ESTABLISHMENT OF THEMOST COMMON GROUND ON WHICH LOCAL ARBITRAL AWARDS BECOME UNENFORCEABLE IN SRI LANKA

Abstract

The parties select more adversarial arbitration process over other alternative dispute resolution methods mainly due to the enforceability of the arbitral award. If the arbitral award becomes unenforceable due to any reason, the selection of arbitral process is useless. In this scenario, aresearch was conducted specially to find out the most common ground on which local arbitral awards become unenforceable in Sri Lanka and to explore the reasons to occur the unenforceability under that most common ground with the expectation that this improved knowledge would assist to minimize the unenforceability of local arbitral awards. The research was conducted under the quantitative research approach. A cross-sectional, retrospective and non-experimental study design was adopted. The local arbitration cases registered at the High Court-Colombo during 2009-2012 for the setting aside or for the enforcement of the awards and the courts had completed the proceedings were selected as the convenient sample. The sample contained 910 cases. The data collection process was a two tiered process. In the first tier, a cross sectional survey was carried out at the High Court-Colombo to find out arbitral awards become unenforceable due to setting aside or refusal of the enforcement by the High Court. If the judgment of the High Court was appealed to the Supreme Court the judgment of the Supreme Court was also considered. Through the first tier of data collection, it was found that non adherence to the enforcement procedure is the most common ground on which local arbitral awards become unenforceable in Sri Lanka. During the second tier of data collection, semi structured interviews were conducted with the parties who failed to enforce the arbitral award due to non adherence to enforcement procedure, those parties were mainly financial institutions and contained 16 organizations. Through the interviews it was found that performance defects of the legal counsel and the performance defects of the officer in charge of the case are the main reasons for the unenforceability of arbitral awards under the most common ground. Therefore it is recommended to establish proper reporting and monitoring systems within the organizations dealing with arbitration.