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DIAG HUMAN: A CASE STUDY ON MULTIǧJURISDICTIONAL ENFORCEMENT…
under its laws, or if recognition or enforcement would be contrary to the public
policy of that country.
“Finality” of an award
Before dealing with the issue estoppel applied by the English High Court, I will
touch upon the question of the “finality of an award”, which was the principal issue
in the Diag Human case and on which courts in the enforcement proceedings made
some interesting views.
The New York Convention requires that an award be “binding” instead of “final”.
This terminology shift in the New York Convention was motivated by the aim to
streamline rather cumbersome enforcement procedures available at that time under
the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927. The
Geneva Convention (which was replaced by the New York Convention) stipulated
the so-called “double exequatur” requiring a party seeking enforcement of an award
first to prove that the award is “final”. Many courts interpreted this provision of
the Geneva Convention to require that a party obtain leave for enforcement in the
country of the award’s origin before seeking enforcement abroad
10
.
Article V(1) of the New York Convention, which provides that enforcement
may be resisted if the award has not yet become binding upon the parties, leaves the
term binding undefined. Although there is an international consensus that “binding”
does not require the double exequatur, there are different interpretations by national
courts regarding what law should be applied to the question of whether an award is
considered binding. The “binding” test in different jurisdictions can bring different
results. Under one approach, an award can be binding if it is no longer subject to
appeal on the merits, while, under another approach, an award is binding unless it
has been set aside or suspended.
11
The burden of proof under the New York Convention lies upon the party
resisting enforcement. In other words, it is not the party seeking enforcement of the
award who has to prove that the award has become binding in the country in which
the award was made. It is the party against whom enforcement is sought who has to
prove that the award has not become binding.
12
There is generally no disagreement
that the decision whether an award is binding is to be made by the enforcing court.
Given the review mechanism agreed by the parties in the arbitration agreement
and the fact that the review process was pending at the time Diag Human filed the
enforcement requests, courts in relevant jurisdictions had to determine whether the
Award was indeed binding. In general in all the proceedings, the Czech Republic
10
See Van den Berg, A. J.:
The New York Convention of 1958: An Overview 1
, 17 (6 June 2008), http://
www.arbitration-icca.org/articles.html(last visited 21 May 2015).
11
Supra
note 9, p. 337-346.
12
Supra
note 9, p. 247.