Refusal to Enforce a Foreign Award - Chapter 39 - Arbitration Law of Czech Republic: Practice and Procedure
Alexander J. Bělohlávek, Univ. Professor, Dr.iur., Mgr., Dipl. Ing. oec/MB, Dr.h.c. Lawyer admitted and practising in Prague/CZE (Branch N.J./US), Senior Partner of the Law Offices Bělohlávek, Dept. of Law, Faculty of Economics, Ostrava, CZE, Dept. of Int. and European Law, Faculty of Law, Masaryk University, Brno, CZE (visiting), Chairman of the Commission on Arbitration ICC National Committee CZE, Arbitrator in Prague, Vienna, Kiev etc. Member of ASA, DIS, Austrian Arb. Association. The President of the WJA – the World Jurist Association, Washington D.C./USA.
Originally from: Arbitration Law of Czech Republic: Practice and Procedure
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39.I. PRIORITY APPLICATION OF THE RULES OF INTERNATIONAL ORIGIN
Giving priority application to the rules of international origin is very frequent in international practice, especially in connection with the enforcement of foreign arbitral awards. The oldest and most successful treaty relating to arbitration is the New York Convention (NYConv), ratified by 146 states,5 which regulates the recognition of foreign arbitral awards in states which are bound by the Convention. Article V of the NYConv contains an exhaustive list of alternative grounds justifying the refusal of recognition of an arbitral award. The grounds listed in Article V(1) of the NYConv may only be applied if invoked by the party against whom the enforcement is sought. They include invalidity of the arbitration agreement (subparagraph (a)), breach of the right to present one’s case (subparagraph (b)), decision ultra petita (subparagraph (c)), incorrect constitution of the arbitral panel (subparagraph (d)), and a situation where the arbitral award has not yet become binding (subparagraph (e)). The grounds specified in Article V(2) of the NYConv may be applied by the national court of its own motion (sua sponte). Such grounds include lack of arbitrability of the dispute (subparagraph (a)) and violation of public policy (subparagraph (b)).
In the countries which have adopted the NYConv and whose lex arbitri is based on the UNCITRAL Model Law (UML),6 the NYConv principally prevails, in compliance with the principle of precedence (preferential application) of the law of international origin (an international treaty). This also applies in the Czech Republic in terms of Section 47 of the ArbAct,7 in conjunction with Article 10 of the Constitution. However, the structure of Article 36(1) of the UML is identical to the structure of Article V of the NYConv and lists the same grounds for which a national court may refuse recognition and enforcement of a foreign arbitral award.
Another important treaty is the European Convention on International Commercial Arbitration of 1961 (“EConv”).8 The EConv, however, does not primarily focus on the enforcement of arbitral awards; the provisions of the EConv regulating these matters are based on the NYConv.9 Nevertheless, it does not limit the grounds for the refusal to enforce an award by limiting the consequences of the annulment of the award in the country where it was made. This Convention has been signed by 32 states.