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Judicial Review of Arbitral Awards on Merits in Europe

Dmitry Anatolyevich Pentsov


  • Parties often overlook the possibility of judicial review when choosing an arbitration seat, but this can impact the duration, cost, and finality of the arbitration award, making it a crucial factor in selecting a forum.
  • The "balanced" approach, used by England and Switzerland, allows limited judicial review on points of law or specific grounds, while the "restrictive" approach, common in other European countries, limits review to grounds similar to those in the New York Convention.
  • Belgium's past "exclusionary" approach, which restricted challenges to arbitration awards involving only non-Belgian parties, did not increase its attractiveness as an arbitration venue.
Judicial Review of Arbitral Awards on Merits in Europe
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When selecting the seat of their future arbitration, parties do not usually consider the whether the forum they select permits its courts to review arbitration awards on the merits. Nevertheless, that should be an important consideration because such review may increase the duration and cost of the proceedings. Moreover, such judicial review could also frustrate the expectations of the parties, who may have chosen to resolve their disputes through arbitration precisely because of their desire to obtain a final and binding award not subject to judicial review. It follows that the possibility of substantive review of awards by the courts should be considered in choosing an arbitration forum. This is particularly true for parties choosing to hold their arbitration in Europe where the extent of judicial review may differ from one nation to another.

Varying Possibilities for Judicial Review of Awards

Although the details may differ from nation to nation, judicial review of arbitration awards in Europe currently takes one of two general approaches. The first approach, which may be called "balanced" approach, is represented by England and Switzerland, which, according to the 2018 International Arbitration Survey, are consistently ranked among the most preferred seats of arbitration in Europe. In England, pursuant to section 69(1) of the Arbitration Act 1996 (1996 c. 23), unless the parties exclude any right of appeal, a party may appeal an arbitration award on a point of law, if all parties agree to an appeal or if the court grants leave to appeal. The court may grant leave to appeal if the following four conditions are satisfied: 

  1. the determination of the question will substantially affect the rights of one or more of the parties; 
  2. the question is one that the tribunal was asked to determine, 
  3. the decision of the tribunal on the question presented is obviously wrong, or the question presented is one of general public importance and the decision of the tribunal is at least open to serious doubt; and 
  4.  it is just and proper considering all the circumstances for the court to determine the question. 

To be "obviously wrong,” the decision must be a "major intellectual aberration," and the error must be one that can be grasped simply by studying the award itself (HMV UK Ltd v Propinvest Friar Limited Partnership [2011] EWCA Civ 1708 (10 November 2011), ¶8). For courts in England and Wales, a "question of law" refers to questions of English or Welsh law, and questions concerning the law of other countries are classified as issues of fact. Since the Arbitration Act does not allow appeals from findings of facts (Guangzhou Dockyards Co Ltd v. E.N.E. Aegiali I [2010] EWHC 2826 (Comm) (5 November 2010), ¶33), it follows that a party would not be able to appeal the award of the questions of foreign law.

In Switzerland, the extent to which arbitration awards are subject to judicial review depends on whether the arbitration is domestic or international in nature. Part 3 "Arbitration" of the Swiss Civil Procedure Code (Code de procedure civile, Dec. 19, 2008, RS 272), governs domestic arbitration and allows a party to appeal an award to the Swiss Federal Tribunal, the country’s highest judicial authority, when the award is arbitrary because it is based on factual findings that are obviously contrary to the facts stated in the case files or because it constitutes an obvious violation of law or equity. Strictly speaking, an appeal from an obvious violation of foreign law is possible, but such appeals are generally viewed as less likely to succeed.

No similar ground exists for appealing international arbitration awards. Chapter 12 of the Swiss Federal Private International Law Act (Loi fédérale sur le droit international privé (LDIP), Dec. 18, 1987, RS 291), governs international arbitration. The grounds for challenging arbitrary awards on merits under article 190(2) of the LDIP are very restrictive and essentially are limited to cases where substantive public policy has been violated or there has been what is called a "formal denial of justice". In the latter instance, the appealing party must demonstrate that:

  1. the arbitral tribunal by inadvertence or by a misunderstanding, did not take into account the claims, arguments, evidence, and offers of evidence presented by that party;
  2. such matters were material to the outcome of the case; and
  3. as a result, the appealing party’s right to be heard on this point effectively was not been respected at all.

Under article 190(2) of the LDIP, only a violation of a fundamental legal principle can result in the setting aside of an international award on the grounds of violation substantive public policy. As a possible example of such violation, the federal tribunal refers to a hypothetical case where an arbitrator breaches the principle of contractual fidelity (pacta sunt servanda) by refusing to apply a contractual clause, while admitting that it binds the parties or, conversely, requires the parties to comply with a contractual clause, which it considers not to bind them. Such a hypothetical case has yet to materialize. Moreover, when none of the parties to international arbitration has its domicile, its habitual residence, or a place of business in Switzerland, they may exclude all such appeals or limit them to some of the grounds listed in article 190(2). Conversely, parties willing to expand the opportunities to challenge an award on appeal may provide that chapter 12 of LDIP does not apply and agree that part 3 of the Civil Procedure Code shall apply instead. By the same token, the parties to a domestic arbitration who wish to restrict the avenues of appeal, may exclude the application of part 3 and instead agree that chapter 12 of LDIP shall apply.

The second approach, which may be called "restrictive," is currently used by a wide variety of European nations. It generally limits the grounds for appeal of arbitral awards to those listed in article V of the New York Convention or to essentially similar grounds set forth in article 34 of the UNCITRAL Model Law. For example, in Sweden, according to section 34 of the Swedish Arbitration Act, an award may be wholly or partially set aside if:

  1. it is not covered by a valid arbitration agreement between the parties;
  2. the arbitrators have made the award after the expiration of a time limit set by the parties;
  3. the arbitrators have exceeded their mandate, in a manner that probably influenced the outcome of the arbitration;
  4. the arbitration, according to section 47 of the act, should not have taken place in Sweden;
  5. an arbitrator was appointed in a manner that violates the parties’ agreement or the Swedish Act;
  6. an arbitrator was unauthorized to adjudicate the dispute due to any circumstance set forth in sections 7 or 8 of the act; or
  7. without fault of the appealing party, there otherwise occurred an irregularity in the course of the proceedings which probably influenced the outcome of the case.

Similarly, in Russia, pursuant to article 34(2) of the Law on International Commercial Arbitration (Law of the Russian Federation "On international commercial arbitration," dated Jul. 7, 1993 No. 5338-1), the arbitral award may be set aside by the competent court if:

  1. the appealing party provides evidence that:
    1. one of the parties to the arbitration agreement was to some extent incapacitated or the agreement was invalid under the law to which the parties subordinated it, and in the absence of such an indication, under the law of the Russian Federation;
    2. the party was not properly notified of the appointment of the arbitrator or the arbitration proceedings, including the time and place of the arbitration hearing, or for other good reasons, could not present its case;
    3. the award was made in a dispute that is not subject to the arbitration agreement or is not subject to its terms, or the award contains rulings on matters beyond the arbitration agreement (if the rulings on matters covered by the arbitration agreement may be separated from those not covered by such an agreement, only the part of the arbitration award that contains the rulings on matters not covered by the arbitration agreement may be set aside); or
    4. the composition of the arbitral tribunal or the arbitration procedure did not comply with the agreement of the parties or federal law; or
  2. the competent court determines that:
    1. the object of the dispute may not be subject to arbitration under federal law or;
    2. arbitration award is contrary to the public order of the Russian Federation.

France also generally follows the traditional limitative approach towards judicial review of international arbitration awards. According to article 1520 of the new Code of Civil Procedure (nouveau code de procedure civile), a request to annul an award is possible only if:

  1. the arbitral tribunal wrongly declared itself competent or incompetent;
  2. the arbitral tribunal was improperly constituted;
  3. the arbitral tribunal failed to comply with the mandate entrusted to it; (iv) the principle of due process has not been respected; or
  4. recognition or enforcement of the award is contrary to international public order.

Moreover, according to article 1522 of the code, the parties may expressly waive the right to judicial review at any time by special agreement. In such instances, they can still appeal a court order authorizing forced execution of an arbitral award (orodonnance d’execuatur) for one of the reasons listed in article 1520.

In addition, a 2019 decision of the Paris Court of Appeals in Venezuela v. Rusoro Mining Ltd. reaffirmed that, when considering an appeal from an international arbitration award on the ground of wrong acceptance by the tribunal of temporal jurisdiction, the appellate court may still review "all the elements of law or fact" to assess the scope of the arbitration agreement and to infer the consequences on the respect of the mission entrusted to the arbitrators (République Bolivarienne du Venezuela c. Rusoro Mining Ltd., Cour d’appel [CA] [regional court of appeal] Paris, 1e ch, Jan. 29, 2019). Although this decision was subsequently set aside by the Court de Cassation on different grounds (Cour de cassation [Cass.] [supreme court for judicial matters ], 1e civ., Mar. 31, 2021), it clearly demonstrates to prospective parties that, despite the absence of specific statutory grounds directly allowing for the substantive review of awards in France, such review may still be possible on jurisdictional grounds. Furthermore, as concerns domestic arbitration, under article 1489 of the code, the parties may agree that the award is subject to appeal and may be reviewed on questions of both fact and law.

Rise and Fall of "Exclusionary" Approach

While currently Belgium follows the "restrictive" approach, in an apparent effort to increase its share of the rapidly growing arbitration market it tried in the past the approach which may be called "exclusionary". According to article 1717.4, inserted in the Judicial Code (Code judciaire, Oct. 10, 1967) by Act of March 27, 1985, Belgian courts could hear an application set side an arbitration award only when at least one party to the dispute was either a natural person with Belgian nationality or residence in Belgium, or a legal person incorporated in Belgium or having a branch or operating headquarters there. Conversely, for arbitration involving only non-Belgian parties, such challenge was excluded.

Contrary to expectations, this law did not result in an increased number of arbitrations in Belgium but might have led to Belgium being chosen for arbitrations less frequently. On May 19, 1998, article 1717.4 was amended and parties were given the general right to challenge awards in court on the grounds essentially similar to those of UNCITRAL Model Law. Parties could agree to exclude such appeals when none of them were a natural person with Belgian nationality or a resident of Belgium, or a legal person having its main establishment or a branch in this country.


The clearly visible lack of success of the "exclusionary" approach in Belgium reveals that prospective users of arbitration as method of dispute resolution may not be prepared to exclude from the outright the possibility of substantive review. At the same time, despite the subsequent abandonment of this approach, almost a quarter of century later, this country still did not enter the ranks of the most preferred sets of arbitration in Europe. This outcome strongly suggests that the popularity of certain jurisdiction as arbitration forum is not primarily based on whether it permits the arbitral awards to be challenged on appeal, but has more to do with its geographic location, language, perceived neutrality, and impartiality of domestic legal system as well as sophistication of local arbitrators and arbitration practitioners.

Still, from the point of view of choosing arbitration seat, the "balanced" approach looks favorable as compared with the "restrictive” approach. It stives to provide equilibrium between the two competing objectives of finality and fairness of arbitral awards, which lies at the heart of perennial debate about the tolerable degree of state control over arbitration and the compatibility of such involvement with the notion of arbitration as method of private dispute resolution. Moreover, the statutory possibility of judicial review of awards on merits counterbalanced by the statutory right of the parties to exclude such review by their mutual agreement may be seen as beneficial for the development of international arbitration in general. Over the last several decades it turned into a truly globalized industry offering commercial dispute resolution services to customers all over the world. As the example of Belgium demonstrates, these customers could be interested in getting additional options for their money and unwilling to limit in advance their possible choices associated with these options, notably, as concerns the possibility of subsequent judicial review of awards on merits.