Party-Autonomy as a Ground Against Recognition and Enforcement of Foreign Arbitral Awards

Recognition and enforcement may be refused if the arbitration procedure followed was not in accordance with the parties’ agreement. This is in line with the policy to respect party autonomy and their arbitration agreements. Parties may agree to submit their dispute to an institution’s arbitration rules and agree to its procedure, including the procedure in the appointment of an arbitrator.

In the case of Mabuhay Holdings Corporation v. Sembcorp Logistics Limited, the Supreme Court denied the contention of Petitioner Mabuhay against the appointment of a Thai arbitrator. Petitioner Mabuhay contended that the arbitration clause calls for an arbitrator with an expertise on Philippine law and on the subject matter, thereby excluding a Thai national without a background on Philippine law.

The Court, however, pointed out that the arbitration clause provides that the arbitrator shall be appointed in accordance with the ICC Arbitration Rules with the ICC as the appointing authority. “Where the parties have agreed to submit their dispute to institutional arbitrational rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under such arbitration rules for the selection and appointment of arbitrators.” As such, the appointment of the Thai arbitrator was in accordance with the arbitration clause since under the ICC Arbitration Rules, the sole arbitrator shall be of a nationality other than those of the parties.

Read the other issues raised in the case:

“Jurisdiction as a Ground Against Recognition and Enforcement of Foreign Arbitral Awards”

“Public Policy as a Ground Against Recognition and Enforcement of Foreign Arbitral Awards”