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Copyright © International Chamber of Commerce (ICC). All rights reserved.
( Source of the document: ICC Digital Library )
Associate, Bureau Pierre Tercier
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 Article IV(1)(a) of the New York Convention.
The case on appeal before the Supreme Court of Cyprus (Intersputnik International Organization of Space Communications v. Alrena Investments Limited, Civil Appeal No. 298/2013) concerned a first instance court’s decision refusing the recognition and enforcement of an arbitral award rendered by the International Commercial Arbitration Court of the Chamber of Commerce of the Russian Federation and Industry (hereinafter ‘ICAC Court’). The reasoning behind the first instance court’s refusal was the non-compliance with Article IV(1)(a) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (hereinafter the ‘New York Convention’) (as ratified by Cypriot Law No. 84/79). Specifically, the first instance court found that the condition of a duly authenticated original of the award had not been met. As the application before it was accompanied by the underlying award bearing the signatures of the tribunal members and a seal of the ICAC Court thereto but not accompanied by a certification of the veracity of either, the first instance court dismissed the application.
On appeal, the appellants argued that the first instance court erred in its decision, noting that what had been enclosed with their application, including the mentioning in the award that three original versions thereof had been duly signed – one of which was that submitted before the first instance court – was sufficient.
In examining the decision of the court of first instance, the Supreme Court first sets out the text of Article IV(1) of the New York Convention, which reads in relevant part:
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, while international conventions concerning the recognition and enforcement of foreign arbitral awards are to be strictly interpreted, their philosophy is the accessibility to a speedy dispute resolution mechanism, and the specific autonomous procedure provided in both the New York Convention and Cypriot law on international arbitration should be followed.
The question, therefore, before the Supreme Court, was whether the document accompanying the appellants’ application could be considered as a ‘duly authenticated original award’.
To determine the answer, the Supreme Court referred to a treatise of Albert Jan van den Berg1 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, among others, to the decision of the English Court of Appeal in Antony Lombard-Knight ν Rainstorm Pictures Inc ( EWCA Civ 356). In the said case, the Court of Appeal relied on Prof. van den Berg’s aforementioned treatise and held that a foreign arbitral award is authentic when the document includes the arbitrators’ original signatures, considering that the purpose of the New York Convention is the facilitation of the procedure of enforcement of arbitral awards without unnecessary obstacles thereto. The courts are, therefore, rather liberal in the acceptance of the original decisions containing the original signatures of the arbitrators without any further ratification or certification.
It thus followed that the requirement of a ‘duly authenticated original award’ was prima facie satisfied. The application included the original award bearing the signatures of the three tribunal members, the seal of the ICAC Court as well as its certificate that the decision was one of the three authentic texts rendered by the arbitral tribunal. The Supreme Court also acknowledged that the award indicated that it was final and subject to mandatory enforcement. For the Supreme Court, any further certification of the original signatures or seal would unnecessarily transfer the condition that applies to copies to the originals.
In support of its analysis, the Supreme Court also referred to the treatise of Reinmar Wolff2, which also distinguishes the application between authentication and certification. It added that as Article IV(1) does not include the conditions for a valid authentication or certification, it was up to the recognising state to apply the relevant applicable law to such cases.
In light of the foregoing, and its further examination of precedent in relation to Article IV(1), the Supreme Court held that the approach of the first instance court was incorrect and vacated its decision.
The Supreme Court of Cyprus rectified a questionable application of Article IV(1) by the first instance court, not by being more lenient, but by interpreting and applying the said provision in a manner that gives effect to the ordinary meaning of the terms and the purpose of the New York Convention itself. Undeniably, although not mentioned in the decision itself, this is the requirement of Article 31(1) of the Vienna Convention on the Law of Treaties, which provides that ‘[a] treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose’.
As the Supreme Court aptly determined, the terms authentication and certification are different. Authentication comprises a formality by which the signatures of the award are confirmed as genuine by a competent authority – in this case Cypriot courts. Certification, on the other hand, requires an attestation by a third party that the copy of the award is identical to the original.
Mixing both terms would render their use in the text of the New York Convention meaningless. For the Supreme Court, there was nothing to dispute the genuineness of the signatures of the award. Its approach, therefore, is in line with the uniform application of Article IV(1)(a) by other Contracting States to the Convention. Indeed, aside from the decisions relied upon by the Supreme Court, others have stated that ‘it would be a hollow formality to require the claimant to prove the – undisputed – existence and authenticity of the arbitral award’ (See e.g. German Supreme Court (Bundesgerichtshof), Investor v. Republic of Poland, 17 August 2000, Yearbook Commercial Arbitration, 2001, pp. 771-772).
Further, the Supreme Court’s understanding of the difference between the terms is also in line with the purpose and object of the New York Convention, which is to facilitate enforcement through a minimum of conditions to be fulfilled by the party seeking enforcement of an award falling under the New York Convention. In the words of one national court: ‘Article IV must be interpreted in accordance with the spirit of the Convention … The Contracting States wished to reduce the obligations for the party seeking recognition and enforcement of a foreign arbitral award as much as possible’ (e.g. Swiss Cour de Justice, 15 April 1999, Yearbook Commercial Arbitration, 2001, pp. 863-866). Requiring an additional procedural step to an original document, whose authenticity is not disputed contrary to what may be the case when faced with copies, would defeat such purpose and object. Such purpose was effectively acknowledged by the Supreme Court in its interpretation and application of the New York Convention as it abstained from imposing additional obligations on the party seeking the recognition and enforcement of the arbitral award.
Albert Jan van den Berg, ‘The New York Convention of 1958: An Overview’, in Emmanuel Gaillard & Domenico Di Pietro, eds., Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice (London: Cameron May, 2008).
Reinmar Wolff (ed.), The New York Convention. A Commentary. Beck/ Hart, 2012.