The Impact of Public Policy Considerations - Chapter 9 - Arbitration of International Intellectual Property Disputes
Prof. Dr. Richard Kreindler is a Partner of Shearman & Sterling LLP, resident in its Frankfurt office, and has specialized in international arbitration and litigation matters since 1985. He is a member of the New York and Paris Bars and is an Honorary Professor of Law at the University of Münster, Germany, where he has taught since 1999. He has handled numerous commercial, construction and investment arbitrations throughout the world as counsel, partyappointed arbitrator, sole arbitrator, chairman and expert witness. He has also served in an editorial or advisory capacity for leading global arbitration-related publications and authored over 400 publications and presentations on dispute resolution topics. He is a graduate of Harvard, Munich, Columbia and Münster Universities and is a Fellow and Chartered Arbitrator of the Chartered Institute of Arbitrators. He was Chairman of the IBA working group charged with drafting the 2010 IBA Rules on the Taking of Evidence in International Arbitration.
Anna G. Tevini is an Associate of Shearman & Sterling LLP, currently resident in its New York office and previously based in its Frankfurt office. She advises clients in international commercial and investment arbitration, transnational litigation and compliance/anticorruption matters. Anna has published and lectured on international commercial and investment arbitration, as well as trade law, including with a special focus on Asia. She completed her doctoral studies in international economic law (summa cum laude) at Göttingen University, having studied law, political science, and Mandarin Chinese in Germany, Italy and China. Anna is a speaker of Young CEAC, the young practitioners' forum of the Chinese-European Arbitration Center and a member and coordinator of the working group on investment protection law of the German branch of the International Law Association. She speaks English, French, German, Italian and Mandarin Chinese.
Originally from Arbitration of International Intellectual Property Disputes
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I. Introduction
Arbitration is essentially private dispute settlement based on party autonomy. Party autonomy, however, is not without its limits. There are important limitations on party autonomy, most notably, on grounds of public policy. The importance of this limitation is demonstrated by the fact that public policy is only one of two grounds expressly set forth in the New York Convention by which a court may, under its own law, refuse to enforce an arbitral award, the other being arbitrability.1 It is this intersection of party autonomy and public policy that is of particular interest, and a special challenge, in the area of arbitration of intellectual property disputes.
First, there may be public policy limitations to the general right to submit disputes to arbitration. In the public interest, a state can reserve certain subject matters to the exclusive domain of the national courts and thereby exclude or severely circumscribe arbitrability. Moreover, depending on the applicable law and the specific circumstances, public policy considerations may also render an arbitration agreement void or voidable. Since the arbitration agreement is the basis for any international IP arbitration,2 voidness or voidability of the arbitration agreement may well translate into an undermining or lack of jurisdiction of the arbitral tribunal and, hence, to a lack of basis for the arbitration proceedings overall.
Second, there may be public policy limitations to both the substantive and the procedural laws that may be applicable to the dispute. So-called mandatory laws may limit the parties' freedom of choice of the substantive law or laws. So-called procedural public policy, overlapping in large part with concepts of due process, may restrict the arbitral tribunal's otherwise existing discretion to determine the procedural course of the arbitration.
Third, there may be public policy limitations to the enforcement of an arbitral award. National arbitration laws typically include public policy grounds among the grounds for challenging international arbitral awards at the seat of the arbitration. Public policy violations are, as previously noted, also a ground for refusal of enforcement pursuant to Article V of the New York Convention.
I. Introduction 437
II. Meaning and Function of Public Policy in International Arbitration
A. The Function of Public Policy in International Arbitration Generally
B. The Impact of Public Policy Considerations in IP Disputes
III. Public Policy Limitations in International Arbitration and their Particular Relevance to Intellectual Property Disputes
A. Public Policy Limitations to Arbitration as Means of Dispute Settlement
B. Public Policy Limitations to the Applicable Substantive and Procedural Law
C. Public Policy Limitations to the Existence and Enforcement of the Arbitral Award
D. Public Policy Considerations as Grounds for Vacatur of the Arbitral Award at the Seat of the Arbitration
E. Key Issues in Public Policy Limitations on the Validity or Enforcement of Awards
IV. Practical Relevance of Public Policy Considerations at Different Stages of the Arbitration
A. Prior to Arbitration
B. During Arbitration
C. Post-Arbitration
V. Summary and Practical Considerations