Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
Baker & McKenzie
Australian courts are arbitration friendly and will enforce arbitration agreements. The courts must stay court proceedings if the parties have agreed to an arbitration agreement and the matter is capable of settlement by arbitration, unless the agreement is null and void, inoperative or incapable of being performed (Section 7 of the International Arbitration Act 1974 (Cth)).
Charles Russell Speechlys LLP
Arbitration agreements may be enforced in the same manner as general contracts. The national courts will recognise and respect the choice of parties to contracts or disputes to enter into arbitration.
The Belgian courts are arbitration-friendly and will refer parties to arbitration unless:
- there is no proof that an arbitration agreement existed;
- one of the parties was incapable of entering into an arbitration agreement; or
- the subject matter of the dispute is not arbitrable.
The Supreme Court considers certain subjects which are governed by mandatory legislation (eg, the unilateral termination of exclusive distribution agreements for an undetermined period) to be non-arbitrable. However, this view is highly disputed, especially given the change in the definition of ‘arbitrability’ since the Supreme Court’s judgments in this regard.
Since the Brazilian Supreme Court declared the constitutionality of arbitration agreements in 2001, they are generally enforced in Brazil, according to the terms of the Arbitration Act. Thus, when a dispute which is subject to an arbitration agreement is submitted to a national court, the court will generally refer the parties to arbitration – even if one party objects to the existence or validity of the arbitration agreement, as the arbitrator is competent to decide on this issue.
The national courts have consistently demonstrated a favourable attitude towards arbitration agreements by, for example, regularly refusing to grant anti-arbitration injunctions.
Kambourov & Partners Attorneys at Law
Arbitration agreements are enforced indirectly – the court, on an objection of a party for the existence of an arbitration agreement, dismisses the proceedings and refers the parties to arbitration unless it finds the arbitration agreement to be “null and void, inoperative or incapable of being performed”. Under penalty of implied waiver, the objection must be made with the statement of defence.
Bulgarian courts generally tend to enforce arbitration agreements, even imperfect ones. The pro-enforcement policy was recently demonstrated by the Sofia Court of Appeal, which ruled that it could not consider the validity of an arbitration agreement after the appointed arbitrators had already rejected the objections to its validity. The court ruled that in these circumstances it may consider the validity only regarding a challenge against the final award.
Unlike in other jurisdictions, a Bulgarian court would refuse to enforce a unilateral arbitration clause that grants one of the parties a choice between arbitration and state courts.
Arbitral agreements are generally respected by the Danish courts.
Shearman & Sterling LLP
Arbitration agreements are enforced in accordance with Article 13 of the Arbitration Act, which provides that a domestic court seized of a claim which is subject to an arbitration agreement must dismiss the claim as inadmissible.
Article 2 of Decree 19/1959 also incorporates Article 2 of the New York Convention on the enforceability of arbitration agreements into Egyptian law.
King & Spalding LLP
France is well known as a favourable venue for international arbitration. This is largely due to the deference accorded to the arbitration agreement and award, as well as the protection of arbitration proceedings from judicial interference. Thus, for example, when a dispute subject to an arbitration agreement is brought before a court, the default position is for the court to decline jurisdiction in favour of the arbitral tribunal (Article 1448 of the Code of Civil Procedure).
Brödermann Jahn RA GmbH
Generally speaking, the German courts are pro-arbitration. Arbitration agreements are enforced by initiating arbitration proceedings or by invoking the arbitration agreement on the first occasion before an ordinary court (Section 1032(1) of the Code of Civil Procedure).
Under Section 20 of the Arbitration Ordinance (Cap 609), where a claim is brought before the court in a matter which is the subject of an arbitration agreement, a party to the claim can request that the parties be referred to arbitration. The court will grant that request and stay the court proceedings unless the arbitration agreement is null and void, inoperative or incapable of being performed.
The Hong Kong courts are generally supportive of arbitration. Arbitral awards, whether made in or outside Hong Kong, are enforceable in the same way as court judgments, provided that leave is first obtained under Section 84 of the ordinance. Leave will only be refused in exceptional cases.
White & Case LLP
The Indian courts are increasingly adopting a pro-arbitration approach and enforcing valid arbitration agreements. The statement of objects and reasons of the Arbitration and Conciliation Act also recognises the principle of non-intervention by courts in the arbitration process. However, the Indian courts will refuse to enforce an arbitration agreement where the agreement is invalid or the dispute is not arbitrable.
Barnea & Co
Arbitration agreements are usually implemented by mutual consent, when the parties are in dispute about a matter contained in the arbitration agreement. They can also be enforced by court order, if a claim is filed in a dispute where an arbitration agreement exists. In most cases, arbitration agreements take precedence. Arbitration is a common alternative to litigation, and the courts are generally supportive of it.
Nctm Studio Legale
Arbitration agreements both establish the power of the tribunal and revoke the power of the national courts to make a decision. If a claim that is subject to an arbitration agreement is brought before a national court, the court’s jurisdiction must be challenged upon submission of the first brief of defence at the latest; otherwise, the arbitral tribunal will lose its competence over the dispute. If the arbitral tribunal finds that it does not have jurisdiction, the dispute may proceed before the national courts and vice versa.
The national courts are generally pro-arbitration and will give effect to a valid arbitration agreement between the parties. Pursuant to Article 808-quater of the Code of Civil Procedure, in case of doubt the arbitration agreement is interpreted to extend to all disputes arising under the contract or from the relationship implied by the agreement.
The Offices of Njeri Kariuki
The national courts' attitude has become increasingly positive over the last seven to eight years. Arbitration agreements are enforced through the courts. Awards are filed under a miscellaneous application for consideration by the Commercial Division of the High Court.
Loyens & Loeff
Luxembourg case law has consistently confirmed the compulsory nature of arbitration clauses. The domestic courts will thus decline jurisdiction when they are faced with an arbitration clause invoked by one of the parties.
Nigerian courts tend to uphold arbitration agreements. Arbitration agreements are enforced by a successful application for a stay of proceedings and a reference of the dispute to arbitration. The courts will readily grant stays once the applicant has shown that it is ready, able and willing to arbitrate the dispute.
Advokatfirmaet Simonsen Vogt Wiig AS
Arbitration agreements are enforceable in Norway. The Norwegian courts will dismiss claims or actions subject to arbitration at a party’s request, provided that the request is made before or at the latest when reviewing the merits of the claim or action.
The party which asserts that the claim or action is subject to arbitration must prove the existence of the arbitration agreement. If one of the parties claims that the arbitration agreement is void, the court has jurisdiction to decide its validity (and the rest of the case, provided that the agreement is actually declared void). However, if arbitral proceedings are already commenced when the action is brought before an ordinary court, the court will dismiss the action, unless it is clear that the arbitration agreement is void. If the arbitral tribunal has declared that it has jurisdiction, the decision can be appealed to the ordinary courts.
Zamfirescu Racoti & Partners Attorneys at Law
The national courts in Romania recognise and enforce valid arbitration agreements. According to publicly available records, in Romania there have been no successful anti-arbitration injunctions or other similar proceedings suppressing the effects of arbitration agreements.
One particularity is that, according to the Code of Civil Procedure, a court seized of a dispute governed by an arbitration agreement shall decline jurisdiction if at least one of the parties invokes the agreement to arbitrate. However, the court shall maintain jurisdiction if the plaintiff submits its defence on the merits of the dispute without making any reservations with respect to the arbitration agreement.
Baker Botts LLP
Under Article 8 of the International Arbitration Law, the Russian court seized of a matter that is subject to an arbitration agreement shall, at the request of a party, refer the parties to arbitration, unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed.
Accordingly, to enforce an arbitration agreement, the Russian courts will verify that:
- the dispute falls within the scope of the arbitration agreement;
- the arbitration agreement has been made in a proper form, the subject matter is arbitrable and the agreement is not null and void, inoperative or incapable of being performed, and
- one of the parties has requested enforcement of the arbitration agreement by no later than submission of its first statement on the substance of the dispute.
Article 7(12) now stipulates that, by default, an arbitration agreement contained in a contract also covers disputes relating to termination and invalidity of that contract.
Allen & Gledhill LLP
There are two main ways in which arbitration agreements may be enforced by the local courts:
- Domestic court proceedings are stayed in favour of arbitration.
- An anti-suit injunction is issued to restrain a party from proceeding with foreign court proceedings instituted in breach of the arbitration agreement.
The Singapore courts are pro-arbitration and will seek to uphold arbitration agreements wherever possible. In particular, under the International Arbitration Act, the local courts must order a stay of court proceedings commenced in breach of an arbitration agreement unless the arbitration agreement is null and void, inoperative or incapable of being performed. The judiciary has no residual discretionary power to refuse a stay.
In contrast, under the Arbitration Act, the local courts have discretion to refuse to order a stay. However, this discretion will be exercised only in limited circumstances. For instance, the local courts may refuse to order a stay where the dispute involves multiple parties and not all of them are party to the arbitration agreement. In such case, the courts take the view that the commencement of arbitration would likely result in delay, extra costs and potentially inconsistent findings.
The different approaches under the Arbitration Act and the International Arbitration Act have arisen as a result of legislative intent for the local courts to have a greater degree of curial supervision over domestic arbitration, as compared to international arbitration.
The Spanish courts enforce arbitration agreements and adopt a pro-arbitration stance. Section 11.1 of the Arbitration Act prevents ordinary courts from settling any dispute submitted to arbitration if one of the parties to the agreement has initiated the corresponding arbitration process.
Frank Advokatbyrå AB
Swedish courts are favourable towards arbitration. Valid arbitration agreements are respected and enforced by Swedish courts to the effect that they exclude the courts’ jurisdiction. A party that seeks to invoke an arbitration agreement as the basis for an objection to a court’s jurisdiction must do so in its first submission.
Bär & Karrer
Swiss courts are not allowed to order arbitration if one of the parties does not voluntarily comply with an arbitration agreement. Under Swiss law, the enforcement of an arbitration agreement may be ensured as follows:
- The state courts will decline jurisdiction whenever there is a valid arbitration agreement between the parties, unless the parties proceed on the merits without reservation (Article 7 of the Federal Statute on Private International Law; Article II(3) of the New York Convention).
- A party may refer to a state court to seek assistance in the constitution of the arbitration tribunal (Article 179 of the Federal Statute on Private International Law).
- A party may also turn to a state court if the other party obstructs the conduct of the arbitration proceedings (Article 185 of the Federal Statute on Private International Law).
Hergüner Bilgen Özeke
Where a dispute subject to arbitration is brought before a Turkish court and the defendant objects to it being resolved by arbitration, it must submit a preliminary objection to this effect in its statement of defence. Under Turkish law, preliminary objections cannot be made after the statement of defence has been submitted. The court will examine any objection to arbitration as a preliminary matter and seek the parties’ clear intent by reviewing their arbitration agreement, if any. If the arbitration objection is accepted, the court will dismiss the case on procedural grounds.
United Arab Emirates
Baker Botts LLP
Arbitration agreements are enforced in accordance with Article 203 of the UAE Civil Procedure Law. Article 203(5) provides that if the parties agree to arbitrate the dispute, they cannot bring an action in respect of the same dispute before the national courts. Article 203(5) also states that where one of the parties initiates litigation without regard for an arbitration agreement, unless the other party objects at the first hearing, the arbitration agreement will be deemed to be cancelled.
The UAE courts generally enforce arbitration agreements if there is evidence of a clear intention between the parties to be bound by arbitration.
United Arab Emirates > DIFC
Baker Botts LLP
Under Article 13(1) of the DIFC Arbitration Law, the DIFC court will dismiss or stay any substantive claim that has been brought before it in breach of an arbitration agreement, regardless of whether the seat of the arbitration is within or outside the DIFC.
Baker Botts LLP
The Arbitration Act 1996 promotes party autonomy and the English courts are expected to adopt a non-interventionist approach where parties have agreed to submit their disputes to arbitration. The English courts have proven to be arbitration friendly and to construe arbitration agreements in a manner that is supportive of arbitration. If timely sought, the courts will stay their proceedings in respect of a matter which under the arbitration agreement is to be referred to arbitration (Section 9), and might also issue an anti-suit injunction against the party acting in breach of the arbitration agreement.
Unless otherwise agreed by the parties, the tribunal has the power to rule on its own substantive jurisdiction - that is, as to whether there is a valid arbitration agreement governing the dispute (Section 30(1)). Where certain conditions are met, however, the court is entitled, on request, to make a preliminary determination of any question as to the substantive jurisdiction of the tribunal (Section 32(1)).
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