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Misconceptions about international (commercial) arbitration *

Published online by Cambridge University Press:  07 July 2009

A.M. Stuyt
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Extract

1. When noting the arbitral award of 2 July 1956 of Messieurs Ripert and Panchaud in the case between the Société Européenne d'Etudes et d'Entreprises and the Yugoslav Government, it was not foreseen that this case would lead to so many decisions of municipal courts in Switzerland, France and the Netherlands, dealing with questions of State immunity and of execution of arbitral awards.

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Articles
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Netherlands Yearbook of International Law , Volume 5 , December 1974 , pp. 35 - 58
Copyright
Copyright © T.M.C. Asser Press 1974

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References

1. See Stuyt, A.M., Survey of International Arbitrations 1794–1970 (Leyden: Sijthoff/New York: Oceana, 1972) No. A 17, p. 476.Google Scholar

2. Hereafter cited SEEE.

3. Original French text of the award in 86 J.D.I.(1959) p. 1074 et seq. English translation on p. 1075 et seq. and in I.L.R.(1957) p. 761 et seq.

4. Cf. Mann, F.A., “The proper law of contracts concluded by international persons” 35 B.Y.I.L.(1959) pp. 34–57Google Scholar; idem, “State contracts and international arbitration”, 42 B.Y.I.L. (1967) pp. 1–37.Google Scholar

5. Cf. I.L.R.(957) p. 761.

6. Cf. I.L.R.(1957) p. 764.

7. I.L.R.(1957) p. 765.

8. It must be observed that the Yugoslav Government did not at all appear before the arbitrators; it was an award by default. That is not the same situation as “not contest” something before the arbitrators.

9. 86 J.D.I.(1959) p. 1077, cf. also I.L.R.(1957) p. 762.

10. See infra, p. 39, 41–44.

11. Infra, p. 42–43.

12. See I.L.R. (1957) p. 762 n. 1.

13. 86 J.D.I. (1959) p. 1075.

14. A/CN. 9/21, paras. 86–100 (UNCITRAL Yearbook I (1968–1970) p. 260). Cf. the Preliminary Report of the Special Rapporteur, Mr. Ion Nestor (Romania) on International Commercial Arbitration, dated 18 February 1970, ACN.9/42. para. 54.

15. I.L.R. (1957) p. 765.

16. I.L.R. (1957) pp. 765–766.

17. I.L.R. (1957) p. 766.

18. I.L.R. (1957) p. 763 n. 1.

19. 87 J.D.I. (1960) p. 761.

20. See infra p. 41.

21. 10 February 1970, J.C.P. (1971) No. 16810.

22. Text in 47 Revue Critique (1958) pp. 359–366 and Revue de l'Arbitrage (1957) p. 100.Google Scholar

23. For a substantial comment on the decision see the note by Aubert, J.F. in 47 Revue Critique (1958) pp. 368–373.Google Scholar

24. Text in 47 Revue Critique (1958) pp. 366–367, comment by J.F.Aubert, ibid at pp. 374–375.

25. I.e. the removal from the register of original copies of court sentences.

26. 47 Revue Critique (1958) p. 375.

27. See infra p. 45.

28. 87 J.D.I. (1960) p. 761.

29. Article 1021 reads: “Les jugements arbitraux, même ceux préparatoires, ne pourront être exécutés qu'après l'ordonnance qui sera accordée, à cet effet, par le président du tribunal, au bas ou en marge de la minute, sans qu'il soit besoin d'en communiquer au ministère public; et sera ladite ordonnance expédiée en suite de l'expédition de la décision. La connaissance de l'exécution du jugement appartient au tribunal qui a rendu l'ordonnance”.

30. 98 J.D.I. (1971) pp. 131–134, with a note of Philippe Kahn on pp. 134–139; the first decision also in J.C.P. (1971) No. 16810. where 8 July is given as the date of the decision.

31. Convention on the Execution of Foreign Arbitral Awards, 92 L.N.T.S. p. 310; Trb. 1964 No. 95.

32. Text and comment by Ruzié, D. in J.C.P. (1971) No. 16810Google Scholar

33. 98 J.D.I. (1971) p. 138.

34. English translation in 3 N.Y.I.L. (1972) p. 294.

35. 330 U.N.T.S. p 38; Trb. 1958 No. 145, 1959 No. 58, 1964 No. 96.and 1971 No. 85.

36. Decision of 8 September 1972. English translation in 4 N.Y.I.L. (1973) p. 391; for details vide infra.

37. English translation in this Yearbook infra p. 290. Text in N.J. 1974 No. 361, with comment of P. Zonderland on the arbitral award, and H.F. van Panhuys on immunities.

38. By judgment of 25 October 1974 the Hague Court of Appeal assumed jurisdiction to entertain appellant's original request. It was dismissed, after new pleas had been entered. On 14 May 1974, the Court heard the Parties in chambers, following which, on 11 June 1974, the Attorney-General (Procureur-Generaal) presented a conclusion together with a note (to my knowledge, a rare occurrence). As in the French court (vide supra para. 8 first référé) the respondent relied on “public policy”, and, again, the agreement between France and Yugoslavia of 18 November 1950 was raised: the French Ministry of Foreign Affairs had explained its position, by note of 3 May 1974, to the Netherlands Government. As a result the Court decided that “enforcement of that decision [of 1956] would by contrary to Dutch public policy, since enforcement would imply that execution could be levied against property of the Yugoslav State in the Netherlands in contravention of an agreement concluded by this country”. Having regard to such conflict with public policy, the grant of exequatur should, in the Court's opinion, be refused.

39. At the end, the actors say: “So endet die Geschichte einer Reise./ Ihr habt gehört und Ihr habt gesehen, / Ihr saht das Uebliche, das immerfoit Vorkommende./ Wir bitten euch aber:/ Was nicht fremd ist, findet befremdlich./ Was gewöhnlich ist, findet unerklärlich./ Was da üblich ist, das soll euch erstaunen./ Was die Regel ist, das erkennt als Missbrauch/ Und wo ihr den Missbrauch erkannt habt/ Da schafft Abhilfe.”

40. So, before that war, Yugoslavia was a Kingdom, since the war it is a Federal Socialist Republic.

41. “Le défaut, c'est-à-dire le refus par l'une des parties ou son abstention de faire valoir ses moyens devant le juge est, en droit arbitral, une attitude paradoxale et exceptionelle”. Witenberg, J.C., L'Organisation judiciaire, la procédure et la sentence internationales (Paris, 1937) p. 381.Google Scholar

42. Nothing prohibited the award to be pronounced on every possible territory of the world.

43. Intervention resulting either in public international law agreements or in unilateral actions.

44. L'Arbitrage commercial international (Paris, 1965) pp. 437–438.Google Scholar

45. A.M. Stuyt, op. cit Nos. 98, 106, 180, 184, 213, 218, 220, 297 and 316. See also the Reports of Georges Scelle on arbitral procedure in the International Law Commission of the United Nations, I.L.C. Yearbook 1950 vol. II pp. 116 et seq.

46. Riedberg, P., Der amiable Compositeur im internationalen privaten Schiedsgerichtsverfahren (Frankfurt/M-Berlin, 1962)Google Scholar; Philippe Fouchard, op. cit. pp. 405–406: “… conduit les arbitres à écarter l'application des droits nationaux pour se référer exclusivement aux stipulations contractuelles et aux usages de la profession”.

47. 484 U.N.T.S. p. 374. See also Robert, J., Arbitrage civil et commercial, droit interne et droit international privé (Paris, 1967), p. 50.Google Scholar

48. Vide infra para. 15.

49. “Le siège de l'arbitrage international de droit privé”, Revue de l'Arbitrage (1966) p. 5.Google Scholar

50. Annuaire de l'Institut de Droit International 1957 vol. II p. 423.Google Scholar

51. We shall abstain from commenting on the various, and sometimes contradictory decisions of civil and administrative tribunals in France. Suffice it to refer to the critical notes in French journals.

52. Article 993. Cf. Nantwi, E.K., The enforcement of international judicial decisions and arbitral awards in public international law (Leyden, 1966)Google Scholar; Bruno Oppetit, “Le refus d'exécution d'une sentence arbitrale étrangère dans le cadre de la Convention de New York”, Revue de l'Arbitrage (1971) pp. 97–107.Google Scholar

53. Cf. the decisions of 25 September 1916, N.J. 1917 p. 13, and of 13 January 1917, N.J. 1917 p. 133.

54. Act of 26 April 1917, Stb. 1917, No. 303, by which a new Article 13a was inserted in the Act on General Principles of Legislation of 1829, Stb. 1829 No. 28.

55. See, inter alia, Belinfante, W.G., Het Europees Verdrag inzake de immuniteit van Staten [The European Convention on State Immunity] (Deventer: Kluwer, 1973) 36 pp.Google Scholar, and Voskuil, C.C.A., De Nederlandse rechtspraak betreffende de staatsimmuniteit [Decisions of the Netherlands Courts involving State Immunity] (Deventer: Kluwer, 1973) 46 ppGoogle Scholar. and Annex [reports presented at the 1973 annual meeting of the Netherlands International Law Association and published in the Mededelingen (Proceedings) of the Association Nos. 67 and 68 Mededelingen No. 69 contains the proceedings of the discussion on the reports at the annual meeting]; Voskuil, C.C.A., De ‘act of state doctrine’ en het Nederlandse internationaal privaatrecht [Baarn: Hollandia, 1968), 61 ppGoogle Scholar. [report presented at the 1968 annual meeting of the Netherlands International Law Association and published in Mededelingen No.57.Mededelingen No. 58 contains the proceedings of the discussion on this report at the annual meeting]; Carabiber, Ch., “L'arbitrage international et le problème de l'immunité de juridiction des Etats et des collectivités publiques signataires d'une clause compromissoire insérée dans un contrat de droit privé”, Revue de l'Arbitrage (1967) pp. 49–68Google Scholar. See also Circular Note to the Foreign Missions on Sovereign Immunity in Civil Proceedings, Bonn, 20 December 1973, 13 I.L.M. (1974) pp. 217–219.

56. The treaty entered into force for the Netherlands on 23 July 1964 and for Switzerland on 1 June 1965. Both States made the declaration as mentioned in Article 1(3), that they would apply the Convention to the recognition and enforcement of awards made only [emphasis added] in the territory of another Contracting State.

57. 27 L.N.T.S. p. 157; Trb. 1964 No. 94.

58. Cf. the decision of the same Court in the Cabolent case of 28 November 1968, 9 I.L.M. (1970) p. 152; 1 N.Y.I.L. (1970) p. 225; N.J. (1969) No. 484; A.M.Stuyt, op. cit. No.A 24, p. 483.

59. 4 N.Y.I.L. (1973) p. 391.

60. See infra p. 292.

61. “The present state of the law regarding international commercial arbitration” in Bos, M. (ed.), The present state of international law (Deventer: Kluwer 1973) p. 319Google Scholar [written in honour of centenary celebration of the International Law Association 1873–1973]; see also “Arbitration between Government Controlled Bodies and Foreign-owned Business Firms”, I.L.A. Report, 1972 pp. 641–646Google Scholar [ a progress report prepared by M.Domke, Chairman of the I.L.A.Committee on International Commercial Arbitration ].

62. Supplement (Paris, 1973) p. 78, No. 165.

63. Cf. Encyclopédie de droit international (Paris: Dalloz, 1969) vol. II, p. 118Google Scholar; cf. also Ch. Carabiber, loc. cit. pp. 64–66;

“Si l'immunité de juridiction comporte une dérogation s'agissant d'actes de commerce ou de gestion privée, l'immunité d'exécution, elle, est absolue. Elle couvre les intérêts patrimoniaux et les biens appartenant à un Etat étranger. ‘Il y aurait quelque indécence à saisir en France les biens d'un Etat étranger. Ce serait un act de nature à troubler les relations de la France avec cet Etat (Battifol). Il n'est possible ni de saisir-arrêter des sommes détenues par un tiers pour le compte d'un Etat étranger ni de prendre à son encontre de simples mesures conservatoires. De nombreuses décisions judiciaires ont consacré le principe selon lequel les voies d'exécution sont impossibles à l'égard de l'Etat et des personnes de droit public ( Cass. Civ. 1885, S. 1886.I.353;…) La jurisprudence britannique est rest´e immuablement attachée à ce principe. Il en est de même de la jurisprudence belge. La jurisprudence suisse est catégorique en ce qui concerne l'immunité d'exécution … Enfin par son jugement du 15 avril 1965, le Tribunal de La Haye s'est déclaré incompétent dans une affaire où une société qui se présentait comme néerlandaise – encore qu'elle fut en réalité de nationalité canadienne – assignait en validité de saisies-arrêts pratiquées entre les mains de Sociétés néerlandaises, la National Oil Company (NIOC) dont tout le capital appartient au Gouvernement Iranien en motivant sa décision comme suit: 'on ne saurait conclure ni à une renonciation au droit de faire appel à l'immunité, ni se prévaloir du fait que l'on s'est soumis à un arbitrage dans les cas mentionnés à la Convention qui n'a pas de point de contact avec la procédure juridique des Pays-Bas, ni du fait que la NIOC s'est défendue contre les présentes demandes’.”.

64. 575 U.N.T.S. p. 159; Trb. 1966 Nos. 152 and 225, Trb. 1968 No. 153, Trb. 1970 No. 100.

65. Article 54 stipulates: “(1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state. (2) A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation. (3) Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought”.

65a. Cf. Article 23 of the European Convention on State Immunity, done at Basle, 16 May 1972: “No measures of execution or preventive measures against the property of a Contracting State may be taken in the territory of another Contracting State except where and to the extent that the State has expressly consented thereto in writing in any particular case.” (66 A.J.I.L. (1972) p. 931; French text in Trb. 1973 No. 43; not yet in force).

66. Trb. 1972 No. 51; 63 A.J.I.L. (1969) p. 875; 73 R.G.D.I.P. (1969) p. 919; 29 Z.A.ö.R.V. (1969) p. 711

67. The just quoted Vienna Convention is meant to apply only to treaties between States, not to treaties with or between other subjects of international law (Article 3).

68. See Sanders, P., “New York Convention on the recognition and enforcement of foreign arbitral awards”, 6 N.T.I.R. (1959) p. 59.Google Scholar

69. Article 1(3) reads: “When signing, ratifying or acceding to this Convention, or notifying extension under Article X hereof, any State may on the basis or reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State. It may also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration”.

70. Article XII regulates the entry into force of the Convention.

71. Sanders loc. cit. p. 59.

72. Article 28 of the Convention on the Law of Treaties.

73. In the year the arbitral award was pronounced, 1956, the New York Convention did not even exist.

74. International Commercial Arbitration, Problems concerning the application and interpretation of existing multilateral conventions on international commercial arbitration and related matters ( Doc.A/CN.9/64), UNCITRAL Yearbook vol. III (1972), pp. 193–250, ad para. 103.

75. Articles 34 and 35 of the Vienna Convention on the Law of Treaties.

76. See note 47. Cf.Klein, F.E., “La convention européenne sur l'arbitiage commercial international”, 51 Revue Critique (1962) pp. 621–640Google Scholar. It may be remembered that two intergovernmental political organisations, the United Nations and the Council of Europe, and two scientific international institutions, the Institut de Droit International and the International Law Association, have promoted international (commercial) arbitration.

(a) The United Nations:

– the New York Convention of 1958;

– the just quoted Convention of 1961, prepared by the Economic Commission for Europe;

– the IBRD Convention of 1965;

– the activities of the UNCITRAL;

– the activities of the International Law Commission, especially as regards the codification of arbitral procedure, and of state responsibility.

(b) The Council of Europe:

– the Agreement of 17 December 1962 relating to application of the European Convention of 1961 (ECE);

– the European Convention of 20 January 1966 providing a uniform law on arbitration.

(c) The Institut de Droit international:

– Resolution of 11 September 1959 on international recognition and enforcement of arbitral awards.

(d) The International Law Association:

– Committee activities since 1922 (see Martin Domke in Report 1958 p. 414).

77. See supra notes 53 and 54.

78. Article 13 (4) of the Bailiff's Regulation [Deurwaardersreglement], Stb. 1934 No.598, as amended, Stb. 1960 No. 562, reads: “The bailiff shall refuse to serve a writ if he has been notified by Our Minister [of Justice] that serving the writ would be contrary to the international obligations of the State…”.

79. P.C.I.J. Ser. A/B Nos. 67 and 69.

80. See note 58. Cf. Domke and Glossner, op. cit. in note 61, p. 319 note 96.