Enforcing Annulled Arbitral Awards: Comparison of Approaches in the United States and in the Netherlands

Abstract

This contribution examines the procedural aspects of the enforcement of arbitral awards that were set aside in the jurisdiction where they were rendered. It focuses on recent cases in the United States and the Netherlands, which adopted a different line of reasoning than the approach taken by French judiciary many years ago. According to the latter, an arbitral award set aside in the ‘country of origin’ may be enforced in France in reliance on national law. Namely, French law on enforcement is more favourable than the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral. The courts in the United States and in the Netherlands in recent cases have taken a different approach. They examine the judgment setting aside the award and ignore the effects of the annulment in certain circumstances. Even though there are some common denominators, there are substantial differences between the line of reasoning of the courts in the US and the Netherlands. They remain distinct although a more recent decision of the Dutch Supreme Court emphasises an exceptional nature of such enforcement so that the difference between the two approaches may seem somewhat mitigated. However, a closer look reveals that substantial discrepancies between the courts in these two jurisdictions have remained. The article provides for a critical view on the enforcement of annulled arbitral awards in general. In particular, it points to drawbacks of variety of unilateral approaches amongst various jurisdictions. Additionally, it suggests the development of internationally accepted standards for the sake of legal certainty and predictability of arbitration, should the acceptance of the enforcement of annulled arbitral appear a majority view amongst academics and arbitration practitioners.