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Argentina

Division IV of the Federal Court of Appeals on Administrative Matters recently found there to be no basis presently for Argentina's request to set aside the refusal of the International Court of Arbitration of the International Chamber of Commerce (ICC) to admit a challenge against an arbitral tribunal chairman. This request was based on the argument that the ICC court had failed to express the grounds for its decision.

The Argentine Chamber of Commerce and the Chamber of Commerce and Industry of the Russian Federation have signed an agreement to make the resolution of disputes that may arise in bilateral commerce and other economic relations easier. This includes investments between individuals or legal entities domiciled in both countries.

A recent case emphasizes the importance of the seat of arbitration, since its selection determines the procedural law and jurisdiction. Parties involved in arbitration proceedings should ensure they have a complete understanding of the jurisdiction, scope and value of arbitral agreements and the consequences of non-fulfilment of their obligations.

The Supreme Court of the Province of Buenos Aires is yet to decide on appeals filed against the decision of the La Plata Court of Appeals in re Milantic Trans SA v Ministry of Production - Shipyard Río Santiago. The Supreme Court now has the opportunity to reaffirm the correct path marked by the first judicial decision and restore the principle of legal rights.

In a recent case Division D of the Commercial Court of Appeals upheld a first instance decision which had rejected the lack of jurisdiction objection filed by the defendants due to the existence of an arbitral clause agreed by the parties. The court held that arbitral clauses "should be interpreted in a restricted manner".

In a recent decision the Court of Appeals confirmed and ratified the importance of the inclusion of an appropriate arbitration clause in each contract, and the application of the requisites of formal validity of the same, at the moment of requesting the recognition and enforcement of an arbitral award under the New York Convention.

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Australia

The Federal Court of Australia has held that parties who agree to arbitration or exclusive jurisdiction clauses are bound by their agreements. Only in exceptional circumstances will the court grant a stay that has the effect of overriding an exclusive jurisdiction agreement.

The federal Parliament has finally passed the Tax Laws Amendment (Long-Term Non-reviewable Contracts) Bill 2005. The bill sets out a new arbitration process to be used in cases where a supplier and a recipient cannot reach agreement on the consideration to account for the imposition of goods and sales tax.

In the absence of any legal precedent, it is unclear how an Australian court faced with an application for security for costs in respect of an international arbitration would respond. However, the courts appear to have the power to order such security notwithstanding the lack of an express legislative foundation.

The Supreme Court of Victoria has overturned a tribunal decision that characterized an expert determination as arbitration. Although the procedures are similar, the distinction can be crucial, particularly in areas such as domestic construction where arbitration is prohibited. The decision illustrates how to ensure that an agreement is characterized as expert determination.

The Supreme Court of Western Australia recently held that under Western Australia's Commercial Arbitration Act, an appeal lies from the refusal of leave to appeal an arbitral award on a question of law. The decision is consistent with the policy of a uniform platform for arbitration in Australia and brings Western Australia into line with other Australian states.

The Victorian Civil and Administrative Tribunal recently held that an expert determination agreement was in reality an agreement to arbitrate. Looking at the substance of the agreement, the tribunal was persuaded by the fact that the agreement required a judicial enquiry, allowed the right to be heard and required a determination of the dispute in accordance with the law.

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Austria

The Vienna International Arbitral Centre recently initiated a comprehensive review process aimed at modernising, overhauling and streamlining its rules. The process included a widely distributed user survey, a number of discussion rounds and a roadshow. The process is finally nearing completion and the centre is preparing to release the revisions publicly.

The Supreme Court recently clarified the relationship between state immunity and enforcement of an arbitral award in a case concerning art loaned by the Czech Republic to a Vienna museum for an exhibition. The Czech Republic argued that the works of art under dispute were cultural objects serving the country's sovereign aims, and thus exempt from enforcement proceedings. The Supreme Court rejected this defence.

The Supreme Court was recently faced with an inexecutable arbitration clause and clarified the interpretation of arbitration agreements and their boundaries. The court held that arbitration agreements must be interpreted primarily under procedural law; if an agreement refers to an arbitral institution which no longer exists, the agreement becomes inoperative only if it is impossible to reconstruct a comparable arbitration court.

The Vienna Commercial Court recently refused to set aside an arbitral award issued by a United Nations Commission on International Trade Law tribunal seated in Vienna that had awarded Danish-Polish Telecommunications Group €400 million against Telekomunikacja Polska. The court's decision is in line with the trend of Austrian case law to uphold arbitral awards.

The Supreme Court recently handed down a decision relating to the arbitrability of shareholder disputes in which it generally confirmed their arbitrability, but declared them to be subject to certain criteria. The decision is in line with the general approach to uphold arbitral awards taken by the Supreme Court since the introduction of the arbitration law. In fact, only in rare cases has the court set aside arbitral awards.

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Bahamas

The Arbitration Act and the Arbitration (Foreign Arbitral Awards) Act have entered into force. Both acts are the result of The Bahamas' commitment to adhere to the recommendations of the United Nations Commission on International Trade Law in order to develop uniformity and harmonization in the law relating to arbitral procedures on a domestic level, as well as the specific needs of international commercial arbitration practice.

Belgium

The Brussels Court of First Instance recently set aside an arbitral award which it found had violated Article 81 of the EC Treaty. The court noted that an award must be set aside for any violation of public policy, not only in the event of obvious, effective and concrete violation.

For the second time in two years the Supreme Court has ruled that when a state court is seized of an action in a matter in respect of which the parties entered into an arbitration agreement, the state court may apply its own law (ie, the lex fori) in deciding whether the dispute is arbitrable and must be referred to arbitrators.

The Belgian Supreme Court recently quashed a judgment by the Antwerp Court of Appeal that had set aside an arbitral award because the arbitrators had misquoted a contractual provision. The advocate general stressed that the competence given to arbitral bodies cannot be limited by allowing an exhaustive review of awards by state courts.

A Belgian court recently found that it had no jurisdiction to hear a request for provisional measures brought by a party which sought to bar the arbitral institution and the appointed arbitrators from continuing the arbitration proceedings in which it was a respondent. The court applied the Kompetenz-Kompetenz principle, declining its territorial competence and jurisdiction over the subject matter.

In a long-awaited decision, Belgium's Supreme Court has ruled that when a state court is seized of an action in a matter in respect of which the parties entered into an arbitration agreement, the state court may apply its own law to decide whether the dispute is arbitrable and must be referred to arbitration.

The Belgian House of Representatives has adopted a bill that adds a new section on mediation to the Code of Civil Procedure. The bill expressly recognizes the validity of contractual mediation clauses, and introduces standardized procedures for voluntary and judicial mediation. It is hoped that the new legislation will help to reduce the backlog in the Belgian courts.

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Brazil

Overview
Including: Institutions; Seminars and conferences; Research; International treaties and conventions.

The Senate recently established a special committee to discuss amendments to the Arbitration Act. While the committee's president has pledged not to hinder the progress of arbitration in Brazil, he has expressed the need to adjust the legal text to reflect Brazil's dynamic economic environment and the modifications brought by changes to both the law and the judiciary in recent years.

The more the Brazilian courts get acquainted with arbitration, the more effective this method becomes. Another set of important court decisions from 2012 illustrates how knowledgeable the judiciary has become regarding the validity of agreements to arbitrate, the scope of arbitration, the enforcement of foreign awards and the judiciary's role before, during and after arbitral proceedings.

The concession agreements of three recently privatised airports contain clauses submitting any disputes to International Chamber of Commerce arbitration, sending a clear pro-arbitration message to all interested foreign investors. However, the draft agreements for two relevant upcoming projects indicate that the government may have shifted its position on arbitration in major infrastructure works.

The Sao Paulo appellate court recently held that insurance companies are precluded from commencing arbitral proceedings abroad until Brazilian courts have decided the merits of a challenge brought by the insureds against the validity of the underlying arbitration clause in the agreement. Proceedings which had been commenced in London were suspended as a result.

The quality of arbitration jurisprudence is likely to improve with the creation of a specialised chamber of the Sao Paulo Appellate Court which has exclusive jurisdiction over commercial law disputes, including lawsuits arising from arbitration. Despite the recent establishment of this chamber, a review of its first arbitration-related decisions reveals a pro-arbitration stance among its members.

Violation of public order has been a recurring argument in challenging the confirmation of arbitral awards rendered outside Brazil, particularly those arising from proceedings applying foreign law. However, as confirmed by its decision in a recent case, the Superior Court of Justice continues to uphold a restrictive view of such an important, yet fluid concept of law.

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Canada

In Murphy v Amway Corporation the Federal Court of Appeal affirmed that class claims brought under Section 36 of the Competition Act are arbitrable. The decision reiterates prior jurisprudence that in the absence of legislative language to the contrary, Canadian courts will enforce arbitration agreements and class action waivers.

Negotiations with China on a foreign investment protection agreement have been ongoing since 1994, but were repeatedly frustrated by China's intransigence on the issue of dispute resolution. An agreement has now been hammered out; once it enters into force, investors will need to consider carefully whether to invoke any available domestic legal remedies before submitting claims to arbitration under the treaty.

Businesspeople and corporate counsel often seem not to pay much attention to their choice of dispute resolution mechanism when negotiating a contract. They should consider carefully the kinds of dispute likely to arise and choose a dispute resolution mechanism accordingly. A poor choice could result in a commitment to an inappropriate mechanism; and if no choice is made, then by default litigation is chosen.

In 1986 the Uniform Law Conference of Canada developed the Uniform International Commercial Arbitration Act. The conference has now established a working group to bring forward recommendations to update the act in 2013. The aim of this initiative is to help to maintain Canada's reputation as a leader in the field of international commercial arbitration.

The Ontario Court of Appeal has held that when an application is brought under the United Nations Commission on International Trade Law Model Law to set aside an arbitral award, made under Chapter 11 of the North American Free Trade Agreement, on the grounds of jurisdictional error, the standard of review to be applied by a court is 'correctness', not 'reasonableness'.

A potential tug-of-war between courts and arbitration tribunals concerning their respective roles in shareholder disputes involving both statutory and contractual claims has been averted. The Supreme Court of British Columbia has ruled that a claim for statutory oppression relief should be stayed until the determination, by arbitration, of the underlying issue of the proper interpretation of a unanimous shareholder agreement.

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Chile

If the enforcement of an award rendered in a foreign country is rejected for procedural reasons, the decision is not considered to have the force or effect of a final resolution and the petitioner can request its enforcement for a second time.

The Court of Appeals of Santiago recently clarified two important issues relating to arbitration - whether an award can be made after the two-year limit prescribed by law has expired, and whether an arbitrator determine the fee he is to be paid.

China

It is generally accepted that when a claim or a debt is assigned, the arbitration agreement attached thereto is also assigned. However, the Supreme People's Court has opined that an arbitration clause contained in a contract for carriage of goods by sea was not binding on an insurer that stepped into the shoes of the insured consignee by way of subrogation.

The Supreme People's Court recently issued a direction that an arbitral award should be refused recognition and enforcement as the arbitration concerned an inheritance dispute and was therefore not arbitrable. However, a request for a declaration of title to a 50% equity share in a company by way of succession could be characterized as a commercial matter.

The Supreme People's Court has upheld the Chinese courts' first decision on an arbitral award issued by a truncated tribunal. Recognition and enforcement were refused in accordance with Article V(1)(d) of the New York Convention. However, Chinese arbitration law and practice do not absolutely reject an arbitral award issued by a truncated tribunal.

For the first time since China acceded to the New York Convention in 1987, a foreign arbitration award has been refused recognition and enforcement in China on public policy grounds. Although the court apparently intended to set a precedent on these grounds, the case leaves open a number of significant questions.

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Colombia

The Constitutional Court has decided that private parties are free to agree on the procedural rules that will govern a domestic arbitration. The ruling was rendered while reviewing the Amendment to the Statutory Law of Justice, approved by Congress in 2007. This decision ends a lengthy debate as to whether parties could freely agree on the applicable procedure.

The government of Colombia recently submitted a bill to Congress that aims to consolidate the various provisions that regulate both national and international arbitration. Even though the bill reproduces almost verbatim a significant number of existing arbitration provisions, it introduces interesting modifications - particularly in connection with domestic arbitration involving state entities.

The Constitutional Court has upheld Law 1069/2006, which approved the bilateral investment treaty between Colombia and Spain. This is the second bilateral investment treaty to be approved unconditionally by the court. The court found no constitutional objection to arbitration - as provided for in the treaty - as a valid mechanism for resolving investment disputes.

In a surprising decision the Constitutional Court has revoked a previous decision which annulled an award issued by a national arbitral tribunal on the grounds that the matters involved could be subject to arbitration. The court stated that in local arbitration the parties may agree freely on the procedure to be followed by the arbitral tribunal.

The Constitutional Court has recently ruled that Article 7 of the Investment Stability Law, which does not provide for international arbitration for disputes on stability contracts, does not violate the Constitution. Among other things, the court held that disputes relating to state contracts must be governed by Colombian law and national arbitral tribunals are more qualified to apply national law.

Arbitral tribunals have held that they have jurisdiction to rule on the absolute nullity of contracts, even where the plaintiff had not invoked the nullity of the contract during the arbitration. These decisions are based on Civil Code provisions pursuant to which judges may, on their own motion, declare the absolute nullity of an agreement where the agreement is null on its face.

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Cyprus

As a member of the European Community, Cyprus is bound by the Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. Therefore, a worldwide freezing order or other order issued by an arbitral tribunal of any EU member state will be recognised by the courts of Cyprus without the need for special procedures, subject to certain limitations.

The definition of 'commercial arbitration' under international law was the focus of a recent Nicosia District Court decision. Although the definition is very wide and encompasses a multitude of relationships, including professional cooperation, it is not exhaustive. The court therefore had to consider whether a shareholders' agreement was covered by the definition, despite not being explicitly mentioned in the relevant law.

In a recent judgment, the Nicosia District Court clarified important aspects of the International Commercial Arbitration Law and its application. The law provides a mechanism through which the Cypriot courts are given wide powers to issue interim mandatory, prohibitive and/or freezing orders in aid of international commercial arbitration that has been commenced or is about to commence.

Denmark

Overview
Including: Initiation of arbitration - institutional or ad hoc?; Submitting disputes to arbitration; Arbitration agreement; Ordinary courts; Composition of tribunal; Proceedings; Setting aside arbitral awards; Recognition and enforcement of arbitral awards; Foreign arbitral awards; Costs and security.

The council of the Institute of Arbitration recently adopted new rules for the hearing of arbitration cases. The new rules aim to make arbitration proceedings more effective, and thereby shorter, leading to a reduction in costs. Among other things, under the new rules it will no longer be possible for a claimant to bring an arbitration case solely by filing a request with the institute.

A recent arbitral award from the Danish Institute of Arbitration established that failure to pay the requested security for a counterclaim does not necessarily lead to termination of the arbitral proceedings as a whole. The award establishes the legal situation regarding the provision of security for counterclaims within the rules of the Institute of Arbitration.

The Building and Construction Arbitration Board has recently adopted new rules concerning the arbitration procedure for building and construction disputes. The purpose of the new rules is to make the arbitration proceedings more effective and thus quicker. The main change is that parties are now responsible for the proceedings early in the procedure. The new rules took effect early this year and apply to all arbitration proceedings brought before the board.

In a recent decision the Supreme Court established that an arbitrator was not independent because of his previous role as an adviser to one of the parties in regards to the contract on which the arbitration tribunal was to decide. However, the arbitration award was not found legally invalid, as the claimant had not stated its objection in time.

Cooperative housing associations and owners' associations are likely to be considered 'consumers' under Section 7(2) of the Arbitration Act. This means that they will not be bound by arbitration clauses in, for example, the General Conditions for Consultancy and Assistance or the General Conditions for Works and Supplies in the Construction Sector.

Is a bankruptcy estate obliged to accept an arbitration clause between the insolvent company and another company? Due to market conditions, this issue has significantly increased in importance and is worth examining more closely. The question should be taken into consideration before depending on an arbitration clause when entering into, for example, an international supplier agreement or a debt restructuring agreement.

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Ecuador

Recent government decisions and several Constitutional Court rulings have seriously impeded the enforcement of awards issued by international arbitral tribunals established in accordance with bilateral investment treaties. In such cases it seems that the prevailing party should try to enforce the award elsewhere. This shift in public policy must be taken into consideration by international legal counsel.

In the protected dispute between Chevron Corporation and Ecuador on one side, and the US multinational and a group of Ecuadorean citizens on the other, an international arbitral tribunal has found Ecuador liable for breaching two interim awards on provisional measures. The tribunal may take several months to issue its ruling and the failure of Ecuador to comply with the interim awards may cost it dearly.

A United Nations Commission on International Trade Law arbitration tribunal recently ruled on a dispute arising within the framework of a licence for the generation of power granted to a US venture by the National Council for Electricity. The tribunal found that the agency's actions were not attributable to the state under international law because they lacked "governmental nature".

An International Centre for Settlement of Investment Disputes tribunal found Ecuador liable when it terminated unilaterally an oil contract that it had signed with Occidental Petroleum Corporation and took over its installation without compensation. The ruling covers a wide range of issues at the centre of the ongoing debate on international investments disputes.

The Guayaquil Provincial Court recently ruled on an attempt by a party to an arbitration agreement to divert a case that was being heard by an arbitral tribunal to a judge. The court reaffirmed that judges cannot accept actions related to disputes that parties have agreed to arbitrate. This ruling – particularly the fine that it imposed on the judge who accepted the action – should deter the adoption of this strategy in future.

Ecuador has refused to enforce an interim arbitral award issued by an international arbitral tribunal. The tribunal had directed Ecuador to halt an ongoing judicial proceeding between a group of Ecuadorian citizens and a multinational corporation until it rules on the merits of the dispute. The court ruled that it would not abide by the arbitral award because the interim award conflicted with human rights treaties.

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Egypt

Decree 8310/2008 created various unconstitutional obstacles to the enforcement of arbitration awards in Egypt. This decree is now being challenged before the courts. One case brought before the Administrative Court challenged the courts' refusal to initiate enforcement proceedings for an arbitration award until a judgment in a nullity action brought against the arbitration award had been issued.

Ostensibly, the minister of justice has issued Decree 8310/2008 to regulate the deposition of arbitration awards with the courts. The deposition of an arbitration award is one of the steps required for enforcement under the Arbitration Law. However, for as yet undisclosed reasons, the minister also chose to introduce what are regarded by some as unconstitutional obstacles to the enforcement of arbitration awards.

The Cairo Court of Appeal recently confirmed its restrictive approach in setting aside arbitral awards, particularly in the context of international commercial arbitration. The court confirmed and upheld the universal principle of severability of the arbitration agreement and ascertained the existence of a simple presumption that an arbitral award is presumed to have been rendered after due deliberations unless proven otherwise.

In a recent case the respondent requested the annulment of an International Chamber of Commerce arbitral award rendered in arbitral proceedings commenced by the plaintiff and others. The Cairo Court of Appeal set aside and annulled the arbitral award on account of its violation of Egyptian public policy.

The Constitutional Court is the judicial authority entrusted with assessing the conformity of Egyptian laws with the Constitution. In recent years it has examined the constitutionality of certain provisions of the Arbitration Law and the new Commercial Law. The arbitration-related provisions pertained to, among other things, technology transfer disputes.

The Constitutional Court is the judicial authority entrusted with assessing the conformity of Egyptian laws with the Constitution. In recent years it has examined the constitutionality of certain provisions of the Arbitration Law and the new Commercial Law. The arbitration-related provisions pertained to, among other things, the process of challenging arbitrators.

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El Salvador

A recent decision issued by the chief justice of the Supreme Court reflects that a new, arbitration-friendly policy has taken root at the top levels of the Salvadoran judiciary. This is a major step towards establishing the widespread use of arbitration and building confidence in its effectiveness as a dispute resolution method.

The Law on Conciliation, Mediation and Arbitration aims to help create a more favourable legal environment for foreign transactions and investment. To this end, it recognizes universal principles of arbitration which make this form of alternative dispute resolution available in most transnational contracts concluded with Salvadoran companies.

Finland

Finland recently brought the EU Mediation Directive into force by implementing the Act on Mediation in Civil Disputes and Certification of Settlements by Courts. Both the directive and the new act aim to facilitate access to alternative dispute resolution and promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a balanced relationship between mediation and judicial proceedings.

Institutional arbitration in Finland is managed by the Arbitration Institute of the Central Chamber of Commerce. The institute releases annual statistics concerning institutional arbitration. This update reviews these statistics with regard to 2008 and the first two quarters of 2009.

A recent ruling by the Supreme Court has made it clear that where a party to an agreement containing an arbitration clause or arbitration agreement wishes to maintain the option to have civil claims arising from the other party’s offence heard in connection with a criminal trial, this should be expressly stipulated in the arbitration clause.

Given the warm welcome that they received over four years ago, it is surprising that the Rules for Expedited Arbitration of the Arbitration Institute of the Finnish Central Chamber of Commerce are rarely used. This reluctance arguably stems not from an assessment of their benefits and pitfalls, but rather from a deep-rooted respect for the idea that parties should have sufficient opportunity to present their case.

The Finnish Supreme Court has issued a long-awaited judgment in which it clarified the grounds for setting aside arbitral awards. The case concerned an award decided on the basis of a statutory provision that neither of the parties had specifically invoked during the arbitration proceedings. The judgment adopts a strict interpretation of the grounds for setting aside arbitral awards.

The latest statistics of the Finnish Central Chamber of Commerce Arbitration Institute and Redemption Committee clearly indicate that the significance of institutional arbitration as a means of commercial dispute resolution is increasing. The flexibility offered by recent developments is likely to ensure the popularity of institutional arbitration for the settlement of domestic and international disputes.

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France

When French arbitration law was reformed in 2011, one major innovation was to amend the position on the stay of enforcement of international arbitral awards pending the outcome of annulment proceedings or of an appeal against an order granting leave to enforce (exequatur). However, the courts' severity towards requests for a stay of execution has given rise to concerns about exequatur proceedings.

According to the French law on international arbitration, an action to set aside is available against international arbitral awards issued in France. Therefore, such an action may be instituted only against arbitral awards. The distinction between arbitral awards and other communications issued by tribunals can be unclear; however, a decision of the Supreme Court provides useful guidance.

The interaction between insolvency proceedings and arbitration is treated differently in different countries. The French legal position is clear: the supervening insolvency of a party does not render a dispute inarbitrable. In a recent decision the Paris Court of Appeal found that the International Court of Arbitration of the International Chamber of Commerce had committed an "excessive measure" justifying the annulment of an award.

In a recent case the Supreme Court reaffirmed the existence of an arbitral legal order, independent of any national legal order. It held that the arbitral proceedings in question were detached from the French judicial order, since the tribunal's seat was located in Sweden and proceedings were governed by the United Nations Commission on International Trade Law rules.

Since March 2010 the ordinary French courts have been able to challenge the constitutionality of a statute or statutory provision through a specific procedure. However, the reform was silent on the issue of whether arbitral tribunals enjoy similar rights to ask the Supreme Court to refer a matter to the Constitutional Council. In a recent decision, the Supreme Court found no basis for such rights to be allowed to arbitrators.

It is a truism that relativity applies in arbitration. An award can be set aside by the courts of the English seat of arbitration and yet be declared enforceable in France. The conflicting decisions issued by the Paris Court of Appeal and the UK Supreme Court in Dallah illustrate that an arbitral award can have a different fate depending on the approach of the courts of the seat of arbitration and the courts of the places where enforcement is sought.

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Germany

The Federal Supreme Court recently confirmed that foreign arbitration agreements which do not adhere to the formal requirements of Article II(2) of the New York Convention may still be valid under the less strict criteria of Section 1031 of the Code of Civil Procedure.

The Federal Supreme Court has changed its jurisdiction on preclusion in enforcement proceedings relating to international arbitral awards. The court held that a debtor is not required to exhaust all available remedies at the (foreign) seat of arbitration to preserve its right to argue in enforcement proceedings in Germany that no valid arbitration agreement exists.

Together with its conciliation rules of 2002, Germany's foremost arbitration institution has now established a comprehensive set of administered ADR procedures to respond to the growing demand for the timely and cost-effective (although not necessarily final and binding) resolution of disputes. This update provides an insight into which procedures might advantageously be applied in different situations.

The Frankfurt Higher Regional Court has frozen assets on the basis of an ex parte application for preliminary enforcement of a foreign arbitral award. The decision was made under Section 1063(3) of the Code of Civil Procedure's preliminary enforcement provision, which allows successful claimants in arbitration to obtain securing measures like asset freezes even before exequatur of the arbitral award is granted.

The Federal Supreme Court ended the German practice of permitting claimants to seek the enforcement of foreign judgments confirming arbitral awards. Overturning a 25-year-old ruling, the court no longer offers claimants a choice between the enforcement of the original arbitral award and the recognition of its exequatur from jurisdictions following the procedural merger doctrine.

The Supreme Court has held that disputes on the validity of shareholder resolutions in German limited liability companies are arbitrable, based on an arbitration clause in the company's articles of association. The court established a set of requirements for the validity of shareholder arbitration clauses that other jurisdictions may wish to take into account when considering their position on appropriate procedural safeguards.

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Greece

In a recent case the Supreme Court recognised the broad discretion enjoyed by the arbitral tribunal, failing an agreement by the parties, to determine the rules of the arbitral procedure. In such cases the tribunal has the right to determine the arbitral procedure by selecting a mixed procedural system, in light of the needs of the parties and the particular international arbitration, avoiding any peculiarities of Greek law.

The Supreme Court recently held that an amendment of claim or counterclaim in international arbitration is admissible, provided that a series of requirements are met. A request for preventive protection, even for future disputes that are conditional on the occurrence of a certain event, is not groundless, provided that future disputes fall within the scope of the arbitration agreement.

A recent judgment held that the grounds for resisting enforcement contained in Article V of the New York Convention are exhaustive; thus, any other ground (however framed) – including the full payment of an award – is inadmissible. It was also held that a claim to compensate for legal costs incurred as a result of a breach of an arbitration agreement is capable of being resolved through arbitration.

The Athens Court of Appeal partially refused enforcement of a foreign arbitral award that awarded punitive damages (in the form of a penalty) on grounds of public policy under the New York Convention. For the first time, the global economic crisis was held to be a contributing factor in determining the excessive nature of the punitive damages, which the court ruled had violated public policy.

The Supreme Court recently held that the filing of a domestic arbitral award with the registrar of the first instance court at the place where the award was made is not a condition for its validity. The date of the award is essential for establishing that the award was issued within the period for which the arbitration agreement was in force.

In the context of a motion before a state court to refer a dispute to arbitration, the objective arbitrability of such a dispute is governed by Greek law and not by the law that governs the arbitration procedure or agreement. The Piraeus Court of Appeal recently issued a judgment that dealt with objective (rather than subjective) arbitrability, as the question of arbitrability that was raised related to the subject matter and not to the parties of the dispute.

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Hong Kong

China's Supreme People’s Court has confirmed that awards made in ad hoc arbitration proceedings in Hong Kong are enforceable in China. This issue had been of particular concern because it had been unclear whether arbitration awards made with the assistance of the Hong Kong International Arbitration Centre would necessarily be treated as institutional awards or merely ad hoc awards.

When it comes to enforcing arbitration awards, the Hong Kong courts have generally adopted a pro-enforcement stance; but there are limits to the utility of an arbitration award. A court recently found that an arbitration award was only conclusive between the parties to the case, and did not bind a third party who had guaranteed the performance of the contract.

A recent case provides helpful clarification of the position in Hong Kong when uncertainty arises over the existence of an arbitration agreement. As long as a prima facie case is made out that there is an agreement, the court must refer the matter to arbitration - unless the arbitration agreement is null and void, inoperative or incapable of being performed.

The Court of Final Appeal recently considered the exercise of the judicial discretion to grant leave to appeal against a domestic arbitral award. The case is another example of the Hong Kong courts' pro-enforcement stance with respect to arbitration awards. However, the leading judgment widens the scope to appeal against an award where the dispute arises out of a standard form clause.

On February 1 2000 an arangement for the mutual enforcement of arbitral awards between Hong Kong and the Mainland came into effect. It is hoped this will restore international confidence in Hong Kong as an 'arbitration-friendly' jurisdiction for matters concerning mainland China.

A recent case illustrates a difference in the treatment of interest on an award under the English Arbitration Act 1996 and the Arbitration Ordinance of Hong Kong, with Hong Kong granting automatic interest on an award similar to that provided by England’s 1950 Arbitration Act.

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Hungary

A new law that restricts the right to refer certain matters to arbitration has entered into force. Among other things, it affects contracts concerning rights in rem and matters relating to 'national property' - a term that covers material objects, but may also extend to things as disparate as rights, company shareholdings, emission units and Hungarian airspace.

The Supreme Court has considered the effects of a verification proposal (ie, a motion of one party requesting the arbitrators to decide on a certain question) on the right of the parties to present their case. It ruled that the tribunal’s decision on whether to entertain the verification proposal does not affect the parties' procedural rights.

A recent Supreme Court judgment sets out key principles in respect of the validity and enforceability of an arbitration agreement. Among other things, the court ruled that where two parties are joined to a lawsuit but only one has agreed to arbitration, the dispute may only be resolved by the competent court.

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India

The Delhi High Court recently affirmed that where parties to an agreement make reference to an arbitrator for the purposes of determining a question of law, the decision taken by the arbitrator cannot be interfered with by the courts, even if the court itself may have a different view on the question of law from that taken by the arbitrator. The court may interfere only where the view arrived at by the arbitrator is implausible or contrary to law.

In a recent appeal of an International Chamber of Commerce arbitration in Malaysia, the Delhi High Court had to consider whether the Indian law of limitation was a procedural law or a substantive law. The lead arbitrator had noted that since the statute of limitations in both India and Malaysia was procedural, an action could be brought in Malaysia even if the period of limitation in the claim had expired under the Indian Limitation Act.

A recent case before the Delhi High Court demonstrates that the courts continue to frown on parties' efforts to avoid arbitration by filing suits that implead unnecessary parties. Efforts on the part of the courts to weed out frivolous civil suits filed by parties to scuttle the arbitral process is a necessary step and will go a long way towards building the confidence of commercial parties when considering engaging in arbitration.

A constitutional bench of the Supreme Court recently issued a judgment in which it restricted the scope of interference by Indian courts in arbitrations conducted outside the territorial boundaries of India by excluding the applicability of Part I of the Arbitration and Conciliation Act 1996 to such arbitrations. This judgment was much anticipated in international commercial arbitration circles and is very welcome.

Bilateral investment treaties have recently become the chosen pathway for dispute resolution by foreign investors in India. However, historically foreign companies that invest in India have rarely invoked the dispute resolution clauses of such treaties. A view has been canvassed that India should therefore consider amending its investment treaties so as to reduce the protections accorded to foreign investors.

A recent case before the Supreme Court has confirmed the grounds under which arbitration awards may be challenged. As detailed under Section 34 of the Arbitration and Conciliation Act, the court has the power to allow an amendment where an application has been made within the prescribed limits, if the peculiar circumstances of the case so warrant and it is so required in the interest of justice.

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International

The flexibility of arbitral procedure should provide parties with the means to avoid the unpredictable and unforeseen costs and delays that are often associated with commercial litigation. However, such problems can creep into arbitrations. Parties can take a number of steps to prevent arbitration from taking on the undesirable characteristics of litigation.

International commercial arbitration is not simply domestic commercial litigation in disguise. It involves a unique skill set and requires particular training and expertise. A company that ignores the highly specialised nature of international arbitration does so at its own peril.

The PRIME Finance Disputes Centre will launch its arbitration services in early 2012. PRIME Finance's goal is to provide, encourage, enable and support alternative dispute resolution, with its main focus on disputes concerning complex financial products, such as derivatives. Its panel of experts includes some of the most eminent financial and alternative dispute resolution experts in the world.

The revised United Nations Commission on International Trade Law Arbitration Rules are in force. Key amendments include new provisions to accommodate the potential for multi-party arbitrations, expanded rules on interim measures and a requirement that a respondent serve a response to the notice of arbitration. This last change will be particularly welcomed by corporate counsel.

Iraq

As the security situation in Iraq has improved, interest in international direct investment has increased. However, one consistent frustration maintained by many foreign parties is the difficulty in securing the enforcement of foreign judgments and arbitral awards. As federal Iraq is not a signatory to the 1958 New York Convention, many of the traditional enforcement and recognition mechanisms do not apply.

Ireland

The Law Reform Commission has issued its Report on Alternative Dispute Resolution, specifically focusing on mediation and conciliation. It remains to be seen how many of the report's recommendations will be adopted, although it is likely that many – if not all – will eventually find their way onto the statute books in some form, particularly since a draft Mediation and Conciliation Bill is annexed to the report.

The High Court recently stressed that there are strong public policy considerations in favour of enforcing arbitration awards and that this is no less so in the case of New York Convention awards. However, this leaning in favour of enforcement must not stand in the way of refusal where this is required as matter of public policy.

The Irish courts have traditionally been very reluctant to interfere with the arbitration process. The recent decision in GLC Construction Limited v County Council of the County of Laois is an example of a case where the court felt justified in referring an arbitrator's award back to the arbitrator for reconsideration following an application by the plaintiff to the High Court for such an order.

In a recent case the court considered the issues to which it should have regard in assessing whether to interfere with an arbitral award. The award was upheld as no mistake of law appeared on the face of the award, the arbitrator had conducted himself correctly within the terms of his appointment, and any perceived bias should have been asserted during the course of the arbitration.

A recent decision suggests that it is not only parties to an arbitration agreement who will be bound to adhere to it; so too will those who have agreed to a defined mechanism of alternative dispute resolution. This is in line with the tradition of the Irish courts in supporting arbitration and not interfering with the arbitration process except where this is necessary.

The domestic Arbitration Act obliges a court to stay court proceedings initiated by any party to an arbitration agreement, unless it is satisfied that the agreement is null and void. The act has since been amended to state that this provision does not prevent any party to an arbitration agreement from bringing civil proceedings under the small claims procedure of the district court.

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Israel

The Supreme Court of Israel has rejected an application for the annulment of an arbitral award on the grounds that the arbitrator had incorrectly interpreted and implemented the law. As any such mistake was not contradictory to the basic norms of society, the court found no grounds to justify annulling the award.

The Supreme Court of Israel has ruled on the time limitations placed on arbitration proceedings. It confirmed that the Arbitration Act is intended to resolve conflicts out of court in order to lighten the heavy burden on the courts, and that procrastination in the course of arbitration is to be seen as undermining the entire process.

The Supreme Court recently ruled that although the district court has material jurisdiction over disputes that are litigated in court, in the case in question a magistrates court had approved the arbitration agreement and so that same court should govern the arbitration proceedings.

A recent case raised the issue of the validity of a special kind of arbitration. One of the parties involved was the Histadrut, the Israeli workers' union, and the case concerned elections to one of its regional councils. The arbitration in question was a ruling by the Histadrut Judgment Tribunal which affirmed a decision to annul the membership of nine individuals.

The Supreme Court recently held that a rabbinical court's refusal to apply Israeli secular law as stipulated in an arbitration clause precluded the resolution of the dispute in that forum. In another case, the Supreme Court held that an arbitrator's departure from the application of law in favour of his own judgment was not fatal to his final decision.

Italy

The Mediation Law – which transposed the EU Mediation Directive into Italian law – originally provided that a large range of disputes could not be brought before civil courts unless the plaintiff had first attempted mediation. However, the Constitutional Court recently overturned the law on the grounds that it exceeded the scope of both the directive and the Italian Constitution by making mediation mandatory.

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Kazakhstan

Under the New York Convention 1958, the Kazakhstan courts may set aside an arbitral award issued outside the member state if the award was made under its law. However, the position is far from clear-cut in practice and a Kazakh defendant may prefer to comply with an award even if it represents a breach of Kazakhstan’s public order requirements and exceeds the scope of the arbitration agreement.

Kenya

The Nairobi Centre for International Arbitration Act demonstrates the government's commitment to promoting reconciliation, mediation, arbitration and traditional dispute resolution mechanisms in Kenya. The act's main objective is to establish an independent, non-profit-making international organisation for commercial arbitration based in Nairobi.

Arbitration can be distinguished from litigation due to its flexibility, low cost and lack of complex procedures. However, these attributes are no longer characteristic of arbitration, as the arbitral process is gradually becoming as expensive as litigation – especially if the award is challenged in court. In such case, the same technicalities apply as in civil proceedings.

Arbitration in Kenya is governed by the 1995 Arbitration Act (as amended). There is no substantive law governing other forms of alternative dispute resolution. The absence of a substantive law may be attributed to the fact that these alternative forms are not as widely used as litigation and arbitration. However, the law now recognises these forms of dispute resolution – perhaps in response to their growing popularity.

Before entering into arbitration in order to resolve a dispute, all parties should pay close attention to the type of arbitration they are entering into and the manner in which the proceedings are to take place. The devil lies in the detail; the more astute a party, the greater its chances of achieving a successful outcome from the proceedings.

Of the various alternatives to dispute settlement that are available to parties in Kenya (eg, negotiation, mediation, conciliation and litigation), there appears to be an increasing trend towards resorting to arbitration as the best way to resolve disputes. This update considers the reasons behind the recent popularity of arbitration, taking into consideration its advantages and drawbacks.

An ever-increasing number of parties to disputes have perfected the art of agreeing to arbitration in the first instance, only to resort to the courts if the arbitral award is not in their favour, thus wasting a lot of time and resources and defeating the purpose of having gone to arbitration in the first place. It is hoped that a recent Court of Appeal decision will bring this practice to an end.

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Lebanon

Overview
Including: International treaties; Legislation; Arbitral bodies and other entities; Interaction with court system; Drafting arbitration agreements; Enforceability of arbitration agreements; Kompetenz-kompetenz; Arbitrability; Consolidation and separability; Third parties; Starting the process; Interim relief; Procedural rules; Awards; State immunity.

Effective and transparent dispute resolution methods are as imperative in Lebanon as they are in any other jurisdiction. The principal instrument governing the enforcement of international arbitral awards in Lebanon is the New York Convention, but both the Code of Civil Procedure and the courts also play a crucial role in protecting the integrity of the arbitral process.

Careful consideration must be given when selecting a choice of law clause, as the circumstances in which an arbitration agreement can bind a third party differ from jurisdiction to jurisdiction. Under Lebanese law, a third party may find itself bound by an arbitration agreement in a number of cases, including on the basis of its relationship with one of the signatories to the arbitration clause.

Liechtenstein

In recent years the arbitration regime has been revised in order to enhance Liechtenstein's attractiveness as a venue for arbitration. The arbitration law now reflects the provisions of the United Nations Commission on International Trade Law Model Law, and the New York Convention has also been ratified.

Lithuania

A recent Supreme Court decision is the first in Lithuanian case law on the issue of the arbitrability of public procurement disputes. However, it has already sparked a debate among experts. Is it a Pandora's box, opening up the possibility of more disputes being deemed non-arbitrable, or is it a necessary weapon against bad-faith actions arising from public procurement relationships?

Disputes arising from contractual and other relations in the world of sport are normally settled by specialised sports arbitration bodies. A Court of Appeal decision recently raised the prospect that arbitration awards to settle disputes between professional sportspeople and their clubs might be ineligible for recognition and enforcement. However, the position of the courts now looks more reassuring.

Although the Supreme Court is essentially positive towards arbitration, its jurisprudence sometimes creates more surprise than stability. Although it seems clear that a court must refrain from assessing an arbitration clause if the question of the tribunal's jurisdiction is already a matter of contention in arbitration proceedings, it is less clear what approach a court may take if arbitral proceedings have not yet been initiated.

It is often said that litigation is more advantageous than arbitration due to the possibility of securing enforcement of the court's decision by applying for interim measures. This is only partially true. Although under the Law on Commercial Arbitration the arbitral tribunal has limited possibilities to decide on application of interim measures, this might easily be solved by applying to the court of general jurisdiction.

In Lithuania, Belarusian arbitral awards may be enforced only once they have been recognized and authorized for enforcement by the Lithuanian Court of Appeals. Belarusian arbitral awards cannot be reviewed on the merits; rather, they can be considered only on the basis of certain conditions that may constitute grounds for non-recognition.

Including: Arbitration Institutions; National and International Arbitration Regulations; Arbitration Agreements; Non-arbitrable Disputes; Arbitrators; Proceedings; Expenses; Interim Measures; Challenges; Recognition and Enforcement; Other Forms of Alternative Dispute Resolution.

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Malaysia

Overview
Including: Arbitral Regime; Advantages of Arbitration; Drafting Arbitration Agreements; Separability of Arbitration Clauses; Stay of Proceedings; Selection of Arbitral Tribunal; Qualification of an Arbitrator; Preliminary Relief and Interim Measures; Evidentiary Matters; Discovery; Damages; Arbitral Awards; Stating the Case; Setting Aside of Arbitral Awards; Enforcement of Arbitral Awards.

The Putrajaya Federal Court recently analysed a technical services agreement between two parties in order to determine what constitutes an agreement to arbitrate. The court recognised that there should be minimal interference with parties seeking to have their dispute arbitrated, but that clear terms and written evidence of an agreement to arbitrate were a requirement for the grant of a stay.

An arbitral award was recently set aside by the Kuala Lumpur High Court after it found that the arbitrator could not be said to be impartial. The sole arbitrator had signed a statement of independence before being appointed, declaring his impartiality and independence, but failed to disclose the fact that he later became a director of the bank that had financed the joint venture between the parties.

The Federal Court recently upheld an arbitral award that had been granted following a dispute over a production sharing contract. The court decided against setting aside the award, but held that if the award had been tainted with illegality, it could have been set aside on the grounds that an error of law has been committed. The court also held that all matters regarding the construction of a document are questions of law.

In Sabah in East Malaysia, no one can practise as an advocate or solicitor unless his or her name is on the roll and he or she has a valid practising certificate with authorisation to act in such role. This would ordinarily be of little interest to the international arbitration community, but in a recent case the Sabah courts construed it to mean that foreign lawyers were barred from appearing as counsel in arbitral proceedings.

Sections 38 and 39 of the Arbitration Act 2005 empower the court to recognise and enforce an award from a foreign state. The Kuala Lumpur High Court recently had occasion to consider the exercise of this power. In its decision, the court held that there was no valid arbitration agreement from which the arbitral tribunal could validly render an award and refused to recognise and enforce the arbitral awards.

In a recent decision the High Court confirmed that the Arbitration Act places a discretionary, not obligatory, requirement on the court regarding the 90-day timeframe for filing an application to set aside an arbitral award. The court thus retains some degree of discretion to extend this timeframe where circumstances so require.

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Mexico

The Supreme Court has reviewed the power of judges regarding arbitration procedures and arbitral awards issued under the terms of the Commerce Code, and the effects of resolutions ex aequo et bono or as amiable compositeur (ie, based on what is fair and just, rather than on the letter of the law). However, the court's arguments regarding resolutions ex aequo et bono have met with some criticism.

A Mexican court's annulment of a final arbitral award - which had granted around $400 million in damages to a company in dispute with the government agency Pemex - has become a highly controversial issue. This approach to arbitration puts future and current investments at risk, as a result of the lack of legal commitment and security that government agencies may be seen to offer.

The amendments to the International Chamber of Commerce Arbitration Rules finally measure up to international practice in jurisdictions such as Mexico, where the arbitration rules of the main local arbitral institutions had already included provisions for appointing emergency arbitrators and seeking interim relief.

The Law for the Protection and Promotion of Fair Business Practices was recently introduced to the legislative body. Unfortunately, the chapter on dispute settlement disregards the general principles of mediation. In particular, imposing a penalty on parties that fail to participate in an initial dispute resolution meeting contradicts the idea that mediation is a voluntary procedure.

Recent Commerce Code changes provide that an arbitral tribunal and a requesting party are liable for interim measures and any damages that such measures may cause to the other party. It has been argued that this will deter tribunals from granting interim measures. However, in practice an arbitral tribunal has a range of arguments at its disposal that may limit or exclude its liability.

Recent amendments to the Commerce Code include several provisions regarding judicial involvement in arbitration procedures. Although various changes will expedite the arbitration procedure by clarifying the judiciary's scope of action, the provisions relating to injunctions represent a risk for arbitral tribunals.

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Netherlands

The minister of justice recently submitted a draft bill to Parliament to modernise the Arbitration Act 1986. The aim of the draft bill is to make the Netherlands more attractive as a seat for arbitration. This is to be achieved by, for example, codifying best practice to enable the parties to tailor the arbitration to their needs and making it possible to limit annulment proceedings to a single instance.

In the event that the parties cannot agree on the appointment of arbitrators within the period specified by the applicable institutional rules of arbitration, the Arbitration Act allows them to request the president of a district court to appoint the arbitrators. This provision has been further clarified in a recent case, in which the Dutch courts adopted a pragmatic approach.

The District Court of The Hague recently rejected a claim to annul an arbitral award rendered in favour of Croatia against Austrian casino company Adria Beteiligungs GmbH. After its earlier case in which it upheld an arbitral award rendered in proceedings against Ecuador in favour of US energy company Chevron, the court again showed that Dutch courts are arbitration friendly and reluctant to quash arbitral awards.

Two first instance district courts put aside arbitration agreements for reasons of reasonableness and fairness in cases concerning third-party or impleading proceedings. Even though the Netherlands has a sophisticated arbitration law and Dutch courts generally observe and respect valid arbitration agreements, courts may find that there are compelling reasons to disregard a contractual arbitration agreement.

A number of arbitration institutions have made it possible for parties to request interim measures prior to the constitution of the arbitral tribunal from a so-called 'emergency arbitrator'. Meanwhile, where parties choose for the seat of the arbitration to be in the Netherlands, in urgent cases they can opt for tried and tested summary arbitral proceedings under the Dutch Arbitration Act.

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Nicaragua

The new Mediation and Arbitration Law was finally published in the Official Gazette on June 24 2005. Among other things, parties may request the nullity of arbitration awards before the Civil Court of the Supreme Court of Justice. Therefore, arbitration awards cannot be considered as final decisions and the arbitration process cannot be carried out independently of the judicial power.

Nigeria

The Lagos Court of Appeal recently ruled that serving an arbitration notice by email constitutes 'effective service' of the arbitration notice under the English Arbitration Act 1996, for the purposes of registering and enforcing a foreign arbitral award in Nigeria. This decision once again highlights the need for a review of the Arbitration and Conciliation Act in order to reflect modern technological realities.

Although Nigeria appears to satisfy the criteria that should be considered when selecting a seat of arbitration, the reality is that few, if any, international arbitrations take place in Nigeria - or indeed in most other African states. Key issues such as arbitrability, anti-arbitration injunctions and the limitation period for enforcement proceedings remain to be addressed if Nigeria is to become a preferred venue for arbitration.

A recent case has allowed the Lagos Court of Appeal to consider the timeframe within which proceedings to recognise and enforce foreign arbitral awards should be brought. The court pointed out that case law in this area is not straightforward, therefore disputing parties which may want to commence enforcement proceedings in Nigeria should conduct their arbitration proceedings expeditiously with no undue delays.

The International Chamber of Commerce, Nigerian National Committee has formally launched the ICC Arbitration and Alternative Dispute Resolution Rules 2012. The new rules define a structured, institutional framework that is intended to ensure transparency, efficiency and fairness in the dispute resolution process while allowing parties to exercise their choice over many aspects of the procedure.

Norway

In a little-noticed decision handed down just over two years ago, the Norwegian Supreme Court considered the intricate question of whether a foreign arbitral award against a company could become vested with direct effect against the company’s sole shareholder through a 'piercing of the corporate veil'.

In a recent case the Norwegian Supreme Court considered whether an arbitrator can be called as a witness. It also ruled on the extent to which a party's written outline may be used as evidence in an action to annul an arbitration award. The decision partly establishes new references for these issues.

The Arbitration Act 2004 came into force on January 1 2005, coinciding with the repeal of Chapter 32 (Sections 452 to 473) of the Civil Procedure Act. The new act brought clarity to a number of issues and introduced uniform regulation of Norwegian and international arbitration. This update discusses some of the practical changes it made to the law.

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Oman

Royal Decree 47/1997, which governs arbitration procedures in Oman, permits arbitration to be conducted in Oman or abroad if the parties expressly agree to this effect. A recent amendment redefines the terms 'Arbitration Board' and 'court', and another addresses jurisdictional aspects.

Poland

The Supreme Court was asked to consider whether arbitral tribunals should be bound by previous arbitral awards issued between the same parties and recognised by Polish courts. In its ruling, the court adapted the res judicata principle to arbitration by allowing arbitral tribunals to decide on a case-by-case basis whether they should follow previous arbitral awards issued between the same parties.

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Portugal

A recent case arose from the disputed connection between three contracts, of which only the first included an arbitration clause; however, the third contract generally incorporated the first. The Supreme Court held that the temporal, functional and economic connection between the contracts made clear that despite the autonomy of the contracts, the arbitration clause in the first contract applied to the third.

Including: A decade of growth; Case law; New arbitration legislation.

Disputes concerning non-disposable rights cannot be arbitrated. However, the Lisbon Court of Appeal recently held that in such cases the invalidity of an arbitration agreement relates only to those rights which are absolutely non-disposable, not to those which are relatively non-disposable, such as rights that involve an economic interest.

The Supreme Court recently addressed the mechanisms available, under both arbitration legislation and the Code of Civil Procedure, to parties seeking to challenge an arbitral award. The decision is seen as favouring arbitration in general, but recommends amendments to the legal framework for challenging arbitral awards - a new draft law proposes an improved approach to a number of its shortcomings.

The Lisbon Court of Appeal has stated that agreements from which a dispute stems must contain arbitration agreements directly, rather than in a document to which the agreement signed by the parties refers. This goes against the court's usual trend of interpreting the law in line with international practice and theory.

The Supreme Court has held that an arbitral award under the New York Convention can be enforced automatically in Portugal without having been reviewed or confirmed. The court's conclusion - which is highly innovative internationally, let alone in Portugal - is open to debate, but undoubtedly marks a major change in Portuguese case law.

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Romania

The new Civil Procedure Code makes significant changes to the previous arbitration rules by incorporating recent jurisprudential and doctrinal solutions in order to create a more attractive and flexible alternative dispute resolution procedure. The new code contains several innovations that aim to speed up the arbitral process and facilitate access to this private form of justice.

Russia

The Supreme Arbitrazh Court has issued Resolution 831/12, reaching a conclusion on the invalidity of alternative (asymmetrical) arbitral clauses. The resolution will have a significant impact on practice despite the fact that it does not completely resolve the issue of the validity of arbitration selection as a means of dispute resolution in alternative arbitral clauses.

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Singapore

The Singapore International Arbitration Centre (SIAC) has amended its rules of arbitration to incorporate the latest best practices in international arbitration and reflect SIAC's new governance structure. With these recent changes, SIAC has addressed its increasing caseload and emphasised the promotion of time-efficient proceedings.

Under Singapore arbitration law, parties can opt to have their arbitration proceedings governed by either Singapore's domestic arbitration regime or the international arbitration regime. As a recent case illustrates, when drafting an arbitration clause, it may be prudent to explore the differences between the two regimes in respect of the powers of the court and arbitral tribunals to grant interlocutory orders.

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Slovakia

The Ministry of Justice recently published its proposal for an amendment to the Arbitration Act which aims to strengthen consumer protection. This update looks at some of the key changes envisaged by the amendment and the effect that they might have on arbitration proceedings.

A recent amendment to the Slovak Civil Code has made it harder to arbitrate consumer disputes. Effective as of January 1 2008, the amendment makes all exclusive arbitration clauses within consumer contracts null and void. The amendment also appears to apply retroactively to all consumer contracts concluded before it came into force.

South Africa

In a recent case before the Johannesburg High Court, the applicant sought to make an order of court of an arbitration award granting absolution from the instance. The court found that it had been the arbitrator’s duty to give effect to the agreement between the parties so that its award should be final. The award therefore did not achieve the intended finality.

Various standard-form building contracts contain an option or a requirement for disputes to be determined by arbitration. Such contracts are often altered by the parties, resulting in uncertainty as to what amounts to a ‘referral’ to arbitration. Although the building contract may prescribe the applicable rules, this does not necessarily address the issue.

The Supreme Court of Appeal has confirmed that where parties have agreed that an arbitrator's decision is final, no appeal against such a decision can be entertained. A legitimate challenge may be made only by invoking the statutory review provisions contained in the Arbitration Act 1965.

The assimilation of the United Nations Commission on International Trade Law Model Law into South Africa's international arbitration legislation would address the uneasiness created by its failure to enact legislation effecting the New York Convention and thus international concern regarding the courts' broad discretion whether to enforce an arbitration agreement.

There is no industry-preferred arbitration regime or any detailed policy formulation dealing with arbitration. However, insurers are increasingly using arbitration to resolve insurance disputes, but subject to an arbitration regime which is expeditious and which avoids the pitfalls of privatized litigation.

Spain

The Barcelona Court of Appeals recently issued a ruling in a case concerning an action to set aside an arbitral award issued by the Barcelona Court of Arbitration. The arguments of the annulment action were based on the Insolvency Act and the Civil Procedure Law

The recently passed Law 11/2011 has amended the Arbitration Law and has introduced, among other things, an obligation for arbitrators and arbitral institutions to take out an insurance policy in order to cover their potential liabilities. This update discusses the conflict between the Insurance Law and this new requirement for an obligatory insurance policy in connection with arbitrators' liability under Spanish law.

The Barcelona Court of Appeal has issued a ruling in a case concerning the evaluation of the validity of a submission to arbitration. It confirmed a lower court ruling that it is the arbitral tribunal itself which should decide whether it is competent, and its potential decision not to solve a certain dispute does not affect its competence to solve subsequent disputes between the parties.

This update looks at two key issues: the legal privilege and state secret exceptions to the general discovery obligation set down in the International Bar Association Rules on the Taking of Evidence in International Arbitration, and the creation of a specialist arbitration court in Madrid. It is hoped that the specialisation of courts will later be confirmed and extended to other major business locations.

Proposals in a draft amendment to the Arbitration Act include the reallocation of jurisdiction for the support of arbitral proceedings and an arbitration-friendly change on setting aside awards on public policy grounds. It also introduces a groundbreaking arbitration procedure for disputes within the public administration. Only a few issues have failed to attract the general approval of Spain's arbitration practitioners.

Madrid Court of First Instance 74 considered that the award in a recent case included declaratory relief, but not condemnatory relief. According to Article 521 of the Civil Procedure Law, declaratory and constitutive relief are unenforceable. Article 559.1.3 of the law also states that an award that includes no condemnatory relief is unenforceable. It therefore appears that in this case the award was unenforceable.

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Sweden

A recent Supreme Court decision considered the implications where an application is made for a court order for the production of documents within the context of arbitration. The court stated that guidance can be obtained from the 2010 International Bar Association Rules on the Taking of Evidence in International Arbitration even in the case of domestic arbitration.

Concorp Scandinavia AB brought an action in the district court against Karelkamen Confectionary AB. Karelkamen argued that Concorp's action should be dismissed, claiming that the dispute should be resolved by arbitration in accordance with the Arbitration Act. The district court denied Karelkamen's motion and the decision was appealed to the Supreme Court.

The Svea Court of Appeal recently considered whether an arbitral award should be set aside on the grounds of the disputed substantive agreement not being arbitrable under the Arbitration Act due to its alleged violation of then-mandatory Soviet law and being punishable under Soviet criminal law. The court took an arbitration-friendly approach to arbitrability in an international context.

The Supreme Court has considered what is required for a foreign arbitral award to be recognised and enforced in Sweden by applying the Swedish Arbitration Act, which goes back to the New York Convention of 1958. The court had to determine whether the respondents had been duly notified of the arbitration proceedings against them.

The Supreme Court recently handed down judgment in a case involving arbitrator bias. The issue was whether the disputed award should be set aside due to alleged bias in the proceedings, on the basis that the arbitrator had previously been appointed in several disputes in which a party was represented by counsel from a particular law firm.

The Stockholm Chamber of Commerce (SCC) has adopted an entirely new set of rules for the appointment of 'emergency arbitrators'. The rules should be analyzed by any party that has incorporated the SCC's dispute resolution provisions into an agreement, and parties already involved in a contentious matter would be well advised to attempt to anticipate whether the new rules are to the advantage of any of the parties.

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Switzerland

Overview
Including: Arbitration Agreement; Scope of Application; Seat of the Arbitral Tribunal; Arbitrability; Arbitration Agreement; Arbitral Tribunal; Pending Arbitration; Procedure; Jurisdiction; Decision; Setting an Award Aside; Exclusion Agreements; Deposit and Certificate of Enforceability; Foreign Arbitral Awards

The Swiss Supreme Court recently confirmed that an ad hoc arbitral tribunal seated in Geneva was regularly constituted within the meaning of the Private International Law Act where French courts had appointed the co-arbitrator of the Israeli respondent in the arbitration proceeding. The domestic court seized to appoint the co-arbitrator was located in France and not Switzerland, which the parties had then chosen as the seat of arbitration.

The Supreme Court recently rendered decisions in four arbitration-related cases. The issues under discussion included settlement and the pacta sunt servanda principle, whether an international arbitral award must be reasoned, legal capacity and waiver of a reasoned award.

The Supreme Court recently revisited the question of the impact of the party's bankruptcy on the continuation of arbitration. Restrictions to arbitration contained in foreign law provisions which do not affect the parties' legal capacity are irrelevant to an arbitration in Switzerland.

The Supreme Court recently opted for a flexible and pragmatic interpretation of the New York Convention, confirming Switzerland's reputation as an arbitration-friendly forum. It admitted that in certain circumstances, a party seeking enforcement in Switzerland of an award issued in English may be exempt from producing a certified comprehensive translation of the entire arbitral award into one of the Swiss national languages.

The Supreme Court declined to hear, in a challenge against the final award, arguments related to the constitution of an ad hoc arbitral tribunal that had already been heard by the lower cantonal court in an ancillary proceeding. The Supreme Court considered that the lower cantonal court had already issued a final and binding determination on the constitution of the tribunal and had thus satisfied the judicial review requirement.

For the first time since the Private International Law Act was enacted in 1987, the Supreme Court has vacated an international arbitration award on material public policy grounds. The violation was obvious and thus the annulment of the award is no indication that the Supreme Court intends to be more intrusive into arbitrators' decisions and reasoning, as an appeal court would be.

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Taiwan

The Taiwan courts have confirmed that they will not allow a party unilaterally to thwart the progress of an arbitration by abusing the 'unable-to-elect' provision in an arbitration clause. This provision should be interpreted as applicable only where both parties are unable or unwilling to elect their own respective arbitrator and jointly to elect the presiding arbitrator.

A recent Supreme Court decision suggests that an arbitral award cannot be challenged merely on the grounds of improper application of substantive law or failure to make reference to the specific provisions of substantive law on which the award is based.

As the statutory period for court actions to vacate an arbitral award is brief and non-extendable, a losing party who wishes to have the award vacated and its attorney must consider all possible grounds for vacation and spell them out in the petition from the outset. Any missed grounds cannot be invoked once the 30-day statutory period has elapsed.

The losing party in an arbitration recently challenged the award on the grounds that insufficient reasons were given and the arbitrators had decided the dispute ex aequo et bono (ie, according to what is right and good). The Supreme Court ruled that an award may be challenged only if no reasons at all are given, and found that the arbitrators had applied general principles of law.

Pre-arbitration provisions are often found in government procurement contracts for construction. Non-compliance with these provisions is frequently invoked by government employers who lose the arbitration and seek to have the arbitral award set aside. A recent ruling is one of several Supreme Court judgments to address this issue.

Thailand

The latest development in a long-running and controversial dispute between Thailand's Expressway and Rapid Transit Authority and a local/international joint venture, concerning the construction of a 55-kilometre expressway, is unlikely to be the end of what is increasingly regarded as a test of support for arbitration under Thai public sector contracts.

The Arbitration Institute has revised and reissued its arbitration rules to take account of recent changes in arbitration law. The new rules came into force on May 2 2003. In a related development, the Office of Judicial Affairs has published official English-language translations of the new rules, the Arbitration Act 2002 and the Code of Ethics for Arbitrators.

Turkey

In a recent Court of Appeals decision, the court overruled an arbitration objection based on the Law on the Obligatory Use of Turkish, which stipulates that two Turkish companies should execute their agreements in Turkey in Turkish. Although the intention of the parties to arbitrate their disputes was clear in the agreement, the court ruled that the effect of the law should have been considered.

Under the Code of Civil Procedure, in order to avoid uncertainty, the dispositive sections of court decisions should stand alone, without the need to repeat any statements included in the legal reasoning. The Court of Appeals has ruled that this provision of the code is mandatory. As a result, dispositive sections that give rise to doubt are in breach of the law. The same principle applies to the enforcement of foreign arbitral awards.

Establishment of a globally renowned arbitration centre in Istanbul has long been discussed, particularly in light of the increasing use of arbitration as an alternative dispute resolution mechanism. The recent preparation of a draft bill to create such a centre is a significant and concrete step towards reinforcing Istanbul's status as an international business centre.

The 19th Chamber of the Court of Appeals recently ruled that the enforcement of a foreign arbitral award was subject to progressive court fees, since the award related to the collection of debt. This decision is of great significance, as the Court of Appeals has clearly ruled that the enforcement of a foreign arbitral award is subject to proportional court fees if the award relates to debt collection.

Bilateral investment treaties signed by Turkey primarily provide for two international arbitration mechanisms for dispute resolution, one of which is that governed by the International Centre for Settlement of Investment Disputes (ICSID). However, only certain disputes shall be subject to ICSID jurisdiction. Disputes related to immovables and in rem rights therein are exclusively within the jurisdiction of the Turkish courts.

The Istanbul Chamber of Commerce (ICOC) has recently formed a working group for the purpose of updating its current rules on arbitration, which date from 1979. The new rules are expected to comply with the new Code of Civil Procedure and embody certain concepts of global arbitration rules. With the new rules, the ICOC aims to become a more appealing institution for parties using arbitration.

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Ukraine

It is standard practice for parties to international contracts to agree on the particular law that will apply to the contract. However, as two recent arbitrations show, parties occasionally make a mistake in properly naming the applicable law or include too many conflicting clauses in their contract, which may stymie an arbitral tribunal in deciding which substantive law should be applied.

The New York Convention provides that recognition and enforcement of a foreign arbitral award may be refused at the request of the party against which it is invoked only if that party furnishes proof that it was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings. However simple at first glance, the question of what constitutes 'proper notice' turns out to be less than clear in practice.

Creditors seeking enforcement of arbitral awards for claims against Ukrainian bankrupt companies face difficulties if the award has not been recognised by the courts of general jurisdiction. Such an award is not enforceable in Ukraine and the claim may be denied in bankruptcy proceedings. The courts have suggested their own solution to this problem – unfortunately, not a pro-arbitration one.

Article 52 of the Rules of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry governs the procedure for forwarding an arbitral award to the parties to arbitration proceedings. Recent changes have allowed arbitrators extra time to forward awards to parties; however, there are concerns that extension of the time limits might result in unreasonable delays in the rendering of awards.

The mitigation of damages is a well-known principle in international legal practice. Ukrainian case law and arbitration practice may lack a generally applied approach on the issue, but previous decisions of the International Commercial Arbitration Court at the Chamber of Commerce and Industry provide an indication of how the mitigation rules have been applied.

President Yanukovych has signed state budget legislation which provides for significant compensation payments to foreign investors in relation to arbitral awards rendered under the auspices of the International Centre for Settlement of Investment Disputes (ICSID). The move confirms Ukraine's willingness to honour its commitments under the ICSID Convention.

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United Kingdom

The High Court recently held that the power to grant injunctions in support of arbitration proceedings is not confined to the English courts. The case provides useful guidance as to the circumstances in which parties that have agreed to submit their dispute to arbitration in London might find themselves without recourse to the English courts and instead subject to foreign court proceedings.

Many commercial dispute resolution clauses provide for claims to be submitted to conciliation or mediation before they can be submitted to arbitration or court proceedings. However, these are often only agreements to negotiate in good faith, which are not enforceable under English law. A recent High Court decision highlights the requirements that conciliation or mediation clauses should meet to be upheld by the courts.

The Court of Appeal has enforced an arbitral award that was set aside by the courts in the jurisdiction where the award was made. The case is the latest decision in the longstanding dispute between Yukos and Rosneft which has given rise to numerous arbitral and court proceedings in various jurisdictions following the expropriation of Yukos's oil assets.

The Court of Appeal has upheld the first instance decision in Sulamerica Cia Nacional de Seguros SA v Enesa Engenharia SA. The court found that the law of the arbitration agreement had its closest and most real connection with the seat of the arbitration, not the substantive law governing the underlying insurance policy.

A recent decision has reiterated the importance of the principle of comity towards the courts of "foreign and friendly states" in considering whether to grant anti-suit injunctions. The court was faced with an opaque arbitration clause providing for London as the "venue" of the arbitration, but also referring to the application of the Indian Arbitration and Conciliation Act 1996.

An arbitral tribunal has jurisdiction to grant damages for breach of an arbitration agreement. The application of that principle in the context of EU law was questioned in the latest court application in the long-running West Tankers saga. The English court confirmed that EU law did not circumscribe the arbitral tribunal's jurisdiction to award damages for breach of an arbitration agreement.

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USA

In a significant development for international litigants and practitioners, a New York court recently enforced as a court judgment a $25 million award that had been issued by a tribunal from the Bahrain Chamber for Dispute Resolution. The decision provides a preview of issues that are likely to confront a growing number of courts around the world, as an increasing number of disputes are adjudicated by quasi-judicial bodies.

A US court recently refused to recognise and enforce an arbitral award issued against two entities from the People's Republic of China on the basis that the court lacked personal jurisdiction over those entities. The ruling is significant because it confirms that most US jurisdictions will allow personal jurisdiction defences in actions to enforce foreign arbitral awards under the New York Convention.

In a recent decision the US Court of Appeals for the Eighth Circuit compelled arbitration and upheld a class arbitration waiver in the face of arguments that a federal labour statute rendered that waiver unenforceable. The decision is significant for international arbitration practitioners because it reaffirms US federal courts' trend of favouring the enforceability of arbitration agreements and class arbitration waivers.

A US district court has permitted an applicant to obtain evidence from a third party under Title 28, Section 1782 of the US Code to support claims that the applicant had brought in a North American Free Trade Agreement (NAFTA) arbitration. The ruling represents a developing area of NAFTA practice and demonstrates the increasing importance of 1782 applications in international arbitration.

A federal district court in New York recently sanctioned the losing party's counsel for filing what the court deemed to be a frivolous application to set aside an international arbitral award. The ruling represents another decision in the emerging trend of US federal courts to sanction parties and/or their counsel for asserting improper challenges to arbitral awards.

Recent Supreme Court decisions indicate that unless parties to an arbitration agreement agreed to allow a class arbitration, the parties cannot be required to participate in a class arbitration. However, franchisors have wondered whether they should include a 'no class action' clause in their agreements. A recent decision underscores the continuing importance of including carefully drafted clauses in franchise agreements.

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