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13 December 2018
The New York Convention and the United Nations Commission on International Trade Law (UNCITRAL) Model Law have the following salient features:
The UNCITRAL Model Law is based on the principle that a party's failure to use an available active remedy to resist the enforcement of an award will not preclude it from using a passive remedy to do so under Article V of the New York Convention.
The choice of remedies principle provides for two types of remedy.
Active remedies may be sought before the supervisory court of the seat of arbitration, which may constitute a challenge of:
As regards the latter, Article V of the New York Convention sets out the grounds for such an award as follows:
Where one of the above grounds applies, Articles V(1)(a) and V(1)(e) of the New York Convention(1)(2) provide that the supervisory court's holding of an arbitral agreement to be invalid or setting aside of an arbitral award will – subject to the discretion of the non-seat state's enforcement court – provide a ground for the latter court to refuse the award's enforcement.(3)
Award debtors may also use passive remedies to resist the recognition and enforcement of an award before the court in the seat or the non-seat state (in accordance with Articles 35 and 36 of the UNCITRAL Model Law) by proving various grounds, as provided for in Article V of the New York Convention.
Under the choice of remedies principle, award debtors may choose both active and passive remedies. Therefore, even if an award debtor does not use or pursue active remedies to challenge a preliminary ruling or set aside an award, it may resist the award's enforcement by passive means.
Passive remedies can be exercised in accordance with Article V of the New York Convention in any non-seat state at the enforcement court's residual discretion in the following circumstances:
For further information on this topic please contact William Leung at William KW Leung & Co by telephone (+852 2810 6199) or email (firstname.lastname@example.org). The William KW Leung & Co website can be accessed at www.jwlw.com.
(1) Under Article V(1)(a) of the New York Convention, the recognition and enforcement of an arbitral award may be refused where "the said agreement is not valid… under the law of the country where the award was made".
(2) Under Article V(1)(e) of the New York Convention, the recognition and enforcement of an arbitral award may be refused where "the award… has been set aside… by a competent authority of the country in which… that award was made".
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