Marc J. Goldstein Arbitrator & Mediator NYC
September 10, 2009

Enforcement of Convention Awards Collaterally Attacked in Courts of “Secondary Jurisdiction”

Dear Readers: A posting on the Kluwer Arbitration Blog by Francesca Richmond discusses some recent UK case law on merits review of arbitration awards in the courts, and alludes briefly to a pending US enforcement case in which a District Court in Washington is asked to deny recognition out of respect for a judgment of a Qatari court under Qatari law, notwithstanding that the seat of the arbitration was Paris. Reproduced below is the comment I have posted on the Kluwer website.

Francesca —

Your posting inspired me to look at the brief for Respondents in the IITIC/Dyncorp enforcement case, to ascertain on what basis the federal district court in Washington is asked to deny recognition of a French award on the basis of merits review in Qatari courts.

The fulcrum of the DynCorp Respondents’ argument is that ITIIC “is estopped from contesting that the Qatari Court of Cassation was competent to set aside the award.”. That may be a correct legal conclusion based on IITIC’s efforts in the Qatari courts.

But how does this proposition sustain Respondents’ burden to show that one of the Convention grounds for denying recognition and enforcement exists?

Respondents invoke Article V(1)(e) of the Convention, and thus it is their burden to show that the Qatari courts were a “competent authority of the country in which, or under the law of which, the award was made.”. All agree that the ICC validly designated Paris as the seat of arbitration — no seat having been designated in the arbitration agreement. Thus, the award was made in France.

There remains the possibility that the parties might have agreed to proceed before the Paris-seated tribunal under the arbitral procedural law of Qatar. But Respondents do not argue this. And there is no indication in Respondents’ papers that this was agreed or that the Sole Arbitrator understood that he was governed by Qatari lex arbitri.

Respondents argue that the Qatari courts had jurisdiction to review the merits of the award because the controlling Arabic version of the arbitration agreement did not state that the award shall be “final and binding,” and that, under Qatari arbitration law, the omission of these words opens the door to full-bore merits review in the Qatari courts.

But if the lex arbitri in the case was the French law, the significance (if any) of the omission of “final and binding” from the clause is an issue of French arbitration law, at least as far as a U.S. court applying Article V(1)(e) is concerned.

No authority cited by Respondents permits a party to sustain its burden of establishing a defense to enforcement under the New York Convention solely by invoking estoppel principles against the party seeking recognition. Here it is still Respondents’ burden to show prima facie that the lex arbitri was the law of Qatar, and they have not even attempted this.

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