In an appellate judgment, the Full Court of the Federal Court of Australia has ruled that a foreign arbitral award is not enforceable because the arbitral tribunal was not constituted strictly in accordance with the parties’ arbitration agreement. Notably, the decision also considers the courts’ discretion to enforce an award even where a party establishes a ground for non-enforcement, an issue on which there was previously “no authoritative statement in Australia”.
The Full Court allowed an appeal from its first instance decision that enforced a foreign award pursuant to the International Arbitration Act 1974 (Cth).
In a recent and controversial judgment, the High Court of South Africa set aside an attachment order authorising the attachment of an aircraft owned by the Tanzanian Government in satisfaction of a foreign arbitral award, on the ground that the award “ceased to exist” when it was converted into an order of the courts of the seat in Tanzania.
Twala J’s 4 September 2019 judgment in The Government of Tanzania v Steyn and Others sits uneasily with the strict mandatory enforcement regime for New York Convention awards introduced in South Africa’s revamped International Arbitration Act of 2017 (the “South African Act“). It also underlines the importance of clear drafting in any post-award settlement agreement to ensure that the parties retain the ability to enforce the terms of the original award in appropriate circumstances.
In this post, we examine the High Court’s reasoning and compare it with the approach that the English courts might take in similar circumstances under the Arbitration Act 1996 (the “English Act“). We conclude with some practical guidance for parties considering a post-award settlement.
In a judgment dated 7 October 2015, the Cour de cassation (French Supreme Court) has rejected an appeal against an order granting exequatur (enforcement) of a foreign arbitral award. The appellant had argued that such an order may be subject to an appel-nullité (nullity appeal) in circumstances where a judge has exceeded his or her powers. The Supreme Court reiterated that an appeal against an order granting enforcement is only permitted under certain limited grounds relating to the arbitral award itself (that is, those specified in Article 1520 of the French Code of Civil Procedure). It did not, however, expressly exclude the possibility of resorting to an appel-nullité in such circumstances. (Cass. Civ. 1re, 7 Oct. 2015, F-P+B, n° 14-17.490.)