Revue - Les Cahiers de l'Arbitrage N°1-2023 - 51

DOCTRINES - DÉBATS
necessary pursuant to section §570.507 (b), while additional administrative burden
was provided for in section §570.508.
13. Although the LSR is no longer in force, its impact was significant both
on arbitration practitioners and on the parties involved in international arbitration
proceedings. For the lawyers having an important Libyan client base, it meant
that they could only represent a limited number of clients and therefore their
revenues from this category of clients diminished drastically. The impact for
parties established in Iran and Libya was that they had effectively been cut off from
accessing U.S. legal services and expertise in relation to certain transactions, or, in
case of sanctions against Libya, had limited ability to initiate a claim or defend one
by relying on US lawyers in arbitration.
14. The lack of legal representation cannot be invoked as a defence in order
to oppose the recognition of an arbitral award. 20
The only cases which may
be recalled here are those involving parties who deliberately chose not to be
represented 21
due to unclear instructions 22
or whose legal representatives failed to be present at the hearings
or other factors. Thus, it is questionable whether
recognition would be granted against a party who was not able to provide itself
legal representation due to economic sanctions. Arguing this might be a long shot,
as many jurisdictions are not affected by prohibitions to provide legal services, as
mentioned above.
15. Born considers that the tribunal should not grant " a significant, unjustified
procedural advantage " to one of the parties, 23
meaning that it should take into
account, when applicable, the burden of choosing a counsel by sanctioned
parties. There is at least one known example of an arbitral award set aside after
a hearing was fixed without regard to the award-debtor and its inability to secure
legal representation by the time of the hearing. 24
Thus, a lack of representation
may be taken into account by arbitral tribunals when it is due to the difficulties
encountered by a sanctioned party in securing legal representation.
16. A similarly careful approach was taken by the tribunal in the Nord
Stream 2 AG v. European Union case, 25
where the tribunal granted two consequent
suspensions after the claimant was designated a sanctioned entity and saw its
external legal counsel resign. 26
20. Gary Born, 'Chapter 26: Recognition and Enforcement of International Arbitral Awards
(Updated September 2022)', in Gary B. Born, International Commercial Arbitration (3rd edition,
Kluwer Law, 2022)
21. Judgment of 29 June 1989, XVI Y.B. Comm. Arb. 546 (Oberlandesgericht Frankfurt am Main).
22. Judgment of 26 July 2012, Nova Shipping Ltd v. Med Marine AS, Case No. 505950/KG RK
11-3695 (Amsterdam Rechtbank).
23. Gary Born, 'Chapter 25: Annulment of International Arbitral Awards (Updated January
2023)', in Gary Born, International Commercial Arbitration (Third Edition, Kluwer Law International
2021), 3421-3690.
24. Coromandel Land Trust Ltd v. MilkT Invs. Ltd, CIV-2009-419-000232 (Hamilton High Ct.
2009).
25. Procedural Order No. 7, Nord Stream 2 AG v. European Union, PCA Case No. 2020-07,
[2]-[5]. Procedural Order No. 8, Nord Stream 2 AG v. European Union, PCA Case No. 2020-07,
[4]-[5].
26. Tom Cornell, 'Chapter 14: Sanctions and Arbitration: The Impact of Sanctions on English
Law-Governed Contracts and English- Seated Arbitrations', in Gregory Roy Fullelove, Laila Hamzi,
et al. (eds), International Arbitration in England: Perspectives in Times of Change (Kluwer Law
International 2022) 267, 275.
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