Problems Associated with the Enforcement of Arbitral Awards Revisited: Australian Consumer Protection; Conflict of Laws; An English Law Perspective

Abstract

THE NEW York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (‘the New York Convention’) was designed to provide a speedy and efficient mechanism for the worldwide enforcement of arbitral awards subject to limited exceptions. Unfortunately, a recurring problem in international arbitration has been the breakdown of the scheme arising out of an enforcing court's refusal to enforce an arbitral award on the grounds that the arbitral tribunal has failed to take account of the law of the enforcing state, relying on the public policy exception to recognition and enforcement contained in Article V.2(b) of the New York Convention.1 The basis for such ‘public policy’ refusal is that certain provisions of the law of the enforcing state (usually statutory) are matters of fundamental public policy, which should not be disregarded even though the contract giving rise to the arbitral award does not provide for the application of that law. These issues were considered by the US Supreme Court in the landmark and oft-cited decision of Mitsubishi Motors Corp . v. Soler Chrysler-Plymouth, Inc .2 There the question for consideration was the arbitrability of certain allegations by Soler Chrysler-Plymouth (a US company) against Mitsubishi (a Japanese company) relating to alleged anti-competitive practices contrary to the US Sherman Act. The parties' sales agreement provided for all disputes between the parties to be settled by arbitration in Switzerland applying Japanese law. The Supreme Court recognized the arbitrability of such disputes, consistently with the parties' bargain, but warned in a famous footnote3 that in the event that resort to arbitration were to result in the disregarding of Soler Chrysler-Plymouth's rights to pursue statutory remedies for antitrust violations, the United States would have the opportunity, at the enforcement stage, to ensure that those legitimate interests in the enforcement of …