The topic is Challenges or recourse against the recognition and enforcement of an International Commercial Arbitration award

RESEARCH PAPER ON CHALLENGES AGAINST THE RECOGNITION AND REINFORCEMENT OF AN INTERNATIONAL COMMERCIAL ARBITRATION AWARD
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OUTLINE
Introduction
Body
* Overview of the International Commercial Arbitration award
* Recognition and enforcement of an International Commercial arbitration award
* Challenges against the recognition and reinforcement of an International Commercial Arbitration award
* Recognition or enforcement of the award would be contrary to public policy
* Arbitrators had no jurisdiction in making the award
* Agreement was made under some incapacitation
* Lack of due process
* The award exceeds the submission to arbitration
* Improper arbitral procedure and lack of proper composition of arbitral tribunal
* A court has suspended an award
* Non-arbitrability
Conclusion
Bibliography
INTRODUCTION
Arbitration is a form of legal settlement carried out by a party not involved in the dispute and is done outside the court. The resolution of conflict involving the parties especially from different countries is evidenced by the issuance of an International Commercial Arbitration award. This award is meant to bind the agreement arrived at by the involved parties in the dispute. Recourses challenging the recognition and enforcement of this award have been brought to the attention of the court system .This research paper will be aimed at discussing the challenges against the recognition and enforcement of an International Commercial Arbitration award.[Christian Buhring-Uhle and Gabriele Lars Kirchhof. Arbitration and Mediation in International Business, 2nd Edition (2006).] [Ibid as consulted and relied upon in the analysis]
BODY
Overview of the International Commercial Arbitration award
International commercial arbitration involves the use of arbitrators in solving business disputes among transnational parties. It involves insertion of an arbitration clause into the business agreement involving the two parties and translates to a binding decision. International commercial arbitration has become common due to the increasing international commercial disputes. Consequently, its non judicial nature makes it a viable alternative for many foreign parties who might distrust the legal system incase of a dispute with a foreign party. Moreover, court cases in a foreign country may be expensive, complicated and time consuming. In conjunction, it may be difficult to enforce a decision rendered by a foreign court. Also, the arbitrators are agreed upon by both parties and are people who have specialized competence.[International Commercial Arbitration, May 25 2011, American Society of International Law, /erg/?page=arb.] [Ibid as consulted and relied upon in the analysis.] [Ibid.]
Arbitral awards also provide international recognition to the involved parties. This has seen more than 140 countries agree to bide by the terms of the also know as the New York Convention. Since these awards are final and binding, it avoids appeal processes and ads to the confidentiality of the parties that are not willing their settlement to be known.[Convention on the Recognition and Enforcement of Foreign Arbitral Award of 1958.]
Recognition and enforcement of an award
For an arbitral award to be recognized the parties upon whom it binds need to supply the legal system with written attestation of the award. Its enforcement follows thereafter, regardless of country in which it was made, subject to the provisions of.[Article 35 Recognition and enforcement.]
Challenges against the recognition and reinforcement of an International Commercial Arbitration award
Recourse against the recognition and enforcement of an International Commercial Arbitration award can be provided if the defense against whom the award was enforced can prove that: there was no valid agreement, the award was made due to lack of substantial jurisdiction, and that there was serious irregularity in the tribunal, proceedings and award. Quoting failure of tribunal to be fair or to adopt suitable procedures, or uncertainty concerning consequence of the award is considered irregularities. More over, if the tribunal is reported to have exceeded its powers or did not conduct proceedings as per the laid down procedures by involved parties. Consequently, if persons vested with powers by the parties and the arbitral exceeded their powers; the award was obtained fraudulently or in a way that was contrary to public policy. Moreover, if there was failure by any involved parties to comply with the requirements of the award.[Section 66 (3) and 67 (1) Arbitration Act 1996.] [Ibid as consulted and relied upon in the analysis] [Ibid] [Ibid]
Article 36 cites the recourse for recognition or enforcement of an International Commercial Arbitration award. A challenge is made if the defendant proves that the agreement was made under some incapacitation. Also, if the award made was not at per with requirements of that country. More over, when one of the parties evidences they were not informed when the arbitrator was being appointed. In conjunction, if the commercial arbitration award has not been legally bound to the parties by the country in which it was made.[Article 36 Grounds for refusing recognition and enforcement. See also Section 103 (2) Arbitration Act 1996 in England.]
Fraudulent attainment of an award
The recognition and reinforcement of the International Commercial Arbitration award is challenged in situations whereby it is found that the parties involved did not have a valid agreement. This is challenged in a situation whereby the arbitrators determine that only A and B were parties to an arbitration agreement regarding A, B, and C.
In the case of Westacre Investments Limited v Jugoimport spdr Holding Limited the recognition and reinforcement of an International Commercial Arbitration award was challenged secondary to plaintiffs` claims of having been attained fraudulently. The evidence produced should be so strong that it could be decisive at the hearing. However, the defendants failed to raise their allegation with the Swiss Federal Tribunal within the time period allowed that the claimants used perjured evidence to obtain the award. This led to them being denied the right to question the England Swiss arbitration award. Contra in the case of Soleimany v Soleimany the court refused to enforce the arbitral ward. It was proved beyond reasonable doubt that the arbitrator was dealing with an illegal enterprise where upon he considered that the illegality would have no effect on the rights of the parties. The English court was reluctant to enforce the award whether domestic or foreign since it would be against the public policy.[[1999] 3 WLR 811.] [Ibid as consulted and relied upon in the analysis] [[1998] 3 WLR 811.] [Ibid as consulted and relied upon in the analysis]
Consequently, recourse against the recognition and reinforcement of an International Commercial Arbitration award would be awarded if is proved that the arbitral proceedings were conducted against natural justice. Citing it was showed that the arbitrator declined to adjourn the proceedings, hence denying the respondent the opportunity to obtain evidence that would refute the allegations. In the case of Catalina (Owners) v Norma (Owners) it was also proved that the arbitrator made remarks which indicated predetermined concepts regarding the evidence of a witness of a particular populace, who happened to be a witness of one of the parties.[Enoch and Zaretsky, Bock & Co [1910] 1 KB 327 (CA).] [[1938] 61 LIL Rep 360.] [Ibid as consulted and relied upon in the analysis]
Arbitrators had no jurisdiction in making the award
Additionally, a challenge against the recognition and reinforcement of an International Commercial Arbitration award can be raised where it is proved that the arbitrators had no jurisdiction in making the award. In the case of Kianta Osakeyhtio v Britain and Overseas Trading C Ltd parties to a timber contract agreed to arbitrate. Following arising of a dispute after the arbitration, a second agreement was arrived at, with no arbitration clause. This led to dispute arising following the second compensation agreement, challenging the recognition and reinforcement of the International Arbitration award.[[1953] 2 LIL Rep 569s.] [Ibid as consulted and relied upon in the analysis]
Agreement was made under some incapacitation
Recourse against recognition and enforcement of an International Commercial Arbitration award on the ground of incapacity among the parties has rarely been enforced. This is since there has been no reported United States judicial decision regarding incapacitation of the parties. In affirmation, in the case of Buques Centramericons, S A v Refinadora Costarricense de Petroleos, S A, the plaintiff filed a case against the recognition of an award with the defendant. The plaintiff claimed the agreement was made prior to approval by company owners` legislature of the country. The court ruled in favor of the arbitrators` findings and confirmed the award after it affirmed that this issue had previously been heaved and rejected at some stage in the arbitral hearing. In the case of American Construction Machinery & Equipment Corp. v. Mechanized Construction of Pakistan Ltd , an argument had been raised challenging the validity of the award on the basis that it had been enforced under the Pakistan law. Since the Pakistan law had not been cited by the party involved in the arbitration, to seal the concurrence they arrived at, the challenge was revoked by the court.[No. 87 Civ. 3256 (DNE), 1989 U. S. Dist LEXIS 5429 at* 1 (S. D. N. Y. May 18, 1989).] [Ibid as consulted and relied upon in the analysis] [659 F. Supp. 426 (S.D.N.Y.), aff`d, 828 F.2d 117 (2d Cir. 1987).] [Ibid as consulted and relied upon in the analysis]
Article two of the New York convention provides that an agreement can only be recognized by the contracting states if it is made quoting "in writing" . This includes quoting "arbitration agreement or contract with an arbitration clause, contained in an exchange of telegrams and letters or signed by the parties". The validity of the agreement is to be judged on the law where the enforcement was m...