Convention on the Recognition and Enforcement of Foreign Arbitral Awards


Convention on the Recognition and Enforcement of Foreign Arbitral Awards

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, was adopted by a United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959. The Convention requires courts of contracting states to give effect to private agreements to arbitrate and to recognize and enforce arbitration awards made in other contracting states. Widely considered the foundational instrument for international arbitration, it applies to arbitrations which are not considered as domestic awards in the state where recognition and enforcement is sought. Though other international conventions apply to the cross-border enforcement of arbitration awards, the New York Convention is by far the most important.

Contents

Background

In 1953, the International Chamber of Commerce (ICC) produced the first draft Convention on the Recognition and Enforcement of International Arbitral Awards to the United Nations Economic and Social Council. With slight modifications, the Council submitted the convention to the International Conference in the Spring of 1958. The Conference was chaired by Willem Schurmann, the Dutch Permanent Representative to the United Nations and Oscar Schachter, a leading figure in international law who later taught at Columbia Law School and the Columbia School of International and Public Affairs, and served as the President of the American Society of International Law.

International arbitration is an increasingly popular means of alternative dispute resolution for cross-border commercial transactions. The primary advantage of international arbitration over court litigation is enforceability: an international arbitration award is enforceable in most countries in the world. Other advantages of international arbitration include the ability to select a neutral forum to resolve disputes, that arbitration awards are final and not ordinarily subject to appeal, the ability to choose flexible procedures for the arbitration, and confidentiality.

Once a dispute between parties is settled, the winning party needs to collect the award or judgment. Unless the assets of the losing party are located in the country where the court judgment was rendered, the winning party needs to obtain a court judgment in the jurisdiction where the other party resides or where its assets are located. Unless there is a treaty on recognition of court judgments between the country where the judgment is rendered and the country where the winning party seeks to collect, the winning party will be unable to use the court judgment to collect.

Countries which have adopted the New York Convention have agreed to recognize and enforce international arbitration awards. As of July 23, 2011, there are 146 signatories which have adopted the New York Convention: 144 of the 193 United Nations Member States, the Cook Islands (a New Zealand dependent territory), and the Holy See have adopted the New York Convention.[1] Only 49 U.N. Member States and Taiwan have not yet adopted the New York Convention. A number of British dependent territories have not yet had the Convention extended to them by Order in Council.

Summary of provisions

Under the Convention, an arbitration award issued in any other state can generally be freely enforced in any other contracting state (save that some contracting states may elect to enforce only awards from other contracting states - the "reciprocity" reservation), only subject to certain, limited defenses. These defenses are:

  1. a party to the arbitration agreement was, under the law applicable to him, under some incapacity;
  2. the arbitration agreement was not valid under its governing law;
  3. a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
  4. the award deals with an issue not contemplated by or not falling within the terms of the submission to arbitration, or contains matters beyond the scope of the arbitration (subject to the proviso that an award which contains decisions on such matters may be enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those matters not so submitted);
  5. the composition of the arbitral tribunal was not in accordance with the agreement of the parties or, failing such agreement, with the law of the place where the hearing took place (the "lex loci arbitri");
  6. the award has not yet become binding upon the parties, or has been set aside or suspended by a competent authority, either in the country where the arbitration took place, or pursuant to the law of the arbitration agreement;
  7. the subject matter of the award was not capable of resolution by arbitration; or
  8. enforcement would be contrary to "public policy".

Text

The text of the convention is available online.[1]

Parties to the New York Convention


As of October 1, 2009, 142 of the 192 United Nations Member States have adopted the New York Convention. The Convention has also been ratified by Holy See and the Cook Islands. Only fifty of the U.N. Member States have not adopted the Convention. In addition, Taiwan has not adopted the Convention and a number of British Overseas Territories have not had the Convention extended to them by Order in Council. British Overseas Territories to which the New York Convention has not yet been extended by Order in Council are: Anguilla, British Virgin Islands, Falkland Islands, Turks and Caicos Islands, Montserrat, Saint Helena (including Ascension and Tristan da Cunha). The British Virgin Islands have implemented the New York Convention into domestic law (Arbitration Ordinance 1976), although Britain has never issued an Order in Council legally extending the New York Convention to the British Virgin Islands.

State Date of Ratification State Date of Ratification
 Afghanistan 30 November 2005  Albania 27 June 2001
 Algeria 7 February 1989  Antigua and Barbuda 2 February 1989
 Argentina 14 March 1989  Armenia 29 December 1997
 Australia 26 March 1975  Austria 2 May 1961
 Azerbaijan 29 February 2000  Bahamas 20 December 2006
 Bahrain 6 April 1988  Bangladesh 6 May 1992
 Barbados 16 March 1993  Belarus 15 November 1960
 Belgium 18 August 1975  Belize 26 November 1980 (extension notice)
 Benin 16 May 1974
 Bolivia 28 April 1995  Bosnia and Herzegovina 1 September 1993
 Botswana 20 December 1971  Brazil 7 June 2002
 Brunei Darussalam 25 July 1996  Bulgaria 10 October 1961
 Burkina Faso 23 March 1987  Cambodia 5 January 1960
 Cameroon 19 February 1988  Canada 12 May 1986
 Central African Republic 15 October 1962  Chile 4 September 1975
 China, People's Republic of 22 January 1987  Colombia 25 September 1979
 Costa Rica 26 October 1987  Côte d'Ivoire 1 February 1991
 Cook Islands 12 January 2009  Croatia 26 July 1993
 Cuba 30 December 1974  Cyprus 29 December 1980
 Czech Republic 30 September 1993  Denmark 22 December 1972
 Djibouti 14 June 1983  Dominica 28 October 1988
 Dominican Republic 11 April 2002  Ecuador 3 January 1962
 Egypt 9 March 1959  El Salvador 26 February 1998
 Estonia 30 August 1993  Finland 19 January 1962
 France 26 June 1959  Gabon 15 December 2006
 Georgia 2 June 1994  Germany 30 June 1961
 Ghana 9 April 1968  Greece 16 July 1962
 Guatemala 21 March 1984  Guinea 23 January 1991
 Haiti 5 December 1983  Holy See 14 May 1975
 Honduras 3 October 2000  Hungary 5 March 1962
 Iceland 24 January 2002  India 13 July 1960
 Indonesia 7 October 1981  Iran, Islamic Republic of 15 October 2001
 Ireland 12 May 1981  Israel 5 January 1959
 Italy 31 January 1969  Jamaica 10 July 2002
 Japan 20 June 1961  Jordan 15 November 1979
 Kazakhstan 20 November 1995  Kenya 10 February 1989
 Korea, Republic of 8 February 1973  Kuwait 28 April 1978
 Kyrgyzstan 18 December 1996  Lao People's Democratic Republic 17 June 1998
 Latvia 14 April 1992  Lebanon 11 August 1998
 Lesotho 13 June 1989  Liberia 16 September 2005
 Lithuania 14 March 1995  Luxembourg 9 September 1983
 Macedonia, The former Yugoslav Republic of 10 March 1994  Madagascar 16 July 1962
 Malaysia 5 November 1985  Mali 8 September 1994
 Malta 22 June 2000  Marshall Islands 21 December 2006
 Mauritania 30 January 1997  Mauritius 19 June 1996
 Mexico 14 April 1971  Moldova, Republic of 18 September 1998
 Monaco 2 June 1982  Mongolia 24 October 1994
 Montenegro 23 October 2006  Morocco 12 February 1959
 Mozambique 11 June 1998  Nepal 4 March 1998
 Netherlands 24 April 1964  New Zealand 6 January 1983
 Nicaragua 24 September 2003  Niger 14 October 1964
 Nigeria 17 March 1970  Norway 14 March 1961
 Oman 25 February 1999  Pakistan 14 July 2005
 Panama 10 October 1984  Paraguay 8 October 1997
 Peru 7 July 1988  Philippines 6 July 1967
 Poland 3 October 1961  Portugal 18 October 1994
 Qatar 30 December 2002  Romania 13 September 1961
 Russian Federation 24 August 1960  Rwanda 31 October 2008
 Saint Vincent and the Grenadines 12 September 2000  San Marino 17 May 1979
 Saudi Arabia 19 April 1994  Senegal 17 October 1994
 Serbia 12 March 2001  Singapore 21 August 1986
 Slovakia 28 May 1993  Slovenia 6 July 1992
 South Africa 3 May 1976  Spain 12 May 1977
 Sri Lanka 9 April 1962  Sweden 28 January 1972
 Switzerland 1 June 1965  Syrian Arab Republic 9 March 1959
 Tanzania, United Republic of 13 October 1964  Thailand 21 December 1959
 Trinidad and Tobago 14 February 1966  Tunisia 17 July 1967
 Turkey 2 July 1992  Uganda 12 February 1992
 Ukraine 10 October 1960  United Arab Emirates 21 August 2006
 United Kingdom of Great Britain and Northern Ireland 24 September 1975  United States of America 30 September 1970
 Uruguay 30 March 1983  Uzbekistan 7 February 1996
 Venezuela 8 February 1995  Viet Nam 12 September 1995
 Zambia 14 March 2002  Zimbabwe 26 September 1994

States which are Not Party to the New York Convention


 Andorra  Angola  Bhutan
 Burundi  Cape Verde  Chad  Comoros
 Congo, Republic of the  Democratic Republic of the Congo  Equatorial Guinea  Eritrea
 Ethiopia  Fiji  Gambia  Grenada
 Guinea-Bissau  Guyana  Iraq  Kiribati
 North Korea  Libyan Arab Jamahiriya  Liechtenstein  Malawi
 Maldives  Federated States of Micronesia  Myanmar  Namibia
 Nauru  Palau  Papua New Guinea  Saint Kitts and Nevis
 Saint Lucia  Samoa  Sao Tome and Principe  Seychelles
 Sierra Leone  Solomon Islands  Somalia  Sudan
 Suriname  Swaziland  Taiwan  Tajikistan
 Timor-Leste  Togo  Tonga  Turkmenistan
 Tuvalu  Vanuatu  Yemen

United States Issues

Under American law, the recognition of foreign arbitral awards is governed by chapter 2 of the Federal Arbitration Act.

However, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention") does not preempt state law. In Foster v. Neilson, this Court held “Our constitution declares a treaty to be the law of the land. It is, consequently, to be regarded in courts of justice as equivalent to an act of the Legislature, whenever it operates of itself without the aid of any legislative provision.” Foster v. Neilson, 27 U.S. 253, 314 (1829). See also Valentine v. U.S. ex rel. Neidecker, 57 S.Ct. 100, 103 (1936); Medellin v. Dretke, 125 S.Ct. 2088, 2103 (2005); Sanchez-Llamas v. Oregon, 126 S.Ct. 2669, 2695 (2006). Thus, over a course of 181 years, the United States Supreme Court has repeatedly held that a self-executing treaty is an act of the Legislature (i.e., act of Congress).

External links

References

  1. ^ "Contracting States". Albert Jan van den Berg. 23 July 2011. http://www.newyorkconvention.org/new-york-convention-countries. Retrieved 23 July 2011. 

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