All insights Arbitration

Public policy at the ADGM Courts: Article V(2)(b)

ADGM · public policy
Photo: Asep Bagja Priandana / Unsplash

Public policy is the exception every losing party reaches for and few succeed with. Before the ADGM Courts it is a narrow, internationally-minded gate, not a back door to re-arguing the merits.

A safety valve, kept tight

Article V(2)(b) permits a court to refuse recognition and enforcement where doing so would be contrary to the public policy of the forum. It is the Convention's safety valve for its most fundamental values, but it is deliberately narrow, and the drafters, courts and commentators have resisted every attempt to widen it into a general merits review.

International, not domestic, public policy

Best international practice distinguishes a State's ordinary domestic public policy from the far smaller set of fundamental principles that engage international public policy for the purpose of enforcing foreign awards. Only a breach of that fundamental core (the essential principles of justice or morality, or the State's most basic legal order), should defeat enforcement. A common-law commercial forum such as the ADGM is naturally aligned with this restrained, internationally-oriented conception.

The gate opens only for a breach of a State’s most fundamental values, never for mere disagreement with the result.

What does not qualify

An error of law or fact by the tribunal is not a public-policy breach. A generous award, an unwelcome interpretation, a result a party considers commercially harsh, none engages the ground. The court does not review the merits under the banner of public policy; to allow it would unravel the Convention's whole design.

The onshore dimension

Where enforcement is ultimately aimed at onshore UAE assets, counsel should be alert that the public-policy conception applied at the point of onward execution has historically been articulated more broadly than the international standard. The strategy, therefore, is to build an award and a record that would survive the narrowest and the broadest formulations alike, and to choose the enforcement route with that in mind.

Key instruments: New York Convention 1958 (Article V(2)(b)); UNCITRAL Model Law; ILA Recommendations on public policy (persuasive guidance); ADGM Arbitration Regulations 2015. General information, not legal advice.

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