Why is Article VI relevant?
‘If an application for the setting aside or suspension of the award has been made to a
competent authority referred to in article V(1)(e), the authority before which the award is
sought to be relied upon may, if it considers it proper, adjourn the decision on the
enforcement of the award and may also, on the application of the party claiming enforcement
of the award, order the other party to give suitable security.’
Article VI grants enforcement courts the discretionary power to adjourn its decision on
enforcement pending annulment proceedings where the award was made. Although it can
contribute to procedural efficiency, it can also allow a losing party to commence annulment
proceedings to delay or frustrate enforcement elsewhere. Thus, enforcement courts should see
whether its annulment request is ‘bona fide’ before making such decision to adjourn. Also,
they will consider various factors like the Convention’s goal to facilitate enforcing awards
and expediting dispute resolution, the party’s likelihood in prevailing in the setting aside
proceedings, expected duration of proceedings pending where the award was issued, potential
hardship to parties, judicial efficiency and international comity. For example, in Soleh1,
English Court of Appeal suggested it was entitled to enforce an award even though it was
subject to set aside proceedings in the country of origin. If the award was manifestly invalid,
then the enforcement application should be postponed. But if it was manifestly valid, then it
should be immediately enforced or the party seeking to oppose enforcement should pay
substantial security.
Article V(1)(e) – The Award Has Not Yet Become ‘Binding’
‘Recognition and enforcement of the award may be refused, at the request of the party against
whom it is invoked, only if that party furnishes to the competent authority where the
recognition and enforcement is sought, proof that: The award has not yet become binding on
the parties, or has been set aside or suspended by a competent authority of the country in
which, or under the law of which, that award was made.’
‘Binding’
There are two overarching approaches to defining ‘binding’.
The autonomous definition is that an award can be deemed ‘binding’ as soon as it is
no longer possible to lodge an appeal on the merits (if such appeal is even available).
However, Working Party agreed that unfair delays would be caused to the enforcement if
applicant must wait until all possible means of recourse are exhausted, including those
normally not having suspensive effect2.
The territorial definition is that an award can be deemed ‘binding’ when it becomes
binding under the law of the seat.
But ultimately, courts will give precedence to the parties’ agreement, in which any
institutional rules they have contracted to enter into providing that awards becoming binding
when issued will be sufficient. In Australia3, Supreme Court of Queensland held that an
1
Soleh Boneh International Ltd v. Government of the Republic of Uganda and National Housing Corporation,
[1993] 2 Lloyd's Rep 208.
2
Convention on the Recognition and Enforcement of Foreign Awards, Travaux Preparatoires – Summary
Record of the Seventeenth Meeting, at 3, U.N. Doc. E/Conf.26/SR.17 (Sep. 12, 1958)
(Comment of Mr. De Sydow (Sweden)).
3
Resort Condominiums International Inc. v. Ray Bolwell and Resort Condominiums, Pty. Ltd., Supreme Court
of Queensland, Australia, 29 October 1993, XX Y.B. Com. Arb. 628 (1995).
