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.

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. 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	Fiji	26 December 2010
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	Liechtenstein	5 October 2011
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	Gambia	Grenada
Guinea-Bissau	Guyana	Iraq	Kiribati
North Korea	Libyan Arab Jamahiriya	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

• http://www.newyorkconvention.org
• Neil J. Saltzman, The Enforcement of Foreign Awards in New York State
• http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention.html
• http://www.wipo.int/amc/en/arbitration/ny-convention/parties.html
• The New York Convention on the UN Audiovisual Library of International Law, with an introductory note by Albert Jan van den Berg, video footage and photos related to the negotiations and adoption of the Convention.