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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.
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 June 2015, there are 156 State parties which have adopted the New York Convention: 153 of the 193 United Nations Member States, the Cook Islands, the Holy See, and the State of Palestine.[1] Forty-five UN Member States have not adopted the New York Convention and a number of British dependent territories have not had the Convention extended to them by Order in Council.
Under the Convention, an arbitration award issued in any other state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. These defenses are:
Additionally, there are three types of reservations that countries may apply:[2]
States may make any or all of the above reservations. Because there are two similar issues conflated under the term "reciprocity", it is important to determine which such reservation (or both) an enforcing state has made.
As of May 2015, the Convention has 156 state parties, which includes 153 of the 193 United Nations member states plus the Cook Islands, the Holy See, and the State of Palestine. Forty UN member states have not adopted the Convention. In addition, Taiwan has not been permitted to adopt the Convention (but generally enforces foreign arbitration judgments) 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, Falkland Islands, Turks and Caicos Islands, Montserrat, Saint Helena (including Ascension and Tristan da Cunha).
The Convention has also been extended to a number of British Crown Dependencies, Overseas Territories, Overseas departments, Unincorporated Territories and other subsidiary territories of sovereign states.
Under American law, the recognition of foreign arbitral awards is governed by chapter 2 of the Federal Arbitration Act, which incorporates the New York Convention.[3]
Therefore, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention") preempts state law. In Foster v. Neilson, the Supreme 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).
United Kingdom, New Zealand, Tokelau, Pitcairn Islands
Vatican City, Rome, Pope, Roman Curia, Italy
Gibraltar, British Virgin Islands, Bermuda, United Kingdom, Saint Helena, Ascension and Tristan da Cunha
Syria, West Bank, Gaza strip, Israel, Egypt
Kaohsiung, China, Taipei, Philippines, South Korea
Willem C. Vis Moot, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Uncitral, Erasmus University, Albert Ludwigs University of Freiburg
Arbitration, Cornell University, United States Code, Title 11 of the United States Code, Internal Revenue Code
New York City, Treaty, Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others, Convention on the Recognition and Enforcemen...
British Virgin Islands, Public policy, British Virgin Islands company law, UNCITRAL Model Law on International Commercial Arbitration, British Virgin Islands law
Arbitration, Online dispute resolution, North America, Types of business entity, Computer software