Chapter II: General principles and the legal framework for the recognition and enforcement of foreign arbitral awards
1.1. Definition of the terms “recognition” and “enforcement”
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Chapter II: General principles and the legal framework for the recognition
arbitration.337 The court will then declare the award enforceable focused on this “recognition”.
In the case of domestic awards, § 1060 (1) ZPO provides that formal recognition is not necessary.338 The provision obviously shows that the enforcement of a domestic award will occur once a court finds it enforceable. The wording of both § 1060 and § 1061 ZPO also makes clear that the term “enforcement” is a misnomer in this context. The point is the court is not ordering enforcement measures, but it is just issuing a declaration of enforceability, which is considered to be the official basis of further enforcement measures by the competent enforcement organs of that state.
So we should bear in mind that the terms of ‘recognition’ and ‘enforcement’ are misleading. In particular, in two respects they are incoherent. First, proceedings for ‘recognition and enforcement’ in the sense of the New York Convention 1958 or §§ 1060, 1061 ZPO must be clearly distinguished from proceedings in the proper sense. In the German legal system the enforcement of rights is composed of a two-step process, which involves two separate and various sets of proceedings. German law differentiates between the Erkenntnisverfahren339 and the Vollstreckungsverfahren.340 In the first stage the existence of an alleged rights’
determination has an important role. The second stage is concerned with the execution of the first stage’s findings against a party or its property. Proceedings for recognition and enforcement of awards according to the New York Convention 1958 or to §§ 1060, 1061 ZPO, belong to the first stage. A separate proceeding for the recognition of the other non-enforcement related effects of awards is rare in Germany and it is not necessary, while the recognition occurs automatically.
Another point of misleading of terminology is that the terms ‘recognition and enforcement’ are tightened much.341 The German Civil Procedure Code clearly compares both concepts. The difference is especially cleared in relation to domestic awards. Different sections of the ZPO regulate both concepts.342 According to German law, it makes a difference whether a party wants to require the active enforcement of an award, or whether it wants to prevent the re-litigation of considered issues. Berger defines these concepts as follows: Recognition means the acceptance of a foreign award as having the same effects as a domestic award. Focused on this recognition, the court will declare the award enforceable. Both decisions are usually
337 Redfern/Hunter (supra n. 332), paras. 10-13.
338 Ibid.
339 Erkenntnisverfahren is regulated in the first seven books of the ZPO.
340 Vollstreckungsverfahren is regulated in the 8th book of the ZPO.
341 Cf. Wieczorek, Zivilprozeßordnung und Nebengesetze, Band IV, Teil I: ZPO, 8. Buch: Zwangsvollstreckung,
§§ 704-863, Berlin 1958, p. 29.
342 For instance, § 1055 ZPO (recognition) and § 1060 ZPO (enforcement).
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rendered in the same judgement. The award may then be enforced against the losing party by the competent enforcement organs of that state.343
In many legal systems, a special proceeding to obtain a declaration of enforceability is necessary for the active enforcement of an award and the recognition of non-enforcement related effects (in particular, res judicata) happens automatically.
1.1.2. Definition of the terms “recognition” and “enforcement” in Uzbek Law
While the recognition institute is new for Uzbek legal science, the term ‘recognition’ has not been defined from the scientific point of view until now in Uzbek legal literature. Related monographs are entirely lacking the term and the authors of publications in this field confine themselves by stressing practical difficulties in dogmatic clarifications of the recognition institute and thus not mentioning the theoretical aspects of the terms “recognition” and
“enforcement”.344
The recognition of a foreign title has not been discussed as well. The comments on procedural law do not address the topic. This situation is unique for many CIS countries, while it traces to the Soviet Law. The USSR was a closed community, since it was not almost interested in International Commercial Affairs. Some Uzbek laws are silent in relation to the supremacy of international legal treaties in some spheres,345 though in some spheres the Uzbek legal system accords the priority to international agreements.346
The term ‘recognition’ is not defined in the CIS agreements. Bilateral mutual legal aid treaties of Uzbekistan do not discuss this problem, too. The exception is the Treaty between Uzbekistan and China, which defines the legal effect of recognized court judgements.347 Art. 20 of this treaty however remained unclear and its meaning is interpreted differently.
According to multilateral agreements of the CIS the recognition is not distinguished as a separate stage, being necessary for enforcement of foreign court judgments. For example, such recognition is done automatically in accordance with the Kiev Convention. Enforcement of foreign court judgments is done directly by a court enforcement officer, without involvement of the competent courts of the state where enforcement is sought.
343 Berger (supra n. 335), p. 677.
344 Amanova, Arbitration Courts: Advantages and Limitations, Ekonomicheskoye obozreniye 1999, p. 8.
345 The Law on International Treaties of 1995 also contains no primacy clause with respect to treaties.
346 Art. 2 of the Law “On foreign investments” of 1998 accords priority to international treaties concluded by Uzbekistan with respect to investment disputes. On the other hand, Art. 2 of the Law “On Arbitration Courts”
accords priority to an international treaty if it establishes other rules than those provided in the legislation of Uzbekistan on arbitration courts.
347 Art. 20 of the Bilateral Treaty between Uzbekistan and China on Mutual Legal Aid of 1992.
The Minsk Convention, on the other hand, does not differentiate between recognition and enforcement. These are two elements of the same concept. A court decision of a contracting state is submitted to the competent Uzbek court for recognition and enforcement, which is done by issuance of an enforcement order by such competent court.