Originally from Arbitration Law of Canada: Practice and Procedure, Fourth Edition

PREVIEW

10.1    RECOGNITION

There is a difference between the recognition of an award and its enforcement. Recognition simply refers to the acknowledgement of the binding nature of an award and is reflected in the language of the Domestic Acts and the Model Law. The Domestic Acts provide: “An award binds the parties, unless it is set aside or varied….”  Article 35(1) of the Model Law provides: “An arbitral award, irrespective of the country in which it was made, shall be recognized as binding and, upon application …shall be enforced…”

The New York Convention provides in Article III:

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

The recognition of an arbitral award prevents the re-litigation of the same disputes between the same parties. As such, res judicata and issue estoppel apply in arbitration as they would in court. Decisions rendered by a tribunal of competent jurisdiction will attract the application of issue estoppel in later court proceedings or in later arbitration proceedings between the same parties.  For the doctrine of issue estoppel to be successfully invoked, three preconditions must be met: (1) the issue or question must be the same as the one decided in the prior proceeding; (2) the prior decision must have been final; and (3) the parties to both proceedings, or their privies, must be the same. If these preconditions are present, the court still has a residual discretion to determine whether issue estoppel should operate to prevent an issue being raised again. 

Res judicata, of which issue estoppel is a subset, requires that a party put forward its entire case in a single action, and operates to prevent a party from later raising a point which, by using reasonable diligence, might have been put forward at first instance. This doctrine similarly applies to an arbitral award. A party will be estopped from later raising issues that ought to have been raised when the matter was first heard in arbitration. Res judicata is not restricted to issues determined on the merits.  For example, a claimant cannot bring an arbitration for breach of contract and then later try and sue or bring a new arbitration against the same respondent for damages for tort on the same facts.