The court has no right to review the arbitration award on the merits.
This principle is enshrined in the UNCITRAL Model Law.
The Law of January 21, 2019 supplemented article 52 of the Law with paragraph 3 of the following content: "when considering a request for annulment of an arbitration award or refusal to issue a writ of execution, the court does not have the right to review the arbitration award on the merits."
Such an addition is fully justified, since an arbitration award can be set aside only on the limited grounds provided for in paragraphs 1,2 of article 52 of the Law.
When the court examines the presence or absence of grounds for revocation of an arbitration award, the court has no right to review the arbitration award on its merits, has no right to decide whether the arbitration applied the norms of substantive law correctly, the subject of proof was determined and the evidence was evaluated. An arbitral award may be set aside only on the grounds provided for in paragraphs 1, 2 of article 52 of the Law, since the arbitration is independent and therefore it is unacceptable for courts to interfere in the work of the arbitration, especially since arbitration is not part of the judicial system.
In judicial practice, there continues to be a review of arbitration decisions on the merits, which is regarded by the court of cassation as a violation of the norms of law and entails the cancellation of judicial acts.
However, it should be noted that such examples are becoming more isolated.
Thus, by the decision of the judicial board for civil Cases of the Supreme Court dated January 14, 2020, the ruling of the judicial board for Civil Cases of the Almaty City Court dated September 11, 2019 was canceled.
In the case, it was established that the court of appeal overturned the ruling of the specialized interdistrict economic court of Almaty city dated August 14, 2019, which was refused to overturn the arbitration decision.
The appellate instance, one of the arguments for the cancellation, indicated that the arbitration had misinterpreted the norms of civil law, which served as the basis for recognizing acts of completed work as valid.
The Court of cassation, canceling the judicial act, concluded that the court of appeal had exceeded its authority and had unreasonably assessed the evidence, which it had no right to do due to the direct instructions of the Law.
By ruling No. 2 of the Uralsk city of the West Kazakhstan region on April 21, 2020, left unchanged by the court of Appeal, the arbitration decision of the International Arbitration Court of the West Kazakhstan Region dated March 26, 2020 on the claim of Denginaselenie LLP against Utegenova Sh.A. for foreclosure was canceled.
It follows from the judicial acts that the court overturned the arbitration award, as it concluded that 486,600 tenge was voluntarily paid to Tegenova Sh.A. under the loan agreement dated February 28, 2017. Also, by way of deduction from wages, based on the executive inscription of the notary dated November 26, 2018, the amount of 217,448 tenge was recovered.
In this connection, the court concluded that the arbitration award was illegal, since there was no debt owed by Utegenova Sh.A.The arbitral award cannot be reviewed on its merits, therefore, the court had no right to analyze the arguments of the parties and examine the merits of the case and cancel the arbitration award on these grounds.
Therefore, those courts that refuse to grant a request for annulment of an arbitration award in such cases are doing the right thing.
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