A Courts Review of an Arbitrators Award May Be Restricted
On November six, 2018, the Argentine National Supreme Court ("Supreme Court") ruled on a example regarding the annulment of a domestic arbitration award. The Supreme Court found that the honour was not subject to annulment, since it had complied with the requirements of Sections 760 and 761 of the National Procedural Code ("NPC") and it did not affect public policy.
The background of the instance refers to a contract executed between the National State ("National State") and a articulation venture of pocket-sized companies ("Propyme", and together with the National State, the "Parties") in 1999, related to an economic support programme for pocket-sized companies. The contract contained an arbitration agreement and the constabulary that established the economic support plan stated that any dispute had to be resolved past arbitration. The National Land terminated the contract in December 2000. In 2001, Propyme filed a claim for declared damages related to the termination of the contract.
The Parties entered into an arbitration with a sole arbitrator. The honour ordered the National State to pay ARS 931,124.57 and US$ 96,508.80 to Propyme. Confronting this, the National State filed an disparateness claim before the Federal Chamber of Appeals ("Sleeping room") alleging that (i) the laurels was non based neither in the contract nor in the applicable law, (ii) the evidence had not been assessed properly and (3) the arbitrator omitted to apply public policy laws on currency exchange and consolidation. The Chamber conceded the disparateness simply regarding the omission to employ public policy laws on currency exchange and consolidation and dismissed the disparateness on the basis of applicable law and evidence assessment, since such points exceeds the annulment recourse and would revise the merits of the award, which is non allowed past the NPC.
The National State appealed the decision before the Supreme Courtroom stating that an arbitral award tin be revised in the merits when there are reasons of public policy, as it happened in this case. The Supreme Court used 2 standards to analyze the annulment claim. First, it analyzed if the laurels barbarous within the grounds of annulment independent on Sections 760 and 761 of the NPC. Second, information technology analyzed if there were reasons of public policy to revise the merits of the example.
Regarding the first question, the Supreme Courtroom stated that judicial revision of arbitral awards is restricted, and cannot encompass the revision of the merits of the dispute, just only the compliance with the grounds of Sections 760 and 761 of the NPC. In this sense, the courts shall only review that (i) the honor does not accept essential flaws of procedure, (ii) it was non rendered out of term or (iii) it decides disputes that were not submitted to arbitration. Since the National State did non evidence whatever of this basis, just rather stated reasons of applicative police and testify assessment, the award was non bailiwick to annulment by the grounds of the NPC. Regarding the second question, the Supreme Court understood that the National State did not testify any affectation of the public policy, but merely a discrepancy with the outcome of the award. For this, the Supreme Court have into account that the National State voluntarily agreed to arbitrate, and waived the right to appeal the laurels.
This conclusion shows the support of the Supreme Court to arbitration, since it limits the possibilities of annulment, and therefore, gives legal certainty to arbitral awards. Moreover, this is in line with the recent enactment of Police 27,449 on International Commercial Arbitration, which is a verbatim of the UNCITRAL Model Law, and contains grounds for annulment fairly similar to those upheld by the Supreme Court and contained in the NPC.
Source: https://globalarbitrationnews.com/argentine-supreme-court-supports-restricted-review-of-arbitral-awards/
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