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ARGENTINA 8
Corte Suprema de Justicia de la Nación, 24 September 2019
(Deutsche Rückversicherung AG v. Caja Nacional de Ahorro y
Seguro, in liquidation, et al.)
ARGENTINA 8
The Supreme Court affirmed the decision of the appellate court (ARGENTINA 6 A and ARGENTINA 6 B, which also found that litigation tax should be paid on exequatur ptoceedings), which had granted partial enforcement of a US award (and its US confirmation decision) after modifying it to comply with the public policy provisions of the Argentinean regime of debt consolidation. Both parties had acknowledged the public policy nature of these provisions; since the claimant had done so by not appealing the decision of the court of appeal, the Supreme Court had no jurisdiction to review this issue. The Court affirmed the holding of the appellate court that an exequatur court had the power under the Argentinean Code of Civil Procedure to modify an award before enforcing it, in order to bring it in line with Argentinean public policy – here, the debt consolidation regime. The Court relied on Art. VII of the 1958 New York Convention, which allowed the party seeking enforcement of a foreign award to rely on a more favourable domestic law, in the interest of promoting the enforcement of foreign awards. The Supreme Court also rejected the arguments raised by Argentina that enforcement should be denied because the arbitral tribunal (i) held, in violation of Argentinean law on the powers of representation, that a document signed by an unauthorized person interrupted prescription; and (ii) erroneously applied the five-year statute of limitations for prescription under Dutch law rather than the one-year time limit applicable to contracts of reinsurance and retrocession under Argentinean law. Both arguments failed because they were not among the grounds for refusal exhaustively listed in the Convention and because they would imply a review of the merits of the arbitral decision, which the Court stressed was impermissible. (See also ARGENTINA 6 A and ARGENTINA 6 B.)
The court discusses questions relating to the general approach taken by the Convention to the grounds for refusal of recognition and enforcement, including its pro-enforcement bias, as well as the system of the Convention, under which recognition and enforcement may only be denied on seven listed grounds and the petitioner has only the obligations set out in Art. IV.
The court discusses the principle that the merits of the award may not be reviewed and that the court may only carry out a limited review of the award to ascertain grounds for refusal.
Public policy: The court discusses the effect of other alleged violations of public policy on the recognition and enforcement of an arbitral award, such as contradictory reasons, manifest disregard of the law (US), etc.
More-favorable right provision: The court discusses examples of domestic laws of countries where enforcement of foreign awards is more favorable.
The court discusses this general reciprocity clause, which was inserted in the Convention to remedy the absence in the commercial reservation (Art. I(3)) of a federal-state clause allowing Contracting States not to apply the Convention to awards made in a constituent state or province of a Contracting State which was not bound to apply the Convention.