A Study of the Cross-Border Enforcement of Arbitral Awards Based on Penalty Clauses in English Law: Is Public Policy an Obstacle?

Abstract

This dissertation aims to analyze the penalty rule in English law to make it the enforceability of arbitral awards based on penalty clauses available in England. It starts with a detailed analysis of the penalty rule and the decision of the Supreme Court on Makdessi, which decided on the character and new application of the penalty rule. This case will be discussed in the first section under the existing rule. In the second section, we will examine the relationship between public policy and arbitration in the scope of the New York Convention to show how they are relevant to each other when it comes to the enforcement of arbitral awards based on contractual penalties. Particular importance has been given to the recent Pencil Hill case in this context. In the last section, the principal questions will be addressed concerning why the penalty rule should be abolished and the new rule should be enforced.