Author: Adam Sulkowski
Published: June 1999
Enforcement of Arbitral Awards
New York Convention
Description: This article seeks to evaluate Polish arbitration law and specifically to analyze how the applicable law would effect the recognition and enforcement of international arbitral awards. This issue merits analysis because, as the case of the German firm Saarpapier Vertriebs GmbH demonstrates, foreign arbitral awards are not consistently enforced in Poland.
This paper will examine two procedural scenarios that are derived from the history of Chromalloy Aeroservices v. Arab Republic of Egypt (“Chromalloy,” as it is often referred to), a case which involved the enforcement of a nullified foreign arbitral award. The Chromalloy case is helpful to use in this regard for three reasons. First, being the first reported occasion where a U.S. court decided to enforce a nullified arbitral award, the issues received a clear and thorough review. Second, the procedural history provides lucid examples to evaluate in light of Polish law. Third, practitioners in the field of arbitration extensively reviewed and commented on the reasoning that the court adopted in dealing with the New York Convention of 1958, which will help guide the following analysis.
Mutually agreed–upon, effective procedures for the arbitration of business disputes are vital to long-term, international business operations. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “Convention”) is one of the most significant means by which countries commit themselves to the fostering of arbitration. The Convention has been called “the major arbitration treaty with worldwide effects.” Lord Mustill once wrote that the Convention could “lay claim to be the most effective instance of international legislation in the entire history of commercial law.” By committing themselves to the recognition and enforcement of foreign arbitral awards, signatory countries encouraged parties to international business disputes to refer them to arbitral panels. Often, however, the recognition and enforcement of foreign arbitral awards can run into difficulties. In the words of Richard Hill, “anomalies can arise when different jurisdictions have different laws concerning arbitrability and it is not immediately obvious which jurisdiction’s laws should prevail.”
Difficulties may arise when the courts of a country are asked to determine the legitimacy of an arbitral award. As described infra, an unsatisfied party to an arbitration may demand that an arbitral judgment be nullified by a court of the country in which it was awarded (if the laws of the country permit review).