Enforcement of an Award

Enforcement of arbitral awards International Commercial Arbitral Awards Article 35, Schedule 1, Text of UNCITRAL Model Law on International Commercial Arbitration, Arbitration Act 2010 deals with the recognition and enforcement of international commercial arbitral awards. Article 36, Schedule 1, Text of UNCITRAL Model Law on International Commercial Arbitration, Arbitration Act 2010 deals with the grounds for refusing recognition or enforcement of international commercial arbitral awards. Domestic Arbitral Awards S.23 of the Arbitration Act 2010 deals with the enforcement of domestic arbitral awards.

Schedule 1, Arbitration Act 2010 Article 35 Recognition and enforcement of international commercial arbitration awards Article 35 (1) An arbitral award, irrespective of the country in which it was made, shall be recognised as binding and, upon application in writing to the competent court, shall be enforced subject to the provisions of this article and of article 36. Article 35 (2) The party relying on an award or applying for its enforcement shall supply the original award of a copy thereof. If the award is not made in an official language of this State, the court may request the party to supply a translation thereof into such language.

Schedule 1, Arbitration Act 2010 – Article 36 Grounds for refusing recognition or enforcement of international commercial arbitral awards Article 36 (1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only: (a) at the request of the party against whom it is invoked, if that party furnishes to the competent court where recognition or enforcement is sought proof that: (i) a party to the arbitration agreement referred to in article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or (ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

Schedule 1, Arbitration Act 2010 – Article 36 Grounds for refusing recognition or enforcement of international commercial arbitral awards (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or (v) the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made; or

Schedule 1, Arbitration Act 2010 – Article 36 Grounds for refusing recognition or enforcement of international commercial arbitral awards Article 36 (b) if the court finds that: (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or (ii) the recognition or enforcement of the award would be contrary to the public policy of this State. Article 36 (2) If an application for setting aside or suspension of an award has been made to a court referred to in paragraph (1)(a)(v) of this article, the court where recognition or enforcement is sought may, if it considers it proper, adjourn its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the other party to provide appropriate security.

Enforcement of an Award (Domestic Awards) S.23 (1) Arbitration Act 2010 allows parties to enforce an award with the court’s permission. An award will be enforced in same way as a court order or judgement. S.23 (2) provides that an award will be binding and can be relied upon by the parties. Articles 35 & 36, Schedule 1 do not apply to the enforcement of domestic awards. These articles apply only to the recognition & enforcement of international commercial arbitration awards.

Arbitration Act 2010 – enforcement of the award S.23 (1) An award (other than an award within the meaning of (section 25) made by an arbitral tribunal under an arbitration agreement shall be enforceable in the State either by action or, by leave of the High Court, in the same manner as a judgment or order of that Court with the same effect and where leave is given, judgment may be entered in terms of the award. S.23 (2) An award that is enforceable under subsection (1) shall, unless otherwise agreed by the parties, be treated as binding for all purposes on the parties between whom it was made, and may accordingly be relied on by any of those parties by way of defence, set-off or otherwise in any legal proceedings in the State. S.23 (4) Articles 35 and 36 shall not apply in respect of an award in arbitral proceedings which took place in the State. An application to enforce an award is made by way of special summons and grounding affidavit.

Enforcement of the arbitrator’s award Any order of enforcement by the court may be made on such terms as to costs or otherwise as that court thinks just. Once award is made it should be entered as a judgement and given effect accordingly – Grange Developments v Dublin County Council (No.4) [1989] IR 377 An award should be entered as a judgment once an award has been made and the time for challenging the award has passed – Middlemiss v Hartlepool Corporation [1973] 1 All ER 172

Enforcement of the Award under the 1954 Act (now repealed) S.41, Arbitration Act 1954: “An award on an arbitration may, by leave of the Court, be enforced in the same manner as a judgment or order to the same effect and, where leave is given, judgment may be entered in terms of the award.”

Refusal to Enforce an Award – common law Court may refuse to enforce an award. (1) some defect or error on the face of the award; (2) arbitrator has admittedly made some mistake and wants award remitted to him in order to correct the award; (3) material evidence has since been obtained; (4) misconduct on the part of the arbitrator; (5) grounds of public policy.

Refusal to Enforce an Award (common law)- defect or error on the face of the award Grange Developments v Dublin County Council (No.4)[1989] IR 377 Plaintiff refused planning permission for a site. Plaintiff was awarded compensation by way of an interim award under the Local Government (Planning and Development) Act Subsequent to the award, the defendants issued legal proceedings challenging the constitutionality of the provisions under which this compensation was payable. Plaintiff sought to enforce the arbitrator’s award.

Refusal to enforce an award - Grange Developments v Dublin County Council (No.4) Defendant argued that the award should not be enforceable pending the outcome of the challenge to the constitutionality of the Local Government (Planning and Development) Act In the High Court, Murphy J. held that refusal can occur where there are particularly and unusual circumstances that may affect validity of award. Murphy J. found that there were no unusual circumstances in this case and allowed the enforcement of the award. Murphy J. commented that “an arbitration award should be given the same effect as a judgment unless there are particularly disturbing and unusual circumstances which may affect the validity of the award”

Refusal to enforce an award Middlemiss v Hartlepool Corporation [1972] 1 WLR 1643 – award should be entered as a judgement once award has been made and time for challenging it in court has passed. Lord Denning M.R. held that leave should be given to enforce an award as a judgment unless there is real ground for doubting the validity of the award. Defendant claimed that there was a point of law that had been wrongly decided. Lord Denning M.R. held that the defendant should have raised this point by way of case stated within the prescribed period of time. The arbitrator had not expressly dealt with this particular point in his award. However, the defendant had raised this point during the reference. Therefore the court held that the arbitrator was taken to have fully considered and rejected the defendant’s point.

Middlemiss v Hartlepool Corporation [1972] 1 WLR 1643 Lord Denning MR at p.1646: “once an award has been made - and not challenged in the court - it should be entered as a judgment and given effect accordingly. It should not be held up because the losing party says he wants to argue some point or other or wants to set up a counterclaim or anything on that sort. He would not be allowed to do so in the case of a judgment not appealed from. Nor should he do so in the case of an award that he has not challenged.”

Refusal to enforce an award (common law) – grounds of public policy DST v Raknoc [1987] 2 All ER 769 In this case, a party sought to enforce a foreign award. The other party resisted the application for enforcement of the award claiming that it would offend public policy. In the English Court of Appeal, Lord Donaldson M.R. held that considerations of public policy can never be exhaustively defined. It must involve some element of illegality, the enforcement of such award would be injurious to the public good or that enforcement would be wholly offensive to the ordinary reasonable and fully informed member of the public on whose behalf the powers of the state are exercised.

Refusal to enforce an award (common law) – grounds of public policy Brostrom Tankers AB v Factorias Vulcano SA [2004] 2 IR 191 Plaintiff instituted proceedings seeking the enforcement of an award of a foreign arbitrator. S.9 of the Arbitration Act 1980 dealt with the enforcement of New York Convention awards. S.9(2) stated that one of the grounds for refusing the enforcement of an award was were it “would be contrary to public policy to enforce the award.” Defendant opposed the plaintiff’s application to enforce the award arguing that it would be contrary to public policy to enable the plaintiff to recover a sum greater than 10% of the arbitrator’s award. In the High Court, Kelly J. held that there was no aspect of Irish public policy which could justify the refusal of an order for enforcement of the award in this case. Furthermore, Kelly J. noted that the public policy defence for refusing to enforce an award is narrow in scope and could only be invoked where there was some element of illegality or where the enforcement of the award would be clearly injurious to the public good or where it would be wholly offensive to the ordinary responsible and fully informed members of the public. In this case, Kelly J. commented that there were strong public policy considerations in favour of enforcing awards and this applied equally to New York Convention awards.

Time period to enforce award Statue of Limitations 1957, s.11(1)(d) – 6 year limitation period to enforce award. Agromet Motoimport v Maulden Engineering [1985] 2 Al ER 436 – Otton J. held that an action to enforce an award is an independent cause of action distinct from the and in no way entangled with the original contract or the breach of contract that gives rise to arbitration. Otton J. held that there is an implied term in the contract that an award should be honoured when it is made. The implied term is breached when a party fails to honour an award.

Time period to enforce award Statute of Limitations 1957 s.11(1) provides that the time limit begins from “the date on which the cause of action accrued”. In Agromet Motoimport v Maulden Engineering, Otton J. held that time starts to run from when a party fails to abide by terms of award. International Bulk Shipping and Services Ltd (IBSSL) v Minerals and Metals Trading Corpn. of India [1996] 1 All ER 1017 – court reached different conclusion. Question for the court was what was the appropriate limitation period. In IBSSL - these awards stated that the payments were to be made “forthwith” to the plaintiffs. Plaintiffs sought to enforce the awards in 1993.

Time period to enforce award – IBSSL English Court of Appeal held that the six year limitation period to enforce an arbitral award begins from the time that the person’s cause of action arises & this will arise when the claimant becomes entitled to enforce an award. It could not be argued that the causes of action arose before the awards were published. Evans L.J. held that the claim arises under a contractual undertaking to honour the agreement, which may mean that the party against whom the award is made is under an immediate obligation to pay the amount of the award. Evans L.J. held that the payment process may take 28 days but could hardly be longer than three moths. He rejected the argument that the cause of action did not commence until the respondent’s failure to honour their contractual obligation to pay was unequivocal.

Time period to enforce award National Ability SA v Tinna Oils and Chemicals Ltd; The Amazon Reefer [2010] 2 All ER 899 Claimant ship-owners applied for permission to enforce arbitral awards more than 6 years after the date of the awards. Question before the court was whether the action to enforce the awards was subject to the six year limitation period. Claimants argued that s.7 of the Limitation Act 1980 (UK) did not apply to s.26 of the UK Arbitration Act 1950 (enforcement of the arbitral award). Court of Appeal held that applications to enforce arbitral awards under s.26 was an ‘action to enforce an award’ within the meaning of s.7, Limitation Act CAPP also held that: “It was of considerable importance to the conduct of international arbitration in London that the law should be simple and clear.”