The Enforcement of Awards Annulled in their Place of Origin The French and U.S. Experience

Abstract

This article examines to what extent awards which have been annulled in their country of origin can be enforced in France and the United States. In the 1990s the Hilmarton case in France and the Chromalloy decision in the United States seemed to indicate that French and U.S. case law was moving in a similar direction. In both cases the courts enforced awards that had been set aside in their place of origin, not pursuant to the New York Convention, but on the basis of the more favourable provisions of domestic arbitration law. However, since then, the French and U.S. courts have taken diametrically opposed views. While the French courts continue to ignore foreign annulment decisions altogether, and will enforce an international arbitration award regardless of what the home jurisdiction finds as to its validity, U.S. courts have increasingly refused to enforce awards which were set aside at the place of arbitration. U.S. courts will disregard a foreign annulment decision only if it fundamentally violates U.S. public policy. This article argues in favour of a middle approach. By giving the word “may” in the phrase “Recognition and enforcement of the award may be refused” in Article V of the New York Convention greater weight, enforcement courts can examine the validity of a foreign annulment decision in the light of internationally recognized annulment reasons and not from the perspective of domestic rules pertaining to the recognition of foreign judicial decisions. This should strengthen the international efficacy of commercial arbitral awards within the framework of the New York Convention and not on the basis of domestic arbitration law.