Our Courts Judicial Review Of Arbitral Awards

Arbitration is favored by the commercial community for its advantages of volunteer, finality, fastness, and low cost. The modern court has changed its hostile attitude towards arbitration into supportive and considers the arbitration as an alternative dispute resolution. The Courts in France, German, and U.S. restrict themselves to review arbitral award, with the scope of arbitral procedures and the arbitrators’misconduct, but not on the substantive issues of the award. Since 1995 when Chinese Arbitration Law became effective, with more than ten years of development, there are two major controversial problems about the Court’s review on arbitral award:one is the "dual sets" of procedures of vacatur and refusal of enforcement; the other is the "double standard" to make difference between residential award and foreign-related award. ChapterⅠof this thesis introduces judicial review on domestic and foreign-related arbitral awards under Chinese arbitration laws. ChapterⅡemploys case study method to introduce "manifest disregard of law" under U.S. arbitration laws. This chapter expounds the source, development, value, challenge of this doctrine, and the scholars’ suggestions on it. The emphasis is the cases heard on U.S. Court of Appeals for the Second Circuit, the most influential court on this doctrine, and then the legal standard by the Second Circuit is concluded. Based upon the studies in ChapterⅠandⅡ, ChapterⅢcriticizes the system defects of judicial review on arbitral awards, and gives proposals to reform Chinese judicial review on arbitral award in the view of the doctrine of "manifest disregard of law" under U.S. laws. I suggest that the "double standard" to differentiate residential and foreign-related awards should be eliminated, and the refusal of enforcement should be incorporated into vacatur. So we would face the problem on how to limit the judicial review on substantive issues determined in arbitral awards in the way of reforming judicial review on the arbitral awards, specifically, "definite errors on application of law" as stipulated in Chinese Civil Procedure Law Article 213 (5), a ground for refusal of enforcement of an arbitral award. I try to restate the legislative intent on Chinese Civil Procedure Law Article 213 (5) through methods of literal interpretation, systematic interpretation, purpose interpretation, and etc. I believe when the arbitrator definitely errs in application of law, the Court neither goes extreme to refuse to review in sacrifice of the justice for the parties, nor to review comprehensively in sacrifice of the cost-effectiveness of the parties. When it reviews the legal issues on an arbitral award, the Court may consider adopting the legal standard of "manifest disregard of law" developed by the United States Second Circuit:(1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case.