Investor Presentaiton
160
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
(d) The composition of the arbitral authority or the
arbitral procedure was not in accordance with the agreement
of the parties, or, failing such agreements, was not in
accordance with the law of the country where the arbitration
took place; or
(e) 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."
Section 2 of Article V provides that a court can also refuse
enforcement if:
"(a) The subject matter of the difference is not capable of
settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be
contrary to the public policy of that country."
It is generally accepted that national courts should exercise a
highly deferential standard of review when deciding whether or not
to enforce an arbitral award under the New York Convention. The
grounds for refusing enforcement found in Article V(1) deal
generally with procedural matters, and challenges to awards in
investor-State cases based on them have usually not been
successful."
192
The Article V(2) grounds encompass policy objections that
might exist in the enforcing State that would defeat enforcement of
an award. The first is the question of arbitrability whether the
subject matter of the arbitration was capable of being removed from
a national court for decision. In an ISDS case this should not be a
frequent problem given that the State itself would have consented to
arbitrate the dispute. The public policy defense in Article V(2)(b),
on the other hand, is often considered a significant threat to
192
Reinisch, 2010, p. 677.
UNCTAD Series on International Investment Agreements IIView entire presentation