A Comparison Of The Use Of The Public Policy Defence By Different Countries To Resist The Enforcement Of International Arbitral Awards – A Rising Star Or Setting Sun?

A Comparison Of The Use Of The Public Policy Defence By Different Countries To Resist The Enforcement Of International Arbitral Awards – A Rising Star Or Setting Sun?

In Brazil recognition and enforcement may be refused if the award is “against Brazilian public policy, sovereignty and good moral principles ”. In an award which came before the Brazilian courts for enforcement the public policy exception was applied on the ground that the foreign award did not comply with certain provisions of the Brazilian Arbitration Act applicable to arbitrations conducted in Brazil . Those provisions require an arbitration agreement to be in writing and duly signed by the parties. However the agreement was not signed by one of the parties and the court in refusing enforcement held that the fact that one of the parties did not sign the agreement which contained the arbitration clause violated the principle of autonomy of the parties and was against Brazilian public policy.

Similarly, in Turkey, recognition and enforcement can be denied if the award is contrary to “morals” . In expanding the scope of a public policy defence, their courts have upheld the public policy defence on a finding that a domestic time limit for the issuance of a foreign arbitral award was breached, and consequently denied enforcement of a foreign arbitral award.

In India, the recognition and enforcement of a foreign arbitral award is deemed contrary to public policy if it is contrary to the ‘fundamental policy of Indian law, the interests of India, or justice or morality’.

The Supreme Court in the case of Renusagar Power Plant Co. Ltd vs General Electric Co decided that an award may be contrary to public policy if such enforcement is contrary to (i) the fundamental policy of Indian law; or (ii) the interests of India; or (iii) justice or morality. It stated thus:

“It is obvious that since the Act is calculated and designed to sub serve the cause of facilitating international trade and promotion thereof by providing for speedy settlement of disputes arising in such trade through arbitration, any expression or phrase occurring therein should receive, consisting with its literal and grammatical sense, a liberal construction.”

Funke Adekoya

No Comments

Post a Comment