Introduction to ICCA

www.arbitration-icca.org

Introduction to ICCA


What is ICCA?

• ICCA is a worldwide NGO establishedin 1961

• Based at the Peace Palace in TheHague

• Promotes arbitration, conciliation,and other means of internationaldispute resolution

• Promotes the harmonization ofarbitration and conciliation rules,laws and standards

• Activities:

• Congresses

• Publications

• Research projects


ICCA Membership

Over 1000 ICCA members in around 90 countries

Over 8000 Young ICCA members worldwide


Some ICCA Congresses held since 1961

Rotterdam, 1966

Beijing, 2004

Moscow, 1972

New Delhi, 1975

Beijing, 2004


With the assistance of the Permanent

Court of Arbitration

ICCA Publications


ICCA Projects


New York Convention Roadshows


Mauritius 2012 | Inaugural Roadshow

Edinburgh | May 2015 Quito | February 2017

New York Convention Roadshows

Kigali | March 2021


ICCA’s Judges’ Guide to the New York Convention


Introduction to International Arbitration


1. What is international arbitration?

2. Legal framework of international arbitration

3. Arbitral process: the role of national courts

Presentation Structure


What Is International Arbitration?

• International arbitration is:• binding resolution of disputes outside national or international

courts• involving parties from different countries and/or cross-border

transactions• by (a) neutral adjudicator(s) • based on agreements to arbitrate and• enforceable by law.

• Proceedings are (usually) private and confidential

• Investment arbitration


The Legal Framework of International Arbitration

• Treaties• New York Convention (1958): mandatory recognition and

enforcement of foreign arbitral agreements and awards

• National arbitration law• Law of place (seat) of arbitration• Governs proceedings and enforcement of agreement and award• Implements and is constrained by the New York Convention• UNCITRAL Model Law v. non-Model Law jurisdictions

• Contract• Arbitration agreement (usually a clause in a contract)• International arbitration rules (typically incorporated by the

arbitration agreement)


Arbitral Process: The Role of National Courts

• General rule: no review of the merits

• Role of courts varies among jurisdictions, but there are typical features

• Assistance• Taking evidence• Recognition and enforcement of arbitration agreement• Ordering interim measures• Recognition and enforcement of interim measures • Recognition and enforcement of arbitral award

• Supervision• Issues of appointment, challenge and termination of arbitrator mandates• Jurisdiction of the arbitral tribunal• Respect for agreed procedure and mandatory provisions• Setting aside of arbitral award

The Enforcement of Arbitration Agreements

and Arbitral Awards: New York Convention and

other (treaty) instruments


Enforcement of arbitration agreements and arbitral awards under:

1. The New York Convention

2. The United Nations Commission on International Trade Law (UNCITRAL) Model Law

3. The International Center for Settlement of Investment Disputes (ICSID) Convention

Presentation Structure


1. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention” or “NYC”)


Introduction to the New York Convention: ICCA’s Guidebook for the Judiciary

Freely accessible at ww.arbitration-icca.org.


History of the NYC

• Recognition and Enforcement before the New YorkConvention

• Geneva Protocol on Arbitration Clauses 1923and Geneva Convention on the Execution ofForeign Arbitral Awards 1927

• New York Convention• Drafts prepared by ICC in 1953 followed by a draft

from ECOSOC in 1955• Conference in New York in 1958• ICCA co-founder Pieter Sanders was a key drafter

of the New York Convention (see video on ICCAwebsite)

Pieter Sanders, Roeland Loewe and Eric Bergsten at UNCITRAL in 1976


Success of the New York Convention

• Probably the most successful treaty in private international law

• 168 Contracting States (July 2021)

• Courts interpret the Convention in favor of enforcement


Contracting States

168 Contracting States


Interpretation by Courts

• More than 2,500 court decisions from over 95 jurisdictions published in ICCA’s Yearbook Commercial Arbitration as of 1976

• Accessible via: www.kluwerarbitration.com and www.newyorkconvention.org

• Objective: uniform judicial interpretation


Interpretation by Courts

• Index of Topics on Court Decisions (example):

Available at: www.newyorkconvention.org


Convention Text and Structure

• 16 Articles

• Articles I – VII(1) are relevant

• Article XVI: 5 authentic texts• Chinese, English, French, Russian, Spanish


New York Convention Text and Structure

• Article I: Scope (Award)

• Article II: Arbitration Agreement

• Article III: Enforcement Award In General

• Article IV: Conditions to be Fulfilled by Petitioner

• Article V: Grounds for Refusal of Enforcement of Award

• Article VI: Setting Aside Pending in Country of Origin

• Article VII(1): More-Favorable-Right Provision


• Article III: Each Contracting State shall recognize arbitralawards as binding and enforce them in accordance with the rules ofprocedure of the territory where the award is relied upon, under theconditions laid down in the following articles.

• Article II(1): Each Contracting State shall recognize an agreementin writing under which the parties undertake to submit to arbitrationall or any differences which have arisen or which may arise betweenthem in respect of a defined legal relationship, whether contractual ornot, concerning a subject matter capable of settlement by arbitration.

• The NYC contemplates two actions:• The recognition and enforcement of arbitral agreements• The recognition and enforcement of arbitral awards

Objectives of the NYC


General Scope of the NYC (Awards): Article I(1)

Article I(1):

This Convention shall apply to the recognition andenforcement of arbitral awards made in the territory of aState other than the State where the recognition andenforcement of such awards are sought […]. It shall alsoapply to arbitral awards not considered as domesticawards in the State where their recognition and enforcementare sought.


First action: Enforcement of arbitration agreements under NYC Article II

Article II(3):

The court of a Contracting State, when seized of an action in amatter in respect of which the parties have made an agreementwithin the meaning of this article, shall, at the request of one ofthe parties, refer the parties to arbitration, unless it finds that thesaid agreement is null and void, inoperative, or incapable of beingperformed.


Test for enforcement of agreements:

(1) Is there an agreement in writing to arbitrate the subject of the dispute?

(2) Does the agreement provide for arbitration in the territory of a signatory of the Convention?

(3) Does the agreement arise out of a legal relationship, whether contractual or not, which is considered as commercial?

(4) Does the commercial relationship have some reasonable relation with one or more foreign States?

If the court resolves those questions in the affirmative, then it must order arbitration unless it finds the agreement “null and void, inoperative or incapable of being performed”.

First action: Enforcement of arbitration agreements under NYC Article II(3)




Article II(2):

The term “agreement in writing” shall include an arbitral clause ina contract or an arbitration agreement, signed by the parties orcontained in an exchange of letters or telegrams.



• First alternative: Arbitration agreement is signed• Includes signed contract with arbitration clause

• Second alternative: Arbitration agreement is contained in exchange of letters• Exchange of electronic communication (email) is generally held to be

sufficient

• Issue: Does a tacit acceptance of the arbitration agreement meet Article II(2)?• Text of the Article would seem not to allow it• Some courts are more liberal in applying Article II(2)



(2) Does the agreement provide for arbitration in the territory of a signatory of the Convention?

• Applies if State has used reciprocity reservation of Article I(3). Two-thirds of the Contracting States used this reservation.


Article I(3):

When signing, ratifying or acceding to this Convention, or notifyingextension under article X hereof, any State may on the basis of reciprocitydeclare that it will apply the Convention to the recognition andenforcement of awards made only in the territory of anotherContracting State . . . .


(3) Does the agreement arise out of a legal relationship, whether contractual or not, which is considered as commercial?

• Applies if State has used the commercial reservation of Article I(3). One-third of the Contracting States used this reservation.


Article I(3):

[…] It may also declare that it will apply the Convention only todifferences arising out of legal relationships, whether contractual or not,which are considered as commercial under the national law of theState making such declaration.



(4) Does the commercial relationship have some reasonable relation with one or more foreign States?

• The New York Convention does not contain a definition of its scope with respectto the enforcement of arbitration agreements (unlike Article I for theenforcement of foreign arbitral awards).

• Courts look for a “foreign element” to the agreement in order to enforce itunder the Convention.

• The Convention does not govern the recognition and enforcement of domesticagreements.


Referral to arbitration is mandatory (no discretionary power)

• Three exceptions to mandatory referral:• “Null and Void”

• Arbitration agreement is invalid from the outset• e.g. fraud, fraudulent inducement, illegality, mistake

• “Inoperative”• Agreement was valid at one point but has ceased to have effect• e.g. waiver, revocation, repudiation, or termination

• “Incapable of Being Performed”• Arbitration cannot proceed due to legal impediment• e.g. optional clause, concurrent jurisdiction of courts, inaccurate

designation of rules or institution, blank clauses



Summary:

• Courts must compel arbitration (i.e., refer the parties to arbitration)if arbitration agreement is valid pursuant to the requirements of theNew York Convention



Second action: Enforcement of arbitral awards under NYC Articles III-VI

Article III:

Each Contracting State shall recognize arbitral awardsas binding and enforce them in accordance with the rules ofprocedure of the territory where the award is relied upon,under the conditions laid down in the following articles [IV, Vand VI] . . . .


In order to enforce arbitral awards under the NYC, judges must uphold the conditions for enforcement under Article IV:


Article IV:

1. To obtain the recognition and enforcement mentioned in the preceding article, the partyapplying for recognition and enforcement shall, at the time of the application, supply:

(a) The duly authenticated original award or aduly certified copy thereof;

(b) The original agreement referred to in Article II or a dulycertified copy thereof.

2. If the said award or agreement is not made in an official language of the country inwhich the award is relied upon, the party applying for recognition and enforcement shallproduce a translation of these documents into such language. The translation shall becertified by an official or sworn translator or by a diplomatic or consular agent.


• Applicant is required to submit together with the request only two documents: thearbitration agreement and the arbitral award

• Award should be the authenticated original award (or a certified copy)• The arbitration agreement should be the original (or certified copy)

• Authentication: attestation of signatures

• Certification: attestation of copy conforming to original

• Translation in language of court if language of these two documents is different

• Once conditions are met, the applicant has a prima facie right to recognition andenforcement, subject to Article V (grounds for refusal of enforcement)




The respondent has the right to resist enforcement by invoking one of the grounds for refusal of enforcement provided in Article V:

• Article V(1)• One of the five grounds must be proven by the respondent:(a) Invalid arbitration agreement(b) Violation of due process(c) Excess of authority(d) Irregularity in constitution of arbitral tribunal or arbitral procedure(e) Award not binding; award set aside or suspended by the court in the country were made

• Article V(2)• Court may raise these grounds on it is own motion:(a) Lack of arbitrability(b) Violation of public policy


• Features of Article V NYC:

• Article V sets out the limited and exhaustive grounds for denying recognition and enforcement

• No review of the merits

• Burden of proof: the party resisting enforcement bears the burden of proving one of the grounds for refusal of enforcement in Article V(1)

• Narrow interpretation by courts

• Invocation of a ground is rarely successful (approximately 10% of cases)



Article VI: Adjournment of enforcement decision

• When an enforcement procedure is concurrent with a setting aside procedure in the country where the award was made:


Article VI:

If an application for the setting aside or suspension of theaward has been made to a competent authority referred to in articleV(1)(e), the authority before which the award is sought to be reliedupon may, if it considers it proper, adjourn the decision on theenforcement of the award and may also, on the application of theparty claiming enforcement of the award, order the other party to givesuitable security.


• Difference between enforcement and setting aside:

• Enforcement: permission by court to execute an arbitral award• Limited to jurisdiction in which enforcement is sought

• Setting aside: invalidation by court of an arbitral award• Court of the country where the award was made has exclusive jurisdiction

over setting aside; it constitutes a ground for refusal of enforcement in othercountries (Article V(1)(e) NYC)

• Enforcement court may adjourn decision on enforcement if an action for setting aside ispending in the country where the award was made (discretionary power)

• If adjournment is granted, court may impose security



Alternative bases for enforcement: NYC Article VII

Article VII(1):

The provisions of the present Convention shall not affect the validity ofmultilateral or bilateral agreements concerning the recognition andenforcement of arbitral awards entered into by the Contracting States nordeprive any interested party of any right he may have to availhimself of an arbitral award in the manner and to the extentallowed by the law or the treaties of the country where such awardis sought to be relied upon.


• Rationale: the NYC is aimed at facilitating the enforcement of foreign arbitral awards

• Thus, if domestic law or other treaties make enforcement easier, that regime can be relied upon

• A party is not allowed to pick and choose between the New York Convention and another basis for the enforcement of a foreign award.

• No “cherry picking”

• Courts may therefore not mix multiple enforcement regimes

Alternative bases for enforcement: NYC Article VII


2. The UNCITRAL Model Law


UNCITRAL Model Law: Introduction

• What is the UNCITRAL Model Law on International Commercial Arbitration?

• A model law intended to assist States in reforming and modernizingtheir national laws on arbitral procedure

• 84 States; 117 jurisdictions

• Parties can reach the Model Law via Article VII of NYC (more-favorable-rightprovision) or designate it in an arbitration agreement as the operative regimeof the arbitration


Article 8:

(1) A court before which an action is brought in a matter which is thesubject of an arbitration agreement shall, if a party so requests no laterthan when submitting his first statement on the substance of thedispute, refer the parties to arbitration unless it finds that theagreement is null and void, inoperative or incapable of beingperformed.

(2) Where an action referred to in paragraph (1) of this article has beenbrought, arbitral proceedings may nevertheless be commenced orcontinued, and an award may be made, while the issue is pendingbefore the court.

First action: Enforcement of arbitration agreements under the Model Law


Article 7: Option 1

(3) An arbitration agreement is in writing if its content is recorded in any form,whether or not the arbitration agreement or contract has been concludedorally, by conduct, or by other means.

(4) The requirement that an arbitration agreement be in writing is met by an electroniccommunication if the information contained therein is accessible so as to be useablefor subsequent reference; “electronic communication” means any communication thatthe parties make by means of data messages; “data message” means informationgenerated, sent, received or stored by electronic, magnetic, optical or similar means,including, but not limited to, electronic data interchange (EDI), electronic mail,telegram, telex, or telecopy.

(5) Furthermore, an arbitration agreement is in writing if it is contained in an exchangeof statements of claim and defence in which the existence of an agreement isalleged by one party and not denied by the other.

(6) The reference in a contract to any document containing an arbitration clauseconstitutes an arbitration agreement in writing, provided that the reference is such as tomake that clause part of the contract.



Article 7: Option 2

“Arbitration agreement” is an agreement by the parties to submit toarbitration all or certain disputes which have arisen or which may arisebetween them in respect of a defined legal relationship, whethercontractual or not.



• Enforcement in an UNCITRAL Model Law jurisdiction on same terms as NYC• See Articles 35 and 36 of the Model Law

• Article 35: recognition and enforcement of an arbitral award “irrespective of the country in which it was made”

• Article 36: only 7 grounds for refusal of enforcement identical to the 7 grounds in the NYC

Second action: Enforcement of arbitral awards under the Model Law


3. The ICSID Convention


• What is the ICSID Convention?• Stand-alone framework for the conduct of arbitration proceedings

• If arbitration agreement provides for ICSID arbitration, must refer to ICSID

• Pecuniary obligations of arbitral awards issued under the ICSID Convention are directly enforceable in the same manner as a court judgment

The ICSID Convention: Preliminary Remarks


Article 54:

(1) Each Contracting State shall recognize an award rendered pursuant to thisConvention as binding and enforce the pecuniary obligations imposed by thataward within its territories as if it were a final judgment of a court inthat State. A Contracting State with a federal constitution may enforce such anaward in or through its federal courts and may provide that such courts shalltreat the award as if it were a final judgment of the courts of a constituent state.

Second action: Enforcement of arbitral awards under the ICSID Convention


Article 54:

(2) A party seeking recognition or enforcement in the territories of a ContractingState shall furnish to a competent court or other authority which such State shallhave designated for this purpose a copy of the award certified by theSecretary-General. Each Contracting State shall notify the Secretary-Generalof the designation of the competent court or other authority for this purpose andof any subsequent change in such designation.

(3) Execution of the award shall be governed by the laws concerning theexecution of judgments in force in the State in whose territories suchexecution is sought.



• Unlike under the NYC, parties cannot resist enforcement of ICSID awards in national courts

• Article 52 of ICSID Convention: autonomous procedure for the review of awards by ad hoc Committee from ICSID’s Panel of Arbitrators


Article 52:

(1) Either party may request annulment of the award by an application in writingaddressed to the Secretary-General on one or more of the following grounds:

(a) that the Tribunal was not properly executed;

(b) that the Tribunal has manifestly exceeded its powers;

(c) that there was corruption on the part of a member of the Tribunal;

(d) that there has been a serious departure from a fundamental rule ofprocedure; or

(e) that the award has failed to state the reasons on which it is based.


Final Remarks

• Do not make enforcement of agreements and awards more complicated than it is

• Courts should promote a harmonized interpretation of the NYC by consulting decisions made by judges in other jurisdictions

• The same applies to the UNCITRAL Model Law and the ICSID Convention


Thank You!

Introduction to ICCA

Documents

Transcript of Introduction to ICCA