Does the law impose limits on the available remedies? Are some remedies not enforceable by the local courts?
International Arbitration (2nd Edition)
In principle, the remedial powers of arbitrators are matters to be agreed upon by parties. Parties may consensually specify the types of monetary and non-monetary relief that can be granted by their arbitrators.
There are no limits on the monetary relief which may be awarded by an arbitrator save where parties otherwise agree. In respect of non-monetary relief, it is submitted that arbitrators may award injunctive relief, such as injunctions, specific performance, and declarations, even where an express agreement conferring such powers is absent. Such practices have been upheld in other UNCITRAL Model Law jurisdictions, findings to which Malaysian courts would pay regard.
Under Chilean law, an arbitral tribunal is empowered to grant to a party in its award effective damage, loss of profit and moral damages. The latter even in cases of contract breaching as the national case law has evolved in this matter during the last decades. Monetary awards may include interests.
The arbitral tribunal may also order the specific performance or termination of a contract, in both cases with damages, as stated in Article 1.489 of the Chilean Civil Code.
Nevertheless, the arbitrators may not grant punitive damages, since they are not recognized under Chilean law.
LAV does not exclude any available remedies although the tribunal is of course limited by the request/claim presented by the parties in their claim and counter-claim.
It means that all remedies available in Portuguese Civil Procedural Code are also available to arbitrators as long as they do not violate the principles of public policy.
The same answer is applied regarding the remedies enforced by Portuguese Courts.
Punitive damages are contrary to Luxembourg public order and could lead to the voidance of the award under article 1244 NCPC. Generally speaking, any remedies or relief ordered by the arbitral tribunal can only be enforced with the intervention of a judicial authority (article 1242 NCPC).
In principle, Swiss procedural law does not impose any limits on the final remedies available to an arbitral tribunal with its seat in Switzerland. The available remedies are depending on the law applicable to the substance of the dispute. If the dispute is governed by Swiss law, the following main categories of final remedies exist:
- Specific performance;
- damages, if specific performance is no longer possible (no punitive damages are available);
- abstaining from or tolerating certain acts or a situation; and
- issuing a declaration of will
- Creation, modification, or termination of a legal relationship; and
- Declaratory Relief
In accordance with art. V para 2(b) of the New York Convention, Swiss courts are not enforcing remedies that are considered to be contrary to Swiss public policy. In this regard, in particular treble and punitive damages are critical. According to the Swiss Federal Tribunal, such damages might infringe Swiss public policy, depending on the particular circumstances of the case.
The arbitration law itself does not impose any limitations on the available remedies. Generally, the types of remedies primarily depend on the substantive law of the dispute. Moreover, the parties themselves may determine further competences of the tribunal.
Although remedies are not limited, some remedies are not enforceable in Germany. Most importantly, the Bundesgerichtshof held that punitive damages are considered a violation of public policy.
Ukrainian law does not impose specific limits on the remedies available before arbitral tribunal if they are in line with the applicable law. Practical enforcement of the remedies, which do not envisage payment of a specific sum, by the enforcement bodies is, however, very difficult in Ukraine. For instance, courts may find violation of public policy if the arbitral award imposes obligations in contradiction with the mandatory rules of law. In JKX v Ukraine case the court considered the application for recognition and enforcement of emergency arbitrator award in which the arbitrator ordered Ukraine not to impose royalties on gas production higher than 28 per cent, in contrast with then applicable 55 per cent. While the case was considered in several retrials, the court of appeal, for instance, refused to recognize and enforce the emergency award finding inter alia that such award changed the tax rates in violation of the Tax Code of Ukraine and such competence of judges violates the public policy in Ukraine. However, the issue of enforceability of remedies in local courts is to be decided on the case-by-case basis.
The Panama Arbitration Law is silent as to the limits on the available remedies, provided that such remedies do not violate Panamanian public policy (for domestic awards) or international public policy (for awards issued outside of Panama or for awards issued in Panama in international arbitration proceedings).
There are no specific limits on the remedies that an Arbitral Tribunal in an On-Shore arbitration may award.
Neither the DIFC Court nor the ADGM Court impose any specific limit, nor expressly classify any remedies as unenforceable.
The limitations with respect to available remedies to a far extent go hand in hand with the issue of arbitrability. Hence, the remedy cannot include non-arbitrable measures, such as penalties or fines. Apart from these limitations, the tribunal is free to award any remedy, however, within the scope of the parties’ pleadings.
Enforcement of an award can be refused on basis of the defenses available under the New York Convention. In addition, enforcement will only be accepted with respect to specific obligations imposed on a party, e.g. payment, restitution, etc. Declaratory awards cannot be enforced.
Spanish law does not allow punitive damages. Be that as it may, when the contract contains provisions for punitive damages, arbitrators may grant them if the conditions provided for in the contract are met, carefully assessing their proportionality, based on the principle of free will of the parties.
However, the enforcement of this kind of damages in Spain may prove complicated as it could give grounds to one of the arguments to challenge an award based on principles of public order.
Other than the mandatory provisions of Serbian law (such as public policy limitations), there are no specific limitations of the remedies that the arbitral tribunal may award, and such remedies are enforceable by local courts.
In general, there are no limitations to the remedies that can be awarded by the arbitral tribunal as long as these are within the reliefs agreed upon by the parties and subject to the general rule that parties cannot agree on contractual stipulations that are contrary to law, morals, good customs, public order and public policy.
There is no provision under the Arbitration & Conciliation Act, 1996 which limits on the available remedies.
Arbitration awards are unappealable; however, a party may submit a request for clarification when the award is not clear or for amplification when the arbitral award does not resolve on all the topics in dispute. The request for clarification or amplification may be filed by either party within three days from the date that the award is served. The arbitrators have a term of ten days to resolve on the request.
Arbitrators cannot award punitive or exemplary damages as these contradict mandatory public policy in Egypt.
The law does not impose any limits on the available remedies. In principle, an arbitration tribunal has the same power as the ordinary courts. The most common remedy in commercial disputes is damages in the event of breach. However, the arbitration tribunal may also grant the remedy of specific performance, which will be enforced by the relevant authorities. The only limit to the power of the arbitration tribunal is interim measures, cf. question 23 above.
The Arbitration Act does not impose any limits as to available remedies which may be ordered by the arbitral tribunal. Thus, unless otherwise agreed by the parties, the arbitral tribunal may order any remedy which could be ordered by a national court. In any case, local court will not enforce remedies ordered by the arbitral tribunal which are contrary to the Croatian public order.
ICA Law does not limit the types of remedies an arbitral tribunal can award, save where the existence or dissolution of a Cyprus Company or the rectification of any of its registers is involved or where a remedy would affect the registration of rights over immovable property situated in Cyprus or where other public policy reasons dictate that the relevant remedy can only be granted by the Court.
There are no statutory provisions in the CCP regulating the remedies that a tribunal can award. However, it is established that arbitrators have wide discretion as to the type of final remedies they can order. Arbitrators can:
- Order a party to pay damages.
- Issue injunctions (ordering a party to do something or preventing a party from doing something).
- Make a declaration as to whether a party is liable.
There are no rules limiting the type of interest that can be awarded by an arbitral tribunal. Arbitrators can award compound interest.
There are also no specific restrictions on the type of damages that can be awarded. French law allows for the full compensation of damages. Damages for emotional and psychological distress suffered and lost profits can be awarded.
It is unclear whether an award of punitive damages would be problematic. While such damages are never awarded in civil litigation, the French courts have held that punitive damages are not necessarily contrary to French international public policy. However, such damages must not be disproportionate to the harm suffered (see Court of Cassation, First Civil Chamber, 1 December 2010, No. 09-13.303).
The Italian CCP does not contain provisions regarding the type of remedies available to the parties in arbitration. The only limitation is that arbitral tribunals cannot issue orders for seizure of property or other interim measures, unless expressly provided for by law (see question No. 21 above).
All of the remedies recognised under the relevant laws and granted in arbitral awards are enforceable by the courts. Unless the parties agree otherwise, an arbitral tribunal may make an award on whichever types of remedies it sees fit, including declarations, injunctions, damages (including punitive and exemplary damages) and rectification.
Limits are ordre public and given that the enforcement has to be effected by the Austrian court system, alien remedies may prove difficult to enforce in practice.
The FAA does not impose limits on remedies. Consistent with the strong federal policy favoring arbitration, federal courts generally ‘have . . . been hesitant to find that the arbitrator exceeded his authority where the arbitration agreement fails to affirmatively or otherwise clearly limit the arbitrator’s authority.’ Rhone-Poulenc, Inc. v. Gould Electronics, Inc., 1998 WL 704420, *3 (N.D. Cal. 1998). Certain states impose limits on arbitral remedies, but such rules do not apply to arbitrations governed by the FAA (essentially, arbitrations involving interstate or international commerce). For example, New York law prohibits arbitrators from awarding punitive damages, but this restriction does not apply to New York-seated arbitrations governed by the FAA.
No such limitation is imposed. The question is dealt with in the context of arbitrability. Public order considerations are also obviously applicable.
The parties to an arbitration agreement are free to determine in the agreement between them the remedies that the arbitrator may grant under the arbitration. In the absence of any reference to this issue in the arbitration agreement, under the Israeli law (Section Q to the first addendum of the Arbitration Law), the arbitrator has the authority to render a declarative award, mandatory injunction or restraining injunction, specific remedy and any other remedy that the court is authorized to grant. The arbitrator may also grant an intermediate award that decides on the arbitration in portions. It is noteworthy that the enforcement of temporary awards given by an arbitrator requires an application to the court.
Subject to any rights of challenge, the parties are free to agree the remedies enforceable by the tribunal (s.48).
There is no specific provision in the arbitration law as to the type of remedies available to the parties. Therefore, there is no limitation on the type of remedies that an arbitral tribunal may award, other than the limitation imposed by the parties’ claims in the sense that the arbitral tribunal can only grant what was requested, regardless of the nature of the claim.
However, to a large extent the admissibility of the remedies depends on the substantive and procedural law applicable to the dispute. For example, if the arbitral tribunal applies Romanian procedural law, it may consider a request for a declaratory judgment to be inadmissible to the extent that the claimant has the option to bring a claim to enforce its rights.
As for the enforceability of the remedies, again the arbitration law does not impose any limitations, the only remedies not enforceable being therefore the ones not enforceable by their nature (for example declaratory judgements).
The arbitral tribunal cannot grant remedies on matters which are not requested by the parties and not in the compliance with the arbitration agreement. Additionally, punitive damages are not recognised under Turkish law and any arbitral award which includes punitive damages will be against the public order and will be result in the cancellation of the award.