The relationship between national courts and arbitration is marked by a complex interdependence. Similar to a parent-child dynamic, arbitration continually strives for independence from national courts, yet it cannot function without their support. National courts are essential in filling gaps when arbitrators lack the authority to enforce their decisions. However, the involvement of courts can sometimes be detrimental to both the parties and the arbitration tribunal. This essay will examine the role of national courts in international commercial arbitration, exploring the delicate balance between courts providing necessary assistance and their potential for harmful intervention.[1]

National courts can become involved in international arbitration for various reasons and at different stages of the arbitration process.

Interim Measures in International Arbitration
Under Article 17 of the UNCITRAL Model Law,[2] arbitral tribunals can grant interim measures upon a party's request. This authority is recognized in many national arbitration laws (Lex arbitri). However, several factors limit arbitrators' power to issue such measures, necessitating national court assistance.

1. Timing of Interim Measures: Arbitral tribunals cannot grant interim measures before their formation. Hence, parties often seek national court intervention to preserve the status quo and protect evidence, preventing the loss or destruction of assets and evidence before the tribunal is established. Emergency arbitrator procedures have been introduced by many international institutions to address this gap. An emergency arbitrator can order provisional measures until the tribunal is constituted. Despite their initial appeal, these procedures are often ineffective due to enforcement challenges in foreign jurisdictions, as many arbitration statutes do not include provisions for enforcing interim measures ordered by tribunals. Additionally, such orders do not qualify as final awards under the New York Convention, leading parties to seek interim relief from national courts to avoid enforcement issues.
    
2. Enforcement Challenges: The cross-border nature of international commercial disputes complicates the enforcement of tribunal-ordered interim measures. For instance, in the case of Living Consulting Group AB (Sweden) v. OOO Sokotel (Russian Federation),[3] the Russian Highest Arbitrazh Court ruled that Russian courts could only enforce awards that decide on the merits. However, recent case law shows a trend towards enforcing tribunal-ordered provisional measures. The Cairo Court of Appeal has stated that such measures are compatible with the New York Convention, facilitating the enforcement of arbitration agreements and awards.
    
3. Third-Party Limitations: According to Article 17(2) of the Model Law, interim measures can only be ordered against parties to the arbitration agreement, not third parties. This limitation is problematic because tribunals cannot compel third parties to attend hearings, disclose documents, or preserve evidence. Therefore, national courts must assist in obtaining evidence, as outlined in Article 27[4] of the Model Law, which allows a tribunal or a party, with tribunal approval, to request evidence from a competent court.

National court involvement is essential for the progress of arbitral proceedings but can have adverse effects. For example, seeking interim relief from courts might prejudice the final award. The House of Lords in Channel Tunnel v. Balfour[5] highlighted the tension when courts are asked to provide interim relief similar to the remedy sought in arbitration, potentially leaving little for arbitrators to decide. Additionally, courts may require the disclosure of factual information, which can affect the arbitration process.

National Courts and Final Awards in International Arbitration
When an arbitral tribunal issues a final award, it concludes the arbitration proceedings and declares itself functus officio, meaning it no longer has authority over the matter. A final award is the tribunal's conclusive decision on all issues in the dispute. At this stage, national courts play their primary role in international arbitration by enforcing the arbitral award. However, the losing party can challenge the award's validity and enforcement under Articles V of the New York Convention[6] and Article 36 of the UNCITRAL Model Law.

1. Challenging the Award at the Arbitral Seat: A party can challenge the award in the court where the arbitration took place, subject to the local arbitration law (Lex arbitri). For instance, under the English Arbitration Act 1996, an award can be challenged if the tribunal lacks substantial jurisdiction, there were serious procedural irregularities, or the parties agreed to appeal on a point of law. If the court at the arbitral seat sets aside the award, courts in other jurisdictions may refuse to enforce it. However, they are not obligated to do so. Notably, in Pt Putrabali V Rena Holdings, the French Cour de Cassation enforced an award annulled by English courts,[7] and in Chromalloy v Arab Republic of Egypt, the District Court of Columbia enforced an award annulled in Egypt.[8] Section 34 of the Indian ACA[9] also talks about the setting aside of the arbitral award.
    
2. Resisting Enforcement in Other Jurisdictions: Under the New York Convention, a party may resist enforcement of an award in the court where enforcement is sought. Article V(1) outlines grounds for refusal, including an invalid arbitration agreement, procedural irregularities, the award exceeding the scope of arbitration, improper tribunal composition or procedures, and annulment at the arbitral seat. Additionally, enforcement can be refused if the dispute is not arbitrable under local law or if the award violates public policy.
    

The court will either confirm and enforce the award or refuse recognition and enforcement based on these grounds. The implications of a refusal vary, depending on the challenge's basis and case circumstances. The winning party in arbitration may, depending on time limits, recommence arbitration or litigation, or seek enforcement in a different jurisdiction.

Analysis of National Courts' Involvement
National courts' involvement in international arbitration differs before and after the tribunal's establishment. Before the tribunal is formed, court involvement generally supports arbitration by enforcing agreements and protecting evidence and assets. However, excessive review of jurisdictional challenges is discouraged if the arbitration agreement is prima facie valid.

After the tribunal is established, increased court involvement can hinder the arbitration process, although the responsibility for this typically lies with the parties rather than the courts. Therefore, court involvement at this stage should follow the tribunal's decisions, assisting with evidence, enforcing partial awards, or conducting judicial reviews during annulment and enforcement phases.

Establishment of the Arbitral Tribunal and Challenges to Arbitrators
Appointment of Arbitrators
Under Article 11(3)(a) of the UNCITRAL Model Law, national courts can appoint arbitrators if a party fails to do so within thirty days of receiving a request from the other party, or if the two appointed arbitrators cannot agree on a third within thirty days. Article 11(5) further requires that courts consider any qualifications for arbitrators specified in the arbitration agreement. This judicial assistance is beneficial as it speeds up the formation of the arbitral tribunal and prevents parties from employing delaying tactics to obstruct the arbitration process.

Challenges to Arbitrators
National courts also have the authority to address challenges to the independence and impartiality of arbitrators. However, Article 13 of the Model Law requires that such challenges be initially submitted to the arbitral tribunal before involving national courts at the arbitration seat.

Case Law Examples
In National Iranian Oil Company v. Crescent Petroleum Company International Limited,[10] the English High Court was involved in appointing an arbitrator when the parties could not agree. This intervention ensured the arbitration process proceeded without undue delay. In contrast, in Soh Beng Tee & Co Pte Ltd v. Fairmount Development Pte Ltd, the Singapore Court of Appeal dealt with a challenge to an arbitrator's impartiality, demonstrating the court's role in maintaining the integrity of the arbitration process by addressing valid concerns about arbitrator bias.

End Notes:

1. Julian D M Lew, 'Does National Court Involvement Undermine the International Arbitration Process' (2009) 24(3) American University International Law Review 489–537, 494.
2. art 11(3) (a).
3. Living Consulting Group AB (Sweden) v OOO Sokotel (Russian Federation), Presdium of the Highest Arbitrazh Court, Russian Federation 5 October 2010, A56-63115/2009.
4. art 27.
5. Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, 367-368.
6. Pmb S, 'Article V - Guide - NYCG 1958' (1958 New York Convention Guide) accessed 25 May 2024.
7. France / 29 June 2007/ France, Cour de Cassation / Societe PT Putrabali Adyamulia V Societe Rena Holding et Societe Moguntia Est Epices / 05-18.053.
8. Chromalloy Aeroservices V Arab Republic of Egypt U.S. District Court for the District of Columbia -939 F.supp. 907,909 (DDC 1996).
9. Section 34 of the Indian ACA
10. National Iranian Oil Company v Crescent Petroleum Company International Limited, [2016] EWHC 510 (Comm).

Written By: Abhinav Patel, Dr.Ram Manohar Lohia National Law University
Email: [email protected]