I. Setting Aside Procedure
Since in a significant number of countries, the legislation concerning the vacation of an arbitral award is based on the UNCITRAL Model Law, many setting aside proceedings will be based on Art. 34 UNCITRAL Model Law. Furthermore, many Vis Moot problems will invite you to make an argument based on hypothetical enforcement proceedings in a contracting state to the New York Convention. For these reasons, this section will focus on the grounds for setting aside an award under the UNCITRAL Model Law.
Most of the grounds for setting an arbitral award under Art. 34 Section II UNCITRAL Model Law aside have already been referred to in this script. This applies to cases in which one of the parties was under some incapacity or in which the arbitration agreement was not valid under the law applicable to it; it applies to cases in which the arbitral procedure was not in accordance with the procedure agreed upon by the parties and it also applies to cases in which the subject matter of the dispute is not arbitrable according to the lex loci arbitri or in which the award is in conflict with the public policy of the forum state. Yet, there are also grounds so far unnamed by this script. Art. 34 Section II UNCITRAL Model Law also ensures that each party was able to present his case, that the composition of the arbitral tribunal was in accordance with the parties’ agreement and that the arbitral tribunal has not exceeded its jurisdiction.
In case of a successful challenge, the award issued by the arbitral tribunal will usually be declared null and void. In many situations, the state court declaring the award null and void will also remit the case to the arbitral tribunal in order to save valuable resources of the parties. If, however, the award was set aside since the arbitral tribunal held the arbitration agreement to be invalid, the state courts’ jurisdiction might revive, allowing the parties to initiate state court proceedings instead. In other cases, if, for instance, the award was set aside because of a serious misconduct of the arbitral tribunal, the consequence of setting the award aside could be that the parties may start over the proceedings anew with a different arbitral tribunal. Yet, not only the grounds for vacating an arbitral award will be decisive for the consequences following an award’s declaration to be null and void but also the law of the respective forum state.