Legal Updates

 Commercial LitigationNovember 06, 2020

Enforcement of Foreign Arbitral Awards in Ireland

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Following the completion of the Brexit process on 31 December 2020, Ireland will be the only English speaking, common law jurisdiction in the European Union and we anticipate a consequential increase in parties looking to Ireland as a venue to resolve disputes and enforce judgments. Ireland will also undoubtedly became a more attractive jurisdiction for international arbitration.

With that in mind, this article provides a summary of the legal framework and process under which foreign arbitral awards may be enforced in Ireland.

Legal Framework in Ireland

All arbitrations in Ireland, both domestic and international, are governed by the Arbitration Act 2010 (the Act). The Act incorporates the UNCITRAL Model Law on International Commercial Arbitration (the Model Law).

As a signatory to the New York Convention, 1958, an arbitral award, irrespective of the country in which it was made (provided that country is a signatory of the New York Convention) must be recognised and enforced in Ireland unless one of the grounds set out in the Model Law exists. Those grounds are discussed in more detail below.

In addition, the Geneva Protocol on Arbitration Clauses 1923, the Geneva Convention on the Execution of Foreign Arbitral Awards 1927 and the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 continued to have force of law in Ireland as a result of the Act. It is also possible to enforce foreign arbitral awards in Ireland where no convention or treaty applies.

It should be noted that the Model Law itself does not outline the procedure for enforcement of foreign arbitral awards, which is left to each national body to determine.

Procedure

The enforcement process for foreign arbitral awards in the Irish Courts is the same as for domestic awards and is provided for by Section 23 of the Act and Order 56 rule 3(1) of the Rules of the Superior Courts (Order 56).

Order 56 states as follows;

“….any application or request to the Court for any of the following orders or reliefs by any party to a reference under an arbitration agreement in relation to an arbitration, or by any person in relation to an intended arbitration, may be made by originating notice of motion;….(g) for the leave of the Court to enforce or to enter judgment in respect of an award pursuant to section 23(1) of the Arbitration Act 2010”.

In terms of the proofs and documents required to be placed before the Irish Courts in seeking leave to enforce, the affidavit grounding the enforcement application must include reference to the jurisdiction of the Irish Courts to make an order for enforcement. The affidavit must also include, as an exhibit, an original or a copy of the award that is sought to be enforced per Article 35(2) of the Model Law. The party against whom the award is sought to be enforced is entitled to submit a replying affidavit, outlining their objections to the application seeking leave to enforce, which can be jurisdictional in nature or based on one of the grounds outlined at Article 36 of the Model Law below.

Grounds for Refusal

Article 36 of the Model Law sets out the grounds that a Court can consider in refusing to enforce a foreign arbitral award. They must be raised by the party against whom the award is sought to be enforced against, as part of any replying affidavit filed before the court on behalf of that party. These grounds are finite in nature and set out below:

(i) That a party to the arbitration agreement was under some incapacity; or the arbitration agreement is not valid under the law to which the parties have subjected it or under the law of the country where the award was made; or

(ii) the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or was not in accordance with the law of the country where the arbitration took place; or

(v) the award has not yet become binding on the parties or has been set aside or suspended by a court of the country in which, or under the law of which, that award was made.

In addition, at the application seeking leave to enforce leave will not be granted if the Irish court finds that the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Ireland or the recognition or enforcement of the award would be contrary to the public policy of Ireland. However, in Brostrom Tankers A.B v Factorias Vulcano SA [2004] IEHC 198 the Irish High Court emphasised that the public policy ground would be interpreted narrowly as a broad interpretation would defeat the purpose of the New York Convention.

Jurisdiction

Establishing jurisdiction where neither party has a connection to Ireland is key to enforcing foreign arbitral awards in Ireland. The most well-known example of a refusal to enforce a foreign arbitral award in the Irish courts is the decision of Mr. Justice Kelly in Yukos Capital S.A.R.L v OAO Tomskneft VNK [2014] IEHC 115. In that case, the plaintiff had previously sought to enforce an arbitral award of the International Court of Arbitration of the International Chamber of Commerce in New York (the ICC) in the defendant’s native Russia. However, this was refused by the Russian courts on the grounds that it would be contrary to public policy in Russia.

When the plaintiff then sought to enforce in the Irish courts, Kelly J. held that because the defendant held no assets in Ireland, and the case originally brought before the ICC had no connection to Ireland, that the High Court could use its discretion to refuse to enforce the award in this jurisdiction. Also relevant to that decision was that it represented the fourth attempt of the plaintiff to enforce the award (the other three of which had been unsuccessful) and it was seen as unjust that the defendant should bear the expense of another defence in Ireland without any solid basis for doing so.

This case remains good law in Ireland and has been applied in a number of subsequent judgments here.

Conclusion

Subject to the jurisdictional threshold being met, the enforcement of foreign arbitral awards in Ireland is a well-established, efficient process. It is notable also that decisions of the High Court in relation to the enforcement of foreign arbitral awards cannot be appealed, which provides additional certainty.

For more information in relation to arbitration in Ireland generally and the attractiveness of Ireland as a forum for litigation post-Brexit, please see our previous briefings here and here.

Dillon Eustace
November 2020

DISCLAIMER: This document is for information purposes only and does not purport to represent legal advice. If you have any queries or would like further information relating to any of the above matters, please refer to the contacts above or your usual contact in Dillon Eustace.

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