International Commercial Law Exam Notes PDF

International Commercial Law ============================ Exam ---- - Standardanswers to the exam - Introduction to all general provisions - Full assignments for all typical questions - Introductions to all legislation - Loan the books - Read the articles on canvas -...

International Commercial Law ============================ Exam ---- - Standardanswers to the exam - Introduction to all general provisions - Full assignments for all typical questions - Introductions to all legislation - Loan the books - Read the articles on canvas - Read the judgements Lection 1 -- Introduction ------------------------- - - - - - - - - - - - - - - a. - - - - b. - c. d. - e. - - - - f. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Regulatory framework for arbitration - The arbitration agreement - National law on arbitration (seat country) - The Model Law - The New York Convention - Institutional rule-sets - UNCITRAL Ad hoc Arbitration Rules - IBA Rules on Evidence - Arbitration practice - Types of arbitration - Ad hoc arbitration - Institutional arbitration - ICC (France) - AAA (USA) - LCIA (UK) - HKIAC (China) - SIAC (Singapore) - - An UNCITRAL Convention from 1980 - Its purpose is to create a uniform sales law applicable to international sales of goods contracts between commercial parties. - Instead of national sales and contract law. - Default rules, the parties agreement is superior - Allocation of risks - Transaction costs - CISG governs 98 contracting states. - CISG and choice of law rules - Art. 1.1 - (a), the direct rule - If both parties is from different CISG states CISG applies. - (b), the indirect rule - If only one party is CISG state, the sellers' rules apply. If the seller is from a CISG state CISG applies - CISG also applied in Non-Contracting States, e.g. the UK. **Lecture 2** [Brussels 1 -- structure] - Double instrument - Jurisdiction - Parallel system - Defendants domiciled in MS -- Brussels 1 - Defendants domiciled in non-MS -- National law - Exceptions for consumer-, employment- exclusive jurisdiction and choice of court agreements - Recognition - Brussels 1 covers all MS judgments - Non-MS judgments governed by national law [Brussels 1 -- Interpretation ] - Travaux préparatoires - Explanatory reports - Brussels Convention - Lugano Convention - Preambel with recitals in the Regulation - The EU Court of Justice - Preliminary rulings - Binding on the asking court - Binding on all other courts - Uniform and national concepts [Brussels 1 -- Scope of application ] - Article 1 -- Brussels 1 applies to civil and commercial matters. 1. Not for governments acting on their public obligations. 2. An un-defined concept 3. A number of exclusions in art. 1(2) 4. LTU, Case 29/76 - Article 4 -- the defendant's domicile 5. General jurisdiction 6. The relevance of other factors? - Group Josi, Case C-412/98 7. Strict or discretionary rule? - Owusu, C-281/02 - *Article 62 -- What is a domicile?* 8. In order to determine whether a party is domiciled in the Member State whose courts are seised of a matter, the court shall apply its internal law (National law) 9. If a party is not domiciled in the Member State whose courts are seised of the matter, then, in order to determine whether the party is domiciled in another Member State, the court shall apply the law of that Member State. - National concepts - Some variety - Several domiciles - No EU domicile - *Article 63* 10. For the purposes of this Regulation, a company or other legal person or association of natural or legal persons is domiciled at the place where it has its: - A legal entity can be sued in any of the above stated locations. - Article 7.1 - Contract jurisdiction - When the parties are entered into a contract they can sue in any of the parties domiciled states. - When we have a choice we call it *forum shopping*. - The purpose of art. 7.1. - Predictability - (The place of delivery means the final destination of the goods, cf. car trim. C-381/08) - Article 7.2 -- Tort claims (erstatningssager) - When you have a tort claim in a non-contractual relationship, you can sue in relation to article 7.2. - If the wrongful action happens in one MS and the damage happens in another MS, the court proceedings will be in the state, where the damage was done, not where the harmful event occurred or may occur. - - Pre-contractual liability -- for the cases of a contract being draftet but not officially entered into. art. 7.2 about non-contractual cases (tort) will appl - Sheville, Case C-68/93 (Tort/erstatning) - Deformation Case - Sues French newspaper (France Soir) for deformation in the UK. - Mosaic Principle -- Only [local] jurisdiction in the UK as only 5-10 copies were sold. - All other states where the news paper was sold had local jurisdiction - EDate, Case C-509/09 and Martinez, Case C-161/10 - Sues UK newspaper (eDate) for deformation in Spain. - As the news was online, court in Spain had [total] jurisdiction. - All other states had local jurisdiction. - Forud for art. 7.1 I Brussels 1 - Article 5.1 -- Contract jurisdiction, Brussels Convention - A person domiciled in a Member State may be sued in another Member State: (1) in matters relating to a contract, in the courts for the place of performance of the obligation in question. - For Payment obligations, in Denmark, the place of performance would be at the place of the creditor, jf. Pengeskyld er bringeskyld. - For delivery of goods, the place of obligations would be the place of delivery. - Any lawyer would find an obligation in either of the parties domicile locations, therefore, art. 7.1 means that you can sue in any of the parties domicile locations. - Consumer Jurisdiction, art. 17-19 - The purpose of the provisions - Procedural protection - Protection n respect of recognition and enforcement - The consumer concept - A natural person who enters a private contract - The rules of jurisdiction, art. 18 - The consumer can sue in both parties' country. - The seller can only sue the consumer in the consumers country. - Not if there is a choice of court clause in the agreement. This clause/agreement is only valid if the consumer reaffirms the choice of court after the dispute arises. - Scope of application, art. 17 - The rules don't apply to all consumer contract - They only apply to the 3 contracts listed in art. 17 g. Credit sale h. Loan to sponsor a credit sale i. Internet consumer contracts Contents {#contents.Overskrift} ======== [International Commercial Law 1](#international-commercial-law) [Exam tips 1](#_Toc178054872) [Lection 1 -- Introduction 1](#exam) [Chapter 2 -- Jurisdiction 8](#chapter-2-jurisdiction) [Chapter 3 -- The Applicable Law in Contract 9](#chapter-3-the-applicable-law-in-contract) [Chapter 4 -- the Applicable Law in Tort 12](#chapter-4-the-applicable-law-in-tort) [Chapter 5 -- Recognition and Enforcement of Foreign Judgments 13](#chapter-5-recognition-and-enforcement-of-foreign-judgments) [Chapter 6 -- International Commercial Arbitration 14](#chapter-6-international-commercial-arbitration) [CISG -- Key Findings 16](#cisg-key-findings) [Chapter 1 -- Introduction and Overview 16](#chapter-1-introduction-and-overview) [Chapter 2 -- Field of Application and General Provisions 17](#chapter-2-field-of-application-and-general-provisions) [Chapter 3 -- Sales Contract Formation 19](#chapter-3-sales-contract-formation) [Chapter 4 -- Obligations of the Parties 20](#chapter-4-obligations-of-the-parties) [Chapter 5 -- Passing of Risk (art. 66-70) 21](#chapter-5-passing-of-risk-art.-66-70) [Chapter 6 -- Remedies for Breach 21](#chapter-6-remedies-for-breach) [Chapter 7 -- CISG Reservations (and Other Final Provisions) 22](#chapter-7-cisg-reservations-and-other-final-provisions) Chapter 2 -- Jurisdiction ------------------------- **General jurisdiction** provides courts with the power to adjudicate any and all matters (e.g. domicile). **Specific jurisdiction** comprises situations where the assertion of power to adjudicate is limited to matters arising out of (or intimately related to) the affiliating circumstances on which the particular jurisdiction claim is based. (art. 7(1), art. 7(5), art. 10-16 (insurance), art. 17-19 (consumer), art 20-23 (employment)) **Supplementary (default rule)** are rules that apply only in the absence of a binding jurisdictional agreement. **Mandatory rules** are rules that in all cases are binding and is not subject to contrary agreement (art. 24 immovable property; art. 15, 19, 23, 24) **Lex loci delicti** is the law of the country in which the relevant acts and events took place (tort, delict) p. 62 **Lugano Convention (2010)** serves to join MS of EU and EU states Iceland, Norway, Switzerland (and DK). **[Brussels I Regulation, 2002 (recast 2012) ]** Double convention (instrument) that governs both (i) jurisdiction of the courts and (ii) recognition and enforcement of judgments in other Contracting States. Purpose is to promote the free movement of judgments. +-----------------------------------+-----------------------------------+ | **Article 1** | The regulation applies to civil | | | and commercial matters, excluding | | | revenue, customs, etc. | +===================================+===================================+ | **Article 4** | **General Rule** | | | | | | Defendant's domicile. "Subject to | | | this Regulation, persons | | | domiciled in a Member State | | | shall, whatever their | | | nationality, be sued in the | | | courts of that Member State." | | | Actor sequitur forum rei | +-----------------------------------+-----------------------------------+ | **Article 6** | **No Forum Agreement** | | | | | | In the absence of a forum | | | agreement, the jurisdiction of | | | the courts in matters where a | | | defendant is domiciled outside | | | the EU is generally determined by | | | the domestic procedural law of | | | the forum. | +-----------------------------------+-----------------------------------+ | **Article 7** | **(special jurisdiction) (default | | | rule -- applies only when | | | defendant EU domicile)** | | | | | | Forum solutionis (forum of | | | performance), EU domiciliaries | | | may be sued in another MS. | | | | | | **Article 7(1)(a)** at the place | | | of performance of the obligation | | | in question. | | | | | | **Article 7(1)(b)** specifies | | | place of performance | | | (goods/services were/should | | | delivered). | | | | | | - (The place of delivery means | | | the final destination of the | | | goods, cf. car trim. | | | C-381/08) | | | | | | **Article 7(2**) (special | | | jurisdiction) Forum delicti | | | commissi (the forum of the | | | commission of the tort), "*in | | | matters relating to tort, delict | | | or quasi-delict, in the courts | | | for the place where the harmful | | | event occurred or may occur.*" | +-----------------------------------+-----------------------------------+ | **Article 25-26** | **(Choice of Court/ Forum | | | agreements)** | | | | | | 25 (express) 26 (implied) refer | | | to the implied or expressed forum | | | agreement. | | | | | | If there is no contest to the | | | lack of jurisdiction, then the | | | court can proceed. (prorogation | | | and derogation) (exclusive | | | jurisdiction). | | | | | | Article 25 has the formal | | | validity requirements for | | | contracts. If the contract null | | | and void (substantial validity), | | | the law applied should be the | | | national law from the COCA state | | | (Choice of Court agreement). | | | | | | - Article 25(5) refers to | | | doctrine of separability. | +-----------------------------------+-----------------------------------+ | **Article 29** | (**lis pendens** / **parallel | | | proceedings**, + art. 31(2)-(3)) | | | | | | 1. "Without prejudice to Article | | | 31(2), where proceedings | | | involving the same cause of | | | action and between the same | | | parties are brought in the | | | courts of different Member | | | States, any court other than | | | the court first [seised shall | | | of its own motion stay its | | | proceedings until such time | | | as the jurisdiction of the | | | court first seised is | | | established."] | | | | | | 2. \... | | | | | | 3. "Where the jurisdiction of | | | the court first seised is | | | established, any court other | | | than the first court seised | | | shall decline jurisdiction in | | | favour of that court." | | | | | | - [Race to the courthouse | | | principle]. The | | | first one to seise the court | | | has *home court advantage*. | | | | | | - [Italian | | | torpedo:] if you | | | have a bad case, you should | | | seise a court without | | | jurisdiction to prolong or | | | even cancel the case, as the | | | jurisdiction has to be | | | established before the court | | | proceedings can be brought in | | | the state with the | | | jurisdiction. | | | | | | - This is cancelled by Art. | | | 31(2) -- see below. | +-----------------------------------+-----------------------------------+ | **Article 31** | **Reverse Lis Pendens** | | | | | **(2-3)** | Every other court other than the | | | court under the COCA, shall stay | | | its proceedings until court under | | | COCA declares it has no | | | jurisdiction under the agreement. | | | | | | - Only applies to exclusive | | | jurisdictions agreements | +-----------------------------------+-----------------------------------+ | **Article 63** | **Defining domicile** | | | | | | Legal persons: a) statutory seat, | | | b) central administration, c) | | | principal place of business. | +-----------------------------------+-----------------------------------+ | | | +-----------------------------------+-----------------------------------+ Chapter 3 -- The Applicable Law in Contract ------------------------------------------- **Choice-of-law** is often applied to describe the rule-sets and procedures which competent courts use to choose (designate) a given body of substantive law, usually the law of a given State. **Forum shopping** is when plaintiff A initiates litigation against defendant B in the courts of state X because A predicts that the X-court will apply procedural or substantive rules more favorable to A. **Lex causae** (\"law of the cause\"), in conflict of laws, is the law chosen by the forum court from the relevant legal systems when it judges an international or interjurisdictional case "applicable substantive law". **Lex loci contractus** is the \"law of the place where the contract is made\" ("single-contact type rule") **1955 Hague Convention** is the law applicable to international sales of goods (priority over Rome C, I and II) **Party autonomy** enables parties the freedom of choice of applicable law. **Overriding mandatory** provisions are rules that "trump" or override the rules of the law applicable. **Ordre public (public policy)** article 16/21 RR1: narrow exception: incompatibility with public policy. **CISG (1980)** **Hague Convention (1955)** **[Which regulation should we use:]** - **Rome Convention:** All contracts in the countries applicable before 17/12/2009 - **Rome 1 Regulation**: All contracts in the countries applicable on or after 17/12/2009 - **The CISG**: Lex Specialis within sales of goods contracts B2B. - **The Hague Convention:** Same as CISG **[Rome Convention (1980)] -- *(discretionary rules)*** Rome Convention 1980 is applicable to all EU MS regarding contracts concluded prior to 17 Dec. 2009. +-----------------------------------+-----------------------------------+ | **Article 4(1)** | **Closest Connection Test** | | | | | | Article 4(2) is presumption to | | | 4(1) | | | | | | - The choice of law is | | | determined by the country | | | with is closest connected to | | | the matter/dispute. | +===================================+===================================+ | **Article 7** | **Overriding mandatory | | | provisions** | | | | | | Article 7(1) applies to mandatory | | | rules of another country if the | | | case has a close connection. | | | | | | Article 7(2) directed at the | | | rules of the law of the forum, in | | | a situation where they are | | | mandatory of the law otherwise | | | applicable to the contract. | +-----------------------------------+-----------------------------------+ **[Rome I Regulation (2008)] - *(combination of strict and discretionary (narrow) rules)*** *Definition:* Law applicable to contractual obligations ([all EU MS except DK]). Rome Convention and Rome I Regulation apply to the choice of the substantive contractual law of a country. Rome II Regulation governs conflicts relating to non-contractual obligations. +-----------------------------------+-----------------------------------+ | **Article 1** | **Civil and Commercial Matters** | | | | | | This Regulation shall apply, in | | | situations involving a conflict | | | of laws, to contractual | | | obligations in civil and | | | commercial matters. It shall not | | | apply, in particular, to revenue, | | | customs or administrative | | | matters. | +===================================+===================================+ | **Article 2** | **Universal Application** | | | | | | *"Any law specified by this | | | Regulation shall be applied | | | whether or not it is the law of a | | | Member State."* | +-----------------------------------+-----------------------------------+ | **Article 3** | **Party Autonomy** (freedom of | | | choice -- trumps default rules -- | | | express vs. implied). | | | | | | [Article 3(3)] narrow | | | mandatory limit: can't derogate | | | from provisions of "other | | | country" | +-----------------------------------+-----------------------------------+ | **Article 4** | **Applicable Law** | | | | | | *"To the extent that the law | | | applicable to the contract has | | | not been chosen in accordance | | | with Article 3 and without | | | prejudice to Articles 5 to 8, the | | | law governing the contract shall | | | be determined as follows:"* | | | | | | [Article 4(1)] - | | | Single-contact test (a) sale of | | | goods, (b) provision of services, | | | etc. | | | | | | [Article 4(2)] - | | | habitual residence of party | | | required to effect characteristic | | | performance. | | | | | | [Article 4(3)] - | | | *manifestly more* closely | | | connected to another state | | | (narrow escape clause) | | | | | | [Article 4(4)] - if | | | not (1) or (2) then closest | | | connection test. | +-----------------------------------+-----------------------------------+ | **Article 6** | **Certain consumer contracts** | | | | | | In the absence of choice of law | | | agreement/clause, the consumers | | | law shall apply. | +-----------------------------------+-----------------------------------+ | **Article 7** | **Insurance contracts** | +-----------------------------------+-----------------------------------+ | **Article 8** | **Employment contracts** | +-----------------------------------+-----------------------------------+ | **Article 9** | **Overriding mandatory | | | provisions** | | | | | | 1. definition | | | | | | - Provisions that are *"\... | | | crucial by a country for | | | safeguarding its public | | | interest, such as its | | | political, social or economic | | | organisations\..."* | | | | | | 2. nothing restricts the | | | application of these | | | overriding mandatory | | | provisions. | | | | | | 3. *"Effect may be given to the | | | overriding mandatory | | | provisions of the law of the | | | country where the obligations | | | arising out of the contract | | | have to be or have been | | | performed, in so far as those | | | overriding mandatory | | | provisions render the | | | performance of the contract | | | unlawful.*" | +-----------------------------------+-----------------------------------+ | **Article 19** | **Defines habitual residence** | | | | | | 1. companies, central | | | administration; natural | | | person, principal place of | | | business; | | | | | | 2. agency, branch, other | | | establishment, location; | | | | | | 3. time is the conclusion of the | | | contract. | +-----------------------------------+-----------------------------------+ **[Hague Convention (1955)] *-- Strict rules*** Applies to international contracts of sale. Members include Denmark, Finland, France, Italy, Norway, Sweden, Switzerland and Northern Ireland. +-----------------------------------+-----------------------------------+ | **Article 2 (1)** | 1. Choice of law is express, | | | | | | 2. results unambiguously from | | | the provisions of the | | | contract. | +===================================+===================================+ | **Article 3** | **Sellers law** | | | | | | If there is no choice of law | | | agreement, the sellers law will | | | apply. | +-----------------------------------+-----------------------------------+ | **Article 4** | **Buyers law** | | | | | | If the seller has travelled into | | | the buyer's country to commence | | | the contract; the buyers law | | | applies. | +-----------------------------------+-----------------------------------+ | **Article ?** | **Auction** | | | | | | If you can't use art. 3 or 4, the | | | place of auction will be the | | | choice of law. | +-----------------------------------+-----------------------------------+ | **Article 25** | **Priority** | | | | | | Rome 1: Hague has priority over | | | Rome convention (art. 21) and | | | Rome 1 regulation. | +-----------------------------------+-----------------------------------+ **[CISG (1980) The Vienna Convention ]** CISG contains supplementary substantive rules of sales law which serve to fill contractual gaps. Applicable in all MS besides Ireland, UK and Malta. +-----------------------------------+-----------------------------------+ | **Article 1 (1)** | **Sales of goods** | | | | | | *"This Convention applies to | | | contracts of sale of goods | | | between parties whose **places of | | | business** are in different | | | States:* | | | | | | a. *if both parties have place | | | of business in contracting | | | (CISG) states* *CISG | | | Applies.* | | | | | | - *Direct rule* | | | | | | b. *if none or one of the | | | parties have place of | | | business in a CISG state, but | | | choice of law rules points to | | | contracting (CISG) states* | | | *CISG applies.* | | | | | | - *Indirect rule* | +===================================+===================================+ | **Article 6** | **Opt-out of CISG clauses** | | | | | | The parties to a sales contract | | | covered by the CISG, can opt-out | | | of clauses by agreeing on other | | | terms. | +-----------------------------------+-----------------------------------+ | **Article 94** | **Reservation against CISG.** | | | | | | "*Contracting states that have | | | similar rules on sales law can | | | declare on their internal | | | relation will no be bound by CISG | | | relation*" | | | | | | - All Nordic states have same | | | rules on sales law. | | | | | | - Out-out of article 1(1)(a) | +-----------------------------------+-----------------------------------+ | **Article 95** | Option to opt-out of article | | | 1(1)(b). | +-----------------------------------+-----------------------------------+ **[Questions]** 1. What is the relationship between Rome I and the CISG and the Hague 1955 Convention in France? 2. Under which circumstances can parties agree on the law governing their contract under Rome I? Can they choose the law of a non-MS? 3. How is the choice of law issue resolved in Rome I in cases where the parties have not agreed on the law governing the contract? 4. What is meant "international mandatory or overriding provisions" in Rome I? 5. How is the choice of law regulated in Rome I, where a consumer from MS A purchase shoes over the internet from a commercial Seller in MS B? **Case I** Buyer from Germany entered into a contract for the sale of goods with Seller from DK. 1. How will a German court decide the law governing the contract if there is no choice of law agreement in the contract? a. *Both parties are CISG States, therefore CISG shall apply, cf. Art. 1(1)(a).* 2. How will a Danish court decide the law governing the contract if there is no choice of law agreement in the contract? b. *Both parties are CISG States, therefore CISG shall apply, cf. CISG Art. 1(1)(a).* 3. Can the parties agree on the law governing the contract? c. Yes, cf. CISG art. 6 (opt out of CISG) **Case II** A from Germany entered into a cooperation contract on chemical research with B from France. 1. How will a German court decide the law governing the contract if there is no choice of law agreement in the contract? a. Rome 1? Depends on when the contract was commenced. Art 4? 2. How will a French court decide the law governing the contract if there is no choice of law agreement in the contract? b. Rome 1? Depends on when the contract was commenced. Art 4? 3. Can the parties agree that the contract shall be governed by Swiss law? c. Yes, cf. Rome 1 art. 2 & 3 4. Can the parties agree that the contract shall be governed by the Unidroit principles for international commercial contracts? d. No. Unidroit only applies to arbitration matters. Chapter 4 -- the Applicable Law in Tort --------------------------------------- **[Rome I Regulation (2007) ]** Purpose is to harmonize the national conflict-of-laws rules previously applied by courts of the EU MS. It applies to all EU MS except Denmark. It leads to increased certainty and predictability (single-contact). **Lex loci delicti commissi** is the \"law of the place where the delict \[tort\] was committed\". **Lex loci damni** refers to the law of the place where the injury occurs. This is a general rule applied under conflict of laws. **[Scope]** +-----------------------------------+-----------------------------------+ | **Article 1 (1)** | **Non-contractual obligations** | | | | | | "This Regulation shall apply, in | | | situations involving a conflict | | | of laws, to non-contractual | | | obligations in civil and | | | commercial matters (exclusive | | | revenue, customs etc.). " | +===================================+===================================+ | **Article 3** | **Universal application** | | | | | | "Any law specified by this | | | Regulation shall be applied | | | whether or not it is the law of a | | | Member State." | +-----------------------------------+-----------------------------------+ **[Torts/Delicts ]** +-----------------------------------+-----------------------------------+ | **Article 4 (1)** | **General rule (lex loci damni)** | | | | | | "*the law of the place where the | | | damage occurs*" | +===================================+===================================+ | **Article 4 (2)** | **Exception (lex communis)** | | | | | | "habitual residence" (same | | | country, that law applies) | +-----------------------------------+-----------------------------------+ | **Article 3 (3)** | **Manifestly more closely | | | connected (narrow escape | | | clause)** | +-----------------------------------+-----------------------------------+ | **Article 5 (1)** | **Product Liability** | | | | | | "Without prejudice to Article | | | 4(2), the law applicable to a | | | non-contractual obligation | | | arising out of damage caused by a | | | product shall be: | | | | | | a. lex communis: habitual | | | residence (if product was | | | marketed here) | | | | | | b. place of product acquisition | | | (if product was marketed | | | here) | | | | | | c. lace of damage (if product | | | was marketed here) | +-----------------------------------+-----------------------------------+ | **Article 7** | **Environmental Damage** | | | | | | Either sue according to article 4 | | | or where the event happen. | +-----------------------------------+-----------------------------------+ | **Article 14** | **Freedom of choice** | | | | | | **14(1):** Parties may agree to | | | submit non-contractual | | | obligations to the law of their | | | choice: | | | | | | a. by an agreement entered into | | | after the event giving rise | | | to the damage occurred, or; | | | | | | b. where all the parties are | | | pursuing a commercial | | | activity, also by an | | | agreement freely negotiated | | | before the event giving rise | | | to the damage occurred. | | | | | | *"The choice shall be expressed | | | or demonstrated with reasonable | | | certainty by the circumstances of | | | the case and shall not prejudice | | | the rights of third parties."* | | | | | | **14(2):** specifies that | | | mandatory provisions in | | | respective countries cannot be | | | derogated from. | +-----------------------------------+-----------------------------------+ | **Article 16** | **Overriding Mandatory | | | Provisions** | | | | | | *"Nothing in this Regulation | | | shall restrict the application of | | | the provisions of the law of the | | | forum in a situation where they | | | are mandatory irrespective of the | | | law otherwise applicable to the | | | non-contractual obligation."* | +-----------------------------------+-----------------------------------+ | **Article 17** | **Assessing conduct** | | | | | | *"\[consider\] the rules of | | | safety and conduct which were in | | | force at the place and time of | | | the event giving rise to the | | | liability."* | +-----------------------------------+-----------------------------------+ | **Article 23** | **Habitual residence:** | | | | | | *"Place of central | | | administration" and "principal | | | place of business"* | +-----------------------------------+-----------------------------------+ | **Article 26** | **Public policy of the forum**: | | | | | | *"The application of a provision | | | of the law of any country | | | specified by this Regulation may | | | be refused only if such | | | application is manifestly | | | incompatible with the public | | | policy (ordre public) of the | | | forum."* [(narrow | | | exception)] | +-----------------------------------+-----------------------------------+ Chapter 5 -- Recognition and Enforcement of Foreign Judgments ------------------------------------------------------------- **Res judicata (retspræjudikat)** is a matter that has been adjudicated by a competent court and therefore may not be pursued further by the same parties. **Audiatur et altera pars means** "listen \[also\] to the other side"; no unfair hearings **Direct jurisdiction** describes the question for the rendering court, since only the rendering court is directly engaged with the question whether it should exercise jurisdiction or not. **Indirect jurisdiction** describes the question for the requested court, since that court can control only indirectly, through the recognition procedure, whether jurisdiction was properly exercised or not. **Baliliff -- Sheriff -- official of the state** is the local court to enforce judgements against the debtor. E.g. Fogedretten in Denmark. **Reciprocity** -- Civil law countries (MS1 will recognize ruling from MS2, if MS2 recognize ruling from MS1 or if MS1 is obliged to do so) **Unilateral** -- Common law countries (MS1 will recognize rulings from other MSs) **Governing law for R&E (Parallel system):** Judgement from EU MS: Brussels 1 -- outside the EU: National law. **[Brussels I Regulation, 2002 (recast 2012) ]** Double convention (/instrument) that governs both (i) jurisdiction of the courts and (ii) recognition and enforcement of judgments in other Contracting States. - [Purpose is to promote the free movement of judgments in civil and commercial matters. ] +-----------------------------------+-----------------------------------+ | **Article 36** | **Automatic recognition:** | | | | | | "*A judgment given in a Member | | | State shall be recognized in the | | | other Member States without any | | | special procedure being | | | required*. " | | | | | | - Exequatur procedure abandoned | | | in Recast 2012. | +===================================+===================================+ | **Article 39** | **Automatic enforceability:** | | | | | | "*A judgment in EU MS1, if | | | enforceable, is enforceable in | | | all other EU MS without any | | | declaration of enforceability | | | being required*." | | | | | | - Judgement given the same | | | effect as in the state of | | | origin. | +-----------------------------------+-----------------------------------+ | **Article 45 (1)** | **Refusal of Recognition** | | | | | | *"On the application of any | | | interested party, the recognition | | | of a judgment shall be refused:* | | | | | | a. *if such recognition is | | | manifestly contrary to | | | [public policy] | | | in the Member State | | | addressed;* | | | | | | b. *Where the judgment was given | | | in default of appearance, if | | | the defendant was not served | | | with the document which | | | instituted the proceedings | | | \[...\]* | | | | | | c. *If the judgment is | | | irreconcilable with a | | | judgment given between the | | | same parties in the MS | | | addressed;* | | | | | | - "Conflicting judgements | | | I" | | | | | | d. *If the judgment is | | | irreconcilable with an | | | earlier judgment given in | | | another Member State or in a | | | third State involving the | | | same cause of action and | | | between the same parties, | | | \[...\]* | | | | | | - "Conflicting Judgments | | | II" | | | | | | - Third member state has to | | | recognise the first | | | judgement. | | | | | | e. *if the judgment conflicts | | | with:* | | | | | | - *Sections 3, 4 or 5 of | | | Chapter II where the | | | policyholder, the | | | insured, a beneficiary of | | | the insurance contract, | | | the injured party, the | | | consumer or the employee | | | was the defendant; or* | | | | | | - *Section 6 of Chapter | | | II.."* | +-----------------------------------+-----------------------------------+ | **Article 45 (3)** | **No review of jurisdiction:** | | | | | | *"Without prejudice to point (e) | | | of paragraph 1, the jurisdiction | | | of the court of origin may not be | | | reviewed. The test of public | | | policy referred to in point (a) | | | of paragraph 1 may not be applied | | | to the rules relating to | | | jurisdiction."* | +-----------------------------------+-----------------------------------+ | **Article 46** | **Refusal of enforcement** | | | | | | *"On the application of the | | | person against whom enforcement | | | is sought, the enforcement of a | | | judgment shall be refused where | | | one of the grounds referred to in | | | Article 45 is found to exist."* | | | | | | **NB!!!** It is possible, | | | however, to refuse R+E under the | | | public policy proviso if the | | | judgment-rendering court refused | | | to hear defendant's counsel only | | | because he/she didn't appear in | | | person, cf. C-7/98, Krombach. | +-----------------------------------+-----------------------------------+ | **Article 52** | **No substantive review: (common | | | provisions)** | | | | | | *"Under no circumstances may a | | | judgment given in a Member State | | | be reviewed as to its substance | | | in the Member State addressed."* | | | | | | - Foreign judgements must be | | | accepted as-is. | | | | | | - Can only be changed through | | | appeal. | +-----------------------------------+-----------------------------------+ **[Case Law: ]** - C-125/79, Denilauler defendant has to be informed about proceedings in another MS. - Public Policy art. 45(1)(a): C-7/98, Krombach and C-38/98, Renault - Conflicting Judgements I art. 45(1)(c): C-80/00 **[Q&A]** 1. *Which judgments are entitled to recognition and enforcement under Brussels I? EU judgments and/or judgments from non-Member States?* a. EU judgments are entitled to R&E in other MSs without any special procedures, cf. Art. 36 and 39. i. Common law: Reciprocity ii. Civil law: Unilateral recognition 2. *What is meant by the "prohibition against reviewing jurisdiction" for a judgment at the stage of recognition and enforcement?* b. The court in the MS where R&E are sought must accept the jurisdiction decisions made by the court of origin without Jurisdiction review, cf. Art. 45(3). 3. *What is meant by the "prohibition against substantive review" of a judgment at the stage of recognition and enforcement?* c. The court cannot question the correctness of the original judgment or reconsider the facts and legal issues that were already decided by the court of origin, cf. Art. 52. 4. Give examples of public policy. Is public policy a uniform or a national concept? d. Fundamental rights/ national law? In principle: national concept -- In reality: Uniform concept. 5. When can conflicting judgments be refused recognition and enforcement? e. A judgment can be refused if it is irreconcilable with an earlier judgment involving the same parties and/or the same cause of action, provided that the earlier judgment was given in the MS addressed or in another MS or in a third state, provided that the earlier judgment fulfills the conditions necessary for its recognition in the MS addressed. **[Case ]** A from Germany got a judgment against B from Spain. However, B also got a judgment from Spain against A. The two judgments concern the same contract. 1. What happens if A seeks to have its judgment recognised and enforced in Spain? a. The German judgement will be refused according to art. 45(1)(c), if we disregard lis pendens in art. 29. 2. What happens if B seeks to have its judgment recognised and enforced in Germany? b. The Spanish judgement will be refused according to art. 45(1)(c), if we disregard lis pendens in art. 29. 3. What happens if both A and B seek to have their judgments recognised and enforced in Luxembourg, where both parties have assets? c. The judgement first rendered by the court in Luxembourg will prevail, i.e. be recognized and enforced, cf. Art. 45 (1)(d), if we disregard lis pendens in art. 29. Chapter 6 -- International Commercial Arbitration ------------------------------------------------- **[What is arbitration? (from arbitration template) ]** - Arbitration is an **alternative dispute resolution (ADR)** (or settlement mechanism). - [Arbitration is the private, judicial determination of a dispute by an independent third party]. - An arbitration hearing has 1-3 so called arbitrators who will decide on the dispute between the parties -- one and three are most common numbers of arbitrators due to the obvious reason of this preventing a tie. - The arbitrators are chosen by the parties or the institution, if institutional arbitration is proceeded. - There are no specific requirements for arbitrators' skills, but often judges, advocates, professors and businesspersons with expertise within the field of the given dispute are chosen. - Arbitration is thus an alternative to court action (litigation), often used by companies due to its benefits. - For instance, arbitration is private which means that there is no access for media and it is impossible for competitors to follow the disputes. - It might also be faster and potentially cheaper, as judgements in litigation are often appealed which drags out the process while under arbitration, the judgement is final. - Due to the New York Convention, judgements can be enforced almost anywhere in the world. **Types of arbitration** - Ad hoc arbitration -- Arbitration is conducted by individual arbitrators. - Institutional arbitration -- Arbitration overseen by institutional body, e.g.: - ICC (France) - AAA (USA) - LCIA (UK) - HKIAC (China) - SIAC (Singapore) **Lex arbitri** is the law that that governs the arbitration processes. (procedural rule set) **Lex loci arbitri** is the law of the place of the arbitration **UNCITRAL Model Law**: purpose is to have a good model for arbitration acts and statues to obtain harmonization and uniformity on arbitration procedures across the world. **Lex mercatoriais** the "law merchant", the generally accepted principles of commercial law or intern. trade **Multistep dispute resolution clause**: 1. Friendly negotiation 2. Mediation 3. Arbitration. **Dispositive motions**: e.g. written procedure, no hearing. The parties will never meet. **Confidentiality:** Needs to be stated in the arbitration agreement. "DANISH ARBITRATION ACT IS MODEL LAW" **Arbitral cases** - Most commercial and contractual disputes - Anti-trust law in respect of damages against the wrong doer (tort) **Non-Arbitral cases** - Criminal matters -- tax matters - Child custody -- family law - Private tenancies - Bankruptcy - Patents **[Model Law ]** +-----------------------------------+-----------------------------------+ | **Article 7** | **Description of "Arbitration | | | agreement" -- Option (1)** | | | | | | 1. *"Arbitration agreement" is | | | an agreement by the parties | | | to submit to arbitration all | | | or certain disputes which | | | have arisen or which may | | | arise between them in respect | | | of a defined legal | | | relationship, **whether | | | contractual or not**. **An | | | arbitration agreement may be | | | in the form of an arbitration | | | clause in a contract or in | | | the form of a separate | | | agreement**.* | | | | | | 2. *[The arbitration agreement | | | shall be in writing. | | | ]* | | | | | | 3. *An arbitration agreement is | | | in writing if its content is | | | recorded in any form, whether | | | or not the arbitration | | | agreement or contract has | | | been concluded orally, by | | | conduct, or by other means.* | | | | | | 4. *The requirement that an | | | arbitration agreement be in | | | writing is met by an | | | electronic communication if | | | the information contained | | | therein is accessible so as | | | to be useable for subsequent | | | reference; "electronic | | | communication" means any | | | communication that the | | | parties make by means of data | | | messages; "data message" | | | means information generated, | | | sent, received or stored by | | | electronic, magnetic, optical | | | or similar means, including, | | | but not limited to, | | | electronic data interchange | | | (EDI), electronic mail, | | | telegram, telex or telecopy.* | | | | | | 5. *Furthermore, an arbitration | | | agreement is in writing if it | | | is contained in an exchange | | | of statements of claim and | | | defence in which the | | | existence of an agreement is | | | alleged by one party and not | | | denied by the other.* | | | | | | 6. *The reference in a contract | | | to any document containing an | | | arbitration clause | | | constitutes an arbitration | | | agreement in writing, | | | provided that the re-ference | | | is such as to make that | | | clause part of the contract.* | +===================================+===================================+ | **Article 8** | **Lis Pendens** | +-----------------------------------+-----------------------------------+ | **Article 10** | **Number of arbitrators** | +-----------------------------------+-----------------------------------+ | **Article 11** | **Appointment of arbitrators** | +-----------------------------------+-----------------------------------+ | **Article 16** | **Competence of arbitral tribunal | | | and doctrine of separability | | | (Kompentenz-Kompetenz)** | +-----------------------------------+-----------------------------------+ | | **Art. 16 (1)** Separability: The | | | arbitration agreement is separate | | | from the commercial contract | | | (container contract) | | | | | | - Purpose: invalidity of the | | | commercial contract does not | | | affect the validity of the | | | arbitration agreement. | | | | | | - Applies to COCA also? | +-----------------------------------+-----------------------------------+ | **Article 18** | **Equality** | +-----------------------------------+-----------------------------------+ | **Article 20** | **The lex arbitri** | | | | | | 1. The parties are free to | | | choose the lex arbitri (the | | | rules governing the arbitral | | | proceedings) | | | | | | 2. If the parties fail to agree | | | on lex aribiri, the arbitral | | | tribunal will determine the | | | seat for the proceedings. | +-----------------------------------+-----------------------------------+ | **Article 28** | **The applicable law** | | | | | | Party autonomy | +-----------------------------------+-----------------------------------+ | **Article 34** | **(2)(b)(i) The seat law governs | | | arbitrability [during the | | | proceedings]** | +-----------------------------------+-----------------------------------+ **[New York Convention ]** The purpose of the NYC is to increase effectiveness regarding recognition and enforcement of foreign arbitral awards. Each contracting state must recognize arbitration awards and enforce them, cf. art. 3. +-----------------------------------+-----------------------------------+ | **Article 2** | **Recognition of an arbitration | | | agreement** | | | | | | 1. *"[Each Contracting State | | | shall recognize an agreement | | | **in writing**] | | | under which the parties | | | undertake to submit to | | | arbitration all or any | | | differences which have arisen | | | or which may arise between | | | them in respect of a defined | | | legal relationship, whether | | | contractual or not, | | | concerning [a subject matter | | | capable of settlement by | | | arbitration."]* | | | | | | - *Concept of arbitrability | | | (**[during the stage of the | | | enforcement) | | | (]**see Model law | | | art. 34)* | | | | | | 2. *"The term \"**agreement in | | | writing**\" shall include an | | | arbitral clause in a contract | | | or an arbitration agreement, | | | signed by the parties or | | | contained in an exchange of | | | letters or telegrams."* | | | | | | - Formal validity requirements | | | (writing, signed, witnesses, | | | etc.) | | | | | | - should be applied recognizing | | | that the circumstances | | | described therein are not | | | exhaustive. | | | | | | - No signature is needed, | | | if the parties agree | | | otherwise. | | | | | | 3. *"The court of a Contracting | | | State, when seized of an | | | action in a matter in respect | | | of which the parties have | | | made an agreement within the | | | meaning of this article, | | | shall, at the request of one | | | of the parties, refer the | | | parties to arbitration, | | | unless it finds that the said | | | agreement is **null and | | | void**, **inoperative** or | | | **incapable** of being | | | performed."* | | | | | | - *Null and void*: no consent, | | | duress, etc.. lack of | | | capacity or pathological | | | clauses. | | | | | | - *Inoperative:* Res judicata, | | | expiry of arbitration, etc. | | | | | | - *Incapable:* Contradicting | | | language, arbitrator | | | unavailable, too vague, etc. | +===================================+===================================+ | **Article 3** | **Recognition of arbitration | | | awards** | | | | | | *"Each contracting state shall | | | recognize arbitration awards as | | | binding and enforce them in | | | accordance with the rules of | | | procedure of the territory where | | | the award is relied upon (the | | | country where recognition and | | | enforcement is sought), under the | | | conditions laid down in the | | | following articles. There shall | | | not be imposed substantially more | | | onerous conditions or higher fees | | | or charges on the recognition or | | | enforcement of arbitral awards to | | | which the convention applies than | | | are imposed on the recognition or | | | enforcement of domestic arbitral | | | awards."* | +-----------------------------------+-----------------------------------+ | **Article 5** | **Refusal of recognition** | +-----------------------------------+-----------------------------------+ **[Other Notes]** **Judicial Assistance for arbitration** Arbitral Tribunal should have a life of their own. - Courts should not interfere with arbitral tribunals, cf. Art. 5 in the model law. - Tribunals have no coercive power, courts do have such powers - Assistance in getting started by avoiding the arbitrators - Oversight of the role of courts - Invalidity and enforcement award can only be done by courts - Judicial assistance under the Model Law - Validity of arbitration agreement, art. 8 - Interim measures, art. 9 - Appointment of arbitrators, art. 11 - Challenge procedure, review, art. 13 - Competence, review, art. 16 - Recognition and enforcement of interim measures, art. 17 H and 17 I - Evidence, art. 27 - Invalidity, art. 34 - Recognition and enforcement of award, art. 35 - If a party institutes court proceedings in spite of an arbitration agreement shall refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed**, cf. NYC art. 2(3) and Model law, art. 8.** - Option for the court to review the agreement above: - [Complete/Thorough review] - [Light review] - Courts apply both standards - Competence of the arbitral tribunal - The competence-competence doctrine is a cornerstone in most countries and the Model Law, art. 16 *(doctrine of separability)* - France, art. 1448 code civil procedure, the arbitration agreement is only set aside by a court if manifestly void - China, tribunals are generally not allowed to determine their own jurisdiction - **Interim measures,** generally accepted that parties may ask a court for interim measures even if arbitration is agreed, see e.g. Model Law, art. 9 - Interim measures, Model Law, art. 17(2) - Maintain or restore status quo - Preserving assets for enforcement - Preserve evidence - **Court assistance in taking evidence for the tribunal***;* The arbitral tribunal or a party with the approval of the arbitral tribunal may request from a competent court of this State assistance in taking evidence. The court may execute the request within its competence and according to its rules on taking evidence. - **Model law, art.** **27**. **[The Tribunal ]** - - - - - - - - - - - - - - - - - - - - - - - - - - - - **Sole arbitrator** - Should be chosen after the dispute has arisen - Sometimes difficult to agree at that stage - Agree on qualifications, exchange a list of 3-5 candidates - The institution, or the seat courts will choose Model law art. 11 - No institution to help with appointments - Appointing authority should be agreed in the arbitration clause - UNCITRAL ad hoc Rules, art. 6.2, the SG of the Permanent Court of Arbitration at the Hague - Institutional rules provide a solution - Model Law art. 15 - Replacement before the beginning of the case - Replacement during the case - How much of the testimony should be repeated? - Common sense approach if transcripts. **Pro Immunity of arbitrators** - Quasi-judicial functions - Finality of the award - No intimidation by one of the parties - Deter arbitrators from arbitrate **Con Immunity of arbitrators** - Increase carelessness, fraud abuse of power - No readily available remedies against poor arbitrators, except cri-minal proceedings for fraud - No appeal of award **[The Arbitration Award]** - **An Award/ a final award** - Resolves the dispute on the substance between the parties - Terminates the duties of the tribunal - The losing party may try to challenge it - The losing party may try prevent enforcement - **Partial and interim awards** - Uncitral Rules, art. 34,1, the tribunal [may make separate awards on different issues at different times.] - Substantive claims, e.g. the interpretation of a given contractual clause. - Procedural issues, e.g. competence, choice of law for the container contract. - Interim measures, Uncitral Rules, art. 26 - Interim awards are not enforceable under the NYC - **Consent award** - Sometimes parties settle the dispute before the tribunal. - Settlement is not enforceable under the NYC. - Model Law, art. 30, the parties may ask the tribunal to render an award on the basis of the settlement. - Consent awards are enforceable under the NYC. - **Default award** - The respondent does not participate in the arbitral proceedings - In litigation, courts often automatically deliver a default judgment in favour of the claimant. - In arbitration, this is is possible, thus the tribunal must still review all the evidence and the arguments, if any, by the respondent - Default awards are enforceable under the NYC - Requirements to the final award, Unicitral rules, art. 34, model law art 31. - In writing - Final and binding - Supported by reasons - Signed by the (majority of) arbitrators - Dated - Place of arbitration named - Communicated to both parties simultaneously - Time limits of the final award - Sometimes agreed that tribunal should deliver an award within say 3 or 6 months - Institutional general rule, ICC 6 months - Exception can be made (usually does) - Fast track arbitration - Disadvantages of short time limits - No proper examination - Risk of invalidity or non-enforcement - Concurring and dissenting views - Concurring view, agreement with the result, but a different reason - Dissenting view, disagreement with result and reasoning - Neither form part of the award - Risk of providing the losing party with a basis for challemging the award - Risk of disclosure of the deliberations of the tribunal, which are confidential - Scrutiny of the draft award - Often mandatory in institutional arbitration - The institution can propose changes to the substance, ICC Rules, art. 33 - The decision whether to follow or reject these changes remains with the arbitrators, ICC Rules, art. 33 - Remedies - Monetary damages - Interests - Limits in the lex arbitri? - Limits in the law of enforcement? - Prohibitions, eg Sharia legislation - Declaratory award - Stating the rights of the parties - Injunctive relief - Respondent should abstain from certain actions - Punitive damages - Rarely awarded, civil law vs common law - Public policy - Hague 2005 and 2019 Judgments Conventions - Res judicata of the award (præjudikatsværdi) - The same issue that has been decided by the tribunal cannot be re-litigated or re-arbitrated between the parties, further proceedings are barred - Res judicata when the award is made, communicated to the parties or when it is no longer subject to invalidity proceedings - The exact time depends on the lex arbitri - Confidentiality of the award - Governed by the lex arbitri and institutional rules - England, implied obligation of confidentiality when an arbitration agreement has been entered into - US, Sweden, and Australia, no confidentiality unless agreed between the parties - Institutional rules on confidentiality - LCIA, art. 30, broad protection, no publication of the award, unless both parties have consented to publication - ICC, no confidentiality, unless the tribunal upon request has taken measures for protecting trade secrets and confidential information, art. 22 - Parties should agree on confidentiality. - Post-award proceedings - The award is final - How about errors and incompleteness? - Model Law, art. 33 - Additional awards on omitted claims - corrections for clerical and typographical errors and errors of computation - Ex offico or after a request from one of the parties - A 30 day-time-limit - Institutional rules often provide for corrections for clerical and typographical errors and errors of computation - Ex offico or after a request from one of the parties - Often a 30 day-time-limit **Attempts to set aside the award** - Courts rarely set aside an award - Finality of the award - Binding nature of the award - [No review on the substance] - A successful challenge [usually] requires: - Procedural grounds - Misconduct or bias of arbitrator - Methods of challenge - Invalidity proceedings before a court - Annulment the award - Set aside the award - Vacate the award - Appeal to a new tribunal *(extremely rare)* - ICSID arbitration - appeal to another tribunal - If the second tribunal annul the award, each party can appeal to a 3^rd^ tribunal - European Court of Arbitration - appeal to a new tribunal with three arbitrators - Only if the 1st award was made by a sole arbitrator - Invalidity proceedings should be brought before the courts in the seat state - The seat state's courts have supervisory power - Model Law states - Grounds of challenge - Usually, NO challenge on points of law - Challenges only on: - Jurisdictional grounds -- non-mandatory - Usually made at the beginning of the arbitration, Model Law, art. 16 - If made after the award has been delivered, a party risks to lose the right to object - Excession of power / competence - Issues decided that were not covered by the arbitration agreement - Competence ground (Model Law, art. 34,2, a, iii) -- non-mandatory - Procedural grounds (Model Law, art. 34, 2, a): -- non-mandatory - *(i[), invalid arbitration agreement]* - *(ii) the party making the application [was not given proper notice] of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case (undue process)* - *(iv), the composition of the arbitral tribunal or the [arbitral procedure was not in accordance with the agreement] of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Law.* - Arbitrability and public policy, (Model Law, art. 34, 2, b) *(will be examined ex office by the court without request by the part)* -- mandatory - The subject matter is not capable of being settled by arbitration under the law of the seat state (i) - The award is against public policy of the seat state (ii) j. Fundamental notions of justice, fairness, and honesty k. Corruption, fraud, lack of integrity - Challenges on the [merits] is generally not possible - *Exception*: England, Arbitration Act, art. 69, a party may appeal an award on a [point of law], unless the parties have agreed otherwise - The court may nevertheless grant a right of appeal if: - The tribunal was obviously wrong on the point of law, or - The question of law is of general public importance and the decision is open to doubt - *Exception*: US, in some states, manifest disregard of the law is a ground for invalidity according to case law: - A party must show that the arbitrator knew and understood the law, yet deliberately disregarded it - The status of the doctrine is uncertain - Challenges and time limitations - The seat law determines - Model Law, art. 34, 3, three momths from the date where the award was received (e.g. Denmark) - England, 28 days, Arbitration Act, art. 70,3 - France, a month, CCP, art. 1519 - China, about six months, Arbitration Law, art. 59 - Effects of a successful challenge - Invalid arbitration agreement, court proceedings in Dutch law - Invalid due to procedural irregularities, the case can be sent back to the tribunal, Model Law, art. 34, 4 - Partial invalidity, the invalid part is set aside, the rest remains (usually happens in respect of competence questions **Enforcement of the award** - Application of international conventions - Principles governing recognition and enforcement - Requirements for enforcement - Grounds for non-enforcement - *Recognition* means to accept the award, res judicata - *Enforcement* means execution - The New York Convention, more than 177 Contracting States - Very efficient and broad, global applicability - Pro enforcement bias - The New York Convention, scope - It applies to "foreign awards" - US, foreign and non-domestic awards as defined by the Federal Arbitration Act - China, the same in principle, but the status of an award is determined by the arbitral institution - Obs, many Chinese courts only recognise and enforce awards administered - The New York Convention, reservations - Art. I, 3, reciprocity, taken by approx. half of the States - Art. I, 3, only commercial cases as defined by the State making the declaration, taken by approx. 44 States - No uniform definition - Excludes in general criminal law, family law, and trust matters - The New York Convention, grounds for non-enforcement - General provisions should be interpretated narrowly - Exhaustive grounds for non-enforcement in the NYC - Not based on the merits / the substance - NYC, art. V - Para. 1, five grounds that apply only: l. If invoked by a party, and m. That party proves the existence of the ground - Para. 2, two grounds that: n. The court applies of its own motion / ex officio / automatically - NYC, art. V, 1, a, invalid arbitration agreement - *The parties to the agreement referred to in article II were, under the law applicable to them, 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.* - NYC, art. V, 1, b, lack of notice / undue process - *The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case.* - NYC, art. V, 1, c, excess of authority / no competence - *The award deals with a difference 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,