Can the parties waive any rights of appeal or challenge to an award by agreement before the dispute arises (such as in the arbitration clause)?

International Arbitration (4th edition)

Argentina Small Flag Argentina

Under Argentine law, appeals on the merits against an award can be validly waived by the parties. The parties cannot waive the right to bring a request for setting aside an arbitral award, either wholly or partially, before or after the dispute has arisen.

Austria Small Flag Austria

Parties cannot, under Austrian law, agree to exclude or expand the scope of appeal or challenge.

Bulgaria Small Flag Bulgaria

No. The provision of Art.47 of ICAA is mandatory and none of the grounds for the challenge of the award can be excluded or waived by the parties.

United States Small Flag United States

Although the Supreme Court has not yet decided the issue, at least one federal appellate court has held that, where the FAA governs, parties cannot “eliminate all judicial review of arbitration awards” because such waiver “would not only run counter to the text of the FAA, but would also frustrate Congress’s attempt to ensure a minimum level of due process for parties to an arbitration.” In re Wal-Mart Wage & Hour Emp’t Practices Litig., 737 F.3d 1262, 1268 (9th Cir. 2013); cf. MACTEC, Inc. v. Gorelick, 427 F.3d 821, 830 (10th Cir. 2005) (finding that contractual provision limiting the right to appeal from a district court’s judgment confirming or vacating an arbitration award was permissible so long as it is clear and unequivocal).

Some states like California will allow pre-dispute waiver of judicial review where it is “clear and explicit.” See Emerald Aero, LLC v. Kaplan, 215 Cal. Rptr. 3d 5, 21 (Ct. App. 2017), as modified on denial of rehearing (Mar. 21, 2017), review denied (June 14, 2017). However, the courts have found that generic waivers of judicial review on the merits do not waive rights to judicial review based on the limited, enumerated circumstances in the California Arbitration Act. Id.; see also HUB Int’l Ins. Servs. v. Morales, No. E067095, 2018 WL 2978262, at *5 (Cal. Ct. App. June 14, 2018) (“we interpret the waiver as reflecting the standard appellate waiver that follows the submission to arbitration: The parties can only appeal based upon the limited grounds set forth ante, such as corruption and acts in excess of authority. All other issues have been waived.”)

Canada Small Flag Canada

Parties cannot waive the right to appeal or challenge an international commercial arbitral award before the dispute arises.

Cyprus Small Flag Cyprus

In accordance with Article 28 (1) of the Contract Law, Cap. 149, every agreement which absolutely restricts a party from enforcing his rights under or in respect of any contract, or which limits the time within which he can enforce his rights, is void to that extent.

On the other hand, under Article 31, Section III of the Arbitration Rules of 2011 set out by the Cyprus Eurasia Dispute Resolution and Arbitration Center, failure by any of the parties to comply with these Rules or with any requirements of the Arbitration Agreement shall be deemed to be a waiver of the right of such party to make an objection, unless such party can show that, under the circumstances, its failure to object was justified.

UAE Small Flag UAE

UAE- Federal Jurisdiction
Article 54(5) of the UAE Arbitration Law provides that the right to challenge an arbitral award cannot be waived prior to the issue of the award.
The grounds on which the arbitral award can be nullified is set out in Article 54 of the UAE Arbitration Law.

The nullification of an arbitral award is only subject to appeal before the Court of Cassation.

UAE - Common Law Jurisdictions
The DIFC Arbitration Law does not expressly either allow nor restrict the parties to the arbitration from agreeing to exclude rights of appeal or recourse to the Courts.
This right may, however, be waived by the parties or the grounds on which such an application may be permitted can be limited by agreement under the ADGM Regulations (Regulation 54).

United Kingdom Small Flag United Kingdom

Under s.69(1) of the 1996 Act, the parties to arbitral proceedings can agree to waive the right to appeal to the court on a point of law.

The right to challenge the award for lack of jurisdiction or serious irregularity cannot be waived by the parties, even with mutual agreement. However, s.73 of the 1996 Act states that if a party continues to take part in the proceedings, it may lose the right to raise such an objection unless it can prove that it did not know of the grounds for objection at the time.

Singapore Small Flag Singapore

In the context of domestic arbitration in Singapore, the Singapore High Court has held, in Daimler South East Asia Pte Ltd v Front Row Investment Holdings (Singapore) Pte Ltd [Daimler], [2012] 4 SLR 837 at [15], that ‘parties could exclude the right of appeal by adopting rules of arbitration’. The Daimler Court further held that the parties in that case actually had excluded the right of appeal under s 49(1) of the AA (i.e., the Arbitration Act generally applicable to domestic arbitration), which provides that ‘[a] party to arbitral proceedings may (upon notice to the other parties and to the arbitral tribunal) appeal to the Court on a question of law arising out of an award made in the proceedings’. The Daimler Court noted that s 49(2) of the AA provides in relevant part that ‘the parties may agree to exclude the jurisdiction of the Court under this section...’. Accordingly, the parties in Daimler had waived the right to appeal by adopting the ICC Rules 1998, which stated at Art. 28(6) that, ‘[b]y submitting the dispute to arbitration under these Rules, the parties undertake to carry out any Award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made’.

By contrast, in the international arbitration context, the IAA primarily emphasizes a right to appeal on a ruling of jurisdiction by a tribunal (at s 10), does not provide a general right to appeal on questions of law, and contains no similar language to that of the AA for excluding the jurisdiction of the Singapore Courts. Further, while s 19B(1) of the IAA (Effect of award) confirms that ‘[a]n award made by the arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties’, s 19B(4) states that ‘(t)his section shall not affect the right of a person to challenge the award by any available arbitral process of appeal or review or in accordance with the provisions of this Act and the Model Law’. As such, it is unlikely that the Singapore Courts would consider that parties had effectively excluded any rights of appeal or challenge to an award in an arbitration agreement otherwise available under the IAA (e.g., through the selection of institutional rules of arbitration that purport to waive the right to judicial recourse).

South Korea Small Flag South Korea

The Arbitration Act does not provide for waiver of any rights of appeal or challenge to an award by agreement in advance of dispute, and no Korean court has issued any published decision on this issue to date.

Germany Small Flag Germany

The right to apply for setting aside an arbitral award cannot be excluded by the parties in advance entirely. The Federal High Court (Bundesgerichtshof) held that such waivers are invalid, in particular as far as the waiver would extend to the right to challenge an arbitral award based on the issue on non-arbitrability as well as on violation of public policy grounds.

India Small Flag India

The Arbitration and Conciliation Act, 1996 provides provision for appeal against the award of the Domestic Tribunal under section Section 37 of the Act. In India, it is settled principles of law that a party by way of contract cannot waive any statutory right or any agreement contrary to the statute is null and void to that extent. Therefore, a party cannot waive any rights of appeal or challenge to an award by agreement before the dispute arises.

Indonesia Small Flag Indonesia

The parties do not have the right to appeal an arbitration award. In theory, they could incorporate a waiver to allow a challenge to the award, in line with the proinciple of freedom of contract under the Indonesian civil code. However, the court does not always rely on this waiver in determining whether to examine the annulment request.

Liechtenstein Small Flag Liechtenstein

§ 628 para. 3 Liechtenstein CCP provides that the grounds for a challenge of an arbitral award which are set out in § 628 para. 2 sub-para 7 (lack of arbitrability) and 8 (violation of the Liechtenstein ordre public) Liechtenstein CCP may also be raised ex officio. From that provision the majority of legal scholars conclude that parties to an arbitration cannot waive these two grounds as a basis of challenge, neither prior to nor after the conclusion of the arbitral proceedings. All other grounds stipulated in § 628 para. 2 sub-paras. 1-6 Liechtenstein CCP may be waived after the award has been rendered, but not before, in particular, not in the arbitration agreement.

Malaysia Small Flag Malaysia

An award is final and binding, subject to it being set aside, and generally, there is no right to appeal.

In Malaysia, it appears that parties to an arbitration proceeding may not waive its rights to set aside an award, which is provided under Section 37 of the Arbitration Act, even by consent, given, inter alia, that Section 37 falls under Part II of the Arbitration Act which mandatorily governs domestic and international arbitrations in Malaysia pursuant to Section 3 of the Arbitration Act.

France Small Flag France

Parties to an international arbitration can waive their right to bring an action to set aside an award (FCCP Article 1522). Where the right to set aside has been waived in international arbitration, the parties still retain the right to appeal an enforcement order issued by a French Court (FCCP Article 1522). In domestic arbitration, however, the right to bring an action to set aside an award is mandatory – that is, the right cannot be waived – unless the parties have provided for a right to appeal (FCCP Article 1491).

Egypt Small Flag Egypt

As per the EAL, a party cannot waive its right to apply for annulment of the award prior to rendering the said award. (article 54.1)

Czech Republic Small Flag Czech Republic

Due to the mandatory nature of the rules outlined above on the repeal of arbitration awards, any such waiver will be disregarded.

Chile Small Flag Chile

The ICA Act is silent on the matter. There are not judicial decisions on the issue either. Nevertheless, it is reasonable to state that the application for setting aside the award of Article 34 is a matter of public policy and cannot thus be waived in advance.

In domestic arbitration, the available recourses against the awards can be waived in advance except the recurso de casación based on lack of competence or ultra petita, and the recurso de queja.

Mexico Small Flag Mexico

There is no precedent for this matter under Mexican legislation, nevertheless, if an award annulment is based on grounds that prove it is contrary to public policy, these considerations cannot be waived by the parties.

Nigeria Small Flag Nigeria

The parties are free to insert any terms in their contract and would be bound by the terms of their agreement. The fact that the parties are empowered to waive their right to challenge an arbitral award is buttressed by the fact that the statutory provisions on challenges to arbitral awards are not mandatory. The validity of such provisions may be challenged in view of the fact that there is a right to approach courts in Nigeria. The Nigerian courts have held in other circumstances that access to the judicial system is a public right which cannot be waived or ousted by agreement.

Norway Small Flag Norway

No.

Philippines Small Flag Philippines

Any stipulation that the arbitrators’ award or decision shall be final is valid. If such a stipulation was mutually and voluntarily agreed upon, and has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy, the said stipulation must be respected. [Korea Technologies Co., Ltd. v Lerma (2008)]

Saudi Arabia Small Flag Saudi Arabia

It is unlikely that a court would enforce a waiver to the parties’ limited right to appeal on procedural and jurisdictional grounds because such right is given to the parties by law.

Taiwan Small Flag Taiwan

As the above AL provision on setting aside the award is mandatory, it cannot be contracted around, thus parties cannot waive any right of challenging the award in the arbitration agreement beforehand.

Switzerland Small Flag Switzerland

The parties may waive any possibility at all to appeal an arbitral award if all parties to the dispute have their domicile or place of business outside Switzerland. Such waiver can either be outlined in the arbitration agreement or be made subsequently by written declaration of the parties. Such waiver must, given its implications, be made expressly be the parties. Reference to institutional rules providing for the finality of arbitral awards do not suffice for such purposes.

In a recent much-noticed decision, the Swiss Federal Tribunal demonstrated the far-reaching consequences of a waiver of the right to appeal against an arbitral award rendered in an international context. Particularly, the Swiss Federal Tribunal found that (i) in the absence of any explicit limitation thereto, a valid waiver of the right to appeal against an arbitral award applies to all grounds for appeal stipulated in art. 190 para 2 PILA, namely also the arbitrators' alleged lack of independence and impartiality and (ii) that a waiver of the right to appeal against an arbitral award will, at least in certain circumstances, also exclude a party from requesting a review of such arbitral award by means of the extraordinary remedy of revision.

Greece Small Flag Greece

Pursuant to article 900 GrCCP the parties may not ex ante waive their right to challenge the award. An ex post waiver is always deemed valid. Nevertheless, an ex ante waiver may be deemed valid in case the respective agreement entailing the arbitration clause is ratified by law which then prevails over article 900 GrCCP as lex specialis. This is common in contracts entered into by the Greek State.

Same principles apply, according to case law and the prevailing view in legal literature, to international commercial arbitral proceedings having their seat in Greece.

Turkey Small Flag Turkey

Under Turkish law, parties may not waive any rights of challenge to an award due to the general principle which prohibits waiver of a right that has not born or matured yet.

Article 15 of the IAL regulates that the parties may, in part or in full, renounce their right to initiate an action for setting aside the award provided that the parties are domiciled abroad.

Updated: November 6, 2019