<

THURSDAY OCTOBER 13

Afternoon

Enforcing AwardsProf. Pierre Lalive

Professeur à la Faculté de Droit et àl'Institut des Hautes Etudes Internationales

de l'Université de Genève

\

ENFORCING AWARDS

Résumé of the report of Professor LALlVE

/'<, I

This subject is thankless and difficult for a number of

reasons. We know for example that the overwhelming majority

of awards are recognised and performed voluntarily, so that

enforcement difficulties are exceptions to the rule and may

consequently be considered hardly representative of the

insti tution of arbitration . However, we should not overlook

the interest and topicality of this subj ect which enables

knowledge and understanding of arbitration to be improved.

Both for arbitral award and for the entire arbitrationprocedure the instant when enforcement is called forconstitutes the "momentof truth".

Moreover, the interest presented by this subject has

( )

considerably increased over recent years, with on the one

hand the expansion of international commercial arbitration ,

and on the other the economic recession which has encou~aged

amul tiplication of disputed cases, a' tendency to insist on

procedural points, to appeal against awards and to refuse toperform them.

One of the difficulties of this subject results from its

particularly extensive nature, since it calls for both the

analysis of the main international conventions and the

comparative examination of national statute and case law. It

would not be of great interest here to restate this type of

analysis, which has been made very often by authors and

practitioners. Another difficulty is caused by the confiden­

tial nature of arbitrations, which prevents orie from having

an exact knowledge of the subject matter. In addition one

must beware of hasty, incomplete or biassed generalisations,

which are too frequent in this field.

-2- ''1\

"

General observations

One important preliminary question here is the definition of

the term "arbitral award". this term must be understood in a

broad sense as comprising not only the decisions rendered in

the course of a "jurisdictional" or "contentious" arbi tra­

tion, but likewise decisions rendered during a "free" or

"contractual" arbitration (even if case law and doctrine are

divided on this last point). One other distinction of

undisputable practical importance is to be examined that

which differentiates "foreign" awards from "national" awards

without speaking of a new category of awards, which has

appeared in the course of recent years, "anational" or

"transnational" awards). Finally, in order to have a total

perspecti ve of the subj ect, we also have to consider the

cases of declaratory awards, summary awards, provisional

measures, "arbitral referee", etc.

Among the fundamental ideas that specialists should keep in

mind in approaching the present subject, the following

matters must particularly be recalled : an arbitral award is

not always worthy of being respected and enforced; in

consequence appeals against awards, or the refusal of

enforcement can in certain cases be justified both in the

general interest and in that of a· better quality of ().

, arbitration. In addition, it would be vain and utopian to

hope, or even recommend, total abandonment of control by

national courts.

Appeals against awards

One main consequence of entering into an arbitration

undertaking is that of accepting the award which results. It

is nonetheless true that all or nearly all countries accept

appeals or objections to enforcement two separate but

related forms of "rejection" of an arbitral award.

-3-

With regard to the organisation and conditions for exercising

the means of appeal, the most varied solutions exist side by

side in comparative law. As regards appeals for setting aside

(the most frequent), their grounds originate from two main

systems., the "continental" system of legislative enumeration,

and the "Common Law" system of the general clause, based on

the idea of "misconduct" of the arbitrator. There is a large

degree of unity in comparative law in relation to the

grounds, which can be reduced to three main Ldeas the

absence of a contractual basis for the jurisdiction of the

arbitràtors, procedural irregularities, and the inadmissibi­

lity of the contents of the award.

The diversity of national legislations and the uncertainty

.which results from this (in numerous basic concepts) are to

some extent compensated for by the recent legislative

t.endency to give even greater recognition to the specific

characteristics of international arbitration (a topical

example of which the French Decree of 12 May 1981). Indeed,

it is neither advisable nor reasonable to submit two such

different (although neighbouring) institutions as domestic

and international arbitration to one and the same set of

rules.()

In judicial practicè, international arbitration is without

question favoured and national courts are most often inclined

to judge appeals as inadmissible or unfounded. This attitude

is above all explained by a desire to give effect to the

principle "pacta sunt servanda". Are there still too many

unwarranted and unfounded appeals ? The truth in this respect

seems to be less clear-cut than is often suggested.

Nonetheless, a number of courses should be considered to

improve the situation still further. (Some examples are

greater limitation of the grounds for appeal in international

cases, or restriction of the ability to appeal by means of

rules on jurisdiction of Courts acceptance of the

possibility of waiving any appéal contractually, etc.

-4-

Compulsory enforcement

The uncertain nature of the solutions offered by national

laws constituted the essential reason for the establishment

and success of the international conventions. (This means not

just the New York Convention of 10 June 1958 but also the

many regional conventions on this subject). Despite its gaps

and defects the New York Convention itself does not appear to

require revising for the moment.

One very current concern is that of limiting the immunity

from enforcement of states and public bodies. Event if there

is a general tendency to restrict state immunity from

enforcement, national court decisions once again provide

evidence of a disconcerting number of different approaches to

this subject.

Voluntary performance

As a general rule awards are carried out voluntarily. The

reasons for this way of behaving are nonetheless worth

examining. (These include : - the dissuasive role of the case

law relating to appeals and objections to enforcement,

private "sanctions" provided for in the rules of various

professional organisations, etc.). (

The best guarantee of voluntary performance in undeniably the

quality of the award itself. The classical formula: ''''In

arbitration is as good as the arbitrator" is true but

incomplete. It should be extended to cover the arbitration

institutions and the parties' lawyers. It goes without saying

that all of these must possess the necessary "professional"

qualifications and abilities, but in addition they need to

have a "comparative" approach, and to be very· open-minded

towards judicial pluralism and the diversity

of cultures and socia-political systems.

To be viable for the future, any solution aimed at ensuring

the enforcement of awards, and first of all their quality,

must start with a better "training" of all the participants

in.an international arbitration.

(Translation from the

French original)

Enforcing Arbitral Awards

( General Report

bypierre LALIVE

Conference for the 60th Anniversary

of the Court of Arbitration

of the International Chamber of Commerce

"International Commercial Arbitration

in a Changing World"

, )(Paris: 11th, 12th and 13th October 1983)

TABLE OP CONTENTS

Pages

Introduction

Chapter 1: Some Preliminary Observations 11

Section 1: On the Inevitable and DangerousCharacter of Generalisationsin the Field of Arbitration 11

Section 2: What Arbitral Awards are concerned? 15

(A) IIJurisdictional" Arbitrationand IIFreell (or Contractual)Arbitration 1 5 '

(B) "Poreiqrr'", "Nationalll,IITransnational"Awards 18

(C) Declaratory, Summary, ProvisionalAwards, etc. 21

Section 3: Some Simple Ideas recalled 24

Chapter 2: Appeals against Awards 27

Chapter 3: Assuring the Enforcement of Awards 52

I. Assuring Compulsory Enforcement 52(i) in the absence of an

international convention 52(ii) multilateral conventions 55

II. Assuring Voluntary EnforcemEnt 62(i) private sanctions 64(ii) spontaneous enforcement 65

A) arbitrators; B) institu­tions~ Cl lawyers

Conclusion 76

- 1 -

"ENFORCING ARBITRAL AWARDS"

(Professor Pierre Lalive)

INTRODUCTION

with the enforcement of arbitral awards

and the means of assuring it - we come to the last of

the subjects chosen by the organisers of this Con­

ference, the last logically and chronologically speak­

ing. One may wonder if this subject is not, at the same

time, the last by order of interest and importance, and

if it does not have the doubtful privilege of also

being the most unprofitable, the most tedious and per­

haps the most difficult!

(, )

One must first of all recall that many

arbitral proceedings do not end with an award, but with

an arrangement, sometimes expressed or formulated in an

"award by consent" (in the sense of Article 17 of the

ICC Rules). It is one of the major purposes of arbitra­

tion - an advantage wh ich is often under-est imated - to

favour conciliation (whether with or without the par­

ticipation of the arbitrators). The thorough study of

the respective theses to which the arbitral procedure

compels the parties often lead each of them to better

appreciate its own weak points, to diminish its initial

claims, to better understand the inconveniences, the

unproductive and costly character of a prolonged proce­

dure. - Moreover, it is often easier to accept conces­

sions during the proceedings than before or outside an

arbitration; the perspective of an unfavourable award

- 2 -

plays the role of Damocles's sword. Finally, arbitra­

tion has the general utility (which is also often

upappreciated) of enabling a person to make concessions;

wlithout involving its own responsibility, within its

company or its administration, the.arbitrators carrying

the blame of a unpopular. compromise or decision!

In short, the award is only a part, and

perhaps not the most interesting part, of the vast

field of arbitration.

The well-known fact must also be recalled

that the large majority of awards are recognized and

enforced "spontaneously" - over 90% as far as ICC arbi­

trations are concerned.

Let us note in passing that this high

rate of voluntary enforcement of awards can no doubt

be explained, at least partly, by the credit and confi~

dence placed in institutional arbitration, in particu­

lar that of the Institution whose 60th anniversary we

are celebrating this week. What about the case of non-

institutional arbitrations? We have little information\

in this respect, in the nature of things; how~ver,

nothing allows us to presume that, in the case of ad

hoc arbitrations, the enforcement of awards would give

rise to much more frequent or much greater diffi-

culties.

rf spontaneous enforcement is undoubtedly

the rule in the field of international trade, ,is it

reasonable to study it and thus risk falling into a

sort of superficial legal sociology? Is it reasonable

- 3 -

to concentrate our attention on exceptional situations,

on the small minority of cases where awards do give

rise to difficulties of enforcement, calling for the

intervention of State courts? In doing this, ~o not

jurists fall into the error with which they are often

reproached, that of being interested, in social life

and in the life of the law in particular, in pathologi­

cal situations alone?

l)

Other considerations seem to underline

lack of interest of our subject: when one speaks of

"arbitration", one more often means either its prin­

ciple, or the arbitral proceedings, which tend as a

rule to lead to a decision. What draws the principal,

if not the exclusive, attention of practitioners and

jurists in this field is either the "pre-arbitral"

phase (that is to say the conclusion of the arbitration

undertaking) r or the arbitral phase properly speaking.

By the force of circumstances, one knows less and one

is interested less in the post-arbitral phase, that of

enforcement of the award. And the parties themselves,

in general, scarcely worry about this until after the

award, when the proble~ of enforcement is raised "in

concreto", whereas they would have been well-advised to

think about it earlier, for example at the time of the

drafting of the compromissory clause! 1) As spontaneous

enfo~cernent is, as we have seen, the rule, one can

understand to some extent this attitude of the parties,

an attitude which is favoured by the inexperience of

many jurists in the field of international arbitration.

In a recent study published in the

Mélanges Goldman 2), F. Rigaux writes:

- 4 -

"Il est permis de croire que l'institu­tion arbitrale est dénaturée et, même,perd l'essentiel de son prix si, à laprorédu~e arbitrale, doit succéder uneprocédure ultérieure devant les tribunauxétatiques" .

(Translation) :

"One may think that the nature of thearbitral institution is completelyaltered and even loses the essential ofits value if the arbitral procedure mustbe followed by a subsequent procedurebefore State courts".

The observation is quite right although

perhaps expressed in excessive terms.

In short, the difficulties surrounding

the enforcement of awards and, in particular, compul­sory enforcement, through State constraint, are not

only exceptions, accidents whose importance should notbe overest.Lmated, but they are also not very typical of

the institution of arbitration, of which they would

seem to denote the rare failures.

Let us admit all this and the particular

and rather unproductive character of our subject. Thisbeing conceded, it remains for us, nevertheless, to

justify its inclusion in the programme of this Con­

ference. This can be done, in our submission, by

stressing, first, its general interest for a betterknowledge and understanding of arbitration, and,

second, its particular interest in the context of cur­

rent business trends and practices.

- 5 -

"Assuring the enforcement of awards" does

not mean, or rather does not only mean, preoccupying

oneself with compulsory enforcement, obtaining from

States that they give the necessary assistance to hav­

ing one of the fundamental obligations of all parties

to an arbitrati~n undertaking respected, that of com­

plying with the award. It is also, and perhaps

especially, a question of maintaining and increasing

even more the rate, already high, of voluntary enforce­

ment. Wh ich demands that one examines, be it briefly,

the motives and causes of this attitude, and .the

mechanisms peculiar to its generalisation. Let us

recall, in passing, this fact: "voluntary" or "spon­

taneous" enforcement of awards does not mean entirely

free nor ... enthusiastic compliance!

()

However that may bei it must not be for­

gotten that in the case of arbitral awards just as in

the case of other legal situations, the same phenomenon

may be observer: in the internal legal order, the great

majority of rules of law are respected and followed

spontaneously, without there being a need to resort to

State constraint, and this for various reasons, one of

which, well-known, is the great probability and the

quasi-certainty of the unfortunate consequences (among

which the intervention of State organs) of a possible

refusal to respect the rules.

On the other hand, the cases of refusal

to enforce an award (for example in the form of an

appeal for annulment or an opposition to "exequatur"),

exceptional or "pathological" though they may be, must

allow all practitioners of arbitration to draw useful

- 6 -

lessons, or even to effect self-criticism. If "a

healthy man is an ill man who is unaware of his ill­

ness", a sick man who admits and recognizes his illness

contributes "nolens volens" to the progress of medecine

and of a health policy. The same is true, on the whole,

for arbitration.

If state courts have sometimes annulled

awards or refused to have them enforced, it is surely

in a minority of the cases (they,too concerning a

minority) of refusal of spontaneous enforcement, but -

and this is what interests us here - it is more often

for good reasons: because of serious errors committed

either by the parties or their counsel, in the pre­

arbitral and arbitral phases, or by the arbitrators

themselves. And these accidents deserve all the more

attention since the ones and the others obviously have

an interest in avoiding the "censure" of the judicial

organisms and since, as far as the arbitrators are con­

cerned in particular, the latter must - to use the

wording of Article 26 of the Rules of Arbitration of

the ICC, "make every effort to make sure the award is

enforceable at law".

The pathology of the enforcement of arbi­

tral awards is thus a mirror, sometimes distorting, but

a mirror all the same; and the picture of international

arbitration which it reflects deserves examination by

all practitioners.

In short, the moment of carrying our the

award constitutes, for the ~rbitral award and for arbi­

tration as a whole, the hour of truth or, as our Ameri-

- 7 -

can friends say, "the acid t est :', It is at this moment

that will be best revealed the qualities and defects of

all that has preceded, from the tdme of drafting of the

arbitration clause to tbat of th~ award of the arbitra­

tors, including the time of the chpice of the latter

and of the choice of the lawyers, the place of arbitra­

tion and including the conduct of the proceedings them­

selves.

The interest of our subject cannot thus

be denied, al~ the less so since it seems to have

increased in the last few years. As to the current

practical interest or "ae:tualité'lof the subj.ect, one

can admit, first of all, that it is permanent: the

arbitration undertaking implies that of enforcing the

award to be rendered, and what would arbitration be

worth if the arbitral awards either were not enforced

in a considerable number of cases, or gave rise too

often to discouraging difficulties of enforcement?

()What deserves underlining, more than

these truisms, is the increased practical importance of

the problem today, for two reasons, whieh are sometimes

inter-related:

The first reason is linked to the expan­

sion and extraordinary success of international commer­

cial arbitration. The latter has spread throughout the

entire world~ it has (if I may say so) "become inter­

national". It is no longer, or it is less and less the

apanage or monopoly of parties belonging to the same

geographical, economic or political milieu - which cer-

- 8 -

tain people called, in terms moreover very ambiguous,

arbitration IIbetwee n gentlemenil.Itis today a Itpluri­

cultural" phenomenon, where not only different legalsystems, but feelings, traditions, visions of the world

which are sometimes very varied often come face to

face. This is what has increased its importance and

interest, no doubt, and also its difficulties.

A second reason is due to the economic

recession. The difficulties of all kinds that companieshave to face have, according to many observers, brought

about a certain amount of "crispation" or nervousness,

a tendency towards the multiplication of matters indispute, a refusal of conciliation and, in the case ofarbitration, a certain tendency towards incidents de

procédure, appeals of all kinds and even refusal of

enforcement.

This seems to be the case, for example,

for international contracts relating to certain rawmaterials whose price is subject to important and rapid

fluctuations. One has known cases where a party had adirect and important interest in not performing the

contract, sometimes to avoid becoming bankrupt. Let ussuppose that the litigation is submitted to arbitration

and that - in the absence of a clause d'adaptation or ahardship clause - the arbitrator can do nothing more

than confirm non-performance and condamner the default­ing debtor. In the economic conjuncture envisaged in

our example, this debtor risks refusing to enforce theaward, just as he has refused to perform the contract

and for the same reasons, in the hope that he will thus

obtain considerable concessions from the creditor.

- 9 -

On this point as on others, this Confer­

ence should allow useful exchanges of views and

experiences, enabling us to confirm or refute the ten­

dency mentioned above.

To conclude, one should admit the inter­

est and importance of the subject which I have been

asked to deal with. After all this takes nothing away,

after all, from its rather unproductive character and

its intrinsic difficulty.

The subject "the enforcement of awards"

is indeed particularly vast since it requires, or would

require, not only the analysis of the principal inter­

national conventions, like that of New York of 1958 or

of Geneva of 1961, but also the comparative study of

numerous national laws and case laws (whose com-

plexity, uncertainties and -ev en confusion have often

been underlined by the commentators). A tentative syn­

thesis would obviously overstep the bounds of the

present Reporti a rapid glance at this vast field would

hardly be in keeping with this celebration, and would

risk entailing too many abusive simplifications or

generalisations, beyond what is tolerable in this kind

of exercice!

Let us add to this difficulty that which

results from the fact that the subject of the present

Report has already be2n explored over and over again,

as can be seen for example from the considerable amount

of studies devoted to the 1958 New York Convention

alone, due in particular to such authorised authors as

- 10 -,

Pieter Sanders, Giorgio Bernini, Peter Schlosser, and

these are just a few; but I would like to mention in

particular the admirable book published in 1982 by René

David entitled "L'arbitrage dans le commerce inter­

national" - a book which no-one interested in arbitra­

tion, in one way or another, can afford to ignore.

After so many learned studies and after

the substantial reports and commentaries which have

been presented up to now at this 60th anniversary Con­

ference - all of which, at least indirectly, touch on

the enforcement of awards, what can the last rapporteur

still do? Certainly not attempt to renew a thoroughly

well-known subject, nor claim to enrich the knowledge

of a meeting of specialists and practitioners so well-

experienced in arbitration.

within the limits of the present Report,

I propose, more simply, and without professing to be

complete, to suggest a few thoughts on various aspects

of the enforcement of arbitral awards, whether this

enforcement be "compulsory" or "voluntary", two ele­

ments which are connected and even complementary. The

choice of these aspects will no doubt be subjective, or

arbitrary; the task has been made easier for me by the

certainty of being defended by thr~e particularly qual­

ified commentators who, coming from different horizons,

will, if necessary, fill the gaps and rectify any lack

of balance in my paper.

- 11 -

Chapter 1: Some Preliminary Observations

Ser::tion1: On the Inevitable and Dangerous Character

of Generalisations ~n the Field of

Arbitration

The great English poet and painter

William Blake said somewhere: "to generalise is to be

an idiot! ,i - a remark which in itself (be it said in

passing) constitutes a rather good example of a

generalisation! This reminder on prudence is useful, no

doubt, to every rapporteur entrusted with present Lnq a

vast field in a few pages, but it is especially neces­

sary especially for anyone who has to deal with a sub­

ject comparatively, covering many national legal

systems and, even more than elsewhere, in the field of

international arbitration.

)

The confidential character of arbitra­

tions, together with their multiplicity and variety,

constitutes a tremendous obstacle to a true knowledge

of the subject. We must be aware of the fact that our

experience is necessarily limited and our data partia~.

This emphasizes the privileged position

of the few arbitration institutions which, like the ICC

Court, do function on a transnational or plurinational

level, and have also been able to accumulate a treasure

of experiences and an incomparable "know-how", which,

thanks to them, benefit generations of practitioners,

as far as possible, through seminars, colloquia or con­

ferences or through studies such as those accomplished,

- 12 -

for example with the assistance of Professor

B5ckstiegel, by the Institute of International Business

Law and Practice. This illustrates the importance of

periodical publications such as that of the ICCA, the

Yearbook Commercial Arbitration, c~eated and directed

by P. Sanders.

In spite of these achievements and

efforts, we are a long way, by the force of circum­

stances, from being sufficiently informed about the

practice and problems of international arbitration -

for example as far as the enforcement of awards is con­

cerned - and it remains very delicate and risky to

generalise from the few illustrations and elements in

our possession, either by personal experience, or from

other sources'.One knows the anecdote of the English

traveller of the XVI11th century who, when arriving for

the first time on French soil in Calais, saw a red­

haired lady passing by on the quay and noted imme-

diately, and seriously, in his note-book: "French

ladies are red-haired!".

Many of the declarations one hears in

colloquia or one reads in professional journals in the

field of arbitration make one think unavoidably of this

kind of "reasoning". Thus, I have read or heard myself,

in the last few years, affirmations such as: "the stan­

dards of impartiality of English and American arbitra­

tors are higher than those of Continental arbitrators"!

_ "Swiss Courts admit annulment appeals very easily!" -

"ICC arbitrators are too well paid!" and "The arbitra­

tors designated by a party outside Europe always vote

- 13 -

for the thesis of the party who chose them"j, and such

similar nonsense.

( )

One must say too that, nmong the affirma­

tions or information which are exchanged or distributed

today in the numerous "journées d'études", colloquia,

symposia,_etc. which flourish almost everywhere on sub­

jects of international trade, a considerable amount

deserve being considered not only as "incomplete", but

also as partial and selfish. In the intense competition

which has developed these last few years among regional

or national arbitration centres, it happens that the

tendentious criticism accompanies, more or Le-ssdis­

creetly, the address "pro domo sua"! How then can one

distinguish, in the mass of contradictory information

and generalisations, that which deserves credit from

that -which partake of pure publicity campaigns? To such

and such a practitioner from Monomotapa who praises the

virtues of his system and of his arbitration institu­

tions, the incomparable merits of a recent local law

and the facilities it offers, one is tempted to cite

the reply given by Moli~re's Sganarelle to his neigh­

bour, a ieweller: "You are a goldsmith, Mr. Josse, and

your advice reveals a man who is desirous of selling

his goodsj".

Among these difficulties related to

information, it is appropriate to point out an aspect

which is under-estimated by many commentators. Even

when an arbitral award is published, in its entirety or

especially in part, it is not easy, on this basis

alone, to get a fair and accurate idea about the liti­

gation which has just been solved. Without knowing tne

- 14 -

whole context, and at least the written memorials of

the parties, how can one obtain an exact idea of an

award? The latter, in any case, is often a compromise,

in which what; is not said can sometimes be as important

as that which is formulated, and ir which what is said

cannot really be judged unless one knows the entire

facts and arguments of the parties? Experience shows

that very important arbitral awards, which have been

published, have often given rise to misunderstandings

or errors of interpretation on the part of most eminent

jurists 3)

Moreover, those who really know the liti­

gation in question, whether lawyers or arbitrators are

bound by secrecy and can therefore scarcely contribute,

with certain exceptions, to a full clarification of the

problems raised.

These remarks, valid as they are for

arbitral awards, are also valid, so we believe,

"mutatis mutandis" (although no doubt to a lesser

degree), for judicial decisions related to appeals or

opposition à exécution. And the risks of errors of

interpretation appear proportional, as often in com­

parative law, to the distance (geographic and cultural)

which separates the commentator from the decision ..

- 15 -

Section 2: What Arbitral Awards are concerned?

To follow a correct methad, it is appro=

priate to define one's subject and to say first of all

what one means here by "arbitral award" (a notion which

is not defined, for example, in the 1958 New York Con­

v e n t i.o n ) 4)

(A) The question must be raised, in particu-

lar, whether the object of our study is only "jurisdic­

tional" arbitration, that which the narrow perspective

of jurists often considers alone, or whether_it is

appropriate to consider also the so-called "free" or

"contractual" arbitration (in well-known forms such as

Italian "irrituale" arbitration, common law arbitration

or the German "SchiedsgutachtenfI). This classical

question remains of g~eat interest today, just as the

questions, which are closely related, of the adaptation

of contracts,

arbitrations.

"amiable.composition" or "delocalised"

( ) One knows that case law is uncertain on

such questions and that the doctrine is divided, par­

ticularly as to the well-known problem which shall not

be discussed here), whether an Italian "Ioda irrituale"

or another "free" award (Iike the Ripert-P anchaud award

in the SEEE vi Yugoslavia case) is covered or protected

by the New York Convention (of 10th June 1958) on the

recognition and enforcement of foreign arbitral awards.

The Court of Cassation of Italy, in a

judgement of 18th September 1978, replied in the

- 16 -

affirmative. In the opposite sense, the German BGH, on

8th October 1981 (in the Comitas case) replied in thenegative, without admitting the intermediary and in

fact contestable solution of the OLG of Hambu.:g (of7th February 1980 - refusing enforcement but accepting

recognition). Be it said in passing, the practical use

of such a ,negative position is difficult to perceive

when .theGerman courts have in the same case admittedsubsidiary submissions of the claimant aiming at having

the defendant declared by the judgement as bound by the

award 5)

The textual interpretation of the New

York Convention, taking into account its preparatorywork or its differences and resemblances with the 1927

Geneva Convention, has been largely discussed. For ourpart,·we are much more convinced by the arguments of

the Italian Court or of authors like Mauro Ferrante,R. David and others, than by the motives of the German

BGH and the arguments of P. Sanders or A. van den Berg.

The text of the Convention does not seem to us to

exclude a wide conception of arbitral awards and, as

Ferrante writes 6):

"The fact that an award is not directlyenforceable in a national system of lawin no way prevents that award from beingenforced by virtue of an internationalconvention".

Be this as it may,' this is not the main

point. The key to the problem must be found in the

needs of international trade today, such as they arerevealed in practice; it is not in the text, moreover

- 17 -

silent, of an international convention drafted a quar­

ter of a century ago, and still less in the defini­

tions, techniques and concepts peculiar to the various

internal laws. If there is a field where what Rabel

called autonomous characterization in private inter­

national law, a "qualification" founded on comparative

law, is justified, it is that of international arbitra­

tion, where a true transnational, or even universal,

material, private international law is in the process

of being created today 7)

)

Little does it matter finally whether the

award of "amiable composition" or the decision of the

arbitrator which adapts or arranges contractual rela­

tions is considered, in such and such a legal system

(as in English law), as being outside arbitration

prope~. To be sure, observes R..David, the procedural

laws and national laws on recognition and enforcement

"have not taken into consideration this hypothesis" but

it is not because of the "contractual" or "free"

character of the arbitration or of the award, it is

simply "because the decision of the arbitrator is not

capable of being recognized and enforced in the manner

provided by the procedural laws" 8)

For practical reasons, due for example to

the particularities of a given national system in the

field of recognition and enforcement of foreign awards,

a party can have an interest, moreover, in preferring

"contractual II arbitration and, to simplify things, in

not requesting that it be considered as the equivalent

of a foreign judgement. It is clear that, in such a

case, since the award is nothing other than a contract,

- 18 -

its enforcement does not raise any particular problems

but simply (taking into account too, of course, the

rules of international jurisdiction) well-known

questions of the private international law of con­

tracts 9)

In short, on this point as on others, a

global perspective, a comparative approach is necessary

for a good understanding of the problems under scru­

tiny, a perspective which is detaçhed from national

historical contingencies, from legislative or jurispru­

dential uncertainties and doctrinal subtleties (a good

example of which is the eternal and vain debate between

the "jurisdictional", "contractual" and "mixed" theses

on the "nature" of arbitration).

(B) In the same line of thought, one must

raise another distinction which is peculiar to arbitra­

tions of the classical "contentious" kind 10), a dis­

tinction which is well-known, if not always clearly

understood, between "foreign" awards and "national"

awards. One realizes immediately that this distinction

can have a practical importance both in the field of

annulment appeals and in that of the methods of

enforcement and of the obstacles to compulsory enforce-

ment.

The question seems to resolve itself

automatically for the partisans of the territorial cri­

terion, of the theory of the "seat", of the assimila­

tion of an award rendered abroad with a foreign judge­

ment - a conception which is long out of date, at least

since the 1958 New york Convention, and which is hardly

- 19 -

tenable today 11). The awards rendered on the territory

of the State in question (it being a question of

appeals or compulsory enforcement) would thus be

"national", even when the litigation has no conne ct i.on

with the said State and when all the parties are

foreign to and non-resident in that State. Such would

be the cr~terion, simple and even simplistic, still in

force in certain countries, for example Sweden 12). On. .the other hand, all awards rendered outside the terri­

tory would be "foreig~", even when rendered by virtue

of the law of the latter or between its nationals.

\ )

It is hardly possible today, taking into

account the international conventions of the last quar­

ter of a century and recent legislative texts, to abide

by this territorial criterion of the "nationality" of

awards. Let us refer here to the attractive formula of

Reni David 13) for whom the question, confused by the

proliferation of dogmatic doctrinal writings and by the

obscurity of the rather rare judicial decisions, is in

fact "relatively simple". It can be summed up in one

principle, accompanied by two exceptions: the basic

criterion is the place where the award is rendered (one

can recognize here the territorial principle, which has

been retained only in part by the New York Convention,

since a contracting State has the right not to consider

as "national" an award rendered on its territory),

subject to two possib~e exceptions.

The first "exception", known in certain

internal laws, retains the criterion of the law applied

to the arbitration; thus, for a State, an award ren­

dered abroad but on the basis of its law (and vice

- 20 -

versa) would be national; one finds here, once again,

to a certain extent, the idea, mentioned above,

expressed in Article I (1) in fine of the New York Con­

vention. According to a second exception, which does

not deserve our attention here, th~ criterion would be

the existence, or non-existence, of jurisdiction

(obviously not exclusive!) of the national courts for

the litigation which has been submitted to arbitration,

whatever the place of the latter. An award rendered

abroad according to a foreign law of arbitration would

thus be "national" in so much as the dispute would have

been within the jurisdiction of the national courts, in

the absence of an arbitral clause.

In connection with these questions, one

cannot dispense with wondering too, briefly, whether

"anat.ionalll awards exist (or rather "transnational"

more than "foreign"awards) or to examine what decisions

come under the New York Convention (and what are the

conditions of recognition according to this Conven-

tion 14)

In this connection, we shall limit our­

selves to expressing here the opinion that recent

developments confirm the possibility of "anat ionaI' or

entirely "denationalisedll arbitral awards, that is to

say of awards for which the procedure depends wholly on

the agreement of the parties without any reference to a

national law. Article 11 of the ICC Arbitration Rules

would seem to lead to the same opinion and, more

clearly, after the famous Götaverken judgement of the

Court of Paris, the new French Code of Civil Procedure

- 21 -

(Article 1475) in the version modified by the Decree of

1981 15)

( C) Third distinction or third attempt to

delimit our subject: concerning "the enforcement of

awards", should one also consider declaratory awards,

summary awards, the enforcement of provisional measures,.

or "référé arbitral", etc.? We shall limit ourselves,

here too, to some indications only.

"Declaratory" awards do not give rise to

"enforcement" properly speaking. However, it seems use­

f uâ, or even necessary, to consider them too "AI? order

to get a complete view of the subject; in other words,

it is appropr iate to take the term "enforcement" in its

widest sense, and not in the narrow sense of material

enforcement. And this for 'two reasons at least:

First of all, the cases are not rare in

which the parties to a litigation merely request a

"declaration" from the arbitrators, a statement of the

exact legal situation. By doing this, they do not think

of asking merely for a sort of legal advice. Implicitly

at least (or by internal agreements which are ~ot

brought to the knowledge of the arbitrators), the par­

ties have undertaken to draw from the declaratory award

the consequences which result from it, that is to say

to respect and to "enforce" the decision 16)

A second reason for considering decla­

ratory awards is that, in certain cases, they take the

form of a partial award (in which the arbitrators make

a decision, for example, in a first stage, on the prin-

- 22 -

ciple of responsibility, before reaching a final award

(condemnation) in a second phase (if it takes place,

failing an agreement between the p,arties - an agreement

which the declaratory award of ten'favours).

In the various hypotheses of "declara­

tory" awards, in short, it seems that one must always

preoccupy oneself with "assuring the enforcement of

awards" (in the wide sense of the word enforcement) and

that the arbitrators, in particular, cannot totally

disregard (whether they consider themselves bound or

not, in this case, by Article 26 of the ICC Rules) pre­

occupations concerning th~ future respect of their

decision 17)

After the case of declaratory awards, one

must mention that of the enforcement of arbitral deci­

sions other than final, such as decisions rendered pro­

visionally, in a "référé arbitral" or in the form of a

"summary award".

The question of provisional measures is

most often discussed from the point of view of the

intervention of the judicial authoritie~ to which, in

various countries (as in Germany or in Switzerland),

the law reserves the monopoly of provisional measures,

at least in internal arbitration 18)

In countries whose law does not prohibit

arbitrators from pronouncing provisional measures, the

question should be examined of the extent of their

powers in that respect and, in particular, of the

enforcement of these provisional measures. This is a

- 23 -

question which seems to deserve more attention than it

has received up to now.

Since the ICC Court Df Arbitration has

drafted rules on the "référé arbitral", it would be

interestipg to discuss here the enforcement of awards

made ,within the framework of this particular procedure.

The question is new and it is probable that practi-)

tioners have scarcely had the opportunity to see it

raised before now. One may think that the present

structure of national legislations (in the field of

provisional measures, and for example concerning the

distribution of jurisdictions within the organisation

of Courts), linked with the frequent absence of dis­

tinction between internal arbitration and international

arbitration, creates, or would create, serious obsta­

cles to the enforcement, in many countries, of provi­

sional measures ordered abroad in the form of an "arbi­

tral award".

)Finally, it could be useful to envisage,

generally, the problems of enforcement to which interim

or summary arbitral decisions may give rise. The com­

plexity of certain international litigations and the

inevitable slowness of proceedings can justify, always

more, partial or "interlocutory" awards liable to

enforcement. By way of analogy, let us mention here the

judicial decisions of an interlocutory character which

grant the claimant, before any final d~cision, an

uncontested, or not seriously contestable, part of his

claim.

- 24 -

It seems that it is this power of the

English High Court of Justice - to render summary

judgements - which inspired the authors of the recent

Rules (of 1983) of the Institution of Civil Engineers

for arbitration in matters of construction. Article 14

of these Rules 19), under the title of "Summary

Awards", provi~es in particular that:

"The arbitrator may at any time make asummary award and for this purpose shallhave the power to award payment by oneparty to another of a sum representing areasonable portion of the final netamount which in his opinion that party islikely to be ordered to pay after deter­mination of all the issues in the arbi­tration and after taking into account anydefence or counterclaim upon which theother party may be entitled to rely..."(Rule 14.1).

It wi11 be interesting to observe the

application of these new Rules and the fate reserved,

in case of challenge before the courts, to such "sum-

mary awards II •

Section 3: Some Simple Ideas Recalled

To conclude this chapter, it seems

advisable to the rapporteur to formulate - for his per­

sonal use even more than for that of the participants

of this Conference - a wa~ning against preconceived

ideas in arbitration.

Perhaps it is neither superfluous nor

scandalous to recall here, so to speak lIinlimine

- 25 -

litis~, some very simple ideas (some will say sim­

plistic) I ideas that specialists sometimes risk losing

sight of, at least for a time.

(a) The first idea is that arbitra~ion, it has often

been said, is not a panacea; it is not an aim in

itself but a means to an end - one of the most

innocuous means to prevent,conciliate and/or end a

litigation of international trade.

(b) The second idea is that an arbitral award is not

always worthy of being respected and enforced. No

more than there is "sanctity of contracts~ (accord­

ing to the ambiguous expression which is a

favourite of certain American jurists) is there

"sanctity of awards". The result is that appeals

against awards and the refusal of enforcement can,

in certain cases, be justified, not only for the

needs of the case, but also in the general interest

of arbitration and that of a better quality of

awards.

) (c) Finally, it is certainly desirable for States to

grant (as they do on the whole) a favourable treat­

ment to international arbitration and, in particu­

lar, to arbitral awards; this taking into account

the needs and conditions of international trade, In

the interests even of the international community.

But it would be vain and utopic to hope or to

recommend States to abandon all control by their

courts.

- 26 -

Having made these general observations,

we are now going to evoke, in successive chapters, cer­

tain questions raised on the one hand by the means of

"appeal" (in the broad sense) and, on the other I by the

compulsory enforcement of awards and by the means of

opposing such enforcement and, last but not least, the

voluntary ,or spontaneous enforcement of awards.

- 27 -

Chapter 2 Appeals against Awards

A first obstacle to the enforcement of

awards is, of course, the exercise_of the faculty to

appeal which is conferred, often imperatively, by the

national laws, even though the parties have not pro­

vided for appeal (for example in the form of appeal to

a second arbitral authority) or have renounced it

expressly. A consequence of the arbitration undertaking

is no doubt, besides the obligation to arbitrate, that?

of accepting the award to be rendered, that is to say

of abstaining either from appealing against it, or from

opposing its enforcement.

)

In present practice, and in particular in

Engli£h-speaking countries, arbitral clauses often go

further than simply mentioning, as usual, that the

award will be "final and without appeal": they add, for

example, that the parties undertake to enforce it in

good faith and without delay, and often state, further­

more, that they waive their right to any means of

appeal which they are allowed to waive.

Under the title "finality and enforce­

ability of the award", Article 24 of the ICC Rules,

after having stipulated that "the arbitral award shall

be final", continues (para. 2):

"By submitting the dispute to arbitrationby the ICC, the parties shall be deemedto have undertaken to carry out theresulting award without delay and to havewaived their right to any form of appeal

- 28 -

insofar as such waiver can validly bemade".

There is a close connection between the

question of the means of appeal an? that of opposition

to the enforcement of awards. What one can call, using

a global term, the "rejection" of the award often has

the same causes (psychological or legal), whether it is

a question of appealing against the award or of oppos­

ing .the enforcernent.

Nevertheless, differences exist, whether

it is a question of grounds to be invoked, or of proce­

dure, or of legal regime of these two forms of rejec­

tion. As for the grounds, if they are the same to a

large extent, they are not necessarily identical; Swiss

judge~ents, for example 20) have stated that the legal

list of grounds for annulment could not be completed by

grounds drawn from Article V of the New York Conven­

tion, taking into account the object of the latter Con­

vention.

As to the procedure, the differences are

considerable, in the nature of things, as far as judi­

cial jurisdiction is concerned for example, not to for­

get the final result of the appeal or of the opposition

to enforcement: it is perfectly possible, indeed, for a

foreign award which is not annulled in its "country of

origin" (a term which is as convenient as ambiguous) to

be refused enforcement in a country X, and to be

granted it in a country Y or Z (according to the

effect, of course, of the international conventions in

- 29 -

question or of the national laws in presence), the con­

trary, moreover, not being inconceivable.

Let us recall too, in passing, that if

the problems of enforcement concer..nall the awards

(including, as we have seen, those which are made in

"f ree" or,"purely contractual" arbitrations ), the means

of appeal can, by definition, only affect decisions

made in a "contentious" arbitration.

Finally, in this connection also, one

cannot escape the delicate distinction between

IInational" awards and IIforeign", or even "inter­

national" or "transnational", awards.

I )

It will only be a question here of

appeals made or liable to be made against awards said

to be "national", whether it be because the award has

been rendered in the country of the judge seized with

the appeal or because it has been made abroad by virtue

of the law of the country of the judge. This is the

"normal" hypothesis, and even the only hypothesis pos­

sible in many countries, for reasons of judicial juris­

diction in particular. Suppose these last diffic~lties

resolved, it is not certain that the judgement which

would admit the appeal would be recognized abroad (for

example in the country in which the award has been ren­

dered), whence a "lame" legal situation (a situation

whose private international law certainly knows

examples but which it is not appropriate to multi-

ply) 21)

- 30 -

One can wonder, in these conditions, what

interest there could be in allowing the losing party to

appeal against the award "abroad" (that is to say

outside the courtry where it has been rendered or whose

law has been applied to the arbitration). It may be,

however, that such an interest exists, for example in

the count7y of residence of the losing party, where the

latter has its property, and where it wishes to prevent

requests for enforcement 22)

One cannot exclude, as a rule 23), the

utility of an appeal affecting in certain cases foreign

awards, in particular in the sense of awards rendered

abroad. The hypothesis is not theoretical, as is shown,

for example, in the French Decree of 12th May, 1981, a

chapter of which concerns, precisely, "the means of

appea-l against arbitral awards rendered abroad (as well

as those which have been rendered in the field of

international arbitration).

One must admit too, on the level of the

"desirable law", yet another justification for appeals

aiming at the annulment of awards rendered abroad i this

in the case in which the means of opposition to recog­

nition and the ultra-limited character of the control

of the judge of "ext2quatur" (taking into account the

too limited character, ex hypothesi, of appeals in the

country of origin) would result in preventing the mini­

mum degree of State control which appears indis­

pensable. One can see by that, once again, the "close

relationship between the two questions of the means of

appeal and of opposition to enforcement. Without enter­

ing further into detail, one may conclude that, on the

- 31 -

ground of the "desirable law", an ideal solution is

conceivable only within the.framework of a "global"

international convention, which would deal at the same

time with judicial ju:::-isdictionand with the reasons

for appeal and for opposition to enforcement.

Be this though it may, in positive law,

it seems that the majority of legislations allow

appeals only in the country "of origin" of the award.

We shall find this problem again later on in relation

to "exclusion agreements" or agreements to renounce

possibilities of appeal.

Let us point out, finally, the very

special system, which could be judged audacious, pro­

vided by the Moscow Convention of 26th May, 1972, a

Convention by which the CAEM countries have, on the one

hand, eliminated all differences between nat ional

awards and foreign awards as far as enforcement is con­

cerned (but not the means of appeal) and, on the other

hand, have eliminated all differences between arbitral

awards and judgements, whence a total assimilation

between arbitral award, even "foreign", and internal

judgement. This very interesting solution appears com­

prehensible and even "normal" within the framework of

an "integrated" regional system, in view of its partic­

ular organisation of foreign trade and the existence of

permanent arbitral tribunals which are nearer, in

various respects, to State tribunals than classical

arbitration 24)

As for the organisation and conditions of

exercise of the means of appeal, the most varied solu-

- 32 -

tions co-exist in comparative law, and it is obviously

not possible to give ~ere even a sketchy outline of

such solutions. Is the regime of appeals against awards

modelled after that of appeals against judgements? Is

it specific to arbitral awards? Do~s it provide for the

reformation of the award by the judge or (which seems

preferable a priori, but is not always possible) for

the referring of the case to the ~rbitrator? What are

the time-limits and their point of departure? What tri­

bunals are competent, and at what degree or level of

jurisdiction? Is the appeal judgement itself liable to

one or several appeals? What are the consequences of

the admission of the appeal against an award? Such are

some of the many questions raised in this field and

which we shall not evoke here.

Leaving aside the request for interpreta­

tion (which have been dealt with by President

B. Goldman in his Report) and the request for

"revision" (in spite of its interest, which far outruns

the number of cases, more or less minute, in which it

is used), we shall concentrate our attention on the

annulment appeals, on their motives from the point of

view of comparative legislation and, especially, on

judicial practice and the possible means of improving

the situation in this field 25)

(1) Let usb egin withan elementary statement: all the

legal systems, in fact, possess means of appeal

(one of the rare exceptions being that of awards

rendered by the Arbitral Commission of the Chamber

of Industry and Commerce of the USSR 26). The fact,

- 33 -

it has been said, is normal and inevitable

(although the arbitral award is essentially an act

of private law).

(2) Second remark: one should distinguish, in good

theory, between the cases of annulment or rather

~annulability~, on the one hand, and the cases of

absolute nullity or ipso iure, on the other (a

distinction unknown, I believe, in French law). The

characteristic effect of absolute nullity (known in

many legislations, for example in the case of the

absence of an arbitration agreement or also - which

seems more arguable - where the agreement--violates

public order) is that it can be invoked at all

times and even outside all procedures; thus

(according to P. Schlosser) in Sweden, in Greece

and in the English or Dutch case law.

The idea of nullity ipso iure may seem difficult to

criticise on the ground of general principles, and

it has hardly been studied in the field of arbitra­

tIon: butits possible consequences give cause for

alarm. It is true that, according to Schlosser,

~the practical importance of absolute nullities is

not very great anywhere in the field of arbitra­

tion". Nevertheless, two recent experiences prompt

me to think that the idea could supply certain par­

ties with new means of obstruction and dilatory

tactics. In this connection, we have seen several

attempts to use, before any annulment proceedings,

so-called "declaratory actions" (in German "Fest-

steLlunq sklaqen'") aimed at obtaining from the judge

that he declares either the non-existence or theI

- 34 -

absolute nullity of an award (or even, before this

award, the non-existenc~ of the arbitration under­

taking). Are such actions admissible, when there

exists a system of annulment appeals?

(3) Third remark: as for the grounds of annulment

appea~s, one finds in comparative law two principal

systems: (a) that, which one could call "conti­

nental", of legislative and limitative enumeration,

of motives of appeal and (b) that, peculiar to the

Common law, of the general clause, founded not on

the existence of an objective motive, but on a

"~ubjective" conception based on the idea of mis­

conduct of the arbitrator. It seems that both

methods lead to broadly equivalent results, at

least in judicial practice. It may be that dif­

ferences do exist between these methods, if not

from the point of view of legal certainty, at least

from the point of view of the psychological effect,

stimulating or dissuasive, of a given legislation.

(4) Fourth remark: whatever the great diversity of

texts and formulae may be, it is gratifying to

note, on the basis for example of Peter Schlosser's

analysis, what he calls lithegreat degree of,unity

presented everywhere by the institution" of the

annulment appeal, and the "great resemblance" in

legal enumerations of the annulment motives. These

motives may be broken down into three principal

ideas: (1) the absence of a conventional basis to

the jurisdiction of the arbi,trators, (2) the irreg­

ularities of the arbitral procedure (in the wide

sense, including the constitution of the arbitral

- 35 -

tribunal) and (3) the inadmissibility of the con­

tents of the award 27) (concerning this last cate­

gory of annulment motives, one immediately thinks

of violation of public policy as a reason for refu­

sal of enforcement - cf. Article V, of the New York

Convention) .

The substantial unity of national laws, in this

respect, seems particularly clear as far as respect

of fundamental principles of the procedure is con­

cerned, it being a question especially of the

guarantee of the integrity and impartiality of the

arbitrators, of the principle of equality of the

parties and of the respect of the rights of

defence.

( )

One will note with interest, after P. Schlosser,

that there are many more differences from one

country to another concerning the appeals aimed at

controlling the conventional basis of the arbitra~

torls jurisdiction. However, there is said to

exist, according to our learned colleague, an

interesting resemblance between the Anglo-American

system of injunction and the Swiss system (the

equivalent of which Schlosser regrets does not

exist in other systems of the European Continent)

of immediate appeals against the "incidental" or

interlocutory decision of the arbitrator on his own

jurisdiction 28)

Another field in which the comparative analysis

does reveal some diversity between national legis­

lations is that of non~respect, by the arbitrators,

- 36 -

of the parties' agreements on the arbitral proce­

dure or of their wrong interpretation. According to

Schlosser 29), such a hypothesis would allow the

appeal for misconduct of the arbitrator in England

and, in Germany and Sweden, wo.uId belong to the

principle of the entire control of the arbitral

procedure by the judge, contrary to the system of,the Swiss Concordat which intentionally "limits the

hypotheses of annulment". In the Netherlands and in

Belgium, according to the French tradition, this

control of the procedure is said to be effected

through the formulae of appeals ("action ultra

vires") or arbitral decision based on the arbitra­

tor's excess of jurisdiction "outside the terms of

the arbitration agreement". - In short, this area

would seem to be one of the exceptions to the

general harmony existing between national laws as

to the grounds of appeal.

(5) Fifth remark: the fact is well-known but must con-'

stantly be underlined: the great majority of legis­

lations (contrary to what one can sometimes

read 30)) and disregarding recent statutes, make no

distinction between internal arbitration and

"international" arbitration, that is to say, in the

case of awards rendered in the country of the judge

seized with an appeal, between the awards rendered

in internal matters, on the one hand, and "inter­

national" awards, on the other (according to the

usual formal criteria in private international law,

i.e. the difference in residence of the parties or,

according to the more material criterion of French

- 37 -

case law, that of involvement of the "interests of

international trade"). The consequences of this

fact are considerable, and sometimes under­

estimated: this ignorance of the specificity of

international arbitration results in the applica­

tion to the latter of the multiple grounds of

appe al often provided for with respect to "inter­

nal" awards, which in principle do deserve a strict

control sincè it is a question, within the same

legal order, of a private activity, competing with

the normal activity of the judicial authorities.

Let us now turn, after these fi¥~ general

observations, to present practice, to its tendencies

and to the improvements that could be worthy of recom­

mendation.

On the subject of present "practice", I

should like first of all to make two observations on

national legislations.

[ ) First observation: our rapid comparative

glance at national legislations, and the encouraging

statements of a Peter Schlosser (on the degree of har­

mony that can be revealed by an attentive analysis)

should not lead us to overoptimistic conclusions: the

diversity remains great, at least in the form and

vocabulary of existing rules. The general picture

appears complex or even confused. The practitioner of

international trade, easily misled already by his own

national regulations, will also be a fortiori confused

when he attempts to understand a foreign legislation,

- 38 -

in order to judge, for example, the chances of an

appeal against an award.

To that may be added the uncertainty of

numerous basic concepts: what is an "action ultra

vires" or excess of jurisdiction of the arbitrator, or

a "manifestly arbitrary" award or a "gross violation of

elementary principles of law and equity"? What is an

"award bad on its face" (a "key notion of English law")

and what is meant by the American notion of "evident

partiality" of the arbitrator 31)? Legal insecurity

appears considerable in the systems which, like English·

law, take their inspiration from the "subjectivist con­

ception", mentioned above(which is based on the vague

concept of "misconduct"); and it is even more consid­

erable where the judge enjoys important discretionary

powers. On the other hand, the "civilian" technique of. -;..' limitative lists of motives of appeal, according to the

"objectivist" conception, gives an impression, perhaps

false, of greater security, and it is possible that, by

the very number of grounds indicated, it urges rather

than discourages one to resort to appeal against an

award.

My second observation relates to the

recent legislative movement and its tendency, which

must be welcome, to recognize more and more the speci­

ficity -of international arbitration.

Indeed, modern legislations, under the

impulse of doctrine, case law, international conven­

tions and the practice of arbitral institutions, recog-

- 39 -

nize more and more that it is neither timely nor rea­

sonable to submit to one and the same regulation two

institutions which are so different, although related,

such as internal arbitration and int~rnational arbitra­

tion (would it be reasonable, for example, to impose on

international air tra~sport the legal system of inter­

nal road traffic?).

Among the examples of this legislative

tendency, we may mention, briefly, the preliminary

draft of the Swiss Federal Law of 30th June 1978 (at

present pending before Parliament, in the form of a

Governmental Draft of 10th November '1982), the English

Act of 1979, the French Decree of 12th May 1981 and the

recent Italian Decree (of 9th February 1983) modifying

the Italian Code of Civil Procedure of 1942. Other

draf~s are being prepared in many other countries.

The most interesting of these texts, and

the most innovating, seems to be the French Decree of

12th May, 1981 concerning international arbitration; it

has already received many authorized commentaries so

that it is not necessary to say more here. As for the

English Arbitration Act of 1979, it constitutes a

remarkable progress in several respects, in particular

on the questiDn of appeal~. However, one may regret

what René David (who can certainly not be suspected of

antipathy or lack of understanding vis-à-vis English

lawl) calls its "rather complex regulations" which are

of "baffling subtlety" 32)

- 40 -

If one must express satisfaction at this

legislative tendency towards separate regulation (in

whole or in part) specifically adapted to international

arbitration, one must not for all that forget its

limits, and the fact that its motivations are sometimes

questionable. This tendency is to be seen within the

context o~ a general movement towards the expansion of

inter:national arbitration, towards the somewhat impro­

vised or anarchic creation of new arbitration centres,

in short towards more or less open competition 33),

which is sometimes more national or nationalist in its

spirit than international.

Let us pass on to judicial practice. Our

purpose to not to attempt to review it on a comparative

level, which would be an undertaking even more

unmea-sured and adventurous than concerning national

legislations, It is rather to mention, first of all,

the indisputable favour enjoyed by international arbi­

tration with the majority of judges. One has often

pointed out the restrictive interpretation of the

motives of appeal which is found in case law, and the

unquestionable fact that the great majority of annul­

ment requests are rejected by the courts.

The examples are many, but there is no

room here to mention them. In a certain way, they

reveal the judicial attitude even more than the deci­

sions (on the enforcement of awards) rendered by virtue

of an international convention which, like that of New

York of 1958, clearly aims at favouring recognition and

at restricting the grounds of appeal.

- 41 -

When pronouncing judgement on annulment

of awards, courts are more often than not strongly

inclined to judge the appeal inadmissible for some rea­

son or other or to declare it unfounded. In the case

law with which I am most familiar,_Swiss case law,

numerous judgements remind the plaintiff, in no uncer­

tain terms, that an annulment request is not an

"appeal" (in the ordinary narrow sense of the term) and

that, in choosing arbitration, the parties have neces­

sarily assumed risks, knowingly and willingly 34)! The

same attitude is reflected in the judgements of various

countries which base themselves on Article 24 para. 2

of the ICC Rules, at least among other reasons, to

reject the request foi annulment 35)

)• i

This reference to Article 24 is interest­

ing a.lso because it brings to light a pers istent

feature in the judicial attitude or psychology, which

cannot be reduced to the simple or simplistic formula

of "favor arbitrationis" 36). Certainly, many judges

(particularly in countries where they are allowed to be

arbitrators and thus have an opportunity to understand

the institution from within) are conscious of the

advantages of international arbitration, conscious of

the fact that it answers the needs of international

trade and does not represent any real competition for

the judicial authorities, all the less so since a heavy

overload of judicial work of judges is a widespread

phenomenon. But it is not certain that the determining

reason for this judicial attitude is, as has been said,

a special favour or sympathy for arbitration.

- 42 -

When called upon to apply an inter­

nat.ional convention like that of New York, a judge

draws inspiration from the object and finality of the

treaty, according to usual criteria of Lntsr-pretat i.on,As for appeals against awards, on& may think that the

decisions which. are called (a little hastily) "favour­

able" to ~rbitration - because they reject appeals

against the awards - may be explained more simply:

judges intend to give effect to the principle "pacta

sunt servanda", to oblige the parties to accept the

consequences of·the arbitration undert akinq i, and to

discourage dilatory manoeuvres and the bad faith of

debtors who are reluctant to carry out their obliga-

tions.

This being said, there are of course some

annulment requests which have been crowned with suc­

cess; the judgements wh i ch admit them, in certain cases

at least, can be considered too as "favourable" to

arbitration - in that they contribute, by their educa­

tive and preventive effect, to improving the quality of

awards and the future conduct of the practitioners of

arbitration! Arbitrators, any more than judges, are no\

infallible - it is hardly necessary to say so - and the

existence of State "appeals", whether they aim at

annulment or at "revision", is virtually inevitable.

They even exist in a system as special as that of

ICSID, established by the 1965 Washington Convention of

the World Bank (Articles 51 and 52).

On the basis of the above observation,

some people might be astonished: how can one conciliate

what has just been said with the criticism, frequently

- 43 -

heard in international meetings, levelled at the too

great "facility" with which the judges of countries X,

y or Z are said to entertain appeals against arbitral

awa rds?

One must here, I repeat, beware of hasty

or biased generalisations, and take into account a cer­

tain number of factors:

1 • Just as it would be dangerous and

unrealistic to renounce all control of the enforcement

of awards, it would be equally so to renounce all

appeals whatsoever. Moreover, what would be gained on

the one side in a "liberal" sense would risk being lost

on the other. It would be inopportune and unrealistic,

in particular, to envisage, for arbitral awards, the

equivalent of the "Gretna Greens" of the past in the

matter of international marriage or of the "Meccas of

divorce", such as Reno, Haiti or Chihuaha!

r

3. We have seen that it is very difficult

from outside to get a clear and accurate picture of an

arbitration case and, to a lesser perhaps but not

negligible extent, of the judicial decisions relating

to it. As for the reactions, in this respect, of the

parties or their lawyers, it may probably be assumed

that, most often, a lawyer against whom the arbitrator

has decided will be favourable to the possibility of

wide possibilities to appeal against awards, whereas,

conversely, he who has won the case tends to regard

such appeals as abusive! One of Beaumarchais's charac­

ters says: "one only has twenty-four hours at the Law

Courts to curse one's judges" (and, I will add, one's

- 44 -

arbitrators!); one has twenty or thirty days or more,

according to the cases, to appeal against an award or

to ~ppeal against the decision on appeal. And one has

a Id.fe-time to criticise, in conferences of colloquia,either the abuse of appeals, or their excessive accept­

ance by judges, or even the tendency of Courts to

reject all appeals systematically!

"

In short, reality appears more varied

than is often contended. If a surficiently thorough and

wide investigation could be made, it would perhaps

bring us surprises concerning the expectations andforecasts or the parties to an arbitration clause. Cer­

tainly, by accepting the latter, the parties haveundertaken to accept also an award the contents of

which they would disagree with. But they have notrenounced their rights and claims by signing the arbi­

tration clause. They wanted no doubt a final and rela~tively rapid decision, but have not accepted in advance

an award other than fair and correct; they have notcommitted themselves in advance to accept and carry out

any kind or award, rendered in any kind of procedure.At the time of accepting ICC arbitration and provisions, '

such as that of Article 24 para. 2 of the Rules; cer­tain parties are perhaps far from being against the

existence, as a sort of reinsuranc~, of rights andgrounds of appeal which it is legally impossible to

waive!

Does it roIlow that" aIl is for the best.

in the best possible world"? Certainly not! There

exist, first of all, just as in the field or appeal ofjudicial decisions, abusive appeals (against final

- 45 -

awards as against interim decisions made by arbitra­

tors). This is not a major problem, as courts have ade­

quate means of dealing with abuse and bad faith in mat­

ters of procedure. What is more preoccupying is th~

exercise, unjustified but not frankly abusive, of the

multiple means of appeal offered by the legislative

arsenal of the majority of countries. That the immense

majo~ity of these appeals are finally rejected changes

nothing in the fact that a precious amount of time

will have been lost (taking into account, also and

above all, a phenomenon completely foreign to arbitra­

tion, that of the "surcharge" of the judicial system

and its considerable delays in a large number-of coun­

tries). The possibilities thus offered to the losing

party cannot be denied, of an obstruction which is

incompatible with the initial will of the parties and

with the needs of international trade, and it is to be

feared, in these days of economic recession, that for

the reasons pointed out in our introduction, these pos­

sibilities may tempt an increasing number of tradesmen.

)

Let us therefore review - to conclude

th is ehapter - the var iou s me ans of wh ich one can th ink

to limit this danger.

1 • The first means is obviously le9islativ~

and results from what has already been said: it is

unreasonable merely to transpose to appeals against

international arbitration awards the motives and annul­

ment procedures which have been thought out and enacted

for internal arbitration 37). It is necessary to

further limit motives of appeal on the international

level and to reduce them, as much as possible, to a few

- 46 -

simple notions amounting to the three general themes

shown in the comparative analysis mentioned above 38)

so as to draw the grounds of annulment nearer the

grounds authorizing the refusal to enforce an foreign

award under international conventions such as those of

New York of 1958 and Geneva of 1961 39)

But it is easy to speak of "reducing the

motives of appeal to simple notions", and much less

easy to formulate then in a legislation (and still

less, perhaps, in an international convention if one

takes into account the actual working conditions of

international codification) 40). Will one recommend,

for example, to limit the motives of appeal to

questions of law alone - as is done in the English

Arbitration Act of 1979, Sections 1 (2 and 4)7 The

soLuti on seems tempting and simple; but one comes to

doubt it if one thinks of the old and delicate problem

of distinguishing "fact" and "law" r of the often vague

frontiers between these fields, which have led certain

statutes or judicial decisions, influenced by practical

needs, to assimilate to violations of the law (in the

field of appeals precisely, at least against judge­

ments), the case of affirmations of fact which are

manifestly contrary to the documents filed in the case.

2 • A second means would consist in limiting

the possibilities of 2ppeal through rules on jurisdic­

tion (which Article IX no. 1 of the Geneva Convention

does indirectly, in a certain way). One finds here

again the delicate distinction between "national" award

and "foreign" award. One could admit, similarly to the

judgement of the Court of Paris in the Götaverken

- 47 -

case 41), that the courts of the country where the

award has been rendered declare the appeal inadmissible

if the litigation has no other contact with the country

than the place, chosen for reasons of mere practical

convenience, of the arbitration.

3. A third process is that of the conven-

tional waiver of the right to any appeal, an idea

accepted since 1977 by the preliminary draft of Swiss

Federal Law on private international law (and which the

Draft of the'Federal Government, in Article 178, has

somewhat mitigated, by allowing renunciation only by

foreign parties and only after the constitution of the

arbitral tribunal). Similarly, mention must be made of

the excellent provision of the English Arbitration Act

of 1979, Section 3.4 - for international arbitrations.

4. On the procedural level, various other

I )

means, more or less related, also deserve to be

envisaged, including that of preliminary authorization

to appeal. Thus the Arbitration Act of 1979 (Section 1,

Subsection 4) subjects this authorization to the condi­

tion that the High Court considers that:

"Having regard to all the circumstances,the determination of the question of lawconcerned could substantially affect therights of one or more of the parties tothe arbitration agreement; "

Moreover, the same rule provides that the

Court can subject the authorization to such conditions

as it judges appropriate (such as, presumably, the pay-

- 48 -

ment of a guarantee or the partial enforcement of the

award).

In this same connection, the refusal of

any suspensive effect of the request for annulment

seems apt, in principle, to limit the temptation to

appeal. Ip this sense, Article 38 of the Swiss

Concordat on Arbitration provides that:

"Le recours n'a pas d'effet suspensif.L'autorité judiciaire [compétente) peuttoutefois lui accorder cet effet si unedes parties le demande".

(Translation):

The request for annulment has no sus­pensive effect. The competent Court mayhowever grant this effect upon request byone of the parties". . .

The exercise of dilatory appeal should be

sanctioned (and it is already in certain cases, butperhaps not sufficiently), by means of higher legalcosts, order to pay the costs of the other party, etc.It also happens that, going further, the courts order

the plaintiff, at the request of its opposing party, topay damages for the prejudice caused by the appeal 42)

5 • .On the level of judicial organisation,

certain solutions, existing in various countries,should perhaps be generalised: thus the rule whichobliges a plaintiff to take all annulment appeals auto­

matically before a higher jurisdiction, or which

excludes any appeal against the decisions of suchjurisdiction. This Court should also be authorized or

- 49 -

encouraged to decide on annulment appeals by way of

summary proceedings. Finally, it could be desirable for

specialised judges, having the experience of matters of

international trade a~d in rarticblar of international

arbitration, to compose thE jurisdiction of appeal -

which is, moreover, the case in many countries.

6. It is too early to examine here what the

Draft Model Law on International Arbitration which is

being prepared by CNUDCI/UNCITRAL will be. The Working

Group entruste~ with the draft is still to hold several

meetings and a new preliminary draft will be discussed

publicly next year at the Interim Congress of the ICCA

in Lausanne (from 9th to 12th May, 1984).

However, three provisional observations

seems possible in the circumstances.

l _)

(a) The Draft contains provisions on appeals concerning

the annulment of arbitral awards (Articles 40 and

41), provisions which do not precede, but follow,

those (Articles 37-39) related to recognition and

enforcement. They take into account, in spite of

the reserve of numerous alternative .solutions, the

system 0 f the 1958 New York Convention (f0 rex ampIe

as to the insufficiency of the strictly "terri­

torial" approach and as to the faculty of the par­

ties to submit the arbitration procedure to a law

other than that of the place of arbitration 43)

(b) Generally speaking, the drafts known to date reveal

the serious and thorough work accomplished by the

- 50 -

"Working Group'! and the Secretariat of UNCITRAL,

which contrasts fortunately with the way in which

certain other international organisations sometimes

venture to discuss questions of arbitration 44)

If one were to limit oneself to reading the very

texts of the draft provisions envisaged, one could

of course find many weaknesses in them; these

should not give rise to undue worry, since the

notes of the Secretariat suggest almost always

(with the discretion of style peculiar to this

kind of document) appropriate remedies or improve-

ments.

(c) Third observation: the specialists and practi­

tioners of international arbitration should take a

close interest in the outcome of the work of

UNCITRAL and, especially, should be aware of the

traditional and deeply-rooted reluctance of States

to accept modific~tions and restrictions to their

internal laws.

The case of annulment grounds is signifi­

cant: the proposal (yet not very revolutionary) to

limit the annulment motives provided by the "rnodeI Law "

or the motives of refusal of recognition enumerated in

Article V (1-2) of the New York Convention has raised

many doubts and counter-proposals, whose aim seems to

add new appeal grounds!

All those who have had the experience of

the negotiation of international conventions of this

kind will note, without surprise, the deep hostility of

- 51 -

States towards the unification of law and be aware of

the risks inherent in all attempts of international

codification. We do not wish to deny the interest and

even the utility of the majority of these attempts (at

least by their indirect consequences, e.g. on the

mutual education. of the participants), but we must

recognize the tendency of most international assemblies

to come to an agreement only on the level of the

"smallest common denominator". One must therefore face

the danger that the adoption of a "model law on inter­

national commercial arbitration", however seriously

prepared it may be, may finally be more harmful than

useful. The adoption of such a model law, while it may

constitute a progress for some of the States which have

no specific legislation in this field, would indeed by

deplorable if 1t were to represent a regression for the

others and slow down developments desired by the

operators of international trade.

- 52 -

Chapter 3: Assuring the Enforcement of Awards

I. Assur ing Compulsory Enforcement

Since it is absolutely out of the

question to review in a few pages a subject both vast

and complex, and on the comparative level, the reader

will forgive, it is hoped, the partial, fragmentary

character of the following observations.

In the absence of an international con­

vention on the recognition and enforcement of "foreign"

(or, more exactly, "non-national") awards, the question

depends on national laws, the comparative analysis of

which reveals the extraordinary diversity, the compli­

cation; the multiplicity of methods and techniques of

solutions, and many confusions and uncertainties.

If one leaves aside the case of awards

considered as purely "contractual" 45), one notes in

this field the use of two different approaches, that of

assimilation to a foreign judgement (with the incon­

veniences it carries, including "exequatur" in the

country of origin) and that of the assimilation, more

or less complete, to a "national" arbitral award 46).

Let us also mention the system, traditional in coun­

tries of Common law, of ordinary civil actions aimed at

obtaining the confirmation of the award and its "con­

version" into a judgement (a situation which seems near

to the case, mentioned above, of the "free" or "con­

tractual" award)~ in such a case, the so-called doc­

trine of the extinction by absorption (merger) of the

- 53 -

award into a judgement has given rise to misunderstand­

ings and well-known difficulties 47)

Among the many questions which are

raised, let us mention that of the .nature of the

foreign "award", its obligatory or enforceable

character abroad, the notion of "autorit~ de la chose

jugée" ("res judicata") (a concept unknown in Common

Law and organized in several ways in civil law coun­

tries), the exact o.qject of the "exequatur" granted to

an award already confirmed abroad, the difficulties

peculiar to awards rendered "par öéfaut" or "ex parte",

the duration of the enforceable character of an arbi­

tral award 48l, the many grounds of "opposition to

exequatur", the law applicable to the arbitral proce­

dure, the consequences of a refusal of enforcement 49)

( .I

This rapid list, however incomplete it

may be, iilustrates the vastness of the subject and its

complexity SOl. The extraordinarily complicated and

uncertain character of the solutions given by national

laws, solutions which are often unfavourable to arbi­

tration, has been the prime aDd decisive cause of the

elaboration and success of international conventions on

the subject!

It would be exaggerated and unfair, how­

ever, to ignore or minimise the existence of certain

national jurisprudential solutions which are "open" to

the recognition and enforcement of foreign awards. In

various countries, courts had reached favourable solu­

tions, in a spirit of international cooperation

(inspired or not by old conventions such as that of

- 54 -

Geneva of 1927), in p~rticular by giving a resolutely

restrictive interpretation of the objection of public

policy (or "Ordre public") and by refusing to consider

the difference of political ~nd social conceptions

between the two countries in question as a pertinent

factor. Such is for example, as far as we know, the

position in Socialist countries 51): the fact that the

foreign award origi~ates from a State having a social

system quite different from the system of the country

called upon to recognize a foreign award does not con­

stitute an obstacle to enforcement.

In the same line of thought, one can men­

tion the very firm case law of the Swiss Federal Tribu­

nal which, for more than a quarter of a century (and

contrary to the case law, in internal matters, relative

to awards of arbitral tribunals of professional asso­

ciations) liberally admits the peculiar structure of

the arbitration institutions of Eastern European coun­

tries and in particular the system of lists of arbitra­

tors comprising only persons having the same nation­

ality and domicile as the seat of the arbitration

institution 52). According to G. Bernini 53), it could

be otherwise in certain Socialist countries which

refuse "exequatur" when the foreign'award represents or

contains "the infringement of the principles of

legality or of the principles of social intercourse in

the .. People's Republic" (a phrase which appears dan­

gerously va~t and recalls the words "principles of pub­

lic law" which were added, in old conventions, to those

of "ordre public"). The liberal attitude is, according

to various authors, in conformity with the intentions

which, in the Declaration of Helsinki, inspired the

- 55 -

reference to arbitration as a peaceful mean~ of

eliminating disputes between nations 54)

Let us now discuss international (multi­

lateral) conventions on the recogni..tion and enforcement

of awards .

On these conventions, and particularly on

the New York Convention of 10th June 1958, one is

tempted to note that "everything has been said, and the

contrary of everything" - so that there is little to be

added! It suffices to refer the rare practitioners who

are unaware of them to the abundant doctrine on the

subject and to the periodical reports on case law

which, in particular, the "Yearbook Commercial Arbitra­

t.Lon" gives us.

( )

Let us observe, first of all, in passing,

that arbitration specialists would have an interest in

not concentrating their attention merely on the New

York Convention, but also in studying regional conven­

tions, such as the European Convention on International

Commercial Arbitration of Geneva, of 21st April,

1961 55) (which, astonishingly enough, does not deal,

even by reference to that of New York, with the

enforcement of awards) or the various regional conven­

tions of Latin America 56), the Convention of the Arab

League on the Enforcement of Decisions, of 14th Septem­

ber, 1952 57) and the Convention, mentioned above, of

Moscow of 26th May, 1972 on the settlement by arbitra-1

tion of civil law disputes resulting from economic,

scientific and technical cooperation.

- 56 -

On the New York Convention, we shall

limit ourselves here to three observations:

(1) The first one, which is entirely devoid of origin­

ality, will be to affirm the co_nsiderable progress

made by this Convention, especially by its new dis­

tribution (contrary to that of the 1927 Geneva Con­

vention) of the roles between the claimant and the

defendant in matters of recognition, and by its

more marked confirmation of the international

character of awards and of the autonomy of the par­

ties. No doubt its text, a work of compromise, goes

less far - and one can regret this - than the ICC's

proposal of 1953 submitted to the Economic and

Social Council of UNO under the title "On the

Recognition and Enforcement of International Arbi­

tral Awa r'ds" 58). No doubt too its text is not a

masterpiece of coherence and is not always clear~

but in what international convention on such

questions could one expect to find this, taking

into account the conditions of their nègotiation

and drafting 59)?

(2) The second observation, which cannot be passed over

in silence, relates to the gaps and shortcomings of

the said Convention. One shortcoming, if it is one,

is due to the large possibilities offered with

respect to refusal of recognition and, in particu­

lar, lies in the vague reference (of Article V.2)

to public policy (one should at least have speci­

fied "international") and to the grounds of "non­

arbitrability "according to the law of the country"

called upon to recognize (terms which do not take

- 57 -

into account the dimensions of private inter­

national law on the question). Moreover, the Con­

vention has a limited object, and, for example,

does not deal with the means of appeal against

awards, a question left to the .conceptions of ~ach

State on the law applicable to arbitration.

Finally, mention must at least be made of the very

interesting proposals of the Afro-Asian Consulta­

tive Legal Committee 60) suggesting to improve the

Convention on two important points: the faculty of

the parties to establish an arbitral procedure

independent from a nat ional law, and the exclusion

of State immunities for the participants to inter-

'national commercial arbitration.

( )

(3) And this leads us to our third and final observa­

tion: do these imperfections justify a revision or

amendment of the New York Convention? The question

has been raised during these last few years, by

various organisations like UNCITRAL and the ICCA.

With excellent specialists such as H. Strohbach and

A. van den Berg 61), we are convinced that, accord­

ing to a classical phrase, "it is urgent to wait".

Thanks to an enlightened case law, the Convention

seems to function well and there are considerable

risks that a conference on revision, according to

the more or less uncontrollable dynamics of work in

an assembly, might lead to jeopardizing past

improvements without real compensation.

- 58 -

We cannot better conclude than by quoting Heinz

Strohbach 62):

"These legal and polit.ical considerationsmust not be allowed to divert attentionfrom the fact that the present legalsituation is unsatisfactory. There isstill no solution for the disparitybetween the steady process of inter­nationalisation in arbitration on the onehand, and, on the other hand, the con­tinuing submission to the national lawsof individual countries, which are, inpart, truly parochial".

Finally, it is necessary to say a few

words about the question, of great interest today, of

immunity of enforcement of States and public enter­

prises-, and in particular about the Washington Conven­

tion of 18th March, 1965, known as the World Bank or

ICSID Convention, from the narrow point of view of the

enforcement of awards (while taking care not to

encroach upon the domain of another rapporteur,

Professor Böckstiegel).

The fact that the question is of great

practical interest today is sùfficiently shown by the

number of cases brought before the courts of various

countries, by the many attempts to obtain attachments

of assets, and by the political or doctrinal discus­

sions of the last few years. Without mentioning old or

too special cases like that of the SEEE vi Yugoslavia,

I shall mention as they come the famous case Liamco­

Libya (and its judicial repercussions in France,

Switzerland, the United States of America and Sweden),

- 59 -

the cases Benvenuti-Congo, Eurodif-Iran, and the no

less famous case Ipitr3de-Nigeria 63)

These cases, and many others, give us a

general picture which is frustratingly heterogeneous

and confusing. Sometimes judges consider that the arbi­

tration undertaking implies a waiver to immunity of

jurisdiction but not to that of enforcement, or that a

waiver to the la tter rema ins revocable e , Sometimes they

reject immunity of enforcement in principle but subject

its effects to various exceptions and conditions; some­

times they base themselves on the criterion of the

nature of the activity which has given rise to arbitra­

tion, sometimes on that of the destination of funds

which are the object of an attachment request; and

sometimes they refuse to accept jurisdiction by invok­

ing either that the case has no contact with the

"forum" or the "Act of State Doctrine". There is a

mosaic of solutions which reveal above all the uncer­

tainty of contemporary international law and the

timidity of courts in cases having a political connota­

tion.

\ )

True it is that the general tendency is

to restrict even the immunity of enforcement of the

State, in conformity with the needs of international

trade and with the phrase (due, I believe, to Lord

Wilberforce) "once a trader, always a trader!. But one

can easily understand, too, that courts cannot act

totally freely, outside all control of the Executive,

in procedures of compulsory enforcement apt to involve

or affect the normal functioning of foreign public ser­

vices and to jeopardize relations between States 64)

- 60 -

The serious difficulties in the enforce­

ment of awards, in cases where a State or public enter­

prise is concerned, must not of course alter the

general perspective. In arbitration between States or

public enterprises, on the one hand, and private enter­

prises on the other, it is not rare for the State to be

the claimant or, whatever the latter's procedural posi­

tion may be, for the arbitral award to decide in its

favour (and even the State may experience certain dif­

ficulties in obtaining enforcement 65) but these diffi­

culties should easily be surmounted). It also happens,

when the State loses, that it accepts and enforces the

award voluntarily or, which is not rare, that it pre­

fers a discreet transaction - to which the perspective

of a judicial procedure and the publicity resulting

from it are not always foreign.

To conclude our remarks on this aspect of

the general problem of enforcement, I should like to

say a few words, first on the 1958 New York Convention,

then on the 1965 Washington Convention.

The exception of immunity of enforcement

of awards, within the framework of the New York Conven­

tion, .does not seem to have particularly drawn the

attention of the commentators. In his excellent mono­

graph, van den Berg evokes in just a few lines (p. 282)

and seems doubtful about the applicability of the Con­

vention to arbitral awards rendered against a State or

a public entity 66). This opinion seems questionable,

all the more so since the Convention nowhere makes an

exception for this kind of arbitration and, in Arti-

- 61 -

cle 1-1, simply refers to arbitral awards "arising out

of differences between persons, whether physical or

legal" 67), with no other explanation or restriction.

j

If one admits, with DS, that the New York

Convention is applicable in this kind of case, immunity

of enforcement could be invoked only on the basis of

Article V para. 2b of the Convention relative to public

policy. Now this notion cannot be interpreted entirely·

freely by the case law of a Contracting State; it must

be·interpreted restrictively and in conformity with the

finality of the Convention. If contemporary public

international law did oblige States - which is not the

case in our opinion - to grant other States immunity of

enforcement in all circumstances, even for cases "iure

gestionis" and the majority of cases of "international

trade", one could admit that the judge of ~ State party

to the New York Convention may and even must grant

immunity of enforcement. Seeing on the contrary that

States, in the present state of the development of

international law, seem to enjoy great freedom in this

field, a very restrictive position (just as that of the

Court of Appeal of Svea-Stockholm of 18th June, 1980 in

the Liamco case 68)) seems to assert itself by virtue

of the New York Convention.

Finally, we shall recall that the ICSID

Convention, which represents the great progress that we

know of in this field of international arbitration, has

been justifiably prudent in not dealing with the deli­

cate question of immunity of enforcement of ICSID

awards, a question which is left to the appreciation of

the various internal laws 69). This may perhaps be

- 62 -

regretted. However, in a recent article 70), Georges R.

Delaume asserts \..;ith force that this weakness is more

apparent than real, and is compensated for, in the

system of the Convention, by the cbligation of publ c

international law, which binds the State to enforce the

award as well as by the revival, in this case, of

diplomatic protection. One can hardly disagree with

this conclu sion.

II. 'Assuring Va luntary Enforcemeçt

At first sight, the phrase may seem para­

doxical: what need, what interest can there be in

"assuring" a "voluntary" enforcement of awards?

The reply, or rather the replies are sim­

ple: at the beginning of this Report, it was underlined

that the voluntary respect of awards was the rule,

which is confirmed approximately nine times out of ten.

It is useful to ascertain the motivations of this

behaviour, in order to make sure that the same causes

produce the same effects and - why not? - to try to

improve things even more in the future. After all, it

would be rash to believe that "voluntary" enforcement

of arbitral awards is always a proof of satisfaction, a

sign favourable to the institution. This stands to

reason for the loser, who has perhaps foregone appeal­

ing or opposing enforcement merely for the sake of

peace, for fear of the slowness and costs of a judicial

procedure. As for the winning party, it may be that at

the end of the arbitration, it will say "never again!" I

because of the mixed feelings the experience has left

it.

- 63 -

As a matter of fact, arbitral tribunals,

from th is po int of vi ew, are in no bet ter pos ition than

State courts. The observation is common: he who has to

do with justice (be it public or private) rarely has a

good recollection of it - somewhat-like the patient

leaving hospital, even cured. A litigation, just like;

an illness, even if their outcome is favourable, can no

doubt constitute a useful experience; they rarely pro­

cure great satisfaction!

\For all these reasons, and however high

the statistics of voluntary enforcement may be, they do

not exempt us from examining this phenomenon and from

constantly seeking, here too, possible progress.

)

Let us first of all recall once again

this ~ruism that so-called "voluntary" enforcement can

have many causes and is not always "spontaneous". A

first cause - which illustrates the narrow relationship

with the above and shows the utility of a "global"

approach of the subject - is of course the existence of

a national legislation or an international convention

favourable to arbitration, and the dissuasive role of

case law in the field of appeals or opposition to

enforcement of awards. Fear of the policeman is the

beginning of wisdom!

This brings us to evoking the role of

"private sanctions" which may be established by con­

tract or by rulei of various professional organisa­

tions, such as the arbitral institutions of certain

chambers of commerce or stock exchanges for raw

materials (examples: GAFTA and FOSFA arbitrations).

- 64 -

This recognition of the preventive role

of public or private sanctions, i.e. of organised

social pressure, must not lead us to forget or under­

estimate the paramount influence ~f psychological fac­

tors such as good faith and honesty in business,

anxiety to respect one's undertakings and preserve

one's reputation, etc.

It is in this context that one must

situate sanctions like the publication of the arbitral

award or of the fact of its unenforcement, the threat

of which is provided by a number of rules or by-laws of

professional associations 71). Independently from

agreements of mutual assistance for the enforcement of

awards (agreements that certain commercial organisa­

tions in various branches have concluded between each

other), one must mention, among the "corporative means"

used, the prohibition to resort in the future to arbi­

tration administered by the institution in question or

- a more refined and original solution - the faculty

given to a defendant to refuse arbitration initiated by

a party having previously refused to enforce an award

of that institution. Finally, one should mention the

ultimate sanction, which is the exclusion from the pro­

fessional association, close to a boycott. This rapid

enumeration of corporate sanctions - which are not

always and necessarily efficient, particularly in an

climate of recession and keen economic competition -

suffices to bring to light both their importance and

the doubts that may be formulated on their lawfulness.

- 65 -

)

Finally, a "private sanction" which

naturally comes to mind is the penal clause, which

would be provided by the arbitration rules or stipu­

lated in the contract by the parties. This me~ns is not

currently used in practice 72), which can easily be

understood: parties are often reluctant, when conclud­

ing a contract, to provide for possible litigations and

stipulate arbitral clauses; it would be even more dif-,

ficult for them at that time to secure themselves

expressly against their possible respective bad

faith 73) 1

The various institutional or purely pri­

vate procedures, which have just been mentioned and

which tend to assure enforcement of awards could in

fact .beconsidered as depending less on "voluntary"

enforcement than on "compulsory" enforcement. But

jurists have got into the habit of seeing constraint

only in the form of State, and essentially national

coercion - a little like, since the nineteenth century,

they tend to see Law only in .t.heform of national laws.

This narrow and confined view is maintained and

favoured by the programmes used in Law schools and uni-

.versities allover the world and its detrimental

effects can be felt, in particular, in the field of

international arbitration 74)

Let us turn now to spontaneous enforce­

ment or voluntary enforcement strictly speaking, that

is to say to the essential point, and let us first

recall this old fact: the best guarantee for enforce­

ment is, quite simply, the quality of the award.

- 66 -

Studies and congresses on arbitration

have rec~lled over and over again the phrase "An arbi­

tration is worth what the arbitrator is worth!" It

expresses an undeniable but partia"l truth. Such are the

two aspects which will now be discussed concluding this

Report.

(A) Arbitrators

(1) The arbitrators first of all. Their quality, and

thus their choice, is of course a decisive factor,

but which is far from being the only one. Contrary

to the State judge, who is conscious (sometimes too

much) of having behind him the power of the State,

the arbitrator know~ that his decision will be

accepted above allan account of the intrinsic

value of the motives, the clearness and good sense

of the operative part. He will no doubt be anxious

to make sure - according td the excellent formula

of Article 26 of the ICC Rules - that "the award.is

enforceable at law" but he will be preoccupied.much

more with obtaining either a conciliation, or an

award acceptable to both parties and which does not

jeopardize the resumption of their business rela­

tions. This anxiety for balance (which often con­

trasts with the clear-cut, or even brutal, charac­

ter of judicial decisions) can, it is true, be

driven too far and lead certain arbitrators to "run

with the hare and hunt with the hounds" or to com­

promi se even when only one of the part ies' pos i­

tions is well-founded.

- 67 -

(2) A second observation must be made, which seems to

be more important and (relatively) more original:

in his conduct of the arbitration and in his award

_ and this is an essential aspect of his objectiv~

ity - the international arbit~ator of today must

show proof of a comparative or comparatist mind,

open to legal pluralism, to various cultures and

various political and social systems. "Arbitration

will hardly be regarded by a party as a suitable

way of solving the case" - writes René David 75)

quite rightly - "if it is to .be administered by an

arbitrator who is imbued with the ways of thinking

and the prejudices of another culture".

\ )

These considerations are essential in the first

place for the chairman of an arbitral tribunal,

but they are also true for the arbitrators desig­

nated by each party. In this respect, let us note

in passing that an arbitral award given by a tri~

bunal of t0ree members (and especially, obviously,

if it is rendered unanimously) has more chances of

being well-accepted than an award made by a sale

arbitrator (which of course is no sufficient reason

to proscribe as ~ general rule the latter formula,

which is quicker and less expensive).

(3) Third remark: in this context, a factor must be

mentioned which concerns the acceptance, not only

of awards, but aiso of arbitration in general (two

aspects inevitably inter-related). The respect of

awards and, to begin with, the confidence' in arbi­

tration would, it is sometimes contended, be much

greater on the universal level if arbitral tri-

- 68 -

bunals comprised more arbitrators from non-European

countries or had their seat more often outside

industrialised countries.

Having regard to the capital importance of the

problem, and although it oversteps the strict

bound~ of this Report, some comments seem indispen­

sable.

(a) First of,all, a certain mistrust which still

exists with respect to international arbitra­

tion (with a resulting hesitation to accept and

carry out, awards) - a mistrust connected with

lack of experience and ignorance of realities -

is in no way a monopoly of new countries. It

would be wrong to believe that, in industrial­

ised countries (in spite of the important

effort of information and permanent training

which is being accomplished here and there, in

particular under the auspices of the ICC),

little remains to be done to dispel precon­

ceived opinions and-misunderstandings.

(b) Proposals have been made from various quarters

to resort much more often and sytematically to

arbitrators from developing countries, as a

remedy to a persisting suspicion, in these

countries, with respect both to the arbitration

undertaking and to awards. The idea is quite

right in itself: it is certain that, more

numerous practitioners of these countries asso­

ciated with arbitrations are, more the

- 69 -

knowledge of the institution will spread and

more one will become accustomed not only to

resort to it Ibut also and especially to know

how to use it and to refrain from expecting

more from it that it can reasonably offer.

(c) But one must also be aware of the practical

limits of s.u ch proposals. Nothing would be

gained by imposing on the parties the chaice of

an arbitrator and, especially, an umpire, for

"geopolitical" reasons. As arbitration is

founded on the confidence of the parties, one

can hardly se_e_whatconceivable benefit could

be derived from a sort of "proportional repre­

sentation" of nationalities, regions, political

systems (contrary, moreover, to the modern ten­

dency towards a real "internationalisation" of

arbitral tribunals) 76)

\ )

(d) What seems to us infinitely more important than

specific arbitration rules on this point is an

intensification of efforts towards information

and permanent training, such as are being made

today, for example,'by the ICC (in particular

through the Institute of International Business

Law and Practice), in developing countries

especially. To assert that such efforts, and

above all that of official international

organisations, remain quite inferior to real

needs is not a criticism, but a statement of

fact. Let us recall too, on the other hand,

that one cannot become an arbitrator overnight

and that "time does not spare what is done

without it"!

- 70 -

(e) As a matter of fact, having confidence in

awards and, in general, in international arbi­

tration, rests - and this is another truism -

on the confidence in the objectivity of the

arbitral tribunal and, in particular, of its

chairman. This is a generai problem which is in

no way limited to the "North-South" dimension.

As unpleasant as it may be, a reality must be

looked at in the face: in many states of the

world, freedom of expression and judicial inde­

pendence are reduced, or are even non-existent,

a fact which has inevitable consequences in the

field of arbitration (for example on the choice

of its place and the choice of the arbitra­

tors). In a certain number of countries, an

arbitrator would have to show heroism, the word

is not too strong, to assist in the drafting of

an objective and impartial award.

(f) Finally, it is hardly necessary to mention a

typical example of preposterous generalisation,

according to which international arbitration

should be considered as an institution reflect­

ing the sole experience and point of view of

industrialised countries. This contention is

absurd. No-one today can ignore, for example,

the rich experience of Socialist countries of

Eastern Europe in the field, or the existence

of an old tradition of arbitration in Asian

countries, like China, as has been shown by the

great comparatist René David. Reproaching the

institution for having developed more or first

- 71 -

of all, in Western Europe would be about as

intelligent as rejecting the use of the rail­

way or the airplane because they were not

developed or used to begin with in the

Antarctic or the Sahara!

(B) Institutions

, )After the arbitrators, the arbitration

institutions One may indeed complete the tradi-

tional phrase by adding, first of all: "arbitration and

awards are as good as the arbitration institution makes

them!"

)

(1) One of the characteristics of contemporary develop~

ment in this field is a tendency towards prolifera­

tion of new arbitration institutions, national and

regional in particular, with the manufacture it

implies of new regulations. It is not certain that

this development constitutes a progress from all

points of view. No more than an arbitrator can be

trained overnight, an efficient arbitration insti­

tution or centre can hardly be created by a stroke

of the pen. In both cases, a great amount of time

is necessary in order to acquire the experience and

know-how apt to create this confidence which is the

key towards voluntary enforcement of arbitral

awards.

Furthermore, as far as national arbitration centres

are concerned (and particularly those which under­

take to administer both internal cases and inter-

- 72 -

national cases), there is every reason to fear the

creeping or open predominance of a national, or

even nationalist, spirit which is the exact oppo­

site of the openrnindedness and broad cornparat;ive

approach which, as said above r: are so badly needed

today.

(2) This is the reason why prudence, and even scepti­

cism, are called for with respect to proposals

whose aim is to create, for example by inter-State

conventions, new institutional mechanisms of arbi­

tration. According to a recent study, of great

interest, by Professor Giardina 77), such an insti­

tutional mechanism, inspired more or less

indirectly by the examples of ICSID or of the

Moscow Convention, would permit to reduce or

abolisb national control by the judge of the

country of enforcement, at least for awards con­

cerning determined sectors of activity, such as

that of raw materials. One could thus reach, or so

it is alleged, a sort of "automatic" recognition,

assimilating the award rendered within the frame­

work of this institutional system with a national

judicial decision.

The idea certainly deserves attention.

However, two points should be kept in mind: the example

of IeSID (independently even from its "AdditioITal

Mechanism") would seem to suggest caution, in spite of

its merits and its precious preventive role; second,

the example of th~ Moscow Convention, seeing its par-

- 73 -

ticular context, hardly seems liable to be generalised.

Scepticism is even much more necessary when one reads

the idèas or proposals devoid of all realism and even

of the required knowledge of arbitration which are

sometimes put forward by certain international organis­

ations 78)

! )

More interesting is the suggestion some­

times made of increasing the powers of the institution

administering certain arbitrations.

Article 21 of the ICC Rules obliges the

arbitrator to submit the draft award to the Cou~t of

Arbitration, and allows the latter, on the one hand to

"lay down modifications as to the form" and even to

"draw his attention" to some points of substance, yet

respecting his "liberty of decision" 79) it is true.

One may suppose that this provision contributes, at

least in certain cases, to assuring the quality of

awards and, consequently, their voluntary enforcement -

independently from the effects of Article 26, mentioned

above, of the same ICC Rules.

\ )Would it be possible, and desirable, to

gd further? For example by providing for the obligation

for the parties to inform the arbitration institution.of the enforcement, or the diffi,culties of enforcement,

of the award; or to provide for a system of conven­

tional sanctions administered by the said institution,

or to authorize the latter to derogate, in the case of

non-enforcement, from the confidentiality of awards?

Each of these suggestions may seem to have its advan­

tages but also offers many drawbacks. In a subject as

- 74 -

complex, delicate and diversified as international com­

mercial arbitration, one must beware of the dangers of

perfectionism and of a certain contemporary habit or

mania towards codification.

(C) Lawyers

Finally, an aspect should be brought to

light which seems to have been sadly neglected: it

relates to one of the conditions, not sufficient but

necessary, of the quality of awards, and thus of their

acceptation and enforcement. This condition may be sum­

marized as follows: lI"arbitration is as good as lawyers

make it!

We are not concerned here merely with the

lawyers and counsel who take part in an arbitral proce­

dure, write memorials, examine the witnesses, argue

orally oefore the arbitrators; we are also concerned

wi th company lawyers, legal advisers, parties' repre-

sentatives, etc.

The reader may perhaps forgive us for

indulging here in one of those very generalisations

whose dangers were denounced at the beginning. If there

exist today, in larger numbers, many international

arbitrator~ that can be called "specialised", i.e. as

having the training and "comparatist" or international

approach which are indispensable, is this also true for

lawyers? One would hesitate to answer in the affirma-

t ive.

- 75 -

According to concordant opinions, it is

not unfrequent for international arbitrations to be

conducted, on one side or the other, by counsel perhaps

possessing a great experience on the local level, but

badly prepared legally and psycholngically for facing

the particular difficulties of international arbitra­

tion - wh~ch today is becoming more and more, as

already said, a "plur icuLtura.l" phenomenon. How many

cases have been jeopardized, if not lost, by attorneys

imbued with national ways of thinking, having no appre­

ciation or understanding of foreign law or of any IIcom-

paratist" spirit, and behaving, to speak bluntly, like

"bulLs in a china shop"?

\ )

Two reasons at least may be suggested for

this state of affairs: on the one hand, the almost

exclllsively national and, in part, anachronistic

character 6f leg~l teaching given in universities, law

schools or during professional training courses 80).

The other reason, connected with the inadaptation of

present legal training, results from a-general under­

estimation of the complexity of the problems raised, in

many cases, by international arbitration. Whence the

naive idea of some people that any good practitioner

can successfully master the difficulties of inter­

national arbitration.

Thus it does not suffice, so we believe,

to say "arbitration and awards are as good as the arbi­

trator makes them", nor to associate with the arbitra­

tor, in this respect, the arbitration institution. The

quality of awards and their acceptance (by parties and

judges) does not depend on arbitrators alone but also

- 76 -

on all the jurists called upon to prepare and present

the claims and arguments of the parties.

Our conclusion will be short, and it

should hardly cause surprise if i~ is found to reflect

the origin and "professional idiosyncracy" of the

rapporteu~: all future solutions aimed at assuring the

acceptance and enforcement of awards, and thus their

quality, that is to say aimed at ensuring the general

progress of arbitration, are linked with a better

training of all participants, whether jurists or non­

jurists, parties' representatives, arbitration institu­

tions, arbitrators, and, finally, judges called upon to

decide appeals against awards or oppositions to

enforcement. If international arbitration is an

important instrument for the prevention and solution of

international trade disputes, and thus for closer

cooperation between the peoples, a better preparation

or training of all its actors appears an essential task

of today and tomorrow.

- 77 -

NOTES

1) Cf. R. Nobili, Conference at an ICC seminar 1977,

p. 1.

2) "Souveraineté des Etats et arbitrage transna­

tiona1", p. 274.

( \3) Let us mention three of the numerous examples that

could be cited: that of the Aramco award, for the

first case, and for the second, that of the Swiss

decisions in the famous arbitration Société euro-

péenne d'études et entreprises (S.E.E.E.) v. Yugo-

slavia and, more recently, the LIAMCO case.

4) According to a technique of omission which can be

justified in an international convention - a simi­

lar example of which can be found in the 1965

Washington Conve nt ion , of ICSID (which voluntarily

abstains from defining the key notion of "invest­

ment").

( )5) Yearbook Commercial Arbitration 1979 p. 296; Year­

book 1983 p. 366.

6) About the Nature (National or A-National,

Contractual or Jurisdictional) of ICC Awards under

the New York Convention, "Mélanges Sanders"

pp. 139-40.

7) As René David writes, "L'arbitrage dans le commerce

international", p. 7:

- 78 -

la distinction [entre arbitrage "juridic­tionnel" et arbitrage "libre"], faite parles juristes nous paraît relever d'une"jurisprudence des concepts" artifi~cielle; elle tend ~ dftruire l'unit~ fon­cière de l'institution et est dépourvuede sens aux yeux des commerçants".

(Translation):

"the distinction [between "jurisdic-tional" and "free" arbitration], made byjurists seems to us to partake of anartificial conceptual jurisprudence; ittends to destroy the fundamental unity ofthe institution and is devoid of anysense in the eyes of traders".

8) No. 406.

9) Cf. R. David, p. 505.

10) In "free" arbitration, the award merely raises the

question of the validity and effects of an inter­

national contract, a question to be judged in the

first place according to the principle of autonomy

of the parties and according to the conflict rule

of the forum, subject to "ordre public"; cf. Renf

David, p. 528.

11) In shrewd observations on the judgement of the Can­

tonal Court of Vaud in the case SEEE v. Yugoslavia,

J.-F. Aubert noted for example, in 1958 - "Revue

critique de droit international priv~" 1958 II

367 ff. (besides the misuse of words when employing

the terms "seat" of the "tribunal" for an arbitra­

tion) the illogical theory which claims to deduce

- 79 -

from this "seat" the national law applicable to the

arbitration, whereas only a predetermined legal

system can confer on a place the legal effect and

val ue afa" sea t" ! .

12) R. David, No. 405.

13) No. 405.

.I )

14) Must the "territorial principle" have been

respected or is it sufficient for the award to be

valid according to the arbitration law chosen by

the parties? On these two theses and on the various

intermediary theories, see M. Ferrante' s synthesis,

op.cit. in "M~langes Sanders", p. 132; the author

rightly underlines that it is -only failing an

agreement between the parties that it is necessary,

in accordance with the Convention, to refer to-the

territorial law on the composition of the tribunal

or on the aibitral proceedings.

~ )

15) Cf. in this respect, in particular, R. David,

No. 405,;J. Paulsson in International Comparative

Law Quarterly 1981, p. 358; the South African deci­

sion Benidai Trading of 16th June, 1977 (Yearbook

vol. VII 1982 p. 351) and the American decision

Bergesen vi Joseph Muller Corporation (548 F supp.

650; M. Ferrante, in "M~langes Sanders" 1982

p. 132) - one can also mention, in this context,

some of the decisions made concerning the famous

case SEEE v. Yugoslavia.

- 80 -

16) Are we not close here to the "8indend Advies" of

Dutch law, or even to "free" or "irrituale" arbi­

tration of Italian law? In the Comitas case, men­

tioned above, the Germ(n 8GH, in an argumentation

that hardly seems convincing, categorically

rejected the comparison made by P. Schlosser

be t.ween declaratory awards and awards in a II free"

arbitration; for the German High Court, if decla­

ratory awards are not liable to enforcement, it is

because of their contents.

17) But it is necessary for the country, or countries,

of enforcement of the award to be foreseeable by

the arbitrators. Moreover, let us point out in

passing the interesting hypothesis - realised in

one of the important Libyan arbitrations, that of

T~xaco, decided by Professor R.-J. Dupuy (Award of

19th January 1977, in Yearbook Commercial Arbitra­

tion IV (1979) 177 and "Clunet" 1977, p. 350 -

where the sole arbitrator is requested to proceed

in two stages, the first ending in a declaratory

award; in case this was not respected, each party,

after a certain time ("d~lai de gr~ce"), had the

right to return to the arbitrator to start the

second phase, ending in an award (for example of

damages) liable to direct material enforcement.

18) This is one of the points where specific rules,

peculiar to international arbitration, seem neces­

sary; for example, one cannot see any justification

in the prohibition for the arbitrators to order

provisional measures when these are not meant for

enforcement in the country in which the arbitration

- 81 -

takes place, but only abroad, and particularly in a

country where this judicial monopoly does not

exist.

19) Kindly communicated by Mr. Micbael Schneider,

Attorney-at-Law, Lalive and Budin, Geneva.

20) Cf. Dutoit, Knoepfler, Lalive and Mercier, "Réper­

toire de droit international privé suisse, vol. 1

No. 459; Cartier v. Horowitz, judgement of the Can­

tonal Court of Vaud of 3rd October, 1978.

21) Cf. Strohbach, Towards an International Arbitral

Award, "Mélanges Sanders", p. 310.

22) Cf. R. David, No. 44S.

~ )

23) Except in the case of a conventional system like

that of the 1961 Geneva Convention whose Arti-

cle IX.1 only admits annulment or setting aside of

an award, as a cause for refusal of recognition or

enforcement, "where such setting aside took place

in a State in which, or under the law of which, the

award has been made", and this for defined reasons.

2~) Cf. in this sense R. David, p. S42 - on these

characteristics of the Moscow Convention, see

H. Strohbach, op.cit., "Mélanges Sanders" 1982,

p. 3 0 S' f f., 3 0 9.

2S) Those who are interested in a comparative analysis

are advised to consult for example, besides René

David's book already mentioned, the excellent syn-

- 82 -

thesis presented by P. Schlosser at the Dijon

Colloquium in 1977 ("Revue de l'arbitrage", 1980,

p. 286). - See also, in spite of its lack of

success, the European Convention (of Strasbourg)

providing a Uniform Law on Arbitration, of

20th Januar~, 1·966, Articles 25 ff.

26) C J~.L • P. Schlosser, "Revue de l'arbitrage" 1980,

p. 287.

27) Cf. P. Schlosser, op.cit., p. 293; see also

R. David, No. 416, who distinguishes four cate-

gories.

28) Let us note in passing, with respect to English

law, that it still seems much more reluctant than

Continental laws as regards the arbitrator deciding

about his own jurisdiction, even after the 1979

Arbitration Act; in this sense, cf. C. Schmitthoff,

The Jririsdiction of the Arbitrator, in "M~langes

Sanders", who refers to the Dalmia judgement of the

Court of Appeal - p. 292.

29) P. 296-7.

30) Cf. Strohbach, op.cit., in ~M~langes Sanders",

p. 305.

31) P. Schlosser, "Revue de l'arbitrage" 1980 p. 291,

299.

32) R. David observes on this subject that "les techni­

ciens du style 16gislatif anglais ont atteint avec

- 83 -

l'Arbitration Act de 1979 un des sammets de leur

art empoisonné"! (translation: "with the 1979 Arbi­

tration Act, the technicians of the English legis­

lative style have reached one of the summits of

their poisonous skill"!).

33) Accor~ing to the Times of 2nd November, 1978, one

60uld read, under the heading "Bill should prevent

loss of legal cases to other countries", the fol-­

lowing observation: "Many millions of pounds are

being lost to the U.K. because lawyers now advise

client companies not to seek arbitration in London

for disputes over international contracts". Accord­

ing to certain recent commentators, the Italian law

of 9th February, 1983 aims at making Italy a host,

of international arbitrations which have previously

been discouraged ,by various particularities of

Italian law, preventing for example the participa­

tion of foreign arbitrators.

)

34) See for example Dutoit, Knoepfler, Lalive and

Mercier, "Répertoire de droit international privé

suisse", vol. 1 No. 458; Bucher-Guyer A.G. judge­

ment of 17th March, 1976, ATF 102 la 493.

35) Thus the Court of Paris in the Lebar case of

22nd April, 1980, in "Revue de l'arbitrage" 1981

p. 171 and the Supreme Court of Sweden in the

famous Götaverken case of 13th August, 1979, in

"Revue de l'arbitrage" 1980, p. 555.

36) On this idea of judicial "favour", see

e.g. P. Sanders, Twenty Years Review of the New

- 84 -

York Convention in The International Lawyer 13,

1979 p. 269 who states ~hat "in general, courtsi

favour intern.tional commercial arbitration".i;

37) Or, in feder~l countries, for arbitration internal

to the federation, resulting in awards which are

often' assll1ilated to the civil judgement given by a

member State. It has been thought possible to

t.ranspo se t.hese internal solutions to problems

raised by international arbitration an erroneous

method which resulted in numerous complications and

confusions.

38) Absence of a conventional basis of the arbitrator's

jurisdiction, serious violation of the fundamental

principles of procedure, such as equality of·the

parties and "due process": and, as a kind of

counterpart of "public policy" in the field of

recognition, "arbitrariness" according to the case

law of the Swiss Federal Tribunal, that is "a gross

violation of an eLerne'n t.ary and uncontested prin­

ciple of law", or a "manifestly untenable" deci­

sion.

39) Let us underline in passing Article IX litt. 2 of

this last Convention which, for States party to

both Conventions, limits the list of grounds for

annulmen t.

40) On this subject, see P. Lalive, "Codification et

arbitrage international", in "Mélanges Goldman,

p. 151 ff., for example 165-166.

- 85 -

41) Judgement of 21st February, 1980 in "Revue de

1I arbitrage II 1980 p. 524.

42) In this sense, for example, see the judgement men­

tioned above of the Court of Paris in the case v.

Lebai, Note 35 above.

( ')43) See Document A/CN9/WG11/WP42 of 25th January, 1983,

note 22, and the Draft Report of the Working Group

on the Work on its 5th Session: A/CN9/WG11/5/CRP1.

44) On this subject, see for example the Report pub­

lished by UNIDO (the United Nations Industrial

Development Organisation) in 1979, entitled

"L'industrie ~ l'horizon 2000 - nouvelles perspec­

tives", for example pages 34-36 relative to "Propo­

sition NO.4".

45) Cf. our observations on "free" or "irrituale" arbi­

tration, above Note 16.

\ )46) We mentioned above, Note 37, pro memoria, the

special case of the federal States, such as the

United States of America or Switzerland.

47) Cf. R. David, No. 430, p. 534.

48) Cf. S. Lebedev, How Long dbes a Foreign Award stay

Enforceable?, in "I'1élangesSanders", p. 213.

49) Consequences which are in certain countries the

object of the doctrine of "reinstatement" and, on

- 86 -

the conventional level, are envisaged by the Moscow

Convention, Article V, 2 - which introduces a very

useful clarification.

50) Cf. Ren~ David, pw 530.

51) See för example for Hungary G. Sebestyen, in Year­

book I (1976) p. 61.

52) See ATF Ligna v. Baumgartner, 84 I 39.

53) "The Enforcement of ICC Arbitral Awards in CMEA

Countries", Report .at the ICC seminar in Prague,

January, 1978, P. 17.

54),. Cf. Bernini, op.cit., p. 17.

55) Often jpdged less important than that of New York

because of its more limited number of ratifica­

tions, the Geneva Convention presents various

interesting characteristics, particularly in its

Article IX, 2 which limits between contracting par­

ties the cases of refusal of recognition provided

for in Article V of the New York Convention.

56) Inter-American Convention on International Commer­

cial Arbitration signed in Panama on 30th January,

1975; Inter-American Convention on the Extra­

Terri~orial Validity of Foreign Judgements and

Arbitral Awards, signed in Montevideo on 8th May,

1979.

- 87 -

57) Text in the "Revue égyptienne de droit inter ....

nat ion al" 8, 1952, P . 333.

58) ICC Brochure No. 174; cf. on this subject-

H. Strohbach, op.cit., "Mélanges Sanders" 1982,

p.307.

59) Cf. on this subject Note 40 above.

60) Doc. A/CN9/127, quote~ by Strohbach op.cit.,

p. 306.

61) Respectively op.cit. p. 306 and book on the New

York Convention, p. 394-95.

62) Op.cit. 'p, 306 •

.., :-,~-

63) ATF 106 la 142; 480 F. Supp. 1175 (1980); ILM 1981

891 (Liamco); Yearbook VII (1982) 207 (Benvenuti);

"Revue de llarbitrage", 1982 209 (Eurodif-Sifidif);

Yearbook IV (1979) 336; New York Convention,

G. Gaja, V. 88•1. (Ipitrade).

64) Consult, on recent French case law, the studies

written by Bruno Oppetit in the "Clunet" 1981,

p. 369, and pierre Bourelf in the "Revue de

11arbitrage" 1982, p. 119.

65) "As is shown by the Award rendered on 15th February,

1974 under the presidence of René David between the

Ethiopian Government and the American company

Baruch-Foster; see also the judgement (granting

"exequatur") rendered by the U.S. Court of Appeals

- 88 -

for the Fifth Circuit, on 19th June, 1976,

mentioned by G. Gaja, New York Convention V', 37, 1.

66) He is referring here to an article of Cappelli­

Perchiballi, International Lawyer 1978.

67) In this sense, a recent decision of the Court of

Cassation of Tunis, not yet published, has applied

the New York Convention in a case where a foreign"<, '

party requested the enforcement of an award againstI

a Tunisian public organisation.

68) Court of Appeals of Svea, 18th June, 1980 in 11M

1981 p. 893.

69) According to Article 55 of the Convention, "nothing-in Article 54 shall be construed as derogating from

the law in force in any Contracting State relating

to immunity of that State or of any foreign State

from execution".

70) Foreign Sovereign Immunity: Impact on Arbitration,

The Arbitration Journal, June 1983, vol. 38 No. '2,

p. 34.

)

71) On these questions, see Ph. Fouchard, "Les usages,

l'arbitre et le juge" iri"M~langes Goldman, p. 67;

R. David, op.cit. No. 401.

72) According to Ren~ bavia (No. 401, p. 493-4), the

absence of popularity of the penal clause, as a

means of assuring the enforcement of awards, is due

to the influence of'~nglish law and the role of

\ )

()

-- 89 -

English trade in the historical development of

arbitration. ,ii!

73) One will distinguish the penal clause from the

"guarantee (or "cautio") that parties must pay at

the beginnirig6f various institutional arbitra­

tions',the object of which is to guarantee payment

o f the arbitration costs.

J4) Cf. R. David~ No. 454 and passim.p

75) David on Arbitration in The International Trade. A

Book Review, .in "Mélanges Sanders, p. 92.

76) It is necessary to qualify very strongly, in this

respect, the succinct and even ambiguous phrase of

René David - "Mélanges Sanders, p. 92, who writes:

"arbitration cannot be popular in the under­

developed countries if it is to be held in an

industrialized country and if the case is to be

decided by an arbitrator who is a citizen of such

country". The place of the arbitration is or should

be chosen for purely practical reasons and the fact

that the arbitrator is a national of the country of

the seat, whether it be an industrialized or a

developing country, cannot - which David does not

say - lead a party to suppose or assume any absence

of objectivity!

77) The Question of General Recognition and Enforcement

of Arbitral Awards, Rassegna arbitrato 1982

p. 289 ff.

.,'i

.,_.", .r-:

- 90 -

78) Above Note 44.

79) In a case decided by a judgement of 29th June,

1979, the Obergericht of Zurich rejected an annul­

ment request which was founded on the ground that

this "preliminary examination of the award by the

Court'of Arbitration" constitutes an inadmissible

attack on the arbitrator's independence.

Cf. "R~pertoire de droit international priv~

suisse", vo1. 1, No. 484.(

80) In a Resolution adopted at its session in Athens in

1979, "Annuaire", vol. 58, II p. 205, on the teach­

ing of international law, the "Institut de Droit

international" rightly deplores the obvious insuf­

ficiencies in the present law teaching programmes

in the majority of countries; a situation which

contrasts with the increasing internationalisation

of the modern world and is not in harmony with the

needs of international trade. The "Institut de

Droit international" notes that "in many countries

law is still taught essentially or even exclusively

along the lines of national considerations and

methods and that the teaching of international law,

whether public or private, is often quantitatively

and qualitatively inadequate to meet the demands of

our times and is not provided in a sufficiently

international perspective".

-------------------

M. Pierre BELLET

FRANCE

Etudes

Etudes à Paris, au lycée Janson .de Sailly, à la Faculté de droit,

et à l'Ecole libre des Sc~ences Politiques.

Lauréat de la FacUlté de droit de Paris;

Activité professionnelle

Avocat stagiaire

Magistrat

)successivement Juge d'Instruction, Juge, Conseiller, Président

du Tribunal de paris, Président de Chambre à la Cour der

Cassati6n, Premier Président de la Cour de Cassation

Expert français à Bruxelles, auprès de la C.E.E., et délégué à

la Conférence de droit international privé de La Haye

.-< "

Professeur à l'Irtstitutd'Etudes judiciaires de Paris I

Professeur à l'Ecole Nationale de la Magistrature

Membre de la Commis~~on de réforme de la procédure civile.

Chargé de mission par le Ministre de la Justice :

_ pour l'étude des pr-of'es's i.one judiciaires aux USA

_ pour la fusion des professions judiciaires en France

_ pour l'étude des problèmes nés de la postulation des avocats,

_ pour l'indemnisation des victimes de la route

Président honoraire du Camité français de Droit international

privé

Vice-président de l'Association des Juristes européens

Président de la Cour d'Arbitrage de la Chambre de Commerce

franco-arabe

Ancien président de chambre du Tribunal arbitral irano-américain

de La Haye

Collaborateur de la Revue critique de droit international du

Clunet, la Revue de l'arbitrage, la Semaine Juridique, la Gazette

du Palais.

;.... "'_' ...,~~... ',--'.""

,C" . ,J

Professeur Pierre LALlVE

SUISSE

M. Pierre André Lalive d'Epinay est né à .La Chaux-de-Fonds

(Neuchâtel, Suisse), le 8 octobre 1923.

Etudes et titres académiques

Licence-ès-lettres et licence en droit, Université de Genève

Doctorat en droit, Université de Cambridge

Brevet d'avocat, Genève

Docteur en droit honoris causa de l'Université Jean Moulin, Lyon,

et de l'Université de droit, d'économie et de sciences sociales de

Paris II.

,( )

\. )

Emplois et postes

Depuis 1955, professeur ordinaire à la Faculté de Droit de Genève,

ainsi que, dès 1961, à l'Institut universitaire de hautes études

internationales. Directeur du départment de droit international

privé de la Faculté de Droit.

Il a été Doyen de la Faculté de Droit de Genève, "Visiting

professor", Parker School of Foreign and Comparative Law, Columbia

University, Professeur visitant au Centre d'études industrielles

de Genève, Titulaire de la Chaire Francqui de droit international,

à titre étranger, à l'Université libre de Bruxelles, Arthur

Goodhart Professor of Legal Science, Université de Cambridge,

Fellow of King's College, Cambridge.

Elu en 1965 Associé puis, en 1975, Membre de l'Institut de droit

international.

Sur le terrain pratique, expert ou conseil de plusieurs gouverne­

ments devant la Cour internationale de justice d~ La Haye, membre

de diverses commissions législatives et délégué du Gouvernement

suisse à plusieurs assemblées internationales, arbitre ou avocat

dans divers arbitrages internationaux, interétatiques ou com­

merciaux

Depuis 1979, Président du Conseil scientifique de l'Institut du

droit et des pratiques des affaires internationales (Paris, CCI)

. Président de l'Association suisse d~ l'Arbitrage

Publications

Auteur d'environ 80 publications, spécialement dans les domaines

du droit international privé, du droit du commerce international

et de l'arbitrage.

(

...... :,.",

,'-," . .'1.,

,-,:,'-".. ;

Mr. Howard M. HOLTZMANN

UNITED STATES OF AMERICA

Education

Academic Degrees B.A., J.D., Litt. D.

Positions held

(' J

Member, Iran-United States Claims Tribunal, The Hague

Senior Partner, law firm of Holtzmann, Wise & Shepard, New York

Past Chairman of the Board of Directors of the American

Arbitration Association; presently Chairman of that orgarüza­

tion's International Arbitration Committee

Vice-Chairman, ICC Arbitration Commission

Vice-Chairman, International Council for Commercial Arbitration

Past Chairman, Arbitration Committee of the American Bar

Association Section of Corporation, Banki~g and Business Law

Head of United States Government delegations to UNCITRAL in

connection with preparation of UNCITRAL Arbitration Rules and

UNCITRAL Conciliation Rules, presently member of U.S. delegation

to UNCITRAL Working Group preparing model arbitration law

Head of U.S. delegation which prepared the Model Arbitration

Clause for use in United States-Soviet trade

Head of U.S. delegation which prepared the recent Model

Arbitration Clause for use in United States-Hungarian trade

Consultant to U.S. Government on arbitration provjsions in trade

agreements with the Soviet Union and with the People's Republic

of China

Chairman of Joint Committee of the American Arbitration

Association and the American Bar Association which prepared the

"Code of Ethics for Arbitrators in Commercial Disputes"

Director of corporations and universities in the United States.

()

Publications

Author of numerous publications on international arbitration and

trade, including the book "A New Look at Legal Aspects of Doing

Business with China"

I/

M. Tudor POPESCU

ROUMANIE

M. Tudor POPESCU est né le 22 mai 1913 à BRAILA, Roumanie.

Etudes

Docteur en Droit "magna cum laude", Iassy, 1937

Docteur en Droit, Paris, 1940

Diplômé de l'Institut de Droit Comparé, Paris 1938

Fonctions universitaires

(Professeur titulaire à la Faculté de Droit de l'Université de

Bucarest, depuis 1947

Visiting Professor aux universités de : Uppsala, Stockholm, Lund,

Strasbourg, Hambourg, Würzburg, Camerino, Palermo, liège, Rome,

etc.

Autres activités

en Roumanie

I\ )

Membre du Conseil législatif

Président de la Cour d'Arbitrage Commercial International

Président de la Société de Droit Comparé

internationales

Membre du Conseil de Direction de l'Institut International pour

l'Unification du Droit Privé - "UNIDROIT" - Rome, depuis 1968

Membre du Conseil International de l'Arbitrage Commercial

Membre du Conseil scientifique de l'Institut du Droit et des

Pratiques des Affaires Internationales prés la Chambre de

Commerce Internationale de Paris.

Spécialités Droit comparé, Droit international privé, Droit .du

Commerce international

r

" ...

II