The governing law of the standard Kurdistan Petrol Sharing Agreements (“PSA’s”) is English Law, and they call for any dispute arising out of the PSA to be resolved through the London Court of International Arbitration (“LCIA”) in accordance with the LCIA Rules.
Yet, given that Iraq is not yet a full signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York” Convention) which provides for the enforcement of foreign arbitral awards, Iraqi courts are not legally obliged to enforce a foreign arbitral award except in accordance with the Iraqi Enforcement Law.
Iraq has entered into few bilateral treaties, but it is a signatory state of the 1983 Convention on Judicial Co-operation between States of the Arab League (the “Riyadh Convention”).
This Convention applies to foreign judgements and arbitral awards and consequently an award under an arbitration whose seat is in a signatory country to the Riyadh Convention may be the best possible option for a company signed up to a PSA to enforce an award made in respect of the PSA in Kurdistan. Please note that the Riyadh Convention does not permit enforcement against Governments, however.
In addition, while the Kurdistan Regional Government waives its right to claim sovereign immunity under the PSA’s, it his unclear whether the courts in Kurdistan will uphold this waiver, since it has yet to be tested.
– William Kirtley