Public policy as a ground for the refusal to enforce international commercial arbitration awards
Robertson, Johannes Berning
MetadataShow full item record
In international commercial arbitration the recognition and enforcement of the award is a very important aspect of the whole arbitration process since recognition and enforcement can ultimately ensure a successful recovery of monies due. It is therefore critically important for parties to be certain that if an award is made in their favour that the award will not be refused recognition and enforcement in the country where they will ultimately seek enforcement of the award. The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 provides in article V(2)(b) that the recognition and enforcement of an award may be refused if the award is contrary to the public policy of that state. South Africa is a party to the New York Convention. This led to the enacting of the Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977. The wording of section 4(1 )(a)(ii) of the Foreign Awards Act has the same effect as article V(2)(b) of the New York Convention. This dissertation attempts to determine the circumstances under which a South African court will come to the conclusion that an international commercial arbitration award is against South African public policy and accordingly unenforceable in South Africa. When trying to resist the enforcement an international commercial arbitration award on the basis that enforcement of the award will be against public policy, then the applicable public policy is not the domestic public policy but the international public policy of the relevant country. Domestic public policy means those moral, social or economic considerations which are applied by courts as grounds for refusing enforcement of a domestic arbitral award. The term international public policy, on the other hand, indicates those considerations which are applied by the enforcing courts when enforcing foreign arbitral awards rather than domestic awards. International public policy is understood to be narrower than domestic public policy. The application of an international public policy in the enforcement of international commercial arbitration awards was envisaged by the authors of both the New York Convention and the UNCITRAL Model Law. English arbitration law is an example of a jurisdiction that is well equipped to deal with the enforcement of international commercial arbitration awards and embraces the concept of international public policy. English law, and specifically English case law, may therefore provide a framework to compare the South African legal principles applicable to the public policy exception with, and to determine improvements that should be made. South African law allows for the public policy exemption to be applied and case law does indicate the application of international public policy. South African courts are well capable of dealing with any issue of enforcement of a foreign arbitral award but our legislation is inadequate and our case law limited. South Africa therefore needs to urgently pass new commercial arbitration legislation to develop our arbitration law and to instil confidence in South Africa as a venue for the conduct of international commercial arbitration. In this regard English law can be of assistance, not only because of the shared heritage but also because that law is one of the most developed regimes of arbitration law.
- Law