Staying Court Proceedings—Compelling Arbitration - Chapter 4 - International Arbitration Checklists - 3rd Edition
Originally from International Arbitration Checklists - Third Edition
Chapter 3 dealt with the procedure for bringing arbitration proceedings under an arbitration agreement. But what if, despite the arbitration agreement, a party commences proceedings in national courts? How should the other party respond? And how can an arbitration clause be worded to avoid a national court accepting jurisdiction? The above checklist of issues may need to be considered.
Staying Court Proceedings under the New York Convention
An agreement to submit a dispute to arbitration would be of little value if either party to the agreement could commence legal action before a state court with respect to any of the matters covered by the agreement. This is precisely why one of the first international treaties on international arbitration, the Geneva Protocol on Arbitration Clauses, established the duty of state courts to recognize arbitration agreements concluded by the parties, and not to examine the merits of a dispute covered by the arbitration agreement. The New York Convention and the UNCITRAL Model Law discussed further below embrace the same principle.
Article II of the New York Convention provides that:
1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.
2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.
3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.