Katerina Haslam-Jones

Enforcing foreign arbitral awards
Grounds and Procedure
KATERINA HASLAM-JONES
PADVA, HALSLAM-JONES & PARTNERS
[email protected]
www.phjpartners.com
Padva, Haslam-Jones & Partners LLP
Grounds and Procedures
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Grounds:
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Procedure:
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New York Convention 1958
Federal laws (reciprocity/начало взаимности)
Upon Application (Art 242 APK);
The duly authenticated original award or a duly certified copy; and
The original arbitration agreement (arbitration clause) or a duly certified
copy thereof (Art II and IV Convention 1958).
Art 242 APK – sets up the procedure
Forum shopping/Forum execution
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Convention 1958, Art 5
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1. Recognition and enforcement of the award may be refused:
(a)
Incapacity of a party , or invalidity of the agreement
Not proper notification or party was unable to present the case
Matters beyond the scope of the arbitration
The composition of the tribunal or the procedure was not in
accordance with the parties’ agreement, or law
No binding award
(b)
(c)
(d)
(e)
2. May also be refused if the competent authority finds that:
a)
b)
Matter is not capable of settlement by arbitration
Public Policy
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Art 244 APK RF
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1. No binding award
2. No proper notification/Party unable to present the
case
3. Exclusive competence of Russian court
4. Existing decision between the same parties on the
same issue
5. The decision is pending
6. Statute of Limitation
7. Public Policy
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Convention 1958 /Art. 244 APK
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No binding award
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No binding award
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Not proper notification or party was unable
to present the case
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No proper notification or party unable to
present the case
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Matters beyond the scope of the arbitration
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Exclusive competence of Russian court
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Matter is not capable of settlement
by arbitration
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Existing decision between the same
parties on the same issue
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The decision is pending
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Statute of Limitation
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Public Policy
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The composition of the tribunal or
the procedure was not in accordance
with the parties’ agreement, or law
Incapacity of a party , or invalidity of
the agreement
Public Policy
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Differences between the Grounds
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Procedural v. Substantive (Public Policy)
Defined v. Discretionary, open for
interpretation (Public Policy)
Burden of proof:
Part 1, Art V: On the Party against whom the award is
issued
 Part 2, Art V: On the Party against whom the award is
issues OR could be established by the Court
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What Courts cannot do
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Review the merits of the case, to establish the matter to be proven, evaluate
the evidence
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Check lawfulness and reasonableness of the judgment itself (10 Bulletin of the
Supreme Court of the RF, 1995).
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Therefore:
 Infringement of public policy would take place only if enforcement of
foreign judgement would lead to results contradicting public policy.
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Does not matter whether the applied norms of the foreign
substantive law correspond to the Russian legislation or not.
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Is it really the case?
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Public Policy Rule (PPR)
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Understanding the PPR:
 No uniform understanding
 Contrary to public policy – PP in procedural law,
substantive law and in the law of conflict.
 Matter was considered on the basis of Russian law
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Interpretation and application of the PPR:
 The legal construction of “contradiction to public policy”
carries an evaluative character
 Concepts derived from Russian judicial practice
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Case law – from the case law comes understanding and
interpretation of PPR
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Конституция РФ
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Глава 1: «Противоречие основам правового строя нашей
страны, определенным в Конституции РФ». Под
противоречием публичному порядку РФ понимается
противоречие основам конституционного строя России (ст
1-15), например, положениям о признании частной
собственноси, в том числе и на землю, о единстве
экономического пространства, свободе перемещения
товаров, свобода экономической деятельности.
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Глава 2: Так же противоречие главе 2 Конституции – «права
и свободы человека и гражданина», противоречия
общественному правосознанию и фундаментальным
принципам права.
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Russian Constitution
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Chapter 1: Contradiction to public policy – understood as
contradiction to the principles of the constitutional basis of the
Russian state: for example, contradiction to provisions on
recognition of private property, including land; on unity of
economic territory of the RF; on freedom of movement of
goods, services and financial assets; freedom of economic
activities (Art 8 and 9).
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Chapter 2: “Rights and freedoms of person and citizen” include
contradiction to the public sense of justice and fundamental
principles of the law.
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Wider interpretation of PP includes
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Anti-dumping legislation
Legislation on privatisation
Fundamental legal principles of commercial
turnover
Legislation on competition
Bankruptcy
City-forming enterprises
Etc.
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Some specific examples
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Principles of Russian law:
Fault of the defendant
 An award of a monetary sum in a foreign currency
against a Russian company
 “Punitive damages” principle – strong ground for
escaping liability under PPR [TXO Production v. Allians
Resources]
 Nationalisation – confiscation of property for state
purposes without reimbursement
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PPR Summary
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No reference should be made to public policy if the matter was
considered by the foreign court or arbitral tribunal on the basis of
Russian law and enforcement is sought in Russia.
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Improper application of norms of the substantive law by a foreign
court and application of norms contrary to the norms of the Russian
law applicable to similar relations cannot be used to refer to the PP of
Russia as the Russian court has no right to review the substance of a
foreign arbitral award.
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The subject of evaluation as regards the PPR should not be the arbitral
award itself, but the results of its enforcement, which man be contrary
to PP.
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Issues of most importance
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Thinking about enforceability of a contract
before drafting the contract (Choice of law).
Arbitration v. Litigation v. Mediation
Forum shopping/Execution shopping
Multiple claims on enforcement (allocation of
assets)
Remedies available to the parties (i.e.injunctions)
Settlements – must be in the award to be
enforceable
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