How supportive are the local courts of arbitration (domestic and international)? How long does it typically take to enforce an award?

Construction

Belgium Small Flag Belgium

Belgium is very arbitration friendly. Awards are enforced expediently, also due to the limited grounds upon which they can be challenged.

Oman Small Flag Oman

Omani courts will not assume jurisdiction over a contractual dispute where the contract provides for arbitration as a mechanism for dispute resolution unless otherwise agreed by the parties.

Oman is a signatory to the 1958 New York Convention on the recognition and enforcement of foreign arbitral awards (the “Convention”). However, we are aware of only one foreign arbitral award that has been enforced by the Omani courts under the Convention.

The enforcement of foreign arbitral awards (and judgments) is a two-stage process: 1) the successful party obtains ‘recognition’ of the arbitral award from the Omani courts (formal permission for enforcement proceedings to be commenced in Oman on the basis of the award); 2) the award is executed through enforcement proceedings before the local court.

Articles 352-353 of the Civil and Commercial Procedure Law (RD 29/2002 -the “CCPL”) sets out conditions for the enforcement of a foreign judgment or arbitral award respectively.

Given the scarcity of precedent enforcement decisions, time-frames are difficult to predict.

Denmark Small Flag Denmark

Arbitration awards are generally recognized and enforced by the ordinary court system. An award can be enforced after 14 days.

Denmark is party to the New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards of 1958. Foreign arbitration awards can usually be enforced in Denmark.

Spain Small Flag Spain

It depends pretty much on the volume of arbitrations a company has per year.

Even though it is an executive title, it can take quite a long time to enforce it if the party who has to accomplish it does not do it voluntarily, as you are then obliged to go to Court.

Indonesia Small Flag Indonesia

The recent developments have shown Indonesian courts to be more supportive in enforcing both international and domestic arbitration awards.

  1. Enforcement of International Arbitration Awards:

    International arbitration awards are not immediately enforceable in Indonesia and pursuant to Article 65 of Law No 30 of 1999 regarding Arbitration and Alternative Dispute Resolution (the “Arbitration Law”), the Central Jakarta District Court has the authority to deal with the acknowledgment of international arbitration awards.

    Article 66 of the Arbitration Law provides for a number of pre-requisite requirements for international arbitration awards to be enforced in Indonesia being:
    (a) the international arbitration award must be made by an arbitrator or panel of arbitrators in a country which is bound by agreement with Indonesia, either bilateral or multilateral, on the acknowledgment and enforcement of International Arbitration Awards;

    (b) the International Arbitration Award in paragraph (a) is limited to awards which pursuant to Indonesian law is in the scope of commercial law;

    (c) the international arbitration award as referred to in paragraph (a) can only be enforced in Indonesia if it is not contrary to public policy;

    (d) the international arbitration award can only be enforced in Indonesia after obtaining an execution order (eksekuatur) from the Head of the Central Jakarta District Court; and

    (e) the international arbitration award in paragraph (a) involving the State of the Republic of Indonesia as a party in the dispute, can only be enforced after obtaining an execution order from the Supreme Court of the Republic of Indonesia which is further assigned to the Central Jakarta District Court.

    The most common objections raised by recalcitrant Indonesian parties in trying to prevent the enforcement of international arbitration awards is by using the grounds that the international arbitration awards is against Indonesian public policy. There have been cases in the past where the District Court of Central Jakarta have refused to enforce an international arbitration award under this basis.

    Whereas for the enforcement of international arbitration awards, referring to Article 66 (d) an International Arbitration Award may be enforced in Indonesia only after obtaining an order of Eksekuatur from the Chairman of the District Court of Central Jakarta. In practice, the order is issued at the latest 30 (thirty) days after an application for execution of the award is submitted to the Clerk of the District Court of Central Jakarta

  2. Enforcement of National Arbitration Awards:

    The enforcement of national arbitration awards is regulated under Article 59 of the Arbitration Law which states that at the latest 30 (thirty) days from the date of the arbitration award is rendered, the original or an authentic copy of the award shall be submitted for registration to the Clerk of the District Court by the arbitrator(s) or a legal representative of the arbitrator(s). The costs related to the preparation of the registration deed must be paid by the parties. In practice, once this is satisfied then the arbitration award can be enforced.

    Furthermore, based on Article 63 of Arbitration Law the Chairman’s instruction of the district court must be written on the issued original and authentic copies of the arbitration award, and with this instruction, the award be enforced as if it were a final and binding judgment in a civil case according to Article 60 of Arbitration Law.

Please note that in practice there may be considerable delay if the enforcement of the arbitration award is challenged by the other party.

Enforcement of international arbitration awards would also need to consider the location of the assets or the address of the losing party, because the implementation of the execution order from the District Court of Central Jakarta must be delegated to the authorized chairman of the relevant District Court.

Mexico Small Flag Mexico

Local courts are very supportive of arbitration awards. This has taken a lot of time and effort from society organizations in order to make the judiciary conscious about the validity and enforcement of arbitral awards.

A relevant arbitration in the oil industry in recent years caused an international award to be declared nulled and void (The COMMISA case). The case arose awareness on the legal and judiciary community about the validity of arbitral awards.

Colombia Small Flag Colombia

Colombia has a strong support for courts of arbitration, both domestic and international. Once the arbitral decision is made, the ruling is easily executed. Normally, the decision includes the period of time in which the ruling must be executed, with the corresponding tools towards its enforcement.

Serbia Small Flag Serbia

Domestic arbitral award are considered as equal to court final and binding judgment. Further, Serbia is a contracting party to the New York Convention on recognition and enforcement of arbitral award, thus all arbitral awards rendered in the territory of another Contracting Party State shall be recognised and enforced without a re-examination of the merits of the case.

Arbitral award has to, however, fulfil the following conditions:

  1. It has to be rendered by a competent court of arbitration;
  2. It has to be rendered with respect to the parties’ right to participate in the arbitral proceedings (with special consideration on appropriate delivery of relevant documents);
  3. It has to be final;
  4. That none of the following reasons set out below are applicable to it:
    1. arbitral tribunal has exceeded given authority;
    2. there has been a breach of arbitration agreement;
    3. the arbitral award was based on a false statement of a witness or expert or on a forged document or the award
    4. the subject of dispute is not arbitrable;
    5. the recognition of the arbitral award would be against Serbian public policy.

The procedure of recognizing and enforcing a foreign arbitral award may take up to two years, based on the complexity of the case, the location of the assets and the cooperation of the debtor, etc.

Switzerland Small Flag Switzerland

Domestic courts are rather supportive of arbitration. They can be asked to nominate the members of the arbitral tribunal if such members are not appointed within a reasonable deadline. Ordinary courts may also be asked to order interim measures as well as to support the arbitral tribunal if the taking of evidence or any other procedural act requires the assistance of the official authorities. In certain situations, an award may be appealed to the ordinary courts or to the Swiss Federal Court. Timing for the enforcement highly depends on the merits of the case.

Australia Small Flag Australia

The Australian courts are very supportive of international and domestic arbitration. Applications made to the courts in support of an arbitration, such as an application to stay court proceedings, interim measures and orders relating to the taking of evidence, are addressed swiftly and in an arbitration friendly manner. It is difficult to set aside an award or to challenge enforcement as the Australian courts have considered the grounds for challenge in a manner that is consistent with international practice.

Enforcement of an award where there is no challenge takes approximately 3 to 4 months. If there is an application to challenge enforcement, then the process may take 6 to 8 months depending upon the complexity of the grounds for challenge. The process may take a further 6 to 8 months if the court’s decision is appealed.

Norway Small Flag Norway

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.

Sweden Small Flag Sweden

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.

Hong Kong Small Flag Hong Kong

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.

United Kingdom Small Flag United Kingdom

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.

United States Small Flag United States

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

UAE Small Flag UAE

The UAE courts are arbitration-friendly. Domestic awards, i.e. awards rendered from an arbitration seated in the UAE, must be ratified/recognised in the local courts before they can be enforced. Unless the underlying dispute violates public policy, the UAE courts will not re-examine the merits of a case. However, the courts can, and do, set aside awards due to procedural irregularities.

In addition to procedural issues, awards have been set aside for specific breaches of procedure such as arbitration clauses not being signed (even where the underlying contract being signed), arbitration awards not being signed by the arbitrators on each individual page and where a witness did not give evidence under oath. It is hoped that the enactment of the new Federal Arbitration Law (expected mid-late 2018) will bring clarity as to when an award will be set aside for procedural irregularity, and reduce the scope for arbitral awards to be challenged on this basis.

As to the enforcement of international awards, UAE law gives precedence to international instruments over the domestic enforcement regime. Significantly, therefore, the New York Convention on the Recognition and Enforcement of Arbitration Awards, to which the UAE acceded in 2006 without any declarations or reservations, governs the enforcement of foreign awards between Members states.

In terms of timing, the ratification/recognition process passes through the usual three-tiered court system which can take a number of months, and in some cases, years. Once ratified, enforcement usually takes between one and two months.

Germany Small Flag Germany

In Germany, arbitration tribunals are formed on the basis of contractual agreements. The arbitral tribunal can rule on its own jurisdiction and on the existence or validity of the arbitration agreement (section 1040, Code of Civil Procedure - Zivilprozessordnung - ZPO).

The duration of arbitration depends on the subject matter and the scope of the dispute. Procedures usually last between 6 months and 1 year.

Austria Small Flag Austria

The courts are very open to arbitration. In some cases, courts put pressure on the parties to terminate their dispute out of court through mediation.

France Small Flag France

Arbitration is recognized and arbitration awards are upheld under French law. However, the French Courts have a limited right to control and review the awards. The timing for the enforcement will depend on each specific cases.

Greece Small Flag Greece

Greek courts are generally very supportive both of domestic and international arbitration. They tend to respect and uphold arbitral clauses to the extent that they are valid and apply to the dispute in question. Greece has ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and in addition, as regards international arbitration taking place in Greece, has enacted Law 2735/1999, which incorporated the UNCITRAL Model Law in Greek law. In terms of enforcement of an arbitral award issued outside Greece, a two-stage process needs to be followed. The first stage involves the filing of an application for declaring the award enforceable in Greece. This is done through the voluntary procedure ('ekousia dikaiodosia'), which leads to the issuance of a decision by the Greek courts in roughly 2-6 months from filing. The second stage involves the enforcement of the Greek decision declaring enforceable the foreign arbitral award, which is carried out under the ordinary procedure in Greece. If the award has been issued in Greece, the process will be faster, as the aforementioned first stage will not be necessary.

Saudi Arabia Small Flag Saudi Arabia

In private sector cases, the courts must decline jurisdiction if there is an agreement to arbitrate and the defendant pleads the agreement before filing a substantive defence. If a substantive defence is filed, the defendant has agreed to the court’s jurisdiction. Enforcement of an arbitration award rendered outside Saudi Arabia can take two years.

Malaysia Small Flag Malaysia

Generally, the Malaysian Courts are friendly and supportive of arbitration. Statistics shows that between 2013 and 2018, the Malaysian Courts granted 90%-100% of the applications for recognition and enforcement of arbitration awards. Enforcement of an arbitral award typically requires up to three months. However, where a respondent applies to set aside either the award or registration of the award under Section 38 of the Arbitration Act 2005, the enforcement proceedings could be delayed for up to a year before they are disposed of by the High Court.

Recently, the Malaysian Arbitration Act 2005 has been amended to further encourage arbitration as a dispute resolution method and to promote Malaysia’s profile as a safe-seat and arbitration friendly jurisdiction. The amendments were made to reflect the 2006 amendments to the UNCITRAL Model Law. Of particular significance, Section 42 of the Arbitration Act 2005 (reference of a question of law arising out of a domestic arbitral award) has been removed to uphold the finality of an arbitration award. Accordingly, unlike litigation in the traditional courts where parties could be subjected to multiple levels of appeal (i.e. appeal from the High Court to the Court of Appeal and subsequently Federal Court), parties in an arbitration proceedings have ‘one bite of the cherry’.

Updated: October 16, 2018