Set Aside Award

In international arbitration, to set aside (or "vacate" or "annul") an award means that a national court at the seat of arbitration declares the award invalid. Unlike an appeal, set-aside proceedings do not review the merits; they assess narrow procedural and jurisdictional grounds such as lack of a valid arbitration agreement, exceeding the tribunal's mandate, improper composition of the tribunal, denial of due process, or conflict with the public policy of the seat.

The grounds are largely standardized through the UNCITRAL Model Law on International Commercial Arbitration (1985, revised 2006), Article 34, which mirrors the refusal-of-enforcement grounds in Article V of the 1958 New York Convention. Countries that have adopted the Model Law (over 85 jurisdictions) apply broadly similar criteria, though application varies. France, for example, permits set-aside under Article 1520 of its Code of Civil Procedure on five enumerated grounds.

A set-aside ruling normally extinguishes the award in the seat state. However, enforcement courts elsewhere are not automatically bound: under New York Convention Article V(1)(e), recognition "may" be refused if the award has been set aside, leaving discretion. French courts have famously enforced awards annulled at the seat (e.g., Hilmarton v. OTV, Cour de cassation 1994; Putrabali, 2007), treating the international award as autonomous. U.S. courts have split, with Chromalloy v. Egypt (D.D.C. 1996) enforcing an annulled award but later decisions such as TermoRio v. Electranta (D.C. Cir. 2007) declining to do so.

In investment treaty arbitration under the ICSID Convention (1965), the equivalent mechanism is annulment under Article 52, decided by an ad hoc committee within ICSID itself rather than by national courts, on five limited grounds. Non-ICSID investor-state awards (e.g., under UNCITRAL Rules) remain subject to set-aside at the seat, as seen in the Dutch Supreme Court proceedings concerning the Yukos v. Russia awards.