Article V
1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.
Travaux préparatoires on Article V
A. Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Comments by Governments and Organizations
A.1. ECOSOC: Report of the Committee on the Enforcement of Foreign Arbitral Awards: 18 March 1955
A.2. Comments by Governments and Organisations on the Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards: January 1956 - March 1958
- E/2822 - Report by the Secretary-General, Recognition and Enforcement of Foreign Arbitral Awards, 31 Jan 1956
- E/2822/Add.1 - General Observations, Comments on Articles 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15
- E/2822/Add.2 - Comments by Greece on Articles 1, 3, 4
- E/2822/Add.4 - Comments by the Netherlands and the UK on Articles 1, 3, 4, 8, 9
- E/2822/Add.5 - Comments by Hungary and Norway on Articles 1, 3, 4, 7
- E/2822/Corr.1 - Comments by France on Article 4
- E/2840 - Memorandum by the Secretary-General
- E/CONF.26/3 - Comments by New Zealand on Articles 1, 4, 5
- E/CONF.26/3/Add.1 - Comments by the Netherlands on Articles 4, 5 and Suggestion of an Additional Article
A.3. Activities of Inter-Governmental and Non-Governmental Organizations in the Field of International Commercial Arbitration: Consolidated Report by the Secretary-General - 24 April 1958
A.4. Comments on the Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards: Note by the Secretary-General: 6 March 1958
B. United Nations Conference On International Commercial Arbitration: Documents
B.2. Amendments to the Draft Convention Submitted by Governmental Delegations : 21 -28 May 1958
- E/CONF.26/L.8 - Sweden: amendments to Articles 3, 4 and suggestion of additional articles
- E/CONF.26/L.15 - Japan: amendments to Articles 2, 4
- E/CONF.26/L.15/Rev.1 - Japan: amendments to Articles 3, 4
- E/CONF.26/L.16 - Pakistan: amendments to Articles 1, 3, 4, 6, 12 and suggestion of an additional Article
- E/CONF.26/L.17 - Netherlands: amendments to Articles 3, 4, 5
- E/CONF.26/L.23 - United Kingdom: amendments to all Articles from Article 3 onwards
- E/CONF.26/L.24 - United Kingdom: proposed amendment to Article 4
- E/CONF.26/L.30 - Switzerland: amendment to Article 3 as amended by the Netherlands amendment (E/CONF.26/L.17)
- E/CONF.26/L.31 - Israel: amendments to amendments as proposed by the Netherlands (E/CONF.26/L.17)
- E/CONF.26/.L.32 - France: Amendment to Article 4 as proposed by the Netherlands (E/CONF.26/L.17)
- E/CONF.26/L.35 - Yugoslavia: amendment to articles 3, 4
- E/CONF.26/L.34 - Federal Republic of Germany: amendments to Articles 3, 4, 5
B.3. Comparison of Drafts Relating to Articles III, IV and V of the Draft Convention - 29 May 1958
- E/CONF.26/L.33 - Amendments proposed by the Netherlands, Sweden, the Committee, France, Pakistan and Israel
- E/CONF.26/L.33/Rev.1
B.5.Further Amendments to the Draft Convention Submitted by Governmental Delegations - 29 May -3 June 1958
- E/CONF.26/L.37/Rev.1 - Brazil: amendment to article 4 of the text proposed by Working Party III (E/CONF.26/L.43)
- E/CONF.26/L.38 - Italy: amendment to the Netherlands amendment (E/CONF.26/L.17) to article 4
- E/CONF.26/L.39 - Yugoslavia: amendment to the Netherlands amendment to article 4 (E/CONF.26/L.17)
- E/CONF.26/L.40 - France, Federal Republic of Germany and Netherlands: amendment to articles 3, 4 and 5
B.7. Text of Articles III, IV and V of the Draft Convention Proposed by Working Party III: 3 June 1958
B.9. Amendments by Governmental Delegations to the Drafts Submitted by the Working Parties and Further Suggested Drafts 3-5 June 1958
B.10. Text of Articles Adopted by the Conference: 4-6 June 1958
B.11. Text of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards as Provisionally Approved by Drafting Committee 6-9 June 1958
- E/CONF.26/L.61 - Text of the Convention as provisionally approved by the Drafting Committee on 6 June 1958
- E/CONF.26/8 - Text of the Convention as as provisionally approved by the Drafting Committee on 9 June 1958
B.12. New Text of Articles I (3), V (1)(a), (b), and (e) Adopted by the Conference at its 23rd Meeting - 9 June 1958
B.14. Final Act and Convention on the Recognition and Enforcement of Foreign Arbitral Awards
C. Summary Records of the United Nations Conference on International Commercial Arbitration, New York, 20 May - 10 June 1958
- 2 nd meeting [E/CONF.26/SR.2 - Adoption of the rules of procedure (continued), consideration of the draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards (E/2704 and Corr.1, E/2822 and Add. 1 to 6, E/CONF.26/2. 26/3 and Add.1, 26/4)]
- 3 rd meeting [E/CONF.26/SR.3 - E/2704 and Corr.1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Ad.1, 26/4, 26/7]
- 4 th meeting [E/CONF.26/SR.4 - E/2704 and Corr.1, E/CONF.26/2, E/CONF.26/3 and Add.1, E/CONF.26/7]
- 5 th meeting [E/CONF.26/SR.5 - E/2704 and Corr.1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.6 and L.9]
- 6 th meeting [E/CONF.26/SR.6 - E/2704 and Corr.1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.6 to L.12]
- 7 th meeting [E/CONF.26/SR.7 - E/2704 and Corr.1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.6 to 13]
- 9 th meeting [E/CONF.26/SR.9 - E/2704 and Corr. 1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.7, L.8, L.12. L.14, L.16]
- 10 th meeting [E/CONF.26/SR.10 -E/2704 and Corr.1, E/CONF.26/2, E/COPNF.26/L.11 and L.21]
- 11 th meeting [E/CONF.26/SR.11 - E/2704/Rev.1, E/2822 and Add.1-6, E/CONF.26/2, 6/3 and Add.1, 26/4, 26/7, E/CONF.26/L.6-L.31]
- 12 th meeting [E/CONF.26/SR.12 - E/2704 and Corr.1, E/CONF.26/7, E/CONF.26/L.8 and Corr.1, L.15/Rev.1, L.16, L.19, L.22, L.31 to L.34]
- 13 th meeting [E/CONF.26/SR.13 - E/2704 and Corr. 1, E/2822 and Add.1 to 6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.8 and Corr.1, L.15/Rev.1, L.16, L.17, L.22 to L.25, L.30 to L.36]
- 14 th meeting [E/CONF.26/SR.14 - E/2704 and Corr.1, E/2822, E/CONF.26/L.17, L.31, L.33/Rev.1, L.34. L.38 and L.40]
- 16 th meeting [E/CONF.26/SR.16 - E/2704 and Corr.1, E/2822 and Add. 1-6, E/CONF.26/2, 26/3 and Add.1, 26/4, 26/7, E/CONF.26/L.10/Rev.1, L.12, L.13, L.41, L.42]
- 17 th meeting [E/CONF.26/SR.17 - E/2704 and Corr.1, E/CONF.26/L.31, L.37/Rev.1, L.43 and L.45]
- 20 th meeting [E/CONF.26/SR20 - E/2704 and Corr.1, E/2822 and Add.1 to 6,, E/CONF.26/2, E/CONF.26/3 and Add.1, E/CONF.26/4, E/CONF.26/7, E/CONF.26/L.16, L.28, L.49 and L.52]
- 21 st meeting [E/CONF.26/SR.21 - E/2704 and Corr.1, E/2822 and Add.1 to 6, E/CONF.26/2, 3 and Add.1, E/CONF.26/4, 7, E/CONF.26/L.16, L.28, L.49, L.52, L.55, L.56]
- 23 rd meeting [E/CONF.26/SR.23 - E/CONF.26/L.60; Adoption and signature of the Final Act and Convention (E/CONF.26/8, 9, E/CONF.26/L.28, L.49, L.58, L.61)]
- 24 th meeting [E/CONF.26/SR.24 - Adoption and signature of the Final Act and Convention (E/CONF.26/8 and 9, E/CONF.26/L.63), Report of the Credentials Committee (E/CONF.26/10)]
D. Committee on the Enforcement of International Arbitral Awards
- E/C.2/373 - Enforcement of international arbitral awards: statement submitted by the International Chamber of Commerce, a non-governmental organization having consultative status in category A
- E/AC.42/1 - Comments received from Governments regarding the Draft Convention on the Enforcement of International Arbitral Awards
D.1. Summary Records of the Committee on the Enforcement of International Arbitral Awards
- 1 st meeting [E/AC.42/SR.1]
- 2 nd meeting [E/AC.42/SR.2]
- 4 th meeting [E/AC.42/SR.4]
- 5 th meeting [E/AC.42/SR.5]
- 6 th meeting [E/AC.42/SR.6]
- 7 th meeting [E/AC.42/SR.7]
- 8 th meeting [E/AC.42/SR.8]
-
INTRODUCTION
1. Article V of the New York Convention sets forth the limited and exhaustive grounds on which recognition and enforcement of an arbitral award may be refused by a competent authority in the Contracting State where recognition and enforcement is sought. Article V (1) lists the grounds for refusal that must be raised “at the request of the party against whom [the award] is invoked”. Article V (2) lists the grounds on which a court may refuse enforcement of its own motion.
2. The drafters of the New York Convention sought to overcome the hurdles that an applicant had to meet under the previous regime for recognition and enforcement of foreign arbitral awards. The 1927 Geneva Convention placed the burden on the party relying on an arbitral award to prove five cumulative conditions in order to obtain recognition and enforcement, including that the award was “final”, which in practice required the party to effectively obtain two decisions of exequatur, one at the country where the award was issued, and one at the place of enforcement.560 As a further obstacle, under the 1927 Geneva Convention a court was required to refuse recognition and enforcement if the award had been annulled in its country of origin, if the respondent had not been given proper notice or was under a legal incapacity, or if the award dealt with differences not contemplated in the parties’ arbitration agreement.561 The 1927 Geneva Convention also allowed a party opposing recognition and enforcement to raise any additional grounds for refusal available under the law governing the arbitration.562
560. Article 1 of the 1927 Geneva Convention. See the chapter of the Guide on article V (1)(e) of the New York Convention, paras. 2-4.
561. Article 2 of the 1927 Geneva Convention.
562. Article 3 of the 1927 Geneva Convention.
3. While the first draft of article V of the New York Convention closely followed the wording of the 1927 Geneva Convention,563 significant changes were introduced during the drafting process. The final text of article V reflects the recommendation of the Dutch delegation to eliminate the requirement of double exequatur, to restrict the grounds for refusal of recognition and enforcement as much as possible and to place the burden of proving such grounds on the party opposing recognition and enforcement.564 Furthermore, while the 1927 Geneva Convention provided that recognition and enforcement “shall be refused” if one of the grounds for non-enforcement in its article II were present, the final text of article V omits any language that makes refusal to recognize and enforce mandatory.
563. Travaux préparatoires, Draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Report of the Committee on the Enforcement of International Arbitral Awards, E/2704, E/AC.42/4/Rev. 1, Annex, p. 2.
564. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Recognition and Enforcement of Foreign Arbitral Awards, Comments by Governments on the draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, E/CONF.26/3/Add.1, para. 7. See also Pieter Sanders, The Making of the Convention, in Enforcing Arbitration Awards under the New York Convention: Experience and Prospects (United Nations, 1999).
4. As discussed in the following chapters on article V of the Guide, courts in the Contracting States have generally construed the grounds for refusal under the Convention narrowly, and have exercised their discretion to refuse recognition and enforcement of foreign arbitral awards under the New York Convention in exceptional cases only.565
565. See, e.g., the chapters of the Guide on articles V (1)(a), V (1)(b), V (1)(c), V (1)(d), V (2)(a) and V (2)(b).
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A. Court discretion under article V
5. The objective of the New York Convention is to facilitate the recognition and enforcement of arbitral awards to the greatest extent possible and to provide a maximum level of control which Contracting States may exert over arbitral awards. In accordance with this objective, the Convention grants courts of the Contracting States the discretion to refuse to recognize and enforce an award on the grounds listed in article V, without obligating them to do so.566
566. Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 265 (1981); Gary B. Born, International Commercial Arbitration 3428-33 (2014); Teresa Cheng, Celebrating the Fiftieth Anniversary of the New York Convention, in 50 Years of the New York Convention: ICCA International Arbitration Conference 679, 680 (A.J. van den Berg, ed., 2009).
6. In some Contracting States, courts have exercised this discretion by reference to the permissive language of the English version of the Convention (or equivalent phrasing in legislation implementing the Convention in their territory), which provides that recognition and enforcement “may be refused” if one of the grounds for refusal under article V is present.567 Certain commentators similarly note that the wording of the official versions of the Convention, with the exception of the French version which uses the present tense, permits a court to exercise its discretion to recognize and enforce.568
567. China Agribusiness Development Corporation v. Balli Trading, High Court of Justice, England and Wales, 20 January 1997, XXIV Y.B. Com. Arb. 732 (1999); Nigerian National Petroleum Corporation v. IPCO (Nigeria) Ltd., Court of Appeal, England and Wales, 21 October 2008,[2008] EWCA Civ 1157; Chromalloy Aeroservices v. Arab Republic of Egypt, District Court, District of Columbia, United States of America, 31 July 1996, 94-2339; China Nanhai Oil Joint Service Corporation Shenzhen Branch v. Gee Tai Holdings Co. Ltd., High Court, Supreme Court of Hong Kong, Hong Kong, 13 July 1994, 1992 No. MP 2411.
568. Jan Paulsson, May or Must Under the New York Convention: An Exercise in Syntax and Linguistics, 14 Arb. Int’l 227 (1998); Gary H. Sampliner, Enforcement of Foreign Arbitral Awards After Annulment in their Country of Origin, 11(9) Int’l Arb. Rep. 22, 23 (1996); Fifi Junita, Public Policy Exception in International Commercial Arbitration—Promoting Uniform Model Norms, 5 Contem. Asia Arb. J. 45, 59-60 (2012).
7. As other commentators point out, the French version of the Convention is equally permissive, as reflected by the more-favourable-right provision at article VII (1), which confirms the intention of the Convention’s drafters to establish a “ceiling”, or maximum level of control for the enforcement of arbitral awards, leaving each State free to act less restrictively.569 Courts in France have recognized and enforced arbitral awards based on a narrower range of grounds for refusal under French law than under article V in accordance with article VII (1).570
569. Emmanuel Gaillard, Enforcement of Awards Set Aside in the Country of Origin: The French Experience, in Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention, ICCA Congress Series No. 9, 505, 517 (1998); Thomas Clay, La Convention de New York vue par la doctrine française, 27 ASA Bull. 50, 54-56 (2009).
570. See the chapters of the Guide on article V (1)(e), para. 29, fn. 992 and article VII, paras. 42-44.
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B. Exhaustive character of grounds under article V
8. The New York Convention contains an exhaustive list of the grounds upon which courts in the Contracting States may refuse recognition and enforcement. Article V (1) states that recognition and enforcement may be refused “only if” the requesting party furnishes proof that one of the enumerated grounds in that paragraph is present. Article V (2) states that recognition and enforcement “may also be refused” if the enforcing court finds that one of the two grounds listed in that paragraph is present.
9. The grounds for refusal under article V do not include an erroneous decision in law or in fact by the arbitral tribunal. A court seized with an application for recognition and enforcement under the Convention may not review the merits of the arbitral tribunal’s decision. This principle is unanimously confirmed in the case law571 and commentary572 on the New York Convention.
571. See, e.g., Trading company (Israel) v. Buyer (Germany), Oberlandesgericht, Cologne, Germany, 23 April 2004, XXX Y.B. Com. Arb. 557 (2005); Kotraco, Inc. v. V/O Rosvneshtorg, Moscow District Court, Russian Federation, 31 October 1995, XXIII Y.B. Com. Arb. 735 (1998); AB Götaverken (Sweden) v. General National Maritime Transport Company (Libya), Supreme Court, Sweden, 13 August 1979, VI Y.B. Com. Arb. 237 (1981); Generica Ltd. v. Pharmaceutical Basics, Inc. et al., District Court, Northern District of Illinois, Illinois, United States of America, 18 September 1996, 95 C 5935, XXII Y.B. Com. Arb. 1029 (1997); Xiamen Xinjindi Group Ltd. v. Eton Properties Ltd., High Court, Hong Kong, 14 June 2012, HCLL 13/2011.
572. See, e.g., Fouchard Gaillard Goldman on International Commercial Arbitration 983, para. 1693 (E. Gaillard, J. Savage eds., 1999); Gary B. Born, International Commercial Arbitration 3707 (2014); Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 269-73 (1981); Julian D.M.Lew, Loukas A. Mistelis, Stefan M. Kröll, Comparative International Commercial Arbitration paras. 26-66 (2003); Nigel Blackaby et al., Redfern and Hunter on International Arbitration para. 11.56 (2015); Pieter Sanders, A Twenty Years’ Review of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 13 Int’l Law 269 (1979); Michael Hwang and Amy Lai, Do Egregious Errors Amount to a Breach of Public Policy?, 71 Arbitration 1 (2005).
10. Courts of the Contracting States have also consistently found that the Convention does not allow refusal to recognize and enforce based on procedural grounds other than those listed in article V. For instance, a Swiss appeals court rejected a challenge to recognition and enforcement on the ground that one party was invited to participate in the arbitration in a language it did not understand shortly before the commencement of the arbitration, holding that this did not constitute one of the enumerated grounds under article V.573 Courts in Belgium,574 the United Kingdom,575 Colombia,576 Luxembourg,577 Israel,578 Canada,579 Germany,580 Hong Kong,581 the Netherlands,582 Italy583 and Bermuda584 have advanced the same position. Leading commentators on the New York Convention equally confirm that the grounds for refusal under article V are exhaustive.585
573. N.Z. v. I, Appellationsgericht, Basel-Stadt, Switzerland, 27 February 1989, XVII Y.B. Com. Arb. 581 (1992).
574. Inter-Arab Investment Guarantee Corp. v. Banque Arabe et Internationale d’Investissements, Cour d’Appel, Brussels, Belgium, 25 January 1996, XXII Y.B. Com. Arb. 643 (1997).
575. Rosseel NV v. Oriental Commercial Shipping, High Court of Justice, England and Wales, 16 November 1990, XVI Y.B. Com. Arb. 615 (1991).
576. Petrotesting Colombia S.A. v. Southeast Investment Corporation, Corte Suprema de Justicia, Colombia, 27 July 2011; Drummond Ltd. v. Instiuto Nacional de Concesiones, Corte Suprema de Justicia, Colombia, 3 May 2012, XXXVII Y.B. Com. Arb. 205 (2012).
577. Sovereign Participations International S.A. v. Chadmore Developments Ltd., Cour d’Appel, Luxembourg, 28 January 1999, XXIV Y.B. Com. Arb. 714 (1999).
578. Zeevi Holdings Ltd. (in receivership) (Israel) v. The Republic of Bulgaria, District Court, Jerusalem, Israel, 13 January 2009, XXXIV Y.B. Com. Arb. 632 (2009).
579. Abener Energia, S.A. and Sunopta Inc. v. Suopta Inc. and Abener Energia, S.A., Ontario Superior Court of Justice, Canada, 15 June 2009, 2009 CanLII 30678.
580. Parties not indicated, Oberlandesgericht, Hamm, Germany, 2 November 1983, XIV Y.B. Com. Arb. 629 (1989).
581. Karaha Bodas Company LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Court of Final Appeal, Hong Kong, 5 December 2008, FACV 6/2008.
582. German Party v. Dutch Party, President of Rechtbank, The Hague, The Netherlands, 26 April 1973, IV Y.B. Com. Arb. 305 (1979).
583. C.G. Impianti SpA (Italy) v. B.M.A.A.B. and Sons International Contracting Company WLL (Kuwait), Corte di Appello, Milan, Italy, 29 April 2009, XXXV Y.B. Com. Arb. 415 (2010).
584. Sojuznefteexport v. Joc Oil Ltd., Court of Appeal, Bermuda, 7 July 1989, XV Y.B. Com. Arb. 384 (1990).
585. Gary B. Born, International Commercial Arbitration 3426-27 (2014); Roy Goode, The Role of the Lex Loci Arbitri in International Commercial Arbitration, 17 Arb. Int’l 19, 22 (2001); Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 265 (1981); Julian Lew and Loukas Mistelis, Comparative International Commercial Arbitration, para. 26-70 (2003); Nigel Blackaby et al., Redfern and Hunter on International Arbitration para. 11.57 (2015); Marike R.P. Paulsson, The 1958 New York Convention in Action 166 (2016).
11. In certain early cases, courts of the United States considered that an arbitrator’s manifest disregard of the law, which constitutes a ground for vacating domestic arbitral awards under the United States Federal Arbitration Act, could also constitute a ground for refusing to enforce a foreign arbitral award under the Convention.586 In more recent cases, however, United States courts have held that the exhaustive nature of the grounds for refusal under article V bars the application of this doctrine to awards falling under the Convention. In the words of one United States appeals court, “[t]here is now considerable caselaw holding that, in an action to confirm an award rendered in, or under the law of, a foreign jurisdiction, the grounds for relief enumerated in Art. V of the Convention are the only grounds available for setting aside an arbitral awards [sic]”.587 Commentators confirm this view.588
586. Wilko v. Swan, Court of Appeals, Second Circuit, United Stated of America, 7 December 1953, 346 United States 427; Office of Supply, Government of the Republic of Korea v. New York Navigation Company, Inc., Court of Appeals, Second Circuit, United States of America, 8 November 1972, 469 F.2d 377 (1972); American Construction Machinery & Equipment Corp. Ltd. v. Mechanised Construction of Pakistan Ltd., District Court, Southern District of New York, United States of America, 23 March 1987, 659 F. Supp. 426 (S.D.N.Y. 1987).
587. Yusuf Ahmed Alghanim & Sons, W.LL v. Toys “R” Us, Inc., Court of Appeals, Second Circuit, United States of America, 10 September 1997, XXIII Y.B. Com. Arb. 1058 (1998). See also Brandeis Intsel Ltd. v. Calabrian Chemicals, District Court, Southern District of New York, United States of America, 5 January 1987, 656 F. Supp. 160 (S.D.N.Y. 1987).
588. Gary B. Born, International Commercial Arbitration 3711 (2014); Kenneth R. Davis, Unconventional Wisdom: A New Look at Articles V and VII of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 37 Tex. Int’l L.J. 43 (2002), 70-71; Ray Y. Chan, The Enforceability of Annulled Foreign Arbitral Awards in the United States: A Critique of Chromalloy, 17 Boston U. Int’l L.J. 141, 160 (1999); Eric A. Schwartz, A Comment on Chromalloy: Hilmarton, à l’américaine, 14(2) J. Int’l Arb. 126, 132 (1997); Stephen T. Ostrowski and Yuval Shany, Chromalloy: United States Law and International Arbitration at the Crossroads, 73 N.Y.U. L. Rev. 1650, 1675 (1998).
12. An Australian court interpreted the legislation originally implementing the Convention in Australia, which omitted the words “only” in the chapeau to article V,589 as granting it residual discretion to refuse recognition and enforcement for reasons not enumerated in the Convention.590 In 2010, the legislation was amended to provide that “[t]he court may only refuse to enforce the foreign award in the circumstances” listed in article V.591
589. See Section 8(5) of the International Arbitration Act 1974 (Cth), which, prior to enumerating the grounds on which recognition and enforcement could be refused, stated that “the court may, at the request of the party against whom it is invoked, refuse to enforce the award if that party proves to the satisfaction of the court that [...]”.
590. Resort Condominiums International Inc. v. Ray Bowell, Supreme Court of Queensland, Australia, 29 October 1993, XX Y.B. Com. Arb. 628 (1995).
591. See International Arbitration Act 1974 (Cth), section 8(3A), as amended by International Arbitration Amendment Act 2010 (Cth), section 7.
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C. Burden of proof under article V
13. Article 1 of the 1927 Geneva Convention expressly required the party seeking to rely on an award to prove a number of positive conditions before recognition and enforcement was granted. However, it provided no guidance on whether the court where recognition and enforcement was sought should examine the grounds for non-enforcement under article 2 ex officio, or only at the request of the party opposing recognition and enforcement. It was also silent on which party had the ultimate burden of proving these grounds for refusal.
14. Following a proposal made by the German delegation during the drafting of the New York Convention,592 article V sets forth a clear rule with respect to the burden of proving the grounds for refusing to recognize and enforce an arbitral award.
592. Travaux préparatoires, United Nations Conference on International Commercial Arbitration, Recognition and Enforcement of Foreign Arbitral Awards, Comparison of Drafts Relating to Articles III, IV and V of the draft Convention on the Recognition and Enforcement of Foreign Arbitral Awards, E/CONF.26/L.33/Rev.1, p. 3.
15. The introductory sentence of article V (1) provides that recognition and enforcement may only be refused “at the request of the party against whom [the award] is invoked”, and if that party “furnishes proof” of the grounds listed in that paragraph. In accordance with this wording, courts in the Contracting States have consistently recognized that the party opposing recognition and enforcement has the burden of raising and proving the grounds for non-enforcement under article V (1).593
593. See, e.g., Dutch Shipowner v. German Cattle and Meat Dealer, Bundesgerichtshof, Germany, 1 February 2001, XXIX Y.B. Com. Arb. 700 (2004); Trans World Film SpA v. Film Polski Import and Export of Films, Corte di Cassazione, Italy, 22 February 1992, XVIII Y.B. Com. Arb. 433 (1993); Europcar Italia SpA v. Maiellano Tours Inc., Court of Appeals, Second Circuit, United States of America, 2 September 1998, 97-7224, XXIV Y.B. Com. Arb. 860 (1999); Encyclopedia Universalis S.A. v. Encyclopedia Britannica Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-cv, XXX Y.B. Com. Arb. 1136 (2005).
16. Article V (2) provides that the grounds under the second paragraph may be observed by a court ex officio. Courts of the Contracting States have confirmed that the grounds for refusal under article V (2) do not have to be pleaded by the party opposing recognition and enforcement.594 While article V (2) does not specifically allocate the burden of proof to either party, courts of the Contracting States have considered that the party opposing recognition and enforcement has the ultimate burden of proving such grounds.595 Leading commentators on the Convention express the same view.596
594. See, e.g., Efxinos Shipping Co. Ltd. v. Rawi Shipping Lines Ltd., Corte Di Appello Genova, Italy, 2 May 1980, VIII Y.B. Com. Arb. 381 (1983); Rosseel NV v. Oriental Commercial Shipping, High Court of Justice, England and Wales, 16 November 1990, XVI Com. Arb. 615 (1991); Sovereign Participations International S.A. v. Chadmore Developments Ltd., Cour d’Appel, Luxembourg, 28 January 1999, XXIV Y.B. Com. Arb. 714 (1999).
595. See, e.g., Licensee v. Licensor, Oberlandesgericht, Düsseldorf, Germany, 21 July 2004, XXXII Y.B. Com. Arb. 315 (2007); Gater Assets Ltd. v. Nak Naftogaz Ukrainiy, Court of Appeal, England and Wales, 17 October 2007, [2007] EWCA Civ 988; Hebei Import & Export Corp. v. Polytek Engineering Co. Ltd., Court of Final Appeal, Hong Kong, 9 February 1999, [1999] 2 HKC 205; NTT Docomo Inc. v. Ultra D.O.O., District Court, Southern District of New York, United States of America, 12 October 2010, 10 Civ. 3823 (RMB)(JCF). See also the chapter of Guide on article V (2)(b), para. 57.
596. See, e.g., Gary B. Born, International Commercial Arbitration 3418-19 (2014); Dirk Otto, Omaia Elwan, Article V (2), in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention 345, 348 (H. Kronke, P. Nacimiento et al. eds., 2010).
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