3rd DIS Baltic Arbitration DaysDr. Marc D. Veit

Enforcement of Arbitral Awards and International Sanctions

Riga, 26 June 2014

International trade sanctions

Enforcement of Arbitral Awards and International Sanctions

Increasing number of countries affected Sanctions are becoming more restrictive and extensive

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Example: Trade sanctions against Iran

Oil/gas Shipping equipment/st

eel

Financial transactions

Blacklist

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Enforcement of Arbitral Awards and International Sanctions

Trade sanctions impact international arbitration at different stages

En-forcement

Illegality/Impossibility

Arbitrability

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Enforcement of Arbitral Awards and International Trade Sanctions

Inst

itutio

n?

Arbitrability

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Sanctions impact international arbitration at different stages

Illegality Impossibility

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Trade sanctions impact international arbitration at different stages

Enforcement stage

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Sanctions impact international arbitration at different stages

Switzerland: X Ltd. Vs. Z (21 January 2014)

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Enforcement of Arbitral Awards and International Sanctions

Sale and Purchase Contract (1977) for delivery of crude oil to Israel

X. Ltd (Switzerland) Z (Iran)

USA: Ministry of Defense and Support for the Armed Force of the Islamic Republic of Iran vs. Cubic Defense Systems (9th Cir. 2011)

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Enforcement of Arbitral Awards and International Sanctions

Cubic Defense Systems (USA)

Ministry of War (Iran)

Contract on sale and service of air combat maneuvering range (1977)

Sanctions as obstacles to enforcement Complete prohibition of coal-export: COSID v. Steel

Authority of India, AIR 1986 Del. 8 (22) (Delhi High Court, India)

Public policy exception?

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Enforcement of Arbitral Awards and International Sanctions

Institutions?

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Sanctions impact international arbitration at different stages

Lessons learnt Disputes involving international sanctions are

arbitrable International trade sanctions generally do not belong

to transnational public policy Awards will be enforced in many jurisdictions, despite

international trade sanctions Even if award is enforced, actual payment may require

approval Difficult situation for institutions

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Enforcement of Arbitral Awards and International Sanctions