What happens to enforcement when the award is challenged at its seat? Article V(1)(e) and Article VI give the ADGM Courts a calibrated answer — and one of international arbitration’s most debated questions.
Not yet binding
Article V(1)(e) allows refusal where the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made. “Binding” is read in the Convention's own, autonomous sense: an award is binding once it is no longer open to ordinary recourse on the merits, and the losing party cannot delay enforcement merely by lodging a challenge at the seat.
Set aside or suspended
Where an award has actually been annulled at the seat, the respondent has a Convention ground to resist. But the word in Article V is “may”, not “must” — the Convention leaves a residual discretion, and courts in several jurisdictions have, in narrow circumstances, enforced awards annulled abroad. This is one of the field's genuinely unsettled questions; a common-law forum such as the ADGM is well placed to weigh it carefully rather than treat annulment as automatically decisive.
A challenge at the seat is not a stay by default — and even annulment is a discretion, not an on-switch.
The Article VI stay
Where a set-aside application is pending at the seat, Article VI lets the enforcing court adjourn its decision if it considers it proper, and — on the creditor's application — order the respondent to give suitable security. This is the balancing valve: it allows the ADGM Courts to hold the ring pending the seat's decision without letting a tactical annulment application become a cost-free means of delay.
Strategy around a challenge
For the creditor, security is the answer to delay: press for an order under Article VI so that time bought at the seat is not time in which assets disappear. For the respondent, a set-aside application must be real and diligently pursued; a Convention court will not reward a challenge lodged only to stall.
Key instruments: New York Convention 1958 (Articles V(1)(e) and VI); UNCITRAL Model Law; ADGM Arbitration Regulations 2015. General information, not legal advice.