A business person's guide to negotiating an international arbitration agreement

Multinational Business Review, Spring 1998 by Reinsch, Roger W, DeVito, Raffaele

The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said

(a) agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

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

(c) The award deals with a difference 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, provided that, if the decisions on matters submitted to arbitration may be recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the

agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

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

(2) Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) The recognition or enforcement of the award

would be contrary to the public policy of that country.

The above shows that the policy of the Convention is to make arbitral awards issued in Contracting States enforceable, with some exceptions. The broadest, and most unpredictable, exception is the public policy exception of the country where the award is trying to be enforced. In practice, when such an exception would apply is very unpredictable, since each country has its own concept of what public policy is and should be.

Official Contract (National) Language.

Most international contracts will involve parties who speak different languages. In those cases, the parties should agree on the official contract language. Whichever language they choose will be the official language in the arbitration proceeding, as well. This is very important because all the documents will be translated into that official language, and will then be considered the "correct" version. This will apply to the contract itself and any correspondence between the parties. The choice of language is very important. All of the arbitration organizations reviewed allow the parties to choose the language. If the parties have not chosen the language, all but the Russian Chamber of Commerce rules state that the tribunal decides the language based on the language of the contract and other documents. The Russian rules state that if the parties have not chosen a language, Russian will be the language of the arbitral proceedings.