The necessary reliance on local courts for enforcement of foreign arbitral awards can lead to significant delays in finalising a dispute. Obtaining a favorable arbitration award is often only half the battle, as subsequent annulment and enforcement proceedings can last years. A particularly common problemis the staying of an enforcement award pending determination of annulment proceedings in the seat of the arbitration. The years it takes for a final determination of these post-award proceedings renders nugatory any favorable award, and places in jeopardy the value and competence of international arbitration in resolving commercial disputes.
Until recently, courts have shown considerable reluctance to enforce arbitral awards that are subject to annulment proceedings. Such reluctance is understandable, especially in light of the principles underpinning the New York Convention on the Reciprocal Enforcement of Arbitration Awards 1958 (Convention) and the comity between courts of signatory parties. The Bermuda Court of Appeal considered these principles recently in the decision of LAEP Investments Ltd v Emerging Markets Special Situations 3 Ltd,  CA (BDA) 10 Civ, 9 (LAEP case). Whilst sympathetic to the enforcing party’s situation, the court ultimately found that even a potential delay of 10 or more years occasioned by the annulment proceedings in Brazilian courts to be insufficient to allow prior enforcement.