Dáil Éireann debate -
Tuesday, 6 May 1980

Vol. 320 No. 5

Arbitration Bill, 1980: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Justice (Mr. Doherty)

The convention provides panels of conciliators and arbitrators whose services may be called upon by investors and states. The basic principle is that investment disputes should be settled by conciliation and arbitration but ratification of the convention by a state does not mean that that state is thereby obliged to submit any dispute with a foreign investor to arbitration. Resort to arbitration in relation to any particular matter is wholly voluntary. However, once consent to arbitration has been given it cannot be withdrawn and a subsequent refusal by one party to co-operate will not prevent the other party from proceeding with the arbitration.

Most of the provisions of the convention deal with the organisation of the International Centre and the regulation of the conciliation and arbitration proceedings, and do not need implementing legislation. There are, however, important provisions relating to the effect of an award and the enforcement of monetary obligations imposed by an award which have to be covered in the Bill. Article 54 provides that each contracting state shall recognise an award as binding and enforce the pecuniary obligations imposed by an award as if the award were final judgment of a court in that state. Section 16 of the Bill gives effect to this article by providing that the pecuniary obligations imposed by an award shall, by leave of the High Court, be enforced in the same manner as a judgment or order of the High Court to the same effect. Where leave is so given, judgment may be entered in for the amount due or outstanding under the award.

In accordance with Article 55 the obligation to enforce an award will not derogate from the law in force in any contracting states relating to immunity of that state or of any foreign state from execution. In theory, therefore, a state against whom an award has been given could invoke immunity from execution of an award in a country which provided such immunity and the convention provisions have been criticised because of that. It is, of course, impossible to ensure fully that sovereign states will live up to their obligations and the convention goes as far as is practicably possible to ensure that awards are enforced. Any refusal by a contracting state to honour an award given against it would, of course, be a breach of its obligation under the convention to treat the award as binding and this could give rise to action on the international plane by the investor's home state on behalf of the investor.

While Part III of the Bill contains grounds on which enforcement of a New York Convention award can be refused, there is no provision in Part IV for refusing to enforce a Washington Convention award. The reason for this is that the New York Convention deals with awards that can arise in any area of dispute and from different arbitration systems—some of which might have features unacceptable to others. It is necessary, therefore, to interpose at the enforcing stage a means of ensuring that the basic requirements of justice have been complied with. The Washington Convention, on the other hand, deals with awards of a strictly limited class. Moreover, they can arise only from an arbitration process regulated by the convention itself which contains adequate safeguards to ensure compliance with these basic requirements. It is because of this that the convention can provide that an award is to be enforced as if it were an order of a domestic court.

If any dispute arises as to the validity of an award, that matter must be taken up with the International Centre in accordance with the provisions of the convention. To cover any such case, section 17 of the Bill provides for the adjournment of an application for enforcement pending the settlement of any claim for the revision, interpretation or annulment of an award.

Article 17 of the convention provides that any deficit incurred in the operations of the international centre shall be borne by the contracting states. In fact, no such deficit has so far arisen. The purpose of section 14 is to give authority for the payment of any contribution under Article 17 or for payment of any administrative expenses that might be incurred by the Minister for Finance. Such administrative expenses, for example, could arise from participation in the activities of the Administrative Council of the international centre, which is representative of all contracting states, or of committees appointed by that council.

The possibility of a direct charge on public funds under Article 17 of the convention makes section 13 of the Bill necessary. The Constitution provides in Article 29.5.2º that the State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement have been approved by Dáil Éireann. Since a charge to public funds will not arise under the New York Convention, a provision similar to section 13 is not required in relation to that convention.

Section 15 provides, in subsection (2), that the 1954 Arbitration Act shall not apply to proceedings under the Washington Convention. However, subsection (1) (a) allows certain provisions of that Act to be applied by order of the Minister for Justice to proceedings under the convention. An order of this nature might be made if arbitration proceedings under the convention were to take place here. The convention provides in Chapter VII that conciliation and arbitration proceedings may be held at the seat of the International Centre, which is at Washington, or elsewhere. Subsection (1) (b) permits the provisions of the Foreign Tribunals Evidence Act, 1856, to be applied by ministerial order to proceedings under the convention. Such an order would be made if it became necessary to take evidence in this country for the purpose of an arbitration hearing in another country.

The Washington Convention has been generally regarded internationally as a worthwhile development. It has been signed by 80 and ratified by 75 states and provision for the use of its facilities has been inserted in an increasing number of bilateral treaties dealing with investment.

Part II of the Bill deals with the power of a court to stay proceedings in a dispute which was the subject of an arbitration agreement. Paragraph 3 of Article II of the New York Convention requires a court, at the request of one of the parties, to stay the proceedings and refer the matter to arbitration unless the agreement is null and void, inoperative or incapable of being performed. There is a somewhat similar requirement in the 1923 Geneva Protocol on Arbitration Clauses to which effect was given by section 12 (2) of the Arbitration Act 1954. Articles 26 of the Washington Convention provides that consent to arbitration shall exclude any other remedy unless otherwise stated. Part II gives effect to the provisions of both conventions in this regard by requiring a court to stay the proceedings except in the circumstances set out in section 5.

The scope of Part II is not, however, confined to foreign arbitration agreements. It applies to domestic agreements as well. At present a court has a discretion under section 12 (1) of the 1954 Act on whether to stay proceedings in a dispute covered by a domestic arbitration agreement whereas in the case of a foreign agreement section 12 (2) of the same Act obliges the court, except in certain circumstances, to stay the proceedings. Domestic arbitration agreements are therefore being assimilated to foreign agreements in this regard. I think it is desirable in principle that parties should be held to their agreement. Of course any party to arbitration proceedings here is entitled to require the arbitrator to state a case on a question of law for the decision of the High Court. This right is not affected by section 5.

This is, I think, a non-controversial Bill which will, I hope, commend itself to Deputies on all sides of the House. Because of its technical nature it is, perhaps, more a Committee Stage Bill but if there are any particular aspects on which Deputies would like clarification, I shall endeavour to deal with those aspects in the course of my reply.

Mr. Keating

I agree that this Bill is largely technical and is, therefore, a Committee Stage Bill but there are certain elements and certain underlying philosophies relevant to the Bill which need attention.

The Bill has as its objective the ratification in this country of two international conventions dealing with arbitration. With dozens of other countries we are co-signatories to those two conventions. One gets the growing impression that a significant amount of our legislation and of our legislative reform is engendered not necessarily so much by what one might call domestic origination as by either pressure from outside or a value system reflected in a set of laws emanating from outside the country or indeed from what I consider to be the weakening ability of our parliament to respond to the need for legislative reform.

The two conventions concerned were signed some years ago and we are now only enabling them to be ratified here. One of the lessons to be drawn from the evidence that we find increasingly around us is that the whole area of law reform is largely being taken up from outside the House, either through our courts, through the European courts or by way of conventions such as the two in question. This is a matter to which I should like the Minister to refer when he is concluding. There is an important point here because this change means that there are major implications, not only for Irish law but also in terms of constitutional matters. One might ask, for example, to what extent the type of conventions referred to insinuate into our legislation a set of values or an attitude to life which is not necessarily Irish?

I am not suggesting that we do not have anything to learn from the reactions of outside bodies or organisations or from other cultures or civilisations but in recent times we have had to witness—and to some extent regrettably—the reality that either our own courts have told us we must change the law in some areas or that we have been told by the European courts that we must do so. In some cases we have had to change our law on foot of conventions to which in some cases we have subscribed readily but to which in other cases we have been reluctant subscribers. This means that our Constitution is being rewritten constantly and that we have a body of law resulting from that, and often belatedly, which is changing but not necessarily within our control. I have certain anxieties about that. It reflects badly on our own ability to say that we need to change the law in some area and we are seen to be reacting to events that we are either unwilling to face up to or are not in control of.

Therefore, there is a basic question which this convention helps us to underscore and that is the degree to which we are masters of our own legislative destiny. The Bill, in so far as it embodies in this case a relatively non-controversial set of proposals in relation to arbitration, which is a sensible procedure in itself, is not in any way essentially disagreeable to anybody in the House though there are points of difference in relation to the technical aspects of it. This basic question centres around the degree to which we are being forced increasingly to react to legislative reforms emanating outside the House, usually by non-legislators, by people who do not have a mandate to do that. I do not wish to decry that in any way. It is good that we have the courts and also the European courts to tell us where there must be reform. In that way there is protection for the citizens when in certain regards we are not able to protect them.

An international convention provides us with a framework in which we can view in a new way the challenge in that convention. In recent times we have had about half a dozen cases such as the Airey case and the adoption referendum, whereby we were told either by the supreme court or by the European courts that we were not doing our job as it should be done and that, therefore, our law would have to be changed. This would mean rewriting our Constitution.

There are serious implications there which we will not go into in very great detail in the context of this Bill. The same is true of all international conventions to which we are normally very minor contributors, in some cases dragged in perhaps reluctantly in the context of being participants or contributors to agreements made at United Nations or European level. I wonder what effect this is having on Irish law, Irish attitudes to international and domestic issues and legislation and to what extent it is eroding the primary responsibility of this Parliament to legislate. In my view, we are ceding to some degree our power and responsibility—I stress responsibility—in this regard.

I am not suggesting that this Bill offends massively in that respect but it is appropriate that one should say it is regrettable that we have to be bludgeoned into changing legislation. Fortunately we have the Judiciary and the European and international structures which tell us that what we are doing in our country is not in line with right standards and values and that we should change. I wish we had the courage and wisdom to do this ourselves. If we did we would have to be less reliant on being literally reactionary and more innovatory and law reformist. All laws need to be reformed regularly because they become out of date not long after they are written.

This Bill, which deals with two international conventions, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Washington Convention, pose a number of questions. In my opinion arbitration is a sensible approach. If we can evolve a framework and create a structure whereby people can thrash out their agreements by a process of arbitration, then it is to the good. The Minister might be good enough to tell me why there has been a delay in the ratification of these conventions.

We should have a closer look at section 5 which bears on section 12 of the 1954 Act. The new Bill appears to circumscribe the more generous provisions in section 12 (1) of the Arbitration Act, 1954, which reads:

If any party to an arbitration agreement or any person claiming through or under him commences any proceedings in any court against any other party to the agreement or any person claiming through or under him in respect of any matter agreed to be referred, any party to such proceedings may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to that court to stay the proceedings, and that court, if it is satisfied that there is not sufficient reason why the matter should not be referred in accordance with the agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.

Section 5 of the new Bill refers to the staying of court proceedings where party proves arbitration agreement and is almost the same as section 12 of the 1954 Act, but I wonder why there are some differences. Section 5 reads:

If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings....

I find the use of the word "legal" mysterious because the full phrase is "commences any legal proceedings in any court against any other party to such agreement", which is identical with section 12 of the 1954 Arbitration Act. I do not understand why the word "legal" was used, because I am not aware of what other proceedings one can introduce in a court. That small point might be cleared up on Committee Stage. The section reads on:

...in any court against any other party to such agreement, or any person claiming through or under him, in respect of any matter agreed to be referred to arbitration, any party to the proceedings may at any time after an appearance has been entered, and before delivering any pleadings...

Why are there differences in the two pieces of legislation? Perhaps the Minister would be good enough to compare the differences and see if section 5 of the Bill is more restrictive, because it seems to deem relevant only matters agreed to be referred to arbitration. There are a number of minor differences and distinctions I would like the Minister to look at and tell me why the changes were made in that section.

It appears there might be a weakening of the powers of the courts arising from this and some minor sections of this Bill. I would like to ensure that the courts, which have done and continue to do a great service to this country, particularly in the area of what might be called an inert approach to law reform on occasions, would not be restricted in their powers arising from the implementation of this Bill.

The domestic implications of legislation of largely international origin have never been the subject of serious consideration. In view of the global village—to use a sociological expression— in which we live, would it be worth considering what effect the implementation of this convention and other legislation—which in some cases is almost foisted on us, and certainly insisted upon by agencies, governments or structures outside this country—would have on our way of life which is vulnerable in some respects, although I think we have a great deal to gain in any such transaction.

Section 8 reads:

Any person who seeks to enforce an award shall produce—

(a) the duly authenticated original award or a duly certified copy of that award,...

What does evidence of a "duly authenticated original award" mean? In the context of the principle of private international law, how does one authenticate an original award? What criteria are acceptable for such an authentication? There is room for confusion here. We should be very clear what we mean when we say certain authentication is acceptable but others might not be.

Section 9 reads:

(1) Enforcement of any award shall not be refused otherwise than pursuant to the subsequent provisions of this section.

We are then given a list, which needs to be scrutinised but need not be discussed in detail at this stage. In other words, it seems that unless a case comes under a heading outlined in this section it cannot be refused. There may be some good and valid reasons for this other than those set out in section 9. It seems that we run the risk of throwing out a lot of case law built up over the years because it will be out of bounds on the basis of this section. I should like to know the reason for limiting the power in section 9. Why limit the jurisdiction of courts which are our fundamental weapon when it comes to the question of instilling justice into all our systems and permeating all our laws with justice? There is a big distinction because I often feel that it is not more law we need but more justice in the laws we have. Why circumscribe and inhibit the prospects of a court being able to act in those areas? Why lose out on the great benefit and expertise we have built up over decades, perhaps centuries, by a volume of case work to which lawyers regularly refer? Section 5 omits the words "ready, willing and able" which are contained in the earlier Act. Will the Minister explain his thinking for the change in that section?

An Leas-Cheann Comhairle

I am sure the Deputy will agree that he is now embarking upon Committee Stage work.

Mr. Keating

Those two sections are the core of my concern and I have a slight apprehension about them. Public policy dictates that a person is entitled to seek the aid of a court but this section seeks to limit that right by detailing exceptions to arbitration. The old section gave the court more discretion. For example, the old section mentioned "sufficient reason". We should guard against a person using the arbitration clause in the Bill to escape a responsibility, to be able to say that if he goes to court the likelihood is that he will come out worse but he opts for arbitration because of the de-limiting of the Bill under which he has an option which might benefit him. The potential is there in the arbitration clause to stop another party obtaining his legal rights. A court can and should be able to force such a person into court but the new provisions reduce the powers of courts to stop a defendant misusing the arbitration clause. For example, delaying tactics may be adopted. A person may refuse or fail to agree on arbitration. There may be differences on details of various elements within arbitration, methods by which justice could be delayed indefinitely. That is added to by the understandably fairly unwieldy intercourse which has to take place between agencies here and in other countries and the various third party agencies which, in the event of a dispute, come into play. There are great grounds for delaying and putting off the day of justice if we are not careful. In a Bill which was designed to expedite the dealings of various arbitration discussions and procedures we do not wish to introduce a measure which gives people the ability to escape justice. What we all want and crave for surely is a system to deal more rapidly with such procedures.

One can envisage, for example, a failure to agree on a date and other shenanigans that lawyers are familiar with when dealing with defendants. Courts have built up a series of precedents under "sufficient reason" and "ready, willing and able" in the previous Act. Those case laws are directed towards ensuring that justice is achieved between the parties. Public policy should dictate that justice is seen to be done and I am not so sure that the Bill does this. It is hard to be definite about that until one sees the provisions of the Bill in action. Accordingly, the Minister should endeavour to embody in the Bill some system of self-monitoring or self-regulation. I do not know why we do not adopt that system more widely. We get very little chance to discuss any measures and once a provision is on the Statute Book it is almost impossible to change it. A change takes a major debate, a major provocation and a major lobby. In Bills like this we should be able, by ministerial order, or by the introduction of a repealing Bill, to make changes if certain provisions do not operate satisfactorily. I do not know if it is possible to build into a Bill such a system of automatic recall after a period of time to permit an assessment of how it worked and give an opportunity to change it, but such an approach is worth considering.

Arbitration has its merits which include relative speed, informality and the fairly intimate handling of matters that do not necessarily need a public court system. However, we must ensure and copperfasten the guarantee to two people on both sides of arbitration hearings that the courts have the power over the proceedings and have the basic responsibility, subject to the Minister for Justice, to ensure that in the event of the proceedings not working out the parties involved will not evade their responsibility. The courts, if necessary, should have the same power they always had to intervene. I do not understand from what quarter the call came to reduce the powers of our courts under section 4 of the 1954 Act. I do not believe there was any public demand for it and it is my view that most people are concerned about any suggestion of restricting the power of our courts in this regard. The Minister should think again about this. This amending section will inevitably strengthen the hands of the strong as opposed to the weak. Those who will benefit most will be people who will be able to use the weight and the power, financially and otherwise, to make the maximum gain from the arbitration procedure while knowing at the same time that the powers of courts are slightly limited relative to the previous Act. My approach would have been in the contrary direction.

Unless the defendant is brought within the stated exceptions the amending section may otherwise hold up the arbitration hearing or frustrate it. The old section gave courts wider power to ensure justice was not frustrated. I should like to know if consideration was given to the constitutional provision that justice should be administered in courts of law. We do not want a situation such as that which arose in the context of the debate on the adoption issue where doubts about the legality of adoption orders led us to a referendum to clear those doubts. Is there a degree to which the arbitration proceedings and decisions could have constitutional implications? If the arbitration procedure is interpreted as being a system of dispensing justice that system is enshrined in the Constitution as being in the hands of the courts. We do not want, even by inference, to imply that that is diluted or subtracted from. Will the Minister tell the House if there is a possibility that such a situation whereby the inference of arbitration is about dispensing justice could weaken the fabric of the court or dilute its power?

I can see the amending section being availed of by unscrupulous people, usually with economic weight and the power, as it were, to grind their adversaries into the dust, to outstay them, outlast them, out-manoeuvre them, out-buy them in terms of legal weight behind them and so on. There is a difficulty there that needs to be cleared up. It is a very fundamental difficulty relating to the more than hint, the strong suggestion, that the change from the 1954 Act to the relevant or comparable section of this Bill has as its net result the weakening of the power of the courts. That would seem to strike right at the heart of our justice system, would not be to our advantage but indeed would be most unhealthy.

Perhaps the Minister would be good enough to tell us the implications of acceptance of this Bill and the two conventions involved, the New York and Washington Conventions, in regard to our relations with Northern Ireland, whether or not international dealings would be affected and, if so, how, whether or not the situation there is that an analagous Act has already been implemented and what is the impact in that regard. Are there any specific cases in progress at present that would be affected by this Bill? If so, is there another legal problem here? If cases have been embarked on on the understanding that a position obtains—as it does now in the absence of this Bill—and if, in the meantime, the legislation is enacted will it apply to these cases? If so to what extent will the parties involved have a claim that they entered into the proceedings on a very different understanding which has now been changed?

In the course of his speech the Minister spoke about the 56 countries that have ratified the New York Convention and said:

It is appropriate that we should undertake to enforce only awards arising in a country which, in its turn, will enforce Irish awards.

The enforcing agency and the manner in which that is handled and structured is of interest here. There are some countries that are co-signatories to these conventions, others that are likely to become such co-signatories where the standards operating, the procedures and structures of justice, the administration of the courts, even the system of government, to put it mildly, may be somewhat different from what we would consider normal or even democratic. Therefore how will we deal with such a problem? We have a real difficulty here, which is that we have never worked out, as it were, a basic human rights policy in relation to such countries. For example, how are we to evaluate the enforcement or non-enforcement of these conventions by some other countries whose basic value systems, the very standards of democracy they apply are profoundly different? In some cases we would consider them to be profoundly wrong, dehumanising and degrading; in other cases they may be just different.

Is there a difficulty here about not accepting decisions reached in that environment, in that context, and how will we handle that problem? It seems to me that, in the whole field of international relations, we have a growing difficulty because of the vacuum which exists here in relation to a fully worked out or fully-flushed policy on human rights basically and on the various political and economic attitudes arising therefrom. We have seen evidence of difficulties recently when we have had confusion relating to our political response on major international issues which has left us unhealthily divided as a country because we have never sat down and asked: "What do we do about this kind of situation? What do we work out as criteria for action when there is a denial of human rights internationally?"

Then there is the question of a duly authenticated award, or a certified copy of the original arbitration agreement. I should like to know what are the criteria for acceptance of such. The Minister referred also to the Convention on the Settlement of Investment Disputes between States and Nationals of other States, and said:

The purpose of this Convention is to promote the flow of private investment into underdeveloped countries by providing a means of resolving disputes between foreign investors and the countries in which they have invested.

I have some anxieties about this because the pattern and tradition of activity in this area have been, I think, unhelpful to very many of these underdeveloped countries. I wonder to what extent—and this goes back to my basic question about the manner in which law not of our origination is being foisted on us—is this section being insisted on, or being pressured by what we might call major entrepreneurial agencies whose concern would not be the same as that of the Minister or mine, namely, the welfare of the people of a particular underdeveloped country but rather much more commercial or pragmatic concerns. Basically this convention is about settlement of investment disputes. In so far as we can influence such matters I should like to be quite certain that it is designed to protect the welfare of people rather than the profits of multi-national companies or agencies of that nature, not that I have any hostility in that direction. Our concern should be to spend most of our time in the parliamentary system devoted to the welfare of people rather than of commercial enterprises. I appreciate, as the Minister says:

It represents the culmination of efforts over previous decades to promote investment in countries needing it and at the same time to ensure protection of such investment. One of the problems was the absence of an international facility specifically designed to resolve disputes between private investors and sovereign States.

This is where the structure of the arbitration is very important. A lot of this investment—and probably the reason for disputes over it—would arise out of mixed feelings about what the investment should be for, how it should be used and so on. For example, there has been the experience of the green revolution in undeveloped countries. Here I can visualise a situation in which a body of commercial attitude would say that investment was necessary in a certain regard, should be orientated in a certain direction and certain conditions laid down for it which are not dictated, even to a small degree, by the people in respect of whose country we were speaking about. There has been massive exploitation of such countries by what we might loosely term the western section of the northern hemisphere. I should like assurance that this convention about which we are talking and our contributory support would not be designed to augment such massive exploitation over the years which has deprived people of so much in order to give advantage to, relatively speaking in global terms, the small few.

I would appreciate the Minister commenting on the basic points about the question of the courts and the degree to which we are increasingly becoming diminished in our status as legislators, having to oblige pressures from outside or from other agencies by unwillingness to be innovative in that area. That is a trend that should be reversed and it is timely to refer to it in the context of this Bill.

Minister of State at the Department of Justice (Mr. Doherty)

I thank Deputy Keating for his comments. I shall endeavour to comment in so far as I can on the various points raised.

The first point that the Deputy asked a question on was the fact that the conventions had not been ratified. For the Deputy's information and for the information of the House, Ireland signed the Washington Convention on 30 August 1966 and did not sign the New York Convention, which was open for signature until 31 December 1958. Subsequent to the signature of the Washington Convention it was agreed that the Department of Justice would include provisions to implement the convention in the then proposed Arbitration Bill to give effect to the Council of Europe Convention on Uniform Law on Arbitration and the New York Convention as soon as pressure of more urgent legislation permitted. Pressure of other work prevented the proposed Bill being proceeded with and after Ireland became a member of the EEC it was decided to proceed with the ratification of the New York Convention, because of the provisions of Article 220 of the Treaty of Rome, when the negotiations of the EEC Judgments Convention were completed. The opportunity was taken to include also the necessary provisions to implement the Washington Convention.

The point has been made that there is a tendency to assimilate other values from other countries into our society through the legislative process. This Bill is not a law reform Bill. It is intended to introduce legislation that will deal with the enforcement of foreign awards against people living here and provides for us a reciprocal or corresponding right for our own citizens and people in other countries.

In relation to the monitoring of the courts and the reduction of the power of the courts, it is expected that under the convention there will be very few cases.

An Leas-Cheann Comhairle

There is some talk going on in the Gallery. The Gallery should be silent all the time.

Mr. Doherty

We could not in any way change the law here without a breach of our obligations under the convention.

I will take some other points raised and then I will deal with the sections as referred to. The Deputy had a specific interest in the question of Northern Ireland. I understand that the UK has ratified both conventions and that the provisions of the conventions apply in Northern Ireland as they apply here, so that point is covered.

Mr. Keating

With the permission of the Leas-Cheann Comhairle, I want to ask a question. On the question of the apparent reduction or inhibition of power of the courts, could the Minister develop that, not necessarily today if he has not got the information immediately available? What is the basic reason for the relative reduction?

Mr. Doherty

The Deputy raised the question of the use of the word "legal" in section 5. In that regard, if Deputy Keating would allow any questions on the textual differences to be examined between now and the Committee Stage, it would give us an oportunity to deal with this in more depth. In relation to section 5, it is desirable that the party who has formally agreed to refer disputes to arbitration should not be able to go behind the agreement if the agreement is valid and capable of being performed. This is recognised in the Geneva Convention, in the New York Convention and in the Washington Convention. It is equally desirable in relation to domestic agreements that the change is not very great and it is also to be expected that, under the existing section 12 (1) of the 1954 Act, a court faced with a party who has instituted proceedings in breach of arbitration agreement made by him would invariably proceed on the basis that the party should be held to his agreement and that the proceedings should be stayed if the agreement was a valid agreement and capable of being performed. The purpose of section 5 is twofold in so far as (a) it is to give effect to both conventions by requiring courts to stay proceedings instituted in a matter in which the parties had agreed to refer to arbitration and, (b) to bring the existing provisions of our law dealing with the staying of proceedings in matters subject to domestic arbitration agreements into line with provisions in relation to foreign agreements.

In relation to section 8, there was mention of a "duly authenticated original award". The question of how an award should be authenticated would be a matter for the court to decide and to be satisfied about. Eventually there may be rules of court or rules brought about by the court to deal with that aspect. Grounds for refusal of enforcement under section 9 reproduces the conditions under which enforcement may be refused under the convention. The reasons are largely similar to the reasons for refusal of enforcement under the 1954 Act and we could not ratify the New York Convention unless we inserted the grounds of refusal in section 9.

Mr. Keating

Does the Minister accept that that might mean or imply an implicit reduction in the power of our domestic courts?

Mr. Doherty

I do not.

Mr. Keating

Will the Minister be good enough to consider that point?

Mr. Doherty

I will certainly examine it.

The Bill is a useful measure even though its provisions may not be invoked to any great extent here, and it is true to say that foreign arbitration awards rarely, if ever, come before our courts for enforcement. Be that as it may, foreign businessmen contemplating contracts with Irish interests will be anxious to know whether arbitration awards given against the Irish party will be enforceable here. Ratification of the New York Convention will guarantee enforcement under internationally accepted rules. For any Irish interests here who may enter into investment contracts with foreign Governments or foreign State agencies ratification of the Washington Convention will open up the possibility of having any disputes arising resolved by the International Centre for the Settlement of Investment Disputes. Further, since Ireland is a member of the World Bank, it is appropriate and desirable that we should ratify the Washington Convention, which was sponsored by that body; and, as I have already mentioned, ratification of the New York Convention will enable Ireland to comply with obligations imposed under Article 220 of the Treaty of Rome. It is also true to say that when we negotiate at international conventions we cannot dictate the final form they may take. There are inevitably compromises between the widely differing points of view and we have to accept these compromises just as they do in other countries.

Question put and agreed to.

Committee Stage ordered for Tuesday, 13 May 1980.