As mentioned in a previous post, I wanted to discuss with you some recent U.S. court decisions which have delineated the standards followed by local courts in enforcing annulled arbitral awards.
As is well-known, once an arbitral award is rendered, parties to a dispute often race to the courts: The winning party seeks the enforcement of the award while the losing party seeks its annulment.
Of course, if the losing party is successful in obtaining the annulment of an arbitral award, this situation can seriously complicate and even jeopardize the enforcement proceedings initiated by the winning party. Indeed, the New York Convention provides that a court may refuse to enforce a foreign award if “a competent authority” has set the award aside or has suspended it.
Notably, the wording of the Convention, and in particular the use of the word “may” (instead of “shall”), has given rise to discussions on whether a court remains entitled to enforce an award that has been set aside. This issue is particularly delicate as it often involves policy considerations.
In the United States, several court decisions have recently reassessed the standards to be applied by the courts when enforcing annulled awards.READ MORE