DANGEROUS LIASONS? – THE RELATION OF INTERNATIONAL COMMERCIAL ARBITRATION WITH EU LAW AND THE EUROPEAN HUMAN RIGHTS CONVENTION

16 November 2023

Our managing partner, dr.Richard Schmidt LL.M was invited by the Legal Division of the Hungarian Chamber of Commerce and Industry and the Hungarian Commercial Arbitration Court to make a presentation on the sometimes stormy relation of international commercial arbitration with EU law and the European Convention of Human Rights.

The event was held on 9^th November 2023, and it was opened by Dr. Lajosné Balog, Head of the Legal Division of the Hungarian Chamber of Commerce and Industry, and by Dr. János Burai-Kovács, President of the Hungarian Commercial Arbitration Court, who stressed the importance of this topic both in domestic & international arbitration.

Introduction

Richard started his presentation by presenting the main characteristics of EU law and the European Convention of Human Rights, as supranational legal orders, and continued with the features of the judgments of the Strasbourg-based European Court of Human Rights (ECtHR) and the Luxemburg-based Court of Justice of the European Union (CJEU).

Richard after summarised the 3 (three) contemporary representations of international arbitration, namely the “seat theory”, which focuses on the seat of arbitration (mono-local theory), the “judgment theory”, which emphasizes the importance of the recognition of the arbitral award in other jurisdictions (multi-local theory), and finally the independent legal order theory, which conceives international arbitration as a distinct legal order.

The arbitration agreement

In the first part of the presentation, Richard summarised the case law of the Strasbourg court in relation with the arbitration agreement, starting from the doctrine of “partial waiver”, according to which the arbitration agreement shall be considered as a waiver of right to fair trail, enshrined by Article 6 (1) of the ECHR.

The presentation included the milestone judgments of the ECtHR in relation with the conditions of the waiver, and the limits of the waiver.

The arbitration procedure

The second part of the presentation dealt with the arbitral proceedings in front of the arbitral tribunal. In this phase the leading cases of the ECtHR in relation with such issues like tribunal formation, independence & impartiality of arbitrators, and the right to a judgment within reasonable time were presented.

After that Richard addressed the question, whether arbitral tribunals can ask preliminary questions from the CJEU, and highlighted practical situations, where arbitral tribunals face with the application of mandatory EU law (competition law, commercial agency, consumers, etc.)

Richard continued with the court proceedings connected with the arbitration procedure, especially the procedures for arbitrator appointment, the application for interim measures and anti-suit injunctions, where the most important cases of the CJEU were summarised.

The arbitral award

The settings aside and recognition & enforcement of arbitral award was the subject of the last part of the presentation. First, Richard addressed the question, whether the parties can waive their right to annul the arbitral award under the ECHR.

When it comes to recognition & enforcement of the arbitral award, Richard first dealt with the question to what extent these matters can be affected by the Brussels Ia Regulation in the light of the case law of CJEU.

After that he presented the milestone cases, where the ECtHR condemned states, who refused the enforcement of commercial arbitral awards.

Special thanks to Dr.Balog Lajosné and Dr.János Burai Kovács, for the invitation and to the  Legal Division of the Hungarian Chamber of Commerce, the Hungarian Commercial Arbitration Court, and to the Hungarian Lawyer’s Association for organising this event.