New York Convention
Signatories to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) agree to enforce arbitral awards made in other states in a straightforward manner. Subject to the grounds of challenge set out below, the New York Convention applies to awards from any ‘foreign’ country covering any subject matter. Upon access, a signatory can make two reservations:
- A state may stipulate a reciprocity reservation, in which case the courts of the state will only enforce awards made in the territory of another contracting state (hence the need to site the arbitration in a New York Convention contracting state). However, the Model Law requires the recognition and enforcement of an award irrespective of the country in which it was made. As the Model Law is being adopted by increasing numbers of countries, the impact of the reciprocity reservation is lessening.
- Contracting states can also stipulate that they will only enforce awards where the underlying dispute is considered to be ‘commercial’ by the national law of the country where enforcement is sought.
Under the New York Convention the party seeking recognition and enforcement is required to produce:
- the original award or a certified copy;
- the original agreement containing the agreement to arbitrate or a certified copy.
These documents will need to be translated if they are not in the language of the country where enforcement is sought.
Resisting enforcement
The only grounds on which the losing party can resist enforcement under the New York Convention are that:
- the parties to the arbitration agreement were under an incapacity/the agreement is not valid;
- the losing party was not given proper notice of the appointment of the arbitrator or the arbitration proceedings, or did not have an opportunity to present his case;
- the award deals with a dispute not contemplated by the arbitration agreement;
- the tribunal was not validly constituted;
- the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which or under the (procedural) law of which was made;
In addition:
- the dispute was not capable of being settled by arbitration under the law of the country where enforcement is sought (to give a few examples: in respect of enforcement of arbitration awards in Russia, potentially significant areas for commercial parties engaged in Russia related disputes may be the question of arbitrability of corporate disputes concerning the establishment of/management of or participation in a Russian corporate (see here and here) and and Russian laws on mandatory jurisdiction over entities which may be subject to foreign sanctions see here; and in respect of enforcement in the PRC; there is a requirement that disputes between PRC parties concerning subject matter in mainland China be arbitrated (or litigated) domestically only (see here for more)).
- the enforcement would be contrary to public policy of the place where enforcement is sought.
When seeking to enforce the award, local laws regarding formalities will also need to be complied with.
The New York Convention expressly provides that the parties may have recourse to local laws or enforcement and bilateral treaties.