Court Interventions in Arbitrations From a common law point of view

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Court Interventions in Arbitrations From a
common law point of view

• Ajmalul Hossain QC
• Senior Advocate, Bangladesh

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International Arbitrations  And National Court
We will consider

•  
• The desired objectives of arbitrations
•  
• What approach is taken by courts in practice
•  
• What consequences may flow with too much
  intervention

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International arbitrations are normally disputes
involving parties and arbitrators of different
nationalities

• Some basic principles
• Party autonomy choice of forum and applicable
  law
• Flexible procedures
• Speedy resolution
• Confidentiality
• Parties choice of language applies

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National Courts

• Do not normally allow jurisdiction of courts to
  be excluded
• Follow rigid and formal procedures
• Dispute comes into public domain and gets
  publicity
• Language of the national court
• Possibility of executive influence on decisions
  in favour of local parties

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Desired objectives

• The ideal and expectation is for international
  arbitration to be established and concluded
  according to internationally accepted practices,
  free from control of parochial laws, and without
  the interference of the local courts. Arbitration
  agreements and awards should be recognised and
  given effect, with little or no complication or
  review, by national courts. Dr. Julian Lew
• Therefore, the national courts should
• Provide greater effectiveness to arbitral
  proceedings
• Support arbitral proceedings where needed
• Assist the arbitral proceedings
• Do not interfere or derail the arbitration
  proceedings

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Sometimes it is said that there is a thin line
between helpful assistance and unhelpful
interference. ADR can be Additional Dispute
Resolution

• Seat of arbitration legal place of arbitration
  which parties or tribunal agree
• Seat dictates the lex arbitri or the law of the
  arbitration
• Seat gives curial or supervisory jurisdiction to
  the local courts

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Court Assistance -Pre Arbitration

• Grant injunctions or stay court proceedings
  brought in breach of the arbitration agreement
  obligation under NY Convention (Art. 2(3)) and
  part of the UNCITRAL Model Law (Art. 8)
• Assist with the appointment of arbitral tribunal
  as a default mechanism  
• Assist with any change of the constitution of the
  tribunal 
• Issue interim preservatory orders before
  formation of Tribunal

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During arbitration

• Preserve evidence or subject matter of dispute
• Issue procedural orders relating to security for
  costs, disclosure and inspection of documents,
  summoning and attendance of witnesses
• Interim injunctions, appointment of receiver,
  making of attachment order

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Post award

• Deal with challenges to and setting aside of
  awards
• Give recognition to the award
• Enforce the award

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Sometimes the supportive role of the courts is
overshadowed by the abuse of the supervisory
powers of the court. The reasons are

• Courts place a narrow and parochial
  interpretation on modern arbitration laws to
  limit their application and to interfere in the
  arbitration process.
• Chauvinism of judges
• Ignorance of generally accepted principle of
  private international law

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Two types of interference by the courts

• Interference with the arbitral proceedings
•  
• Interventions preventing enforcement of arbitral
  awards

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Arbitral Proceedings

• Interfering with the competence-competence
  principle, i.e., the tribunal should rule on its
  own jurisdiction SBP v Patel Engineering
  (India)
• Revoking the authority of the Tribunal
  Petrobangla v Saipem (Bangladesh)
• Granting anti-arbitration injunctions Hub Power
  Co v Wapda (Pakistan)

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Interferences with enforcement of awards

• Extended meaning of public policy Saw Pipes v
  ONGC
• Limits of national laws to enforce international
  arbitrations Bhatia v Bulk Trading
• London award to be enforced in USA set aside in
  India Venture Global v Satyam

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What is the risk of too much interference by
national courts ?

• States can be held responsible under
  international law for the wrongful acts of their
  judiciary in interfering with arbitration
  proceedings Saipem v Bangladesh 
• Undue interference by national courts with a
  foreign investors contractual right to arbitrate
  may amount to expropriation under international
  law.

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Conclusions

• Parties do not get their bargain, ie, dispute
  resolved by chosen method
• Risk of further dispute arising out of failed
  arbitration
• Good for lawyers terrible for clients