Reflections on finality in arbitration

• Pages: 485-510
• DOI: 10.10520/EJC131287
• Date: 01 January 2012
• Author: Christa Roodt
• Published date: 01 January 2012

485

Reflections on finality in arbitration*

Christa Roodt

BLC, LLB, LLM, LLD

Lecturer, University of Aberdeen, Scotland; Research Fellow, Department of

Jurisprudence, University of South Africa

OPSOMMING

Ondersoek na die Finaliteit van 'n Arbitrasiebevel

Hierdie artikel oorweeg die

Tel co rd ia -

en

Lufuno

-sake vanuit die oogpunt van

die finaliteit van ’n arbitrasiebevel. Die vraag wat te berde kom, is wanneer ’n

arbitrasiebevel finaliteit bereik waar ’n saak voor meer as een forum

(arbitrasie en staatlike howe), in meer as een jurisdiksie gevoer word. Die

prosedurele meganismes wat Amerikaanse en Suid-Afrikaanse howe tydens

die

Tel co rdi a

-dispuut toegepas het asook hul onderskeie benaderings tot

res

iudicata

, het ’n groot mate van ooreenstemming getoon.

Dit is te verstane dat die afhandeling van ’n internasionale proses vertraag

kan word deur bepaalde grondwetlike regte wat die spoed van die

afhandeling van ’n saak kan beïnvloed. Nietemin, indien die reg op ’n billike

verhoor op enige stadium in die verrigtinge gepleit mag word, word ’n

geleentheid geskep vir die dispuut om vryelik te eskaleer gedurende die

verhoor. Dit kan die hofproses oopstel vir misbruik en die afhandeling van

die geskil vertraag. Die minderheidsbeslissing in

Lufuno

skenk ’n mate van

oorweging aan die potensiële negatiewe implikasies hiervan. Die finaliteit

van die geskilbeslegtingsproses kan na behore bestuur word aan die hand

van ’n wyer interpretasie van

res iudic ata

in internasionale dispute en ’n

meer geredelike ondersoek hierna, op die hof se inisiatief.

Die moontlikheid dat die

Tel co rd ia

-dispuut verder bespoedig sou kon word,

word ondersoek met verwysing na die New York Konvensie op die Erkenning

en Afdwing van Arbitrasiebevele van 1958, en aan die hand van aanbevelings

wat deur ander gerekende internasionale liggame uitgereik is.

1Introduction

It is untenable to differentiate sharply between national and

international law in the context of international commercial arbitration.

Transactions that are international in some respect may fall squarely

within the ambit of a domestic body of law; and the quality of the

domestic implementation of the international obligations imposed by

the 1958 New York Convention on the Recognition and Enforcement of

Foreign Arbitral Awards (the NYC),1 may largely determine whether a

1 Based on a paper delivered at the Works-in-Progress Conference of the

University of Missouri, Columbia, on 2011-10-20. The financial assistance of

the Carnegie Trust and the Law School of the University of Aberdeen is

gratefully acknowledged. Thanks are due to an anonymous reviewer who

made helpful remarks. The usual disclaimer applies.

1 Concluded 1958-06-10; 9 USCA §§ 201–8. Compare Art 8 UNCITRAL Model

Law on International Commercial Arbitration, first adopted on 1985-06-21

*

486

2012 De Jure

state court or an arbitral tribunal will be competent to rule on the matter.

Domestic law has a role in respect of the right of access to justice, due

process of law, and “who decides” (the doctrine and practice of

compétence-compétence

). Domestically, the policy goal may be to

centralise judicial review of arbitral proceedings; respect arbitral

autonomy; or to optimise the relationship between arbitral tribunals and

courts. In the case of a regional grouping such as the European Union,

the policy goal is different, because the Internal Market must be

safeguarded.2 The international context and consequences of parallel or

sequential proceedings in multiple fora remain relevant to both the

domestic and regional contexts, on account of considerations of

procedural efficiency and public policy.

Under Article II(3) of the NYC, state courts (in the states party) are

obliged to refer the parties who entered into an arbitration agreement,

to arbitration and to decline jurisdiction, if the court is seized with a claim

on the same subject matter, unless the arbitration agreement is null and

void, inoperative or incapable of being performed. The international duty

imposed by the NYC is intended to prevent parties to an arbitration

agreement from resorting to dilatory tactics in the form of parallel court

proceedings. The wording of the provision leaves little room for judicial

discretion so as to avoid an unjustified exercise of jurisdiction, except

perhaps for an anti-suit injunction in support of an arbitration agreement.

Article II(3) of the NYC effectively removes the weighing of factors

associated with a referral. Court proceedings brought in violation of the

arbitration agreement are to be stayed in order to “allow arbitration to

be determinative”,3 provided only that basic prerequisites are met. The

prerequisites are that parties agreed to arbitrate, the arbitration

agreement falls under the NYC, a dispute exists, the dispute is arguably

within the scope of the arbitration agreement, the arbitration agreement

is in writing, and the subject-matter is capable of being settled by

arbitration. While the interpretation of the text of the NYC is subject to

different positions adopted by national courts,4 and Article II(3) fails to

take account of jurisdictions that never “refer” parties to arbitration, the

construction of the arbitration agreement is intended to be harmonised

among the Contracting States. To this end, the terms “null and void,

inoperable or incapable of being performed” are to be construed

2(

UN doc A/40/17 Annex I

), and amended in 2006 by UNCITRAL’s report on

the work of its 39th session (

UN Doc A/61/17 Annex I

).

2 Roodt “Border Skirmishes Between Courts and Arbitral Tribunals in the EU:

Finality in Conflicts of Competence” 2011

Yea rboo k of Priv Int L

91.

3 Van den Berg

The New York Arbitration Convention of 1958: Towards a

Uniform Judicial Interpretation

(1981) 128–31; Huang “Which Treaties Reign

Supreme? The Dormant Supremacy Clause Effect of Implemented Non-Self-

Executing Treaties” 2011

Ford ham LR

2211 2236.

4 Interpretation can be directed by (a) Arts 31 and 32 of the 1969 Vienna

Convention on the Law of Treaties; or (b) constitutional or other sources of

domestic law; or (c) domestic and foreign precedent; or (d) the

travaux

préparatoires

of the NYC.