Under the New York Convention, an arbitral award may not be recognized and enforced if a party successfully proves that:
"The composition of the arbitral authority 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."1
Put differently, according to Article V(1)(d) of the NYC, the enforcement court may deny the recognition and enforcement of an arbitral award if (1) the composition of the arbitral authority or (2) the arbitral procedure was not in accordance with the parties' agreement, or in the absence of such agreement, the laws of the seat of arbitration.2 In practice, the laws of the seat are applied regularly in the absence of the parties' agreement in that respect.3
This note will focus on the composition of the arbitral authority. For other grounds, see Recognition and Enforcement of non-ICSID Awards.
II. Procedural issues under the New York Convention
Similarly to other grounds under Article V(1) of the NYC, Article V(1)(d) of the New York Convention can only be raised by the parties to an arbitration.4 The enforcement court cannot do so at its own motion.5
Manufacturer v. Exclusive distributor, Oberlandesgericht Schleswig, Germany, 24 June 1999, 16 SChH 01/99; DMT S.A. v. Chaozhou City Huaye Packing Materials Co., Ltd. Chaoan County Huaye Packing Materials Co., Ltd., Supreme People’s Court, China, 12 October 2010, Min Si Ta Zi No. 51, 2010; China Nanhai Oil Joint Service Corp, Shenzen Branch v. Gee Tai Holdings Co. Ltd., Supreme Court of Hong Kong, Hight Court, No. MP 2411, 13 July 1994, YCA XX, 1995, 671; AO Techsnabexport v. Globe Nuclear Servs. & Supply Ltd., Court of Appeals (4th Circ.) 15 December 2010, XXXVI Y.B. Com. Arb. 407, 411, 2011.
III. Party autonomy with respect to the composition of the arbitral authority under the New York Convention
The starting point of Article V(1)(d) of the New York Convention is that the composition of the arbitral authority must be established according to the parties' agreement.7 When examining whether Article V(1)(d) of the New York Convention is breached, the court must first examine whether there is an agreement in place between the parties on the composition of the arbitral authority. In case the parties have included such provisions, the court will determine the extent of the parties’ agreement and whether such provision has been violated.8
If there is no agreement with respect to the composition of the arbitral authority, the enforcement court should determine whether the parties have agreed on another law than the law of the seat of arbitration.9 If the parties have not agreed to a specific composition of the arbitral authority, and if there is no specific law that governs such composition, the enforcement court should examine whether the composition of the arbitral authority was in accordance with the law of the seat of arbitration.10
IV. Criteria for invoking Article V(1)(d) of the New York Convention
A. Burden of proof
When raising an argument relating to an alleged improper composition of the arbitral authority, the party that opposes the recognition and enforcement further to that ground for refusal of the recognition and enforcement of the arbitral award shall bear the Burden of Proof.11
Western Bulk Pte Ltd. V. Beijing CSGC Tiantie Iron & Steel Trade Co. Ltd., Tianjin Maritime Court, 12 July 2012, CLOUT Case No. 1577; Bharat Aluminium Co. v. Kaiser Aluminium Technical Service, Inc., Supreme Court of India, CLOUT Case No. 1424, XXXVII Y.B. Com. Arb. 244, 2012; Patrick Ryan v. Kevin O'Leary (Clonmel) Ltd. & Anor, High Court of Ireland, 23 November 2018, IEHC 660; Gad Chemicals Ltd. V. BIP Chemicals Ltd. et. al., Supreme Court of Israel, 27 December 2012, CLOUT Case No. 1329; Aloe Vera of America, Inc. v. Asianic Food (S) Pte Ltd. and Chiew Chee Boon, Judgment of the High Court of Singapore, 10 May 2006, para. 61; RosKurEnergo AG v. National Joint Stock Company Naftogaz Ukrainy, Supreme Court., 24 November 2010, CLOUT Case No. 1380; Encyclopaedia Universalis S.A. v. Encyclopeaedia Britannica, Inc., XXX Y.B. Com. Arb. 1136, 1139 (2005) (2D Cir. 2005); CEEG (Shanghai) Solar Science & Technology. Co. v. Lumos LLC, United States District Court, District of Colorado, 29 May 2015, XL Y.B. Com. Arb. 586, 2015; Grow Biz International Inc. v. D.L.T. Holdings Inc., and Debbie Tanton, Supreme Court of the Province of Prince Edward Island, Canada, 23 March 2001, GSC-17431, XXX Y.B. Com. Arb. 450, 2005.
B. Standard of proof
There is a high threshold to successfully invoke Article V(1)(d) of the New York Convention with respect to the composition of the arbitral authority.12
Transocean Shipping Agency P. Ltd. v. Black Sea Shipping & Ors., Supreme Court of India, 14 January 1998; Polimaster Ltd., NA&SE Trading Co., Limited v. RAE Systems, Inc., Court of Appeals, Ninth Circuit, United States of America, 28 September 2010, 623 F.3d 832; Encyclopedia Universalis S.A. v. Encyclopedia Britannica, Inc., Court of Appeals, Second Circuit, United States of America, 31 March 2005, 04-0288-CV; Terna Bahrain Holding co WLL v. Bin Kamel Al Shamzi & Others  2 CLC 1, para. 85(2).
HSN Capital LLC v. Productora y Comercializador de Television, S.A. de C.V., District Court, Middle District of Florida, Tampa Division, United States of America, 5 July 2006, 8:05-cv-1769-T-30TBM; Shaanxi Provincial Medical Health Products I/E Corporation v. Olpesa, S.A., Supreme Court, Spain, 7 October 2003, 112/2002, XXX Y.B. Com. Arb. 617 (2005); Logy Enterprises Ltd. v. Haikou City Bonded Area Wansen Products Trading Co., Court of Appeal, Hong Kong, 22 May 1997, No. 65 (Civil).
V. Case law
However, in practice, the improper composition of the arbitral authority has in very few cases been accepted as a violation of the New York Convention. Consequently, there are at time of writing a small number of cases in which refusal on the recognition and enforcement of an arbitral award was based on this specific ground.16 Therefore the award was not enforced when:
Courts have rejected a broad range of allegations arising out of investor-State arbitration relating to Article V(1)(d), including, but not limited to, arguments that:
Courts may also decide to recognize and enforce an arbitral award in case of only a minor violation.25 An example of such a minor violation could cover the situation in which it is agreed that an arbitrator should have a certain quality, e.g. somebody with certain industry experience, and the actual arbitrator does not meet such qualification. Notwithstanding the absence of such correct qualification, enforcement courts may recognize and enforce such award.26
Sistem Mühendislik Inşaat Sanayi ve Ticaret A.Ş. v. Kyrgyz Republic, ICSID Case No. ARB(AF)/06/1, Opinion and Order of the US District Court for Southern District of New York, 30 September 2016, para. 12; Sistem Mühendislik Inşaat Sanayi ve Ticaret A.Ş. v. Kyrgyz Republic, ICSID Case No. ARB(AF)/06/1, Summary Order of the United States Court of Appeals for the Second Circuit, 17 July 2018, para. 6.
Wolff, R., New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards –Commentary, 2nd ed., 2019.
Jarvin, S., Irregularity in the Composition of the Arbitral Tribunal or the Arbitral Procedure, in Gaillard, E. and Di Pietro, D. (eds.), Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice, 2008.
Van den Berg, A., The New York Convention of 1958: An Overview, in Emmanuel, G. and Di Pietro, D., Enforcement of Arbitration Agreements and International Arbitral Awards, 2008.
Nacimiento, P., Article V(1)(d), in Kronke, H., Nacimiento, P., Otto, D. and Port, C. (eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention, 2010.
Böckstiegel, K., Kröll, S. and Nacimiento, P. (eds.), Arbitration in Germany. The Model Law In Practice, 2014.