2008).
17. In one reported case where procedural rules of the country where the arbitration took place were applied, a United States court held that, because there was no agreement between the parties concerning the arbitral procedure, the allegation that the arbitrator had improperly refused to lớn hear oral evidence that was pertinent & material to lớn the dispute had khổng lồ be assessed with reference to lớn the arbitration procedure of the United States, where the arbitration took place.870 The court found that the arbitrator’s decision to lớn decide the matter based solely on documentary evidence did not constitute misconduct under the rules of the place of arbitration, và enforced the award.
870. InterCarbon Bermuda, Ltd. V. Caltex Trading & Transport Corporation, District Court, Southern District of New York, United States of America, 12 January 1993, 91 Civ. 4631 (MJL), XIX Y.B. Com. Arb. 802 (1994).
18. Article V(1)(d) places no express limitation on the autonomy of the parties lớn agree on the composition of the arbitral tribunal or the arbitral procedure.
19. However, the question whether parties’ agreement should be limited by the mandatory rules of the seat has been raised by commentators. One commentator has suggested that a failure to comply with the parties’ agreement should not constitute a ground for refusal under article V(1)(d), where such failure is justified by the obligation khổng lồ comply with the mandatory rules of the place of the arbitration.871 Other authors have argued that it should be assumed that the parties’ intention was to be bound by an agreement that is valid at the place of arbitration, & that the reference khổng lồ “agreement of the parties” must therefore be understood within the limits of the mandatory rules of the forum.872
871. Jörg Gentinetta, Die Lex Fori Internationaler Handesscheidsgerichte 302 (1973).
872. Jean-François Poudret, Sébastien Besson, Comparative Law of International Arbitration 839-40(2007).
20. These interpretations vày not seem to accord with the intention of the drafters of the Convention which, as shown in the explicit terms of article V(1)(d), was lớn ensure that the parties’ agreement should prevail over the provisions—mandatory or not—of the law of the seat. In this respect, the wording of article V(1)(d) departed from the 1927 Geneva Convention, in which the law of the country where the arbitration took place retained paramount importance.873
873. See article 1(c) of the 1927 Geneva Convention, which provided that the các buổi tiệc nhỏ seeking recognition & enforcement had lớn demonstrate “
21. The secondary role of the procedural rules where the arbitration took place was confirmed in a 1979 Report on the Convention by the United Nations Secretary General, which stated that the “priority given lớn the parties’ wishes” under article V(1)(d) “is merely limited by the public policy ground under paragraph 2(b).”874 The Swiss Federal Tribunal affirmed this view in a 1982 case, where it considered that “by virtue of the agreement of the parties, even the mandatory rules of procedure of a State also can be declared inapplicable và they can be substituted with the parties’ own rules.”875
874. Report of the Secretary-General: Study on the Application and Interpretation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), A/CN.9/168, in X Yearbook of the United Nations Commission on International Trade Law 106 (1979). Another commentator has noted that any potential conflict between the rules chosen by the parties và the mandatory rules of the forum is counterbalanced under the Convention by the public policy provision of article V(2)(b), as well as the due process requirement of article V(1)(b). Patricia Nacimiento, Article V(1)(d), in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the thành phố new york Convention 281, 286 (H. Kronke, p Nacimiento et al. Eds., 2010).
875. Joseph Müller A. G. V. Sigval Bergesen, Federal Supreme Court, Switzerland, 26 February 1982; see also Hanseatisches Oberlandesgericht
APPLICATION A. The requirement that the composition of the arbitral tribunal accord with the governing rules
22. Article V(1)(d) provides that the composition of the arbitral authority must have been in accordance with the agreement of the parties, or in the absence of an agreement, the law of the country where the arbitration took place, failing which recognition & enforcement of the award may be refused.
23. The standard of proof for showing that the constitution of the arbitral tribunal was irregular is high.876 In the words of one United States court, the burden is “substantial because the public policy in favour of international arbitration is strong.”877
876. See, e.g., Conceria G. De Maio và F. Snc v. EMAG AG, Court of Cassation, Italy, đôi mươi January 1995, XXI Y.B. Com. Arb. 602 (1996); Transocean Shipping Agency p. Ltd. V. Black Sea Shipping và Ors., Supreme Court, India, 14 January 1998; Polimaster Ltd., NA&SE Trading Co., Limited v. RAE Systems, Inc., Court of Appeals, Ninth Circuit, United States of America, 28 September 2010, 08-15708, 09-15369; Encyclopedia Universalis S.A. V. Encyclopedia Britannica, Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-CV; Karaha Bodas Co. (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia), Court of Appeals, Fifth Circuit, United States of America, 23 March 2004, 02-20042, 03-20602.
877. Polimaster Ltd., NA&SE Trading Co., Limited v. RAE Systems, Inc., Court of Appeals, Ninth Circuit, United States of America, 28 September 2010, 08-15708, 09-15369.
24. Courts may require a showing that the alleged irregularity would have resulted in a different award had the procedural rule been observed. For example, a German court rejected the argument of a party that a three-member tribunal had been appointed by the wrong authority, since that buổi tiệc nhỏ had failed khổng lồ demonstrate that a different appointment procedure would have led to a different ruling.878
878. Creditor under the award v. Debitor under the award, Oberlandesgericht
25. Furthermore, even where it has been established that the composition of the tribunal is irregular, courts may consider that the parties’ subsequent behaviour results in a mutually agreed modification khổng lồ the applicable procedure. For instance, a German court considered that, where both parties had appointed arbitrators who were not members of the institution specified in their agreement, the parties had tacitly modified their agreement. The court consequently rejected the challenge lớn enforcement based on article V(1)(d).879
26. Courts have sometimes interpreted article V(1)(d) restrictively & have enforced awards where the composition of the tribunal deviated from the parties’ agreement.
27. For instance, the Hong Kong Supreme Court enforced an award rendered in China, even though its members were selected from a different danh mục of arbitrators than provided in the parties’ agreement.880
880. China Nanhai Oil Joint Service Corporation Shenzen Branch v. Gee Tai Holdings Co. Ltd., High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411.
28. Courts have rejected challenges under article V(1)(d) where the parties choose institutional rules to govern their procedure that provide for flexibility concerning the manner in which the tribunal is to be composed.881 On the other hand, a German court refused recognition & enforcement where an award was rendered by two, instead of three arbitrators, as expressly required by the rules of the International Arbitration Court of the Belarusian Chamber of Commerce that the parties had agreed would govern their arbitration.882
881. See, e.g., Shaheen Natural Resources Company Inc. V. Société Nationale pour la Recherche, la Production and others, Court of Appeals, Second Circuit, United States of America, 15 November 1983, 733 F. Supp. 2d 260, X Y.B. Com. Arb. 540 (1985).
882. E20, Supplier (United States) v. State enterprise (Belarus), Bundesgerichthof
29. Courts have exercised the residual discretion they enjoy under article V(1) & have rejected challenges based on an irregular composition of the tribunal where it is clear that a tiệc nhỏ had previously intended khổng lồ frustrate the arbitral procedure. For instance, the Supreme Court of Spain enforced an award rendered by a sole arbitrator appointed by one of the parties, where the các buổi tiệc nhỏ opposing enforcement had refused khổng lồ appoint a co-arbitrator.883 Similarly, a United States court enforced an award rendered by one of the party appointees as a sole arbitrator where the other party chose not to participate in the arbitration.884
883. X v. Naviera Y S.A., Supreme Court, Spain, 3 June 1982, XI Y.B. Com. Arb. 527 (1986).
884. Al Haddad Bros. Enterprises Inc. V. M/S “Agapi” và Diakan Love S.A., District Court, District of Delaware, United States of America, 9 May 1986, 635 F. Supp. 205. See also China Nanhai Oil Joint Service Corporation Shenzen Branch v. Gee Tai Holdings Co. Ltd., High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411; Conceria G. De Maio và F. Snc v. EMAG AG, Court of Cassation, Italy, 20 January 1995, XXI Y.B. Com. Arb. 602 (1996).
30. In the few cases where courts have refused khổng lồ enforce awards pursuant to article V(1)(d), the manner in which the tribunal was constituted materially deviated from the parties’ agreement.
31. For example, a United States court refused enforcement in a case where the parties had agreed that they would each appoint a co-arbitrator, who would appoint a president if they failed khổng lồ reach a decision, and where one of the arbitrators had failed khổng lồ even tương tác the other before requesting the appointing authority to appoint the third arbitrator.885
885. Encyclopedia Universalis S.A. V. Encyclopedia Britannica, Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-CV.
32. An Italian court upheld a challenge where the parties’ agreement that the tribunal should constitute a specific number of arbitrators was not followed, và noted that the composition of the tribunal would also have been invalid according to the laws of the place of the arbitration.886
886. Rederi Aktiebolaget Sally v. S.r.l. Termarea, Court of Appeal of Florence, Italy, 13 April 1978, IV Y.B. Com. Arb. 294 (1979).
33. Certain authors have considered that courts may refuse enforcement under article V(1)(d) based on the alleged bias of an arbitrator.887 This may also constitute a ground for refusal under article V(2)(b) where it is contrary to lớn public policy.888
887. Christian Borris, Rudolf Henneke, Article V(1)(d), in thành phố new york Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958—Commentary 329, 339 (R. Wolff ed., 2012);
888. See the chapter of the Guide on article V(2)(b), paras. 59-61.
34. The standard of proof for arbitrator bias under article V(1)(d) is particularly high. For example, a United States court held that the mere fact that the tribunal President và the counsel of one of the parties both served on the same board of directors và were members of the same organization was insufficient to justify a refusal, where the tiệc nhỏ bringing the challenge had provided no evidence that they had otherwise communicated with each other.889 A Hong Kong court has equally affirmed this high burden of proof, finding that the các buổi party opposing enforcement had failed khổng lồ prove its allegation that the tribunal’s deliberations had been affected by the alleged bias of one member.890
889. HSN Capital LLC v. Productora y Comercializador de Television, S.A. De C.V., District Court, Middle District of Florida, Tampa Division, United States of America, 5 July 2006, 8:05-cv-1769-T-30TBM. See also Nicor International Corporation v. El Paso Corporation, District Court, Southern District of Florida, United States of America, 24 November 2003, 02-21769, where the court decided that the parties opposing enforcement had failed to prove that a sole arbitrator’s previous representations or nationality influenced his decision-making; Shaanxi Provincial Medical Health Products I/E Corporation v. Olpesa, S.A., Supreme Court, Spain, 7 October 2003, 112/2002, XXX Y.B. Com. Arb. 617 (2005).
890. Logy Enterprises Ltd. V. Haikou city Bonded Area Wansen Products Trading Co., Court of Appeal, Hong Kong, 22 May 1997, No. 65 (Civil).
B. The requirement that the arbitral procedure accord with the governing rules a. Criteria for procedural irregularities
35. The recognition & enforcement of an award may be refused under article V(1)(d) where the arbitral procedure was not in accordance with the agreement of the parties or, “failing such agreement”, with the law of the country where the arbitration took place.
36. The term “arbitral procedure” encompasses the period beginning with the filing of an kích hoạt and ending when the award is rendered.891 The application of the law by a tribunal, on the other hand, goes to lớn the actual merits of a dispute & therefore falls outside the scope of nhận xét at the recognition và enforcement stage.892
891. Christian Borris, Rudolf Henneke, Article V(1)(d), in new york Convention on the Recognition & Enforcement of Foreign Arbitral Awards of 10 June 1958—Commentary 329, 344 (R. Wolff ed., 2012); Patricia Nacimiento, Article V(1)(d), in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the thủ đô new york Convention 281, 292 (H. Kronke, p Nacimiento et al. Eds., 2010).
892. Vigel S.p.A. V. Trung quốc National Machine Tool Corporation, Court of Cassation, Italy, 8 April 2004, XXXI Y.B. Com. Arb. 802 (2006). See also Venture Global Engineering, LLC v. Satyam Computer Services, Ltd., Court of Appeals, Sixth Circuit, United States of America, 15 May 2007, 062056, XXXIII Y.B. Com. Arb. 970 (2008).
37. The burden of proof for an alleged procedural irregularity is on the buổi tiệc nhỏ opposing recognition & enforcement. The evidence must be provided893 và it must be clear.894
893. Grow Biz International Inc. V. D.L.T. Holdings Inc., & Debbie Tanton, Supreme Court of the Province of Prince Edward Island, Canada, 23 March 2001, GSC-17431, XXX Y.B. Com. Arb. 450 (2005).
894. See, e.g., Manufacturer v. Exclusive distributor, Oberlandesgericht
38. As with the composition of the tribunal, the threshold of proof for showing an irregular arbitral procedure under article V(1)(d) is high. One United States court observed that the Convention does not “permit reviewing courts to police every procedural ruling made by the arbitrator & to set aside the award if any violation of the <...> procedures is found. Such an interpretation would directly conflict with the ‘pro-enforcement bias’ of the Convention và its intention to lớn remove obstacles to confirmation of arbitral awards.”895
895. Compagnie des Bauxites de Guinée v. Hammermills Inc., District Court, District of Columbia, United States of America, 29 May 1992, 90-0169, XVIII Y.B. Com. Arb. 566 (1993).
39. Article V(1)(d) is silent as khổng lồ what types of procedural irregularities should lead khổng lồ a refusal to recognize and enforce. Most courts require a substantial defect in the arbitral procedure and/or a causal nexus between the defect and the award. A range of approaches have been adopted for determining these criteria.896
896. Christian Borris, Rudolf Henneke, Article V(1)(d), in new york Convention on the Recognition & Enforcement of Foreign Arbitral Awards of 10 June 1958—Commentary 329, 344 (R. Wolff ed., 2012); Patricia Nacimiento, Article V(1)(d), in Recognition và Enforcement of Foreign Arbitral Awards: A Global Commentary on the thành phố new york Convention 281, 292-93 (H. Kronke, phường Nacimiento et al. Eds., 2010).
40. One approach is lớn ascertain whether the alleged irregularity substantially prejudiced one of the parties.
41. In one case, an English court enforced an award where the tribunal applied a revised mix of procedural rules that had superseded those provided for in the parties’ agreement, holding the các buổi tiệc nhỏ opposing enforcement had not suffered sufficient prejudice lớn justify a refusal.897 In another case where the arbitration was held at a different place than the agreed place of arbitration and a tiệc nhỏ had refused to lớn participate, an English court held that the different location did not affect the fairness of the proceedings or prejudice that party. The court reasoned that the wording of the arbitration agreement had not made it clear that the parties regarded the venue as critically important.898 The courts of the United States have similarly considered that the “appropriate standard of reviews would be lớn set aside an award based on a procedural violation only if such violation caused substantial prejudice lớn the complaining party.”899
897. China Agrobusiness Development Corporation v. Balli Trading, High Court of Justice, Queen’s Bench Division, England and Wales, trăng tròn January 1997, XXIV Y.B. Com. Arb. 732 (1999).
898. Tongyuan International trading Group v. Uni-Clam Limited, High Court of Justice, England và Wales, 19 January 2001, 2000 Folio No 1143.
899. Compagnie des Bauxites de Guinée v. Hammermills Inc., District Court, District of Columbia, United States of America, 29 May 1992, 90-0169, XVIII Y.B. Com. Arb. 566 (1993). See also P.T. Reasuransi Umum Indonesia v. Evanston Insurance Company, Utica Mutual Insurance Company & others, District Court, Southern District of New York, United States of America, 21 December 1992, 92 Civ. 4623 (MGC), XIX Y.B. Com. Arb. 788 (1994).
42. Another approach is khổng lồ require a các buổi tiệc nhỏ opposing enforcement to lớn prove that the outcome of the case would have been different had the alleged irregularity not occurred. As noted above, this approach has also been followed in challenges based on the composition of the tribunal.900
900. See, e.g., Creditor under the award v. Debitor under the award, Oberlandesgericht
43. For example, in a 2004 decision, a German court enforced an award that was rendered five months after the time limit phối in the parties’ agreement. The Court found that the các buổi tiệc nhỏ opposing enforcement had not proven that the tribunal would have decided differently had the tribunal respected the time limit.901 Other German courts have followed this approach.902
901. K Trading Company v. Bayerischen Motoren Werke AG, Bayerisches Oberstes Landesgericht
902. Exclusive distributor v. Manufacturer, Oberlandesgericht
44. The distinction between the varying approaches may be more apparent than real, & in many cases may lead khổng lồ the same outcome particularly since not all courts distinguish between them and/or refer khổng lồ them simultaneously.903 Of the few decisions where a foreign award has been refused enforcement pursuant lớn the second alternative of article V(1)(d), the buổi tiệc ngọt opposing enforcement brought evidence of fundamental or unjustifiable procedural defects that one could consider would have met the criteria of both approaches. For instance, in a 1968 case, a Swiss court refused to lớn issue an enforcement order on the grounds that the arbitral tribunal had not complied with the agreement of the parties that “all disputes should be settled in one và the same arbitral proceedings” and instead conducted the arbitration in two stages.904 In a 2001 case, the Italian Supreme Court enforced a first award but not a second award made with respect lớn the same dispute. The Court held that the second award was contrary to the parties’ agreement that contemplated only one arbitration, depending on which tiệc ngọt commenced arbitration first.905
903. Christian Borris, Rudolf Henneke, Article V(1)(d), in new york Convention on the Recognition và Enforcement of Foreign Arbitral Awards of 10 June 1958—Commentary 329, 347 (R. Wolff ed., 2012); Patricia Nacimiento, Article V(1)(d), in Recognition và Enforcement of Foreign Arbitral Awards: A Global Commentary on the new york Convention 281, 298 (H. Kronke, p Nacimiento et al. Eds., 2010).
904. Firm in Hamburg (buyer) v. Corporation (A.G.) in Basel (seller), Court of Appeal of the Canton of Basel-Stadt, Switzerland, 6 September 1968, I Y.B. Com. Arb. 200 (1976).
905. Tema Frugoli SpA, in liquidation v. Hubei Space Quarry Industry Co. Ltd, Court of Cassation, Italy, 7 February 2001, XXXII Y.B. Com. Arb. 390 (2001).
45. In assessing challenges khổng lồ recognition và enforcement under article V(1)(d), courts have recognized the broad discretion of arbitral tribunals khổng lồ organize & control the arbitral proceedings.
46. For instance, a United States court rejected an argument that the tribunal had deviated from the parties’ agreement by consolidating claims arising out of two separate contracts. In the Court’s view, the decision to consolidate the claims was within the tribunal’s discretion, and this decision was reached after a careful interpretation of the parties’ contract.906 In another decision, a United States court held that there was no deviation from the rules of the American Arbitration Association agreed to lớn by the parties where the tribunal had considered a belatedly submitted technical report, adding that “rbitration proceedings are not constrained by formal rules of procedure or evidence.”907
906. Karaha Bodas Co. (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia), Court of Appeals, Fifth Circuit, United States of America, 23 March 2004, 02-20042, 03-20602.
907. Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, Court of Appeals, Eleventh Circuit, United States of America, 22 May 1998, 94-2982, 94-2530. See also Compagnie des Bauxites de Guinée v. Hammermills Inc., District Court, District of Columbia, United States of America, 29 May 1992, 90-0169, XVIII Y.B. Com. Arb. 566 (1993), concerning the tribunal’s application of the ICC Arbitration Rules; China National Metal Products Import/Export Company v. Apex Digital, Inc., Court of Appeals, Ninth Circuit, United States of America, 16 August 2004, 03-55231, XXX Y.B. Com. Arb. 908 (2005), concerning the tribunal’s application of the CIETAC Rules.
47. Courts have similarly held that a tribunal’s adjudication of a case based on documentary evidence without an oral hearing does not justify a refusal under article V(1)(d). A German court reached this decision where the provisions of the 1996 English Arbitration Act agreed to lớn by the parties granted discretion to the tribunal lớn schedule an oral hearing.908 A United States court held that a tribunal’s decision of an issue of contract interpretation based solely on documentary evidence was not fundamentally unfair where the parties had not agreed on the applicable procedure. In this instance, the tribunal assessed the issue by reference to lớn the laws of the United States, where the arbitration had taken place.909
908. Hanseatisches Oberlandesgericht
909. InterCarbon Bermuda, Ltd. V. Caltex Trading và Transport Corporation, District Court, Southern District of New York, United States of America, 12 January 1993, 91 Civ. 4631 (MJL), XIX Y.B. Com. Arb. 802 (1994).
48. Certain national laws expressly require an arbitral tribunal to lớn provide the reasons for its final decision.910 The same is true of certain institutional rules that the parties may choose khổng lồ govern their dispute.911 If the parties’ agreement, or the agreed upon arbitration rules or national law, require the award to lớn contain reasons, the failure khổng lồ provide reasons may be a ground for refusal under article V(1)(d).912 Courts have observed the limited scope of đánh giá of arbitral awards at the enforcement stage when examining these types of challenges.913
910. For instance, the laws of Australia, Belgium, England, France, Germany, Italy, Ireland, the Netherlands and Switzerland all expressly require arbitrators lớn state the reasons for their decision in their award.
911. For instance, Article 31(2) of the UNCITRAL model Law on International Commercial Arbitration presumes that, in the absence of any indication khổng lồ the contrary, the parties’ intention is that the arbitrators should state the grounds for their awards.
912. See however Food Services of America, Inc. V. Pan Pacific Specialties Ltd., Supreme Court of British Columbia, Canada, 24 March 1997, A970243, XXIX Y.B. Com. Arb. 581 (2004), where the court held that an arbitrator’s failure lớn state reasons, as required by the rules of the American Arbitration Association agreed upon by the parties, was not considered part of the arbitral procedure.
913. Oberlandesgericht
49. Where an arbitration agreement or award falls within the field of application of both the new york Convention and the 1961 European Convention on International Commercial Arbitration, the requirement to state reasons will be assessed in light of the provisions of the European Convention. Article VIII of the European Convention provides that the parties to lớn an arbitration shall be presumed to lớn have agreed that reasons shall be given for the award unless they expressly declare otherwise, or have assented khổng lồ an arbitral procedure under which it is not customary to lớn give reasons, provided that neither các buổi party requests before the over of the hearing or the making of the award that reasons be given.914
914. European Convention on International Commercial Arbitration, Geneva, 21 April 1961, Article VIII: “The parties shall be presumed to lớn have agreed that reasons shall be given for the award unless they (a) either expressly declare that reasons shall not be given; or (b) have assented to lớn an arbitral procedure under which it is not customary to lớn give reasons for awards, provided that in this case neither buổi tiệc nhỏ requests before the over of the hearing, or if there has not been a hearing then before the making of the award, that reasons be given.”
50. In a case concerning an application for enforcement that was subject to lớn both the thủ đô new york Convention và the European Convention, the Italian Court of Cassation decided that enforcement should be denied where the presumption under Article VIII had not been rebutted because one party seeking enforcement had expressly requested during the arbitral proceeding that reasons be given for the award. This was notwithstanding the fact that the Arbitration Rules of the Sugar Association of London, which the parties agreed would govern the arbitral procedure, did not require that reasons for an award be provided.915
915. Fratelli Damiano s.n.c. V. August Tropfer & Co., Court of Cassation, Italy, 8 February 1982, 722, IX Y.B. Com. Arb. 418 (1984).
51. The question has arisen whether a buổi tiệc ngọt may be estopped from raising the defence to enforcement under article V(1)(d), where it has failed to vì chưng so before the arbitral tribunal. A number of courts have held that a complaint concerning the composition of the tribunal or the arbitral procedure will not be entertained at the enforcement stage if it existed at the time of the arbitral proceedings và could have been raised before the tribunal.
52. A German court has held that, even where it was shown that the tribunal was irregularly composed, the buổi tiệc nhỏ raising the challenge was precluded from relying on article V(1)(d) because it had been aware of the defect but nonetheless participated in the arbitration without raising any objection.916 The courts of China917 and Italy918 have also held that a buổi tiệc ngọt that has failed lớn raise an irregularity during the arbitral proceeding, although it could have done so, has waived its right to vì so at the enforcement stage.
916. Manufacturer v. Supplier, in liquidation, Oberlandesgericht
917. DMT S.A. V. Chaozhou city Huayi Packing Materials Co., Ltd. Chaoan County Huaye Packing Materials Co., Ltd., Supreme People’s Court, China, 12 October 2010, <2010> Min yêu thích Ta Zi No. 51.
918. Conceria G. De Maio và F. Snc v. EMAG AG, Court of Cassation, Italy, 20 January 1995, XXI Y.B. Com. Arb. 602 (1996)
53. A refusal to uphold a challenge under article V(1)(d) that could have been raised during the proceedings has been linked by some courts to lớn the principle of good faith. The Supreme Court of Hong Kong has considered that “there is indeed a duty of good faith which in the circumstances of this case required the defendant lớn bring <...> its objections khổng lồ the formation of this particular arbitral tribunal. Its failure to vày so and its obvious policy of keeping this point up its sleeve to be pulled out only if the arbitration was lost, is not one that I find consistent with the obligation of good faith nor with any notions of justice and fair play.”919
919. China Nanhai Oil Joint Service Corporation Shenzen Branch v. Gee Tai Holdings Co. Ltd., High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411. See also X AG v. Y AS, Federal Tribunal, Switzerland, 4 October 2010, 4A 124/2010, XXXVI Y.B. Com. Arb. 340 (2011).
54. Courts have similarly considered that a các buổi tiệc nhỏ will be barred from invoking a defence under article V(1)(d) based on an irregular procedure at the exequatur stage if it failed to object khổng lồ the irregular arbitral proceedings during the course of the arbitration. In Chrome Resources S.A. V. Leopold Lazarus Ltd., the Swiss Federal Tribunal rejected a challenge that the arbitral tribunal had consulted an expert in the absence of the parties, finding that the party’s attempt to raise this objection at the enforcement stage was in bad faith & constituted an abuse of rights.920 Courts in England,921 Germany,922 Greece,923 & the United States924 have similarly barred a buổi tiệc ngọt from asserting any defect of the arbitral procedure at a later stage if it had the opportunity to lớn raise a reservation in a timely manner during the arbitral proceedings.
920. Chrome Resources S.A. V. Léopard Lazarus Ltd., Federal Tribunal, Switzerland, 8 February 1978, XI Y.B. Com. Arb. 538 (1986).
921. China Agrobusiness Development Corporation v. Balli Trading, High Court of Justice, Queen’s Bench Division, England and Wales, trăng tròn January 1997, XXIV Y.B. Com. Arb. 732 (1999).
922. Manufacturer v. Exclusive distributor, Oberlandesgericht
923. Greek Company v. FR German Company, Court of Appeal of Athens, Greece, 4458, 1984, XIV Y.B. Com. Arb. 638 (1989).
924. Shaheen Natural Resources Company Inc. V. Société Nationale pour la Recherche, la Production and others, Court of Appeals, Second Circuit, United States of America, 15 November 1983, 733 F. Supp. 2d 260, X Y.B. Com. Arb. 540 (1985); Imperial Ethiopian Government v. Baruch Foster Corporation, Court of Appeals, Fifth Circuit, United States of America, 19 July 1976, 535 F.2d 334, II Y.B. Com. Arb. 251 (1977); Karaha Bodas Co. (Cayman Islands) v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Indonesia), Court of Appeals, Fifth Circuit, United States of America, 23 March 2004, 02-20042, 03-20602.
55. The same result has been reached in cases where the các buổi party opposing enforcement has alleged that the arbitral procedure was irregular, but at the same time chose not to participate in the proceedings. In a 1995 decision, a Singapore court held in a case where a party chose deliberately not to participate in an arbitration, that it had waived its rights lớn criticize the way in which the arbitration proceeding had been conducted.925 Similarly, an English court decided that “in view of the fact that the sellers chose khổng lồ take no part in the proceedings, it is impossible <...> to submit that any failure khổng lồ comply with the agreement of the parties as khổng lồ venue had any prejudicial effect as far as
925. Hainan Machinery Import và Export Corporation v. Donald và McArthy Pte Ltd, High Court, Singapore, 29 September 1995, 1056 of 1994, XXII Y.B. Com. Arb. 771 (1997).
926. Tongyuan International Trading Group v. Uni-Clam Limited, High Court of Justice, England and Wales, 19 January 2001, 2000 Folio No 1143.
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927. Manufacturer v. Supplier, in liquidation, Oberlandesgericht