Recognition of a Tanzanian arbitral award in the Netherlands under European regulations
It is rare for a foreign arbitral award to be recognised in the Netherlands on the basis of a regulation other than the New York Convention. Recently, however, the Court of The Hague granted an application for the recognition and enforcement of a Tanzanian arbitral award on the basis of a European regulation. Litigation Lawyer Otto Hennis explains the ruling.
Application for recognition of a Tanzanian arbitral award
As Lawyer Otto Hennis explained in a previous blog, it is easier to enforce a foreign arbitral award in the Netherlands than a ruling by a foreign (regular) court. This is particularly true of awards from countries outside Europe. The simple reason for this is that 157 countries have now ratified the New York Convention. However, it is also possible to enforce a foreign arbitral award in the Netherlands on the basis of a treaty other than the New York Convention.
Tanzania received European Union funding
The background to this case was a dispute between the UK-based international construction company Stirling and the Republic of Tanzania about a contract for road surface repair works between Dar es Salaam and Bagamoyo. The European Union awarded funding to the Tanzanian project from the European Development Fund.
The agreement included the Procedural Rules on Conciliation and Arbitration of Contracts Financed by the European Development Fund (EDF). These so-called EDF Rules provide, among other things, that any disputes arising from the agreement between Stirling and Tanzania should be submitted to a tribunal of three arbitrators. Furthermore, the EDF Rules provide that any Member State of the EEC must recognise an arbitral award and that the Member State concerned will ensure that the award can be enforced there (Article 33.3).
Procedures for recognition and enforcement
According to the EDF Rules, for an arbitral award to be recognised and enforced, the applicant must submit an authentic copy of the arbitral award to the authority designated by the Member State concerned (Article 34.1). Following verification of the copy’s authenticity, the leave – as appears from the wording of the EDF Rules – will be affixed to that copy of the arbitral award. According to the EDF Rules, there will therefore be no formal or substantive tests.
Dispute leads to arbitration proceedings
At some point, a dispute had arisen between Stirling and Tanzania, as a result of which Stirling initiated arbitration proceedings. Stirling won the arbitration, and Tanzania was ordered to pay specific amounts of money in two arbitral awards. However, Tanzania refused to make these payments. Therefore, to be able to seek recovery from Tanzania’s assets in the Netherlands, Stirling applied for leave to enforce the awards.
Jurisdiction of the Court of The Hague
First of all, the Court found that, contrary to the EDF Rules, the Netherlands had not designated an authority responsible for granting leave. Therefore, the Court, referring to the EDF Rules, declared itself competent to process Stirling’s request pursuant to the Dutch Arbitration Act.
Dutch Court awarded recognition and enforcement
Tanzania did not appear as a party in the recognition procedure. Therefore, under the applicable rules on notices to appear, the Court itself examined whether it had been properly informed of the proceedings. To this end, the Court found that the summons to appear had been validly served and that, despite some formal defects in the summons, a valid summons to appear had been issued for the processing of the application for recognition. The Court then awarded the application for recognition and enforcement.
Lawyer assisting in the enforcement of arbitral awards in the Netherlands or abroad
Do you wish to enforce a Dutch or foreign arbitral award? If so, please contact us. We can initiate the application for recognition and enforcement on your behalf, after which you can take enforcement measures against the party against whom judgement has been given.