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West Wickham student travels to India to negotiate a place in the final of international law competition - Edenbridge Chronicle

Google International ADR News - Sat, 2018-01-20 08:52

West Wickham student travels to India to negotiate a place in the final of international law competition
Edenbridge Chronicle
The three final-year students were the only team from the UK to take part and were accompanied to Goa by the Law School's Lecturer in Alternative Dispute Resolution (ADR), Janie Clement-Walker. The final, judged by a panel of five expert mediators ...

West Wickham student travels to India to negotiate a place in the final of international law competition - Edenbridge Chronicle

Google International ADR News - Sat, 2018-01-20 08:52

West Wickham student travels to India to negotiate a place in the final of international law competition
Edenbridge Chronicle
The three final-year students were the only team from the UK to take part and were accompanied to Goa by the Law School's Lecturer in Alternative Dispute Resolution (ADR), Janie Clement-Walker. The final, judged by a panel of five expert mediators ...

West Wickham student travels to India to negotiate a place in the final of international law competition - Edenbridge Chronicle

Google International ADR News - Sat, 2018-01-20 08:52

West Wickham student travels to India to negotiate a place in the final of international law competition
Edenbridge Chronicle
The three final-year students were the only team from the UK to take part and were accompanied to Goa by the Law School's Lecturer in Alternative Dispute Resolution (ADR), Janie Clement-Walker. The final, judged by a panel of five expert mediators ...

West Wickham student travels to India to negotiate a place in the final of international law competition - Edenbridge Chronicle

Google International ADR News - Sat, 2018-01-20 08:52

West Wickham student travels to India to negotiate a place in the final of international law competition
Edenbridge Chronicle
The three final-year students were the only team from the UK to take part and were accompanied to Goa by the Law School's Lecturer in Alternative Dispute Resolution (ADR), Janie Clement-Walker. The final, judged by a panel of five expert mediators ...

Enforcement in Romania of Awards Set-Aside at their Seat

Kluwer Arbitration Blog - Sat, 2018-01-20 00:46

Adrian Iordache

The Question

The question of enforcing arbitral awards which had been subject to set-aside proceedings at their seat is long-standing in academic debate1) For instance, Nadia Darwazeh, Article V (1)(e), in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention 301, 307-09 (H. Kronke, P. Nacimiento et al. eds., 2010); Paulsson, Jan, Enforcing Arbitration Awards under the New York Convention, Experience and Prospects, Papers presented at “The New York Convention Day”, 10 June 1998, United Nations Publication, 24 (1999) jQuery("#footnote_plugin_tooltip_5598_1").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_1", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); and it continues to be of acute practical importance.

Yet, and despite the unusual uniformity of legislative drafting on this topic, which we owe to the geographical pervasiveness of the New York Convention, judicial responses in various jurisdictions have been spanning from one end to the other of the spectrum of possibilities.

Here, we briefly test-run some recent judicial practice against the particulars of the Romanian legal system, in the hope of assisting practitioners in tackling the issue in an intelligible manner if and when the matter reaches the courts.

The Romanian Civil Procedure

The New York Convention 1958 applies in Romania since 1961 (see Decree of the Council of State no 186 of 24 July 1961). However, there has not been, to our knowledge, any reported court decision directly on the issue.

The wording of the Romanian Civil Procedural Code 2010, which gives effect to the New York Convention prescription, reads (in our translation):

Art. 1129: Grounds for refusal of recognition or enforcement
Recognition and enforcement of the award is refused by the court, if the party against whom the award is invoked proves any of the following circumstances:
[…]
(f) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

The first observation to be made is that the language, in Romanian, is more restrictive than the English authentic version of the Convention, which is express to the effect of preserving the court’s discretion to enforce (i.e. recognition and enforcement “may be” refused).

Arguably, it is also stricter, in its normative part, than the French authentic version of the Convention which stipulates that the recognition and enforcement “will not be refused … unless” (“ne seront refuses … que si”)2) The Romanian translation of the Art V as provided in the Decree by which Romanian adhered to the New York Convention in 1961 appears to be a close translation of the French authentic version of the Convention and reads (in our translation of the relevant part) “The recognition and enforcement of the award will not be refused, upon request by the party against whom it is invoked, unless that party proves …”. jQuery("#footnote_plugin_tooltip_5598_2").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_2", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });, thus under-determining what must happen if the condition is indeed met, and which suggests, in the French version, a necessary but not the sufficient condition for the norm. The New York Convention language can be said to be consistent with (i.e. not excluding) a residual discretion of the court to enforce in certain special circumstances (discussed below.)

By contrast, the syntax of the Romanian Civil Procedure Code provision is: if the condition is met, the enforcement “is refused by the court” – i.e. affirming the premise, confirms the conclusion.

Nevertheless, assuming that the language is indeed logically tighter in the Romanian formulation, it remains the case that, where the national provisions fall foul of the general purpose of the Convention to promote enforcement of arbitral awards, the language of the Convention may be held to prevail over the national provision.3) The Romanian Constitution Art 11 consecrates properly ratified international treaties as “internal law”. See also the Vienna Convention on the Law of Treaties 1969 art. 27, replicated in internal law by the Art. 31 (5) of the Law of Treaties no 590/2003, which prevents courts from invoking national law to refuse the application of international treaties, a principle confirmed also by case law, cf. e.g. Romanian Supreme Court Decision no 3283 of 17 Sep 2014. jQuery("#footnote_plugin_tooltip_5598_3").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_3", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Before addressing this point further, we turn to the recent arguments by the Netherlands Supreme Court in the Maximov enforcement case.

Maximov

The facts of the dispute between Nikolay Maximov and the Novolipetsky Metallurgichesky Kombinat have been widely reported. Briefly, the dispute concerns an arbitral award obtained by Mr Maximov at the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, but which was set aside by the Moscow Commercial Court on 21 June 2011, a quashing decision which was upheld on appeal by the Federal Commercial Court of Moscow District on 10 October 2011, and permission to appeal was refused on paper by the Supreme Commercial Court of the Russian Federation on 30 January 2012. Mr Maximov has attempted enforcement of the arbitral award in France, where he was successful4) Cour de Cassation, chambre civile 1, 25 mai 2016, 14-20.532 ; Cour D’appel De Paris Pôle 1 – Chambre 1 Decision of 01 April 2014, 12/15479 ; Order of exequatur by the Tribunal de Grande Instance Paris dated 16 May 2012. jQuery("#footnote_plugin_tooltip_5598_4").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_4", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });, and in the Netherlands and the UK5) Maximov v Open Joint Stock Company “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC 1911 (Comm).
jQuery("#footnote_plugin_tooltip_5598_5").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_5", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });, where, in each case he has not.

The Netherlands Supreme Court has issued a decision on enforcement proceedings on 24 Nov 20176) Hoge Raad Decision of 24.11.2017, case number 16/05686. ECLI:NL:HR:2017:2992. jQuery("#footnote_plugin_tooltip_5598_6").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_6", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); which further elaborates on the way Art. V (1) e) is approached by the court.

The decision is interesting for our purposes for at least two reasons: one, it contains an interpretative discussion of the normative language of the New York Convention based on the Vienna Convention on the Law of Treaties 1969 and the New York Convention’s travaux préparatoires. Second, it reaffirms the margin of appreciation of the Dutch courts in determining whether to exercise their discretion to refuse enforcement under the New York Convention, and proposes certain landmarks for the exercise of that discretion.

On the first point, the Netherlands Supreme Court proposes that the only interpretation consistent with both authentic languages of the New York Convention art. V (1) e) given the Convention’s general purpose and design, is that the courts retains a margin of appreciation in determining whether to refuse enforcement where the facts at art. V (1) e) are invoked, in special circumstances (see para 3.4.5 of the Netherlands Supreme Court Decision).

On the second point, the Netherlands Supreme Court asserts that such special circumstances where such enforcement discretion could be exercised, include situations where the foreign annulment judgment is incapable of recognition in the Netherlands on the ground that one or more of the conditions that apply under Dutch private international law are not respected for the recognition of a foreign decision (para 3.4.6 of the Netherlands Supreme Court Decision). It is notable that this is so, despite the fact that it may not be procedurally necessary for the party resisting enforcement to introduce a separate action for the recognition of the foreign annulment decision.7) Amsterdam Court of Appeal Decision of 18 Sep 2012, interim judgment. case number 200.100.508/01. jQuery("#footnote_plugin_tooltip_5598_7").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_7", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });
The approach is on its face similar to the one used in the case of Yukos Capital8) Amsterdam Court of Appeal Decision of 28 April 2009, case number 200.005.269/01 jQuery("#footnote_plugin_tooltip_5598_8").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_8", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); by the same Dutch courts, which, on different facts, led to the opposite conclusion, i.e. enforcement was permitted.

On the one hand, it may be argued that the strengthening of the discretion of enforcement courts in connection to Art. V (1) e) renders the application of that provision unpredictable, thereby defeating the purpose of the Convention drafters.9) Paulsson, Marike R. P., “Enforcement of Annulled Awards: A Restatement for the New York Convention?” Kluwer Arbitration Blog, December 21, 2017 jQuery("#footnote_plugin_tooltip_5598_9").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_9", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

However, since the circumstances giving rise to the application of the art V (1) e) exception are inextricably linked to a foreign court judgment, it is difficult to see how national courts can ignore the question of whether that judgment, properly considered, would otherwise be apt to be recognised by the enforcement forum. Conversely, it could be argued that, giving uncritical credence to the annulment decision, would amount to affording the foreign court judgment a level of deference superior to the one conferred upon the foreign arbitral decision. In the context of the purpose of the New York Convention, this is difficult to defend, especially as the annulment proceedings are de plano excluded from the scope of the New York Convention.10) Art. I of the New York Convention as universally interpreted by the courts. See also Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 20 (1981), p 20 and ff. jQuery("#footnote_plugin_tooltip_5598_10").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_10", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

Foreign judgments

In any event, it is not necessary to dispense with this criticism for the limited purposes of this exercise. We find value in examining what could be the result of such approach in the case of the Romanian Civil Procedure Code, as no other guidance is provided to the courts by the New York Convention itself for the application any residual discretion in the application of Art. V (1) e). In this context, the framework affirmed by the Netherlands Supreme Court would have the merit of providing clear criteria, endogenous to the Romanian law, for examining the matter, albeit without predetermining any future decision on different future facts.

The relevant rules are contained in arts. 1096-1098 of the Romanian Civil Procedure Code and provide for basic conditions to recognition as well as a list of grounds for which a court “may” refuse enforcement. For a foreign court decision to be recognised it must be:

(a) final [definitive] under its own law;
[…]
(c) passed in a jurisdiction in respect of which there is “reciprocity” of recognition of the effects of court judgments.

Among the express grounds for which a court “may” further refuse enforcement, we note in particular the circumstance that the judgment is “manifestly contrary” to public order as reflected in the Romanian private international law; and that this incompatibility is weighed taking account particularly of the intensity of the connection with the Romanian legal order and the gravity of the effect thereby caused. There would also be ground for refusal of enforcement, inter alia, where the judgment in question is subject to challenge in the jurisdiction where it was issued.

We observe here the difference in language: while enforcement of a foreign arbitral award “will be refused … if”, enforcement of a foreign court decision “may be refused.” We note also that the “public order” standard is not only elevated by the requirement of “manifest” incompatibility, but weighed further against the extent of the connection to the forum. Both elements of the standard further emphasise the very limited scope for a refusal of enforcement.

On the other hand, for a recognition and enforcement procedure, the foreign court decision must be “definitive” which would not be the case after a judgment of first instance regularly subject to appeal. On the facts of Maximov, the annulment of the arbitral award would therefore have been apt to be given weight only upon dismissal of its final appeal.11)This is without prejudice to the New York Convention’s own mechanism in Art. VI permitting (but not mandating) an adjournment of enforcement proceedings pending conclusion of set-aside proceedings at the seat. jQuery("#footnote_plugin_tooltip_5598_11").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_11", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] });

More generally, by referring the question of the application of art. V (1) e) to the national rules on enforcement of foreign court judgments, we move beyond a scrutiny of the formal legal grounds invoked by the annulment courts in their quashing decision. Instead, the challenge becomes one of proper grounding and evidencing a refusal of enforcement of the annulment decision, in particular by reference to “manifest incompatibility” with national public order. This task imposes an appropriately “heavy burden”12) We use the words of Sir Michael Burton (Sitting as a Judge of The High Court) in Maximov v Open Joint Stock Company “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC 1911 (Comm), who rendered judgment refusing enforcement in the same dispute in the UK. jQuery("#footnote_plugin_tooltip_5598_12").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_12", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); on the party attempting the enforce despite the prima facie application of art. V (1) e).

Conclusions

The Romanian courts are bound by legislative language which purports to limit their discretion to enforce foreign arbitral awards set aside at their seat. Nevertheless, the New York Convention language may be given precedence if more lenient to enforcement and therefore we cannot exclude a certain margin of appreciation subsisting in Romanian courts confronted with the argument.

Furthermore, taking our cue from the Netherlands Supreme Court decision in Maximov, we suggest that introducing criteria from private international law rules on recognition of foreign judgment into the exercise of art. V (1) e) assessment, would lead to a standard not unlike the one used by the Dutch, UK or US courts.13) See for instance Corporacion Mexicana de Matenimiento Integral, S De RL De CV v Pemex-Exploracion y Produccion, No 13-4022 (2d Cir Aug 2, 2016) by reference to language similar to the Art. V (1) found in the Inter-American Convention on International Commercial Arbitration, also known as the Panama Convention. jQuery("#footnote_plugin_tooltip_5598_13").tooltip({ tip: "#footnote_plugin_tooltip_text_5598_13", tipClass: "footnote_tooltip", effect: "fade", fadeOutSpeed: 100, predelay: 400, position: "top right", relative: true, offset: [10, 10] }); In particular, the threshold for a finding that the foreign annulment decision is to be disregarded for “public order” considerations would be a very high one, and met only in exceptional circumstances.

Finally, we agree that the application of art. V (1) e) has yielded divergent results in various jurisdictions (and even within the same jurisdiction) potentially detracting from a purpose of uniformity which may be said to be implicit in the New York Convention design. However, by way of limited defence, we would argue that this may be the result not of any insurmountable defect in the wording of Art. V (1), but of the diversity of factual circumstances and evidentiary difficulties in defeating a foreign judgment on “public order” grounds. Last but not least, the uncertainty might also be a result of shifts in court attitudes and perceptions surrounding particular foreign justice systems.

This piece is based on a presentation made before the international seminar Current Issues in International Commercial and Investment Arbitration, held in Bucharest on 14 December 2017. We thank Mr Johan Bouman of Wolters Kluwer Romania for his support in understanding original Dutch texts which would be otherwise inaccessible to the writer.

References   [ + ]

1. ↑ For instance, Nadia Darwazeh, Article V (1)(e), in Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention 301, 307-09 (H. Kronke, P. Nacimiento et al. eds., 2010); Paulsson, Jan, Enforcing Arbitration Awards under the New York Convention, Experience and Prospects, Papers presented at “The New York Convention Day”, 10 June 1998, United Nations Publication, 24 (1999) 2. ↑ The Romanian translation of the Art V as provided in the Decree by which Romanian adhered to the New York Convention in 1961 appears to be a close translation of the French authentic version of the Convention and reads (in our translation of the relevant part) “The recognition and enforcement of the award will not be refused, upon request by the party against whom it is invoked, unless that party proves …”. 3. ↑ The Romanian Constitution Art 11 consecrates properly ratified international treaties as “internal law”. See also the Vienna Convention on the Law of Treaties 1969 art. 27, replicated in internal law by the Art. 31 (5) of the Law of Treaties no 590/2003, which prevents courts from invoking national law to refuse the application of international treaties, a principle confirmed also by case law, cf. e.g. Romanian Supreme Court Decision no 3283 of 17 Sep 2014. 4. ↑ Cour de Cassation, chambre civile 1, 25 mai 2016, 14-20.532 ; Cour D’appel De Paris Pôle 1 – Chambre 1 Decision of 01 April 2014, 12/15479 ; Order of exequatur by the Tribunal de Grande Instance Paris dated 16 May 2012. 5. ↑ Maximov v Open Joint Stock Company “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC 1911 (Comm).
6. ↑ Hoge Raad Decision of 24.11.2017, case number 16/05686. ECLI:NL:HR:2017:2992. 7. ↑ Amsterdam Court of Appeal Decision of 18 Sep 2012, interim judgment. case number 200.100.508/01. 8. ↑ Amsterdam Court of Appeal Decision of 28 April 2009, case number 200.005.269/01 9. ↑ Paulsson, Marike R. P., “Enforcement of Annulled Awards: A Restatement for the New York Convention?” Kluwer Arbitration Blog, December 21, 2017 10. ↑ Art. I of the New York Convention as universally interpreted by the courts. See also Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 20 (1981), p 20 and ff. 11. ↑ This is without prejudice to the New York Convention’s own mechanism in Art. VI permitting (but not mandating) an adjournment of enforcement proceedings pending conclusion of set-aside proceedings at the seat. 12. ↑ We use the words of Sir Michael Burton (Sitting as a Judge of The High Court) in Maximov v Open Joint Stock Company “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC 1911 (Comm), who rendered judgment refusing enforcement in the same dispute in the UK. 13. ↑ See for instance Corporacion Mexicana de Matenimiento Integral, S De RL De CV v Pemex-Exploracion y Produccion, No 13-4022 (2d Cir Aug 2, 2016) by reference to language similar to the Art. V (1) found in the Inter-American Convention on International Commercial Arbitration, also known as the Panama Convention. function footnote_expand_reference_container() { jQuery("#footnote_references_container").show(); jQuery("#footnote_reference_container_collapse_button").text("-"); } function footnote_collapse_reference_container() { jQuery("#footnote_references_container").hide(); jQuery("#footnote_reference_container_collapse_button").text("+"); } function footnote_expand_collapse_reference_container() { if (jQuery("#footnote_references_container").is(":hidden")) { footnote_expand_reference_container(); } else { footnote_collapse_reference_container(); } } function footnote_moveToAnchor(p_str_TargetID) { footnote_expand_reference_container(); var l_obj_Target = jQuery("#" + p_str_TargetID); if(l_obj_Target.length) { jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight/2 }, 1000); } }More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


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Telangana: 'More lawyers should take up arbitration',says International Centre for Alternative Dispute Resolution - The New Indian Express

Google International ADR News - Fri, 2018-01-19 20:17

Telangana: 'More lawyers should take up arbitration',says International Centre for Alternative Dispute Resolution
The New Indian Express
HYDERABAD: With the number of pending cases in the courts increasing, the judiciary is under pressure and unable to dispose of cases. Therefore, it is time for lawyers to explore alternative dispute resolutions, JLN Murthy of International Centre for ...

and more »

United States: Registration Opens For Authentication In Art (AiA) Congress 2018 - Mondaq News Alerts

Google International ADR News - Fri, 2018-01-19 05:23

United States: Registration Opens For Authentication In Art (AiA) Congress 2018
Mondaq News Alerts
The Hague, Netherlands - January 2018 - Registration is now open for the 2018 Authentication in Art Congress (AiA) program entitled, "Towards Solutions," to be held 7-9 June 2018 in The Hague, Netherlands. Several important art world initiatives will ...

Wheels of justice rusty – GBA President - GhanaWeb

Google International ADR News - Fri, 2018-01-19 05:04

GhanaWeb

Wheels of justice rusty – GBA President
GhanaWeb
Speaking at the opening of a two-day seminar on arbitration advocacy for lawyers, judges and other professionals involved in arbitration, Mr Koffie said the cost of resolving disputes in the orthodox judicial system far outweighs that of Alternative ...

International Arbitration on Oil Stock Purchase Agreements, Prepaid Oil Agreements and Gas Projects within Latin America

Kluwer Arbitration Blog - Thu, 2018-01-18 21:00

Alejandro E. Leáñez Rieber

The need to attract foreign oil & gas investment due to the current low price in Latin American countries is creating an environment were once non-friendly arbitration jurisdictions are increasingly accepting international arbitration clauses for complex landmark deals. This trend is being used within Stock Purchase Agreements of Mixed Oil Companies, Prepaid Oil Agreements when the financing comes from Chinese banks and on Agreements for the Development of Offshore Gas Projects.

First, in some countries private participation in upstream hydrocarbon activities as well as “primary activities”, is only possible through joint ventures in which the State has more than 50% equity ownership (the “Mixed Company”), and therefore decision-making control. The rest of the shares can be acquired by private international oil companies. However, issues might arise with the closing of the transaction, if for example one of the parties does not complete the sale and purchase of the shares according to the Stock Purchase Agreement (the “SPA”); if the buyer does not pay the purchase price in accordance with the established installments to complete the full purchase price of the SPA, or if any of the post actions after signing the SPA are not completed, which can include the consent of the Ministry of Oil to the sale.

Disputes under the SPA are generally solved pursuant to the UNCITRAL Arbitration Rules. The Secretary General of the Permanent Court of Arbitration in The Hague has the appointing authority. In some cases, there are fork in the road clauses, if the buyer of the stocks begins court proceedings in the country were the stock purchase was made he is prevented to pursue an international arbitration claim.

If there is a common question of law or fact in connection with the SPA or any other acquisition document, the same arbitrators shall be appointed in relation to such disputes. Moreover, the Parties may add to the SPA the consolidation of disputes, were a related dispute and an existing dispute are consolidated through a “Consolidation Order” before the arbitral tribunal.

Second, state owned oil companies are increasingly using prepaid oil agreements in order to guarantee financing for oil projects. In this type of agreement, the trader prepays, the oil producer with a lump sum, and the oil producer then repays that sum with hydrocarbons. The prepaid amount bears interest at base rate plus a margin.

With respect to each delivery of oil, generally the national oil company shall irrevocably inform the purchaser in writing the payment currency, expected loading quantity, expected loading date and expected payment date. In the event that the oil company increases the barrels of oil delivered, the purchaser undertakes to purchase such additional barrels and to make payments in respect of the additional barrels delivered.

A dispute could arise if the state-owned oil company fails to meet the daily oil exports to the trader or if the national oil company assigns, transfers, novates and/or dispose of to any person any interest in or any rights and/or obligations under the prepaid oil agreement. Usually, the dispute resolution clause is subject to the UNCITRAL Arbitration Rules in effect at the time of termination of the agreement. The administrative center is the Singapore International Arbitration Centre (“SIAC”) in accordance with its practice rules and regulations.

Finally, on major natural gas projects, for the exploitation and development of off-shore gas reservoirs, block licenses are granted by the Ministry of Oil & Gas. In order to ensure the economically viable development of such hydrocarbons, joint ventures are created in which private oil companies own the majority of the shares.

In this type of projects there is an evaluation of gas reservoirs, the terms of the license are negotiated with the Ministry of Oil & Gas, in many of these licenses there is a mandatory bono award which is negotiated between the Ministry and the private oil company, the term of the license is established, the program development of the blocks is set, the royalties required by the Ministry and the exoneration of windfall profit taxes. Usually, international private companies have the exclusive right to commercialize at its sole discretion their production quota in the international markets.

Controversies might arise if the Ministry requires the private oil company to commercialize its production quota in the national market, if the royalties required by the Ministry are not compliant with the agreements and if the tax authorities start charging windfall profit taxes in the case of a sudden rise of gas prices. On the other side, the Ministry could also prompt a dispute if it determines that the private oil company did not follow the program development of the blocks. Usually, the dispute resolution clauses for these projects are under the International Chamber of Commerce (“ICC”) Rules of Arbitration, in which the parties also agree to waive their right to resort to other fora for dispute resolution.

Consequently, private oil companies investing in Latin America require international arbitration clauses to safeguard their investment on major projects and state-owned oil companies together with the Ministries of Oil are increasingly giving their consent to attract foreign investment.

*The views contained in this article only express a personal scenario on possible international arbitration trends.

More from our authors: International Arbitration and the Rule of Law
by Andrea Menaker
€ 240


The post International Arbitration on Oil Stock Purchase Agreements, Prepaid Oil Agreements and Gas Projects within Latin America appeared first on Kluwer Arbitration Blog.

Friends

ADR Prof Blog - Thu, 2018-01-18 17:29
I sometimes get inquiries about acronyms FOI (friend of Indisputably), FOB (friend of the blog), and especially the coveted designation __FOI (___ friend of Indisputably), such as AFOI, BFOI etc.  People want to know what the initial letters stand for.  The answer is whatever you want them to stand for. For example, I identified Tim … Continue reading Friends →

Justice delivery: Akeredolu urges states to adopt ADR - The Punch

Google International ADR News - Thu, 2018-01-18 17:03

Justice delivery: Akeredolu urges states to adopt ADR
The Punch
A professor of law, Alero Akeredolu, has urged all states in Nigeria to incorporate Alternative Dispute Resolution arrangement into their justice system because of the vast opportunities it offers in settlement of dispute. While delivering an inaugural ...

Is an Adversarial Process Our Best and Highest Good? The Case for Early Mediation - Mediate.com

Google International ADR News - Thu, 2018-01-18 16:18

Is an Adversarial Process Our Best and Highest Good? The Case for Early Mediation
Mediate.com
He is a Past President (2006-2007) and member of the Massachusetts Collaborative Law Council, the International Academy of Collaborative Professionals and the New England Association for Conflict Resolution. He writes frequently on collaborative law ...

In Memoriam: CPR Chairman Emeritus Charles Renfrew - Mediate.com

Google International ADR News - Thu, 2018-01-18 11:48

Mediate.com

In Memoriam: CPR Chairman Emeritus Charles Renfrew
Mediate.com
The International Institute for Conflict Prevention and Dispute Resolution mourns the loss of Chairman Emeritus Charles B. Renfrew (pictured above), who died in San Francisco on Dec. 14 at age 89. Renfrew had served nearly 15 years as board chairman ...

Tim Hedeen: Good and Easy Class Exercise

ADR Prof Blog - Thu, 2018-01-18 07:40
OFOI Tim Hedeen described the following class exercise about the nature of negotiation, which can easily be adapted in many ways.  (If you want to give students even more of a run for their money, you might assign students to read the short piece on the definition of negotiation that Andrea Schneider, Noam Ebner, David … Continue reading Tim Hedeen: Good and Easy Class Exercise →

EXCLUSIVE: Herbert Smith Freehills makes double hire in South Africa - African Law & Business (ALB)

Google International ADR News - Thu, 2018-01-18 03:04

EXCLUSIVE: Herbert Smith Freehills makes double hire in South Africa
African Law & Business (ALB)
Ripley-Evans, who joins from leading South African independent firm Cliffe Dekker Hofmeyr (CDH), has experience in both domestic and international commercial alternative dispute resolution, in particular, in arbitration and mediation, with a practice ...

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EXCLUSIVE: Herbert Smith Freehills makes double hire in South Africa - CDR News Magazine

Google International ADR News - Thu, 2018-01-18 02:59

EXCLUSIVE: Herbert Smith Freehills makes double hire in South Africa
CDR News Magazine
Ripley-Evans, who joins from leading South African independent firm Cliffe Dekker Hofmeyr (CDH), has experience in both domestic and international commercial alternative dispute resolution, in particular, in arbitration and mediation, with a practice ...

EXCLUSIVE: Herbert Smith Freehills makes double hire in South Africa - CDR News Magazine

Google International ADR News - Thu, 2018-01-18 02:59

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Finality of Arbitral Awards in Nigeria- Separating Harm from Hubris (Part 1)

Kluwer Arbitration Blog - Thu, 2018-01-18 02:43

Adebayo Adenipekun

A feature of arbitration that makes it appealing to the user is the finality of arbitral awards. Parties are encouraged, upon the advice of counsel to submit to the arbitral process because the end result is final and not subject to appeal. However, the reality as users come to find, is that an award is not always the last piece of the dispute jigsaw. Sometimes, the award is itself a source of dispute which results in applications to annul the award, to wholly or partly set the award aside, to remit portions of it for reconsideration, etc. There is a reasonable fear (and risk) that if parties are increasingly and repeatedly confronted with this harsh reality, arbitration will lose its appeal and users will more readily apply the same suspicions they have of litigation to arbitration. There is even a growing clamour for a return to traditional litigation anchored by specialised commercial courts so that parties skip the illusion of arbitration and litigate straightaway.

However, we must be aware that there are a number of disputes in which a rendered arbitral award is fully accepted by the parties which voluntarily abide by it. A number of awards are challenged in part with the unchallenged portions still available for benefit of the award creditor. Furthermore, Nigerian courts have (if at all lately) usually leaned toward arbitrators when an award is challenged on the basis of arbitrator misconduct. The implication of this is the undeniable position that firstly, not all awards get challenged; secondly, not all impugned awards are wholly challenged; thirdly and quite obviously, not all challenged awards result in nullification.

As a result, the persistent and loud criticisms about the finality of awards in Nigeria are sometimes more anecdotal than factual (or legal). No doubt, the Nigerian legal framework needs legislative and judicial intervention to clearly delineate the sphere of the courts’ interference with awards and to give firm legal flooring to the principle of finality of awards in a manner that is both assuring to the arbitration stakeholder and reflective of best, current arbitration trends. However, to exclude oversight altogether (which I concede is not the goal of many critics) will do more harm than good to the practice of arbitration. The need for some oversight is perhaps best underscored by the fact that even in the current arbitration bill pending before the Nigerian federal legislature (which the pro-finality critic hails as a major step forward), an award review committee is to be constituted to entertain award review applications.

Arbitral institutions nullify awards: It is often an immediate and automatic reaction to ascribe reviews of awards to courts. It is usually within the context of subjecting an arbitrable and arbitrated dispute to the same litigation which parties sought to avoid by signing arbitration clauses. However, that criticism is scarcely fair and if fair, it is incomplete. This is because arbitral institutions operated by some of the best, brightest and oldest hands in the practice of arbitration, permit, entertain and resolve challenge applications and sometimes nullify awards.

While all the above may be easily understandable even amongst arbitrators, the OHADA case of Getma v. Guinea is quite interesting, if not disappointing. In Getma, the award of the arbitrators was set aside by the Common Court for Justice and Arbitration (CCJA) on the basis solely that against the rules of OHADA, the arbitrators had negotiated an upward review of their fees! It is thus on record today that an arbitral award has been set aside not because the arbitrators misconducted themselves (within the context of the traditional UNCITRAL interpretations), but because the parties agreed to pay the arbitrators what they thought was fair to the arbitrators. Interestingly, the award that was set aside did not itself include a demand for the reviewed fees (as the CCJA Secretary-General had warned) and the United States’ Court of Appeals for the District of Columbia Circuit did find that the “decision to set aside Getma’s entire award might seem to be a harsh penalty” (although despite that finding, the Court stood by the annulment for reasons I find agreeable and reasonable).

The takeaway, therefore, is that not only arbitral institutions entertain post-award applications that may undermine the finality of an award, they sometimes uphold those applications even for the most controversial reasons. Annulment is not peculiar to the CCJA too – ICSID wholly annulled the Fraport v. Philippines’ award and partly annulled Venezuela v. Tidewater, to name a few.

Model law and laws of perceived arbitration hubs allow for challenge of award – often, the post-award interventions of Nigerian courts are vilified and denounced straight off the bat by arbitrators and arbitration practitioners as an overreach. While that may indeed be so in individual cases, a crucial point that gets lost in the mix is that the option to review/nullify an award is not in itself a vice to arbitration. Otherwise, the renowned hubs of arbitration around the world would not be so. London, home to the LCIA and the Chartered Institute of Arbitration is a favourite arbitration venue. Still, the English Arbitration Act 1996 provides that awards may be challenged in court. The Act further provides that in determining such a challenge under certain sections, the court may confirm the award, set aside in whole or in part or vary the award (the last being a license unavailable in Nigerian law). The Act also allows appeals from arbitral references on points of law by agreement or with leave.

Dubai is another oft-praised venue for arbitral proceedings. Article 216 of the UAE Civil Procedure Code permits parties to apply to court for the nullification of an award upon the occurrence of a limited number of events. And while Article 217 prohibits an appeal from an award, it provides that judgements “approving the arbitrators’ award may be contested in any of the appropriate manners of appeal” – as is the position in Nigeria. Section 48 of the Singapore Arbitration Act also allows the court to set an award aside for 9 different reasons ranging from party incapacity to inarbitrability, while Section 24 of the Singapore International Arbitration Act allows the court to set an award aside for all the reasons provided in Article 34 of the UNCITRAL Model Law, for fraud and breach of any of the rules of natural justice.

Experience tells us the arbitrator is not always right: The Judge (or arbitrator) is not always right. An arbitrator, being human, can err, can be conflicted, can be mischievous and may even with the best of intentions, be wrong. The experience is the same all over the world and in Nigeria, court interventions in the past, though slow and painful, have sometimes been justified. In the Nigerian case of T.E.S.T v. Chevron [2017] 11 NWLR (Pt. 1576) 187, the arbitrator of his own accord raised an issue and on that note, refused a part of the Claimant’s claim which the Respondent had not denied – without hearing the parties on the point. The Claimant successfully applied to have that portion of the award set aside – all the way to the Supreme Court. In Statoil v. FIRS & anor (2014) LPELR-23144(CA), the Court of Appeal concluded that the claims in the reference touched on Federal taxes and were not to be arbitrated and accordingly permitted a third party (the federal tax agency) to take out Summons in Court against the reference.
While most arbitral awards are not disturbed by courts and a good number are not challenged anyway, those that have been set aside or references that have been interfered with by courts demonstrate the point that sometimes, even if not often, the arbitrator may get it wrong and the duty to correct the error may fall to the courts. And these rare instances may be all too important – the Court of Appeal in Statoil observed that the allegation of unremitted sums ran up to a figure well over ₦20 billion!

In sum, post-award interventions are not at all strange to arbitration neither are they an innovation of the Nigerian courts. And insofar as the fear is that arbitration is being converted to litigation by set-aside proceedings or that challenge applications diminish the status of arbitration in Nigeria or even worse, the status of Nigeria as an arbitration destination, the criticism is more frenzied than fact-based.

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