YMG Joint Webinar – Public Policy Defence re Enforcement of Arbitral Awards

On Tuesday 21 June 2022, the Young Members Group of the CIArb London Branch hosted a webinar with its fellow YMGs from the CIArb Kenya Branch and CIArb Nigeria Branch on the topic of the public policy defence to the enforcement of arbitral awards.

The webinar kicked off with moderator Elizabeth Montpetit (from Taylor Wessing, CIArb London Branch YMG) providing an overview of the genesis of the public policy defence, from the New York Convention and specifically Article V(2)(b), which enables the courts of a Contracting State to refuse recognition and enforcement of an arbitral award when they find that such recognition or enforcement would be contrary to its public policy – the so-called “public policy defence”.

Next it was up to our speakers to discuss the differences and similarities concerning different jurisdictions’ approach to the public policy defence, specifically in Nigeria, Kenya and France.

Orji A Uka (from ALP NG & Co) spoke about the position in Nigeria, where he explained that under s.48 of the Nigerian Arbitration Act, the Nigerian court may set aside an arbitral award: if the court finds that the dispute is not (i) arbitrable or (ii) “that the award is against public policy of Nigeria.” It was explained that, although these are two distinct defences, in Nigeria, the courts have conflated both of these defences. The Nigerian Courts have failed to draw the distinction between these two defences and there is a fear that the Nigerian courts have given public policy a very wide interpretation. As a result, Nigerian lawyers, whose clients are dissatisfied with an award, will often use the public policy defence as an “omnibus defence”. It remains to be seen whether the recently passed Arbitration and Mediation Bill will clarify matters concerning public policy defence. He also highlighted a recent negative trend where Nigerian courts, despite not being the court with supervisory jurisdiction, have been setting aside foreign awards.

Staying in the African continent, James Ngotho Kariuki (from IKM Advocates DLA Piper Africa and current Chair of the CIArb Kenya Branch YMG) spoke about the position in Kenya, noting the similarities with Nigeria, whilst highlighting that case law in Kenya tends to emphasise the finality of arbitration awards. It was also mentioned that Kenyan courts have tried to define what is meant by "contrary to public policy", considering that this could be (i) inconsistency with the Constitution or national laws whether written and unwritten, (ii) inimical to the national interest of Kenya and/or (iii) contrary to justice and morality (in itself, a difficult concept to define). Overall, the Kenyan Courts take a very strict and narrow approach to protect the intended purpose of arbitration which is its finality.

Finally, moving to Europe, and specifically France, Angélica André (from White & Case) considered the position under French law and highlighted that there is no clear definition of public policy and it is a moving concept which is based on a case-by-case analysis. Unlike Nigerian or Kenyan courts, French courts differentiate between domestic public policy and international public policy, mirroring the French distinction between domestic and international arbitration. Domestic public policy is applied as a broader concept, whereas French courts are more careful when it comes to international public policy. Further, the French courts consider cases anew, not being bound by arbitral tribunal’s findings in facts and law regarding public policy related issues. A recent trend seen in France is the Courts’ references to international conventions, including e.g. the 2003 UN Convention of Corruption, when considering questions of international public policy. It was suggested that the reasoning behind this is likely due to the Courts’ desire to have further support for their decisions and to provide comfort and a sense of harmonisation of solutions, while there is a risk, as some French legal authors have pointed out, that it may lead to adopting international concepts that French society has not yet accepted, or would not accept anymore, if France is not a signatory to these conventions.

Reported by Elizabeth Montpetit and Mark McMahon, CIArb London Branch YMG Committee Members