Does the annulment of an arbitral award by the courts of the arbitration seat necessarily preclude its enforcement?

An examination of Article V(1)(e) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958) (conventionally known as the New York Convention) suggests that the answer is not necessarily yes. Under the New York Convention, recognition and enforcement of an award may be refused, at the request of the party against whom it is invoked, if “(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.” The permissive wording of the provision leaves room for divergent approaches at the enforcement stage.

This client alert examines how different jurisdictions apply Article V(1)(e) and considers whether, under their respective legal frameworks, an arbitral award may still be enforced where it has been set aside by the courts at the seat of arbitration.

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