The UNCITRAL Model Law after Twenty-Five Years: Global Perspectives on International Commercial Arbitration - Chapter 6 - Exercising Discretion under Articles 34 and 36 of the Model Law: A Review of Practice
Amokura Kawharu is a senior Lecturer in Law at the University of Auckland, and holds a B.A./LL.B. (Hons) from the University of Auckland and an LLM from the University of Cambridge. Her research interests include international trade and investment law, arbitration, and international dispute resolution. She contributes reviews on disputes settlement for the New Zealand Law Review and recently co-authored a treatise on New Zealand arbitration law with David Williams Q.C., Williams & Kawharu on Arbitration (LexisNexis, 2011). Prior to joining the Auckland Law Faculty in 2005, she practised as a Solicitor for a number of years in New Zealand and Australia.
The opening paragraph of article 34(2) UNCITRAL Model Law on International Commercial Arbitration 19851 provides that “[a]n arbitral award may be set aside by the court”2 on proof of one of the enumerated grounds. In article 36(1), an enforcement court is directed that “[r]ecognition or enforcement of an arbitral award . . . may be refused”3 on substantially the same grounds. In isolation, the word “may” has a permissive meaning. If we adopt this meaning, “may” implies that a reviewing court in a setting aside proceeding under article 34, as well as an enforcement court acting under article 36, has a residual discretion regarding whether to set aside or to refuse enforcement despite the proof of a relevant ground. The existence of such a discretion has not been accepted by all, however, including by those who read “may” together with the word “only”, which follows shortly after it. Nor is there guidance in the Model Law text as to how a court should exercise the discretion, assuming, as this chapter assumes, that the discretion does exist.
The discretion in articles 34 and 36 implicates one of the basic issues in modern arbitration law—the extent of the court’s role in reviewing awards. The discretion usefully provides a means by which a court may further the finality objective in respect of arbitration, because it enables the court to refuse to set aside, or to enforce, despite the presence of a ground for setting aside or refusing enforcement. At the same time, a court that endorses an award produced in a deeply flawed arbitration in the name of arbitral finality will leave impressions of rough justice for those involved in the arbitral process. Widely different approaches to the discretion under article 36 introduce undesirable unpredictability and may encourage forum shopping.
PART III: RECURRING ISSUES-POST-AWARD
Exercising Discretion under Articles 34 and 36 of the Model Law: A Review of Practice