Sample Law Dissertation Discussion Paper on Enforcement of International Commercial Arbitration Awards in Jordan: A Comparative Legal Study with the UK

Enforcement of International Commercial Arbitration Awards in Jordan: A Comparative Legal Study with the UK

CHAPTER 2: PROBLEMS OF ENFORCEMENT ARBITRATION IN THE COMPARATIVE JURISDICTIONS

Introduction

Several problems of implementation of arbitration have arisen in the Arabic nation and United Kingdom. This chapter investigates and discusses the nature of such enforcement problems with respect to arbitration in Arabic Nations and New York Convention. Arbitration is defined as a technique used to settle disputes outside the legal system, and the disputing parties agree to accept the decision made in the arbitration, otherwise referred to as the award. Problems of enforcement arbitrationoften arise due to the different legal principles being applied by different countries[1]. For instance, the number of legal cases regarding commercial disputes in Jordan[2] over the past few years has increased disproportionately to the rise in the provision of legal services, and this has resulted into a delay in settling commercial disputes due to some problems of enforcement arbitral awards[3]. The same applies to the situation in United Kingdom.

Problems of Enforcement Arbitration in Arabic Nations

Arbitration is a technique used to settle disputes outside the legal system, and the disputing parties agree to accept the decision made in the arbitration, otherwise referred to as the ‘award’. The use of arbitration techniques has been on the rise in Arabic nations due to the increasing number of commercial cases, which cannot be speedily handled in the courtrooms. In Arabic nations, the available courts are overwhelmed by the increasing number of commercial cases, which necessitates the use of arbitration provisions[4]. Through this technique, both parties to the dispute pick an arbitrator (a third party person) to decide over the case. They make a binding decision to agree with the outcome of the arbitrator.

Although the use of arbitration technique is rapidly increasing in Arabic nations such as Jordan and Saudi Arabia, these countries face a number of problems of implementation. The first problems relates to sharia laws and Islamic faith[5] in general. Even though there is no conflict between sharia laws and the concept of arbitration, the Arabic nations have found it pretty hard to unify the two in order to facilitate enforcement of arbitration. Even though arbitration concept has been used successfully to resolve many disputesbetweenforeign investors and governments in the Arabic nations, governments hold negative attitudes towards arbitration due to their strict view of sharia laws. In general, Arabic governments hold the view that arbitration gives leeway for overriding sharia laws in their countries[6].

In the Arabic nations, most governments always insist on exclusive application of sharia laws in the arbitration. This problem started with the Aramco case during late 1950s when Saudi Arabia government openly protested the tribunal’s view of not applying the sharia laws. Since, most governments in Arabic nations still hold negative attitude about arbitration thus creating problems in its enforcement. As a result, most governments in the region want to apply more strict regulations when applying arbitration so that it conforms to the sharia laws. The problem with using sharia law in arbitration is that it comes from old Islamic religious practices thus does not provide detailed regulations and rules for future development[7].

Sharia laws demands the use of Quran yet it does not provide anything for setting complex concession contract. This creates problems when it becomes to enforcement of the arbitration laws. BecauseQuran does not provide anything for setting complex concession contracts; the relevant authorities set rules and regulations for arbitration[8]. The problem is that they set rules and regulations in a manner that the arbitration does not conflict with the principles of Quran and established sharia laws. This has created a huge problem in the implementation of arbitration because authorities in Arabic nations insist on maintaining the perspective of sharia laws and Quran even if it involves foreign investors who are not bound by Islamic faith. In essence, the involvement of sharia laws goes beyond the principles of arbitration because it tends to favor only Muslims even if non-Muslims are involved in the dispute.

Finality of the court award is another huge problem facing the implementation of arbitration in Arabic countries[9]. This problem majorly arises due to differences in the use of sharia laws and Islamic principles in the arbitration process. Most arbitration codes in the Arabic nations allow parties to challenge the court decision or any other award such as interim measures though an appeal process. These provisions do not follow the principlesof many modern rules and procedures for arbitration. The problem is that such arbitration code allows the local judicial system to preside over the appeal, which may be a great source of favouritism[10]. In addition, both parties to the case do not favor such local judicial processes. In most cases, it favors only one party, which is usually the native.

Implementation of arbitration in Arabic nations is problematic because of the appeal provisions[11], which contradict UNCITRAL and ICC rules. According to the rules set by both the United Nations Commission on International Trade Law (UNCITRAL) and International Chamber of Commerce (ICC), arbitration decisions are not appealable. Although some Arabic countries have amended the appeal provision to conform to the guidelines provided by both UNCITRAL and ICC, appeal is still a major problem in these countries. In essence, Arabic countries have not changed their arbitration codes to conform to the provisions given by UNCITRAL and ICC. This actually jeopardizes the whole purpose and process of arbitration in the Arabic nations.Iraq, Libya, and Yemen are amongst the leading Arabic countries that have refused to ratify the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards[12].

Another problem relates to the overall lack of political good will in Arabic nations. This is because a country’s political good will is important in recognition as well as implementation of arbitration awards. In addition, political good will serves the essential purpose of developing arbitration and in extension the judicial system and legislation in any country. It should be acknowledged that the Islamic faith does not recognize arbitration process. In addition, arbitration is not rooted in the Arabic culture due to the fundamental principles of Islamic religion, which makes Arabic nations less responsive to arbitration[13].Lack of supportive political good will prevents the development, investments, and enforcement of arbitration in Arabic countries. Recently, Qatar unexpectedly annulled a foreign arbitration wards citing that the delivery of the award was not made in the name of His Highness Emir of Qatar, which is a strong indication of the missing political good will in the country.

Identifying where problems with implementation of arbitration in Arabic nations started is essential in fixing it[14]. Most scholars have strongly started that arbitration has always been used in Arabic nations such as United Arab Emirates and Jordan among others. For several years, the Arabic nations practiced arbitration in pre-Islamic time. However, the onset of Islamic region brought some new changes to the way arbitration was practiced in the region. As Islam spread in the region, most countries recognized sharia laws as the only infallible rule of the land to be followed. This directly affected the way arbitration was practiced both nationally and internationally. As time goes, the Arabic nations started practicing arbitrations that were recognized by the sharia laws. At the moment, implementation of international arbitration in Arabic nations is proving problematic due to the influence of Islamic sharia laws.

Despite this heritage, the Arabic nations has played great role in the field of arbitration[15]. In the Arabic nations, there are bountiful of talents, and resources, which have enhanced the advancement of arbitration. However, the growth of arbitration in Arabic nations has not taken the same formula and format as the rest of other countries such as the west. Arbitration is practiced in the Middle East; the only challenge is that it is largely determined by the established sharia laws. In the Middle East, most agreements are designed to provide for variety of forms of arbitration dependent on sharia laws and Islamic principles. For many years, most Arabic nations such as Egypt and Lebanon have taken a lead in creating arbitration institutions within their regional borders.

With the exception of Yemen, Sudan, and Libya, most Arabic nations have accepted the implementation of New York Convention within their regional borders[16]. Despite these significant progresses, most Arabic nations still conjure up different odd judgements especially when foreign arbitration is involved. In most cases, such countries refuse the implementation of foreign arbitration using a number of odd and incredulous judgements. They give reasons that appear to be in complete violation of the New York Convention thus preventing its successful enforcement. There are three major reasons why the implementation of foreign arbitration in Arabic nation is very problematic. These include lack of political good will, inexperienced judicial system and lack of understanding of the local laws[17].

Lack of effective legislative platform that can successfully enforce foreign arbitration is a major problem in the Middle East. For instance, in the Middle East, most legislative platforms do not allow for the implementation of foreign arbitration. This becomes very problematic especial when the case involves foreign non-Islamic courts because they are not based on the principles and teachings of sharia laws[18]. In addition, most legislative systems in the Middle East do not support foreign arbitration within their borders. Furthermore, most legislative platforms in the Middle East do not support the implementation of foreign arbitral awards within their borders. This problem has been created by the long-time Islamic heritage in the Middle East.

Inexperienced judicial system is another great problem for the implementation of foreign arbitration in the Arabic nations. For instance, mots judicial systems in the Middle East do not have experience dealing with the foreign arbitral awards. In addition, most judicial systems are localized and do not have the international experience thus making enforcement of international arbitration very problematic[19]. Such judicial systems do not follow any international standards in delivery of their services and awards. As a result, international arbitrations are handled in similar manner to local cases. To make it worse, most judicial systems in the Middle East lack understanding of the international arbitration due the Islamic heritage in the region[20]. The people generally have negative bias about international arbitration.

Another factor that has contributed significantly to the problem of implementation of arbitration in the Arabic nations is the arbitrators’ general lack of understanding of the local court system and culture in the region. Generally, international arbitrators in the Middle East do not understand the local judicial systems and legislative platforms, which have significantly contributed to the inefficiency in enforcement of foreign arbitration in the region[21]. To enhance the arbitration process, the arbitrators must understand the local judicial system and legislative platforms. In essence, the judicial system and legislative platform in the middle is quite different from the west and have great influence in the enforcement of arbitral awards.

Culture is another cause of the problem in the implementation of foreign arbitration in the Arabic nations. The major problem is the failure of foreign arbitrators to understand the Arabic culture and use it to influence the implementation of arbitral awards[22]. In essence, delivering of international arbitral awards should consider the culture of people in the Arabic nations. Failure to recognize the Arabic culture actually increases their districts on international arbitration. In essence, they do not see a sense of belonging to the international courts that is delivering the foreign arbitral awards thus problems emerges concerning implementation[23]. The Arabic nations value and highly regard their culture and traditional judicial practices.

Another serious problem is caused by lack of adequate support from international arbitrators. Most Arabic nations do not receive adequate support from international arbitrators thus leading to serious problems concerning its enforcement. It is a fact that in Arabic nations the legislators as well as judicial authorities do not adequately support international arbitration[24]. This has subsequently led to serious weaknesses in the judicial and legislative systems in supporting international arbitration. In essence, most judicial and legislative systems in the Arabic nations have not created strong structures that support the recognition and implementation of international arbitration within their jurisdiction. In addition, there are no adequate trainings about enforcement of international arbitration in the Arabic nations. Most enforcers are not adequately trained on the process, which has significantly contributed to the limited progress of foreign arbitration in the Middle East region. Lack of training and awareness has increased the number of challenges that foreign arbitral awards faces in terms of recognition and enforcement.

Nonetheless, some of the blames for the failures fall on the shoulders of leading international arbitrators and organizations. Most international organizations facilitating foreign arbitral awards have failed to make significant contributions in the Arabic nations to the progress of international arbitration[25]. Such organizations have responsibilities of contributing to and guiding the progress of international arbitration in this region because majority of the local organizations have negative bias. Their contribution is essential and twofold in the Arabic nations. First, they contribute to the progress of the arbitration and secondly they enhance understanding of the local on the implementation of international arbitration in the Middle East region. It is argued that left alone, they Arabic nations have not political will to enhance the implementation of foreign arbitration in the region[26]. In essence, they need the support of international community and organization in enhancing the progress of arbitration in the region.

The first thing, which is most important, is that fact that for many years contact and engagement of international arbitrators in the Arabic nations has been self-centred[27]. With only few exceptions, the contacts and engagements of international arbitrators in this region have been initiated for the purpose of business development and marketing. This is done primarily to secure nominations and generate work for the local and international businesses in the Middle East region. This practice does not coincide with the responsibility of international arbitrators; in fact, it does not recognize the needs and responsibilities of the Middle East region, which go beyond the self-centred business needs.

There is a general reluctance of the foreign arbitrators to move away from the self-centred business approach in handling arbitration in the region[28]. For instance, rarely do the international arbitrators engage in public relations campaigns or lobbying in the Middle East regions to enhance progress in the recognition and implementation of foreign arbitration in the region. In addition, they have not openly volunteered to work on any review of foreign arbitration acts or provisions in the Arabic nations. Very rarely do the leading international arbitration firms engage in training arbitrators and lawyers in the Middle East region[29]. If it happens, such engagements usually do not follow the established arbitration rules. In essence, they are usually done for the benefit of business practice rather that for the progress of arbitration in the Middle East region. For example, international arbitration firms in the Arabic nations hire only a handful of local lawyers and arbitrators[30].

It has been suggested that international arbitrators have the potential of properly diagnosing the problem of enforcement of foreign arbitration in the Arabic nations. Even though this slightly varies from one country to another, the international arbitrators in the Middle East are more reluctant in contributing to provision of the required solutions. There are many problems with the engagement and participation of international arbitrators in the Middle East region. For instance, the international arbitrators have not put forward constructive investment of time in progressing arbitration in the region. In addition, there is no constructive investment of travel and money towards the enhancement of foreign arbitration[31]. On the other hand, international law firms in the Arabic nations allow issues relating to implementation of arbitration to drag.

Furthermore, the international arbitrators are not sensitive enough to the enforcement issues in the Arabic nations. Besides sensitivity, they are culturally well informed about specific issues causing problems in the recognition and implementation of international arbitrations in the Middle East[32]. Even though these issues may seem trivial, they significantly contribute to the failure of successful recognition and enforcement of foreign arbitration in the Arabic nations. Another problem is that international arbitrators tend to focus on European styles and standards when arbitrating cases in the Arabic nations. This practice has created uproar amongst the Arabic nations who see is a way of despising their culture and local legal and judicial systems[33]. To enhance enforcement, international arbitrators should change tactics and start focusing on the Middle East styles and standards.

In the Arabic nations, most local requirements for foreign arbitration are generally simple and trivial thus significantly contributing to the problematic enforcement. Most of the requirement simple deal with the recommended procedures that should be practiced during the hearing and issuing of arbitral awards. On the control, the local requirements have not expanded to include other measures such as enforcement of the issued awards. These requirements include checking for power of the attorney, agreement of time extension, right of parties to represent themselves, and having witnesses among others. Working without acquainting themselves with major issues is a big flaw undertaken by the international arbitrators.

Despite the many challenges, the Arabic nations are slowly accepting the international arbitration principles in their countries. Most recently, in 2012, Saudi Arabia passed new arbitration laws, which would facilitate enforcement[34]. However, the world is still waiting to see whether the judicial system in Saudi Arabia will use the new judicial provisions to enforce international arbitral awards that involve aspects of sharia laws[35]. Recently, United Arab Emiratesalso made some new progress towards enforcing foreign arbitral awards in their countries. In 2013, the country’s court of cassation created provisions for enforcing local arbitration awards which is a great step towards the international arbitration of awards[36].

Problems of Enforcement the New York Convention

The New York convention, also known as New York Arbitration Convention or The New York Arbitration Convention on the Recognition and Enforcement of Foreign Arbitral Awards was passed on 10 June 1958 during a global convention in New York City, United States of America[37]. It was and still is an important policy documents that provide guidelines for international arbitration awards. Its application recognizes and enforces the use offoreignarbitral in local judicial systems. The New York Convention is a landmark instrument that has many virtues for international arbitration awards. It was developed to enhance implementation of arbitral awards as well as nourish respect for binding commitments globally[38]. The New York Convention arbitration instrument was developed to inspire confidence in the rule of law as assure fair treatment in commercial disputes of internal origin.

After more than 50 years of existence, the enforcement of New York Convention still faces a number of challenges. Even though it is the most successful international treaty for commercial law, which has been adhered to by more than 117 states, it still faces a number of challenges related to enforcement[39]. Demographically, its successful enforcement has been limited to Latin America and European countries. However, major enforcementchallenges lie with the Arabic countries due to the differences in application of laws and basic principle behind each legal tenet. The primary problem of enforcing the New York Convention is by itself limited to arbitration concerning resolving commercial disputes. For instance, it only applies to countries that have made the necessary declaration, of which less than fifty countries have done so.

Non-ratification of the New York Convention especially by the Arabic states is a major problem to its successful enforcement. Many countries in the Middle East have barely refused to ratify the application of New York Convention in facilitating international arbitration awards. Iraq, United Arab Emirates, and Yemen are some of the leading Arab countries that have refused to ratify the New York Convention[40]. Within the past 50 years, the west has been persuading Arabic countries with vain to ratify the use of New York Convention in facilitating international arbitration awards. This state of affair coupled with inadequacy in local arbitration continues even to date in the Middle East.Another problemconcerns the currentasphyxia and breakdown of court systems in the Middle East, Jordan, and Iraq being one of the affected countries[41].

Another problem with the enforcement of New York Convention concern sits provision for states to choose alternativecontract terms depending on their legal systems[42]. In particular, the New York Convention has a provision that allows states to choose independently the basis for reciprocity as well as commercial relationship. This provision gives states leeway to evade the terms of international arbitration when New York Convention is being applied. Mostly, Arabic states have over utilized this provision to hinder the implementation of foreign arbitral awards. They insist on the use of their local legal system especially sharia laws.

The use of reciprocity and commercial reservation is inconsistent with the trend towards international arbitration awards and certainly hinder its enforcement[43]. Even through the number of Arabic states that have adopted New York Convention is large and is still growing they do not facilitates its enforcement through the use of reciprocity and commercial reservations. The inherent problem with this provision is that it allows each state to determine independently the type of relationship it considers commercial for the purpose of arbitration awards[44]. In practice, this provision creates numerous problems with respect to implementation of foreign arbitration. For instance, it has made it difficult to have a uniform interpretation of foreign arbitration awards[45]. Subsequently, most parties commence legal proceeding even without ensuring the existence of arbitration agreements.

Another problem with the enforcement of the New York Convention lies with the recognition of arbitration awards to which the convention applies. The New York Convention provisions allow both recognition as well as implementation of award as stated below;

“Each contracting state shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory the award is relied upon, under the condition laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this convention applies than one imposed on the recognition or enforcement of domestic arbitration awards”

However, even though the New York Convention binds the contracting state, the big problem is that countries may independently choose to rely on such awards simply as a way of self-defense. Alternatively, the contracting country may choose to use arbitration awards to set off any legal proceeding concerning her commercial relationships with another country[46]. So far, the provisions under New York Convention do not require the enforcement to impose hard and difficult conditions beyond what is provided by the legal systems of the country. This provision creates another challenge in the implementation of arbitration awards because it limits the extent[47] to which the convention can be applied. In addition, it makes the implementation of the convention dependent on the country’s judicial system. It also gives country the authority to choose how the international arbitration would be applied.

Basically, there are three major areas of government concerns that have played greater roles in the failure of enforcement of New York Convention in the Arabic nations. They include retroactive application of the convention, the perceived bias in western arbitration, and lastly inexperienced judges and arbitrators. The governments’ failures to ratify and enforce New York Convention are influenced by these three underlying factors.

To start with, most governments in the Arabic nations are concerned that New York Convention would retroactively affect the causes of actions that arose prior to its ratification. Retroactivity is one of the greatest fears of the Arabic governments especially in relations to actions before ratification of New York Convention. Their main fear is that if they ratify New York Convention, it would subsequently open floodgates that would allow other claims that arose before the date of accession to be signed under arbitration agreements. As a result, this would permit the use of non-retroactivity reservation even though its permissibility has not been settled. It is a major challenge preventing implementation of the convention; however, it has not prevented other states in the Middle East from applying the New York Convention. Perhaps, most complying Arabic states are using international arbitration under the Vienna convention to avoid the retroactivity condition.

Lack of experienced arbitrators and judges is another underlying factor causing problems in the implementation of New York Convention in the Middle East. In essence, most judges and arbitrators in the Middle East have limited experienced dealing with international arbitral majorly because it is rarely practiced in the region. In addition to this, the region lack specialized practicing judges and practitioners for foreign arbitration[48]. The major problem of implementation of New York Convention is that judges and practitioners in the Arabic nations required to assess validity of the award lack the international experience and exposure. As a result, they cannot assess whether the award is valid award from the viewpoint and perspective given of the given foreign judicial system. In addition, most judges and lawyers in the Arabic nations are unable to assess and interpret specific arbitral cases from the international perspective because they are faced with obscure religious laws[49]. On the other hand, they perceive the perception of international judicial systems to be fallible secular law thus have no direct authority to apply within their jurisdiction.

Their unfamiliarity with the foreign judicial and legislative systems subsequently creates a huge huddle concerning enforcement of the New York Convention within their jurisdiction[50]. Another closely linked problem is that the presence of few experienced judges and lawyers which apparently makes it difficult to ratify New York Convention in the Middle East. As a result, most countries in the region have not ratified the New York Convention thus cannot be applied in foreign arbitration cases. Furthermore, the New York Convention has not clearly distinguished between domestic and foreign arbitration thus creating problem concerning enforcement. More, the New York Convention is uncertain and contains some gaps, thus, judges and lawyers cannot rely on it fully[51].

Perceived bias in the western international arbitration is another huge problem limiting the enforcement in the Arabic nations. The concerns for perceived biases have a long history that goes back to some unfavourable pre-convention decisions rendered by western arbitrators in the Middle East region[52]. An often-cited case to evidence the bias in western arbitration is that of Trucial Coast Ltd v Sheikh of Abu Dhabi. In this case, English law was used to solve the dispute, which apparently violated an agreement by the parties to use the Islamic sharia law. This eventually caused controversy and biases against international arbitration thus failure to ratify New York Convention by most Arabic nations.

Even though biases against the western arbitration still exist, the overall regressive attitude in the Middle East towards foreign arbitration is gradually changing[53]. This slowly happens as the people gradually adapt to the needs of international commerce and trade in the region. There has been increased exchange of goods and services between the Arabic nations and western countries, which actually calls for foreign arbitration.

Lastly, the state of party involved in the dispute may refuse to enforce the New York Convention[54]. This is because the convention allows any of the partiesinvolved in the dispute to refuse the recognition or enforcement of arbitration. This is problematic because it allows the refusal to be done if the party is able to furnish some sufficient evidence. The major problem is that it does not provide guidelines for determining the level of sufficiency of the provided evidence. Some parties to a dispute choose to use this provision to refuse the enforcement is against the rules of international arbitration[55], which requires it to be binding at all times. Ina addition, it allows the implementation of foreign arbitration award to be revoked and appealed which is against the rules of United Nations Commission on International Trade Law.

Jordan and UK Arbitration – Possible Conflict Cases

The extent to which international arbitration awards are recognized and enforced in United Kingdom and Jordan vary significantly depending on many factors including political good will, cultural background, and structural and legal system of the country. In addition, emerging differences between United Kingdom and Jordan has created a source of conflicting cases some of which will be highlighted in this section. It is essential to note that the performance of how international arbitration awards is recognized and enforced depends on the effectiveness of the government in providing the necessary enforcing mechanisms. Both United Kingdom and Jordan governments provide different modes and mechanisms for enforcement of arbitration[56]. Besides enforcement, they also provide grounds for refusal of arbitration awards.Nonetheless, both United Kingdom and Jordan have failed to strike a balance between the interest of losing party and the interest of the wining party[57].

English and Jordanian courts work under similar yet difference policies in enforcing the outcomes of international arbitral awards. Both countries are apparently ready to recognize and enforce foreign arbitral awards because of deeper interest to protect the legitimate expectorations people involved in the dispute[58]. Another reason that facilitates the implementation of arbitral awards is the dire need to protect autonomy of both parties to the dispute. Both countries have recognized that parties to the dispute would suffer injustice if their reliance on the arbitral awards would be rejected. Refusal to cognize and enforce arbitration by both English and Jordanian courts would frustrate the legitimate expectation of parties to the dispute as well as undermines the principles of United Nations Commission on International Trade Law.

The legal instruments applicable in both United Kingdom and Jordanhave different historical backgrounds, which determine their recognition and implementation of foreign arbitral awards[59]. Depending on the country, these different historical backgrounds actually determinehow and why various legal instruments relating to arbitral wards are created. For example, unlike in Jordan, the development of legal instruments that enhance recognition and implementation of foreign arbitration started several years in United Kingdom[60]. The long history of legal instruments has beneficially advancement the recognition and implementation of foreign arbitration in United Kingdom unlike in Jordan. In each stage of development, English courts have created one or more legal instrument to facilitate recognition and enhancement of foreign arbitration. Sincethen, the country has enacted several arbitration acts the first being in 1968 which created Statute 9 & 10 Will 3, c 15.

With this perspective, the development of foreign arbitration in United Kingdom has been recognized as similar to Common Law process.Similarly, in Jordan, the use of arbitration to resolve dispute have existed since the establishment of the country as a kingdom[61]. However, developmentofarbitration laws started during the era of Emirate of East Jordan that lasted between 1923 and 1946. The first arbitration act was enacted in Jordan in 1933, better known as the Palestinian Arbitration Act 1933, which was later modified in 1946.Currently Jordan is attempting to liberalize her economy, which has called for vast privatization and reforms in both legal and economic systems to attract numerous foreign investors[62]. One aspect of these reforms is the implementation of foreign arbitration for instance the new Arbitration Act No 31 of 2001.35, which is considered a huge step forward in adopting arbitral awards in Jordan. In addition, the country has recently ascended to several regional, bilateral, as well as international conventions that recognize and enforce foreign arbitral awards[63].

Example of conflicting cases

The McLean Homes South East Ltd v Blackdale Ltd(unreported, November 2, 2001) is an example of anotherconflicting case in the UK and Jordan arbitration.Unlike in Jordan, the arbitration laws enacted in United Kingdom prohibit the aggrieved party from bringing an appeal or creating an application in English High Court not until the arbitration process has been completed and reviewed. However, if the party choose to do so, the court will not comply with the 28-day limit, which is set to start from the time award is prescribed. In this case, Blackdale Ltd appealed before the arbitration process was completed[64]. However, contrary to the UK arbitration laws, the judge used common sense based on reasoned judgement to ratify that that time should start from the date the applicant was notified of result. The result of this judgement conflicted the provision of UK arbitral laws[65].

Over years, there has been growing conflict over the status of an arbitrator as an employed person. There is no consensus on this issue in both United Kingdom and Jordan. Both countries have not provided antidiscrimination laws that protect the status of an arbitrator. This was depicted a recent controversial case in United Kingdom – Jivraj v Hashwani (November 5 2012). In this case, the aggrieved party made an appeal to the Court of Appeal, which is contrary to the provisions and rules of international arbitration[66]. On their part, the Court of Appeal handed down judgements against anti-suit injunctions not recognizing the status of an arbitrator as an employee. Event it was a significant decision, it contradicted the international arbitration laws in United Kingdom.

Another related case was that of Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others (May 31, 2012). Similarly, this case was about the recognition of an arbitrator as an employee[67]. Similarly, the UK Court of Appeal gave guidelines that recognized laws governing the work of an arbitrator. The UK Court of Appeal decided to give new conditions governing the arbitration agreement even though the Brazilian law governed the arbitration process. This case conflicted the international arbitration rules by involving the local Court of Appeal to presiding over a case that has already been decided[68].

The recent AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC (12 June 2013) presented another conflicting case in international arbitration. The Supreme Court presided over the case on 12 June 2013 and unanimously dismissed the previous verdict by the Court of Appeal[69]. In their judgement, the Supreme Court maintained that English courts do not have any jurisdiction to make final verdict maters that have being presided over through international arbitration. The court argued that such actions would interfere with foreign proceedings and breach international arbitration agreements.

The West Tankers Inc vs Allianz SpA and others (April 4, 2012) also provide an example of a conflicting case. In this case, the UK Court of Appeal confirmed that it has authority to enforce an arbitral award. Although parties to the dispute had agreed to arbitrate the case to England, the case was later brought to Italian courts through the insurers[70]. Conflict emerged when both Italian and English courts started presiding over the case. However, the English court issued an anti-suit injunction to the Italian court thus ending the conflict.

The Banyan Tree v Meydan is an example of a challenging case concerning the implementation of international arbitration in the Arabic nation. The Dubai International Financial Centre (DIFC) Court presided over the case on 16 September 2014. The case attracted considerable attention. According to decision, they had jurisdiction to recognize and enforce local arbitral awards issued by the DIFC Courts, which has been the centre of controversy in this case. Furthermore, the court held that it its power to recognize and enforce DIAC (Dubai International Arbitration Centre) arbitral awards even when parties to the dispute were not connected to the DIFC. The court also held that it could recognize and enforce DIAC awards even before ratification by the Dubai courts.

The Banyan Tree v Meydan is an important case that was a beneficiary of an award that was made by foreign arbitrator appointed under DIAC’s provision. The case basically sought the implementation of awards that are issued by the DIFC Courts. In this case, Meydan claimed that only the Dubai Courts and not the DIFC Courts has the jurisdiction to recognize and enforce the award because it was issued by the under DIAC’s provision[71]. The case brought a lot of controversies concerning the enforcement of overseas arbitral awards in the Arabic nation. The case was controversial and conflicting since there was not clear arbitration provision for dealing with such situation.

However, the arbitral judge rejected the Meydan’s claim that only DIFC Courts provided proper and exclusive forum for dealing with the case. Even though this decision was not actually surprising, many people had assumed that only the DIFC Courts has jurisdiction to recognize and enforce local arbitral awards in Dubai[72]. For many years, the recognition and implementation of local arbitral wards in Dubai was assumed to DIFC Courts even though there is no explicit expression that foreign arbitrators have no legal jurisdiction to recognize and enforce local arbitral.

The Banyan Tree v Meydan case raised the intriguing possibility of using foreign arbitrators to recognize and enforce local arbitral awards, something that has been sidelined for many years in the Middle East region. In most cases, a connection with the local DIFC courts has been required for recognition and enforcement of such local arbitral awards[73]. The prospect of using foreign arbitrators to enforce local arbitral awards has caused a stir in the Arabic nation especially with their legal community. The Banyan Tree v Meydan case provided new perspective to handling the local arbitral awards, which has been largely limited to the DIFC courts.

Conclusion and Recommendations

(a) Conclusion

Generally, judicial enforcements of international arbitration awards are very rare in most Arabic countries including Jordan. The enforcement of New York Convention and other international arbitration have met several challenges associated with the weakness of the legal system as well as culture of the country[74]. The fact that arbitral contracts are met through voluntary compliance also account for their limited popularity in the Arabic states. In most countries, parties choose to arbitrate disputes in order to maintain amicable relationships with business partners as well as to avoid courts[75].

The Arabicnations face several problems when it comes to arbitration awards. Major problems areassociated with the Islamic faith and the use of sharia laws, which are considered authoritative and binding authority in most Arabic nations[76]. The problem is that Quran does not provide room for development of complex conventions. In addition, most government in Arabic countries have negative attitude towards the recognition and enforcement of arbitration. Another problem relates to the overall lack of political good will in Arabic nations[77]. Despite theseproblems, some Arabic countries have started creating platforms for recognition and implementation of arbitration awards. The problems confronting the enforcement of New York Convention and international arbitration is not peculiar to Jordan but prevails in most other Arabic nations.

Arabic nations are generally lagging in the progress of recognition and implementation of international arbitration. If they have to take leading roles in the international arbitration, the Arabic nations must recognize and address the number of issues they have that prevent them from successfully recognizing and enforcing international arbitral awards. These issues prevent the Arabic nations from emerging as the leading jurisdiction for international arbitration. By improving these issues, the Arabic nations would eventually become arbitration-friendly internationally just like other countries in the world[78]. Recognizing and enforcing foreign arbitration is essential in the Middle East because it would make the countries valued globally. At the moment, most Arabic nations are not arbitration-friendly due to culture in the region combined with Islamic sharia laws.

Furthermore, for the Arabic nations to become leaders in the implementation of international arbitration, they must have a strong political good will. At the moment, most countries in the Middle East do not have substantial political good will to support and campaign for the recognition and enforcement of international arbitral awards. Political good will is generally lacking in the region and most leaders have biases towards the acceptance of international arbitration within their jurisdiction[79]. In essence, political good will in the Arabic nations should recognize the essential roles of foreign arbitration in the region. In addition, political good will only is effective in enhancing implementation of arbitration if they are accompanied by specific actions that are targeting comprehensive reforms in the legislative and judicial systems in the region. Besides these reforms, awareness and educational programmes should be included because they have great potential of changing people’s minds about arbitration[80].

To be successful in taking leadership role in enhancing international arbitration, the Arabic nations must introduce new legislations, which are updated to the international standards[81]. Although this would prove very problematic due to the deeply rooted Islamic culture, the Middle East countries should reform most of the current existing laws to become successful at implementation of foreign arbitral awards. Training of arbitrators as well as the judicial on international arbitration is generally missing the Arabic nation.

(b) Recommendation

The problems of enforcement of New York Convention and international arbitration in Jordan and other Arabic nations can be solved using a number of strategies. First, there is a dire need for concerned authorities to review the provisions under The New York Convention. This is because the problems of enforcement of New York Convention are related to its conflicting and week provisions. In essence, most legal provisionscontained in this document are week and does not facilitateproper enforcement. In addition, some provisionscreateleeway for avoidance of implementation of the convention. The review should create forceful provisions and provide their interpretation for application.

Another useful recommendation is to create forum for training on international arbitration awards[82]. Public awareness and knowledge about arbitration should be increased in Jordan and other Arabic nations to facilitate enforcement. Arbitrators as well as other people involved in the arbitration process should be equally trained on the international arbitration awards.

With no doubt, lack of developed structure is one of the major contributing factors to limited recognition and implementation of arbitration awards in Jordan and other Arabic nations[83]. To solve this problem, it is recommended to invest heavily in infrastructural facilities in this country. For instance, several international arbitration institutions should be established in Jordan. These institutions will increase awareness and understanding of the significance of the international arbitration awards amongst the public[84].

Another useful recommendation is to put in place internationally acceptable legislation that would check and monitor the way international arbitration awards are being implemented. They should also monitor and check how national laws are interfering with the enforcement of arbitration[85]. This will provide useful guidelines for improving how international arbitration awards are recognized and enforced in Arabic nations such as Jordan. Lastly, the international community should provide technical assistance, more information, and more training in relation to the New York Convention and recognition and implementation of arbitration awards[86].

Another recommendation concerns the role and responsibility of international arbitrators working in Arabic nations. When it comes to working in Middle East, it is essential if international arbitrators are aware of the exact local issues of each country in this region. Even though there are many similarities, each Arabic nation has specific issues regarding the implementation of international arbitration. These issues concern the recognition and enforceability of the foreign arbitral award in each Arabic nation. This will certainly make their cases relevant in the Middle East and thus enhance enforceability. The international arbitrators need to consider local issue of each country when hearing or drafting their final arbitral awards in order to enhance their enforceability. In particular, they need to consider whether their arbitral awards are enforceable before in the specific country before issuing them to reduce failures and controversies[87].

This coincides with the requirement for international arbitrators to be responsible for enforceability of their arbitral awards. Internationally, it is recognized that arbitrators should be responsible for ensuring that their arbitral awards are enforceable in the given country before issuing them. In addition, while dealing with Arabic nations, the international arbitrators’ work should not only be about hearing and issuing arbitral awards. In essence, their work should extend to include ensuring that the issued arbitral awards are enforceable. In the Middle East, most international arbitrators just focus on hearing and rendering awards rather than ensuring that they are enforceable. Besides, the work of arbitrators in this region has majorly focused on receiving, hearing, and rendering award yet forgetting the most important part, which is enforcement[88].

The responsibility of foreign arbitrators should be elevated to higher level so as to increase accountability, which is essential in enhancing implementation of international arbitral awards in the Arabic nations[89]. In addition, the bar for foreign arbitrators should be moved to a higher tier for the same purpose. This approach is essential for ensuring that foreign arbitrators are able to meet challenges of enforcement affecting the Arabic nations. In addition, foreign arbitrators should recognize significance of respect in Arabic nations by refraining from any form of arrogant conduction when hearing and issuing arbitral awards. Instead of arrogant act, they should carry out all necessary due diligence when issuing arbitration in the Middle East region. It is essential to include this in the roles and duties of the international arbitrators in order to gain substantial progress in the Arabic nations[90].

These recommendations if properly implemented would ensure rapid growth in the recognition and implementation of foreign arbitration awards in Jordan and the rest of other Arabic nations.

References

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Al Ateyat, Mostafa, and Ahmad Kh Al Dhahir. “Overview on Online Arbitration and Procedures (Jordan as an Example).” Canadian Social Science 9, no. 2 (2013): 82-91.

Ayad, Mary B. A Proposal to Guide Future Draft Article Provisions for a Model Harmonised International Commercial Arbitration Law Code (hicalc) in the Middle East and North Africa or a Uniform Arab Arbitration Law. Australia Macquarie University, 2013.

Blackaby, Nigel, Constantine Partasides, Alan Redfern, and M. Hunter. ” An overview of international arbitration.” Redfern and hunter on international arbitration , 2012: 1-83.

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Cuniberti, Gilles. “Beyond Contract-The Case for Default Arbitration in International Commercial Disputes.” Fordham International Law journal 32 (2012): 417.

Darwazeh, Nadia. “Arbitration in the Arab World An Interview with Professor Ahmed Sadek El-Kosheri.” Journal of International Arbitration 25, no. 2 (2012): 203.

El-Ahdab., Jalal. “Arbitration with the Arab countries.” Kluwer Law International, 3 (2011): 402-413.

Fox, Hazel. Law of State Immunity. London: Oxford University Press, 2013.

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Newman, Lawrence W, and Michael Burrows. The Practice of International Litigation. Irvington-on-Hudson, NY: Transnational Juris, 2012.

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[1]Gary Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing. (Walter Kluwer and Business 2010)

[2]William Slomanson, Fundamental Perspectives on International Law. (Wadsworth Printing Press 2011)

[3]Pierre Tercier, Post Award Issues. (JurisNet 2011)

[4]Mary Ayad, A Proposal to Guide Future Draft Article Provisions for a Model Harmonised International Commercial Arbitration Law Code (hicalc) in the Middle East and North Africa or a Uniform Arab Arbitration Law. (Australia Macquarie University 2013)

[5]Gary Born, International Arbitration: Cases and Materials. (Aspen Publishers 2011)

[6]Grant Hanessian and Kaplan Jacob, Icdr Awards and Commentaries. (Ashgate 2012)

[7]Joanna Jemielniak, Legal Interpretation in International Commercial Arbitration. (Aspen Publishers 2014)

[8]Hazel Fox, Law of State Immunity. (Oxford University Press 2013)

[9]Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[10]Herbert Kronke, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention. (Kluwer Law International 2010)

[11]Mohamed Ismail, International Investment Arbitration: Lessons from Developments in the Mena Region. (Ashgate 2013)

[12]Lawrence Newman and Burrows Michael, The Practice of International Litigation. (Transnational Juris 2012)

[13]Abd Aḥdab and El-Ahdab Jalal, Arbitration with the Arab Countries. (Kluwer Law International 2011)

[14] Gary Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing. (Walter Kluwer and Business 2010)

[15] Gary Born, International Arbitration: Cases and Materials. (Aspen Publishers 2011)

[16] Grant Hanessian and Kaplan Jacob, Icdr Awards and Commentaries. (Ashgate 2012)

[17] Joanna Jemielniak, Legal Interpretation in International Commercial Arbitration. (Aspen Publishers 2014)

[18] Hazel Fox, Law of State Immunity. (Oxford University Press 2013)

[19] Mary Ayad, A Proposal to Guide Future Draft Article Provisions for a Model Harmonised International Commercial Arbitration Law Code (hicalc) in the Middle East and North Africa or a Uniform Arab Arbitration Law. (Australia Macquarie University 2013)

[20] Joanna Jemielniak, Legal Interpretation in International Commercial Arbitration. (Aspen Publishers 2014)

[21] Pierre Tercier, Post Award Issues. (JurisNet 2011)

[22] William Slomanson, Fundamental Perspectives on International Law. (Wadsworth Printing Press 2011)

[23] Abd Aḥdab and El-Ahdab Jalal, Arbitration with the Arab Countries. (Kluwer Law International 2011)

[24] Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[25] Mary Ayad, A Proposal to Guide Future Draft Article Provisions for a Model Harmonised International Commercial Arbitration Law Code (hicalc) in the Middle East and North Africa or a Uniform Arab Arbitration Law. (Australia Macquarie University 2013)

[26] Pierre Tercier, Post Award Issues. (JurisNet 2011)

[27] William Slomanson, Fundamental Perspectives on International Law. (Wadsworth Printing Press 2011)

[28] Abd Aḥdab and El-Ahdab Jalal, Arbitration with the Arab Countries. (Kluwer Law International 2011)

[29] Herbert Kronke, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention. (Kluwer Law International 2010)

[30] Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[31] Mohamed Ismail, International Investment Arbitration: Lessons from Developments in the Mena Region. (Ashgate 2013)

[32] Lawrence Newman and Burrows Michael, The Practice of International Litigation. (Transnational Juris 2012)

[33] Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[34]Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[35]Ibid 76

[36]Ibid 99

[37]Lee III, Emery Willging and Thomas E. “Defining the Problem of Cost in Federal Civil Litigation.” Duke Law Journal 60 (2010): 765.

[38]Jalal, El-Ahdab. “Arbitration with the Arab countries.” Kluwer Law International, (2011): 402-413.

[39]Gilles, Cuniberti. “Beyond Contract-The Case for Default Arbitration in International Commercial Disputes.” Fordham International Law journal, 32 (2012): 417-422.

[40]Nadia, Darwazeh. “Arbitration in the Arab World An Interview with Professor Ahmed Sadek El-Kosheri.” Journal of International Arbitration 25, no. 2 (2012): 203-210.

[41]Nigel Blackaby, Partasides Constantine, Redfern Alan, and Hunter M. “An overview of international arbitration.” Redfern and hunter on international arbitration, (2012): 1-83.

[42]Stovall, Howard L. “Arab Commercial Laws-Into the Future.” International Law, 34 (2012): 839-842.

[43]Sophie, Pouget. “Arbitrating and mediating disputes.” Policy research Working paper (2013): 56-76

[44]Strong, S. I. “What Constitutes an’Agreement in Writing’in International Commercial Arbitration? Conflicts between the New York Convention and the Federal Arbitration Act.” Stanford Journal of International Law, 48 (2012): 47.

[45]Javaid, Rehman. Islamic state practices, international law and the threat from terrorism: a critique of the’clash of civilizations’ in the new world order. London: Hart Publishing, 2012.

[46]Kenneth Kaoma Mwenda, Principles of Arbitration Law. (Brown Walker Press 2003)

[47]Imre Szalai, Outsourcing Justice: The Rise of Modern Arbitration Laws in America, (Carolina Academic Press 2013)

[48] Gilles, Cuniberti. “Beyond Contract-The Case for Default Arbitration in International Commercial Disputes.” Fordham International Law journal, 32 (2012): 417-422.

[49] Jalal, El-Ahdab. “Arbitration with the Arab countries.” Kluwer Law International, (2011): 402-413.

[50] Lee III, Emery Willging and Thomas E. “Defining the Problem of Cost in Federal Civil Litigation.” Duke Law Journal 60 (2010): 765.

[51] Nadia, Darwazeh. “Arbitration in the Arab World An Interview with Professor Ahmed Sadek El-Kosheri.” Journal of International Arbitration 25, no. 2 (2012): 203-210.

[52] Nigel Blackaby, Partasides Constantine, Redfern Alan, and Hunter M. “An overview of international arbitration.” Redfern and hunter on international arbitration, (2012): 1-83.

[53] Stovall, Howard L. “Arab Commercial Laws-Into the Future.” International Law, 34 (2012): 839-842.

[54]Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[55]Sophie, Pouget. “Arbitrating and mediating disputes.” Policy research Working paper (2013): 56-76

[56]Kenneth Kaoma Mwenda, Principles of Arbitration Law. (Brown Walker Press 2003)

[57]Imre Szalai, Outsourcing Justice: The Rise of Modern Arbitration Laws in America, (Carolina Academic Press 2013)

[58]Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[59]Redfern, Alan, Nigel Blackaby, and Martin Hunter. Law and Practice of International Commercial Arbitration. (Sweet and Maxwell 2012)

[60]Mostafa, Al Ateyat, and Dhahir, Ahmad Kh Al. “Overview on Online Arbitration and Procedures (Jordan as an Example).” Canadian Social Science 9, no. 2 (2013): 82-91.

[61]Arthur Rovine, Contemporary Issues in International Arbitration and Mediation. (Cambridge University Press 2015)

[62]Abd Aḥdab and El-Ahdab Jalal, Arbitration with the Arab Countries. (Kluwer Law International 2011)

[63]Gary Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing. (Walter Kluwer and Business 2010)

[64]McLean Homes South East Ltd vs Blackdale Ltd (unreported, November 2, 2001)

[65]ibid

[66]Jivraj v Hashwani (November 5 2012)

[67]Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others (May 31, 2012)

[68]Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others (May 31, 2012)

[69]AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC (12 June 2013)

[70]West Tankers Inc vs Allianz SpA and others (April 4, 2012)

[71] Imre Szalai, Outsourcing Justice: The Rise of Modern Arbitration Laws in America, (Carolina Academic Press 2013)

[72] Javaid, Rehman. Islamic state practices, international law, and the threat from terrorism: a critique of the’clash of civilizations’ in the new world order. London: Hart Publishing, 2012.

[73] Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[74]Gary Born, International Arbitration: Cases and Materials. (Aspen Publishers 2011)

[75] Kenneth Kaoma Mwenda, Principles of Arbitration Law. (Brown Walker Press 2003)

[76]Gilles, Cuniberti. “Beyond Contract-The Case for Default Arbitration in International Commercial Disputes.” Fordham International Law journal, 32 (2012): 417-422.

[77]Hazel Fox, Law of State Immunity. (Oxford University Press 2013)

[78] Strong, S. I. “What Constitutes an’Agreement in Writing’in International Commercial Arbitration? Conflicts between the New York Convention and the Federal Arbitration Act.” Stanford Journal of International Law, 48 (2012): 47.

[79] Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[80] Sophie, Pouget. “Arbitrating and mediating disputes.” Policy research Working paper (2013): 56-76

[81] Gary Born, International Arbitration and Forum Selection Agreements: Drafting and Enforcing. (Walter Kluwer and Business 2010)

[82]Herbert Kronke, Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention. (Kluwer Law International 2010)

[83]Jalal, El-Ahdab. “Arbitration with the Arab countries.” Kluwer Law International, (2011): 402-413.

[84]Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[85]Joanna Jemielniak, Legal Interpretation in International Commercial Arbitration. (Aspen Publishers 2014)

[86]Stovall, Howard L. “Arab Commercial Laws-Into the Future.” International Law, 34 (2012): 839-842.

[87] Jingzhou Tao, Arbitration Law and Practice in China. (Wolters Kluwer Law and Business 2012)

[88] Imre Szalai, Outsourcing Justice: The Rise of Modern Arbitration Laws in America, (Carolina Academic Press 2013)

[89] Stovall, Howard L. “Arab Commercial Laws-Into the Future.” International Law, 34 (2012): 839-842.

[90] Hazel Fox, Law of State Immunity. (Oxford University Press 2013)