This eighth and final post of the Arbitration Proceedings in Yemen will be discussing issues related to the recognition and enforcement of foreign orders and awards in accordance with Yemen Arbitration Law No (22) of 1992, as amended (the “Arbitration Law”) and Yemeni Centre for Conciliation and Arbitration Rules (“YCCA Rules”).
- What is the procedure for enforcing a foreign arbitration award in Yemen? What evidence does the applicant have to produce in order for an award to be enforced?
For enforcing a foreign arbitration award in Yemen, an application for enforcement of such award must be filed before the Commercial Court of Appeal in the capital Sana’a, with the following documents (all translated into Arabic and legalised up to the Yemen Embassy in the country in which the award was issued):
a) The original of the award or a copy certified by the members of the arbitral tribunal;
b) A copy of the agreement to arbitrate. This merely means a copy of the agreement relating to the dispute in question which contains the arbitration clause;
c) A copy of the minutes of registration of the award before the local court: Article (50) of the Arbitration Law stipulates that the original award, arbitration agreement and related decisions should be submitted before the competent court within thirty days from the date of its issuance and obtain a receipt for such submission. (This request is one of the most problematic in the enforcement of foreign arbitration awards, because it is almost impossible to translate and legalise a foreign award and file it before the local court within thirty days of its issuance date);
d) A certified Arabic translation of all the above including other related documents if the award was not made in Arabic; and
e) A duly executed and notarised Power of Attorney in favour of the attorney filing the enforcement application issued by the filing party or on its behalf.
Such application is considered as a normal commercial court claim for the purpose of litigation proceedings. Hence, it will initially be examined by the Court of Appeal which is supposed to give its decision based upon procedural formalities which are set out in the Arbitration Law.
Note that the Court of Appeal is usually a court of subject matter. Hence it has the jurisdiction to examine all facts and substantive issues. However, this should not be applicable in cases of enforcement of arbitral awards, because the courts are supposed to examine only procedural formalities. Having stated this, we have seen in the past that courts in Yemen have involved themselves in re-examining enforcement cases including all facts and evidence. This is not the norm and may not be relied upon as a general rule.
Once again, the parties are given the chance to appeal the Court of Appeal’s decision by submitting an application before the High Court. Such application must be submitted within a period of thirty days from the date of the appellant receiving the original version of the decision of the Court of Appeal.
Unlike the Court of Appeal, the High Court is only concerned with examining the competence of the previous court in its application of legal principles. The High Court does not have jurisdiction to examine substantive matters or facts of the case. If the High Court determines any violation relating to application of the law, it would return the case to the Court of Appeal for re-examination with guidance provided by the High Court. On the other hand, if the High Court found no violation in the decision of the Court of Appeal, it would uphold the latter’s decision. Such decision would then be final and absolute, and may not be challenged any further.
Note: According to Article (54) of the Arbitration Law, the Court may annul the award of its own accord, even without the request of any party, if the award was issued in a matter not permitted for arbitration or if the award contained issues against public order or Sharia principles.
For a local Execution Court to enforce a foreign arbitration award, the following additional criteria must be satisfied:
- Proper representation of the parties in the arbitration proceedings;
- Yemeni courts should not have exclusive jurisdiction to examine the dispute in question: For example, Article (20) of the Commercial Agencies Law No (23) of 1997, as amended, provides that Yemen courts shall have exclusive jurisdiction to adjudicate any disputes arising from agency related disputes. Therefore, any arbitration awards relating to agency claims would not be enforced in Yemen, even if the parties have agreed to arbitrate the dispute;
- The award should be final and enforceable in its country of issuance; and
- Judicial reciprocity between Yemen and the country in which the award was issued, which should be catered for by virtue of signed conventions.
Having set out the preceding additional conditions to be satisfied for the execution of a foreign award, Article (497) of the Arbitration Law provides that the provisions of international treaties/conventions ratified by Yemen shall prevail over domestic execution provisions in local legislation.
This theoretically implies that if one elects to execute a foreign award based on a Yemeni ratified convention which does not impose the above additional local execution conditions, then the local courts should not apply such conditions. However, in practice, we are aware of a case in which a local court rejected such argument and applied the abovementioned additional local execution conditions, resulting in dismissing the execution of the foreign award.
Following ratification, the procedures to be undertaken by the Execution Judge are as follows:
- The Execution Judge of the Court of First Instance shall notify the adjudged party to pay the ordered amount within seven days;
- Failing payment, the Execution Judge shall instruct the local police to arrest and surrender the ordered party to the Execution Judge within fifteen days; and
- Failing that, the Execution Judge shall order compulsory execution, which includes attachment and sale of assets, etc.
2. Does a foreign award have to be translated to the country’s official language for the purpose of seeking its enforcement?
Yes, a foreign award has to be translated to the country’s official language for the purpose of seeking its enforcement.
3. When, why, and how can the enforcement of a foreign arbitral award be resisted or refused?
The enforcement of a foreign arbitral award could be resisted by filing an annulment request before the Court of Appeal in response to the claim of ratification or before the Execution Court, raising any of the following petitions:
- If the award was made without agreement to arbitrate or if the agreement to arbitrate was null or void or expired;
- If one of the parties lacked capacity;
- If there was an irregularity in the proceedings;
- If the arbitral tribunal exceeded its mission;
- If the arbitral tribunal was constituted in a manner contrary to the agreement to arbitrate;
- If the award was not reasoned;
- If the award was not enforceable in its country of issue;
- If the award is in violation of Islamic Shari’a or public order;
- If the award was issued in absentia;
- If there is no reciprocity with the country in which the award was issued; and
- If Yemeni courts have exclusive jurisdiction over the dispute in question.
4. Which treaties or conventions entered into by Yemen are most used by foreign parties applying to enforce a foreign arbitral award? Which are least used?
Yemen ratified the 1965 Washington Convention on the Settlement of Disputes between States and Nationals of Other States (ICSID) on 20th November 2004. It has also ratified the 1983 Riyadh Convention on Judicial Cooperation between States of the Arab League, on 11th June 1984, which includes arbitration. Both conventions seem to be equally used.
Yemen has also signed other bilateral judicial agreements which have not come into force, such as the agreement with Bahrain on 1st December 2002.
Yemen is not a signatory to the New York Convention. Enforcement is usually dealt with by choosing a seat which is a member to the Riyadh Convention or in a seat which has reciprocity with Yemen.
5. What are the most common reasons given by the courts for refusing to recognise foreign awards?
- If the award is in violation of Islamic Shari’a or public order;
- If the award was issued in absentia (despite aforementioned analysis);
- If there is no reciprocity with the country in which the award was issued;
- Non ratification of the New York Convention; and
- Non filing of the award before the local competent court within the stipulated thirty day period from the date of the award.
6. Are there any issues with regards to sovereign immunity that would prevent the execution of an award made against your State?
Most State related contracts we have come across that contain foreign arbitration provisions are of a commercial nature and entered between an international entity and an organ representing the State. Such organ would have a separate legal and financial personality from the State, and would be contracting in its commercial capacity.
We have personally experienced a number of awards which were voluntarily enforced against the Yemeni State/Ministries and State organs. In an arbitration in Canada few years ago, a State organ submitted a plea in respect of sovereign immunity, but the tribunal rejected such plea on the basis that the State organ had a separate legal and financial personality from the State and had contracted in its commercial capacity.