Author: Christopher R. Drahozal*
Published: October 2000
| Jurisdiction: International |
Topics: Enforcement of Arbitral Awards Enforceability Commercial Disputes |
Description: Arbitration is a widely used alternative to litigation for resolving international commercial disputes. By choosing an arbitral forum, parties agree not to have their disputes resolved in national courts. But in most cases national courts retain some supervisory authority over the arbitral award. A court in the arbitral situs (the “vacating court”) has the authority to vacate the award under standards set out in its national arbitration law. In addition, when the prevailing party seeks to enforce the award in another jurisdiction, the court in which enforcement is sought (the “enforcement court”) may decline enforcement under standards set out in its national arbitration law, as constrained by international treaty.
This article takes an economic approach to a question that has troubled international arbitration commentators: when should a court enforce an arbitration award that has been vacated in the arbitral situs. The “traditional approach” is that a vacated award is not enforceable in another jurisdiction. The “French approach” is that a vacated award is nonetheless enforceable in France, so long as it satisfies French standards for enforcing arbtral awards. The “Chromalloy approach,” so-called after the leading American case on the subject, is that a vacated award is nonetheless eforceable in the United States, so long as it satisfies American standards for enforcing arbitral awards and the parties agreed in their contract that the arbitration award would not be subject to appeal.
*Professor of Law, University of Kansas School of Law. I appreciate comments from Jack Coe, John Head, Rusty Park, Bo Rutledge, Steve Ware, and participants in faculty workshops at the University of Aberdeen School of Law and the University of Kansas School of Law.