As previously reported, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the â€śNew York Conventionâ€ť) entered into force with respect to Myanmar on Monday 15 July 2013. At the time, we noted that a necessary next step was the introduction of new domestic legislation to implement the Convention, in particular toprovide for the enforcement of foreign arbitral awards and arbitration agreements. Continue reading
For almost a decade, the validity of arbitration clauses that subject a Sino-foreign contract dispute to arbitration before a foreign arbitration institution, but with a seat in China, has been controversial. Many practitioners and commentators believe, for a variety of reasons, that such clauses are invalid under Chinese law. A recently published decision of the Supreme People’s Court of China (“SPC”), however, casts doubt on this view. Continue reading
On 11 June 2014, the International Labour Organisation (“ILO”) adopted a Protocol (“Protocol”) to the 1930 Forced Labour Convention No. 29 (“Convention”). The Protocol is intended to update the 84 year old Convention and to address gaps in its implementation.
The Protocol calls for governments to pursue a range of measures in order to prevent and eliminate forced labour, including by ensuring that the coverage and enforcement of legislation relevant to the prevention of forced labour applies to all workers and sectors of the economy and by strengthening labour inspection services.
The Protocol will enter into force one year after it has been ratified by at least two member States of the ILO.
Herbert Smith Freehills has published its Sanctions Update e-bulletin on recent developments in the sanctions regime against Iran.
On 21 July 2014, it was announced that the six month suspension of EU and US sanctions against Iran as part of the Geneva Joint Plan of Action agreed in January 2014 would be extended until 24 November 2014 to allow negotiations between the P5+1 (China, France, Germany, Russia, the UK and the US) and Iran to continue.
For further information, please contact Rod Fletcher, Partner, Susannah Cogman, Partner, Daniel Hudson, Partner, Elizabeth Head, Associate, or your usual Herbert Smith Freehills contact.
+44 20 7466 7555
Following on from their previous article in Young Arbitration Review (“YAR”), “The Impounded Boeing 737“, Herbert Smith Freehills associates Vanina Sucharitkul and Gregory Travaini have published a further article on Walter Bau AG v The Kingdom of Thailand entitled “The Impounded Boeing 737 â€“ The Saga Continues” in the fourteenth edition of YAR.Â Â Here, they examine Thailandâ€™s continued efforts to resist enforcement of the arbitration award in multiple jurisdictions. To read the full article, please click here.
For further information, please contact Vanina Sucharitkul, Senior Associate, Gregory Travaini, Avocat, or your usual Herbert Smith Freehills contact.
Vanina SucharitkulSenior Associate
+66 2 6573821
+33 1 53 57 65 37
This article was first published in Young Arbitration Review, July 2014, p.5 and is reproduced by kind permission of Young Arbitration Review.
On 16 July 2014, the Full Federal Court of Australia handed down its reasons for dismissing TCL Air Conditioner (Zhongshan) Co Ltdâ€™s (TCL) appeal from the Courtâ€™s decision in in Castel Electronics Pty Ltd v TCL Air Conditioner (Zhongshan) Co Ltd (No 2). The decision clarifies the circumstances in which an arbitral award will be set aside or denied recognition or enforcement under the Model Law as a result of a failure to accord a party procedural fairness in connection with making the award.
A further step towards transparency: UNCITRAL approves Draft Convention on Transparency in Treaty-Based Investor-State Arbitration
On 9th July 2014, at its 47th session, the United Nations Commission on International Trade Law (UNCITRAL) approved a Draft Convention on Transparency in Treaty-Based Investor-State Arbitration (the Convention). The main aim of the Convention is to extend the application of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (the Transparency Rules). As previously reported by us, the Transparency Rules were introduced to try and increase transparency in investor-state arbitrations by allowing for greater public access to documents and hearings and for interested parties to make submissions to the tribunal.
If adopted by the UN and embraced by states, the Convention has the potential to bring about a significant change to the resolution of investor-state disputes, impacting states and investors alike.
On 7 July 2014, an Arbitral Tribunal constituted under Annex VII of the United Nations Convention on the Law of the Sea 1982 (the Convention) issued its award in the Bay of Bengal Maritime Boundary Arbitration between the Peopleâ€™s Republic of Bangladesh and the Republic of India, granting approximately 106,613km2 to Bangladesh and 300,220 km2 to India, out of a total relevant area of 406,833km2. The Award provides much needed clarity on the maritime entitlements of both Bangladesh and India.
Like the 2012 decision of the International Tribunal for the Law of the Sea (ITLOS) in the Bangladesh/MyanmarÂ case, a consequence of the delimitation was the creation of a small “grey area” creating potential overlapping entitlements of Bangladesh, India and Myanmar (which was not a party to the arbitration).
While in deciding larger uncertainties over the entitlements of Bangladesh and India the Tribunal created new (albeit smaller) uncertainties over competing sovereign rights in the grey area, the Tribunal’s encouragement of the parties to cooperate in the exercise of their sovereign rights is to be welcomed. There are a number of precedents where states have shared rights in maritime areas to achieve a favourable solution for all parties.
The Award also provides an excellent precedent for the peaceful settlement of maritime boundary disputes and shows how States can de-politicise sovereignty issues and cooperate to achieve political and commercial certainty.
“A Delicate Matter”: English Court considers enforcement of awards set aside by the courts of the seat and ability to claim post-award interest in those circumstances
In the case of Yukos Capital SARL v OJSC Rosneft Oil Company  EWHC 2188 (Comm) the English Court considered two preliminary issues relating to the long-running dispute between Yukos Capital SARL (“Yukos Capital”) and OJSC Rosneft Oil Co. (“Rosneft”). The issues were as follows:
- Whether enforcement of arbitral awards that have been set aside by the courts of the seat is precluded under common law; and
- whether, in principle, interest could be recovered on such arbitral awards under either Russian and/or English law.
In relation to the enforcement issue, the Court considered the “test” was whether it could (in particular and identifiable circumstances) treat an award as having effect notwithstanding a later decision of a court annulling the award. The Court found that, as a general position, it would be unsatisfactory and contrary to principle if a Court were bound to recognise a decision of a foreign court which offended against basic principles of honesty, natural justice and domestic concepts of public policy.
It is clear therefore that, in general terms, the Court has the power to enforce the Awards at common law notwithstanding the set-aside decisions of the courts of the seat. However, it now remains for Yukos Capital to prove the allegations which it has made as to why those set aside decisions should not be recognized by the English Court.
Whilst the claim to interest under Russian law was unsuccessful (as a matter of Russian law), the Court concluded that, in principle, interest on the sums claimed in the English proceedings could be recovered under Section 35A of the Senior Courts Act 1981, notwithstanding the fact that interest had not been awarded by the tribunal.
The Supreme People’s Court of China (“SPC“) issued its fourth five-year reform plan for courts on 9 July 2014.Â Â The reform is one of the top priorities of President Xi Jinping’s administration, and has the stated aim of strengthening judicial independence and professionalism by giving judges more authority in making their rulings and autonomy from interference by local governments.
The reform is in line with the judicial reform decisions taken at the third plenary session of the 18th Communist Party Central Committee earlier this year, which pledged to ensure the lawful and independent use of judicial authority to enhance transparency and credibility.