A party may resist enforcement of a non-ICSID arbitral award pursuant to the New York Convention on the ground that the award deals with “matters not falling within the terms of the submission to the arbitration”.
According to Article V(1)(c) of the New York Convention, the enforcement court may refuse to recognize and enforce the arbitral award if:
“[it] 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, 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 (...)”
This ground is rarely invoked and successful.1 Occasionally it may be invoked with other grounds included in Article V of the Convention.2
II. General remarks
A. Party's duty to invoke a ground for challenge
As with other grounds included in the exhaustive list of Article V(1) of the Convention, (i) this ground must be raised by a party itself,3 which (ii) has the burden of proving that refusal is justified.4 Courts will not intervene ex officio.5 See further Recognition and Enforcement of Non-ICSID Awards.
B. Pro-enforcement spirit of the Convention
Following the pro-arbitration philosophy of the Convention, enforcement courts are generally reluctant to accept challenges brought under Article V(1)(c) of the Convention.6
C. No review on the merits
The enforcement court cannot review the merits of the tribunal’s decision.9 Accordingly, courts will not evaluate whether the arbitral tribunal reached correct or incorrect factual or legal conclusions.10 The limited scope of the court’s control has to focus therefore on “verifying whether a ground under Article V exists”.11
D. Partial enforcement
Article V(1)(c) of the Convention allows for a partial enforcement of the award.12 As such, healthy part of the award can be separated from a defective one (dealing with matters falling outside the terms of submission to arbitration) and enforced.13 See further paragraphs 5-6 above.
III. Interpretation of Article V(1)(c) of the New York Convention
The language of Article V(1)(c) of the Convention is not easily comprehensible, inviting potentially a plethora of different interpretations.
The difficulty in application arises from the fact that the proviso is descriptive in nature. The text may suggest two separate hypotheses subsumed therein, namely (i) the award that deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, and (ii) the award includes decisions on matters beyond the scope of the submission to arbitration.
In practice, this ground is often used as a challenge to the scope of the tribunal’s jurisdiction (excess of jurisdiction), where the “submission to arbitration” is then interpreted as the agreement to arbitrate (potentially modified by the subsequent Terms of Reference, if applicable).14 See further Recognition and Enforcement of non-ICSID Awards.
Reviewing the scope of the "submission to arbitration", however, should also entail the analysis of the parties' subsequent submissions and not only agreement to arbitrate.15 Consequently, a tribunal decision awarding more than was claimed (ultra petita) falls under Article V(1)(c) of the Convention.16
IV. Application of Article V(1)(c) of the New York Convention in a context of investment treaty arbitration
A. Deferential review of non-ICSID awards by the enforcement courts
Enforcement courts generally apply the same principles and deference to non-ICSID investment awards that are applied to international commercial arbitration awards. For example, a U.S. enforcement court concluded that “[…]the Tribunal's decision is entitled to substantial deference and that it ultimately acted well within its permissible scope to arbitrate.”20 See further paragraphs 4-8 above.
B. Examples of unsuccessful attempts of invoking Article V(1)(c) of the Convention
Awards have been enforced when the award-debtor asserted that:
Wolff, R. (ed.), New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958: Article-by-Article Commentary, 2nd ed., 2019.
UNCITRAL, UNCITRAL Secretariat Guide on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 2016.
Reisman, W.M. and Richardson, B., Tribunals and Courts: An Interpretation of the Architecture of International Commercial Arbitration, in van den Berg, A.J. (ed.), Arbitration – The Next Fifty Years, 2012, pp. 17-66.
Azeredo da Silveira, M. and Lévy, L., Transgression of the Arbitrators’ Authority: , in Gaillard, E. and Di Pietro, D. (eds.), Enforcement of Arbitration Agreements and International Arbitral Awards. The New York Convention in Practice, 2008, pp. 639-678.
Kronke, H., Nacimiento, P., Otto, D. and Port, N.C. (eds.), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention, 2010.
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