With the UNCITRAL Working Group II (Dispute Settlement) Colloquium on the Recognition and Enforcement of Electronic Arbitral Awards recently concluded, we would like to draw your attention to the identified benefits of introducing legal framework on recognition and enforcement of electronic awards (e-awards) as well as pinpoint the most pressing reasons why parties, arbitral tribunals, and arbitral institutions currently continue to rely mostly on paper-based awards.

Benefits:

• there is a general acknowledgement that electronic awards offer undeniable advantages of efficiency, convenience, cost-effectiveness, and environmental friendliness, thus complementing efforts to streamline arbitral proceedings;
• enabling the reliance on e-awards is aligned with the development of digital and paperless contracts and trade generally, as well as the transition of courts to fully digitalized proceedings;
• with modern technology such as the use of electronic seals, electronic awards are more secure and even less likely to be tampered with compared to their paper-based counterparts;
• as evidenced by the impact of the COVID-19 pandemic on traditional mail and courier services, digitizing the processes in arbitral proceedings, including that relating to awards, will ensure the uninterrupted delivery of justice in the event of similar disruptions.

Despite these evident benefits, e-awards are not widely used in practice yet. The question then arises why a general tendency is there still to issue awards in paper form.

It appears that under the current international and national legal frameworks, electronic awards are not an attractive option for arbitrators and the parties, compared to paper-based awards mainly due to concerns of their enforceability and utility. This perception is shaped by several factors including (i) the legal uncertainty on originality, (ii) concerns on formal validity and notification process, and (iii) practical concerns on integrity.

Obstacles to facilitating the reliance on electronic awards mainly arise from:

• domestic laws implementing the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) often implicitly or explicitly require arbitral awards to be in paper form and physically transmitted, despite advancements in digitalization in other areas of judicial proceedings;
• currently, the recognition and enforcement of e-awards is left to domestic laws, practices, and procedures to develop applicable standards, which may vary among jurisdictions;
• inability to rely on electronic awards for various procedural purposes. This include serving the award on the counterparty, seeking to set aside the award, commencing enforcement proceedings, using it for filing at public registries, or relying on its estoppel effects in court proceedings. In many legal systems, these procedures often required a paper original or an authenticated paper copy of the electronic award;
• in many jurisdictions judges still interpret and accept awards as duly authenticated originals when they are apostilled pursuant to the Convention of 5 October 1961 Abolishing the Requirement of Legalization for Foreign Public Documents (HCCH 1961 Apostille Convention). The certification of awards by relevant apostille authorities in that jurisdictions is contingent upon confirmation of their actual wet ink signature.

With that in mind, there seems to be an indispensable need for further development and clarification of the recognition and enforcement of e-awards at the international level.

Watch our profile as we will delve deeper into topics related to the benefits and challenges of modernizing the New York Convention.

by Joanna Iwanicka

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The UNCITRAL Colloquium:
Dates: 1 October (Tuesday) to 2 October 2024 (Wednesday)
Venue: Vienna International Center (VIC), Vienna; Boardroom D

Agenda:

• Panel 1 will discuss issues related to electronic awards from the perspectives of arbitral institutions.
• Panel 2 will discuss the experience of digitalization in national court proceedings, focusing on the electronic rendering and enforcement of judgments.
• Panel 3 will be dedicated to providing an overview of UNCITRAL existing texts on electronic commerce and electronic communication.
• Panel 4: the discussions will focus on consistency across UNCITRAL instruments and to capitalize on the solution they provide.