HARD QUESTIONS IN UNEASY TIMES: THE PROSPECT OF ENFORCING FOREIGN AWARDS APPLYING SHARI’A LAW IN AUSTRALIA.

Abstract

International arbitration under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards [“New York Convention”] is the leading institution for the resolution of transnational disputes of a commercial character. Operating across interfaces between societies, polities, cultures, and as the vanguard mechanism of its kind, international arbitration must grapple not only with differences between legal systems, but also with divergent social values and cultural norms. Saudi Arabia’s shift, over the past decade, towards becoming an arbitration-friendly jurisdiction, provides a timely opportunity to reflect. This paper raises, as a thought piece, the situation of enforcement of Saudi Arabia seated arbitral award in Australia, and the scope for resisting enforcement on public policy grounds. Saudi Arabia is an Islamic country with legal, political and social systems based on Shari’a law. The New York Convention permits a contracting State to refuse enforcement of an arbitral award where to grant enforcement would be contrary to public policy. This paper examines those aspects of Shari’a law which may be relevant to international commerce and dispute resolution and considers the likely impacts of Shari’a law on Saudi-seated arbitral awards. It then examines Australian judicial treatment of the public policy exception in order to distil the implications, if any, of Shari’a law on enforceability of Saudi-seated awards in Australia.