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Recognition and Enforcement of Annulled Foreign Arbitral Awards

An Analysis of the Legal Framework and its Interpretation in Case Law and Literature


Claudia Alfons

When state A, in which an arbitral award was rendered, decides to annul the award in accordance with its national laws, it does not necessarily mean the award is effectively null and void. Rather, the initially prevailing party X may still be granted enforcement of the award in state B. The situation gets even worse, if a second arbitration is conducted in state A, this time rendering an award in favour of the former underlying party Y. Now party Y may in turn – successfully – seek the enforcement of the second award. This book aims to analyse the legal framework and the national case law resulting in such out-comes and gives recommendations how legal certainty may be assured – de lege lata and de lege ferenda.


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A. Introduction 15


15 A. Introduction I. International Arbitration Today Today’s growing inter-connectedness of the global economy frequently involves business transactions with different legal cultures, which usually entail unfamiliar- ity and disproportions when at least one party is reliant on foreign legal and court systems. In the course of the last few decades, international arbitration has increas- ingly developed from a remedy for only “the happy few” to an ordinary means of adequate dispute resolution for such complex contractual relations. International arbitration provides parties with a neutral forum, a specialised and indepen dent panel, and the opportunity to conduct proceedings in an agreed language and little court intervention. International arbitration also provides for them easy and ef- fi cient enforcement of the resulting award. Another particularity of international arbitration is that distinct subject matters may be governed by different systems of law. However, the determination of the applicable law, as will be demonstrated, is a fairly debated issue among arbitration practitioners and scholars. Generally speaking, the term “applicable law” may refer to the following legal matters: (i) the main contract; (ii) the arbitration agreement; (iii) the parties’ capacity to lawfully enter into an arbitration agreement; (iii) the arbitration proceedings, including the capacity and jurisdiction of the arbitrators, time limits, interim judicial assistance and the form, validity and fi nality of the award; and (v) the enforcement of the resulting award. Achieving quick, easy and broad satisfaction of the awarded claims is actually the “overarching goal” of parties entering into international arbitration. 1 In...

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