How supportive are the local courts of arbitration (domestic and international)? How long does it typically take to enforce an award?
The Arbitration Act of 2004 governs arbitration that take place in Norway. The district courts can assist during the arbitration process if needed, for example with taking evidence and nominating arbitrators.
Both international and Norwegian awards are recognisable and enforceable in Norway if the dispute could have been settled by arbitration under Norwegian law, and recognition and enforcement is not contrary to public policy.
Norwegian awards can be enforced by the local enforcement authorities, which typically take 1-4 months. Foreign awards have to be sent to the local district court to be enforced. This can take up to 3-6 months.
Arbitration is very common in Sweden and both the legislation and the courts are supportive of arbitration. Swedish arbitration awards are directly enforceable in Sweden by an application to the Enforcement Agency. The courts do not need to be involved. An application for enforcement of a foreign award must undergo an exequatur proceeding in the Svea Court of Appeal in Stockholm. Enforcement of arbitral awards is not a problematic area in Sweden.
In general, Hong Kong is a pro-arbitration and pro-enforcement jurisdiction, and there are very limited grounds for resisting enforcement of an arbitration award. Unless the parties have opted in to the right to appeal on grounds of serious irregularity or point of law, there is no right of appeal under the Arbitration Ordinance, although an award may be challenged on procedural grounds. These procedural grounds are identical to those set out in Article 34(2) of the UNCITRAL Model Law, namely:
1 Incapacity of one of the parties, or invalidity of the arbitration agreement under the law of the arbitration agreement;
2 Lack of proper notice of the arbitration, of or the opportunity for a party to present its case;
3 The award deals with matters outside of the scope of the submission to arbitration;
4 The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; or
5 The subject-matter of the dispute is not capable of settlement by arbitration under the law of Hong Kong; or
6 The award is in conflict with the public policy of Hong Kong.
In any event, both appeals and procedural challenges are subject to strict deadlines (30 days and 3 months, respectively, from delivery of the award).
International arbitral awards readily are enforceable in Hong Kong, as Hong Kong (through China) is a signatory to the New York Convention. China’s ratification of the New York Convention is subject to two reservations. The effect of these reservations is that an arbitral award is only enforceable under the New York Convention if:
7 the award was made in the territory of another contracting State (albeit arbitration awards made in non-contracting jurisdictions are also enforceable at the discretion of the Hong Kong courts); and
8 the dispute giving rise to the award arises out of legal relationships, whether contractual or not, that are considered commercial under the national law (however, the relationship between the parties to a construction dispute would almost universally be considered “commercial”).
In addition, the enforcement in Hong Kong of awards from Mainland China, Macau and Taiwan are governed by separate statutory procedures.
Given the Hong Kong courts’ stance towards arbitration, the enforcement of arbitral awards is generally comparatively swift. If uncontested, an award may be enforced within 2-3 months. However, the time required will always depend on the particular facts of a case and the parties’ approach.
The English courts are extremely supportive of arbitration: the Arbitration Act 1996 is designed to support arbitration, and no distinction is made between domestic and international arbitration.
There are limited grounds of appeal. Although there is a right to appeal on a point of law, that right is often deleted from contracts.
There is a procedure in place for swift enforcement of arbitral awards, but in practice the need to apply to the court to enforce is rare.
The United States recognizes, and its courts will enforce, foreign arbitral awards pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (known as the New York Convention). The New York Convention was incorporated into U.S. Law through Chapter 2 of the Federal Arbitration Act (FAA). See 9 U.S.C. Sec. 201, et seq. In order for the award to be enforceable in the United States, the arbitral award must be final and binding on the parties in the foreign country were the award was rendered. U.S. courts look to the law of the foreign country where the award was rendered to determine whether the award is enforceable and final. U.S. courts will not, however, enforce an arbitration award if the scope of the arbitration award exceeds the scope of the agreement to arbitrate or where the party against whom the award was issued did not receive proper notice of the proceedings or was not afforded an opportunity to present its case.
U.S. courts also recognize and enforce domestic arbitration awards. Like international arbitration awards, enforcement of domestic arbitral awards is governed by the FAA. The only instances in which U.S. courts refuse to enforce arbitral awards is when the award was procured through fraud, where there is evidence the arbitrators were not impartial, where the arbitrators were found guilty of misconduct or where the arbitrators exceeded their powers. The party opposing enforcement of the arbitration award bears the burden of proving the award should not be enforced.
The FAA provides the framework and procedures for the enforcement of arbitration awards in the United States. In order to enforce an arbitral award, the party seeking enforcement must commence an action by filing a petition or motion to confirm the award in either the state or federal courts. These proceedings are intended to be summary in nature, thereby speeding the enforcement process. Nevertheless, the timing for enforcement varies considerably in the United States depending upon the forum in which the enforcement action is brought. In most cases, the time between filing the enforcement action and confirmation of the award can take between several months to over a year. Enforcement proceedings must be commenced within three years of the award. See 9 U.S.C. Sec. 207