Section 34 of the Arbitration and Conciliation Act 1996 sets out the conditions for setting aside an arbitral award. In this context, the term 'arbitral award' has always been understood as an award rendered by the majority members of an arbitral tribunal. However, recent decisions of the Bombay High Court and the Delhi High Court, while setting aside the award of the arbitral tribunal, have upheld the so-called 'minority award', in variance with the act and established precedent.
It is relatively rare for the English courts to overturn awards of arbitral tribunals. However, a recent decision of the Commercial Court did just that, setting aside a London Court of International Arbitration partial award made by a panel of three queen's counsel. The partial award was challenged on the basis that the arbitral tribunal had lacked substantive jurisdiction and the application had been made pursuant to Section 67 of the Arbitration Act 1996.
The National Identity Management Commission recently issued the Mandatory Use of the National Identification Number Regulations 2017, under which "the filing and registration of criminal and civil actions in courts or other arbitration processes" is now included in the list of transactions that require the use of a national identity number. Although this requirement is legitimate, how it will be enforced in private transactions and the effects of non-compliance on such transactions remain unclear.
Two appeal courts recently ruled on two separate cases in which arbitral awards were challenged on the basis that the tribunals had departed from decisions made on issues of merits in procedural orders. Generally, procedural orders are not final and binding and a tribunal is free to amend previously issued procedural orders. However, procedural orders are sometimes used as a tool for making interim decisions on the merits of the case.
In a recently published decision, the Supreme Court set aside an arbitral award on the grounds that the parties had not consented to submit their dispute to arbitration. The decision shows the importance of the distinction between a subjective and objective interpretation. Awards should thus clearly identify for each finding of contractual interpretation whether it stems from subjective or objective interpretation.
The Supreme Court recently ruled that a Dutch court may enforce an annulled arbitral award if, among other things, the local annulment decision is based on grounds other than those set out in Article V(1)(a)-(d) of the New York Convention and which are not internationally recognised, or the annulment decision is irreconcilable with Dutch private international law. This judgment offers important guidance as to the Dutch courts' discretion to enforce annulled awards.
A recent Rzeszow Appellate Court ruling has confirmed that a European account preservation order (EAPO) can be issued by a state court to secure claims which have been submitted by the parties to arbitration. The case concerned a request for arbitration following a lack of fulfilment of contractual obligations. The request was followed by a petition to a regional court requesting that an EAPO be issued against the respondent in the pending arbitration.
The Mediation Act 2017 recently entered into force. The act's objective is to promote mediation as an attractive alternative to court proceedings, in terms of time, cost, resources and the avoidance of acrimony. Although mediation may not be suitable for all disputes, the act provides a platform for parties to resolve their difficulties without commencing litigation where appropriate (albeit certain classes of case are excluded from its scope).
In 2015 the 15th Chamber of the Court of Appeals held that courts cannot grant a preliminary attachment on the ground of a foreign court judgment, unless this judgment had been enforced in Turkey. The court's reasoning was that foreign court judgments and foreign arbitral awards can be executed in Turkey only if and when they are enforced in Turkey. However, a dissenting opinion in this decision stated that courts can grant a preliminary injunction before an enforcement decision has been finalised.
The Nicosia District Court recently issued an order which referred a dispute to arbitration. The order stipulated that the arbitrator should deliver a final decision within nine months. One of the parties applied to the court for an extension of the arbitration procedure. The court rejected the application on the ground that only the arbitrator had the right to apply for such an extension.
A recent Ontario Court of Appeal decision has affirmed the favourable Canadian approach to the enforcement of international arbitration awards under the United Nations Commission on International Trade Law Model Law. The court of appeal's restraint when asked to set aside and refuse to enforce an international arbitral award is consistent with recent cases, which have upheld the narrow circumstances in which courts can do so.
The Federal Court recently held that under Section 42 of the Arbitration Act, judicial intervention is warranted only where the award substantially affects the rights of one or more parties. A perverse, unconscionable and unreasonable award is not grounds to set aside the award under Section 42. Further, according to the court, Section 42 provides no jurisdiction to deal with questions of fact.
Multi-tiered dispute resolution clauses prescribing pre-arbitral steps are common in commercial contracts in order to allow parties to resolve their disputes in a non-adversarial set up, preserve commercial relationships and save costs. Almost all contracts require performance of such pre-arbitral steps as a condition precedent to arbitration, but are they specifically enforceable? In other words, are pre-arbitral steps mandatory or directory in nature?
The Supreme Court recently ruled that the provisions that require arbitrators' details to be included in the award also apply by analogy to tribunal secretaries. Following the judgment, arbitrators should always refer in detail to the particulars of the secretary employed in the arbitration (which is always a best practice) in order to avoid unnecessary complications that may lead to the setting aside of the award.
The Court of Queen's Bench of Alberta recently applied the principle of competence-competence in the context of a parallel litigation and arbitration dispute resolution procedure. As parallel dispute resolution procedures give rise to a complex interplay between the jurisdiction of the courts and arbitral tribunals, the case is an excellent example of the practical application of the principle and can serve as a useful tool for both domestic and international arbitration practitioners.
In a recent case regarding the enforcement of an arbitral award against Kazakhstan, the English court ruled that in light of new evidence that had not been before the tribunal when the award was rendered, the allegations of fraud raised by Kazakhstan should be fully investigated before a view could be taken as to whether the award could be enforced in England. The court confirmed that public policy is a matter for each state to consider, regardless of whether the courts of another country have ruled on the matter.
Parties' ability to choose their arbitrators remains one of the most frequently mentioned advantages of arbitration over litigation. However, this freedom makes sense only if it preserves the overarching duties of arbitrators and judges alike – that is, the duty to be and remain independent and impartial from the parties.
Broadly speaking, the cost of a dispute includes parties' expenses in relation to attorney fees, procedural costs (court or arbitration fees) and additional expenses (eg, transport and food costs). In terms of these costs, on a superficial analysis, arbitration appears costlier than litigation, as the parties must pay arbitrators' fees, while judges are paid by the government of the countries where the dispute occurs. However, on a more careful analysis, it is evident that the inverse conclusion is true.
The Supreme Court recently considered whether proceedings (wrongly) commenced before an Austrian district court to set aside an arbitral award could nevertheless be continued. Notwithstanding the Supreme Court's exclusive jurisdiction regarding the setting aside of arbitral awards, the unusual facts of the case at hand led to the creation of an additional channel of appeals not provided for in the law.
Cases involving allegations against the appointment, impartiality or independence of abitrators are usually complicated and it is difficult to make any firm statements, save for obvious cases of bias. A recent Court of Appeals decision set aside an International Chamber of Commerce award due to the fact that, among other things, one party's rights had allegedly been infringed when the sole arbitrator was selected in the course of the proceedings.