CYPRUS: Does the principle of res judicata apply to arbitral awards?
In the case of Cruz City 1 Mauritius Holdings v Arsanovia Limited, the Applicants filed an application for the registration and the enforcement of an arbitral award. The Respondents had filed their opposition relying on the principle of res judicata since the particular award had been enforced in an earlier proceedings before the Courts of Cyprus. It is worthy to note that during the previous proceedings the Court had dismissed the application for registration etc, on the grounds that the Applicants had failed to satisfy the conditions of Article IV of the New York Convention. The Court had stated that the principle of res judicata did not apply in this case for the following main reasons:
(i) The definition of finality was examined and the Court relied on the English case of Carl-Zeiss-Stiftung v Rayner (1969) 3 ALL ER 897 whereby it was stated that finality meant:
“Finality for this purpose means that the decision: (a) is one which does not ex facie, as in the case of an order for an account or enquiry, leave something to be judicially determined or ascertained before the decision can become effective or enforceable; and (b) is not subject to subsequent discharge, rescission, modification or any other form of revision by the Court or tribunal making the decision."
Therefore an earlier judgment must be a decision on the merits of the case in order for the principle of res judicata to be invoked. Hence the crucial point was to examine whether the fact that the Applicants had failed to meet the conditions set by Article IV of the New York Convention had a bearing on the merits of the case or whether it was in fact of a procedural nature. The Court in this issue decided following the English case of Rainstorm Pictures Inc v Lombard- Knight (CA) 2014 Bus LR 1196 that the requirements as to Article IV are of a procedural nature as also held in the case of Bristol Business Corporation v Besuno Limited (2011) 1(Β) A AΔ 934".
On the basis of the above, the principle of res judicata does not apply on the issue of satisfaction of the procedural conditions set out in Article IV of the New York Convention.
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