Staying an arbitral award means to halt or postpone the enforcement of that award in one forum pending the outcome of a legal result in another forum (whether setting-aside proceedings at the seat or separate enforcement proceedings at another forum). The legal regime governing the staying of investment treaty awards (outside the ICSID Convention) will generally be the New York Convention1 (the "Convention")2 and the domestic law of the State where the enforcement is sought.
In situations where the losing party to an investment treaty arbitration seeks to set aside the non-ICSID award at the seat while the winning party seeks to enforce the same award in another jurisdiction, the courts of the latter jurisdiction enjoy discretion to stay enforcement of the award under Article VI of the Convention.3 The courts also have discretion to require security as a condition of obtaining a stay.4 Courts have also considered that granting an indefinite stay of proceedings may be considered as an abuse of discretion.5
In addition, it is also possible for a court to enforce part of the award and order the stay of another part, pending a final decision in the annulment proceedings.6 Therefore, the mere existence of set-aside proceedings at the seat will not automatically entitle the losing party to a stay in the other jurisdiction.7 But, if the court of the seat has suspended or set aside the award, the losing party will have an advantage to refuse enforcement of the award at the other jurisdiction under Article V(1)(e).8
Article VI does not set forth any standards by which a court should decide whether a stay should be granted.10 Consequently, national courts have taken into account the purpose of the Convention to facilitate and expedite dispute resolution,11 including hardship,12 likelihood of success13 within a reasonable period of time,14 standard of review in the foreign proceedings and its characteristics15 and international comity.16 For example, the court in New York (US) will consider the aim of expeditious resolution and the factual background to the initiation foreign proceedings.17
One factor leaning towards granting a stay could be the desire to not have inconsistent results whereby the award is set aside at the seat, but still enforced at another jurisdiction.18 Courts may be concerned about conflicting results where a stay is not granted.19 Another commentator has opined that a court should grant a stay only if the requesting party offers "some summary proof that the award is tainted by a defect which is likely to cause its setting aside in the country of origin."20 Another view holds that the court should balance the relative prejudices to the parties when considering staying the award.21
UNCITRAL Model Law Article 36(1)(a)(v) and (2) mirror the Convention.24 Thus adopting states may offer similar protection.25 National legislation may provide further grounds for staying enforcement, including national interests.26 Parties to the Geneva Convention, which was the first mechanism for international enforcement of arbitral awards, can utilise its wider discretion to refuse enforcement.27
Káposznyák, A., Chapter 25: The Expanding Role of the New York Convention in Enforcement of International Investment Arbitral Awards, in Fach Gomez, K. and Lopez-Rodriguez, A.M. (eds.), 60 Years of the New York Convention: Key Issues and Future Challenges, 2019.
Chapter 26: Recognition and Enforcement of International Arbitral Awards, in Born, G., International Commercial Arbitration, 2nd ed., 2014.
Sanders, M. and Salomon, C., Enforcement of Arbitral Awards Against States and State Entities, Arbitration International, 2017.
Lahlou, Y. and Others, Chapter 9: Substantive barriers to Recognition and Enforcement of Foreign Awards under Article V(1) of New York and Panama Conventions, in Frischknecht, A.A. and Others (eds.), Enforcement of Foreign Arbitral Awards and Judgments in New York, 2018.
Tupman, W.M., Staying Enforcement of Arbitral Awards under the New York Convention, Arbitration International, 1987.
Achtouk-Spivak, L. and Ben Mansour, A., Reconnaisance et execution des sentences arbitrales en matière d’investissement, in Leben, C. (ed.), Droit international des investissements et de l’arbitrage transnational, 2015.
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