Annulment of International Arbitration Awards ICSID

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Chapter 25: Annulment of International Arbitral Awards
Author [Chapter 25] (1)
Gary B. Born (IAI profile) P 3163
This Chapter examines issues relating to the annulment (also termed “setting aside” or
“vacatur”) of international arbitral awards. First, the Chapter examines the limits that the New
York Convention and other international instruments place on the grounds for annulment of
Publication international arbitral awards by national courts. Second, the Chapter examines the
presumptive validity of international arbitral awards under national (and international) law.
International Commercial Third, the Chapter discusses the grounds which are available for annulling international
Arbitration (Second Edition) awards, in particular under national arbitration legislation. Finally, the Chapter examines the
consequences of a judicial decision annulling an international award.
Bibliographic reference § 25.01 INTRODUCTION

'Chapter 25: Annulment of As discussed above, award-debtors frequently comply voluntarily with international arbitral
International Arbitral Awards', awards made against them. (2) Nonetheless, there are circumstances in which a party
in Gary B. Born , International concludes, either for tactical reasons or because of a genuinely-held sense of injustice, that an
Commercial Arbitration award against it is fundamentally wrong. In these cases, parties may seek to annul or set aside
(Second Edition), 2nd edition the award against it. (3)
(© Kluwer Law International;
Kluwer Law International 2014) As already discussed, the New York Convention limits the jurisdictions in which annulment of
pp. 3163 - 3393 an international arbitral award may be sought (in particular, to the place where the award was
made or under the law of which the award was made). (4) As also discussed above, if an
annulment action can properly be brought in a particular jurisdiction, then the Convention
imposes no express international limits on the grounds available for annulment under national
law in that jurisdiction. The Convention’s only limits on the annulment authority of the arbitral
seat are implied (and, as discussed below, disputed); even if accepted, these limits leave the
subject of annulment primarily to local law in the arbitral seat. (5)
Nonetheless, as discussed below, most national arbitration regimes have adopted broadly
similar approaches to the available grounds for annulment of international arbitral awards. In
most states, the grounds for annulment are limited to bases paralleling those applicable to
non-recognition of awards in Article V of the New York Convention.
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Thus, many national arbitration statutes, including the UNCITRAL Model Law, permit the
annulment of international awards if: (a) there was no valid arbitration agreement; (b) the
award-debtor was denied an adequate opportunity to present its case; (c) the arbitration was
not conducted in accordance with the parties’ agreement or, failing such agreement, the law of
the arbitral seat; (d) the award dealt with matters not submitted by the parties to arbitration;
(e) the award dealt with a dispute that is not capable of settlement by arbitration; or (f) the
award is contrary to public policy. In addition, many arbitration statutes also provide for the
annulment of an award if: (g) the arbitral tribunal lacked independence or impartiality; (h) the
award was procured by fraud; or (i) in a limited number of states, the arbitrator’s substantive
decision was seriously wrong on the merits. A few national arbitration statutes include
additional (and sometimes more expansive) grounds for annulment, which vary from
jurisdiction to jurisdiction. All of the foregoing grounds for annulment are discussed in §25.04
below.
The legal consequences of the annulment of an international arbitral award should be readily-
identifiable, but they are not. As discussed in Section §25.11 below, a number of national courts
have held that the annulment of an award in the arbitral seat renders the award “nonexistent”
and prevents it from being subsequently recognized or enforced in other states. Despite this, a
number of other national courts have held that an award may be recognized and enforced
even if it has been annulled in the arbitral seat. (6) Although this latter position is to be
preferred, the circumstances in which an annulled award may or must be recognized abroad
remain unclear as a practical matter. (7)
§ 25.02 INTERNATIONAL LIMITS ON GROUNDS FOR ANNULLING

INTERNATIONAL ARBITRAL AWARDS
The grounds which are available for annulling an international arbitral award in the place of
arbitration are defined principally, and arguably entirely, by national law. As discussed below,
the New York Convention (and other international arbitration conventions) have frequently
been interpreted as imposing no limits on the substantive grounds that may be invoked to
annul an international arbitral award, thus leaving the subject entirely to national law. As also
discussed below, however, on a proper analysis, this view incorrectly ignores the implied
substantive limits imposed by the Convention on the annulment of international awards.
Nonetheless, even if accepted, these implied limits leave national law and courts with very
broad annulment authority.
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[A] Authorities Holding That New York Convention Imposes No Limits On Grounds for
Annulling Awards
The text of the New York Convention does not impose any express limits on the grounds that
may be relied upon to annul an international award in the arbitral seat. Article V provides a
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limited (and exclusive) list of substantive grounds which may be relied upon in refusing
“recognition or enforcement” of an award. (8) As discussed above, however, Article V’s
limitations do not apply to actions to annul an award in the arbitral seat, and instead apply
only to the “recognition” of “foreign” and “nondomestic” awards. (9)
Nor does any other provision of the Convention expressly impose such limitations. On the
contrary, Articles V(1)(e) and VI of the Convention refer to the possibility of actions to annul an
award, by the “competent authority” in the arbitral seat, without expressly imposing any limits
on the grounds that may be relied upon to annul an award. (10)
Consistent with these textual provisions, most national courts and commentators have
concluded that the New York Convention imposes no limits on the grounds which may be relied
upon to annul an award in the arbitral seat. A decision of a U.S. appellate court in Yusuf Ahmed
Alghanim & Sons WLL v. Toys “R” Us, Inc. is illustrative of this analysis:
“We read Article V(1)(e) of the Convention to allow a court in the country under whose law the
arbitration was conducted to apply domestic arbitral law, in this case the FAA, to a motion to
set aside or vacate that arbitral award. … There is no indication in the Convention of any
intention to deprive the rendering state of its supervisory authority over an arbitral award,
including its authority to set aside that award under domestic law.” (11)
The court concluded:
“[T]he Convention mandates very different regimes for the review of arbitral awards (1) in the
state in which, or under the law of which, the award was made, and (2) in other states where
recognition and enforcement are sought. The Convention specifically contemplates that the
state in which, or under the law of which, the award is made, will be free to set aside or modify
an award in accordance with its domestic arbitral law and its full panoply of express and implied
grounds for relief.” (12)
Other national courts, in the United States (13) and elsewhere, (14) have frequently reached the
same conclusions. There are a few exceptions, but these decisions typically lack reasoned
analysis. (15)
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The weight of commentary is to the same effect, discerning no limits in the New York
Convention to the grounds on which the courts of the arbitral seat may annul an award made
there. As one distinguished practitioner has reasoned:
“What the Convention did not do … was provide any international mechanism to insure the
validity of the award where rendered. This was left to the provisions of local law. The
Convention provides no restraint whatsoever on the control functions of local courts at the seat
of arbitration.” (16)
Or, in the words of another student of the subject, “[t]here are no multilateral conventions on
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the extent of control of arbitral awards by national courts. The subject is exclusively
governed by national laws.” (17) Indeed, virtually no commentary concludes that the
Convention limits the grounds for annulment of an award in the arbitral seat.
In part for this reason, some commentary has urged the adoption of mechanisms permitting
institutional appellate review of arbitral awards as a substitute for divergent standards for
annulment under national law. (18) This type of mechanism could be structured to resemble
the institutional review process under the ICSID Convention. (19) There has, as yet, been little
enthusiasm for such proposals from either commercial users or governmental representatives.
[B] Implied Limits Imposed by New York Convention on Grounds to Annul Awards
The foregoing is not the only credible interpretation of the Convention. Indeed, while this
position is widely repeated, it produces anomalous results which are very difficult to justify in
light of the Convention’s overall structure and purposes. Given this, the better view is that the
Convention imposes implied limits on the substantive grounds that may be relied upon to
annul awards in the arbitral seat; although these grounds leave substantial autonomy to
national courts and legislatures in the arbitral seat, they nonetheless impose international
limits on the annulment of international awards.
Under the orthodox analysis of annulment authority, which holds that the Convention imposes
no limits on the annulment of awards in the arbitral seat, a Contracting State would in
principle be free to subject all international awards made on its territory to de novo judicial
review, with full evidentiary and legal submissions on the merits of the parties’ dispute,
treating the award as relevant evidence in the litigation, if that, but no more. That is the
necessary consequence of holding that the Convention “provides no restraint whatsoever on
the control functions of local courts at the seat of arbitration.” (20)
If adopted, this approach would both violate the basic commitment, undertaken by
Contracting States in Article II of the Convention, to “recognize” agreements to arbitrate and
distort the fundamental character of an arbitral “award.” As discussed above, it is in their very
nature that arbitration agreements provide for the binding resolution of disputes by
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arbitration, (21) with that resolution set forth in an arbitral “award,” which in its very nature is a
P 3168 final and binding decision; it is a fundamental and necessary element of arbitration
agreements and arbitral awards to provide for binding dispute resolution, not for an
irrelevant or merely advisory arbitration followed by de novo judicial resolution of disputes.
(22)
Treating an award as nothing more than a non-binding recommendation, with the parties’
dispute subject to de novo litigation, would thus contradict Contracting States’ obligations
under Article II of the Convention to recognize agreements to arbitrate and would be
inconsistent with the essential attributes of an arbitral award. Put differently, de novo judicial
consideration of the parties’ dispute would convert an agreement to arbitrate into an
agreement to mediate and an award into a mere recommendation, results which are contrary
to the Convention’s premises and requirements.
Thus, although it is true that the Convention does not expressly limit the scope of national
court review of awards in annulment actions, in Article V or elsewhere, the correct view is that
the Convention does so indirectly by requiring Contracting States to recognize agreements to
arbitrate (in Article II) and to treat awards consistently with the basic attributes of such
instruments. Consistent with this, a few national courts have concluded, albeit typically
without detailed analysis, that actions to annul international awards must be limited to the
grounds specified in Article V of the Convention. (23)
If the foregoing analysis is accepted, it is necessary to define precisely what limits the
Convention imposes on actions to annul international awards. One possibility would be to
extend the limits contained in Article V from actions to recognize awards to actions to annul
awards, permitting annulment only in circumstances where non-recognition would be allowed.
This interpretation is impossible to accept: it affords unjustifiably broad scope to the Article V
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exceptions, given the Convention’s drafters’ deliberate decision to make them applicable
to recognition actions involving “foreign” and “nondomestic” awards, but not annulment
actions involving other awards, (24) and given the fairly widespread, unchallenged availability
of non-Article V grounds for annulment actions in a number of Contracting States. (25)
A less expansive approach is to interpret Article II as requiring that any judicial review of
international awards in an annulment action not compromise the parties’ basic agreement
that their disputes would be finally resolved by arbitration. This analysis would limit judicial
review in an annulment action to no more than a customary supervisory function, in line with
that of virtually all Contracting States to the Convention, of reviewing the arbitral procedures
(e.g., procedural fairness, jurisdiction) and/or identifying material errors of law or fact (as some
jurisdictions permit), but would preclude de novo judicial disposition of the parties’ dispute.
This analysis relies on the observation that de novo judicial review fundamentally contradicts
the parties’ agreement to resolve their disputes by arbitration, rendering that agreement
virtually meaningless. De novo judicial review would also ignore the essential character of
arbitration and arbitral awards, recognized and embodied in the arbitration regimes of
essentially all Contracting States, which is to finally resolve the parties’ disputes in a binding
manner, in contrast to mediation or conciliation, which is merely a prelude to litigation in
national courts. (26) The European Court of Justice has described the approach of most
national arbitration legislation, and the policies underlying such provisions, as follows:
“[I]t is in the interest of efficient arbitration proceedings that review of arbitration awards
should be limited in scope and that annulment of or refusal to recognize an award should be
possible only in exceptional circumstances.” (27)
Authorities in most other jurisdictions are almost unanimously to the same effect, permitting
annulment only in exceptional and limited circumstances. (28) De novo judicial review of
arbitral awards is not only fundamentally inconsistent with this general approach to
annulment proceedings by Contracting States, but also contradicts the basic character of an
agreement to arbitrate – in violation of Article II of the Convention.
The same analysis also precludes Contracting States from applying substantive rules of law in
annulment proceedings that violate the Convention’s specific provisions regarding recognition
P 3170 of arbitration agreements (e.g., Article II’s prescription of a maximum form requirement,
requirements for recognition of agreements to arbitrate future and noncontractual disputes
and requirements for recognition of the material terms of arbitration agreements). Contracting
States are obliged, by the Convention, to give general effect to these substantive rules
regarding international arbitration agreements, in both proceedings to enforce arbitration
agreements and other proceedings, including annulment actions; these substantive
protections would have only limited utility, and would do little to achieve the Convention’s
objectives, if they could be ignored in annulment proceedings, after an award had been made.
As a consequence, Article II’s provisions mandating recognition of agreements to arbitrate are
properly interpreted to apply in annulment proceedings in Contracting States, placing limits
on substantive grounds for annulment of international arbitral awards.
This analysis would preclude, among other things, application of idiosyncratic local rules that
would deny effect to agreements to arbitrate in violation of Article II of the Convention. For
example, annulment decisions that ignored Article II(2)’s maximum form requirement, (29) that
invalidated agreements to arbitrate noncontractual or future disputes (in violation of Article
II(1)), (30) that denied effect to ad hoc (or institutional) arbitration agreements, (31) that
overrode agreed arbitral procedures and required application of a domestic procedural code,
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(32) that disregarded the parties’ choice of an arbitral seat or language, (33) or that ignored
Article V(1)(a)’s choice-of-law rules, (34) would all be contrary to the New York Convention.
Equally, annulment decisions resting solely on a conclusion that an award had been made
against a local business or damaged local commercial interests (35) would contradict the
Convention’s objectives of facilitating the enforcement of arbitration agreements and awards
through uniform international standards.
One might argue that it is unnecessary (and unjustifiable) to rely on Article II of the Convention
as impliedly limiting the grounds for annulling awards. This analysis would rest on the
observation that Article II, by its terms, addresses only arbitration agreements, and not
arbitral awards, and that the provisions of the Convention relevant to awards are set forth
(only) in Articles III to VI, not Article II.
These arguments are unpersuasive. They would allow a Contracting State to engage in de novo
judicial review of all international awards in annulment actions – a result which it is difficult to
conceive the Convention’s drafters intended and which contradicts the language and purposes
of Article II, as well as the broader purposes of the Convention. As discussed above, those
purposes are to give effect to agreements to resolve disputes through international arbitration
and to promote the recognition of the results of such agreements (i.e., arbitral awards). (36)
The fact that Article II is directed at arbitration agreements is not grounds for ignoring its
P 3171 effects throughout the arbitral process, which is derived from and dependent upon the
agreement to arbitrate. (37) As discussed above, the parties’ arbitration agreement is central
to the conduct of the arbitral proceedings, with party autonomy, expressed in the terms of the
agreement to arbitrate, defining the character of the arbitral proceedings and the scope of the
arbitral award. (38) As a consequence, the obligations of Contracting States to recognize
arbitration agreements necessarily extend to the treatment of such agreements by national
courts in the context of reviewing arbitral awards and arbitral proceedings.
The decisive point is that the Convention’s drafters ultimately took the fairly radical step of
dealing with both arbitral awards and arbitration agreements in a single instrument. (39) These
provisions may, and indeed must, be interpreted as a single and cohesive regime. (40) Doing so
makes it impossible to accept the notion that the Convention imposes no limits at all on the
treatment by Contracting States of arbitration agreements in the context of the annulment of
awards. Permitting this result would render the Convention’s basic provisions regarding
arbitration agreements largely irrelevant and would contradict the Convention’s integration of
provisions regarding both agreements and awards in a single treaty.
This conclusion is decisively confirmed by the jurisdictional scope of the Convention with
respect to international arbitration agreements. As discussed in detail above, Article II of the
Convention is not subject to the jurisdictional limitation that is applicable, by virtue of Article
I(1), to the treatment of arbitral awards in Articles III, IV and V. (41) As a consequence, Article II
applies to international arbitration agreements, not merely to arbitration agreements that
produce foreign or nondomestic awards; in contrast to the treatment of awards under Article
I(1), the location of the arbitral seat (i.e., the place where the award will be made) is irrelevant
to the Convention’s treatment of arbitration agreements in Article II. (42)
The Convention’s application to all international arbitration agreements, including locally-
seated international arbitrations, makes it essential that Article II apply in annulment
proceedings. Unless Article II limits a Contracting State’s treatment of locally-seated
international arbitrations in annulment proceedings, the Convention’s provisions regarding
arbitration agreements (including its maximum form requirement, presumptive validity rules,
and provisions regarding future disputes, noncontractual disputes and institutional
arbitrations) could all be ignored in annulment proceedings and would be of little practical
utility.
Nor is it unusual that the Convention addresses this issue briefly and would prescribe a
general, rather than a detailed, standard regarding annulment of international arbitral awards:
that observation applies to almost all of the Convention’s “constitutional” provisions, (43) and
takes into account the evolving character of state practice under the Convention. (44) Likewise,
P 3172 it is unsurprising that the Convention’s drafters did not fully address all the consequences
of their decision to introduce Article II into the Convention, producing for the first time an
international instrument that addressed both arbitration agreements and awards. (45) Their
decision to do so had, however, inescapable and important consequences for the scope of
judicial review of awards, including in the arbitral seat.
[C] Other International Arbitration Conventions

Most other international arbitration conventions are similar to the New York Convention in
their treatment of annulment of international awards. The Inter-American Convention adopts
essentially the same approach as the New York Convention (in Article 5), and is susceptible to
precisely the same interpretation with regard to limits on the grounds for annulment (focusing
on Article 1). (46)
The European Convention is somewhat different, in that it expressly addresses (in Article IX)
the consequences of decisions in the arbitral seat setting aside awards, providing that such
decisions will not be a basis for non-recognition of an award unless they rest on specified
grounds (essentially identical to those set forth in Articles V(1)(a) to (d) of the New York
Convention). (47) In effect, these provisions indirectly limit the effects of annulment decisions
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unless they are based on specified grounds.
A notable exception to the foregoing approach is the ICSID Convention. Articles 53 and 54
obligate all ICSID Contracting States – including the state where the arbitral award was made
and the arbitral hearings were conducted – to recognize ICSID awards. (48) There is no room,
under this regime, for national courts to annul or review an ICSID award, regardless where
those courts may be located or what their connection to the dispute was. The sole review
mechanism for an ICSID award is provided by the ICSID Convention, which (unusually) permits a
form of internal appellate review by an ICSID annulment panel. (49)
§ 25.03 PRESUMPTIVE OBLIGATION TO RECOGNIZE INTERNATIONAL ARBITRAL

AWARDS UNDER NATIONAL ARBITRATION LEGISLATION
Virtually all national arbitration statutes treat international arbitral awards as binding, with
res judicata effect, from the time that they are made (as discussed in detail below). (50)
Likewise, national arbitration legislation uniformly treats arbitral awards as mandatory
instruments, imposing obligations on the parties to comply with their terms, not
recommendations or suggestions for future conduct. (51) Consistent with these attributes,
P 3173 virtually all modern arbitration legislation treats awards as presumptively valid in actions
to annul (and to recognize or confirm) such awards, while permitting annulment only on
specified and limited grounds. As the European Court of Justice observed, “annulment of or
refusal to recognize an award should be possible only in exceptional circumstances.” (52)
In practice, annulment of an international arbitral award is an unusual result in most
developed jurisdictions. This is the almost inevitable advice from counsel, who report that
most international arbitral awards are voluntarily complied with, (53) and is confirmed by
empirical studies and reports of national court decisions in cases involving international
awards. Thus, reviews of annulment proceedings in Switzerland, (54) the United States, (55)
France (56) and England (57) have concluded that annulment of international awards is an
exceptional occurrence, with the overwhelming majority of all awards being upheld in the face
of annulment challenges.
These general observations about the exceptional character of annulment and empirical
evidence on the same topic are borne out by the provisions of most national arbitration
regimes concerning the annulment of international awards. As discussed below, these statutory
regimes almost uniformly provide only limited, relatively narrowly-defined grounds for setting
aside such awards.
[A] Presumptive Validity of Arbitral Awards Under Uncitral Model Law

The UNCITRAL Model Law sets forth a representative and influential approach to the
annulment of international awards by courts in the arbitral seat. Article 34 of the Model Law
provides for the presumptive validity of international arbitral awards, (58) with such awards
having binding force and preclusive effects from the moment they are made (59) and being
subject to immediate recognition in both local and foreign courts. (60)
P 3174 The presumptive validity of international awards under the Model Law is subject only to
specified exceptions, which are set out in Article 36 (dealing with recognition of both
domestically-made and foreign awards) and Article 34 (dealing with annulment of
domestically-made awards). (61) These grounds for recognition and annulment parallel the
non-recognition grounds in the New York Convention, and are narrowly construed.
[1] Recognition in Summary Proceedings Under Article 35
As noted above, an award is subject to immediate recognition (or confirmation) under Article
35 of the Model Law. Article 35 provides:
“An arbitral award, irrespective of the country in which it was made, shall be recognized as
binding and, upon application in writing to the competent court, shall be enforced subject to
the provisions of this article and of article 36.” (62)
The procedure for recognition of an award under Article 35 is intended to be summary in
nature. (63) In particular, “there is an important policy interest in ensuring the effective and
speedy enforcement of international arbitration awards; the corollary, however, is that the task
of the enforcing court should be ‘as mechanistic as possible.’” (64)
As discussed below, defenses may be raised by the award-debtor to recognition (or
confirmation) of an award, but the burden is on the award-debtor both to affirmatively raise
and prove these defenses. (65) As also discussed below, the standard of proof required to annul
(or deny recognition or confirmation of) an award is generally an elevated one, satisfied only in
exceptional and narrow circumstances. (66)
[2] Article 34 Provides Exclusive Grounds of Annulment
Article 34 of the Model Law provides a detailed list of grounds, divided into two categories
(Articles 34(2)(a) and 34(2)(b)), for “recourse to a court against an arbitral award.” (67) There is
P 3175 little question that Article 34 was intended to specify the exclusive, exhaustive list of
grounds for annulment. (68) Under Article 34(2), an award may be annulled “only if” the party
challenging the award establishes one of the six specified grounds set forth in the Article’s
subsections. (69)
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National courts have made clear, as the Model Law’s language expressly provides, that Article
34’s grounds for setting an award aside are exclusive. (70) Some courts have also held that the
grounds for annulment under Article 34(2) may not be extended by analogy, (71) or have relied
on Article 5 of the Model Law to underscore the exclusivity of Article 34’s annulment grounds.
(72)
The grounds set forth in Article 34 parallel those applicable to recognition of an award under
Article 36 of the Model Law and Article V of the New York Convention (with the exception of the
provisions of Article V(1)(e) and Article 36(1)(a)(v), dealing with awards that are not “binding” or
that are annulled in the arbitral seat, where no parallel provision exists in Article 34’s
annulment provisions). Specifically, Article 34 provides that an award may be annulled if:
(a) the arbitration agreement was invalid or a party thereto lacked capacity;
(b) a party was unable to present its case, including for lack of notice;
(c) the award deals with matters outside the scope of the submission to arbitration;
(d) the composition of the arbitral tribunal or the arbitral procedure was not in accordance
with the parties’ arbitration agreement;
(e) the dispute is nonarbitrable; or
(f) the award violates local public policy. (73)
If none of these specified grounds is present, then the award may not be annulled under the
Model Law.
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[3] Article 34’s Grounds for Annulment Are Discretionary
It is equally clear that the grounds specified in Article 34(2) of the Model Law are permissive
and discretionary, not mandatory. That is, a court may annul an award if one or more of the
Article 34(2) grounds are satisfied, but the court is not mandatorily required to annul the award,
even where one of these grounds applies. This is made express by Article 34(2), which provides
that an “award may be set aside by the court … only if” specified grounds are present. (74)
Some national versions of the Model Law go even further than the original UNCITRAL Model Law
in providing specifically that the power to annul an award is discretionary. (75)
In many cases, the existence of one of the Article 34(2) grounds will be sufficiently serious that
annulment of the award will be virtually automatic. Nonetheless, there may be instances
where, for example, a procedural error was sufficiently inconsequential that it is held not to
affect the award’s validity or justify annulment. (76)
[4] Party Seeking Annulment Under Article 34 Generally Bears Burden of Proof
Also preliminarily, it is clear that the burden of proving that one of the exceptions under
Article 34 of the Model Law applies is on the party seeking to set an award aside. That is the
explicit requirement with regard to the exceptions in Articles 34(2)(a)(i) to (iv), as to which
Article 34(2)(a) requires that “the party making the application [to annul] furnish proof” that the
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exception applies. (77) Judicial authority, in countries that have adopted the Model Law,
(78) is to the same effect, and is paralleled in jurisdictions that have not adopted the Model
Law. (79)
Article 34(2)(b) of the Model Law, which provides for annulment on grounds of nonarbitrability
and public policy, is not prefaced by the foregoing requirement that the party seeking to annul
an award demonstrate that the exception is applicable. This parallels the New York
Convention (80) and reflects the power of a national court to raise these issues sua sponte or ex
officio.
Nevertheless, it would be wrong to conclude that the burden of proof allocations noted above
are inapplicable to Article 34(2)(b)’s public policy and nonarbitrability exceptions. On the
contrary, many public policy and nonarbitrability rules are designed in part for the protection
of particular parties, and it is entirely appropriate to conclude that the party seeking to annul
an award bears the ultimate burden of demonstrating that one of these exceptions applies. A
different approach may be appropriate in cases involving nonarbitrability rules designed for
the protection of third parties or the public generally; in these cases, depending on local law,
different allocations of the burden of proof may be appropriate.
[5] Article 34’s Grounds for Annulment Narrowly-Construed
It is also clear as a general matter that Article 34’s grounds for annulment are to be construed
in a restrictive manner. According to one national court, Article 34 should be interpreted in
light of a “general rule of interpretation … that the grounds for refusal of enforcement are to be
construed narrowly.” (81) Authorities from other Model Law jurisdictions are to the same effect.
(82)
P 3178 Some courts reason that the standard of review under Article 34 is tailored to preserve the
autonomy of the arbitral process and to minimize judicial intervention in that process. (83)
This “minimal curial intervention … acknowledges the primacy which ought to be given to the
dispute resolution mechanism that the parties have expressly chosen.” (84) Another court
reasoned that limited judicial review under Article 34 rests on “concerns of international
community, respect for the capacities of foreign and transnational tribunals, and sensitivity to
the need of the international commercial system for predictability in the resolution of
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disputes.” (85)
Notably, these observations apply fully to awards made in locally-seated arbitrations. The
decisive point is that, while locally-seated, the awards are nonetheless international arbitral
awards, subject to the UNCITRAL Model Law on International Commercial Arbitration. As a
consequence, annulment of these awards gives rise to considerations of international comity,
respect for international tribunals and the needs of the international commercial system (just
as the decisions quoted above observe); that fact, and the international character of the
arbitral award, is not altered by the location of the arbitral seat.
[6] Relevance of New York Convention Authority Under Article 34
As noted above, the text of Article 34 of the UNCITRAL Model Law closely tracks that of Article V
of the New York Convention. (86) As some commentators have observed, the drafters of the
Model Law sought to “mirror,” and were “eager to align,” (87) the grounds for annulment of an
award under Article 34 of the Model Law with those for non-recognition of an award in Article V
of the New York Convention; the Model Law’s drafting history confirms what Article 34’s text
makes clear. (88)
As a consequence, decisions applying Article V of the Convention are relevant and persuasive
authority under Article 34. In one court’s words:
“The grounds for challenging an award under the Model Law are derived from Article V of the
New York Convention. … Accordingly, authorities relating to Article V of the New York
P 3179 Convention are applicable to the corresponding provisions in Articles 34 and 36 of the
Model Law. These authorities accept that the general rule of interpretation of Article V is that
the grounds for refusal of enforcement are to be construed narrowly. …” (89)
This analysis is well-considered. It is not only the language of Article 34 that tracks Article V of
the Convention; in addition, the fundamental purposes of the Model Law, and its treatment of
annulment, adopt the rationale and objectives of the Convention. In particular, the Model Law
seeks to ensure a pro-enforcement regime for international arbitral awards, including awards
in locally-seated arbitrations, with minimal judicial intervention. These objectives argue
decisively for treating decisions under Article V as persuasive authority in interpreting Article
34 of the Model Law.
[7] Partial Annulment of Award Under Article 34
It is clear that partial annulment of arbitral awards is permitted, and in some cases required,
by the UNCITRAL Model Law. Article 34(2)(a)(iii) of the Model Law provides for partial
annulment of an award where only part(s) of the award exceeded the jurisdiction of the
tribunal: “if the decisions on matters submitted to arbitration can be separated from those not
so submitted, only that part of the award which contains decisions on matters not submitted to
arbitration may be set aside.” (90) As discussed below, courts have applied this provision to
annul only parts of awards where other parts were within the tribunal’s authority. (91)
Although other subsections of Article 34(2) lack Article 34(2)(a)(iii)’s express reference to partial
annulment (in cases of excess of authority), the same possibility exists under other grounds for
annulment. Thus, if one part of a tribunal’s award violates the annulment forum’s public policy,
or rested on a procedurally-unfair process, then that portion of the award may be annulled,
P 3180 without affecting separable parts of the award that are unaffected by the relevant public
policy or procedural objections. (92) This parallels the treatment of partial recognition under
the New York Convention and Article 36 of the Model Law. (93)
[B] Presumptive Validity of Arbitral Awards Under U.S. Federal Arbitration Act
Like the UNCITRAL Model Law, the domestic FAA in the United States reflects a strong
presumption in favor of the validity and enforceability of arbitral awards including, in
particular, international arbitral awards. Section 9 of the FAA, which applies to awards made in
the United States, provides:
“If the parties in their agreement have agreed that a judgment of the court shall be entered
upon the award – made pursuant to the arbitration, and shall specify the court, then at any
time within one year after the award is made any party to the arbitration may apply to the
court so specified for an order confirming the award, and thereupon the court must grant such
an order unless the award is vacated, modified, or corrected as prescribed in §§10 and 11 of
this title.” (94)
Sections 10 and 11 of the FAA then set forth exceptions to the confirmation of awards which are
broadly similar (but not identical) to those in Article V of the New York Convention and Article
34 of the UNCITRAL Model Law. (95)
U.S. courts have consistently interpreted the provisions of the FAA concerning vacatur and
confirmation of awards in a robustly pro-enforcement fashion. As one court explained:
“The purpose of arbitration is to permit a relatively quick and inexpensive resolution of
P 3181 contractual disputes by avoiding the expense and delay of extended court proceedings.
Accordingly, it is a well-settled proposition that judicial review of an arbitration award should
be, and is, very narrowly limited.” (96)
Or, as the U.S. Supreme Court recently held, “[u]nder the FAA, courts may vacate an arbitrator’s
7
decision ‘only in very unusual circumstances.’” (97) Other U.S. authority is to the same effect.
(98)
It is well-settled that confirmation of an award is mandatory, subject to limited exceptions.
Except where an award may be vacated, on one of the specific grounds identified in §10 of the
FAA, U.S. courts are required to confirm it. (99) The grounds set forth in §10 are in principle
exclusive, although U.S. courts have recognized non-statutory public policy and (less clearly)
manifest disregard grounds for vacatur. (100) It is well-settled that federal standards for
vacatur under the FAA are preemptive under U.S. law, superseding more expansive grounds for
vacatur under state law. (101) There is some authority suggesting that a U.S. court has
discretion to refuse to vacate an award, even if one of the FAA’s grounds for vacatur is present,
although this seldom occurs in practice. (102)
U.S. courts have emphasized that the confirmation of an award under the FAA is a summary
P 3182 procedure, intended to safeguard the expeditious character of the arbitral process. (103)
As under the UNCITRAL Model Law, it is clear that the burden of proof in a vacatur action under
the FAA is on the award-debtor. (104) It is also clear, as discussed elsewhere, that this burden
of proof is a substantial one, particularly in international cases. (105)
U.S. courts have held that a party which seeks to vacate, or delay confirmation of, an award
without a substantial basis for doing so is subject to sanctions. (106) One court underscored
this, holding that “[w]hen a party who loses an arbitration award assumes a never-say-die
attitude and drags the dispute through the court system without an objectively reasonable
belief it will prevail, the promise of arbitration is broken,” and sanctions may be appropriate.
(107)
[C] Presumptive Validity of Arbitral Awards Under Other National Arbitration

Legislation
Other national arbitration statutes are broadly similar to the UNCITRAL Model Law and FAA in
their treatment of the presumptive validity of international arbitral awards. In particular, most
states take the same structural approach as the Model Law and FAA, providing for the
presumptive validity of awards, subject to only enumerated and exclusive exceptions which
parallel those applicable to non-recognition of a foreign award under the New York
Convention.
Under French law, an award is presumptively valid and enjoys immediate res judicata effect
once it has been made. (108) Article 1518 of the revised French Code of Civil Procedure
provides that the same grounds exist for annulling an international award made in France as
P 3183 those applicable to a French court’s recognition of an award made abroad. (109) These
grounds are “exhaustive,” (110) and set forth bases for annulment that are more limited than
those contained in Article V of the New York Convention for non-recognition. (111) In particular,
French courts have emphasized that substantive judicial review of the merits of the arbitrators’
award is not permitted in an action to annul an international award made in France. (112)
Similarly, Article 190 of the Swiss Law on Private International Law provides for the
presumptive (and immediate) finality of an international arbitral award made in Switzerland,
subject to annulment only on grounds roughly parallel to those in Article 34 of the Model Law
and in Article V of the New York Convention (for non-recognition). (113) As under the UNCITRAL
Model Law, Article 190’s grounds for annulment are exclusive: (114)
“The [Swiss] Federal Tribunal has displayed reticence since the [Swiss Law On Private
International Law] entered into force, and has been very reluctant to set aside awards except
for grounds relating to arbitrability and competence.” (115)
A number of other civil law jurisdictions are similar. (116)
P 3184 Most common law jurisdictions also provide for the binding, res judicata character of
international arbitral awards, subject only to limited, exclusive statutory grounds for
annulment or non-recognition, generally on the basis of legislation adopting the UNCITRAL
Model Law. This is true in England, (117) Canada, (118) Australia, (119) Singapore, (120) Hong
Kong, (121) India, (122) New Zealand (123) and elsewhere. (124)
In contrast, a few jurisdictions adopt different, less favorable standards for the annulment or
non-confirmation of international arbitral awards made on national territory. This is most
likely in states that have historically been mistrustful of international arbitration, where
international awards may not be presumptively valid, or are subject to expansive powers of
judicial review.
Thus, in a (very) few states, awards are subject to judicial review on the same grounds as court
judgments. (125) Similarly, courts in a few other jurisdictions have adopted expansive
conceptions of public policy. (126) As already noted, however, these approaches are unusual
departures from the approach to annulment adopted in contemporary international
arbitration statutes – which is to follow the Model Law’s general approach of treating
annulment as a limited exception to the presumptive validity of international arbitral awards.
The grounds for annulment available under national arbitration legislation are, in the first
instance, matters of national law and the issues that arise in their application are principally
issues of national law. Nonetheless, as discussed below, these issues also reflect common
principles of international arbitration law as to which decisions in foreign jurisdictions are
8
relevant and instructive in interpreting national annulment provisions.
This is in part because annulment provisions in national arbitration statutes all concern the
P 3185 same problems, arising from the same international arbitral process. As a consequence,
the approaches of different legal systems share important common characteristics and offer
solutions with general relevance. It is also because annulment provisions in most
contemporary arbitration statutes generally parallel both one another and Article V of the New
York Convention; thus, analysis under other arbitration legislation and the Convention is often
relevant by analogy in interpreting particular national laws.
As discussed above, that is particularly, and explicitly, true under the UNCITRAL Model Law.
(127)
Decisions in foreign jurisdictions are particularly important under the UNCITRAL Model Law,
because of its character as a uniform international instrument with a common text and
drafting history. (128) That is underscored by the 2006 revisions of the Model Law, which
provide in Article 2A that in interpreting the Model Law “regard is to be had to its international
origin and to the need to promote uniformity in its application and the observance of good
faith.” (129)
Nonetheless, decisions from foreign jurisdictions are more generally instructive in interpreting
annulment provisions in all national legislation dealing with international arbitral awards
(regardless whether they are Model Law jurisdictions). Again, that is because, regardless of
jurisdiction, these provisions all address common problems arising from the same
international process, as to which virtually all states share a common approach, reflected in
the Convention and Model Law.
§ 25.04 GROUNDS FOR ANNULLING ARBITRAL AWARDS UNDER NATIONAL

ARBITRATION LEGISLATION
As discussed above, arbitration statutes in most states provide only limited grounds to annul
international arbitral awards. It is fundamental under virtually all national legal systems that
an action for the annulment of an international arbitral award is not comparable to an appeal
from a lower court judgment. As one U.S. court put it, using language that is widely applicable
in other jurisdictions:
“In reviewing an arbitration award, courts ‘do not sit to hear claims of factual or legal error by
an arbitrator as an appellate court does in reviewing decisions of lower courts.’” (130)
An annulment court does not review the arbitral tribunal’s decision in the nature of an
appellate proceeding, but instead considers only whether one of a specified number of
defined statutory grounds for annulment is present.
Most national arbitration legislation permits actions to annul an award only on grounds
analogous to those set out in Articles V(1) and V(2) of the New York Convention and Articles 34
and 36 of the Model Law, as well as (in some states) a limited measure of judicial review of the
P 3186
substance of the arbitrators’ decision. Thus, as noted above the drafters of the UNCITRAL
Model Law were “eager to align” (131) the grounds for annulment of an award under Article 34 of
the Model Law with those for non-recognition of an award in Article V of the New York
Convention and Article 36 of the Model Law. (132) This legislative (and judicial) approach is
consistent with the objectives of the international arbitral process and, in particular, the
parties’ desire for a single, neutral forum for the final, expeditious resolution of their disputes.
(133)
The grounds for annulment of international awards under contemporary national arbitration
regimes are summarized below, in each case focusing first on the UNCITRAL Model Law. As
discussed above, the grounds on which an award may be annulled is a matter governed
principally by the law of the judicial annulment forum. (134) Nonetheless, as discussed below,
there are also substantial areas of similarity in the grounds for annulment under most
contemporary legal systems, reflecting the fact that these different legal regimes all address
the same international arbitral process and all generally share the same objectives (of
facilitating that process).
In summary, the grounds available for annulment of an international arbitral award are:
1.The award was rendered pursuant to an arbitration agreement that, under the applicable
law, the parties lacked capacity to make or was invalid. (135)
2.The award-debtor was not given proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his case. (136)
3.The award deals with a difference not contemplated by or not falling within the terms of the
submission to arbitration. (137)
4.The composition of the arbitral tribunal or the tribunal’s procedures violated either the
parties’ agreement or (absent any such agreement) the law of the arbitral seat. (138)
5.The subject matter of the parties’ dispute is not capable of settlement by arbitration, or is
“nonarbitrable,” under the law of the annulment forum. (139)
P 3187 6. Recognition or enforcement of the award would be contrary to the public policy of the
annulment forum. (140)
9
In addition, as discussed above, an award cannot be confirmed (or annulled) unless it is “final”
within the meaning of applicable national arbitration legislation. (141)
The following sections address each of the grounds of annulment, as well as a limited number
of additional grounds for annulment available under arbitration legislation in some
jurisdictions. In each case, the focus is on the general principles, burden of proof rules, choice-
of-law rules, substantive standards and other aspects of the relevant basis for annulment.
[A] Nonexistent or Invalid Arbitration Agreement

An international arbitral award may be annulled, under all national legal systems, if it was
based on a nonexistent or invalid arbitration agreement or if one of the parties lacked
capacity to conclude such an agreement. These bases for annulment give effect to the basic
rule that the international arbitral process is based on consent (142) and that, absent consent,
an arbitral award is invalid and ineffective.
[1] General Principles
The Model Law is representative of national approaches to annulment based on the lack of a
valid arbitration agreement. Article 34(2)(a)(i) of the Model Law provides that an award may be
annulled if one of the parties was “under some incapacity” or if the arbitration agreement “is
not valid under the law to which the parties have subjected it or, failing any indication
thereon, under the law of [the State where the action to annul is brought].” (143) These grounds
for annulling an international award parallel those set forth, in the context of non-recognition
of an award, in Article V(1)(a) of the New York Convention. (144) They reflect the fundamental
importance of consent to international arbitration: as discussed above, without a valid
agreement to arbitrate, there is no basis for either an international arbitration or an
international arbitral award. (145)
The same annulment grounds are recognized under most other national arbitration statutes.
P 3188 (146) The French Code of Civil Procedure and Swiss Law on Private International Law are
representative of approaches in civil law jurisdictions, providing for annulment where “the
arbitral tribunal wrongly upheld or declined jurisdiction” (147) or “the Arbitral Tribunal wrongly
accepted or declined jurisdiction.” (148) The 1966 European Convention Providing a Uniform
Law on Arbitration and other international instruments include similar provisions. (149)
The text of the U.S. FAA is idiosyncratic, including no express provision dealing with the
absence of a valid agreement to arbitrate. (150) Nonetheless, U.S. judicial decisions make it
clear that the nonexistence of such an agreement is grounds for vacatur of an international (or
domestic) arbitral award in the United States. (151)
Substantive issues relating to the validity of an arbitration agreement and the capacity of a
party are dealt with in detail elsewhere, both in the context of the enforcement of
international arbitration agreements (under Articles 8 and 16 of the UNCITRAL Model Law and
parallel provisions of other national laws) (152) and the recognition of international arbitral
awards (under the New York Convention and parallel provisions of national law). (153) In
P 3189 general, the same basic substantive analysis that applies in these contexts is equally
applicable in disposing of an application to annul an arbitral award. (154)
Among other things, the separability presumption which applies in the context of actions to
enforce arbitration agreements also applies in annulment proceedings; (155) the same is true
of the choice-of-law rules applicable to the law governing the various aspects of an
international arbitration agreement. (156) Likewise, the generally-applicable principles of
contract formation and validity, and substantive rules of international law, which apply in
actions to enforce arbitration agreements and recognition actions, also apply in actions to
annul awards. (157) The authorities and analysis set forth above, in Chapters 3, 4 and 5, and
below, in Chapter 26, are therefore also generally-applicable in annulment actions under
Article 34 and parallel provisions of other national laws.
In addition, however, several specific issues arise in connection with annulment applications
under Article 34(2)(a)(i) of the Model Law and related provisions of other arbitration statutes.
These points raise special issues in the annulment context and therefore warrant separate
attention.
[2] Burden and Standard of Proof
It is well-settled that the burden of showing the invalidity of an arbitration agreement under
Article 34(2)(a)(i) of the Model Law (or parallel provisions of other national arbitration statutes)
is on the party seeking annulment. (158) This contrasts with the allocation of the burden of
proof at the agreement-enforcement stage, where the party seeking to stay or dismiss national
court proceedings generally must demonstrate the existence and validity of an agreement to
arbitrate. (159) This shifting of the burden of proof of a valid arbitration agreement has
significant practical consequences; it underscores the importance of the presumptive validity
of an arbitral award.
It is unclear whether the award-debtor’s burden of proof under Article 34(2)(a)(i) extends to the
nonexistence, as well as the invalidity, of the arbitration agreement. As discussed below, there
is authority that the burden of proof of the existence of an agreement to arbitrate in a non-
recognition action under the Convention is on the award-creditor. (160) The better view,
P 3190 however, is that the award-debtor bears the burden of proof of both the nonexistence and
10
the invalidity of the arbitration agreement under Article V(1)(a). (161) The same analysis
applies in the annulment context.
There is limited authority on the standard of proof that must be satisfied in order to
demonstrate that an arbitration agreement is invalid. In particular, it is unclear whether the
award-debtor must make a “clear” or “strong” showing in order to establish that an arbitration
agreement is invalid. (162) The likely approach in most jurisdictions would be a generally-
applicable “balance of probabilities” or a “more likely than not” showing with regard to the
existence and validity of the arbitration agreement.
[3] Separability Presumption
As discussed above, the consistent rule in virtually all contemporary legal systems is that
international arbitration agreements are presumptively separable from the underlying
commercial contract with which they are associated. (163) The separability presumption
concerns the existence and substantive validity of the arbitration agreement, rather than
issues of the arbitrators’ competence-competence. (164) As a consequence, the presumption
applies fully in the context of annulment proceedings under Article 34 of the Model Law and
parallel provisions of other national arbitration legislation: in order to set aside an award
under Article 34(2)(a)(i), it is necessary to demonstrate that the agreement to arbitrate itself –
not the underlying contract – is nonexistent or invalid. (165)
As discussed above, there are variations in the separability presumption among national legal
systems. (166) Nonetheless, virtually all jurisdictions provide that an award cannot be annulled
on the grounds that the arbitrators incorrectly decided that the parties’ underlying contract
was invalid, unenforceable, or illegal; those claims do not concern the validity, enforceability,
or existence of the arbitration agreement itself, and therefore are not grounds for annulment
under Article 34(2)(a)(i) of the Model Law or comparable provisions of other legislation. (167)
P 3191 That conclusion applies, among other things, to claims that the underlying contract was
procured by fraud, (168) was invalid by reason of unilateral or mutual mistake, (169) was
invalid for lack of consideration, (170) was unconscionable, (171) was terminated or rescinded,
P 3192
(172) was invalid for failure of a condition precedent to the underlying contract, (173) or
was illegal. (174) It also applies to allegations that the claimant’s claims are time-barred. (175)
P 3193 In some jurisdictions (particularly the United States and England), courts inquire whether
a claim is directed “specifically” at the validity or legality of the arbitration agreement. (176) If
not, then the claim only involves the alleged invalidity of the underlying contract and
therefore does not provide grounds for annulment under Article 34(2)(a)(i) of the Model Law or
comparable provisions of other statutes. (177)
Conversely, if a claim of invalidity is directed “specifically” at the arbitration agreement (as in
cases involving claims that the arbitration agreement is unconscionable, (178) is asymmetrical,
P 3194 (179) is uncertain, (180) was a contract of adhesion, (181) was not incorporated, (182) lacked
consideration, (183) violated public policy, (184) was not an agreement to arbitrate, (185) or has
P 3195 been waived (186) ), then it does concern the validity of that agreement and provide
grounds for annulment of an award on jurisdictional grounds.
More complicated issues arise from claims that the underlying contract never existed. In a
number of jurisdictions, claims that the underlying contract was nonexistent are categorized as
involving “doubly relevant” facts, which simultaneously impeach both the underlying contract
P 3196 and the associated arbitration agreement. (187) Examples of such claims include claims
that the underlying contract (or a signature on it) was forged, (188) that the underlying contract
was never formed, (189) or that an agent who executed the underlying contract lacked
P 3197 authority. (190) Where such claims are asserted, they simultaneously impeach the
arbitration clause, as well as the underlying contract, and therefore provide grounds for
annulment of an award.
Less clear are other claims that are not readily categorized as challenges to the “existence” or
“validity” of the parties’ agreement, including claims that the underlying contract was the
result of duress or that a party lacked capacity to conclude a contract. (191) In some
jurisdictions (notably the United States), courts have reached divergent results in dealing with
such claims, concluding variously that claims of duress (192) and lack of capacity (193) impeach
the arbitration clause and, conversely, that duress (194) and capacity (195) claims do not affect
the arbitration agreement. Only in the former case do such claims provide grounds for
annulment of an award.
[4] Formal Validity
As discussed above, many jurisdictions impose requirements of formal validity on
international arbitration agreements; historically, these requirements were based on
P 3198 Article II(2) of the New York Convention, but more recently-enacted national arbitration
statutes have relaxed or abandoned these form requirements. (196) Regardless of the content
of national form requirements, the formal invalidity of an arbitration agreement provides
grounds for annulment of the award, under Article 34(2)(a)(i) of the Model Law and parallel
provisions of other national arbitration legislation. (197)
As also discussed above, Article II of the Convention imposes a maximum form requirement,
which precludes Contracting States from imposing more demanding formal requirements on
international arbitration agreements. (198) The Convention’s maximum form requirement
applies in annulment actions in the arbitral seat, as well as in recognition and other
11
proceedings outside the arbitral seat. (199) As a consequence, a Contracting State may not
annul an international arbitral award, made locally, on the basis that the arbitration
agreement was not contained in a separate instrument, was not printed in all capitals or red
ink, was not in large font, and the like; (200) all of these heightened form requirements are
contrary to Article II’s minimum form requirements and may not be imposed by Contracting
States, whether in annulment proceedings or otherwise.
[5] Choice of Law Governing Arbitration Agreement
The choice of the law applicable to international arbitration agreements is discussed in detail
above in the context of the enforcement of arbitration agreements. (201) In principle, the same
choice-of-law rules that apply to the enforcement of arbitration agreements also apply in the
context of the annulment of awards under Article 34(2)(a)(i) of the Model Law and parallel
provisions of other national arbitration statutes.
As in other contexts, different choice-of-law rules apply to different aspects of the agreement
to arbitrate in annulment proceedings. In particular, different choice-of-law rules apply to,
and different substantive laws are potentially applicable to, the formation and substantive
validity of international arbitration agreements, the formal validity of arbitration agreements
and the capacity of the parties to conclude arbitration agreements. (202)
[a] Law Governing Substantive Validity of Arbitration Agreement
The law governing the substantive validity of international arbitration agreements in
annulment proceedings is generally prescribed by the New York Convention and parallel
P 3199 provisions of national arbitration legislation. As discussed above, Article V(1)(a) of the
Convention contains conflict-of-laws rules for selecting the law governing the substantive
validity of the parties’ arbitration agreement in recognition proceedings. (203) The choice-of-
law rules set forth in Article V(1)(a) are also applicable in annulment proceedings, as well as
proceedings to enforce arbitration agreements, by virtue of Article II of the Convention. (204)
As discussed above, the Convention requires a systematic interpretation of Articles II and V,
with Article V(1)(a)’s choice-of-law rules being incorporated into Article II, and thereby being
made generally-applicable in Contracting States, including in annulment proceedings.
As also discussed elsewhere, under Article V(1)(a), an award need not be enforced if the parties’
arbitration agreement “is not valid under the law to which the parties have subjected it or,
failing any indication thereon, under the law of the country where the award was made.” (205) The
same standard is prescribed by Article 34(2)(a)(i) of the Model Law, which provides in identical
terms that the validity of the arbitration agreement is governed by the law chosen by the
parties and, in the absence of such choice, by the law of the state where the annulment
application is filed. (206) Similarly, non-Model Law jurisdictions also apply the same choice-
of-law rules to international arbitration agreements in annulment proceedings as applicable
in proceedings to enforce such agreements. (207)
The first limb of this provision (i.e., giving effect to the parties’ choice-of–law agreement) is
consistent with the more general rule of party autonomy, which applies even in the absence of
statutory provisions like Article 34(2)(a)(i). (208) Only where parties have not chosen a law to
govern the arbitration agreement is the default rule in the second prong of Articles 34(2)(a)(i)
and V(1)(a), providing for application of the law of the arbitral seat, relevant.
Under both Articles 34(2)(a)(i) and V(1)(a), and choice-of-law rules more generally, (209) a
choice-of-law agreement may be either express or implied. (210) That is consistent with the
language of Articles 34(2)(a)(i) and V(1)(a), which require giving effect to “any indication”
regarding the law governing the arbitration agreement, rather than imposing an express
agreement or clear statement requirement. It is also consistent with more general choice of
P 3200 law rules, which recognize and give effect to implied choice-of-law agreements; (211) there
is no reason to adopt a different approach with respect to arbitration agreements.
A choice-of-law agreement is effective to select the law governing the arbitration agreement
under Articles 34(2)(a)(i) and V(1)(a) even if the validity or existence of any agreement between
the parties is denied. This rule, that the law applicable to issues of validity and existence is
the law which would apply if the agreement in question were valid, is consistent with more
general choice-of-law principles (as discussed above), (212) and the approach under Article II
of the Convention (as also discussed above). (213) Contrary suggestions are unsupported and
should not be accepted. (214)
In practice, parties virtually never expressly choose the law governing their international
arbitration agreements, instead almost always including only general choice-of-law provisions
in their underlying contracts. (215) As discussed above, some courts and arbitral tribunals
interpret the choice of an arbitral seat as an implied choice of the law governing the
P 3201 arbitration agreement; (216) other courts and tribunals interpret general choice-of-law
clauses as expressly or impliedly selecting the law governing the separable arbitration
agreement. (217)
As also discussed above, the better view is that Articles II(1) and V(1)(a) of the Convention, and
Article 34(2)(a)(i) of the Model Law, require application of a validation principle in selecting
the law applicable to the substantive validity of the arbitration clause. (218) In choosing
international arbitration, as a means for the efficient and neutral resolution of disputes
touching on a number of different jurisdictions, parties intend that their arbitration agreement
will be valid and effective, under whatever national legal system will provide that result,
12
without the cost, uncertainty and complexity of traditional choice-of-law analyses. (219) This
analysis applies fully in annulment proceedings, under both Articles II and V(1)(a) of the
Convention and Article 34(2)(a)(i) of the Model Law, each of which contemplates that the “law
to which the parties have subjected” their arbitration agreement is a validation principle
giving maximum effect to that agreement. (220)
The second limb of Articles 34(2)(a)(i) and V(1)(a), providing for secondary application of the
law of the state where the annulment application is filed to the substantive validity of the
arbitration agreement, is less straightforward. These provisions prescribe a mandatory, default
choice-of-law rule for international arbitration agreements, requiring application of the law of
the annulment forum in cases where the parties have neither expressly nor impliedly chosen
the law governing the arbitration clause. In virtually all cases, this will also be the law of the
arbitral seat, since annulment actions may only be pursued in the arbitral seat. (221)
As discussed above, in a number of jurisdictions, courts apply either international law
principles or a validation principle to the substantive validity of international arbitration
agreements, in both cases aimed at giving effect to international arbitration agreements
notwithstanding discriminatory or idiosyncratic rules of national law. (222) Indeed, as
discussed above, the better view is that the New York Convention and Model Law (in Article
34(2)(a)(i)) require application of a validation principle to the choice of the law governing
international arbitration agreements (on the basis that a validation principle reflects the
parties’ implied choice of law for their arbitration agreement). (223)
Article 34(2)(a)(i)’s fallback choice-of-law rule should be interpreted to include both a
validation principle and international principles of neutrality (on the basis that these
principles are themselves either the parties’ implied choice or the law of the annulment
forum). (224) Alternatively, the annulment court’s discretion to deny annulment of an award
P 3202 (225) should be exercised where the arbitration agreement is valid under either
international principles or the validation principle, although invalid under the law of the
arbitral seat. In practice, such an interpretation appears to be the approach followed in states
that have adopted either a validation principle or comparable international rules, including
France, (226) the United States, (227) Switzerland, (228) the Dominican Republic (229) and Peru.
(230) If these approaches are not accepted, then the default rule prescribed by Article 34(2)(a)
(i) (and Article V(1)(a) of the Convention) is the law of the arbitral seat.
The current draft of the ALI’s Restatement (Third) U.S. Law of International Commercial
Arbitration adopts a different approach from that prescribed by either Article 34(2)(a)(i) of the
Model Law or Articles II and V(1)(a) of the Convention. Under the Restatement approach, the
default rule for the law governing the substantive validity of international arbitration
agreements is the law selected by a contract’s general choice-of-law clause. Section 4-12 of the
draft Restatement would provide:
“If the parties have not agreed upon a body of law to govern the arbitration agreement (either
expressly or impliedly), a general choice-of-law clause in the contract determines the law
governing the validity of the arbitration agreement. If the parties have neither selected any
law to govern the arbitration agreement nor included in the contract a general choice-of-law
clause, the law of the seat of arbitration, without resort to its choice-of-law rules, governs the
issue.” (231)
This approach should not be followed. In cases where “the parties have not agreed upon a
body of law to govern the arbitration agreement (either expressly or impliedly),” then the
second prong of Article 34(2)(a)(i) and Article V(1)(a) specifically prescribe a default choice-of-
law rule. That default rule is very clearly the law of the arbitral seat, not the law governing the
P 3203 parties’ underlying contract. Courts in Contracting States are not free to reject this default
rule, which is mandatorily applicable by reason of Article II of the Convention and which in any
event reflects sound policy; (232) that is true both in recognition actions (discussed below (233)
) and in annulment proceedings. There is no basis under the Convention, or national law, for
substituting the law governing the underlying contract for either a validation principle or the
default rule specified in Articles V(1)(a) and 34(2)(a)(i).
[b] Law Governing Capacity
As discussed above, Article 34(2)(a)(i) of the Model Law permits annulment of an award where
one of the parties lacked the capacity to conclude a binding arbitration agreement. (234) This
reflects more general principles regarding the invalidity of the arbitration agreement (which
require that the parties have capacity to conclude the agreement), which would apply even in
the absence of specific statutory language. Article 34(2)(a)(i) also provides that the parties’
capacity is to be determined by the law “applicable to them,” or their “personal law,” again
reflecting generally-applicable choice-of-law principles. (235)
As discussed above, choice-of-law rules dealing with capacity differ materially among different
jurisdictions. (236) In many civil law systems, the capacity of juridical persons is governed by
the law of the seat of the entity in question, while in common law jurisdictions the law of the
place of incorporation ordinarily applies to issues of capacity. (237) Similarly, the capacity of
natural persons in civil law jurisdictions is generally governed by the law of their nationality,
while the capacity of natural persons in common law jurisdictions is governed by the law of
their domicile. (238)
The better approach in the context of capacity to conclude an international arbitration
13
agreement is to apply a validation principle. (239) Where parties enter into international
transactions, calling by definition for activities affecting multiple states, their contractual
agreements should be given maximum effect, notwithstanding local law provisions that would
impede the enforceability of contractual arrangements in a domestic setting. That is
P 3204 particularly true with respect to international arbitration agreements, whose fundamental
purpose is to avoid and ameliorate choice-of-law and jurisdictional uncertainties in
international transactions and to ensure an enforceable means of dispute resolution. (240)
Applying a validation principle, the parties’ capacity should be upheld so long as it validly
exists under the law of any state with a reasonable relationship to the transaction in question.
Thus, in a transaction affecting States A and B, with an arbitral seat in State C, the parties’
capacity to enter into an arbitration agreement should be upheld where any of the laws of
States A, B, or C would reach this result. (241) Again, this result should apply as a matter of
mandatory international law under the Convention and as a matter of national law, under
Article 34(2)(a)(i) of the Model Law and analogous national arbitration legislation.
[c] Law Governing Formal Validity
The law governing the formal validity of international arbitration agreements in annulment
proceedings is potentially different from that governing the substantive validity of such
agreements. As discussed above, questions of formal validity are governed by Article 7 of the
UNCITRAL Model Law and parallel provisions of other national arbitration legislation, in each
case subject to the uniform international maximum standard for form requirements prescribed
by Article II of the Convention. (242)
In many cases, the law governing the formal validity of an international arbitration agreement
in annulment proceedings is the law of the arbitral seat and annulment forum, subject to
Article II’s international maximum standard. Nonetheless, there is in principle no reason that
parties may not agree upon the law governing issues of formal validity; in this case, the
implied choice-of-law analysis and validation principle applicable to issues of substantive
validity should be equally applicable. (243) Applying this analysis, if an arbitration agreement
is formally valid under the law governing the underlying contract, the law of the arbitral seat,
or the law of the recognition forum, it will be formally valid for purposes of an annulment
proceeding (under Article 34(2)(a)(i) and similar national arbitration legislation).
[d] Substantive Rules of International Law Under New York Convention
As also discussed above, the New York Convention should be interpreted as imposing
international limits on the grounds of invalidity on which international arbitration agreements
may be challenged. (244) In particular, only generally-applicable rules of contract law, and not
discriminatory rules that single arbitration agreements out for special or unusual burdens, may
be invoked to challenge the validity of an international arbitration agreement that is subject
to the Convention. These limits are justified both by Article II’s reference to ordinary rules of
P 3205 contract law (“null and void, inoperative or incapable of being performed”), and by the
Convention’s objective of ensuring that Contracting States recognize the validity of arbitration
agreements in accordance with uniform international standards. (245)
Thus, Article II(3) of the Convention requires – as a uniform international rule, applicable in
annulment as well as enforcement proceedings – the recognition of international arbitration
agreements except where such agreements are invalid under generally-applicable,
internationally-neutral contract law defenses that do not impose discriminatory requirements
or conditions on the formation or validity of agreements to arbitrate. (246) Under this
standard, provisions of national law in Contracting States that impose discriminatory
requirements, such as unusual notice requirements (e.g., all capital letters, particular font or
colors), consent requirements (e.g., that arbitration agreements be specifically approved,
approved by particular authorities, or established by heightened proof requirements),
procedural requirements (e.g., only institutional arbitration agreements or domestic arbitral
seats are permitted), or invalidity rules (e.g., arbitration agreements applicable to future
disputes, fraud claims, or tort claims are invalid) are all impermissible under the Convention’s
international standard. (247)
In the overwhelming majority of cases, annulment decisions by national courts are consistent
with the foregoing analysis. National courts virtually always apply generally-applicable rules of
contract law to issues of formation and validity (substantive and formal) of international
arbitration agreements. (248) Only in rare, often pathological, instances, do national courts
apply discriminatory rules of national law to the existence or validity of international
arbitration agreements.
[6] Preclusive Effect of Prior Jurisdictional Ruling by Arbitral Tribunal
As discussed in detail above, all contemporary national arbitration regimes recognize some
version of the competence-competence doctrine. (249) As a consequence, by the time of an
annulment action, there will ordinarily have been consideration of jurisdictional objections by
the arbitral tribunal (followed by a jurisdictional ruling), failing which jurisdictional objections
will very likely have been waived. (250) A central issue in subsequent annulment proceedings is
the preclusive effect (if any) of the prior jurisdictional determination of the arbitral tribunal.
Many national arbitration statutes provide little or no guidance on the preclusive effects of
prior jurisdictional rulings by the arbitral tribunal. For example, neither Article 34(2)(a)(i) of the
14
P 3206 Model Law nor §10 of the FAA addresses the preclusive effect of a jurisdictional award by the
arbitral tribunal – whether positive or negative. As discussed above, this is a subject on
which different national courts and commentators take different positions. (251)
[a] Positive Jurisdictional Award
As discussed elsewhere, many national courts apply a de novo standard of judicial review to
jurisdictional determinations of arbitral tribunals. That is true, for example, in UNCITRAL
Model Law jurisdictions, the United States, France, England and elsewhere. (252)
The text of Article 16(3) of the Model Law arguably contemplates de novo judicial review of
jurisdictional rulings of the arbitral tribunal, by providing that the dissatisfied party may
request “the court specified in Article 6 to decide the matter” (253) (rather than “review the
decision”). Equally, the language of Article 34(2)(a)(i) also arguably implies de novo judicial
review of questions regarding the existence and validity of the arbitration agreement, by
simply stating the grounds on which an award may be set aside, without any reference to
deference to arbitral determinations. (254)
In the absence of statutory guidance, courts in Model Law jurisdictions have generally adopted
a de novo standard of review of jurisdictional issues in proceedings under Articles 16(3) and
34(2)(a)(i), at least insofar as issues of law (as distinguished from fact) are concerned. (255) One
such decision held that “the standard of review of the award the court is to apply is
correctness, in the sense that the tribunal had to be correct in its determination that it had the
ability to make the decision it made”; nonetheless, the same court also held that “[c]ourts are
warned to limit themselves in the strictest terms to intervene only rarely in decisions made by
consensual, expert, international arbitration tribunals, including on issues of jurisdiction.”
(256)
On the other hand, courts in some Model Law states appear to accord a substantial degree of
deference to arbitral rulings on jurisdiction, including on legal conclusions. Thus, where an
P 3207 arbitral tribunal’s award dealt in detail with the alleged nonexistence of the contract
containing the arbitration clause, a court held that it could not review the existence of the
arbitration clause in annulment proceedings. (257)
A de novo approach to judicial review of jurisdictional rulings also applies in the United States.
The general rule in vacatur proceedings under the FAA is that arbitrators’ jurisdictional
decisions are subject to de novo judicial review: “[i]f … the parties did not agree to submit the
arbitrability question itself to arbitration, then the court should decide that question …
independently.” (258) The U.S. Supreme Court has repeatedly underscored this point, holding
among other things:
“[If] the parties did not agree to submit the arbitrability question itself to arbitration, then the
court should decide that question just as it would decide any other question that the parties
did not submit to arbitration, namely independently.” (259)
Thus, if the arbitrators have not been granted the power to finally resolve jurisdictional
disputes (as discussed below (260) ), then their award will be subject to an action to vacate
under §10(a)(4) of the FAA; judicial review of decisions regarding the existence or validity of an
arbitration agreement under §10(a)(4) is de novo, affording no deference to the tribunal’s
jurisdictional findings or conclusions. (261)
Although there is little authority directly addressing the issue, the better view is that U.S.
P 3208 courts would nonetheless give at least some weight to the factual findings of arbitrators,
particularly where those findings were based on a complete evidentiary record and involved
issues of industry expertise. (262) In the words of one U.S. decision:
“[T]he issue of validity was litigated before the Arbitrators, and they found that the
Shareholders Agreement was duly adopted and valid, contrary to Rintin’s contentions, and also
that the arbitration clause itself was valid and enforceable. We therefore have no authority to
set aside the award on this basis.” (263)
English courts also review jurisdictional decisions by arbitrators concerning the existence or
validity of the arbitration agreement on a de novo basis, often without any suggestion of
deference to the arbitrators’ legal conclusions or factual findings. In the words of one English
decision:
“[I]n action to review jurisdictional award, ‘the court is not in any way bound or limited to the
findings made in the award or to the evidence adduced before the arbitrator; it does not
review the decision of the arbitrator but makes its own decision on the evidence before it.’”
(264)
Similarly, the French Cour de cassation has held:
“[T]here is no restriction upon the power of the courts to examine, as a matter of law and in
consideration of the circumstances of the case, elements pertinent to the grounds in question
… in particular, it is for the court to construe the contract in order to determine itself whether
the arbitrator ruled in the absence of an arbitration clause.” (265)
P 3209 Likewise, Swiss courts review jurisdictional awards on a de novo basis, although only after
according a substantial degree of deference to the factual findings of arbitral tribunals. (266)
Thus, “[s]eized for lack of jurisdiction, the Federal Tribunal freely reviews the legal issues,
including preliminary issues which determine the jurisdiction of the arbitral tribunal or its
15
absence.” (267) At the same time, Swiss courts have held:
“[The efficacy of the arbitral process] would be seriously compromised if the Federal Tribunal’s
full power to examine claims [for annulment] were interpreted as entitling it freely to review
the findings of fact made by the arbitral tribunal in the same way as an appeal court.” (268)
Other courts have also adopted de novo standards of review of arbitrators’ decisions upholding
the existence or validity of arbitration agreements, in most cases according such rulings no
formal preclusive effect. (269)
Despite a general standard of de novo review, and the refusal of many national courts to grant
formal preclusive effect to arbitrators’ jurisdictional rulings, courts in a number of jurisdictions
have accorded a substantial degree of deference to arbitrators’ factual determinations and
legal conclusions regarding the existence or validity of arbitration agreement in annulment
proceedings. As already outlined, that is true in U.S., (270) Canadian, (271) Swiss (272) and a few
other jurisdictions. (273) That is particularly true where the arbitral tribunal has conducted
extensive fact-finding (especially involving witness credibility), has particular expertise in the
commercial sector at issue, or has particular expertise in the applicable law (especially when
the reviewing court does not). In all these circumstances, although the annulment decision is
P 3210 made on a de novo basis, it makes no sense to ignore the arbitrators’ jurisdictional fact-
finding, analysis and conclusions and national courts generally have not done so.
Finally, as discussed elsewhere, national courts have also distinguished between annulment
based on the nonexistence or invalidity of the arbitration agreement (subject, under the Model
Law, to Article 34(2)(a)(i)) and annulment based on exceeding the scope of a concededly valid
arbitration agreement (subject, under the Model Law, to Article 34(2)(a)(iii)). (274) As to the
latter category of jurisdictional disputes, many courts have accorded the arbitrators’ decisions
regarding the scope of the arbitration agreement substantial deference. (275)
[b] Negative Jurisdictional Ruling
Alternatively, if an arbitral tribunal issues a negative jurisdictional award, holding that there is
no valid arbitration agreement or that one party lacked capacity to conclude the alleged
arbitration agreement, then the question arises as to the effect of this decision in a subsequent
action to annul the award. National courts have provided different responses to this question.
[i] Availability of Judicial Review of Negative Jurisdictional Ruling
As discussed above, in some legal systems, a negative jurisdictional ruling is deemed a “non-
award,” which is not capable of being set aside or confirmed. (276) A non-award also arguably
has no preclusive effects (and is equivalent to a procedural order by the arbitral tribunal).
In other jurisdictions, a negative jurisdictional ruling is treated as an award, but is also held
not to be subject to judicial review on the grounds that the arbitrators erred in their
jurisdictional analysis (although the ruling may be reviewed for procedural irregularities,
public policy objections and the like). That was the conclusion of the German
Bundesgerichtshof in a 2002 judgment (discussed above), which reasoned that none of the
substantive grounds set forth in §1059(2) of the German ZPO (paralleling Article 34(2) of the
Model Law) for annulment of an award included correcting a mistaken negative jurisdictional
award. (277) The Bundesgerichtshof’s decision is of particular importance because, if accepted,
P 3211 its reasoning would apply more generally to Article 34(2) of the UNCITRAL Model Law. A few
other national legal regimes appear to produce similar results. (278)
In contrast, other jurisdictions treat negative jurisdictional rulings as awards in the same
manner as other types of non-jurisdictional awards, with the same degree of finality and
preclusive effect as a positive jurisdictional award. For example, Article 190(2)(b) of the Swiss
Law on Private International Law provides for judicial review in an annulment action “if the
Arbitral Tribunal wrongly accepted or declined jurisdiction”; (279) the revised French Code of
Civil Procedure is almost identical. (280) Similarly, §10(a)(4) of the U.S. FAA applies equally to
both positive and negative jurisdictional awards. (281)
As discussed above, this latter approach is clearly superior. It makes no sense to accord a
negative jurisdictional award no, or reduced, preclusive effects or possibilities for judicial
review. (282) On the contrary, if an arbitral tribunal considers whether there is a valid
arbitration agreement, or whether a party lacked capacity, and concludes that no valid
agreement or capacity existed, then the tribunal’s resolution of the relevant factual and legal
issues should be no less binding and no less subject to annulment than other jurisdictional
determinations by an arbitral tribunal.
[ii] Standard of Judicial Review of Negative Jurisdictional Ruling
The same de novo standard of judicial review that applies in annulment proceedings involving
negative jurisdictional rulings should in principle apply to positive rulings. There is nothing in
the text of national arbitration statutes (e.g., UNCITRAL Model Law, Articles 16(3) and 34(2)(a);
FAA, §10(4); Swiss Law on Private International Law, Article 190(2)(b)) that would suggest
different standards of review.
More fundamentally, there is no reason that the standard of review should differ in the two
settings: the arbitrators’ incorrect denial of a party’s right to an arbitral forum is no less
deserving of correction than the arbitrators’ incorrect denial of a judicial forum. Consistent
P 3212 with this, most national courts have held that the same de novo standard of judicial review
16
that applies to positive jurisdictional rulings also applies to negative rulings. (283)
Similarly, the same deference to the arbitrators’ fact-finding and industry or legal expertise
that applies to positive jurisdictional rulings (284) is also applicable to negative jurisdictional
decisions. Again, there is no reason that a tribunal’s superior access to the facts or expertise
should be given less weight in one setting than the other.
[c] Agreements to Resolve Jurisdictional Disputes Finally by Arbitration
As discussed above, a number of legal systems permit parties to agree to finally resolve
jurisdictional disputes by arbitration (and give binding effect to such agreements). That is true
in the United States, (285) England (286) and Canada, (287) and should also be true in UNCITRAL
Model Law jurisdictions generally. (288) (In contrast, most German authorities appear to hold
that agreements granting arbitrators authority to finally resolve jurisdictional disputes are
void and unenforceable. (289) )
[i] First Options: Validity of Agreement to Resolve Jurisdictional Disputes by Arbitration
Where national law gives effect to agreements to resolve jurisdictional disputes finally by
arbitration, then the arbitrators’ jurisdictional rulings (both negative and positive) will
generally be treated as conclusive. As discussed above, the seminal decision on the topic is
that of the U.S. Supreme Court in First Options of Chicago v. Kaplan. (290) There, the Court held
that parties may agree to finally resolve “arbitrability” issues by arbitration, provided that
there is “clear and unmistakable” evidence of that agreement. In the Court’s words, the
decisive issue is whether the parties have “agree[d] to submit the arbitrability question itself
to arbitration,” or “agreed to arbitrate arbitrability,” which requires “‘clear[] and
unmistakable[]’ evidence” that the parties concluded such an agreement. (291)
P 3213 The First Options decision and its progeny have given rise to significant uncertainties
(which are discussed in detail above, (292) and not addressed again here). In summary, where
parties have “clearly and unmistakably” agreed to finally resolve disputes over the validity
and enforceability of their arbitration agreement by arbitration, then the substance of the
arbitrators’ jurisdictional ruling will be subject to only minimal review of the merits under the
FAA. In the Supreme Court’s words:
“Did the parties agree to submit the arbitrability question itself to arbitration? If so, then the
court’s standard in reviewing the arbitrator’s decision about that matter should not differ from
the standard courts apply when they review any other matter that parties have agreed to
arbitrate.” (293)
Consistent with this, numerous U.S. lower courts have refused to apply more than the most
deferential standard of judicial review to jurisdictional rulings where the parties have
concluded an agreement to resolve jurisdictional objections by arbitration. (294)
[ii] First Options: “Clear and Unmistakable” Evidence of Agreement to Arbitrate Jurisdictional
Disputes
As discussed above, U.S. courts have reached divergent conclusions about what constitutes
“clear and unmistakable” evidence” of an agreement to resolve jurisdictional disputes by
arbitration. Most U.S. courts have only required the parties’ manifestation of an intention to
submit jurisdictional issues to arbitration, as distinguished from a valid agreement to finally
resolve jurisdictional issues by arbitration, without subsequent judicial review; the better view,
P 3214 however, is that the latter type of agreement should be required under the FAA before the
arbitrators’ jurisdictional ruling will be treated as conclusive. (295)
Moreover, many U.S. courts have found the requirement for clear and unmistakable evidence
of an agreement to resolve jurisdictional disputes by arbitration satisfied by arbitration
agreements incorporating institutional arbitration rules (296) or by a “broad” arbitration
clause. (297) Again, however, the better view is that a more specific agreement, to finally
resolve jurisdictional disputes by arbitration, should be required in order to dispense with
judicial review of jurisdictional rulings in a vacatur proceeding. (298)
[iii] First Options: Challenges to Existence of Arbitration Agreement
Under the approach adopted by most U.S. courts, challenges to the existence of the arbitration
agreement are treated differently from challenges to the validity or enforceability of that
agreement. Many lower U.S. courts have held that challenges to the existence of any
arbitration agreement are necessarily for judicial determination, regardless of any alleged
agreement to finally resolve jurisdictional disputes by arbitration. (299) In one court’s words:
“[I]f the dispute is over the very existence of the agreement to arbitrate, a district court, and
not the arbitrator, must decide if the arbitration clause, (indeed, the entire agreement) is
enforceable against the parties.” (300)
The rationale of these decisions is that, where a party denies that it has concluded any
agreement at all, there cannot be “clear and unmistakable” evidence of an agreement to
arbitrate arbitrability issues; any such evidence, in the form of the putative arbitration
agreement, is necessarily disputed and cannot satisfy First Options’ requirement for “clear and
unmistakable” evidence.
P 3215 [iv] First Options: Challenges to Existence of Underlying Contract
17
Relatedly, most courts have reached the same conclusion where the existence (as
distinguished from the validity or enforceability) of the underlying contract is challenged. In
these cases, U.S. courts have generally required de novo judicial review of claims that there
was no arbitration agreement (on the basis that there can have been no “clear and
unmistakable” evidence of an agreement to resolve jurisdictional disputes by arbitration).
(301)
Thus, the U.S. Supreme Court has held that “[t]he issue of the agreement’s ‘validity’ is different
from the issue whether any agreement between the parties ‘was ever concluded.’” (302)
Similarly, the Court has “distinguish[ed between the] treatment of the generally nonarbitrable
question whether an arbitration agreement was ‘ever concluded’ [and] the question whether a
contract containing an arbitration clause was illegal when formed, which question we held to
be arbitrable in certain circumstances.” (303)
Consistent with this, and as discussed above, many U.S. courts have required judicial
determination of claims that the underlying contract (or a signature on it) was forged, (304)
that the underlying contract was never formed, (305) that the underlying contract was the
result of duress, (306) that a party lacked capacity to conclude a contract, (307) or that an
agent who executed the underlying contract lacked authority (308) – in each case, regardless
whether or not an agreement to resolve jurisdictional disputes by arbitration allegedly
existed. Simply put, these decisions hold that “if a party’s signature were forged on a contract,
it would be absurd to require arbitration if the party attacking the contract as void failed to
allege that the arbitration clause itself was fraudulently obtained.” (309)
At the same time, however, other U.S. lower courts have reached almost entirely opposite
conclusions in cases involving similar facts. These courts have held that parties agreed to
finally resolve, by arbitration, claims that a party to a contract containing an arbitration
agreement lacked capacity, (310) that a condition precedent to the effectiveness of the
underlying contract was not fulfilled, (311) that the underlying contract was procured by duress
P 3216 (312) and that there was a forgery of documents or signatures. (313) As discussed above,
reconciling these various U.S decisions regarding agreements to resolve jurisdictional disputes
by arbitration is at best very difficult. (314)
[v] UNCITRAL Model Law: Validity of Agreement to Resolve Jurisdictional Disputes by Arbitration
Courts in other jurisdictions have also held that parties may agree to finally resolve at least
some jurisdictional disputes by arbitration, with the consequence that the jurisdictional
rulings of the arbitrators will be subject to minimal substantive review. As discussed above,
English courts have held that parties may agree to binding resolution of jurisdictional disputes
by arbitration. (315) Canadian courts have reached the same conclusion, (316) as should courts
in other UNCITRAL Model Law jurisdictions. (317) As under U.S. law, where the parties have
concluded a valid agreement to finally resolve jurisdictional disputes by arbitration, the
arbitrators’ resulting jurisdictional ruling should be subject to minimal substantive review.
(318)
[d] Procedural Rulings
As discussed above, it is important to distinguish an arbitral tribunal’s “procedural” rulings
from its “jurisdictional” decisions: only “jurisdictional” rulings are subject to de novo judicial
review in annulment proceedings (under Article 34(2)(a)(i) and parallel provisions of national
law), while “procedural” rulings are generally entitled to substantial deference and subject to
only minimal judicial review. (319) Most “procedural” rulings by arbitral tribunals during the
course of an arbitration (such as disclosure and privilege rulings, evidentiary decisions,
timetable for arbitration, decisions regarding stays or suspension of arbitral proceedings,
confidentiality rulings and the like) are clearly non-jurisdictional in character and are not
subject to judicial review under Article 34(2)(a)(i) of the Model Law or parallel provisions of
other national arbitration legislation. (320)
More difficult are pre-arbitration procedural requirements, such as requirements to negotiate
in good faith (sometimes for a specified time period), to mediate, or to pursue some
alternative form of dispute resolution prior to commencing arbitral proceedings. (321) As
discussed in detail above, even where they are enforceable, these requirements are frequently
P 3217 regarded as raising issues of “admissibility,” rather than “jurisdiction,” with the
consequence that they are not subject to de novo judicial review in an annulment proceeding.
(322)
As discussed in detail above, U.S. courts have generally held that “procedural” issues do not
constitute jurisdictional objections, which are subject to de novo judicial review in an
annulment proceeding. (323) Rather, procedural rulings by the arbitrators are subject to
minimal judicial review (in accordance with the principles discussed below). (324) This view is
generally correct: although pre-arbitration procedural requirements can conceivably be
drafted to resemble jurisdictional requirements, the better view is that these requirements
inherently involve aspects of the arbitral procedure and, equally important, the remedies for
breach of these requirements necessarily involve procedural issues – in both cases, which are
best suited for resolution by arbitral tribunals, subject to minimal judicial review, like other
procedural decisions. (325)
A recent, and controversial, U.S. decision addressing this issue arose under a bilateral
investment treaty (BIT) in Republic of Argentina v. BG Group plc, where a U.S. appellate court
18
vacated an award made in the United States under the U.S.-Argentina BIT on the grounds that
the BIT’s requirement for litigation in local (Argentine) courts prior to initiating arbitration had
not been satisfied. (326) The court held that the BIT’s pre-arbitration litigation requirement
was a jurisdictional requirement (distinguishable from other procedural requirements
regarding the conduct of the arbitral process itself) and that compliance with that requirement
was reviewable on a de novo basis in a vacatur proceeding under the FAA. (327) The U.S.
Supreme Court accepted the case for discretionary (certiorari) review and its decision will
likely clarify the characterization and treatment of procedural requirements in annulment
proceedings under the FAA.
Many other national courts have categorized compliance with pre-arbitral requirements,
including for negotiations or other forms of dispute resolution, as issues of procedure or
admissibility, not as jurisdictional preconditions. As such, these issues have generally not been
subject to de novo judicial review in annulment proceedings. (328) For the reasons outlined
above, this is the better view. (329)
[e] Prior Judicial Rulings
P 3218 In some annulment actions, the parties will have previously litigated jurisdictional
disputes in national courts (e.g., in an action to stay or enjoin a parallel litigation, to enjoin the
arbitration, or to obtain an order compelling arbitration or appointing an arbitrator). (330) In a
subsequent annulment proceeding, the question of the preclusive effect of the previous
judicial decisions can arise.
In general, where a prior judicial decision on jurisdictional issues was rendered by a court in
the arbitral seat, that decision will have preclusive effects in annulment proceedings. (331) Of
course, that will not be the case where a judicial determination of jurisdiction was on a prima
facie basis (because the issue in annulment proceedings will be whether the jurisdictional
ruling was correct, not whether there was a prima facie basis for jurisdiction). (332)
[7] Lack of Capacity
All national arbitration regimes permit annulment of an award because one of the parties
lacked the capacity to conclude a binding arbitration agreement. As noted above, Article 34(2)
(a)(i) of the Model Law is representative, providing for annulment where “[the] part[ies] to the
arbitration agreement” were “under some incapacity.” (333) Even in jurisdictions where
P 3219 arbitration legislation does not provide expressly that lack of capacity to conclude the
arbitration agreement is grounds for annulment, courts have reached this conclusion without
hesitation. (334)
There is little question but that the award-debtor bears the burden of proof with respect to a
lack of capacity under Article 34(2)(a)(i) and parallel provisions of other national arbitration
legislation. Issues of capacity are plainly subject to Article 34(2)’s general allocation of the
burden of proof (discussed above (335) ), and are for the award-debtor to both raise and
ultimately prove.
There is also little question but that the “incapacity” relevant to annulment on jurisdictional
grounds (and referred to in Article 34(2)(a)(i) of the Model Law) is the lack of capacity to
conclude a binding agreement to arbitrate, as distinguished from capacity to conclude the
underlying contract. That is required by the separability presumption and is confirmed by
Article 34(2)(a)(i)’s reference to “the parties to the agreement referred to in Article 7.” (336)
One court has held that a party’s incapacity must be assessed as of the time the parties
concluded the arbitration agreement. The fact that a party was placed in liquidation during
the course of the arbitration did not provide a basis for annulment of the award under Article
34(2)(a)(i). (337)
[8] Waiver of Jurisdictional Objections
It is elementary that jurisdictional objections may be waived. (338) If a party does not
challenge the existence or validity of the putative agreement to arbitrate relatively early in
the arbitral proceedings, then virtually all national legal systems preclude subsequent
jurisdictional objections, including in annulment proceedings. (339)
P 3220 For example, decisions under the Model Law have held that if a party did not challenge
the existence of an arbitration agreement at the latest in the statement of defense (as
required by Article 16(2)), it was precluded from subsequently raising that objection under
Article 34. (340) The circumstances in which a waiver of jurisdictional objections may be found
are discussed in detail above. (341)
One court explained the rationale for giving effect to waivers of jurisdictional objections as
follows:
“[R]equiring a party to object to the arbitrator’s jurisdiction during the arbitration conserves
resources. If a party objects to the arbitrator’s jurisdiction and the arbitrator sustains the
objection, then the parties can go directly to court and, if the court affirms, avoid an
unnecessary arbitration proceeding.” (342)
More fundamentally, the failure of a party to object to an arbitral tribunal’s jurisdiction in a
timely manner constitutes an implied agreement to proceed with resolution of the parties’
disputes by arbitration, which is subject to recognition and enforcement under the New York
19
Convention and national arbitration legislation, in the same manner as other arbitration
agreements. (343)
In a few cases, courts have held that a party is not permitted to raise jurisdictional objections
as a defense in an action to enforce an arbitral award brought by the award-creditor, but must
P 3221 instead affirmatively seek to annul the award on jurisdictional grounds. (344) In contrast,
in most jurisdictions a party can remain inactive and raise a jurisdictional objection for the
first time in an action to enforce or confirm the award by an award-creditor. (345) This latter
course is provided for by Article 36 of the UNCITRAL Model Law, which permits parties to raise
in confirmation actions, including in the arbitral seat, the same grounds that are available for
annulment. (346) Nonetheless, as discussed above, authority in some Model Law jurisdictions
holds that a party is required to challenge a jurisdictional ruling under Article 16(3) when the
ruling is made, and that failure to do so waives subsequent rights to challenge the ruling under
Article 34 (and Article 36). (347)
[B] Denial of Opportunity to Present Case

A tribunal’s failure to afford the losing party an equal and adequate opportunity to present its
case during the arbitration can provide grounds for annulling an award under all national
arbitration regimes. This basis for annulment is related to the failure to comply with the
parties’ agreed arbitral procedures, which is discussed separately below. (348)
Article 34(2)(a)(ii) of the UNCITRAL Model Law is representative of national arbitration
legislation providing for annulment based on serious procedural unfairness; Article 34(2)(a)(ii)
provides that an award may be annulled if the applicant “was not given proper notice of the
appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present
his case.” (349) This provision is modeled closely on Article V(1)(b) of the New York Convention,
(350) and is directed towards denial of notice or an opportunity to be heard and similar types
of serious procedural unfairness. (351)
Article 34(2)(a)(ii) of the Model Law is characteristic of annulment grounds in other national
P 3222 arbitration statutes. (352) Section 10(c) of the U.S. FAA provides that an award may be set
aside “[w]here the arbitrators were guilty of misconduct in refusing to postpone the hearing,
upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights of any party have been
prejudiced,” (353) while Article 1520 of the revised French Code of Civil Procedure permits
annulment of an award “if due process has not been respected.” (354) The European
Convention Providing a Uniform Law on Arbitration and other international instruments adopt
similar bases for annulment of awards. (355)
The English Arbitration Act, 1996, is sui generis and provides a catalogue of the principal
grounds for serious procedural irregularity justifying setting an award aside; these include
failing to deal with all the issues presented to the tribunal, failing to conduct the arbitral
proceedings in accordance with the parties’ arbitration agreement, failing to render an award
free from ambiguity, failing to conduct the proceedings fairly and equitably and exceeding the
arbitral tribunal’s powers. (356) The English Act also provides that these procedural defects
will only warrant setting an award aside if they caused substantial injustice to the party
challenging the award. (357)
Although these various grounds for annulment arise under different national arbitration
statutes, they raise the same or very similar issues concerning the international arbitral
process. Because annulment decisions deal with a common process of international
arbitration, with a common set of objectives, decisions in one jurisdiction are highly relevant
to questions of arbitral fairness in other jurisdictions. Equally relevant are decisions in the
context of recognition of foreign or nondomestic awards under the New York Convention. (358)
P 3223 Annulment of an award based on denial of an equal and adequate opportunity to be
heard is related to, but distinguishable from, annulment of an award for failure to comply with
the parties’ agreed procedural arrangements (discussed below). (359) It is fundamental that an
award may be annulled based simply on a violation of mandatory procedural protections
imposed by applicable law, regardless of the terms of the parties’ agreement regarding the
arbitral procedures. (360) The opportunity to be heard, and the right to equal treatment, entail
mandatory procedural guarantees; these guarantees apply even in the absence of an
agreement by the parties on arbitral procedures and, in some cases, will override the parties’
procedural agreement. (361)
At the same time, as discussed elsewhere, it is also essential to formulate and apply
mandatory procedural guarantees in the context of specific agreements to arbitrate, including
both the parties’ procedural agreements and expectations. (362) This follows from the central
role of party autonomy with regard to the arbitral procedures (as discussed above). (363) Given
the importance of the parties’ autonomy, particularly in the context of arbitrations between
commercial parties, the application of procedural guarantees by national courts to override
the parties’ agreed procedures is an exceptional occurrence.
Equally important, as discussed above, mandatory national law restrictions on the parties’
agreed arbitral procedures are subject to international limitations, imposed by Articles II and
V(1)(d) of the New York Convention. These provisions should be interpreted to preclude
20
application of discriminatory or idiosyncratic mandatory procedural requirements by
Contracting States, including in annulment actions. (364) For example, the Convention is best
interpreted as precluding mandatory requirements that the language of the arbitration be that
of the arbitral seat, that the arbitrators be of a particular religion or nationality, that the
procedures used in local courts be mandatorily used and the like. (365)
Several related procedural guarantees are incorporated into Article 34(2)(a)(ii), including the
right to: (a) equal treatment; (366) (b) an adequate opportunity to present one’s case; (367) and
P 3224 (c) regular, nonarbitrary procedures. (368) These guarantees reflect the basic mandatory
procedural requirements that national law in most jurisdictions imposes on locally-seated
arbitrations (and that parallel the requirements of Article V(1)(b) of the New York Convention).
(369) These safeguards apply generally to all aspects of the arbitral procedures, including
constitution of the tribunal, (370) presentation of both factual evidence and legal argument
(371) and opportunities to respond to either the other party’s case (372) or to new arguments
identified by the arbitrators. (373)
The procedural protections that are relevant in an annulment context have been described as
follows by a recent Swiss decision:
“The right to be heard, as guaranteed by Art. 182(3) and 190(2)(d) [of the Swiss Law on Private
International Law], provides each party with the right to state all its factual and legal
arguments on the object of the dispute and to provide necessary evidence, as well as the right
to participate in hearings and to be represented or assisted in front of the arbitrators.” (374)
German courts have adopted similar reasoning, holding that the right to be heard entails two
related sets of rights: (a) a party is entitled to present its position on disputed issues of fact
and law, to be informed about the position of the other parties and to a decision based on
evidence or materials known to the parties; (375) and (b) a party is entitled to a decision by the
arbitral tribunal that takes its position into account insofar as relevant. (376) Other authorities
provide comparable formulations of the content of the right to be heard. (377)
P 3225 [2] Choice of Law Governing Procedural Fairness
A recurrent question in actions to annul an international arbitral award under Article 34(2)(a)
(ii), or parallel provisions of other national laws, concerns the appropriate standards of
procedural fairness and, in particular, what law prescribes the content of such standards. (378)
Many national courts have held that local standards of procedural fairness in the arbitral seat
apply in an application to annul an international award. As one U.S. court has held, in an
annulment action under the FAA, “an arbitral award should be denied or vacated if the party
challenging the award proves that he was not given a meaningful opportunity to be heard as
our due process jurisprudence defines it.” (379)
Indeed, absent a choice of a foreign procedural law by the parties, (380) there is no other
plausible choice of a national law. The law of the arbitral seat (and annulment forum) provides
the procedural law of the arbitration in virtually all cases (381) and is fairly clearly the law of
the jurisdiction that is most closely connected to the conduct of the arbitral proceedings.
Insofar as a national legal system is relevant to the standards of procedural fairness in an
international arbitration, it is that of the arbitral seat.
At the same time, national courts have emphasized that application of the law of the arbitral
seat in proceedings to annul an international award does not mean that local litigation
procedures must be applied by the arbitrators, but only that fundamental requirements of
fairness, guaranteed by local law, must be satisfied. (382) These due process requirements
often reflect basic procedural guarantees, applicable in a wide range of domestic procedural
P 3226 settings within the national legal system, but not the particular procedural requirements
of local national litigation codes. (In most cases, constitutional guarantees will apply directly
only to national court or administrative proceedings, and will not be directly applicable to
international arbitral proceedings; (383) these protections will nonetheless be applicable by
analogy or as providing persuasive guidance.)
For example, U.S. courts have held that the general procedural guarantees based by analogy
on the U.S. Constitution apply in actions to annul international awards made in the United
States (and not the specific procedural provisions of the Federal Rules of Civil Procedure).
(384) In the words of one recent U.S. decision, “in making evidentiary determinations, an
arbitrator need not follow all the niceties observed by the federal courts. … The arbitrator
‘need only grant the parties a fundamentally fair hearing.’” (385)
Swiss courts have adopted a similar approach, holding that basic principles of procedural
fairness under the Swiss Federal Constitution are applicable in defining the minimum
standards of fairness in international arbitrations seated in Switzerland, but that there is no
requirement that arbitrators apply the domestic procedural rules applicable in Swiss courts.
P 3227 (386) A number of other jurisdictions have applied similar approaches, looking by analogy
to local constitutional guarantees (and not to local codes of civil procedure or evidence). (387)
Moreover, most national courts have applied standards of procedural fairness tailored to
international proceedings, rather than purely local national standards, in annulment
proceedings involving international awards. For example, French courts have applied “the
fundamental notions of due process, within the French concept of international public policy.”
(388)
21
This approach is well-considered: the standards of procedural fairness in an international
arbitration should be neither domestic legal standards nor standards applied in litigation
contexts, but rather sui generis international standards. This conclusion is required by the
essentially international character of international arbitration, aimed at providing a neutral
dispute resolution process tailored to the needs and expectations of particular parties, from
different jurisdictions, involved in a particular international dispute. (389) It is inconsistent
with this objective, and with the parties’ procedural expectations, to impose particular
domestic standards on the arbitral process.
Thus, even if the basic constitutional guarantees of the arbitral seat provide the starting point
for standards of procedural fairness in international arbitral proceedings, it is essential that
courts apply those guarantees in light of the international character of the arbitral process. In
particular, this requires not rigidly imposing local procedural requirements or practices,
applicable in local court proceedings, and instead recognizing that the fundamental issue is
whether the parties were treated equally and afforded a reasonable opportunity to be heard
in the context of the international procedure to which they agreed.
P 3228 [3] Burden and Standard of Proof
The allocation of the burden of proof and the standard of proof for annulment of an award for
serious procedural unfairness is similar to the treatment of these issues under most other
grounds of annulment. The award-debtor bears the burden of proof of procedural unfairness,
warranting annulment, and the showing required is a substantial one.
[a] Burden of Proof
It is clear that the party seeking annulment of an award on the basis of procedural unfairness
bears the burden of proof. In the words of one court, rejecting an application to annul an award
for procedural unfairness, “[p]laintiff has not satisfied the stringent burden of proof necessary
to establish that the arbitral proceedings were conducted so unfairly as to result in substantial
prejudice.” (390) Similarly, under the UNCITRAL Model Law, the award-debtor has the burden of
affirmatively raising claims of procedural unfairness, which cannot be raised ex officio by the
annulment court, (391) and of establishing those claims.
[b] Standard of Proof
It is also clear that the burden of demonstrating procedural unfairness, sufficient to warrant
annulment of an award, is a significant one in most jurisdictions. As one representative
decision declared, a tribunal’s procedural ruling will be upheld “[i]f any reasonable basis
exists” for it. (392) Or, in the words of a leading U.S. decision, “arbitrators are charged with the
duty of determining what evidence is relevant and what is irrelevant, and … barring a clear
showing of abuse of discretion, the court will not vacate an award based on improper evidence
or the lack of proper evidence.” (393) Other authorities are to the same effect. (394)
P 3229 [c] Judicial Deference to Parties’ Agreed Arbitral Procedures
Decisions under Article 34(2)(a)(ii) and analogous statutory provisions generally reflect a
pronounced judicial reluctance to annul awards based on alleged procedural mistakes by the
arbitrators. This is particularly true with regard to procedures resulting from agreements
between the parties, where national courts have upheld almost all consensually-adopted
procedures in international commercial settings. (395) As a Canadian Supreme Court decision
concluded, the provisions of the Model Law “affirm the principle of procedural flexibility in
arbitration proceedings, by leaving it to the parties to determine the arbitration procedure or,
failing that, leaving it up to the arbitrator to determine the applicable rules of procedure.”
(396)
The same result applies under the FAA. In the words of one U.S. court, “parties are as free to
specify idiosyncratic terms of arbitration as they are to specify any other terms in their
contract.” (397) Courts in other jurisdictions reach similar conclusions. (398)
These decisions reflect the fundamentally consensual nature of international arbitration, (399)
P 3230 as well as the parties’ broad procedural autonomy, recognized in Articles II and V(1)(d) of
the New York Convention and elsewhere. (400) There will be limited circumstances in which a
procedural agreement between the parties is so unfair or arbitrary that it will be held to
violate mandatory procedural guarantees, (401) but such instances are very rare (particularly
in cases involving commercial parties).
[d] Judicial Deference to Arbitrators’ Procedural Decisions
National courts have been almost as deferential to procedural and evidentiary rulings by
arbitral tribunals (in the absence of procedural agreements by the parties). (402) In the words
of one representative decision, applying Article 34(2)(a)(ii) of the UNCITRAL Model Law, “a high
level of deference should be accorded to the Tribunal, especially in cases where the [award-
debtor] is in reality challenging a finding of fact.” (403) Decisions in other Model Law
jurisdictions are similar. (404)
English decisions are to the same effect, affording procedural decisions in international
arbitrations substantial deference: “It is not a ground for intervention that the court considers
that it might have done things differently.” (405) Rather, an award will only be annulled if the
arbitral process was “so removed from what could reasonably be expected of the arbitral
22
process that the court should be expected to intervene.” (406)
U.S. courts take a similar view: “[a]n arbitrator enjoys wide latitude in conducting an
arbitration hearing. Arbitration proceedings are not constrained by formal rules of procedure
P 3231 or evidence.” (407) Some U.S. courts have held that they must “accord even greater
deference to the arbitrator’s decisions on procedural matters than those bearing on
substantive grounds.” (408) At the same time, however, while “[f]ederal courts do not
superintend arbitration proceedings,” judicial review remains available for “determining
whether the procedure was fundamentally unfair.” (409)
Civil law decisions are to the same effect. (410) As the Swiss Federal Tribunal has explained,
the Swiss legislature, like law-makers in other jurisdictions, “did not desire that procedural
public policy should be extensively interpreted and that there should arise a code of arbitral
procedure to which the procedure, as freely selected by the parties, should be subjected.”
(411)
P 3232 [4] Recurrent Issues Regarding Procedural Fairness
There are a number of recurrent categories into which claims of procedural unfairness or
irregularity fall. The principal categories are summarized below, as they are applied in
annulment actions. (412) These concrete applications are essential supplements to general
statements regarding procedural guarantees.
Equality of Treatment. As discussed above, most national arbitration regimes require equal
treatment of the parties in arbitral proceedings. (413) If a tribunal denies one party equal
treatment, by granting its counter-party an opportunity to address an issue, to submit
evidence, to produce a witness, or otherwise present its case, without affording comparable
opportunities to other parties, then its award may be subject to annulment. (414) As one court
reasoned:
“Equal treatment of the parties, guaranteed by Art. 182(3) and 190(2)(d) [of the Swiss Law on
Private International Law] implies that the proceedings must be organized and conducted in
such a way that each party has the same possibilities to present its case. Under that principle,
which also applies to the time limits within which the briefs must be filed, the arbitral tribunal
must treat the parties in the same way at all stages of the proceedings.” (415)
On the other hand, as also discussed above, equal treatment does not require precisely
identical treatment (e.g., the same amount of time, number of witnesses) and tribunals are
afforded considerable discretion in their procedural decisions. (416) Equality of treatment also
does not preclude a tribunal from relying solely on one party’s fact or expert witnesses or
accepting one party’s view of the law. (417) On the contrary, the tribunal’s adjudicative
mandate requires it to accept the evidence and argument that is correct, regardless whether it
is that of one party and not the other; indeed, a refusal to do so would itself be a violation of
the tribunal’s basic duty to resolve the case in accordance with the law and evidentiary record.
(418)
Notice of Hearings or Other Matters. If a party is not provided notice, or is provided inadequate
notice, of hearings or other important steps in the arbitral process, this will be grounds for
P 3233 annulling a resulting award. This is provided for expressly by Article 34(2)(1)(ii) of the
UNCITRAL Model Law (and Article V(1)(b) of the Convention) and is universally-recognized in
non-Model Law jurisdictions as grounds for an annulment action. (419) Consistent with this,
Model Law courts hold that the parties must be provided advance notice of any hearing or any
meeting of the arbitral tribunal for the purposes of inspection of goods, other property, or
documents. (420)
In general, arbitrators are reasonably careful in ensuring that the parties receive adequate
notice of hearings, or other steps in the arbitral process, and national courts have usually
rejected claims of inadequate notice. (421) Nevertheless, cases arise in which a party is not
provided proper notice and where the tribunal’s award is annulled. (422)
In some cases, factual disputes arise as to the award-debtor’s receipt of the notice of
arbitration (or other steps in the arbitral process). Where a communication was addressed to a
P 3234
party and delivered to the party’s mailing address and not returned by the post or courier
company, one court assumed that someone associated with the party had received and signed
for the communication. (423)
In a few cases, courts have confirmed awards, notwithstanding the lack of proof that the award-
debtor actually received notice, if reasonable diligence was used by the award-creditor or
tribunal in attempting to provide notice. (424) Thus, some courts have held that an arbitral
tribunal is permitted to rely on the address contained in the parties’ contract (and that a party
is obliged, when moving to a new location different from that specified in a contract, to notify
its counter-party). On the other hand, one court held that it was insufficient for no second effort
to be made to serve a request for arbitration where the first effort, delivered to the
defendant’s registered office, was returned with the notice “not delivered.” (425)
Refusal to Hold Hearing. As discussed above, the parties’ right to be “heard” often connotes an
oral hearing, and many national arbitration statutes expressly require arbitral tribunals to
conduct a hearing if requested by one of the parties. (426) A tribunal’s refusal to conduct an
oral hearing, where it has been requested, can be a classic instance of denial of a party’s
opportunity to be heard, leading to annulment of the resulting award. (427) An arbitral tribunal
23
is generally not required to hold an oral hearing unless a request for a hearing has been made.
(428)
Nonetheless, arbitrators are not obliged to conduct hearings on every issue that arises in an
P 3235 arbitration and in practice are properly afforded substantial discretion in determining
how and whether to hear the parties on particular issues or evidence. (429) Indeed, a number
of national courts have held that arbitrators are under no obligation to hold any oral hearing at
all in an arbitration if they conclude that a hearing is unnecessary. (430) Despite these
decisions, it remains prudent and appropriate, in an era where technology permits “hearings”
to be conducted effectively by telephone or videoconference, to conduct at least some form of
hearing in most cases where a party requests it.
Finally, it is well-settled that parties are almost always free to agree (including in advance) to
dispense with an oral hearing and such agreements, sometimes termed agreements for
“documents only” arbitrations, are valid and enforceable. (431) It is conceivable that, if
unforeseen developments made a hearing essential to presentation of a party’s case, an
agreement on a “documents only” arbitration could be invalidated, but this would be
exceptional.
An arbitrator’s duty to hold hearings is not discharged by merely allowing a formal
presentation by the parties and thereafter disregarding or ignoring it. Rather, having
permitted parties to make oral (and other) submissions, the arbitral tribunal is required to
take these submissions into account. (432)
Adjournment and Scheduling of Hearings or Other Procedural Steps. Parties sometimes seek to
annul awards on the grounds that scheduling decisions were made that either seriously
impeded their ability to present their case (e.g., prevented the attendance of a witness,
granted counsel less preparation or presentation time than requested) or provided adverse
parties with some advantage (e.g., more time to respond). Under most national laws,
P 3236 arbitrators are accorded substantial discretion in scheduling and adjourning hearings
and, as a consequence, awards are very seldom annulled on these grounds. (433) As one
experienced international practitioner remarked:
“[I[n the author’s experience, there has never been a single ICC case where the award was set
aside because the time given to counsel had been limited or the number of exchanges of briefs
restricted.” (434)
Nevertheless, if a tribunal grants one party a significant, unjustified procedural advantage or
refuses without justification to postpone or reschedule a hearing, when essential witnesses or
irreplaceable counsel are unavailable, the award is vulnerable to annulment. (435)
P 3237 Language of Arbitration. Award-debtors sometimes seek to annul awards on the grounds
that they did not satisfactorily comprehend or speak the language of the arbitration. Such
claims are particularly difficult to sustain where the parties have agreed upon the language of
the arbitration; tribunals cite both the parties’ agreement and the award-debtor’s freedom to
retain translators and counsel proficient in the language of the arbitration. (436) Cases where
the arbitral tribunal selects the language of the arbitration are only slightly more difficult; the
tribunal’s decision is generally well within its procedural discretion, (437) and there is
ordinarily no reason that a party cannot obtain translations and counsel fluent in the language
chosen by the arbitrators.
Introduction of New Claims. If a tribunal permits the last-minute introduction of a genuinely
new claim, without affording the counter-party an adequate and equal opportunity to respond,
a basis for annulling the award on procedural fairness or regularity grounds arises. In practice,
however, arbitrators are accorded substantial discretion in permitting or excluding the
introduction of new claims. (438) The arbitrators’ discretion may be limited by institutional
rules (such as Article 23(4) of the 2012 ICC Rules), or by the parties’ arbitration agreement. (439)
Typically, however, these types of provisions preserve the arbitrators’ procedural discretion,
rather than limiting or overriding it.
Exclusion or Admission of Evidence. Another potential ground for annulling an award is the
P 3238 arbitrators’ allegedly improper exclusion or admission of evidence. As discussed above,
however, arbitral tribunals possess broad authority over evidentiary matters, as reflected in
national arbitration legislation and judicial decisions. (440) In the words of the U.N. Secretary
General, commenting on the draft 1976 UNCITRAL Rules:
“In making rulings on the evidence, arbitrators should enjoy the greatest possible freedom and
they are therefore freed from having to observe the strict legal rules of evidence.” (441)
Similarly, the basic rule under the FAA in the United States remains that stated by Judge Henry
Friendly nearly 40 years ago: “in handling evidence an arbitrator need not follow all the
niceties observed by the federal courts. He need only grant the parties a fundamentally fair
hearing.” (442) Other jurisdictions adopt similar standards, granting tribunals in international
arbitrations very broad discretion to admit or exclude evidence, including to regulate the
timing of evidentiary submissions. (443)
As these standards suggest, annulment applications based on evidentiary decisions by the
arbitral tribunal have rarely succeeded. That is true under the FAA, in the United States, where
P 3239 courts have remarked that “arbitrators are not bound by the rules of evidence,” (444)
“arbitrators are afforded broad discretion to determine whether to hear evidence” (445) and
not “every failure of an arbitrator to receive relevant evidence [will] constitute misconduct
24
requiring vacatur of the arbitrator’s award.” (446)
Similarly, other common law courts have repeatedly refused to annul particular awards based
on allegedly improper refusals to admit or exclude evidence. (447) As one English court put it:
“[Arbitral tribunals enjoy the] widest discretion permitted by law to determine the procedure
to be adopted, and to ensure the just, expeditious, economical and final determination of the
dispute. The arbitrators determined that strict rules of evidence should be disapplied.” (448)
Civil law jurisdictions have reached similar conclusions, applying the same standards to reject
P 3240 most annulment applications based on evidentiary rulings. (449) Similarly, a tribunal’s
refusal to appoint an expert is virtually never a ground for annulment for procedural
unfairness. (450)
Indeed, some civil law courts have held that a tribunal’s determination that it was unnecessary
to consider particular evidence, because it was irrelevant, cannot provide any basis for
annulling the award, on the theory that this was at most an error of substantive law, not a
denial of procedural fairness. (451) Other courts have emphasized the tribunal’s authority to
establish and apply Rules for the timing of the parties’ submissions and rejected annulment
applications where the tribunal’s rules were not complied with. (452)
Nevertheless, there are exceptions, where national courts have occasionally held that the
tribunal improperly prevented a party from introducing critical evidence or failed to permit a
party to respond to evidence or arguments advanced by the counter-party. (453) Other
decisions appear to annul awards on the basis that the arbitrators did not properly weigh or
evaluate the evidence, although these decisions are a distinct minority. (454)
P 3241 The same analysis applicable to decisions regarding the admission or exclusion of
evidence applies with even greater force to decisions regarding the weight and credibility of
the evidence which, in principle, are elements of the tribunal’s decision on the merits of the
parties’ dispute and not subject to any judicial review under most national laws. (455)
Nonetheless, a court in Canada reasoned that a tribunal cannot draw adverse inferences from
a party’s failure to present evidence if that party is prohibited by law from doing so (but then
rejected the claim on the facts of the case). (456)
Disclosure Rulings. Parties sometimes seek to annul awards based on alleged unfairness in a
tribunal’s disclosure rulings (typically, in common law jurisdictions, where parties may claim
that the tribunal was required to have granted their requests for disclosure in order to enable
them to present their case). (457) These challenges have virtually always been rejected (again,
even in common law jurisdictions). (458)
National courts have also generally rejected arguments that an award should be annulled
because it (subsequently) emerged that a party had failed to comply with disclosure orders in
the arbitration. Even where the documents in question were material, courts have frequently
refused to annul the resulting award, either on grounds of fraud or otherwise. (459)
Examination and Cross-Examination. Another common ground for seeking to annul an award is
the alleged impropriety of a tribunal’s ruling either permitting or excluding/curtailing witness
P 3242 examination, whether direct or cross. Given the arbitrators’ broad procedural and
evidentiary authority, (460) courts are extremely reluctant to annul awards on these grounds.
Even courts in common law jurisdictions are usually unwilling to rely on the curtailment of
examination or cross-examination to annul an award. (461) Common law courts have
considered the importance of the testimony, the available opportunities for rebutting it and
other factors in deciding whether a denial of cross-examination rendered a hearing
fundamentally unfair. (462) Despite this, a few decisions have annulled awards where
apparently arbitrary rulings have prevented a party from adducing clearly material evidence.
(463)
Refusal to Permit Party to Present Argument or Evidence. As discussed above, a fundamental
procedural guarantee under most legal systems is the right to present one’s case to the
decision-maker. This is referred to variously as the right to “be heard,” the right to
“contradictory proceedings,” (464) the “principe de la contradiction” (465) and the right to “due
process.” (466) In the words of the Swiss Federal Tribunal, a party must be afforded the right
“to examine its opponents’ submissions, to make observations thereon and to refute them with
P 3243 its own submissions and offers of evidence.” (467) Or, as another court put it, a party
should have the opportunity to comment on all facts relevant to the award. (468)
Where an arbitral tribunal fails to permit a party to present its argument or evidence, or to
respond to its counter-party’s evidence or argument, then the tribunal’s subsequent award is
potentially subject to annulment. For example, awards may be annulled where a tribunal has
refused to allow a party an opportunity to present specified evidence or to present argument
on particular issues. (469) Similarly, an award may be annulled because the award-debtor was
(inadvertently) not provided with documents submitted by another party to the arbitral
tribunal. (470) Awards may also be annulled if a party is denied the opportunity to participate
in the arbitration because of the nonpayment of its share of the tribunal’s costs. (471)
Nonetheless, as also noted above, a tribunal is generally afforded substantial discretion in
determining the need for and admissibility of evidence (472) or argument on particular issues.
(473) Moreover, although parties have the right to present evidence, they must do so within the
procedural rules and timetable required by the arbitral tribunal. In one court’s words:
25
“An entitlement to evidence exists only to the extent that the evidential submission took place
P 3244 timely and in compliance with formal requirements. The [award-debtor’s] submission that
a new witness should be heard was late according to the procedural provisions applicable to
the arbitration.” (474)
In some jurisdictions, an award may also be annulled if the arbitrators permitted a party to
submit evidence, but then did not in fact consider that evidence or argument. (475) In one
court’s words, the arbitrators have a “minimal duty to review and deal with the pertinent
issues. This duty is breached when inadvertently or by misunderstanding, the arbitral tribunal
does not take into account some statements, arguments, evidence and offers of evidence
submitted by one of the parties and important to the decision to be issued.” (476) Caution
must be exercised, however, to ensure that this ground for annulment does not become the
basis for an indirect review of the substance of the arbitrators’ decision.
Arbitrators’ Consideration of Material Outside Record. Arbitrators sometimes conduct private
fact-finding of various sorts, such as independently visiting a site, engaging in independent
research, interviewing witnesses and the like. Absent contrary agreement, substantial fact-
finding of material evidence outside the record in the arbitration is generally improper under
most legal systems and international practice, and will expose the award to annulment. (477)
As one court observed:
“[An arbitrator who engaged in such activities] was acting under a misapprehension of his
P 3245 function as an arbitrator, which is not to play the part of Perry Mason where he feels that
the submissions or evidence of the parties might usefully be supplemented.” (478)
Despite this, parties are free to agree to permit arbitrators to undertake independent
investigations. For example, one court held that the tribunal’s independent investigations
were in principle authorized by the applicable institutional rules, although the tribunal’s
conduct could nonetheless constitute a violation of the right to be heard if a party could not
comment on their result. (479)
On the other hand, arbitrators are permitted to draw on their experience and expertise in
evaluating the evidentiary record presented by the parties. (480) In one case, an award-debtor
argued that the arbitrator improperly relied solely on his own expertise (because he
determined a price for natural gas based on a model he prepared, without discussing the
model with the parties). Applying Article 34(2)(a)(ii) of the Model Law, the annulment court
held that the arbitrator’s model was not an “expert report” or “evidentiary document” under
Article 24(3), which should have been provided to the parties. The court reasoned that the
arbitrator had been chosen for his expertise and that the arbitration agreement provided for
the use of such knowledge, and therefore that the arbitrator’s refusal to discuss the model with
the parties did not constitute a denial of the right to be heard. (481)
Ex Parte Contacts of Arbitrators with Parties. As discussed elsewhere, virtually all national legal
systems and institutional rules presumptively forbid ex parte contacts between the parties (or
their counsel) and the arbitrator(s) about the substance of the parties’ dispute. (482)
Noncompliance with these prohibitions can be grounds for annulment of the tribunal’s award,
although most courts inquire into the intent, materiality and context of such communications.
P 3246 (483) On the other hand, where the parties have agreed to permit ex parte contacts by the
arbitrators, they will generally be permissible, provided that the parties are treated equally
and fairly. (484)
Questioning by Tribunal. Consistent with the arbitrators’ general procedural authority,
particularly over the conduct of the arbitral hearing, (485) national courts have generally
rejected claims that questioning or comments by an arbitrator (even when very interventionist)
constituted procedural unfairness, including on the grounds that the arbitrator had prejudged
the issues. (486) Indeed, there is a substantial argument that a tribunal is obliged to ask
clarifying questions. (487) Some national courts have suggested that an arbitrator’s comments
that particular issues are irrelevant, or already satisfactorily dealt with, may constitute
procedural errors if they lead a party not to present evidence, but the tribunal subsequently
changes its mind without informing the parties. (488)
Prejudgment by Tribunal. In principle, an award is subject to annulment in many jurisdictions if
the arbitral tribunal “prejudged” the issues in dispute, by reaching a decision without affording
the parties an opportunity to be heard. (489) In practice, awards are very seldom annulled on
prejudgment grounds, in part because of the difficulties of proof. (490) Rare exceptions exist –
as in one case where the arbitral tribunal purportedly issued a detailed award the same day
that it received the parties’ written submissions. (491)
Inadequate Internal Deliberations of All Members of Tribunal. Some national courts have held
that awards may be annulled where there was not meaningful participation in deliberations by
P 3247 all the tribunal members. (492) In the words of one U.S. decision, “[a]s a general rule in the
arbitration context, it is essential that there be unanimous participation by the arbitrators
during the deliberations upon the award to be made.” (493)
In most instances, only the most egregious instances of a breakdown in a tribunal’s
deliberative process will justify setting aside an award. (494) Courts will be particularly
unreceptive to such claims where one party-nominated arbitrator has obstructed or delayed
deliberations or publication of an award. (495) As one court put it:
“[W]hen two arbitrators are agreed upon the outcome of the dispute, the third arbitrator
26
cannot prolong the deliberations by demanding continued discussions in an attempt to
persuade the others as to the correctness of his opinion. The dissenting arbitrator is thus not
afforded any opportunity to delay the writing of the award.” (496)
The related subject of “truncated tribunals” is discussed above. (497)
No Verbatim Transcript. It is sometimes suggested in common law jurisdictions that the lack of
a verbatim transcript of the arbitral hearing is a ground for setting the award aside. (498)
Particularly in an international setting, where many national courts do not use verbatim
transcripts, such suggestions have little substance. (499) Where an arbitral tribunal refuses to
make any record – such as summary minutes or a protocol – of the hearing, there are
P 3248 substantially stronger grounds for annulment, but even in these circumstances many
national courts refuse to disturb an otherwise valid award. (500)
“Surprise” Decisions by Arbitrators. If the arbitrators rest a decision on factual materials or (less
clearly) a legal theory not advanced by the parties, without providing the parties an
opportunity to be heard, their award is subject to annulment. (501) One English decision
correctly summarizes the approach of many courts to this issue:
P 3249 “In truth, we are simply talking about fairness. It is not fair to decide a case against a party
on an issue which has never been raised in the case without drawing the point to his attention
so that he may have an opportunity of dealing with it, either by calling further evidence or by
addressing argument on the facts or the law to the tribunal. The essential function of an
arbitrator or, indeed, a Judge is to resolve the issues raised by the parties. The pleadings
record what those issues are thought to be and, at the conclusion of the evidence, it should be
apparent what issues still remain live issues. If an arbitrator considers that the parties or their
experts have missed the real point – a dangerous assumption to make, particularly where, as
in this case, the parties were represented by very experienced Counsel and solicitors – then it
is not only a matter of obvious prudence, but the arbitrator is obliged, in common fairness or,
as it is sometimes described, as a matter of natural justice, to put the point to them so that
they have an opportunity of dealing with it.” (502)
This rule follows from the parties’ general right to an opportunity to be heard, (503) and is
related to the arbitrators’ obligation not to exceed the scope of the parties’ submissions. (504)
On the other hand, arbitrators are not obligated to give the parties specific invitations to
comment on every inference that might be drawn from the evidence or interpretation that
might be given to a statute or contract. (505) It is also clear that the arbitrators are not
required to invite a party to devote detailed attention to what proves to be a (or the) decisive
point; the only requirement is that the parties be given the opportunity to address all of the
issues upon which the tribunal may base its decision. (506) Similarly, the fact that the arbitral
P 3250 tribunal did not adopt the valuation method of either party, but instead adopted its own
position, will not ordinarily constitute a surprise decision. (507)
Some jurisdictions distinguish between factual and legal matters, citing the principle of jura
novit curia and holding that an arbitral tribunal has greater freedom to rest a decision on legal
grounds not addressed by the parties than with respect to factual grounds that have not been
addressed by the parties. (508) According to settled Swiss authority:
“In Switzerland the right to be heard principally relates to the finding of facts. The right of the
parties to be questioned on legal issues is recognized only limitatively. As a rule, according to
the principle of jura novit curia [“the court is presumed to know the law”], courts or arbitral
tribunals freely assess the legal significance of the facts and may also decide on the basis of
rules of law other than those relied upon by the parties. Consequently, to the extent that the
arbitration agreement does not limit the task of the arbitral tribunal to the legal grounds
raised by the parties, the parties need not be heard specifically on the meaning of applicable
rules of law. As an exception the parties must be given an opportunity to be heard when the
court or the arbitral tribunal considers basing its decision on a rule or argument which was not
raised during the proceedings and whose relevance the parties could not anticipate.” (509)
P 3251 A number of other authorities are to the same effect. (510) For example, a Spanish court
held that an arbitrator will not exceed his or her mandate by reclassifying a party’s claim (as
contemplated by the iura novit curia principle). (511)
As the above excerpt indicates, however, even where this reasoning is adopted, courts have
annulled awards that rested on authorities or arguments that the parties did not address and
could not reasonably have foreseen as relevant. (512) Where the arbitral tribunal adopts a
legal position or theory different from that previously communicated to the parties or where
its decision, for other reasons, came as a surprise to the parties, the tribunal is required to
inform the parties and permit them an opportunity to be heard on the issue. (513)
Other national courts have annulled awards where the arbitral tribunal rested its decision on
legal provisions or argument raised sua sponte by the arbitrators and not addressed by the
P 3252 parties. (514) In the words of one French decision, “the principle of due process implies
that the arbitral tribunal cannot introduce any new legal or factual issue without inviting the
parties to comment on it.” (515)
Reasoned Awards. As discussed above, a number of national arbitration statutes require that
awards rendered in locally-seated arbitrations be reasoned, (516) with some such statutes
providing for the annulment of unreasoned awards. (517) In the absence of express statutory
provisions of this sort, many courts decline to annul unreasoned awards. A recent Australian
27
decision explained the rationale for refusing to annul an award for lack of adequate reasons as
follows:
“Though courts and arbitration panels both resolve disputes, they represent fundamentally
different mechanisms of doing so. The court is an arm of the state; its judgment is an act of
state authority, subject generally in a common law context to the right of appeal available to
parties. The arbitration award is the result of a private consensual mechanism intended to be
shorn of the costs, complexities and technicalities often cited (rightly or wrongly, it matters
not) as the indicia and disadvantages of curial decision making. That some difficult and
complex arbitrations tend to mimic the procedures and complexities of court litigation may
be a feature of some modern arbitration, but that can be seen perhaps more as a failing of
procedure and approach rather than as reflecting any essential character of the arbitral
process that would assist in a conclusion (erroneous in principle) that arbitrations should be
equated with court process and so arbitrators should be held to the standard of reasons of
judges.” (518)
P 3253 This reasoning is well-considered and provides a sound basis for denying annulment of
unreasoned or inadequately reasoned awards, with the exception of cases where the parties’
arbitration agreement requires reasons (which then justifies annulment on the grounds that the
arbitrators failed to comply with the parties’ agreed arbitral procedures (519) ). A number of
other national court decisions also refuse to annul awards on the grounds that they are
unreasoned. (520)
Some courts have annulled awards where it appears from the text of the award that the
arbitrators have not considered the parties’ arguments, reasoning that this constitutes a denial
of the parties’ opportunity to be heard. (521) The better approach, however, is to analyze
awards of this character under the rubric of unreasoned awards, rather than seeking to infer a
denial of an opportunity to be heard.
Default Awards. As discussed above, it is well-settled under most national laws that, absent
contrary agreement, arbitrators have the power to proceed with an arbitration,
notwithstanding one party’s non-participation, and to make a default award. (522) Courts have
routinely rejected applications to annul awards made in these circumstances, (523) with some
courts going further and holding that a party’s failure to participate in the arbitration
precludes it from subsequently complaining about the arbitral procedures adopted in the
P 3254 party’s absence. (524) It is also clear that a party’s non-participation in the proceedings
does not qualify as a violation of the right to be heard even if the party’s default is based on
the position that the arbitral tribunal lacks jurisdiction. (525)
[5] Material Violation of Procedural Rights Ordinarily Required for Annulment
It is elementary that only a material violation of a party’s procedural rights can result in
annulment. Minor or trivial violations of procedural rights are inevitable in any adjudicative
process and do not provide grounds for annulment. (526) For example, if a tribunal wrongly
allows one party somewhat more time or more favorable conditions to present its case than
equal treatment permits, its award should ordinarily not be subject to annulment
notwithstanding the procedural violation. As one judicial decision correctly summarized the
approach in most jurisdictions, “[i]f an arbitration is basically fair, Courts should resist the
temptation to plunge into detailed complaints about flaws in the arbitration process.” (527)
[6] Material Prejudice Ordinarily Required for Annulment
A number of authorities have held that an award will not be annulled for procedural unfairness
unless it can be demonstrated that the procedural violation had a material effect on the
P 3255 arbitral process or the arbitral tribunal’s decision. (528) These authorities do not generally
require proof that a procedural irregularity caused the tribunal’s decision, but more than an
incidental or trivial effect on the tribunal’s decision-making or decision is required in order to
justify annulment.
There is authority for shifting the burden of proof with respect to materiality to the award-
creditor: if the award-debtor establishes the existence of a serious procedural unfairness, then
some courts hold that the burden shifts to the award-creditor to prove that the irregularity was
immaterial. (529) Other authority holds that the burden of proof remains on the award-debtor
as to all issues. (530)
It is sometimes said that a violation of the parties’ right to be heard results in automatic
annulment of an award, without any need to demonstrate that the violation had a causal
connection to the tribunal’s decision. (531) A Hong Kong decision (later reversed on appeal)
explained the basis for this conclusion, emphasizing the risk of an annulment court preempting
the arbitrator’s consideration of the evidence:
“If a party has been denied the opportunity to make a submission on a matter central to its
case on the award, it will, in my view, rarely be that the court will be able to say that the result
could not be different. In other words, the court will come to the conclusion that it cannot say
that the result could not be different. In so doing, the court cannot examine the submission
that might have been made, and apply that to the result to which the tribunal has arrived,
because to do so would be to pre-empt the tribunal’s decision-making power to the court. It is
P 3256 the quality of the violation that must be examined rather than the materiality and the
effect on the outcome of the arbitration.” (532)
28
Despite this, the better view is that an award should ordinarily be annulled only if a tribunal’s
procedural error had a material effect on the arbitral process or the outcome in the arbitral
award; the wrongful denial of an opportunity to be heard on an ancillary or incidental point
should not provide grounds for annulling an otherwise valid award. This requirement is express
in some national arbitration legislation (533) and has been adopted by the weight of judicial
authority in other jurisdictions. (534)
Although care should be taken not to speculate about the consequences of a procedural error,
and its correction, an annulment court is capable of evaluating the importance of a particular
issue to the parties’ dispute and, in cases where an issue is cumulative or incidental, declining
to annul an otherwise valid award. Of course, where procedural errors could have materially
affected the tribunal’s decision-making on a dispositive substantive issue or where there were
gross violations of basic procedural guarantees that tainted the entire arbitral procedure, no
specific showing of prejudice or disadvantage is required.
P 3257 [7] Waiver of Procedural Objections
As with other types of objections during the arbitral proceedings, most national arbitration
regimes require that parties object to procedural or evidentiary rulings during the proceedings
in order to preserve their rights subsequently to seek annulment of an award on the basis of
those rulings. Many institutional arbitration rules contain provisions requiring parties promptly
to raise procedural objections and deeming the failure to do so a waiver. (535)
Even in the absence of agreements incorporating such provisions, however, national law will
almost invariably produce the same result: if parties fail promptly to raise a procedural
objection, they will be held to have waived subsequent objections in an annulment action. In
some jurisdictions, national arbitration legislation expressly provides for waiver of procedural
objections unless they are raised in a timely fashion. (536) Even absent such statutory
provisions, national courts hold that procedural violations may generally be waived: that is
true in both common law (537) and civil law (538) jurisdictions. As one court put it:
P 3258
“A party with an objection to an arbitration panel has an affirmative obligation to raise
that objection with the arbitrators or else that objection shall be waived.” (539)
Or, as another court held, “a party with notice and an opportunity to participate must voice its
procedural objections before the arbitrators to preserve these objections; otherwise, these
objections are waived.” (540)
The application of waiver principles complements the central role of the parties’ procedural
autonomy in international arbitration. As discussed above, there is in general no pre-
established procedural code, applicable generally in international arbitral proceedings, but
instead a procedure resulting from the parties’ agreements and respective procedural
requests. (541) Given this, it is ordinarily only where a party has requested, and been denied, a
particular procedural right, or where it objects to a particular procedure after it has been
ordered or proposed, that it will be able to raise that procedural action in an annulment
proceeding. (542)
[8] Annulment Not Mandatory
As noted above, annulment under most national arbitration statutes, including Article 34(2) of
the Model Law, is discretionary, not mandatory. (543) In addition to the requirements for a
material violation of procedural fairness, resulting in material prejudice, courts more generally
have the authority to confirm or deny annulment of an award even when Article 34(2)(a)(ii) and
P 3259 parallel provisions of other statutes are satisfied. Given the demanding standard of proof
required to demonstrate the existence of serious procedural unfairness, causing material
prejudice, it is unlikely that this discretionary authority will be exercised with any frequency,
but it nonetheless exists.
[C] Failure to Comply With Arbitral Procedures Agreed by Parties

A tribunal’s failure to conduct the arbitral proceedings in accordance with the parties’
arbitration agreement or applicable procedural rules can also provide grounds for annulling
an award in most jurisdictions. This basis for annulment is a reflection of, and means of giving
effect to, the consensual nature of the arbitral process and the parties’ general procedural
autonomy. (544)
Article 34(2)(a)(iv) of the Model Law is representative, providing for the setting aside of awards
where “the arbitral procedure was not in accordance with the agreement of the parties, unless
such agreement was in conflict with a provision of this Law from which the parties cannot
derogate.” (545) This basis for annulment is similar to Article V(1)(d) of the New York
Convention, (546) and parallels provisions in other national arbitration statutes. (547) In
jurisdictions where no statutory provision directly addresses the subject, national courts have
nonetheless held that awards are subject to annulment if the arbitrators fail to observe the
procedures agreed upon by the parties. (548)
P 3260 The annulment of awards for failure to respect the parties’ procedural agreements is
related to, but distinguishable from, the denial of an opportunity to be heard (discussed above
(549) ). Thus, the parties’ procedural agreement may provide for procedures that would not,
29
absent such agreement, be mandatory, but violation of these agreed procedures can
nonetheless provide grounds for annulment. Conversely, a party’s right to be heard can be
denied, by violation of mandatory procedural requirements, even where the tribunal does not
violate any procedural arrangement agreed by the parties.
The annulment of awards for failure to comply with the parties’ procedural agreement gives
effect to the parties’ procedural autonomy, which forms one of the cornerstones of the
contemporary arbitral process. (550) It is essential to these principles of the arbitral process
that awards rendered in violation of the parties’ valid exercise of their procedural autonomy
be subject to annulment (as well as non-recognition). More generally, as discussed above, it is
critical to assess the mandatory procedural requirements of the right to be heard in the
context of the parties’ particular agreement to arbitrate and procedural understandings: the
right to be heard cannot be divorced from the parties’ agreements and expectations regarding
how that right is to be exercised in particular circumstances. (551)
The text of Article 34(2)(a)(iv) differs in one respect from that of Article V(1)(d) of the
Convention. Article 34(2)(a)(iv) permits annulment of an award based on noncompliance with
the parties’ agreement only where that agreement was not “in conflict with a provision of this
law [i.e., the UNCITRAL Model Law] from which the parties cannot derogate.” (552) This text is
not included in Article V(1)(d) of the Convention and is arguably inconsistent with the primacy
afforded by the Convention to the parties’ procedural autonomy. (553)
The principal object of Article 34(2)(a)(iv)’s reference to mandatory provisions is Article 18 of
the Model Law and its guarantee of equality of treatment and an opportunity to be heard. (554)
Where the parties’ agreement on the constitution of the arbitral tribunal or the arbitral
procedures violates Article 18, then Article 34(2)(a)(iv) does not provide for annulment of the
P 3261 resulting award if the parties’ agreed procedures are not applied. (555) It is clear that the
parties’ agreement on arbitral procedures is only, under Article 34(2)(a)(iv), overridden by
mandatory national law (in the arbitral seat), and not by non-mandatory, default rules. (556)
The burden and standard of proof for annulment of an award based on failure to comply with
the parties’ agreement regarding arbitral procedures parallels the treatment of these issues
under other bases for annulment. It is clear that the award-debtor bears the burden of proof of
noncompliance with the parties’ agreed procedures. (557) It is also clear that the burden of
demonstrating procedural irregularities, sufficient to warrant annulment of an award, is a
substantial one under most national arbitration regimes. (558)
[3] Composition of Arbitral Tribunal
The improper composition of the arbitral tribunal is grounds for annulment of the arbitrators’
award in most legal systems. Article 34(2)(a)(iv) of the UNCITRAL Model Law is representative,
providing that an award may be annulled if “the composition of the arbitral tribunal … was not
in accordance with the agreement of the parties … or, failing such agreement, was not in
accordance with [the arbitration statute in the arbitral seat].” (559) This provision is again
analogous to the grounds for non-recognition set out in Article V(1)(d) of the New York
P 3262 Convention. (560) It parallels similar grounds for annulment that are contained in
arbitration legislation in countries that have not adopted the Model Law. (561)
Where a tribunal was not constituted in accordance with the parties’ agreement, national
courts have held that the tribunal’s award may be annulled. This includes courts in the United
States, (562) France, (563) England (564) and elsewhere. (565) A leading U.S. lower court
P 3263 decision concisely summarized this approach as follows: “[a]rbitration awards made by
arbitrators not appointed under the method provided in the parties’ contract must be
vacated.” (566) Or, as the French Cour de cassation concluded, “an action for annulment
against an award is proper if the arbitral tribunal was irregularly constituted.” (567)
The same conclusion applies if the parties’ agreement regarding unanimity of the tribunal’s
decision (or other aspects of the tribunal’s decision-making) is violated. Thus, notwithstanding
the Model Law’s default provision for majority decisions by the arbitral tribunal, (568) an
award rendered by a majority of the members of the arbitral tribunal was annulled where the
arbitration clause in a shareholders’ agreement provided for unanimity. (569)
On the other hand, a few courts have suggested (generally, incorrectly) that noncompliance
with the provisions of the parties’ arbitration agreement regarding constitution of the arbitral
tribunal will not be grounds for annulment. (570) Similarly, some national arbitration
legislation does not provide for annulment based solely on the grounds that the arbitrators
were allegedly not independent or impartial or lacked the qualifications agreed upon by the
parties. (571) Additionally, as noted above, noncompliance with an agreement on constituting
the arbitral tribunal that violates mandatory provisions of the law of the arbitral seat, such as
Article 18’s guarantee of equal treatment under the Model Law, will not provide grounds for
annulment. (572)
[4] Failure to Comply With Agreed Arbitral Procedures
As discussed above, arbitration agreements not infrequently contain a variety of procedural
provisions, tailored to the parties’ particular needs and interests (for example, regarding
P 3264 disclosure, types of submissions, witness hearings, time limits for award, etc.). (573) As
discussed above, a tribunal’s (or appointing authority’s) failure to comply with these
30
procedural requirements can constitute grounds for annulling the award. (574) As one court
held:
“There is no provision of the law of arbitration and award more sacred than that the arbitrator
must, in arriving at his award, conform to all the stipulations in the agreement of submission,
and that any violation of the terms of such agreement will render the award invalid.” (575)
In the words of another court:
“[A]rbitrators may exceed their power within the meaning of §10(a)(4) [of the FAA] if they fail to
comply with mutually agreed-upon contractual provisions in an agreement to arbitrate. An
arbitrator may also exceed her authority by failing to provide an award in the form required by
an arbitration agreement.” (576)
Relying on such reasoning, national courts have annulled awards based on a variety of failures
or refusals by arbitral tribunals to comply with the parties’ procedural agreements. (577)
P 3265 At the same time, in practice, most arbitration agreements and institutional rules impose
relatively few specific procedural requirements, instead being intended by the parties to grant
the arbitral tribunal broad authority to conduct the arbitral proceedings. (578) The same
analysis applies to administrative and similar decisions by arbitral institutions, which are held
to enjoy broad discretion to administer their own institutional arbitration rules. (579) As a
consequence, it is relatively unusual for an award to be annulled because of the arbitrators’
failure to comply with the parties’ agreed arbitral procedures.
Unusually, Swiss courts have held that violations of the parties’ agreed procedural
arrangements will not be grounds for annulment of an award. (580) This view is
P 3266 idiosyncratic and difficult to reconcile with either the basic consensual nature of the arbitral
process or the parties’ procedural autonomy. It can also contradict obligations imposed by the
New York Convention to recognize the material terms of valid international arbitration
agreements. (581)
[5] Failure to Comply With Contractual Time Limits
A common instance of challenges based on noncompliance with the parties’ agreement
concerns the time limits for making an award. Some arbitration agreements include
contractual time limitations (which may be different from statutory time limits imposed by the
arbitration legislation of the arbitral seat, if such statutory limits exist). (582) The failure of a
tribunal to adhere to such contractual time limits may provide grounds for annulling an award.
Historically, arbitral awards were subject to annulment in some jurisdictions if rendered after
the time specified in the parties’ arbitration agreement. (583) In contemporary practice,
however, national courts have frequently rejected claims that an arbitral tribunal’s failure to
comply with time limits imposed by the parties’ agreement or institutional rules provides a
basis for annulling an award, (584) although there are exceptions. (585)
Absent clear language to the contrary, an agreement regarding time limits should not be
treated as jurisdictional, but instead as an element of the procedural conduct of the
P 3267 arbitration. An unjustified violation of such an agreement regarding arbitral time limits
should permit the parties to seek removal of the arbitrator(s), (586) but not to annul an award,
once it has been made.
Some U.S. courts have held that an award is valid if rendered a “reasonable” time following
expiry of time limits in the parties’ agreement. (587) English courts have reached similar
results. (588) If the parties’ agreement provides expressly that the arbitrators’ power to render
an award expires after a specifically-prescribed time period, that limit will generally be
enforced, but very clear language requiring this result should be required. (589)
[6] Materiality and Effect of Procedural Violation
Most courts inquire into the materiality of the procedural requirements which were not
complied with, and will not set aside an award because minor formalities or technical
provisions were ignored. Departures from the parties’ agreed arbitral procedures will also
often be countenanced unless they are both extreme and prejudicial. (590) To similar effect,
some national courts have refused to annul awards based on a failure to comply with the
parties’ procedural agreement save where that agreement was explicit and specific. (591)
P 3268 Courts have also considered the importance of the procedural rule that was allegedly
violated in annulment actions under Article 34(2)(a)(iv). (592)
[7] Waiver of Procedural Objections
As in other contexts, a party’s failure to object to departures from the parties’ agreed arbitral
procedures will virtually always waive any objection in subsequent annulment proceedings.
(593) For example, a party was not permitted to seek annulment of an award based on
noncompliance with a multi-tier dispute resolution process where the noncompliance was not
raised during the arbitral proceedings. (594) Similarly, the failure by a party to object to
noncompliance with contractually-agreed time limits has been held to waive objections under
Article 34(2)(a)(iv) of the Model Law. (595)
A waiver will be found only where a party was aware, or should have been aware, of
noncompliance with the parties’ agreed arbitral procedures. Where no written record of the
proceedings was kept by the arbitral tribunal, contrary to the parties’ agreement, but this was
31
not apparent to the award-debtor, a court held that no waiver of rights under Article 34(2)(a)
(iv) had occurred. (596) There may be procedural protections that are non-waivable (e.g., in
P 3269
cases of corruption or similar gross procedural violations), but these would generally be
categorized as denials of mandatory guarantees of the right to be heard, rather than
violations of the parties’ agreed arbitral procedures. (597)
[D] Failure to Comply With Procedures Prescribed by Law of Arbitral Seat

The failure of an arbitral tribunal to comply with procedural requirements imposed by the laws
of the arbitral seat may, in the absence of contrary agreement by the parties, provide grounds
for annulment of the arbitral award. This basis for annulment is virtually never invoked, save
where it overlaps with annulment for a denial of an opportunity to be heard, discussed above.
Article 34(2)(a)(iv) of the UNCITRAL Model Law is representative of national arbitration
legislation addressing violations of the law of the arbitral seat, with the provision’s second
limb providing for the annulment of an award where the arbitral procedure, “failing …
agreement, was not in accordance with this Law.” (598) This basis for annulment mirrors Article
V(1)(d) of the New York Convention, (599) and is similar to that provided by a number of other
arbitration statutes. (600)
Some jurisdictions provide a more limited basis for annulment than that contained in Article
34(2)(a)(iv)’s second limb: in these states, national arbitration law prescribes no mandatory
procedural requirements other than the guarantee of an equal opportunity to be heard and
there is therefore only a limited basis for annulment of international awards, essentially
identical to annulment for denial of an opportunity to be heard under Article 34(2)(a)(ii) or
equivalent national statutory provisions. This is the case, for example, in the United States,
(601) France (602) and Switzerland. (603)
P 3270 This latter approach is superior to that in the second limb of Article 34(2)(a)(iv), which
serves no useful purpose beyond that fulfilled by guarantees of an opportunity to be heard.
That is, national procedural codes and requirements – other than guarantees of procedural
equality and fairness – generally have no role in international arbitration and should not
provide grounds for challenging an award. (604)
Moreover, as discussed above, the existence of a mandatory local procedural code or similar
requirements for international arbitrations is in tension with Articles II and V(1)(d) of the New
York Convention, which afford primacy to the parties’ agreed arbitral procedures. (605) That is
particularly true given the parties’ presumptive desire for an internationally-neutral arbitral
procedure tailored by the parties and arbitrators to the needs and circumstances of individual
cases, rather than a generic national procedural code derived from domestic litigation
systems. (606) Consistent with this, there is very little authority involving annulment of
international awards based on violation of local statutory rules that are not concerned with the
parties’ equal opportunity to be heard.
Some Model Law jurisdictions have adopted Article 16 in an amended form, providing that the
arbitral tribunal must (or should) resolve jurisdictional objections in a preliminary ruling. (607)
A violation of this rule has been held not to constitute grounds for annulment. (608)
Some courts have held that arbitral proceedings terminate with the rendering of an award and
that violations of any agreed arbitral procedures after this point are not covered by Article
34(2)(a)(iv); among other things, these authorities hold that violations of agreed procedures for
notifying an award are not grounds for annulment under subparagraph (a)(iv). (609) A similar
analysis has been adopted in the recognition context. (610)
P 3271 [2] Burden and Standard of Proof
It is clear that the award-debtor bears the burden of proof of noncompliance with the law of
the arbitral seat (as with other grounds for annulment). (611) It is also clear that the burden of
demonstrating a violation of the law of the arbitral seat, sufficient to warrant annulment of an
award, is a substantial one under most national arbitration regimes. (612)
[3] Statutory Time Limits
One of the few instances where awards are exposed to a nontrivial risk of annulment for
violation of the law of the arbitral seat involves noncompliance with statutory time limits on
the arbitral process. As discussed above, most national laws no longer impose statutory time
limits for making awards. (613)
Nonetheless, some states have maintained such deadlines for the arbitral process. (614) The
purpose of these legislative provisions is to ensure that arbitration is, in fact, speedy and
expeditious. In many jurisdictions, the parties may agree to extend applicable statutory
deadlines, including through agreements incorporating institutional rules that allow either the
arbitral institution or the arbitrators to extend the deadline. (615)
P 3272 A tribunal’s failure to make a final award within applicable statutory time limits can
provide a basis for annulling the award under applicable national arbitration legislation,
either under provisions generally requiring compliance with the law of the arbitral seat or
under provisions specifically addressing statutory time limits. (616) A Spanish Supreme Court
decision, which has since been statutorily overruled, explained this result as follows:
32
“[T]he time limit fixed for issuing the arbitral award ought to be inexorably respected, because
it is the period of time during which the parties voluntarily waive the determination of their
differences [by national courts], and grant the powers of decision to the arbitrators. The expiry
of this period terminates the power of the arbitrators, for having exceeded the limit, and
nullifies any arbitral action outside this time.” (617)
This reasoning reflects outdated conceptions of arbitration, as an exceptional, rather than
typical and preferred, (618) means of international dispute resolution and, as noted above, has
been statutorily-repudiated.
As with agreements imposing time limits on the arbitration, statutory time limits should not be
regarded as jurisdictional. (619) A tribunal’s failure to comply with a time limit should
therefore not generally provide grounds for annulment of an award (although it may be
grounds for removal of an arbitrator).
[4] Composition of Arbitral Tribunal
As noted above, Article 34(2)(a)(iv) of the Model Law, and comparable legislation in other
jurisdictions, provides for annulment of an award where, in the absence of agreement between
the parties, the constitution of the arbitral tribunal was not in accordance with the law of the
arbitral seat. (620) This aspect of Article 34(2)(a)(iv) generally parallels Article V(1)(d) of the
Convention, but again with the addition of language specifically including mandatory
provisions of the law of the arbitral seat. (621)
In general, only where the parties have not made an agreement, express or implied, regarding
constitution of the arbitral tribunal is the law of the arbitral seat relevant under Article 34(2)(a)
P 3273 (iv) and similar statutory provisions. (622) In addition, however, there may be instances
where mandatory law in the arbitral seat imposes requirements concerning the arbitrators
(e.g., independence and impartiality, capacity, nationality, number), but these grounds are
narrow and subject to the New York Convention’s international limitations. (623) Rather, Article
34(2)(a)(iv)’s second prong is generally-applicable where the parties did not reach agreement
on a particular aspect of the tribunal’s constitution or composition, and the law of the arbitral
seat provides a default rule.
It is uncertain whether an award may be annulled where an arbitrator lacked capacity
required by applicable law: the reasoning in support of possible annulment is that a tribunal
whose member(s) lacked requisite legal capacity had not been constituted in accordance with
the law of the arbitral seat. (624) Some national arbitration legislation includes an arbitrator’s
lack of capacity under the law of the arbitral seat as grounds for annulment. (625) Nonetheless,
there are substantial arguments for refusing to annul an award based upon an arbitrator’s
alleged lack of capacity; (626) these arguments are particularly strong where the arbitrator’s
lack of capacity arises under a law other than that of the arbitral seat (e.g., the law of the
arbitrator’s domicile or residence). (627)
[5] Lack of Reasoned Award
As discussed above, some national arbitration statutes provide that arbitral awards must be
reasoned (e.g., Article 31(2) of the UNCITRAL Model Law). (628) In these jurisdictions, the failure
of an arbitral tribunal to provide reasons may provide grounds for annulment of the award.
(629)
As also discussed above, however, the standard for reasoning in arbitral awards differs
P 3274 materially from that in local court judgments. Most courts hold that arbitral tribunals have
no obligation to address all details of the arguments raised and evidence presented in the
reasoning of their awards. (630) Similarly, some courts have held that the fact an award did not
contain legal reasoning did not make the reasoning insufficient where the arbitrators were lay-
persons. (631)
[6] Materiality and Effect of Procedural Violation
Even where national law prescribes particular procedural requirements, annulment of an
award should ordinarily be available only in cases involving substantial departures from
statutory requirements, which cause material prejudice to the award-debtor. (632) Courts
should not endeavor to find procedural violations or impeach otherwise valid and enforceable
awards because of immaterial or incidental procedural missteps. As with noncompliance with
the parties’ agreed arbitral procedures, (633) an award should be annulled only where it had a
material impact on the arbitral procedure or decision.
[7] Waiver of Procedural Objections
As with objections based on violations of the parties’ agreed arbitral procedures, annulment
applications based on noncompliance with the law of the arbitral seat are subject to claims of
waiver. In general, a party’s failure to object to noncompliance with statutory or other
requirements of the law of the arbitral seat will be treated as a waiver of subsequent rights to
seek annulment on the basis of that noncompliance.
Waiver is particularly likely in the case of challenges to a tribunal’s composition. This is
because of the existence, under most arbitration legislation and institutional rules, of
interlocutory challenge mechanisms which enable a party to immediately seek relief for
failure to comply with agreed procedures for constituting the arbitral tribunal. (634)
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In virtually all cases, a party’s failure to seek relief through such interlocutory challenge
mechanisms will constitute a waiver of rights subsequently to seek to annul the award on
P 3275 grounds which could have been raised in a challenge. (635) An unsuccessful institutional
challenge will not generally be preclusive in a subsequent proceeding to annul the arbitral
award. (636)
[E] Arbitrator’s Lack of Independence or Impartiality

Many national legal systems provide for the annulment of awards if the arbitral tribunal (or a
member thereof) did not satisfy applicable standards of independence and impartiality. This
basis for annulment is not specifically included in the annulment provisions of some national
arbitration statutes (e.g., UNCITRAL Model Law), but is nonetheless generally available in
contemporary international arbitration regimes. (637)
The arbitrators’ lack of impartiality or independence as a basis for annulment is not expressly
provided for in Article 34(2) of the UNCITRAL Model Law (or in the recognition provisions of
Article V of the New York Convention). Similarly, although there are exceptions, (638) relatively
few other national arbitration statutes include the arbitrators’ lack of independence or
impartiality as an express basis for annulment of an award. (639)
In contrast to the Model Law and legislation in most other jurisdictions, U.S. law contains
several statutory exceptions to the general obligation to confirm arbitral awards which apply
when irregularities have occurred in the constitution of the arbitral tribunal. Section 10(a)(1) of
the domestic FAA permits vacatur of an award where the “award was procured by corruption,
fraud, or undue means,” while §10(a)(2) allows vacatur of an award if “there was evident
partiality or corruption in the arbitrators”; moreover, §10(a)(3) permits vacatur of an award if
“the arbitrators were guilty of misconduct in refusing to postpone the hearing … or of any other
misbehavior by which the rights of any party have been prejudiced.” (640)
P 3276 Relying on these statutory provisions, U.S. courts will vacate awards based on arbitrator
bias or lack of independence. (641) Claims that an arbitrator was biased are also often coupled
with claims that the arbitrator was guilty of misconduct; indeed, alleged examples of an
arbitrator’s misconduct are often cited as evidence of bias or partiality. (642)
Even in the absence of express statutory authority, national courts and commentators have
frequently concluded that claims of an arbitrator’s lack of independence or impartiality are
impliedly included within the general provisions of Article 34(2) or equivalent annulment
P 3277 provisions of other national laws. (643) The impartiality of the arbitral tribunal is central
to the arbitral process, (644) and awards by partial or biased arbitrators can be annulled in
most jurisdictions. As a Swiss Federal Tribunal decision reasoned:
“Similarly to a state judge, an arbitrator must present sufficient guarantees of independence
and impartiality. Breaching that rule leads to irregular composition pursuant to Art. 190(2)(a)
[of the Swiss Law on Private International Law].” (645)
Claims of lack of independence or impartiality can be based on Article 34(2)(a)(ii) of the Model
Law, because a partial tribunal arguably denies a party an opportunity to present its case; or
on Article 34(2)(a)(iv), because a partial tribunal is arguably not constituted in accordance with
the parties’ agreement or with applicable law; or on Article 34(2)(b)(2), because a partial
tribunal arguably violates conceptions of procedural (or other) public policy. Whatever
specific provision of Article 34 is invoked, analysis of independence and impartiality issues is
generally similar, and focuses on the issues discussed above in connection with the selection
of arbitrators. (646)
It is clear that the party seeking annulment of an award bears the burden of demonstrating the
arbitrators’ lack of independence and impartiality. That is required by the plain language of
many national arbitration statutes, including Article 34(2)(a) of the UNCITRAL Model Law, and
has been consistently acknowledged in annulment decisions. (647)
[3] Standards of Arbitrators’ Impartiality and Independence
The standards of impartiality and independence that are applicable to international
arbitrators are discussed above, in the context of interlocutory challenges to arbitrators, and
P 3278 are relevant to analysis in the context of annulment proceedings. (648) Nonetheless, as
also discussed above, there are important differences in the standards that are applicable,
respectively, to interlocutory removal of an arbitrator and annulment of an award. (649)
In particular, an arbitrator can be removed based on “justifiable doubts” regarding his or her
independence or impartiality – a standard that does not require establishing that it is more
likely than not that the arbitrator was biased or partial or that the arbitral tribunal’s decisions
are or would be materially affected by that bias. (650) In contrast, annulment of an award
cannot be based upon “doubts” about (or “risks” of) arbitrator bias, but instead requires a
showing, by a preponderance of the evidence, that an arbitrator was in fact biased or lacked
the requisite independence. (651) Moreover, in contrast to interlocutory challenges to
arbitrators, annulment of an award requires a showing of materiality and prejudicial effects of
the arbitrator’s bias on the arbitral process (652) – which can provide a substantial obstacle to
34
annulment of an award, based on one arbitrator’s asserted lack of impartiality, made after a
lengthy and otherwise satisfactory arbitral process.
As a practical matter, national courts are typically reluctant to hold that an arbitrator was
biased in an annulment action initiated following expensive and time-consuming arbitral
proceedings that appear to have reached an appropriate result. Thus, the possibility that an
award will be annulled at this stage of proceedings is usually significantly lower than the
likelihood of prevailing on an institutional or judicial application to remove an arbitrator early
in the arbitral process. (653)
In considering challenges to an arbitrator’s impartiality and independence, courts also
sometimes rely on the fact that the arbitral award was unanimous: the implicit or explicit
point is often that the chairman and the party-nominated arbitrator of the party resisting
P 3279 enforcement agreed with the award’s result and, therefore, any bias by one arbitrator was
either harmless error or of minimal importance. (654) Although this reasoning has some merit,
it must be applied with caution.
As discussed above, most contemporary national arbitration statutes and institutional rules
require that all of the arbitrators, including the co-arbitrators, remain impartial and
independent (absent contrary agreement). (655) One arbitrator’s lack of impartiality
contradicts this requirement and effectively denies the losing party the opportunity to
persuade that arbitrator of its case (and hence to affect the other arbitrators’ views in
deliberations). In general, therefore, the unanimity of an award should not preclude annulment
of the award on grounds of arbitrator partiality.
Nonetheless, where the exceptional remedy of annulment of an arbitral award is sought, it is
appropriate to consider the impact of an arbitrator’s lack of independence on the arbitral
process and award. Where an award is unanimous, there may well be grounds for concluding
that any lack of independence or impartiality had no material effect on the arbitral process.
(656) This conclusion is more appropriate in cases not involving corruption or flagrant bias on
the part of an arbitrator; where an arbitrator failed to disclose a conflict which was a good
faith error of judgment, and the award was unanimous, annulment will be unlikely.
In one (unusual) decision, an annulment court first emphasized the exceptional character of
annulment, but then annulled portions of an award which were supposedly obviously wrong,
concluding from the award’s putative errors that it should be annulled on the basis of “evident
partiality” of the arbitrator. (657) That decision (first) wrongly considers the substance of the
tribunal’s decision, (second) wrongly concludes that “incorrect” substantive decisions are
evidence of arbitrator bias, and (third) then only partially annuls the supposedly biased
arbitrator’s award. Many of the more serious mistakes that an annulment decision can make
were compressed into the court’s decision.
Some annulment decisions have considered challenges to the validity of provisions of
P 3280 arbitration agreement on the grounds that they are allegedly one-sided or unfair. (658) As
discussed above, most courts grant the parties broad autonomy with regard to the selection
procedures for the arbitral tribunal. (659) Nonetheless, in some circumstances, provisions of
arbitration clauses will be sufficiently one-sided to warrant annulment of an award. (660)
[4] Waiver of Objection to Arbitrator’s Independence or Impartiality
Challenges to an award based on an arbitrator’s alleged lack of impartiality raise issues of
waiver. As discussed above, in many jurisdictions (including under the UNCITRAL Model Law),
an arbitrator’s alleged lack of independence may be raised in national courts during the
arbitral proceedings, without awaiting a final award. (661) Moreover, as also discussed above,
most institutional rules provide challenge procedures, by which an arbitrator may be removed
during the course of the arbitral proceedings for lack of independence or impartiality. (662)
If a party fails to challenge an arbitrator’s impartiality and independence pursuant to either
statutory or institutional challenge mechanisms, notwithstanding notice of the factual grounds
for challenge to the arbitrator, it will generally be held to have waived the right to seek
annulment of an award on these grounds. (663) A party is not entitled to adopt a “Heads I win,
tails you lose” approach by holding objections to an arbitrator in reserve until an award is
rendered. (664) Simply put, “[w]here a party was fully aware of facts which could possibly
indicate arbitrator partiality at the time of the arbitration hearing and that party fails to make
an objection during the course of the hearing, it waives its right to object.” (665)
This approach has been taken by courts in the United States, (666) France, (667) Switzerland,
P 3281 (668) England (669) and other (670) jurisdictions. National courts emphasize that waiver
“extends to questions such as arbitrator bias, that go to the very heart of arbitral fairness,”
(671) holding, for example, that “[u]nder Israeli law (similar to Swiss law), a claim for
disqualification of an arbitrator must be raised at the first opportunity; otherwise it will not be
accepted.” (672) Similarly, “an award will not be set aside if the circumstances alleged to
disqualify an arbitrator were known to both parties before the arbitration commenced and
they proceeded without objection.” (673)
Thus, the failure of a party to challenge an arbitrator, either before an arbitral institution
pursuant to institutional arbitration rules or before the arbitral tribunal, has been held to
waive subsequent claims to annul an award on grounds of arbitrator bias. (674) Similarly, a
P 3282 party’s failure to refer a challenge, initially rejected by the arbitral tribunal or institution,
to a court in the arbitral seat is a waiver of a right subsequently to seek annulment of the
35
award for lack of impartiality. (675)
Nevertheless, there will be cases where a party discovers previously-unknown facts after the
making of a final award, which provide grounds for objecting to an arbitrator’s independence
or impartiality. In these instances, there may be grounds for seeking to annul the resulting
award, even in jurisdictions (including under the Model Law), where the ordinary procedure is
to challenge an arbitrator during the course of the arbitration. (676)
It is unclear to what extent a party will be held to have waived rights to seek annulment based
on constructive knowledge, of circumstances that a party could reasonably have discovered
but apparently did not. There is authority for the proposition that a party will be charged with
constructive knowledge of facts and circumstances providing the basis for a challenge, and
that failure to make the challenge will waive the party’s rights in subsequent annulment (677)
and recognition (678) proceedings.
The foregoing decisions are well-considered: it is unjust and inefficient to permit a party to
P 3283 force the annulment of an award, and the repetition of the arbitral proceedings, based on
its own lack of diligence; at the same time, claims of lack of actual knowledge of an arbitrator’s
conflict of interest must be viewed with a measure of reserve. For both sets of reasons, it is
generally appropriate to find a waiver of annulment rights where a party had constructive
knowledge of the basis of a challenge to an arbitrator’s independence or impartiality.
[5] Preclusion
Where a party invokes interlocutory statutory and institutional challenge procedures during
the course of the arbitration, and an arbitrator is not removed, then issues of preclusion arise.
Where a court in the arbitral seat rejects a claim that an arbitrator lacks the requisite
independence and impartiality, in an interlocutory challenge, then that decision may be
preclusive, or at least persuasive evidence, in a subsequent proceeding to annul an award on
the same grounds of arbitrator bias. (679) Although the issue virtually never arises in the
annulment context, the same conclusion has been reached when a court outside the (eventual)
arbitral seat has appointed (or heard a challenge regarding) one of the arbitrators. (680)
On the other hand, a strict application of preclusion rules in many jurisdictions is likely to
result in conclusions that decisions about removal of an arbitrator do not involve the same
claim as decisions about annulment of an award (and, thus, that the former will have no
preclusive effects in annulment proceedings). (681) Even here, however, the practical
importance of a prior decision rejecting essentially the same claims of arbitrator bias in a
subsequent annulment proceeding is substantial.
Where an arbitrator is unsuccessfully challenged during the arbitral process pursuant to an
institutional challenge procedure (as distinguished from a judicial challenge), related
considerations apply. (682) In particular, the question arises whether an institutional decision
rejecting a challenge is preclusive in subsequent proceedings to annul an award based on the
arbitrator’s alleged lack of impartiality or independence.
In most jurisdictions, courts have held that an institutional decision, in an action to remove an
arbitrator under institutional arbitration rules, does not have preclusive effects in a
subsequent proceeding to annul an award based on the arbitrator’s lack of independence or
impartiality. (683) These decisions are, in some instances, based on an interpretation of the
P 3284 relevant institutional rules, concluding that such rules cannot be interpreted as giving
preclusive effects to a challenge decision in subsequent proceedings seeking annulment of an
award based on an arbitrator’s lack of impartiality or independence. Thus:
“there is no reason to conclude that [the award-debtor’s] acceptance of arbitration under the
AAA Commercial Rules, including Rule 19 [regarding challenges to arbitrators], can be deemed
a knowing contractual waiver of its right to an independent judicial determination [of evident
partiality in a vacatur action].” (684)
Other decisions appear to hold that, even if institutional rules expressly provided that an
institutional challenge decision is preclusive in subsequent annulment proceedings, those
rules would not be enforceable. (685) In the words of one Swiss decision:
“The Appellants also filed a challenge, which was rejected by the ICC Court of International
Arbitration. As it was issued by a private organism, such a decision to reject a challenge was
not capable of a direct appeal to the Federal Tribunal, and would not bind the Court, which
may accordingly freely review whether or not the circumstances invoked to support the
challenge properly justify the grievance under review.” (686)
If parties in fact agree that an institutional challenge decision will be binding and preclusive
in subsequent annulment proceedings, it is difficult to see why such an agreement should not
be enforceable. Parties are generally free to waive challenges to arbitrators’ independence
P 3285 and impartiality, and there is no reason that such waivers cannot be effective in
annulment, as well as removal, actions. (687) In any event, as a practical matter, the
institutional challenge decision will have considerable weight in later annulment proceedings.
(688)
In some jurisdictions, it is not possible to challenge an arbitrator for lack of independence or
impartiality during the course of the arbitration, and a party’s only avenue for recourse is to
preserve an objection and seek to annul the final award. This is, for example, the legal regime
under the FAA in the United States. (689) In these circumstances, a party must record its
36
objection to the arbitrator’s independence and impartiality, and then raise these objections in
an action to annul the final award; (690) no issues of preclusion arise in these circumstances.
[6] Discovery in Aid of Annulment Based on Arbitrator Bias
An issue that arises in some annulment proceedings, at least in common law jurisdictions, is
the possibility of discovery in support of challenges to the arbitrator’s independence and
impartiality. In the United States, where broad pretrial discovery rights exist, a number of
courts have held that the Federal Rules of Civil Procedure (including their discovery provisions)
are in principle applicable to actions to vacate an award under the FAA based on alleged bias
of the arbitrator(s). (691) In other cases, U.S. courts have concluded that discovery in a vacatur
action is both wasteful and improperly intrusive into the arbitral process, and therefore not
available. (692)
P 3286 In any event, U.S. courts will generally not order discovery relating to potential bias of
arbitrators unless the party resisting enforcement provides strong, independent evidence of
possible bias. (693) One representative formulation of this requirement is that:
“To justify discovery, the party challenging the arbitration decision has the burden of showing
the alleged defect, such as partiality of the arbitrators or some other fundamental defect. …
Unless a party presents clear evidence of impropriety, the party will not be permitted to
conduct additional discovery.” (694)
Outside the United States, discovery to support challenges to the arbitrator’s independence
and impartiality (or in other annulment claims) is generally unheard of.
[F] Excess of Authority

An award may be set aside in most legal systems if the arbitral tribunal has “exceeded its
authority.” This ground for annulment gives rise to a number of difficult issues.
Article 34(2)(a)(iii) of the UNCITRAL Model Law is representative of national arbitration
statutes, providing that an award may be annulled if it “deals with a dispute not contemplated
by or not falling within the terms of the submission to arbitration, or contains decisions on
matters beyond the scope of the submission to arbitration.” (695) This basis for annulling an
award is modeled on the grounds for non-recognition in Article V(1)(c) of the New York
Convention, (696) and is paralleled by many arbitration statutes (697) and international
instruments. (698) In the United States, the FAA provides for vacatur of awards where “the
arbitrators exceeded their powers …” (699)
P 3287 This ground for annulment is directed towards cases where a valid arbitration agreement
existed, but the matters decided by the tribunal either exceeded the scope of that agreement
or the scope of the issues presented to the tribunal by the parties in the arbitration. The
excess of authority ground also applies where the tribunal failed to decide matters presented
to it in the arbitration.
It is well-settled that the award-debtor bears the burden of proof of an excess of authority.
(700) That is required by the statutory text of Article 34(2)(a)(iii) of the Model Law, and parallel
provisions of other national arbitration legislation, (701) as well as by judicial decisions in
many jurisdictions. (702)
It is also well-settled that the burden of demonstrating an excess of authority, sufficient to
warrant annulment of an award, is a substantial one under most national arbitration regimes.
P 3288 (703) As one U.S. decision emphasized in interpreting §10(a)(4) of the FAA, courts accord
“the ‘narrowest of reading’ to the ‘excess of powers’ provisions.” (704)
[3] Recurrent Grounds for Excess of Authority Claims
There are a number of recurrent grounds for claiming that an arbitral tribunal has exceeded its
authority. These generally involve claims of either extra petita (the tribunal went beyond the
limits of its authority) or infra petita (the tribunal failed to fulfill its mandate by not exercising
authority it was granted).
[a] Awards Ruling on Matters Outside Scope of Parties’ Submissions
Article 34(2)(a)(iii) permits annulment of awards where the arbitrators “rule[d] on issues not
presented to [them] by the parties” – so-called “extra petita” or “ultra petita.” (705) As with
other grounds for annulment, most courts are reluctant to accept claims that the arbitrators
exceeded the scope of the parties’ submissions. (706)
P 3289 One of the clearest examples of an excess of authority under Article 34(2)(a)(iii) and
parallel provisions of other national arbitration legislation is a tribunal’s award of relief that
neither party requested. (707) A French appellate decision explained the rationale for these
limits on the arbitrators’ authority (which, in this respect, are more rigorous under French law
than some other national arbitration regimes) as follows:
“The fact that the contract was governed by French law does not allow the arbitrators to award
interest pursuant to Art. 1153(1) of the Civil Code on the sole ground that this is permitted under
37
that provision, even in the absence of a request of the parties. There is a difference between
the role of a state court and that of an arbitrator, whose jurisdiction is based on the parties’
consent and who must therefore preserve the consensual character of the proceedings by
consulting the parties on their intention as to the mission of the tribunal.” (708)
Similarly, another court annulled an award on the grounds that the relief ordered by the
tribunal “exceeded the arbitrators’ powers because it was not sought by either party, and was
completely irrational because it wrote material terms of the contract out of existence.” (709)
Nonetheless, an award will not be subject to annulment where the arbitrators grant relief that,
while different from what a party requested, is subsumed within relief that the party requested
(most obviously, a lower quantum of damages than that requested by the claimant). (710) More
P 3290 generally, courts also accord arbitrators substantial discretion in fashioning remedies,
including granting relief that neither party has expressly requested. (711) Although categorical
rules are impossible to formulate, the decisive issue appears to be whether the relief granted
by the arbitrators was subsumed within or reasonably related to that requested by the parties.
(712)
Another example of an excess of authority under Article 34(2)(a)(iii) and parallel provisions of
other arbitration statutes involves awards deciding issues or disputes that the parties have not
submitted to the arbitral tribunal. (713) A tribunal exceeds its authority by ruling on an issue
P 3291 not presented by the parties in the arbitration even if the issue or dispute that it
addresses is within the scope of the parties’ arbitration agreement. As one court explained:
“Arbitrators have the authority to decide only those issues actually submitted by the parties.”
(714)
On the other hand, an arbitral tribunal is permitted to adopt different legal characterizations
of the facts than those advanced by the parties. (715) In doing so, the arbitrators may (and
should) request the parties to address factual and/or legal issues that are raised, but not
directly dealt with, by the parties’ submissions and that are necessary to decide in order to
resolve the parties’ dispute. Doing so is not an excess of mandate and is instead both
appropriate and necessary in order properly to resolve the parties’ dispute in accordance with
the applicable law. (716)
Doubts about the scope of the parties’ submissions are resolved in most legal systems in favor
of encompassing matters decided by the arbitrators. Put differently, a considerable measure
of judicial deference is accorded to the arbitrators’ interpretation of the scope of their
mandate under the parties’ submissions. (717) In the words of one court, “[w]e will not over-
scrutinize the panel’s language and leap to the conclusion that it exceeded its power in
formulating the award.” (718)
Some annulment courts have adopted unduly formalistic approaches to the question whether
a particular issue or argument was submitted to the tribunal. For example, one recent
Singaporean decision held that issues not raised in the parties’ “pleadings” had not been
P 3292 submitted to the tribunal, notwithstanding the fact that these issues had been raised in
argument during the arbitration. (719) The better view is not to look to local rules of civil
procedure or litigation practices in determining whether an issue was presented to the
arbitrators; the proper inquiry is instead a pragmatic one into whether the parties and tribunal
had an opportunity to consider and submit evidence and argument on a particular issue. (720)
An arbitral tribunal may also exceed its authority if it makes an award after becoming functus
officio. (721) Thus, a few courts have held that the arbitral tribunal exceeded its mandate
where, after issuing a final award, it reopened the case and issued another award (recalling or
revising its earlier award). (722) As discussed above, however, many national arbitration
statutes and institutional rules authorize corrections, interpretations, or supplementations of
arbitral awards (thereby removing most questions regarding the arbitrators’ authority to take
particular post-award actions). (723)
[b] Awards Failing to Address Matters Within Parties’ Submissions
Conversely, if a tribunal fails to consider all of the issues that have been submitted to it (so-
called “infra petita”), the award may be annulled under at least some national laws. Some
national arbitration legislation provides specifically for annulment in such cases, leaving little
question regarding the matter. (724) For example, the European Convention Providing a
Uniform Law on Arbitration provides for annulment of an award “if the arbitral tribunal has
omitted to make an award in respect of one or more points of the dispute and if the points
omitted cannot be separated from the points in respect of which an award has been made.”
(725)
In contrast, there is no provision in the UNCITRAL Model Law that provides for annulment in the
case of infra petita (as distinguished from extra petita), and some authorities hold that the
Model Law does not permit annulment for a failure to consider one or more of the issues
presented to the tribunal. This analysis was followed in a recent decision of the Paris Cour
P 3293 d’appel, which held that “Article 1502(3) of the [French New Code of Civil Procedure, now
Article 1520(3) of the revised French Code of Civil Procedure] cannot be invoked against an
award which decided infra petita; the grounds for annulment are to be restrictively construed.”
(726)
The better view, however, is that awards should generally be subject to annulment on infra
petita grounds, including when (as in Model Law jurisdictions) arbitration legislation contains
38
no express provision to that effect. That is because an arbitral tribunal’s failure to consider
issues presented to it in fact amounts to an excess of authority, even if it appears only to be
the reverse, because it effectively rewrites the tribunal’s mandate, which is an act beyond the
arbitrators’ competence; that is particularly true when a tribunal fails to consider defenses or
counterclaims related to relief that it does grant.
The presumption is that arbitrators did not decide matters infra petita, but rather decided all
the disputes submitted to them (including by impliedly rejecting claims and defenses not
specifically addressed). (727) Only where it is clear that the arbitral tribunal failed to consider
and resolve a particular claim should a finding of infra petita be possible.
As with other grounds of annulment, an award should be set aside on infra petita grounds only
where it resulted in material prejudice to the award-debtor. (728) Similarly, concepts of waiver
should apply to infra petita objections, although, in practice, parties will often be unaware that
the arbitrators are not addressing particular claims until receiving the final award.
P 3294 [c] Awards Addressing Matters Outside Scope of Arbitration Agreement
An award will also be subject to annulment if an arbitral tribunal purports to decide issues
that are not within the scope of the parties’ arbitration agreement. (729) Indeed, this is one of
the paradigmatic examples of an excess of authority under most national arbitration regimes,
reflecting the consensual nature of the arbitral process. (730)
It is sometimes suggested that the “excess of authority” basis for annulment under Article 34(2)
(a)(iii) of the Model Law and similarly-worded legislative provisions does not apply to claims
that the award decided issues outside the scope of the arbitration agreement (as
distinguished from claims outside the scope of the parties’ submissions in the arbitration).
(731) This interpretation is contrary to at least some modern legislation (732) and to the better
reading of the language and purposes of the Model Law. (733) There is no satisfactory reason to
interpret the phrase “submission to arbitration” as limited solely to the submissions made by
the parties in particular arbitral proceedings, and as excluding the matters submitted to
arbitration by the parties’ arbitration agreement. (734) If an award addresses matters that are
clearly not within the scope of the parties’ agreement to arbitrate, then it should be subject to
annulment on excess of authority grounds.
It is clear that, consistent with the approach adopted by most authorities to the interpretation
of arbitration agreements, doubts regarding the scope of such agreements will be resolved in
favor of including matters within such agreements. (735) For example, the Canadian Supreme
P 3295 Court held that the arbitrator’s mandate should not be interpreted restrictively as being
limited to what is expressly set out in the arbitration agreement but should cover also
“everything that is closely connected with that agreement.” (736)
Some courts have also held that the arbitrators’ jurisdiction includes the authority to
determine preliminary or incidental questions, even if not included within the express terms of
the arbitration agreement. (737) This principle is more broadly applicable, reflecting the fact
that, while consensual, arbitration is an adjudicative process in which the tribunal necessarily
has an inherent authority to decide matters incidental or supplemental to its primary
jurisdiction. Nonetheless, where a tribunal decides issues (or makes awards against parties)
that are clearly outside the scope of the arbitration agreement, their award may be subject to
annulment. (738)
Finally, an arbitral tribunal will exceed its authority if it purports to issue a binding award
when the parties have only agreed to “non-binding” arbitration. (739) Agreements for non-
binding arbitration are unusual (and arguably do not constitute arbitration agreements at all
(740) ), but where parties have concluded them, a tribunal lacks the authority to make a
binding arbitral award.
[d] Standard of Review of Interpretation of Scope of Arbitration Agreement
In considering whether an arbitral tribunal exceeded the scope of its authority under the
arbitration agreement, courts have adopted different standards of review. Some courts have
considered the scope of the arbitrators’ jurisdiction de novo, without any deference to the
tribunal’s jurisdictional determination. As one decision under the UNCITRAL Model Law held:
P 3296 “the standard of review of the award the court is to apply is correctness, in the sense that
the tribunal had to be correct in its determination that it had the ability to make the decision
it made,” but also holding:
“Courts are warned to limit themselves in the strictest terms to intervene only rarely in
decisions made by consensual, expert, international arbitration tribunals, including on issues
of jurisdiction.” (741)
Other decisions from Model Law and non-Model Law jurisdictions adopt similar standards of
review. (742)
In contrast, other annulment decisions accord varying degrees of deference to arbitral rulings
on the scope of an arbitration agreement. As discussed above, where the parties have agreed
to submit the question of the scope of a concededly valid arbitration agreement to arbitration,
courts in the United States and elsewhere will generally give broad deference to the
arbitrators’ jurisdictional ruling, treating it in the same manner as any other substantive
determination. (743) In the words of one court, “once a court independently determines the
parties agreed to arbitrate an issue, it should give ‘extreme deference’ to an arbitrator’s
39
decision regarding the scope of that issue.” (744)
Even in the absence of such an agreement, some annulment courts grant a considerable
degree of deference to arbitral tribunals’ decisions about the scope of their jurisdiction,
usually on the basis that such determinations entail an interpretation of the parties’
P 3297 underlying contract, which is for the arbitrators; that is true both in the United States (745)
and elsewhere. (746) As one U.S. court reasoned: “The burden of proving that the arbitrators
exceeded their authority is great. If a dispute is even arguably within the scope of an
arbitration clause, the dispute is arbitrable.” (747) Similarly, “[a] presumption of arbitrability
exists which requires the court to decide in favor of arbitration when ‘the scope of an
arbitration clause is fairly debatable or reasonably in doubt.’” (748) Likewise, applying the
Model Law, one court held that the arbitral tribunal did not exceed its powers since the
interpretation of the main contract made by the arbitral tribunal was not unreasonable. (749)
These views are to be preferred. Where parties have concluded a valid agreement to arbitrate,
the arbitral tribunal’s decision on the scope of that agreement should be accorded substantial
deference. That is particularly true where parties have agreed to institutional arbitration rules
granting arbitrators authority to determine their own jurisdiction, but the same conclusion is
also implicit in an agreement to arbitrate. (750) The scope of a tribunal’s authority is
P 3298 necessarily intertwined with substantive decisions about the meaning of the parties’
underlying contract, which the parties have committed to the arbitrators’ determination, and
the tribunal’s resolution of these issues should be accorded substantial deference.
[e] Incorrect Substantive Decision on Merits of Dispute
It is well-settled that an arbitral tribunal does not exceed its authority merely because it
reaches an incorrect substantive result: doing so is not an excess of mandate or authority, but
a substantive mistake on an issue within the tribunal’s jurisdiction. Arbitral awards may be
subject to annulment for substantive mistakes in some legal systems, which provide for
substantive review of the tribunal’s decision on the merits, (751) but this does not suggest that
errors in legal analysis or factual evaluation are excesses of authority; on the contrary, the
existence (in a few legal systems) of a separate ground of substantive review confirms that
errors in legal or factual assessment are not excesses of jurisdiction.
A recent English decision correctly explained this conclusion under a provision of the English
Arbitration Act dealing with excess of authority:
“Making an error as to the application of the applicable law can involve no excess of power
under §68(2)(b) since … the concept of a failure by the tribunal to reach the ‘correct decision’
as affording a ground for challenge under §68 is wholly inimical to the scheme and purpose of
the Act.” (752)
Or, as one U.S. decision put it, “we are limited to determining whether the Arbitrator did the
job he was told to do, i.e., whether he acted within the scope of his powers; not whether he did
it well, correctly, or reasonably, but simply whether he did it.” (753) Even more succinctly, the
U.S. Supreme Court recently declared that: “The arbitrator’s construction holds, however good,
bad, or ugly.” (754)
Other authorities are to the same effect, repeatedly holding that substantive mistakes
regarding law or fact are not excesses of authority, even when they are very serious errors. (755)
P 3299 In particular, decisions under Article 34(2)(a)(iii) of the Model Law have repeatedly
rejected claims that the tribunal’s decision was egregiously wrong, characterizing them as
efforts to review the tribunal’s decision on the merits or to reevaluate the evidence. (756)
It is sometimes suggested that an extremely grave substantive error can constitute an excess
of authority. For example, a recent U.S. Supreme Court decision (in Stolt-Nielsen SA v.
AnimalFeeds Int’l Corp.) held that an award may be vacated for an excess of authority if the
“arbitrator stray[ed] from interpretation and application of the agreement and effectively
dispense[d] his own brand of industrial justice.” (757) A number of other U.S. decisions have
adopted a similar analysis. (758) (This reasoning is difficult to reconcile with the “manifest
disregard of law” doctrine under the U.S. FAA (discussed below), where U.S. courts have held
that an award may be annulled if the arbitrators deliberately ignore directly controlling rules
P 3300 of law, but not if they deliberately ignore the terms of the parties’ contract or factual
record. (759) ) A few decisions in other jurisdictions appear to adopt broadly similar reasoning.
(760)
Any such analysis must be regarded with particular reserve. It is in considerable tension with
the bed-rock principle, recognized under the UNCITRAL Model Law and many other legal
systems, that an annulment court will not review the substance of the arbitrators’ decision.
(761) It also risks converting what is meant to be an inquiry into the scope of the tribunal’s
jurisdiction into something resembling an appellate review of the merits of the arbitrator’s
award. This is fundamentally inconsistent with the arbitral process and the terms and
objectives of most contemporary national arbitration legislation.
As one Canadian decision, under the Model Law, recently concluded:
“courts are to be circumspect in their approach to determining whether an error alleged under
Article 34(2)(a)(iii) properly falls within that provision and is a true question of jurisdiction.
They are obliged to take a narrow view of the extent of any such question. And when they do
identify such an issue, they are to carefully limit the issue they address to ensure that they do
40
not, advertently or inadvertently, stray into the merits of the question that was decided by the
tribunal.” (762)
Consistent with this approach, the U.S. Supreme Court recently clarified its decision in Stolt-
Nielsen, emphasizing the very unusual facts of that case and the very narrow scope of review for
excess of authority under the FAA. In Oxford Health Plans LLC v. Sutter, the Court held that the
burden of proving an excess of authority under §10(a)(4) was firmly on the award-debtor and
that this was a very significant (“heavy”) burden that would be satisfied only in “very unusual”
circumstances. (763) The Court then described the exceptional circumstances of its decision in
Stolt-Nielsen, which had vacated an arbitral award ordering class arbitration, largely confining
that decision to its facts:
“In Stolt-Nielsen, the arbitrators did not construe the parties’ contract, and did not identify any
agreement authorizing class proceedings. So in setting aside the arbitrators’ decision, we
found not that they had misinterpreted the contract, but that they had abandoned their
interpretive role.” (764)
The Oxford Health Court also explained:
P 3301 “Nor, we continued, did the panel attempt to ascertain whether federal or state law
established a ‘default rule’ to take effect absent an agreement. Instead, ‘the panel simply
imposed its own conception of sound policy’ when it ordered class proceedings. But ‘the task
of an arbitrator,’ we stated, ‘is to interpret and enforce a contract, not to make public policy.’
In ‘impos[ing] its own policy choice,’ the panel ‘thus exceeded its powers.’” (765)
The Supreme Court considered an issue in Oxford Health that was very similar to that in Stolt-
Nielsen – namely, whether an arbitral tribunal’s award requiring class arbitration was subject
to vacatur on excess of authority grounds. Notably, the Oxford Health Court reached the
opposite result from that in Stolt-Nielsen, and refused to vacate the award authorizing class
arbitration, reasoning:
“Here, the arbitrator did construe the contract (focusing, per usual, on its language), and did
find an agreement to permit class arbitration. So to overturn his decision, we would have to
rely on a finding that he misapprehended the parties’ intent. But §10(a)(4) bars that course: It
permits courts to vacate an arbitral decision only when the arbitrator strayed from his
delegated task of interpreting a contract, not when he performed that task poorly. Stolt-
Nielsen and this case thus fall on opposite sides of the line that §10(a)(4) draws to delimit
judicial review of arbitral decisions.” (766)
Simply put, the Oxford Health Court reemphasized the very narrow scope of the FAA’s “excess of
authority” ground for vacatur, underscoring that the function of judicial review is not to
determine whether the arbitrator committed “error” – or even “grave error” – but solely to
consider whether the arbitrator refused to perform his “delegated task of interpreting a
contract.” (767)
Nonetheless, as suggested in Oxford Health and discussed below, if a tribunal deliberately
ignores the applicable law or contract, and reaches a conclusion based entirely on its own view
of the equities, then there may be very narrow circumstances in which an award may properly
be annulled. (768) In these cases, however, the award is not annulled because the tribunal
makes a substantive mistake, which implies that the arbitrators were seeking to apply the
relevant legal rules and erred, but because the tribunal deliberately chose to ignore its
mandate to apply the law and instead effectively acted ex aequo et bono. (769) Any such
analysis must be conducted with great circumspection, to avoid encroaching on the
arbitrators’ mandate and violating the rule against substantive review of the arbitrators’
decision; nonetheless, where an arbitrator does ignore his or her mandate, annulment is
generally both appropriate and necessary.
P 3302 [f] Awards Ex Aequo et Bono
A similar analysis should apply where an arbitral tribunal which has not been granted amiable
compositeur or ex aequo et bono authority nonetheless renders an award not based on legal
principles. (770) As discussed elsewhere, most national arbitration regimes provide that an
arbitral tribunal may only decide ex aequo et bono if expressly authorized to do so by the
parties. (771) Absent such agreement, awards made ex aequo et bono (or as amiable
compositions) will be subject to annulment as an excess of authority. (772) For example, an
Egyptian court annulled an award where the arbitrator decided ex aequo et bono without being
expressly authorized to do so; it was not that the arbitrators erred in their choice-of-law or
substantive analysis, but that they instead adopted a fundamentally different arbitral
procedure than that agreed upon by the parties. (773)
[g] Application of Incorrect System of Law
Most national courts have rejected arguments that the arbitrators failed to comply with the
parties’ arbitration agreement by applying the law of the “wrong” jurisdiction. (774) Properly
P 3303 considered, this is an application of the more general principle, discussed above, that an
award is not subject to annulment merely because the arbitrators reached an incorrect
substantive result. (775)
Most national courts have also held that awards may not be annulled merely because the
arbitrators applied a substantive law other than that chosen by the parties. (776) Save where
an arbitrator expressly refuses to give effect to a concededly valid choice-of-law clause, and
41
instead applies some other legal system, an award’s disposition of choice-of-law issues falls
within the arbitrators’ mandate to decide the substance of the parties’ dispute and is subject
to the same (generally very limited or nonexistent) judicial review that exists for other
substantive decisions. (777) In the words of one court:
“Even where an arbitration agreement requires the arbitrator to apply a particular law or body
of law, an arbitrator’s failure to apply such a law is not in excess of an arbitrator’s powers.”
(778)
There are contrary decisions, holding that refusals to give effect to a choice-of-law agreement
constitute an excess of authority, but these are ill-considered and have generally been
reconsidered or rejected by appellate decisions. (779)
P 3304 [h] Arbitrators’ Remedial Authority
As discussed above, most national arbitration regimes accord international arbitral tribunals
broad authority over remedial matters: in general, arbitrators possess remedial authority at
least as expansive as that of national courts. (780) Arbitral awards are annulled for excess of
authority with respect to the exercise of remedial authority only very rarely. (781) Among other
things, courts have repeatedly upheld the inherent authority of an arbitrator to issue interim
or provisional relief, (782) to grant injunctive or declaratory relief, (783) to make partial awards,
(784) to sanction parties who have not participated in good faith in the arbitration (785) and to
make a costs award. (786)
P 3305 A recurrent issue concerns the consequences of an arbitral tribunal’s award of relief that
violates contractual limitations (e.g., an award of consequential damages or lost profits,
notwithstanding contractual provisions forbidding such relief). (787) In general, most national
courts have (correctly) concluded that these types of awards do not constitute an excess of
authority, but instead involve erroneous substantive decisions, not subject to judicial review.
(788) Some authorities have suggested that contractual limitations on the tribunal’s remedial
authority may constitute jurisdictional limitations on the arbitrators’ authority, but only if this
is expressly stated. (789)
[i] Arbitrators’ Procedural Rulings
It is sometimes suggested that an arbitral tribunal’s procedural rulings constitute an excess of
authority, because they do not comply with either the parties’ agreement regarding arbitral
procedures or the law of the arbitral seat. In UNCITRAL Model Law jurisdictions, these
arguments are properly considered under Article 34(2)(a)(iv), and not as excess of authority
arguments under Article 34(2)(a)(iii). (790) In jurisdictions with no statutory equivalent to Article
34(2)(a)(iv), serious procedural irregularities are sometimes considered as an excess of
authority (although, strictly speaking, this is inappropriate). (791) In those instances, the same
analysis as that discussed above in the context of Article 34(2)(a)(iv) should apply.
P 3306 [j] Class Arbitrations
Arbitral awards regarding so-called “class arbitration” raise special issues with respect to
“excess of authority” provisions. (792) In particular, it is unclear whether a decision ordering
class arbitration should be categorized as a jurisdictional issue, presumptively subject to de
novo judicial review, (793) or instead as a procedural (or substantive) decision, presumptively
subject to minimal judicial review. (794) As discussed in detail above, most authority
addressing class arbitrations is under the FAA in the United States. (795) That authority is,
unfortunately, uncertain and divided.
On the one hand, the Supreme Court has held (in a badly-divided plurality opinion) that the
question whether an arbitration agreement provided for class arbitration was not a
jurisdictional (or, in terminology sometimes used under the U.S. FAA, a “gateway”) issue and
was therefore for decision by the arbitrators, subject to minimal judicial review. (796) More
recently, however, the Court has suggested pointedly that its earlier (plurality) decision may
have been wrongly-decided, (797) indicating that the question whether the parties have agreed
to class arbitration may be categorized as a jurisdictional issue, presumptively subject to de
novo judicial review. (798)
Although the Supreme Court has yet to resolve the issue definitively, this latter view appears
correct: the decision whether an agreement to arbitrate contemplated a class arbitration,
between a large, often indeterminate number of parties, is the sort of question concerning the
fundamental character and structure of the arbitral process, as well as the identities of its
P 3307 parties, that commercial parties would ordinarily expect a court, rather than arbitral
tribunal, to resolve. (799) As a consequence, it is best regarded as jurisdictional, rather than
procedural, in character.
[4] Material Excess of Jurisdiction and Prejudice
Article 34(2)(a)(iii) requires a material excess of jurisdiction, rather than a trivial or incidental
excess, in order to warrant annulment of an award. The text of Article 34(2)(a)(iii) does not
expressly impose a materiality requirement, but there is no justification for annulling an award
based on immaterial excesses of authority. (800) Similarly, the better view is that a tribunal’s
excess of authority should warrant annulment only where it causes material prejudice to the
award-debtor.
42
In many cases, however, any excess of authority will be material: a tribunal’s decision on
matters that the parties did not grant it authority to decide will almost always be a material
excess of authority, given the vital role of consent in the arbitral process. As discussed below,
however, partial annulment of an award (where one aspect of the tribunal’s award exceeds its
authority, but other aspects do not) is the appropriate remedy in many cases involving this
sort of excess of authority.
[5] Partial Annulment of Award
Article 34(2)(a)(iii) provides expressly for partial recognition of an award where only part(s) of
the award exceeded the tribunal’s jurisdiction: “if the decisions on matter submitted to
arbitration can be separated from those not so submitted, only that part of the award which
contains decisions on matters not submitted to arbitration may be set aside.” (801) Consistent
with this provision, courts have annulled only parts of awards where other parts were within
the tribunal’s authority. (802)
P 3308 [6] Waiver of Excess of Authority
It is essential that the party claiming that the arbitrators exceeded the scope of the
arbitration agreement or parties’ submissions have raised its jurisdictional objection during
the arbitral proceedings. As discussed elsewhere, jurisdictional objections are subject to
waiver, including through a failure to raise such objections in a timely manner. (803) If a party
is aware of the arbitral tribunal’s alleged excess of mandate, whether actual or anticipated, it
must object in order to preserve the right to annul the arbitrators’ subsequent award. (804) (As
discussed above, in states where parties may confer competence-competence on the
arbitrators to finally decide jurisdictional objections, an award making such a jurisdictional
decision on the scope of the parties’ arbitration agreement will generally be subject to either
no or de minimis judicial review in an annulment proceeding. (805) )
[G] Nonarbitrability of Dispute

The nonarbitrability doctrine provides an exceptional and relatively infrequently-used basis
for the annulment of international arbitral awards. Article 34(2)(b)(i) of the Model Law is
representative, providing that an award may be annulled if the court finds that “the subject-
P 3309 matter of the dispute is not capable of settlement by arbitration” under the law of the
judicial annulment forum. This provision is modeled on Article V(2)(a) of the New York
Convention, amended only slightly to confirm expressly that the nonarbitrability standards of
the annulment forum apply. (806) As with other bases for annulment under Article 34, the
nonarbitrability ground is paralleled closely by other arbitration legislation, including in non-
Model Law jurisdictions. (807)
The nonarbitrability doctrine is discussed in detail above in connection with the enforcement
of international arbitration agreements. (808) That discussion is in principle relevant to
application of the nonarbitrability doctrine in the context of annulment. Nonetheless, several
issues (discussed below) warrant separate treatment.
[1] Choice of Law Governing Nonarbitrability
As discussed above, the Model Law, as well as most other arbitration legislation, provides a
specialized choice-of-law rule governing application of the nonarbitrability doctrine in
annulment proceedings. Under Article 34(2)(b)(i), the nonarbitrability rules of the arbitral seat
are applicable in annulment proceedings; (809) other arbitration legislation, generally based
on the Model Law, is identical. (810) These provisions parallel the structure of the escape
mechanism of Article V(2)(a) of the New York Convention, in the recognition context, permitting
Contracting States exceptionally to apply the local law of the recognition forum to deny effect
to foreign awards (and international arbitration agreements). (811)
As also discussed above, the applicability of the nonarbitrability rules of the arbitral seat in an
annulment action does not necessarily mean that those rules, by their own terms, apply in
particular cases. Thus, if the arbitration concerned matters having no connection to the
arbitral seat, governed by foreign law, there would ordinarily be no reason to apply the
nonarbitrability rules of the arbitral seat to claims governed by foreign law. (812) Conversely,
as discussed above, there may be rare instances in which a nonarbitrability rule of a state
other than the arbitral seat could be relevant in an annulment action. (813)
P 3310 As also discussed above, the better view is that the New York Convention imposes limits
on national nonarbitrability rules. Those limits require all Contracting States (including the
arbitral seat) to treat the nonarbitrability doctrine as an exceptional escape mechanism
tailored to safeguard specified national public policies and to apply such policies in a non-
discriminatory fashion consistent with state practice under the Convention. (814) These limits
apply in annulment actions, as well as in other contexts.
As with other grounds for annulment, the burden of proof with respect to a nonarbitrability
objection is generally on the award-debtor. That is not contradicted by the text of arbitration
legislation like Article 34(2)(b) of the UNCITRAL Model Law, which omits a requirement that the
award-debtor furnish “proof” that an award deals with nonarbitrable subjects and instead
provides only that the annulment court must “find[]” Article 34(2)(b)(i) satisfied. (815) Although
43
this text permits an annulment court to raise issues of nonarbitrability ex officio, it does not
alter the presumptive validity of the award or the requirement that an affirmative showing be
made to overcome this presumptive validity. (816)
[3] Issues of Waiver and Preclusion
Application of the nonarbitrability doctrine in the context of annulment applications involves
the possibility of waiver of nonarbitrability objections, including particularly by a party’s
failure to raise them during the arbitration. As a general matter, concepts of waiver are not
readily applied to nonarbitrability objections; as with public policy objections,
nonarbitrability doctrines are the product of mandatory national law and application of
concepts of waiver to such principles is not straightforward. Consistent with this, Article 34(2)
(b) of the UNCITRAL Model Law permits nonarbitrability objections to be raised ex officio by
the annulment court, (817) in contrast to Article 34(2)(a) of the Model Law, which requires the
award-debtor affirmatively to raise specified grounds of annulment.
P 3311 Nonetheless, as discussed above, a number of claims which are the basis for applications
of the nonarbitrability doctrine are capable of being settled or waived after a dispute has
arisen. That is true of competition, securities, consumer, employment and similar claims, all of
which can frequently be settled or waived after a dispute has arisen. (818) By similar analysis,
parties should also be capable of waiving at least some nonarbitrability objections by failing
to raise them either during or following the arbitral proceedings. (819)
Despite the force of this analysis, legislation in some jurisdictions has been interpreted to limit
the ability of parties to waive nonarbitrability objections and to permit such objections to be
raised for the first time in annulment proceedings. (820) Indeed, under some interpretations,
national courts are required to raise such objections ex officio, regardless of prior (or
continuing) waiver by a party.
The better view is that nonarbitrability objections should be capable of waiver. This result is
particularly appropriate where the asserted nonarbitrability rules exist principally for the
protection of particular commercial parties, who are in principle capable of waiving those
rights, as opposed to statutory regimes directed principally to the protection of third parties
or public interests.
[H] Public Policy (821)

It is well-settled in most jurisdictions that an arbitral award may be annulled if it violates a
limited number of fundamental public policies or mandatory laws. The public policy exception
is frequently invoked as a basis for annulling arbitral awards and gives rise to substantial
complexities. These complexities parallel those arising in connection with application of the
public policy doctrine in other contexts, particularly the recognition and enforcement of
foreign and nondomestic awards. (822)
Article 34(2)(b)(ii) of the Model Law provides that an award may also be annulled if the
relevant court finds that “the award is in conflict with the public policy of this State.” (823) This
P 3312
public policy (or “ordre public”) exception is modeled most directly on Article V(2)(b) of
the New York Convention, (824) and has close parallels in other national arbitration regimes.
(825)
Even in jurisdictions (such as the United States) where no statutory public policy basis for
annulment exists, courts have recognized the doctrine as “a specific application of the more
general doctrine, rooted in the common law, that a court may refuse to enforce contracts that
violate law or public policy.” (826) The public policy doctrine in the context of annulment
actions is derived from, and related to, applications of the public policy doctrine in other
private international law contexts, including choice of law and recognition of foreign
judgments. (827)
It is clear that the concept of “public policy,” for purposes of annulment of international
arbitral awards, refers to a relatively narrow category of non-waivable rules of mandatory law
that are fundamental to the legal or social order of a jurisdiction, often involving criminal
prohibitions or comparable mandatory rules. As one Singaporean court reasoned, “illegality
and public policy are two strands of the same principle.” (828)
P 3313
The approach to public policy in the United States is broadly representative of the
treatment of public policy in annulment proceedings in many other jurisdictions. Although, as
noted above, the domestic FAA provides no statutory basis for setting aside awards on public
policy grounds, it is well-established that such an exception exists. (829) As in other contexts
involving application of public policy exceptions under U.S. law, (830) public policy as a basis
for vacating an award under the FAA is extremely narrow. Thus, U.S. courts emphasize that,
under the FAA, the public policy exception does not “sanction a broad judicial power to set
aside arbitration awards as against public policy.” (831)
In order for a public policy to provide a basis for vacating an award under the domestic FAA,
the policy must be “explicit,” “well-defined and dominant.” (832) Public policies may only be
derived “by reference to the laws and legal precedents,” and not from “general considerations
of supposed public interests.” (833) Critically, only a narrow range of fundamentally important
mandatory laws and overriding public policies are capable of providing the basis for a public
44
policy objection under U.S. law. In particular, public policy can generally be invoked only
where recognition of a decision would “undermine the public interest, the public confidence in
the administration of the law or security for individual rights” (834) or be “repugnant to
fundamental notions of what is decent and just in the State where enforcement is sought.” (835)
Even if these standards are satisfied, “the violation of such a policy must be clearly shown if an
P 3314
award is not to be enforced.” (836) And finally, an award will only be held to violate public
policy in the United States if it produces a result that the parties could not lawfully have
agreed upon directly. (837)
Other jurisdictions adopt similar approaches to public policy in the context of annulment
proceedings, providing that an award may be annulled on public policy grounds only if it
prescribes relief that directly contradicts a clearly-defined and mandatory rule which is
fundamental to the legal or moral order of the state in question. One Swiss court described
public policy for annulment purposes as follows:
“An award is inconsistent with public policy if it disregards the essential and broadly
recognized values which, according to Swiss concepts, should be the basis of any legal order.
An award is contrary to material public policy when it violates some fundamental principles of
material law to such an extent that it is no longer consistent with the determining legal order
and value system; among such principles are, in particular, contractual trust and compliance
with the rules of good faith. For an award to be contrary to material public policy, a narrower
concept than arbitrariness, it is not sufficient for the legal rule to have been clearly violated.”
(838)
Similarly, a recent Singaporean decision held that an award could be annulled, based on
illegality of the parties’ underlying contract, only if the illegality “shock[ed] the conscience,”
was “clearly injurious to the public good or … wholly offensive to the ordinary reasonable and
fully informed member of the public” or “violat[ed] the forum’s most basic notion of morality
and justice.” (839)
Likewise, it is not sufficient to warrant annulment that an award contain statements or
conclusions that violate applicable public policy. Rather, as discussed below, the dispositive
provisions of the award must concretely violate applicable public policy. (840) Similarly, not
every violation of a mandatory provision of national law amounts to a violation of public
policy; only provisions of law that are fundamental to the legal order or basic morality of a
state are grounds for a public policy violation. (841)
P 3315
[2] Choice of Law Governing Public Policy in Annulment Proceedings
Application of the public policy doctrine in annulment actions raises choice-of-law questions.
Article 34(2)(b)(i) provides that the “public policy of this State” is applicable in annulment
actions, (842) and most national courts appear to have adopted this approach. Other national
legislation is similar, (843) consistent with the general role of public policy in private
international law as an escape device. (844)
[a] International Public Policy
Some authorities hold that the public policy exception in the context of annulment actions
refers to “international” public policy, rather than local or domestic public policy. This is made
explicit in the French Code of Civil Procedure, where Article 1520(5) provides for the annulment
of awards that are “contrary to international public policy.” (845) A few other jurisdictions have
enacted essentially identical statutory provisions. (846) Courts in other jurisdictions have
adopted similar approaches in international cases, even absent express statutory language to
this effect. (847)
P 3316 Considerable debate exists as to what constitutes “international” public policy for
purposes of annulment proceedings. As discussed elsewhere, different authorities have
variously concluded that the concept refers to an autonomous body of international public
policies, derived from international sources and state practice; (848) to those public policies
of the forum state that are considered applicable in international contexts; (849) or to those
public policies of the forum intended for international settings, but only insofar as that public
policy is consistent with applicable international law principles. (850) The better view in the
annulment context is the final one, which is consistent with the character of public policy as an
escape mechanism, but subject to the structural limitations of the New York Convention. (851)
As discussed below, the national public policies that a particular state considers to have
international application are typically said to be a narrower, more limited category of matters
than those which apply in domestic matters. (852) The rationale is that only matters which are
essential to the forum state’s legal system, and considered mandatory even in international or
transnational settings, will constitute international public policy.
[b] Foreign Public Policy
National courts may also give effect in annulment actions to the public policy of a foreign
state, provided that applicable conflicts rules support such a result. (853) This approach is
appropriate only in exceptional cases, where local public policies demand giving effect to a
foreign state’s public policy, notwithstanding both the absence of any independent local
public policy and the Convention’s general objectives of facilitating the recognition and
enforcement of international arbitration agreements and awards. (854)
45
[c] Relevance of Public Policy for Recognition Purposes
It is unclear whether “public policy” for purposes of annulment of an award is identical to
P 3317
public policy in recognition actions under the Convention. The concept of public policy in
the two settings clearly has close parallels, and some authorities have held that the two
concepts are identical. (855) Nonetheless, there is a substantial argument that public policy,
for purposes of recognition under the New York Convention, should be even more
circumscribed than that in an annulment action under national law.
[3] Focus of Public Policy Exception: Relief Awarded or Underlying Dispute?
It is not clear whether the public policy exception requires proof that mere enforcement of the
award would itself violate applicable public policy (for example, by compelling conduct that
would violate a public policy) or whether a broader inquiry is relevant (for example, into the
substantive character of the party’s underlying claims and the tribunal’s decisions or the
conduct of the arbitral proceedings). (856) Under a restrictive interpretation of the doctrine,
public policy could only be successfully invoked if an award’s dispositive provisions required
an action (e.g., transfer of funds in violation of exchange controls, asset freezes) that was
prohibited by mandatory law. As discussed below, a similar approach is taken by some
authorities in the contexts of recognizing foreign awards and foreign court judgments. (857)
Alternatively, the public policy exception might apply where the substantive claim on which
the award is based is itself contrary to applicable public policy or where the arbitral
proceedings were contrary to applicable public policy in some manner. For example, under
this interpretation, public policy could be invoked to seek annulment of an award that
imposed liability in a manner that is contrary to applicable public policy (e.g., requiring one
party to indemnify another party for its deliberately wrongful or fraudulent conduct, imposing
liability for failure to complete a contract for official corruption or to engage in
internationally-forbidden conduct). Similarly, public policy could be applied to annul an
award based on procedural irregularities (for example, fraud in the arbitral process or
arbitrator bias).
It is not clear in many jurisdictions whether the public policy exception requires proof that
enforcement of the award would itself violate applicable public policy or compel conduct that
P 3318
would violate a public policy. (858) Alternatively, and more likely, the public policy
exception is implicated where the underlying substantive claim on which the award is based is
contrary to applicable public policy. (859)
The foregoing issue was considered by the English courts in Soleimany v. Soleimany, which set
aside an award enforcing a joint venture for the purpose of smuggling goods out of Iran in
violation of Iranian customs laws:
“it is in our view inconceivable that an English court would enforce an award made on a joint
venture agreement between bank robbers, any more than it would enforce an agreement
between highwaymen. … Where public policy is involved, the interposition of an arbitration
award does not insulate the successful party’s claim from the illegality which gave rise to it. …
The reason, in our judgment, is plain enough. The court declines to enforce an illegal contract,
… not for the sake of the defendant, nor (if it comes to the point) for the sake of the plaintiff.
The court is in our view concerned to preserve the integrity of its process, and to see that it is
not abused. The parties cannot override that concern by private agreement. They cannot by
procuring an arbitration conceal that they, or rather one of them, is seeking to enforce an
illegal contract. Public policy will not allow it.” (860)
This reasoning expresses the likely result in most annulment settings: public policy is not
concerned solely with the specific and limited act of enforcing an award, and requiring a
payment of money or other actions, but also considers the underlying claims and
determinations in the award. (861) Any other result would render the public policy exception
largely meaningless – because the payment of money, in and of itself, is very seldom contrary
to public policy or mandatory law. (862)
Rather, the public policy defense must look to the legal claim (or defense) on which the grant
(or denial) of particular relief rested. If this claim or defense, as applied in a particular case,
violates fundamental principles of mandatory law or public policy of the arbitral seat, then the
award is subject to annulment. (863)
P 3319 It is clear, however, that it is the arbitrators’ concrete application of a legal rule or
principle, not the abstract statement of the rule, that is necessary for annulment of an award.
Thus, annulment is “not available for every party who manages to find some generally
accepted principle which is transgressed by the award,” (864) and instead “enforcement of the
award [must] be directly at odds with a well defined and dominant public policy.” (865) As
French courts have held, it is not an award’s inconsistency with an abstract statement of public
policy that justifies annulment, but rather enforcement of the tribunal’s specific award that
must violate public policy:
“the scrutiny of the Court … must bear not upon the evaluation made by the arbitrators with
regard to the cited requirements of public policy, but on the solution given to the dispute,
annulment only being appropriate if enforcement of that solution violates the aforementioned
public policy.” (866)
Other authorities reach the same result. (867)
46
It is clear that, like other grounds for annulment, the burden of proof with respect to a violation
of public policy is on the award-debtor. That is true notwithstanding the introductory text of
some arbitration legislation (such as Article 34(2)(b) of the UNCITRAL Model Law) which omits a
requirement that the award-debtor furnish “proof” that an award violates public policy and
instead provides only that the annulment court must “find[]” Article 34(2)(b)(ii) satisfied. (868)
Nonetheless, the correct reading of Article 34(2) and other national arbitration legislation is
that these provisions permit a national court to raise issues of public policy sua sponte or ex
officio in annulment proceedings, rather than requiring an award-debtor affirmatively to raise
the issue (as is the case under Article 34(2)(a)). This should not be interpreted as altering the
ultimate burden of proof which, consistent with the overall structure and purposes of Article
34, should generally remain with the award-debtor. (869)
P 3320
It is also clear that the standard of proof required to establish a public policy violation is
a demanding one. As discussed in greater detail below, courts uniformly hold that a violation
of public policy must be “blatant, effective and concrete”; (870) is available “only in extreme
cases” (871) and “must be clearly shown if an award is not to be enforced.” (872) Or, to similar
effect, the Swiss Federal Tribunal has reasoned that, “[b]eing an exception, the public policy
reservation is to be interpreted restrictively.” (873) These formulations reflect the underlying
requirement that, unless the award-debtor demonstrates clearly and convincingly that an
applicable public policy forbids recognition or enforcement of an award, annulment will not
be warranted.
[5] Exceptional Nature of Public Policy Exception in Annulment Actions
It is trite to observe that application of the public policy doctrine is potentially unpredictable
and expansive. (874) Nonetheless, national courts in most developed jurisdictions have
annulled international arbitral awards on the basis of public policy only in limited,
exceptional cases. (875) Courts from almost all jurisdictions have repeatedly and consistently
underscored the narrow and exceptional character of public policy, as a basis for annulment of
P 3321
an international arbitral award. (876) Some courts have suggested that the scope of public
policy in annulment actions is more expansive than that in recognition proceedings. (877)
Public policy has generally been invoked only in cases of clear violations of fundamental,
mandatory legal rules, not in cases of judicial disagreement with a tribunal’s substantive
decisions or procedural rulings. In general, awards have been annulled on public policy
grounds only in cases of corruption, (878) illegal contracts, (879) egregious violations of
competition (or similar) laws, (880) certain insolvency issues (881) and fraud. (882)
The overwhelming majority of U.S. decisions reject applications to vacate either international
or domestic arbitral awards on public policy grounds. (883) The standard required for vacatur
on public policy grounds is exceptionally high: “[C]ourts may refuse to enforce arbitral awards
only in those rare cases when enforcement of the award would be directly at odds with a well
defined and dominant public policy.” (884)
Nonetheless, there have been a nontrivial number of successful vacatur applications under the
FAA, often in the context of highly-regulated domestic U.S. industries. For example, awards
have been annulled for reinstating passenger aircraft pilots or truck drivers dismissed for
P 3322
alcohol abuse, (885) reinstating industrial employees dismissed for drug use, (886)
reinstating a police officer who lied during a medical exam, (887) requiring actions adversely
affecting public safety or health, (888) not sufficiently deterring fraudulent conduct, (889) not
sufficiently deterring racial discrimination, (890) failing to deter sexual harassment, (891) and
incorporating an interest provision in a new collective bargaining agreement. (892) In contrast,
there are very few cases of vacatur of an international arbitral award on public policy grounds.
(893)
The use of public policy as a basis for annulling an award under French law is equally limited.
French courts have held:
“a public policy argument can be accepted only when the enforcement of the award would
violate in an unacceptable way our public policy, such violation having to affect in a manifest
manner an essential rule of law or a principle of fundamental importance.” (894)
P 3323
Only in rare cases, (895) involving insolvency proceedings, (896) mandatory investment
regulations (897) and bribery, (898) have French courts annulled awards based on public
policy. (899)
German courts have adopted a similarly restrictive approach to public policy in annulment
actions, declaring:
“Only in extreme cases, when the enforcement of the arbitral award would lead to evident
abuse and to grave harm to public order, can an arbitral award be set aside on the basis of
§1059 ZPO. Such is, in particular, the case when an award enforces an agreement contrary to
bonos mores, or breaches a rule which is part of the very basis of the social or economic order
of a country, or in case the award was obtained by fraud.” (900)
German courts have held that public policy would provide a basis for annulment of an arbitral
award in cases involving corruption, (901) serious competition law violations, (902) fraud, (903)
violations of human rights (904) and certain insolvency issues. (905)
P 3324
47
P 3324
Likewise, Swiss courts have also found violations of public policy only in exceptional
circumstances, including bribery, (906) procedural public policy (907) and prohibitions against
pursuit of an individual’s profession. (908) Similarly, courts in other developed jurisdictions
have also generally adopted narrow interpretations of the public policy exception in
annulment proceedings. (909)
It is non-controversial in most jurisdictions that the public policy doctrine is not a basis for
reviewing the substance of the arbitrators’ award in an annulment action. (910) There are
P 3325
nonetheless frequent attempts to persuade courts to deviate from this rule – where
counsel seek to garb substantive objections to a tribunal’s award in public policy dress – which
are only rarely successful. (911)
It is also non-controversial, and seldom even argued, that an award does not violate public
policy if it is denominated in a currency other than that of the arbitral seat. (912) It is
conceivable that such an award could violate the parties’ arbitration agreement, but there
would be a substantial argument that any such decision by a tribunal would concern the
substance of the parties’ dispute, and therefore not ordinarily be subject to review.
[6] Deference to Arbitrators’ Application of Public Policy and Mandatory Laws
In many cases, annulment on public policy grounds involves issues of public policy or
mandatory law already considered by the arbitral tribunal. In these circumstances, questions
arise regarding the deference, if any, that an annulment court should accord to the arbitrator’s
decision on issues of public policy.
National courts have taken a variety of approaches to the treatment of an arbitral tribunal’s
determination of issues of public policy or mandatory law. Some courts have considered issues
of public policy de novo, without any deference to the arbitrators’ decision, while other courts
have accorded the arbitrators’ decisions about public policy issues considerable deference.
(913) A recent Singaporean decision adopted the former approach, reasoning:
“the court cannot abrogate its judicial power to the Tribunal to decide what the public policy
of Singapore is and, in turn, whether or not the Concluding Agreement is illegal (illegality and
public policy being … mirror concepts in this regard), however eminent the Tribunal’s members
may be. Accordingly, … the court is entitled to decide for itself whether the [parties’ underlying
contract] is illegal and to set aside the Interim Award if it is tainted with illegality, just as in
Soleimany, the English [Court of Appeal] refused to enforce the Beth Din’s award as it was
tainted with illegality.” (914)
The Singaporean court nonetheless reversed a trial court decision to annul the award on
grounds of public policy, noting that the arbitral tribunal considered and rejected claims of
P 3326 illegality, that “the Tribunal did not ignore palpable and indisputable illegality” and that
there was nothing on the face of the parties’ agreement to indicate that it was illegal. The court
also refused to reconsider the arbitrators’ factual findings, using them as the basis for its
public policy analysis. (915)
Other courts have adopted similar analyses with regard to the public policy determinations of
arbitral tribunals, in most cases apparently according the arbitrators’ factual findings a
considerable measure of deference, while resolving issues of law and public policy de novo.
(916) In contrast, some courts have afforded arbitral determinations with respect to public
policy or mandatory law rules substantial deference. (917)
A tribunal’s serious (mis)application of a fundamental rule of mandatory law is sometimes held
to constitute a violation of public policy. Representative examples of mandatory laws include
statutory protections, such as competition laws or securities regulations, and mandatory rules
that override private contractual arrangements, such as rules against exculpation of fraud or
willful misconduct, liability limitations and the like. National courts have frequently held that
these rules of mandatory law reflect public policy and that their serious (mis)application can,
in principle, provide the basis for annulment of an award. (918)
P 3327 Despite this, (mis)applications of most statutory (and common law) rules will not provide
the basis for a potential violation of public policy: these are simply aspects of the arbitrators’
determination of the parties’ substantive dispute and errors in applying such provisions are
not grounds for annulment. In most jurisdictions, only serious (mis)applications of mandatory
statutory provisions that are fundamental to the legal, economic, or social order of a particular
state will provide the basis for annulment on public policy grounds. (919) Conversely,
provisions of commercial (or other) law out of which the parties are free to contract will not
provide the basis for a public policy objection to an award. (920)
Even where a mandatory law or public policy is at issue, courts have usually rejected
arguments that particular awards violated public policy because of the tribunal’s
(mis)application of that mandatory law. Most authorities hold that an annulment court’s role in
reviewing the substance of the arbitrators’ decision is highly circumscribed and that only very
clear and serious (mis)applications of mandatory law will result in annulment.
P 3328 A representative example of this analysis is France, where the Cour de cassation has held
that an annulment court’s review “is limited to flagrant, effective and concrete breaches” of a
fundamental rule of mandatory law. (921) Similarly, U.S. courts have held that review of the
arbitrators’ application of U.S. antitrust laws in an action to vacate must only consider whether
the arbitrators “took cognizance of the antitrust claims and actually decided them,” (922)
P 3329
48
P 3329 reasoning that any other approach would be “throwing the results [of the award] in the waste
basket.” (923) Courts in other jurisdictions, including England, (924) Switzerland, (925)
Germany, (926) Austria, (927) Sweden, (928) Italy (929) and Singapore (930) adopt similar
analyses.
Commentary generally also follows the same restrictive view of public policy in annulment
actions, reasoning that only extreme (mis)applications of public policies or mandatory laws
should permit an award to be set aside. (931) The overriding theme of these authorities is that
an incorrect application of mandatory law rules is not fundamentally different from
(mis)application of other rules of law by the arbitral tribunal, and that only in cases involving
serious errors of mandatory law, leading to results that significantly undermine or frustrate
statutory objectives in a socially-unacceptable manner, may an award be annulled. Other
errors of law, including mandatory law, do not ordinarily provide a basis for annulment.
Nonetheless, there are commentators who urge, (932) and national courts which apply, (933)
P 3330
more extensive judicial review of arbitrators’ mandatory law and public policy decisions,
on the grounds that this is necessary in order to safeguard underlying public values. An
intermediate Dutch appellate decision held:
“a national court must grant a request for annulment of an arbitral award – when, in its opinion,
that award is indeed in conflict with Art. 81(1) EC Treaty – in cases in which it would grant a
request for annulment because of a violation of national rules of public policy pursuant to its
national procedural law.” (934)
The decision has been sharply criticized, for permitting a public policy defense to be raised for
the first time in recognition proceedings, for adopting an inappropriately expansive notion of
public policy and for misapplying EU competition law. (935) Nonetheless, it reflects one
(interventionist) end of the spectrum of judicial responses to public policy issues in annulment
proceedings.
Some courts have held that a tribunal’s refusal to give effect to a binding national court
judgment, disposing of a substantive claim, would violate local public policy (936) :
“Arbitrators are not free to ignore the preclusive effect of prior judgments under the doctrines
of res judicata and collateral estoppel.” (937) It is, however, unclear why awards involving
(mis)applications of rules of res judicata should be treated differently from awards involving
other mistaken substantive rulings by a tribunal. (938)
Some authorities have also suggested that violations of the principle of proportionality
constitutes a violation of public policy (for example, in cases involving damages, costs, interest
P 3331
and the like). (939) Notions of proportionality are occasionally relied upon in annulment or
recognition proceedings, (940) but in most annulment contexts, they are rejected. (941)
[7] Procedural Public Policies
Some national legal systems also provide that a “procedural” public policy may provide
grounds for annulling an international arbitral award. Although there is no provision to this
effect in the UNCITRAL Model Law, the drafting history of the Model Law provides:
“It was understood that the term ‘public policy,’ which was used in the 1958 New York
Convention and many other treaties, covered fundamental principles of law and justice in
substantive as well as procedural respects.” (942)
Consistent with this, some national arbitration legislation provides expressly for annulment on
grounds equivalent to “procedural public policy,” (943) while a few national court decisions
have adopted comparable analyses. (944) In the words of one recent Swiss annulment
decision:
“Procedural public policy is breached in case of violation of fundamental and generally
recognised procedural principles, the disregard of which contradicts the sense of justice in an
intolerable way, so that the decision appears absolutely incompatible with the values and
legal order of a state ruled by laws.” (945)
The concept of procedural public policy overlaps substantially with denial of a party’s
opportunity to be heard, under provisions such as Article 34(2)(a)(ii) of the UNCITRAL Model
Law. (946) Some commentators have suggested that the concept of procedural public policy
incorporates principles of equal treatment (which may not be encompassed in some national
P 3332 protections of the parties’ opportunity to be heard) and protections against fraud. (947)
This analysis is unconvincing, because the opportunity to be heard encompasses equality of
treatment (948) and because public policy is generally held to include instances of fraud. (949)
Nonetheless, it is doubtful that an autonomous body of procedural standards, extending
beyond guarantees of an opportunity to be heard in Article 34(2)(a)(ii), is either necessary or
constructive; it would provide little by way of necessary protections, while adding a potentially
expansive basis (“unruly horses,” again) for overriding the parties’ procedural autonomy.
[I] Waiver of Public Policy Objection

A significant, but ill-explored, subject is the extent to which a party’s failure to raise a public
policy issue during the arbitral proceedings may waive its ability to rely on that public policy
during annulment proceedings. In principle, it is difficult to conclude that public policies and
mandatory laws are subject to waiver in the strict sense; as already discussed, the defining
characteristic of mandatory laws and public policies is that they override private agreements,
49
(950) making ordinary conceptions of waiver difficult to apply.
Consistent with this, under the UNCITRAL Model Law, public policy objections to confirmation
or enforcement of an award may be raised sua sponte by a court, which is again in tension with
a strict principle of waiver. (951) Some national courts have adopted this reasoning, apparently
holding that claims based on mandatory laws or public policies are not subject to waiver. (952)
Nonetheless, a number of authorities have held that considerations similar to waiver and
estoppel should be relevant to annulment of an award based on public policy objections. The
Paris Cour d’appel has held that matters of EU competition law are subject to a doctrine that
comes close to waiver, if they are not raised during arbitral proceedings; (953) the court
reasoned that failure to raise a public policy defense deprived the reviewing court of an
evidentiary record on which to assess the public policy objection and that it was not for the
court to create such a record:
P 3333 “Although the annulment court, within the scope of its supervisory powers, can carry out an
evaluation in both fact and law of the elements of the award that lie within its control, it
cannot pronounce judgment on the merits of a complex case regarding the mere possibility of
certain contractual provisions being unlawful if it has not yet been pleaded before, or decided
by, an arbitrator. There is no reason to allow [the award-debtor] to benefit from any intentional
or unintentional gaps in its defence of its case before the arbitrators (whether it did at the
time consider it to be probable or even proven that the disputed contractual clauses were
compatible with the rules of [EU] competition law or, on the contrary, whether it purported to
avoid sanctions being imposed by the Commission) so as to enable it to reserve its arguments
for the subsequent stage in the proceedings asking to annul the award pronounced against it.”
(954)
English courts would appear (by analogy) to take similar approaches. (955)
The better view, reflected in these authorities, is that public policy and mandatory law rules
should be capable of waiver. In many jurisdictions, mandatory law claims can be resolved by
private settlement after a dispute has arisen, (956) which implies that such claims can also be
lost through waiver (or by agreement or estoppel). This result is particularly compelling where
the asserted public policies are statutory rights granted principally for the protection of
particular commercial parties, who ought in principle to be capable of waiving those rights, as
opposed to statutory regimes directed principally to the protection of third parties.
Finally, some authorities have held that an arbitrator’s failure to raise a public policy issue sua
sponte or ex officio is not itself an independent ground for annulling an award. (957) There may
be instances in which an award violates a mandatory law or public policy, after proceedings in
which the arbitrators did not raise such issues, but this entails a separate basis for annulment
(not relying on the arbitrators’ failure to raise public policy issues sua sponte).
[J] Fraud
P 3334 It is reasonably clear that fraud is a ground for annulling an award under virtually all
national arbitration regimes.
The UNCITRAL Model Law does not refer expressly to fraud, but its drafting history makes clear
that fraud was intended to provide a basis for annulment, under the head of public policy in
Article 34(2)(b)(ii). (958) To similar effect, arbitration legislation in a number of non-Model Law
jurisdictions provides expressly for fraud as a ground for setting an award aside. (959) Likewise,
in state-to-state and investment contexts, a limited basis for annulment of awards in cases
involving corruption on the part of the arbitral tribunal has been recognized. (960)
Even in the absence of express statutory authorization, national courts are generally willing to
consider arguments that an award be annulled on grounds of fraud. (961) That is the approach
that has been taken in recognition actions under the New York Convention (which also lacks an
express reference to fraud in Article V) (962) and which is permitted by way of revision or
P 3335 remission of a fraudulently-obtained award to the arbitral tribunal in some jurisdictions.
(963) Indeed, it is difficult to conceive that national courts would, or should, give legal effect to
awards procured by fraud.
[2] Exceptional Character of Fraud as Basis for Annulment
Nonetheless, it is also clear that fraud is an exceptional basis for annulment and that
safeguards against baseless claims of fraud, aimed at delaying enforcement of the award and
successful completion of the arbitral process, are required. Thus, while permitting annulment
on the basis of fraud in the arbitral proceedings, national courts have demanded clear and
compelling evidence of fraudulent conduct, that could not previously have been discovered
and that had a significant effect on the tribunal’s decision.
In the United States, the domestic FAA’s “fraud” exception (964) is generally interpreted as
applying to deliberate efforts to deceive the tribunal and adverse party concerning material
issues. (965) A standard formulation of the showing that is required to establish fraud under the
FAA is:
“First, the movant must establish the fraud by clear and convincing evidence. Second, the
fraud must not have been discoverable upon the exercise of due diligence prior to or during
50
the arbitration. Third, the person seeking to vacate the award must demonstrate that the fraud
materially related to an issue in the arbitration.” (966)
U.S. courts have generally rejected claims of fraud based only on alleged misstatements of fact
in the arbitration, in the absence of deliberate and wrongful deception through the use of
P 3336 fraudulent evidence. (967) Fraud is almost always confined to cases involving a party’s use
of perjured testimony or fabricated evidence during the arbitral proceedings. (968) There is
little question that such conduct is unacceptable and can provide grounds for annulling an
award. “Intentionally giving false testimony in an arbitration proceeding would constitute
fraud.” (969) Some courts have also suggested that deliberately and wrongfully withholding
material evidence that a party has been ordered to disclose may also be analogous to
providing perjured testimony. (970)
Courts in other jurisdictions have also adopted very demanding standards for annulling an
award on the basis of fraud. English courts have required a showing of deliberate fraud (not
inadvertence or negligence) which affected the substance of the arbitrator’s decision: an
award may be annulled only if “obtained by the fraud of a party to the arbitration or by the
fraud of another to which a party to the arbitration was privy.” (971) Negligent failures to
comply with discovery orders will not amount to fraud, even in cases of serious dereliction of
disclosure obligations. (972) Moreover, “where perjury is the fraud alleged, i.e., where the very
issue before the arbitrators was whether the witness or witnesses were lying, the evidence must
be so strong that it would reasonably be expected to be decisive at a hearing, and if
unanswered must have that result.” (973)
P 3337
Civil law jurisdictions are similar. Under Swiss law, an award may be annulled if it was
influenced by criminal acts, including false testimony, forgery of documents, or bribery. (974)
Austria (975) and France (976) take similar approaches. Fraud is also a basis for annulment of an
award under German law, although intentionally giving false testimony in arbitral proceedings
does not necessarily constitute fraud. (977)
The burden of proof of fraud in an annulment proceeding is unequivocally on the award-
debtor. (978) In addition, as discussed above, claims of fraud generally must satisfy elevated
standards of proof in many legal systems. (979) The same is true in the annulment context,
where it is clear that the award-debtor faces a very substantial burden of proof to obtain
annulment of an award. (980) Moreover, fraud will only constitute grounds for annulment where
the tribunal relied upon the fraudulent materials, and not where its decision was not
influenced by the alleged fraud. (981)
P 3338 [4] Intrinsic Versus Extrinsic Fraud
Even if perjured testimony, or the equivalent, is shown, an award will not be annulled for fraud
if the complaining party “had an opportunity to rebut his opponent’s claims at the arbitration
hearing.” (982) Some courts have distinguished between “intrinsic” fraud, which entails deceit
during the arbitral proceedings (e.g., perjury), and “extrinsic” fraud outside the arbitration
(e.g., deliberate falsehoods regarding actions taken in national courts or elsewhere). (983) In
most cases, an award-debtor will have challenged the authenticity or credibility of disputed
evidence during the arbitral process, and the tribunal will have considered these challenges in
weighing the evidence, making annulment on the basis of fraud inappropriate.
These decisions reflect the nearly universal recognition that it is important for careful limits to
be maintained on the circumstances in which fraud can be relied on to annul an award, in
order to ensure that such arguments do not become a back-door means of attacking the
substance of the tribunal’s reasoning and evaluation of the evidence. Consistent with this,
courts from virtually all jurisdictions have demanded clear and convincing showings of fraud,
that materially affected the outcome of the arbitration, and that could not have been
discovered or corrected during the arbitral process.
§ 25.05 NATIONAL ARBITRATION LEGISLATION WITH ANNULMENT GROUNDS

WHICH ARE MORE EXPANSIVE THAN UNCITRAL MODEL LAW
As discussed above, the UNCITRAL Model Law sets forth a limited, exclusive list of grounds for
annulling international arbitral awards that are closely modeled on those contained in Article
V of the New York Convention with regard to the non-recognition of foreign or nondomestic
awards. (984) This is consistent with the approach in many jurisdictions, where only limited
grounds, roughly paralleling those in the Convention, are available for annulling an award.
(985)
In contrast, a number of other arbitration statutes permit awards to be annulled on additional
P 3339
grounds, not contained in either Article 34 of the Model Law or Article V of the Convention.
(986) As noted above, most authorities have concluded that neither the Convention nor other
international arbitration conventions limit the grounds that may be invoked to annul an award
in the arbitral seat, a position which is relied upon to justify non-Article V bases under national
law for annulling awards. (987) Thus, as discussed below, a number of jurisdictions (including
the United States, England, Singapore, China and Brazil) permit annulment on bases other than
those included in Article V of the Convention or the Model Law.
Despite these exceptions, the trend in recent years has been very decisively towards adopting
51
or emulating the Model Law’s limited list of grounds for annulment, and away from more
expansive national law bases for annulment. Although states have generally not adopted
arbitration regimes that provide for no judicial review of international awards, (988) they have
tended to strictly limit the grounds of judicial review to those set forth in the UNCITRAL Model
Law (and, by analogy, paralleling Article V of the Convention). This approach has been
motivated principally by recognition of the parties’ objectives in entering into international
arbitration agreements, (989) and in particular their desire for prompt, expeditious dispute
resolution, with little or no judicial review of the merits of the arbitrators’ award. (990)
[A] Judicial Review of Arbitral Tribunal’s decision on Merits

One of the most commonly-encountered bases for annulling international awards which does
not exist under the UNCITRAL Model Law involves substantive review of the merits of the
arbitrators’ decision. Historically, arbitration regimes frequently provided for a measure of
judicial review of arbitral awards (comparable to that exercised by appellate courts over first
instance judicial decisions). (991) Although the clear tendency of modern arbitration legislation
is away from this sort of review, it continues to be authorized, to a limited extent, in some
jurisdictions.
[1] Judicial Review of Merits of Arbitral Award
Substantive review of the arbitrators’ decision can take many forms, and can involve varying
degrees of judicial deference to the arbitrators’ determinations. All of these various forms of
P 3340 substantive review differ fundamentally from the bases for annulment under Article 34 of
the Model Law and the bases for non-recognition under Article V of the New York Convention:
they concern the correctness of the arbitrators’ ultimate decision, rather than objections to the
arbitral procedure, the arbitrators’ impartiality or jurisdiction, or matters of public policy.
Despite a trend away from any judicial review of the merits of awards, deriving in large part
from the UNCITRAL Model Law’s approach to the issue, a number of jurisdictions continue to
provide for annulment of international arbitral awards based upon such review. These
jurisdictions include England, Ireland, China, Singapore, Abu Dhabi, Libya, Saudi Arabia,
Argentina, Egypt and the United States (arguably). (992) Additionally, courts in other
jurisdictions may sometimes come close to, or engage in, a form of judicial review of the merits
of the arbitrators’ award in the context of a public policy or excess of authority analysis. (993)
Even in states which permit a measure of judicial review of the merits of the arbitrators’
decision, however, this review is usually highly circumscribed and available only to correct
egregious errors of law (and not errors of fact or contract interpretation). Indeed, as discussed
above, there is a substantial argument that more expansive judicial review, involving de novo
or similar types of judicial factual or legal assessments of the substance of the parties’ dispute,
would violate the New York Convention. (994)
[a] Manifest Disregard of Law Under U.S. Federal Arbitration Act
Under the FAA, in the United States, courts applied a “manifest disregard of law” standard of
review for a number of decades, to applications to vacate both domestic and international
(995) arbitral awards made in the United States. There is a substantial body of U.S. authority on
the “manifest disregard” standard, much of which is not completely clear or consistent;
nonetheless, the overwhelming weight of this authority recognizes a very narrow, seldom-
exercised power of judicial review of the arbitrators’ substantive rulings on issues of law. (996)
The “manifest disregard of law” formula derives most recently from dicta in Wilko v. Swan, a
1953 decision where the U.S. Supreme Court declared that “the interpretations of the law by
the arbitrators, in contrast to manifest disregard are not subject, in the federal courts, to
P 3341 judicial review for error in interpretation.” (997) The manifest disregard doctrine has long
been controversial. (998) Some U.S. lower courts have observed rightly that the Wilko comment
is “ungrammatical in structure” and “unnecessary to the [Wilko] decision,” (999) while a number
of other U.S. courts questioned whether the manifest disregard exception is legitimate and
whether it serves any useful purpose. (1000) Commentators have also criticized the doctrine,
including on the grounds that it results in “the very foundations of the institution of arbitration
[being] eaten away.” (1001)
Most recently, the U.S. Supreme Court expressed serious doubts about the manifest disregard
doctrine in its 2008 decision in Hall Street Associates LLC v. Mattel, Inc. The Hall Street Court
questioned whether the manifest disregard doctrine is consistent with the FAA’s statutory
scheme for confirmation and vacatur of awards, holding that “§§10 and 11 respectively provide
the FAA’s exclusive grounds for expedited vacatur and modification.” (1002) The Hall Street
Court also commented that “maybe” Wilko refers only to “§10 grounds collectively,” rather than
a “new ground for review” of an award. (1003)
P 3342 In the wake of the Hall Street decision, U.S. lower courts have reached divergent
conclusions about the continued vitality of the manifest disregard of the law doctrine. (1004)
Some appellate courts (in the Fifth, Eighth and Eleventh Circuits) have interpreted Hall Street
as a rejection of the manifest disregard doctrine. (1005) Other appellate courts (in the Second
and Ninth Circuits) have held that manifest disregard is simply a judicial gloss on the FAA’s
statutory grounds for vacatur and have continued to apply their pre- Hall Street manifest
disregard precedent. (1006) Recently, the Fourth Circuit ruled that the manifest disregard
doctrine is still viable, (1007) while the Seventh Circuit held that “manifest disregard of the law
52
is not a ground on which a court may reject an arbitrator’s award unless the award orders
parties to do something that they cannot lawfully do (e.g., participate in a cartel to fix prices).”
(1008) Other U.S. courts have adopted contradictory or non-committal positions regarding
manifest disregard since Hall Street. (1009)
Until Hall Street, the manifest disregard exception appeared so deeply-entrenched in
P 3343 domestic U.S. law that it was difficult to conceive it being abandoned in the foreseeable
future. (1010) Nonetheless, the Supreme Court’s decision in Hall Street suggests that the
doctrine’s future in the United States is uncertain and precarious. (1011) Absent clarification of
the issue by the Supreme Court, the future status of the manifest disregard doctrine will likely
continue to be unsettled.
Even if the manifest disregard doctrine retains vitality, the doctrine provides very little, if any,
basis for annulment beyond that provided by the FAA’s “excess of authority” provision (in
§10(a)(4) of the FAA). Thus, it is clear that an award cannot be vacated on manifest disregard
grounds merely because the reviewing court is convinced that the award is wrong, or even
clearly wrong, about the law. (1012) In one lower court’s colorful explanation: “Arbitrators do
not act as junior varsity trial courts where subsequent appellate review is readily available to
the losing party.” (1013)
Rather, the manifest disregard standard is akin to a form of public policy analysis and requires
that the reviewing court conclude that the arbitral tribunal was aware of controlling legal
P 3344
authority and deliberately chose to disregard it – hence, the phrase “manifest disregard of
the law.” One leading U.S. decision explains the requirements under the doctrine as follows:
“The two-prong test for ascertaining whether an arbitrator has manifestly disregarded the law
has both an objective and a subjective component. We first consider whether the ‘governing
law alleged to have been ignored by the arbitrators [was] well defined, explicit, and clearly
applicable.’ [Second,] [w]e then look to the knowledge actually possessed by the arbitrator.
The arbitrator must ‘appreciate[] the existence of a clearly governing legal principle but
decide[] to ignore or pay no attention to it.’ Both of these prongs must be met before a court
may find that there has been a manifest disregard of law.” (1014)
In the same vein, where no reasoned award is made, then reviewing courts generally will
uphold the award if any rational basis can be posited for the outcome. (1015)
It is clear that the burden of demonstrating manifest disregard of the law, in those U.S. courts
that recognize the doctrine, is on the party seeking vacatur, (1016) with most courts holding
that an award must be confirmed if there is “even a barely colorable justification for the
outcome reached.” (1017) In the words of one early Supreme Court decision:
“‘courts … have no business weighing the merits of the grievance [or] considering whether there
is equity in a particular claim.’ When the judiciary does so, ‘it usurps a function which … is
entrusted to the arbitration tribunal.’” (1018)
P 3345
A few U.S. lower court decisions have expressly or impliedly adopted more expansive
standards for reviewing the substance of an award, (1019) but, as discussed above, most
decisions adopt highly deferential approaches. Indeed, as noted above, one post- Hall Street
decision effectively equated the doctrine with notions of public policy, concluding that the
manifest disregard standard provides only that “[t]he arbitrator may not direct the parties to
violate the law.” (1020)
Whatever its precise formulation, the “manifest disregard” standard concerns issues of law,
and not of fact or contractual interpretation. In most instances, U.S. courts have declined to
inquire at all into the correctness of the arbitrators’ factual conclusions and contract
interpretations, as distinguished from interpretations and applications of the law. (1021) As the
U.S. Supreme Court has explained, in refusing to vacate an award on manifest disregard
grounds:
“No dishonesty is alleged; only improvident, even silly fact-finding is claimed. This is hardly a
sufficient basis for disregarding what the agent appointed by the parties determined to be the
historical facts.” (1022)
Similarly, the “question of interpretation of the [parties’] agreement is a question for the
arbitrator. It is the arbitrator’s construction which was bargained for.” (1023)
P 3346 The same conclusion should apply to interpretations of non-U.S. law. In principle, a U.S.
court should never review an arbitral tribunal’s application of non-U.S. law on manifest
disregard grounds; that is because a national court will virtually always lack the expertise in
foreign legal systems to conclude that the arbitrators’ application of foreign law was so
fundamentally perverse to require vacating their award. (1024) Of course, the possibility of
annulling an award on the grounds that the application of foreign law violates the public policy
of the arbitral seat remains. (1025)
Notwithstanding the FAA’s requirement of deference to the substantive decisions contained in
arbitral awards, a few U.S. courts have suggested, without significant analysis, that decisions by
arbitrators on issues of public policy will be reviewed de novo. (1026) Nonetheless, more recent
U.S. decisions appear to have applied the same standards of substantive review to issues of
public policy as to other legal questions under the “manifest disregard” doctrine. (1027) In any
event, relatively few U.S. judicial decisions vacate awards on the grounds that the arbitrators
erred in their resolution of issues of public policy. (1028)
P 3347
53
P 3347
As discussed below, it is unclear whether the FAA permits parties to validly waive judicial
review under the manifest disregard standard. (1029) Despite the strong tradition of respect for
party autonomy under the FAA, several U.S. courts have suggested that manifest disregard
review may not be contractually waived or excluded. (1030) At a minimum, it appears that the
general waivers of judicial review contained in some institutional rules (1031) will not be
interpreted as excluding manifest disregard review in U.S. courts. (1032)
Some commentators have suggested that the manifest disregard standard under the FAA
should be dramatically reformed, to permit judicial review of most legal conclusions in
arbitral awards. (1033) This view contradicts a number of the basic objectives of international
arbitration, including the parties’ desire for neutrality, speed, business experience and
competence and ability to select their own tribunal. (1034) As discussed below, the suggestion
has little to recommend it to business users in the international environment, save as a
justification for permitting businesses to contract into more detailed judicial scrutiny, should
that (unusually) be their wish. (1035)
[b] Judicial Review of Merits of Arbitral Award Under English Arbitration Act
English law provides an approach to judicial review of the merits of the arbitrators’ award
which is broadly similar to, but arguably more nuanced than, the “manifest disregard”
standard in the United States. Historically, English law provided for comparatively expansive
P 3348 judicial review of the substance of awards (until fairly recently, even absent a contrary
agreement). (1036) This approach was substantially altered in the English Arbitration Act, 1996.
(1037)
Section 69 of the 1996 Act provides that, in a limited category of cases, an award may be
subject to appellate review by the English courts for substantive errors of law. (1038) This
provision is subject to a number of important limitations.
Section 69 only applies “unless otherwise agreed by the parties.” This qualification applies
where parties who have expressly waived rights of recourse against an award in their
arbitration agreement, as well as to parties whose agreements incorporate institutional rules
that limit the right of appeal to the extent permitted by law (such as the ICC Rules and the LCIA
Rules). (1039)
Even when the parties have not excluded its application either expressly or impliedly, §69
applies only to questions of English (not non-English) law (not facts), (1040) and then only to
issues of English law that are of broad public significance or where the award was obviously
wrong. (1041) An appeal under §69 can also only be initiated with either the agreement of all
the parties to the proceedings or with the permission of the court (such permission only being
P 3349
granted if specific statutory conditions in §69(3) are satisfied). (1042) Finally, §69 also only
permits an award to be annulled if the reviewing court concludes that it is “just and proper” to
do so. (1043)
Applying §69 and related provisions of the Act, English courts have emphasized that “a major
purpose of the new Act was to reduce drastically the extent of intervention of courts in the
arbitral process.” (1044) In a similar vein, another decision emphasized that an English court
should not, in an annulment action, approach the award
“with a meticulous legal eye endeavoring to pick holes, inconsistencies and faults in awards
and with the objective of upsetting or frustrating the process of arbitration. Far from it. The
approach is to read an arbitration award in a reasonable and commercial way, expecting, as is
usually the case, that there will be no substantial fault that can be found with it.” (1045)
Recent English cases have emphasized that §69 is a “long stop provision” that should be
exercised sparingly so as to “respect the decision of the parties’ choice.” (1046) The prevailing
approach of English courts under the 1996 Act is, therefore, to permit only narrowly
circumscribed challenges to the substance of the arbitrators’ application of English law.
Moreover, as noted above and discussed in greater detail below, even this limited substantive
review may be excluded by agreement. (1047)
[c] Judicial Review of Merits of Arbitral Award in Other Jurisdictions
A few other legal systems provide grounds for limited substantive review of arbitral decisions.
Under Chinese law, until statutory amendments in 2012, an award could be annulled if the
court concludes that the evidence was insufficient or the application of law was seriously
wrong. (1048) That resembled similar standards in New Zealand. (1049) At least in verbal
formulation, these various provisions contemplate only a limited appellate review of the legal
(not factual) conclusions of the arbitrators, permitting annulment only in cases involving
serious errors of law.
P 3350
A few jurisdictions, particularly some less developed legal systems, permit even more
extensive judicial review of the merits of international arbitral awards. Some Latin American
legislation provides for judicial review of awards on the same grounds that are available with
regard to first instance court decisions. (1050) A number of Arab states also apparently provide
for expansive judicial review of the substance of the arbitrators’ award, (1051) or the
arbitrators’ choice of substantive law. (1052)
[2] No Judicial Review of Merits of Arbitral Award
As outlined above, the past several decades have seen a progressive abandonment of judicial
54
review of the substantive grounds for awards, including most notably in the UNCITRAL Model
Law, (1053) Chinese arbitration legislation (1054) and (potentially, following Hall Street) the
United States. (1055)
No provision of Article 34 (or otherwise) of the UNCITRAL Model Law provides, even remotely,
for judicial review of the substance of the arbitrators’ decision. On the contrary, authorities
from Model Law jurisdictions emphasize that awards are not subject to judicial review on their
merits. In the words of one Canadian decision:
“Article [34 of the UNCITRAL Model Law] provides that an award may only be set aside if the
objecting party proves one of the enumerated deficiencies. None of the grounds allows a
reviewing court to review the merits of a tribunal’s decision.” (1056)
Another Canadian court described the approach under Article 34 of the Model Law as follows:
“It is noteworthy that article 34 of the Code [equivalent to Article 34 of the Model Law] does not
allow for judicial review if the decision is based on an error of law or an erroneous finding of
fact if the decision is within the jurisdiction of the Tribunal. The principle of non-judicial
P 3351 intervention in an arbitral award within the jurisdiction of the Tribunal has often been
repeated.” (1057)
Courts from other Model Law jurisdictions have adopted similar views. (1058) A number of
decisions reason that annulment is not an appeal proceeding in which evidence is reevaluated
and the correctness of the arbitral tribunal’s decision is examined. (1059) Indeed, one
Singaporean court held that this principle was “trite law.” (1060)
P 3352 As discussed below, the same trend is present in non-Model Law jurisdictions, where the
weight of national court authority rejects the possibility of review of the merits of the
arbitrators’ decision in annulment proceedings involving international arbitral awards. (1061)
For example, in Switzerland, historic practice and the Swiss Cantonal Concordat provided for a
measure of judicial review of the merits of the arbitrators’ decision. (1062) The Swiss Law on
Private International Law deliberately abandoned that approach, instead providing for no
review of the merits of awards in international matters. (1063) Under this legislation, Swiss
courts have held, in detailing the nature of review in an annulment proceeding:
“it is not sufficient that the evidence be improperly weighed, that a factual finding be
manifestly false, that a contractual clause not have been correctly interpreted or applied or
that an applicable principle of law has been clearly breached.” (1064)
Likewise, French courts have emphasized that an annulment application is not intended to
determine “whether the arbitrators replied well or badly to the claims of the parties,” and that
“as long as they exist, the reasons of the award” are sufficient, “independent of quality of the
reasoning which relates to the merits.” (1065) Judicial decisions in a number of other
jurisdictions are similar. (1066)
Similarly, some national arbitration legislation affirmatively provides that a reviewing court
P 3353 “cannot enquire into the merits of the dispute.” (1067) Indeed, as noted above, it is often
said that a central element of the contemporary international arbitral process is the general
absence of judicial review of the merits of the tribunal’s award. (1068)
At the same time, and a touch ironically, some courts which abjure inquiry into the substance
of the tribunal’s award and reasoning nonetheless appear to permit review which is not
dissimilar from the limited judicial review with respect to the merits available in the United
States and England. This inquiry occurs under the rubric of either public policy or excess of
authority and produces results which are comparable to those in U.S. and English courts.
Thus, the Swiss Federal Tribunal has held that the principle of pacta sunt servanda is a matter
of public policy and would be violated if a tribunal “refuse[s] to apply a contractual clause
while admitting it binds the parties or to the contrary imposing on them a clause that does not
bind them.” (1069) Thus:
“The principle of pacta sunt servanda, in the restrictive meaning it has according to case law
based on Art. 190(2)(e) [of the Swiss Law on Private International Law] is violated only if the
arbitral tribunal refuses to apply a contractual clause whilst admitting that it binds the parties
or, conversely, if it requires them to comply with a clause which it considers as not binding. In
other words, the arbitral tribunal must have applied or refused to apply a contractual
provision in a way that contradicts its own interpretation as to the existence or the contents of
the legal instrument in dispute.” (1070)
A comparable view may arise from the conclusion of French courts recognizing a “general
principle of international public policy whereby contracts are to be performed in good faith.”
(1071) German courts have likewise held that they can review the question whether a contract,
on which the claim in the arbitral proceedings was based, is void for violating the principle of
bonos mores. (1072) These analyses arguably do not differ substantially from the manifest
disregard standard in the United States and the scope of judicial review in England (and
arguably go further by extending beyond manifest disregard of the “law” to manifest disregard
of contractual terms). (1073)
P 3354 [3] Future Directions: Judicial Review of Merits of Arbitral Award
There is substantial debate about the wisdom of permitting judicial review of the merits of the
arbitral tribunal’s substantive decisions in international arbitrations. Some commentators
55
have argued that a measure of judicial review of the substance of the arbitrators’ decisions is
an essential safeguard against arbitrary or fundamentally unjust awards. (1074) In contrast,
others have concluded that substantive review of international awards is unnecessary and
leads to the very delays and involvement of national courts that arbitration agreements are
intended to avoid. (1075)
The historic rationale for judicial review of the merits of awards rested on twin pillars of
mistrust of the arbitral process and concern for uniform application of the law. These concerns
were well-stated in an early 20th century English decision, holding that parties were not
permitted to contract out of the then-existing English statutory regime (the “case-stated”
procedure) (1076) providing for de novo judicial review of rulings on issues of law by arbitral
tribunals:
“Among commercial men what are commonly called commercial arbitrations are undoubtedly
and deservedly popular. That they will continue their present popularity I entertain no doubt,
so long as the law retains sufficient hold over them to prevent and redress any injustice on the
part of the arbitrator, and to secure that the law that is administered by an arbitrator is in
substance the law of the land and not some home-made law of the particular arbitrator or the
particular association. To release real and effective control over commercial arbitrations is to
allow the arbitrator, or the Arbitration Tribunal, to be a law unto himself, or themselves, to give
him or them a free hand to decide according to law or not according to law as he or they think
fit, in other words to be outside the law …” (1077)
P 3355
This result is sometimes defended, even today, in part on the grounds that judicial review
of the merits of arbitral awards is supposedly what the parties actually want, or at least should
want: “anecdotal evidence suggests that some parties positively welcome … security against
potentially questionable or even perverse decisions by arbitrators.” (1078) It is also defended
on the grounds that a measure of judicial review of the merits is a necessary, or desirable,
guarantee of quality, integrity and judicial control over the arbitral process. (1079)
On the other hand, at least in the international context, judicial review of the merits of the
arbitrators’ decisions often conflicts with the parties’ desire for a neutral, non-national forum,
where decisions are to be made by arbitrators who the parties are involved in selecting,
applying commercial expertise in an expeditious proceeding. (1080) In international cases,
judicial review of the merits of awards replaces decisions by the parties’ chosen arbitrators
with those of national court judges, sometimes from one party’s home jurisdiction, as well as
materially prolonging the time and costs required for dispute resolution. (1081)
The case for judicial review of the substance of international arbitral awards is sometimes
grounded on untenable premises:
“The essence of commercial arbitration, especially in an international context, is that it is a
completely private and secret affair, purposefully a-national, procedurally uncertain, typically
without discovery, rules of evidence or a record, with arbitrators of varying nationalities and
qualifications who are not required to give reasons for their awards, whose notions of
‘appropriate’ or ‘correct outcomes’ can be so radically different as to employ wholly different
parameters, and whose decisions typically are not subject to meaningful judicial review.”
(1082)
This critique, together with others like it, is misconceived in almost every respect.
Of course, international arbitration is not “completely private and secret,” but rather subject
to a considerable measure of judicial, regulatory and public scrutiny (with confidentiality
being either nonexistent or subject to significant exceptions under many national laws, while
awards are frequently published) (1083) ; nor is international arbitration “a-national,” but
instead both national and international (with arbitrators and parties applying a complex
P 3356
structure of international conventions, national arbitration and substantive laws and
institutional rules) (1084) ; nor is arbitration “procedurally uncertain,” but governed by a
reasonably well-developed set of procedural guidelines and practices, coupled with
procedural authority vested in arbitral tribunals aimed at ensuring that the most sensible and
efficient possible procedures are tailored for each case (1085) ; nor “without discovery, rules of
evidence or a record,” but rather with disclosure (applied in a more effective, orderly and
sensible fashion than that provided in most national legal systems), (1086) with rules of
evidence (designed specifically for complex commercial disputes, instead of being inherited
from criminal jury trial systems or civil bureaucracies) (1087) and with verbatim transcripts
(instead of the more abbreviated records common in many judicial proceedings) (1088) ; nor
“unreasoned,” but rather producing detailed reasoned awards that are of a quality readily
comparable to many national court judgments (putting aside jury verdict forms in some
common law jurisdictions). (1089) Nor can one readily understand why it might be suspect, in
resolving international commercial disputes, to select tribunals constituted of “arbitrators of
varying nationalities and qualifications”; to the contrary, doing so is both more just and more
commercially-satisfactory than arbitrarily-assigned tribunals of domestic judges (or juries),
drawn solely from one party’s home jurisdiction, invariably without efforts to obtain either
international or relevant commercial experience, (1090) and also more consistent with deeply-
rooted historical practice in both state-to-state and commercial arbitration contexts. (1091)
That said, although there are many misconceived arguments advanced on the topic, there
remains a serious rationale for a measure of judicial review of the substance of international
awards in the arbitral seat. The ancient adage that “absolute power corrupts absolutely” (1092)
56
has force in this context, as in others. Simply put, a limited measure of substantive judicial
review arguably serves to safeguard the integrity of the arbitral process by permitting
annulment of truly perverse decisions and by providing arbitrators with an enhanced incentive
to do their job properly.
From this perspective, it is desirable to reserve the possibility of substantive judicial review in
cases where arbitral tribunals depart entirely from the parties’ agreement and the applicable
law, and arrogate to their own subjective preferences the disposition of the parties’ rights.
Save where they have expressly waived any judicial review or agreed to arbitration ex aequo et
bono, (1093) this is not what commercial parties bargain for nor what developed legal regimes
should provide.
P 3357
It is towards such abuses that the very limited judicial review available under U.S. and
English law, aimed principally at deliberate refusals to apply clearly-applicable legal rules, is
directed. Indeed, this is confirmed by the existence, in the form of putative “public policy”
exceptions (discussed above), of limited judicial review of the merits of awards even in
jurisdictions where such review is formally excluded. (1094)
If properly cabined, in the manner of most U.S. and English decisions, the possibility of very
limited substantive review of legal conclusions in awards is, on balance, desirable. Purely
procedural review of the conduct of the arbitration is capable of preventing many – but not
necessarily enough – instances of true injustice and arbitrary conduct by arbitral tribunals: an
arbitrator can cloak profoundly unfair or wrongful conduct in the guise of meticulous
procedural formalities, and only the possibility of some substantive review on the merits can
effectively check such conduct.
On the other hand, it is essential to narrowly limit the scope of any substantive judicial review
in international cases: “[a]rbitration awards are subject to very limited review in order to avoid
undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding
long and expensive litigation.” (1095) Maintaining strict and effective limits on such review – so
that it does not drift into anything remotely resembling full-fledged appellate review – is
necessary, but also demanding.
National courts are subject to almost inevitable temptations to extend the scope of their
review (in a counterpoint to adages about absolute power, “partial power inspires thirst for
more power”), and to be anxious to correct perceived errors even when not “manifest” or
“flagrant.” Nevertheless, where appellate courts maintain careful limits on the scope of any
review of the merits of legal conclusions, the mere existence of this possibility helps reduce
the risk of arbitrary, unfair, incompetent, or biased arbitral decisions.
This type of very limited substantive review is best viewed as a form of public policy
exception: in rare instances, an arbitral tribunal’s interpretation of the law or contractual
terms (not the evidence) is so misconceived and in such willful contradiction to settled
statutory or judicial authority that it violates the concepts of the adjudicative process and
legal order. In these cases, and exceptionally, public policy justifies annulling the award.
Not coincidentally, this notion of public policy is recognized even in states that do not permit
substantive judicial review of arbitral awards in annulment actions. (1096) This possibility of
limited, exceptional judicial review of substantive decisions by the arbitrators is at once both
a necessary evil and an important bulwark against arbitrary abuses of arbitral authority.
[B] Internally-Contradictory and Uncertain Awards

Some national legal regimes provide for the annulment of awards that are internally-
P 3358 contradictory or uncertain. For example, Article 1704(2)(j) of the former Belgian Judicial
Code provided that an award may be annulled if it “contains conflicting provisions.” (1097)
Similarly, §68(2) of the English Arbitration Act, 1996, allows applications to the court in the
event of “uncertainty or ambiguity as to the effect of the award.” (1098) National law in several
other jurisdictions is broadly similar. (1099)
Courts in other jurisdictions have also annulled awards on the basis that they contained
contradictory reasoning. For example, the Tunisian Court of Cassation set aside an award
because the reasons given were contradictory and therefore were treated as nonexisting. (1100)
Other decisions are similar. (1101)
The basic rationale of such decisions is that an award that is contradictory is either not
reasoned (1102) (since contradictory reasons are supposedly the equivalent of no reasons at
all) or violates public policy (since it mandates inconsistent results). (1103)
Courts in other jurisdictions have rejected the notion that awards may be annulled because
they are internally-inconsistent. (1104) French courts have concluded, for example, that “the
argument based on the contradiction of the reasoning of the arbitral decision [is] not
admissible.” (1105) Swiss courts also hold that the Swiss Law on Private International Law does
P 3359 not provide any basis for annulling an award for inconsistent reasons, whether on public
policy grounds or otherwise. (1106) Similarly, U.S. courts have held that confused and even
inconsistent reasoning in an award is insufficient grounds to vacate it, whether under the
“manifest disregard” standard or otherwise. (1107)
Even where internal inconsistency is accepted as a ground for annulment, it is important to
recognize the limits of this analysis. Mere inconsistencies in an award’s reasoning should not
ordinarily constitute grounds for annulling the award. (1108) Rather, an award’s dispositive
57
provisions must contain irreconcilable grants of relief (for example, both completely
dismissing a claim and granting relief on the same claim, or ordering a party both to do and
not to do a particular act). In determining whether an award is internally-inconsistent, courts
should assume that the arbitral tribunal intended to make a coherent decision and use every
effort to interpret the award’s provisions in a consistent manner.
[C] Formal Defects in Award

Under some national arbitration regimes, formal defects in an award are grounds for
annulment. (1109) These defects can include failure to sign an award, (1110) failure to provide
reasons (1111) and failure to comply with other requirements for an award (e.g., record the date
and/or place of the award). (1112)
P 3360
In other jurisdictions, violations of form requirements may not constitute grounds for
annulment or may be waivable. (1113) A German court held, for example, that the failure of an
arbitral tribunal to state the place of arbitration in the award as required in Article 31(3) of the
Model Law would not provide grounds to annul an award. (1114)
Even in jurisdictions where formal defects in an award are possible grounds for annulment,
courts should both permit corrections by the arbitral tribunal and consider carefully whether
formal defects have any material impact on the parties’ substantive rights. (1115) If no such
impact exists, then annulment is ordinarily inappropriate (for example, under the court’s
discretionary authority to deny annulment even when a statutory basis for setting an award
aside exists). (1116)
[D] Expansive and Idiosyncratic Grounds for Annulment

Some national courts also rely on grounds for annulment which nominally parallel those
regarding an opportunity to be heard (under Article 34(2) of the Model Law and comparable
legislation), but that in reality are much broader or different. This approach can manifest itself
through decisions based on local procedural idiosyncrasies, (1117) broad nonarbitrability rules,
(1118) noncompliance with local statutory formalities, (1119) or creative constructions of local
P 3361 law to fashion additional grounds for annulment. (1120) As discussed above, there are
substantial arguments that many of these grounds for annulment violate the New York
Convention’s implied limitations on annulment authority. (1121)
§ 25.06 NATIONAL ARBITRATION LEGISLATION WITH ANNULMENT GROUNDS

WHICH ARE LESS EXPANSIVE THAN UNCITRAL MODEL LAW
A few jurisdictions have adopted legislation providing narrower grounds for annulling
international arbitral awards than those available under the UNCITRAL Model Law. There is
substantial variety among these approaches.
Under French law, the grounds for annulment of an international award made in France are
identical to those available for non-recognition of a foreign award. (1122) In both instances, the
showings that are required for annulment or non-recognition are more limited than those
available for non-recognition under Article V of the New York Convention – reflecting a
particularly pro-arbitration legislative approach. (1123) Swiss law adopts a similar approach to
the annulment of awards made in Switzerland. (1124)
In some cases, national arbitration legislation has (or has had) prohibitions against any
application to annul an award made locally. As discussed below, this was the approach taken
for a time by Belgium, which, in 1985, enacted an innovative statute that abolished all rights to
seek annulment of awards made in Belgium between non-Belgian parties. (1125) After this
legislation attracted a reasonable amount of skepticism (and few arbitrations), (1126) Belgium
P 3362 amended the statute to provide foreign parties with the option of waiving the right to seek
annulment, but retaining the possibility of annulment in cases where no such waiver existed.
(1127)
A similar approach to that originally adopted in Belgium had been partially adopted in
Malaysia. Until recently, the Malaysian Arbitration Act provided no mechanism for judicial
review of any ICSID, UNCITRAL, or Kuala Lumpur Regional Arbitration Centre awards. (1128) As
with the Belgian legislation, it does not appear that this legislation had attracted users to
Malaysia as an arbitral seat and it was abandoned in more recent Malaysian legislation. (1129)
More recently, Bahrain adopted legislation establishing a specialized legal regime for
“international commercial disputes” by creating a “Free Arbitration Zone,” with arbitral awards
made under this regime not being subject to annulment by Bahraini courts, but instead subject
to annulment in other states (in particular, England). (1130) In contrast to the Belgian and
Malaysian experiences, this regime appears to have attracted at least a measure of interest
among users.
Proposals to abolish judicial review in an annulment action in the arbitral seat are not entirely
novel. A comparable approach was suggested by U.N. Secretary General Dag Hammarskjold at
the outset of negotiations for the New York Convention in 1958, in a paper outlining the
possibility of concentrating all judicial review of awards exclusively in the courts of the state
where recognition and enforcement of the award is sought. This approach was justified on the
grounds that:
58
“an arbitral tribunal does not necessarily meet and render its award in a country where any of
the legal relationships involved in the dispute that gave rise to arbitration are to be
implemented; that arbitral tribunals are not judicial organs of the State where they meet and
do not derive their authority from its laws; and that an arbitral award may be of no inherent
public interest to the country in which it was rendered unless it is also to be given legal effect
in that country.” (1131)
The Secretary General’s proposal was not pursued in the New York Convention. Nonetheless,
P 3363
the Convention’s abandonment of any requirement that awards be “final” in the arbitral
seat, as a condition of recognition, (1132) and its provisions for possible recognition of annulled
awards, (1133) moved materially in the direction of accomplishing the goals of this proposal.
These provisions of the Convention had the effect of transferring the consequences of an
annulment action from the level of internationally-required preconditions for recognition of an
award to the level of national law, where states would be free to accord, or not to accord,
effect to foreign annulment decisions.
Despite these proposals, experience to date in countries that have abolished entirely the
possibility of annulment actions (e.g., Belgium, Malaysia) raises the possibility that users
would be wary of proposals to abrogate annulment entirely. (1134) Such decisions appear to
contribute to the confidence of users in, and the security of, the arbitral process. There are also
benefits from centralizing potential challenges to an award in a single judicial forum, with the
arbitral seat being a presumptively neutral location (as evidenced by the parties’ choice of the
arbitral seat).
§ 25.07 AGREEMENTS LIMITING OR EXPANDING GROUNDS FOR ANNULLING

INTERNATIONAL ARBITRAL AWARDS
Parties sometimes include provisions in arbitration agreements designed to alter the
otherwise applicable standards under national law for annulling awards. (1135) These
agreements typically make it more difficult to annul an award, either waiving any right to seek
annulment or restricting the grounds on which annulment can be sought. In some instances,
however, parties take the opposite approach and agree to permit more extensive judicial
review of an award. Both types of agreements raise questions of enforceability, as well as
interpretation, under national law and the New York Convention. (1136)
[A] Agreements Excluding or Limiting Applications to Annul International Arbitral

Awards
P 3364
Provisions in some arbitration agreements purport to waive or exclude any judicial review
of the award. Such provisions most frequently take the form of waivers or exclusions
incorporated from institutional arbitration rules. Thus, most institutional rules provide, with
varying degrees of specificity, for the waiver of judicial recourse against the arbitrators’ award.
(1137) Alternatively, some recommended arbitration agreements include specific waivers of
rights to seek annulment or revision of the award. (1138)
[1] Validity of Agreements Excluding or Limiting Right to Annul Arbitral Awards
Agreements excluding or limiting a party’s rights to seek annulment of an award raise
significant questions of validity and enforceability. Some national arbitration legislation
expressly addresses the enforceability of such agreements, typically by giving effect to them in
at least some circumstances.
Belgium provides a relatively expansive approach, applicable in cases where the parties have
no relationship to Belgium. As discussed above, in 1985, Belgium enacted legislation which
abolished any right to apply to Belgian courts for annulment of awards made between non-
Belgian parties. (1139) Belgium later amended its arbitration statute (in 1998) to restore the
right to seek annulment of awards made in Belgium, save where (non-Belgian) parties had
affirmatively agreed to exclude or limit annulment applications. (1140) The statute leaves little
question but that such agreements are presumptively valid and enforceable, regardless of the
grounds on which annulment might be sought.
Current Swiss law is similar to the revised Belgian legislation. (1141) Articles 190 and 192 of the
Swiss Law on Private International Law provide Swiss courts with jurisdiction over applications
P 3365
to annul awards made in Switzerland, while also specifying that non- Swiss parties may
agree to exclude such applications. (1142) Non-Swiss parties are expressly permitted to waive
either some or all of the grounds for annulment specified in Article 190; (1143) this includes
waiver of annulment on grounds of serious defects in the fairness in the arbitral process, such
as denials of the right to be heard or partiality of the arbitral tribunal. (1144)
The Swiss Federal Tribunal recently upheld the enforceability of Article 192’s waiver provisions,
rejecting an argument that Article 6 of the European Convention on Human Rights forbids the
waiver of annulment:
“The issue at hand is whether or not it is possible to renounce a recourse against a future
arbitral award without violating Art. 6(1) EHRC. The question must be answered in the
affirmative. The renunciation to appeal does indeed entail the impossibility for the losing
party to obtain a finding by the Federal Tribunal that the award under appeal was issued in
breach of the fundamental procedural guarantees contained in the treaty provision. However,
neither the letter nor the spirit of the provision prevent a person from renouncing such
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guarantees of his own volition as long as such renunciation is not equivocal and does not
conflict with any important public interest.” (1145)
Swiss courts have seen “no reason to deprive the parties able to bear the consequences of a
renunciation to appeal from the possibility offered by this provision – which embodies
procedurally the principle of party autonomy – to escape any state intervention which could
harm the confidentiality of arbitration or to prevent the swift obtention of an enforceable
decision putting an end to the dispute.” (1146) Nonetheless, as discussed below, Swiss law
requires that the waiver of the right to seek annulment be in writing and express. (1147)
As already discussed, the English Arbitration Act, 1996, permits exclusion clauses, by which
P 3366
parties waive their right to judicial review of the substance of the award in appellate
proceedings under §69 of the Act. (1148) English law takes a more limited view of such waivers
than Belgian and Swiss law, however, and does not permit waivers of the right to set aside an
award for either jurisdictional objections or serious irregularity affecting the tribunal or the
proceedings. (1149)
A few other arbitration statutes are similar, providing expressly that parties (typically limited
to foreign parties) may waive or limit the grounds for annulling an international arbitral award.
(1150) Recent Bahraini legislation creates what is described by local authorities as a “Free
Arbitration Zone,” permitting parties to exclude the possibility of judicial review of arbitral
awards in Bahraini courts (although contemplating, instead, judicial review in foreign courts
specified by the parties). (1151)
The foregoing statutory provisions, allowing parties to limit or exclude annulment applications,
were motivated in part by deference to the parties’ autonomy. Just as parties are permitted to
waive their right of access to a first instance court, by agreeing to arbitrate, or to agree to
arbitration ex aequo et bono or amiable compositeur, (1152) so it is said they are permitted to
waive judicial review of an award.
Some commentators have been critical of legislation permitting parties to contract out of
judicial review in an action to annul. These critics argue:
“[Judicial review of awards is a necessary] bulwark against corruption, arbitrariness, bias, …
and … sheer incompetence, in relation to acts and decisions with binding legal effect for
P 3367 others. No one having the power to make legally binding decisions in this country should
be altogether outside and immune from this system.” (1153)
There is substantial force to these comments, but where sophisticated companies freely
decide that they wish to forego any review in annulment proceedings, it is difficult to see why
that agreement should not be given effect, save in the most extraordinary circumstances (e.g.,
involving post hoc fraud or similar wrongdoing). In particular, there seems to be little question
that commercial parties are – and long have been – free to agree to arbitration ex aequo et
bono, and to arbitration without a reasoned award, both of which effectively exclude any
meaningful right of judicial review. (1154) If this is permitted, then there is little justification for
holding that parties cannot waive appellate review of a tribunal’s substantive decision,
reasoning, procedures and other actions.
Despite the force of this rationale, national arbitration legislation in a few jurisdictions
provides that agreements waiving or restricting the parties’ rights to seek annulment of an
award are unenforceable. (1155) These prohibitions are effectively the mirror image of Belgian,
Swiss, Bahraini and similar statutes permitting agreements excluding annulment rights.
Most national arbitration statutes do not contain provisions expressly addressing the validity
or enforceability of agreements excluding annulment rights. That is true, in particular, of the
UNCITRAL Model Law, where neither Article 34 nor any other provision of the statute addresses
the issue. (1156)
In the absence of statutory authority addressing the validity of agreements excluding
annulment rights, national courts have reached divergent conclusions as to the validity and
enforceability of such agreements. On the one hand, some national court decisions, including
in Model Law jurisdictions, uphold the validity of agreements excluding the right to annul an
award. (1157)
On the other hand, courts in other jurisdictions, again including Model Law jurisdictions, have
P 3368
refused to give effect to agreements excluding the possibility of annulment. For example,
French, (1158) Canadian, (1159) New Zealand (1160) and other (1161) courts have held without
detailed analysis that agreements excluding the possibility of annulment are unenforceable.
As one French court held, the purported waiver of annulment, under Article 28(6) of the 1998
ICC Rules, “cannot deprive the parties … of bringing annulment proceedings against the award,
which is a matter of public policy.” (1162)
Somewhat differently, under German law, a complete waiver of judicial review of awards is
invalid, although partial waivers of at least some grounds are apparently not. (1163) Thus,
German commentators generally conclude that parties may waive their right to judicial review
with regard to specific grounds of annulment, as long as those grounds are not designed to
protect the interests of the public or third parties. (1164)
U.S. authority on the validity of waivers of annulment is divided. A few decisions have
apparently held broadly that waivers of vacatur are unenforceable under the FAA. (1165) A
number of other U.S. courts have refused to give effect to alleged contractual waivers of
60
vacatur under the FAA, including with regard to actions to vacate on “manifest disregard”
grounds, but have generally done so on the basis that particular contractual provisions were
not properly interpreted as waivers of rights to seek vacatur. (1166)
P 3369 In contrast, a few U.S. decisions appear to recognize the right of parties to waive vacatur,
provided they do so clearly and explicitly. (1167) These decisions are arguably contrary to the
U.S. Supreme Court’s decision in Hall Street Associates LLC v. Mattel, Inc. (discussed below),
holding that the FAA’s standards for judicial review of awards are exclusive and cannot be
expanded by contract. (1168) At least arguably, the Supreme Court’s rationale would extend
equally to waivers of judicial review. (1169)
The rationale for decisions refusing to enforce waivers of annulment is that it is essential to the
legal protection of the parties, and the national legal order, that there be at least some
judicial control over the arbitral process. The better view is that this analysis is mistaken.
Provided that no interests of third parties or the public are involved, it is wrong to deny
commercial parties the possibility of ending their dispute on the basis of a single decision,
without appeal. That is particularly true in international settings, where the possibility of
P 3370 annulment involves the very delays, risks of partiality and costs that international
arbitration agreements (and the New York Convention and UNCITRAL Model Law) are designed
to avoid. (1170)
Nonetheless, agreements excluding applications to annul an award raise particular
sensitivities where issues of jurisdiction or public policy are concerned and, in these settings,
argue for stricter limits on the validity of exclusion agreements. In the former case, it is at best
anomalous for an arbitrator to be able to make an award, as to which no challenge of any sort,
including as to the arbitrator’s status as such, is possible. (1171) It is difficult to conceive that
national arbitration legislation will not be interpreted to permit parties to challenge the
existence of any agreement to arbitrate (including any waiver of judicial review). Equally, in
cases of public policies designed to protect third party and public rights, waivers of annulment
applications are particularly difficult to justify (and particularly likely to be held
unenforceable).
[2] Interpretation of Agreements Excluding or Limiting Right to Annul Arbitral Awards
Assuming that agreements to waive judicial review in an annulment action are in principle
enforceable, at least in some instances, questions arise as to what constitutes such an
agreement. Most jurisdictions have required that such waivers be clear and specific. (1172)
In Switzerland, both Swiss courts and other authorities have repeatedly concluded that a
waiver of rights to seek annulment of an award must be express under the Swiss Law on Private
International Law. (1173) Thus, Swiss courts have held that an agreement to arbitrate under
institutional rules providing that the award is “final and binding” (1174) or “without appeal”
does not suffice to waive judicial review in an annulment proceeding. (1175)
P 3371
Some Swiss authority suggests that a waiver of annulment must refer expressly to Article
190 of the Swiss Law on Private International Law, but the better view is that no such reference
is necessary, provided that the waiver is otherwise unambiguous. (1176) Consistent with this,
Swiss courts have held that rights to seek annulment under Article 190 have been waived by
agreements providing that “neither Party shall have any right to appeal such decision to any
court of law,” (1177) that the award “shall be final and binding on the parties who exclude all
and any rights of appeal from all and any awards insofar as such exclusion can validly be
made” (1178) and that “[t]he decision of [Court of Arbitration for Sports] shall be final and
binding on all parties and no right of appeal will lie from the [CAS] decisions.” (1179)
Australian and Canadian courts have reached similar results under the UNCITRAL Model Law,
requiring unequivocal language in order to effect a waiver of annulment rights. (1180) Those
U.S. courts which permit waiver of rights to seek vacatur of an award have also generally
required clear language effecting such a result (holding, among other things, that agreements
that the arbitral award is “final” or “binding” are insufficient to waive annulment rights). (1181)
P 3372
The English Arbitration Act, 1996, provides that judicial review of the merits of the
arbitrators’ award under §69 of the Act may be excluded through the incorporation of
institutional rules providing that awards shall not be subject to recourse or appeal. (1182) At
the same time, as in the United States and Switzerland, English courts have held that an
agreement providing only that awards will be “final” and “binding” will not suffice to exclude
review of the merits of the arbitrators’ decision. (1183) The same approach has been adopted
in Singapore. (1184)
In contrast, some Canadian authority holds that an agreement that the award is “final and
binding” is sufficient to waive judicial review. (1185) In a somewhat different approach, New
Zealand courts have held that when the contract provides for an award to be final and binding
it will not be determinative, but it will be an important consideration in judicial review of the
award. (1186)
The better view is that waivers or limitations of all judicial review of awards in an annulment
action should require clear language. As discussed above, the possibility of judicial review is
an important protection against arbitrary, unfair decisions by the arbitrators. (1187) Although
commercial parties should generally be permitted to waive this protection, they should not be
held to have taken this step absent evidence that they really meant to do so.
61
In particular, agreements that an award is “final” and/or “binding” should not independently
suffice to waive rights to either due process or (where it exists) limited substantive judicial
review. On the other hand, the 2012 ICC Rules’ waiver of “any form of recourse” against an award
is difficult to interpret as other than a waiver of any right to seek annulment of the award.
P 3373 (1188) The same result should generally apply where the parties waive the right to
“appeal,” “annul,” “set aside,” “vacate,” or “resist enforcement of” an award.
In contrast to most institutional rules, the 1976 and 2010 UNCITRAL Rules do not include
language automatically waiving the right to seek annulment (instead providing that the award
is final and binding). (1189) The 2010 UNCITRAL Rules are accompanied by model language
providing for waiver of rights to seek annulment, but this provision is not included in the
UNCITRAL Rules themselves and must be affirmatively added to the parties’ arbitration
agreement. (1190)
Finally, as discussed further below, an agreement waiving rights to seek annulment of an award
is not necessarily an agreement waiving rights to resist recognition or confirmation of an
award. (1191) That is true both as a matter of interpretation and enforceability. In general,
unless an agreement specifically refers to and waives rights to oppose confirmation or
recognition, a waiver of annulment rights should not extend to confirmation or recognition
(which is a separate proceeding with different legal consequences from annulment (1192) ).
Similarly, as discussed below, the enforceability of agreements waiving rights to resist
confirmation, recognition and enforcement raise additional issues, not necessarily resolved by
analysis of waivers of rights to seek annulment. (1193)
[B] Agreements for Heightened Judicial Review of International Arbitral Awards

Parties sometimes enter into agreements providing for more extensive, rather than less
P 3374 extensive or no, judicial review of awards. (1194) They do so because of concerns about the
fallibility of arbitrators and the desire for additional procedural rights to correct mistaken
awards. Nonetheless, in many countries, agreements for heightened judicial review are
regarded with disfavor and serious doubts exist as to their enforceability. (1195)
The most extensive body of authority considering agreements for heightened judicial review is
from the United States, where some courts historically upheld such provisions, (1196) while
others refused to do so. (1197) The U.S. Supreme Court considered the validity of agreements
providing for heightened judicial review of domestic awards in Hall Street Assocs., LLC v.
Mattel, Inc., ultimately (and, properly considered, incorrectly) holding that the FAA’s statutory
grounds for vacatur were exclusive and that the “statutory grounds for prompt vacatur and
modification may [not] be supplemented by contract.” (1198)
The Hall Street Court acknowledged that the “FAA lets parties tailor some, even many features
of arbitration by contract, including the way arbitrators are chosen, what their qualifications
should be, which issues are arbitrable, along with procedure and choice of substantive law.”
P 3375 (1199) The Court went on to hold, however, that “to rest this case on the general policy of
treating arbitration agreements as enforceable as such would be to beg the question, which is
whether the FAA has textual features at odds with enforcing a contract to expand judicial
review following the arbitration.” (1200) The Court then concluded that the language of the
FAA’s provisions dealing with confirmation and vacatur of awards mandatorily required
confirmation of awards (in §9), subject to only limited grounds for vacatur (in §10), while
contrasting the supposedly mandatory and “[in]flexible” terms of §§9 and 10 (1201) with those
of §5 (regarding judicial selection of arbitrators). (1202)
Notwithstanding the Hall Street result and analysis, it is difficult to see why parties should not
be permitted as a matter of policy to contract for “ordinary” judicial review, of the sort that
would apply if the arbitral award was a first instance judgment. (1203) This accords with
principles of party autonomy, and does not detract from (but enhances) the parties’ “judicial”
protections. The only basis in policy for objecting to such agreements would be that private
litigants should not be permitted to define contractually the appellate review functions of a
national court. Although there is some force to this concern, it is at best tenuously implicated
where parties simply contract for the generally-applicable level of appellate review provided
by the relevant national courts in appeals from first instance judicial decisions.
Nor is there substantial force to the notion that statutory grounds for vacatur should, because
they are ordinarily mandatory, not be subject to modification by contract, as the Hall Street
Court reasoned. The fact that the FAA provides an exclusive list of statutory grounds of judicial
review of an award does not speak – even indirectly – to the question whether parties should
be permitted validly to contract for heightened (or reduced) judicial review. (1204) Given the
fundamental importance of party autonomy to the arbitral process, it is very difficult to see
why, in principle, statutory mechanisms for judicial review should not be interpreted, absent
express legislative provisions to the contrary, to allow for agreements regarding heightened
judicial review.
Finally, there is also little substance to the Hall Street Court’s effort to interpret §§9 and 10 as
“inflexible” and mandatory. Those provisions are “inflexible” only because the Court so
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declared; in reality, §§9 and 10 do nothing more than set out the grounds for vacatur which
are generally-applicable under the FAA and which any arbitration legislation must do, without
saying anything about the parties’ “flexibility” to add to or exclude such grounds. Again, the
central role of party autonomy in the arbitral process (which the Court thought largely
irrelevant) provides the obvious and decisive basis for interpreting §§9 and 10 – affirming the
62
parties’ autonomy to structure their dispute resolution mechanism in the most efficient and
reliable manner they are able.
In contrast to Hall Street, most state courts in the United States have reached the opposite
result under almost identically-worded state arbitration legislation. Thus, in a well-reasoned
opinion, the Texas Supreme Court rejected Hall Street’s reasoning and interpreted the Texas
General Arbitration Act to give effect to agreements providing for heighted judicial review of
arbitral awards. (1205) Despite the similarities between the language of the FAA and the Texas
state arbitration statute (modeled on the Uniform Arbitration Act), the Texas court held that,
“[w]ith great respect, we are unable to conclude that Hall Street’s analysis of the FAA provides
a persuasive basis for construing the TAA the same way.” (1206) The court reasoned that “[a]s a
fundamental matter, Texas law recognizes and protects a broad freedom of contract,” (1207)
and that the purpose of the TAA is to facilitate arbitration agreements, which have been
enforceable in Texas by Constitution or statute since at least 1845.” (1208)
The Texas court’s decision applies only to judicial review of awards made in Texas. Its analysis
is, however, more consistent with historic views of party autonomy than that in Hall Street, and
one can anticipate that other U.S. states will follow suit; indeed, California and New Jersey
courts have already done so, again, in carefully-reasoned opinions. (1209) If this trend
continues, as a practical matter, agreements for heightened judicial review of arbitral awards
would be enforceable in the United States. (1210)
There is limited authority outside the United States concerning the validity of agreements for
heightened judicial review of arbitral awards. Those decisions that do address the issue
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express skepticism about the validity of such agreements. (1211) In contrast, arbitration
legislation in Hong Kong and Israel provides expressly (and wisely) for the validity of
agreements for heightened review of arbitral awards. (1212)
For the reasons summarized above, the better approach is to give effect to agreements
providing for heightened judicial review of international arbitral awards. This result is arguably
required by Article II of the Convention, on the basis that such agreements are material terms
of the parties’ agreement to arbitrate. More fundamentally, for the reasons well-expressed by
U.S. state courts’ decisions, respect for party autonomy and the basic objectives of the arbitral
process argue decisively for permitting parties to contract for heightened judicial review of
arbitral awards (provided that this does not impose undue or inappropriate obligations on
national courts).
[C] Effect of Choice-of-Law Agreements on Standard of Judicial Review

Parties sometimes argue that a choice-of-law agreement in their underlying contract alters the
standard of review or the bases for annulment that would otherwise apply in an annulment
action. (1213) Where the choice-of-law agreement is a general provision in the parties’
underlying contract, specifying the law governing the contract, courts have unanimously (and
correctly) held that the provision has no impact on the standard of judicial review or bases for
annulment. (1214) Some authorities also hold that parties may not expand the scope of judicial
review of the substantive conclusions of an arbitral tribunal by requiring that the award
“correctly” apply the law. (1215)
P 3378
§ 25.08 TIME LIMITS UNDER NATIONAL LAW FOR APPLICATIONS TO ANNUL
AND TO CONFIRM INTERNATIONAL ARBITRAL AWARDS
Most national arbitration legislation imposes various time limits on applications to annul and
to recognize arbitral awards (both domestic and foreign). The interaction of these time limits,
and the consequences of failing to comply with them, gives rise to potentially complex issues.
[A] Time Limits for Annulment Applications

Virtually all national arbitration statutes require that applications to annul awards be filed
within short time periods after notification of the award to the award-debtor. The stated and
obvious purpose of such provisions is to enhance the finality of awards and to ensure that the
arbitral process provides speedy, efficient resolution of parties’ disputes. (1216)
Thus, the UNCITRAL Model Law provides that an application to annul an award must be made
within three months from receipt of the award by the party challenging the award. (1217) A
Model Law decision explained the rationale for Article 34’s time limits in unsurprising terms:
P 3379
“It is clear that Art 34 is meant not only to limit the grounds for setting aside an award, but
also to ensure that any challenge is brought promptly within the period specified.” (1218)
Other national arbitration statutes provide variously for 28 days, three months, or six months;
(1219) a few statutes provide for much shorter periods, of only five, ten, or twenty days. (1220)
Courts in Model Law jurisdictions have held that the time limit for seeking annulment begins
when the award is received by the award-debtor, (1221) although this is a matter of statutory
provision in particular jurisdictions. If more than one party was involved in the arbitration,
then the time period will in principle begin to run separately for each party, depending on the
time of receipt of the award by each party, which can differ. (1222) In cases of partial or interim
awards, the time limit will begin to run separately for each award. (1223)
Some courts have suggested (wrongly) that annulment on the basis of public policy or
63
nonarbitrability can be sought outside statutory time limits (such as Article 34(3) of the
UNCITRAL Model Law), because they may be raised ex officio by the annulment court. (1224)
That conclusion confuses the court’s authority to consider an issue within a properly
commenced annulment action and the award-debtor’s right to commence an annulment
proceeding, with the latter being subject to strict time limits and unaffected by judicial
authority in actions brought within those time limits.
[B] Time Limits for Recognition and Confirmation Applications

All of these various time periods applicable to annulment applications contrast with the
substantially longer periods permitted for a party to apply for confirmation or recognition of
an award (typically three or more years). (1225) Alternatively, some arbitration legislation
P 3380 omits any time limit at all for recognition and enforcement of awards. (1226) As discussed
below, in the absence of specific statutory time limits for recognition of awards (including
foreign awards under the Convention) some national courts have applied time limits for
enforcing local court or foreign court judgments. (1227) In virtually all cases, these time limits
are substantially longer than those applicable to annulment application, reflecting the pro-
enforcement objectives of the Convention and national arbitration legislation and the goal of
finality of awards.
[C] Consequences of Failure to Seek Timely Annulment of Award

An important issue is whether a party may resist recognition of an award if it does not seek
annulment of the award within the statutory time periods for annulment. Resolution of that
issue depends principally on the terms of applicable national arbitration legislation in the
annulment forum (virtually always, the arbitral seat).
The UNCITRAL Model Law suggests that a party may elect not to seek annulment of an award
(under Article 34) and nonetheless subsequently resist recognition of the award on almost
identical grounds (under Article 36). As discussed elsewhere, Article 36 applies to both awards
made abroad and awards made locally, (1228) while setting out grounds for non-recognition
that are essentially identical to Article 34’s grounds for annulment. (1229) At the same time,
Article 36 imposes no time limit for raising grounds for non-recognition, thus apparently
leaving an award-debtor free in principle not to seek annulment of an award and instead to
resist recognition of the award when the award-creditor initiates proceedings to recognize and
enforce the award.
The foregoing result has been adopted by the weight of Model Law authority and commentary.
(1230) It is difficult to reconcile any other conclusion with the text of the Model Law. That is
confirmed by the drafting history of the Model Law, which records the rejection of proposals to
limit grounds for non-recognition of awards when annulment had not been sought:
“The prevailing view … was not to adopt such a provision. It was pointed out that the intended
preclusion unduly restricted the freedom of a party to decide on how to raise its objections. In
view of the different purposes and effects of setting aside and of invoking grounds for refusal of
recognition or enforcement, a party should be free to avail itself of the alternative system of
P 3381 defences which was recognized by the 1958 New York Convention and should be maintained
in the model law. It was further pointed out that if the provision were limited to recognition
and enforcement of domestic awards it would not be consistent with the policy of the model
law to treat awards in a uniform manner irrespective of their place of origin.” (1231)
That explanation, together with the structure and text of the Model Law, leaves little question
but that an award-debtor is free to raise objections to recognition under Article 36,
notwithstanding not previously having sought annulment of the award under Article 34. (1232)
In contrast, other national arbitration legislation arguably provides that an award-debtor
cannot remain passive and resist recognition of an award after the time limitation for seeking
annulment has expired, but instead must affirmatively seek annulment of the award within the
statutory time limit for such applications. In these jurisdictions, failure to seek timely
annulment of an award will result in the award-debtor being barred from challenging
recognition of the award in response to the award-creditor’s initiation of recognition and
enforcement proceedings. These statutes do not provide for “double control” of arbitral
awards, and instead require that any objection to the award be raised affirmatively in an
annulment proceeding.
For example, the German ZPO modified the UNCITRAL Model Law, to provide in §1060(2), that:
“Grounds for setting aside shall not be taken into account, if at the time when the application
for a declaration of enforceability is served, an application for setting aside based on such
grounds has been finally rejected. Grounds for setting aside under section 1059 subs. 2, no. 1
shall also not be taken into account if the time-limits set by section 1059 subs. 3 [i.e., the
equivalent of Article 16(3) of the Model Law] have expired without the party opposing the
application having made an application for setting aside the award.” (1233)
Under the German version of the Model Law, a party’s failure to raise jurisdictional objections
in an immediate challenge (under Article 16(3)) results in waiver of those objections in
P 3382
subsequent recognition proceedings; on the other hand, with respect to other grounds for
non-recognition, only a negative annulment decision will preclude a defense to recognition
(but a failure to seek annulment will not do so).
64
Less clearly, a few UNCITRAL Model Law jurisdictions have omitted Articles 35 and 36 from their
local enactments of the Model Law. (1234) As a consequence, under these statutes, recognition
of foreign awards is governed by the New York Convention (permitting the award-debtor to
raise defenses to recognition), but no statutory provision establishes a comparable basis for
resisting recognition of international awards made in locally-seated arbitrations. (1235) One
possible explanation for this omission is to require that objections to the recognition of awards
made in locally-seated arbitrations be raised exclusively in annulment proceedings, brought
within statutory time limits, rather than in recognition actions. A Singaporean decision,
subsequently reversed on appeal, adopted precisely this conclusion, in the context of
Singapore’s arbitration legislation (which omits Articles 35 and 36 of the Model Law), as follows:
“there is simply no ‘hook’ … for the inclusion of the grounds under Art 34 of the Model Law to
resist enforcement of a domestic international award where the prescribed time limit has
lapsed.” (1236)
On appeal, however, the Singapore Court of Appeal rejected this interpretation of Singaporean
law, holding instead that the omission of Articles 35 and 36 was not meant to adopt the
“radical” approach of “contract[ing] out of the Model Law philosophy of treating the
enforcement of all awards uniformly and preserving the ‘choice of remedies’” for the award-
debtor. (1237) The court (somewhat creatively) interpreted §19 of the Singaporean arbitration
legislation, providing that an award may be enforced in the same manner as a judgment, as
granting Singaporean courts discretion to deny recognition of international awards, made in
Singapore-seated arbitrations, on the same grounds that were available for foreign and
nondomestic awards under the Convention. (1238)
An approach similar to that adopted (statutorily) in Germany has been adopted by some
courts under the FAA in the United States. Under the FAA, an application to vacate an award
must be brought within three months of the making of the award, while the time period for
seeking confirmation of an international award is three years. (1239) A number of courts have
P 3383
held that a party that fails to seek to vacate an award within the statutory three-month
time period, is subsequently barred from resisting confirmation of the award in a confirmation
action brought by the award-creditor. (1240) As one court reasoned:
“the failure of a party to move to vacate an arbitral award within the three-month limitations
period prescribed by section 12 of the [FAA] bars him from raising the alleged invalidity of the
award as a defense in opposition to a motion brought under section 9 of the [FAA] to confirm
the award.” (1241)
Nonetheless, other U.S. courts have reached contrary conclusions, (1242) as has the
Restatement (Third) U.S. Law on International Commercial Arbitration. The draft Restatement
reasons:
“The Restatement takes the position that, while a party loses the right to seek vacatur of an
award once the vacatur limitations period has passed, it is not foreclosed from raising the
corresponding grounds in defense against confirmation of the award. Any other rule would
encourage a party seeking confirmation of an award to wait to bring the action until after the
shorter vacatur limitations period has passed, at which point the defendant would find itself
with no substantive defenses. It would also lay a trap for the unwary, since the losing party in
an arbitration could reasonably believe that the established defenses to confirmation are
available for as long as a confirmation action may be brought.” (1243)
As a matter of sound policy, the Restatement view, like that of the UNCITRAL Model Law, is not
attractive. The objectives of finality and the summary character of the confirmation process
argue for requiring award-debtors to challenge an adverse award, if they wish to do so, in a
timely annulment proceeding in the arbitral seat, and, if they do not, subjecting them to
recognition, without the possibility of raising defenses available in annulment, in the arbitral
seat; it is undesirable to permit award-debtors to hold back challenges, rather than raising
them in a timely manner. There is little substance to the suggestion that requiring parties to
comply with the FAA’s time requirements is a trap for the unwary; commercial parties
ordinarily do, and should be presumed to, know the law and their decision not to comply with
it provides no excuse for adopting inefficient procedures that frustrate the award-creditor’s
legitimate enforcement of its rights.
P 3384
The question whether a party should be permitted to raise defenses to confirmation or
recognition, after failing to do so in an annulment proceeding, is ultimately one of statutory
construction in particular jurisdictions. Different states have adopted different legislative
approaches to the issue (for example, compare the UNCITRAL Model Law and Germany’s
arbitration legislation). Nonetheless, where fairly possible, national legislation should be
interpreted to require an award-debtor to challenge an award in an annulment proceeding,
failing which it will be barred from resisting recognition, confirmation, or enforcement.
§ 25.09 REQUIREMENTS UNDER NATIONAL LAW THAT INTERNATIONAL

ARBITRAL AWARDS BE “FINAL” OR “BINDING” BEFORE ANNULMENT MAY BE
SOUGHT
It is well-settled under virtually all national arbitration legislation that annulment can only be
sought of an “award,” and not of a procedural order or of a decision of a dispute resolution
body other than an arbitral tribunal. (1244) In addition, many national arbitration statutes only
65
permit the annulment, or the confirmation, of awards which are “final.” Under these statutes,
awards which are not “final” are not generally subject to annulment or confirmation.
That is true, for example, under the domestic FAA in the United States: (1245) “[A]n arbitration
award must be final and binding before a district court may vacate or enforce it.” (1246) The
same requirement that only “final” awards can be annulled (or confirmed) also applies in other
jurisdictions, including under the Swiss Law on Private International Law, (1247) the Spanish
P 3385
Arbitration Act, (1248) the Malta Arbitration Act, (1249) as well as court decisions in the
Netherlands (1250) and the Russian Federation. (1251)
Applying the FAA’s domestic “finality” requirement, U.S. courts have held that awards
definitively resolving all of the issues in the parties’ dispute (classic “final awards”) are final for
purposes of vacatur and annulment. (1252) Most U.S. lower courts have also held that partial
awards, finally resolving particular claims in the arbitration, are also “final awards” for
purposes of vacatur and confirmation. (1253) As discussed elsewhere, many U.S. courts have
also regarded decisions granting most types of interim relief as final awards. (1254) Although
authority is divided, U.S. courts also appear to hold that at least some categories of
jurisdictional awards are final awards for purposes of vacatur and confirmation. (1255)
In contrast, the UNCITRAL Model Law does not appear to require that an award be “final” in
order to be subject to annulment under Article 34 or to be subject to confirmation or
recognition under Articles 35 and 36. (1256) Instead, the Model Law provides that an award is
“binding” when it is made, (1257) and then prescribes time periods for purposes of annulment
and recognition of all “awards.” (1258)
P 3386
As a consequence of these provisions, the Model Law imposes no express “finality”
requirement for the annulment or confirmation of awards made locally. Consistent with this,
courts in Model Law jurisdictions have upheld the validity of arbitration agreements that do
not provide for the finality of the arbitral tribunal’s awards. (1259) Similarly, some Model Law
courts have held that awards may be confirmed or annulled even if they are not “final,”
provided that they are “binding.” (1260) Nonetheless, authorities in some Model Law
jurisdictions appear to have adopted a requirement that an award be final before annulment
(or enforcement) proceedings are permitted. (1261)
Under the Model Law, an award should be regarded as “binding” as soon as it has been signed
and delivered to the parties (1262) (absent contrary agreement (1263) ). This parallels the
interpretation of the New York Convention’s requirement (discussed below) that awards be
“binding” before they must be recognized under the Convention. (1264) In addition, awards
should be regarded as “binding” only when they are intended to definitively resolve all or part
of the parties’ dispute (e.g., resolving all claims and counterclaims (a classic “final award”),
resolving one or more, but not all, claims (a partial award)).
The better view is also that jurisdictional rulings are also properly regarded as awards, which
are binding for purposes of annulment and recognition, under the Model Law. (1265) Finally, as
also discussed above, the better view is also that decisions granting interim relief are properly
regarded as binding awards, (1266) although these are also subject to enforcement under the
specialized regime available under the 2006 Revisions of the Model Law. (1267)
National law requirements of “finality” are generally only applicable with regard to the
P 3387
annulment and confirmation of awards that are made locally, and not to the recognition of
foreign awards (made in a foreign arbitral seat). (1268) As discussed below, foreign awards are
subject to non-recognition under the New York Convention only when they are not “binding,” as
distinguished from “final.” (1269)
§ 25.10 “ENTRY OF JUDGMENT” CLAUSE

Section 9 of the FAA in the United States arguably requires, as a condition for confirmation of
an arbitral award, that the parties’ underlying arbitration agreement provide that “judgment
upon the award may be entered by any Court having jurisdiction hereof.” (1270) This formula
reflects historical (and archaic) U.S. domestic practice, which required that arbitration
agreements contain a so-called “entry of judgment” clause in order to be enforceable. (1271)
Some U.S. decisions still invoke this requirement, refusing to confirm awards that are not
based on agreements with such a provision, on the now-untenable theory that, absent “entry of
judgment” language, it is unclear that parties intended their arbitration agreement to produce
a binding result. (1272)
Most recent decisions have largely abandoned the “entry of judgment” requirement, even in
purely domestic U.S. settings, holding that the parties impliedly intended the arbitral process
and award to be final and binding. (1273) In one court’s words:
“It is true that the arbitration clause in this case does not, in haec verba, provide that ‘a
judgment of the court shall be entered upon the award …’ But the nature of the arbitration
P 3388
commitment and the parties’ use of it leave little doubt that both [parties] contemplated
binding arbitration with enforcement of any award through the entry of judgment in a court.”
(1274)
Other U.S. lower court decisions hold that the parties’ agreement to arbitrate pursuant to
institutional arbitration rules, providing that the award will be final and binding, satisfy the
“entry of judgment” clause requirement. (1275) These decisions are clearly correct, particularly
in international settings: indeed, the notion that commercial parties would proceed through
66
the expense and delay of a full-scale arbitration, only to obtain an unenforceable and non-
binding result, is highly implausible. It contradicts the parties’ basic purpose in agreeing to
arbitrate, being to finally resolve their disputes in an objective and efficient manner. Absent
the clearest language providing for a non-binding result, awards should be subject to
confirmation and recognition under the FAA, whether or not they contain an entry of judgment
clause. (1276)
U.S. courts have also held that decisions interpreting §9 to require an “entry of judgment”
clause are preempted or superseded by the FAA’s and New York Convention provisions relating
to international arbitrations. As one court reasoned:
“Section 207 does not in any way condition confirmation on express or implicit consent.
Because the plain language of §207 authorizes confirmation of arbitration awards in cases
where §9’s consent requirement expressly forbids such confirmation, we hold that the two
provisions conflict. Accordingly, we hold that §207 preempts §9’s consent-to-confirmation
requirement in cases under the Convention.” (1277)
This reasoning is well-considered, particularly in the recognition context: the entry of judgment
requirement ignores the parties’ real commercial intentions and imposes a form requirement
that the Convention does not contemplate or permit.
P 3389
§ 25.11 CONSEQUENCES OF ANNULLING INTERNATIONAL ARBITRAL
AWARDS
An issue of substantial practical and theoretical importance concerns the consequences of the
annulment of an international award. This topic has attracted considerable attention, without
yet producing a clear consensus of views (either judicial or academic).
[A] Differing Consequences of Annulment and Non-Recognition of Arbitral Award

As noted above, significantly different consequences may flow from (a) a national court’s
refusal to recognize or confirm an international award, as compared with (b) a national court’s
decision annulling or setting aside the award. (1278) If an award is denied recognition in a
national court outside the place of the arbitration, the award nonetheless plainly remains in
existence as a “binding” award. It is non-controversial that the award can be taken to other
jurisdictions, and efforts can be made to recognize and enforce it anew. No judicial act has
purported to “annul” or “vacate” the award, or to render the award nonexistent; instead, the
non-recognition judgment decides only that the award may not be recognized and enforced in
a particular state. (1279)
In contrast, if an award is “annulled,” “set aside,” or “vacated” in the place where it was made,
then the award arguably ceases to have legal effect or existence (or becomes null), at least
under the laws of the state where it was annulled, just as an appellate court decision vacates a
trial court judgment. When the “award” is taken by the award-creditor to other jurisdictions,
the award-debtor can be expected to argue that there is no longer any award to be recognized.
For some years after the New York Convention came into force, this premise was generally
accepted, albeit without analysis, and awards which had been annulled in the arbitral seat
were denied recognition elsewhere. (1280)
P 3390
Despite the foregoing, the differences between annulment and non-recognition of an
award are sometimes overstated. In particular, it is essential in addressing this issue to
consider the consequences of both annulment and non-recognition outside the state in which
an award is annulled or not recognized.
When an award is denied recognition outside the place of arbitration, the court’s non-
recognition decision will arguably have preclusive effect in other jurisdictions. This is a
question of private international law, governed generally by local law or relevant treaties on
the enforcement of foreign judgments. (1281) Under these authorities, there is a serious
argument that a court’s non-recognition of an award on one of the grounds set forth in Article
V(1) of the New York Convention (or parallel provisions of other international conventions)
should preclude the award-holder from relitigating this issue in other potential recognition
forums. (1282) In circumstances where this does occur, the differences between annulment and
non-recognition can be less marked than sometimes suggested.
Conversely, even if an award is annulled in the place of arbitration, courts in other jurisdictions
may nonetheless choose to recognize and enforce the award. (1283) As discussed below, this is
particularly true where the award has been annulled on grounds of local public policy and/or
nonarbitrability, or because local law permits review of the merits of the arbitral tribunal’s
decision. (1284) In these instances, foreign courts may be free (or even required) to recognize
the award notwithstanding its annulment. Again, this results in a diminution of the differences
between annulment and non-recognition.
[B] Non-Recognition of Award Annulled in Arbitral Seat

As discussed in detail below, Article V(1)(e) provides that an award may be denied recognition
if it “has been set aside or suspended by a competent authority of the country in which, or
under the law of which, that award was made.” (1285) The UNCITRAL Model Law and other
national arbitration legislation contain similar provisions. (1286)
P 3391
67
P 3391 When a court in the arbitral seat annuls a foreign or nondomestic award, (1287) the
question arises as to whether this requires (or permits) other national courts to deny
recognition of the award under Article V(1)(e). This issue has been resolved in differing ways by
national courts and other authorities, and is addressed in detail below. (1288) In principle, the
better view is that awards annulled in the arbitral seat not only may, but in some
circumstances must, be recognized in other Contracting States. The same analysis applies to
suspension of the award in the arbitral seat.
[C] Other Consequences of Annulment

A further issue is what the effect of an annulment decision is on the parties’ arbitration
agreement and the arbitral tribunal. With regard to the former, the annulment of an award
should have no effect on the parties’ underlying agreement to arbitrate. That agreement
subsists even if an arbitral tribunal engaged in procedural misconduct or manifestly
misapplied the law or exceeded the scope of its authority. (1289)
With regard to the effect of annulment on the arbitrators, the short answer will generally be
that the tribunal is functus officio and an annulment does not change this or bring the tribunal
back into legal existence. Unusually, the Swiss Law on Private International Law provides that,
when an award is annulled, it is remitted to the former arbitral tribunal for further
proceedings. (1290) This is not usually advisable, however, and in most jurisdictions a new
tribunal must be constituted. (1291)
§ 25.12 STANDING TO SEEK ANNULMENT

In many jurisdictions, only parties to an arbitration, who are bound by an arbitral award, are
entitled to seek to annul the award. Applying Articles 35 and 36 of the UNCITRAL Model Law,
one national court held that an annulment application could only be made by parties to the
arbitration agreement; third parties lacked standing to seek annulment, even if they had an
interest in the outcome of the arbitral proceedings or would be directly affected by it. (1292)
P 3392
Courts in other jurisdictions appear to adopt similar views. (1293)
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68
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When Is An Arbitral Award Non-Domestic Under the New York Convention of 1958?, 6 Pace
L. Rev. 25 (1985); Vigoriti, A Common Law of Arbitration: Arbitral Awards and Appeals, 6 Am.
Rev. Int’l Arb. 29 (1995); Webster, Review of Substantive Reasoning of International Arbitral
Awards by National Courts: Ensuring One-Stop Adjudication, 22 Arb. Int’l 431 (2006).
2) SeePart III; §22.01, p. 2898; (especially §22.01[A]).
3) As noted above, an award-debtor may also seek to correct, modify, or interpret the
award. In general, however, such actions are very limited, are resolved by the arbitral
tribunal itself (not a reviewing court) and do not alter the intended meaning in an award
or resolve an award-debtor’s disagreement with the arbitral tribunal’s decision or
procedural actions. See§24.01.
4) See§11.03[C][1][c][iii]; §22.01[B][4]; §22.04[A]; §25.11[B].
5) See§22.02[A]; §25.02. As discussed below, however, the New York Convention and other
international arbitration conventions are best interpreted as imposing limited implied
restrictions on the grounds that may be invoked to annul an award. See§25.02[B].
6) See§25.11; §§26.05[C][8][a][i]-[ii].
7) See§25.11; §26.05[C][8][b].
8) See§22.02[A]; §26.03[B][5]; §26.05[A].
9) See§22.02[E][1][a].
69
10) New York Convention, Arts. V(1)(e), VI. Article V(1)(e) refers only to the fact that an award
has “been set aside or suspended by a competent authority,” without prescribing
express limits on the grounds for setting aside or suspending decisions. Article VI is
similar. See§11.03[C][1][c][iii]; §22.02[E][1][a][iii]; §22.04[A][1]; §22.04[C]; §25.02[A].
11) Yusuf Ahmed Alghanim & Sons WLL v. Toys “R” Us, Inc., 126 F.3d 15, 21-22 (2d Cir. 1997)
(emphasis added).
12) Yusuf Ahmed, 126 F.3d at 23 (emphasis added).
13) See, e.g., Ario v. Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277 (3d Cir. 2010)
(adopting reasoning in Toys “R” Us); Gulf Petro Trading Co., Inc. v. Nigerian Nat’l Petroleum
Corp., 512 F.3d 742, 747 (5th Cir. 2008) (“Convention permits a primary jurisdiction court to
apply its full range of domestic law to set aside or modify an arbitral award”); TermoRio
SA v. Electranta SP, 487 F.3d 928 (D.C. Cir. 2007); Stone & Webster v. Triplefine Int’l Corp.,
118 F.Appx. 546 (2d Cir. 2004); Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 364 F.3d 274, 287-88 (5th Cir. 2004) (“courts of primary jurisdiction,
usually the courts of the country of the arbitral situs, have much broader discretion to
set aside an award [and] may apply their own domestic law”); Karaha Bodas Co. v.
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 368 (5th Cir. 2003)
(“By its silence on the matter, the Convention does not restrict the grounds on which
primary-jurisdiction courts may annul an award, thereby leaving to a primary
jurisdiction’s local law the decision whether to set aside an award.”); Westerbeke Corp. v.
Daihatsu Motor Co., 304 F.3d 200 (2d Cir. 2002); Trans Chem. Ltd v. China Nat’l Mach. Imp.
& Exp. Corp., 161 F.3d 314 (5th Cir. 1998); Virginia Sur. Co. v. Certain Underwriters at Lloyd’s
London, 671 F.Supp.2d 966, 998 (N.D. Ill. 2009); Shanghai Foodstuffs Imp. & Exp. Corp. v.
Int’l Chems., Inc., 2004 U.S. Dist. LEXIS 1423, at *6 (S.D.N.Y.); Lummus Global Amazonas, SA
v. Aguaytia Energy del Peru, SR Ltda, 256 F.Supp.2d 594 (S.D. Tex. 2002); Spector v.
Torenberg, 852 F.Supp. 201, 208 (S.D.N.Y. 1994); C.T. Shipping Ltd v. DMI (U.S.A.) Ltd, 774
F.Supp. 146 (S.D.N.Y. 1991); Int’l Standard Elec. Corp. v. Bridas Sociedad Anonima Petrolera,
745 F.Supp. 172 (S.D.N.Y. 1990).
14) See, e.g., Minmetals Germany GmbH v. Ferco Steel Ltd [1999] 1 All ER 315, 330-31 (Comm)
(English High Ct.) (“In international commerce a party who contracts into an agreement
to arbitrate in a foreign jurisdiction is bound not only by the local arbitration procedure
but also by the supervisory jurisdiction of the courts of the seat of the arbitration.”);
Westacre Inv. Inc. v. Jugoimport-SPDR Holding Co. Ltd [1998] 4 All ER 570, 607 (QB) (English
High Ct.) (“convention recognises that the primary supervisory function in respect of
arbitration rests with the court of supervisory jurisdiction as distinct from the
enforcement court”); Aloe Vera of Am. Inc. v. Asianic Food (S) Pte Ltd, [2006] SGHC 78, ¶56
(Singapore High Ct.) (“The grounds on which enforcement of an award may be resisted
under the Act, however, are not the same grounds that would entitle [the judgment
debtor] to set aside the Award in the jurisdiction of the supervisory court.”); A v. R, [2009]
3 HKLRD 389, ¶¶28-29 (H.K. Ct. First Inst.) (“[I]f a party alleges that there is something
invalid about an award made in X, then it is for that party to apply to the Court of X (as
the supervising jurisdiction) for relief against the award. Recourse should not be to the
enforcing Court. It is not for the enforcing Court, in the guise of applying public policy, to
usurp the jurisdiction of the supervising Court and in effect itself supervise the
supervising Court.”); Shin-Etsu Chem. Co. Ltd v. Aksh Optifibre Ltd, XXXI Y.B. Comm. Arb.
747, 772 (Indian S.Ct. 2005) (2006).
15) See§25.02[B], p. 3169.
16) Craig, Some Trends and Developments in the Laws and Practice of International
Commercial Arbitration, 30 Tex. Int’l L.J. 1, 11 (1995) (emphasis added). See also Patocchi,
The 1958 New York Convention: The Swiss Practice, in The New York Convention of 1958 145,
192-93 (ASA Spec. Series No. 9 1996) (international award made in Switzerland subject
only to Swiss grounds to annul); Quigley, Accession by the United States to the United
Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 70
Yale L.J. 1049, 1070 (1961) (“Significantly, [Article V(1)(e)] fails to specify the grounds upon
which the rendering State may set aside or suspend the award. While it would have
provided greater reliability to the enforcement of awards under the Convention had the
available grounds been defined in some way, such action would have constituted
meddling with national procedure for handling domestic awards, a subject beyond the
competence of the Conference.”); A. van den Berg, The New York Arbitration Convention of
1958 19-27 (1981).
17) H. Gharavi, The International Effectiveness of the Annulment of An Arbitral Award 29 (2002).
18) See Knull & Rubins, Betting the Farm on International Arbitration: Is It Time to Offer An
Appeal Option?, 11 Am. Rev. Int’l Arb. 531 (2000); Mangan, Globalisation of Arbitral Disputes
– Is It Time for A New Convention?, 2008 Int’l Arb. L. Rev. 137 (proposing appellate review
of international arbitral awards by international court).
19) See ICSID Convention, Art. 52; C. Schreuer et al., The ICSID Convention: A Commentary Art.
52, ¶¶890-1095 (2d ed. 2009).
20) See Craig, Some Trends and Developments in the Laws and Practice of International
Commercial Arbitration, 30 Tex. Int’l L.J. 1, 11 (1995); §25.02[A].
21) See§1.02[B][5]; §2.02[C][1][b][iv]. As discussed above, an agreement to obtain a non-
binding recommendation should not be regarded as an arbitration agreement.
See§§2.02[C][2][b]-[c].
70
22) See§§2.02[C][1] & [4]; §2.02[D]; New York Convention, Art. II(1) (“parties undertake to
submit to arbitration all or any differences”; “subject matter capable of settlement by
arbitration”).
23) These decisions have typically arisen in the comparatively unusual context of
“nondomestic” awards made in the United States. See, e.g., Indus. Risk Insurers v. MAN
Gutehoffnungshütte GmbH, 141 F.3d 1434, 1442 (11th Cir. 1998) (only grounds enumerated
in Article V of New York Convention may be basis for vacating awards subject to
Convention, including “nondomestic” awards made in United States); Lander Co., Inc. v.
MMP Invs., Inc., 107 F.3d 476, 480-82 (7th Cir. 1997); Tesoro Petroleum Corp. v. Asamera (S.
Sumatra) Ltd, 798 F.Supp. 400, 405 (W.D. Tex. 1992); Avraham v. Shigur Express Ltd, 1991
U.S. Dist. LEXIS 12267, at *5 (S.D.N.Y.) (applying Article V, not §10 of FAA); Fiat SpA v.
Ministry of Fin. & Planning, 1989 U.S. Dist. LEXIS 11995, at *11 (S.D.N.Y.) (“Since the
Convention, as supplemented by the [FAA], applies to arbitration awards rendered in the
United States involving foreign interests, Article V(1)(c) shall apply.”); Brandeis Intsel, Ltd
v. Calabrian Chem. Corp., 656 F.Supp. 160, 167 (S.D.N.Y. 1987). See also Johnson Controls,
Inc. v. Edman Controls, Inc., 712 F.3d 1021, 1025 (7th Cir. 2013) (“Chapters 2 and 3 of the FAA
state that a Convention award may be vacated only on the grounds specified in the
applicable Convention. … This could be important in some cases, because the
Convention grounds for vacatur are slightly different from those in Chapter 1 of the FAA.
… It is not clear whether a party may bring an action under Chapter 1 to vacate an award
issued by an arbitrator in a U.S. jurisdiction, but governed by the Convention. … If it
made any difference to our case, we would need to decide whether the district court
erred by allowing this action to proceed under Chapter 1 of the FAA, or if the party who
might have been advantaged by analysis under the proper Convention might have
waived its arguments.”); Archer-Daniels-Midland Co. v. Paillardon, 2013 WL 1892675, at *5
(C.D. Ill.) (“Chapter Two of the FAA states that a Convention award may be vacated only
on the grounds specified in the New York Convention. … The Seventh Circuit has
recognized that it is not clear whether a party may bring an action under Chapter 1 of
the FAA to vacate an award issued in a U.S. jurisdiction, but governed by the New York
Convention.”).
24) See§22.02[E][1][a][iii]; §25.02[A].
25) These include the United States (arguably), England, China and other states, all of which
permit some measure of judicial review of the merits of arbitrators’ decisions.
See§25.05[A].
26) See§2.02[C][1][b][iv]; §2.02[C][2][c].
27) Eco Swiss China Time Ltd v. Benetton Int’l NV, [2009] Case No. C-126/97, ¶35 (E.C.J.).
28) See, e.g., World Bus. Paradise, Inc. v. Suntrust Bank, 403 F.Appx. 468, 470 (11th Cir. 2010)
(“[a]rbitration’s allure is dependent upon the arbitrator being the last decision maker in
all but the most unusual cases”; when litigants pursue baseless contests of awards, “the
promise of arbitration is broken”); Berger, The Modern Trend Towards Exclusion of
Recourse Against Transnational Arbitral Awards: A European Perspective, 12 Ford. Int’l L.J.
605 (1989); Mayer & Sheppard, Final ILA Report on Public Policy as A Bar to Enforcement
of International Arbitral Awards, Recommendation 1(a), 19 Arb. Int’l 249, 250 (2003) (“The
finality of awards rendered in the context of international commercial arbitration
should be respected save in exceptional circumstances.”).
29) See§4.06[A][1]; §5.02[A][2][d].
30) See§§2.03[E]-[F].
31) See§5.05[C].
32) See§§11.03[C][1][c][vi]-[vii]; §15.02[A].
33) See§11.03[B]; §14.02[A][9].
34) See§4.04[A][1][b]; §4.04[B][2][b].
35) See §25.05[D].
36) See§1.04[A][1]; §2.01[A][1][a]; §5.01[B][2]; §§26.03[B]-[C].
37) See§11.03[C][1][c][ii]; §15.02[A]. See also New York Convention, Art. V(1)(d).
38) See§1.04[A][1][c][iii]; §11.02; §11.05[B][2]; §15.02.
39) See§1.04[A][1]; §2.01[A][1][a]; §11.03[C][1][c].
40) See also§4.04[A][1][b]; §4.04[B][2][b]; §26.01[A][2].
41) See§1.04[A][1][a].
42) See§11.03[C][1][c][v].
43) See§1.04[A][1][e].
44) The role of state practice under the Convention is described elsewhere. See§1.04[A][1][d];
§4.05[C][5]; §6.06; §11.03[C][1][c][vii]; §12.01[B][2][c]; §15.04[A][1]; §26.05[C][9][e].
45) See§1.04[A][1]; §2.01[A][1][a]; §11.03[C][1][c].
46) See§1.04[A][3]; §22.04[A][3].
47) See§1.04[A][2].
48) ICSID Convention, Arts. 53, 54. See C. Schreuer et al., The ICSID Convention: A Commentary
Arts. 53-54, ¶¶1096 et seq. (2d ed. 2009).
49) ICSID Convention, Art. 52. See C. Schreuer et al., The ICSID Convention: A Commentary Art.
52, ¶¶890-1095 (2d ed. 2009); §24.08.
50) See§§27.01[B][3]-[5].
51) See§2.02[C][1][b][iv]; §22.01[A].
52) Eco Swiss China Time Ltd v. Benetton Int’l NV, [1999] Case No. C-126/97, ¶35 (E.C.J.).
53) SeePart III; §22.01, p. 2898.
71
54) See Dasser, International Arbitration and Setting Aside Proceedings in Switzerland: An
Updated Statistical Analysis, 28 ASA Bull. 82 (2010) (6.5% of annulment applications in
Swiss courts succeeded between 1989 and mid-2009).
55) See Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 389 (2d Cir. 2003)
(describing decisions to vacate award in four out of 48 applications in recent Second
Circuit decisions).
56) See Crépin, Le contrôle des sentences arbitrales par la Cour d’appel de Paris depuis les
reformes de 1980 et de 1981, 1991 Rev. arb. 521 (in 1980 and 1981, only two awards
annulled by French courts in 46 challenges on public policy grounds).
57) See Paulsson, Arbitration-Friendliness: Promises of Principle and Realities of Practice, 23
Arb. Int’l 477, 489 (2007) (between 2002 and 2004, less than 5% of annulment proceedings
commenced in English courts successful).
58) UNCITRAL Model Law, Art. 35(1).
59) See§27.01[B][2]. As discussed elsewhere, the preclusive effects of an award under the
UNCITRAL Model Law are implied. See§27.01[B][2]. Some national arbitration legislation,
based on the Model Law, has added express language regarding the award’s immediate
preclusive effects. See§§27.01[B][3]-[5].
60) UNCITRAL Model Law, Art. 35(1). See§25.03[A][1].
61) UNCITRAL Model Law, Art. 34(2)(a).
63) See, e.g., Gater Assets Ltd v. NAK Naftogaz Ukrainy [2007] 2 Lloyd’s Rep. 588, ¶59 (English
Ct. App.) (recognition should proceed “almost as a matter of administrative procedure”);
Shandong Hongri Acron Chem. Joint Stock Co. Ltd v. PetroChina Int’l (H.K.) Corp. Ltd, [2011]
HKCA 168, ¶12 (H.K. Ct. App.) (“[A]t the recognition stage, the court’s task is to decide
whether leave should be granted to ‘enter judgment in terms of the award, order or
direction.’ The court respects the plain intent behind the relevant provisions to make
awards to which they apply enforceable with ease, subject to the narrowly confined
exceptions, ‘almost as a matter of administrative procedure’.”).
64) Shandong Hongri Acron Chem. Joint Stock Co. Ltd v. PetroChina Int’l (H.K.) Corp. Ltd, [2011]
HKCA 168, ¶12 (H.K. Ct. App.).
65) See§25.03[A][4]; §25.04; §26.03[B][3]; §26.05[C]. There are exceptions for defenses based
on public policy and nonarbitrability, which may be raised ex officio by the recognition
court.
66) See§25.03[A][5]; §§26.03[B]-[C].
67) UNCITRAL Model Law, Art. 34(2) (emphasis added). See also H. Holtzmann & J. Neuhaus, A
Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative
History and Commentary 910 (1989).
68) In some jurisdictions, there is also a right to “revision” of an award, based on newly-
discovered evidence, usually of a character indicative of fraud or comparable
circumstances. See§24.07.
69) SeeUNCITRAL Model Law, Arts. 34(2)(a), (b). See H. Gharavi, The International Effectiveness
of the Annulment of An Arbitral Award 31 (2002); H. Holtzmann & J. Neuhaus, A Guide to the
UNCITRAL Model Law on International Commercial Arbitration: Legislative History and
Commentary 912-19 (1989).
70) See, e.g.,Canada (Attorney Gen.) v. S.D. Myers Inc., [2004] 3 F.C.R. 368 (Canadian Fed. Ct.);
D. Frampton & Co. v. Thibeault, [1988] F.C.J. No. 305 (Canadian Fed. Ct.); United Mexican
States v. Metalclad Corp., 89 B.C.L.R.3d 359 (B.C. S.Ct. 2001); Holding Tusculum BV v. Louis
Dreyfus SAS, [2008] QCCS 5904 (Québec Super. Ct.); Bayview Irrigation Dist. #11 v. United
Mexican States, [2008] CanLII 22120 (Ontario Super. Ct.) (grounds for setting aside awards
are exhaustively enumerated in Art. 34); Navigation Sonamar Inc. v. Algoma Steamships
Ltd, [1987] R.J.Q. 1346 (Québec Super. Ct.); ABC Co. v. XYZ Co. Ltd, [2003] 3 SLR 546
(Singapore High Ct.); Methanex Motunui Ltd v. Spellman, [2004] 1 NZLR 95 (Auckland High
Ct.).
71) See Judgment of 30 August 2002, 11 Sch 02/00 (Hanseatisches Oberlandesgericht
Hamburg).
72) See Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec Super. Ct.);
Newspeed Int’l Ltd v. Citus Trading Pte Ltd, [2003] 3 SLR(R) 1 (Singapore High Ct.); China
Nanhai Oil Joint Serv. Corp. v. Gee Tai Holdings Co. Ltd, [1994] 3 HKC 375 (H.K. Ct. First Inst.)
(enforcing award on basis that respondents had participated fully in arbitral
proceedings without objection, notwithstanding fact that composition of arbitral
tribunal was irregular).
73) SeeUNCITRAL Model Law, Art. 34(2).
74) SeeUNCITRAL Model Law, Art. 34(2) (emphasis added). This parallels the discretionary
character of non-recognition under Article 36 of the Model Law (and Article V of the New
York Convention). See§26.03[B][6]. See also H. Holtzmann & J. Neuhaus, A Guide to the
Commentary 912 (1989).
75) See, e.g, British Columbia Commercial Arbitration Act, §30 (Where the court finds that
the arbitrator has “committed an arbitral error,” but that “the error consists of a defect
in form or a technical irregularity,” the court may refuse to set aside the award where
“refusal would not constitute a substantial wrong or miscarriage of justice.”); Israeli
Arbitration Law, Art. 26(a) (annulment application may be dismissed if “no miscarriage
of justice has been caused”).
72
76) See§25.04[B][6]; §25.04[C][6]; §25.04[D][6]. See also§26.05[C][3][f]; §26.05[C][4][i]; §26.05[C]
[5][b][v]; §26.05[C][5][c][v].
77) SeeUNCITRAL Model Law, Art. 34(2). See also H. Holtzmann & J. Neuhaus, A Guide to the
78) See, e.g.,Canada (Attorney Gen.) v. S.D. Myers Inc., [2004] 3 F.C.R. 368 (Canadian Fed. Ct.);
Corporación Transnacional de Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414
(Ontario Ct. App.); Noble China Inc. v. Lei, (1998) 42 O.R.3d 69 (Ontario Super. Ct.); Pac.
China Holdings Ltd v. Grand Pac. Holdings Ltd, [2011] 4 HKLRD 188, 218 (H.K. Ct. First Inst.)
(“Consistently with the pro-enforcement bias of the legislation, in my view, the onus in
establishing the basis for the appropriate exercise of the discretion will be on the party
seeking to attack the award. In an enforcement situation, that will be the losing party,
asking that the discretion be exercised against enforcement. In the setting aside
situation, again that will be the losing party, asking that the discretion be exercised in
favour of setting aside.”), rev’d on other grounds, [2012] 4 HKLRD 1 (H.K. Ct. App.).
79) See, e.g., D.-H. Blair & Co. v. Gottdiener, 462 F.3d 95, 110-11 (2d Cir. 2006); Trans Chem. Ltd
v. China Nat’l Mach. Imp. & Exp. Corp., 161 F.3d 314, 319 (5th Cir. 1998); Beth Israel Med. Ctr
v. 1199/S.E.I.U. United Healthcare Workers E., 530 F.Supp.2d 610, 614 (S.D.N.Y. 2008); May
v. First Nat’l Pawn Brokers, Ltd, 887 P.2d 185, 189 (Mont. 1994).
80) See§26.03[B][3]; §26.05[C][9][c]; §26.05[C][10][b].
81) Corporación Transnacional de Inversiones SA de CV v. STET Int’l SpA, (1999) 45 O.R.3d 183,
¶26 (Ontario Super. Ct.) (emphasis added), aff’d, (2000) 49 O.R.3d 414 (Ontario Ct. App.).
82) See, e.g., Quintette Coal Ltd v. Nippon Steel Corp., (1990) 47 B.C.L.R.2d 201 (B.C. S.Ct.);
Bayview Irrigation Dist. #11 v. United Mexican States, [2008] CanLII 22120 (Ontario Super.
Ct.) (grounds for setting aside awards, which are exhaustively enumerated in Article 34,
must be construed narrowly); Corporación Transnacional de Inversiones SA de CV v. STET
Int’l SpA, (2000) 49 O.R.3d 414 (Ontario Ct. App.); Grand Pac. Holdings Ltd v. Pac. China
Holdings Ltd, [2012] 4 HKLRD 1 (H.K. Ct. App.) (court’s review is narrow); Castel Elecs. Pty
Ltd v. TCL Air Conditioner (Zhongshan) Co. Ltd, [2012] FCA 1214 (Australian Fed. Ct.);
Amaltal Corp. Ltd v. Maruha (N.Z.) Corp. Ltd, [2004] 2 NZLR 614, ¶¶41-47 (New Zealand Ct.
App.) (reviewing with approval U.S., English and Canadian cases narrowly construing
public policy grounds for annulment); Judgment of 22 March 2006, Uniprex SA v. Grupo
Radio Blanca, SAP M 2572/2006 (Madrid Audiencia Provincial); Kenya Shell Ltd v. Kobil
Petroleum Ltd, Civil Application No. 57 of 2006 (Nairobi Ct. App.).
83) SeeQuintette Coal Ltd v. Nippon Steel Corp., [1990] B.C.J. No. 2241 (B.C. Ct. App.); Tusculum
BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec Super. Ct.).
84) CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK, [2011] SGCA 3, ¶25
(Singapore Ct. App.).
85) Quintette Coal Ltd v. Nippon Steel Corp., [1990] B.C.J. No. 2241, ¶27 (B.C. Ct. App.).
86) See§25.03[A][2], p. 3176.
87) K.-P. Berger, International Economic Arbitration 663 (1993); J. Lew, L. Mistelis & S. Kröll,
Comparative International Commercial Arbitration ¶25-32 (2003) (in many jurisdictions,
only limited grounds are available for annulling award; these grounds “mirror[]” Article V
of New York Convention); J.-F. Poudret & S. Besson, Comparative Law of International
Arbitration ¶786 (2d ed. 2007) (“UNCITRAL Model Law and certain laws which were
inspired thereby have closely followed the 1958 Convention”).
88) SeeUNCITRAL, Report of the Secretary-General on the Possible Features of A Model Law of
International Commercial Arbitration, U.N. Doc. A/CN.9/207, ¶110, XII Y.B. UNCITRAL 75
(1981); UNCITRAL, Report of the Working Group on International Contract Practices on the
Work of Its Fourth Session, U.N. Doc. A/CN.9/232, ¶15, XIV Y.B. UNCITRAL 33 (1983).
89) Corporación Transnacional de Inversiones SA de CV v. STET Int’l SpA, (1999) 45 O.R.3d 183,
¶26 (Ontario Super. Ct.) (emphasis added), aff’d, (2000) 49 O.R.3d 414 (Ontario Ct. App.).
90) UNCITRAL Model Law, Art. 34(2)(a)(iii).
73
91) See, e.g., §25.04[F][5]; Judgment of 28 April 1987, 1991 Rev. arb. 345 (Paris Cour d’appel);
Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec Super. Ct.) (partially
annulling award; “the Tribunal acted ultra petita by granting relief on claims that were
not made by either of the parties”); Xiamen Xinjingdi Group Ltd v. Eton Props. Ltd, XXXIV
Y.B. Comm. Arb. 548, 560 (H.K. Ct. First Inst.) (2009) (“nothing in the Arbitration Ordinance
ties the Court’s hand as to enforcing only part of an award where appropriate”);
Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Indus. Co. Ltd, [2009] HKCFI 94,
¶111 (H.K. Ct. First Inst.); Judgment of 12 February 2010, T.D.N. SA v. Tokio Marine Europe
Ins., SAP M 2047/2010 (Madrid Audiencia Provincial) (partial annulment of awards
possible when part of award is unconstitutional, illegal, or unreasonable); Judgment of 2
February 2007, Jaral Decoración, SL v. Peñasco Rodilla, SL, SAP M 1255/2007 (Madrid
Audiencia Provincial) (partially setting aside award where arbitrators granted interest
without being requested to do so); Judgment 7 February 2011, Sociedad de Inversiones
Inmobiliarias Del Puerto SA v. Constructora Iberoamericana SA, AR/JUR 7147/2011 (Buenos
Aires Cámara Nacional de Apelaciones en lo Comercial) (same); Judgment of 16 October
2011, Ministerio de Transportes y Comunicaciones v. Rudy Alberto Zapana Morales, Exp.
00045-2011 (Lima Corte Superior de Justicia); (partially annulling part of award where
arbitrator exceeded powers by adjudicating third party claim); Judgment of 25 January
2008, Case No. 810/71 (Egyptian S.Ct.).
Courts have reached the same conclusion under the FAA. See, e.g., Comedy Club, Inc. v.
Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009) (“If an arbitrator exceeded the scope
of his authority in issuing an award, and that award is divisible, we may vacate part of
the award and leave the remainder in force.”).
92) See, e.g., Euro’n Gas Turbines SA v. Westman Int’l Ltd, XX Y.B. Comm. Arb. 198 (Paris Cour
d’appel 1993) (1995) (partially annulling award on public policy grounds); Judgment of 31
January 2012, DFT 4A_360/2011 (Swiss Federal Tribunal) (award may be partially annulled
for denial of opportunity to be heard); Tusculum BV v. Louis Dreyfus Holding SAS, [2008]
QCCS 5904 (Québec Super. Ct.) (partially annulling award for, among other things, lack of
notice and opportunity to be heard; tribunal “infringed the audi alteram partem rule”);
Judgment of 2 February 2007, Jaral Decoración, SL v. Peñasco Rodilla, SL, SAP M 1255/2007
(Madrid Audiencia Provincial) (partially setting aside award where arbitrators granted
interest without being requested to do so).
93) See§26.03[B][8].
94) U.S. FAA, 9 U.S.C. §9. The section continues:
“If no court is specified in the agreement of the parties, then such application may be
made to the United States court in and for the district within which such award was
made. Notice of the application shall be served upon the adverse party, and thereupon
the court shall have jurisdiction of such party as though he had appeared generally in
the proceeding. If the adverse party is a resident of the district within which the award
was made, such service shall be made upon the adverse party or his attorney as
prescribed by law for service of notice of motion in an action in the same court. If the
adverse party shall be a non-resident, then the notice of the application shall be served
by the marshal of any district within which the adverse party may be found in like
manner as other process of the court.”
95) See U.S. FAA, 9 U.S.C. §§10, 11.
96) Diapulse Corp. of Am. v. Carba, Ltd, 626 F.2d 1108, 1110 (2d Cir. 1980).
97) Oxford Health Plans LLC v. Sutter, 133 S.Ct. 2064, 2068 (U.S. S.Ct. 2013) (quoting First
Options of Chicago, Inc. v. Kaplan, 514 U. S. 938, 942 (U.S. S.Ct. 1995)).
98) See§25.02[B]; Lagstein v. Certain Underwriters at Lloyd’s, London, 607 F.3d 634, 640-41 (9th
Cir. 2010) (reversing district court’s vacatur of award and emphasizing degree of judicial
deference required under FAA); Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d
133, 138-39 (2d Cir. 2007) (recognizing deference to be given awards and declining to
expand grounds for vacatur beyond those enumerated in FAA); D.-H. Blair & Co. v.
Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006); Liberty Re (Bermuda) Ltd v. Transam. Occidental
Life Ins. Co., 2005 WL 1216292, at *2 (S.D.N.Y.) (“Arbitrations [sic] awards are subject to a
very limited review in order to avoid undermining the twin goals of arbitration, namely
settling disputes efficiently and avoiding long and expensive litigation.”); Note, Judicial
Review of Arbitration Awards on the Merits, 63 Harv. L. Rev. 681 (1950).
99) See Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 587 (U.S. S.Ct. 2008) (“On application
for an order confirming the arbitration award, the court ‘must grant’ the order ‘unless the
award is vacated, modified, or corrected’. … There is nothing malleable about ‘must
grant’, which unequivocally tells courts to grant confirmation in all cases, except when
one of the ‘prescribed’ exceptions applies.”); Frazier v. CitiFin. Corp., LLC, 604 F.3d 1313,
1321 (11th Cir. 2010) (“Section 9 of the FAA provides that, upon application of any party to
the arbitration, the court must confirm the arbitrator’s award unless it is vacated,
modified, or corrected in accordance with sections 10 and 11 of the statute.”) (emphasis
in original); Will v. Parsons Evergreene, LLC, 2011 WL 2792398, at *1 (D. Colo.) (court
confirmed award as it “must” where respondent failed to assert any reason under FAA to
vacate, modify or correct award; “there is no flexibility in this statutory mandate”).
100) See Restatement (Third) U.S. Law of International Commercial Arbitration §4-11(a)
(Tentative Draft No. 2 2012) (“A court may [vacate an award] only on the grounds set forth
in Sections 4-12 through 4-18.”). See also§25.05[A][1][a].
74
101) See, e.g., Victrix SS Co. v. Salen Dry Cargo AB, 825 F.2d 709, 712 (2d Cir. 1987); I/S Stavborg
v. Nat’l Metal Converters, Inc., 500 F.2d 424, 429-30 (2d Cir. 1974); C.T. Shipping, Ltd v. DMI
(U.S.A.) Ltd, 774 F.Supp. 146, 148-49 (S.D.N.Y. 1991); Marley v. Drexel Burnham Lambert,
Inc., 566 F.Supp. 333, 334 (S.D. Tex. 1983).
102) See Restatement (Third) U.S. Law of International Commercial Arbitration §4-11(c)
(Tentative Draft No. 2 2012) (“A court may, in exceptional circumstances [vacate an
award] notwithstanding the existence of a ground for denying recognition or
enforcement.”).
103) See Idea Nuova, Inc. v. GM Licensing Group, Inc., 617 F.3d 177, 180 (2d Cir. 2010)
(“confirmation ordinarily is a summary proceeding that merely makes what is already a
final arbitration award a judgment of the court”); Wachovia Sec., Inc. v. Gangale, 125
F.Appx. 671, 676 (6th Cir. 2005) (“Section 9 of the [FAA] is clear that confirmation is a
summary proceeding and the court must confirm the award where the award is not
vacated, modified or corrected.”); Gas Natural Aprovisionamientos, SDG, SA v. Atl. LNG Co.
of Trinidad & Tobago, 2008 WL 4344525, at *3 (S.D.N.Y.) (“Normally, confirmation of an
arbitration award is a summary proceeding that merely makes what is already a final
arbitration award a judgment of the court, and the court must grant the award unless the
award is vacated, modified, or corrected.”).
104) See, e.g., Lessin v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 481 F.3d 813, 821 (D.C. Cir.
2007); Sarofim v. Trust Co. of the W., 440 F.3d 213, 216 (5th Cir. 2006); United Food &
Commercial Workers Int’l Union v. Foster Poultry Farms, 74 F.3d 169, 174 (9th Cir. 1995).
See§25.04[A][2].
105) See§25.03[A][4]; §25.04[A][2]; §25.04[B][3][a]; §25.04[C][2]; §25.04[D][2]; §25.04[E][2];
§25.04[F][2]; §25.04[G][2]; §25.04[H][4]; §25.04[J][3]; §26.03[B][3].
106) See, e.g., World Bus. Paradise, Inc. v. Suntrust Bank, 403 F.Appx. 468, 470 (11th Cir. 2010)
(imposing sanctions for frivolous appeal of denial of motion to vacate award:
“[a]rbitration’s allure is dependent upon the arbitrator being the last decision maker in
all but the most unusual cases” and when litigants pursue baseless contests of awards,
“the promise of arbitration is broken”); Manning v. Smith Barney, Harris Upham & Co., 822
F.Supp. 1081, 1083-84 (S.D.N.Y. 1993) (“sanctions are peculiarly appropriate in the context
of a challenge to an arbitration award which appears to be a largely dilatory effort”).
107) B.L. Harbert Int’l, LLC v. Hercules Steel Co., 441 F.3d 905, 913-14 (11th Cir. 2006).
108) SeeFrench Code of Civil Procedure, Art. 1484 (“As soon as it is made, an arbitral award
shall be res judicata with regard to the claims adjudicated in that award …”).
See§27.01[B][5].
109) SeeFrench Code of Civil Procedure, Arts. 1518, 1520, 1525(3). See J.-L. Delvolvé, G. Pointon
& J. Rouche, French Arbitration Law and Practice: A Dynamic Civil Law Approach to
International Arbitration ¶377 (2d ed. 2009); Kovacs, Challenges to International Arbitral
Awards – The French Approach, 25 J. Int’l Arb. 421, 426 (2008).
110) French Code of Civil Procedure, Art. 1520; Judgment of 9 October 2008, 2009 Rev. arb. 360,
362 (French Cour de cassation civ. 1e) (“challenge [against arbitral awards] is only
available on the grounds exhaustively listed in Article 1502 of the Code of Civil
Procedure”); Judgment of 6 January 1987, S. Pac. Props. Ltd v. République Arabe d’Egypte,
26 Int’l Legal Mat. 1004 (1987) (French Cour de cassation civ. le); E. Gaillard & J. Savage
(eds.), Fouchard Gaillard Goldman on International Commercial Arbitration ¶1603 (1999)
(“This list is exhaustive.”).
111) See Carducci, The Arbitration Reform in France: Domestic and International Law, 28 Arb.
Int’l 125, 154-55 (2012).
112) See, e.g.,Judgment of 6 October 2010, Fondation Albert Abela Family v. Fondation Joseph
Abela Family Found., 2010 Rev. arb. 813, 814 (French Cour de cassation civ. 1e); Judgment
of 23 February 1994, Andre v. Multitrade, 1994 Rev. arb. 683 (French Cour de cassation civ.
le) (“seeks, in reality, to have the substance of the award revised, which is prohibited in
international arbitration”); Judgment of 24 June 2010, Société Inforad Ltd v. Société Tes
Elec. Solutions, 2010 Rev. arb. 676 (Paris Cour d’appel) (“review of the merits of the award
… is prohibited”); J.-L. Delvolvé, G. Pointon & J. Rouche, French Arbitration Law and
Practice: A Dynamic Civil Law Approach to International Arbitration ¶¶376, 389 (2d ed.
2009).
113) SeeSwiss Law on Private International Law, Arts. 190, 194; Berti & Schnyder, in S. Berti et
al. (eds.), International Arbitration in Switzerland Art. 190, ¶7 (2000) (“A notified award is
final. Finality engenders the effects of res judicata and enforceability.”).
114) See Berti & Schnyder, in S. Berti et al. (eds.), International Arbitration in Switzerland Art.
190, ¶1 (2000) (“exclusive list of grounds for the setting aside” of award).
115) Berti & Schnyder, in S. Berti et al. (eds.), International Arbitration in Switzerland Art. 190,
¶18 (2000).
116) See, e.g., German ZPO, §1059; Belgian Judicial Code, Art. 1717; Netherlands Code of Civil
Procedure, Art. 1065; Austrian ZPO, §611; Italian Code of Civil Procedure, Art. 829; Spanish
Arbitration Act, 2011, Art. 41; Japanese Arbitration Law, Art. 44; Mexican Commercial
Code, Art. 1457. See also Judgment of 9 October 2012, Ann Arbor Foods SA v. Domino’s Pizza
Internacional Inc., Case No. 1420-2010 (Santiago Corte de Apelaciones) (denying
annulment of award on grounds that grounds for annulment under Article 34 of Chilean
Arbitration Law had not been satisfied).
75
117) English Arbitration Act, 1996, §58(1) (“Unless otherwise agreed by the parties, an award
made by the tribunal pursuant to an arbitration agreement is final and binding …”),
§§66-69; R. Merkin, Arbitration Law ¶¶18.117 et seq., 20.1 et seq. (1991 & Update August
2013).
118) Canadian Commercial Arbitration Act, 2013, Art. 34(2); British Columbia International
Commercial Arbitration Act, §35(1); Ontario International Commercial Arbitration Act,
Schedule, §35(1).
119) Australian International Arbitration Act, 2011, §16(1), Schedule 2, Art. 34(2).
120) Singapore International Arbitration Act, 2012, Art. 49.
121) Hong Kong Arbitration Ordinance, 2013, §81 & Schedule 2, ¶¶5-6.
122) Indian Arbitration and Conciliation Act, Art. 34(2).
123) New Zealand Arbitration Act, Schedule 1, Art. 34(2).
124) See Berger, The Modern Trend Towards Exclusion of Recourse Against Transnational
Arbitral Awards: A European Perspective, 12 Fordham Int’l L.J. 605 (1989).
125) See, e.g., Argentine National Code of Civil and Commercial Procedure, Art. 758 (“All
means of recourse available against court decisions can be raised against an arbitral
award, if not waived in the terms of reference.”); Portuguese Law on Voluntary
Arbitration, Law No. 31/86, as amended by Decree-Law No. 38/2003, Art. 29(1) (“Unless
the parties have waived the right to appeal, the same appeals which are admissible
regarding a judgment of the Court of First Instance may be lodged with the Court of
Appeal against the arbitral award.”).
In 2012, new arbitration legislation entered into force in Portugal which eliminated the
presumption of judicial review of arbitral awards; under the revised legislation,
appellate review is only permitted if expressly provided for in the arbitration
agreement. SeePortuguese Law on Voluntary Arbitration, 2011, Arts. 39(4), 53.
126) See§25.04[H][5]; §§25.05[A] & [D].
127) See§25.03[A][6], pp. 3179-80.
128) See§1.04[B][1][a]; §17.02[G][2], p. 2466.
129) UNCITRAL Model Law, 2006 Revisions, Art. 2A(1).
130) Major League Umpires Ass’n v. Am. League of Prof’l Baseball Clubs, 357 F.3d 272, 280 (3d
Cir. 2004) (quoting Tanoma Mining Co. v. Local Union No. 1269, 896 F.2d 745, 747 (3d Cir.
1990)).
131) K.-P. Berger, International Economic Arbitration 663 (1993); J. Lew, L. Mistelis & S. Kröll,
Comparative International Commercial Arbitration ¶25-32 (2003) (in many jurisdictions,
only limited grounds are available for annulling an award which “mirrors” Article V of
New York Convention); J.-F. Poudret & S. Besson, Comparative Law of International
Arbitration ¶786 (2d ed. 2007) (“UNCITRAL Model Law and certain laws which were
inspired thereby have closely followed the 1958 Convention”).
132) See Report of the Secretary-General on the Possible Features of A Model Law of
International Commercial Arbitration, U.N. Doc. A/CN.9/207, ¶110 XII Y.B. UNCITRAL 75
(1981); Report of the Working Group on International Contract Practices on the Work of Its
Fourth Session, U.N. Doc. A/CN.9/232, ¶15, XIV Y.B. UNCITRAL 33 (1983). See also H.
Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial
Arbitration: Legislative History and Commentary 1055-56 (1989) (“The enforcement regime
of the Model Law was intended to be aligned with the New York Convention, save that it
would apply not just to foreign awards but also domestic awards arising out of
international commercial arbitrations.”).
133) See§1.02[B].
134) See§11.03[D][1][a]; §11.05[B][2][b][ii]; §25.02.
135) UNCITRAL Model Law, Art. 34(2)(a)(i). See also§§26.05[C][1]-[2].
136) UNCITRAL Model Law, Art. 34(2)(a)(ii). See also§§26.05[C][3] & [6].
137) UNCITRAL Model Law, Art. 34(2)(a)(iii). See also§26.05[C][4].
138) UNCITRAL Model Law, Art. 34(2)(a)(iv). See also§§26.05[C][5]-[6].
139) UNCITRAL Model Law, Art. 34(2)(b)(i). See also§26.05[C][10].
140) UNCITRAL Model Law, Art. 34(2)(b)(ii). See also§§26.05[C][6] & [9].
141) See§25.03[B]. See also§26.05[C][7].
142) See§2.02[C][1][b][i]. See also§5.04[D].
143) UNCITRAL Model Law, Art. 34(2)(a)(i). See H. Holtzmann & J. Neuhaus, A Guide to the
Commentary 915-16 (1989).
144) New York Convention, Art. V(1)(a). See also Inter-American Convention, Art. 5(1)(a);
European Convention, Art. IX(1)(a); §26.05[C][1]-[2].
145) See§1.04[E][1]; §2.02[C][1][b][i]; §5.04[D]. See also§26.05[C][1][a], p. 3448.
76
146) See, e.g., English Arbitration Act, 1996, §67(1) (allowing annulment application “(a)
challenging any award of the arbitral tribunal as to its substantive jurisdiction; or (b) for
an order declaring an award made by the tribunal on the merits to be of no effect, in
whole or in part, because the tribunal did not have substantive jurisdiction”); German
ZPO, §1059(2)(1)(a) (allowing annulment where “a party to the arbitration agreement …
was under some incapacity pursuant to the law applicable to him; or the said agreement
is not valid under the law to which the parties have subjected it or, failing any indication
thereon, under German law”); Belgian Judicial Code, Art. 1717(3)(a)(i) (allowing annulment
where “[arbitration] agreement is not valid under the law to which the parties have
subjected it”); Netherlands Code of Civil Procedure, Art. 1065(1)(a) (allowing annulment in
“absence of a valid arbitration agreement”); Italian Code of Civil Procedure, Art. 829(1)
(allowing “recourse for nullity” where “the arbitration agreement is null and void”);
Spanish Arbitration Act, 2011, Art. 41(1)(a); Singapore International Arbitration Act, 2012,
Art. 31(2)(a)(b); Hong Kong Arbitration Ordinance, 2013, §81; Chinese Arbitration Law, Art.
58(1) (allowing annulment where “[t]here is no agreement for arbitration”); Japanese
Arbitration Law, Art. 44(1) (allowing annulment if “(i) the arbitration agreement is not
valid due to limits to a party’s capacity; [or] (ii) the arbitration agreement is not valid
for a reason other than limits to a party’s capacity under the law to which the parties
have agreed to subject it (or failing any indication thereon, under the law of Japan”);
Korean Arbitration Act, Art. 36(2)(1)(a); Indian Arbitration and Conciliation Act, Art. 34(2)
(a); Russian Arbitration Act, Art. 34(2)(1) (allowing annulment if “a party to the arbitration
agreement … was under some incapacity, or the said agreement is not valid under the
law to which the parties have subjected it or, failing any indication thereon, under the
law of the Russian Federation”).
147) French Code of Civil Procedure, Art. 1520(1).
148) Swiss Law on Private International Law, Art. 190(2)(b).
149) European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(c)
(allowing annulment “if there is no valid arbitration agreement”); ILC, Draft on Arbitral
Procedure Prepared by the International Law Commission at Its Fourth Session, 1952, U.N.
Doc. A/CN.4/59, Art. 30, II Y.B. I.L.C. 60, 66, (1952) (“The validity of the award may be
challenged by either party on one or more of the following grounds: … (a) That the
tribunal has exceeded its powers; (b) That there was corruption on the part of a member
of the tribunal; (c) That there has been a serious departure from a fundamental rule of
procedure.”).
150) See U.S. FAA, 9 U.S.C. §10(a)(4) (allowing vacatur “where the arbitrators exceeded their
powers”).
151) See, e.g., First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (U.S. S.Ct. 1995)
(affirming vacatur where arbitrators lacked jurisdiction over non-signatory); Schneider v.
Kingdom of Thailand, 688 F.3d 68 (2d Cir. 2012) (nonexistence of agreement to arbitrate is
grounds for vacatur); DK Joint Venture 1 v. Weyand, 649 F.3d 310 (5th Cir. 2011) (denying
confirmation of award where parties had never agreed to arbitrate).
152) SeeChapter 5.
153) See§§26.05[C][1]-[2].
154) See, e.g., Doug Brady, Inc. v. N.J. Bldg Laborers Statewide Funds, 2009 WL 349147, at *4
(D.N.J.) (“Brady’s argument would not provide grounds for denying a motion to compel
arbitration; accordingly, in the aftermath of arbitration, the same argument does not
provide grounds for vacating the award”); Thompson v. Lee, 589 A.2d 406, 414 (D.C. 1991)
(“defenses that could have been raised under the statutory proceeding for an order
[compelling arbitration] can be raised as defenses in a suit to confirm an award”).
155) See§3.03[A][2], p. 404.
156) See§4.02[B]. See also§25.04[A][5]; §26.05[C][1][e]; §26.05[C][2][a].
157) See§5.04[A][3]; §§26.05[C][1][e][i](4)-(5).
158) See§25.03[A][4].
159) See§§5.04[B]-[C]; §5.06[A][4].
160) See§26.05[C][1][b], p. 3451.
161) See§26.05[C][1][b], p. 3452.
162) Similar issues arise in the context of recognition of foreign awards. See§26.05[C][1][b],
pp. 2452-54.
163) See§3.01.
164) See§3.03[F]; §7.02[F].
165) It is clear that the “agreement” referred to in Article 34(2)(a)(i) is the agreement to
arbitrate (which is what is “referred to in Article 7”), not the underlying contract.
166) See§3.03[A][2].
77
167) See, e.g., N.J. Bldg Laborers Statewide Benefits Fund v. Am. Coring & Supply, 341 F.Appx.
816, 820 (3d Cir. 2009) (confirming award where debtor claimed underlying contract was
unenforceable: “Federal courts have limited authority to address challenges to
arbitration awards. … Due to the severable nature of an arbitration clause, challenges to
arbitrability are reserved for the court, while arguments that attack the contract as a
whole must be presented to an arbitrator.”); Nat’l Union Fire Ins. Co. v. Las Vegas Prof’l
Football LP, 2010 U.S. Dist. LEXIS 5829, at *6-7 (S.D.N.Y.) (“[Award-debtor] has not
specifically challenged the validity of the arbitration provisions, or argued that those
provisions were the product of fraud, duress or some other impropriety. Therefore, the
issue of the contract’s validity is an issue for the arbitrators to decide”); Doug Brady, Inc.
v. N.J. Bldg Laborers Statewide Funds, 2009 WL 349147 (D.N.J.) (refusing to consider
challenge to validity of underlying contract as basis for vacating award); Rintin Corp., SA
v. Domar, Ltd, 374 F.Supp.2d 1165, 1170 (S.D. Fla. 2005) (“Plaintiff’s argument is really
nothing more than an attack on the contract as a whole as opposed to the ‘written
undertaking to arbitrate’ and thus does not constitute a valid basis to vacate an arbitral
award”); Judgment of 21 November 2008, 19 Sch 12/08 (Oberlandesgericht Köln).
168) See, e.g., Downer v. Siegel, 489 F.3d 623 (5th Cir. 2007) (challenge to award on grounds
contract was procured by fraud was “beside the point”: “even if this contract had been
induced by fraud, the arbitration clause is enforceable unless the plaintiffs were
fraudulently induced into agreeing to the arbitration clause itself”); Ferro Corp. v.
Garrison Indus., Inc., 142 F.3d 926, 933 (6th Cir. 1998) (reversing lower court’s vacatur of
award on grounds that arbitration agreement was fraudulently induced: “fraudulent
inducement of a contract is to be decided by an arbitrator, unless the making of the
arbitration clause itself was fraudulently induced. Here, Appellee Ferro drafted the
arbitration agreement contained in the CMA and has not asserted that the arbitration
agreement was fraudulently induced”); R.M. Perez & Assocs., Inc. v. Welch, 960 F.2d 534,
538 (5th Cir. 1992) (“If the fraud relates to the arbitration clause itself, the court should
adjudicate the fraud claim. If it relates to the entire agreement, then the [FAA] requires
that the fraud claim be decided by an arbitrator.”); T & R Enters., Inc. v. Cont’l Grain Co.,
613 F.2d 1272, 1278 (5th Cir. 1980) (affirming lower court’s confirmation of award; award-
debtor failed to make “an unequivocal denial that the agreement to arbitrate was
made”); Comprehensive Merchandising Catalogs, Inc. v. Madison Sales Corp., 521 F.2d 1210,
1213 (7th Cir. 1975) (“Since we now hold that an arbitration provision of a contract is
separable, the agreement to arbitrate would be ‘valid’ even if the substantive portions
of the contract were induced by fraud”); Activant Solutions, Inc. v. Notoco Indus., LLC,
2011 WL 5079490, at *3 (N.D. Cal.) (refusing to consider claim that underlying contract was
fraudulently induced: “statutory language does not permit the federal court to consider
claims of fraud in the inducement of the contract generally”); Doug Brady, Inc. v. N.J. Bldg
Laborers Statewide Funds, 2009 WL 349147, at *7 (D.N.J.) (confirming award and rejecting
claim that arbitration agreement was result of fraud-in-the-factum: “Brady’s ardent
protestations that the parties intended a CBA with a narrower scope, and that, after-the-
fact, the parties performed under the CBA as if it had a narrower scope, are of no
moment in considering whether the parties completed an arbitration agreement. Alas,
this Court must conclude, as did another court in the Eastern District of New York in a
similar arbitrability dispute, that ‘Plaintiff is simply trying to cloak a fraudulent
inducement claim in the language of fraud in the execution.’”) (quoting McCaddin v. S.E.
Marine Inc., 567 F.Supp.2d 373, 381-82 (E.D.N.Y. 2008)); Fiona Trust & Holding Corp. v.
Privalov [2007] UKHL 40, ¶964 (House of Lords) (“The doctrine of separability requires
direct impeachment [by fraud] of the arbitration agreement before it can be set aside.”);
Quadwest Dev. Pty Ltd v. Thi, [2009] WASC 260, ¶¶50, 60-63 (W. Australia S.Ct.) (denying
annulment on grounds that underlying contract was induced through fraudulent
misrepresentation and deferring to arbitrator’s factual determination).
169) See, e.g., Masco Corp. v. Zurich Am. Ins. Co., 382 F.3d 624, 629-30 (6th Cir. 2004) (even if
insurance contract is voidable due to mutual mistake, arbitration clause in contract is
valid); Unionmut. Stock Life Ins. Co. v. Beneficial Life Ins. Co., 774 F.2d 524, 529 (1st
Cir.1985) (mutual mistake is issue for arbitrator to decide, unless specifically directed at
arbitration agreement); Storm Water Inspection & Maint. Servs., Inc. v. Smith, 2007 WL
1849097, at *6 (Cal. Ct. App). See also§5.06[C][2].
170) See, e.g., Turner v. Package Express, LP, 2013 WL 2149786 (Tex. Ct. App.) (claim that
underlying contract lacked consideration not grounds for vacatur); Wells Fargo Advisors,
LLC v. Watts, 858 F.Supp.2d 591 (W.D.N.C. 2012) (denying vacatur on grounds contract
lacked consideration); Storm Water Inspection & Maint. Servs., Inc. v. Smith, 2007 WL
1849097, at *6 (Cal. Ct. App.) (denying vacatur on grounds underlying contract lacked
consideration: “Courts do not look to the contract as a whole to determine arbitrability.
Challenges to the validity of the underlying contract (i.e., ambiguous, unclear, lack of
consideration, mutual mistake) are not considered.”); Hubbard v. Fischel, 2002 WL
1722409 (Cal. Ct. App.) (failure of consideration voided underlying contract but had no
effect on arbitrability of claims).
78
171) See, e.g., Brennan v. CIGNA Corp., 282 F.Appx. 132 (3d Cir. 2008) (claim that underlying
contract was contract of adhesion is for arbitrator, not court, in vacatur action);
Kowalewski v. Samandarov, 590 F.Supp.2d 477, 487 (S.D.N.Y. 2008) (unconscionability of
whole contract, as opposed to arbitration clause, is matter for arbitrator to determine);
Med. Shoppe Int’l, Inc. v. Asong, 2006 WL 83491, at *3 (E.D. Mo.) (rejecting vacatur because
licensing agreement and arbitration provision were allegedly unconscionable: “I am not
free to substitute my judgment for that of the arbitrator’s even if I were to disagree with
his interpretation of the facts or the law”); Drogorub v. Payday Loan Store of WI, Inc., 826
N.W.2d 123 (Wis. Ct. App. 2012) (unconscionability of underlying contract did not affect
validity of arbitration agreement); Cotchett, Pitre & Mccarthy v. Universal Paragon Corp.,
114 Cal.Rptr.3d 781, 790 (Cal. Ct. App. 2010) (denying vacatur: “in cases where the
arbitration clause within a contract itself is valid and enforceable (and no claim has
been made in this case that it was not), it is up to the arbitrator to resolve a claim that
the substance of the contract is unconscionable”). See also§5.06[C][4].
172) See, e.g., N.J. Bldg Laborers Statewide Benefits Fund v. Am. Coring & Supply, 341 F.Appx.
816, 820 (3d Cir. 2009) (confirming award where debtor claimed the underlying contract
had expired); Mulvaney Mechanical, Inc. v. Sheet Metal Workers Int’l Ass’n, 351 F.3d 43,
45-46 (2d Cir. 2003) (claim that contract was rescinded was issue for arbitrators and not
grounds for vacatur); Lin Ming v. Chen Shu Quan, [2012] 2 HKLRD 547, ¶28 (H.K. First Inst.)
(challenge to validity of contract was for arbitrators to determine; “even if the contract
is repudiated and the repudiation is accepted, the arbitration clause survives the
repudiation”); Judgment of 15 January 2008, Third Millennium Co. SRL v. Guess Inc., XXXVI
Y.B. Comm. Arb. 296, 299 (Florence Corte d’Appello) (2011) (rejecting claim contract had
expired as grounds for challenging award: “only the arbitrators may ascertain whether
an arbitration agreement or clause is still in force or has expired because of the new
contract”); Codelfa Constr. Pty Ltd v. State Rail Auth. (NSW), [1982] 149 CLR 337, 366-67
(Australian High Ct.) (rescission of underlying contract has no effect on arbitration
agreement and is not grounds for annulling award). See also§5.06[C][7].
173) See, e.g., Schacht v. Beacon Ins. Co., 742 F.2d 386 (7th Cir. 1984) (question whether
condition precedent to underlying contract is fulfilled is for arbitrators); McIntyre v.
Household Bank, 2004 WL 1088228, at *1 (N.D. Ill.) (denying vacatur and deferring to
arbitrator’s determination that condition precedent to underlying contract was not met;
“it is the arbitrator’s role to consider any arguments about the validity or enforceability
of the entire contract, including the failure of a condition precedent”); Judgment of 6
December 1988, Société Navimpex Centrala Navala v. Société Wiking Trader, 1989 Rev. arb.
641 (French Cour de cassation civ. 1e) (denying annulment on grounds that underlying
sales contract never came into existence, due to failure of seller to provide a letter of
guarantee, which was condition precedent). Compare Marshall Durbin Poultry Co., Inc. v.
United Food & Commercial, 268 F.3d 1064, 1064 (5th Cir. 2001) (vacating award where
mandatory precondition to arbitration was not met; arbitrator “exceeded the scope of
its authority” by ignoring procedures which “constituted a jurisdictional prerequisite to
arbitration”). See also§5.06[C][8].
174) See, e.g., Sleeper Farms v. Agway Inc., 506 F.3d 98, 103 (1st Cir. 2007) (denying vacatur on
grounds contract was illegal; “[a]s a matter of federal law, the arbitration clause is
unaffected even if the substance of the contract is otherwise void or voidable”);
Nussbaum v. Kimberly Timbers, Ltd, 856 A.2d 364, 370 (Conn. S.Ct. 2004) (denying vacatur;
claim that underlying contract was illegal was for arbitrator to decide); Harbour Assur.
Co. (U.K.) Ltd v. Kansa Gen. Int’l Ins. Co. Ltd [1992] 1 Lloyd’s Rep 81 (English Ct. App.)
(challenge to legality of underlying contract is matter for arbitrators and therefore
subject to narrow review); Beijing Jianlong Heavy Indus. Group v. Golden Ocean Group Ltd
[2013] EWHC 1063 (Comm) (English High Ct.) (denying annulment of interim award;
alleged illegality of underlying contract irrelevant to validity of arbitration agreement);
Judgment of 20 June 2002, Société Ordatech v. Société W. Mgt, 2002 Rev. arb. 976 (Paris
Cour d’appel) (illegality of underlying contract has no relevance to validity of arbitration
agreement). Compare R.P.T. of Aspen, Inc. v. Innovative Commc’ns, Inc., 917 P.2d 340, 343
(Colo. App. 1996) (court must determine threshold issue of whether entire contract is
illegal). See also§5.06[C][12].
175) See, e.g., Bapu Corp. v. Choice Hotels Int’l, Inc., 371 F.Appx. 306 (3d Cir. 2010) (rejecting
claim that statute of limitations had expired and therefore arbitrator lacked
jurisdiction); Wagner Constr. Co. v. Pac. Mechanical Corp., 157 P.3d 1029, 1030 (Cal. S.Ct.
2007) (“affirmative defense that the statute of limitations has run is for the arbitrator
rather than the court to decide”); Horsfield Constr., Inc. v. City of Dyersville, 823 N.W.2d
418 (Iowa App. Ct. 2012) (denying challenge to award on grounds that claim was time-
barred); Am. Fed’n of Gov’t Employees, Council 236 & Gen. Servs. Admin., 45 FLRA 813, 816
(F.L.R.A. 1992) (rejecting challenge to arbitrators’ dismissal of claim as untimely: “[m]ere
disagreement with an arbitrator’s evaluation of the evidence and interpretation of the
[contract] in resolving a question of procedural arbitrability provides no basis on which
to find an award deficient”); W. of England Ship Owners Mut. Protection & Indem. Assoc. v.
Hellenic Indus. Dev. Bank SA [1999] Lloyd’s Rep. 95, 107 (Comm) (English High Ct.)
(allegation that claim is time-barred is for arbitrator, not court, to decide). See
also§5.06[C][15].
79
176) See, e.g., Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-46 (U.S. S.Ct. 2006)
(“unless the challenge is to the arbitration clause itself, the issue of the contract’s
validity is considered by the arbitrator in the first instance”); Prima Paint Corp. v. Flood
& Conklin Mfg Co., 388 U.S. 395, 403-04 & n.12 (U.S. S.Ct. 1967) (“[If the claim] goes to the
‘making’ of the agreement to arbitrate – the federal court may proceed to adjudicate it.
But the statutory language does not permit the federal court to consider claims [against
the validity of] the contract generally.”); Fiona Trust & Holding Corp. v. Privalov [2007]
UKHL 40, ¶35 (House of Lords) (“The doctrine of separability requires direct
impeachment of the arbitration agreement before it can be set aside. This is an exacting
test. The argument must be based on facts which are specific to the arbitration
agreement. Allegations that are parasitical to a challenge to the validity to the main
agreement will not do.”); El Nasharty v. J Sainsbury plc [2008] 1 Lloyd’s Rep 361, ¶30
(Comm) (English High Ct.) (challenge to arbitration agreement must be based on facts
specific to arbitration agreement, and not simply challenge to validity of contract
containing it). See also§3.03[A][2][b][ii](1), p. 414.
177) See, e.g., Activant Solutions, Inc. v. Notoco Indus., LLC, 2011 WL 5079490, at *3 (N.D. Cal.)
(“Court may consider the issue of fraudulent inducement only where it pertains
specifically to the arbitration agreement, as opposed to the contract containing the
arbitration clause”); Nat’l Union Fire Ins. Co. v. Las Vegas Prof’l Football LP, 2010 U.S. Dist.
LEXIS 5829, at *6-7 (S.D.N.Y.) (“[Award-debtor] has not specifically challenged the validity
of the arbitration provisions. … Therefore, the issue of the contract’s validity is an issue
for the arbitrators to decide.”); Harbour Assur. Co. (U.K.) Ltd v. Kansa Gen. Int’l Ins. Co. Ltd
[1992] 1 Lloyd’s Rep 81 (English Ct. App.) (where arbitration clause itself is “not … directly
impeached” then arbitrators have jurisdiction to consider validity of contract as a
whole); Abuja Int’l Hotels Ltd v. Meridien SAS [2012] EWHC 87, ¶32 (Comm) (English High
Ct.) (rejecting challenge to award; challenge was not “based on facts which are specific
to the arbitration agreement”). See also§7.03[E][5][b].
178) See, e.g., Cronin v. Citifin. Servs., Inc., 352 F.Appx. 630, 635 (3d Cir. 2009) (rejecting, after de
novo consideration, claim that award should be vacated because arbitration agreement
was allegedly void on unconscionability grounds: “the class action waiver is not
unconscionable under the public policy of Pennsylvania”); Murray v. United Food &
Commercial Workers Int’l Union, 289 F.3d 297 (4th Cir. 2002) (reversing confirmation of
award on grounds that arbitration clause was unconscionable); Woods v. Saturn Dist.
Corp., 78 F.3d 424 (9th Cir. 1996) (rejecting, after de novo consideration, claim that
arbitral procedures were unconscionable because they unduly favored employer); Ceglio
v. Nordstrom, Inc., 2011 WL 2971167 (D.N.J.) (rejecting, after de novo consideration, claim
that arbitration agreement was unconscionable); Eyewonder, Inc. v. Abraham, 2010 WL
3528882 (S.D.N.Y.) (rejecting claim that arbitration agreement was unconscionable;
reviewing arbitrators’ jurisdictional ruling de novo); Reeves v. Chase Bank USA, NA, 2008
WL 2783231 (E.D. Mo.) (rejecting challenges to existence and unconscionability of
arbitration agreement; considering jurisdictional issues de novo); Choice Hotels Int’l, Inc.
v. Patel, 2004 WL 57658 (D. Md.) (rejecting claim that arbitration clause was
unconscionable); Watts v. Pac. Window Prods., Inc., 2007 WL 987872 (Cal. Ct. App.)
(reviewing de novo challenge to award on grounds arbitration agreement was
unconscionable); Walker v. IASCO, 2003 WL 22300861 (Cal. Ct. App.) (rejecting, after de
novo consideration, claim that arbitration agreement was unconscionable); Hanover Ins.
Co. v. Losquadro, 600 N.Y.S.2d 419 (N.Y. Sup. Ct. 1993) (reviewing de novo claim that
arbitration clause was unconscionable); Judgment of 26 October 2006, Elisa Maria
Mostaza Claro v. Centro Móvil Milenium SL, [2006] Case No. C-168/05, ¶39 (E.C.J.) (“A
national court seized of an action for annulment of an arbitration award must determine
whether the arbitration agreement is void and annul that award where that agreement
contains an unfair term.”). Compare Med. Shoppe Int’l, Inc. v. Asong, 2006 WL 83491, at *3
(E.D. Mo.) (rejecting claim that award should be vacated because licensing agreement
and arbitration provision were unconscionable: “I am not free to substitute my judgment
for that of the arbitrator’s even if were to disagree with his interpretation of the facts or
the law.”).
179) See, e.g., Willis Flooring, Inc. v. Howard S. Lease Constr. Co., 656 P.2d 1184, 1185 (Alaska
S.Ct. 1983) (confirming award where arbitration agreement was asymmetrical); Morrow v.
Hallmark Cards, Inc., 273 S.W.3d 15 (Mo. Ct. App. 2008) (considering de novo challenge to
award on grounds arbitration agreement lacked mutuality); Flores v. Prime Time Prods.,
Inc., 2008 WL 4616801, at *10-11 (Cal. Ct. App.) (reversing confirmation of award on
grounds arbitration agreement was asymmetrical); Martinez v. Master Protection Corp.,
118 Cal.App.4th 107, 115 (Cal. Ct. App. 2004) (vacating award for lack of mutuality where
arbitration agreement required employees to arbitrate all claims, but reserved
employer’s right to obtain injunctive relief in judicial forum for certain causes of action);
Walker v. IASCO, 2003 WL 22300861 (Cal. Ct. App.) (reviewing de novo and rejecting claim
arbitration agreement lacked mutuality); Kaye Knitting Mills v. Prime Yarn Co., 326
N.Y.S.2d 361 (N.Y. App. Div. 1971) (vacating award where arbitration agreement was
asymmetrical); Harbour Assur. Co. (U.K.) v. Kansa Gen. Assur. Co. [1993] 1 Lloyd’s Rep. 455,
468-69 (English Ct. App.) (suggesting that asymmetrical “contrats d’adhesion in which the
arbitrator is in practice the choice of the dominant party” may be grounds for vacatur).
80
180) See, e.g., Kruse v. AFLAC Int’l, Inc., 458 F.Supp.2d 375 (E.D. Ky. 2006) (failure to provide
specific terms as to where arbitration was to take place, who was to pay for arbitration,
its procedure, or what law applied did not invalidate arbitration agreement); Judgment
of 7 February 2002, SA Alfac v. Société Irmac Importacão, Comércia e Industria Ltda, 2002
Rev. arb. 413, 415-16 (Paris Cour d’appel) (upholding award rendered under ICC Rules
based on clause referring parties to “arbitration in Paris in accordance with the rules of
the international arbitration association”); Judgment of 7 November 2011, DFT 138 III 29
(Swiss Federal Tribunal) (rejecting action to set aside award brought on basis of
uncertainty of arbitration agreement); Judgment of 24 January 2003, XXX Y.B. Comm. Arb.
509 (Hanseatisches Oberlandesgericht Hamburg) (2005) (upholding arbitration clause
providing “Arbitration: Hamburg”; relying on trade usages to uphold award by Deutscher
Kaffee Verband); Judgment of 4 April 2013, STSJ CAT 5322/2013, Legal Ground No. 7, ¶4
(Catalonia Tribunal Superior de Justicia) (annulling award where arbitration agreement
“neither stated with sufficient clarity where the seat of the arbitration was to be located
nor undoubtedly delegated such determination to the [tribunal]”).
181) See, e.g., Perhach v. Option One Mortg. Corp., 382 F.Appx. 897 (11th Cir. 2010) (rejecting
after de novo consideration claim that employee’s arbitration agreement with employer
was coercive because employer required employee to sign agreement as condition of
employment); Watts v. Pac. Window Prods., Inc., 2007 WL 987872 (Cal. Ct. App.)
(considering de novo challenge to award on grounds arbitration agreement was contract
of adhesion); Hanover Ins. Co. v. Losquadro, 600 N.Y.S.2d 419 (N.Y. Sup. Ct. 1993) (same);
Judgment of 17 December 2012, SAP VA 1793/2012, 2-3 (Valladolid Audiencia Provincial)
(considering de novo and rejecting challenge to award on grounds arbitration agreement
“was incorporated into a contract of adhesion”; “such a clause is legible, clear and
comprehensible and has been signed by the client who was in a position to be aware of
its existence when the contract was signed”).
182) See, e.g., Century Indem. Co. v. Certain Underwriters at Lloyd’s, London, 584 F.3d 513 (3d
Cir. 2009) (reviewing de novo and denying motion for vacatur; arbitration agreement
incorporated by reference); Grey v. Am. Mgt Servs., 204 Cal.App.4th 803 (Cal. Ct. App.
2012) (reviewing de novo and vacating award; arbitration agreement was not
incorporated); Logan & Kanawha Coal Co., LLC v. Detherage Coal Sales, LLC, 841 F.Supp.2d
955 (S.D. W.Va. 2012) (same); GGIS Ins. Servs., Inc. v. Lincoln Gen. Ins. Co., 773 F.Supp.2d
490, 503 (M.D. Pa. 2011) (same); Colorado-Arkansas-Texas Distrib., LLC v. Am. Eagle Food,
525 F.Supp.2d 428 (S.D.N.Y. 2007) (same); Lisnave Estaleiros Navais SA v. Chemikalien
Seetransport GmbH [2013] EWHC 338 (Comm) (English High Ct.) (annulling, after de novo
review, award that found arbitration agreement incorporated from one party’s general
terms and conditions); Arsanovia Ltd v. Cruz City 1 Mauritius Holdings [2012] EWHC 3702
(Comm) (English High Ct.) (reviewing de novo and vacating award on grounds arbitration
agreement was not incorporated into contract); Judgment of 6 March 2013, STSJ CAT
5343/2013 (Catalonia Tribunal Superior de Justicia) (reviewing de novo and vacating
award; arbitration agreement in first contract was not incorporated into parties’
subsequent contract).
183) See, e.g., Legair v. Circuit City Stores, Inc., 213 F.Appx. 436 (6th Cir. 2007) (considering de
novo and rejecting claim that arbitration agreement lacked consideration); Morrow v.
Hallmark Cards, Inc., 273 S.W.3d 15, 28 (Mo. Ct. App. 2008) (vacating award; arbitration
provision unenforceable for lack of consideration); Bd of Educ. of Berkeley County v. W.
Harley Miller, Inc., 236 S.E.2d 439, 447 (W. Va. 1977) (court rejected after de novo review
claim that arbitration agreement lacked consideration where agreement was “bargained
for”).
184) See, e.g., Williams v. Cigna Fin. Advisors, Inc., 197 F.3d 752 (5th Cir. 1999) (rejecting after de
novo review claim that arbitration agreement was void because it supposedly required
payment of fees that deterred party from pursuing federal rights); DeGaetano v. Smith
Barney, Inc., 983 F.Supp. 459 (S.D.N.Y. 1997) (holding, after de novo review, that
arbitration clause in employment agreement was void as against public policy, to extent
that it waived employee’s right to obtain attorney fees as prevailing Title VII plaintiff).
See also Brady v. Williams Capital Group, LP, 878 N.Y.S.2d 693, 695 (N.Y. Sup. Ct. 2009)
(denying confirmation of award: “fee splitting” provision in employment contract
containing arbitration clause was void as contrary to public policy because costs were
“prohibitive” for employee), aff’d as modified, 14 N.Y.3d 459 (2010); Beijing Jianlong Heavy
Indus. Group v. Golden Ocean Group Ltd [2013] EWHC 1063, ¶26 (Comm) (English High Ct.)
(denying annulment but noting “if the public policy ground on which the underlying
contract is unenforceable also taints the arbitration agreement, the latter will similarly
be unenforceable”); Judgment of 10 January 2012, M.E. Serant v. SA Deloitte, 2012 Rev. arb.
337 (Paris Cour d’appel) (setting aside arbitral award on grounds arbitration agreement
was contrary to public policy because it was contained in employment contract).
185) See, e.g., Canadian Am. Ass’n of Prof’l Baseball, Ltd v. Ottawa Rapidz, 711 S.E.2d 834 (N.C.
Ct. App. 2011) (considering de novo and denying vacatur on grounds that dispute
resolution procedure was not arbitration agreement); Kenny v. Rich, 186 P.3d 989 (Utah
Ct. App. 2008) (affirming vacatur; “acknowledgment” that parties executed was not
arbitration agreement); Allstate Ins. Co. v. Suarez, 833 So.2d 762 (Fla. S.Ct. 2002)
(affirming vacatur where putative arbitration agreement was agreement for appraisal);
Judgment of 20 May 2005, 10 Sch 01/05 (Oberlandesgericht Naumburg); Judgment of 28
May 2009, Proindein SA v. Eguskitzu SL, SAP SS 490/2009 (Gipuzkoa Audiencia Provincial)
(considering de novo and denying annulment on grounds arbitration agreement did not
exist).
81
186) See, e.g., Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 221 (3d Cir. 2007) (waiver of right
to arbitrate is presumptively for court to decide); J.D. Shehadi, LLC v. US Maint., Inc., 2011
WL 4632484, at *5 (E.D. Pa.) (rejecting challenge to award for alleged waiver; “[t]hat the
arbitrator may have decided the waiver issue is irrelevant to this Court because whether
a party’s litigation conduct constitutes a waiver of the right to compel arbitration is a
matter for the Court to decide”); Jackson Trak Group, Inc. v. Mid States Port Auth., 751 P.2d
122, 129-30 (Kan. 1988) (holding after de novo review that award-creditor had not waived
right to arbitrate); Aspri Invs., LLC v. Afeef, 2011 WL 3849487 (Tex. App. Ct.) (reviewing de
novo challenge to award alleging waiver of right to arbitrate). But see Ewing v.
Catastrophe-Texas LC, 375 S.W.3d 545, 552 (Tex. App. Ct. 2012) (“waiver of the right to
arbitrate is not a statutory ground for vacating, modifying, or correcting an arbitration
award”).
187) See§3.03[A][2][b][iv](1); §§3.03[A][2][c], [e] & [g]. Compare Restatement (Third) U.S. Law of
International Commercial Arbitration §4-12(d) (Tentative Draft No. 2 2012) (“Under this
Section, a court does not review the arbitral tribunal’s determination of the validity of a
contract that includes the arbitration agreement. However, the court determines de
novo … the existence of the contract that includes the arbitration agreement”). The
Restatement formulation incorrectly conflates all cases of nonexistent underlying
contracts with cases where the same facts (“doubly relevant” facts) result in the
nonexistence of both the underlying contract and the arbitration clause.
188) See, e.g., Frazier v. CitiFin. Corp. LLC, 604 F.3d 1313 (11th Cir. 2010) (affirming award where
arbitrator accepted that signature on contract had been forged); Doug Brady, Inc. v. N.J.
Bldg Laborers Statewide Funds, 2009 WL 349147, at *3 (D.N.J.) (“FAA reserves other ‘void’
arguments, such as fraud in the execution, for arbitration rather than adjudication, so
long as the arbitration clause itself is not the crux of the dispute”); N.J. Bldg Laborers’
Statewide Benefit Funds v. Mark Constr., 2008 WL 3833542, at *1-3 (D.N.J.) (same); Premium
Nafta Prods. Ltd v. Fili Shipping Co. Ltd [2007] UKHL 40, ¶17 (House of Lords) (“[T]here may
be cases in which the ground upon which the main agreement is invalid is identical with
the ground upon which the arbitration agreement is invalid. For example, if the main
agreement and the arbitration agreement are contained in the same document and one
of the parties claims that he never agreed to anything in the document and that his
signature was forged, that will be an attack on the validity of the arbitration
agreement.”); Harbour Assur. Co. (U.K.) Ltd v. Kansa Gen. Int’l Ins. Co. Ltd [1993] QB 701, 723
(English Ct. App.) (“There will obviously be cases in which a claim that no contract came
into existence necessarily entails a denial that there was any agreement to arbitrate.”);
HJ Heinz Co. Ltd v. EFL Inc. [2010] 1 CLC 868 (QB) (English High Ct.) (claim that signature on
contract was forged, if proven, provides grounds for annulment); Judgment of 2 November
2012, STSJ 13404/2011 (Andalucía Tribunal Superior de Justicia) (considering de novo
challenge to award on grounds signature to contract was forged; denying annulment
where party failed to prove forgery). §3.03[A][2][b][ii](3).
189) See, e.g., Sanford v. MemberWorks, 483 F.3d 956, 962 (9th Cir. 2007) (“Issues regarding the
validity or enforcement of a putative contract mandating arbitration should be referred
to an arbitrator, but challenges to the existence of a contract as a whole must be
determined by the court prior to ordering arbitration.”); Hyundai Merchant Marine Co.
Ltd v. Am. Bulk Transp. Ltd [2013] EWHC 470 (Comm) (English High Ct.) (annulling award
that found arbitration agreement on basis that there was no consensus on underlying
contract and therefore no consensus on arbitration agreement); Azov Shipping Co. v.
Baltic Shipping Co. [1999] 2 Lloyd’s Rep. 159 (Comm) (English High Ct.) (annulling award
where plaintiff never agreed to be bound by underlying contract or arbitration
agreement contained in it); Judgment of 10 July 1990, Société Pia Invs. v. Société Cassia,
1990 Rev. arb. 851 (Paris Cour d’appel) (annulling award where draft underlying contract
was never signed by parties); N. Blackaby et al., Redfern and Hunter on International
Arbitration ¶5.107 (5th ed. 2009) (“If the contract never existed at all, then there was
never an agreement. So the arbitral tribunal can have no valid existence, authority or
jurisdiction.”). CompareJudgment of 25 October 2005, Société Omenex v. M. Hugon, 2006
Rev. arb. 103, 105 (denying annulment on basis that “according to the principle of
validity of arbitration agreement and its autonomy in international arbitration, nullity
or non-existence of the contract containing such arbitration agreement do not affect the
latter”). See also§3.03[A][2][b][ii](3).
82
190) See, e.g., Sphere Drake Ins. Ltd v. All Am. Ins. Co., 256 F.3d 587 (7th Cir. 2001) (party may be
required to arbitrate only if agent had authority to bind it to reinsurance contract); Jin
Geng Zhao v. Ming Du Int’l Trade, Inc., 2013 WL 64433, at *6 (Cal. Ct. App.) (considering de
novo and rejecting claim that party never consented to arbitration agreement because
agent lacked authority); Toal v. Tardif, 178 Cal.App.4th 1208, 1213-14 (Cal. Ct. App. 2009)
(vacating award on basis that attorney did not have authority to bind client to
arbitration); Judgment of 10 June 2004, Société Bargues Agro Indus. v. Société Young Pecan
Co., 2006 Rev. arb. 154 (Paris Cour d’appel) (considering de novo and denying vacatur on
grounds that agent lacked authority); Fung Sang Trading Ltd v. Kai Sun Sea Prods. & Food
Co. Ltd, [1992] 1 HKLR 40, 49-50 (H.K. High Ct.) (claim that agent lacked authority to
execute arbitration agreement can be grounds for vacatur). Compare Premium Nafta
Prods. Ltd v. Fili Shipping Co. Ltd [2007] UKHL 40, ¶18 (House of Lords) (“[I]f … the agent
exceeded his authority by entering into a main agreement in terms which were not
authorized or for improper reasons, that is not necessarily an attack on the arbitration
agreement. It would have to be shown that whatever the terms of the main agreement or
the reasons for which the agent concluded it, he would have had no authority to enter
into an arbitration agreement.”). See also§3.03[A][2][b][ii](3).
191) See, e.g., C.R. Klewin Ne., LLC v. City of Bridgeport, 919 A.2d 1002, 1020 (Conn. 2007) (citing
unclear “gray area” in treatment of claims of lack of assent or capacity). See also
Restatement (Third) U.S. Law of International Commercial Arbitration §4-12, comment e
(Tentative Draft No. 2 2012) (“Uncertainty remains, however, as to whether challenges to
the main contract on grounds such as duress and lack of capacity affect the existence of
the main contract or only its validity.”).
192) See, e.g., S & G Flooring, Inc. v. N.Y. City Dist. Council of Carpenters Pension Fund, 2009 WL
4931045 (S.D.N.Y.) (reviewing de novo claim that contract was signed under duress);
Nussbaum v. Kimberly Timbers, Ltd, 856 A.2d 364, 370 (Conn. 2004) (duress in formation of
contract can serve as basis to vacate award); Thompson v. Lee, 589 A.2d 406, 414 (D.C.
1991) (“[D]efenses that could have been raised under the statutory proceeding for an
order [compelling arbitration] can be raised as defenses in a suit to confirm an award. …
Such defenses would include … duress.”); Kurtz v. Wizbowski, 2008 WL 2569183, at *4-7
(Cal. Ct. App.) (reviewing de novo claim that contract was signed under duress; denying
vacatur).
193) See, e.g., Spahr v. Secco, 330 F.3d 1266, 1273 (10th Cir. 2003) (capacity claims are for court
to decide: “[I]t would be odd indeed if a party claimed that its mental incapacity
specifically affected the agreement to arbitrate. … Unlike a claim of fraud in the
inducement, which can be directed at individual provisions in a contract, a mental
capacity challenge can logically be directed only at the entire contract.”); Composition
Roofers Local 4 Pension Fund v. Best Roofing of N.J., Inc., 2009 WL 5033945, at *2 (D.N.J.)
(capacity is issue for courts, not arbitrators, to decide); WB, The Bldg Co., LLC v. El
Destino, LP, 257 P.3d 1182, 1188 (Ariz. App. Ct. 2011) (capacity to enter into underlying
contract for court to decide); Irvani v. Irvani [2000] CLC 477, 493-95 (English Ct. App.)
(considering de novo and denying annulment based on incapacity because party
challenging award failed to show he was incapacitated by drug addiction).
194) See, e.g., Adams v. FedEx Ground Package Sys., Inc., 2013 WL 1164426, at *3-4 (D. Colo.)
(claims that underlying contract procured through duress are for arbitrator to decide);
Ceglio v. Nordstrom, Inc., 2011 WL 2971167 (D.N.J.) (rejecting motion to vacate on grounds
that arbitration agreement was unconscionable and signed under duress; arguments
were for arbitrator to decide); Perry Homes v. Cull, 258 S.W.3d 580, 589 (Tex. S.Ct. 2008)
(where arbitrator decided claims of duress affected contract as a whole, court will only
consider duress claim directed specifically to arbitration agreement). See also§3.03[A]
[2][b][ii](3), p. 428 n. 447.
195) See, e.g., Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 472 (5th Cir. 2002) (claim that party
to contract containing arbitration clause lacked mental capacity to execute contract
was question for arbitrators; capacity defense did not relate specifically to arbitration
clause, but rather was part of underlying dispute). But see In re Morgan Stanley & Co.,
Inc., 293 S.W.3d 182, 189 (Tex. S.Ct. 2009) (“Primerica has been roundly criticized and we
are aware of no other court that has followed its reasoning”). See also§3.03[A][2][b][ii](3).
196) See§5.02 (especially §5.02[D]); UNCITRAL Model Law, Art. 7.
197) See, e.g., Belgian Judicial Code, Art. 1717(3)(i) (annulment if “[arbitration] agreement is
not valid under the law to which the parties have subjected it or, failing any indication
thereon, under the law of Belgium”); Italian Code of Civil Procedure, Art. 829(5). See
also§25.04[A][1].
198) 1.04[A][1][c][i], p. 108; §4.06[A][1]; §5.02[A][2][a].
199) See§§5.02[A][2][b] & [d].
200) See§5.02[A][2].
201) SeeChapter 4.
202) See§4.03.
203) See§4.04[A][1][b].
204) See§4.04[A][1][b][iii].
205) New York Convention, Art. V(1)(a) (emphasis added).
206) SeeUNCITRAL Model Law, Art. 34(2)(a)(i).
83
207) See Judgment of 18 March 2013, DFT 4A_388/2012, ¶3.4.1 (Swiss Federal Tribunal);
Judgment of 16 October 2012, DFT 138 III 714, 715 (Swiss Federal Tribunal); Judgment of 8
July 2009, Société d’études et représentations navales et industrielles (Soerni) v. Société Air
Sea Broker Ltd (ASB), 2009 Rev. arb. 529 (French Cour de cassation civ. 1e) (appeal
against order granting recognition and enforcement of arbitral award); Judgment of 30
March 2004, Société Uni-Kod v. Société Ouralkali, 2005 Rev. arb. 959 (French Cour de
cassation civ. 1e) (same); Judgment of 20 December 1993, Municipalité de Khoms El Mergeb
v. Société Dalico, 1994 Rev. arb. 116, 117 (French Cour de cassation civ. 1e); Judgment of 25
November 1999, SA Burkinabe des ciments et matériaux v. Société des ciments d’Abidjan,
2001 Rev. arb. 165 (Paris Cour d’appel) (annulment action against partial award on
jurisdiction).
208) This choice-of-law rule is discussed above. See§§4.04[A][1][b][ii]-[iii]. See also§4.04[B]
(especially §4.04[B][2][b].).
209) See§4.04[A][2][i], pp. 526-27; §26.05[C][1][e]; §26.05[C][2][a].
210) See§4.04[A][1][b][iii], p. 499; §26.05[C][1][e]; §26.05[C][2][a].
211) See, e.g., Rome Convention, Art. 3(1); Restatement (Second) Conflict of Laws §187,
comment a (1971); Cont’l Mark Ltd v. Verkehrs-Club de Schweiz, [2001] HKCFI 862, ¶29 (H.K.
Ct. First Inst.) (“In the absence of an express agreement [to choose Hong Kong law] … [i]t
has been said that no one factor is necessarily decisive. The ultimate test appears to be
what is the system of law with which the transaction has the closest and most real
connection.”); Akai Pty Ltd v. People’s Ins. Co. Ltd, [1995] NSWSC 37, ¶9 (N.S.W. S.Ct.)
(choice of forum can be indication of implied choice of law); B. Berger & F. Kellerhals,
International and Domestic Arbitration in Switzerland ¶1269 (2d ed. 2010); Blessing, Choice
of Substantive Law in International Arbitration, 14(2) J. Int’l Arb. 39, 43-44 (1997); J.-F.
Poudret & S. Besson, Comparative Law of International Arbitration ¶682 (2d ed. 2007).
212) See Rome Regulation, Art. 10(1) (“The existence and validity of a contract, or of any term
of a contract, shall be determined by the law which would govern it under this
Regulation if the contract or term were valid.”), Art. 10(2) (“Nevertheless, a party, in order
to establish that he did not consent, may rely upon the law of the country in which he
has his habitual residence if it appears from the circumstances that it would not be
reasonable to determine the effect of his conduct in accordance with the law specified
in paragraph 1.”); Restatement (Second) Conflict of Laws §200, comment a (1971)
(“questions involving the validity of a contract, in respects other than capacity and
formalities, are determined by the law chosen by the parties”); Permanent Bureau,
Hague Conference on Private International Law, Consolidated Version of Preparatory Work
Leading to the Draft Hague Principles on the Choice of Law in International Contracts, Art.
5 (October 2012) (“(1) The consent of the parties as to a choice of law is determined by
the law that would apply if such consent existed. (2) Nevertheless, to establish that a
party did not consent to the choice of law, it may rely on the State where it has its place
of business, if under the circumstances it is not reasonable to determine that issue
according to the law specified in the preceding paragraph.”); L. Collins (ed.), Dicey,
Morris and Collins on The Conflict of Laws ¶¶32R-154 et seq. (15th ed. 2012) (“[T]he
existence and validity of a contract, or of any term of a contract, are determined by the
law which would govern it … if the contract or term were valid.”).
213) See§4.04[A][1][b][iii].
214) See, e.g., Restatement (Third) U.S. Law of International Commercial Arbitration §4-12,
comment c (Tentative Draft No. 2 2012) (“In cases in which a party’s assent to the main
contract is challenged, using the law specified in a choice-of-law clause in the contract
or the law of the arbitral seat would be ‘bootstrapping’ – giving effect to a contract
provision when the party’s assent to that contract provision is at issue.”).
215) See§4.04[A].
216) See§4.02[B]; §4.04[A][2][c]. See also§26.05[C][1][e][i](1).
217) See§4.04[B][6]. See also§26.05[C][1][e][i](1).
218) See§4.01; §5.02[A][2][d]. See also§26.05[C][1][e][i](1).
219) See§4.04[A][1][b]. See also§26.05[C][1][e][i](1).
220) See§4.04[A][3]. See also§26.05[C][1][e][i](1).
221) See§22.04[A][2][a].
222) See§§4.04[A][3]-[4].
223) See§4.01. See also§26.05[C][1][e][i](1).
224) See§§4.04[A][3]-[4]. Likewise, the New York Convention’s prohibitions against
discriminatory and idiosyncratic national laws should also apply under Article 34(2)(a)
(i). See§4.04[A][1][b][v]; §4.04[A][2][j][v]; §4.05[A][2]; §4.07[B][3]; §4.08.
225) See§25.03[A][3].
226) See Judgment of 4 July 1972, Hecht v. Buisman’s, 99 J.D.I. (Clunet) 843 (French Cour de
cassation civ. le); Castellane, The New French Law of International Arbitration, 28 J. Int’l
Arb. 371, 372-73 (2011); E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶1611 (1999).
84
227) See Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571, 579-80 (7th
Cir. 2007) (“[T]he Convention and its implementing federal legislation express a clear
federal interest in uniform rules by which agreements to arbitrate will be enforced. …
The application of parochial rules … to agreements arising under the Convention would
frustrate one of the primary objectives of the United States in becoming a signatory to
the Convention: securing uniform standards by which agreements to arbitrate
international disputes are governed.”); Smith/Enron Cogeneration Ltd P’ship v. Smith
Cogeneration Int’l, Inc., 198 F.3d 88, 96 (2d Cir. 1999) (“When we exercise jurisdiction
under Chapter Two of the FAA [in a vacatur/recognition proceeding involving a
nondomestic award], we have compelling reasons to apply federal law, which is already
well-developed, to the question of whether an agreement to arbitrate is enforceable. …
[P]roceeding otherwise would introduce a degree of parochialism and uncertainty into
international arbitration that would subvert the goal of simplifying and unifying
international arbitration law.”).
228) See B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland
¶¶367-73 (2d ed. 2010); Berti & Schnyder, in S. Berti et al. (eds.), International Arbitration
in Switzerland Art. 190, ¶¶36-39 (2000).
229) Dominican Republic Commercial Arbitration Law, Art. 10(5).
230) Peruvian Arbitration Law, Art. 13(7).
231) Restatement (Third) U.S. Law of International Commercial Arbitration §4-12, comment c
(Tentative Draft No. 2 2012). See id. at §4-14, comment b.
232) The draft Restatement analysis also appears confused: if one were to apply the law
chosen by a general choice-of-law clause in the underlying contract to the arbitration
agreement, it would only be on the basis that this was the parties’ implied (or express)
choice. However, that analysis would contradict the premise of the current Restatement
approach, which is stated to be that the parties have not agreed upon “either expressly
or impliedly” the law governing their arbitration agreement. More fundamentally, the
Restatement approach ignores the parties’ genuine intentions regarding the law
governing their international arbitration agreement, which, as discussed in detail above,
are captured by the validation principle, not by arbitrary choice-of-law rules selecting
either the law of the arbitral seat or the law of underlying contract. See§4.04[A][2][i]. See
also§26.05[C][1][e][i](1).
233) See§26.05[C][1][e][i](2), p. 3465.
234) See§5.03[C]; §25.04[A][1].
235) See§4.07[B][1].
236) See§4.07; §4.08.
237) See§4.07[B][1]. See also Fid. Mut. Life Ass’n v. Harris, 57 S.W. 635, 637 (Tex. 1900)
(corporation derives powers from law which creates it).
238) See§4.07[B][1]. See also Hammerstein v. Sylva, 124 N.Y.S. 535 (N.Y. Sup Ct. 1910) (capacity
to enter into contract governed by law of domicile).
239) See§4.07[B][2].
240) See§1.02[B][3].
241) See§4.07[B][2].
242) See§4.06[B]; §25.02[B]. Article II’s international standards supersede inconsistent, more
demanding national law standards. See§4.06[A][1]; §25.02[B].
243) See§4.06[B][1]; §25.04[A][5][a].
244) See§1.04[A][1][c][i]; §4.04[A][1][b]; §5.06[B][1].
245) See§1.04[A][1]; §4.04[A][4][c].
246) See§5.06[B][1].
247) See§5.06[B][1][a]; §25.02[B].
248) See§4.04[A][4]; §5.04[A][3]; §5.06[A][3]. See also§§26.05[C][1][e][i](4)-(5).
249) See§7.01; §7.02.
250) See§§7.03[I][4]-[5].
251) This issue is discussed in detail in the competence-competence context. See§7.03[A][5];
§7.03[E][7]; §§7.03[I][4]-[5]. This issue is also considered in the context of the recognition
and enforcement of awards. §22.03[B][1]; §26.05[C][1][f].
252) See§7.03[A][5]; §7.03[B][3]; §7.03[E][7]; §7.03[F][4]; §27.02[B][3].
253) UNCITRAL Model Law, Art. 16(3) (emphasis added).
254) UNCITRAL Model Law, Art. 34(2)(a)(i).
255) See, e.g.,Judgment of 23 October 2003, III ZB 29/03 (German Bundesgerichtshof); Judgment
of 7 June 2006, 11 Sch 02/06 (Oberlandesgericht Dresden); United Mexican States v.
Cargill, Inc., [2011] ONCA 622, ¶35 (Ontario Ct. App.) (“Accepting that courts should
interfere only sparingly or in extraordinary cases, the court must have some basis to test
whether the panel acted beyond its jurisdiction. … Normally, where the issue is one of
pure jurisdiction, the correctness standard would apply, implying possible
consideration of, but no deference to, the decision of the tribunal under review.”);
Insigma Tech. Co. Ltd v. Alstom Tech. Ltd, [2008] SGHC 134 (Singapore High Ct.) (de novo
review of arbitrators’ jurisdictional decision under Article 16(3)); PT Tugu Pratama
Indonesia v. Magma Nusuntara Ltd, [2003] SGHC 204 (Singapore High Ct.); Downer Constr.
(N.Z.) Ltd v. Silverfield Devs. Ltd, CIV-2004-404-4488 (Auckland High Ct. 2004); Assumption
Sisters of Nairobi Registered Trustee v. Standard Kebathi, [2008] eKLR (Kenyan High Ct.).
See also§7.03[A][5]; §26.05[C][1][f].
256) United Mexican States v. Cargill, Inc., [2011] ONCA 622, ¶46 (Ontario Ct. App.).
85
257) See Judgment of 30 April 2007, SAP M 240/2007, Legal Ground Nos. 2, 3 (Madrid Audiencia
Provincial) (“The court, after recognizing that the award deals in detail with the issue
relating to the existence of the contract and the subsequent duty to resort to arbitration
which arises out of it, holds that it is not possible to rule again on a matter which was
dealt with in detail by the arbitration award because ‘[o]therwise, the essence and
nature of the annulment action would be distorted as such action would be a second
instance as regards the content of the arbitration award.’”).
258) See, e.g., Amway Global v. Woodward, 744 F.Supp.2d 657, 663 (E.D. Mich. 2010) (upholding
arbitrator’s rulings on jurisdiction under deferential standard of review after concluding
parties agreed to arbitrate jurisdictional dispute); Dighello v. Busconi, 673 F.Supp. 85, 87
(D. Conn. 1987) (“parties’ submissions of the issues expressly empowered the Arbitration
Panel to determine the rights, obligations and liabilities of the four corporate entities
whose activities played major roles in the grievances presented for resolution”), aff’d
mem., 849 F.2d 1467 (2d Cir. 1988).
259) See§7.03[E][2]; First Options of Chicago, Inc. v. Kaplan,514 U.S. 938, 943 (U.S. S.Ct. 1995)
(emphasis added).
260) See§25.04[A][6][c]. See also§7.03[E][7][a], p. 1193.
261) See, e.g., DK Joint Venture 1 v. Weyand, 649 F.3d 310 (5th Cir. 2011) (vacating award against
non-signatories; affording arbitral tribunal’s jurisdictional decision no deference and
rejecting argument that non-signatories were subject to arbitration agreement on
agency grounds); Czarina ex rel Halvanon Ins. v. W.F. Poe Syndicate, 358 F.3d 1286, 1293
(11th Cir. 2004) (“under United States and international law, a court asked to confirm an
award should review an arbitration panel’s conclusion that the parties agreed to
arbitrate, unless the parties have agreed to submit this question to the arbitration
panel”); Amedeo Hotels Ltd v. N.Y. Hotel & Motel Trades Council, 2011 WL 2016002, at *5-7
(S.D.N.Y.) (vacating award in part against non-signatory; reviewing arbitral tribunal’s
jurisdictional decision de novo where parties had not submitted arbitrability question to
arbitral tribunal); Octagon, Inc. v. Richards, 2010 WL 3932272, at *5 (E.D. Va.) (court
independently determined that claims were arbitrable and confirmed award); Roe v.
Ladymon, 318 S.W.3d 502, 517-18 (Tex. App. 2010) (vacating award against member of
limited partnership, in his personal capacity; reviewing arbitrator’s jurisdictional finding
de novo “without deference to the arbitrator’s prior decision on the issue”).
262) See, e.g., Rintin Corp., SA v. Domar Ltd, 476 F.3d 1254, 1259 (11th Cir. 2007). See also Rogers
Wireless Inc. v. Muroff, [2007] 2 S.C.R. 921 (Canadian S.Ct.) (where challenge to arbitration
agreement involved mixed questions of fact and law, requiring evidentiary submissions,
issue was for arbitrators to determine).
263) Rintin Corp., SA v. Domar Ltd, 476 F.3d 1254, 1259 (11th Cir. 2007).
264) People’s Ins. Co. of China, Hebei Branch v. Vysanthi Shipping Co. [2003] 2 Lloyd’s Rep. 617,
¶25 (QB) (English High Ct.). See also A v. B [2010] EWHC 3302 (Comm) (English High Ct.)
(characterizing challenge to arbitral tribunal’s jurisdiction in annulment action as
requiring “a complete rehearing” rather than limited appellate review); Metal Distrib.
(U.K.) Ltd v. ZCMM Inv. Holdings plc [2005] EWHC 156 (Comm) (English High Ct.); Amec Civil
Eng’g Ltd v. Secretary of State for Transp. [2004] EWHC 2339 (TCC) (English High Ct.);
Peterson Farms Inc. v. C&M Farming Ltd [2004] 1 Lloyd’s Rep. 603 (QB) (English High Ct.);
Electrosteel Castings Ltd v. Scan-Trans Shipping & Chartering Sdn Bhd [2002] EWHC 1993
(Comm) (English High Ct.).
265) Judgment of 6 January 1987, S. Pac. Props. Ltd v. République Arabe d’Egypte, 26 Int’l Legal
Mat. 1004, 1006 (1987) (French Cour de cassation civ. le). See also Judgment of 7 November
2012, Amplitude SA v. Oebe TH Thotou & Iakovoglou Promodos, Case No. 11-25891 (French
Cour de cassation civ. 1e); Judgment of 6 October 2010, Fondation Albert Abela Family v.
Fondation Joseph Abela Family, 2010 Rev. arb. 969 (French Cour de cassation civ. 1e)
(“annulment judge reviews the arbitral tribunal’s award on jurisdiction, regardless of
whether it is positive or negative, by enquiring into all the legal and factual elements [of
the dispute] enabling him to determine the scope of the arbitration agreement”);
Judgment of 12 June 2012, République du Congo v. Comm’n Imp. Exp. SA, 2012 Rev. arb. 811
(Paris Cour d’appel); Judgment of 26 March 2009, Société Papillon Group Corp. v.
République Arabe de Syrieet, 2010 Rev. arb. 525 (Paris Cour d’appel); Judgment of 16 June
1988, Société Swiss Oil Corp. v. Société Petrogab & République du Gabon, 1989 Rev. arb.
309 (Paris Cour d’appel). See also J.-L. Délvolvé, J. Rouche & G. Pointon, French Arbitration
Law and Practice ¶173 (2009); Mayer, L’autonomie de l’arbitre international dans
l’appréciation de sa propre compétence, 217 Recueil des Cours 319, 339-42 (1989).
266) See§7.03[C][4]; Judgment of 11 January 2011, DFT 4A_579/2010 (Swiss Federal Tribunal)
(factual findings of arbitral tribunal binding in annulment action challenging tribunal’s
jurisdiction unless they are separately subject to challenge or (exceptionally) new
evidence is available); Judgment of 3 May 2010, DFT 4A_456/2009 (Swiss Federal
Tribunal) (accepting facts found by arbitral tribunal but concluding that they did not
show existence of valid agreement to arbitrate); Judgment of 20 January 2010, DFT
4A_548/2009, ¶2.4 (Swiss Federal Tribunal); Judgment of 2 September 1993, Nat’l Power
Corp. v. Westinghouse, DFT 119 II 380, 383 (Swiss Federal Tribunal).
267) Judgment of 20 January 2010, DFT 4A_548/2009, ¶3.1 (Swiss Federal Tribunal).
268) Judgment of 2 September 1993, Nat’l Power Corp. v. Westinghouse, DFT 119 II 380, 383
(Swiss Federal Tribunal).
86
269) See, e.g.,Dallah Real Estate & Tourism Holding Co. v. Ministry of Religious Affairs, Gov’t of
Pakistan [2010] UKSC 46, ¶86 (U.K. S.Ct.) (“[I]n most national systems, arbitral tribunals
are entitled to consider their own jurisdiction, and to do so in the form of an award. But
the last word as to whether or not an alleged arbitral tribunal actually has jurisdiction
will lie with a court, either in a challenge brought before the courts of the arbitral seat …
or in a challenge to recognition or enforcement abroad.”); Arsanovia Ltd v. Cruz City 1
Mauritius Holdings [2012] EWHC 3702, ¶1 (Comm) (English High Ct.) (“The Tribunals have
determined that they had substantive jurisdiction, but their decisions do not bind me in
any way and I must consider the matter de novo.”); Kenon Eng’g Ltd v. Nippon Kokan Koji
Kabushiki Kaisha, [2004] HKEC 542, ¶¶17-22 (H.K. Ct. App.) (arbitrator may rule on validity
of arbitration clause in first instance but court retains authority to review matter de
novo); Geimer, in R. Zöller (ed.), Zivilprozessordnung §1040, ¶8 (30th ed. 2013); Wagner, in
F.-B. Weigand (ed.), Practitioner’s Handbook on International Arbitration ¶7.39 (2d ed.
2009).
270) See§7.03[E][7][c]. See also§26.03[B].
271) See§7.03[A][5]. See also§26.03[B].
272) See§7.03[C][4]. See also§26.03[B].
273) See§7.03[A][5]. See also§26.03[B].
274) See§7.03[A][2][c]; §25.04[F][3][c].
275) See§25.04[F][3][d]; Judgment of 2 May 2012, Repub. of Ecuador v. Chevron Corp. (U.S.A.),
Case Nos. 11-402 and 11-2813 (Hague Rechtbank) (annulment court will consider
arbitrators’ decision on existence and validity of arbitration agreement de novo, but will
defer to arbitrators’ decision on scope of arbitration agreement; rejecting application to
annul BIT award).
276) See§7.03[A][4][c]; §7.03[D][4]; P. Sanders, Quo Vadis Arbitration? 185 (1999).
277) See Judgment of 6 June 2002, 2003 SchiedsVZ 39 (German Bundesgerichtshof). See Kröll,
Recourse Against Negative Decisions on Jurisdiction, 20 Arb. Int’l 55 (2004). See§7.03[A][4]
[c], pp. 1101-04; §7.03[I][5], pp. 1236-37 for a discussion of the decision. Compare Bayview
Irrigation Dist. #11 v. United Mexican States, [2008] CanLII 22120 (Ontario Super. Ct.)
(negative jurisdictional decision reviewed pursuant to Article 34).
278) See§7.03[A][4][c]; Netherlands Code of Civil Procedure, Art. 1052(5); A. van den Berg et al.,
Netherlands Arbitration Law 83 (1993). See also S. Koussoulis, Jurisdictional Problems in
International Arbitration 59-62 (2000).
279) Swiss Law on Private International Law, Art. 190(2)(b); §7.03[C]. See, e.g.,Judgment of 5
December 2008, DFT 4A_376/2008 (Swiss Federal Tribunal) (arbitral tribunal’s negative
jurisdictional decision may be challenged in annulment proceeding); Judgment of 28
April 1992, XVIII Y.B. Comm. Arb. 143, 144 (Swiss Federal Tribunal) (1993) (“[Art. 190(2)(b)]
provides for appeal when the arbitral tribunal has mistakenly held that it does, or does
not, have jurisdiction. The court freely examines not only if this is the case, but also
possible preliminary substantive law questions which may have to be resolved in order
to decide on the tribunal’s jurisdiction or lack thereof.”); Judgment of 14 November 1991,
XVII Y.B. Comm. Arb. 279 (Swiss Federal Tribunal) (1992).
280) French Code of Civil Procedure, Art. 1520(1).
281) See§7.03[E][7][a]; LJL 33rd St. Assocs., LLC v. Pitcairn Props. Inc., 2013 WL 3927615 (2d Cir.)
(confirming award holding that certain issues were outside scope of arbitration
agreement and therefore not arbitrable); Saturn Telecomms. Servs., Inc. v. Covad
Commc’ns Co., 560 F.Supp.2d 1278 (S.D. Fla. 2008) (confirming award holding that
arbitration agreement was fraudulently induced and void).
282) See§7.03[A][4][c]; §7.03[I][5].
283) See, e.g., Saturn Telecomms. Servs., Inc. v. Covad Commc’ns Co., 560 F.Supp.2d 1278 (S.D.
Fla. 2008) (undertaking de novo review and confirming award holding that arbitration
agreement was fraudulently induced); Judgment of 6 October 2010, Fondation Albert
Abela Family v. Fondation Joseph Abela Family, 2010 Rev. arb. 969, 969 (French Cour de
cassation civ. 1e) (“annulment judge reviews the arbitral tribunal’s award on jurisdiction,
regardless of whether it is positive or negative, by enquiring into all the legal and factual
elements [of the dispute] enabling him to determine the scope of the arbitration
agreement”); Judgment of 28 April 1992, XVIII Y.B. Comm. Arb. 143, 144 (Swiss Federal
Tribunal) (1993) (“[Art. 190(2)(b)] provides for appeal when the arbitral tribunal has
mistakenly held that it does, or does not, have jurisdiction. The court freely examines
not only if this is the case, but also possible preliminary substantive law questions which
may have to be resolved in order to decide on the tribunal’s jurisdiction or lack
thereof.”).
284) See§7.03[A][5][a].
285) See§7.03[E].
286) See§7.03[A][3].
287) See§7.03[A][5][a].
288) See§7.03[I][2].
289) See§7.03[A][3]; §7.03[D][3]; §7.03[I][2].
290) First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. S.Ct. 1995).
291) First Options, 514 U.S. at 943-44.
292) See§7.03[E][2].
293) First Options, 514 U.S. at 943 (emphasis in original). See§7.03[E][2][a].
87
294) See§7.03[E][7][c]. See also Schneider v. Kingdom of Thailand, 688 F.3d 68, 73-74 (2d Cir.
2012); Petrofac, Inc. v. DyncDermott Petroleum Operations Co., 687 F.3d 671 (5th Cir. 2012);
Frontera E. Georgia Ltd v. Arar, Inc., 483 F.Appx. 896 (5th Cir. 2012); Amway Global v.
Woodward,744 F.Supp.2d 657, 668 (E.D. Mich. 2010) (citing Quixtar, Inc. v. Brady, 2008 WL
5386774, at *11 (E.D. Mich.)) (“Respondents submitted the issue of arbitrability to the
arbitrator for her consideration, without separately arguing that the arbitrator had no
authority to decide the issue of arbitrability.”); Cleveland Elec. Illuminating Co. v. Utility
Workers Union, 440 F.3d 809, 813 (6th Cir. 2006) (award-debtor waived right to
independent judicial review of issue of arbitrability by “submitt[ing] the question of
arbitrability to the arbitrator for his determination” without any indication that it
“wanted to reserve the question of arbitrability for the court”); PowerAgent Inc. v. Elec.
Data Sys. Corp., 358 F.3d 1187, 1192 (9th Cir. 2004) (“Having affirmatively urged the
arbitrators to decide arbitrability and asserted their authority to do so, [a party to the
arbitration] cannot await the outcome and, after an unfavorable decision, challenge the
authority of the arbitrators to act on that very issue.”); Tristar Pictures, Inc. v. Director’s
Guild of Am., Inc., 160 F.3d 537, 540 (9th Cir. 1998) (by submitting jurisdictional challenge
to arbitrator, award-debtor “by its conduct evinced clearly its intent to allow the
arbitrator to decide not only the merits of the dispute but also the question of
arbitrability”); Sonera Holding BV v. Cukurova Holding AS, 895 F.Supp.2d 513 (S.D.N.Y.
2012); Thai-Lao (Thailand) Lignite Coal Ltd v. Gov’t of Lao People’s Dem. Rep., 2011 WL
3516154 (S.D.N.Y.); Amway Global v. Woodward, 744 F.Supp.2d 657 (E.D. Mich. 2010)
(rejecting claim that arbitration agreement was procedurally and substantively
unconscionable; concluding that parties agreed to submit jurisdictional disputes to
arbitration and therefore arbitrators’ decision was not subject to vacatur).
295) See§7.03[E][2][a], p. 1134.
296) See§7.03[E][5][b][v].
297) See§7.03[E][5][b][vi].
298) See§7.03[E][5][b][vi].
299) See§7.03[E][7][b]; United Steel v. TriMas Corp., 531 F.3d 531, 538 (7th Cir. 2008); Sanford v.
MemberWorks, Inc., 483 F.3d 956 (9th Cir. 2007); Will-Drill Res., Inc. v. Samson Res. Co., 352
F.3d 211, 215 (5th Cir. 2003); Bank of Am., NA v. Diamond State Ins. Co., 38 F.Appx. 687, 689
(2d Cir. 2002); Lehman Bros. Sec. v. ERISA, 706 F.Supp.2d 552, 557-58 (S.D.N.Y. 2010);
Sleeper Farms v. Agway, Inc., 211 F.Supp.2d 197 (D. Me. 2002); Brown v. Wells Fargo Bank,
NA, 85 Cal.Rptr.3d 817, 833 (Cal. 2008). See also Rent-A-Ctr, W., Inc. v. Jackson, 130 S.Ct.
2772, 2778 n.2 (U.S. S.Ct. 2010); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444
n.1 (U.S. S.Ct. 2006).
300) Gregory v. Interstate/Johnson Lane Corp., 1999 WL 674765, at *7 (4th Cir.). The draft
Restatement (Third) U.S. Law of International Commercial Arbitration adopts the same
approach. Restatement (Third) U.S. Law of International Commercial Arbitration §4-12,
comment d (Tentative Draft No. 2 2012) (“When the existence of the arbitration
agreement is at issue, the parties cannot avoid court review by clearly and unmistakably
submitting the question to arbitration in their original arbitration agreement …”). A
different result would apply where, after a jurisdictional dispute about the existence of
the original arbitration agreement arose, the parties agreed to finally resolve that
dispute by arbitration.
301) See§7.03[E][7][b].
302) Rent-A-Ctr, W., Inc. v. Jackson, 130 S.Ct. 2772, 2778 n.2 (U.S. S.Ct. 2010).
303) Granite Rock Co. v. Int’l Bhd of Teamsters, 130 S.Ct. 2847, 2856 (U.S. S.Ct. 2010) (quoting
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (U.S. S.Ct. 2006)). See id. at
2855-56 (in domestic labor arbitration, where dispute “concerns contract formation, the
dispute is generally for courts to decide”).
304) See§3.03[A][2][b][ii]; §7.03[E][5][c][ii].
305) See§3.03[A][2][b][ii]; §7.03[E][5][c][ii].
306) See§3.03[A][2][b][ii]; §7.03[E][5][c][ii].
307) See§3.03[A][2][b][ii]; §5.04[D][7][b]; §7.03[E][5][c][ii].
308) See§3.03[A][2][b][ii]; §5.04[D][7][b].
309) Opals on Ice Lingerie, Designs by Bernadette, Inc. v. Bodylines, Inc., 2002 WL 718850, at *3
(E.D.N.Y.).
310) See§3.03[A][2][b][ii](1); §7.03[E][5][c][ii].
311) See§3.03[A][2][b][ii](1); §7.03[E][5][c][ii].
312) See§3.03[A][2][b][ii](3); §5.04[D][8]; §7.03[E][5][c][ii].
313) See§3.03[A][2][b][ii](3); §5.04[D][8]; §7.03[E][5][c][ii].
314) See§3.03[A][2][b]; §7.03[E][5][c][ii].
315) See§7.03[A][3].
316) See§7.03[A][5][a].
317) See§7.03[A][3].
318) The award would be subject to review for procedural irregularities (for example, under
Article 34(2)(a)(ii) and (iv) of the Model Law) and for public policy and nonarbitrability
objections (for example, under Article 34(2)(b) of the Model Law).
319) See§7.03[E][8][b].
320) See§7.03[E][5][e]; Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (U.S. S.Ct. 2002)
(“prerequisites such as time limits, notice, laches, estoppel, and other conditions
precedent to an obligation to arbitrate” are for arbitrators to resolve) (emphasis in
original).
88
321) See§7.03[E][5][e].
322) See§7.03[E][5][e]; Bellemare v. Adlani, [2012] QCCQ 10372, ¶41 (Québec Ct.) (rejecting
claim that pre-arbitration requirement for conciliation was not satisfied on grounds that
arbitrators’ rejection of claim was “not unreasonable”).
323) See§7.03[E][5][e], p. 1190; Howsam, 537 U.S. 79.
324) See§25.04[B][3][d]; §25.04[C][6]; §25.04[D][6].
325) See§7.03[E][5][e]; Langlais v. Pennmont Benefit Servs., Inc., 2013 WL 2450752, at *1 (3d Cir.)
(no vacatur: “procedural questions, such as those concerning … the procedural
prerequisites to arbitration, are for the arbitrator to decide”); Rintin Corp., SA v. Domar,
Ltd, 374 F.Supp.2d 1165, 1168, 1171 (S.D. Fla. 2005) (whether conditions precedent to
arbitration had been fulfilled was issue for arbitrator; motion to vacate denied).
326) Repub. of Argentina v. BG Group plc, 665 F.3d 1363 (D.C. Cir. 2012).
327) Repub. of Argentina, 665 F.3d at 1372 n.6 (satisfaction of pre-arbitration litigation
requirement was not intertwined with merits or an issue where arbitral tribunal was
more expert than court).
328) See§7.03[E][5][e]; United Steelworkers of Am., AFL-CIO-CLC v. St. Gobain Ceramics &
Plastics, Inc., 505 F.3d 417, 420 (6th Cir. 2007) (“Whether the parties have complied with
the procedural requirements for arbitrating the case, by contrast, is generally a question
for the arbitrator to decide.”); Int’l Ass’n of Bridge, Structural v. EFCO Corp. & Constr.
Prods., Inc., 359 F.3d 954, 956-57 (8th Cir. 2004) (compliance with procedural
prerequisites in arbitration agreement was a matter of procedural, not substantive,
arbitrability, and for resolution by arbitrator rather than court); Unis Group, Inc. v.
Compagnie Fin. de CIC et de L’Union Europeene, 2001 WL 487427, at *2 (S.D.N.Y.) (“parties’
dispute relating to the satisfaction of a condition precedent is within the scope of the
Clause and … arbitrators should determine whether [defendant] satisfied such a
condition”); Judgment of 4 March 2004, Nihon Plast v. Takata-Petri, 2004:1/2 Gaz. Pal. 24
(Paris Cour d’appel) (objection based on pre-arbitration conciliation requirement is not
challenge to arbitral tribunal’s jurisdiction but issue relating to admissibility of claim
which cannot be reviewed by Cour d’appel); Burlington N. R.R. Co. v. Canadian Nat’l
Railway, [1997] 1 S.C.R. 5 (Canadian S.Ct.); Krutov v. Vancouver Hockey Club Ltd, [1991]
B.C.J. No. 2654 (B.C. S.Ct.) (procedural objections to commencement of arbitration are for
arbitrator); Judgment of 2 April 2002, Swiss Cargill Int’l SA v. Russian CJSC
Neftekhimeksport, No. 5-Г02-23 (Russian S.Ct.) (compliance with pre-arbitration
procedure falls within competence of arbitrators). See also Award in Hamburg Chamber
of Commerce of 14 July 2006, 2007 SchiedsVZ 55 (tribunal determines whether pre-
arbitration conciliation steps had been complied with under FIDIC contract).
329) See§7.03[E][5][e].
330) See§7.03[C][2]; §7.03[D][2]; §7.03[E][5]; §8.04; §12.06[B].
331) See In re Pharmacy Benefit Managers Antitrust Litigation, 582 F.3d 432, 439 (3d Cir. 2009)
(lower court violated law of case doctrine when it vacated stay in favor of arbitration:
“[l]aw of the case rules have developed ‘to maintain consistency and avoid
reconsideration of matters once decided during the course of a single continuing
lawsuit”) (quoting Casey v. Planned Parenthood of S. Pa., 14 F.3d 848, 856 (3d Cir. 1994));
Agrico Chem. Co. v. Williams Co., Inc., 2005 WL 2044942 (N.D. Fla.) (applying law of case to
court’s earlier decisions regarding arbitration agreement); N. River Ins. Co. v.
Philadelphia Reins. Corp., 63 F.3d 160, 165 (2d Cir. 1995) (reversing trial court’s vacatur of
award for asserted error in consolidating arbitrations).
332) See§7.03[A][2][b].
333) UNCITRAL Model Law, Art. 34(2)(a)(i). See§5.03.
334) See§5.03[C]; Judgment of 16 October 2012, DFT 138 III 714, 719 (Swiss Federal Tribunal)
(“The capacity to conclude an arbitration agreement and to appear as a party in an
arbitration (the so-called subjective arbitral capacity, also arbitral capacity ratione
personae; arbitrabilité subjective) is to be examined according to Art. 190(2)(b) [in an
annulment proceeding].”).
335) See§25.03[A][4]; §25.04[A][2].
336) UNCITRAL Model Law, Art. 34(2)(a)(i).
337) See DV. Transami Ltd v. Agrimag Ltd, Case No. HCT-00-CC-AB-0002-2006 (Comm) (Uganda
High Ct. 2008).
338) See§5.02[A][5][h]; §5.04[D][7][g]; §7.05[A]. See also§26.05[C][1][h]; §26.05[C][2][e].
89
339) See§7.05[A]; UNCITRAL Model Law, Art. 8(1); English Arbitration Act, 1996, §§31(2), 31(3);
Swiss Law on Private International Law, Art. 186(2). See also Howard Univ. v. Metro.
Campus Police Officer’s Union, 512 F.3d 716, 720 (D.C. Cir. 2008) (“arbitration is a matter of
consent; if a party submits to arbitration without objecting to the arbitrator’s
jurisdiction, then it may fairly be said to have consented to the arbitration, and the
other party, having gone forward with the proceeding, may fairly be said to have relied
upon that consent”; “[a]bsent excusable ignorance of a predicate fact, a party that does
not object to the arbitrator’s jurisdiction during the arbitration may not later do so in
court.”); Cleveland Elec. Illuminating Co. v. Utility Workers Union, Local 270, 440 F.3d 809,
813 (6th Cir. 2006) (award-debtor waived right to judicial review of jurisdictional
objection by “submitt[ing] the question of arbitrability to the arbitrator for his
determination” without any indication that it “wanted to reserve the question of
arbitrability for the court”); PowerAgent Inc. v. Elec. Data Sys. Corp., 358 F.3d 1187, 1192
(9th Cir. 2004) (“Having affirmatively urged the arbitrators to decide arbitrability and
asserted their authority to do so, [a party to the arbitration] cannot await the outcome
and, after an unfavorable decision, challenge the authority of the arbitrators to act on
that very issue.”); Tristar Pictures, Inc. v. Director’s Guild of Am., Inc., 160 F.3d 537, 540 (9th
Cir. 1998) (by submitting jurisdictional challenge to arbitrator, award-debtor “by its
conduct evinced clearly its intent to allow the arbitrator to decide not only the merits of
the dispute but also the question of arbitrability”); Vee Networks Ltd v. Econet Wireless
Int’l Ltd [2004] EWHC 2909, ¶23 (QB) (English High Ct.) (“party who objects that the
tribunal lacks substantive jurisdiction must make that objection not later than the time
when he takes the first step in the arbitral proceedings to contest the merits which are
in issue”); Judgment of 31 January 2006, Société Intercafco v. Société Dafci, 2006 Rev. arb.
285, 285 (French Cour de cassation civ. 1e) (“in order to be admissible before the
annulment judge, any ground for annulment set forth under Article 1502 CCP must have
been raised before the arbitral tribunal itself on every possible occasion”); Judgment of
21 February 2012, Etat du Cameroun v. SPRL Projet Pilote Garoube, 2012 Rev. arb. 587, 591
(Paris Cour d’appel) (same); Judgment of 10 January 2012, Société Sharikat al Ikarat Wal
Abnieh (SIWA) SAL v. Société Butel SAL, 2012 Rev. arb. 409, 412 (Paris Cour d’appel) (same);
Judgment of 2 November 2011, S.A.J. & P. Avax v. Société Tecnimont SpA AS, 2012 Rev. arb.
112, 115-16 (Reims Cour d’appel) (same); Judgment of 31 January 2008, Société Thimonnier
v. Société Inner Mongolia Yili Indus. Group Co. Ltd, 2008 Rev. arb. 165 (Paris Cour d’appel)
(same); Judgment of 19 June 2003, République arabe de Syrie, AAO-Golan v. Société
Papillon Group Corp., 2004 Rev. arb. 137 (Paris Cour d’appel) (same). See also R. Merkin &
L. Flannery, Arbitration Act 1996 78-80 (4th ed. 2008) (participation in arbitration waives
later jurisdictional objections unless participation is “under protest, in the form of an
objection to jurisdiction made at the first available opportunity”); E. Gaillard & J. Savage
(eds.), Fouchard Gaillard Goldman on International Commercial Arbitration ¶1606 (1999)
(“party which fails to challenge the jurisdiction of the arbitral tribunal before the
arbitrators themselves will be deemed to have ratified their jurisdiction, thereby
precluding any subsequent challenge on that issue before the French Courts”).
340) See Judgment of 21 November 2008, 19 Sch 12/08 (Oberlandesgericht Köln); Judgment of
20 December 2001, 1 Sch 13/01 (Oberlandesgericht Stuttgart); Judgment of 10 February
1995, XXII Y.B. Comm. Arb. 293 (Moscow City Ct.) (1997).
341) See§§7.05[A] & [F].
342) Howard Univ. v. Metro. Campus Police Officer’s Union, 512 F.3d 716, 720 (D.C. Cir. 2008).
343) See§§7.05[A] & [F].
344) See, e.g., Astro Nusantara Int’l BV v. PT Ayunda Prima Mitra, [2012] SGHC 212 (Singapore
High Ct.), rev’d, PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57 (Singapore
Ct. App.).
345) See, e.g., TC Arrowpoint, LP v. Choate Constr. Co., 2006 WL 91767, at *9 (W.D.N.C.)
(considering and rejecting on merits objection to confirmation of award where award-
debtor claimed arbitrators lacked jurisdiction); PT First Media TBK v. Astro Nusantara
Int’l BV, [2013] SGCA 57 (Singapore Ct. App.).
346) SeeUNCITRAL Model Law, Arts. 34, 36.
347) See§7.03[A][4][d]; §§7.05[A] & [F].
348) See§25.04[C].
349) UNCITRAL Model Law, Art. 34(2)(a)(ii). See also H. Holtzmann & J. Neuhaus, A Guide to the
Commentary 910, 1000 (1989); M. Kurkela & S. Turunen, Due Process in International
Commercial Arbitration 37-39 (2d ed. 2010).
350) New York Convention, Art. V(1)(b). See also Inter-American Convention, Art. 5(1)(b);
European Convention, Art. IX(1)(b); §26.05[C][3].
351) See H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 915 (1989).
90
352) See, e.g., Swiss Law on Private International Law, Art. 190(2)(d) (“if the principle of equal
treatment of the parties or the right of the parties to be heard was violated”); German
ZPO, §1059(2)(1)(b); Netherlands Code of Civil Procedure, Art. 1704(2)(g) (“parties have not
been given an opportunity of substantiating their claims and presenting their case, or
there has been disregard of any other obligatory rule of the arbitral procedure, insofar
as such disregard has had an influence on the arbitral award”); Italian Code of Civil
Procedure, Art. 829(9) (“If the principle of ‘audietur et altera pars’ (principio des
contraddittorio) has not been respected in the arbitration proceedings”); Spanish
Arbitration Act, 2011, Art. 41(1)(b); Singapore International Arbitration Act, 2012, Art. 31(2)
(c); Hong Kong Arbitration Ordinance, 2013, §81; Chinese Arbitration Law, Art. 58;
Japanese Arbitration Law, Art. 44(1)(iii) (“not given notice as required by the provisions of
the laws of Japan”), Art. 44(1)(iv) (“unable to present its case in the arbitral
proceedings”); Korean Arbitration Act, Art. 36(2)(1)(b); Indian Arbitration and Conciliation
Act, Art. 34(2)(a)(iii); Mexican Commercial Code, Art. 1457(1)(b); Russian Arbitration Law,
Art. 34(2)(1) (party “was not given proper notice of the appointment of an arbitrator or of
the arbitral proceedings or was otherwise unable to present his case”).
353) U.S. FAA, 9 U.S.C. §10(c).
354) French Code of Civil Procedure, Art. 1492(4) (for domestic arbitration), Art. 1520(4) (for
international arbitration, including when seat of arbitration is in France).
355) See 1966 European Uniform Law on Arbitration, Annex I, Art. 25(2)(g) (“if the parties have
not been given an opportunity of substantiating their claims and presenting their case,
or if there has been disregard of any other obligatory rule of the arbitral procedure, in so
far as such disregard has had an influence on the arbitral award”); Brazilian Arbitration
Law, Art. 32(8); ILC, Draft on Arbitral Procedure Prepared by the International Law
Commission at Its Fourth Session, 1952, U.N. Doc. A/CN.4/59, Art. 30 (“The validity of the
award may be challenged by either party on one or more of the following grounds: … (c)
that there has been a serious departure from a fundamental rule of procedure”).
356) English Arbitration Act, 1996, §68.
357) English Arbitration Act, 1996, §68(3). See R. Merkin, Arbitration Law ¶20.30 (1991 & Update
August 2013); D. Sutton, J. Gill & M. Gearing, Russell on Arbitration ¶8-072 (23d ed. 2007).
358) See§26.05[C][3].
359) See§25.04[C].
360) See§15.04; §25.04[B][1]; §26.05[C][3][c][i].
361) See§15.04; §25.04[B][3][c]; §26.05[C][3][b][iii].
362) See§25.04[B][3][c]; §26.05[C][3][a].
363) See§11.03[C][1][c][vi]; §15.02.
364) See§11.03[C][1][c][vi]; §12.01[B][2]; §12.04[A][4]; §12.04[B][7]; §14.03[A]; §15.02[A]; §15.04[A].
365) See§25.04[A][5][c].
366) SeeUNCITRAL Model Law, Art. 18 (“parties shall be treated with equality …”); English
Arbitration Act, 1996, §33(1)(a) (“act fairly and impartially as between the parties”); Swiss
Law on Private International Law, Art. 190(2)(d) (“principle of equal treatment of the
parties”); Spanish Arbitration Act, 2011, Art. 24(1); Mexican Commercial Code, Art. 1434; M.
Kurkela & S. Turunen, Due Process in International Commercial Arbitration 186-88 (2d ed.
2010); §15.04[B][2].
367) SeeUNCITRAL Model Law, Art. 18 (“each party shall be given a full opportunity of
presenting his case”); English Arbitration Act, 1996, §33(1)(a) (“giv[e] each party a
reasonable opportunity of putting his case and dealing with that of his opponent”); Swiss
Law on Private International Law, Art. 190(2)(d) (“[parties’] right to be heard in
adversarial procedure”); M. Kurkela & S. Turunen, Due Process in International
Commercial Arbitration 37-39 (2d ed. 2010); §15.04[B][3].
368) SeeEnglish Arbitration Act, 1996, §33(1)(b) (“adopt procedures suitable to the
circumstances of the particular case, avoiding unnecessary delay or expense, so as to
provide a fair means for the resolution of the matters”); M. Kurkela & S. Turunen, Due
Process in International Commercial Arbitration 173-83 (2d ed. 2010); §15.04[B][1].
369) See§15.04[B].
370) See§12.04[C]; §25.04[B][4].
371) See§25.04[B][4].
372) See§15.04[B][3]; §25.04[B][4].
373) See§25.04[B][4].
374) Judgment of 28 October 2008, DFT 4A_294/2008, ¶3.1 (Swiss Federal Tribunal).
375) See, e.g., Judgment of 5 July 2011, 34 Sch 09/11, §II(5)(c)(bb) (Oberlandesgericht München)
(“The right to be heard required that the parties had to be given the opportunity to
make their views known in relation to both the relevant facts and the relevant law, and
that the arbitral tribunal had to consider the parties’ positions. … In accordance with
the right to be heard, the tribunal must give the parties on the one hand the opportunity
to comment on the relevant facts and express their legal opinions in this respect … and
on the other hand, the tribunal must acknowledge, consider, and evaluate the given
arguments, as far as relevant, when rendering its award.”); Judgment of 5 October 2009,
34 Sch 12/09 (Oberlandesgericht München).
376) See, e.g., Judgment of 5 October 2009, 34 Sch 12/09 (Oberlandesgericht München);
Judgment of 15 December 1999, 4 Z Sch 23/99 (Bayerisches Oberstes Landesgericht).
91
377) See, e.g., Slaney v. Int’l Amateur Athletic Found., 244 F.3d 580, 592 (7th Cir. 2001) (“in order
to comport with the requirement that a party to a foreign arbitration be able to present
her case, we require that the arbitrator provide a fundamentally fair hearing …
[including] an adequate opportunity [for a party] to present its evidence and
arguments”) (quoting Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123, 1120 (7th Cir. 1997));
Gas & Fuel Corp. of Victoria v. Wood Hall Ltd & Leonard Pipeline Contractors Ltd, [1978] VR
385, ¶396 (Victoria S.Ct.) (“[T]he parties must be given adequate notice and opportunity
to be heard. … Sub-branches of [this] principle are that each party must be given a fair
hearing and a fair opportunity to present its case … and judgment only after a full and
fair hearing given to all parties.); Methanex Motunui Ltd v. Spellman, [2004] 3 NZLR 454
(Wellington Ct. App.) (right to present one’s case includes possibility to respond to
evidence and arguments from other parties in course of arbitral proceedings); Attorney-
Gen. v. Tozer (No 3), CIV 2003-404-5945 (Auckland High Ct. 2003); Trustees of Rotoaira
Forest Trust v. Attorney-Gen., [1999] 2 NZLR 452 (Comm) (Auckland High Ct). See also
Judgment of 7 October 2002, 2003 BH 127 (Hungarian S.Ct.) (right to present one’s case
includes ability to make written and oral presentations and to present evidence, as well
as to be informed of evidence presented by other party).
378) In principle, local national law would presumptively apply to interpret the meaning of
procedural guarantees contained in national legislation. See, e.g., UNCITRAL Model Law,
Art. 34(2)(a)(ii) (prescribing general standards of procedural fairness, presumptively
governed by law of annulment forum in arbitral seat); English Arbitration Act, 1996, §68
(referring to procedural standards established, as a matter of English law, in Act).
379) Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123, 1129-30 (7th Cir. 1997) (emphasis added).
See also§26.05[C][3][c][i].
380) See§11.05.
381) See§11.01[B].
382) See, e.g., Brandeis (Brokers) Ltd v. Black [2001] 2 All ER 980, ¶68 (Comm) (English High Ct.)
(“To show that an expert witness said things [in the context of an arbitration] which he
would not have been permitted to say in a court of law comes nowhere near to
establishing that there was irregularity, let alone serious irregularity.”); Egmatra AG v.
Marco Trading Corp. [1999] 1 Lloyd’s Rep. 862, 865 (QB) (English High Ct.) (“The test is not
what would have happened had the matter been litigated. To apply such a test would be
to ignore the fact that the parties have agreed to arbitrate, not litigate. Having chosen
arbitration, the parties cannot complain of substantial injustice unless what has
happened simply cannot on any view be defended as an acceptable consequence of
that choice.”); R v. F, [2012] 5 HKLRD 278, 287 (H.K. Ct. First Inst.) (denying vacatur:
“arbitral tribunal is not bound by strict rules of evidence and can admit any evidence
that it considers relevant to the proceeding before it”); Pang Wai Hak v. Hua Yunjian,
[2012] 4 HKLRD 113, 126 (H.K. Ct. First Inst.) (“To justify setting aside an arbitral award [for
lack of procedural fairness], the Court has to be satisfied that a party has been denied
due process. … For this purpose, the conduct complained of must be serious or even
egregious.”).
383) See§11.03[D][2][a]; §15.04[B]; Judgment of 10 February 2010, DFT 4A_612/2009, ¶4.1 (Swiss
Federal Tribunal) (“In this respect [the award-debtor] incorrectly invokes Art. 6(1) ECHR,
Art. 30(3) Federal Constitution and Art. 14 (1) ICCPR since these are not applicable to
voluntary arbitration proceedings according to the correct understanding of the case
law of the Federal Tribunal. It is not possible to derive a right to a public hearing in the
framework of the arbitration proceedings from the provisions mentioned.”).
384) See, e.g., Sheldon v. Vermonty, 269 F.3d 1202, 1207 (10th Cir. 2001) (“[A] fundamentally fair
[arbitration] hearing requires only notice, opportunity to be heard and to present
relevant and material evidence and argument before the decision makers.”) (emphasis in
original) (quoting Bowles Fin. Group, Inc. v. Stifel, Nicolaus & Co., 22 F.3d 1010, 1013 (10th
Cir. 1994)); El Dorado Sch. Dist. No. 15 v. Cont’l Cas. Co., 247 F.3d 843, 848 (8th Cir. 2001)
(“To constitute misconduct requiring vacation of an award, an error in the arbitrator’s
determination must be one that is not simply an error of law, but which so affects the
rights of a party that it may be said that he was deprived of a fair hearing.”); Tempo
Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997) (“Federal courts do not
superintend arbitration proceedings. Our review is limited to determining whether the
procedure was fundamentally unfair.”); Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123,
1130 (7th Cir. 1997) (“arbitrator must provide a fundamentally fair hearing” that “meets
‘the minimal requirements of fairness’ – adequate notice, a hearing on the evidence, and
an impartial decision by the arbitrator”).
385) Howard Univ. v. Metro. Campus Police Officer’s Union, 512 F.3d 716, 721 (D.C. Cir. 2008)
(quoting Lessin v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 481 F.3d 813, 816 (D.C. Cir.
2007)). See also Slaney v. Int’l Amateur Athletic Found., 244 F.3d 580, 592 (7th Cir. 2001)
(“parties that have chosen to remedy their disputes through arbitration rather than
litigation should not expect the same procedures they would find in the judicial arena”).
92
386) See Judgment of 7 September 1993, DFT 119 II 386, 388 (Swiss Federal Tribunal); Judgment
of 2 June 2004, DFT 4P.64/2004 (Swiss Federal Tribunal) (parties’ right to be heard in
Swiss-seated arbitration based on due process rights under Article 29(2) of Swiss Federal
Constitution); Berti & Schnyder, in S. Berti et al. (eds.), International Arbitration in
Switzerland Art. 190, ¶¶59-69 (2000); Schneider, in S. Berti et al. (eds.), International
Arbitration in Switzerland Art. 182, ¶¶52, 64 (2000).
At the same time, Swiss courts and commentary reject the automatic application of
decisions concerning procedures in domestic litigation settings to international
arbitration. SeeJudgment of 30 December 1994, 13 ASA Bull. 217, 221 (Swiss Federal
Tribunal) (1995); Schneider, in S. Berti et al. (eds.), International Arbitration in Switzerland
Art. 182, ¶53 (2000).
387) See, e.g., Judgment of 20 August 2008, 9 Ob 53/08x (Austrian Oberster Gerichtshof) (award
can be set aside if it amounts to an ordre public violation, contrary to fundamental
values of Austrian legal system); Judgment of 1 April 2008, 5 Ob 272/07x (Austrian
Oberster Gerichtshof) (same); Judgment of 29 April 2009, CG Impianti v. Bmaab & Son Int’l
Contracting Co., XXXV Y.B. Comm. Arb. 415, 416-17 (Milan Corte d’Appello) (2010) (award
can be annulled if it violates “the fundamental principles and values of the forum’s legal
system (from the constitutional ones down)”); Judgment of 29 September 2005, XXXIII Y.B.
Comm. Arb. 683, ¶10 (Russian S. Arb. Ct.) (2008) (award can be annulled if it violates
“fundamental principles of the legal order, generally recognized principles of morality
and ethics, as well as the national defense concerns”).
388) Judgment of 27 November 1987, C.C.M. Sulzer v. Somagec, 1989 Rev. arb. 62, 62 (Paris Cour
d’appel). See also, Judgment of 5 February 1991, Société Almira Films v. Pierrel, 1991 Rev.
arb. 625, 631 (French Cour de cassation) (discussing “superior principle of due process,
indispensable to a fair proceeding” in context of international public policy principles
related to insolvency proceedings); Judgment of 24 November 2011, Société EGPC v.
Société NATGAS, 2012 Rev. arb. 134 (Paris Cour d’appel) (due process does not require
arbitrators to allow parties to make submissions on reasoning of award); Judgment of 16
January 2003, Société Intelcam v. SA France Télécom, 2003 Rev. arb. 246 (Paris Cour
d’appel) (enumerating elements of due process in international arbitration); Judgment
of 26 March 1991, Municipalité de Khoms El Mergeb v. Société Dalico, 1991 Rev. arb. 456,
461 (Paris Cour d’appel) (“international public order principle of due process”); S.
Luttrell, Bias Challenges in International Commercial Arbitration: The Need for A “Real
Danger” Test 80-81 (2009); C. Seraglini & J. Ortscheidt, Droit de l’Arbitrage Interne et
International ¶¶799-805 (2013).
389) See§1.02[B][1]; §§15.01[A]-[B].
390) Rintin Corp., SA v. Domar, Ltd, 374 F.Supp.2d 1165, 1170 (S.D. Fla. 2005). See also UR Power
GmbH v. Kuok Oils & Grains Pte Ltd [2009] EWHC 1940, ¶52 (Comm) (English High Ct.)
(“burden of persuading the court that a serious irregularity has occurred is not easily
discharged” and claims of procedural unfairness are “not to be used as a backdoor
means of attack on the factual conclusions of an arbitral tribunal”); Pang Wai Hak v. Hua
Yunjian, [2012] 4 HKLRD 113, 126 (H.K. Ct. First Inst.) (“the conduct complained of must be
serious or even egregious”); Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2011] 4
HKLRD 188, 218 (H.K. Ct. First Inst.) (“Consistently with the pro-enforcement bias of the
legislation, in my view, the onus in establishing the basis for the appropriate exercise of
the discretion will be on the party seeking to attack the award. In an enforcement
situation, that will be the losing party, asking that the discretion be exercised against
enforcement. In the setting aside situation, again that will be the losing party, asking
that the discretion be exercised in favour of setting aside.”), rev’d on other grounds,
[2012] 4 HKLRD 1 (H.K. Ct. App.).
391) SeeUNCITRAL Model Law, Art. 34(2)(a).
392) DVC-JPW Invs. v. Gershman, 5 F.3d 1172, 1174 (8th Cir 1993).
393) Laminoirs-Trefileries-Cableries de Lens, SA v. Southwire Co., 484 F.Supp. 1063, 1067 (N.D.
Ga. 1980).
394) See, e.g., Int’l Union, United Mine Workers of Am. v. Marrowbone Dev. Co., 232 F.3d 383, 389
(4th Cir. 2000) (“arbitrator typically retains broad discretion over procedural matters”);
Local 12934 of Int’l Union v. Dow Corning, 459 F.2d 221, 223 (6th Cir. 1972) (“[I]t has long
been settled that where the substantive issues of a dispute are a proper subject for
arbitration, procedural matters arising out of that dispute are for the arbitrator, not the
courts, to determine.”); U.S. Turnkey Exploration, Inc. v. PSI, Inc., 577 So.2d 1131, 1135 (La.
App. 1991) (“Unless a mode of conducting the proceedings has been prescribed by the
arbitration agreement or submission, or regulated by statute, arbitrators have a general
discretion as to the mode of conducting the proceedings and are not bound by formal
rules of procedure and evidence, and the standard of review of arbitration procedures is
merely whether a party to an arbitration has been denied a fundamentally fair
hearing.”); Kuok Oils & Grains Pte Ltd [2009] EWHC 1940, ¶52 (Comm) (English High Ct.) (it
was “amply within the [tribunal’s] discretion” to decide what evidence to admit and
weight to be given to it); Grand Pac. Holdings Ltd v. Pac. China Holdings Ltd, [2012] 4
HKLRD 1 (H.K. Ct. App.) (reversing annulment; tribunal had broad discretion to determine
procedures and admissibility of evidence).
93
395) See§15.02; §15.04; Judgment of 25 June 1992, XXII Y.B. Comm. Arb. 619, ¶13 (Austrian
Oberster Gerichtshof) (1997) (“The parties may determine the arbitral procedure in the
arbitration agreement or in a separate written agreement.”). See also Xerox Corp. Ltd v.
MPI Techs. Inc., [2008] CanLII 41006, ¶122 (Ontario Super. Ct.) (“conduct of the arbitral
tribunal must be sufficiently serious to offend most basic notions of morality and
justice”).
396) Éditions Chouette (1987) Inc. v. Desputeaux, [2003] 1 S.C.R. 178, ¶70 (Canadian S.Ct.).
397) Baravati v. Josephthal, Lyon & Ross, 28 F.3d 704, 709 (7th Cir. 1994). See also Stolt–Nielsen
SA v. AnimalFeeds Int’l Corp., 559 U.S. 662, 670 (U.S. S.Ct. 2010) (parties are free to specify
“rules under which any arbitration will proceed”); Martin v. Wells Fargo Fin. Alaska, Inc.,
199 F.Appx. 629, 630 (9th Cir. 2006) (awards vacated where arbitration was not conducted
in accordance with terms of arbitration agreement); UHC Mgt Co., Inc. v. Computer
Sciences Corp., 148 F.3d 992, 997 (8th Cir. 1998) (“Parties may choose to be governed by
whatever rules they wish regarding how an arbitration itself will be conducted”);
Amalgamated Ass’n of St. Elec. Railway v. Conn. Co., 112 A.2d 501, 503 (Conn. 1955) (“If [an
arbitration agreement] specifies methods of procedure for the arbitration, the
arbitrators will be bound to that procedure unless it is a violation of law or public
policy.”).
398) See Judgment of 12 March 2003, DFT 4P.2/2003, ¶3 (Swiss Federal Tribunal) (Swiss Law on
Private International Law “leaves the determination of the arbitral procedure to the
parties’ autonomy”); Judgment of 28 March 2007, DFT 4A_2/2007, ¶3.1 (Swiss Federal
Tribunal) (“Under Article 182(1) and (2) [of the Swiss Law on Private International Law],
the parties and, if necessary the arbitral tribunal, determine the arbitral procedure.”);
Judgment of 15 May 1985, Raffineries de pétrole d’Homs et de Banias v. Chambre de
commerce internationale, 1985 Rev. arb. 141 (Paris Cour d’appel) (“It has been
established that the arbitration in question … is an international arbitration governed
by the intentions of the parties. In this case, the rules of domestic law have a purely
subsidiary role and apply only in the absence of a specific agreement by the parties ….
[T]he rules of the [ICC] Court of Arbitration, which constitute the law of the parties, must
be applied to the exclusion of all other laws.”).
399) See§2.02; §15.02; M. Kurkela & S. Turunen, Due Process in International Commercial
Arbitration 28, 43-46 (2d ed. 2010) (“freedom to arbitrate”).
400) See§11.03[C][1][c][vi]; §15.02.
401) See§15.04[B]; §25.04[B][4].
402) See§15.02; §15.03; §15.04.
403) See, e.g., United Mexican States v. Metalclad Corp., (2001) 89 B.C.L.R.3d 359 (B.C. S.Ct.);
United Mexican States v. Karpa, [2003] CanLII 34011, ¶¶77, 90 (Ontario Super. Ct.).
404) See, e.g., Judgment of 17 May 2001, 7 Ob 67/01f (Austrian Oberster Gerichtshof) (“In the
absence of an agreement by the parties regarding the arbitral procedure the arbitrators
may determine the procedure themselves, provided the mandatory norms of [Austrian
law] are not violated.”); Trustees of Rotoaira Forest Trust v. Attorney-Gen., [1998] 3 NZLR 89
(Auckland High Ct.).
405) ABB Attorney Gen. v. Hochtief Airport GmbH [2006] EWHC 388, ¶67 (Comm) (English High
Ct.). See also Warborough Inv. Ltd v. S. Robinson & Sons (Holdings) Ltd [2003] EWCA Civ 751
(English Ct. App.); Petroships Pte Ltd of Singapore v. Petec Trading & Inv. Corp. of Vietnam,
The Petro Ranger [2001] 2 Lloyd’s Rep. 348 (QB) (English High Ct.); Brandeis (Brokers) Ltd v.
Black [2001] 2 All ER 980 (Comm) (English High Ct.); Hussmann (Europe) Ltd v. Al Ameen
Dev. & Trade Co. [2000] 2 Lloyd’s Rep. 83, 95 (QB) (English High Ct.). See also U.K.
Departmental Advisory Committee on Arbitration Law, Report on the Arbitration Bill ¶280
(1996) (“Having chosen arbitration, the parties cannot validly complain of substantial
injustice unless what has happened simply cannot on any view be defended as an
acceptable consequence of that choice. In short, §68 is really designed as a long stop,
only available in extreme cases where the tribunal has gone so wrong in its conduct of
the arbitration that justice calls out for it to be corrected.”).
406) Latvian Shipping Co. v. Russian People’s Ins. Co. [2012] EWHC 1412 (Comm) (English High
Ct.).
94
407) Indus. Risk Insurers v. MAN Gutehoffnungshütte GmbH, 141 F.3d 1434, 1443-44 (11th Cir.
1998). See also John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (U.S. S.Ct. 1964);
Doral Fin. Corp. v. García-Vélez, 2013 WL 3927685, at *4 (1st Cir.) (vacatur denied because
tribunal’s denial of third party subpoena did not deprive party of fundamentally fair
hearing under §10(a)(3)); LJL 33rd St. Assocs., LLC v. Pitcairn Props. Inc., 2013 WL 3927615
(2d Cir.) (tribunal’s exclusion of hearsay evidence not grounds for vacatur; arbitrators
have discretion, but no obligation, to admit hearsay evidence); Century Indem. Co. v.
Certain Underwriters at Lloyd’s, London, 584 F.3d 513, 557 (3d Cir. 2009); Lessin v. Merrill
Lynch Pierce Fenner & Smith, Inc., 481 F.3d 813, 816 (D.C. Cir. 2007); DVC-JPW Invs. v.
Gershman, 5 F.3d 1172, 1174 (8th Cir. 1993) (“If any reasonable basis exists for the
arbitrators’ decision not to postpone a hearing we will not intervene.”); Hotel Condado
Beach v. Union de Tronquistas Local 901, 763 F.2d 34, 38 (1st Cir. 1985); Verve Commc’ns Pvt
Ltd v. Software Int’l, Inc., 2011 WL 5508636 (D.N.J.) (given “undemanding review” and
broad discretion granted by AAA Rules, award-debtor was not deprived of a
fundamentally fair hearing under §10(a)(3)). See also Restatement (Third) U.S. Law of
International Commercial Arbitration §4-21, Reporters’ Note c (Tentative Draft No. 2 2012)
(“[A]rbitrators have broad discretion to limit the number of hearing days or the number
of witnesses who may be called to testify, to limit the availability or extent of discovery
and to limit or exclude formal evidentiary objections and cross-examination.”).
Some U.S. courts have applied an “abuse of discretion” standard to arbitrators’
procedural rulings in annulment actions. See, e.g., Generica Ltd v. Pharm. Basics, Inc., 125
F.3d 1123, 1131 (7th Cir. 1997); Weber v. Merrill Lynch Pierce Fenner & Smith, Inc., 455
F.Supp.2d 545, 553 (N.D. Tex. 2006); Fairchild & Co. v. Richmond, Fredericksburg &
Potomac R.R. Co., 516 F.Supp. 1305, 1313-14 (D.D.C. 1981) (award will be upheld if “there
exists a reasonable basis for the arbitrators’ considered decision not to grant a
postponement”); Petroleum Transp. Ltd v. Yacimientos Petroliferos Fiscales, 419 F.Supp.
1233, 1235 (S.D.N.Y. 1976).
408) Stroh Container Co. v. Delphi Indus., Inc., 783 F.2d 743, 749 (8th Cir. 1986). See also United
Steelworkers of Am. v. Ideal Cement Co., 762 F.2d 837, 841 (10th Cir. 1985) (greater
deference to arbitrators on procedural issues); Hosier v. Citigroup Global Mkts, Inc., 835
F.Supp.2d 1098, 1107 (D. Colo. 2011); Vold v. Broin & Assocs., Inc., 699 N.W.2d 482, 489 (S.D.
2005).
409) Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997). See also Ace Am. Ins. Co. v.
Christiana Ins., LLC, 2012 WL 1232972, at *3 (S.D.N.Y.); Rai v. Barclays Capital Inc., 739
F.Supp.2d 364, 372 (S.D.N.Y. 2010); Controlotron Corp. v. Siemens Energy & Automation,
Inc., 2010 WL 5422520 (S.D.N.Y.) (rejecting vacatur under FAA §§10(a)(3) on grounds that
procedural matters are for arbitrator to decide unless they deprive award-debtor of
fundamentally fair hearing).
410) See, e.g.,Judgment of 30 December 1994, 13 ASA Bull. 217, 221 (Swiss Federal Tribunal)
(1995); Judgment of 18 April 2012, 3 Ob 38/12b (Austrian Oberster Gerichtshof) (right to be
heard violated only if party was not informed of proceedings or was otherwise prevented
from making arguments); Judgment of 25 June 1992, XXII Y.B. Comm. Arb. 619, ¶218
(Austrian Oberster Gerichtshof) (1997) (“The parties may determine the arbitral
procedure in the arbitration agreement or in a separate written agreement. Lacking such
agreement, the arbitrators decide on the procedure.”); Judgment of 10 September 2008,
Shin-Etsu Chem. v. Xinmao Science, [2008] Min Si Ta Zi No. 18 (Chinese Zuigao Fayuan)
(principle of procedural fairness breached where tribunal rendered decision without
hearing party’s argument); Judgment of 15 September 2008, Gold Nutrition v. Laboratorios
Garden House, Case No. 6615-07 (Chilean Corte Suprema) (appointment of arbitrators by
third party was not fundamentally unfair because parties had agreed as such).
411) Judgment of 30 December 1994, 13 ASA Bull. 217, 221 (Swiss Federal Tribunal) (1995).
412) The same categories are discussed below, as they have arisen in the context of
recognition actions. See§26.05[C][3][d].
413) See§15.04[B][2]; §25.04[B][1]; UNCITRAL Model Law, Art. 18 (“parties shall be treated with
equality”); M. Kurkela & S. Turunen, Due Process in International Commercial Arbitration
186-91 (2d ed. 2010).
414) See, e.g.,Judgment of 17 December 2009, Société Fichtner GmbH v. Société Lksur, Case No.
08/16276 (Paris Cour d’appel) (award annulled where claimant received only one of
respondent’s submissions and arbitrator did not permit claimant opportunity to
respond); Judgment of 25 May 1990, Fougerolle v. Procofrance, 1990 Rev. arb. 892 (Paris
Cour d’appel) (1990) (equality of treatment is matter of “procedural public policy”);
Judgment of 19 February 2009, DFT 4A_539/2008 (Swiss Federal Tribunal).
415) Judgment of 19 February 2009, DFT 4A_539/2008, ¶4.1 (Swiss Federal Tribunal).
416) See§15.07[D][1].
417) See, e.g., Judgment of 14 June 2011, DFT 4A_617/2010 (Swiss Federal Tribunal) (tribunal did
not violate due process by relying solely on one party’s expert witness); Judgment of 17
January 2013, DFT 4A_244/2012 (Swiss Federal Tribunal) (arbitrators do not deny party
right to be heard by interpreting evidence in different manner than that contemplated
by the party that submitted it).
418) See§2.02[C][1][b][v]; §13.04[A]
95
419) See, e.g., UNCITRAL Model Law, Art. 34(2)(1)(ii); French Code of Civil Procedure, Art.
1520(4); Swiss Law on Private International Law, Art. 190(2)(d); German ZPO, §1059(2)(1)(b);
Austrian ZPO, §611; Japanese Arbitration Law, Art. 44(1)(iii) (award may be annulled
where “party … was not given notice as required by the provisions of the laws of Japan”).
See also Dahlberg & Öhrström, Proper Notification: A Crucial Element of Arbitral
Proceedings, 27 J. Int’l Arb. 539 (2010); Restatement (Third) U.S. Law of International
Commercial Arbitration §4-13(a) (Tentative Draft No. 2 2012) (court may annul award “to
the extent that the party opposing such grant of relief did not receive adequate notice
of the appointment of the arbitral tribunal or of other important phases of the
arbitration proceedings”). Compare Gingiss Int’l, Inc. v. Bormet, 58 F.3d 328, 332 (7th Cir.
1995) (“We have repeatedly held that 9 U.S.C. §10(a) provides the exclusive grounds for
setting aside an arbitration award under the FAA. … Inadequate notice is not one of
these grounds.”).
420) Judgment of 16 March 2000, 4 Z Sch 50/99 (Bayerisches Oberstes Landesgericht).
421) See, e.g., Bapu Corp. v. Choice Hotels Int’l, Inc., 371 F.Appx. 306 (3d Cir. 2010) (rejecting
claim that award-debtor was not properly served with notice of arbitration); Choice
Hotels Int’l, Inc. v. Patel, 2004 WL 57658 (D. Md.) (rejecting claim that award-debtor never
received proper notice of arbitration); United Mexican States v. Karpa, (2005) 74 O.R.3d
180 (Ontario Ct. App.); Chongqing Mach. Imp. & Exp. Co. Ltd v. Yiu Hoi, XXX Y.B. Comm. Arb.
169 (H.K. Ct. First Inst. 2001) (2005). See also§26.05[C][3][d].
422) See, e.g., Choice Hotels Int’l, Inc. v. SM Prop. Mgt, LLC, 519 F.3d 200 (4th Cir. 2008) (award
vacated for lack of notice; court rejected arbitrator’s finding that notice was proper);
Steward v. Airtran Airways, Inc., 221 F.Supp.2d 1307, 1314 (S.D. Fla. 2002) (vacating award
for lack of notice), aff’d sub nom, Steward v. Mann, 351 F.3d 1338, 1345-46 (11th Cir. 2003);
Kaplan v. Alfred Dunhill of London, Inc., 1996 WL 640901, at *5-6 (S.D.N.Y.) (vacating award
for fundamental unfairness where party had not received notice of arbitration and was
therefore unable to present any evidence, and where tribunal refused to reopen
arbitration after party informed arbitrators of lack of notice); Sesostris, SAE v.
Transportes Navales, SA, 727 F.Supp. 737, 741-43 (D. Mass. 1989); Seldner Corp. v. W.R. Grace
& Co., 22 F.Supp. 388, 393 (D. Md. 1938); PPX Enters., Inc. v. Musicali, 384 N.Y.S.2d 801, 803
(N.Y. App. Div. 1976) (vacating award for failure to timely notify party of hearing), aff’d,
397 N.Y.S.2d 987, 988 (N.Y. 1977); Judgment of 1 July 1999, Brasoil v. GMRA, XXIVa Y.B.
Comm. Arb. 296 (Paris Cour d’appel) (1999) (annulling award for denial of opportunity to
be heard); Judgment of 14 September 1994, 1995 Rev. arb. 447 (Paris Cour d’appel)
(annulling award where parties had not been given notice of hearings); Judgment of 24
October 1991, 1993 Rev. arb. 123 (Paris Cour d’appel), Note, Jarrosson; Judgment of 7
September 2009, 26 Sch 13/09 (Oberlandesgericht Frankfurt) (notice to award-debtor’s
legal representative was inadequate because legal representative’s mandate was
terminated and award-debtor had no knowledge of proceedings); Judgment of 8
November 2001, 6 Sch 04/01 (Hanseatisches Oberlandesgericht Hamburg) (award
annulled because award-debtor had not been informed that presiding arbitrator was
confirmed and tribunal constituted); Guangdong Overseas Shenzhen Co. v. Yao Shun
Group Int’l Ltd, [1998] HKEC 904 (H.K. Ct. First Inst.) (award annulled because party did
not have opportunity to present substantive case).
423) SeeUganda Telecom Ltd v. Hi-Tech Telecom Pty Ltd, [2011] FCA 131 (Australian Fed. Ct.).
424) See Judgment of 15 March 2005, 11 Sch 19/05 (Oberlandesgericht Dresden); To Ho Sum
Eddy v. Sheenluxe Dev. Ltd, [2008] HKCFI 1076 (H.K. Ct. First Inst.) (refusing to annul award
where tribunal and claimant diligently attempted to give notice over ten-year period).
425) Judgment of 31 October 2008, Case No. 728 (Bulgarian S.Ct.).
426) See§15.08[AA]; UNCITRAL Model Law, Art. 24(1) (“unless the parties have agreed that no
hearings shall be held, the arbitral tribunal shall hold such hearings at an appropriate
stage of the proceedings, if so requested by a party”); Belgian Judicial Code, Art. 1705(1)
(“Unless the parties have agreed that no hearings shall be heard, the arbitral tribunal
shall hold such hearings … if so requested by a party.”); Spanish Arbitration Act, 2011, Art.
30(1); Chilean International Commercial Arbitration Law, Art. 24; Mexican Commercial
Code, Art. 1440. See also M. Kurkela & S. Turunen, Due Process in International
Commercial Arbitration 157 (2d ed. 2010); Schneider, in S. Berti et al. (eds.), International
Arbitration in Switzerland Art. 182, ¶¶89-91 (2000).
427) See, e.g.,Judgment of 1 July 1999, 1999 Rev. arb. 834 (Paris Cour d’appel) (award annulled
because tribunal wrongfully rejected party’s claim without hearing or opportunity to
submit evidence); Judgment of 19 January 1990, Immoplan v. Mercure, 1991 Rev. arb. 125
(Paris Cour d’appel) (award annulled where tribunal decided issue without hearing
parties); Judgment of 21 February 2002, 10 Sch 08/01 (Oberlandesgericht Naumburg)
(when party requests, arbitral tribunal is obliged to hold hearing at appropriate stage of
proceedings (under Article 24(1) of Model Law)); Judgment of 30 June 2010, Case No. 7
Ob111/10i (Austrian Oberster Gerichtshof) (award rendered without oral hearing, despite
request of party, may be annulled).
428) SeeUNCITRAL Model Law, Art. 24. See also Judgment of 5 October 2009, 34 Sch 12/09
(Oberlandesgericht München) (failure to complain about lack of hearing rights to do so
in annulment proceeding); Gov’t of the Repub. of the Philippines v. Philippine Int’l Air
Terminals Co., Inc., [2006] SGHC 206 (Singapore High Ct.) (where no party requested oral
hearing, tribunal not required to conduct oral hearing); PT Asuransi Jasa Indonesia
(Persero) v. Dexia Bank SA, [2006] SGCA 41 (Singapore Ct. App.) (neither party requested
oral hearing and therefore no party would be entitled to complain about lack of
hearing).
96
429) See, e.g., Isidor Paiewonsky Assocs., Inc. v. Sharp Prop., Inc., 998 F.2d 145, 156 (3d Cir. 1993)
(no due process violation for failing to hold hearing when party did not request one);
Compagnie des Bauxites de Guinee v. Hammermills, Inc., 1992 WL 122712, at *2 (D.D.C.) (no
violation of procedural fairness where party did not request hearing on costs and
attorneys’ fees, which arbitrators awarded in amount of $1 million); Margulead Ltd v.
Exide Tech. [2004] EWHC 1019 (QB) (English High Ct.) (rejecting challenge to award on
grounds that claimant was not afforded opportunity to reply in oral submissions). See
alsoJudgment of 8 July 2010, Société Marocaines de Losirs MDL v. France Quick AS, 2010
Dalloz 2933 (French Cour de cassation civ. le) (“in a situation where the Chairman of a
company’s Board of Directors initiates arbitration against a respondent, acting under
the name of the company rather than personally, the company cannot argue later that
international public policy has been breached because its Chairman was not present in
the arbitration proceedings”).
430) See, e.g., Dean Witter Reynolds, Inc. v. Eno, 669 N.Y.S.2d 42, 43 (N.Y. App. Div. 1998)
(affirming arbitrators’ dismissal of claim without holding evidentiary hearing);
O’Donoghue v. Enter. Inns plc [2008] EWCH B15 (Ch) (English High Ct.) (award not annulled
when arbitrator refused to hold oral hearing; arbitrator had discretion to determine
whether to hold hearing); Judgment of 21 June 1990, Compagnie Honeywell Bull SA v.
Computacion Bull de Venezuela CA, 1991 Rev. arb. 96 (Paris Cour d’appel), Note, Delvolvé
(noting possibility for arbitral tribunal to dispense with hearings and make decision on
basis of parties’ written submissions).
431) SeeUNCITRAL Model Law, Art. 24(1) (“unless the parties have agreed that no hearings
shall be held …”); Belgian Judicial Code, Art. 1705(1) (“[u]nless the parties have agreed
that no hearings shall be held”); Spanish Arbitration Act, 2011, Art. 30(1); Mexican
Commercial Code, Art. 1440; §15.08[AA].
432) See, e.g., Front Row Inv. Holdings (Singapore) Pte Ltd v. Daimler S.E. Asia Pte Ltd, [2010]
SGHC 80 (Singapore High Ct.); Judgment of 23 April 2013, DFT 4A_672/2012, ¶3.1.1 (Swiss
Federal Tribunal) (“There is an obligation of the arbitral tribunal to take the submission
of the parties into account.”); M. Schneider, Swiss International Private Law (IPRG) Art.
182, n.54 (2007) (tribunal must take into account submissions of parties).
433) See, e.g., DVC-JPW Invs. v. Gershman, 5 F.3d 1172, 1174 (8th Cir. 1993) (“If any reasonable
basis exists for the arbitrators’ decision not to postpone a hearing we will not
intervene.”); Schmidt v. Finberg, 942 F.2d 1571, 1574 (11th Cir. 1991) (refusing to vacate
award where tribunal denied request for postponement of hearing without explanation
and where key witness had long-standing, important prior commitment); Dealer
Computer Servs., Inc. v. Dale Spradley Motors, Inc., 2012 WL 72284, at *4 (E.D. Mich.)
(denial of delay in hearing was in arbitrators’ “full discretion”); Rai v. Barclays Capital
Inc., 739 F.Supp.2d 364, 371 (S.D.N.Y. 2010); Storey v. Searle Blatt, Ltd, 685 F.Supp. 80, 82
(S.D.N.Y. 1988); Dan River, Inc. v. Cal-Togs, Inc., 451 F.Supp. 497, 503-04 (S.D.N.Y. 1978)
(refusing to vacate award where party’s “chief witness” requested, one week before
hearing, to reschedule hearing, which had been scheduled several months in advance);
Foulger-Pratt Residential Contracting, LLC v. Madrigal Condos., 779 F.Supp.2d 100, 118
(D.D.C. 2011) (“In general, courts accord deference to an arbitrator’s decision regarding
postponement or adjournment of matters, except when the decision prevents a party
from presenting ‘pertinent and material evidence.’”) (quoting Naing Int’l Enters., Ltd v.
Ellsworth Assocs.,961 F.Supp. 1, 3 (D.D.C. 1997)); Lee v. Dean Witter Reynolds, Inc., 594 So.2d
783, 785 (Fla. Ct. App. 1992) (refusing to vacate award where tribunal refused to grant
second postponement); Ceseretti v. Trans-Air Sys., 253 N.Y.S.2d 409, 410 (N.Y. App. Div.
1964) (refusing to vacate award where tribunal refused to postpone hearing scheduled
for several weeks because party claimed it needed to attend negotiations relating to
subject matter of arbitration); ASM Shipping Ltd of India v. TTMI Ltd of England [2005]
EWHC 2238 (Comm) (English High Ct.) (refusing to annul award where tribunal refused
postponement after respondent’s lead counsel became unavailable due to personal
reasons); Shuttari v. Solicitors Indem. Fund [2004] EWHC 1537 (Ch) (English High Ct.)
(refusing to annul award where tribunal refused postponement to allow medical
evidence to be adduced; claimant had already received “every indulgence”); Pac. China
Holdings v. Grand Pac. Holdings, [2012] 4 HKLRD 1, ¶68 (H.K. Ct. App.) (no grounds for
annulment where tribunal did not permit award-debtor to have last word on issue: lower
court “was [not] entitled to interfere with a case management decision, which was fully
within the discretion of the Tribunal to make”); Judgment of 25 October 2000, 11 Sch
02/00 (Oberlandesgericht Dresden) (due process not violated where party was given only
short time period to respond to application for issuance of consent award, where terms
of settlement were not in dispute and party had sufficient time to consult with its
lawyers before agreeing to settlement). See also§15.08[AA].
434) Lazareff, International Arbitration: Towards A Common Procedural Approach, in S.
Frommel & B. Rider (eds.), Conflicting Legal Cultures in Commercial Arbitration: Old Issues
and New Trends 31, 35 (1999).
97
435) See, e.g., Naing Int’l Enters., Ltd v. Ellsworth Assocs., Inc., 961 F.Supp. 1, 6 (D.D.C. 1997)
(vacating award because arbitrator refused to postpone hearing); Allendale Nursing
Home, Inc. v. Local 1115 Joint Bd, 377 F.Supp. 1208, 1214 (S.D.N.Y. 1974) (vacating award
because arbitrator refused to adjourn hearing when “crucial” witness became ill); Tube &
Steel Corp. of Am. v. Chicago Carbon Steel Prods., 319 F.Supp. 1302, 1304 (S.D.N.Y. 1970)
(vacating award where tribunal scheduled hearing on date that one party could not
make, and parties had mutually agreed on another date); Coromandel Land Trust Ltd v.
MilkT Invs. Ltd, CIV–2009-419-000232 (Hamilton High Ct. 2009) (arbitrator’s conduct of
arbitral proceeding was a breach of natural justice because he unilaterally set hearing
date when award-debtor’s witnesses would not be available and award-debtor could
not obtain legal representation by time of hearing); Judgment of 20 May 2010, Case No.
43-29903/2008-15-845 (Russian S. Arbitrazh Ct.) (denying confirmation of award where
tribunal did not suspend arbitral proceedings pending translation of evidence);
Judgment of 18 May 2007, Case Nos. A40-4577/07-8-46 & A40-4582/07-8-47 (Moscow Dist.
Fed. Arbitrazh Ct.) (annulling award because tribunal denied award-debtor additional
time to collect evidence); Judgment of 27 June 2006, SAP C 1594/2006 (A Coruña Audiencia
Provincial) (annulling award where hearing was conducted in absence of party’s lawyer).
436) See, e.g.,Judgment of 22 June 2009, 34 Sch 26/08 (Oberlandesgericht München) (use of
Spanish language did not violate award-debtor’s right to due process, as it failed to
prove that it had not been able to present its case; sufficient that party is represented
by lawyer who speaks language of arbitration); Judgment of 5 March 2008, Case No. Gž
6/08-2 (Croatian S.Ct.) (party was not prevented from presenting its case based on
unfamiliarity with language of arbitration; party could have requested translation). See
also§26.05[C][3][d].
437) See§15.08[L], p. 2232; §25.04[B][3][d].
438) See, e.g., Carte Blanche (Singapore) Pte Ltd v. Carte Blanche Int’l, Ltd, 888 F.2d 260, 266
(2d Cir. 1989) (confirming award allegedly not within ICC Terms of Reference); Wachovia
Sec. LLC v. Barnes, 2006 U.S. Dist. LEXIS 34020, at *6 (N.D. Ill.) (confirming award where
one party’s post-hearing submissions made new claims); Grosso v. Barney, 2003 WL
22657305, at *7 (E.D. Pa.) (confirming award where tribunal refused to allow party to
amend Statement of Claim); Peters Fabrics, Inc. v. Jantzen, Inc., 582 F.Supp. 1287, 1292
(S.D.N.Y. 1984) (confirming award where arbitrator refused to allow counterclaim
submitted one week before hearing); Faberge Inc. v. Felsway Corp., 539 N.Y.S.2d 944, 946
(N.Y. App. Div. 1989) (confirming award where arbitrator permitted party to assert claim
not made in request for arbitration; AAA Rules permitted amendment); United Mexican
States v. Metalclad Corp., (2001) 89 B.C.L.R.3d 359 (B.C. S.Ct.) (confirming award where new
claims were presented before reply stage of proceedings). But see Pacol Ltd v. Joint
Stock Co. Rossakhar [1999] 2 All ER 778 (Comm) (English High Ct.) (annulling award
because arbitrator addressed issue of liability even though respondents had admitted
liability); Judgment of 18 May 2007, Cases Nos. A40-4577/07-8-46 & A40-4582/07-8-47
(Moscow Dist. Fed. Arbitrazh Ct.) (annulling awards where tribunal admitted claims
asserted after hearing).
439) See§15.08[Y].
440) See§15.08[AA][6]; §15.09; UNCITRAL Model Law, Art. 19(2) (“The power conferred upon the
arbitral tribunal includes the power to determine the admissibility, relevance,
materiality and weight of any evidence.”); English Arbitration Act, 1996, §§34(1), (2) (“It
shall be for the tribunal to decide all procedural and evidential matters, subject to the
right of the parties to agree any matter.”).
441) Report of the Secretary-General on the Preliminary Draft Set of Arbitration Rules for
Optional Use in Ad Hoc Arbitration Relating to International Trade, UNCITRAL, Eighth
Session, U.N. Doc. A/CN.9/97, VI UNCITRAL Y.B. 163, 176 (1975).
442) Bell Aerospace Co. v. Local 516, Int’l Union, United Auto., Aerospace & Agric. Implement
Workers of Am., 500 F.2d 921, 923 (2d Cir. 1974) (arbitrators’ exclusion of affidavit not
improper). See also Patrizzi & Co. Auctioneers SA v. SDG Corp., 2011 WL 5077422 (N.D. Ill.)
(arbitrators’ differential treatment of evidence proffered by parties and refusal to admit
evidence was not grounds for vacatur because it did not deprive party of fundamentally
fair hearing); Agility Public Warehousing Co. KSC v. Supreme Foodserv. GmbH, 840
F.Supp.2d 703, 713 (S.D.N.Y. 2011) (“Since [award-debtor] argues that the Tribunal
improperly decided the issue of the missing testimony, but does not challenge the
Tribunal’s authority to reach that question in the first place, the Court will not vacate
under §10(a)(4).”); Triomphe Partners, Inc. v. Realogy Corp., 2011 WL 3586161, at *4
(S.D.N.Y.) (arbitrators did not commit procedural error by refusing “to hear evidence
pertinent and material to the controversy,” where this did not deprive award-debtor of
“fundamental[ly] fair[] … arbitration proceeding[s]”).
98
443) See, e.g., London Underground Ltd v. Citylink Telecomms. Ltd [2007] EWHC 1749, ¶39 (TCC)
(English High Ct.) (arbitrator must “conduct the proceedings fairly by reference to the
pleadings, submissions and evidence”); Judgment of 7 July 1994, Uzinexport-Import
Romanian Co. v. Attock Cement Co., 1995 Rev. arb. 107 (Paris Cour d’appel) (“right to a fair
hearing requires that everything which is relevant to the case must be communicated to
both parties”); Judgment of 9 June 1998, C. Srl v. L.S. SA, 16 ASA Bull. 653 (Swiss Federal
Tribunal) (1998) (procedural irregularities in taking of evidence do not necessarily
constitute violation of right to be heard); Judgment of 29 October 2009, 34 Sch 15/09
(Oberlandesgericht München) (arbitral tribunal has authority to decide whether
evidence is relevant and admissible); Judgment of 27 March 2009, 10 Sch 8/08
(Oberlandesgericht Karlsruhe); Judgment of 21 November 2008, 19 Sch 12/08
(Oberlandesgericht Köln); Judgment of 10 July 2003, 26 Sch 01/03 (Oberlandesgericht
Frankfurt); Pac. China Holdings v. Grand Pac. Holdings, [2012] 4 HKLRD 1, ¶68 (H.K. Ct.
App.) (admission of additional legal authorities was “case management decision, which
was fully within the discretion of the Tribunal to make”).
444) Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (U.S. S.Ct. 1991).
445) Areca, Inc. v. Oppenheimer & Co., 960 F.Supp. 52, 55 (S.D.N.Y. 1997).
446) Century Indem. Co. v. Certain Underwriters at Lloyd’s, London, 584 F.3d 513, 557 (3d Cir.
2009). See also Gallus Inv., LP v. Pudgie’s Famous Chicken, 134 F.3d 231, 234 (4th Cir. 1998)
(upholding arbitrator’s admission of settlement offers for purposes of establishing
mitigated damages); Lessin v. Merrill Lynch Pierce Fenner & Smith, Inc., 481 F.3d 813, 818
(D.C. Cir. 2007); Foulger-Pratt Residential Contracting, LLC v. Madrigal Condominiums, 779
F.Supp.2d 100, 120 (D.D.C. 2011) (“Court is ‘neither required nor authorized to comb the
record for technical errors in the receipt or rejection of evidence by arbitrators.’”)
(quoting Bolton v. Bernabei & Katz, PLLC,954 A.2d 953, 960 (D.C. 2008)); Rai v. Barclays
Capital Inc., 739 F.Supp.2d 364, 372 (S.D.N.Y. 2010); InterDigital Commc’ns Corp. v.
Samsung Elecs. Co., 528 F.Supp.2d 340, 352 (S.D.N.Y. 2007) (“vacatur is not appropriate …
where the losing party in an arbitration merely takes issue with the weight accorded to
certain evidence actually considered by the panel or the panel’s rejection of arguments
related to such evidence”); Hayne, Miller & Farni, Inc. v. Flume, 888 F.Supp. 949, 952 (E.D.
Wis. 1995) (“Arbitrators may admit evidence which would be unduly prejudicial if
admitted in court.”); Cobec Brazilian Trading v. Isbrandtsen, 524 F.Supp. 7, 10 (S.D.N.Y.
1980) (no denial of opportunity to present evidence); Fairchild & Co. v. Richmond,
Fredericksburg & Potomac R.R. Co., 516 F.Supp. 1305, 1314 (D.D.C. 1981) (“[A]rbitrators are
charged with the duty of determining what evidence is relevant. … While they may err in
their determination, every failure to receive relevant evidence does not constitute
misconduct.”); Oinoussian SS Corp. v. Sabre Shipping Corp., 224 F.Supp. 807, 809 (S.D.N.Y.
1963) (“it would be carrying coals to Newcastle to require presentation of evidence to
experts in the field”); Gramling v. Food Mach. & Chem. Corp., 151 F.Supp. 853, 858
(W.D.S.C. 1957) (arbitrators were “selected for their peculiar fitness to perform that task
and authorized to do so without considering any evidence”).
447) See, e.g., Shuttari v. Solicitors Indem. Fund [2004] EWHC 1537 (Ch) (English High Ct.) (award
upheld where arbitrator refused adjournment to allow medical evidence to be
obtained); Brandeis (Brokers) Ltd v. Black [2001] 2 All ER 980 (Comm) (English High Ct.);
Egmatra AG v. Marco Trading Corp. [1999] 1 Lloyd’s Rep. 862 (QB) (English High Ct.) (award
upheld where arbitrator refused to permit expert evidence); Hainan Mach. Imp. & Exp.
Corp. v. Donald & McArthy Pte Ltd, XXII Y.B. Comm. Arb. 771, 778 (Singapore High Ct. 1995)
(1997) (“The defendants had had ample opportunity to put up before the arbitration
tribunal whatever they considered to be the real matter in dispute.”).
448) Brandeis (Brokers) Ltd v. Black [2001] 2 All ER 980, ¶56 (Comm) (English High Ct.).
449) See, e.g.,Judgment of 16 November 2000, 2001 Rev. arb. 731 (Paris Cour d’appel)
(upholding award which refused to consider evidence provided by one party; tribunal’s
evidentiary decisions cannot ordinarily be reviewed); Judgment of 3 December 1998, 1999
Rev. arb. 601 (Paris Cour d’appel) (upholding award where tribunal did not require
further technical expert testimony but allowed parties to produce new evidence);
Judgment of 19 December 1990, DFT 116 II 639, 640-41 (Swiss Federal Tribunal) (arbitral
tribunal may determine facts based on evidence it deems relevant); Judgment of 20
December 2006, 34 Sch 16/06 (Oberlandesgericht Munich); Judgment of 31 March 2005, 3
Ob 35/05a (Austrian Oberster Gerichtshof) (“It does not amount to a violation of the right
to be heard if requests for the taking of evidence were not granted or because the facts
were insufficiently determined.”); Judgment of 1 September 1999, 2000 ÖJZ 44 (Austrian
Oberster Gerichtshof) (“An incomplete determination of the facts or consideration of the
legally relevant issues does not per se constitute grounds for an action to set aside the
award. Only fundamental violations of basic notions of due process justify such action.”);
Judgment of 6 September 1990, 6 Ob 572/90 (Austrian Oberster Gerichtshof). See
also§26.05[C][3][d].
450) See, e.g., Judgment of 14 June 2011, DFT 4A_617/2010 (Swiss Federal Tribunal) (tribunal did
not violate due process by not appointing expert where neither party requested it to do
so).
451) See, e.g.,Judgment of 2 July 1992, 1993 NJW-RR 444 (German Bundesgerichtshof).
452) See, e.g., Judgment of 28 February 2013, DFT 4A_576/2012, ¶4.2.2 (Swiss Federal Tribunal)
(tribunal has authority to exclude evidence submitted late in arbitral proceeding: “the
right to adduce evidence, which constitutes one of the elements of the right to be heard,
is not violated when evidence was not requested in a timely manner”).
99
453) See, e.g., Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997) (“Because [an
absent witness] as sole negotiator for Bertek was the only person who could have
testified in rebuttal of appellees’ fraudulent inducement claim … and the documentary
evidence did not adequately address such testimony, there was no reasonable basis for
the arbitrators to conclude that [the witness’s] testimony would have been cumulative
with respect to these issues.”); Prudential Sec., Inc. v. Dalton, 929 F.Supp. 1411, 1417 (N.D.
Okla. 1996) (vacating award because arbitrators excluded material evidence); Cofinco,
Inc. v. Bakrie & Bros., 395 F.Supp. 613, 615 (S.D.N.Y. 1975) (“neglectful disregard” of
evidentiary issues, which denied party opportunity to present evidence, held
misconduct under §10(c) of FAA); Gervant v. New England Fire Ins. Co., 306 N.Y. 393, 399
(N.Y. App. 1954) (“Even in arbitration proceedings the rule is that ‘If the arbitrators refuse
to hear evidence pertinent and material to the matter in controversy, it is
unquestionably such misconduct as will vitiate an award in a court of equity.’”) (quoting
Van Cortlandt v. Underhill, 17 Johns. 405, 410 (N.Y. Ct. Correction Errors 1819); BTC Bulk
Transp. Corp. v. Glencore Int’l AG [2006] EWHC 1957 (Comm) (English High Ct.); Alphapoint
Shipping Ltd v. Rotem Amfert Negev Ltd, The Agios Dimitrios [2004] EWHC 2232 (Comm)
(English High Ct.); Amego Litho Ltd v. Scanway Ltd [1994] 1 EGLR 15 (Ch) (English High Ct.)
(“technical misconduct” in rejecting evidence; award annulled); Judgment of 1 July 1999,
1999 Rev. arb. 834 (Paris Cour d’appel) (award annulled because tribunal wrongfully
rejected party’s claim without hearing or opportunity to submit evidence); Judgment of
10 June 1993, Compagnie Aeroflot v. AGF, 1995 Rev. arb. 447 (Paris Cour d’appel) (award
annulled where tribunal assessed value of leasehold by referring to information not
provided by or available to parties).
Nonetheless, in one case, a Spanish court annulled an award where the arbitrator had
been refused access by a party to disputed premises (and only relied on witness
evidence). Judgment of 25 January 2008, Egson Construcciones SA (Ecosa) v. Canteras y
Construcciones SA, SAP M 1439/2008 (Madrid Audiencia Provincial).
454) See, e.g.,Judgment of 25 March 1999, 2000 Rev. arb. 267 (French Cour de cassation civ. 2e)
(award annulled where tribunal heard one party as third party witness); Judgment of 26
September 1985, 1986 NJW 1436, 1438 (German Bundesgerichtshof) (award annulled
because tribunal wrongly regarded allegations made by defendant as undisputed).
455) See§25.05[A][2]; §26.05[C][12]. See also Judgment of 18 January 2008, FINDESCO SLU v. Ms.
Letitia, SAP B 1657/2008 (Barcelona Audiencia Provincial).
456) United Mexican States v. Marvin Roy Feldman Karpa, [2005] Can LII 249 (Ontario Ct. App.).
457) For a discussion of disclosure in international arbitration, see§16.01; §16.02. See also
Kaufmann-Kohler & Baertsch, Discovery in International Arbitration: How Much Is Too
Much?, 2004 SchiedsVZ 17 (“If a party lacks documents indispensable to establish
relevant facts for which it bears the burden of proof and such documents are
demonstrably within the control of its opponent, one could reasonably argue that a
refusal to grant a production request may deprive the party seeking discovery [of] its
opportunity to be heard.”).
458) See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (U.S. S.Ct. 1991)
(“Although those [discovery] procedures might not be as extensive as in the federal
courts, by agreeing to arbitrate, a party trades the procedures and opportunity for
review of the courtroom for the simplicity, informality, and expedition of arbitration.”);
Doral Fin. Corp. v. García-Vélez, 2013 WL 3927685, at *4 (1st Cir.) (vacatur denied because
tribunal’s denial of third party subpoena did not deprive party of fundamentally fair
hearing under §10(a)(3)); Bain Cotton Co. v. Chestnutt Cotton Company, Docket No. 12-
11138 (5th Cir. 2013) (arbitrators’ denial of discovery requests “does not rise to the level
required for vacating under any of the FAA’s narrow and exclusive grounds”); InterChem
Asia 2000 PTE Ltd v. Oceana Petrochems. AG, 373 F.Supp.2d 340, 352 (S.D.N.Y. 2005) (no
due process violations arising from arbitrator’s discovery procedures); Karaha Bodas Co.
v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 190 F.Supp.2d 936, 952 (S.D.
Tex. 2001) (discovery requests are “well within the reasonable exercise of the Tribunal’s
discretion”); McCrary ex rel. McCrary v. Byrd, 559 S.E.2d 821, 826 (N.C. App. 2002); ABB
Attorney Gen. v. Hochtief Airport GmbH [2006] EWHC 388 (Comm) (English High Ct.)
(upholding arbitrators’ refusal to order disclosure requested by one party).
459) See, e.g., Forsythe Int’l SA v. Gibbs Oil Co., 915 F.2d 1017, 1019 (5th Cir. 1990) (tribunal’s
failure to address party’s refusal to give discovery is not basis for vacating award);
Fernandez v. Clear Channel Broadcasting., Inc., 268 F.Supp.2d 1365, 1368 (S.D. Fla. 2003);
Elektrim SA v. Vivendi Universal SA [2007] EWHC 11 (Comm) (English High Ct.); Profilati
Italia Srl v. Painewebber Inc. [2001] 1 Lloyd’s Rep. 715 (QB) (English High Ct.). See
also§26.05[C][3][d].
460) See§15.08[AA][9]; UNCITRAL Model Law, Arts. 19(2), 24(1); English Arbitration Act, 1996,
§34(1).
100
461) See, e.g., Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123, 1129-31 (7th Cir. 1997)
(confirming award where tribunal curtailed cross-examination because it placed
diminished reliance on witness’s testimony); Papapetropoulous v. Milwaukee Transp.
Servs., Inc., 795 F.2d 591, 593 (7th Cir. 1986) (confirming award where tribunal limited
cross-examination of emotional witness because there was other corroborating evidence
of witness’s testimony); Intercarbon Bermuda Ltd v. Caltex Trading & Transp. Corp., 146
F.R.D. 64, 72 (S.D.N.Y. 1993) (confirming award where tribunal refused to hear witnesses);
Compania Sud-Americanan de Vapores SA v. Nippon Yusen Kaisha [2009] EWHC 1606
(Comm) (English High Ct.) (confirming award where tribunal denied party opportunity to
cross-examine witnesses; court held that serious irregularity occurred but had not given
rise to substantial injustice); Egmatra AG v. Marco Trading Corp. [1999] 1 Lloyd’s Rep. 862
(QB) (English High Ct.) (confirming award where tribunal did not allow party to call
expert witness). See also§26.05[C][3][d].
462) See, e.g., Generica Ltd v. Pharm. Basics, Inc., 1996 U.S. Dist. LEXIS 13716 (N.D. Ill.); Fairchild
& Co. v. Richmond, Fredericksburg & Potomac R.R. Co., 516 F.Supp. 1305, 1314-15 (D.D.C.
1981); Laminoirs-Trefileries-Cableries de Lens, SA v. Southwire Co., 484 F.Supp. 1063, 1066-
67 (N.D. Ga. 1980); Standard Tankers (Bahamas) Co. v. Motor Tank Vessel, AKTI, 438 F.Supp.
153 (E.D.N.C. 1977); Judgment of 15 March 1984, Société Soubaigne v. Société Limmereds
Skogar, 1985 Rev. arb. 285 (Paris Cour d’appel) (arbitrators not obligated to hear
witnesses which were not mentioned in submissions).
463) See, e.g., Gallagher v. Schernecker, 60 Wis.2d 143, 151 (Wis. 1973) (“Arbitrators have a good
deal of discretion in cutting off repetitious or cumulative testimony but they have gone
beyond the limit of discretion when they refuse to hear evidence pertinent and material
to this dispute.”); Chilton v. Saga Holidays plc [1986] 1 All ER 841 (English Ct. App.)
(annulling award because arbitrator refused to allow party to cross-examine claimant on
grounds that claimant was unrepresented); Judgment of 7 September 1993, DFT 119 II 386,
388-90 (Swiss Federal Tribunal).
464) Swiss Law on Private International Law, Art. 182(3); Schneider, in S. Berti et al. (eds.),
International Arbitration in Switzerland Art. 182, ¶¶56-61 (2000).
465) French Code of Civil Procedure, Art. 1520(4) (arbitrator must respect due process
(“principe de la contradiction”)).
466) Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123, 1129-30 (7th Cir. 1997); Sonera Holding BV
v. Cukurova Holding AS, 2012 WL 3925953, at *5 (S.D.N.Y.).
467) Judgment of 19 December 1990, DFT 116 II 639, 643 (Swiss Federal Tribunal).
468) Methanex Motunui Ltd v. Spellman, [2004] 3 NZLR 454 (Wellington Ct. App.).
469) See, e.g., Gbangbola v. Smith & Sheriff Ltd [1998] 3 All ER 730 (QB) (English High Ct.) (award
annulled where arbitrator failed to allow parties to make submissions on costs);
Judgment of 17 December 2009, Société Fichtner GmbH v. Société Lksur, Case No. 08/16276
(Paris Cour d’appel) (award annulled where award-debtor was denied opportunity to
respond to one of award-creditor’s submissions); Judgment of 12 June 2003, 2004 Rev.
arb. 887 (Paris Cour d’appel) (right to fair hearing includes opportunity to contest other
party’s allegations); Judgment of 18 April 1991, MORS v. Supermarket Sys., 1995 Rev. arb.
448 (Paris Cour d’appel) (award annulled where tribunal relied on submission it had
previously rejected as out-of-time and had not permitted award-debtor to address);
Judgment of 19 January 1990, Immoplan v. Mercure, 1991 Rev. arb. 125 (Paris Cour d’appel)
(award annulled where tribunal relied on issues not addressed by parties); Judgment of
10 March 1988, Crocodile Tourist Project Co. v. Aubert, 1989 Rev. arb. 269 (Paris Cour
d’appel); Judgment of 10 September 2001, DFT 127 III 576, 579 (Swiss Federal Tribunal)
(denial of due process where party was denied opportunity to present its position);
Judgment of 24 November 2005, 2006 SchiedsVZ 219, 223 (Oberlandesgericht Frankfurt).
470) See Attorney-Gen. v. Tozer (No 3), Case No. CIV 2003-404-5945 (Auckland High Ct. 2003).
471) See, e.g., Coty, Inc. v. Anchor Constr., Inc., 7 A.D.3d 438, 439 (N.Y. Sup. Ct. 2003) (annulling
award where party failed to pay its share of advance on costs and arbitrators treated
matter as default proceeding under New York civil procedure rules; court held that non-
paying party was “denied a fundamentally fair hearing,” including “right to be heard, to
examine witnesses, to present evidence and to be assisted by counsel”).
472) See§§15.08[AA][6] & [11]; §15.09; Lessin v. Merrill Lynch Pierce Fenner & Smith, Inc., 481
F.3d 813, 816-17 (D.C. Cir. 2007); Max Marx Color & Chem. Co. Employees’ Profit Sharing
Plan v. Barnes, 37 F.Supp.2d 248, 252 (S.D.N.Y. 1999) (“the [Arbitral] Panel need not
address every question presented in the controversy on a motion to dismiss, and … there
is no misconduct in dismissing a claim – and not receiving evidence – on matters
unnecessary to disposition of the claim”); Egmatra AG v. Marco Trading Corp. [1999] 1
Lloyd’s Rep. 862 (QB) (English High Ct.) (no annulment where arbitrator refused to permit
party to submit expert evidence); Judgment of 30 January 2013, DFT 4A_335/2012 (Swiss
Federal Tribunal) (arbitral tribunal may refuse to accept expert report on grounds that
the tribunal does not consider report relevant); Judgment of 14 May 1992, 1992 NJW 2299
(German Bundesgerichtshof).
473) See§15.08[AA][6].
474) Judgment of 20 July 2011, DFT 4A_162/2011, ¶2.3.2 (Swiss Federal Tribunal).
101
475) See, e.g., Judgment of 8 May 2013, DFT 4A_439/2012 (Swiss Federal Tribunal) (annulling
award on grounds that arbitral tribunal failed to consider award-debtor’s argument and
evidence regarding damages; award-creditor did not demonstrate that this argument
and evidence were irrelevant to decision); Judgment of 31 January 2012, DFT 4A_360/2011
(Swiss Federal Tribunal) (rejecting argument that arbitrator’s failure to read award-
debtor’s post-hearing submission violated right to equal treatment; holding that
arbitrator’s failure did violate right to be heard).
476) Judgment of 31 January 2012, DFT 4A_360/2011 (Swiss Federal Tribunal).
477) See, e.g., Textile Workers Union of Am. v. Am. Thread Co., 291 F.2d 894, 901 (4th Cir. 1961)
(affirming vacatur of award where arbitrator went outside record and based decision on
findings from different arbitration); Carolina-Virginia Fashion Exhibitors, Inc. v. Gunter,
230 S.E.2d 380 (N.C. 1976) (vacating award based on arbitrators’ ex parte inspection of
property); Stefano Berizzi Co. v. Krausz, 146 N.E. 436, 437 (N.Y. 1925) (vacating award
because arbitrator gave disputed goods to employees for examination: “plaintiff,
knowing nothing of the evidence, had no opportunity to rebut or even to explain it”);
Norbrook Labs. Ltd v. Tank [2006] EWHC 1055 (Comm) (English High Ct.); Groundshire Ltd v.
VHF Constr. plc [2001] BLR 395 (QB) (English High Ct.) (award would be annulled where
arbitrator relied on own knowledge, without hearing parties, on damages issues);
Judgment of 24 March 1998, Excelsior Film v. UGC-PH, 1999 Rev. arb. 255 (French Cour de
cassation civ. le) (award annulled where tribunal relied on one arbitrator’s knowledge
from related arbitration); Judgment of 10 June 1993, Compagnie Aeroflot v. AGF, 1995 Rev.
arb. 447 (Paris Cour d’appel) (award annulled where tribunal relied on personal
knowledge); Judgment of 18 January 1983, Sporprom Servs. BV v. Polyfacne Immo, 1984
Rev. arb. 87 (Paris Cour d’appel) (award annulled where tribunal relied on expert report
not provided to parties); Judgment of 21 November 2008, 19 Sch 12/08
(Oberlandesgericht Köln) (taking of evidence, such as examination of property, without
informing a party, violates right to present one’s case); Judgment of 29 June 2007, Case
No. R06/005HR, ¶3.3.3 (Dutch Hoge Raad) (“requirements of independence and
impartiality of the courts also apply in arbitration proceedings, [and] arbitrators too will
in principle have to refrain from gathering evidence, in such a way that they must not
themselves, outside the parties, collect evidence.”). See also§§12.05[J]-[K]; §13.05[F];
§15.08[I]; §26.05[C][3][d].
478) Top Shop Estates v. Danino [1985] 1 EGLR 9, 11 (QB) (English High Ct.). See alsoUNCITRAL,
2012 Digest of Case Law on the Model Law on International Commercial Arbitration 148
(2012) (“Independent investigations by the arbitral tribunal, without informing the
parties, may constitute a violation of the right to be heard.”).
479) APEX Tech Inv. Ltd v. Chuang’s Dev. (China) Ltd, [1996] 2 HKC 293 (H.K. Ct. App.).
480) See, e.g., St. George’s Inv. Co. v. Gemini Consulting Ltd [2004] EWHC 2353 (Ch) (English High
Ct.) (“an arbitrator is entitled to use his expert knowledge to arrive at his award,
provided it is of the kind and in the range of knowledge that one would reasonably
expect the arbitrator to have and providing that he uses it to evaluate the evidence
called and not to introduce new and different evidence”); Brunswick Bowling & Billiards
Corp. v. Shanghai Zhonglu Indus. Co. Ltd, [2009] HKCFI 94 (H.K. Ct. First Inst.) (generally
permissible for arbitral tribunal, chosen for its expertise, to draw inferences from
evidence which depart from parties’ positions (although tribunal’s views should be
raised with parties)); Judgment of 10 June 2008, Case No. 206/2008 (Amman Ct. App.)
(arbitrators may rely on their personal knowledge).
482) See§15.08[I]. Although not advisable, ex parte contacts that do not concern disputed
substantive or procedural issues are generally not improper or grounds for annulment.
See, e.g., Judgment of 28 October 2008, DFT 4A_294/2008, ¶3.2.2 (Swiss Federal Tribunal)
(rejecting annulment claim based on arbitrator’s supposedly improper telephone call
with successful respondent’s counsel: “it appears that the [disputed] phone conversation
had as its sole object the request, presented to the Arbitrator by the Respondent’s
counsel, to be able to express a view on the new facts put forward by the
Appellant[/claimant] in its Answer of February 15, 2008, a request which counsel was
invited to make in writing. In view of its object, such a phone conversation between the
Arbitrator and one of the parties was not capable of violating the right to be heard of the
other party.”). See also §26.05[C][3][d] (“Ex Parte Contacts.”).
483) See§12.05[K], p. 1877.
484) SeeJudgment of 24 November 1994, XXI Y.B. Comm. Arb. 635, 640 (Rotterdam Rechtbank)
(1996) (rejecting argument that arbitrator was not impartial, apparently on basis of
having received ex parte information, on grounds that “according to the arbitration
agreement … the arbitrators were given ample powers and had the right to speak
individually to each party”).
485) See§§15.08[AA][5], [9] & [11].
486) See, e.g., Ballantine Books, Inc. v. Capital Distrib. Co., 302 F.2d 17, 21 (2d Cir. 1962) (“A judge
is not wholly at the mercy of counsel, and would be remiss if he did not participate in
questioning to speed proceedings and eliminate irrelevancies. A fortiori an arbitrator
should act affirmatively to simplify and expedite the proceedings before him.”); Cole
Publ’g Co. v. John Wiley & Sons, Inc., 1994 WL 532898, at *5-6 (S.D.N.Y.); Cook Chocolate
Co., v. Salomon, Inc., 748 F.Supp. 122, 127-28 (S.D.N.Y. 1990), aff’d, 932 F.2d 955 (2d Cir.
1991); Catz Am. Co. v. Pearl Grange Fruit Exchange, Inc., 292 F.Supp. 549, 553 (S.D.N.Y. 1968).
102
487) See Schneider, in S. Berti et al. (eds.), International Arbitration in Switzerland Art. 182, ¶55
(2000).
488) See, e.g., Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141, 144-45 (2d Cir. 1992); Judgment of 2
July 1992, 1993 NJW-RR 444 (German Bundesgerichtshof).
489) See also§17.02[G][3][b][iii].
490) See also§26.05[C][3][d].
491) See Guangdong Overseas Shenzhen Co. Ltd v. Yao Shun Group Int’l Ltd, [1998] HKEC 904
(H.K. Ct. First Inst.) (finding sufficient evidence of procedural irregularity to justify setting
aside award where award was issued on same day as party submitted its case on
merits.).
492) See, e.g., Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830, 832 (11th Cir. 1991) (vacating
award issued by two arbitrators, after third arbitrator was disqualified, but not
replaced); Int’l Bhd of Elec. Workers, Local Union 1823 v. WGN of Colorado, Inc., 615
F.Supp. 64, 67-68 (D. Colo. 1985) (vacating award because arbitrator rendered decision
without obtaining signatures of co-arbitrators, indicating absence of “any significant
decision-making process by the majority of the board”); W. Canada SS Co. v. Cia de
Navigation San Leonardo, 105 F.Supp. 452, 453 (S.D.N.Y. 1952) (vacating award because
two party-appointed arbitrators concluded they agreed on merits and, after deciding
not to select a chairman (as required in parties’ agreement), issued an award); Goeller v.
Liberty Mut. Ins. Co., 568 A.2d 176, 178 (Pa. 1990) (vacating award where two arbitrators
excluded third from deliberations); Judgment of 30 April 1991, DFT 117 Ia 166 (Swiss
Federal Tribunal) (annulling award rendered by remaining members of tribunal, after
one arbitrator had resigned); Judgment of 29 October 2002, 2003 SchiedsVZ 92, 94
(Saarländisches Oberlandesgericht) (intention of two arbitrators to issue an award
without participation of abstaining arbitrator had to be communicated to parties in
advance). See also§15.08[JJ]; §23.04; §26.05[C][3][d].
493) Jones v. St. Louis-San Francisco Railway Co., 728 F.2d 257, 263 (6th Cir. 1984).
494) See, e.g., Apex Fountain Sales v. Kleinfeld, 818 F.2d 1089, 1095 (3d Cir. 1987) (rejecting
application to vacate because presiding arbitrator heard evidence alone and forwarded
proposed award to co-arbitrators); Nat’l Bulk Carriers, Inc. v. Princess Mgt Co., 597 F.2d
819, 822 (2d Cir. 1979) (rejecting application to vacate because presiding arbitrator
stated “he would sign an award with whichever of his colleagues would first agree to a
number between $1.5 million and $2.0 million”); Deiulemar Compagnia di Navigazione,
SpA v. Transocean Coal Co., 2004 U.S. Dist. LEXIS 23948, at *18-19 (S.D.N.Y.) (rejecting
application to vacate based on majority’s alleged exclusion of dissenting arbitrator from
deliberations); Judgment of 28 January 1981, 1982 Rev. arb. 485 (French Cour de cassation
civ. 2e) (“no particular form is required for the deliberations of the arbitrators”; court
recognized that party’s right to fair hearing was satisfied where missing arbitrator was
“given the opportunity to make comments on the proposed amendments to the initial
draft of the award”).
495) See§23.04[C].
496) Judgment of 15 May 2003, Czech Repub. v. CME Czech Repub. BV, Case No. T 8735-01 (Svea
Ct. App.), reprinted and discussed in S. Jarvin & A. Magnusson (eds.), International
Arbitration Court Decisions 663, 678-79 (2006).
497) See§12.07.
498) As discussed above, in practice it is common to provide for verbatim transcripts of
arbitral proceedings (absent contrary agreement or where small amounts are in dispute,
making the costs of a transcript excessive). See§15.08[AA][13].
499) SeeJudgment of 14 December 1999, 2000 Rev. arb. 471 (Paris Cour d’appel) (absence of
stenographic or similar record of arbitration hearing not grounds to annul award).
500) See, e.g., Judgment of 29 July 2010, DFT 4A_43/2010, ¶4.2 (Swiss Federal Tribunal) (“There
is no violation of the right to be heard (Art. 190 (2)(d) PILA) by the arbitral tribunal
because the statements of … a witness were not reproduced in the minutes but merely
tape recorded. Keeping minutes is not required by law in international arbitration
proceedings. A general right to written minutes cannot be deducted from the right to be
heard or from procedural public policy.”); Schneider, in S. Berti et al. (eds.), International
Arbitration in Switzerland Art. 182, ¶95 (2000) (despite contrary Swiss authority, no
mandatory requirement for protocol (minutes) of witness testimony or verbatim
transcript).
103
501) See, e.g., JD Wetherspoon plc v. Jay Mar Estates [2007] EWHC 856 (TCC) (English High Ct.);
Vee Networks Ltd v. Econet Wireless Int’l Ltd [2005] 1 Lloyd’s Rep. 192, 194 (QB) (English
High Ct.) (“by advancing the point of construction [not argued by either party] the
arbitrator was neither acting fairly nor giving each party a reasonable opportunity of
putting its case”); Omnibridge Consulting Ltd v. Clearsprings (Mgt) Ltd [2004] EWHC 2276
(Comm) (English High Ct.) (annulling award where arbitrator adopted damages
calculation that neither party had advanced nor had opportunity to comment on);
Judgment of 23 June 2010, Société Top Bagage Int’l v. Société Wistar Enter. Ltd, 2011 Rev.
arb. 448, 448-49 (French Cour de cassation civ. 1e) (“arbitral tribunal violated due
process by ordering, without inviting the parties to discuss the issue, [the claimant] to
compensate a prejudice which was not claimed by [the respondent]”); Judgment of 25
March 2010, Société Commercial Caribbean Niquel v. Société Overseas Mining Invs. Ltd,
2011 Rev. arb. 442 (Paris Cour d’appel) (same); Judgment of 10 June 1993, Compagnie
Aeroflot v. AGF, 1995 Rev. arb. 447 (Paris Cour d’appel) (annulling award where tribunal
assessed value of leasehold by referring to information not provided by or available to
parties); Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec Super. Ct.)
(arbitral tribunal violated right to be heard because award was based on legal doctrine
that had not been discussed with parties); Sugar Australia Pty Ltd v. Mackay Sugar Ltd,
[2012] QSC 38, ¶32 (Queensland S.Ct.) (“a party is entitled to know of a point which
although not raised by its opponent, is considered by the arbitrator to be adverse to its
case”); Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2011] 4 HKLRD 188, 228 (H.K. Ct.
First Inst.) (“In its award, when dealing with the Hong Kong law issue, the Tribunal cited
other New York authorities, to which neither party had been referred, and about which
neither party had made any submissions. I have always understood that the practice
was that, when a judge, in the course of preparing his judgment, came upon authorities
not cited by the parties which the judge considered that might be relevant, he should
refer them to the parties and seek either written or oral submissions on those
authorities. That said, I can find no direct authority to support the proposition. That may
be because it is self evident.”), rev’d on other grounds, [2012] 4 HKLRD 1 (H.K. Ct. App.);
Judgment of 26 June 2003, Case No. S 02/3757 (Helsinki Hovioikeus) (annulling award
because arbitrators failed to afford parties opportunity to address statute of limitations
issue (on which arbitrators based dismissal of claims)). ILA, Committee on International
Commercial Arbitration, International Law Association Recommendations on Ascertaining
the Contents of the Applicable Law in International Commercial Arbitration, ILA Resolution
6/2008, Annex, ¶8 (2008) (“Before reaching their conclusions and rendering a decision or
an award, arbitrators should give parties a reasonable opportunity to be heard on legal
issues that may be relevant to the disposition of the case. They should not give decisions
that might reasonably be expected to surprise the parties, or any of them, or that are
based on legal issues not raised by or with the parties.”); M. Kurkela & S. Turunen, Due
Process in International Commercial Arbitration 186-91 (2d ed. 2010). UNCITRAL, 2012
Digest of Case Law on the Model Law on International Commercial Arbitration 149 (2012)
(“It has been held that decisions which came as a surprise to both parties as they were
based on considerations or legal doctrines which had not been raised or pleaded by the
parties, may constitute a violation of the right to be heard.”).
502) Cameroon Airlines v. Transnet Ltd [2004] EWHC 1829, ¶¶100-01 (Comm) (English High Ct.).
See also Zermalt Holdings SA v. Nu-Life Upholstery Repairs Ltd [1984] 2 EGLR 14, 15 (QB)
(English High Ct.) (“If an arbitrator is impressed by a point that has never been raised by
either side then it is his duty to put it to them so that they have an opportunity to
comment. If he feels that the proper approach is one that has not been explored or
advanced in evidence or submission, then again it is his duty to give the parties a
chance to comment.”).
503) See§15.04[B][3]; §25.04[B][1].
504) See§25.04[F][3][a].
505) See, e.g., Bulfracht (Cyprus) Ltd v. Boneset Shipping Co. Ltd, The MV Pamphilos [2002] 2
Lloyd’s Rep. 681 (QB) (English High Ct.) (arbitrators not required to obtain parties’
comments on all inferences drawn by tribunal from evidence); Hussmann (Europe) Ltd v.
Al Ameen Dev. & Trade Co. [2000] 2 Lloyd’s Rep. 83 (QB) (English High Ct.) (arbitrator’s
appointment of foreign law expert without notifying parties in advance not grounds for
annulling award); Judgment of 6 May 2009, CIECH v. Comexport, 2010 Rev. arb. 90 (French
Cour de cassation civ. 1e) (award which referred to rule of law not previously discussed
by parties did not violate due process because rule was superfluous to arbitrator’s
reasoning (which was “only and entirely” based on arguments discussed by parties));
Judgment of 14 March 2006, 2006 Rev. arb. 653 (French Cour de cassation civ. 1e);
Judgment of 2 March 2006, 2006 Rev. arb. 733 (Paris Cour d’appel) (right to fair hearing
does not require tribunal to provide parties with preliminary statement of legal
reasoning which led to final decision). See also§26.05[C][3][d].
104
506) For a good explanation, see Terna Bahrain Holding Co. WLL v. Al Shamsi [2012] EWHC 3283,
¶106 (Comm) (English High Ct.) (“[I]t is important to keep in mind that whilst s.33
requires a party to be given a reasonable opportunity of addressing his opponent’s case,
that does not mean that the tribunal is acting unfairly in deciding a case on a point to
which the party raising it does not give any great emphasis, or which is not the subject
matter of any great exposition. If a point is raised only briefly, that is in accordance with
the ideal of speedy resolution which is an objective of the arbitral procedure (whether
or not in a given case the objective is achieved). It is none the less so if a host of what
turn out to be bad points are also raised and it is on those other points that the party
raising the issues concentrates his exposition. Provided the issue is raised, however
briefly, the opposing party has an opportunity to address it at whatever length and in
whatever detail he chooses. If he chooses to invite the tribunal to reject it without
addressing it in detail, that may well be a sensible tactic, in order to avoid the risk of
giving it more weight and prominence that the party advancing it has done. But that is
not the same as having been deprived of an opportunity of addressing it, still less of an
unfair procedure having been adopted.”).
507) See, e.g., Judgment of 5 October 2009, 34 Sch 12/09 (Oberlandesgericht München); Soh
Beng Tee & Co. Pte Ltd v. Fairmont Dev. Pte Ltd, [2007] SGCA 28 (Singapore Ct. App.); VV v.
VW, [2008] SLR 929 (Singapore High Ct.). See alsoUNCITRAL, 2012 Digest of Case Law on the
Model Law on International Commercial Arbitration 149 (2012) (“arbitrators are not bound
to adopt the position of either party, and are free to make their own assessment of
evidence and value judgment between the positions presented by the parties”).
508) See Dimolitsa, The Equivocal Power of the Arbitrators to Introduce Ex Officio New Issues of
Law, 27 ASA Bull. 426 (2009); Giovannini, International Arbitration and Jura Novit Curia –
Towards Harmonization, 9(3) Transnat’l Disp. Mgt (2012).
509) Judgment of 20 December 2010, DFT 4A_10/2010, ¶2.1 (Swiss Federal Tribunal). See also
Judgment of 9 October 2012, DFT 4A_110/2012, ¶3.1.1 (Swiss Federal Tribunal) (“As a rule,
according to the adage iura novit curia, State Courts or arbitral tribunals freely assess
the legal consequences of the facts and they may also base their decisions on rules of
law other than those invoked by the parties. Consequently, unless the arbitration
agreement limits the task of the arbitral tribunal to the legal arguments raised by the
parties, they do not have to be heard specifically on the scope to be given to the rules of
law. As an exception, they need to be asked their views when the Court or the arbitral
tribunal considers basing its decision on a provision or a legal consideration that was
not discussed in the proceedings and the pertinence of which the parties could not
anticipate.”); Judgment of 7 January 2011, DFT 4A_440/2010, ¶3.1 (Swiss Federal Tribunal)
(“The arbitral tribunal does not violate the rule ne eat iudex ultra petita partium when it
qualifies the claim in different legal terms than the claimant’s. The principle jura novit
curia, which applies to arbitral proceedings requires indeed the arbitrators to apply the
law ex officio without being limited to the arguments advanced by the parties. They are
accordingly entitled to resort to arguments which were not invoked because that is not a
new claim or a different claim but merely a new qualification of the facts of the case.
The arbitral tribunal is however bound by the object and the amount of the submissions
in front of it, in particular when a party qualifies or limits its claims in the submissions
themselves.”); Judgment of 3 August 2010, DFT 4A_254/2010 (Swiss Federal Tribunal)
(principle of jura novit curia prevails except where legal rule not raised by parties would
be complete surprise).
510) See, e.g., Agility Public Warehousing Co. KSC v. Supreme Foodserv. GmbH, 2011 WL 6952106
(S.D.N.Y.) (fact that tribunal bases decision on theory raised for first time in final award
does not unfairly deprive award-debtor of fundamentally fair hearing); Judgment of 2
July 2008, Werfen Austria v. Polar Electro, KKO 2008:77 (Finnish Korkein Oikeus) (upholding
award based on doctrine of unreasonableness, although neither side had invoked it). See
also Knuts, Jura Novit Curia and the Right to Be Heard – An Analysis of Recent Case Law, 28
Arb. Int’l 669, 671 (2012) (“The principle of jura novit curia is widely accepted in court
litigation, in particular in civil law jurisdictions like Germany, Switzerland, Sweden and
Finland.”).
511) See Judgment of 27 October 2008, Urbaser v. Babcock, SAP M 14661/2008 (Madrid
Audiencia Provincial); SDV. Transami Ltd v. Agrimag Ltd, Case No. HCT-00-CC-AB-0002-
2006 (Uganda High Ct. 2008).
512) See, e.g.,Judgment of 16 December 2009, DFT 4A_240/2009, ¶3.2 (Swiss Federal Tribunal)
(“[T]here is no constitutionally protected right of the parties to be specifically heard as
to the legal assessment of the facts they bring into the proceedings. … There is an
exception when a court intends to base its decision on a legal reason which the parties
did not invoke and which they could not reasonably have deemed as pertinent. It is a
matter of appreciation to determine the issue as to whether or not the application of
law by the arbitral tribunal is to be qualified as unexpected within the meaning of
federal case law and in order to assess that issue in the field of international arbitration,
the Federal Tribunal proceeds with restraint.”); Judgment of 9 February 2009, DFT
4A_400/2008 (Swiss Federal Tribunal) (annulling award where tribunal applied provision
of Swiss mandatory law that parties had not relied upon and that was unforeseeable
(because parties’ dispute had no connection to Switzerland and Swiss mandatory law
provision appeared inapplicable)).
105
513) See Judgment of 30 July 2010, 1 Sch 03/10 (Oberlandesgericht Stuttgart). See also
Judgment of 5 October 2009, 34 Sch 12/09 (Oberlandesgericht München) (arbitral tribunal
suggested in settlement proposal to parties that goods be written off over seven years
and later made award with write-off period of four years; no surprise decision because
parties should have been aware that seven-year period was only proposal for purpose of
settlement); Trustees of Rotoaira Forest Trust v. Attorney-Gen., [1999] 2 NZLR 452 (Comm)
(Auckland High Ct.) (party alleging violation of right to be heard must show that
reasonable litigant would not have foreseen arbitral tribunal’s reasoning and that with
adequate notice it might have been possible to convince tribunal to reach different
result).
514) See, e.g.,Judgment of 3 December 2009, Société Engel Austria v. Société Don Trade, 2010
Rev. arb. 112 (Paris Cour d’appel) (partially annulling award because tribunal rendered
decisions based on principle of foreign law raised sua sponte by arbitrators, without
inviting parties’ submissions); Judgment of 25 November 1997, VRV v. Pharmachim, 1998
Rev. arb. 684 (Paris Cour d’appel) (annulling award where tribunal sua sponte raised and
decided issues); Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec
Super. Ct.) (annulling award based on doctrine of frustration, which neither party had
raised).
515) Judgment of 6 April 1995, Thyssen Stahlunion v. Maaden, 1995 Rev. arb. 448 (Paris Cour
d’appel) (annulling award where tribunal selected interest rate without hearing parties).
516) See§23.03.
517) See, e.g., English Arbitration Act, 1996, §68(2)(h) (award may be annulled for failure to
comply with statutory provisions regarding form of award); Belgian Judicial Code, Art.
1717(3)(a)(iv) (award may be annulled “if the award is not reasoned”); Netherlands Code
of Civil Procedure, Art. 1065(1)(d) (award may be annulled if “the award is not signed or
does not contain reasons in accordance with the provision of Article 1057”); Italian Code
of Civil Procedure, Arts. 823(3), 829(5) (award may be annulled for failure to provide
“brief statement of the reasons”); Taiwanese Arbitration Act, Art. 38(2) (award may be
annulled where “no reasons are stated in the arbitral award when it is required to do
so”). See also§25.05[C].
518) Gordian Runoff Ltd v. Westport Ins. Corp., [2010] NSWCA 57, ¶¶215-16 (NSW Ct. App.). See
also ABB AG v. Hochtief Airport GmbH [2006] EWHC 388, ¶87 (English High Ct.) (“Whilst the
court will never dictate to arbitrators how their conclusions should be expressed, it must
be obvious that the giving of clearly expressed reasons responsive to the issues as they
were debated before the arbitrators will reduce the scope for the making of
unmeritorious challenges as this ultimately has proved to be. It will be of little comfort
for ABB but it may be instructive to know that at the end of my pre-reading in this case I
was fairly certain that I would have no alternative but to remit or to set aside the award,
notwithstanding the court’s general approach to strive to uphold arbitration awards. I
have had to strive a little harder than I might reasonably have expected. Reasons which
were a little less compressed at the essential points might have been more transparent
as to their meaning and might even have dissuaded the unsuccessful party from
challenging the award or, at any rate, from mounting so wide-ranging a challenge.”).
Compare Westport Ins. Corp. v. Gordian Runoff Ltd, [2011] HCA 37 (Australian High Ct.)
(annulling award for inadequate statement of reasons); Oil Basins Ltd v. BHP Billiton Ltd,
[2007] VSCA 255 (Victoria Ct. App.) (same).
519) See§25.04[C].
520) See, e.g., Murray v. Citigroup Global Mkts, Inc., 511 F.Appx. 453, 455 (6th Cir. 2013)
(“[W]here neither statute nor arbitration proceedings demand or produce a detailed
explanation of how the arbitration panel reached its conclusion, we will not vacate an
award for failure to provide such an explanation.”); Biller v. Toyota Motor Corp., 668 F.3d
655, 666 (9th Cir. 2012) (denying motion to vacate for failure to provide reasoned award,
even where arbitration agreement specified tribunal should provide “a written
discussion sufficient to permit limited judicial review”); Cat Charter, LLC v.
Schurtenberger, 646 F.3d 836, 842, 844 (11th Cir. 2011) (rejecting claim that award was
unreasoned: “Generally, an arbitrator need not explain her decision; thus, in a typical
arbitration where no specific form of award is requested, arbitrators may provide a
‘standard award’ and simply announce a result.”).
521) See, e.g.,Judgment of 16 May 2011, DFT 4A_46/2011 (Swiss Federal Tribunal) (annulling
award because tribunal did not deal expressly with respondent’s argument that claim
was time-barred); Judgment of 29 January 2010, DFT 4A_550/2009, ¶5.1 (Swiss Federal
Tribunal) (“principle of the right to be heard according to Art. 182(3) and Art. 190(2)(d) [of
the Swiss Law on Private International Law] does not encompass a right to a reasoned
decision”; “the Arbitral Tribunal must express a view on each argument of the parties
explicitly”); Judgment of 22 March 2007, DFT 4P.172/2006 (Swiss Federal Tribunal)
(tribunal’s failure to address party’s lengthy legal submissions in its award, or to provide
any indication that these submissions were considered, violated party’s right to be
heard); Judgment of 5 October 2009, 34 Sch 12/09 (Oberlandesgericht München) (not
sufficient that arbitral tribunal heard parties’ arguments and evidence; it must also take
them into account in award); Judgment of 15 December 1999, 4 Z Sch 23/99 (Bayerisches
Oberstes Landesgericht). See also§26.05[C][3][d].
522) See§15.04[B][3]; §26.05[C][3][d].
106
523) See, e.g.,Judgment of 24 March 1995, 1996 Rev. arb. 259 (Paris Cour d’appel); Judgment of
26 November 1980, SJ 1982 613, 621 (Swiss Federal Tribunal) (inequality of treatment
which could result from default not procedurally improper where tribunal took steps to
enable respondent to assert its rights); Corporación Transnacional de Inversiones, SA de
CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414 (Ontario Ct. App.) (default award upheld).
524) See, e.g.,Judgment of 12 January 1989, XV Y.B. Comm. Arb. 509, 512 (Swiss Federal Tribunal)
(1990); Hainan Mach. Imp. & Exp. Corp. v. Donald & McArthy Pte Ltd, XXII Y.B. Comm. Arb.
771, 775 (Singapore High Ct. 1995) (1997) (recognizing default award: “[award-debtors]
refused to participate in the arbitration at all and in that situation I found their
complaint that the arbitrators had not considered whether there was sufficient evidence
to make a finding in favour of the plaintiffs unjustifiable”).
525) Corporación Transnacional de Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414
(Ontario Ct. App.) (possibility of default proceedings provided for in Article 25).
526) See, e.g., Roche v. Local 32B-32J SEIU, 755 F.Supp. 622, 624 (S.D.N.Y. 1991) (procedural
error must result in denial of fundamental fairness); United Mexican States v. Metalclad
Corp., [2001] BCSC 664 (B.C. S.Ct.) (seriousness of procedural defect should be considered
when deciding whether to exercise discretion under Article 34); Rhéaume v. Société
d’Investissements L’Excellence Inc., [2010] QCCA 2269, ¶57 (Québec Ct. App. 2010) (“[T]he
principles of autonomy that apply to arbitration, in the sense of absence of judicial
surveillance except on limited grounds, as well as the clear deference the legislature
intended courts to observe with respect to arbitral awards, is incompatible with the
automatic annulment of an award in which there has been a flaw, however minor, in the
arbitral procedure.”); Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904
(Québec Super. Ct.) (inconsequential procedural irregularities not grounds for
annulment); Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2012] 4 HKLRD 1, ¶94
(H.K. Ct. App.) (“the conduct complained of must be serious, even egregious, before a
court could find that a party ‘was otherwise unable to present his case’”). See also
Wachovia Sec., LLC v. Brand, 2012 WL 507022 (4th Cir.) (denying vacatur where award-
debtor only alleged a procedural “mistake” by arbitrators, not intentional bad faith,
gross “misconduct,” or “misbehavior”; confirming award based on “informality” of
arbitral proceedings and arbitrators’ broad discretion over procedural matters);
Restatement (Third) U.S. Law of International Commercial Arbitration §4-13 (b) (Tentative
Draft No. 2 2012) (court may annul award “to the extent that a serious procedural defect
in the arbitral process resulted in a material denial of the party’s opportunity to present
its case or to rebut its opponent’s case”).
527) Mungo v. Saverino, [1995] O.J. No. 3021, ¶80 (Ontario Super. Ct.).
528) See, e.g., Chantiers d’Atlantique SA v. Gaztransport & Technigaz SAS [2011] EWHC 3383
(Comm) (English High Ct.) (refusing to set aside award even though party’s expert
statements “represented a masterclass in evasion and obfuscation and not the evidence
of an honest witness” because, had truth been disclosed to arbitrators, it would not have
affected result of arbitration); Vee Networks v. Econet Wireless Ltd [2004] EWHC 2909, ¶90
(Comm) (English High Ct.) (“[W]here there has been an irregularity of procedure, it is
enough if it is shown that it caused the arbitrator to reach a conclusion unfavourable to
the applicant which, but for the irregularity, he might well never have reached, provided
always that the opposite conclusion is at least reasonably arguable.”); Judgment of 30
May 2006, 9 SchH 3/05 (Oberlandesgericht Oldenburg) (where witness testimony was
excluded by tribunal, court required award-debtor challenging award to set out what
witness would have said and how that would have affected outcome of case); Judgment
of 8 June 2001, 11 Sch 01/01 (Hanseatisches Oberlandesgericht Hamburg) (violation of
right to present one’s case must have effect on content of award); Soh Beng Tee & Co. v.
Fairmount Dev. Pte, [2007] 3 SLR(R) 86, ¶91 (Singapore Ct. App.) (“There must be more
than technical unfairness. … [T]o attract curial intervention it must be established that
the breach of the rules of natural justice must, at the very least, have actually altered
the final outcome of the arbitral proceedings in some meaningful way”); Pac. China
Holdings v. Grand Pac. Holdings, [2012] 4 HKLRD 1, ¶94 (H.K. Ct. App.) (procedural
unfairness must “sufficiently serious or egregious so that one could say a party has been
denied due process” for annulment to be warranted; “an applicant who complains of a
violation is best placed to show that it has been prejudiced and thus, the burden to
show prejudice should be on the Applicant”); Trustees of Rotoaira Forest Trust v.
Attorney-Gen., [1999] 2 NZLR 452 (Comm) (Auckland High Ct.) (party alleging violation of
right to be heard must show that with adequate notice it might have been possible to
convince tribunal to reach different result).
529) See Judgment of 8 May 2013, DFT 4A_439/2012 (Swiss Federal Tribunal) (annulling award
under Article 190(2)(d) of Swiss Law on Private International Law where award-creditor
did not demonstrate that procedural unfairness was irrelevant to decision).
530) See Pac. China Holdings v. Grand Pac. Holdings, [2012] 4 HKLRD 1, ¶106 (H.K. Ct. App.)
(“burden to show prejudice is on the applicant”).
107
531) See Judgment of 31 January 2012, DFT 4A_360/2011, ¶5.1 (Swiss Federal Tribunal) (“[T]he
Federal Tribunal held that it does not behoove this Court to decide whether or not the
arbitrators should have upheld the argument they overlooked had they dealt with it.
Indeed this would be tantamount to disregarding the formal nature of the right to be
heard and the requirement that should it be breached, the decision under appeal must
be annulled irrespective of the appellant’s chance to obtain a different result.”);
Judgment of 28 May 2009, Proindein SA v. Eguskitzu SL, SAP SS 490/2009 (Gipuzkoa
Audiencia Provincial).
532) Pac. China Holdings v. Grand Pac. Holdings, [2011] 4 HKLRD 188, 222 (H.K. Ct. First Inst.
2011) (“Article 34(2)(a)(ii) only requires a party seeking to set aside the award to show
that it was unable to present its case. … [T]here is no requirement that it must be shown
that the case that he would have presented was such that it would have resulted in a
different conclusion by the Tribunal”; “it is only if it is beyond any doubt that the
decision could have been the same, that the court would be allowed to override a
serious violation.”), rev’d on other grounds, [2012] 4 HKLRD 1 (H.K. Ct. App.). See also Vee
Networks v. Econet Wireless Ltd [2004] EWHC 2909, ¶90 (Comm) (English High Ct.) (“Above
all it is not normally appropriate for the court to try the material issue in order to
ascertain whether substantial injustice has been caused. To do so would be an entirely
inappropriate inroad into the autonomy of the arbitral process.”).
533) SeeEnglish Arbitration Act, 1996, §68(1) (“ground of serious irregularity affecting the
tribunal, the proceeding or the award” which the court considers “has caused or will
cause substantial injustice to the applicant”).
534) See, e.g., Patrizzi & Co. Auctioneers SA v. SDG Corp., 2011 WL 5077422, at *4 (N.D. Ill.) (if
arbitrator exceeds authority by discussing alternative bases for damages, e.g., quantum
meruit, it does not constitute a basis for vacatur, if “[his] error was harmless”); Compania
Sud-Americanan de Vapores SA v. Nippon Yusen Kaisha [2009] EWHC 1606 (Comm) (English
High Ct.) (serious procedural irregularity occurred but had not given rise to substantial
injustice); Judgment of 6 May 2009, CIECH v. Comexport, 2010 Rev. arb. 90 (French Cour de
cassation civ. 1e) (award which referred to legal rule not raised or addressed by parties
not annulled because arbitrators’ reasoning rested on other grounds); Rhéaume v.
Société d’Investissements L’Excellence Inc., [2010] QCCA 2269, ¶57 (Québec Ct. App. 2010)
(“[T]he principles of autonomy that apply to arbitration, in the sense of absence of
judicial surveillance except on limited grounds, as well as the clear deference the
legislature intended courts to observe with respect to arbitral awards, is incompatible
with the automatic annulment of an award in which there has been a flaw, however
minor, in the arbitral procedure.”); Pac. China Holdings v. Grand Pac. Holdings, [2012] 4
HKLRD 1, ¶102 (H.K. Ct. App.) (“if the violation had no effect on the outcome of the
arbitration that is a good basis for exercising one’s discretion against setting aside”);
Judgment of 13 February 2008, SAP M 2227/2008 (Madrid Audiencia Provincial) (very
unlikely that not joining party in arbitral proceedings could constitute violation of
public policy). See also §25.02[C][3][c]; §26.05[C][3][f]; Judgment of 7 April 1993, 11 ASA
Bull. 525 (Swiss Federal Tribunal) (1993); German ZPO, §1059(2)(1)(d) (procedural error
“presumably affected the award”).
535) See, e.g., 2010 UNCITRAL Rules, Art. 32; 2012 ICC Rules, Art. 39; ICDR Rules, Art. 25; LCIA
Rules, Art. 32(1); 2013 HKIAC Rules, Arts. 11(7), 19(3); 2010 SCC Rules, Art. 31. See M. Kurkela
& S. Turunen, Due Process in International Commercial Arbitration 32-35 (2d ed. 2010).
536) For example, Article 1466 of the French Code of Civil Procedure provides: “A party which,
knowingly and without a legitimate reason, fails to object to an irregularity before the
arbitral tribunal in a timely manner shall be deemed to have waived its right to avail
itself of such irregularity.” French Code of Civil Procedure, Art. 1466; Judgment of 7
February 2008, Société Française de Rentes et de Financements Créditrente v. Compagnie
Générale de Garantie SA, 2008 Rev. arb. 501 (Paris Cour d’appel).
108
537) See, e.g., Dealer Computer Servs., Inc. v. Michael Motor Co., Inc., 2012 WL 3317809, at *4
(5th Cir.) (party seeking to vacate award based on arbitrator’s evident partiality
generally must object during arbitral proceedings; failure to do so results in waiver); Fid.
Fed. Bank v. Durga Ma Corp., 386 F.3d 1306, 1313 (9th Cir. 2004) (procedural objection
waived); Goff v. Dakota, Minn. & E. R.R. Corp., 276 F.3d 992, 998 (8th Cir. 2002) (waiver of
procedural objection due to failure to raise objection during arbitration); Brook v. Peak
Int’l, Ltd, 294 F.3d 668, 672-73 (5th Cir. 2002) (motion to vacate based on procedural
violations denied; “failure to file a clear written objection to a defect in the selection
process constitutes waiver”); Health Servs. Mgt Corp. v. Hughes, 975 F.2d 1253, 1262 (7th
Cir. 1992) (procedural objection waived, where party raised objection two months after
events in question); Fortune, Alsweet & Eldridge, Inc. v. Daniel, 724 F.2d 1355, 1357 (9th Cir.
1983); Amicizia Societa Navegazione v. Chilean Nitrate & Iodine Sales Corp., 274 F.2d 805,
809 (2d Cir. 1960); Activant Solutions, Inc. v. Notoco Indus., LLC, 2011 WL 5079490, at *4
(N.D. Cal.) (“[Based on] the extent that Notoco believed that it had been prejudiced by
the timing of Activant’s disclosure, it should have raised an objection before the
arbitrator. Having failed to do so, Notoco is precluded from challenging the Award on
that basis.”); Capgemini v. Sorensen, 2005 WL 1560482, at *7-8 (S.D.N.Y.) (party waived
right to challenge award on grounds of denial of opportunity to be heard on quantum of
damages by making tactical decision not to present evidence on this issue: “Having
chosen not to make those alternative arguments, it cannot now argue that it was denied
notice and opportunity to be heard.”); Terna Bahrain Holding Co. WLL v. Ali Marzook
[2012] EWHC 3283, ¶¶126-27 (Comm) (English High Ct.) (confirming award where new
claims were added because other party “continued to take part in the reference without
objection”); Milan Nigeria Ltd v. Angeliki B Maritime Co. [2011] EWHC 892 (Comm) (English
High Ct.) (no basis for annulment if party challenging award was aware of objection but
failed to raise it); Polytek Eng’g Co. v. Hebei Imp. & Exp. Corp., XXIII Y.B. Comm. Arb. 666,
669 (H.K. Ct. App. 1998) (1998) (waiver based on fact that party “simply proceeded with
the arbitration as if nothing untoward had happened”); Shenzhen Nan Da Indus. Trade
United Co. v. FM Int’l Ltd, XVIII Y.B. Comm. Arb. 377, 381 (H.K. Ct. First Inst. 1991) (1993)
(party challenging award “took no objection” to use of new institutional rules); Apa Ins.
Co. Ltd v. Chrysanthus Barnabas Okemo, Misc. Application 241 of 2005 (Nairobi High Ct.)
(party which had not objected to admission of evidence waived right to seek annulment
on this basis). See also§12.06[E]; §15.05; §26.05[C][3][g].
538) See, e.g.,Judgment of 6 May 2009, Société MJA v. Int’l Co. for Commercial Exchanges
(Income), 2010 Rev. arb. 299 (French Cour de cassation civ. le); Judgment of 22 October
2009, Globale Re AG v. Liquidators of ICD, 25(3) Mealey’s Int’l Arb. Rep. 25, 25-26 (2010)
(Paris Cour d’appel) (rejecting application to annul award on grounds that three
arbitrations were improperly consolidated, because award-debtor had not opposed
consolidation); Judgment of 28 February 2008, Liv Hidravlika DOO v. SA Diebolt, 2008 Rev.
arb. 712 (Paris Cour d’appel); Judgment of 7 July 1994, Uzinexport-Import Romanian Co. v.
Attock Cement Co., 1995 Rev. arb. 107 (Paris Cour d’appel) (party that failed to seek
opportunity to respond to late evidence could not seek annulment of award on ground
that evidence was admitted); Judgment of 7 September 1993, DFT 119 II 386 (Swiss Federal
Tribunal) (party that failed to request opportunity to be heard could not seek annulment
of award on grounds that such opportunity was denied); Judgment of 16 July 2002, 2003
SchiedsVZ 84, 86 (Oberlandesgericht Stuttgart) (party precluded from objecting to an
alleged infringement of due process, since it had not raised objection in timely manner
in arbitration); Judgment of 9 October 2012, Ann Arbor Foods SA v. Domino’s Pizza
Internacional Inc., Case No. 1420-2010 (Santiago Corte de Apelaciones) (applying Article
33 of 1998 ICC Rules and Article 4 of Chilean Arbitration Law).
539) Avraham v. Shigur Express Ltd, 1991 WL 177633, at *5 (S.D.N.Y.).
540) Oh Young Indus. Co., Ltd v. E & J Textile Group., Inc., 2005 WL 2470824, at *3 (Cal. Ct. App.).
541) See§§15.01[A]-[B]; §15.02; §15.08.
542) See also§26.05[C][3][g]. There are a limited number of procedural violations which are so
unacceptable that principles of waiver will not apply (e.g., corruption, gross partiality).
See§12.05[C][3]; §12.06[A][3]; §12.06[E]; §15.06.
543) See§25.03[A][3]. See also Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2012] 4
HKLRD 1, ¶102 (H.K. Ct. App.) (discussing court’s discretion to confirm award
notwithstanding due process violations: “Estoppel is an obvious reason for enforcement
notwithstanding a relevant violation. I am further of the view that if the violation had no
effect on the outcome of the arbitration that is a good basis for exercising one’s
discretion against setting aside.”).
544) See§§15.01[A]-[B]; §15.02; §15.07.
545) UNCITRAL Model Law, Art. 34(2)(a)(iv). The provision qualifies the language quoted in
text, by specifying that only violations of the parties’ agreed arbitral procedures which
are not themselves in violation of mandatory norms of the Model Law provide a basis for
annulment. This refers in particular to Article 18’s requirements with regard to equal
treatment and the parties’ opportunities to present their cases. See§15.03[C].
546) New York Convention, Art. V(1)(d). See§11.03[C][1][c]; §26.05[C][5][b].
109
547) See, e.g., English Arbitration Act, 1996, §68(2)(a) (“failure by the tribunal to conduct the
proceedings in accordance with the procedure agreed by the parties”); Netherlands
Code of Civil Procedure, Art. 1065(1)(c) (“arbitral tribunal has not complied with its
mandate”); Spanish Arbitration Act, 2011, Art. 41(1)(d); Singapore International
Arbitration Act, 2012, Art. 31(2)(e); Hong Kong Arbitration Ordinance, 2013, §81; Chinese
Arbitration Law, Art. 58(3) (“composition of the arbitration tribunal or the arbitration
proceedings violate the legal proceedings”); Japanese Arbitration Law, Art. 44(1)(vi)
(“arbitral proceedings were not in accordance with the provisions of the laws of Japan (or
where the parties have otherwise reached an agreement on matters concerning the
provisions of the law that do not relate to the public policy, such agreement)”); Korean
Arbitration Act, Art. 36(2)(1)(d); Indian Arbitration and Conciliation Act, Art. 34(2)(a)(v);
Russian Arbitration Act, Art. 34(2)(1) (“arbitral procedure was not in accordance with the
agreement of the parties”); Taiwanese Arbitration Act, Art. 40(4); Mexican Commercial
Code, Art. 1457(1)(d).
548) See, e.g., Lagstein v. Certain Underwriters at Lloyd’s, London, 607 F.3d 634, 643 (9th Cir.
2010) (“Section 10 of the FAA permits vacatur ‘where the arbitrators exceeded their
powers.’ 9 U.S.C. §10(a)(4). A party has ‘a right to arbitration according to the terms for
which it contracted,’ and arbitrators exceed their powers for purposes of §10(a)(4) when
they ‘act outside the scope of the parties’ contractual agreement.’”); Judgment of 5
March 2008, Republique du Congo v. Société Qwinzy, 2009 Rev. arb. 401, 401 (French Cour
de cassation civ. 1e) (failure to comply with notice provisions in 1976 UNCITRAL Rules,
incorporated in arbitration agreement, was “breach of due process”); Judgment of 19 May
1998, Société Torno SpA v. Société Kagumai Gumi Co. Ltd, 1999 Rev. arb. 601 (Paris Cour
d’appel). CompareJudgment of 1 July 1991, DFT 117 II 346, 348 (Swiss Federal Tribunal).
549) See§25.04[B]. Compare Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2011] 4 HKLRD
188, 225 (H.K. Ct. First Inst.) (“procedure adopted by the Tribunal was not in accordance
with the agreement of the parties, and [the award-debtor] was thereby unable to
present its case”), rev’d on other grounds, [2012] 4 HKLRD 1 (H.K. Ct. App.).
550) See§1.02[B][6]; §15.01[B]; §15.02[A]; §19.04[A]; New York Convention, Art. V(1)(d); European
Convention, Art. IV(1)(b)(iii); UNCITRAL Model Law, Art. 19(1) (“Subject to the provisions of
this Law, the parties are free to agree on the procedure to be followed by the arbitral
tribunal in conducting the proceedings.”); M. Kurkela & S. Turunen, Due Process in
International Commercial Arbitration 28, 43-46 (2d ed. 2010).
551) See§25.04[B][1]; §25.04[B][3][c]; Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141, 146 (2d Cir.
1992) (award vacated because tribunal changed evidentiary rules during hearing and
precluded award-debtor from presenting documentary evidence).
552) UNCITRAL Model Law, Art. 34(2)(a)(iv).
553) See§11.03[C][1][c][ii].
554) SeeUNCITRAL Model Law, Art. 18. See§§15.04[B][2]-[3].
555) Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Indus. Co. Ltd, [2009] HKCFI 94,
¶111 (H.K. Ct. First Inst.).
556) Judgment of 7 May 2008, Case No. 76/123 (Cairo Ct. App.) (chosen arbitration rules prevail
over non-mandatory provisions of law in arbitral seat: applicable institutional rules did
not contain any restrictions as to legal representation in arbitral proceedings and
superseded, on that matter, more stringent requirements of Egyptian law).
557) See, e.g., Bulko v. Morgan Stanley DW Inc., 450 F.3d 622 (5th Cir. 2006) (party seeking
vacatur bore burden of proving appointment of arbitrators did not comply with
selection procedure in arbitration agreement); R.J. O’Brien & Assocs., Inc. v. Pipkin, 64
F.3d 257 (7th Cir. 1995) (same); Weiner v. Commerce Ins. Co., 78 Mass.App.Ct. 563 (Mass.
App. Ct. 2011) (award-debtor bore burden of proof that arbitrator failed to comply with
obligations specified in agreement); Pacol Ltd v. Joint Stock Co. Rossakhar [1999] 2 All ER
778 (Comm) (English High Ct.) (party seeking to set aside award bore burden of proof;
party defending award did not even attend hearing on matter). See also§25.03[A][4].
558) Bulko v. Morgan Stanley DW Inc., 450 F.3d 622, 624 (5th Cir. 2006) (court’s review “is
conducted against the backdrop of the [FAA’s] policy favoring the enforcement of
arbitration agreements; the scope of our review of an arbitration award is extremely
narrow”); R.J. O’Brien & Assocs., Inc. v. Pipkin, 64 F.3d 257, 263 (7th Cir. 1995) (although
arbitration must be conducted in accordance with specified procedures, “a trivial
departure from the parties’ agreement however, may not bar enforcement of an award”);
Sumukan Ltd v. Commonwealth Secretariat [2007] EWCA Civ 1148, ¶28 (English Ct. App.)
(“court will wrestle to avoid setting aside an otherwise perfectly good decision by virtue
of non-compliance with a provision which really does not matter”). See also§12.01[C][5].
559) UNCITRAL Model Law, Art. 34(2)(a)(iv). See H. Holtzmann & J. Neuhaus, A Guide to the
Commentary 910, 916-18 (1989).
560) New York Convention, Art. V(1)(d). See also Inter-American Convention, Art. 5(1)(d);
European Convention, Art. IX(1)(d); §26.05[C][5][b] (especially §26.05[C][5][b][vii]).
110
561) See, e.g., French Code of Civil Procedure, Arts. 1504, 1502(2); English Arbitration Act, 1996,
§68(2)(c); Swiss Law on Private International Law, Art. 190(2)(a) (award may be annulled
where “sole arbitrator has been incorrectly appointed or where the arbitral tribunal has
been incorrectly constituted”); Belgian Judicial Code, Art. 1717(3)(a)(v) (“composition of
the arbitral tribunal … was not in accordance with the agreement of the parties”);
Netherlands Code of Civil Procedure, Art. 1065(1)(b) (“arbitral tribunal was constituted in
violation of the rules applicable thereto”); Italian Code of Civil Procedure, Art. 829(2)
(“arbitrators have not been appointed according to the provisions” of Italian law);
European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(f) (“if the
award was made by an arbitral tribunal irregularly constituted”); Mexican Commercial
Code, Art. 1457(1)(c); Bolivian Law on Arbitration and Mediation, Art. 63(II)(5).
562) See, e.g., Hugs & Kisses, Inc. v. Aguirre, 220 F.3d 890, 893-94 (8th Cir. 2000) (vacating award
where sole arbitrator was unilaterally appointed by award-creditor, contrary to
arbitration agreement providing for parties to agree on the arbitrator: “arbitrators are
without authority where they are not chosen as provided in the parties’ arbitration
agreement”); R.J. O’Brien & Assocs., Inc. v. Pipkin, 64 F.3d 257, 263 (7th Cir. 1995) (“[I]n
order to enforce an arbitration award, the arbitrator must be chosen in conformance
with the procedure specified in the parties’ agreement to arbitrate.”); Health Servs. Mgt
Corp. v. Hughes, 975 F.2d 1253, 1259 (7th Cir. 1992) (dicta that AAA’s failure, in violation of
AAA Rules, to pass on to parties critical information disclosed by arbitrator would be
grounds for vacating award); Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830, 831 (11th Cir.
1991) (vacating award for failure to maintain three-person tribunal as required by
parties’ agreement); Avis Rent A Car Sys., Inc. v. Garage Employees Union, 791 F.2d 22, 26
(2d Cir. 1986); Bear Stearns & Co. v. N.H. Karol & Assocs., Ltd, 728 F.Supp. 499, 501-02 (N.D.
Ill. 1989) (“Arbitrator[s] who [are] improperly elected have no power to resolve a dispute
between the parties”); Rogers v. Schering Corp., 165 F.Supp. 295, 302 (D.N.J. 1958)
(vacating award where a replacement arbitrator was selected without party’s knowledge
or opportunity to challenge), aff’d, 271 F.2d 266 (3d Cir. 1959); W. Canada SS Co. v. Cia de
Navigation San Leonardo, 105 F.Supp. 452, 453-54 (S.D.N.Y. 1952) (vacating award made by
two arbitrators when arbitration agreement provided for three-person tribunal).
563) See, e.g.,Judgment of 10 May 1995, Laiguede v. Ahsen Inox, 1995 Rev. arb. 605 (French Cour
de cassation civ. le) (award annulled where different appointing authority than that
agreed by parties selected arbitrators); Judgment of 4 December 1990, 1991 Rev. arb. 81
(French Cour de cassation civ. 1e); Judgment of 28 June 2007, Société Presse Alliance v.
Gérard, Case No. 06/07067 (Paris Cour d’appel) (“annulment of an arbitral award because
of incorrect constitution of the tribunal”); Judgment of 11 February 1988, Gas del Estudo v.
Ecofisa & E.T.P.M., 1989 Rev. arb. 683 (Paris Cour d’appel); J.-L. Delvolvé, G. Pointon & J.
Rouche, French Arbitration Law and Practice: A Dynamic Civil Law Approach to
International Arbitration ¶¶433 et seq. (2d ed. 2009).
564) See, e.g., Sumukan Ltd v. Commonwealth Secretariat [2007] EWCA Civ 1148, ¶49 (English
Ct. App.) (departure from contractual appointment procedure rendered arbitrator’s
participation “unlawful and the award a nullity”); English Arbitration Act, 1996, §68(2)(e).
565) See, e.g., Judgment of 28 April 1960, 1960 NJW 1296 (German Bundesgerichtshof); Judgment
of 18 May 2007, Case Nos. A40-4577/07-8-46 & A40-4582/07-8-47 (Moscow Dist. Fed.
Arbitrazh Ct.) (award annulled where composition of arbitral tribunal was not in
accordance with parties’ agreement); German ZPO, §1059(2)(1)(d) (“An arbitral award may
be set aside only if … the applicant shows sufficient cause that … the composition of the
arbitral tribunal or the arbitral procedure was not in accordance with … an admissible
agreement of the parties.”); Italian Code of Civil Procedure, Art. 840 (“The court of appeal
shall refuse recognition or enforcement of the foreign award if … (4) the composition of
the arbitration tribunal or the arbitration proceedings was not in accordance with the
agreement of the parties … or with the law of the place where the arbitration took
place.”).
566) Cargill Rice, Inc. v. Empresa Nicaraguense Dealimentos Basicos, 25 F.3d 223, 226 (4th Cir.
1994). See also Crawford Group, Inc. v. Holekamp, 543 F.3d 971, 976 (8th Cir. 2008)
(“Arbitrators exceed their powers if, inter alia, the method of their appointment
provided in the agreement has not been followed”); Bulko v. Morgan Stanley DW Inc., 450
F.3d 622, 625 (5th Cir. 2006) (“An arbitration agreement is a contract; accordingly,
arbitrators must be selected pursuant to the method provided in it. … Courts do not
hesitate to vacate an award when an arbitrator is not selected according to the
contract-specified method.”); Encyclopedia Universalis SA v. Encyclopedia Britannica, Inc.,
403 F.3d 85, 91 (2d Cir. 2005) (premature appointment of presiding arbitrator was
contrary to arbitration agreement and “irremediably spoiled the arbitration process”);
Hugs & Kisses, Inc. v. Aguirre, 220 F.3d 890, 893 (8th Cir. 2000).
567) Judgment of 20 October 2010, 2010 Rev. arb. 669, 670 (French Cour de cassation).
568) UNCITRAL Model Law, Art. 29. See§23.04[A].
569) Judgment of 8 October 2009, SAP MU 1645/2009 (Murcia Audiencia Provincial).
111
570) See, e.g., ANR Coal Co. v. Cogentrix of N.C., Inc., 173 F.3d 493, 499 (4th Cir. 1999) (“Even if
[the arbitrator’s] failure to disclose had violated Rule 19 [of the AAA Commercial Rules],
that would not, by itself, require or even permit a court to nullify an arbitration award.
When parties agree to be bound by the AAA rules, these rules do not give a federal court
license to vacate an award on grounds [not listed in] 9 U.S.C. §10.”); Judgment of 30 June
1994, Hitachi Ltd v. SMS Schloemann Siemag AG, 15 ASA Bull. 99, 104 et seq. (Swiss Federal
Tribunal) (1994) (failure to follow requirements solely agreed on by parties, without basis
in Swiss law, is not reason for annulment).
571) See, e.g., European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(5)
(“Grounds for the challenge and exclusion of arbitrators provided for under Articles 12
and 14 shall not constitute grounds for setting aside within the meaning of paragraph 2.f
of this article, even when they become known only after the award is made.”).
572) See§15.04[B].
573) See§15.01[A]; §15.02; §15.07[D][1].
574) See§25.04[C][3].
575) Fernandes Grain Co. v. Hunter, 274 S.W. 901, 904 (Mo. App. 1925).
576) Cat Charter, LLC v. Schurtenberger, 646 F.3d 836, 842, 844 (11th Cir. 2011).
577) See, e.g., Martin v. Wells Fargo Fin. Alaska, Inc., 199 F.Appx. 629, 630 (9th Cir. 2006) (award
vacated where arbitration was not conducted in accordance with terms of arbitration
agreement); Smith v. Transp. Workers Union of Am., AFL-CIO Air Transp. Local 556, 374 F.3d
372, 374-75 (5th Cir. 2004) (“Although the law imposes a presumption in favor of
arbitrability, the policy that favors resolving doubts in favor of arbitration ‘cannot serve
to stretch a contractual clause beyond the scope intended by the parties or authorize an
arbiter to disregard or modify the plain and unambiguous provisions of the agreement.’
The plain wording of the arbitration agreement contemplates that the arbitrators will
not consider correcting the arbitral award at all at the behest of the parties, and forbids
a correction or amendment on the arbitrators’ own motion more than three business
days after the award. We conclude that the modification made was beyond the reach of
the arbitrators’ power. If an arbitral panel exceeds its authority, it provides grounds for
a court to vacate that aspect of its decision.”); W. Employers Ins. Co. v. Jefferies & Co., 958
F.2d 258 (9th Cir. 1992) (award vacated because tribunal failed to comply with arbitration
agreement’s requirement to provide findings of fact and conclusions of law); Weiner v.
Commerce Ins. Co., 78 Mass.App.Ct. 563 (Mass. App. Ct. 2011) (award vacated where
arbitrator failed to specify damages, as required in arbitration agreement); White v.
Kampner, 641 A.2d 1381, 1387 (Conn. 1994) (award vacated because contractual
negotiation process had not been fulfilled prior to commencing arbitration); Pacol Ltd v.
Joint Stock Co. Rossakhar [1999] 2 All ER 778 (Comm) (English High Ct.) (award annulled
because arbitrator disregarded issues agreed by parties); Judgment of 5 March 2008,
Republique du Congo v. Société Qwinzy, 2009 Rev. arb. 401, 401 (French Cour de cassation
civ. 1e) (award annulled because tribunal did not comply with notice provisions
incorporated in parties’ arbitration agreement); Judgment of 19 May 1998, 1999 Rev. arb.
601 (French Cour de cassation civ. le) (arbitrators must comply with parties’ agreement
on applicable procedure); Judgment of 17 February 2011, 26 Sch 13/10 (Oberlandesgericht
Frankfurt) (award annulled because tribunal failed to follow agreed procedures for
terms of reference for expert); Judgment of 22 June 2005, 2005 SchiedsVZ 308, 309
(Oberlandesgericht Munich) (award annulled because it was decision ex aequo et bono
without parties’ authorization); Yesodei Hatorah College Inc. v. Trustees of the Elwood
Talmud Torah Congregation, [2011] VSC 622, ¶78 (Victoria S.Ct.) (“[T]he basis upon which
the parties agreed to refer matters in dispute to arbitration has not formed the basis of
the arbitration as conducted and, consequently, the appeal must be allowed. It also
follows, for these reasons, that the Award in its entirety cannot be allowed to stand.”);
Siginon Maritime Ltd v. Gitutho Assocs., Misc. Civil Application 719 of 2004 (Mombasa High
Ct. 2005) (application of institutional rules different from those chosen by parties
justifies annulment of award); Kerajaan Republik Demokratik Rakyat Laos v. Hongsa
Lignitwe Co., [2012] D-24NCC (ARB)-7-2010 (Malaysian Trial Ct.) (award annulled due to
improper consolidation in violation of parties’ arbitration agreement); Judgment of 18
July 2006, Propyme Argentina UTE v. Argentine Repub., Lexis No. 35003862 (Argentine
Cámara Nacional de Apelaciones en lo Contencioso Administrativo Federal) (award
annulled because arbitrator failed to follow parties’ agreed arbitral procedure, which
provided for evidentiary hearing: “since the procedural defect … has affected the right
of self-defense of the Government, depriving it of the possibility of offering evidence
even when it had reserved such right … the challenged award must be declared null and
void”).
112
578) See§15.03. See also Capgemini v. Sorensen, 2005 WL 1560482, at *7-8 (S.D.N.Y.) (rejecting
argument that tribunal violated AAA Rules by considering revised claim for relief:
“liability for the shares was a central issue in the arbitration and was fully litigated”);
Tusculum BV v. Louis Dreyfus Holding SAS, [2008] QCCS 5904 (Québec Super. Ct.) (rejecting
claim by award-debtor that reopening arbitral proceedings violated applicable
procedural rules); Dongwoo Mann & Hummel Co. Ltd v. Mann & Hummel GmbH, [2008] 3
SLR 871, ¶87 (Singapore High Ct.) (rejecting challenge to award based on procedure for
compelling document production; “This is a matter well within the jurisdiction of the
tribunal, which has the power and the discretion to determine the rules of procedure
and to conduct the hearing in a manner that it considers most appropriate to ensure the
fair, expeditious, economical and just determination of the dispute procedure it would
adopt”); Wuzhou Port Foreign Trade Dev. Corp. v. New Chem. Ltd, [2001] 3 HKC 395 (H.K. Ct.
First Inst.) (refusing to annul award where award-debtor claimed that arbitral tribunal
should have applied an institution’s former rules, not amended ones); Brunswick Bowling
& Billiards Corp. v. Shanghai Zhonglu Indus. Co. Ltd, [2011] 1 HKLRD 707, 727-28 (H.K. Ct.
First Inst.) (rejecting challenge to award; tribunal not bound by parties’ chosen
procedure when it conflicts with competing requirements of fairness and opportunity to
be heard); Judgment of 7 May 2008, Case No. 76/123 (Cairo Ct. App.) (rejecting claim that
arbitral tribunal’s refusal to join parties to arbitral proceedings was violation of
applicable procedural rules).
579) See, e.g., Appel Corp. v. Katz, 2007 U.S. App. LEXIS 2541, at *3 (2d Cir.) (“In light of the
American Arbitration Association (AAA) rule vesting it with the authority to interpret and
apply its own rules, parties are obligated to comply with the AAA’s determinations so
long as they are within reasonable limits.”); York Research Corp. v. Landgarten, 927 F.2d
119, 123 (2d Cir. 1991) (“Given the parties’ designation of the AAA as the supervisory
authority regarding the resolution of disputes under the agreement, the AAA’s view of the
meaning of its rules is of considerable significance.”); Eyewonder, Inc. v. Abraham, 2010
WL 3528882, at *5 n.3 (S.D.N.Y.) (rejecting claim that AAA misapplied its Rules: “This Court
sees no reason to depart from the conclusion made by the [AAA] Assistant Vice-President
who is most familiar with their rules”).
580) See, e.g.,Judgment of 16 March 2004, 22 ASA Bull. 770, 779 (Swiss Federal Tribunal) (“Even
in cases where a procedural rule was intended by the parties and binding to the
tribunal, it is not mandatory within the meaning of Article 182(3) SLPIL.”); Judgment of 1
July 1991, DFT 117 II 346, 347 (Swiss Federal Tribunal); J.-F. Poudret & S. Besson,
Comparative Law of International Arbitration ¶799 (2d ed. 2007) (“Swiss law does not
sanction the non-respect of the agreed procedure nor of the mission but only the
violation of the mandatory procedural rules laid down at Art. 182(3) [of the Swiss Law on
Private International Law].”).
581) See§11.03[C][1][c][vi]; §12.01[B][2]; §12.04[A][4]; §12.04[B][6]; §14.03[A]; §15.02[A]; §15.04[A].
582) Statutory time limits for making awards are discussed below. See§25.04[C][5]. See
also§15.08[O]; §23.06.
583) See, e.g., Miller v. Prudential Bache Sec., Inc., 884 F.2d 128 (4th Cir. 1989); Jones v. St. Louis-
San Francisco Railway Co., 728 F.2d 257, 265 (6th Cir. 1984) (dicta); Detroit Coil Co. v. Int’l
Ass’n of Mach. & Aerospace Workers, 594 F.2d 575, 581 (6th Cir. 1979) (award vacated
because arbitrator refused to apply clear contractual time limit).
584) See, e.g., Appel Corp. v. Katz, 217 F.Appx. 3, 4 (2d Cir. 2007) (delay of three days in issuing
final award did not cause prejudice to award-debtor); Dean Witter Reynolds, Inc. v.
McCoy, 995 F.2d 649, 651 (6th Cir. 1993); Paine-Webber, Inc. v. Hofman, 984 F.2d 1372 (3d
Cir. 1993); Fiat SpA v. Ministry of Fin. & Planning, 1989 U.S. Dist. LEXIS 11995, at *16-17
(S.D.N.Y.) (arbitrators’ failure to comply with AAA’s rule requiring awards to be made
within 30 days of hearing not basis for vacating award); Laminoirs-Trefileries-Cableries de
Lens, SA v. Southwire Co., 484 F.Supp. 1063, 1106 (N.D. Ga. 1980) (arbitrators’ alleged
failure to comply with ICC rule that award be issued within 6 months from signing Terms
of Reference not basis for vacating award); Local 35 v. Fontainebleau Hotel Corp., 423
F.Supp. 83, 84 (S.D. Fla. 1976) (failure to comply with 30-day contractual limit for issuing
award not basis to vacate award); Judgment of 16 March 2004, 22 ASA Bull. 770, 779 (Swiss
Federal Tribunal) (2004); Judgment of 1 July 1991, DFT 117 II 346, 347 (Swiss Federal
Tribunal).
585) Judgment of 5 March 2009, Case No. C.08.0028.F (Belgian Cour de cassation); NBCC Ltd v.
JG Eng’g Pvt Ltd, (2010) 2 SCC 385 (Indian S.Ct.); Judgment of 17 November 2003, Action No.
433/2003 (Bahrain Cour de cassation) (annulling award where arbitrator had exceeded
time limit of 90 days by approximately 40 days; arbitrator “must abide by such an
agreement unless the parties explicitly or implicitly agree, in writing, on an extension”
and once “time limit elapses, the arbitrator’s jurisdiction … terminates … and the award
issued thereafter is null”); Judgment of 3 December 2002, Case No. 134 (Tunisian Cour
d’appel) (Tunisian arbitration law entitled arbitral tribunal to extend period for making
award, but such extensions should not, in light of parties’ agreement, have been longer
than one month; tribunal exceeded its mandate by making award outside agreed time
limit).
586) See§12.06[A][2].
587) See, e.g., Jones v. St. Louis-San Francisco Railway Co., 728 F.2d 257, 265 (6th Cir. 1984);
Local Union 560, Int’l Bhd of Teamsters v. Anchor Motor Freight, Inc., 415 F.2d 220, 226 (3d
Cir. 1968); Tomczak v. Erie Ins. Exchange, 268 F.Supp. 185, 189 (W.D. Pa. 1967).
588) R. Merkin, Arbitration Law ¶18.28 (1991 & Update August 2013).
113
589) See, e.g., Jones v. St. Louis-San Francisco Railway Co., 728 F.2d 257, 266 (6th Cir. 1984)
(vacating award because of “arbitration board’s failure to comply with requirements of
the arbitration agreement” and award rendered fourteen months after hearing); Davis v.
Ohio Barge Line, Inc., 697 F.2d 549, 555-56 (3d Cir. 1983); City of New Orleans v. United
Transp. Union, 2002 U.S. Dist. LEXIS 3792, at *11 (E.D. La.); R. Merkin, Arbitration Law ¶18.29
(1991 & Update August 2013). See generally Korpela, Construction and Effect of
Contractual or Statutory Provisions Fixing Time Within Which Arbitration Award Must Be
Made, 56 A.L.R.3d 815 (1974).
590) See, e.g., Williams v. Nat’l Football League, 2012 WL 2366636 (D. Colo.) (confirming award
rendered after specified time limit where no substantial prejudice to parties occurred),
aff’d, 2012 WL 3642839 (10th Cir.); Karaha Bodas Co., LLC v. Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, 190 F.Supp.2d 936, 945 (S.D. Tex. 2001) (“it is appropriate to
set aside an award based on a procedural violation only if such violation worked
substantial prejudice to the complaining party”); Fiat SpA v. Ministry of Fin. & Planning,
1989 U.S. Dist. LEXIS 11995 (S.D.N.Y.); McMahon v. RMS Elec., Inc., 695 F.Supp. 1557 (S.D.N.Y.
1988); Dan River, Inc. v. Cal-Togs, Inc., 451 F.Supp. 497, 501-02 (S.D.N.Y. 1978) (AAA’s alleged
error in selecting arbitral forum and procedural rules not basis to vacate award without
showing of effect on “substantive rights”); Rhéaume v. Société d’Investissements
L’Excellence Inc., [2010] QCCA 2269, ¶61 (Québec Ct. App.) (“determine whether the
breach is of such a nature to undermine the integrity of the process, and assess the
extent to which the breach had any bearing on the award itself”); Tusculum BV v. Louis
Dreyfus Holding SAS, [2008] QCCS 5904, ¶129 (Québec Super. Ct.) (requiring material
violation of procedural rules “to avoid the trivialization of judicial review in cases of
minor violation of the procedure”).
591) See, e.g.,Judgment of 6 March 1996, Société Farhat Trading Co. v. Société Daewoo, 1997 Rev.
arb. 69 (French Cour de cassation civ. le); Judgment of 8 March 1988, Société Sofidif v.
OIAETII, 1989 Rev. arb. 481 (French Cour de cassation civ. le) (refusing to annul award in
absence of violation of an “express, precise clause”). See also Food Serv. of Am., Inc. v.
Pan Pac. Specialties Ltd, (1997) 32 B.C.L.R.3d 225, ¶15 (B.C. S.Ct.) (“This narrow scope of
court intervention with respect to international arbitral awards can equally be applied
to an agreement between the parties with respect to such an arbitration. It would not be
appropriate for a court to go beyond the clear meaning of the words in an arbitration
agreement and interpret them in such a way as to render the clause meaningless.”).
592) See, e.g., Judgment of 24 February 1999, 4 Z Sch 17/98 (Bayerisches Oberstes
Landesgericht); Judgment of 4 September 1998, 14 Sch 01/98 (Hanseatisches
Oberlandesgericht Hamburg); Wuzhou Port Foreign Trade Dev. Corp. v. New Chemic Ltd,
[2001] 3 HKC 395 (H.K. Ct. First Inst.); Chongqing Mach. Imp. & Exp. Co. Ltd v. Yiu Hoi (Tin
Lee Ship Builders & Trading Co.), XXX Y.B. Comm. Arb. 169 (H.K. Ct. First Inst. 2001) (2005);
Shenzhen City Tong Ying Foreign Trade Corp. Ltd v. Alps Co. Ltd, XXX Y.B. Comm. Arb 170
(H.K. Ct. First Inst. 2001) (2005).
593) See§25.04[A][8]; §25.04[B][7]; §25.04[D][4]; §25.04[F][6]; §25.04[G][3]; Brook v. Peak Int’l,
Ltd, 294 F.3d 668, 672-73 (5th Cir. 2002) (rejecting application to vacate award on grounds
that, although “[t]he AAA’s departure from the selection procedure outlined in the
Employment Agreement was utterly unwarranted … arbitration remains an adversarial
event, and parties must insist upon the enforcement of their contractual rights before
the arbitrators as they do in court”); Weinberg v. Silber, 2003 WL 147530, at *4 (5th Cir.)
(procedural objections were waived where claimant “participated fully in the arbitration
proceedings yet never complained about any lack of rules or procedures (or any other
defect) until he received an unfavorable result”); Marino v. Writers Guild of Am., 992 F.2d
1480, 1484 (9th Cir. 1993) (“party may not sit idle through an arbitration procedure and
then collaterally attack that procedure on grounds not raised before the arbitrators
when the result turns out to be adverse”); E. Gaillard & J. Savage (eds.), Fouchard Gaillard
Goldman on International Commercial Arbitration ¶1606 (1999) (objections to
composition of tribunal, appointment of arbitrators, violation of deadlines and
admissibility of evidence must be raised before arbitrators).
594) Judgment of 22 March 2006, Uniprex SA v. Grupo Radio Blanca, SAP M 2572/2006 (Madrid
Audiencia Provincial).
595) Judgment of 6 July 2005, 2006 Rev. arb. 429 (French Cour de cassation civ. 1e) (party
waived right to object to any irregularity regarding time limit by participating in
arbitration until award was made and by paying arbitration fees while tribunal was
deliberating); Judgment of 7 November 2007, Case No. 1242/2007 (Jordan S.Ct.) (failure of
party to object to continuation of proceedings was waiver of right to object pursuant to
Article 34).
596) Siginon Maritime Ltd v. Gitutho Assocs., Misc. Civil Application 719 of 2004 (Mombasa High
Ct. 2005).
597) See§15.04[B][3]; §25.04[B][1].
598) UNCITRAL Model Law, Art. 34(2)(a)(iv); §11.03[C][2][a]. See alsoUNCITRAL, 2012 Digest of
Case Law on the Model Law on International Commercial Arbitration 156 (2012) (“In the
absence of an agreement of the parties on specific rules, the relevant standard is the
arbitration law at the place of arbitration.”).
599) New York Convention, Art. V(1)(d); §11.03[C][1][c]; §15.04[A]; §26.05[C][5][c].
114
600) See, e.g., English Arbitration Act, 1996, §§2(1), 33, 68(2)(a) (“failure by the tribunal to
comply with section 33 (general duty of tribunal)”); German ZPO, §1059(2)(1)(d) (“arbitral
procedure was not in accordance with a provision of this Book”); Netherlands Code of
Civil Procedure, Art. 1065(4); Italian Code of Civil Procedure, Art. 829; Singapore
International Arbitration Act, 2012, Art. 31(2)(e); Japanese Arbitration Law, Arts. 3(1), 25,
44(1)(vi) (“composition of the arbitral tribunal or the arbitral proceedings were not in
accordance with the provisions of the laws of Japan (or where the parties have otherwise
reached an agreement on matters concerning the provisions of the law that do not relate
to the public policy, such agreement)”); Korean Arbitration Act, Art. 36(2)(1)(a); Indian
Arbitration and Conciliation Act, Art. 34(2)(a)(ii).
601) See U.S. FAA, 9 U.S.C. §§1-16; Carte Blanche (Singapore) Pte, Ltd v. Carte Blanche Int’l, Ltd,
683 F.Supp. 945, 956 (S.D.N.Y. 1988) (“A major purpose of the Federal Arbitration Act is to
avoid delay and unnecessary expense to the parties … , and the delay that would result
from reviewing procedural rulings of the arbitrators would be substantial.”), aff’d, 888
F.2d 260 (2d Cir. 1989).
602) SeeFrench Code of Civil Procedure, Arts. 1502(3), 1502(4), 1504; J.-L. Delvolvé, G. Pointon &
J. Rouche, French Arbitration Law and Practice; A Dynamic Civil Law Approach to
International Arbitration ¶440 (2d ed. 2009); E. Gaillard & J. Savage (eds.), Fouchard
Gaillard Goldman on International Commercial Arbitration ¶¶1633, 1638-44, 1701 (1999).
603) See B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland ¶1580
(2d ed. 2010); Schneider, in S. Berti et al. (eds.), International Arbitration in Switzerland
Art. 182, ¶¶2-3, 49-51 (2000).
604) See Judgment of 5 May 1998, 1999 BH 128 (Hungarian S.Ct.) (general provisions of code of
civil procedure do not apply in international arbitration, unless explicitly provided for
in arbitration law); Judgment of 10 June 2008, Case No. 206/2008 (Amman Ct. App.) (issue
treated in context of public policy; party’s representation by non-lawyer is not ground
for annulment because arbitration law in arbitral seat did not mandate representation
by lawyer). See also§§11.03[E]-[F]; §11.05[E].
605) See§11.03[C][1][c][v]; §12.01[B][2]; §12.04[A][4]; §12.04[B][6]; §12.05[B][6]; §14.03[A];
§15.02[A]; §15.04[A].
606) See§§15.01[A]-[B]; §§15.06[A]-[B].
607) See, e.g., German ZPO, §1040(3) (tribunal should rule on jurisdictional objection “in
general by means of a preliminary ruling”).
608) Judgment of 28 February 2007, Case No. 2-06-9525 (Tallin Dist. Ct.).
609) See Judgment of 18 January 2008, FINDESCO S.L.U v. Ms. Letitia, SAP B 1657/2008
(Barcelona Audiencia Provincial) (fact that award had been registered by notary showed
that it had been rendered within time prescribed by law).
610) See§23.06[B], p. 3065.
611) See, e.g., Superadio LP v. Winstar Radio Prods., LLC, 844 N.E.2d 246 (Mass. 2006) (award-
debtor bore burden of proof when seeking vacatur on grounds that claimant’s attorney
was unauthorized to practice law); Nolan v. Kenner, 250 P.3d 236 (Ariz. Ct. App. 2011)
(same); Judgment of 25 September 2012, Case No. STSJ PV 1232/2012, Legal Ground No. 6,
¶1 (Basque Country Tribunal Superior de Justicia) (burden of proof on party seeking
annulment on grounds that statutory deadline was violated); Judgment of 12 February
2012, Legget & Platt do Brazil Ltda v. Probel S/A, Case No. 2012.0000034857 (São Paulo
Tribunal de Justiça) (burden of proof on party seeking annulment on grounds of statutory
violations). See also§25.03[A][4]; §25.03[B], p. 3438.
612) See, e.g., Superadio LP v. Winstar Radio Prods., LLC, 844 N.E.2d 246, 249-50 (Mass. 2006)
(“Consistent with policy strongly favoring arbitration … an arbitration award is subject to
a narrow scope of review.”); Nolan v. Kenner, 250 P.3d 236, 238 (Ariz. Ct. App. 2011)
(“Judicial review of arbitration awards is severely restricted.”); Judgment of 25 September
2012, Case No. STSJ PV 1232/2012 (Basque Country Tribunal Superior de Justicia) (“not
every procedural breach must give rise to the highest sanction of annulment, but only
those procedural breaches which cause a serious lack of proper defence to one of the
parties”).
613) The UNCITRAL Model Law, FAA, Swiss Law on Private International Law and English
Arbitration Act, 1996, impose no time limit for making an award. Some national
arbitration legislation expressly grants the arbitral tribunal discretion to determine the
timing of an award. Netherlands Code of Civil Procedure, Art. 1048. See also§15.08[O].
614) See, e.g., French Code of Civil Procedure, Art. 1463(1) (six months from commencement of
tribunal’s mandate, although this limit has been held inapplicable to international
arbitration); Belgian Judicial Code, Art. 1713(2) (“if the arbitral tribunal is late in
rendering its award, and a period of six months has elapsed between the date on which
the last arbitrator was appointed, the President of the Court of First Instance, at the
request of one of the parties, may impose a time limit on the arbitral tribunal”); Spanish
Arbitration Act, 2011, Art. 37(2) (award must be issued within six months); Brazilian
Arbitration Law, Art. 23 (“If no express stipulation is made thereon, the award shall be
made within six months from the date of the commencement of the arbitral
proceedings, or from the date of the substitution of an arbitrator.”). See also§15.08[O];
§23.06.
615) See, e.g., French Code of Civil Procedure, Art. 1463(2); Belgian Judicial Code, Art. 1713(2);
Spanish Arbitration Act, 2011, Art. 37(2).
115
616) See, e.g., Honduran Arbitration Act, Art. 74(5); Peruvian Arbitration Law, Art. 63(1)(g);
Bolivian Law on Arbitration and Mediation, Art. 63(II)(2)(7); Colombian Decree No. 1818 of
7 September 1998, Art. 163(5); El Salvador Law on Mediation, Conciliation and
Arbitration, Art. 68(5); Uruguayan General Code of Procedure, Art. 499(1).
617) Judgment of 12 November 1992, Case No. STS 8380/1992 (Spanish Tribunal Supremo),
quoted in Cairns, The Spanish Application of the UNCITRAL Model Law on International
Commercial Arbitration, 22 Arb. Int’l 573, 590 n.58 (2006). The Spanish Tribunal Supremo’s
judgment was superseded by Article 37(2) of the Spanish Arbitration Act, 2011, which
provides that failure to issue an award within the statutory time limit is not grounds for
annulling the award.
618) See§1.02[B]; §1.03.
619) See§15.08[O].
620) See§25.04[C][3].
621) See§25.04[C]; §26.05[C][5][c].
622) See§15.08[O]; §23.06. Similarly, as discussed elsewhere, Articles II and V(1)(d) of the New
York Convention give priority to the parties’ agreement with regard to the constitution of
the arbitral tribunal. See§11.03[C][1][c][v]; §12.01[C]; §12.04[A][4]; §12.04[C]; §25.04[C][3];
§26.05[C][5][b][vii].
623) As discussed above, the New York Convention is properly interpreted as imposing
international limits on mandatory national law requirements on the composition of the
arbitral tribunal, requiring that these limits be consistent with the Convention’s
structure and objectives and not contrary to state practice among Contracting States.
See§12.01[C]; §12.04[A][4]; §12.04[C].
624) See M. de Boisséson, Le droit français de l’arbitrage interne et international ¶795 (2d ed.
1990).
625) See, e.g., Italian Code of Civil Procedure, Art. 829(3) (“award has been rendered by a
person who could not be appointed as arbitrator according to Article 812”); Brazilian
Arbitration Law, Art. 32(ii).
626) Most arbitration legislation omits the arbitrators’ lack of capacity as grounds for
annulment. It is also relevant to consider the purposes of the relevant capacity
restriction under the law of the arbitral seat. A rule prohibiting judges from sitting as
arbitrators is arguably designed to protect the judiciary, and its violation should
arguably result in administrative sanctions against the offending judge, but not
annulment of an otherwise valid award.
627) See§12.04[B][2]; §12.04[E].
628) See§23.03[B].
629) See, e.g., Judgment of 18 September 2007, 1 Sch 04/06 (Oberlandesgericht Rostock)
(reasons should allow deducing underlying rationale and address parties’ main
arguments); Judgment of 8 January 2010, AZ NV. v. N.N. (Nomen Nescio), Case No. 08/02129
(Dutch Hoge Raad) (in order for lack of reasoning to constitute ground for setting aside
award, reasoning must be so incorrect that it constitutes failure to explain award); Gora
Lal v. Union of India, (2003) 12 SCC 459 (Indian S.Ct.) (award stating that arbitral tribunal
had considered claims then simply recorded its findings on each disputed item, without
any further explanation, failed to make an award with “reasons”); Judgment of 2
December 2008, Case No. 114/124 (Cairo Ct. App.) (annulling award where, absent a party
agreement to that effect, tribunal provided no reasoning).
630) SeeJudgment of 27 August 2009, 26 SchH 03/09 (Oberlandesgericht Frankfurt); Judgment
of 10 July 2003, 26 Sch 01/03 (Oberlandesgericht Frankfurt); Judgment of 15 December
1999, 4 Z Sch 23/99 (Bayerisches Oberstes Landesgericht); Robert E. Schreter v. Gasmac
Inc., (1992) 7 O.R.3d 608 (Ontario Super. Ct.) (absence of reasons in award does not mean
that party’s right to be heard was violated).
631) See Navigation Sonamar Inc. v. Algoma Steamships Ltd, [1987] R.J.Q. 1346 (Québec Super.
Ct.).
632) See, e.g., Wachovia Sec. LLC v. Brand, 2012 WL 507022, at *8 (4th Cir.) (confirming award
despite arbitrators’ refusal to apply statutory “procedural requirements,” because they
“found a different procedure to be better suited to the needs of the arbitration”);
Superadio LP v. Winstar Radio Prods., LLC, 844 N.E.2d 246, 252 (Mass. 2006) (“We conclude
that, even assuming that the representation [of successful party in arbitration by lawyer
not admitted to local bar] might constitute the unauthorized practice of law, the
conduct would not provide a basis to vacate the award.”); Nolan v. Kenner, 250 P.3d 236
(Ariz. Ct. App. 2011) (confirming award because representation of party by foreign
attorney (not authorized to practice in Arizona) was not tantamount to procuring the
award by “undue means”).
633) See§25.04[C][6].
634) See§12.06[A][3].
635) See§12.06[A][3]; §12.06[E]; §25.04[E][4], p. 3281.
636) In many jurisdictions, an unsuccessful institutional challenge to an arbitrator will not be
considered preclusive of claims regarding the arbitrators’ independence and
impartiality in a subsequent annulment action. See§12.06[B][1]; §25.04[E][5]; AT&T Corp.
v. Saudi Cable Co. [2000] 2 Lloyd’s Rep. 127 (English Ct. App.); Berti & Schnyder, in S. Berti
et al. (eds.), International Arbitration in Switzerland Art. 190, ¶¶27-29 (2000).
637) The standards of impartiality and independence applicable to arbitrators are discussed
above. See§12.05.
116
638) See, e.g., U.S. FAA, 9 U.S.C. §10(a)(2) (“… where there was evident partiality or corruption
in the arbitrators, or either of them”); Chinese Arbitration Law, Art. 58(6) (“Arbitrators
have accepted bribes, resorted to deception for personal gains or perverted the law in
the ruling.”).
Most such references are by implication. See, e.g., Swiss Law on Private International
Law, Art. 190(2)(a); Belgian Judicial Code, Art. 1717(3)(a)(v) (“irregularity affecting the
composition of the arbitral tribunal”); European Convention Providing a Uniform Law on
Arbitration, Annex I, Art. 25(2)(f) (“if the award was made by an arbitral tribunal
irregularly constituted”).
639) See, e.g., English Arbitration Act, 1996, §68; French Code of Civil Procedure, Art. 1520;
Italian Code of Civil Procedure, Art. 829; Japanese Arbitration Law, Art. 44; Korean
Arbitration Act, Art. 36; Indian Arbitration and Conciliation Act, Art. 34.
640) U.S. FAA, 9 U.S.C. §§10(a)(1)-(3).
641) See, e.g., Int’l Union, United Auto., Aerospace, & Agric. Implement Workers of Am. v.
Greyhound Lines, Inc., 701 F.2d 1181, 1186 (6th Cir. 1983) (“public policy considerations of
protecting a judge’s or a juror’s impartiality, independence, and freedom from undue
influences apply with equal force as to arbitrators”); Mellon Stuart Constr. v. Metro. Water
Reclamation Dist. Greater Chicago, 1995 U.S. Dist. LEXIS 5376, at *27 (N.D. Ill.) (discussing
Illinois public policy requiring “the impartiality and neutrality of arbitrators selected to
arbitrate disputes between other parties”); Aetna Cas. & Sur. Co. v. Grabbert, 590 A.2d 88
(R.I. 1991) (service as party-appointed non-neutral arbitrator pursuant to a contingent
fee arrangement is grounds for annulling award). Compare Positive Software Solutions,
Inc. v. New Century Mortg. Corp., 476 F.3d 278, 283 (5th Cir. 2007) (reversing vacatur of
award where arbitrator had not disclosed co-counsel status with counsel to party in
arbitration seven years earlier; “reasonable impression of bias” standard is to be
interpreted practically rather than with utmost rigor); MCI Telecomms. Corp. v. Matrix
Commc’ns Corp., 135 F.3d 27 (1st Cir. 1998) (rejecting annulment application where award-
debtor argued that award-creditor was frequent user of arbitral institution (JAMS) and
had close relationship with institution); Beebe Med. Ctr, Inc. v. InSight Health Servs. Corp.,
751 A.2d 426 (Del. Ch. 1999) (vacating award where arbitrator was personally represented
in unrelated litigation by law firm (and individual lawyers) that simultaneously
represented party in arbitration). See also§12.05[A][1][c].
642) See, e.g., Health Servs. Mgt Corp. v. Hughes, 975 F.2d 1253, 1266 (7th Cir. 1992) (arbitrator’s
statement at hearing of his personal views of merits of case held not to be either
misconduct or evidence of bias); Sheet Metal Workers v. Jason Mfg, Inc., 900 F.2d 1392 (9th
Cir. 1990) (various procedural decisions in one party’s favor not evidence of bias); Bell
Aerospace Co. v. Local 516, Int’l Union, United Auto., Aerospace & Agric. Implement
Workers of Am., 500 F.2d 921, 923 (2d Cir. 1974) (various evidentiary and interim rulings in
favor of one party not evidence of bias); Cook Chocolate Co. v. Salomon Inc., 748 F.Supp.
122, 128-29 (S.D.N.Y. 1990) (disagreements between party’s counsel and arbitrators not
evidence of bias), aff’d, 932 F.2d 955 (2d Cir. 1991).
643) See, e.g.,Judgment of 24 March 1998, Excelsior Film v. UGC-PH, 1999 Rev. arb. 255 (French
Cour de cassation civ. le) (arbitrator’s lack of impartiality is grounds for annulment);
Judgment of 2 November 2011, Société Avax v. Société Tecnimont SpA AS, 2012 Rev. arb. 112
(Reims Cour d’appel) (same); Judgment of 10 March 2011, Tesco v. Neoelectra, 2011 Rev.
arb. 569, 571 (Paris Cour d’appel) (“arbitrator must reveal to the parties all
circumstances that may affect his judgment and generate reasonable doubt as to his
impartiality and independence”); Judgment of 2 July 1992, Société Raoul Duval v. Société
Merkuria Sucden, 1996 Rev. arb. 410, 411 (Paris Cour d’appel) (award annulled on grounds
that arbitral tribunal was “unlawfully constituted,” within meaning of Article 1502(2) of
French New Code of Civil Procedure, as a result of appointment of arbitrator who “did
not provide the guarantees of independence, vis-à-vis each of the parties, which any
litigant is entitled to expect of him”); Judgment of 22 June 2010, DFT 4A_162/2010 (Swiss
Federal Tribunal) (annulling award where sole arbitrator had indirect personal interest
in outcome of arbitration; sole arbitrator was vice-director of company that granted
(undisclosed) loan to claimant in arbitration with purpose of “bridging” liquidity crisis
caused by respondent’s non-payment of amounts due claimant); Judgment of 7
November 2006, 25 ASA Bull. 166 (Swiss Federal Tribunal) (2007) (annulling award on
grounds that arbitrator had publicly criticized prior award involving same parties and
related dispute in outspoken terms); Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754
(Affoltern am Albis Bezirksgericht) (1998) (arbitrator’s lack of impartiality is grounds for
annulment); Judgment of 24 February 1999, 2000 NJW-RR 360 (Bayerisches Oberstes
Landesgericht); Judgment of 9 September 2010, Case No. I CSK 535/09 (Polish S.Ct)
(annulling award where co-arbitrator was social friend of party that nominated him and
had previously acted as counsel for party’s wife and related company).
CompareJudgment of 17 December 2009, Gothaer Finanzholding AG v. Liquidators of ICD,
25(3) Mealey’s Int’l Arb. Rep. 5, 5-6 (2010) (Paris Cour d’appel) (rejecting argument that
arbitrator’s actions in related arbitration showed that he was not impartial and that this
provided basis for annulling award).
644) See§2.02[C][4]; §12.05 (especially §12.05[A][6]).
645) Judgment of 29 October 2010, DFT 4A_234/2010, ¶3.2.1 (Swiss Federal Tribunal). See also
Leeman, Challenging International Arbitration Awards in Switzerland on the Ground of A
Lack of Independence and Impartiality of An Arbitrator, 29 ASA Bull. 10 (2011).
646) See§12.05.
117
647) See, e.g., Murray v. Citigroup Global Mkts, Inc., 511 F.Appx. 453, 455 (6th Cir. 2013);
Scandinavian Reins. Co. Ltd v. St. Paul Fire & Marine Ins. Co., 668 F.3d 60, 72 (2d Cir. 2012)
(“burden of proving evident partiality ‘rests upon the party asserting bias’”) (quoting
Andros Compania Maritima, SA v. Marc Rich & Co., AG, 579 F.2d 691, 700 (2d Cir. 1978)); ASM
Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm) (English High Ct.)
(burden on party challenging award to show bias), aff’d, [2007] 1 Lloyd’s Rep. 136 (English
Ct. App.); Judgment of 10 March 2011, Tesco v. Neoelectra, Case No. 09/28537 (Paris Cour
d’appel) (party challenging award failed to meet burden of proof); Judgment of 25
September 2012, Case No. STSJ PV 1232/2012 (Basque Country Tribunal Superior de
Justicia) (burden of proof on party challenging award).
648) See§12.06[A][2]; §12.06[C].
649) See§§12.05[A] & [F].
650) See§§12.05[A][3]-[4].
651) See§12.05[A]. See also JCI Comm’n, Inc. v. Int’l Bhd of Elec. Workers, Local 103, 324 F.3d 42,
51 (1st Cir. 2003) (“Evident partiality is more than just the appearance of possible bias.
Rather, evident partiality means a situation in which ‘a reasonable person would have to
conclude that an arbitrator was partial to one party to an arbitration’”); Montez v.
Prudential Sec., Inc., 260 F.3d 980, 983 (8th Cir. 2001) (reviewing cases on “evident
partiality” standard); Al-Harbi v. Citibank, NA, 85 F.3d 680, 683 (D.C. Cir. 1996) (“[T]he
burden on a claimant for vacation of an arbitration award due to ‘evident partiality’ is
heavy, and the claimant must establish specific facts that indicate improper motives on
the part of an arbitrator.”); ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC
2238, ¶9 (Comm) (English High Ct.) (“The question is whether the fair-minded and
informed observer, having considered the facts, would conclude that there was a real
possibility that the Tribunal was biased”), aff’d, [2007] 1 Lloyd’s Rep. 136, ¶9 (English Ct.
App.); Judgment of 25 September 2012, Case No. STSJ PV 1232/2012, Legal Ground No. 7
(Basque Country Tribunal Superior de Justicia) (“[m]ere suspicions or presumptions
which are based on non-conclusive evidence [cannot] overturn the presumption of
impartiality which is to be expected from deciding entities”); R. Merkin & L. Flannery,
Arbitration Act 1996 158 (4th ed. 2008) (under English law, “it is not enough … that one
party asserts that he has lost confidence in the arbitrator. What is required is that the
complainant has been denied the opportunity to present his case fairly”).
652) See§§12.05[A][3]-[4]; §25.04[D][6]; §26.05[C][6][b].
653) As discussed above, there is a textual basis for this approach in the Model Law’s
standard of “justifiable” doubts regarding an arbitrator’s independence or impartiality.
See§12.05[A][3]; §12.05[E]. See also§12.05[K].
654) See Commonwealth Coatings Corp. v. Cont’l Cas. Co., 393 U.S. 145, 153 (U.S. S.Ct. 1968)
(Fortas, J., dissenting); Merit Ins. Co. v. Leatherby Ins. Co., 714 F.2d 673, 682 (7th Cir. 1983).
655) See§12.05[B][2].
656) See, e.g., Frisch’s Rests., Inc. v. Fortney & Weygandt, Inc., 2008 WL 3586901 (Ohio App.)
(arbitrator who had received two referrals from party’s law firm prior to arbitration and
three additional referrals while it was pending should have disclosed them, but failure
to do so did not demonstrate impropriety warranting vacatur of award).
657) R.R.P (U) Ltd v. ASSIST (U) Ltd, Misc. Arb. Cause No. 04 of 2002 (Comm) (Uganda High Ct.
2002).
658) See, e.g., Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15 (Mo. Ct. App. 2008) (considering
challenge to award on grounds arbitration agreement lacked mutuality); Watts v. Pac.
Window Prods., Inc., 2007 WL 987872 (Cal. Ct. App.) (rejecting on merits challenge to award
on grounds arbitration agreement was substantively unconscionable and contract of
adhesion); Walker v. IASCO, 2003 WL 22300861 (Cal. Ct. App.) (rejecting challenge to
award on grounds arbitration agreement lacked mutuality and was unconscionable);
Hanover Ins. Co. v. Losquadro, 600 N.Y.S.2d 419, 423 (N.Y. Sup. Ct. 1993) (considering
challenge to award: “lack of mutuality in an arbitration clause does not necessarily
render it invalid [but] such factor may be considered in light of all of the existing
circumstances in determining whether the clause may be considered unconscionable”);
Judgment of 22 December 1999, 9 Sch 15/99 (Oberlandesgericht Köln) (rejecting challenge
to validity of arbitration agreement providing that party could appoint co-arbitrator on
behalf of counter-party who failed to appoint own co-arbitrator).
659) See§12.01[B].
660) See, e.g., Morrow v. Hallmark Cards, Inc., 273 S.W.3d 15 (Mo. Ct. App. 2008) (district court
erred in confirming award where arbitration clause committed only employee to
arbitration and employer retained ability to change arbitral procedures at any time).
661) See§12.06[B][1].
662) See§12.06[A][2].
663) See§12.06[A][3]; §12.06[D].
664) AAOT Foreign Econ. Ass’n (VO) Technostroyexport v. Int’l Dev. & Trade Servs. Inc., 139 F.3d
980, 982 (2d Cir. 1999).
665) Hayne, Miller & Farni, Inc. v. Flume, 888 F.Supp. 949, 953 (E.D. Wis. 1995).
118
666) See, e.g., JCI Commc’ns, Inc. v. Int’l Bhd of Elec. Workers, Local 103, 324 F.3d 42, 51 (1st Cir.
2003) (“Absent exceptional circumstances, a court will not entertain a claim of personal
bias where it could have been raised at the arbitration proceedings but was not.”); AAOT
Foreign Econ. Ass’n (VO) Technostroyexport v. Int’l Dev. & Trade Servs. Inc., 139 F.3d 980,
982 (2d Cir. 1999) (“The settled law of this circuit precludes attacks on the qualifications
of arbitrators on grounds previously known but not raised until after an award has been
rendered.”); Health Servs. Mgt Corp. v. Hughes, 975 F.2d 1253, 1263-64 (7th Cir. 1992);
Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726, 732 (5th Cir. 1987) (failure to object
during arbitration to partiality of arbitrator waived objection); Questar Capital Corp. v.
Gorter, 2012 WL 581800, at *17 (W.D. Ky.) (finding waiver of vacatur objection where
alleged arbitrator bias was disclosed during arbitral proceedings but first raised by
award-debtor in vacatur petition); Ilios Shipping & Trading Corp. v. Am. Anthracite &
Bituminous Coal Corp., 148 F.Supp. 698, 700 (S.D.N.Y.), aff’d, 245 F.2d 873 (2d Cir. 1957) (per
curiam); Graceman v. Goldstein, 613 A.2d 1049 (Ct. App. Md. 1992) (rejecting annulment of
award on grounds that award-debtor had not objected to arbitrator after observing
sympathetic conversations and frequent contact between arbitrator and claimant). See
also Revised Uniform Arbitration Act, §12(f) (2000) (“If the parties … agree to the
procedures of an arbitration organization or any other procedures for challenges to
arbitrators before an award is made, substantial compliance with those procedures is a
condition precedent to a [application] to vacate an award on that ground …”).
667) See, e.g.,Judgment of 24 June 1997, Highlight Commc’ns Int’l AG v. Europex, 1997 Rev. arb.
588 (Paris Cour d’appel); Judgment of 6 April 1990, Société Philipp Bros. v. Société Icco,
1990 Rev. arb. 880 (Paris Cour d’appel).
668) See, e.g., Judgment of 4 August 2006, DFT 4P.105/2006 (Swiss Federal Tribunal); Judgment
of 10 June 2003, 21 ASA Bull. 829, 840 (Swiss Federal Tribunal) (2003); Judgment of 9
February 1998, 16 ASA Bull. 634, 646 (Swiss Federal Tribunal) (1998); Judgment of 30 June
1994, Hitachi Ltd v. SMS Schloemann Siemag AG, 15 ASA Bull. 99, 101 (Swiss Federal
Tribunal) (1997).
669) See, e.g., ASM Shipping Ltd of India v. TTMI Ltd of England [2005] EWHC 2238 (Comm)
(English High Ct.), aff’d, [2007] 1 Lloyd’s Rep. 136 (English Ct. App.); Rustal Trading Ltd v.
Gill & Duffus SA [2000] 1 Lloyd’s Rep. 14 (QB) (English High Ct.).
670) See, e.g.,Judgment of 16 July 2002, 2003 SchiedsVZ 84 (Oberlandesgericht Stuttgart);
Judgment of 14 September 2000, XXVIII Y.B. Comm. Arb. 254 (Oberlandesgericht Köln)
(2003); Food Serv. of Am., Inc. v. Pan Pac. Specialties Ltd, (1997) 32 B.C.L.R.3d 225, ¶¶38-43
(B.C. S.Ct.) (“failure to object at the time means that they are deemed to have waived the
right to object”); Canadian Airline Pilots Ass’n v. Canadian Pac. Airlines, (1966) 57 D.L.R.2d
417, 428-29 (B.C. Ct. App.) (plaintiffs had full knowledge of partiality which they accepted
and cannot later be objected to in annulment proceeding); Judgment of 16 December
2009, JKM Transp. ApS v. Danish Crown, Case No. 337/2007 (Danish Højesteret) (party which
had not challenged arbitrator for lack of independence during arbitral proceedings,
even though it knew arbitrator had acted as counsel in related matter, could not later
challenge award on that basis).
671) Marino v. Writers Guild of Am. E. Inc., 992 F.2d 1480, 1484 (9th Cir. 1993).
672) See, e.g.,Judgment of 23 November 2004, XXXI Y.B. Comm. Arb. 786, 788 (Jerusalem Dist.
Ct.) (2006).
673) See, e.g., Ghirardosi v. Minister of Highways of British Columbia, [1966] S.C.R. 367, 372
(Canadian S.Ct.); Judgment of 7 November 2007, Case No. 1242/2007 (Jordan S.Ct.).
674) See, e.g., Marino v. Writers Guild of Am., 992 F.2d 1480, 1484 (9th Cir. 1993) (“[A] party may
not sit idle through an arbitration procedure and then collaterally attack that procedure
on grounds not raised before the arbitrators when the result turns out to be adverse. …
This rule even extends to questions, such as arbitrator bias, that go to the very heart of
arbitral fairness.”); Health Servs. Mgt Corp. v. Hughes, 975 F.2d 1253, 1263-64 (7th Cir. 1992)
(parties’ failure to exercise right to challenge arbitrator under AAA Rules constitutes
waiver of right to object to bias at award confirmation stage); Cook Indus., Inc. v. C. Itoh
& Co., 449 F.2d 106, 107-08 (2d Cir. 1971) (denying motion to vacate award for arbitrator
bias; a party “cannot remain silent, raising no objection during the course of the
arbitration proceeding, and when an award adverse to him has been handed down
complain of a situation of which he had knowledge from the first”); Raitport v. Salomon
Smith Barney, Inc., 57 A.D.3d 904 (N.Y. Ct. App. 2008) (collecting cases holding that failure
to object to arbitrators’ bias constitutes waiver); Gao Haiyan v. Keeneye Holdings Ltd,
[2012] 1 HKLRD 627 (H.K. Ct. App.) (failure to raise claim with arbitrators waived right to
object to bias at enforcement stage; fear of antagonizing arbitral tribunal was no
justification). See alsoEnglish Arbitration Act, 1996, §§68(1), 70(2) (party may lose right to
object to arbitrator bias if “appellant has not first exhausted (a) any available arbitral
process of appeal or review”); Revised Uniform Arbitration Act, §12(f) (2000) (“If the
parties … agree to the procedures of an arbitration organization or any other procedures
for challenges to arbitrators before an award is made, substantial compliance with
those procedures is a condition precedent to a [motion] to vacate an award on that
ground …”).
675) See Judgment of 12 June 2001 (Mexican Juzgado de Distrito), described in A Contribution
by the ITA Board of Reporters, available at www.kluwerarbitration.com.
119
676) See, e.g., Judgment of 14 March 1985, DFT 111 Ia 72 (Swiss Federal Tribunal); Judgment of 29
January 2004, 2005 Rev. arb. 709, 712 (Paris Cour d’appel); Judgment of 12 December 1996,
1998 Rev. arb. 699, 699 (Paris Cour d’appel) (“party that was not aware of the lack of
independence and impartiality of an arbitrator at the time of the appointment of the
arbitral tribunal is entitled to seek annulment of the award on the grounds of lack of
impartiality or independence later on”); Judgment of 23 March 1995, 1996 Rev. arb. 446
(Paris Cour d’appel) (annulling award where concealment by arbitrator of his lack of
independence had prevented party from challenging independence during arbitral
proceedings). See alsoJudgment of 16 July 2002, 2003 SchiedsVZ 84, 87
(Oberlandesgericht Stuttgart).
677) See, e.g., Fid. Fed. Bank, FSB v. Durga Ma Corp., 386 F.3d 1306, 1313 (9th Cir. 2004) (denying
vacatur: waiver doctrine applies where party to arbitration has constructive knowledge
of potential conflict, but fails to object prior to award); JCI Commc’ns, Inc. v. Int’l Bhd of
Elec. Workers, 324 F.3d 42, 52 (1st Cir. 2003) (denying vacatur where party waived
partiality complaint: it “was put on notice of the risk” when it signed contract providing
for industry-represented arbitration panel and “chose not to inquire about the
backgrounds of the Committee members either before or during the hearing”); Kiernan v.
Piper Jaffray Cos., Inc., 137 F.3d 588, 593 (8th Cir. 1998) (denying vacatur because “[w]hile
they did not have full knowledge of all the relationships to which they now object, they
did have concerns about [the arbitrator’s] partiality and yet chose to have her remain on
the panel rather than spend time and money investigating further until losing the
arbitration.”); Cook Indus. v. C. Itoh & Co., 449 F.2d 106, 108 (2d Cir. 1971) (“When a party
has knowledge of facts possibly indicating bias or partiality on the part of the arbitrator
he cannot remain silent and later object to the award of the arbitrator on that ground.”);
Judgment of 14 June 2013, Case no. Ö 2104-12, ¶9 (Swedish S.Ct.) (denying annulment
because “when a party has had some evidence that a circumstance was at hand the right
to reference the circumstance as grounds in challenge proceedings should not be
upheld if the party knowingly neglected to investigate the circumstance further in order
to not become aware of its existence. … In such circumstances, the party must be
deemed to have waived its rights to reference the circumstance.”).
678) See§26.05[C][6][j].
679) See, e.g., Judgment of 20 December 2006, 34 Sch 16/06 (Oberlandesgericht Munich); Berti
& Schnyder, in S. Berti et al. (eds.), International Arbitration in Switzerland Art. 190, ¶30
(2000); Hausmaninger, in H. Fasching et al. (eds.), Zivilprozeßgesetze §589, ¶85 (2d ed.
2007).
680) See, e.g., Judgment of 2 May 2012, DFT 4A_14/2012, ¶2.2.1 (Swiss Federal Tribunal)
(“However when a state court already reviewed whether the arbitrator challenged met
these requirements or not, there is no need for new state control. In conformity with the
goal of Swiss Law on international arbitration, which is to limit as much as possible the
possibilities to challenge arbitral proceedings, it must accordingly be admitted with the
majority of legal writers that the finality of the decision of a Cantonal Court as to a
challenge pursuant to Art. 180(3) PILA means that a subsequent review of that decision
within the framework of an appeal to the Federal Tribunal against the final award of the
arbitral tribunal is excluded.”).
681) See§25.04[E][5].
682) See§12.06[B][1].
683) See§12.05[F]; AT&T Corp. v. Saudi Cable Co. [2000] 2 Lloyd’s Rep. 127, 137 (English Ct. App.).
684) Beebe Med. Ctr, Inc. v. InSight Health Servs. Corp., 751 A.2d 426, 440 (Del. Ch. 1999).
685) See San Carlo Opera Co. v. Conley, 72 F.Supp. 825, 833 (S.D.N.Y. 1946) (party must
challenge arbitrator under institutional rules in order to preserve evident partiality
objection to award; unsuccessful institutional challenge does not preclude application
to vacate on evident partiality grounds), aff’d, 163 F.2d 310 (2d Cir. 1957); Boyhan v.
Maguire, 693 So.2d 659, 662 (Fla. 4th DCA 1997) (“submission of [the arbitrator bias] issue
to the AAA in accordance with Rule 19 [of the AAA Rules] in [no] way limits or bars a court
from considering the issue when properly raised in a proceeding to vacate an award”;
“courts have required compliance with Rule 19 but only to preserve the evident
partiality issue for judicial review; they do not hold that the AAA’s determination of the
issue is then binding on the court in a proceeding to vacate the award”); Britz v. Alfa-
Laval Food & Diary Co., 40 Cal.Rptr. 700, 710 (Cal. 5th Dist. Ct. 1995) (FAA requires de novo
judicial review of evident partiality, even where AAA has previously rejected challenge
to arbitrator’s impartiality under AAA Rules); McKinney Frilling Co. v. Mach I Ltd P’ship,
359 A.2d 100 (Md. App. 1976) (de novo judicial review of evident partiality required, even
where AAA has previously rejected challenge to arbitrator’s impartiality under AAA
Rules).
120
686) Judgment of 6 January 2010, DFT 4A_348/2009, ¶3.1 (Swiss Federal Tribunal). See also
Judgment of 27 June 2012, DFT 4A_54/2012, ¶2.1 (Swiss Federal Tribunal) (“Emanating from
a private body, this decision, which could not be appealed to the Federal Tribunal
directly does not bind this Court, which may accordingly review freely whether the
circumstances invoked to justify the challenge are such as to base a finding that the
Arbitral tribunal was irregularly composed.”); Judgment of 2 May 2012, DFT 4A_14/2012,
¶2.2.1 (Swiss Federal Tribunal) (“the decision issue by a private body, such as the Court
of Arbitration of the International Chamber of Commerce (ICC) or the International
Council of Sport Arbitration (ICSA) as to the challenge of an arbitrator, while not
immediately appealable to the Federal Tribunal, may nonetheless be reviewed in the
framework of an appeal against the award based on the alleged irregular composition of
the arbitral tribunal”).
687) See§12.06[E]; Judgment of 24 June 1999, XXIX Y.B. Comm. Arb. 687, 694 (Oberlandesgericht
Schleswig) (2004) (reasoning, in recognition decision, that: “The defendant made use in
the arbitration of its right to challenge [the arbitrator] for bias. The [ICC] Court of
Arbitration deemed the defendant’s request unfounded. This is the end of the matter,
because this decision does not appear to be clearly defective, e.g., for evident bias.”).
688) See Azteca Constr., Inc. v. ADR Consulting, Inc., 18 Cal.Rptr.3d 142 (Cal. Ct. App. 2004)
(vacating award for arbitrator bias after AAA had rejected challenge to arbitrator at
outset of arbitration on identical grounds).
689) See§12.05[A][1][c]; §12.06[B][3].
690) See, e.g., Health Servs. Mgt Corp. v. Hughes, 975 F.2d 1253, 1260 (7th Cir. 1992) (objection to
arbitrator’s impartiality in arbitral proceedings preserved party’s objection, even where
party proceeds with arbitration after objection is overruled); Cook Indus., Inc. v. C. Itoh &
Co. (Am.) Inc., 449 F.2d 106, 108 (2d Cir. 1971); San Carlo Opera Co. v. Conley, 72 F.Supp.
825, 833 (S.D.N.Y. 1946) (party that made timely objection to arbitrators on grounds of
bias not precluded from reasserting objection in proceeding for confirmation of award),
aff’d, 163 F.2d 310 (2d Cir. 1947).
691) See, e.g., STMicroelecs., NV v. Credit Suisse Sec. (U.S.A.) LLC, 648 F.3d 68 (2d Cir. 2011)
(suggesting that discovery may be permitted regarding arbitrator’s alleged conflicts and
lack of impartiality); Cont’l Materials Corp. v. Gaddis Mining Co., 306 F.2d 952, 955 (10th
Cir. 1962) (permitting discovery where arbitrator’s bills to parties indicated he had
delegated decision to third party); Fertilizantes Fosfatados Mexicanos, SA v. Chem.
Carriers, Inc., 751 F.Supp. 467, 469 (S.D.N.Y. 1990) (after several hundred page dissenting
opinion by co-arbitrator, charging majority with bias and misconduct, district court
conducted evidentiary hearing; charges rejected as “unfair broadside attacks”); Hunt v.
Mobil Oil Corp., 654 F.Supp. 1487, 1495 n.13 (S.D.N.Y. 1987).
692) See Hoeft v. MVL Group, Inc., 343 F.3d 57 (2d Cir. 2003); Woods v. Saturn Distrib. Corp., 78
F.3d 424, 430 (9th Cir. 1996) (no discovery permitted into arbitrators’ alleged bias);
Andros Compania Maritima, SA v. Marc Rich & Co., 579 F.2d 691, 702 (2d Cir. 1978) (refusing
to permit discovery into arbitrator’s relations with party and party-appointed
arbitrator); Hunt v. Mobil Oil Corp., 654 F.Supp. 1487, 1496 (S.D.N.Y. 1987) (“inordinate
delay” if “discovery and an evidentiary hearing were ordered”); Fukaya Trading Co. v. E.
Marine Corp., 322 F.Supp. 278, 284 (E.D. La. 1971) (refusing discovery to determine
arbitrators’ “motives”).
693) See, e.g., O.R. Sec., Inc. v. Prof’l Planning Assocs., Inc., 857 F.2d 742, 747-48 (11th Cir. 1988)
(“[T]he right to obtain discovery in an action to overturn an arbitral decision is strictly
limited. … Unless a party presents clear evidence of impropriety, the party will not be
permitted to conduct additional discovery”); Lummus Global Amazonas SA v. Aguaytia
Energy del Peru SR Ltda, 256 F.Supp.2d 594, 626 (S.D. Tex. 2002) (“[D]iscovery in a post-
arbitration judicial proceeding is available ‘only in limited circumstances where
relevant and necessary to the determination of an issue raised by [a motion to confirm
or vacate an award].’ … [T]he more demanding clear evidence of impropriety standard
applies specifically ‘to discovery inquiries directed at the arbitrator and only when the
goal is to impugn the validity of the arbitrator’s decision.’”) (quoting Frere v. Orthofix,
Inc., 2000 WL 1789641 (S.D.N.Y.)); Samuels v. Beheer, BV, 500 F.Supp. 1357, 1362 (S.D.N.Y.
1980).
694) Empresa Constructora Contex Ltda v. Iseki, Inc., 106 F.Supp.2d 1020, 1024 (S.D. Cal. 2000).
695) UNCITRAL Model Law, Art. 34(2)(a)(iii). The provision goes on to provide “the award deals
with a dispute not contemplated by or not falling within the terms of the submission to
arbitration, or contains decisions on matters beyond the scope of the submission to
arbitration, provided that, if the decisions on matters submitted to arbitration can be
separated from those not so submitted, only that part of the award which contains
decisions on matters not submitted to arbitration may be set aside.”
696) New York Convention, Art. V(1)(c). See also§26.05[C][4].
121
697) See, e.g., English Arbitration Act, 1996, §68(2)(b); French Code of Civil Procedure, Arts.
1492(3), 1520(3); Swiss Law on Private International Law, Art. 190(2)(c); Belgian Judicial
Code, Art. 1717(3)(a)(vi) (“arbitral tribunal has exceeded its powers”); Netherlands Code of
Civil Procedure, Art. 1065(1)(c) (“arbitral tribunal has not complied with its mandate”);
Italian Code of Civil Procedure, Art. 829(4) (“award exceeds the limits of the submission
to arbitration or fails to decide one or more items in the submission to arbitration”);
Spanish Arbitration Act, 2011, Art. 41(1)(c); Singapore International Arbitration Act, 2012,
Art. 31(2)(d); Hong Kong Arbitration Ordinance, 2013, §81; Chinese Arbitration Law, Art.
58(2); Japanese Arbitration Law, Art. 44(1)(x); Korean Arbitration Act, Art. 36(2)(1)(c);
Indian Arbitration and Conciliation Act, Art. 34(2)(a)(iv); Russian Arbitration Law, Art.
34(2)(1); Taiwanese Arbitration Act, Art. 38(1); Mexican Commercial Code, Art. 1457(1)(d).
698) See, e.g., European Convention, Art. IX(1)(c); Inter-American Convention, Art. 5(1)(c);
European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(d) (“if
the arbitral tribunal has exceeded its jurisdiction or its powers”); ILC, Draft on Arbitral
Procedure Prepared by the International Law Commission at Its Fourth Session, 1952, U.N.
Doc. A/CN.4/59, Art. 30, II Y.B. I.L.C. 60, 66 (1952) (“The validity of the award may be
challenged by either party on one or more of the following grounds: (a) that the tribunal
has exceeded its powers …”).
699) U.S. FAA, 9 U.S.C. §10(a)(4).
700) See authorities cited §25.04[F], pp. 3288-89. See also§25.03[A][4]; §26.05[C][4][b].
701) UNCITRAL Model Law, Art. 34(2)(a); English Arbitration Act, 1996, §103(2); Swedish
Arbitration Act, §54; Singapore International Arbitration Act, 2012, Art. 31(2)(a); Hong Kong
Arbitration Ordinance, 2013, §81(2)(a).
702) See, e.g., Youngs v. Am. Nutrition, Inc., 537 F.3d 1135 (10th Cir. 2008) (“parties seeking to
vacate the arbitration result, have the burden of sustaining such an attack”); Solvay
Pharm., Inc. v. Duramed Pharm., Inc., 442 F.3d 471, 475-76 (6th Cir. 2006) (burden of
proving arbitrators exceeded their authority is on award-debtor and “is very great”)
(quoting Glennon v. Dean Witter Reynolds, Inc., 83 F.3d 132, 136 (6th Cir. 1996)); D.H. Blair &
Co., Inc. v. Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006) (“A party moving to vacate an
arbitration award has the burden of proof, and the showing required to avoid
confirmation is very high.”).
703) See, e.g., Oxford Health Plans LLC v. Sutter, 133 S.Ct. 2064, 2068 (U.S. S.Ct. 2013) (“A party
seeking relief under [§10(a)(4)] bears a heavy burden.”); NYKcool AB v. Pac. Fruit, Inc.,
2013 WL 163621, at *1, 3 (2d Cir.) (“‘[w]e have … consistently accorded the narrowest of
readings’ to our capacity to vacate an arbitration award on the ground that the
arbitrators lacked the authority to address an issue.”) (quoting Jock v. Sterling Jewelers
Inc., 646 F.3d 113, 122 (2nd Cir. 2011)); Burlington N. & Santa Fe Railway Co. v. Public Serv.
Co. of Okla., 636 F.3d 562, 568-69 (10th Cir. 2010) (rejecting argument that excess of
authority claims are subject to less deferential standard of review than claims of fraud,
corruption, or misconduct; all receive “highly deferential” review); Reliastar Life Ins. Co.
of N.Y. v. EMC Nat’l Life Co., 564 F.3d 81, 85-86 (2d Cir. 2009) (“Section 10(a)(4) of the
Federal Arbitration Act allows courts to vacate an arbitral award ‘where the arbitrators
exceeded their powers.’ … We have, however, ‘consistently accorded the narrowest of
readings’ to this provision of law”) (quoting Banco de Seguros del Estado v. Mut. Marine
Office, Inc., 344 F.3d 255, 262 (2d Cir. 2003); Porzig v. Dresdner, Kleinwort, Benson, N. Am.
LLC, 497 F.3d 133, 139, 140-41 (2d Cir. 2007) (“this Court … uses an extremely deferential
standard of review for arbitral awards”); Solvay Pharm., Inc. v. Duramed Pharm., Inc., 442
F.3d 471, 475-76 (6th Cir. 2006) (“‘courts must accord an arbitrator’s decision substantial
deference because it is the arbitrator’s construction of the agreement, not the court’s
construction, to which the parties have agreed.’”) (quoting Beacon Journal Publ’g Co. v.
Akron Newspaper Guild, 114 F.3d 596, 599 (6th Cir. 1997)); D.H. Blair & Co., Inc. v. Gottdiener,
462 F.3d 95, 110 (2d Cir. 2006) (“A party moving to vacate an arbitration award has the
burden of proof, and the showing required to avoid confirmation is very high.”); Priority
One Servs., Inc. v. W & T Travel Servs., LLC, 825 F.Supp.2d 43, 51 (D.D.C. 2011) (“narrowest of
readings to the excess-of-authority provision of [FAA] section 10(d)”); Gas Natural
Aprovisionamientos, SDG, SA v. Atl. LNG Co. of Trinidad & Tobago, 2008 WL 4344525, at *3
(S.D.N.Y.) (“showing required to avoid confirmation is very high”).
704) Elite Inc. v. Texaco Panama Inc., 777 F.Supp. 289, 292 (S.D.N.Y. 1991).
122
705) Emilio v. Sprint Spectrum LP, 2013 WL 203361, at *1 (2d Cir.) (“A district court may vacate
an arbitral award under §10(a)(4) if ‘the arbitrator[] exceeded [her] powers,’ which may
be evidenced by (1) consideration of issues beyond those submitted by the parties, or
(2) resolution of issues ‘clearly prohibited by law or by the terms of the parties’
agreement’”); Sutter v. Oxford Health Plans, 675 F.3d 215, 219-20 (3d Cir. 2012) (“An
arbitrator oversteps these limits, and subjects his award to judicial vacatur under §10(a)
(4), when he decides an issue not submitted to him, grants relief in a form that cannot be
rationally derived from the parties’ agreement and submissions, or issues an award that
is so completely irrational that it lacks support altogether.”), aff’d, 133 S.Ct. 206 (U.S.
S.Ct. 2013); Synergy Gas Co. v. Sasso, 853 F.2d 59, 63-64 (2d Cir. 1988) (“The scope of
authority of arbitrators generally depends on the intention of the parties to an
arbitration, and is determined by the agreement or submission.”); Allen v. Hounga [2012]
EWCA Civ 609 (English Ct. App.) (tribunal’s consideration of issues not submitted
deprives parties of an opportunity to be heard (“audi alteram partem”)); Holding
Tusculum BV v. Louis Dreyfus SAS, [2008] QCCS 5904 (Québec Super. Ct.) (partially
annulling award where “Tribunal acted ultra petita by granting relief on claims that were
not made by either of the parties”); Judgment of 2 February 2007, Jaral Decoración, SL v.
Peñasco Rodilla, SL, SAP M 1255/2007 (Madrid Audiencia Provincial) (arbitral tribunal
exceeded mandate where interest on sums in arrears were awarded although they had
not been claimed).
706) See, e.g., Stark v. Sandberg, Phoenix & von Gontard, PC, 381 F.3d 793, 800 (8th Cir. 2004);
Banco de Seguros del Estado v. Mut. Marine Office, Inc., 344 F.3d 255 (2d Cir. 2003) (“We
have ‘consistently accorded the narrowest of readings’ to the FAA’s authorization to
vacate awards [for excess of authority] under section 10(4).”); Elox Corp. v. Colt Indus.,
Inc., 952 F.2d 395 (4th Cir. 1991) (narrow interpretation of excess of authority); Fahnestock
& Co. v. Waltman, 935 F.2d 512 (2d Cir. 1991); Mut. Fire, Marine & Inland Ins. Co. v. Norad
Reins. Co., 868 F.2d 52, 57 (3d Cir. 1989); Mobil Oil Indonesia Inc. v. Asamera Oil (Indonesia)
Ltd, 487 F.Supp. 63, 65-67 (S.D.N.Y. 1980); Judgment of 10 March 1988, Crocodile Tourist
Project Co. v. Aubert, 1989 Rev. arb. 269 (Paris Cour d’appel) (rejecting expansive
interpretation of excess of authority); Judgment of 28 June 1984, Corelec v. Satec,
unreported decision (Paris Cour d’appel); Judgment of 19 December 2001, 20 ASA Bull. 493
(Swiss Federal Tribunal) (2002); Judgment of 19 April 1994, Westland Helicopters Ltd v. Arab
British Helicopter Co., DFT 120 II 172 (Swiss Federal Tribunal).
707) See, e.g., Totem Marine Tug & Barge, Inc. v. N. Am. Towing Inc., 607 F.2d 649, 651 (5th Cir.
1979) (award vacated because arbitrators awarded damages not requested); Judgment of
29 June 2011, Overseas Mining Inv. Ltd v. Commercial Caribbean Niquel, 2011 Rev. arb. 678
(French Cour de cassation civ. 1e) (annulling award on ground that tribunal did not give
parties notice of, or invite comments on, new legal basis for awarding damages which
had not been asserted); Judgment of 28 June 1988, Total Chine v. E.M.H., 1989 Rev. arb. 328
(Paris Cour d’appel) (annulling award that granted interest not requested by claimant);
Judgment of 7 January 2011, DFT 4A_440/2010, ¶3.1 (Swiss Federal Tribunal) (“Awards
granting more or something else than that which was claimed (ultra or extra petita) fall
within that provision.”); Judgment of 19 April 1994, Westland Helicopters Ltd v. Arab British
Helicopter Co., DFT 120 II 172, 175 (Swiss Federal Tribunal) (arbitral tribunal decided ultra
petita when it not only rejected request for declaration of nonexistence of debt, but also
ordered payment of debt, which had not been requested); Judgment of 30 April 1992, DFT
4P.273/1991 (Swiss Federal Tribunal) (arbitral tribunal presented with request seeking
invalidation of contract and repayment of amounts paid under contract acted ultra
petita when it rejected requests and awarded damages related to maintaining contract).
708) Judgment of 30 June 2005, Pilliod v. Econosto, 2006 Rev. arb. 687, 688 (Paris Cour d’appel).
709) PMA Capital Inc. Co. v. Platinum Underwriters Bermuda, Ltd, 400 F.Appx. 654 (3d Cir. 2010).
710) See, e.g.,Judgment of 15 February 2010, DFT 4A_464/2009, ¶4.1 (Swiss Federal Tribunal)
(rejecting claim that arbitrators acted ultra petita where tribunal awarded interest
allegedly not claimed by claimant; reasoning that claimant’s request had sought
interest generally: “[A]n arbitral tribunal does not decide beyond the submissions if it
ultimately does not grant more than the total amount claimed, but assesses certain
elements of the claim other than the claimant, or moreover when, being seized of an
action negating a right which it considers unfounded, finds in the award that a disputed
legal relationship exists, rather than rejecting the action.”); Judgment of 19 December
2001, 20 ASA Bull. 493, ¶3(b) (Swiss Federal Tribunal) (2002) (arbitral tribunal has power
to grant relief under request for “such other and further relief as the Arbitral Tribunal
may determine is just and appropriate under the law”); Judgment of 19 April 1994,
Westland Helicopters Ltd v. Arab British Helicopter Co., DFT 120 II 172 (Swiss Federal
Tribunal) (arbitrators do not act ultra petita if award rejects request for declaration of
nonexistence of debt and also declares existence of debt (without ordering payment)).
711) See, e.g., Harper Ins. Ltd v. Century Indem. Co., 819 F.Supp.2d 270, 277 (S.D.N.Y. 2011) (there
is no “per se rule that it is beyond the authority of the arbitrators to issue a remedy
directed to an issue squarely before them unless it was requested by one of the
parties”); EEC Prop. Co. v. Kaplan, 578 N.W.2d 381 (Minn. Ct. App. 1998) (arbitrator did not
exceed powers in ordering mandatory buyout of partners’ interest; arbitrator had “broad
authority and no specific limitation in fashioning a remedy”); Wealands v. CLC
Contractors Ltd [1999] 2 Lloyd’s Rep. 739 (English Ct. App.) (arbitrators have broad
remedial powers similar to those of a court and may order contribution).
123
712) Relatedly, arbitrators must generally provide the parties an opportunity to be heard
with respect to relief that they grant. See§25.04[B][4]. If arbitrators grant relief that
differs from that requested by the parties, the award may be subject to annulment if the
parties were not afforded an opportunity to address the issue.
713) See, e.g., Emilio v. Sprint Spectrum LP, 2013 WL 203361, at *1 (2d Cir.) (“A district court may
vacate an arbitral award under §10(a)(4) if ‘the arbitrator[] exceeded [her] powers,’
which may be evidenced by (1) consideration of issues beyond those submitted by the
parties.”); Sutter v. Oxford Health Plans, 675 F.3d 215, 219-20 (3d Cir. 2012) (“An arbitrator
oversteps these limits, and subjects his award to judicial vacatur under §10(a)(4), when
he decides an issue not submitted to him.”), aff’d, 133 S.Ct. 2064 (U.S. S.Ct. 2013); Cent.
Montana Rail v. BNSF Railway Co., 422 F.Appx. 636, 638 (9th Cir. 2011) (“Award may be
vacated when] arbitrators rule on a matter not submitted to them”; “[t]he arbitrators did
not act outside of their scope of authority, as the award was limited to answering the
questions submitted for arbitration.”); Westerbeke Corp. v. Daihatsu Motor Co., Ltd, 304
F.3d 200, 221 (2d Cir. 2002); In re Fahnestock, 935 F.2d 512, 515 (2d Cir. 1991) (“[W]e have
recognized that if arbitrators ‘rule[] on issues not presented to [them] by the parties,
[they have] exceeded [their] authority and the award must be vacated.’”); Synergy Gas
Co. v. Sasso, 853 F.2d 59, 63-64 (2d Cir. 1988) (“The scope of authority of arbitrators
generally depends on the intention of the parties to an arbitration, and is determined
by the agreement or submission.”); Ergobilt, Inc. v. Neutral Posture Ergonomics, 2002 WL
1489521, at *8 (N.D. Tex.) (arbitrator exceeded authority when awarding damages on
claim not submitted by parties; court vacated portion of award relating to that claim);
Pacol Ltd v. Joint Stock Co. Rossakhar [1999] 2 All ER 778 (Comm) (English High Ct.) (award
set aside where arbitrators ruled on liability when quantum was only issue presented);
Gbangbola v. Smith & Sheriff Ltd [1998] 3 All ER 730, 740 (QB) (English High Ct.) (“A tribunal
does not act fairly and impartially if it does not give a party an opportunity of dealing
with arguments which have not been advanced by either party.”); PT Prima Int’l Dev. v.
Kempinski Hotels SA, [2012] SGCA 35 (Singapore Ct. App.) (arbitral tribunal exceeded
authority by deciding issue not raised in parties’ “pleadings” (although raised in
argument during arbitration)); Judgment of 19 January 1990, Immoplan v. Mercure, 1991
Rev. arb. 125 (Paris Cour d’appel) (annulling award that addressed issues not raised by
parties); Judgment of 30 September 2003, DFT 130 III 35 (Swiss Federal Tribunal) (award
violated debtor’s right to be heard because arbitral tribunal exceeded rule of jura novit
curia by relying on legal reasons which had not been raised in arbitral proceedings and
were unforeseen); Judgment of 6 February 1990, DFT 116 II 80, cons. 3a (Swiss Federal
Tribunal) (rule of ne eat judex ultra petita partium guarantees particular aspect of right
to be heard).
714) AGCO Corp. v. Anglin, 216 F.3d 589, 593 (7th Cir. 2000).
715) See, e.g.,Judgment of 15 February 2010, DFT 4A_464/2009, ¶4.1 (Swiss Federal Tribunal)
(“An arbitral tribunal does not violate the principle of ne eat iudex ultra petita partium if
it attributes a different legal qualification to the request than that which was presented
by the claimant. The principle of jura novit curia, which is applicable to arbitration,
indeed requires arbitrators to apply the law ex officio, without being limited to the
grounds advanced by the parties. They may therefore entertain grievances that have not
been invoked, as this is not dealing with a new claim or a different claim, but only a new
qualification of the facts of the case. The arbitral tribunal is nevertheless bound by the
object and the amount of the submissions, particularly when the claimant qualifies or
limits its claims in the submissions themselves.”); Judgment of 27 October 2008, Urbaser
v. Babcock, SAP M 14661/2008 (Madrid Audiencia Provincial); SDV Transami Ltd v.
Agrimag Ltd, Case No. HCT-00-CC-AB-0002-2006 (Comm) (Uganda High Ct. 2008). See
also§13.04[A][5].
716) A tribunal should not ordinarily decide factual or legal issues sua sponte, without
requesting the parties to address them, in order to avoid “surprise” decisions that deny
the parties an opportunity to be heard. See§25.04[B][4], pp. 3249-53.
717) See, e.g., Downer v. Siegel, 489 F.3d 623, 627 (5th Cir. 2007) (if there is “ambiguity as to
whether an arbitrator is acting within the scope of his authority, that ambiguity must be
resolved in favor of the arbitrator”); Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d 727,
732 (9th Cir. 2006); Major League Umpires Ass’n v. Am. League of Prof’l Baseball Clubs, 357
F.3d 272, 280 (3d Cir. 2004) (“deference that is accorded to an arbitrator’s interpretation
of the collective bargaining agreement should also be accorded to an arbitrator’s
interpretation of the issue submitted”) (quoting Mobil Oil Corp. v. Independent Oil
Workers Union, 679 F.2d 299, 302 (3d Cir. 1982)); Mobil Oil Corp. v. Independent Oil Workers
Union, 679 F.2d 299, 302 (3d Cir. 1982) (“requiring courts to engage in a close examination
of the submissions to arbitrators would put a considerable strain on judicial resources”);
Kurt Orbau Co. v. Angeles Metal Sys., 573 F.2d 739, 740 (2d Cir. 1978); Keystone Printed
Specialties Co. v. Scranton Printing Pressmen & Assistants Union No. 119, 386 F.Supp. 416,
422 (M.D. Pa. 1974); London Underground Ltd v. Citylink Telecomms. Ltd [2007] EWHC 1749
(TCC) (English High Ct.); ABB Attorney Gen. v. Hochtief Airport GmbH [2006] EWHC 388
(Comm) (English High Ct.); Desputeaux v. Éditions Chouette (1987) Inc., [2003] 1 S.C.R. 178
(Canadian S.Ct.); Quintette Coal Ltd v. Nippon Steel Corp., (1990) 47 B.C.L.R.2d 201 (B.C.
S.Ct.).
718) Certain Underwriters at Lloyd’s v. BCS Ins. Co., 239 F.Supp.2d 812, 817 (N.D. Ill. 2003).
124
719) See PT Prima Int’l Dev. v. Kempinski Hotels SA, [2012] SGCA 35 (Singapore Ct. App.)
(arbitral tribunal exceeded authority by deciding issue not raised in parties’ pleadings
(although raised in argument during arbitration)); A v. R, [2009] 3 HKLRD 389, ¶36 (H.K. Ct.
First Inst.) (arbitrator was constrained “by the Danish legal principle of
forhandlingsmaksimen (adversarial procedure) whereby an arbitrator ‘may only rule on
the basis of the allegations and submissions put forward by the parties’”).
720) The Singaporean decision cited in the preceding note was addressed by an amendment
to the SIAC Rules. See 2013 SIAC Rules, Art. 24(n) (“Tribunal shall have the power to …
decide, where appropriate, any issue not expressly or impliedly raised in the
submissions filed under Rule 17 provided such issue has been clearly brought to the
notice of the other party and that other party has been given adequate opportunity to
respond.”).
721) See§24.02.
722) SeeJudgment of 20 December 2001, 1 Sch 13/01 (Oberlandesgericht Stuttgart); Tan Poh
Leng Stanley v. Tang Boon Jek Jeffrey, [2001] 1 SLR 624 (Singapore High Ct.).
723) See§24.03; §24.04; §24.05.
724) See, e.g., English Arbitration Act, 1996, §68(2)(d); Swiss Law on Private International Law,
Art. 190(2)(c); Italian Code of Civil Procedure, Art. 829(4) (“[award] fails to decide one or
more items in the submission to arbitration or contains contradictory provisions”);
Judgment of 16 May 2011, DFT 4A_46/2011 (Swiss Federal Tribunal) (annulling award
because arbitral tribunal did not decide respondent’s defense that claim was time-
barred; holding that award did not implicitly decide issue). See also§13.04[E]; §23.02.
725) European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(e).
726) Judgment of 27 May 2010, M. Cohen v. Société Total Outremer SA, Case No. 09/08191 (Paris
Cour d’appel). The decision rejects older French commentary, which reasoned that
awards could be annulled on infra petita grounds under French law because,
“[i]ndependently of any issue of jurisdiction, the arbitrators may also be held to have
ruled petita on the grounds that they failed to reach a decision on any one of the parties’
claims, whether by omission or by deliberate refusal to do so.” E. Gaillard & J. Savage
(eds.), Fouchard Gaillard Goldman on International Commercial Arbitration ¶¶1629-30
(1999).
727) See, e.g., Judgment of 10 December 2012, DFT 4A_635/2012 (Swiss Federal Tribunal) (no
infra petita where arbitral tribunal does not award interest and rejects “all other claims,”
without specifically rejecting claim for interest).
728) See§§25.04[B][5]-[6]; §25.04[C][6]; §25.04[D][6]; §25.04[E][3]; §25.04[F][4]; Petrochem.
Indus. Co. v. Down Chem. Co. [2012] EWHC 2739 (Comm) (English High Ct.) (in order to cause
substantial injustice under §68(2)(d), warranting annulment on infra petita grounds,
tribunal must “entirely ignore[] the [issue]”); Judgment of 26 May 2010, DFT 4A_433/2009,
¶2.4.2 (Swiss Federal Tribunal) (partially annulling award where arbitral tribunal
apparently failed to consider factual claims by award-debtor regarding non-payment of
portion of price: “[T]he Arbitral Tribunal did not abide by its minimum duty to examine
the pertinent problems when it did not take into consideration the Appellant’s
allegations as to the withholding the Respondent made, an important item in the
framework of assessing damages. By doing so, the Arbitral Tribunal violated the
Appellant’s right to be heard.”).
Some national courts have rejected claims of infra petita based on fairly formulaic
recitations that the arbitrators have considered and rejected all of the parties’
arguments. See, e.g., Judgment of 5 March 2010, DFT 4A_524/2009, ¶3.1 (Swiss Federal
Tribunal) (award which rejects “any other or further submissions” implicitly rejects all
arguments, including those which it does not specifically address, and therefore does
not constitute award infra petita). This analysis is unobjectionable when applied to
subsidiary or incidental arguments, but raises concerns in the context of significant
claims or defenses.
729) See, e.g., Raymond James Fin. Servs. v. Bishop, 596 F.3d 183, 193 (4th Cir. 2010) (“by
rendering an award whose underlying legal basis exceed the bounds of [arbitrable
disputes under applicable institutional rules,] the tribunal ‘exceeded [its] powers’ under
§10(a)(4)”); Geneva Sec., Inc. v. Johnson, 138 F.3d 688, 692 (7th Cir. 1998) (arbitrators
exceeded scope of authority issuing an award that relied upon matters not subject to
arbitration); Katz v. Feinberg, 167 F.Supp.2d 556 (S.D.N.Y. 2001) (vacating award for excess
of jurisdiction where arbitral tribunal redetermined valuation by appraiser,
notwithstanding contractual provision that valuation would not be subject to
arbitration); Melun Indus., Inc. v. Strange, 898 F.Supp. 990, 993 (S.D.N.Y. 1990); Judgment of
3 October 2000, Nejapa Power Co. v. CEL, 19 ASA Bull. 796 (Swiss Federal Tribunal);
Quintette Coal Ltd v. Nippon Steel Corp., [1990] B.C.J. No. 2241 (B.C. Ct. App.); Holding
Tusculum BV v. Louis Dreyfus SAS, [2008] QCCS 5904 (Québec Super. Ct.); PT Perusahaan
Gas Negara (Persero) TBK v. CRW Joint Operation, [2010] SGHC 202 (Singapore High Ct.),
aff’d, [2011] SGCA 3 (Singapore Ct. App.).
730) See, e.g., Stolt-Nielsen SA v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 (U.S. S.Ct. 2010);
Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009) (arbitrator’s
injunction purporting to bind nonparties exceeded authority); Judgment of 9 December
1997, 1998 Rev. arb. 409 (French Cour de cassation civ. 2e); Judgment of 6 April 1995, 1995
Rev. arb. 466 (Paris Cour d’appel) (arbitrator’s duty is to decide within limits set by
parties, including terms of reference and submissions).
125
731) E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International Commercial
Arbitration ¶1631 (1999).
732) Japanese Arbitration Law, Art. 44(1)(v).
733) See also§7.02[A][1]; §§7.03[A][4]-[5]; §§26.05[C][4][c][i]-[ii].
734) The same argument is (properly) rejected in the context of recognition of awards under
Article V(1)(c) of the New York Convention. See§26.05[C][4][c][ii].
735) See, e.g., UNCITRAL, 2012 Digest of Case Law on the Model Law on International
Commercial Arbitration 151-52 (2012) (“In general, courts have adopted a broad
interpretation of the mandate of the arbitral tribunal.”); Judgment of 11 September 2006,
2007 BH 193 (Hungarian S.Ct.).
736) Desputeaux v. Éditions Chouette (1987) Inc., [2003] 1 S.C.R. 178 (Canadian S.Ct.). See also
Necarctic Nickel Mines Inc. v. Canadian Royalties Inc., [2012] QCCA 385, ¶55 (Québec Ct.
App.) (“scope of arbitration agreements must be interpreted liberally and the
arbitrator’s mandate should include all matter connected to the agreement or the
questions in dispute”).
737) See, e.g., Judgment of 7 February 2011, DFT 4A_482/2010, ¶4.3.1 (Swiss Federal Tribunal)
(denying annulment of award on grounds that tribunal allegedly decided matters
outside scope of arbitration agreement, because issues supposedly arose under
different contract, not subject to arbitration clause: “an arbitral tribunal is authorized to
decide preliminary issues that are not within the scope of the arbitration clause and … it
may clarify points on a preliminary basis that were not eligible for arbitration as such”).
738) See, e.g., DK Joint Venture 1 v. Weyand, 649 F.3d 310, 315 (5th Cir. 2011) (arbitrator
exceeded authority in rendering award against defendants individually since “by signing
the contract as an agent … [they] did not become personally bound by the terms of that
contract, including the arbitration clause”); Comedy Club, Inc. v. Improv W. Assocs., 553
F.3d 1277, 1288 (9th Cir. 2009) (partially vacating award; arbitrator acted beyond scope of
his authority by attempting to bind nonparties); Porzig v. Dresdner, Kleinwort, Benson, N.
Am. LLC, 497 F.3d 133, 139, 140-41 (2d Cir. 2007) (“Porzig’s attorney was not before the
arbitration panel in any manner other than as Porzig’s counsel; Porzig was not before the
Panel with respect to his relationship with his attorney; and neither Porzig nor Attorney
O’Donnell had agreed to arbitrate a dispute, if in fact there was one, over their fee
contract. The Panel here was plainly without jurisdiction to order Porzig’s lawyer to pay
back to his client the specified contingency fee.”).
739) See, e.g., Dow Corning Corp. v. Safety Nat’l Cas. Corp., 205 F.3d 1345 (8th Cir. 2003)
(vacating award under §10(a)(4) where arbitral tribunal issued binding award, but court
concluded that agreement provided for non-binding arbitration).
740) See§2.02[C][1][b][iv].
741) United Mexican States v. Cargill, Inc., [2011] ONCA 622, ¶33 (Ontario Ct. App.) (“Accepting
that courts should interfere only sparingly or in extraordinary cases, the court must have
some basis to test whether the panel acted beyond its jurisdiction. … Normally, where
the issue is one of pure jurisdiction, the correctness standard would apply, implying
possible consideration of, but no deference to, the decision of the tribunal under
review.”).
742) See, e.g.,Judgment of 18 November 2010, Gouvernement de la région de Kaliningrad v.
République de Lituanie, XXXVI Y.B. Comm. Arb. 270, ¶5 (Paris Cour d’appel) (2011) (“The
annulment court reviews the arbitral tribunal’s decision on its own jurisdiction, both
where the tribunal found that it had jurisdiction and where it found that it lacked it, by
examining all the factual and legal elements for ascertaining the scope of the
arbitration agreement and its consequences on the arbitrators’ mandate.”); Judgment of
29 October 2008, 27 ASA Bull. 309, ¶3.1 (Swiss Federal Tribunal) (2009) (“When seized with
a request regarding an arbitral tribunal’s competence [in the present case about the
scope of the arbitration agreement], the Federal Tribunal freely examines questions of
law, including preliminary questions, which determine whether the arbitral tribunal was
competent or not.”). See also Coady v. Ashcraft & Gerel, 223 F.3d 1, 8-9 (1st Cir. 2000) (“As
stated in First Options, ‘[c]ourts should not assume that the parties agreed to arbitrate
arbitrability unless there is “clea[r] and unmistakabl[e]” evidence that they did so.’ The
limited arbitration clause in Coady’s employment agreement contains no such ‘clear
and unmistakable’ language; there is in fact no evidence that the parties agreed to
submit the question of arbitrability to arbitration. Thus, the arbitrators’ views about
what is arbitrable are not given the usual leeway courts give to arbitrators.”).
743) 25.04[A][6][c]; Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d 727, 733 (9th Cir. 2006)
(“arbitrator’s interpretation of the scope of his powers is entitled to the same level of
deference as his determination on the merits”); Foulger-Pratt Residential Contracting,
LLC v. Madrigal Condominiums, LLC, 779 F.Supp.2d 100, 118 (D.D.C. 2011) (rejecting
challenge to arbitrators’ determination of scope of arbitration clause on grounds that
parties submitted issue to arbitrators: “Since the question of arbitrability was properly
before the Panel for resolution, this Court may not disturb the Panel’s jurisdictional
decision on the merits.”).
744) Burlington N. & Santa Fe Railway Co. v. Public Serv. Co. of Okla., 636 F.3d 562, 568 (10th
Cir. 2010).
126
745) See, e.g., Rain CII Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 472 (5th Cir. 2012) (“‘A
reviewing court examining whether arbitrators exceeded their powers must resolve all
doubts in favor of arbitration.’”) (quoting Brook v. Peak Int’l, Ltd., 294 F.3d 668, 672 (5th
Cir. 2002)); Merrill Lynch, Pierce, Fenner & Smith Inc. v. Schwarzwaelder, 2012 WL 3264361,
at *4 (3d Cir.) (“Although we will not ‘“rubber stamp” the interpretations and decisions of
arbitrators,’ … we nevertheless afford arbitration awards ‘a strong presumption of
correctness.’”) (quoting Major League Umpires Ass’n v. Am. League of Prof’l Baseball Clubs,
357 F.3d 272, 280 (3d Cir. 2004)); Morgan Keegan & Co., Inc. v. Garrett, 2012 WL 5209985, at
*4-5 (5th Cir.) (“in deciding whether the arbitrator exceeded his jurisdiction, ‘any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration’”)
(quoting Kergosien v. Ocean Energy, Inc., 390 F.3d 346, 355 (5th Cir. 2004)); HCC Aviation
Ins. Group, Inc. v. Employers Reins. Corp., 243 F.Appx. 838, 842 (5th Cir. 2007) (“‘[i]n
deciding whether the arbitra[l] [tribunal] exceeded its authority, we resolve all doubts
in favor of arbitration.’ Because, at the very least, there are significant doubts about
whether either the West Virginia court’s orders or the parties’ pre-arbitration
correspondence placed the issue of Universal’s coverage under Article 13 outside the
arbitrators’ realm, the district court should have resolved these doubts in favor of
arbitrability and confirmed the arbitration award.”) (quoting Executone Info. Sys., 26 F.3d
at 1320); Sea Shipping, Inc. v. Half Moon Shipping, LLC, 848 F.Supp.2d 448, 455 (S.D.N.Y.
2012) (review must be “highly deferential to the arbitrators”); Int’l Trading & Indus. Inv.
Co. v. DynCorp Aerospace Tech., 763 F.Supp.2d 12, 20 (D.D.C. 2011) (“careful scrutiny of an
arbitrator’s decision” would frustrate purposes of arbitration); F. Hoffman-La Roche Ltd
v. Qiagen Gaithersburg, Inc., 730 F.Supp.2d 318, 325-26 (S.D.N.Y. 2010). Compare Solvay
Pharm., Inc. v. Duramed Pharm., Inc., 442 F.3d 471, 475-76 (6th Cir. 2006) (“Upon
concluding that the matter does concern ‘arbitrability,’ a court should show less
deference to the arbitration panel’s determination of its own ‘jurisdiction.’”).
746) See, e.g., Judgment of 2 May 2012, Repub. of Ecuador v. Chevron Corp. (U.S.A.), Case Nos. 11-
402 and 11-2813 (Hague Rechtbank) (annulment court will consider arbitrators’ decision
on existence and validity of arbitration agreement de novo, but will defer to arbitrators’
decision on scope of arbitration agreement; rejecting application to annul BIT award);
Downer v. Siegel, 489 F.3d 623, 627 (5th Cir. 2007) (if there is “ambiguity as to whether an
arbitrator is acting within the scope of his authority, that ambiguity must be resolved in
favor of the arbitrator”); Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d 727, 733 (9th Cir.
2006) (“arbitrator’s interpretation of the scope of his powers is entitled to the same level
of deference as his determination on the merits”); Major League Umpires Ass’n, 357 F.3d
at 280 (“deference that is accorded to an arbitrator’s interpretation of the collective
bargaining agreement should also be accorded to an arbitrator’s interpretation of the
issue submitted”).
747) Nationwide Mut. Ins. Co. v. Home Ins. Co., 429 F.3d 640, 643-44, 650 (6th Cir. 2005).
748) Downer v. Siegel, 489 F.3d 623, 626-27 (5th Cir. 2007).
749) Quintette Coal Ltd v. Nippon Steel Corp., [1990] B.C.J. No. 2241 (B.C. Ct. App.).
750) SeeChapter 7 (especially §7.02).
751) See§25.05[A][1].
752) B v. A [2010] EWHC 1626 (QB) (English High Ct.). Compare Pearlman v. Keepers & Governors
of Harrow Sch. [1978] 3 WLR 736, 743 (English Ct. App.) (“The distinction between an error
which entails absence of jurisdiction and an error made within jurisdiction is [so] fine …
that it is rapidly being eroded.”).
753) AmerixCorp. v. Jones, 457 F.Appx. 287, 291 (4th Cir. 2011).
754) Oxford Health Plans LLC v. Sutter, 133 S.Ct. 2064, 2071 (U.S. S.Ct. 2013). See also id. at 2068
(“sole question for us is whether the arbitrator (even arguably) interpreted the parties’
contract, not whether he got its meaning right or wrong”).
755) See, e.g., Johnson Controls, Inc. v. Edman Controls, Inc., 2013 WL 1098411, at *4 (7th Cir.)
(“We will not overturn an award because an arbitrator ‘committed serious error,’ or the
decision is ‘incorrect or even whacky.’”) (quoting Int’l Bhd of Elec. Workers v. Exelon Corp.,
495 F.3d 779, 782-83 (7th Cir. 2007)); DiRussa v. Dean Witter Reynolds Inc., 121 F.3d 818, 824
(2d Cir. 1997) (“[A court’s] inquiry under §10(a)(4) thus focuses on whether the arbitrators
had the power, based on the parties’ submissions or the arbitration agreement, to reach
a certain issue, not whether the arbitrators correctly decided that issue.”); St. Luke’s
Hosp. v. SMS Computer Sys., Inc., 995 F.2d 1067 (6th Cir. 1993); Anderman/Smith Operating
Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215, 1219 (5th Cir. 1990); Conseco Life Ins. Co. v. Am.
Worldwide Ins., Inc., 2005 U.S. Dist. LEXIS 19357, at *4 (S.D. Ind.); Lucile Packard Children’s
Hosp. v. U.S. Nursing Corp., 2002 WL 1162390, at *4-5 (N.D. Cal.); Bandwidth Shipping Corp.
v. Intaari [2007] EWCA Civ 998 (English Ct. App.); Judgment of 10 March 1988, Crocodile
Tourist Project Co. v. Aubert, 1989 Rev. arb. 269 (Paris Cour d’appel) (arbitrator did not
exceed his authority); Gov’t of India v. Cairn Energy India Pty Ltd, Rayuan Sivil No. 02(f)–7–
2010(W), ¶52 (Malaysian S.Ct.) (“From the reading of [the contract], no doubt it could be
given two interpretations – one in favour of the Appellant and one in favour of the
Respondents. For that very reason, the matter was sent for arbitration. The fact that the
learned Majority Arbitrators took one approach in interpretation … over the other
cannot be a ground for challenge”).
127
756) See, e.g., Canadian Royalties Inc. v. Nearctic Nickel Mines Inc., [2012] QCCA 385, ¶96
(Québec Ct. App.) (“The Arbitrator’s final conclusions may seem surprising and even
legally questionable. Another tribunal may have come to a different result. It must be
said, however, that the Arbitrator did not overstep his discretion, but merely
endeavoured to determine the scope of the agreement when faced with contradictory
evidence.”); CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK, [2011] SGCA 3
(Singapore Ct. App.); Judgment of 5 May 2009, Case No. 112/124 (Cairo Ct. App.); Chevron
Kenya Ltd & Chevron Uganda Ltd v. Daqare Transporters Ltd, Misc. Application No.
490/2008 (Comm) (Uganda High Ct. 2009); SDV. Transami Ltd v. Agrimag Ltd, Case No.
HCT-00-CC-AB-0002-2006 (Comm) (Uganda High Ct. 2008); Simbymanyo Estates Ltd v.
Seyani Bros. Co. (U) Ltd, Misc. Application No. 555/2002 (Comm) (Uganda High Ct. 2004).
See also Williams, Arbitration and Dispute Resolution, 2006 N.Z. L. Rev. 303, 306 (2006)
(“An important distinction is to be made between an arbitrator’s mistake and an excess
of authority.”).
757) Stolt-Nielsen SA v. AnimalFeeds Int’l Corp., 130 S.Ct. 1758, 1767-68 (U.S. S.Ct. 2010).
758) See, e.g., PMA Capital Ins. Co. v. Platinum Underwriters Bermuda, Ltd, 2010 WL 4409655 (3d
Cir.) (vacating award on grounds that arbitrators wholly deleted provision from contract
and thereby exceeded their authority; rejecting argument that “honourable
engagement” clause in reinsurance policy permitted tribunal to ignore policy); Gibson
Guitar Corp. v. MEC Imp. Handelsgesellschaft GmbH, 1999 WL 1073651, at *3 (6th Cir.) (court
“must defer to the arbitrator’s interpretation of the contract unless the evidence
presented reveals that the arbitrator’s decision is in clear contradiction of the express
terms of the contract”); Madison Hotel v. Hotel & Rest. Employees, Local 25, 144 F.3d 855,
859 (D.C. Cir. 1998) (“if an arbitrator was arguably construing or applying the contract, a
court must defer to the arbitrator’s judgment”); E.I. DuPont de Nemours & Co. v. Local
900, 968 F.2d 456, 459 (5th Cir. 1992) (vacating award on grounds that arbitrator exceeded
authority by ordering relief after finding no liability); Inter-City Gas Corp. v. Boise
Cascade Corp., 845 F.2d 184, 187-88 (8th Cir. 1988) (partially setting aside award because
arbitrator ignored unambiguous contract provision); Stifel, Nicolaus & Co. v. Francis, 872
S.W.2d 484, 485 (Mo. App. 1994) (award vacated as excess of authority because it was
“contrary to the agreed-upon-law”).
759) See§25.05[A][1][a]; Wood v. Penntex Res. LP, 2008 U.S. Dist. LEXIS 50071 (S.D. Tex.) (refusing
to vacate award on grounds that arbitrators did not comply with parties’ agreement to
apply law correctly); Raymond Prof’l Group, Inc. v. William A. Pope Co., 397 B.R. 414, 431
(Bankr. N.D. Ill. 2008) (same).
760) See, e.g., Judgment of 19 October 1998, Case No. 2/98 (Oman Ct. First Inst.) (annulling
award because arbitrator did not apply parties’ contract).
761) See§§25.05[A][2]-[3].
763) Oxford Health Plans, 133 S.Ct. at 2068 (“A party seeking relief under that provision bears
a heavy burden”; “[u]nder the FAA, courts may vacate an arbitrator’s decision ‘only in
very unusual circumstances.’”) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U. S.
938, 942 (U.S. S.Ct. 1995)).
764) Oxford Health Plans, 133 S.Ct. at 2070.
765) Oxford Health Plans, 133 S.Ct. at 2070. The Oxford Health Court also reasoned: “We
overturned the arbitral decision there [in Stolt-Nielsen] because it lacked any
contractual basis for ordering class procedures, not because it lacked … a ‘sufficient’
one. The parties in Stolt-Nielsen had entered into an unusual stipulation that they had
never reached an agreement on class arbitration.” Id. at 2069.
768) See§25.04[F][3][f].
769) See§25.04[F][3][f].
770) See, e.g., Judgment of 29 October 1982, Raoul Duval v. Gen. Cocoa, Case No. I 12239 (Paris
Cour d’appel), described in E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on
International Commercial Arbitration ¶1635 (1999); Judgment of 28 February 1980,
Compagnie Financière Mocupie v. Inveko France, 1980 Rev. arb. 538 (Paris Cour d’appel).
See also Certain Underwriters at Lloyd’s v. BCS Ins. Co., 239 F.Supp.2d 812 (N.D. Ill. 2003)
(rejecting vacatur application on grounds that, even if tribunal made “equitable
decision” this was authorized by parties’ agreement that tribunal apply “business
fairness”).
771) See§19.07; §25.05[A][3].
772) See, e.g.,Judgment of 5 November 2009, Riverstone Ins. Ltd v. Brouard & Daude-Brouard,
2009 Rev. arb. 927 (Paris Cour d’appel) (partially annulling award where tribunal decided
claims amiable compositeur under multiple contracts, all but one of which provided
tribunal with amiable compositeur authority; annulling award under contract that did
not provide amiable compositeur authority); Judgment of 17 December 2009, Gothaer
Finanzholding AG v. Liquidators of ICD, 25(3) Mealey’s Int’l Arb. Rep. 26-27 (2010) (Paris
Cour d’appel) (same); Holding Tusculum BV v. Louis Dreyfus SAS, [2008] QCCS 5904
(Québec Super. Ct.) (award partially annulled where tribunal decided claims amiable
compositeur).
773) See Judgment of 22 June 2005, 34 Sch 10/05 (Oberlandesgericht München); Judgment of 8
January 2002, Case No. 72/117 (Cairo Ct. App.).
128
774) See, e.g., Abu Dhabi Inv. Auth. v. Citigroup, Inc., No. 13-1068-cv (2d Cir. Feb. 19, 2014); ATSA
of Cal., Inc. v. Cont’l Ins. Co., 754 F.2d 1394, 1396 (9th Cir. 1985) (rejecting challenge to
award on basis that arbitrator applied wrong substantive law; arbitrator had authority
to determine applicable law); JW Burress, Inc. v. John Deere Constr. & Forestry Co., 2007
WL 3023975 (W.D. Va.) (choice of substantive law is for arbitrators to decide); Chloe Z
Fishing Co. v. Odyssey Re (London) Ltd, 109 F.Supp.2d 1236, 1253 (S.D. Cal. 2000); Zurich Ins.
Co. v. Ennia Gen. Ins. Co., 882 F.Supp. 1438, 1440 (S.D.N.Y. 1995) (“The issue of the law to be
applied in the arbitration proceeding – including the question whether the choice of law
clause in the Management Agreement applies – is for the arbitration panel.”); Buques
Centroamericanos, SA v. Refinadora Costarricense de Petroleos SA, 1989 U.S. Dist. LEXIS
5429 (S.D.N.Y.) (refusing to overturn arbitrator’s conclusion that New York law governed
parties’ agreement).
A few arbitration statutes provide expressly for annulment of awards where an incorrect
substantive law is applied. See, e.g., Egyptian Arbitration Law, Art. 53(1) (“An arbitration
award may be annulled only: … (d) If the arbitral award failed to apply the law agreed
upon by the parties to govern the subject matter in dispute”); Jordanian Arbitration Law,
Art. 49(a) (“An action for the nullity of the arbitral award shall not be admitted except in
any of the following cases: … (4) If the arbitral tribunal excluded the application of the
law agreed upon by the parties to govern the subject-matter of the dispute.”). These
provisions are idiosyncratic and do not reflect the approach of most states.
775) See§25.04[F][3][e]; §25.05[A][2].
776) See§19.08; B v. A [2010] EWHC 1626 (QB) (English High Ct.) (failure to apply law chosen by
parties is not grounds for annulment); Judgment of 10 March 1988, Crocodile Tourist
Project Co. v. Aubert, 1989 Rev. arb. 269 (Paris Cour d’appel); Judgment of 16 December
2009, DFT 4A_240/2009 (Swiss Federal Tribunal) (suggesting that arbitral tribunal’s
disregard of clear choice of law clause would not be excess of jurisdiction under Article
190(2)(b) of Swiss Law on Private International Law; apparently leaving open possibility
that such disregard would be violation of public policy); Judgment of 14 November 1990,
DFT 116 II 634 (Swiss Federal Tribunal) (decision ex aequo et bono and not based on law
chosen by parties does not violate public policy, at least where result does not differ
fundamentally from that which would have been reached under chosen law); Judgment
of 26 September 1985, 1986 NJW 1436 (German Bundesgerichtshof).
777) See§19.08; §25.05[A]; James Ford Inc. v. Ford Dealer Computer Serv. Inc., 56 F.Appx. 324,
325 (9th Cir. 2003); Nat’l Wrecking Co. v. Int’l Bhd of Teamsters, Local 731, 990 F.2d 957, 960
(7th Cir. 1993); B v. A [2010] EWHC 1626, ¶25 (QB) (English High Ct.) (failure to apply law
chosen by parties is not grounds for annulment: “for a challenge [to an award alleging
that the tribunal exceeded its jurisdiction by ignoring the applicable law] to have any
prospect of success, a conscious disregard of the provisions of the chosen law is a
necessary but not a sufficient requirement”); Judgment of 11 January 1978, IV Y.B. Comm.
Arb. 262 (Landgericht Zweibrücken) (1979) (refusing to annul award on public policy
grounds where arbitral tribunal allegedly erred in choice-of-law analysis).
778) Alexander v. Blue Cross of Cal., 106 Cal.Rptr.2d 431, 438 (Cal. Ct. App. 2001).
779) See Halim v. Great Gatsby’s Auction Gallery, Inc., 516 F.3d 557, 563-64 (7th Cir. 2008)
(“Ignoring a choice of law provision in an arbitration agreement exceeds the arbitrator’s
power since the arbitrator’s power is borne from that arbitration agreement.”); Edstrom
Indus., Inc. v. Companion Life Ins. Co., 516 F.3d 546, 552 (7th Cir. 2008) (“precisely because
arbitration is a creature of contract, the arbitrator cannot disregard the lawful
directions the parties have given them; if they tell him to apply Wisconsin law, he cannot
apply New York law”); Stawski Distrib. Co. v. Browary Zywiec SA, 126 F.Appx. 308, 309 (7th
Cir. 2005) (“Had the arbitrators disdained Illinois law [selected by the parties’ choice-of-
law clause], that might call for judicial relief because they would to that extent have
failed to implement the parties’ agreement.”).
These decisions were subsequently (and correctly) disavowed by the same court that
issued them. Affymax v. Ortho-McNeil-Janssen Pharm., Inc., 660 F.3d 281 (7th Cir. 2011).
Compare Brunswick Bowling & Billiards Corp. v. Shanghai Zhonglu Indus. Co. Ltd, [2009]
HKCFI 94, ¶111 (H.K. Ct. First Inst.); Judgment of 8 June 2001, 11 Sch 01/01 (Hanseatisches
Oberlandesgericht Hamburg); Judgment of 15 December 1999, 4 Z Sch 23/99 (Bayerisches
Oberstes Landesgericht); Judgment of 5 May 2009, Case No. 112/124 (Cairo Ct. App.)
(emphasizing importance of distinguishing between “non-application of the applicable
law by the arbitrator, which is considered a non-respect of the parties’ will, and the
faults resulting from such application”; tribunal “deduced the solutions it reached from
(the agreed-upon) Egyptian legal sources and not from other foreign sources”).
780) See§23.07[A]. This was apparently also true historically in many jurisdictions. See Mann,
The Formalization of Informal Law: Arbitration Before the American Revolution, 59 N.Y.U. L.
Rev. 443, 465 (1984) (arbitrators could “offer remedies that judgments at law could not”).
129
781) See, e.g., Todd Shipyards Corp. v. Cunard Line Ltd, 943 F.2d 1056, 1064 (9th Cir. 1991)
(“[f]ederal law takes an expansive view of arbitrator authority to decide disputes and
fashion remedies”); Vertical UK LLP v. Dundee Ltd, 2011 WL 2419859, at *3 (S.D.N.Y.)
(denying vacatur where arbitrators “arguably” interpreted and applied parties’ contract
to decide an issue submitted to them in “a declaratory rather than an affirmative
posture”); Schoenduve Corp. v. Lucent Techs., Inc., 442 F.3d 727, 733 (9th Cir. 2006)
(“arbitrator did not exceed his authority by awarding [claimant] damages based on
quasi-contract or estoppel”); Stark v. Sandberg, Phoenix & von Gontard, PC, 381 F.3d 793,
800 (8th Cir. 2004) (“arbitrator did not exceed his authority in awarding punitive
damages”); Dole Ocean Liner Express v. Georgia Vegetable Co., 84 F.3d 772 (5th Cir. 1996)
(tribunal did not exceed its authority by finding liquidated damages provision
unenforceable as contrary to public policy); Judgment of 17 December 2009, Czech Repub.
v. Nreka, 2010 Rev. arb. 178 (Paris Cour d’appel) (refusing to annul award that ordered
Czech Republic to cease legal actions against non-party to arbitration; award protected
rights of party to arbitration).
782) See§17.02[B]; CE Int’l Res. Holdings, LLC v. SA Minerals Ltd P’ship, 2013 WL 2661037, at *2
(S.D.N.Y.) (court confirmed and enforced interim relief, ordering party to post security
and freezing assets); First Option Mortg., LLC v. S & S Fin. Mortg. Corp., 743 S.E.2d 574 (Ga.
Ct. App. 2013) (arbitrators have authority to issue interim relief and awards); Pukuafu
Indad v. Newmont Indonesia Ltd, [2012] SGHC 187 (Singapore High Ct.) (recognizing
arbitrators’ power to issue interim relief).
783) See§23.07[C]; Totes Isotoner Corp. v. Int’l Chem. Workers Union Council, 532 F.3d 405, 410
(6th Cir. 2008) (“Courts have long recognized that arbitrators have the legitimate
authority to grant quasi-injunctive relief in the form of cease and desist orders”);
Eyewonder, Inc. v. Abraham, 2010 WL 3528882 (S.D.N.Y.) (arbitrator’s award of injunctive
relief was not excess of authority; parties’ agreement authorized such relief); R. Merkin &
L. Flannery, Arbitration Act 1996 121-22 (4th ed. 2008) (English Arbitration Act confers
power on arbitrators to grant injunctive relief).
784) See§23.01[B]; ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l Life Co., 564 F.3d 81, 86 (2d Cir.
2009) (broadly worded arbitration agreement, with no limiting language, “confers
inherent authority on arbitrators to sanction a party that participates in the arbitration
in bad faith”); AmeriCredit Fin. Servs., Inc. v. Oxford Mgt Servs., 627 F.Supp.2d 85, 96
(E.D.N.Y. 2008) (arbitrator had authority to dismiss claims as sanction for destruction of
evidence); Seagate Tech. v. W. Digital Corp., 2013 WL 3779231, at *7 (Minn. Ct. App.)
(arbitrators have inherent authority to impose sanctions).
785) See, e.g., ReliaStar Life Ins. Co. of N.Y. v. EMC Nat’l Life Co., 564 F.3d 81, 86 (2d Cir. 2009);
Marshall & Co., Inc. v. Duke, 114 F.3d 188, 190 (11th Cir. 1997); Todd Shipyards Corp. v.
Cunard Line, Ltd, 943 F.2d 1056, 1064 (9th Cir. 1991); Gen. Sec. Nat’l Ins. Co. v. Aequicap
Program Adm’rs, 785 F.Supp.2d 411 (S.D.N.Y. 2011); Capgemini v. Sorensen, 2005 WL
1560482, at *7-8 (S.D.N.Y.) (arbitral tribunal did not exceed authority by awarding
monetary damages, because this was incidental to central issue in arbitration); Dongwoo
Mann+Hummel Co. Ltd v. Mann & Hummel GmbH, [2008] 3 SLR 871 (Singapore High Ct.)
(arbitrators may draw negative inferences as sanction when party refuses to comply with
discovery orders). See§15.09[A]; §15.10; §23.08[A][4].
786) See Judgment of 2 February 2007, Jaral Decoración, SL v. Peñasco Rodilla, SL, SAP M
1255/2007 (Madrid Audiencia Provincial).
787) See Emilio v. Sprint Spectrum LP, 2013 WL 203361, at *1 (2d Cir.) (“A district court may
vacate an arbitral award under §10(a)(4) if ‘the arbitrator[] exceeded [her] powers,’
which may be evidenced by … resolution of issues ‘clearly prohibited by law or by the
terms of the parties’ agreement’”); Sutter v. Oxford Health Plans, 675 F.3d 215, 219-20 (3d
Cir. 2012) (“An arbitrator oversteps these limits, and subjects his award to judicial
vacatur under §10(a)(4), when he … grants relief in a form that cannot be rationally
derived from the parties’ agreement”), aff’d, 133 S.Ct. 2064 (U.S. S.Ct. 2013); Rain CII
Carbon, LLC v. ConocoPhillips Co., 674 F.3d 469, 472 (5th Cir. 2012) (“‘If the contract creates
a plain limitation on the authority of an arbitrator, we will vacate an award that ignores
the limitation.’”) (quoting Apache Bohai Corp. v. Texaco China BV, 480 F.3d 397, 401 (5th
Cir. 2007)).
788) See Apache Bohai Corp. v. Texaco China BV, 480 F.3d 397 (5th Cir. 2007) (rejecting
argument that arbitrator’s refusal to give effect to limitation on consequential damages
was excess of authority under §10(a)(4)); EST, LLC v. Smith, 2011 U.S. Dist. LEXIS 56824, at
*16-17 (W.D.N.C.) (same as to liquidated damages provision: arbitrator “does not exceed
his powers by invalidating a liquidated damages provision in the arbitration agreement
under applicable state law”); Saturn Telecomms. Servs. v. Covad Commc’ns Co., 560
F.Supp.2d 1278, 1286 (S.D. Fla. 2008) (same as to prohibition on award of lost profits).
789) See Restatement (Third) U.S. Law of International Commercial Arbitration §4-14, comment
c (Tentative Draft No. 2 2012) (“As a default interpretation of such contractual provisions
[i.e., limitations on tribunal’s authority], the Restatement presumes that such a provision
is a contractual limitation on remedies but not a specific restriction on the tribunal’s
authority. This presumption can be rebutted.”).
790) See§§25.04[C]-[D].
130
791) This is the case under the FAA in the United States. See, e.g., Lagstein v. Certain
Underwriters at Lloyd’s, London, 607 F.3d 634, 643 (9th Cir. 2010) (“Section 10 of the FAA
permits vacatur ‘where the arbitrators exceeded their powers.’ 9 U.S.C. §10(a)(4). A party
has ‘a right to arbitration according to the terms for which it contracted,’ and arbitrators
exceed their powers for purposes of §10(a)(4) when they ‘act outside the scope of the
parties’ contractual agreement’”); Rain Cil Carbon LLC v. ConocoPhillips Co., 2011 U.S. Dist.
LEXIS 68994, at *15 (E.D. La.) (“[I]t is clear that the provisions of the Agreement required
the arbitrator to render a reasoned award, and if he failed to do so he thus exceeded his
power and therefore vacatur is proper.”).
In principle, an excess of authority should be limited to instances where an arbitral
tribunal exceeds the substantive scope of the arbitration agreement (or parties’
submissions in the arbitration), and not be extended to procedural irregularities (or
noncompliance with the parties’ agreement). Nonetheless, local law may adopt a
different approach in particular jurisdictions.
792) Class arbitrations are discussed above. See§10.08.

793) SeeChapter 7 (especially §7.02[B]).
794) See§15.06; §25.05[A].
795) See§10.08.
796) Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (U.S. S.Ct. 2003). See§10.08[A][2].
797) Oxford Health Plans, 133 S.Ct. at 2068 n.2 (“Stolt-Nielsen made clear that this Court has
not yet decided whether the availability of class arbitration is a question of
arbitrability.”). Similarly, in Stolt-Nielsen, Justice Alito went out of his way to note that, in
Bazzle, a plurality, rather than a majority, of the Court had said that “an arbitrator, not a
court, [must] decide whether a contract permits class arbitration.” Stolt-Nielsen SA v.
AnimalFeeds Int’l Corp., 130 S.Ct. 1758, 1772 (U.S. S.Ct. 2010). While evidently skeptical of
this notion, Justice Alito stated that the Court did not need revisit the question because
the parties had “expressly assigned this issue to the arbitration panel.” Id.
798) Somewhat confusingly, the Court was not presented with the question in either Stolt-
Nielsen or Oxford Health whether interpreting an arbitration agreement to require class
arbitration was a jurisdictional (or “arbitrability”) issue for interlocutory resolution by a
court, and therefore, in each case, proceeded on the basis that only a review of the
tribunal’s substantive decision was involved. See§§10.08[A][4][a] & [c]; Oxford Health
Plans, 133 S.Ct. at 2068 n.2; Stolt-Nielsen SA, 130 S.Ct. at 1772.
799) See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83-84 (U.S. S.Ct. 2002)
(“Linguistically speaking, one might call any potentially dispositive gateway question a
‘question of arbitrability,’ for its answer will determine whether the underlying
controversy will proceed to arbitration on the merits. The Court’s case law, however,
makes clear that, for purposes of applying the interpretive rule, the phrase ‘question of
arbitrability’ has a far more limited scope. The Court has found the phrase applicable in
the kind of narrow circumstance where contracting parties would likely have expected a
court to have decided the gateway matter, where they are not likely to have thought that
they had agreed that an arbitrator would do so, and, consequently, where reference of
the gateway dispute to the court avoids the risk of forcing parties to arbitrate a matter
that they may well not have agreed to arbitrate.”).
800) See CRW Joint Operation v. PT Perusahaan Gas Negara (Persero) TBK, [2011] SGCA 3, ¶32
(Singapore Ct. App.) (failure to deal with every issue referred to tribunal would justify
annulment only if it led to actual prejudice).
801) UNCITRAL Model Law, Art. 34(2)(a)(iii).
802) See, e.g.,Judgment of 28 April 1987, 1991 Rev. arb. 345 (Paris Cour d’appel); United Mexican
States v. Metalclad Corp., [2001] BCSC 664 (B.C. S.Ct.) (award should be set aside only in
relation to those grounds which are beyond scope of submission to arbitration); Not
Indicated (P.R. China) v. Eton Props. Ltd, XXXIV Y.B. Comm. Arb. 548, 560 (H.K. Ct. First Inst.
2009) (2009) (“nothing in the Arbitration Ordinance ties the Court’s hand as to enforcing
only part of an award where appropriate”); Judgment of 12 February 2010, TDN SA v. Tokio
Marine Europe Ins., SAP M 2047/2010 (Madrid Audiencia Provincial) (partial annulment of
awards possible when part of award is unconstitutional, illegal, or unreasonable);
Judgment of 2 February 2007, Jaral Decoración, SL v. Peñasco Rodilla, SL, SAP M 1255/2007
(Madrid Audiencia Provincial) (award of interest partially set aside where arbitral
tribunal awarded interest on sums in arrears without being requested to do so);
Judgment of 16 October 2011, Ministerio de Transportes y Comunicaciones v. Rudy Alberto
Zapana Morales, Exp. 00045-2011 (Lima Corte Superior de Justicia) (partially annulling
award where arbitrator exceeded powers by adjudicating third party claim); Judgment 7
February 2011, Sociedad de Inversiones Inmobiliarias Del Puerto SA v. Constructora
Iberoamericana SA, AR/JUR 7147/2011 (Buenos Aires Cámara Nacional de Apelaciones en
lo Comercial) (awards may be partially annulled where unconstitutional, illegal, or
unreasonable).
U.S. courts have reached the same conclusion under the FAA. See, e.g., Comedy Club, Inc.
v. Improv W. Assocs., 553 F.3d 1277, 1288 (9th Cir. 2009) (“If an arbitrator exceeded the
scope of his authority in issuing an award, and that award is divisible, we may vacate
part of the award and leave the remainder in force”).
803) See§5.02[A][2][i]; §5.02[A][5][h]; §5.04[D][7][g]; §7.05[A]; §25.04[A][8].
131
804) See, e.g., Wells Fargo Bank v. WMR e-PIN, LLC, 653 F.3d 702, 710 (8th Cir. 2011) (party
cannot request injunctive relief and then claim that injunctive relief awarded on behalf
of opponent was in excess of arbitrator’s authority); Exportkhelb v. Maistros Corp., 790
F.Supp. 70, 73 (S.D.N.Y. 1992) (failure to object to tribunal’s jurisdiction over counterclaim
waives objection); Spears v. N.Y. City Transit Auth., 262 A.D.2d 493 (N.Y. App. Div. 1999)
(failure to appear at hearing did not constitute waiver of claim that arbitrator exceeded
authority if it is asserted in opposition to application for confirmation in court);
Lieberman v. Lieberman, 566 N.Y.S.2d 490, 494 (N.Y. Sup. 1991) (“any contention that a
claim proposed to be submitted to arbitration is in excess of the arbitrator’s power is
waived unless raised by an application for a stay in the proceedings”); Westland
Helicopters Ltd v. Sheikh Salah Al-Hejailan [2004] EWHC 1625 (Comm) (English High Ct.)
(claimant initially stated interest not sought, then made claim for interest; in absence of
objection by respondent, arbitrator entitled to award interest). CompareJudgment of 3
February 2010, Merial v. Klocke Verpackung Serv. GmbH, 2010 Rev. arb. 93 (French Cour de
cassation civ. 1e) (party had not waived its right to challenge tribunal’s award as ultra
petita because it had objected to award-creditor’s introduction of new claim (and was
not required subsequently to repeat that objection)).
805) See§7.03[E][5][d]; §7.03[E][7]; §7.03[I][3]; §25.04[A][6][a]; First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 943 (U.S. S.Ct. 1995); Repub. of Argentina v. BG Group plc, 665 F.3d
1363, 1370 (D.C. Cir. 2012); Cleveland Elec. Illuminating Co. v. Utility Workers Union of Am.,
440 F.3d 809, 813 (6th Cir. 2006); Kennecott Utah Copper Corp. v. Becker, 186 F.3d 1261,
1267-68 (10th Cir. 1999); NTCH-W. Tenn, Inc. v. ZTE USA, Inc., 2013 WL 228026, at *2 (W.D.
Tenn.). See also§26.05[C][1][f][iii]; §26.05[C][4][c][ii].
806) New York Convention, Art. V(2)(a). See also Inter-American Convention, Art. 5(2)(a);
§26.05[C][10].
807) See§6.03[C]; Argentine National Code of Civil and Commercial Procedure, Art. 737
(“Matters excluded by law from being subject to settlement cannot be submitted to
arbitration under sanction of nullity”); Constitution of the Republic of Ecuador, Art. 190
(“In public contracts arbitration in law is allowed, provided a favorable opinion of the
Office of the State Attorney General in accordance with the conditions established in the
law.”). See also German ZPO, §1059(2) subsec. 2(a) (“subject matter of the dispute is not
capable of settlement by arbitration under German law”); Belgian Judicial Code, Art.
1717(3)(b)(i) (“not capable of settlement by arbitration”); Japanese Arbitration Law, Art.
44(1)(vii) (“dispute that cannot constitute the subject of an arbitration agreement under
laws of Japan”); Russian Arbitration Act, Art. 34(2)(2) (“subject-matter of the dispute is not
capable of settlement by arbitration under the law of the Russian Federation”).
808) SeeChapter 6.
809) See§6.01; §6.03[C][1]; §6.05; §25.04[G]; UNCITRAL Model Law, Art. 34(2)(b)(i) (“subject-
matter of the dispute is not capable of settlement by arbitration under the law of this
state”).
810) See§4.05[B]; §6.03[C]; §25.04[G].
811) See§§4.05[A] & [C]; §6.01; §26.05[C][10] (especially §26.05[C][10][e]).
812) See§6.06.
813) See§§4.05[C][2]-[3]. Compare Arkhangelskoe Geologodobychnoe Predpriyatie v. Archangel
Diamond Corp., Case No. T-2277-04 (Svea Ct. App. 2005) (under Swedish Arbitration Act,
“an arbitration award is invalid if it includes an assessment of an issue that, according to
Swedish law, may not be settled by arbitrators (nonarbitrable). The fact that there in are
mandatory provisions in a certain area, however, does not automatically imply that
disputes in this area are nonarbitrable. As regards international disputes relating to
foreign legislation, it should be determined from case to case whether the applicable
foreign law is of such a nature that a settlement of the case in a Swedish court would not
be accepted. When it comes to an economic-political regulation in a foreign state, there
is often no reason to have the mandatory rules affect settlement possibilities in Sweden
and therefore arbitrability according to Swedish law. This opinion is in line with a
tendency internationally to accept that an international dispute may be resolved by
arbitration proceedings even if a similar national dispute would fall outside the
arbitration area.”).
814) See§4.05[C][5].
815) Read together with the introductory text of Article 34(2)(b), Article 34(2)(b)(ii) provides:
“An arbitral award may be set aside … only if the court finds that … (b) the award is in
conflict with the public policy of this State.” UNCITRAL Model Law, Arts. 34(2)(b), 34(2)(b)
(ii).
816) As discussed above, in cases where a nonarbitrability rule is based on the protection of
third parties’ interests or rights, the general allocation of the burden of proof may be
altered. See§25.03[A][4].
817) UNCITRAL Model Law, Art. 34(2)(b).
818) See§§6.04[A][1]-[3]; §§6.04[B], [G]-[H].
819) See, e.g., Lippert Tile Co., Inc. v. Int’l Union of Bricklayers & Allied Craftsmen, 2013 WL
3942909, at *5 (7th Cir.) (“[W]aiver rule applies equally to questions concerning
arbitrability. … [W]e have repeatedly disapproved of the practice of remaining silent on
an arbitrability issue during arbitration proceedings, only to play the arbitrability card
in federal court after the party loses.”).
820) SeeChapter 6; §25.04[G][3].
821) See authorities cited §19.04[B], pp. 2690-91 n. 415; §26.05[C][9].
132
822) See§5.06[C][13]; §6.02[F] (public policy in context of arbitration agreements); §19.04[B]
(public policy in context of applicable substantive law); §26.05[C][9] (public policy in
context of recognition of awards).
823) UNCITRAL Model Law, Art. 34(2)(b)(ii). A number of states opposed inclusion of a public
policy basis for annulment of awards in the Model Law, on the grounds that the
exception was unduly vague. UNCITRAL, Summary Record of the 318th Meeting, Doc.
A/CN.9/SR.318, ¶34 (India), ¶35 (Sweden), ¶37 (Iraq), ¶39 (Nigeria), ¶44 (Singapore), XVI
Y.B. UNCITRAL 449 (1985). The weight of opinion was to the contrary, and Article 34(2)(b)
(ii) was included. Id. at ¶43 (France), ¶46 (Italy), ¶47 (Argentina), ¶48 (U.S.), ¶49
(Cyprus), ¶50 (Tanzania), ¶51 (Canada), ¶53 (Kenya), ¶54 (Greece). See H. Holtzmann & J.
Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration:
Legislative History and Commentary 910, 918-19 (1989).
824) New York Convention, Art. V(2)(b). See also Inter-American Convention, Art. 5(2)(b);
§26.05[C][9]. National arbitration legislation virtually always includes public policy as a
basis for denying recognition of foreign awards. SeeUNCITRAL Model Law, Art. 36(1)(b)(ii);
§26.05[B].
825) See, e.g., English Arbitration Act, 1996, §68(2)(g) (“award being obtained by fraud or the
award or the way in which it was procured being contrary to public policy”); French Code
of Civil Procedure, Art. 1520(5) (“contrary to international public policy”); Swiss Law on
Private International Law, Art. 190(2)(e) (“award is incompatible with public policy”);
German ZPO, §1059(2) subsec. 2(b) (“recognition or enforcement of the award leads to a
result which is in conflict with public policy (ordre public)”); Belgian Judicial Code, Art.
1717(3)(b)(ii) (“in conflict with public policy”); Netherlands Code of Civil Procedure, Art.
1065(1)(e) (“award, or the manner in which it was made, violates public policy or
morals”); Singapore International Arbitration Act, 2012, Art. 31(4)(b); Hong Kong
Arbitration Ordinance, 2013, §81; Chinese Arbitration Law, Art. 58(6) (“arbitral award goes
against the public interests”); Japanese Arbitration Law, Art. 44(1)(viii) (“content of the
arbitral award is in conflict with the public policy or good morals of Japan”); Korean
Arbitration Act, Art. 36-2(b) (“recognition and enforcement of the award is in conflict with
the good morals or other public policy of the Republic of Korea”); Indian Arbitration and
Conciliation Act, Art. 34(2)(b)(ii); Russian Arbitration Law, Art. 34(2)(2) (“if the award is in
conflict with the public policy of the Russian Federation”). See also European Convention
Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(a) (“contrary to ordre public”).
826) United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 42 (U.S. S.Ct. 1987). See W.R.
Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (U.S. S.Ct. 1983); Hurd v. Hodge, 334 U.S.
24, 34-35 (U.S. S.Ct. 1948).
827) See generally Husserl, Public Policy and Ordre Public, 25 Va. L. Rev. 37 (1938); Lalive,
Transnational (or Truly International) Public Policy and International Arbitration, in P.
Sanders (ed.), Comparative Arbitration Practice and Public Policy in Arbitration 257 (ICCA
Congress Series No. 3 1987); Mayer, Mandatory Rules of Law in International Arbitration, 2
Arb. Int’l 274 (1986).
828) AJU v. AJT, [2011] SGCA 41, ¶20 (Singapore Ct. App.) (“any agreement to stifle the
prosecution of a non-compoundable offence would be illegal (and against public policy)
as such an agreement would undermine the administration of justice”). See also
Judgment of 30 October 2008, III ZB 17/08 (German Bundesgerichtshof); Judgment of 14
September 2001, 10 Sch 04/01 (Oberlandesgericht Karlsruhe); Judgment of 20 August
2008, 9 Ob 53/08x (Austrian Oberster Gerichtshof) (award can be set aside if it amounts
to ordre public violation, contrary to fundamental values of Austrian legal system);
Judgment of 1 April 2008, 5 Ob 272/07x (Austrian Oberster Gerichtshof) (same); Oil &
Natural Gas Corp. Ltd v. Saw Pipes Ltd, [2003] INSC 236 (Indian S.Ct.) (award is contrary to
public policy if it is “patently illegal”); Judgment of 29 April 2009, CG Impianti v. Bmaab &
Son Int’l Contracting Co., XXXV Y.B. Comm. Arb. 415, 416-17 (Milan Corte d’Appello) (2010)
(award may be annulled if it violates “fundamental principles and values of the forum’s
legal system (from the constitutional ones down)”); Judgment of 22 March 2006, Uniprex
SA v. Grupo Radio Blanca, SAP M 2572/2006, Legal Ground No. 3 (Madrid Audiencia
Provincial) (public policy, defined as “public, private, political, moral and even religious
legal principles that are absolutely mandatory for the preservation of the societal
model for a nation at a given time,” covers “arbitrary, patently unreasonable or
unreasonable decisions”); Judgment of 29 September 2005, XXXIII Y.B. Comm. Arb. 683
(Russian S. Arbitrazh Ct.) (2008) (award may be annulled if it violates “fundamental
principles of the legal order, generally recognized principles of morality and ethics, as
well as the national defense concerns”); Apa Ins. Co. Ltd v. Chrysanthus Barnabas Okemo,
Misc. Application No. 241 of 2005 (Nairobi High Ct. 2005) (“(a) inconsistent with the
constitution or other laws of Kenya, whether written or unwritten or (b) inimical to the
national interest of Kenya or (c) contrary to justice or morality”).
829) See United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 42 (U.S. S.Ct. 1987); W.R.
Grace & Co. v. Local Union 759, 461 U.S. 757, 766 (U.S. S.Ct. 1983); Hurd v. Hodge, 334 U.S.
24, 34-35 (U.S. S.Ct. 1948); Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396 (2d Cir.
2009).
830) See§4.05[B]; §6.03[C][4]; §6.04[A][1]; §6.04[B][1]; §6.04[H][1]; §6.04[P]; §§19.04[B][1] & [6];
§§26.05[C][9][d]-[e] & [g].
831) United Paperworkers, 484 U.S. at 43; W.R. Grace, 461 U.S. at 766.
832) W.R. Grace, 461 U.S. at 766.
833) W.R. Grace, 461 U.S. at 766.
133
834) Ackermann v. Levine, 788 F.2d 830, 841 (2d Cir. 1986). See also Loucks v. Standard Oil Co.
of N.Y., 224 N.Y. 99, 111 (N.Y. 1918) (“We are not so provincial as to say that every solution
of a problem is wrong because we deal with it otherwise at home.”).
835) Tahan v. Hodgson, 662 F.2d 862, 864 (D.C. Cir. 1981).
836) United Paperworkers, 484 U.S. at 43. See Mercy Hosp., Inc. v. Massachusetts Nurses Ass’n,
429 F.3d 338 (1st Cir. 2005) (rejecting public policy challenge to award because no
violation of well-defined and dominant public policy); Prudential-Bache Sec., Inc. v.
Tanner, 72 F.3d 234, 242 (1st Cir. 1995) (rejecting challenge on grounds of insufficient
showing that award violated asserted public policy); ESCO Corp. v. Bradken Res. Pty Ltd,
2011 WL 1625815 (D. Or.) (rejecting argument that award of attorneys’ fees to successful
antitrust defendant clearly violated explicit, well-defined and dominant U.S. public
policy).
837) See E. Assoc. Coal Corp. v. United Mine Workers of Am., 531 U.S. 57, 62-63, 67 (U.S. S.Ct.
2000).
Judgment of 27 March 2012, DFT 4A_558/2011 (Swiss Federal Tribunal) (annulling award
that imposed worldwide ban on football player, forbidding his playing in football
events, for failure to pay previously-assessed damages award; ban violated Swiss
substantive public policy providing that “no person may surrender his or her freedom or
restrict the use of it to a degree which violates the law or good morals”).
839) Rockeby Biomed Ltd v. Alpha Advisory Pte Ltd, [2011] SGHC 155, ¶16 (Singapore High Ct.).
See also PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank SA, [2006] 1 SLR(R) 597, ¶59
840) See§25.04[H][3].
841) Desputeaux v. Éditions Chouette (1987) Inc., [2003] 1 S.C.R. 178 (Canadian S.Ct.). See also
Smart Sys. Techs. Inc. v. Domotique Secant Inc., [2008] Q.J. No. 1782 (Québec Ct. App.).
842) UNCITRAL Model Law, Art. 34(2)(b)(i) (emphasis added).
843) See authorities cited §25.04[H], p. 2771 n. 827; Husserl, Public Policy and Ordre Public, 25
Va. L. Rev. 37 (1938).
844) See§4.05[B]; §§19.04[B][1] & [6]; §26.05[C][9][a]; §26.05[C][9][d][ii].
845) French Code of Civil Procedure, Art. 1520(5). SeeJudgment of 8 July 2010, Société
Marocaine des Loisirs MDL v. France Quick AS, 2010 Dalloz 2933 (French Cour de cassation
civ. 1e); Judgment of 24 November 2011, 2012 Rev. arb. 140, 146-47 (Paris Cour d’appel),
Note, Laazouzi; Judgment of 4 November 2010, Case No. 09/1745 (Paris Cour d’appel);
Judgment of 27 October 1994, Lebanese Traders Distribs. & Consultants v. Reynolds, 1994
Rev. arb. 709 (Paris Cour d’appel); Judgment of 30 September 1993, Euro’n Gas Turbines SA
v. Westman Int’l Ltd, XX Y.B. Comm. Arb. 198, 201-02 (Paris Cour d’appel) (1995) (“[T]he
arbitral award violates French public policy and international public policy as its
enforcement in France would give effect to an illicit contract the aim and object of which
being traffic in influence or the payment of bribes; … a contract having as its aim and
object a traffic in influence through the payment of bribes is, consequently, contrary to
French international public policy as well as to the ethics of international commerce as
understood by the large majority of States in the international community.”); Judgment
of 12 March 1985, Intrafor Cofor v. Gagnant, 1985 Rev. arb. 299 (Paris Cour d’appel). See
also Sicard-Mirabal, Mandatory Rules: What’s A Lawyer to Do? in A. van den Berg (ed.),
Arbitration Advocacy in Changing Times 356 (2011).
846) See, e.g., Portugal Code of Civil Procedure, Art. 1096(f); Algerian Code of Civil and
Administrative Procedure, Art. 458 bis 23(h); Lebanese New Code of Civil Procedure, Art.
817(5).
847) See, e.g., Judgment of 8 March 2006, DFT 132 III 389 (Swiss Federal Tribunal); Judgment of
19 April 1994, DFT 120 II 155, 168 (Swiss Federal Tribunal) (“uniform application of Art.
190(2)(e) [of the Swiss Law on Private International Law] (violation of public policy)
appears to require an extensive interpretation of the notion of public policy, i.e.,
transnational or universal public policy, including the fundamental principles of law
which apply irrespective of the connection of the dispute to a specific country”); AJU v.
AJT, [2011] SGCA 41, ¶37 (Singapore Ct. App.) (no difference between public policy for
purposes of annulment of international award made in Singapore and non-recognition of
foreign award: “there is no difference between these two regimes as far as the concept of
public policy is concerned”); Traxys Europe SA v. Balaji Coke Indus. Pvt Ltd, [2012] FCA 276,
¶96 (Australian High Ct.) (“the expression ‘public policy’ … means those elements of the
[domestic] public policy … which are so fundamental to our notions of justice that the
courts of this country feel obliged to give effect to them even in respect of claims which
are based fundamentally on foreign elements such as foreign awards”).
848) See, e.g., Lalive, Transnational (or Truly International) Public Policy and International
Arbitration, in P. Sanders (ed.), Comparative Arbitration Practice and Public Policy in
Arbitration 257, 273-84 (ICCA Congress Series No. 3 1987); Mayer & Sheppard, Final ILA
Report on Public Policy as A Bar to Enforcement of International Arbitral Awards, 19 Arb.
Int’l 249, 251-52 (2003). See also§26.05[C][9][d][ii].
849) See, e.g.,Judgment of 24 November 1993, XXI Y.B. Comm. Arb. 617, 624 (Luxembourg Cour
Supérieure de Justice) (1996); Mayer & Sheppard, Final ILA Report on Public Policy as A
Bar to Enforcement of International Arbitral Awards, 19 Arb. Int’l 249, 251-52 (2003). See
also§26.05[C][9][d].
134
850) See, e.g., Ledee v. Ceramiche Ragno, 684 F.2d 184, 187 (1st Cir. 1982) (in context of Article
II(3), citing rules that “can be applied neutrally on an international scale”); §4.04[A][2][j]
[v]; §4.05[C][5]; §19.04[B][6].
851) See§26.05[C][9][d][iii].
852) See§26.05[C][9][d][iii]; §§26.05[C][9][e] & [g]; Sheppard, Interim ILA Report on Public Policy
as A Bar to Enforcement of International Arbitral Awards, in ILA, Committee on
International Commercial Arbitration, Proceeding of London Conference (2000), 19 Arb.
Int’l 217, 242-46 (2003).
853) See§19.04[B][5].
854) See§1.04[A][1].
855) See, e.g., AJU v. AJT, [2011] SGCA 41, ¶37 (Singapore Ct. App.) (“there is no difference
between these two regimes as far as the concept of public policy is concerned because
the legislative purpose of the [Singapore International Arbitration Act] is to treat all
[international awards made in Singapore] as having an international focus”).
856) See, e.g., Widell v. Wolf, 43 F.3d 1150, 1151 (7th Cir. 1994) (enforcing award for monetary
damages did not implicate underlying public policy); Judgment of 9 January 1995, Inter
Maritime Mgt SA v. Russin & Vecchi, XXII Y.B. Comm. Arb. 789 (Swiss Federal Tribunal)
(1997). See alsoJudgment of 8 April 2004, XXXI Y.B. Comm. Arb. 802, 805 (Italian Corte di
Cassazione) (2006) (award can be denied recognition under Article V(2)(b) “only in
respect of the [dispositive part of the award (‘dispositivo’)]”).
857) See§26.05[C][9][k].
858) See Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 410-12 (2d Cir. 2009)
(enforcing award that required conduct that would violate foreign judgment did not
implicate public policy of seat); Widell v. Wolf, 43 F.3d 1150, 1151 (7th Cir. 1994) (enforcing
award for money damages did not implicate underlying public policy).
859) See United Paperworkers, 484 U.S. at 45 n.12.
860) Soleimany v. Soleimany [1999] QB 785, 800 (English Ct. App.) (emphasis added).
861) See, e.g., Brown, Illegality and Public Policy – Enforcement of Arbitral Awards in England,
2000 Int’l Arb. L. Rev. 31, 33-35; Derains, Public Policy and the Law Applicable to the
Dispute in International Arbitration, in P. Sanders (ed.), Comparative Arbitration Practice
and Public Policy in Arbitration 291-95 (ICCA Congress Series No. 3 1986); Lalive,
Sanders (ed.), Comparative Arbitration Practice and Public Policy in Arbitration 257, 290 et
seq. (ICCA Congress Series No. 3 1986); Sheppard, Interim ILA Report on Public Policy as A
Bar to Enforcement of International Arbitral Awards, in ILA, Committee on International
Commercial Arbitration, Proceeding of London Conference (2000), 19 Arb. Int’l 217 (2003).
862) There are exceptions; in some circumstances, payment of an arbitral award could
violate sanctions, currency controls, or other mandatory laws.
863) See, e.g., English Arbitration Act, 1996, §68(2)(g) (“award being obtained by fraud or the
award or the way in which it was procured being contrary to public policy”); Japanese
Arbitration Law, Art. 44(1)(viii) (“content of the arbitral award is in conflict with the
public policy or good morals of Japan”). See also United Paperworkers Int’l Union v. Misco,
Inc., 484 U.S. 29, 45 n.12 (U.S. S.Ct. 1987); ALI, Recognition and Enforcement of Foreign
Judgments: Analysis and Proposed Federal Statute §5(a)(vi) (2005) (“judgment or the claim
on which the judgment is based is repugnant to the public policy of the United States, or
to the public policy of a particular state of the United States when the relevant legal
interest, right or policy is regulated by state law”); G. Born & P. Rutledge, International
Civil Litigation in United States Courts 1133-34 (5th ed. 2011).
864) Revere Copper & Brass Inc. v. OPIC, 628 F.2d 81, 83 (D.C. Cir. 1980).
865) St. Mary Home, Inc. v. Serv. Employees Int’l Union, Dist. 1199, 116 F.3d 41, 46 (2d Cir. 1997).
866) Judgment of 27 October 1994, Lebanese Traders Distribs. & Consultants v. Reynolds, 1994
Rev. arb. 709, 713 (Paris Cour d’appel). See alsoJudgment of 11 March 2009, de Prémont v.
Société Trioplast AB, 2009 Rev. arb. 240, 240 (French Cour de cassation civ. 1e) (“regarding
the breach of international public policy … the [Court’s] review is limited to flagrant,
effective and concrete breaches”; because arbitral tribunal applied EU rules,
recognition of award “was not contrary to international public policy”); Judgment of 4
June 2008, SNF v. Cytec, 2008 Rev. arb. 473, 475 (French Cour de cassation civ. 1e) (2008)
(“review is limited to flagrant, effective and concrete breaches”); Desputeaux v. Éditions
Chouette (1987) Inc., [2003] 1 S.C.R. 178 (Canadian S.Ct.).
867) See Hebei Imp. & Exp. Corp. v. Polytek Eng’g Co. Ltd, [1999] 1 HKCFA 40, ¶100 (H.K. Ct. App.)
(enforcement should only be refused if enforcing award would be “contrary to the
fundamental conceptions of morality and justice of Hong Kong”).
868) UNCITRAL Model Law, Arts. 34(2)(b), 34(2)(b)(ii) (“An arbitral award may be set aside …
only if the court finds that … (b) the award is in conflict with the public policy of this
State.”).
135
869) See, e.g., Judgment of 25 August 2004, 2004 SchiedsVZ 319 (Bayerisches Oberstes
Landesgericht) (burden of proof was on party opposing enforcement); Denmark
Skibstekniske Konsulenter A/S I Likvidation v. Ultrapolis 3000 Inv. Ltd, [2010] SGHC 108,
¶39 (Singapore High Ct.) (“party opposing enforcement has the burden of proving to the
satisfaction of the court one of the grounds prescribed by [Article 34(2)]”); Hebei Imp. &
Exp. Corp. v. Polytek Eng’g Co. Ltd, [1999] 1 HKCFA 40, ¶100 (H.K. Ct. App.) (same). See also
Restatement (Third) U.S. Law of International Commercial Arbitration §4-18, comments a
& b (Tentative Draft No. 2 2012) (“prevailing U.S. practice … is to interpret public policy
very narrowly”; “public policy is interpreted in light of the presumption in favor of
effectuating awards”).
As discussed above, there may be circumstances in which a different allocation of the
burden of proof is appropriate if the relevant public policy is based on the protection of
third party interests. See§25.03[A][4].
870) Judgment of 21 March 2000, 2001 Rev. arb. 805 (French Cour de cassation civ. 1e).
871) Judgment of 25 August 2004, 2004 SchiedsVZ 319 (Bayerisches Oberstes Landesgericht).
872) United Paperworkers, 484 U.S. at 43.
873) Judgment of 28 July 2010, XXXVI Y.B. Comm. Arb. 337, ¶19 (Swiss Federal Tribunal) (2011).
874) See§19.04[B][1]; §26.05[C][9][g]; Richardson v. Mellish [1824-34] All ER Rep 258, 266
(Common Pleas) (“a very unruly horse, and when once you get astride it you never know
where it will carry you”); Katzenbach, Conflicts on An Unruly Horse: Reciprocal Claims and
Tolerances in Interstate and International Law, 65 Yale L.J. 1087 (1956); Lalive,
Sanders (ed.), Comparative Arbitration Practice and Public Policy in Arbitration 257, 273
(ICCA Congress Series No. 3 1987) (“difficulty, not to say the impossibility” of defining
public policy with precision).
875) See Dasser, International Arbitration and Setting Aside Proceedings in Switzerland: A
Statistical Analysis, 25 ASA Bull. 444, 456 (2007); Dasser, International Arbitration and
Setting Aside Proceedings in Switzerland: An Updated Statistical Analysis, 28 ASA Bull. 82,
87 (2010).
876) See, e.g., St. Mary Home, Inc. v. Serv. Employees Int’l Union, Dist. 1199, 116 F.3d 41, 46 (2d
Cir. 1997); Judgment of 16 July 2002, 1 Sch 08/02 (Oberlandesgericht Stuttgart) (public
policy should only be applied in exceptional cases); Judgment of 14 September 2001, 10
Sch 04/01 (Oberlandesgericht Karlsruhe); Desputeaux v. Éditions Chouette (1987) Inc.,
[2003] 1 S.C.R. 178 (Canadian S.Ct.); Navigation Sonamar Inc. v. Algoma Steamships Ltd,
[1987] R.J.Q. 1346 (Québec Super. Ct.); PT Asuransi Jasa Indonesia (Persero) v. Dexia Bank
SA, [2006] SGCA 41, ¶59 (Singapore Ct. App.); Shanghai City Found. Works Corp. v. Sunlink
Ltd, [2001] 3 HKC 521 (H.K. Ct. First Inst.); Judgment of 16 October 2006, SAP M 16582/2006
(Madrid Audiencia Provincial); Zimbabwe Elec. Supply Auth. v. Genius Joel Maposa, XXV
Y.B. Comm. Arb. 548 (Zimbabwe S.Ct 1999) (2000).
877) See, e.g., Judgment of 30 October 2008, III ZB 17/08 (German Bundesgerichtshof)
(difference between concepts of public policy in two settings is one of degree and not
kind); Oil & Natural Gas Corp. Ltd v. Saw Pipes Ltd, [2003] INSC 236 (Indian S.Ct.) (in
annulment, no need for narrow view of public policy).
878) See, e.g., Judgment of 17 January 2013, DFT 4A_538/2012 (Swiss Federal Tribunal);
Judgment of 30 September 1993, Euro’n Gas Turbines SA v. Westman Int’l Ltd, XX Y.B.
Comm. Arb. 198 (Paris Cour d’appel) (1995). Compare Transp. de cargaison (Cargo Carriers)
v. Indus. Bulk Carriers, [1990] R.D.J. 418 (Québec Ct. App.) (while bribe is immoral,
payment of ransom only involved immorality on part of blackmailer and did not violate
public policy).
Commercial Arbitration 163 (2012) (“Awards enforcing contracts which are illegal under
the applicable law, or otherwise leading to illegal actions, may be contrary to public
policy.”).
Commercial Arbitration 163 (2012) (“Awards which endorse contracts or behaviour
infringing competition law have been considered by courts in several jurisdictions to be
contrary to public policy.”).
Commercial Arbitration 164 (2012) (“Insolvency law includes, in many countries,
mandatory provisions the infringement of which may constitute a violation of public
policy.”).
882) Judgment of 2 November 2000, 2001 WM 104 (German Bundesgerichtshof); Corporación
Transnacional de Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414 (Ontario Ct.
App.) (corruption, bribery, fraud and serious procedural irregularities); Bayview Irrigation
Dist. #11 v. United Mexican States, [2008] O.J. No. 1858 (Ontario Super. Ct.); Zimbabwe Elec.
Supply Auth. v. Genius Joel Maposa, XXV Y.B. Comm. Arb. 548 (Zimbabwe S.Ct. 1999) (2000).
883) See, e.g., authorities cited §25.04[H][1], pp. 3313-14 n 828; Albemarle Corp. v. United Steel
Workers, 2013 WL 49438, at *5 (5th Cir.); E. Coast Distribs. Inc. v. Local 863, 422 F.Appx. 104,
107 (3d Cir. 2011); United States Postal Serv. v. Nat’l Ass’n of Letter Carriers, 330 F.3d 747,
751 (6th Cir. 2003) (rejecting public policy challenge to award); Van Waters & Rogers Inc.
v. Int’l Bhd of Teamsters, Chauffeurs, Warehousemen & Helpers of Am., Local Union 70, 913
F.2d 736, 743 (9th Cir. 1990).
884) St. Mary Home, Inc. v. Serv. Employees Int’l Union, Dist. 1199, 116 F.3d 41, 46 (2d Cir. 1997).
136
885) See, e.g., Delta Air Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 861 F.2d 665 (11th Cir. 1988)
(enforcement of award would violate clearly established public policy condemning
operation of passenger airliners by pilots who are under influence of alcohol);
Amalgamated Meat Cutters & Butcher Workmen, Local Union 540 v. Great W. Food Co., 712
F.2d 122, 125 (5th Cir. 1983) (policy against allowing truck drivers to consume alcohol).
886) See, e.g., Exxon Corp. v. Baton Rouge Oil & Chem. Workers Union, 77 F.3d 850, 855-56 (5th
Cir. 1996) (award which ordered reinstatement of monetary award to employee who,
while working in safety-sensitive position tested positive for use of drugs, violated well-
established public policy against use of drugs by employees in safety-sensitive
positions); Gulf Coast Indus. Workers Union v. Exxon Co., U.S.A., 991 F.2d 244, 249-50 (5th
Cir. 1993) (award in favor of refinery’s process technician violated public policy against
reinstating employee in safety-sensitive position after testing positive for cocaine and
breaching employer’s drug abuse policy on two occasions); Iowa Elec. Light & Power Co.
v. Local Union 204, 834 F.2d 1424, 1426-28 (8th Cir. 1987) (affirming vacatur of award that
would violate “well-defined and dominant national policy requiring strict adherence to
nuclear safety rules”).
887) See Town of Stratford v. AFSCME, Council 15, Local 407, 60 A.3d 288, 293 (Conn. App. 2013)
(“The arbitration panel’s determination to reinstate [police department employee] … in
spite of [lying to medical examiners] runs contrary to the well-defined public policy
against intentional dishonesty by police officers in connection with their employment.”).
888) See, e.g., City of Boston v. Boston Police Patrolmen’s Ass’n, 824 N.E.2d 855, 863 (Mass.
2005) (vacating award for violation of “public policy against requiring the reinstatement
of police officers who have committed felonious misconduct”); Am. Fed’n of State, County
& Mun. Employees, AFL-CIO v. Dept. of Cent. Mgt Servs., 671 N.E.2d 668, 674 (Ill. 1996)
(award that reinstated former employee of public welfare agency violated public policy
in favor of truthful reporting by agency).
889) See, e.g., Commercial Union Ins. Co. v. Lines, 378 F.3d 204, 208 (2d Cir. 2004) (vacating
award where “analysis essentially pits the public policy favoring arbitration … against
the judicial policy of refusing to lend [the court’s] power to assist or protect a fraud”).
890) See Int’l Union of Operating Eng’rs, Local 286 v. Port of Seattle, 264 P.3d 268, 274 (Wash.
Ct. App. 2011) (award reinstating employee who was terminated for hanging a noose at
work violated public policy against racial discrimination articulated in state statute).
891) See State v. AFSCME, Council 4, Local 391, 7 A.3d 931, 939 (Conn. App. Ct. 2010) (award
reinstating corrections officer despite his egregious misconduct violated state’s clear
public policy against workplace sexual harassment).
892) See Globe Newspaper Co. v. Int’l Ass’n of Mach., 648 F.Supp.2d 193, 200 (D. Mass. 2009)
(arbitrator did not have authority to reimpose an interest arbitration provision in new
collective bargaining agreement over employer’s objection because interest arbitration
was non-mandatory bargaining subject under National Labor Relations Act).
893) For one of the few arguable exceptions, see Laminoirs-Trefileries-Cableries de Lens, SA v.
Southwire Co., 484 F.Supp. 1063, 1069 (N.D. Ga. 1980).
894) Judgment of 18 November 2004, SA Thalès Air Défence v. GIE Euromissile, 2005 Rev. arb.
751, 757 (Paris Cour d’appel). The Cour d’appel noted that, in principle, EU competition
law expresses a fundamental public policy of the French legal system. Id. (“It is only
permissible to have recourse to the international public policy exclusionary clause in
art. 1502-5 [now, Article 1520(5)] of the New Code of Civil Procedure if enforcement of the
award would intolerably frustrate our legal system. Its adverse effect must constitute a
manifest violation of a rule of law that is deemed essential or of a fundamental
principle, which is the case with failure to comply with the prohibition laid down in Art.
81 [of the EC Treaty] for the functioning of the internal market since it is indisputable
that the international public policy of the Member States can also have a Community
source.”). See alsoJudgment of 21 March 2000, 2001 Rev. arb. 805 (French Cour de
cassation civ. 1e) (violation of public policy must be “blatant, effective and concrete”);
Judgment of 14 June 2001, Andre v. Tradigrain, 2001 Rev. arb. 773 (Paris Cour d’appel),
Note, Seraglini.
895) See Crépin, Le contrôle des sentences arbitrales par la Cour d’appel de Paris depuis les
réformes de 1980 et de 1981, 1991 Rev. arb. 521, 580 (from 1981-1990, violation of
international public policy was most frequently-invoked basis for setting aside awards,
but only two of 46 such applications were successful).
896) SeeJudgment of 5 February 1991, Société Almira Films v. Pierrel, 1991 Rev. arb. 625 (French
Cour de cassation civ. le).
897) SeeJudgment of 5 April 1990, Courrèges Design v. André Courrèges, 1992 Rev. arb. 110 (Paris
Cour d’appel).
898) SeeJudgment of 30 September 1993, Euro’n Gas Turbines SA v. Westman Int’l Ltd, XX Y.B.
Comm. Arb. 198 (Paris Cour d’appel) (1995).
899) French courts have held that res judicata rules do not constitute matters of public policy.
Judgment of 9 June 1983, Iro-Holding v. Setilex, 1983 Rev. arb. 497 (Paris Cour d’appel);
§25.04[H][6].
137
900) Judgment of 25 August 2004, 2004 SchiedsVZ 319 (Bayerisches Oberstes Landesgericht).
See also Judgment of 30 October 2008, 2009 SchiedsVZ, 66, 67 (German
Bundesgerichtshof); Judgment of 30 May 2011, 2012 SchiedsVZ 47 (Oberlandesgericht
Saarbrücken); Judgment of 15 December 2009, I-4 Sch 10/09 (Oberlandesgericht
Düsseldorf) (2010); Judgment of 22 June 2009, XXXV Y.B. Comm. Arb. 371
(Oberlandesgericht München) (2010); Judgment of 16 July 2002, 2003 SchiedsVZ 84, 88
(Oberlandesgericht Stuttgart).
901) See, e.g.,Judgment of 27 September 2005, 29 Sch 1/05 (Oberlandesgericht Hamm) (in
recognition action); Judgment of 12 March 1998, 6 U 110/97 (Hanseatisches
Oberlandesgericht Hamburg) (in recognition action). See also Voit, in H.-J. Musielak (ed.),
Kommentar zur Zivilprozessordnung §1061, ¶23 (10th ed. 2013) (standard for annulment
under German law is generally same as under Article V(2)(b) Convention regarding
violation of public policy (ordre public)).
902) See, e.g., Judgment of 25 October 1983, KZR 27/82 (German Bundesgerichtshof); Judgment
of 31 May 1972, KZR 43/71 (German Bundesgerichtshof) (EU competition law); Judgment of
27 February 1969, KZR 3/68 (German Bundesgerichtshof) (EU competition law); Judgment
of 25 October 1966, KZR 7/65 (German Bundesgerichtshof); Judgment of 20 May 1966, KZR
10/64 (German Bundesgerichtshof); Judgment of 8 August 2007, 4 Sch 03/06
(Oberlandesgericht Jena); Judgment of 20 April 2005, 11 Sch 01/05 (Oberlandesgericht
Dresden) (competition law); Judgment of 21 July 2004, VI-Sch (Kart) 1/02
(Oberlandesgericht Düsseldorf); Judgment of 15 July 2002, 6 Sch 05/02
(Oberlandesgericht Düsseldorf); Judgment of 29 June 1989, 6 U (Kart) 115/88
(Oberlandesgericht Frankfurt).
903) See, e.g., Judgment of 2 November 2000, III ZB 55/99 (German Bundesgerichtshof);
Judgment of 14 May 1952, II ZR 276/51 (German Bundesgerichtshof); Judgment of 4 June
2012, 2013 SchiedsVZ 112 (Kammergericht Berlin); Judgment of 16 July 2002, 2003
SchiedsVZ 84 (Oberlandesgericht Stuttgart).
904) See, e.g., Judgment of 20 April 2005, 11 Sch 01/05 (Oberlandesgericht Dresden); Judgment
of 14 September 2001, 10 Sch 04/01 (Oberlandesgericht Karlsruhe).
905) See, e.g., Judgment of 30 October 2008, III ZB 17/08 (German Bundesgerichtshof)
(obligation to register claims with insolvency trustee is crucial element in orderly
distribution of debtor’s assets and constitutes public policy; award on unregistered
claim violates public policy). Compare Judgment of 30 October 2008, III ZB 17/08 (German
Bundesgerichtshof) (many mandatory provisions of insolvency law, such as treatment of
executory contracts, are not public policy).
906) Judgment of 17 January 2013, DFT 4A_538/2012 (Swiss Federal Tribunal) (contract for
payment of bribes is contrary to Swiss public policy but bribery must be proven
conclusively; tribunal’s conclusion that payments of less than 10% of contract value are
not bribes was not violation of Swiss public policy).
907) SeeJudgment of 8 February 1978, Chrome Res. SA v. Léopold Lazarus Ltd, XI Y.B. Comm.
Arb. 538, 540 (Swiss Federal Tribunal) (1986) (“case law, nowadays well established, has
recognized that [public policy] applies not only to the contents of the award but also to
the procedure and composition of the Arbitral Tribunal”); Judgment of 26 May 1994, XXIII
Y.B. Comm. Arb. 754, 759 (Affoltern am Albis Bezirksgericht) (1998) (arbitration clause
selecting one party’s lawyer (who also drafted contract) as arbitrator is contrary to Swiss
public policy and arbitrator’s award will not be recognized).
908) See Judgment of 27 March 2012, DFT 4A_558/2011 (Swiss Federal Tribunal) (worldwide,
unlimited ban on professional sports play by award-debtor, as sanction for non-
payment of prior award, violates Swiss public policy against “excessive commitments”
and restraints on professional freedom).
909) See, e.g., Transport de Cargaison v. Indus. Bulk Carriers, [1990] R.D.J. 418 (Québec Ct. App.)
(award requiring reimbursement for payment of ransom not violation of Canadian public
policy); Judgment of 8 March 2006, DFT 132 III 389 (Swiss Federal Tribunal) (violation of
European or national competition law not violation of public policy); Judgment of 21
November 2008, 19 Sch 12/08 (Oberlandesgericht Köln) (incorrect interpretations of
contractual clauses not violation of public policy); Judgment of 20 August 2008, 9 Ob
53/08x (Austrian Oberster Gerichtshof); Judgment of 15 September 1998, 1 Ob 317/97t
(Austrian Oberster Gerichtshof) (agreement on interest rate of 35% did not constitute
violation of Austrian ordre public because interest was claimed in accordance with
foreign statutory interest rate); Judgment of 11 September 2006, 2007 BH 193 (Hungarian
S.Ct.); Judgment of 6 August 2002, N9772/01 (Russian S. Arbitrazh Ct.); Judgment of 18
September 1995, CLOUT Case No. 149 (Moscow City Ct.) (award in foreign currency not
violation of Russian public policy).
910) See§25.05[A][1]; Myers, Inc. v. United Mexican States, XXIX Y.B. Comm. Arb. 183 (Canadian
Fed. Ct.) (2004). See also§26.05[C][9][g].
911) For one decision upholding (on questionable grounds) a public policy challenge,
seeZimbabwe Elec. Supply Auth. v. Genius Joel Maposa, XXV Y.B. Comm. Arb. 548
(Zimbabwe S.Ct. 1999) (2000) (arbitrators’ failure to apply statute of limitations is
violation of public policy and basis for annulling award). See also Judgment of 22 March
2006, Uniprex SA v. Grupo Radio Blanca, SAP M 2572/2006, Legal Ground No. 2 (Madrid
Audiencia Provincial) (guarantee that from “perspective of substantive constitutional
law, … award will be correct”).
912) Judgment of 18 September 1995, XXII Y.B. Comm. Arb. 295 (Moscow City Ct.) (1997).
138
913) See, e.g., AJU v. AJT, [2011] SGCA 41, ¶57 (Singapore Ct. App.) (“English courts have
adopted two divergent approaches vis-à-vis the circumstances in which the court may
reopen an arbitral tribunal’s decision that an underlying contract is legal. On the one
hand, there is the approach taken by Colman J. in Westacre (HC) and the majority of the
English [Court of Appeal] in Westacre (CA); on the other hand, there is the more liberal
(and ‘interventionist’) approach taken in Soleimany and by Waller LJ in Westacre (CA).”).
914) AJU v. AJT, [2011] SGCA 41, ¶62 (Singapore Ct. App.).
915) AJU v. AJT, [2011] SGCA 41, ¶70 (“[F]indings of fact … are not correctable as they are final
and binding on both parties. Public policy, based on the alleged illegality of the
Concluding Agreement, was not engaged by such findings of fact.”).
916) See, e.g., Bhd of Locomotive Eng’rs & Trainmen v. Union Pac. R.R. Co., 882 F.Supp.2d 1032,
1042 (N.D. Ill. 2012) (review of arbitrator’s conclusion that award did not violate policy
rationale of Federal Railroad Safety Act); Dickenson-Russell Coal Co. v. Int’l Union, Mine
Workers of Am., 840 F.Supp.2d 961 (W.D. Va. 2012) (review of arbitrator’s decision to
reinstate employee found using drugs in light of public policy underpinning state pre-
employment drug testing statute); Rohm & Haas Co. v. United Steel, Paper & Forestry, 781
F.Supp.2d 251, 256 (E.D. Pa. 2011) (“Whether an award violates public policy is a question
for the Court, not the arbitrator”); Chase Bank USA v. Hale, 859 N.Y.S.2d 342, 352 (N.Y. Sup.
2008) (review of arbitrator’s conclusions to determine whether award violated policy of
Truth in Lending Act); Schoonmaker v. Cummings & Lockwood of Conn., PC, 747 A.2d 1017,
1023-24 (Conn. 2000) (de novo review, rather than traditional deference, is appropriate in
reviewing arbitrator’s interpretation of state rules of professional conduct and public
policy); Judgment of 21 July 2004, 2006 Wirtschaft und Wettbewerb 281 (Dusseldorf
Oberlandesgericht) (de novo review of arbitrators’ application of competition law;
transferring annulment application to judicial chamber specialized in competition law);
Judgment of 8 March 2007, 2007 Rev. arb. 303 (Brussels Tribunal de première instance)
(de novo review of arbitrators’ application of competition law); Judgment of 5 April 2006,
Electtronica Industriale S.P.A. v. Compañia Anónima Venezolana de Televisión, No. 2001-
100 (Venezuelan Tribunal Supremo de Justicia) (annulling ICC award on public policy
grounds without deference to tribunal’s prior determination of issue).
917) See, e.g., Miami Dolphins Ltd v. Williams, 356 F.Supp.2d 1301, 1304-06 (S.D. Fla. 2005)
(arbitrator’s decision on whether enforcement of liquidated damages clause violated
state public policy should be accorded deference); Judgment of 26 November 2009,
Sarah A. v. Moussa R., 2(4) Int’l J. Arab Arb. 131 (Paris Cour d’appel) (2010) (refusing to
annul award; rejecting argument that underlying contracts were fraudulent, relying on
arbitrator’s detailed examination of similar claims in arbitration); Judgment of 23 March
2006, SNF v. Cytec Indus. BV, XXXII Y.B. Comm. Arb. 282 (Paris Cour d’appel) (2007). See
alsoJudgments of 20 April 2000 and 15 June 2000, 2001 Rev. arb. 805 (Paris Cour d’appel),
Note, Derains (“The courts shall control the compliance of the award with public policy
with regard to the case (facts and law) as pleaded before the arbitral tribunal.”).
918) See, e.g., ACandS, Inc. v. Travelers Cas. & Sur. Co., 435 F.3d 252, 258 (3d Cir. 2006)
(“automatic stay provision of the Bankruptcy Code promotes a public policy sufficient to
preclude enforcement of an award that violates its terms or interferes with its
purposes”); Judgment of 5 January 1999, Gallay v. Fabricated Metals, 2001 Rev. arb. 805
(French Cour de cassation civ. le), Note, Derains (EU competition law generally part of
French public policy); Judgment of 18 November 2004, SA Thalès Air Défence v. GIE
Euromissile, 2005 Rev. arb. 751, 757 (Paris Cour d’appel) (“a rule of law that is deemed
essential or of a fundamental principle, which is the case with failure to comply with the
prohibition laid down in Art. 81 [of the EC Treaty] for the functioning of the internal
market since it is indisputable that the international public policy of the Member States
can also have a Community source”); Judgment of 31 May 1972, 1972 NJW 2180 (German
Bundesgerichtshof) (EU competition law generally part of German public policy);
Judgment of 27 February 1969, 1969 NJW 978 (German Bundesgerichtshof) (EU law
generally part of German public policy); Judgment of 5 May 1998, 3 Ob. 2372/96 (Austrian
Oberster Gerichtshof) (EU VAT law is part of Austrian public policy); Judgment of 23
February 1998, XXIV Y.B. Comm. Arb. 919, 923, 927 (Austrian Oberster Gerichtshof) (1999)
(EU competition law is part of Austrian public policy). See also Eco Swiss China Time Ltd
v. Benetton Int’l NV, [1999] Case No. C-126/97 (E.C.J.) (EU competition laws constitute
public policy under New York Convention).
919) See, e.g., TMR Energy Ltd v. State Prop. Fund of Ukraine, 411 F.3d 296 (D.C. Cir. 2005)
(violation of Ukrainian bankruptcy law is not violation of public policy); Judgment of 3
April 2006, DFT 4P.278/2005 (Swiss Federal Tribunal) (EU competition law is not part of
public policy for purposes of Article 190(2)(e) of Swiss Law on Private International Law);
Judgment of 2 September 1999, XXIX Y.B. Comm. Arb. 697 (Oberlandesgericht
Brandenburg) (2004) (violation of German Bankruptcy Act is not violation of public
policy); Judgment of 2 July 2008, XXXIV Y.B. Comm. Arb. 430 (Alberta Super. Ct.) (2009)
(violation of Alberta Franchises Act is not violation of public policy); Judgment of 27
February 1989, XVI Y.B. Comm. Arb. 536 (Finnish Korkein Oikeus) (1991) (violation of Finnish
bankruptcy law is not violation of public policy).
139
920) See, e.g., Matthews v. Nat’l Football League Mgt Council, 688 F.3d 1107, 1113-14 (9th Cir.
2012) (arbitrator’s enforcement of negotiated choice-of-law and forum provisions in
employment contract did not violate California or federal public policy); PaineWebber,
Inc. v. Agron, 49 F.3d 347, 350-51 (8th Cir. 1995) (where arbitrator ordered reinstatement
of employee, who signed client’s name with client consent, on grounds of “termination
for cause” provision in employment contract, court found no violation of public policy);
United Food & Commercial Workers Int’l Union v. Foster Poultry Farms, 74 F.3d 169, 173-74
(9th Cir. 1995) (no public policy violation where arbitrator enforced collective bargaining
agreement’s provision “that all labor disputes implicating the [agreement] must be
settled through … the arbitration procedures set forth in the contract”); Chicago Bears
Football Club, Inc. v. Haynes, 816 F.Supp.2d 534, 538 (N.D. Ill. 2011) (arbitrator’s
enforcement of negotiated choice-of-law and forum provisions in an employment
contract did not violate California public policy); Judgment of 24 June 2010, Société
Inforad Ltd v. Société Tes Elec. Solutions, 2010 Rev. arb. 675 (Paris Cour d’appel) (contract
dispute do not pertain to international public policy); Glanstein, A Hail Mary Pass: Public
Policy Review of Arbitration Awards, 16 Ohio St. J. Disp. Res. 297, 302 (2001) (“Actions for
breaches of commercial contracts rarely implicate such [public policy] concerns.”).
921) Judgment of 17 December 2009, Société Gothaer Finanzholding AG v. Liquidators of ICD,
25(3) Mealey’s Int’l Arb. Rep. 26 (2010) (Paris Cour d’appel)(allegations that arbitral
tribunal’s findings were not based on any evidence were dismissed because claimant
had not established flagrant, effective and concrete breach of public policy). See
alsoJudgment of 11 March 2009, de Prémont v. Société Trioplast AB, 2009 Rev. arb. 240,
240 (French Cour de cassation civ. 1e) (“recognition [of award] was not contrary to
international public policy” because arbitral tribunal applied applicable EU law);
Judgment of 4 June 2008, SNF v. Cytec, 2008 Rev. arb. 473 (French Cour de cassation civ.
1e), Note, Derains (“the [court’s] review is limited to flagrant, effective and concrete
breaches”); Judgment of 21 March 2000, 2001 Rev. arb. 805 (French Cour de cassation civ.
1e) (violation of public policy must be flagrant and have material effect in order for
award to be annulled); Judgment of 22 October 2009, Linde AG v. Halyvourgiki AE, 2010
Rev. arb. 124 (Paris Cour d’appel) (in order to annul award on grounds of violation of
public policy award-debtor must show that violation of EU competition law is blatant,
real and concrete); Judgment of 18 November 2004, SA Thalès Air Défence v. GIE
Euromissile, 2005 Rev. arb. 751 (Paris Cour d’appel); Mayer, La sentence contraire a l’ordre
public au fond, 1994 Rev. arb. 615.
922) See, e.g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 638 (U.S.
S.Ct. 1985); Lindo v. NCL (Bahamas), Ltd, 652 F.3d 1257, 1267 (11th Cir. 2011); Baxter Int’l,
Inc. v. Abbott Labs., 315 F.3d 829, 832 (7th Cir. 2003); Chisolm v. Kidder Peabody Asset Mgt
Inc., 966 F.Supp. 218, 219 (S.D.N.Y. 1997) (“The standard of judicial review of arbitral
decisions in cases involving statutory rights is no different from the extremely limited
review used in arbitration generally.”); CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238
(Tex. 2002) (confirming award of lien on homestead because of gambling debt: “it is no
more against policy to arbitrate whether a debt has arisen from gambling or some other
activity rendering it unenforceable, as opposed to some legitimate activity, than it is to
litigate the same issue”).
As discussed below, there are U.S. decisions that appear to adopt a more detailed
inquiry into the merits of arbitrators’ public policy decisions. See §24.05[H][5], p. 3322.
923) See Baxter Int’l, Inc. v. Abbott Labs., 315 F.3d 829, 832 (7th Cir. 2003).
924) See, e.g., Abuja Int’l Hotels Ltd v. Meridien SAS [2012] EWHC 87 (Comm) (English High Ct.).
925) See, e.g., Judgment of 27 March 2012, DFT 138 III 322, 327 (Swiss Federal Tribunal);
Judgment of 8 March 2006, DFT 132 III 389, 397 (Swiss Federal Tribunal); Judgment of 1
February 2002, 20 ASA Bull. 337, 348 (Swiss Federal Tribunal) (2002); Judgment of 13
November 1998, XXV Y.B. Comm. Arb. 511, 513 (Swiss Federal Tribunal) (2000).
926) See, e.g.,Judgment of 23 October 2003, III ZB 29/03 (German Bundesgerichtshof); Judgment
of 7 June 2006, 11 Sch 02/06 (Oberlandesgericht Dresden); Judgment of 25 August 2004,
2004 SchiedsVZ 319 (Bayerisches Oberstes Landesgericht); Judgment of 27 May 2002, 23
Sch 06/02 (Kammergericht Berlin).
927) SeePitkowitz, Setting Aside Arbitral Awards Under the New Austrian Arbitration Act, 2007
Austrian Arb. Y.B. 231, 258; Judgment of 24 August 2011, 3 Ob 65/11x (Austrian Oberster
Gerichtshof); Judgment of 26 January 2005, 3 Ob 221/04b (Austrian Oberster Gerichtshof).
928) See, e.g., Judgment of 4 May 2005, Latvian Repub. v. JSC Latvigas Gaze, Case No. T 6730-03
(Svea Ct. App.).
929) See, e.g., Judgment of 21 July 2006, Terra Armata v. Tensacciai, unreported decision (Milan
Corte d’Appello) (minimal review of substance of arbitrators’ application of competition
law); Judgment of 21 March 2006, Nuovo Pignone v. Schlumberger, unreported decision
(Florence Corte d’Appello) (same).
930) See AJT v. AJU, [2011] SGCA 41, ¶¶65, 69 (Singapore Ct. App.) (public policy exception
should generally be conducted on basis of arbitral tribunal’s legal conclusions, and not
on review of its findings of fact, unless there is “fraud, breach of natural justice or some
other recognized vitiating factor”).
140
931) See, e.g., Mourre & Radicati di Brozolo, Towards Finality of Arbitral Awards: Two Steps
Forward and One Step Back, 23 J. Int’l Arb. 171, passim (2006); H. Arfazadeh, Ordre public et
arbitrage international à l’épreuve de la mondialisation 79-109 (2005); Ortscheidt, Le
contrôle superficiel de la violation par l’arbitre de l’ordre public international: une
flagrante autonomie de l’arbitrage, 25 JCP G act. 430 (2008) (“misapplication of [EU
competition law] by the arbitrator is not sufficient by itself to amount to” a breach of
international public policy); N. Shelkoplyas, The Application of EC Law in Arbitration
Proceedings 313-15 (2003) (“It is submitted that non-application or incorrect application
of EC competition law cannot by itself be contrary to public policy because, if it were,
there should be a corresponding positive obligation on arbitrators to enforce certain
laws, which there is not.”).
932) See, e.g., Idot, Arbitration and the Reform of Regulation 17/62, in C. Ehlermann & I.
Atanasiu (eds.), European Competition Law Annual 2001: Effective Private Enforcement of
EC Antitrust Law 320 (2003); Silberman, International Arbitration: Comments From A Critic,
13 Am. Rev. Int’l Arb. 9, 12, 18 (2002) (“Broader protection for mandatory laws in the
context of international arbitration could give greater integrity in the process”; however,
“once a more circumscribed role for private-dispute arbitration is in place, judicial
review by courts should be extremely limited”).
933) See §24.05[H][5].
934) Judgment of 24 March 2005, Mktg Displays Int’l v. VR Van Raalte Reclame BV, XXXI Y.B.
Comm. Arb. 808, 816 (Hague Gerechtshof) (2006).
935) Mourre & Radicati di Brozolo, Towards Finality of Arbitral Awards: Two Steps Forward and
One Step Back, 23 J. Int’l Arb. 171, 181-85 (2006) (“There is no question that the judgment
of the Hague Court of Appeal in Marketing Displays is a deplorable step back on the road
towards finality of arbitral awards …. [T]he judgment is in all respects bad law and
clearly demonstrates the serious drawbacks of the intrusive review of awards by
national courts advocated by some commentators.”).
936) See, e.g., John Morrell & Co. v. Local Union 304A of United Food & Commercial Workers, 913
F.2d 544, 562-63 (8th Cir. 1990); Judgment of 13 April 2010, DFT 4A_490/2009 (Swiss Federal
Tribunal) (annulling award on public policy grounds, for failure to give res judicata effect
to prior Swiss court judgment); Judgment of 28 September 1979, 1980 Rev. arb. 506 (Paris
Cour d’appel) (annulling award for failure to apply res judicata rules); PT Asuransi Jasa
Indonesia (Persero) v. Dexia Bank SA, [2006] SGCA 41 (Singapore Ct. App.). See§27.02;
§27.03 for a discussion of preclusion in international arbitral proceedings.
937) Aircraft Braking Sys. Corp. v. Local 856, Int’l Union, 97 F.3d 155, 159 (6th Cir. 1996). Compare
the treatment of preclusion rules in the context of recognizing foreign awards, §26.05[C]
[9][h][x], pp. 3680-81.
938) See, e.g., Judgment of 9 September 2010, Marriott Int’l Hotels Inc. v. JNAH Dev. SA, Case No.
09/13550 (Paris Cour d’appel) (rejecting annulment of award; res judicata is question of
admissibility for arbitral tribunal and tribunal’s consideration of claims that are barred
by res judicata cannot constitute ground for annulment ); Judgment of 9 June 1983, Iro-
Holding v. Setilex, 1983 Rev. arb. 497 (Paris Cour d’appel) (failure to apply res judicata
rules not violation of public policy); Holding Tusculum BV v. Louis Dreyfus SAS, [2008]
QCCS 5904 (Québec Super. Ct.) (violation of res judicata not violation of public policy).
939) UNCITRAL, 2012 Digest of Case Law on the Model Law on International Commercial
Arbitration 164 (2012) (“The principle of proportionality as a part of public policy has
been invoked by parties in various instances … in relation to the performance of a
contract, its breach, or in relation to costs.”).
940) See§26.05[C][9][h][xiv].
941) See VV v. VW, [2008] SLR 929 (Singapore High Ct.) (rejecting claim that award of costs
three times greater than underlying claim violated public policy because it was not
proportionate; principle of proportionality was not part of narrow concept of public
policy in Singapore).
942) Report of the UNCITRAL on the Work of Its Eighteenth Session, U.N. Doc. A/40/17, ¶297, XVI
Y.B. UNCITRAL 3 (1985).
943) See, e.g., English Arbitration Act, 1996, §68(2)(g) (“the award or the way in which it was
procured being contrary to public policy”) (emphasis added); Netherlands Code of Civil
Procedure, Art. 1065(1)(e) (“the award, or the manner in which it was made, violates public
policy or morals”) (emphasis added).
944) See, e.g., Corporación Transnacional de Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49
O.R.3d 414 (Ontario Ct. App.) (public policy includes both substantive and procedural
aspects); Judgment of 29 October 2009, 26 Sch 12/09 (Oberlandesgericht Frankfurt)
(procedural public policy is violated only by extremely severe procedural violations
that have material effects on party’s case); Judgment of 27 March 2008, Socomep v.
Jouault, 2008 Rev. arb. 342 (Paris Cour d’appel) (procedural public policy guarantees
essential requirements of fair proceeding). See also Mantilla-Serrano, Towards A
Transnational Procedural Public Policy, 20 Arb. Int’l 333 (2004); Schwarz & Ortner,
Procedural Ordre Public and the Internationalization of Public Policy in Arbitration, 2008
Austrian Arb. Y.B. 133.
945) Judgment of 13 April 2010, DFT 4A_490/2009, ¶2.1 (Swiss Federal Tribunal).
946) See§25.04[B]. See also§26.05[C][9][i].
141
947) E. Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International Commercial
Arbitration ¶1654 (1999).
This analysis is difficult to follow. As discussed above, most national laws (including the
Model Law) regard a denial of equal treatment as an independent basis for annulment.
See§25.04[B]. The same is true of fraud. See§25.04[J].
948) See§§15.04[B][2]-[3]; §25.04[B][4]; §26.05[C][3][d].
949) See§25.04[H][5]; §25.04[J][1]; §26.05[C][11].
950) See§4.04[B][2][b][vi]; §6.02[F]; §15.04.
951) SeeUNCITRAL Model Law, Arts. 34(2)(a), 34(2)(b)(2). As discussed elsewhere, public policy
grounds for non-recognition of a foreign award can also generally be raised sua sponte
by the recognition court. See§25.03[A][4]; §26.03[B][3]; §26.05[C][9][c]; New York
Convention, Arts. V(1), (2); UNCITRAL Model Law, Arts. 36(1)(a), 36(1)(b)(ii).
952) See, e.g.,Judgment of 22 October 2009, Linde AG v. Halyvourgiki AE, 2010 Rev. arb. 124
(Paris Cour d’appel) (failure to raise EU competition law claims in arbitral proceedings
does not preclude raising such claims as basis for annulling award on grounds of public
policy).
751, 757 (Paris Cour d’appel) (“there are limits to the possibility to raise a public policy
argument in the framework of the control of an award,” arising from “the final character
of what has been judged on the merits by the arbitrators”).
751, 759 (Paris Cour d’appel)See alsoJudgment of 22 October 2009, Société Linde AG v.
Société Halyvourgiki, 2010 Rev. arb. 124, 127-28 (Paris Cour d’appel) (in annulment action,
involving public policy objection, declining to “rule on the merits of a complex dispute
that has not been decided by the arbitrators and that would require a much more
complete investigation than that which results from [the] exchange of submissions
before [the Paris Cour d’appel]”).
955) See§26.05[C][9][g]; Westacre Inv. Inc. v. Jugoimport-SDPR Holdings Co. Ltd [1998] 4 All ER
570 (QB) (English High Ct.) (discussing issues akin to waiver in context of illegality); Gee,
The Autonomy of Arbitrators and Fraud Unravels All, 22 Arb. Int’l 337 (2006). See also A v. R,
[2009] 3 HKLRD 389 (H.K. Ct. First Inst.) (rejecting argument that public policy objections
cannot be waived; there is “possibility that a party may be precluded by his failure to
raise a point before the court of supervisory jurisdiction from raising that point before
the court of enforcement. Failure to raise such a point may amount to an estoppel or a
want of bona fides such as to … justify the court of enforcement in enforcing an award.”).
956) See§6.02[F].
957) See, e.g.,Judgment of 18 November 2004, SA Thalès Air Défence v. GIE Euromissile, 2005
Rev. arb. 751, 759 (Paris Cour d’appel) (“sole fact that antitrust law was not raised ex
officio by the arbitral tribunal does not justify the setting aside of the award”); Judgment
of 14 June 2001, Andre v. Tradigrain, 2001 Rev. arb. 773 (Paris Cour d’appel).
958) See H. Holtzmann & J. Neuhaus, A Guide to the UNCITRAL Model Law on International
Commercial Arbitration: Legislative History and Commentary 912-15, 1001-02 (1989).
959) See, e.g., English Arbitration Act, 1996, §68(2)(g) (“award being obtained by fraud”);
Belgian Judicial Code, Art. 1717(b)(iii) (“obtained by fraud”); Singapore International
Arbitration Act, 2012, Art. 24(a); Chinese Arbitration Law, Art. 58(4) (“evidences on which
the ruling is based are forged”); Taiwanese Arbitration Act, Art. 40(8) (“any of the
evidentiary documents, upon which arbitral award was based, has been adjudged to
have been forged or fraudulently altered, and the judgment has been affirmed”);
Brazilian Arbitration Law, Art. 32(vi); Iranian International Commercial Arbitration Law,
Art. 33(1)(h)(i) (award relies on “falsified documents or documents were concealed”). See
also European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2) (“if
it was obtained by fraud”); Mayer & Sheppard, Final ILA Report on Public Policy as A Bar
to Enforcement of International Arbitral Awards, in ILA, Committee on International
Commercial Arbitration, Proceeding of New Delhi Conference (2002), 19 Arb. Int’l 249, ¶29
(2003) (recommending annulment where “making of the award was induced or affected
by fraud or corruption”).
960) ICSID Convention, Art. 52(c) (“there was corruption on the part of a member of the
Tribunal”); ILC, Draft on Arbitral Procedure Prepared by the International Law Commission
at Its Fourth Session, 1952, U.N. Doc. A/CN.4/59, Art. 30, II Y.B. I.L.C. 60, 66 (1952) (“The
validity of the award may be challenged by either party on one or more of the following
grounds: … (b) that there was corruption on the part of a member of the tribunal”).
142
961) See, e.g., Mitchell v. Ainbinder, 214 F.Appx. 565, 568 (6th Cir. 2007); MidAmerican Energy Co.
v. IBEW Local 499, 345 F.3d 616, 622 (8th Cir. 2003); Int’l Bhd of Teamsters, Local 519 v. UPS,
335 F.3d 497, 503 (6th Cir. 2003); Westacre Inv. Inc. v. Jugoimport-SPDR Co. Ltd [1999] 2
Lloyd’s Rep. 65 (English Ct. App.) (perjured testimony is grounds for annulling award);
Judgment of 1 July 2010, Thalès v. Brunner Sociedad Civil de Administraçao Ltda, 2010 Rev.
arb. 856 (Paris Cour d’appel); Decision of 26 November 2009, 2(4) Int’l J. Arab Arb. 131
(Paris Cour d’appel) (2010); Judgment of 30 September 1993, Euro’n Gas Turbines SA v.
Westman Int’l Ltd, XX Y.B. Comm. Arb. 198 (Paris Cour d’appel) (1995) (use of fraudulently
falsified documents is grounds for annulling award); Corporación Transnacional de
Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414 (Ontario Ct. App.); Karaha
Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Case No. 0203
03768 (Alberta Super. Ct. 2010); Methanex Motunui Ltd v. Spellman, [2004] 1 NZLR 95
(Auckland High Ct.).
962) See§26.05[C][11].
963) See§24.07.
964) U.S. FAA, 9 U.S.C. §10(a)(1) (award may be vacated in cases of “corruption, fraud or undue
means”).
965) See, e.g., Mitchell v. Ainbinder, 214 F.Appx. 565, 568 (6th Cir. 2007) (“Generally, when a
plaintiff is seeking vacatur of an arbitration award under 9 U.S.C. §10(a)(1), fraud must be
established by clear and convincing evidence. … Both perjury and fraud require proof of
some sort of willful intent to give false testimony.”); Foster v. Turley, 808 F.2d 38, 42 (10th
Cir. 1986); Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982) (“courts must
be slow to vacate an arbitral award on the ground of fraud”); Washington-Baltimore
Newspaper Guild Local 35 v. Washington Post Co., 442 F.2d 1234, 1238-39 (D.C. Cir. 1971).
The same is true in the context of foreign judgments in many jurisdictions. G. Born & P.
Rutledge, International Civil Litigation in United States Courts 1180-82 (5th ed. 2011).
966) Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1383 (11th Cir. 1988). See alsoKaraha
Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 306-
07 (5th Cir. 2004); MidAmerican Energy Co. v. IBEW Local 499, 345 F.3d 616, 622 (8th Cir.
2003); Int’l Bhd of Teamsters, Local 519 v. UPS, 335 F.3d 497, 503 (6th Cir. 2003); Flessas v.
Showa Denko K.K., 1997 U.S. App. LEXIS 15441, at *7-8 (7th Cir.); Foster v. Turley, 808 F.2d
38, 42 (10th Cir. 1986); Dogherra v. Safeway Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982)
(“The fraud must not have been discoverable upon the exercise of due diligence prior to
the arbitration. … The fraud must materially relate to an issue in the arbitration … [and]
must be established by clear and convincing evidence.”); Shearson Hayden Stone, Inc. v.
Liang, 653 F.2d 310, 313 (7th Cir. 1981); Drayer v. Krasner, 572 F.2d 348, 352 (2d Cir. 1978).
967) See, e.g., Repub. of Argentina v. BG Group plc, 715 F.Supp.2d 108, 125 (D.D.C. 2010)
(rejecting argument that award was procured by fraud because witness statements
submitted in arbitration were “identical or substantially identical to a witness
statement” submitted in an earlier case: “Assuming that counsel did in fact have a heavy
hand in drafting the declarations at issue in these cases, their actions do not rise to the
level of wrongdoing unless Argentina can prove that the witness signed the statement
without subscribing to the facts stated therein.”), rev’d on other grounds, 665 F.3d 1363
(D.C. Cir. 2012); Local 261 v. Great N. Paper Co., 118 L.R.R.M. 2317 (D. Me. 1984); Newark
Stereotypers’ Union No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 600 (3d Cir. 1968).
968) For the type of extreme case that will satisfy the fraud exception under the FAA, see
Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1383-84 (11th Cir. 1988), where an
“expert witness” was held to have “lied about all of his credentials – where he went to
school, what degrees he had, and what jobs he had held.”
969) Nat’l Oil Corp. v. Libyan Sun Oil Co., 733 F.Supp. 800, 814 (D. Del. 1990). See MidAmerican
Energy Co. v. IBEW Local 499, 345 F.3d 616, 622 (8th Cir. 2003); Int’l Bhd of Teamsters, Local
519 v. UPS, 335 F.3d 497, 503 (6th Cir. 2003); Flessas v. Showa Denko K.K., 1997 U.S. App.
LEXIS 15441, at *7-8 (7th Cir.).
970) See Biotronik Mess-und Therapiegeraete GmbH & Co. v. Medford Med. Instrument Co., 415
F.Supp. 133 (D.N.J. 1976).
971) Elektrim SA v. Vivendi Universal SA [2007] EWHC 11, ¶80 (Comm) (English High Ct.). See
also Westacre Inv. Inc. v. Jugoimport-SPDR Co. Ltd [1999] 2 Lloyd’s Rep. 65 (English Ct.
App.); L Brown & Sons Ltd v. Crosby Homes (N.W.) Ltd [2008] EWHC 817 (TCC) (English High
Ct.) (setting out circumstances in which award may be set aside on basis of fraud);
Profilati Italia Srl v. Painewebber Inc. [2001] 1 Lloyd’s Rep. 715 (QB) (English High Ct.);
Cuflet Chartering v. Carousel Shipping Co. Ltd [2001] 1 All ER 398, 399 (Comm) (English High
Ct.) (“nothing short of unconscionable conduct would justify the court in setting aside the
award”); Gee, The Autonomy of Arbitrators and Fraud Unravels All, 22 Arb. Int’l 337 (2006).
972) See, e.g., Elektrim SA v. Vivendi Universal SA [2007] EWHC 11 (Comm) (English High Ct.);
Protech Projects Constr. (Pty) Ltd v. Al-Kharafi & Sons [2005] 2 Lloyd’s Rep. 779 (QB)
(English High Ct.) (inadvertent failure to disclose documents is not fraud); Thyssen
Canada Ltd v. Mariana Maritime SA [2005] 1 Lloyd’s Rep. 640 (QB) (English High Ct.);
Profilati Italia Srl v. Painewebber Inc. [2001] 1 Lloyd’s Rep. 715 (QB) (English High Ct.).
In contrast, the Canadian Supreme Court has held that “patently unreasonable errors”
can be construed as an abuse of authority amounting to fraud and as ground for
annulment for an award. Blanchard v. Control Data Canada Ltd, [1984] 2 S.C.R. 476
(Canadian S.Ct.).
143
973) Westacre Inv. Inc. v. Jugoimport-SPDR Co. Ltd [1999] 1 All ER (Comm) 865, 882 (English Ct.
App.).
974) SeeJudgment of 6 October 2009, XXXV Y.B. Comm. Arb. 610 (2010) (Swiss Federal Tribunal)
(court held that award had been obtained by misleading arbitrators through false
witness statements); Judgment of 11 May 1999, 18 ASA Bull. 323 (Swiss Federal Tribunal)
(2000); B. Berger & F. Kellerhals, International and Domestic Arbitration in Switzerland
¶1789 (2d ed. 2010).
975) See Judgment of 28 February 1990, 9 Ob A 38/90 (Austrian Oberster Gerichtshof).
976) SeeJudgment of 17 June 1997, Société Eiffage v. Société Butec, 1997 Rev. arb. 583 (Paris Cour
d’appel); Judgment of 21 January 1997, Société Nu Swift plc v. Société White Knight, 1997
Rev. arb. 429 (Paris Cour d’appel).
977) See, e.g., Judgment of 14 May 1952, II ZR 276/51 (German Bundesgerichtshof); Judgment of
4 June 2012, 20 Sch 10/11 (Kammergericht Berlin); Judgment of 16 July 2002, 2003
SchiedsVZ 84 (Oberlandesgericht Stuttgart); K.-H. Schwab & G. Walter,
Schiedsgerichtsbarkeit ¶15-18 (7th ed. 2005). Compare Lotz, Der Sachverständige im
Schiedsverfahren, 2011 SchiedsVZ 203. See also Judgment of 26 November 2010, SAP M
17907/2010 (Madrid Audiencia Provincial) (forgery of documents submitted in arbitration
does not constitute grounds to annul award).
978) See, e.g., G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1403 (9th Cir. 1992) (party
seeking to vacate award bore burden of proof); Dogherra v. Safeway Stores, Inc., 679 F.2d
1293, 1297 (9th Cir. 1982) (same); Profilati Italia Srl v. Paine Webber Inc. [2001] 1 Lloyd’s
Rep. 640 (award-debtor had burden of proving that fraud was deliberate and award-
debtor suffered “substantial injustice as a result”); Judgment of 11 May 1999, 18 ASA Bull.
323 (Swiss Federal Tribunal) (2000) (award-debtor has burden of proof that tribunal
would have rendered a more favourable award absent fraudulent act).
979) See§25.04[J][2].
980) See, e.g., G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1404 (9th Cir. 1992) (“party
seeking vacation must show that the fraud was (1) not discoverable upon the exercise of
due diligence prior to the arbitration, (2) materially related to an issue in the
arbitration, and (3) established by clear and convincing evidence”); Dogherra v. Safeway
Stores, Inc., 679 F.2d 1293, 1297 (9th Cir. 1982) (“The fraud must … be established by clear
and convincing evidence.”); R. Merkin & L. Flannery, Arbitration Act 1996 (4th ed. 2008)
(Under English law, “[w]hat is required … is fraud on the part of the successful party in
the arbitration, for example, the deliberate withholding of material evidence or abuse
of the arbitral process. A negligent or innocent failure to produce evidence, or the
absence of unconscionable behavior … will not suffice.”).
981) See, e.g., United Mexican States v. Metalclad Corp., [2001] BCSC 664 (B.C. S.Ct.) (no
violation of public policy where fraud was not relied upon by arbitral tribunal).
982) Biotronik Mess- und Therapiegeraete GmbH & Co. v. Medford Med. Instrument Co., 415
F.Supp. 133, 137 (D.N.J. 1976). See also A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d
1401, 1403 (9th Cir. 1992) (reversing district court decision that prevailing parties’
submission of meritless arguments to arbitrators warranted vacating award); Waterside
Ocean Navigation Co. v. Int’l Navigation Ltd, 737 F.2d 150, 153 (2d Cir. 1984); Nat’l Oil Corp.
v. Libyan Sun Oil Co., 733 F.Supp. 800, 814 (D. Del. 1990); Mobil Oil Indonesia Inc. v.
Asamera Oil (Indonesia) Ltd, 487 F.Supp. 63, 66-67 (S.D.N.Y. 1980).
983) G. Born & P. Rutledge, International Civil Litigation in United States Courts 1180-82 (5th
ed. 2011); Hague Convention of 30 June 2005 on Choice of Court Agreements, Art. 9(d)
(judgment may be denied recognition if “obtained by fraud in connection with a matter
of procedure”). See Indocomex Fibres Pte, Ltd v. Cotton Co. Int’l, Inc., 916 F.Supp. 721, 728-
29 (W.D. Tenn. 1996) (allegations of fraud in underlying dispute, not in arbitration, are not
grounds for vacating award).
984) See§25.03 (especially §25.03[A][6]).
985) See, e.g., French Code of Civil Procedure, Arts. 1520, 1523; Swiss Law on Private
International Law, Arts. 190, 194.
986) See§25.05[D]; U.S. FAA, 9 U.S.C. §§9, 10, 202, 207; English Arbitration Act, 1996, §§67-70,
99-103.
987) See§25.02[A]. Contra§25.02[B].
988) As discussed elsewhere, Belgium adopted legislation providing for no judicial review of
international awards made in Belgium in disputes among foreign parties. See§25.06, p.
3362. That legislation was subsequently amended to provide for the possibility of
annulment in such cases, while granting parties the option of waiving judicial review.
See§25.06, pp. 3362-63.
989) See§1.02[B][3].
990) See§1.02[B] (especially §§1.02[B][5] & [7]); §25.03.
991) See§1.04[B][1][d], p. 149; 1.04[B][2]; Berger, The Modern Trend Towards Exclusion of
605 (1989); Kolkey, Attacking Arbitral Awards: Rights of Appeal and Review in International
Arbitrations, 22 Int’l Law. 693 (1988) (overview of evolution of judicial review of arbitral
awards); Okeke, Judicial Review of Foreign Arbitral Awards: Bane, Boon, or Boondoggle?, 10
N.Y. Int’l L. Rev. 29, 31-33 (1997) (“Originally, arbitration was viewed with suspicion by
many court systems throughout the world, seeing it as an attempt to oust their
jurisdiction.”).
992) See§25.05[A][1].
993) See§25.04[H][6]; §25.05[A][2]; §25.05[D]; Mourre & Radicati di Brozolo, Towards Finality of
Arbitral Awards: Two Steps Forward and One Step Back, 23 J. Int’l Arb. 171, 172 (2006).
144
994) See§25.02[B].
995) As discussed above, some U.S. courts have held that awards made in the United States,
even if “nondomestic” under the New York Convention, may be subject to applications to
vacate under domestic FAA standards. See§22.02[E][1][a][iii]; §22.02[E][2][a][iv]. Other
U.S. courts have reached the opposite conclusion, holding that nondomestic awards
made in the United States may only be vacated on grounds equivalent to those in Article
V of the New York Convention. See§25.02[B], p. 3169.
996) The manifest disregard basis for vacatur is seldom advanced and much less seldom
successful. Duferco Int’l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 389-90
(2d Cir. 2003) (awards partially or entirely vacated in four out of 48 cases in Second
Circuit).
997) Wilko v. Swan, 346 U.S. 427, 436-37 (U.S. S.Ct. 1953).
In turn, the Wilko Court apparently drew on a 19th century Supreme Court opinion in a
prize dispute (United States v. Farragut, 89 U.S. 406, 420 (U.S. S.Ct. 1874)). Farragut
opined that mistakes of law made by arbitrators “could have been corrected in the court
below, and can be corrected here.” Farragut, 89 U.S. at 420. The Court then continued:
“the award was also liable … to be set aside … for exceeding the power conferred by the
submission, for manifest mistake of law, for fraud, and for all the reasons on which
awards are set aside in courts of law and chancery.” The Court’s broad language in
Farragut cannot easily be reconciled with Burchell v. Marsh, 58 U.S. 344, 345 (U.S. S.Ct.
1854), where the Court remarked: “If an award is within the submission, and contains the
honest decision of the arbitrators, after a full and fair hearing of the parties, a court of
equity will not set it aside for error, either in law or fact. A contrary course would be a
substitution of the judgment of the chancellor in place of the judges chosen by the
parties, and would make an award the commencement, not the end, of litigation.”
Compare Allen v. Miles, 4 Del. (4 Harr.) 234 (Del. Super. Ct. 1845) (“But in no case will the
court retry the cause, or go into an examination of the merits of an award; or set it aside
because they would have drawn different conclusions from the arbitrations from
conflicting testimony; or would have made a different award. But where it manifestly
appears that the arbitrators have clearly mistaken the law, or that they know what the
law was, and purposely disregarded it, or that they have made an evident mistake in
matter of fact, the court are bound to set aside an award, as they are to set aside a
verdict which is manifestly against the law or the facts.”). See also Phillips, Rules of Law
or Laissez-Faire in Commercial Arbitration, 47 Harv. L. Rev. 590 (1934).
998) Wilko’s principal holding, which involved the arbitrability of certain federal securities
law claims, was overruled in Rodriguezde Quijas v. Shearson/Am. Express, Inc., 490 U.S.
477, 485 (U.S. S.Ct. 1989).
999) I/S Stavborg v. Nat’l Metal Converters, Inc., 500 F.2d 424, 430 n.13 (2d Cir. 1974).
1000) See, e.g., Baravati v. Josephthal, Lyon & Ross, 28 F.3d 704, 706 (7th Cir. 1994) (“We can
understand neither the need for the formula nor the role that it plays in judicial review
of arbitration (we suspect none – that it is just words). If it is meant to smuggle review for
clear error in by the back door, it is inconsistent with the entire modern law of
arbitration. … There is enough confusion in the law. The grounds for setting aside
arbitration awards are exclusively stated in the statute. Now that Wilko is history, there
is no reason to continue to echo its gratuitous attempt at non-statutory
supplementation.”); Rostad & Rostad Corp. v. Inv. Mgt & Research, Inc., 923 F.2d 694, 697
(9th Cir. 1991).
1001) Smit, Manifest Disregard of the Law in the New York Supreme Court, Appellate Division,
First Department, 15 Am. Rev. Int’l Arb. 111, 121 (2004). See also Rau, Fear of Freedom, 17
Am. Rev. Int’l Arb. 469 (2006).
1002) Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct. 2008).
1003) Hall St. Assocs., 552 U.S. 576. Even if “maybe” means “really does,” it is unclear why the
basis for the manifest disregard doctrine would necessarily affect its content.
1004) See Davis, The End of An Error: Replacing “Manifest Disregard” With A New Framework for
Reviewing Arbitral Awards, 60 Clev. St. L. Rev. 87 (2012).
1005) Citigroup Global Mkts, Inc. v. Bacon, 562 F.3d 349, 355 (5th Cir. 2009) (“Hall Street
unequivocally held that the statutory grounds are the exclusive means for vacatur under
the FAA …. Thus, to the extent that manifest disregard of the law constitutes a non-
statutory ground for vacatur, it is no longer a basis for vacating awards under the FAA”);
AIG Baker Sterling Heights, LLC v. Am. Multi-Cinema, Inc., 579 F.3d 1268, 1271 (11th Cir.
2009) (Hall Street confirmed that “§§10 and 11 of the FAA offer the exclusive grounds for
expedited vacatur or modification of an award”); Med. Shoppe Int’l, Inc. v. Turner Invs.,
Inc., 614 F.3d 485, 489 (8th Cir. 2010) (court “previously recognized the holding in Hall
Street and similarly hold now that an arbitral award may be vacated only for the reasons
enumerated in the FAA”). See also Restatement (Third) U.S. Law of International
Commercial Arbitration §4-22, Reporters’ Note g (Tentative Draft No. 2 2012) (“The
Restatement takes the position that manifest disregard of the law is not a ground for
vacating or denying recognition or enforcement of an award under FAA §10”).
145
1006) AZ Holding, LLC v. Frederick, 473 F.Appx. 776 (9th Cir. 2012); Biller v. Toyota Motor Corp.,
668 F.3d 665 (9th Cir. 2012); Goldman Sachs v. Official Unsecured Creditors’ Comm’n of
Bayou Group, 491 F.Appx. 201 (2d Cir. 2012); Stolt-Nielsen, 548 F.3d at 94-95 (manifest
disregard is “shorthand” for FAA’s statutory grounds for vacatur); Comedy Club, Inc. v.
Improv W. Assocs., 553 F.3d 1277, 1290 (9th Cir. 2009) (applying Ninth Circuit’s longstanding
interpretation that manifest disregard is equivalent to §10(a)(4) of FAA). See also Coffee
Beanery, Ltd v. WW LLC, 2008 U.S. App. LEXIS 23645 (6th Cir.) (“we believe it would be
imprudent to cease employing such a universally recognized principle [i.e., manifest
disregard]”).
1007) Wachovia Sec., LLC v. Brand, 641 F.3d 472 (4th Cir. 2012).
1008) Johnson Controls, Inc. v. Edeman Controls Inc., 2013 WL 1098411, at *4 (7th Cir.). See also
George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577 (7th Cir. 2001) (defining manifest
disregard doctrine as providing that “an arbitrator may not direct the parties to violate
the law”).
1009) For the First Circuit, compare Ramos-Santiago v. United Parcel Servs., 524 F.3d 120, 124
(1st Cir. 2008) (“[M]anifest disregard of the law is not a valid ground for vacating or
modifying an arbitral award … under the [FAA]”) with Kashner Davidson Sec. Corp. v.
Mscisz, 601 F.3d 19, 22 (1st Cir. 2010) (‘[We] have not squarely determined whether our
manifest disregard case law can be reconciled with Hall Street.’). See also Repub. of
Argentina v. BG Group plc, 715 F.Supp.2d 108, 116 (D.D.C. 2010) (“A question remains,
however, as to whether this basis [manifest disregard] for vacating an arbitral award
survived the Supreme Court’s recent decision in Hall Street”), rev’d on other grounds, 665
F.3d 1363 (D.C. Cir. 2012); Paul Green Sch. of Rock Music Franchising, LLC v. Smith, 389
F.Appx. 172, 177 (3d Cir. 2010) (‘Based on the facts of this case, we need not decide
whether manifest disregard of the law remains, after Hall Street, a valid ground for
vacatur’); Hicks v. Cadle Co., 355 F.Appx. 186 (10th Cir. 2009) (no need to decide whether
manifest disregard survives Hall Street because petitioners have not demonstrated it).
1010) See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 939, 942 (U.S. S.Ct. 1995) (assuming
existence of manifest disregard standard). See also Hayford, A New Paradigm for
Commercial Arbitration: Rethinking the Relationship Between Reasoned Awards and the
Judicial Standards for Vacatur, 66 Geo. Wash. L. Rev. 443 (1993); Hayford & Kenigan,
Vacatur: The Non-Statutory Grounds for Judicial Review of Commercial Awards, 50 Disp.
Res. J. 22 (1996).
1011) Some state courts in the United States have refused to adopt the manifest disregard
doctrine as a matter of state law. See, e.g., Robinson v. Henne, 2013 WL 3067539, at *3-4
(Miss. S.Ct.) (Mississippi does not recognize manifest disregard; observing that Texas,
Alabama and New York also no longer recognize doctrine); Allstyle Coil Co., LP v. Carreon,
295 S.W.3d 42, 44 (Tex. App. Ct. 2009) (“manifest disregard of the law as an independent,
non-statutory ground for setting aside an award must be abandoned and rejected”);
Hunter, Keith Indus. v. Piper Capital Mgt, 575 N.W.2d 850, 855-56 (Minn. App. 1998)
(refusing to adopt doctrine of manifest disregard in Minnesota and noting that “very few
of the federal circuit courts that have recognized the manifest disregard doctrine have
vacated an arbitration award on that basis”).
1012) See, e.g., United Paperworkers Int’l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 37-38 (U.S.
S.Ct. 1987) (“Courts thus do not sit to hear claims of factual or legal error by an arbitrator
as an appellate court does in reviewing decisions of lower courts.”); Bangor Gas Co., LLC
v. H.Q. Energy Serv. Inc., 695 F.3d 181, 187 (1st Cir. 2012) (limiting manifest disregard
“primarily to cases … where the arbitrator recognized the applicable law, but ignored
it”); Matthews v. Nat’l Football League Mgt Council, 688 F.3d 1107, 1115 (9th Cir. 2012);
Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 407 (2d Cir. 2009) (examples of
manifest disregard are rare and require more than a mere error of law or fact); D.-H. Blair
& Co. v. Gottdiener, 462 F.3d 95, 111 (2d Cir. 2006); Duferco Int’l Steel Trading v. T.
Klaveness Shipping A/S, 333 F.3d 383 (2d Cir. 2003); George Watts & Son, Inc. v. Tiffany &
Co., 248 F.3d 577, 579 (7th Cir. 2001) (“If manifest legal errors justified upsetting an
arbitrator’s decision, then the relation between judges and arbitrators … would break
down.”); ARW Exploration Corp. v. Aguirre, 45 F.3d 1455, 1462 (10th Cir. 1995) (“standard of
review of arbitral awards is among the narrowest known to the law”); Advest, Inc. v.
McCarthy, 914 F.2d 6, 10-11 (1st Cir. 1990); Sargent v. PaineWebber Jackson & Curtis, Inc.,
882 F.2d 529, 532 (D.C. Cir. 1989); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808
F.2d 930, 933 (2d Cir. 1986) (“The error must have been obvious and capable of being
readily and instantly perceived by the average person qualified to serve as an
arbitrator.”); Amway Global v. Woodward, 2010 WL 3927661, at *18 (E.D. Mich.) (“if a court
can find any line of argument that is legally plausible and supports the award then it
must be confirmed, and only where no judge or group of judges could conceivably come
to the same determination as the arbitrators must the award be set aside”); Nat’l Oil
Corp. v. Libyan Sun Oil Co., 733 F.Supp. 800, 819 (D. Del. 1990) (“A mere error of law would
not, however, be sufficient grounds to refuse recognition of the award.”).
1013) Nat’l Wrecking Co. v. Int’l Bhd of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir. 1993).
1014) Telenor Mobile Commc’ns AS v. Storm LLC, 584 F.3d 396, 408 (2d Cir. 2009); Duferco Int’l
Steel Trading v. Klaveness Shipping A/S, 333 F.3d 383, 390 (2d Cir. 2003) (applying three-
prong test: (1) the applicable law “was clear, and in fact explicitly applicable,” (2) “the
law was improperly applied, leading to an erroneous outcome,” and (3) “the arbitrator
must have known of [the law’s] existence, and its applicability to the problem before
him”); Westerbeke Corp. v. Daihatsu Motor Co., 304 F.3d 200, 209 (2d Cir. 2002).
146
1015) See, e.g., India v. Cargill, Inc., 867 F.2d 130, 135 (2d Cir. 1989); Koch Oil, SA v. Transocean
Gulf Oil Co., 751 F.2d 551, 554 (2d Cir. 1985) (“we must accept the [unreasoned, lump sum]
award without attempting an analysis of the arbitrators’ purported reasoning process”);
Postlewaite v. McGraw-Hill, Inc., 1998 U.S. Dist. LEXIS 16885, at *3 (S.D.N.Y.) (denying
motion to vacate award even though the award was unreasoned, since grounds for award
could be inferred from facts of case); Chasser v. Prudential-Bache Sec., Inc., 703 F.Supp.
78, 79 (S.D. Fla. 1988). See also Murray v. Citigroup Global Mkts., Inc., 511 F.Appx. 453, 455
(6th Cir. 2013) (“As we have stated time and again, the absence of a reasoned award
makes it all but impossible to determine whether the arbitration panel acted in
manifest disregard of the law. … [W]e do not entertain a manifest-disregard argument in
the absence of a reasoned award.”).
For judicial dissatisfaction with this approach, see Perini Corp. v. Greate Bay Hotel &
Casino, Inc., 610 A.2d 364, 392 (N.J. 1992) (Wilentz, J., concurring) (“For all we know, the
arbitrators concluded that the sun rises in the west, the earth is flat and damages have
nothing to do with the intentions of the parties or the foreseeability of the consequences
of a breach.”).
1016) See, e.g., Brabham v. A.G. Edwards & Sons, Inc., 376 F.3d 377 (5th Cir. 2004); Bridas SAPIC v.
Gov’t of Turkmenistan, 345 F.3d 347, 363 (5th Cir. 2003); Willemijn Houdstermaatschappij,
BV v. Standard Microsys. Corp., 103 F.3d 9, 12 (2d Cir. 1997); Folkways Music Publ’rs, Inc. v.
Weiss, 989 F.2d 108, 111 (2d Cir. 1993).
1017) Willemijn Houdstermaatschappij, BV v. Standard Microsys. Corp., 103 F.3d 9, 13 (2d Cir.
1997)
1018) Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (U.S. S.Ct. 2001) (quoting
United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 37 (U.S. S.Ct. 1987)). See Bauer v.
Carty & Co., Inc., 246 F.Appx. 375, 377 (6th Cir. 2007) (no review of merits of award);
Sterling China Co. v. Glass, Molders Pottery, Plastics & Allied Workers Local 24, 357 F.3d
546, 557 (6th Cir. 2004) (“Courts ultimately cannot weigh the merits of the grievance or
reverse simply because they disagree with the result.”); Kanuth v. Prescott, Ball & Turben,
949 F.2d 1175, 1179 (D.C. Cir. 1991) (“[C]ourts will not generally inquire into the basis of a
lump-sum award unless they believe that the arbitrators rendered it in ‘manifest
disregard’ of the law or unless the facts of the case fail to support it.”).
1019) See, e.g., Salem Hosp. v. Mass. Nurses Ass’n, 449 F.3d 234, 239 (1st Cir. 2006) (vacating
award that was implausible); Hardy v. Walsh Manning Sec., 341 F.3d 126, 130 (2d Cir. 2003)
(“no reading of the facts can support the legal conclusion [that the respondent] is liable
under respondeat superior”); Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 203-04 (2d Cir.
1998); Montes v. Shearson Lehman Bros., 128 F.3d 1456, 1464 (11th Cir. 1997) (vacating
award where tribunal reached inexplicable result (under applicable law) in unreasoned
award, and where prevailing party had repeatedly urged tribunal to ignore law);
Ainsworth v. Skurnick, 960 F.2d 939, 941 (11th Cir. 1992) (vacating award as arbitrary and
capricious after concluding that there was no rational legal theory justifying arbitrator’s
conclusion); Homecomings Fin. Network, Inc. v. Kotyk, 2007 WL 2417357, at *3 (D.N.J.)
(vacating award on manifest disregard grounds, noting that “the Arbitrator’s entire
decision consists of a single sentence and a mathematical calculation of the amount
awarded”); Shearson Lehman Bros., Inc. v. Hedrich, 639 N.E.2d 228, 233 (Ill. App. 1994)
(vacating award on manifest disregard grounds because “arbitrators impermissibly
ignored the unambiguous contract language”).
1020) George Watts & Son, Inc. v. Tiffany & Co., 248 F.3d 577, 580 (7th Cir. 2001).
1021) See, e.g., Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 510 (U.S. S.Ct. 2001);
Nicholls v. Brookdale Univ. Hosp. & Med. Ctr., 204 F.Appx. 40, 43 (2d Cir. 2006); Wallace v.
Buttar, 378 F.3d 182, 183 (2d Cir. 2004); Galindo v. Stoody Co., 793 F.2d 1502, 1511 (9th Cir.
1986); W. Elec. Co. v. Commc’n Equip. Workers, 554 F.2d 135, 138 (4th Cir. 1977) (because
there were “some facts to support arbitration award,” award was confirmed
notwithstanding arbitrators’ application of incorrect burden of proof); S.E. Atl. Shipping
Ltd v. Garnac Grain Co., 356 F.2d 189, 192 (2d Cir. 1966); Deiulemar Compagnia di
Navigazione, SpA v. Transocean Coal Co., 2004 WL 2721072 (S.D.N.Y.) (in manifest disregard
application, “Respondents’ challenges fail to the extent that they focus on the
arbitrators’ factual findings rather than on their application of the law.”); Success Sys.
Inc. v. Maddy Petroleum Equip., Inc., 316 F.Supp.2d 93, 98 (D. Conn. 2004) (“evaluating
evidence remains the exclusive province of arbitrators”); Am. Ins. Co. v. Messinger, 401
N.Y.S.2d 36, 40 (N.Y. App. Div. 1977). Compare Halligan v. Piper Jaffray, Inc., 148 F.3d 197 (2d
Cir. 1998).
1022) United Paperworkers, 484 U.S. at 39.
1023) United Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 599 (U.S. S.Ct. 1960). See
United Paperworkers, 484 U.S. at 37-38 (“Because the parties have contracted to have
disputes settled by an arbitrator chosen by them rather than by a judge, it is the
arbitrator’s view of the facts and the meaning of the contract that they have agreed to
accept … as long as the arbitrator is even arguably construing or applying the contract
and acting within the scope of his authority, that a court is convinced he committed
serious error does not suffice to overturn his decision.”; courts “do not sit to hear claims
of factual or legal error by an arbitrator as an appellate court does in reviewing
decisions of lower courts”); de la Houssaye, Manifest Disregard of the Law in International
Commercial Arbitrations, 28 Colum. J. Transnat’l L. 449 (1990).
1024) This is the approach under the English Arbitration Act. See§25.05[A][1][b].
147
1025) See§25.04[H].
1026) For example, in W.R. Grace & Co. v. Local Union 749, the Supreme Court declared that
“the question of public policy is ultimately one for resolution by the courts.” See also
Transmarine Seaways Corp. of Monrovia v. Marc Rich & Co. AG, 480 F.Supp. 352, 358
(S.D.N.Y. 1979) (rejecting “argument that the question of [a public policy violation] is
foreclosed from judicial review by the conclusion of a majority of the arbitrators that …
the contract was enforceable. When public policy is asserted as the basis for vacating an
arbitration award, the court is required to make its own, independent evaluation.”);
Botany Indus., Inc. v. N.Y. Joint Bd, 375 F.Supp. 485, 491 (S.D.N.Y. 1974); Meltzer,
Ruminations About Ideology, Law and Labor Arbitration, 34 U. Chi. L. Rev. 545, 558 (1967);
Rau, The Culture of American Arbitration and the Lessons of ADR, 40 Tex. Int’l L.J. 449, 522-
33 (2005). See also§25.04[H][6] for further discussion of judicial review of arbitrators’
decisions on issues of competition law and similar statutory protections.
1027) See, e.g., Baxter Int’l, Inc. v. Abbott Labs., 315 F.3d 829, 832 (7th Cir. 2003) (judicial review
of application of U.S. antitrust laws only considers whether arbitrators “took cognizance
of the antitrust claims and actually decided them”); Chisolm v. Kidder Peabody Asset Mgt
Inc., 966 F.Supp. 218, 219 (S.D.N.Y. 1997) (“The standard of judicial review of arbitral
decisions in cases involving statutory rights is no different from the extremely limited
review used in arbitration generally.”); CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 238
(Tex. 2002).
1028) Compare Commercial Union Ins. Co. v. Lines, 378 F.3d 204, 208 (2d Cir. 2004) (vacating
award where “the analysis essentially pits the public policy favoring arbitration …
against the judicial policy of refusing to lend [the court’s] power to assist or protect a
fraud”); Gulf Coast Indus. Workers Union v. Exxon Co., U.S.A., 991 F.2d 244, 257 (5th Cir.
1993) (vacating award that required reinstatement of refinery worker who tested positive
for drugs); Delta Air Lines, Inc. v. Air Line Pilots Ass’n, Int’l, 861 F.2d 665, 671 (11th Cir. 1988)
(“[W]e have the rare example of an award the enforcement of which would violate clearly
established public policy which condemns the operation of passenger airliners by pilots
who are under the influence of alcohol.”); Iowa Elec. Light & Power Co. v. Local Union 204,
834 F.2d 1424, 1428 (8th Cir. 1987) (public policy precluded enforcement of award
requiring reinstatement of nuclear power plant machinist who had been discharged for
deliberately violating safety regulations); Amalgamated Meat Cutters & Butcher
Workmen, Local Union 540 v. Great W. Food Co., 712 F.2d 122, 125 (5th Cir. 1983) (“To
enforce the arbitrator’s award in this case, an award which compels the reinstatement to
driving duties of a truck driver who admittedly drank while on duty, would violate …
public policy.”). See also§25.04[H][6].
1029) See§25.07[A][1], pp. 3369-70.
1030) See, e.g., Hoeft v. MVL Group, Inc., 343 F.3d 57, 63 (2d Cir. 2003) (agreement that award
“shall not be subject to any type of review or appeal whatsoever” does not waive right to
seek vacatur on manifest disregard grounds: “parties seeking to enforce arbitration
awards through federal court confirmation judgments may not divest the courts of their
statutory and common law authority to review both the substance of the awards and the
arbitral process for compliance with §10(a) and the manifest disregard standard”); Spier
v. Calzaturificio Tecnica SpA, 77 F.Supp.2d 405 (S.D.N.Y. 1999) (agreement providing that
award is “final” and “binding” does “not nullify statutory grounds for vacating awards”).
1031) See§25.07[A].
1032) See M & C Corp. v. Erwin Behr GmbH, 87 F.3d 844, 847 (6th Cir. 1996) (interpreting waiver
narrowly to bar only retrial on merits, not manifest disregard review); Iran Aircraft Indus.
v. Avco Corp., 980 F.2d 141, 146 (2d Cir. 1992); Aerojet-Gen. Corp. v. Am. Arbitration Ass’n,
478 F.2d 248, 251 (9th Cir. 1973).
1033) See McConnaughay, The Risks and Virtues of Lawlessness: A “Second Look” at International
Commercial Arbitration, 93 Nw. U.L. Rev. 453 (1999).
1034) See§1.02[B][6]; §25.03[A]. In Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct.
2008), the Supreme Court referred to a “national policy favoring arbitration with just the
limited review needed to maintain arbitration’s essential virtue of resolving disputes
straightaway.”
1035) See§25.05[A][3].
1036) See Pioneer Shipping v. B.T.P. Tioxide (“The Nema”) [1982] A.C. 724 (House of Lords); R.
Merkin, Arbitration Law ¶¶21.1 et seq. (1991 & Update August 2013); §1.04[B][1][d];
§25.05[A][3].
Prior to the 1996 Act, English law forbid predispute waivers of the right to appeal on
points of law in “special category” cases of admiralty, commodities and insurance
contracts governed by English law. The ‘Special Categories’ Under the English Arbitration
Act 1979 – Memorandum From the Departmental Advisory Committee on Arbitration,
reprinted in 9 Arb. Int’l 405 (1993).
148
1037) See§1.04[B][1][d]; English Arbitration Act, 1996, §69 (“(1) Unless otherwise agreed by the
parties, a party to arbitral proceedings may (upon notice to the other parties and to the
tribunal) appeal to the court on a question of law arising out of an award made in the
proceedings. … (3) Leave to appeal shall be given only if the court is satisfied (a) that the
determination of the question will substantially affect the rights of one or more of the
parties, (b) that the question is one which the tribunal was asked to determine, (c) that,
on the basis of the findings of fact in the award (i) the decision of the tribunal on the
question is obviously wrong, or (ii) the question is one of general public importance and
the decision of the tribunal is at least open to serious doubt, and (d) that, despite the
agreement of the parties to resolve the matter by arbitration, it is just and proper in all
the circumstances for the court to determine the question.”).
1038) See, e.g., B v. A [2010] EWHC 1626 (Comm) (English High Ct.); Schwebel v. Wolf Schwebel
[2010] EWHC 3280 (TCC) (English High Ct.); Sanghi Polyesters (India) Ltd v. Int’l Inv. (KCFC)
(Kuwait) [2000] 1 Lloyd’s Rep. 480 (QB) (English High Ct.); Egmatra AG v. Marco Trading
Corp. [1999] 1 Lloyd’s Rep. 862 (QB) (English High Ct.).
1039) English Arbitration Act, 1996, §69(1). See, e.g., Lesotho Highlands Dev. Auth. v. Impregilo
SpA [2006] 1 A.C. 221 (House of Lords) (parties exclude right of appeal under §69 by way
of Article 26(6) of 1998 ICC Rules); BLCT Ltd v. J. Sainsbury plc [2003] EWCA Civ 884 (English
Ct. App.); Al Hadha Trading Co. v. Tradigrain SA [2002] 2 Lloyd’s Rep. 512 (QB) (English High
Ct.) (agreement that award is “final, conclusive and binding” excludes appeal under
§69).
1040) See Schwebel v. Wolf Schwebel [2010] EWHC 3280 (TCC) (English High Ct.) (no appeal where
law applied by arbitrator(s) was a law other than law of England and Wales); Guangzhou
Dockyards Co. Ltd v. ENE Aegiali I [2010] EWHC 2826, ¶34 (Comm) (English High Ct.) (“it was
axiomatic that in practice arbitrators’ factual findings were not subject to an appeal to
the court”); Reliance Indus. Ltd v. Enron Oil & Gas India Ltd [2002] 1 All ER 59 (Comm)
(English High Ct.); Petroships Pte Ltd of Singapore v. Petec Trading & Inv. Corp. of Vietnam,
The Petro Ranger [2001] 2 Lloyd’s Rep. 348 (QB) (English High Ct.) (court can review
obvious errors of law).
1041) SeeEnglish Arbitration Act, 1996, §69(3)(c); Reliance Indus. Ltd v. Enron Oil & Gas India Ltd
[2002] 1 All ER 59 (Comm) (English High Ct.).
1042) English Arbitration Act, 1996, §69(2).
1043) English Arbitration Act, 1996, §69(3)(d).
1044) Lesotho Highlands Dev. Auth. v. Impregilo SpA [2006] 1 A.C. 221, ¶26 (House of Lords).
1045) ABB Attorney Gen. v. Hochtief Airport GmbH [2006] EWHC 388, ¶64 (Comm) (English High
Ct.) (quoting Zermalt Holdings SA v. Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 (QB)
(English High Ct.)).
1046) Surefire Sys. v. Guardian ECL Europe Ltd [2005] EWHC 1860 (QB) (English High Ct.); Egmatra
AG v. Marco Trading Corp. [1999] 1 Lloyd’s Rep. 862, 865 (QB) (English High Ct.).
1047) SeeEnglish Arbitration Act, 1996, §69(1); R. Merkin, Arbitration Law ¶22.9 (1991 & Update
August 2013); §25.07.
1048) Chinese Arbitration Law, Arts. 58(4), 58(5), 63; Chinese Code of Civil Procedure, Arts.
217(4), (5); Hongda, Judicial Supervision of Arbitration in China, 17(1) J. Int’l Arb. 71, 75-76
(2000).
Under the amended Chinese arbitration legislation, an award may be annulled if the
court concludes that the evidence on which the award is based was forged or the other
party withheld evidence sufficient to compromise the justness of the arbitration.
Chinese Arbitration Law, Arts. 58(4), 58(5); Chinese Code of Civil Procedure, 1991, Arts.
237(4), (5) (repealed).
1049) New Zealand Arbitration Act, Schedule 2, ¶5 (party may appeal on question of law
arising out of award if parties agree or if High Court grants leave, which it may not grant
unless it considers that, having regard to all circumstances, determination of question of
law concerned could substantially affect rights of one or more parties). This review is
only on legal issues. Gold & Res. Dev. (N.Z.) Ltd v. Doug Hood Ltd, [2000] 3 NZLR 318 (N.Z.
Ct. App.).
1050) Argentine National Code of Civil and Commercial Procedure, Art. 758 (“All means of
recourse available against court decisions can be raised against an arbitral award, if not
waived in the terms of reference.”).
1051) Abu Dhabi Code of Civil Procedure, Art. 91(2)(v) (award violating a “general principle of
justice” may be annulled); Libyan Code of Civil and Commercial Procedure, Art. 767.
1052) Egyptian Arbitration Law, Art. 53(1) (“An arbitration award may be annulled only: … (d) If
the arbitral award failed to apply the law agreed upon by the parties to govern the
subject matter in dispute; … (g) If the arbitral award itself or the arbitration procedures
affecting the award contain a legal violation that causes nullity.”).
1053) See§25.03[A]; §25.04. In some respects, this development was a return to historic
approaches. See§1.01[B][1]; R. Zimmermann, The Law of Obligations 529 (1996) (“[I]n
classical Roman law the arbiter (ex compromisso) was entirely free in his decision; he
was not bound by any rules of substantive law. Thus, his award was binding even if it was
unjust or inequitable.”). Compare Ottoman Civil Code of 1876, Art. 1849 (Arbitral award
shall be confirmed “if given in accordance with law. Otherwise it shall not be so
confirmed.”).
1054) As discussed above, China recently amended its arbitration legislation with the
apparent effect of removing substantive review as a basis for annulment. See§25.05[A][1]
[c], p. 3350.
149
1055) As discussed above, the U.S. Supreme Court arguably concluded recently that no
substantive review of awards, under the “manifest disregard of law” doctrine, is
available under the FAA. See Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct.
2008); §25.05[A][1][a], pp. 3342-46.
1057) Canada (Attorney Gen.) v. S.D. Myers Inc., [2004] 3 FC 38, ¶42 (Canadian Fed. Ct.). See also
Editions Chouette Inc. v. Desputeaux, [2003] SCC 17 (Canadian S.Ct.) (judicial review based
on error of law is contrary to principle of autonomy of arbitration); Quintette Coal Ltd v.
Nippon Steel Corp., (1990) 47 B.C.L.R.2d 201 (B.C. S.Ct.); Corporación Transnacional de
Inversiones, SA de CV v. STET Int’l, SpA, (2000) 49 O.R.3d 414 (Ontario Ct. App.); Blanchet v.
Lapierre, [2012] QCCS 4135, ¶31 (Québec Super. Ct.) (“the role of the court is not to
determine whether the arbitrator’s decision is correct or reasonable, just as it is not the
court’s role to analyse the merits of the dispute”); Bellemare v. Adlani, [2012] QCCQ 10372,
¶41 (Québec Super. Ct.) (“according to well-established principles, the court does not sit
on appeal or judicial review of the arbitrators’ decision”); Bayview Irrigation Dist. #11 v.
United Mexican States, [2008] O.J. No. 1858, ¶11 (Ontario Super. Ct.) (“The Court is not
permitted to engage in a hearing de novo on the merits of the Tribunal’s decision or to
undertake a review such as that conducted by a court in relation to a decision of a
domestic tribunal.”); Navigation Sonamar Inc. v. Algoma Steamships Ltd, [1987] R.J.Q. 1346
(Québec Super. Ct.).
1058) See, e.g., Judgment of 11 July 2011, 2011 SchiedsVZ 377 (Oberlandesgericht München);
Judgment of 30 May 2011, 2012 SchiedsVZ 47, B(II)(2) (Oberlandesgericht Saarbrücken)
(“the starting point of the considerations … is the prohibition of the revision au fond”);
Judgment of 25 August 2004, 2004 SchiedsVZ 319, II(3) (Bayerisches Oberstes
Landesgericht) (“it is not for the [reviewing court] to retry the case as a second degree
jurisdiction would do”); Judgment of 16 July 2002, 1 Sch 08/02 (Oberlandesgericht
Stuttgart); Judgment of 14 September 2001, 10 Sch 04/01 (Oberlandesgericht Karlsruhe);
Judgment of 8 June 2001, 11 Sch 01/01 (Hanseatisches Oberlandesgericht Hamburg);
Judgment of 15 December 1999, 4 Z Sch 23/99 (Bayerisches Oberstes Landesgericht);
Judgment of 20 August 2008, 9 Ob 53/08x (Austrian Oberster Gerichtshof); PT Perusahaan
Gas Negara (Persero) TBK v. CRW Joint Operation, [2010] SGHC 202 (Singapore High Ct.),
aff’d, [2011] SGCA 3 (Singapore Ct. App.); ABC Co. v. XYZ Ltd, [2003] 3 SLR 546 (Singapore
High Ct.); Pac. China Holdings Ltd v. Grand Pac. Holdings Ltd, [2012] 4 HKLRD 1, ¶7 (H.K. Ct.
App.) (“The remedy of setting aside is not an appeal, and the court will not address itself
to the substantive merits of the dispute, or to the correctness or otherwise of the award,
whether concerning errors of fact or law.”); TCL Air Conditioner (Zhongshan) Co. Ltd v.
Judges of the Fed. Ct. of Australia, [2013] HCA 5, ¶5 (Australia High Ct.) (“Neither Art 28 of
the Model Law nor an implied term of an arbitration agreement requires an arbitral
award to be correct in law.”); Judgment of 20 January 2006, Sofía v. Tintorería Paris, SAP M
877/2006, Legal Ground No. 2 (Madrid Audiencia Provincial) (“applicable review in
annulment proceedings is that of an external trial, … in such a way that the competent
court examining the case solely decides on the formal guarantees of the proceedings
and the arbitral award, but cannot review the merits of the matter”); Judgment of 10
February 1995, XXII Y.B. Comm. Arb. 294 (Moscow City Ct.); Judgment of 5 May 2009, Case
No. 112/124 (Cairo Ct. App.); Judgment of 10 June 2008, Case No. 206/2008 (Amman Ct.
App.).
1059) See, e.g., Judgment of 6 April 2004, Case No. ATS 4640/2004 (Spanish Tribunal Supremo);
Judgment of 20 January 2006, Sofía v. Tintorería Paris, SAP M 877/2006 (Madrid Audiencia
Provincial); Gov’t of the Repub. of the Philippines v. Philippine Int’l Air Terminals Co., Inc.,
[2006] SGHC 206 (Singapore High Ct.); Judgment of 3 April 2007, Case No. 123/119 (Cairo Ct.
App.); Judgment of 5 February 2008, Case No. 71/123 (Cairo Ct. App.); Judgment of 3 March
2009, Case No. 71/124 (Cairo Ct. App.); Apa Ins. Co. Ltd v. Chrysanthus Barnabas Okemo,
Misc. Application No. 241 of 2005 (Nairobi High Ct. 2005); Simbymanyo Estates Ltd v.
Seyani Bros. Co. (U) Ltd, Misc. Application No. 555/2002 (Comm) (Kampala High Ct. 2004).
1060) PT Perusahaan Gas Negara (Persero) TBK v. CRW Joint Operation, [2010] SGHC 202
(Singapore High Ct.), aff’d, [2011] SGCA 3 (Singapore Ct. App.).
1061) See, e.g., Judgment of 8 April 2005, DFT 4P.253/2004 (Swiss Federal Tribunal); Judgment of
24 June 2010, Société Inforad Ltd v. Société Tes Elec. Solutions, 2010 Rev. arb. 675 (Paris
Cour d’appel) (“a review of the merits of the award … is prohibited”); Judgment of 6
October 2010, Fondation Albert Abela Family Found. (AAFF) v. Fondation Joseph Abela
Family Found. (JAFF), 2010 Rev. arb. 813, 814 (French Cour de cassation civ. 1e) (“a review
of the merits of the award … is prohibited”).
1062) See Berti & Schnyder, in S. Berti et al. (eds.), International Arbitration in Switzerland Art.
190, ¶¶24, 75 (2000).
1063) Swiss Law on Private International Law, Art. 190.
150
1064) Judgment of 8 April 2005, DFT 4P.253/2004, ¶3.1 (Swiss Federal Tribunal). See also
Judgment of 29 January 2010, DFT 4A_550/2009, ¶5.1 (Swiss Federal Tribunal) (“The right
to be heard contains no right to a materially accurate decision. It is not for the Federal
Tribunal to review whether the arbitral tribunal took into account all documents and
rightly understood them or not.”); Judgment of 16 December 2009, 29 ASA Bull. 457, ¶4.1
(Swiss Federal Tribunal) (2011) (“The Federal Tribunal’s review of an international
arbitral award is limited to the question whether the award is in accordance with public
policy.”); Judgment of 26 May 1999, 18 ASA Bull. 331 (Swiss Federal Tribunal) (2000);
Judgment of 22 February 1999, 17 ASA Bull. 537 (Swiss Federal Tribunal) (1999); B. Berger &
F. Kellerhals, International and Domestic Arbitration in Switzerland ¶¶1545, 1618 (2d ed.
2010).
1065) Judgment of 2 October 2000, 2001 Gaz. Pal. 16-17, 21 (Paris Cour d’appel). See
alsoJudgment of 5 January 1999, Gallay v. Fabricated Metals, 2001 Rev. arb. 805 (French
Cour de cassation civ. le); Judgment of 27 October 1994, Lebanese Traders Distribs. &
Consultants v. Reynolds, 1994 Rev. arb. 709 (Paris Cour d’appel); Judgment of 14 October
1993, Société Aplix v. Société Velcro, 1994 Rev. arb. 164 (Paris Cour d’appel); J-L. Delvolvé,
G. Pointon & J. Rouche, French Arbitration Law and Practice: A Dynamic Civil Law Approach
to International Arbitration ¶391(2d ed. 2009) (“The cour d’appel take great care to
ensure that an application for annulment or an appeal against the exequatur based on
one of the grounds set out in Articles 1484 or 1502 CPC does not disguise what is in reality
an appeal on the merits of the case.”).
1066) See, e.g.,Judgment of 8 April 2004, XXXI Y.B. Comm. Arb. 802 (Italian Corte di Cassazione)
(2006); Judgment of 4 December 1982, XXII Y.B. Comm. Arb. 725 (Milan Corte d’Appello)
(1997).
1067) Québec Code of Civil Procedure, Arts. 946(2), 947(2). See also Uruguayan General Code of
Procedure, Art. 499.
1068) See§1.02[B][5]; §25.03[A]; §25.05[A][2]; Berger, The Modern Trend Towards Exclusion of
605 (1989); Note, Judicial Review of Arbitration Awards on the Merits, 63 Harv. L. Rev. 681
(1950); Rau, The Culture of American Arbitration and the Lessons of ADR, 40 Tex. Int’l L.J.
449, 509 (2005) (“one of the cornerstones of any modern arbitration regime is of course
the understanding that arbitral awards are not to be judicially reviewed ‘on the merits’ –
and in particular are not to be reviewed for any ‘error of law’”); Wilske & Mackay, The
Myth of the ‘Manifest Disregard of the Law’ Doctrine: Is This Challenge to the Finality of
Arbitral Awards Confined to U.S. Domestic Arbitration or Should International Arbitration
Practitioners be Concerned?, 24 ASA Bull. 216 (2006).
1069) Judgment of 10 October 2005, 4C.146/2005, ¶7.2.1 (Swiss Federal Tribunal). See also
Judgment of 11 October 2012, DFT 4A_76/2012, ¶4.2 (Swiss Federal Tribunal) (“The
aforesaid principle is violated only when the arbitral tribunal acknowledges the
existence of a contract but declines to enforce it or, conversely, when it denies the
existence of a contract but nevertheless upholds a contractual obligation.”); Judgment of
27 April 2005, DFT 4P.242/2004, ¶7.1 (Swiss Federal Tribunal) (same); Judgment of 14
November 1990, DFT 116 II 634, 638 (Swiss Federal Tribunal) (same).
1071) Judgment of 12 January 1993, République de Côte d’Ivoire v. Norbert Beyrard, 1994 Rev. arb.
685, 691 (Paris Cour d’appel).
1072) Judgment of 27 May 2002, 23 Sch 06/02 (Kammergericht Berlin).
1073) See§25.05[A][1][a]; §25.05[A][1][b].
1074) See, e.g., Craig, Uses and Abuses of Appeal From Awards, 4 Arb. Int’l 174, 198-202 (1988);
Kerr, Arbitration and the Courts: The UNCITRAL Model Law, 34 Int’l & Comp. L.Q. 1, 15
(1985); Mann, Private Arbitration and Public Policy, 1985 Civil Justice Q. 257 (1985);
McConnaughay, The Risks and Virtues of Lawlessness: A “Second Look” at International
Commercial Arbitration, 93 Nw. U.L. Rev. 453 (1999); Park, The Specificity of International
Arbitration: The Case for FAA Reform, 36 Vand. J. Transnat’l L. 1241, 1253 (2003) (“The very
existence of the right to have judicial review on the substantive merits of the case
(particularly on a ground for challenge as vague as ‘manifest disregard’) hangs over
international arbitration like a sword of Damocles, to be grasped by litigators and
judges alike.”).
1075) See, e.g., Berger, The Modern Trend Towards Exclusion of Recourse Against Transnational
Arbitral Awards: A European Perspective, 12 Ford. Int’l L.J. 605 (1989); Paulsson, Arbitration
Unbound: Award Detached From the Law of Its Country of Origin, 30 Int’l & Comp. L.Q. 358,
373 (1981); Paulsson, Delocalization of International Commercial Arbitration: When and
Why It Matters, 32 Int’l & Comp. L.Q. 53, 59 (1983); Shackleton, Challenging Arbitral Awards:
Part III – Appeals on Questions of Law, New Law J. 1834 (2002); Wilske & Mackay, The Myth
of the ‘Manifest Disregard of the Law’ Doctrine: Is This Challenge to the Finality of Arbitral
Awards Confined to U.S. Domestic Arbitration or Should International Arbitration
Practitioners be Concerned?, 24 ASA Bull. 216, 216 (2006) (manifest disregard doctrine
“runs contrary to the recognised principles of international arbitration and … whilst it
may rarely be successfully relied upon, the fact of its common invocation may be
enough to deter parties from choosing the U.S. as their place of arbitration”).
1076) See R. Merkin, Arbitration Law ¶22.1 (1991 & Update August 2013).
1077) Czarnikow v. Roth, Schmidt & Co. [1922] 2 KB 478, 484 (English Ct. App.). See id. at 488.
151
1078) Rokison, “… Pastures New”, 14 Arb. Int’l 361, 363 (1998) (reporting on some users’ views).
See also W. Craig, W. Park & J. Paulsson, International Chamber of Commerce Arbitration
¶28.06 (3d ed. 2000) (“Switzerland’s popularity as an arbitral situs developed at a time
when merits review of ‘arbitrary’ award prevailed under the Intercantonal Concordat.”);
The Rt Hon The Lord Mayor of the City of London, Alderman Robert Finch, ICMA XV, in The
Cedric Barclay Lectures 113 (2006) (Lord Mayor of London: “I shall encourage the view that
there should be more appeals from arbitrations to the Courts not less.”).
1079) See authorities cited §25.05[A][3], p. 3355-56.
1080) See§§1.02[B][1], [4] & [7]; §12.03[A]; §§15.01[A]-[B]; §§15.06[A]-[B].
1081) See alsoMourre & Radicati di Brozolo, Towards Finality of Arbitral Awards: Two Steps
Forward and One Step Back, 23 J. Int’l Arb. 171 (2006).
1082) McConnaughay, The Risks and Virtues of Lawlessness: A ‘Second Look’ at International
Commercial Arbitration, 93 Nw. U. L. Rev. 453, 494 (1999).
1083) See§20.03[C]; §20.04[D].
1084) See§§11.03[B] & [D]; §11.03[E][2]. Among other things, the drafters of the New York
Convention specifically rejected proposals for “a-national” arbitral proceedings and
awards. See§1.04[A][1][a], p. 100 n. 689; §11.03[C][1][c][i], pp. 1546-47; §11.03[C][1][c][vi];
§11.03[E][2]; §22.02[E][1][a][ii](1).
1085) See§1.02[B][6]; §§15.01[A]-[B]; §§15.06[A]-[B]; §15.07[D][1].
1086) See§16.01.
1087) See §1.04[D][1]; §15.07[E]; §15.09[A].
1088) See §15.08[AA][13].
1089) See §23.02[B][3]; §23.03.
1090) See §§12.04[A] & [D].
1091) See §1.01[A][5]; §1.01[B][8].
1092) See Letter From Lord Acton to Bishop Mandell Creighton, dated 5 April 1887 (quoted in G.
Himmelfarb, Lord Acton: A Study in Conscience and Politics 160-61 (1952)).
1093) See§2.02[C][3]; §19.07.
1094) See§25.05[A][2].
1095) Folkways Music Publ’rs, Inc. v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993). See§§1.02[B][5] & [7];
§25.03; §25.05[A][2].
1096) See§25.05[A][2].
1097) 1998 Belgian Judicial Code, Art. 1704(2)(j) (“[I]f the award contains conflicting provisions.”)
(repealed).
1098) English Arbitration Act, 1996, §68(2).
1099) See, e.g., U.S. FAA, 9 U.S.C. §10(a)(4) (“[w]here the arbitrators exceeded their powers or so
imperfectly executed them that a mutual, final, and definite award upon the subject
matter submitted was not made”); Finnish Arbitration Act, §40(3) (“the arbitral award is
so obscure or incomplete if it does not appear in it how the dispute has been decided”);
Honduran Arbitration Act, Art. 74(7); Argentine National Code of Civil and Commercial
Procedure, Art. 761(1) (“An award containing contradictory decisions shall be null and
void.”); Colombian Decree No. 1818 of 7 September 1998, Art. 163(7); El Salvador Law on
Mediation, Conciliation and Arbitration, Art. 68(7). See also European Convention
Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(j) (“if the award contains
conflicting provisions”).
1100) Judgment of 27 November 2008, Case No. 20596/2007 (Tunisian Cour de cassation).
1101) See, e.g., Judgment of 8 June 2001, 11 Sch 01/01 (Hanseatisches Oberlandesgericht
Hamburg) (declining to annul award as it was satisfied that no such bases existed, but
reasoning that award should be annulled if arbitral tribunal fails to state reasons on
which award was based, or reasoning lacks any substance, and is evidently paradoxical
or conflicts with decision made); Judgment of 5 May 2009, Case No. 112/124 (Cairo Ct.
App.) (reasoning of award must not be contradictory and must “allow whoever reviews
the award to determine the logic followed by the arbitrator in fact or at law”).
1102) See§23.03; §25.04[B][4], pp. 3253-54; §26.05[C][3][d], pp. 3528-30 for discussion of the
requirement, applicable under many national laws, that awards be reasoned.
1103) See§25.04[H].
1104) Webster, Review of Substantive Reasoning of International Arbitral Awards by National
Courts: Ensuring One-Stop Adjudication, 22 Arb. Int’l 431, 436-40 (2006).
1105) Judgment of 14 June 2000, XXVI Y.B. Comm. Arb. 270, 271-72 (French Cour de cassation civ.
le) (2001) (“[W]ith the exception of the violation of due process or of international public
policy, … the reasons for an arbitral award may not be reviewed by the court examining
the validity of the award. The ground for appeal based on contradictory reasons for the
arbitral decision was thus inadmissible.”). See alsoJudgment of 11 May 1999, 1999 Rev.
arb. 811 (French Cour de cassation civ. le) (issue in annulment proceeding is not whether
“arbitrators replied well or badly” but only whether reasons “exist”). Compare Danae Air
Transnat’l SA v. Air Canada [2000] 1 WLR 395 (English Ct. App.).
1106) SeeJudgment of 15 March 2011, DFT 4A_481/2010, ¶4 (Swiss Federal Tribunal) (“the
argument that the reasons of an award would be intrinsically incoherent does not fall
within the definition of substantive public policy”).
152
1107) See, e.g., Nicholls v. Brookdale Univ. Hosp. & Med. Ctr., 204 F.Appx. 40, 43 (2d Cir. 2006);
Wise v. Wachovia Sec., LLC, 450 F.3d 265, 269 (7th Cir. 2006); Brabham v. A.G. Edwards &
Sons, Inc., 376 F.3d 377, 381-82 (5th Cir. 2004); St. Mary Home, Inc. v. Serv. Employees Int’l
Union, 116 F.3d 41, 44-45 (2d Cir. 1997) (“Internal inconsistencies in the [award] are not
grounds to vacate the award.”); Kim–C1, LLC v. Valent Biosciences Corp., 756 F.Supp.2d
1258, 1273 (E.D. Cal. 2010) (“The question is whether the award is irrational with respect to
the contract, not whether the panel’s findings of fact are correct or internally
inconsistent.”); Halliburton Energy Servs., Inc. v. NL Indus., 553 F.Supp.2d 733, 780 (S.D.
Tex. 2008) (“The fact that an arbitration award contains inconsistencies is similarly not
sufficient for vacatur.”); Fairchild Corp. v. Alcoa, Inc., 510 F.Supp.2d 280, 286 (S.D.N.Y.
2007) (“Nor do internal conflicts embodied in the arbitrators’ decision warrant denying
confirmation of an award.”).
1108) See, e.g.,Judgment of 29 April 2009, CG Impianti v. Bmaab & Son Int’l Contracting Co., XXXV
Y.B. Comm. Arb. 415 (Milan Corte d’Appello) (2010) (under Article 829 of Italian Code of
Civil Procedure, which provides for nullity of awards containing contradictory decisions,
a contradiction is relevant only if it is between different provisions in award’s
dispositive part).
1109) See§23.02[B] for a discussion of the formal requirements for awards.
1110) See, e.g., English Arbitration Act, 1996, §68(2)(h) (“failure to comply with the requirements
as to the form of the awards”); 1998 Belgian Judicial Code, Art. 1704(2)(h) (“formalities
prescribed in paragraph 4 of Article 1701 [requiring written, signed award] have not been
fulfilled”) (repealed); Netherlands Code of Civil Procedure, Art. 1065(d)(1) (failure to sign
award is grounds for annulment); Italian Code of Civil Procedure, Art. 829(5). See also
European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)(h) (“if the
formalities prescribed in paragraph 4 of Article 22 [requiring written, signed award] have
not been fulfilled”). Compare§26.05[C][13].
1111) See, e.g., European Convention Providing a Uniform Law on Arbitration, Annex I, Art. 25(2)
(i) (“if the reasons for the award have not been stated”); Netherlands Code of Civil
Procedure, Art. 1065(d)(1) (failure to provide reasons is grounds for annulment);
Taiwanese Arbitration Act, Art. 38(2) (“no reasons are stated in the arbitral award when it
is required to do so, except that an amendment thereto has subsequently been made by
the arbitral tribunal”). See§23.03 for a discussion of requirements for reasoned awards.
Other jurisdictions do not provide necessarily for annulment of unreasoned awards. See,
e.g., Judgment of 22 November 1966, Gerstlé v. Merry Hull, 94 J.D.I. (Clunet) 631 (French
Cour de cassation civ. 1e) (1967) (unreasoned award is not “in itself contrary to the French
concept of international public policy”); Judgment of 21 August 1990, DFT 116 II 373, 375
(Swiss Federal Tribunal) (lack of reasons is not an independent basis for annulment of
award); §§23.03[B] & [E]. Even in these jurisdictions, where the parties’ arbitration
agreement prescribes formalities for an award (for example, by incorporating
institutional rules), failure to comply with these formalities may be grounds for
annulment on the grounds of failure to comply with the parties’ agreed arbitral
procedures.
1112) See, e.g., English Arbitration Act, 1996, §68(2)(h); 1998 Belgian Judicial Code, Art. 1704(2)(h)
(repealed); Italian Code of Civil Procedure, Art. 823(2).
1113) See, e.g., UNCITRAL Model Law, Art. 34(2); U.S. FAA, 9 U.S.C. §10; European Convention
Providing a Uniform Law on Arbitration, Annex I, Arts. 25(2)(h), 25(3) (no annulment for
absence on award of date, place of arbitration); Japanese Arbitration Law, Art. 44.
1114) Judgment of 4 June 2002, 1 Sch 22/01 (Oberlandesgericht Stuttgart).
1115) SeeEnglish Arbitration Act, 1996, §68(2) (especially §68(2)(h)).
1116) See§25.03[A][3].
1117) See, e.g., TermoRio SA v. Electranta SP, 487 F.3d 928 (D.C. Cir. 2007) (describing Colombian
judicial decisions annulling award on grounds that agreeing to arbitration under ICC
Rules violated local public policy); Judgment of 10 March 1976, 46 Arb. 241 (Turkish
Yargitay) (1980) (denying recognition of Swiss award on grounds that ICC award is not an
arbitral award).
1118) See, e.g., Recommendations of the High Commercial Court of Ukraine, Case No. 04-5/14
(2007) (corporate shareholder disputes held nonarbitrable under Ukrainian law); Rubins,
The Enforcement and Annulment of International Arbitration Awards in Indonesia, 20 Am.
U. Int’l L. Rev. 359, 373 (2005) (Indonesian courts hold legal (rather than “technical”)
disputes not capable of resolution by arbitration).
1119) The Spanish Tribunal Supremo annulled an international award because it had not been
deposited with a notary, as required by Spain’s domestic arbitration legislation.
Judgment of 28 March 1994, ABC v. C. Española, SA, 1994 Rev. arb. 752 (Spanish Tribunal
Supremo), Note, Mantilla-Serrano. This was overruled by Spain’s 2003 Arbitration Act.
Spanish Arbitration Act, 2003, Art. 37(8).
1120) See, e.g., Rubins, The Enforcement and Annulment of International Arbitration Awards in
Indonesia, 20 Am. U. Int’l L. Rev. 359, 394 et seq. (2005) (Indonesian courts rely, wrongly,
on expansive interpretations of New York Convention’s non-recognition grounds to add
to bases for annulment of awards).
1121) See§25.02[B].
153
1122) French Code of Civil Procedure, Art. 1520; J.-L. Delvolvé, G. Pointon & J. Rouche, French
Arbitration Law and Practice: A Dynamic Civil Law Approach to International Arbitration
¶377 (2d ed. 2009); Kovacs, Challenges to International Arbitral Awards – The French
Approach, 25 J. Int’l Arb. 421, 426 (2008).
1123) See§1.04[B][1].
1124) Swiss Law on Private International Law, Art. 190; Berti & Schnyder, in S. Berti et al. (eds.),
International Arbitration in Switzerland Art. 190, ¶17 (2000).
1125) See§25.07[A][1], p. 3365; Belgian Judicial Code, Art. 1717(4) (pre-1998 amendment) (“Courts
of Belgium may hear a request for annulment only if at least one of the parties to the
dispute decided by the award is either a physical person having Belgian nationality or
residence, or a legal entity created in Belgium or having a Belgian branch or other seat
of operation.”). The legislation was adopted with the expectation that it would increase
Belgium’s attractiveness as an arbitral seat. Vandereist, Increasing the Appeal of Belgium
as An International Arbitration Forum? – The Belgian Law of March 27, 1985 Concerning the
Annulment of Arbitral Awards, 3(2) J. Int’l Arb. 77 (1986).
1126) See Craig, Uses and Abuses of Appeal From Awards, 4 Arb. Int’l 174, 201 (1988) (“the
concept of a non-reviewable award attracts the kind of contempt that was felt some
years ago for divorces from Las Vegas or Chihuahua”); Demeyere, 1998 Amendments to
Belgian Arbitration Law: An Overview, 15 Arb. Int’l 295 (1999); Hanotiau & Block, The Law of
19 May 1998 Amending Belgian Arbitration Legislation, 15 Arb. Int’l 97, 99 (1999) (“It seems
that with notable exceptions, such as the Eurotunnel arbitration, the 1985 Reform has
dissuaded rather than encouraged parties to choose Belgium as the seat of their
arbitration.”).
1127) The current Belgian statutory approach is discussed below. See§25.07[A][1], p. 3365.
1128) Malaysian Arbitration Act, 1952, §34 (repealed) (neither Arbitration Act nor any “other
written law” applies to ICSID, UNCITRAL and Kuala Lumpur Regional Arbitration Centre
awards). SeeLim, National Report for Malaysia (2006), in J. Paulsson (ed.), International
Handbook on Commercial Arbitration (1984 & Update 2013).
1129) SeeMalaysian Arbitration Act, 2005, §37.
1130) Bahrain Legislative Decree No. 30, Art. 25 (“Without prejudice to the procedures set forth
in Articles 23 and 24 of this law concerning the enforcement of the Dispute Resolution
Tribunal award, parties to the dispute shall not be entitled to appeal for the annulment
of the Dispute Resolution Tribunal award in accordance with Article 24 of this law if the
parties have agreed in writing [1] that foreign law will govern the dispute, [2] that they
will not challenge the award before the courts of Bahrain, and [3] that any challenge
against the award shall be before the competent authority in another state.”). See
Townsend, The New Bahrain Arbitration Law and the Bahrain “Free Arbitration Zone”, 65
Disp. Res. J. 74 (2010).
1131) Note by the Secretary-General on the Comments on Draft Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, Doc. E/CONF.26/2 (1958). See alsoFouchard,
La portée internationale de l’annulation de la sentence arbitrale dans son pays d’origine,
1997 Rev. arb. 329.
1132) See§1.04[A][1]; §22.02[A]; §26.03[B][4]. As discussed above, the Geneva Protocol and
Geneva Convention had required that awards be final, before recognition would be
required, thereby effectively imposing the double exequatur requirement. See§1.01[C][2].
Among the New York Convention’s most significant achievements was eliminating the
double exequatur requirement. See§1.04[A][1][a]; §22.02[A]; §26.03[B][4]. This had the
effect of removing the confirmation (or, put negatively, the non-annulment) of an award
from the required conditions of recognition of an award. Instead, the annulment of an
award was “moved” to the permissive list of grounds for either non-recognition (Article
V(1)(e)) or suspension of recognition proceedings (Article VI).
1133) See§25.11; §26.03[B][6] (discussing Article VI).
1134) See§25.06, pp. 3362-63.
1135) See Curtin, An Examination of Contractual Expansion and Limitation of Judicial Review of
Arbitral Awards, 15 Ohio St. J. Disp. Res. 337 (2000).
1136) Nothing in the New York Convention or other international arbitration conventions
expressly addresses the enforceability of agreements purporting to alter the standards
of judicial review applicable in an annulment action. The better view, however, is that
such agreements constitute an integral part of the parties’ agreement to arbitrate and,
as such, are entitled to recognition under Article II of the Convention. See§2.01[A][1];
§5.01[B][2]; §5.04[A]; §11.03[C][1][c][v]; §12.01; §12.03[A]; §14.03; §15.02[A]; §15.05; §17.02[A]
[2]; §17.04[B][2]; §18.02[A]; §23.02[B][1]; §23.07.
1137) See, e.g., 2012 ICC Rules, Art. 34(6); LCIA Rules, Art. 26(9); SIAC Rules, Art. 28(9). See
also§26.05[C][7][e][viii].
1138) SeeG. Born, International Arbitration and Forum Selection Agreements: Drafting and
Enforcing 65, 109-110 (4th ed. 2013).
1139) See§25.06; Belgian Judicial Code, Art. 1717(4) (pre-1998 amendment).
154
1140) 1999 Belgian Judicial Code, Art. 1717(4) (“The parties may, through an express declaration
in the arbitration agreement or through a later agreement, exclude any action for the
annulment of an arbitrator’s award when neither of them is either a natural person with
a Belgian citizenship or a residence in Belgium, or a legal person having its main
establishment or having a branch there.”); 2013 Belgian Judicial Code, Art. 1718 (“By an
explicit declaration in the arbitration agreement or by a later agreement, the parties
may exclude any application for the setting aside of an arbitral award, where none of
them is a natural person of Belgian nationality or a natural person having his domicile or
normal residence in Belgium or a legal person having its registered office, its main place
of business or a branch office in Belgium.”). See Hanotiau & Block, The Law of 19 May 1998
Amending Belgian Arbitration Legislation, 15 Arb. Int’l 99 (1999); Vandereist, Increasing the
Appeal of Belgium as An International Arbitration Forum? – The Belgian Law of March 27,
1985 Concerning the Annulment of Arbitral Awards, 3(2) J. Int’l Arb. 77 (1986).
1141) As discussed above, prior to enactment of the arbitration provisions of the Swiss Law on
Private International Law, Swiss law historically provided for limited, but mandatory,
judicial review of the substance of awards. See§25.05[A][2], p. 3353; Patocchi & Jermini, in
S. Berti et al. (eds.), International Arbitration in Switzerland Art. 192, ¶¶1-3 (2000).
1142) Article 192(1) provides: “If none of the parties have their domicile, their habitual
residence, or a business establishment in Switzerland, they may, by an express
statement in the arbitration agreement or by a subsequent written agreement, waive
fully the action for annulment or they may limit it to one or several of the grounds listed
in Art. 190(2).” See also Patocchi & Jermini, in S. Berti et al. (eds.), International
Arbitration in Switzerland Art. 192, ¶¶13-25 (2000).
1143) Swiss Law on Private International Law, Art. 192(1) (parties may waive “all setting aside
proceedings or they may limit such proceedings to one or several of the grounds listed
in [Article 190(2)]”); Judgment of 1 March 2011, DFT 4A_514/2010, ¶4.1.2 (Swiss Federal
Tribunal) (“an appeal waiver may be all-encompassing, that is, that it may encompass
all of the causes listed at Art. 190(2) [of the Swiss Law on Private International Law]
including the cause of irregular composition of the arbitral tribunal”); Patocchi &
Jermini, in S. Berti et al. (eds.), International Arbitration in Switzerland Art. 192, ¶¶17, 19-
25 (2000).
1144) See, e.g., Judgment of 1 March 2011, DFT 4A_514/2010 (Swiss Federal Tribunal) (parties
validly waived right to seek annulment of decision of arbitral tribunal challenging sole
arbitrator’s impartiality).
Judgment of 19 December 1990, DFT 116 II 639, 640-41 (Swiss Federal Tribunal) (exclusion
agreement in principle valid and enforceable).
1147) See§25.07[A][2], pp. 3371-72.
1148) English Arbitration Act, 1996, §69(1) (right to apply for leave of appeal against an award
on basis of error of law “unless otherwise agreed by the parties”); R. Merkin, Arbitration
Law ¶22.9 (1991 & Update August 2013).
1149) English Arbitration Act, 1996, §§4(1), 68, Schedule 1; R. Merkin, Arbitration Law ¶20.46
(1991 & Update August 2013) (“the Arbitration Act 1996 does not permit the parties to
agree in advance of the occurrence of serious procedural irregularity that there is no
right to apply to the court in the event of any irregularity”).
For earlier English authority on this point, see Mut. Shipping Corp. v. Bayshore Shipping
Co. [1985] 1 Lloyd’s Rep. 189 (English Ct. App.); Czarnikow v. Roth, Schmidt & Co. [1922] 2
KB 478 (English Ct. App.).
1150) See, e.g., Swedish Arbitration Act, §51 (“Where none of the parties is domiciled or has its
place of business in Sweden, such parties may in commercial relationships through an
express agreement exclude or limit the application of the grounds for setting aside an
award.”); Turkish International Arbitration Law, Art. 15(A)(2); Peruvian Arbitration Law, Art.
63(8); Tunisian Arbitration Code, Art. 78(6) (“The parties who have neither domicile,
principal residence, nor business establishment in Tunisia, may expressly agree to
exclude totally or partially all recourse against an arbitral award.”).
For the reverse approach, seeNew Zealand Arbitration Act, Schedule 2, §5(1) (any party
may appeal on “any question of law” arising out of an award if parties affirmatively
agree before award is rendered, all parties agree after the award is rendered or the High
Court grants leave).
1151) Bahrain Legislative Decree No. 30, Art. 25 (“parties to the dispute shall not be entitled to
challenge on nullity base against the award issued by the Dispute Resolution Tribunal in
accordance with Article 24 of this Law, if the parties have agreed in writing to choose a
foreign law concerning the dispute, and they shall not be entitled to challenge the
award before Bahrain’s Courts, and that challenge against the award shall be before the
competent authority in another state”). See Townsend, The New Bahrain Arbitration Law
and the Bahrain “Free Arbitration Zone”, 65 Disp. Res. J. 74, 76-79 (2010) (noting law is
response to practitioners’ reluctance to conduct arbitrations in Middle East due to
mistrust of local courts in wake of cases like Int’l Bechtel Co. Ltd v. Dep’t of Civil Aviation
of Gov’t of Dubai, 300 F.Supp.2d 112 (D.D.C. 2004)), 78 (“Bahrain chose to address these
concerns directly by removing its courts altogether from the picture”). See§25.06.
1152) See§1.02[A]; §8.03[A]; §19.07.
155
1153) Kerr, Arbitration and the Courts: The UNCITRAL Model Law, 34 Int’l & Comp. L.Q. 1, 15
(1985). See also Craig, Uses and Abuses of Appeal From Awards, 4 Arb. Int’l 174, 198-202
(1988); Mann, Private Arbitration and Public Policy, 1985 Civil Justice Q. 257 (1985).
1154) See§19.07; §23.03[E].
1155) See, e.g., Italian Code of Civil Procedure, Art. 829(1) (recourse available “notwithstanding
any waiver”); Portuguese Law on Voluntary Arbitration, 2011, Art. 46(5) (“the right to apply
for the setting aside of an arbitral award cannot be waived”); Egyptian Arbitration Law,
Art. 54(1) (“The admissibility of the action for annulment of the arbitral award shall not
be prevented by the applicant’s renunciation of its right to request the annulment of the
award prior to the making of the award.”).
1156) See also G. Petrochilos, Procedural Law in International Arbitration 86 (2004) (“The
preparatory materials of the Model Law would surely discuss the possibility of exclusion
agreements had the drafters contemplated it. And the drafters did not contemplate that
possibility, because in the system of the Model Law the imperative procedural
provisions reflect procedural public policy.”).
1157) See, e.g., Noble China Inc. v. Lei, [1998] O.T.C. LEXIS 2175 (Ontario Super. Ct.) (at least
where there was no claim that a mandatory provision of Model Law had been breached
(e.g., regarding equal treatment), right to seek annulment could be excluded). See also
Judgment of 18 January 2007, Case No. 4674 (Tunisian Cour de cassation) (where parties
do not have their headquarters, domiciles, or places of business in Tunisia, agreement
excluding annulment rights would be valid; where parties were based in Tunisia,
agreement would be void).
1158) See, e.g.,Judgment of 27 October 1994, 1995 Rev. arb. 263 (Paris Cour d’appel); Judgment of
16 February 1989, 1989 Rev. arb. 711 (Paris Cour d’appel).
1159) See, e.g., Amos Inv. Ltd v. Minou Enter. Ltd, [2008] BCSC 332, ¶22 (B.C. S.Ct.) (“It is clear …
that an arbitration agreement cannot waive judicial review such as is contemplated
under s. 30 of the British Columbia Commercial Arbitration Act.”); Noble China Inc. v. Lei,
[1998] O.T.C. LEXIS 2175, at *38-51 (Ontario Super. Ct.) (parties may not validly exclude
annulment application under Article 34).
1160) See, e.g., Methanex Motunui Ltd v. Spellman, [2004] 3 NZLR 454 (Wellington Ct. App.)
(Article 34 of New Zealand Arbitration Act, providing for application to set aside award,
is “not capable of being excluded by contractual provision to the contrary”; “A
contractual provision which purported to exclude a review for breach of natural justice
would derogate impermissibly from article[s] 18. … [A] reading of the travaux
préparatoires associated with the UNCITRAL Model Law suggests that there was no
contemplation that parties to arbitral proceedings could seek to limit further the rights
of review contemplated by art. 34.”).
1161) Judgment of 31 January 2006, Shin Satellite Pub. Co. Ltd v. Jain Studios Ltd, [2006] 2 SCC
628 (Indian S.Ct.) (dicta that exclusion of any recourse against an award is invalid).
1162) Judgment of 14 November 2004, 2005 Rev. arb. 751 (Paris Cour d’appel).
1163) See Judgment of 26 September 1985, 1986 NJW 1436 (German Bundesgerichtshof).
1164) See A. Baumbach et al., Zivilprozessordnung §1059, ¶3 (71st ed. 2013); Geimer, in R. Zöller
(ed.), Zivilprozessordnung §1059, ¶¶80-82 (30th ed. 2013); K.-H. Schwab & G. Walter,
Schiedsgerichtsbarkeit ¶24-53 (7th ed. 2005).
1165) See, e.g., MACTEC, Inc. v. Gorelick, 427 F.3d 821, 829 (10th Cir. 2005) (suggesting that
attempt entirely to eliminate judicial review of award would conflict with FAA); Hoeft v.
MVL Group, Inc., 343 F.3d 57, 64 (2d Cir. 2003) (“Since federal courts are not rubber
stamps, parties may not, by private agreement, relieve them of their obligation to
review arbitration awards for compliance with §10(a).”); Agility Public Warehousing Co.
KSC v. Supreme Foodserv. GmbH, 2011 WL 6952106 (S.D.N.Y.) (refusing to enforce
agreement limiting scope of, or dispensing with, judicial review of award, including
provisions that award is “final,” “binding upon the parties,” or “non-appealable”);
Drahozal, Standards for Judicial Review of Arbitral Awards in the United States: Mandatory
Rules or Default Rules?, 16(3) Mealey’s Int’l Arb. Rep. 27 (2001).
156
1166) See, e.g., Rollins, Inc. v. Black, 167 F.Appx. 798, 798 n.1 (11th Cir. 2006) (“A ‘binding, final,
and non-appealable’ arbitral award does not mean the award cannot be reviewed. It
simply means the parties have agreed to relinquish their right to appeal the merits of
their dispute; it does not mean the parties relinquish their right to appeal an award
resulting from an arbitrator’s abuse of authority, bias, or manifest disregard of the law.”);
Commc’ns Consultant, Inc. v. Nextel Commc’ns of the Mid-Atl., Inc., 146 F.Appx. 550, 552-53
(3d Cir. 2005) (interpreting waiver narrowly to eliminate ability to challenge arbitrator ’s
legal determinations, but not ability to challenge on the basis of corruption, fraud,
partiality, or failure to provide a hearing); Aerojet-Gen. Corp. v. Am. Arbitration Ass’n, 478
F.2d 248, 251-52 (9th Cir. 1973) (“language in AAA arbitration rules that arbitrator’s
determination as to locale is “final and binding” does not preclude “a limited inquiry
into whether that determination was made in accordance with a minimum standard of
fair dealing”); Goodall-Sanford, Inc. v. United Textile Workers, 233 F.2d 104, 107 (1st Cir.
1956) (“Of course, despite finality an award is subject to some degree of judicial review
through [§§10 and 11 of the FAA] or other appropriate proceedings.”); Baugher v. Dekko
Heating Techs., 202 F.Supp.2d 847, 851 (N.D. Ind. 2002) (provision that parties “waive any
right of appeal to the arbitration decision” nevertheless permits review of award under
FAA); Spier v. Calzaturificio Tecnica SpA, 77 F.Supp.2d 405, 407 (S.D.N.Y. 1999) (agreement
that award is “final” and “binding” does “not nullify statutory grounds for vacating
awards”); Team Scandia, Inc. v. Greco, 6 F.Supp.2d 795, 798 (S.D. Ind. 1998) (permitting
review under FAA despite agreement to a “final,” “binding” and “non-appealable”
award). See also M & C Corp. v. Erwin Behr GmbH, 87 F.3d 844, 947 (6th Cir. 1996)
(interpreting waiver narrowly to bar only retrial on merits, not review of defenses to
enforcement under New York Convention); Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141,
144-45 (2d Cir. 1992) (“final and binding” language bars only de novo review of merits, not
review of defenses to enforcement under New York Convention); §25.07[A][2] (“Those U.S.
courts which permit waiver of right”).
1167) See, e.g., Aerojet-Gen. Corp. v. Am. Arbitration Ass’n, 478 F.2d 248, 251 (9th Cir. 1973);
Swenson v. Bushman Inv. Props., Ltd, 870 F.Supp.2d 1049, 1057 (D. Idaho 2012) (parties
may render award “completely unreviewable” so long as they state their intent “clearly
and unequivocally”); Kim–C1, LLC v. Valent Biosciences Corp., 756 F.Supp.2d 1258, 1265-66
(E.D. Cal. 2010) (parties may eliminate or restrict judicial review of award provided they
do so clearly).
1168) Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct. 2008). As discussed below, Hall
Street’s specific holding was that an agreement for enhanced judicial review (not waiver
of judicial review) was contrary to the FAA’s exclusive statutory grounds for vacatur.
See§25.07[B], p. 3375.
1169) On the one hand, the Court’s focus in Hall Street was on the FAA’s prohibition against
adding to an exclusive list of statutory vacatur grounds, and on a legislative policy in
favor of minimal judicial review of arbitral awards – neither of which would preclude
enforcement of agreements waiving such statutory grounds. On the other hand, the Court
also appeared to treat the FAA’s statutory regime for confirmation and vacatur of awards
as mandatory and inflexible, raising doubts as to the validity of waivers of such grounds.
See also Restatement (Third) U.S. Law of International Commercial Arbitration §4-24,
comment a (Tentative Draft No. 2 2012) (“The parties may also not agree before, during,
or after the arbitral proceedings to refrain from seeking vacatur or resisting
confirmation, recognition, or enforcement of an award …”).
1170) See§§1.02[B][1], [5] & [7].
1171) See also§25.05[A][1][a].
1172) See generallyKirby, Finality and Arbitral Rules: Saying An Award Is Final Does Not
Necessarily Make It So, 29 J. Int’l Arb. 119, 120 (2012) (“[T]o the extent parties believe that
arbitral awards when rendered are final – as in that is it, game over, finished, done –
they will be disappointed. In fact, the degree to which finality provisions in arbitral rules
actually deliver what they may appear on their face to promise depends largely on the
law at the place of arbitration and in other countries where a party seeks recognition
and enforcement of the award.”).
1173) Patocchi & Jermini, in S. Berti et al. (eds.), International Arbitration in Switzerland Art. 192,
¶13 (2000).
1174) See, e.g., 2010 UNCITRAL Rules, Art. 34(2); 2012 ICC Rules, Art. 34(6); LCIA Rules, Art. 26(9).
157
1175) See, e.g.,Judgment of 15 February 2010, DFT 4A_464/2009, ¶3.1.1 (Swiss Federal Tribunal)
(“A clause providing that the award will be final does not constitute a valid renunciation
to appeal. The same applies to the commitment of the parties to respect and comply
with the award.”; Parties did not waive annulment when agreeing that “[t]he arbitration
award, even if passed by the majority of the arbitrators, shall be final and binding for
both Parties hereto. Both Parties to this Contract shall accept the award and proceed
accordingly.”); Judgment of 10 October 2008, DFT 4A_224/2008, ¶2.6.3 (Swiss Federal
Tribunal) (“According to the wording of the arbitration clause, the disputes arising from
the contract are to be decided by the arbitrators finally and the parties undertook to
recognize and to submit to the arbitral award. Contrary to the Respondent’s view, this
does not meet the requirements of a specific renunciation within the meaning of Art. 192
[of the Swiss Law on Private International Law.] According to normal language use,
referring to a decision as “final” does not rule out an appeal based on extraordinary
legal means, but merely the free review of a decision through ordinary legal recourses,
such as for instance an appeal.”); Judgment of 19 December 1990, DFT 116 II 639, 640-41
(Swiss Federal Tribunal) (“Owing to the wide-ranging effects of an exclusion agreement it
is a requirement that the party should clearly express their intention by referring to
setting aside proceedings and waiving them.”); B. Berger & F. Kellerhals, International
and Domestic Arbitration in Switzerland ¶¶1676-81 (2d ed. 2010); Patocchi & Jermini, in S.
Berti et al. (eds.), International Arbitration in Switzerland Art. 192, ¶14 (2000).
1176) CompareJudgment of 15 February 2010, DFT 4A_464/2009, ¶3.1.1 (Swiss Federal Tribunal)
(“[C]ase law is restrictive in admitting agreements excluding appeals and that an
indirect renunciation is considered insufficient. As to a direct renunciation, … a specific
reference to Art. 190 [of the Swiss Law on Private International Law] and/or to Art. 192 is
not mandatory. It is sufficient that an express statement by the parties should show
clearly their common will to renounce any appeal.”) with Judgment of 4 February 2005,
DFT 131 III 173 (Swiss Federal Tribunal) (explicit reference to Articles 190 and 192 of Swiss
Law on Private International Law is required).
1177) Judgment of 4 January 2012, DFT 4A_238/2012, ¶2.2.4.2 (Swiss Federal Tribunal). The
Federal Tribunal rejected the argument that “appeal” does not include annulment:
“none of the laws invoked by the Appellant provides for an ordinary appeal against an
international arbitral award” and therefore a reference to “appeal” must include
annulment. Id.
1178) Judgment of 4 February 2005, DFT 131 III 173, 175 et seq. (Swiss Federal Tribunal).
1179) Judgment of 22 March 2007, DFT 133 III 235, 325 (Swiss Federal Tribunal) (waiver invalid on
grounds of duress).
1180) See, e.g.,Am. Diagnostica, Inc. v. Gradipore Ltd, XXIVa Y.B. Comm. Arb. 574, 589 (N.S.W. S.Ct.
1998) (1999) (“[A]n agreement that an award shall be final and binding and an added
undertaking to carry out the award without delay (which is the most which can be found
in the agreement in relation to the UNCITRAL Arbitration Rules) is insufficient for an
agreement which excludes the right of appeal … in relation to the award. In accordance
with a long history, reference to an award as final and binding leaves it subject to
challenges properly available to a dissatisfied party.”); Raguz v. Sullivan, [2000] NSWCA
240, ¶87 (N.S.W. Ct. App.) (“Mere agreement that an award shall be ‘final and binding’
would not be an exclusion agreement.”); BMV Inv., Ltd v. Saskferco Prods., Inc., [1994] 119
D.L.R.4th 577 (Saskatchewan Ct. App.) (same).
1181) See, e.g., Aerojet-Gen. Corp. v. Am. Arbitration Ass’n, 478 F.2d 248, 251 (9th Cir. 1973) (“While
it has been held that parties to an arbitration can agree to eliminate all court review of
the proceedings, the intention to do so must clearly appear.”); Swenson v. Bushman Inv.
Props., Ltd, 870 F.Supp.2d 1049, 1057 (D. Idaho 2012) (parties may render award
“completely unreviewable” so long as they state their intent “clearly and
unequivocally”); Kim–C1, LLC v. Valent Biosciences Corp., 756 F.Supp.2d 1258, 1265-66 (E.D.
Cal. 2010) (parties may eliminate or restrict judicial review of award provided they do so
clearly).
1182) English Arbitration Act, 1996, §4(3) (“The parties may make such arrangements by
agreeing to the application of institutional rules or providing any other means by which
a matter may be decided.”), §69(1). See Lesotho Highlands Dev. Auth. v. Impregilo SpA
[2006] 1 A.C. 221 (House of Lords); Al Hadha Trading Co. v. Tradigrain SA [2002] 2 Lloyd’s
Rep. 512 (QB) (English High Ct.).
As discussed above, under English law, exclusion agreements appear to be valid only
with respect to judicial review of the substance of the arbitrators’ decision under §69,
and not with respect to procedural unfairness, arbitrator bias and the like. See§25.07[A]
[1], pp. 3366-67.
1183) See, e.g., Shell Egypt W. Manzala GmbH v. Dana Gas Egypt Ltd [2009] EWHC 2097 (Comm)
(English High Ct.) (arbitration clause providing that award “shall be final, conclusive and
binding on the parties” does not exclude rights of appeal under §69 of English
Arbitration Act, 1996; these provisions mean only that award is res judicata). See also
Essex County Council v. Premier Recycling Ltd [2006] EWHC 3594 (English High Ct.)
(agreement that award is “final and binding” did not waive right to appeal on points of
law under §69).
1184) See, e.g., Holland Leedon Pte Ltd (in Liquidation) v. Metalform Asia Pte Ltd, [2010] SGHC
280 (Singapore High Ct.).
1185) Labourers Int’l Union of N. Am. v. Carpenters & Allied Workers, (1997) 34 O.R.3d 472
(Ontario Ct. App.).
158
1186) See Gold & Res. Dev. (N.Z.) Ltd v. Doug Hood Ltd, [2000] 3 NZLR 318, ¶54 (N.Z. Ct. App.)
(words final and binding “indicate that the parties did not contemplate becoming
involved in litigation over the arbitral award. The High Court should lean towards giving
effect to the stated preference of the parties for finality.”).
1187) See§25.05[A][3].
1188) 2012 ICC Rules, Art. 34(6).
The waiver of judicial recourse against an award was broadened in the 1998 ICC Rules,
from “any form of appeal” to “any form of recourse.” W. Craig, W. Park & J. Paulsson,
International Chamber of Commerce Arbitration ¶22.03 (3d ed. 2000) (Article 28(6) of ICC
Rules “seeks to eliminate any ordinary judicial recourse” against an award); Y. Derains &
E. Schwartz, A Guide to the ICC Rules of Arbitration 318-22 (2d ed. 2005).
1189) 2010 UNCITRAL Rules, Art. 34(2).
1190) UNCITRAL Rules, Annex – Possible Waiver Statement (“The parties hereby waive their
right to any form of recourse against an award to any court or other competent authority,
insofar as such waive can validly be made under the applicable law.”).
1191) The treatment of agreements waiving rights to resist recognition are discussed below.
See§26.04.
1192) See§§22.01[B][3]-[5].
1193) See§26.04.
1194) See, e.g., Syncor Int’l Corp. v. McLeland, 1997 WL 452245, at *6 (4th Cir.) (“the arbitrator
shall not have the power to commit errors of law or legal reasoning, and the award may
be vacated or corrected by judicial review for any such error”); Gateway Techs., Inc. v.
MCI Telecomms. Corp., 64 F.3d 993, 995 (5th Cir. 1995) (“errors of law shall be subject to
appeal”); Fils et Cables D’Acier de Lens v. Midland Metals Corp., 584 F.Supp. 240, 242
(S.D.N.Y. 1984) (“the court shall have the power to review (1) whether the findings of fact
rendered by the arbitrator are … supported by substantial evidence, and (2) whether as
a matter of law based on said findings of fact the award should be affirmed, modified or
vacated”). See also Drahozal, Contracting Around Hall Street, 14 Lewis & Clark L. Rev. 905
(2010); Drahozal, Standards for Judicial Review of Arbitral Awards in the United States:
Mandatory Rules or Default Rules?, 16(3) Mealey’s Int’l Arb. Rep. 27 (2001); Franc,
Contractual Modification of Judicial Review of Arbitral Awards: The French Position, 10 Am.
Rev. Int’l Arb. 215 (1999); Hamlin, Contractual Alteration of the Scope of Judicial Review,
15(4) J. Int’l Arb. 46 (1998); Holstein, Co-Opting the Judicial Review of Arbitral Awards
Through Contract, 12 World Arb. & Med. Rep. 276 (2001); Knull & Rubins, Betting the Farm
on International Arbitration: Is It Time to Offer An Appeal Option?, 11 Am. Rev. Int’l Arb. 531
(2000); Moses, Can Parties Tell Courts What to Do? Expanded Judicial Review of Arbitral
Awards, 52 U. Kan. L. Rev. 429 (2004); Raghavan, Heightened Judicial Review of Arbitral
Awards: Perspective From the UNCITRAL Model Law and the English Arbitration Act of 1996
on Some US Developments, 15(3) J. Int’l Arb. 103 (1998); Rau, Contracting Out of the
Arbitration Act, 8 Am. Rev. Int’l Arb. 225 (1997); Smit, Contractual Modification of the Scope
of Judicial Review of Arbitral Awards, 8 Am. Rev. Int’l Arb. 147 (1997); Ware, “Opt-In” for
Judicial Review of Errors of Law Under the Revised Uniform Arbitration Act, 8 Am. Rev. Int’l
Arb. 263 (1997).
1195) See, e.g., Bowen v. Amoco Pipeline Co., 254 F.3d 925, 937 (10th Cir. 2001) (“parties may not
contract for expanded judicial review of arbitration awards”); Chicago Typographical
Union v. Chicago Sun-Times, Inc., 935 F.2d 1501, 1505 (7th Cir. 1991) (parties cannot
contract for judicial review of substance of awards because “federal jurisdiction cannot
be created by contract,” but parties “can contract for an appellate arbitration panel to
review the arbitrator’s award”); Judgment of 6 April 1994, 1995 Rev. arb. 263 (French Cour
de cassation civ. le); Judgment of 23 May 1991, 1991 Rev. arb. 661 (Paris Cour d’appel);
Judgment of 12 December 1989, 1990 Rev. arb. 863 (Paris Cour d’appel); Gallaway Cook
Allan v. Carr, [2013] NZCA 11 (New Zealand Ct. App.) (holding provision for heightened
judicial review of arbitrators’ factual findings invalid).
1196) See, e.g., Harris v. Parker College of Chiropractic, 286 F.3d 790, 792-93 (5th Cir. 2002);
Syncor Int’l Corp. v. McLeland, 120 F.3d 262 (4th Cir. 1997); Gateway Techs., Inc. v. MCI
Telecomms. Corp., 64 F.3d 993, 995 (5th Cir. 1995); New England Utilities v. Hydro-Québec,
10 F.Supp.2d 53, 62-64 (D. Mass. 1998); Fils et Cables D’Acier de Lens v. Midland Metals
Corp., 584 F.Supp. 240, 242 (S.D.N.Y. 1984) (“the court shall have the power to review (1)
whether the findings of fact rendered by the arbitrator are, on the entire record of said
arbitration proceeding, supported by substantial evidence, and (2) whether as a matter
of law based on said findings of fact, the award should be affirmed, modified or
vacated”).
1197) See, e.g., Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 1000 (9th Cir.
2003) (“Private parties’ freedom to fashion their own arbitration process has no bearing
whatsoever on their inability to amend the statutorily prescribed standards governing
federal court review.”); Bowen v. Amoco Pipeline Co., 254 F.3d 925, 932 (10th Cir. 2001);
LaPine Tech. Corp. v. Kyocera Corp., 130 F.3d 884 (9th Cir. 1997); Chicago Typographical
Union v. Chicago Sun-Times, Inc., 935 F.2d 1501, 1505 (7th Cir. 1991).
1198) Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (U.S. S.Ct. 2008). See also Restatement
(Third) U.S. Law of International Commercial Arbitration §4-23(a) (Tentative Draft No. 2
2012) (“Parties may not by agreement expand or supplement the grounds for vacating or
denying confirmation of a U.S. Convention award or for denying recognition or
enforcement of a foreign Convention award …”).
159
1199) Hall St. Assocs., 552 U.S. at 586. See also AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740,
1752 (U.S. S.Ct. 2011) (“parties may not contractually expand the grounds or nature of
judicial review”); Rent-A-Ctr, W., Inc. v. Jackson, 130 S.Ct. 2772, 2781 (U.S. S.Ct. 2010) (“the
nonplenary grounds for judicial review in §10 of the FAA are exclusive”); LaPine v. Kyocera
Corp., 2008 WL 2168914, at *4 n.2 (N.D. Cal.) (“the Ninth Circuit’s decision in Kyocera Corp.,
and the Supreme Court’s recent decision in Hall Street, both hold[] that parties may not
by private agreement expand or contract the grounds on which a federal court reviews
an arbitral award”).
1200) Hall St. Assocs., 552 U.S. at 586. The Supreme Court noted that §10 listed a number of
“egregious departures from the parties’ agreed upon arbitration” procedures and of
“extreme arbitral conduct.” It then reasoned that “the old rule of ejusdem generis has an
implicit lesson to teach here” and that “when a statute sets out a series of specific terms
ending with a general term, that general term is confined to covering subjects
comparable to the specifics it follows.” Id.
1201) The Supreme Court opined that §9 required confirmation of awards, unless one of the
grounds for vacatur specified in §10 was present, with “no hint of flexibility.” Hall St.
Assocs., 552 U.S. at 587.
1202) Hall St. Assocs., 552 U.S. at 588.
1203) See G. Petrochilos, Procedural Law in International Arbitration 97 (2004) (“there would
seem to be no irreparable harm in striking down ‘heightened review’ agreements”).
1204) It is also implausible to suggest that, in formulating statutory annulment mechanisms
and grounds, legislatures intended to address the parties’ freedom to agree upon other
forms of judicial review.
1205) Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) (under Texas Arbitration Act, parties
may contractually expand scope of judicial review of an arbitral award; court disagreed
with and declined to follow U.S. Supreme Court decision in Hall Street).
1206) Nafta Traders, 339 S.W.3d at 95.
1207) Nafta Traders, 339 S.W.3d at 95.
1208) Nafta Traders, 339 S.W.3d at 96. The court qualified its decision with the observation that
the parties had agreed only that the arbitral award would be subject to the same level
of judicial review as a trial court decision. The court held that “an arbitration agreement
providing that a `judge would review the award by flipping a coin or studying the entrails
of a dead fowl’ would be unenforceable.” Id., quoting LaPine Tech. Corp. v. Kyocera Corp.,
130 F.3d 884, 891 (9th Cir. 1997) (Kozinski, J., concurring).
1209) Cable Connection, Inc. v. DirectTV, Inc., 190 P.3d 586, 589 (Cal. 2008) (California Arbitration
Act gives effect to agreements expanding scope of judicial review); Hogoboom v.
Hogoboom, 924 A.2d 602, 606 (N.J. Super. Ct. 2007) (same under New Jersey law).
1210) The Texas court also held (correctly) that the FAA did not preempt the Texas General
Arbitration Act (on the basis that the Texas law gave effect to the parties’ arbitration
agreement). Nafta Traders, 339 S.W.3d at 99-100. The same result should apply under the
Convention and chapter 2 of the FAA, including in cases removed to federal court under
the FAA.
1211) Guangzhou Dockyards Co. v. ENE Aegiali I [2010] EWHC 2826, ¶30 (Comm) (English High Ct.)
(“it is clear that under English law … it is very doubtful that the court has jurisdiction to
hear an appeal from arbitrators on questions of fact, even if the parties were to agree to
such an appeal”; concluding that parties had not purported to confer power on the court
to review arbitrators’ factual finding); Judgment of 15 October 2001, X SA v. Y, 20 ASA Bull.
321, 326 et seq. (Swiss Federal Tribunal) (2001) (“It is uncertain whether the parties’
agreed grounds for challenge [which go beyond those under Swiss law] constitute a basis
for annulment.”); Gallaway Cook Allan v. Carr, [2013] NZCA 11 (N.Z. Ct. App.) (invalidating
provision of arbitration agreement providing for appeal on issues of fact).
1212) Hong Kong Arbitration Ordinance, 2013, §§81(2)(c), 99, Schedule 2, §5 (permitting parties
to “opt in” to judicial review of substance of arbitral tribunal’s decision on merits);
Israeli Arbitration Law, Art. 29B(a) (“Parties to an arbitration agreement, who have
stipulated that the arbitrator shall decide in accordance with the substantial law, are
allowed to agree that the award is appealable, in the Court’s leave, if a fundamental
mistake has occurred in the application of law which could cause a miscarriage of
justice.”).
1213) This argument has been particularly common in U.S. courts, where parties have relied on
choice-of-law clauses selecting state law in efforts to avoid the FAA’s standards for
vacatur, in favor of state law standards. See§25.07[C], pp. 3378.
1214) See, e.g., Johnson v. Gruma, 614 F.3d 1062, 1066 (9th Cir. 2010) (“[A] general choice-of-law
clause within an arbitration provision does not trump the presumption that the FAA
supplies the rules for arbitration.”); Ario v. Underwriting Members of Syndicate 53 at
Lloyds, 618 F.3d 277, 293 (3d Cir. 2010) (“We require the parties to express a ‘clear intent’
to apply state law vacatur standards instead of those of the FAA.”); Action Indus., Inc. v.
U.S. Fid. & Guar. Co., 358 F.3d 337, 341-43 (5th Cir. 2004); Ferro Corp. v. Garrison Indus., Inc.,
142 F.3d 926, 937-38 (6th Cir. 1998); Volk v. X-Rite, Inc., 599 F.Supp.2d 1118, 1123-25 (S.D.
Iowa 2009) (collecting cases).
1215) Restatement (Third) U.S. Law of International Commercial Arbitration §4-10, comment e
(Tentative Draft No. 2 2012) (“the Restatement rejects the notion that parties may
effectively expand judicial review” of awards by requiring that arbitrators “strictly” or
“correctly” apply the law).
160
1216) See, e.g., Turner v. United Steelworkers of Am., 581 F.3d 672, 675-76, 676 n.2 (8th Cir. 2009);
Taylor v. Nelson, 788 F.2d 220, 225 (4th Cir. 1986); Florasynth, Inc. v. Pickholz, 750 F.2d 171,
177 (2d Cir. 1984) (“The role of arbitration as a mechanism for speedy dispute resolution
disfavors delayed challenges to the validity of an award. … Thus, when a party to an
arbitration believes that he has been prejudiced in the proceedings by behavior that
the [FAA] condemns he must bring a motion to vacate within the allotted time.”); Serv.
Employees Int’l Union Local No. 36 v. Office Ctr. Serv., 670 F.2d 404, 412 (3d Cir. 1982); Astro
Nusantara Int’l BV v. PT Ayunda Prima Mitra, [2012] SGHC 212, ¶90 (Singapore High Ct.)
(“Finality of the arbitral process is an important principle of international commercial
arbitration.”), rev’d on other grounds, PT First Media TBK v. Astro Nusantara Int’l BV, [2013]
SGCA 57 (Singapore Ct. App.). See also H. Holtzmann & J. Neuhaus, A Guide to the
There is no basis for suggestions that this three month time period is only precatory. J.
Lew, L. Mistelis & S. Kröll, Comparative International Commercial Arbitration ¶25-26
(2003). The period is plainly mandatory. See ABC v. XYZ Co. Ltd, [2003] 3 SLR(R) 546, ¶9
(Singapore Ct. App.) (“All [Art 34(3)] says is that [an] application [to set aside] may not be
made after the lapse of three months from a specified date. Although the words used are
‘may not’ these must be interpreted as ‘cannot’ as it is clear that the intention is to limit
the time during which an award may be challenged. … It appears to me that the court
would not be able to entertain any application lodged after the expiry of the three-
month period as art 34 has been drafted as the all-encompassing, and only, basis for
challenging an award in court. It does not provide for any extension of the time period
and, as the court derives its jurisdiction to hear the application from the Art alone, the
absence of such a provision means the court has not been conferred with the power to
extend time.”).
1218) Astro Nusantara Int’l BV v. PT Ayunda Prima Mitra, [2012] SGHC 212, ¶97 (Singapore High
Ct.), rev’d on other grounds, PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57
1219) See, e.g., U.S. FAA, 9 U.S.C. §12 (three months); 1 European Convention Providing a
Uniform Law on Arbitration, Annex I, Art. 28(1) (three months); English Arbitration Act,
1996, §70(3) (28 days); French Code of Civil Procedure, Art. 1505 (one month); Spanish
Arbitration Act, 2011, Art. 41(4) (two months); Chinese Arbitration Law, Art. 59 (six months);
Chilean International Commercial Arbitration Law, Art. 34(3) (three months); Mexican
Commercial Code, Art. 1457 (three months); Brazilian Arbitration Law, Art. 33 (90 days).
1220) See, e.g., Peruvian Arbitration Law, Art. 64 (twenty days); Venezuelan Commercial
Arbitration Law, Art. 43 (five days); Bolivian Law on Arbitration and Mediation, Art. 64
(ten days); Colombian Decree No. 1818 of 7 September 1998, Art. 165 (five days);
Ecuadorian Law on Arbitration and Mediation, Art. 31 (ten days).
1221) Moohan v. S. & R. Motors [Donegal] Ltd, [2009] IEHC 391 (Irish High Ct.); Siginon Maritime
Ltd v. Gitutho Assocs., Misc. Civil Application 719 of 2004 (Mombasa High Ct. 2005);
Judgment of 6 May 2008, Case No. 140/124 (Cairo Ct. App.).
1222) Judgment of 10 January 2008, Case No. 23/124 (Cairo Ct. App.).
1223) Judgment of 10 May 2007, 26 Sch 20/06 (Oberlandesgericht Frankfurt); Judgment of 30
May 2006, 9 SchH 3/05 (Oberlandesgericht Oldenburg).
1224) Judgment of 2 November 2000, 2001 WM 104 (German Bundesgerichtshof).
1225) U.S. FAA, 9 U.S.C. §207.
1226) UNCITRAL Model Law, Art. 35 (no time limits).
1227) See§26.07.
1228) See§22.02[E][2][a][i].
1229) See§§25.03[A][2] & [6]; §26.05[B].
1230) See, e.g., Astro Nusanara Int’l BV v. PT Ayunda Prima Mitra, [2012] SGHC 636, ¶10
(Singapore High Ct.) (“[T]he possibility of a party raising defences both at the setting
aside stage (ie, under Art 34) and at the recognition and enforcement stage (ie, under Art
36) was …. concluded on the note that a party should be able to choose between the two
remedies in Art 34 and Art 36.”), rev’d on other grounds, PT First Media TBK v. Astro
Nusantara Int’l BV, [2013] SGCA 57 (Singapore Ct. App.); Broches, UNCITRAL – Commentary
On The Model Law, in J. Paulsson (ed.), International Handbook on Commercial Arbitration
173 (1984 & Update 1990) (“While an application for setting aside is the only recourse by
way of an active attack on the award … [a party is], however, not precluded from
defending itself by requesting refusal of recognition and enforcement in proceedings
initiated by the other party.”).
1231) UNCITRAL, Report of the Working Group on the Work of Its Seventh Session, U.N. Doc.
A/CN.9/246, ¶154 (1984).
1232) PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57, ¶¶58-71 (Singapore Ct.
App.) (“[T]he travaux make it clear beyond argument that the Model Law provides for the
system of ‘choice of remedies’, and that this system applies equally to both foreign and
domestic awards which are treated uniformly under the Model Law. It follows that under
the Model Law, parties that do not actively attack a domestic international award
remain able to passively rely on defences to enforcement absent any issues of waiver.”).
161
1233) German ZPO, §1060(2). SeeJudgment of 16 December 2010, XXXVI Y.B. Comm. Arb. 273, ¶30
(German Bundesgerichtshof) (2011); K. Böckstiegel & S. Kröll (eds.), Arbitration in
Germany: The Model Law in Practice ¶8 (2007) (“[T]he expiry of the three month time-
limit for the initiation of setting aside proceedings also influences the availability of
possible defences in proceedings for a declaration of enforceability (§1060(2)) sentence
3 ZPO.”); Weinacht, Enforcement of Annulled Foreign Arbitral Awards in Germany, 19 J. Int’l
Arb. 313, 318-19 n.29 (2002) (§1060(2) of ZPO mandates “leave for enforcement can no
longer be refused if the time-limit for invoking the grounds for annulment has elapsed
without an application for setting aside being filed”).
1234) This includes Austria, Singapore, Hong Kong, Turkey and California. Austrian ZPO;
Singapore International Arbitration Act, 2012; Hong Kong Arbitration Ordinance, 2013;
Turkish International Arbitration Law; California Code, Title 9.
1235) SeeSingapore International Arbitration Act, 2012, Art. 31; Hong Kong Arbitration
Ordinance, 2013, §§84, 86.
1236) Astro Nusantara Int’l BV v. PT Ayunda Prima Mitra, [2012] SGHC 212, ¶98 (Singapore High
Ct.), rev’d, PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57 (Singapore Ct.
App.). See also id. at 95 (“there is no legal basis for separating the grounds for setting
aside from the time limit imposed upon a setting-aside application”).
1237) PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57, ¶92 (Singapore Ct. App.).
See also id. at ¶65 (“[W]e are satisfied that ‘choice of remedies’ is not just a facet of the
Model Law enforcement regime; it is the heart of its entire design.”) (emphasis in
original).
1238) PT First Media TBK v. Astro Nusantara Int’l BV, [2013] SGCA 57, ¶99 (Singapore Ct. App.).
1239) U.S. FAA, 9 U.S.C. §§12, 207. Restatement (Third) U.S. Law of International Commercial
Arbitration §4-32, comment a(ii) (Tentative Draft No. 2 2012) (“An action to vacate a U.S.
Convention award is subject to the three-month limitations period specified in §12 of
the FAA. This limitation period begins to run at the time of filing or delivery of the award,
as provided in FAA §12.”).
1240) See, e.g., Norton v. AMISUB St. Joseph Hosp., 155 F.3d 1040, 1041 (8th Cir. 1998) (plaintiff
waived right to argue that arbitration agreement was unenforceable contract of
adhesion because she failed to file timely motion to vacate); Florasynth, Inc. v. Pickholz,
750 F.2d 171, 177 (2d Cir. 1984) (citing summary nature of confirmation process and desire
of parties for a “quick and final resolution of their disputes”); Med. Shoppe Int’l, Inc. v.
Asong, 2006 WL 83491 (E.D. Mo.) (award-debtor’s failure to seek to annul award waives
defenses to confirmation).
1241) Cullen v. Paine, Webber, Jackson & Curtis, Inc., 863 F.2d 851, 854 (11th Cir. 1989).
1242) See, e.g., Generica Ltd v. Pharm. Basics, Inc., 125 F.3d 1123 (7th Cir. 1997) (defenses against
recognition of ICC award are not time-barred even when brought more than three
months after award was made); Hartford Fire Ins. Co. v. Lloyd’s Syndicate 0056 ASH, 1997
WL 33491787 (D. Conn.); Jamaica Commodity Trading Co. Ltd v. Connell Rice & Sugar Co.,
Inc., 1991 WL 123962, at *2 (S.D.N.Y.).
1243) Restatement (Third) U.S. Law of International Commercial Arbitration §4-32, comment a(ii)
(Tentative Draft No. 2 2012).
1244) See§22.02[B][3][d]; Judgment of 20 December 2005, 26 Sch 29/05 (Oberlandesgericht
Frankfurt); Judgment of 13 May 2003, 4 Z Sch 35/02 (Bayerisches Oberstes Landesgericht);
Judgment of 17 April 2000, 10 Sch 01/00 (1) (Oberlandesgericht Naumburg).
1245) U.S. FAA, 9 U.S.C. §10; Hart Surgical, Inc. v. UltraCision, Inc., 244 F.3d 231, 233 (1st Cir. 2001)
(award must be “final” to be eligible for confirmation); Kolel Beth Yechiel Mechil of
Tartikov, Inc. v. YLL Irrevocable Trust, 863 F.Supp.2d 351, 357 n.9 (S.D.N.Y. 2012) (“Under
the FAA, a district court has power only to confirm or vacate a final arbitral award.”);
§22.02[B][3][d]; §§23.01[A]-[B].
1246) Am. Postal Workers Union v. U.S. Postal Serv., 422 F.Supp.2d 240, 246 (D.D.C. 2006).
1247) Swiss Law on Private International Law, Art. 190(1); Berti & Schnyder, in S. Berti et al.
(eds.), International Arbitration in Switzerland Art. 190, ¶¶19-23 (2000). See alsoJudgment
of 29 October 2008, DFT 4A_210/2008 (Swiss Federal Tribunal) (decision refusing to stay
arbitration was implicit finding of jurisdiction and therefore award subject to
annulment).
1248) Spanish Arbitration Act, 2011, Art. 40 (“A final award can be challenged in an action for
annulment in accordance with the provisions laid down in this title.”).
1249) Malta Arbitration Act, Chapter 387, Arts. 44(7) (“An award is final when it settles all or
part of the merits of an issue, is susceptible of immediate implementation and is not
preparatory to another stage in the proceedings or otherwise has the effect of bringing
the proceedings to an end.”), 70A(1) (“party to arbitral proceedings may appeal to the
Court of Appeal on a point of law arising out of a final award made in the proceedings”).
1250) Judgment of 24 December 2010, Vastint Holding BV v. Polish Respondent, XXXVI Y.B. Comm.
Arb. 304, 307 (Dutch Hoge Raad) (2011) (“the arbitral award could not be recognized
under Art. 1076 Rv because an interim arbitral award in a case in which no final award
has yet been rendered cannot be said to have become binding on the parties”).
1251) Judgment of 5 October 2012, AB Living Design v. Sokos Hotels St. Petersburg, XXXVI Y.B.
Comm. Arb. 317, 318 (Russian S. Arbitrazh Ct.) (2011) (“… only final awards on the merits
can be recognized”).
162
1252) Dighello v. Busconi, 673 F.Supp. 85, 87 (D. Conn. 1987) (“The general rule is that in order for
an award to be final and definite, it must resolve all issues submitted to arbitration, and
determine each issue fully so that no further litigation is necessary to finalize the
obligations of the parties under the award.”), aff’d mem., 849 F.2d 1467 (2d Cir. 1988).
1253) See, e.g., Global Gold Min. LLC v. Caldera Res., Inc., 2013 WL 1655994 (S.D.N.Y.) (partial
award on liability, where damages quantum was reserved for later award, was final for
purposes of vacatur application). Compare Pearl Sea Cruises LLC v. Irving Shipbuilding,
Inc., 2011 WL 577333 (D. Conn.) (partial award on right to terminate contract and
enforceability of liquidated damages is not final for purposes of vacatur application).
1254) See§17.03[A]; §23.01[D]; CE Int’l Res. Holdings LLC v. SA Minerals Ltd, Index No. 12CV8087
(S.D.N.Y. 2012) (order freezing respondent’s assets as security for claims in arbitration is
final award for purposes of confirmation); Blue Cross Blue Shield of Michigan v.
Medimpact, 2010 WL 2595340 (E.D. Mich.) (AAA Emergency Arbitrator’s grant of interim
relief is final award for purposes of confirmation and vacatur).
1255) Stolt-Nielsen SA v. AnimalFeeds Int’l Corp., 559 U.S. 662, 672 (U.S. S.Ct. 2010) (award on
availability of class arbitration is final for purposes of vacatur application).
1256) UNCITRAL Model Law, Arts. 34, 35, 36.
1258) Thus, Article 34 of the Model Law provides that annulment applications may be filed
within three months from a party having “received the award.” The Model Law also
provides, in Article 35, that an award will be recognized as “binding,” and enforced, upon
its filing with the relevant national court, subject to the defenses to recognition
specified in Article 36. UNCITRAL Model Law, Art. 34(3).
1259) See, e.g., Investissement Charlevoix Inc. v. Gestion Pierre Gingras Inc., [2010] QCCA 1229
(Québec Ct. App.) (giving effect to arbitration agreement that did not provide that
awards would be final and binding).
1260) See, e.g., The Gazette v. Blondin, [2003] R.J.Q. 2090 (Québec Ct. App.) (annulling interim
award where tribunal’s decision was final on merits of issue); AJT v. AJU, [2010] SGHC 201
(Singapore High Ct.) (setting aside SIAC interim award); Ironsands Invs. Ltd v. Toward
Indus. Ltd, Case No. CIV 2010-404-004879 (Auckland High Ct. 2010) (ruling on an
annulment application to set-aside interim award); Judgment of 13 July 2009, Erg
Petroleos, SA v. Realessor, SL, SAP M 289/2009 (Madrid Audiencia Provincial) (setting
aside interim arbitral award regarding jurisdiction of tribunal).
1261) See Judgment of 19 October 2009, Consorcio Sainco Valsala v. Electroperú SA, Case No.
410-2009 (Lima Corte Superior) (application to annul partial award can only be brought
with application to annul final award); Geimer, in R. Zöller (ed.), Zivilprozessordnung
§1059, ¶12 (30th ed. 2013) (§§1059-61 of German ZPO permit annulment only of “final”
award); Voit, in H.-J. Musielak (ed.), Kommentar zur Zivilprozessordnung §1061, ¶5 (9th ed.
2012).
1262) That is consistent with Articles 34 and 35, which permits annulment or recognition of an
award after its delivery to the parties. UNCITRAL Model Law, Arts. 34(3), 35(2).
1263) Cf. Trax Constr. Ltd v. Dyncorp Int’l, LLC, 2010 WL 900464, at *1 (E.D. Va.) (refusing to
recognize award while appeal was pending; relying on express provision of arbitration
agreement).
1264) See§26.05[C][7].
1265) See§§7.03[A][4]-[5]; §22.02[B][3][f]; §23.01[C].
1266) See§17.03[A]; §23.01[D].
1267) See§17.03[B].
1268) Thus, the finality requirements contained in the domestic FAA, English Arbitration Act
and Swiss Law on Private International Law do not apply to the recognition of foreign
awards, which are subject to separate statutory provisions. U.S. FAA, 9 U.S.C. §§202, 301
(recognition of awards subject to New York and Inter-American Conventions); English
Arbitration Act, 1996, §§100, 101 (recognition and enforcement of “New York Convention
Awards”); Swiss Law on Private International Law, Art. 194 (recognition of “foreign arbitral
awards”).
1269) See§26.05[C][7][b].
1270) U.S. FAA, 9 U.S.C. §9.
1271) See Sunshine Beauty Supplies, Inc. v. U.S. Dist. Ct., 872 F.2d 310, 311 (9th Cir. 1989).
1272) See, e.g., Dow Corning Corp. v. Safety Nat’l Cas. Corp., 335 F.3d 742, 745 (8th Cir. 2003)
(“Parties intending binding arbitration should say so explicitly in the agreement to
arbitrate, either by providing that the arbitration award will be ‘final and binding,’ or
words to that effect, or by incorporating by reference the rules of the [AAA] or a similar
arbitral body that expressly provide for binding arbitration.”); PVI, Inc. v. Ratiopharm
GmbH, 135 F.3d 1252, 1254 (8th Cir. 1998) (“We do not agree that the mere inclusion of the
phrase ‘final and binding’ in an agreement to arbitrate makes the award enforceable
under the FAA.”); Oklahoma City Assoc. v. Wal-Mart Stores, Inc., 923 F.2d 791 (10th Cir. 1991)
(“The unambiguous language of §9 leads us to believe that it creates its own level of
subject matter jurisdiction for confirmation under the FAA.”); Varley v. Tarrytown Assocs.,
477 F.2d 208, 210 (2d Cir. 1973) (“the parties must have … agreed that judgment shall be
entered upon the award”); Tucson Elec. Power Co. v. Daimler Capital Serv. LLC, 2013 WL
321877, at *4 (D. Ariz.).
163
1273) Even in domestic cases, most U.S. decisions have found §9’s entry-of-judgment clause
satisfied by implied understandings that the award is final. See, e.g., Booth v. Hume
Publ’g Inc., 902 F.2d 925, 930 (11th Cir. 1990); Milwaukee Typographical Union No. 23 v.
Newspapers, Inc., 639 F.2d 386 (7th Cir. 1981); Place St. Charles v. J.A. Jones Constr., 823 F.2d
120, 124 (5th Cir. 1980); T & R Enters., Inc. v. Cont’l Grain Co., 613 F.2d 1272, 1278-79 (5th Cir.
1980); Kallen v. Nat’l Union of Hosp. & Health Care Employees, 574 F.2d 723, 724-26 (2d Cir.
1978).
1274) Qorvis Commc’ns LLC v. Wilson, 549 F.3d 303, 308 (4th Cir. 2008).
1275) See, e.g., Akaoma v. Supershuttle Int’l Corp., 436 F.Appx. 250 (4th Cir. 2011) (award was
subject to confirmation and vacatur despite absence of entry of judgment clause;
arbitration agreement incorporated AAA Rules, which provided that award would be
binding); Idea Nuova, Inc. v. GM Licensing Group, Inc., 617 F.3d 177 (2d Cir. 2010) (“Among
the equivalent ways [to show intent that the award be final and binding] is a contract
provision providing for arbitration to be conducted pursuant to AAA rules.”); Dow Corning
Corp. v. Safety Nat’l Cas. Corp., 335 F.3d 742, 745 (8th Cir. 2003) (“Parties intending binding
arbitration should say so explicitly in the agreement to arbitrate,” either with “words to
that effect, or by incorporating by reference the rules of the [AAA] or a similar arbitral
body that expressly provide for binding arbitration.”); Rainwater v. Nat’l Home Ins. Co.,
944 F.2d 190, 192-94 (4th Cir. 1991) (incorporating AAA rules providing for entry of
judgment upon the arbitration award makes the arbitration binding).
1276) Decisions suggesting that affirmative evidence of an intent to be bound by an award are
therefore mistaken. Dow Corning Corp. v. Safety Nat’l Cas. Corp., 335 F.3d 742, 746 (8th Cir.
2003) (asserting that there appears to be “no federal case in which an arbitration
agreement entirely silent on this question was construed as providing for binding
arbitration”). The presumption should be that awards are final and binding unless the
parties expressly agree otherwise.
1277) See Phoenix AG v. Ecoplas, Inc., 391 F.3d 433, 436 (2d Cir. 2004). McDermott Int’l, Inc. v.
Lloyds Underwriters of London, 120 F.3d 583, 588-89, n.12 (5th Cir. 1997). See also§23.02[B]
[1], p. 3303 n 139.
1278) See§§22.01[B][3]-[5]; §22.02[E][1][a][ii]; §22.04[B].
1279) The grounds invoked for non-recognition may be based on considerations unique to the
enforcement forum. For example, a court may deny recognition to an award on grounds
that there was no jurisdiction over the award-debtor or any of its property (§22.03[B][1])
or on grounds of local public policy or nonarbitrability rules (§§26.05[C][9]-[10]). In
neither case would the court’s decision even arguably affect the underlying validity of
the award or imply that it should not be recognized elsewhere. On the other hand, non-
recognition may be based on one of the grounds set forth in Article V(1), which apply
equally in all Contracting States. See§§26.05[A] & [C]. In these cases, a decision denying
recognition of an award may have preclusive effects in another jurisdiction. See§25.11[A],
p. 3391.
1280) See§26.05[C][8][a][iii]; Judgment of 6 December 1988, Société Nationale pour la Recherche,
le Transport et la Commercialisation des Hydrocarbures (Sonatrach) v. Ford, Bacon &
Davis, Inc., XV Y.B. Comm. Arb. 370 (Brussels Tribunal de Premiere Instance) (1990);
Judgment of 12 July 1984, SPP (Middle East) Ltd v. Arab Repub. of Egypt, X Y.B. Comm. Arb.
487 (Amsterdam Rechtbank) (1985).
Early commentary regarded the concept of recognition of an annulled award as
revolutionary. See Park, The Lex Loci Arbitri and International Commercial Arbitration, 32
Int’l & Comp. L.Q. 21, 27 (1983); Paulsson, Arbitration Unbound: Award Detached From the
Law of Its Country of Origin, 30 Int’l & Comp. L.Q. 358, 373 (1981); Paulsson, Delocalization
of International Commercial Arbitration: When and Why It Matters, 32 Int’l & Comp. L.Q. 53,
59 (1983).
1281) G. Born & P. Rutledge, International Civil Litigation in United States Courts 1111-13 (5th ed.
2011); L. Collins et al. (eds.), Dicey, Morris & Collins on The Conflict of Laws ¶¶14-019 et
seq. (15th ed. 2012).
1282) SeeKaraha Bodas Co. LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
XXVIII Y.B. Comm. Arb. 752 (H.K. Ct. First Inst. 2003) (2003) (dicta that rejection of defenses
to recognition in U.S. courts would be res judicata to defense to recognition action in
Hong Kong).
Different considerations apply, of course, if an award is refused recognition under Article
V(2) for reasons of local public policy or nonarbitrability, which are exceptional escape
mechanisms that should in principle not have preclusive effects in other potential
recognition forums. See§26.05[C][8][b]; §§26.05[C][9]-[10].
1283) See§26.03[B][6]; §§26.05[C][8][a][i]-[ii].
1284) See§26.05[C][8][b].
1285) New York Convention, Art. V(1)(e). See Darwazeh, in H. Kronke et al. (eds.), Recognition and
Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention
Art. V(1)(e), 319-43 (2010); Liebscher, in R. Wolff (ed.), New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards: Commentary 366-80 (2012); A.
van den Berg, The New York Arbitration Convention of 1958 349-52 (1981).
1286) SeeUNCITRAL Model Law, Art. 36(1)(a)(v) (“the award has not yet become binding on the
parties or has been set aside or suspended by a court of the country in which, under the
law of which, that award was made”); English Arbitration Act, 1996, §103(2)(f); German
ZPO, §1061(1); Austrian ZPO, §614(1); Scottish Arbitration Act, 2010, §20(3)(c)-(d).
164
1287) As discussed below, an award should be regarded as “binding,” and entitled
presumptively to recognition even if it is subject to possible annulment. See§§26.05[C][7]
[e][iii]-[iv].
1288) See§26.05[C][8].
1289) See Kovacs, Challenges to International Arbitral Awards – The French Approach, 25 J. Int’l
Arb. 421, 427 (2008); J.-P. Lachmann, Handbuch für die Schiedsgerichtspraxis 570 (3d ed.
2008); R. Merkin, Arbitration Law ¶¶21.59 to 21.60 (1991 & Update August 2013).
1290) Swiss Law on Private International Law, Art. 191; Judgment of 2 May 2012, DFT 4A_14/2012
(Swiss Federal Tribunal) (if tribunal’s award is annulled, Swiss law does not preclude
dispute from being (re-)decided by original tribunal, except where annulment is on
basis of lack of independence and impartiality); Berti & Schnyder, in S. Berti et al. (eds.),
International Arbitration in Switzerland Art. 191, ¶28 (2000).
1291) Compare R. Merkin, Arbitration Law ¶21.60 (1991 & Update August 2013).
1293) See, e.g., Bacashihua v. USPS, 859 F.2d 402, 405 (6th Cir. 1988) (“[Section 10 of the FAA] has
been strictly interpreted by the courts to prohibit an employee who was not a party to
the arbitration from appealing the results of the arbitration between the employee’s
union and employer.”); Conley v. Appalachian Reg’l Healthcare, Inc., 2012 WL 6196449, at
*2 (E.D. Ky.) (same); Dwyer v. Eagle Marine Servs. Ltd, 2011 WL 2600916, at *4 (N.D. Cal.)
(“Since Plaintiff was not a party to the arbitration, he lacks standing to move to vacate
the award under the FAA.”); Katir v. Columbia Univ., 821 F.Supp. 900, 901 (S.D.N.Y. 1993); E.
Gaillard & J. Savage (eds.), Fouchard Gaillard Goldman on International Commercial
Arbitration ¶1598 (1999) (Under French law, “[t]hird party action against international
arbitral awards are also inadmissible.”).
165
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Annulment of International Arbitration Awards ICSID

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Bibliographic reference § 25.01 INTRODUCTION

§ 25.02 INTERNATIONAL LIMITS ON GROUNDS FOR ANNULLING

[C] Other International Arbitration Conventions

§ 25.03 PRESUMPTIVE OBLIGATION TO RECOGNIZE INTERNATIONAL ARBITRAL

[A] Presumptive Validity of Arbitral Awards Under Uncitral Model Law

[C] Presumptive Validity of Arbitral Awards Under Other National Arbitration

§ 25.04 GROUNDS FOR ANNULLING ARBITRAL AWARDS UNDER NATIONAL

[A] Nonexistent or Invalid Arbitration Agreement

[B] Denial of Opportunity to Present Case

[C] Failure to Comply With Arbitral Procedures Agreed by Parties

[D] Failure to Comply With Procedures Prescribed by Law of Arbitral Seat

[E] Arbitrator’s Lack of Independence or Impartiality

[F] Excess of Authority

[G] Nonarbitrability of Dispute

[H] Public Policy (821)

[I] Waiver of Public Policy Objection

§ 25.05 NATIONAL ARBITRATION LEGISLATION WITH ANNULMENT GROUNDS

[A] Judicial Review of Arbitral Tribunal’s decision on Merits

[B] Internally-Contradictory and Uncertain Awards

[C] Formal Defects in Award

[D] Expansive and Idiosyncratic Grounds for Annulment

§ 25.06 NATIONAL ARBITRATION LEGISLATION WITH ANNULMENT GROUNDS

§ 25.07 AGREEMENTS LIMITING OR EXPANDING GROUNDS FOR ANNULLING

[A] Agreements Excluding or Limiting Applications to Annul International Arbitral

[B] Agreements for Heightened Judicial Review of International Arbitral Awards

[C] Effect of Choice-of-Law Agreements on Standard of Judicial Review

[A] Time Limits for Annulment Applications

[B] Time Limits for Recognition and Confirmation Applications

[C] Consequences of Failure to Seek Timely Annulment of Award

§ 25.09 REQUIREMENTS UNDER NATIONAL LAW THAT INTERNATIONAL

§ 25.10 “ENTRY OF JUDGMENT” CLAUSE

[A] Differing Consequences of Annulment and Non-Recognition of Arbitral Award

[B] Non-Recognition of Award Annulled in Arbitral Seat

[C] Other Consequences of Annulment

§ 25.12 STANDING TO SEEK ANNULMENT

792) Class arbitrations are discussed above. See§10.08.

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