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Get to Know the New York Convention (2)
Currently, the most popular dispute resolution relating to international business and trade is arbitration because it is convenient, speedy, and not complicated like a court proceeding. Moreover, enforcement of the arbitral award is easier than enforcing court judgment since arbitration and an arbitral award are not made under judicial sovereignty [1]. Therefore, enforcing the arbitral award of one country in another country is easier than enforcing the court judgment of one country in another country because it does not enforce one country’s sovereignty over other countries. However, it is enforcing an organization’s decision that is related to international conventions. One of the most important international conventions is New York Convention. There are now 166 countries that signed and became Contracting State of this Convention [2].
Key elements of the New York Convention
New York Convention contains 16 articles in total, including:
Article 1 sets the scope of jurisdiction in enforcing foreign arbitral awards, arbitral awards made by Ad Hoc arbitration and institutional arbitration, and including reservation on enforcement of commercial arbitral awards or arbitral awards made within the Contracting State’s territory.
Article 2 stipulates about recognition of the arbitration agreement.
Article 3 set forth recognition and enforcement of Contracting State’s arbitral awards.
Article 4 regarding documents attached with enforcement of award application and its translation.
Article 5 regarding the refusal of arbitral award enforcement separates into the cases where the disputing parties have a burden of proof and the cases where the courts can determine on their own motion.
Article 6 stipulates the power of a court to adjourn the decision when there is a request to set aside or suspense the decision [LG1].
Article 7 confirms the validity of multilateral or bilateral agreements or other conventions that binds the Contracting States other than the New York Convention.
Article 8-16 stipulate on the signature of the Contracting States, reservation, accession, denunciation of Convention, the receipt of the notification by the Secretary-General, and languages of the original copy of the Convention [3].
Interpreting the Convention
In principle, New York Convention is an international multilateral agreement; therefore, it is considered public international law. When a court enforces New York Convention, the interpretation shall follow the international law as prescribed in Article 31 and 32 of the Vienna Convention on the Law of Treaties [4].
Definition of international arbitral awards under New York Convention
Arbitral awards
The Convention does not stipulate a definition of “arbitral awards”; thus, to interpret whether the words are arbitral awards or not, it must satisfy the following conditions:
1,1 The dispute was filed before the arbitral tribunal and determined by the arbitral tribunal or not.
1.2 The decision is considered an arbitral award or not [5].
Nonetheless, whether it is made by Ad Hoc arbitration or institutional arbitration, every arbitral award would all be binding to the Contacting States.
International arbitral awards
New York Convention defines international arbitral awards as awards that are not made in the territory of a State other than the State where the recognition and enforcement of such awards are sought [7].
Enforcement jurisdiction under the Convention
Article 1 (1) of the New York Convention states that the Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal [8].
Arbitration agreement enforcement
Article 2(1) set forth that each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration whether it is all or partial subjects [9], in which an arbitration agreement must be signed by the parties or contained in an exchange of letters or telegrams [10].
Agreement binding
Article 3 states that each Contracting State shall recognize arbitral awards as binding and enforce them under the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles [11].
Enforcement of arbitral awards
Article 4 of the New York Convention stipulates the conditions of recognizing and enforcing arbitral awards that a winning party shall apply for recognition and enforcement application following the prescribed requirements [12].
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- [1] Ibid.
- [2] https://uncitral.un.org/en/texts/arbitration/conventions/foreign_arbitral_awards/status2 Last accessed on 14 February 2021.
- [3] Supra note 3, p.76.
- [4] International Council for Commercial Arbitration. ICCA’s Guide to the Interpretation of the 1958 New York Convention: A Handbook for Judges. p.12.
- [5] Ibid, p.15.
- [6] New York Convention 1958. Article 1(2)
- [7] New York Convention 1958. Article 1(1)
- [8] Ibid.
- [9] New York Convention 1958. Article 2(1)
- 10] New York Convention 1958. Article 2(2)
- [11] New York Convention 1958. Article 3
- [12] New York Convention 1958. Article 4
