Originally from Defeating and Defending Awards: Arbitrability, Public Policy, and Global Court Practice

PREVIEW

This chapter aims to address the second research question on the scope of Article V(2)(a) and Article V(2)(b) of New York Convention 1958. To answer Research Question B, the work was divided to address two Sub-Research Enquiries:

B1.  The basis of the public policy exception and inarbitrability defence, under Article V(2)(b) and Article V(2)(a).

The meaning of these provisions and how they should be interpreted and applied. (Sections 6.2–6.3 for public policy and section 6.4 for arbitrability).

B2.  The role of the Model Law in enabling the New York Convention 1958, in particular Article 34 and Article 36. (Section 6.5).

Undoubtedly, Article V of the New York Convention 1958 is the most important provision in terms of the recognition and enforcement of arbitral awards. It exhaustively lists the grounds on which recognition and enforcement of foreign arbitral awards may be refused. This is considered to be an improvement from its predecessors, the ECOSOC Draft Convention of 1955 and the Geneva Convention of 1927, under which an enforcing party had the burden of proving a considerable number of conditions and the court could refuse enforcement if it was “satisfied” that another ground hindering enforcement was present.  Under the New York Convention 1958, a party resisting enforcement may not assert any cause for invalidity, as no additional grounds may be established.  An enforcing court may refuse to recognise and enforce an award “only if” the party against whom an enforcement is sought, is able to prove one of the grounds under Article V(1), or if the court on its own motion finds that enforcement would violate its public policy under Article V(2).

Arbitrability is provided for under Article V(2)(a) and public policy under Article V(2)(b); the discussion for these two articles will be kept separate, although where the issues collide or overlap, the points will be made.

Some knowledge of how the public policy and arbitrability defences arise in the said articles is assumed. A certain amount of trawling through the mechanics of the development of these provisions would be helpful. The architectural and mechanical makeup of Article V(2)(a) and Article V(2)(b) must be understood, to fully appreciate how it is truly intended to be applied by the courts of Member States.

This chapter prefaces the discussion by addressing the related substantive public policy exception defence, that is, by looking at Article V(1)(b) and sub-article (d) on procedural public policy. It is important to understand the distinction between these two public policy defences, because although this project specifically focuses on the substantive public policy defence, an understanding of the procedural public defence must be examined to contextualise and separate them – to avoid any possible confusion between the two. Similarly, before this chapter specifically analyses the article on inarbitrability defence, it scrutinises several other relevant provisions addressing the issues relating to arbitrability, namely, the commercial relationship and objective arbitrability under Articles I(3), II(1), and II(3). This chapter also briefly addresses the question of subjective arbitrability, to ensure readers have a thorough understanding of arbitrability itself, rather than just tunnel vision on objective arbitrability. Generally, discussions about these other relating articles provides context, and sheds light on why the drafters of the New York Convention 1958 decided to keep the issue of procedural and substantive public policy separate; and likewise, arbitrability separate from the arbitrability defence.