7.11.16 – Gary B. Born @SPLS “Recognition of Annulled Awards: Rethinking the Topic”

On 7 November 2016, Sciences Po Law School had the pleasure to welcome Mr. Gary Born in Paris for a public event on the recognition and enforcement of annulled international arbitral awards.

Mr. Born aknowledged up front that since most arbitral awards are being complied with on a voluntary basis, the recognition of annulled awards answers above all rather theoretical concerns. Recalling the rich literature dedicated to this topic, and more particularly to the scope of Article V(1)(e) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (hereafter « New York Convention »), Mr. Born offered to rethink this « old bill with many fingerprints on it » during this event. 
Mr. Born started his talk by contrasting the conflicting approaches which coexist today when it comes to the question of the recognition and enforcement of annulled international arbitral awards. He extensively discussed the French view according to which arbitral awards are considered to be the product of a legal arbitral order and are thus fully unlinked to the legal order of the seat of the arbitral tribunal. Accordingly, French Courts have for a long time accepted to recognize and enforce international arbitral awards which have been annulled by the courts of the seat of the arbitration. Mr. Born then went on to discuss the main rationale adopted a contrario by an opposite so-called territorialist view. This view is inter alia largely adopted in Germany and Austria. Despite the absence of relevant case law in Singapore to this day, Mr. Born discussed recent declarations of members of the Singaporian judiciary which seem to indicate that such a territorialist approach would be favored as well.

In beetween this two approaches, Mr. Born discussed the middle ground approaches taken by US, Dutch and Spanish Courts. These would occasionally allow recognition of annulled decisions if the annulment is based on a local annulment standard which is not envisaged by the New York Convention. At this point, Mr. Born highlighted that a majority of annulment decisions originate from developing jurisdictions. 

Following this portrait of conflicting approaches, Mr Born invited the audience to reconsider and discuss the approach taken by the drafters of the New York Convention. He inter alia harshly rejected the conclusion reached by the Indonesian Courts in the infamous Kharas Bodas Case (i.e. that Indonesian Courts would be able to annul an award rendered in Switzerland because Indonesian Law applied to the underlying contract). Accordingly, the New York Convention recognizes the power of annulment only to the courts of the seat of the arbitration (primary jurisdictions).
Another important issue brought to the attention of the audience concerned the scope of Art. V(1)(e) of the New York Convention. Mr. Born ultimately considered that the debated about the permissive-wording of Art 5 has now been settled, in fine recognizing that courts enjoy a certain discretion to refuse recognition of annulled awards. However, he warned that this does not imply that the New York Convention can never oblige a Court to recognize an annulled award. In another infamous case (TermoRio), an arbitral award had been annulled because the court found that an ICC arbitration agreement would not be a valid agreement to arbitrate. Mr. Born argued that such an annulment goes against the very wording of Art II of the New York Convention. In such cases, the secondary jurisdictions should not be able to refuse recognition and enforcement of the arbitral award, but should rather be under an obligation to do so in the absence of any other valid ground for annulment.

Mr. Born concluded his talk by a discussion on the influence of the French approach to international arbitration. As mentioned above, this approach grounds the arbitral phenomenon in an arbitral legal order. Recognizing the subtiltly and creativity of this approach on a considerable amount of crucial issues (e.g. when it comes to the question of choice of law), Mr. Born nevertheless cautioned against any global push to ground international commercial arbitration in such an arbitral legal order (or an international legal order as is the case with international investment arbitration). One must not forget that the ultimate wording of the New York Convention is a compromise of different theoretical representations of international arbitration. Despite this mix, in his opinion, the New York Convention in fact clearly builds on a partnership between private and public justice. Such partnership can hardly be reconciled with a detached arbitral legal arbitral. To the contrary, the New York Convention’s strength builds on the predominant role which it recognizes to national law. This is illustrated by the ‘escape valves’ which can be found in Art. V(1)(a) and V(2)(a) and (b) of the New York Convention. It is precisely because of this predominant role of national law that in return national jurisdictions generally welcome and support arbitral dispute resolution.


Retrouvez-nous à l’Ecole de droit de Sciences Po en novembre pour une présentation unique d’une des plus importantes autorités mondiales sur l’arbitrage international.

Join us at Sciences Po Law School in November for a unique presentation by one of the most preeminent authorities worldwide on international arbitration.

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Gary B. Born
Chair of International Arbitration Practice Group, Wilmerhale

Sciences Po Law School

Prof. Diego P. Fernández Arroyo
Co-Director of Global Governance Studies, Sciences Po Law School

17h, Amphithéâtre Jacques Chapsal
Sciences Po, 27 Rue Saint-Guillaume, 75007 Paris