The Case for Disregarding LSAS (Local Standard Annulments) under the New York Convention – Vol. 7 No. 2

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AuthorJan Paulsson*

Published: August 1996

Enforcement of Arbitral Awards
New York Convention

Description: The New York Convention was intended to ensure that arbitral awards would be enforced around the world unless the party resisting enforcement proves a fundamental impropriety such as excess of jurisdiction, wrongful constitution of the arbitral tribunal, or denial of the opportunity to be heard. Nevertheless, Article V(1)(e) of the Convention allows courts to decline to enforce a foreign award if it has been set aside in its country of origin without distinction as to the grounds upon which it was annulled. In his seminal work on the Convention published in 1981, Profesor van den Berg noted the danger that the Convention could be “undermined” if “all kinds of particularities” of the law of the seat of arbitration were allowed to frustrate enforcement.

The anathema of “local particularities” might conveniently be referred to as “Local Standard Annulments” or LSAs. An example would be the setting aside of an international award on the grounds that it failed to meet a requirement that it be signed by all arbitrators. Such a requirement (which, to take a concrete example, once existed in Austria but was abandoned in 1983) is clearly at odds with contemporary international standards. Moreover, it contradicts modern rules of arbitration, which ensure that a valid award may be rendered even if one arbitrator refuses to cooperate. A party agreeing to international arbitration legitimately expects that a good claim cannot be defeated by the cynical expedient of appointing an arbitrator-saboteur.

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*Freshfields, Paris. This article builds on Rediscovering the New York Convention: Further Reflections on Chromalloy, 12(4) INT’L ARB. REP., April 1997, at 20.