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Convention on the Recognition and Enforcement of Foreign Arbitral Awards

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New York Convention
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
Parties to the convention include almost the full Americas, Europe, large parts of Asia, Oceania, and about 50% of Africa
Parties to the convention[needs update]
Signed10 June 1958 (1958-06-10)
LocationNew York City, United States
Effective7 June 1959
Condition3 ratifications
Signatories24
Parties172
DepositariesSecretary-General of the United Nations
LanguagesArabic, Chinese language, English language, French language, Russian language and Spanish language
Full text
Convention on the Recognition and Enforcement of Foreign Arbitral Awards at Wikisource

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly 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 that are not considered as domestic awards in the state where recognition and enforcement is sought.

The New York Convention is very successful. Nowadays many countries have adopted arbitration laws based on the UNCITRAL Model Law on International Commercial Arbitration. This works with the New York Convention so that the provisions on making an enforceable award, or asking a court to set it aside or not enforce it, are the same under the Model Law and the New York Convention. The Model Law does not replace the Convention; it works with it. An award made in a country which is not a signatory to the Convention cannot take advantage of the Convention to enforce that award in the 169 contracting states unless there is bilateral recognition, whether or not the arbitration was held under the provisions of the UNCITRAL Model Law.

Background

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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 arbitration over court litigation is enforceability: an arbitration award is enforceable in most countries in the world. Other advantages of 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. If the loser voluntarily pays, no court action is necessary.[1] Otherwise, 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.

Cases and statistics

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Public information on overall and specific arbitration cases is quite limited as there is no need to involve the courts at all unless there is a dispute, and in most cases the loser pays voluntarily.[1] A review of disputed cases in China found that from 2000 to 2011, the Supreme People's Court upheld the refusal to enforce the arbitration agreement in 17 cases due to a provision in Article V of the convention (China has an automatic appeal system to the highest court, so this includes all such refusals).[2]

Summary of provisions

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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:[3]

  1. a party to the arbitration agreement was, under the law applicable to him, under some incapacity, or the arbitration agreement was not valid under its governing law;
  2. 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;
  3. 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);
  4. 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");
  5. 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;
  6. the subject matter of the award was not capable of resolution by arbitration; or
  7. enforcement would be contrary to "public policy".

Additionally, there are three types of reservations that countries may apply:[4]

  1. Conventional Reservation – some countries only enforce arbitration awards issued in a Convention member state
  2. Commercial Reservation – some countries only enforce arbitration awards that are related to commercial transactions
  3. Reciprocity reservation – some countries may choose not to limit the convention to only awards from other contracting states, but may however limit application to awards from non-contracting states such that they will only apply it to the extent to which such a non-contracting state grants reciprocal treatment.

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.

Parties to the Convention

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As of January 2023, the convention has 172 state parties, which includes 169 of the 193 United Nations member states plus the Cook Islands, the Holy See, and the State of Palestine. Twenty-four UN member states have not yet 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).

State Date of Adoption State Date of Adoption
Afghanistan 30 November 2005 Albania 27 June 2001
Algeria 7 February 1989 Andorra 19 June 2015
Angola 6 March 2017
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 15 March 2021
Benin 16 May 1974 Bhutan 25 September 2014
Bolivia 28 April 1995 Bosnia and Herzegovina 1 September 1993
Botswana 20 December 1971 Brazil 7 June 2002
Brunei 25 July 1996 Bulgaria 10 October 1961
Burkina Faso 23 March 1987 Burundi 23 June 2014
Cambodia 5 January 1960 Cameroon 19 February 1988
Canada 12 May 1986 Cape Verde 22 March 2018
Central African Republic 15 October 1962
Chile 4 September 1975 People's Republic of China 22 January 1987
Colombia 25 September 1979 Democratic Republic of the Congo 5 November 2014
Comoros 28 April 2015 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 10 June 1958 Estonia 30 August 1993
Ethiopia 24 August 2020 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 Guyana 25 September 2014
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 15 October 2001
Iraq 11 November 2021 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 South Korea 8 February 1973
Kuwait 28 April 1978 Kyrgyzstan 18 December 1996
Laos 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
Republic of Macedonia 10 March 1994 Madagascar 16 July 1962
Malaysia 5 November 1985 Malawi 4 March 2021
Maldives 17 September 2019 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 18 September 1998
Monaco 2 June 1982 Mongolia 24 October 1994
Montenegro 23 October 2006 Morocco 12 February 1959
Mozambique 11 June 1998 Myanmar 16 April 2013
  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 Palau 31 March 2020
Palestine 2 January 2015 Panama 10 October 1984
Papua New Guinea 17 July 2019 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
Russia 24 August 1960 Rwanda 31 October 2008
Saint Vincent and the Grenadines 12 September 2000 San Marino 17 May 1979
Sao Tome and Principe 20 November 2012 Saudi Arabia 19 April 1994
Senegal 17 October 1994 Serbia 12 March 2001
Seychelles 3 February 2020 Sierra Leone 28 October 2020
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
Sudan 26 March 2018 Sweden 28 January 1972
Suriname 10 November 2022
 Switzerland 1 June 1965 Syria 9 March 1959
Tanzania 13 October 1964 Tajikistan 14 August 2012
Thailand 21 December 1959 Timor-Leste 17 January 2023
Tonga 12 June 2020 Trinidad and Tobago 14 February 1966
Tunisia 17 July 1967 Turkey 2 July 1992
Turkmenistan 4 May 2022 Uganda 12 February 1992
Ukraine 10 October 1960 United Arab Emirates 21 August 2006
United Kingdom 24 September 1975 United States 30 September 1970
Uruguay 30 March 1983 Uzbekistan 7 February 1996
Venezuela 8 February 1995 Vietnam 12 September 1995
Zambia 14 March 2002 Zimbabwe 26 September 1994

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.

Territory Date of Ratification Territory Date of Ratification
American Samoa Aruba 24 April 1964
Ashmore and Cartier Islands Australian Antarctic Territory
Baker Island Bermuda 14 November 1979
Bonaire 24 April 1964
British Virgin Islands 25 May 2014 Christmas Island 26 March 1975
Cayman Islands 26 November 1980 Cocos (Keeling) Islands 26 March 1975
Coral Sea Islands Curaçao 24 April 1964
Faroe Islands 10 February 1976
French Guiana French Polynesia 26 June 1959
French Southern and Antarctic Lands Gibraltar 24 September 1975
Greenland 10 February 1976 Guadeloupe
Guam 30 September 1970 Guernsey 19 April 1985
Heard Island and McDonald Islands Howland Island
Isle of Man 22 February 1979 Jarvis Island
Jersey 19 April 1985 Johnston Atoll
Kingman Reef Martinique
Mayotte Midway Atoll
Navassa Island New Caledonia 26 June 1959
Norfolk Island Palmyra Atoll
Puerto Rico Réunion
Saba 24 April 1964 Saint Pierre and Miquelon
Sint Eustatius 24 April 1964 Sint Maarten 24 April 1964
United States Virgin Islands Wake Island
Wallis and Futuna

States which are not party to the Convention

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Equatorial Guinea Eritrea Eswatini formerly Swaziland
Gambia Grenada Guinea-Bissau
Kiribati Libya Federated States of Micronesia
Namibia Nauru Niue
North Korea Saint Kitts and Nevis Saint Lucia
Samoa Solomon Islands Somalia
South Sudan Togo Tuvalu
Vanuatu Yemen

United States issues

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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.[5]

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."[6] 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).

With specific regard to the New York Convention, at least one court discussed, but ultimately avoided, the issue of whether the treaty is self-executing. The court nonetheless held that the convention was, at the least, an implemented non-self-executing treaty that still had legal force as a treaty (as distinguished from an Act of Congress).[7] Based on that determination, the court held that the Convention preempted state law that sought to void arbitration clauses in international reinsurance treaties.

See also

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References

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  1. ^ a b Argen, Robert (1 January 2015). "Ending Blind Spot Justice: Broadening the Transparency Trend in International Arbitration". Rochester, NY: Social Science Research Network. SSRN 2393188. {{cite journal}}: Cite journal requires |journal= (help)
  2. ^ Xia, Xiaohong (January 2011). ""Implementation of the New York Convention in China" by Xiaohong Xia". Arbitration Brief. 1 (1). Retrieved 21 March 2016.
  3. ^ ""Enforcement of Arbitral Awards under the New York Convention – Practic" by Joseph T. McLaughlin and Laurie Genevro". scholarship.law.berkeley.edu. Retrieved 21 March 2016.
  4. ^ "New York Convention, 1958: Reservations". Archived from the original on 20 June 2013. Retrieved 14 May 2014. New York Convention, 1958 – Reservations
  5. ^ "New York Arbitration" (PDF). CMS Legal. Retrieved 21 May 2012.
  6. ^ 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).
  7. ^ Safety National Casualty Corp. v. Certain Underwriters at Lloyd's, London, 587 F.3d 714 (5th Cir. 2009) (en banc), cert. den'd, 562 U.S. 827 (2010).
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