On The Effect Of International Commercial Arbitral Award

It is commonly recognized that giving legal effects to arbitral award will not onlyconform to the expectation of the concerning parties, but also be beneficial to the execution ofthe court in mediation of disputes. And this is also a measure to maintain the authority of theinternational commercial arbitration. It is not difficult to reach such a consensus. Everycountry differs in the legislation and practice concerning the content of effects of arbitralaward on the basis of the consensus, and this difference will have an influence on thedevelopment of the international commercial arbitral award system. Therefore, constructingsystematically the theoretic basis for the arbitral award effects, defining logically thedifferent forms of the arbitral award effects and exploring the real situation of the arbitralaward effects is the premise for shaping the rational understanding and practice of the arbitralaward effects and planning the route of development of the international commercial arbitralaward. On the basis of such consideration, this essay makes an exploration on the relativeissues concerning the international commercial arbitral award effects.This essay is divided into five chapters. It starts from the basic theory of internationalcommercial arbitration legal effects by using such research methods as contrastive andhistorical analysis. It will make clear of the sources of the arbitral award effects, distinguishbetween the formal effects and the actual effects of arbitral award and explore the evolvementof Chinese commercial arbitration system. It will give suggestions on the foundation andlegislation of Chinese commercial arbitration system concerning foreign affairs on the basisof the executive experience of other countries on the effects system.Chapter1Theory on international commercial arbitral award effects. This chapterdefines the implication of international commercial arbitral award from the angles of“international”,“commercial”,“arbitration” and “effects of award”, and makes clear theframework and basic theories for analysis. It explores the source of international commercialarbitral award effects, which include parties’ autonomy and laws. The parties’ autonomy isthe necessity to trigger the arbitral process and the laws made by related country oninternational commercial arbitral award is the main resource of the effects.Chapter2The formal effects of international commercial arbitral award. The formaleffects of international commercial arbitral award are the effects produced in the arbitral award process, which include binding effect and formal determining effect. The binding effectis the effect which brings about by the award of the arbitration tribunal. When the award isdecided, the arbitration tribunal is functus officio. It cannot set aside or vary the award unlessthe concerning party applies to the arbitration tribunal for correcting the clerical mistakes inthe award. The exception of the binding effect is the decision made by the court to require thearbitration tribunal to remit the award to the tribunal for reconsideration. At this time, thearbitration tribunal will have the opportunity to set aside or vary the award. The two lawsystems share the same understanding of the binding effect while they have differentdescription on the binding effect. The formal determining effect is the premise for actualeffect. It is the effect produced by the award on the concerning party. The two law systemshave different interpretation for the formal determining effect. The award only has thedetermining effect when the concerning party cannot set aside or vary the award by appealingto the court in civil law while in common law system, the award will have the determiningeffect when the verdict is made. This difference is integrated in international commercialarbitral award system for the finality is the basic principle. As a result, the arbitral award willacquire the formal determining effect if the concerning party cannot object to the arbitralaward through internal appealing procedures of arbitration or judicial appealing procedures,and the concerning party should be bound by the award.Chapter3The actual effects of international commercial arbitral award: res judicata.The actual effect of International Commercial Arbitral Award is based on the content of theaward. Res judicata is the one of the important parts. Res judicata of the award is defined bothin domestic and international laws. In this case, the choice of laws will influence the resjudicata so far as the international commercial arbitration is concerned. The determinationof res judicata aims at safeguarding the interests of the concerning parties in the first place. Toprotect the benefit of the country and society comes to the second place.Res judicata has twoeffects: first, it has the binding effect on the content; second, it has ne bis in sadem on theforms. Res judicata of international commercial arbitral award is more complicated than theres judicata of civil judgement since we have to deal with the problems lis Pendens by the thearbitration tribunal and the court. It should be banned that the concerning parties ininternational commercial disputes have opened up two war fields considering the processeconomy and the benefits of the concerning parties. Countries such as Britain implement antisuit injuction, but this injuction have been limited when applied in the European Union. Therefore, the problem of lis Pendens will be a difficult issue in the lacking of internationallaws. Res judicata of international commercial arbitral award is different from the doctrine ofstare decisis. The main distinction is the scope. All the arbitral awards will have the effect ofres judicata, but they cannot become precedent, and, whether the nature and content of thearbitral award is suitable to become precedent is questionable. As a result, the researchersadvocate that international commercial arbitral award only have the persuasive effect.Res judicata is the concept in civil law system. There is only a similarconcept—preclusion like res judicata in Anglo-American law system, which includes claimpreclusion and issue preclusion. The focus of the res judicata of international commercialarbitral award is the scope. The scope of res judicata is divided into subject extent, objectextent and time boundary. The subject extent of res judicata is mainly about the effect andrelated parties of res judicata. The concerning parties of arbitration agreement and theconcerning parties of arbitral award are the same parties because of the contractive nature ofinternational commercial arbitration. The concerning parties of arbitration agreement arebound by the res judicata of arbitration award. Therefore, the subject extent of res judicata hasprivity. The object extent of res judicata focuses on the items of the award which has resjudicata. The standard in civil law system is the object of action, which the standard incommon law system is transaction or occurrence. The former focuses on the maintenance ofbenefits of the concerning parties, the latter emphasizes the instant solving of the dispute. Inthis case, the structure of the verdict is divided into the main content of judgment and thereason of judgment in the civil law system and only the verdict in the main content ofjudgment can have res judicata. The effect of issue preclusion is emphasized inAnglo-American law system. The issue preclusion in the former verdict has still effect on thelatter verdict even if the concerning parties are different. Nowadays, the common practice inthe world asks for the attached reasons of international commercial arbitration award, and thisshould be decides according to the real situation. The time boundary is mainly about the timethe res judicata has started and the binding effect of the verdict. The flexibility of internationalcommercial arbitration process makes it useful for increasing the efficiency of the process.Chapter4The actual effects of international commercial arbitral award：effect ofenforcing. The effect of enforcing includes effect by performing means and effect bycompulsory means. There is quite a difference between the civil law system andAnglo-American law system on the effect of enforcing of the verdict. In Anglo-American law system, the verdict is conclusive and has the effect of enforcing when it is made, while in thecivil law system, the verdict only has the effect of enforcing when the formal determiningeffect is fixed. As for the compulsory means, there are means which enforce the award byprocedure of common law besides summary enforcement. Under the pushing of New YorkConvention, the rate of enforcement of foreign countries is very high. Generally speaking, therecognition process of the enforcement should be included before the enforcement of theverdict. However, the recognition process of the enforcement is independent and is not theincidental process of the enforcement. The compulsory means is not an isolated phase for inevery country the court has the right to monitor the enforcement of the award, which includerevoking and refusing the award. These two ways of monitoring have different influences onthe effect of the arbitration award. The former completely denies the effect of the arbitrationaward, the latter only denies the effect of efforcing.Chapter5Theory and reconstruction of Chinese commercial arbitration award effectrelating to foreign affairs. The research on the theory of Chinese commercial arbitrationaward effect relating to foreign affairs is just beginning. There are few research result so far.Generally speaking, the research lacks both the scientific and systematic proving and theconstruction in combination with the actual situation of our country. The legislation is thesame as the research, which mainly manifests the scattering and immaturity of the content.What model should we construct regarding the theory of Chinese commercial arbitrationaward effect relating to foreign affairs? Is it be based on the transplantation of laws orconstruction according to the actual situation? Does it construct solely or combine withreform of other related system? The author compares the arbitration system in late DingDynasty and the court of pie poudre in Western world, and draws a conclusion for theconstruction. The arbitral law should be developed, and at the same time, we should payattention to the coordination between the arbitral law, Civil procedure law and Civil andCommercial Law and is aware the civil society that is the base for commercial arbitration.To put in more specific words, we could adopt the theory and framework of the civil lawsystem, divide the effect of arbitral award into formal effect and actual effect. For the formaleffect, we can refer to the legislation experience of other countries. The focus is on how todefine the formal determining effect. The author suggests that we should graduallystandardize the conditions of the formal determining effect and the reason of denying ofarbitral award according to the situation in civil litigation system reform. And furthermore, we should make clear the monitoring means of the court on the arbitral award and lay a solidfoundation for the construction of the res judicata and effect of enforcing of the arbitralaward.