Author: Hans Smit*
Published: January 2009
Enforcement of Arbitral Awards
Description: Some time after this article was written, the French Cour de Cassation decided the Putrabali case. It affirmed a lower French court’s judgment granting recognition of an award notwithstanding its having been annulled in the place of arbitration. It ruled that an international arbitral award is not anchored in any national legal order, and that the effect of its annulment must be determined by the law of the country in which recognition is sought. The decision has generally been hailed by the commentators, but, upon proper analysis, appears less than commendable.
In the Putrabali case, an arbitration conducted in London between an Indonesian claimant and a French respondent resulted in an award in favor of the respondent. Putrabali, the Indonesian claimant, appealed to the London High Court on issues of law. The London court vacated the award and remanded the case to the arbitral tribunal, which rendered a second award replacing the first and ruling in favor of Putrabali. The French respondent then sought recognition of the first award in the French courts. The latter ruled, in three instances, in favor of the French respondent.
In my judgment, the Cour deCassation should have applied a simple analysis in reaching a solution defined exclusively by reference to the New York Convention. The New York Convention provides that an annulled award “may” be refused recognition. Whether or not the award in question should be recognized therefore depended on how the Court interpreted and applied the New York Convention. The considerations to be taken into account in performing that task are those seeking to serve the aims of the New York Convention. An analysis of this kind ensures uniformity and predictability of recognition of awards under the Convention.
In the case at hand, the parties had agreed to arbitration in London. The lex arbitri they had agreed to was English law. Under that law, the award could be reviewed on a ground on which the London court did review it and was replaced by a second award. In those circumstances, the first award should be denied recognition in France, because it was not a final award in the country of its origin and both the New York Convention and national arbitration laws relating to…
*Stanley H. Fuld Professor of Law, Columbia University.