Arbitration News – Pro-enforcement Bias of New York Convention Given Effect Under Articles V and VI
(Article by Dr. A. Tsavdaridis, published in the Arbitration Newsletter of the ILO on November 07, 2013)
In the enforcement stage of a foreign award in a cotton arbitration, a court held that
litispendence is not a valid ground for resisting enforcement under the
New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It
also held that the concept of public policy, perceived as international, should be given a
narrow interpretation.
Facts
The non-fulfilment of three agreements for the sale of cotton, entered into in 2010 by
two Greek companies, led to international arbitration under the bylaws of the
International Cotton Association in Liverpool. The final award, issued in February 2012
on appeal (by the Technical Appeal Committee of the International Cotton Association),
ordered the seller to pay approximately €4.7 million, plus interest and costs, to the
purchaser. The seller rushed to file court proceedings in Greece, seeking to obtain a
judgment declaring the award null and void. The purchaser moved to enforce the award
in Greece under the New York Convention.
In the enforcement proceedings initiated by the purchaser, the seller opposed
enforcement, arguing that:
l the court proceedings it had already initiated resulted in litispendence that barred the
continuation of the enforcement proceedings; and
l the award violated public policy under Article V(2)(b) of the New York Convention.(1)
As regards public policy in particular, the seller argued that:
l it had been refused the opportunity to present its case orally;
l the parties had been represented not by counsel, but by arbitrators selected from a
pool of arbitrators who were not independent or impartial, as they had been
repeatedly appointed as arbitrators for claimants and respondents in a number of
cases involving non-fulfilment of contracts in 2010; and
l it had no obligation to “the impossible” – as it described the obligation that it was
held liable to fulfil.
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