In an order dated 28 January 2014 (file number III ZB 40/13), the German Federal Supreme Court (Bundesgerichtshof, the “Court”) clarified that an arbitral award can only be set aside in recognition or enforcement proceedings by a state court in “extremely exceptional cases”, i.e. if an award breaches the fundamental principles of the German legal system in a manifest way.
The Court considered this clarification was necessary because by its wording, the relevant provision of the German arbitration law, Sect. 1059 para. 2 no. 2 b) of the code of civil procedure (Zivilprozessordnung – “ZPO”), does not require such “manifest” breach of the fundamental legal principles. The wording of the prior [...]
Arbitration proceedings sometimes spawn a host of parallel court proceedings. It is not unheard for parties to seek to instrumentalise courts, sometimes with the complicity of the courts themselves, to escape the jurisdiction of an arbitral tribunal. Such conduct may, however, expose parties to liability for breach of the arbitration agreement, as was confirmed by a recent decision of the Swiss Supreme Court (4A_232/2013 of 30 September 2013).
In many cases, parties referring a dispute which is covered by an arbitration agreement to a state court do it for tactical reasons, with the hope of obtaining a more favourable decision from the courts in their home jurisdiction than from a neutra [...]
By Roland Ziadé and Claudia Cavicchioli, Linklaters LLP
On 17 December 2013, the Paris Court of Appeal added a new chapter to the Jnah vs. Marriott saga, when it ruled on an action to set aside an arbitral award issued on 3 February 2012 by which an arbitral tribunal denied jurisdiction over claims brought on behalf of Jnah relating to the termination of a hotel management contract.
This decision, which applies the new regime of French arbitration law, confirms that, as had been held by the French Cour de cassation in the Abela case (Cour de cassation, 6 October 2010, Rev. Arb. 2010, p. 815) under the previous arbitration law, the French juge de l’annulation conducts a full review of an a [...]
and Nikki O’Sullivan, Senior Associate at Berwin Leighton Paisner LLP
In a recent decision of the English Commercial Court, Flaux J restated the general principle that the focus of an enquiry under Section 68 of the Arbitration Act 1996 (“the Act”) is to ascertain whether due process has been observed in the making of an Award. It is not designed to be a qualitative assessment of the correctness of the Tribunal’s decision. The case demonstrates that a veiled attempt by a party to appeal an award on the facts or law under the guise of a challenge under Section 68 (no matter how sophisticated the concealment) will not be entertained.
The dispute concerned the Claimant, Primera’s clai [...]
By Justin D’Agostino and Yi-Shun Teoh
In the latest instalment of Pacific China Holdings Ltd (in Liquidation) v Grand Pacific Holdings Ltd, the Hong Kong Court of Final Appeal has confirmed that parties who unsuccessfully challenge arbitral awards will generally be ordered to pay costs on the indemnity basis. This is a relatively rare and robust approach, compared to the majority of common law jurisdictions (for example, England and Wales and Victoria, Australia), which adopt the position that costs are ordinarily awarded against the unsuccessful party on a “party-and-party” basis, unless special circumstances can be established by the successful party. The Hong Kong Appeal Committee’s d [...]
On 01 January 2014, a government bill (ErläutRV 2322 BlgNR 23. GP) introducing changes to the Austrian Arbitration Law will come into force (SchiedsRÄG 2013). Mainly Sec. 615 and 616 of the Austrian Code of Civil Procedure (ACCP), which regulate the procedural levels for challenging an arbitration award in front of an Austrian state court, will be changed. As of the start of next year, the Austrian Supreme Court will be both the first and the last instance to decide about such claims.
History of the Legislation
Based on the work of a group composed of several arbitration practitioners and academics, a ministerial draft bill (351/ME, SchiedsRÄG 2012) issued in February 2012 e [...]