Annulment Of An Arbitral Award And Its Subsequent Enforcement: Two Recent Decisions - ARIA Vol. 19 No. 1 2008
Hans Smit - Stanley H. Fuld Professor of Law, Columbia University. The views expressed in this Comment should not be attributed to the Review.
Originally from American Review of International Arbitration - ARIA
Annulment of arbitral awards and enforcement of annulled awards are gaining more prominence. In an earlier published article, I analyzed the impact of the New York Convention on these subjects and concluded that the Convention, so admirable in other respects, had failed to provide appropriate solutions. The thrust of my article was that the Convention erred in providing for annulment at all, and that, if it were deemed desirable to permit annulment, it should be allowed only by a competent authority of the place of arbitration.
In two recent cases, the courts did not act upon my recommendation. In the first, analyzed in some detail in Professor Takahashi’s article in this issue of the Review, an award was ruled subject to annulment by a court in India, which was neither the place of arbitration nor that of the applicable arbitration law, but was a state whose national was unfavorably affected by the award. As I will argue below, this decision violates the New York Convention and is also detrimental to the wholesome regime created by the Convention.
The second decision, by a Dutch Court of Appeals, concerned an award rendered in the U.S.S.R. by an arbitral tribunal in favor of Yukos, the company controlled by Mikhail Khodorkovsky, who is now languishing in a Russian jail, against the Russian company that had acquired most of Yukos’ Russian assets. This noteworthy award rendered in Russia by an arbitral tribunal that must have been fully aware of the Russian government’s favoring the respondent had been annulled by a Russian court, but was nevertheless recognized and enforced by the Dutch court. While the Dutch court, in my opinion, reached the correct conclusion, it did so on the ground that the Russian court did not meet proper standards of impartiality and judicial integrity. I would argue that recourse to my suggested approach would have produced the same result without the need to cast aspersions on the Russian court.