Private Law
Hamid Reza Oloumi Yazdi; Alireza Danesh Ara
Abstract
Recognition and enforcement of arbitral awards by the competent court when the judgment debtor does not comply with the award willingly is the last step in the settlement of a disputes through an agreed arbitration procedure. The recognition of the arbitral award by a court grants the arbitration ...
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Recognition and enforcement of arbitral awards by the competent court when the judgment debtor does not comply with the award willingly is the last step in the settlement of a disputes through an agreed arbitration procedure. The recognition of the arbitral award by a court grants the arbitration awards an enforceability likewise the judgement of a courts. Recognition and enforcement of arbitration awards by the courts upscales such awards to an enforceable and binding level as it’s enforceability has been endorsed by the law. Moreover, when an arbitral award has been recognized by the court, then the outstanding case shall enjoy the status of a res judicata award which bars the parties to the dispute to take the case to the court or the arbitral tribunal again. The recognition of arbitral award has been mainly focused in international arbitration and in international legal literature such New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (1958) as well as in ICSID Convention for settlement of disputes between foreign investors and sates. However, less attention has been paid to the step of recognition in national arbitration awards, yet it calls for a closer consideration under the national applicable law of the seat of arbitration or the place of its enforcement. The study of judicial precedents in Iran proves that recognition of an arbitral award is likewise a prerequisite for its enforcement. Under Iranian law an arbitral award could be enforced by the court when it does not contradicting the public policy, mandatory rules of law, and the rules of substantial law granting/securing a right. Consequently, when a court order for enforcement of an arbitral award, in fact the court has preliminary recognized its enforceability and its conformity with these three said criteria. In this way, the recognition of a national arbitral award should be considered as a distinguished step in the process of its enforcement. This paper, by looking to the Iranian court precedent, intends to answer to the questions relating to the legal nature and consequences of recognition of a national arbitral award, as well as explaining the procedural rules applicable to this concept, such as the method and form which should be followed for such a request, the legal nature of the court’s decision on this matter, and whether this decision is subject to appeal or not. However, it should be noted that, due to lack of an integrated system for record and publishing of court’s judgments in Iran this research has been confined to the available records.Under Iranian court’s practice and precedent, the recognition of an arbitral award may be requested from the competent court by a “request” from the beneficiary party and it is not necessary to file a “petition” as requested for bringing substantial claims before a court . The court shall deal with such a request as a matter of procedure and not as a matter of substance by checking the procedures followed by the arbitral tribunal. The court may not invite the parties for a hearing session and is not obliged to follow the default rules set out for proceedings in other cases. The decision of the court on the matter of recognition shall be in the form of and “order or decision” by the court, not a judgment, stating the recognition or rejection of the arbitral award. Such a decision may be subject to an appeal like any other decisions of the courts. If the arbitral award has not been recognized by the court, which means in practice the request for its recognition and enforcement has been rejected by the court, the same case cannot be heard by the arbitral tribunal again, but it should be heard by the competent court. However, according to the dominant practice of the courts, the arbitration agreement shall be survived for any other disputes might arise out of the same contract.In the light of judicial policy of Iranian government to pursue people to the out of court settlement of their economic and commercial disputes, in particular by promoting mediation and arbitration, Iranian courts have recently shown more tendency to support and help in recognition and enforcement of national arbitration awards. This approach has been demonstrated in the court decisions and judicial precedent referred to in this paper. In brief, the importance of stage of recognition of an arbitral award should not be broadly interpreted by the courts to jeopardies the said policy, promotion of arbitration and enforceability of the arbitral awards.
