International Arbitration

Where the recognition and enforcement of a foreign arbitral award is needed, the New York Convention applies, and arbitral awards include both awards rendered by a permanent arbitral institution and those rendered by an individual arbitrator.

In addition, an arbitration agreement must be made in writing, and an arbitration clause included in a contract or a separate written arbitration agreement falls within this.

The Convention applies regardless of whether the legal relationship is contractual in nature.

When inserting clause items related to international arbitration, the following items must be clearly set.

Because international arbitration can be commenced once an arbitration agreement exists in writing, securing the validity of the arbitration agreement is more important than anything else.

1. Commencement of arbitration

• Arbitration commences when the claimant submits a request for arbitration or an application for arbitration
• In the case of institutional arbitration, the institution serves the documents or oversees the conduct of the procedure
• An overview of the dispute, the requested relief, and a copy of the arbitration agreement and the like must be submitted

2. Appointment of arbitrators

• Generally, a panel of 3 arbitrators is constituted
• Each party nominates 1 arbitrator, and the third arbitrator is selected by agreement
• Where selection is difficult, the arbitral institution designates them (because neutrality is important, nationality, interests, and field of expertise are considered)

3. Preparation of the procedure

• Document exchange, the schedule for submitting written pleadings, the document production procedure and the like are agreed in advance
• SIAC and others actively use online meetings to improve procedural efficiency

4. Document production and submission of evidence

• A party may request the other party to submit materials, and upon refusal, grounds such as lack of relevance or materiality are required
• Even protected documents may be submitted under a confidentiality undertaking
• The facts may be proven through documents, witnesses, expert statements, and the like

5. Hearing

• The parties begin with opening statements
• Arguments are developed through examination of witnesses, cross-examination, expert testimony, and the like
• It may proceed for up to 2 weeks, and where necessary, it may be replaced by a documentary hearing

• Compulsory enforcement of foreign arbitral awards is possible under the New York Convention
• Member states: more than 170 countries, including the United States, China, Japan, the EU, and Korea
• A duly authenticated original or certified copy of the award and the original arbitration agreement, among other documents, are required
• If the relevant documents are not in the local language, an official translation is required

However, an objection to an arbitral award can be pursued by filing an action with a court to set aside the arbitral award.

The criteria for judgment are whether procedural legitimacy and legality and public order have been impaired.

A party seeking to set aside an arbitral award may file within 3 months from the date of receiving an authenticated copy of the arbitral award, and after the court’s recognition and enforcement decision has become final, even filing an action to set it aside is prohibited.

A court may set aside an arbitral award when the following grounds exist.

• The arbitration agreement is invalid or was concluded by a person without capacity
• The respondent did not receive proper notice of the arbitral proceedings or was deprived of the opportunity to defend
• The content of the award goes beyond the scope of the arbitration agreement
• The composition of the arbitrators or the procedure violates the parties’ agreement or the law of the relevant country
• The award has not yet become final, or has been set aside or suspended
• The nature of the dispute is a matter that cannot be resolved by arbitration under local law, or enforcement is contrary to public order