Cypriot Supreme Court vacates first instance decision on Article IV of the New York Convention, upholding the Convention's underlying objective and spirit

On 4 April 2017, the Supreme Court of Cyprus vacated a decision of a first instance court which had refused the recognition and enforcement of a foreign arbitral award based on the alleged non-fulfilment of the conditions of Article IV(1)(a) of the New York Convention (which forms part of Cypriot law via Law No. 84/1979).

Background

On 27 December 2011, an award was rendered by the International Commercial Arbitration Court of the Chamber of Commerce of the Russian Federation and Industry in favour of Intersputnik, the appellants. 

Thereafter, the appellants sought to have the award recognised and enforced in Cyprus.

Pursuant to Article IV(1)(a) of the New York Convention, which is incorporated into Cypriot law via Law No. 84/1979, the appellants submitted before a first instance court a document which allegedly comprised the duly authenticated original of the foreign arbitral award. According to the appellants, said document evidenced the signatures of the president and other members of the arbitral tribunal, as well as the arbitral tribunal’s seal. Further, the document mentioned that three original versions of the foreign arbitral award had been duly signed.

The first instance court found that the aforementioned were insufficient to conclude that a duly authenticated original pursuant to Article IV(1)(a) had been submitted and dismissed the application for recognition and enforcement. The first instance court referred to precedent of the Supreme Court and found that the certification of the authenticity of the signatures and seal of the arbitral tribunal had been missing.

Decision of the Supreme Court

Before the Supreme Court of Cyprus the appellants argued that the first instance court incorrectly considered that the evidence provided did not comply with the Convention. In specific, they argued that the court’s approach and interpretation was inconsistent to the relevant case law and writings on the issue. According to the appellants, the purpose of Conventions on the recognition and enforcement of foreign arbitral awards is the availability of a relatively easy and fast recognition process in order to make the enforcement possible.

In examining the decision of the court of first instance, the Supreme Court deemed necessary to first lay out the text of the relevant provision of the New York Convention, Article IV(1)(a). Article IV(1)(a) reads as follows:

“1.To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply:

(a) The duly authenticated original award or a duly certified copy thereof.”

The Supreme Court stated that international conventions concerning the recognition and enforcement of foreign arbitral awards are strictly interpreted. It nevertheless stated that the philosophy under such international conventions is the availability of a fast dispute resolution mechanism at an international level and that both Law No. 84/1979 which incorporates the New York Convention and the Cypriot laws on international arbitration provide a specific and autonomous procedure.

Further in its examination as to whether to document submitted was a “duly authenticated original”, the Supreme Court referred to the treatise of Albert Jan van den Berg, The New York Convention of 1958: An Overview, which defines a “duly authenticated original award” as follows:

“The authentication of a document is the formality by which the signature thereon is attested to be genuine. The certification of a copy is the formality by which the copy is attested to be true copy of the original.”

The Supreme Court also referred to decisions of the Hong Kong judiciary, as well as on English treatise on the issue, noting that the phrases “duly authenticated” and “duly verified” add nothing to the common rules of evidence in the presentation of documents.

Further, it referred to the Court of Appeal of England and Wales case Antony Lombard- Knight ν Rainstorm Pictures Inc (2014) EWCA Civ 356, in which the Court of Appeal held that a foreign arbitral award is authentic when the document includes the arbitrators’ original signatures. Moreover, it stated that this liberal approach is in accordance with the object and philosophy of the Convention itself, as that is examined in the Guide to the Interpretation of the 1958 New York Convetion: A Handbook for Judges, which clarifies that the Convention is based on a “pro-enforcement bias” as a way of serving the international business and commerce.

Accordingly, the Supreme Court found that the condition of a “duly authenticated award” was satisfied and that the application should not have been rejected. It held that if a document contains the arbitrators’ original signatures and official seal, no further evidence is required. Further, it noted that it was confirmed that the award was final and, therefore, subject to mandatory execution.

Consequently, the Supreme Court accepted the appeal and vacated the decision of the first instance court.

Source: www.cylaw.org