GETTING TO KNOW THE NEW YORK CONVENTION (1)

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In the past, there has been several rulings and settlements, whether it is based on negotiations, mediation, proceeding to court processes, as well as, entering into the arbitration process.

Arbitration has proved to be popular as it involves a dispute resolution mechanism that can better resolve enforcement barriers than judicial proceedings, takes up less time, and is much more convenient than court proceedings. However, using the services of an arbitration institution is much more convenient than going through an adhoc arbitration. This is due to the fact that every arbitration institution has its own arbitration regulations or Arbitration Rule, and the institution also facilitates its proceedings without the need for the parties involved to proceed on their own accord [1]. These arbitration institutions are available globally, such as the London Court of International Arbitration (LCIA), the Hong Kong International Arbitration Center (HKIAC), the American Arbitration Association – International Center for Dispute Resolution (AAA-ICDR), as well as, the Thailand Arbitration Center (THAC), which is an institution that provides arbitration and mediation services.

When the parties have a dispute and have jointly agreed to forward the dispute to the arbitration process, the next question is, after an arbitration institution which is already available around the world has been chosen, is how to apply the arbitration ruling to be in accordance with the laws of one’s country? The answer to that is, the acceptance and the enforcement of the international arbitration ruling of the disputing countries.

Background of the New York Convention

The New York Convention, is actually officially known as the, Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (“New York Convention”). It is the most successful multilateral instrument in international trade [2], as well as an integral part in linking important treaties relating to the law of arbitration in order to guarantee the acceptance of the ruling and the arbitration agreement. Courts around the world have also accepted, enforced, and construed the convention for a long time.

Initially, after the end of World War I, the League of Nation, with the support of the International Chamber of Commerce (ICC), established the Geneva Protocol on Arbitration Clause League of Nation 1923, which was signed in Geneva on September 24, 1923. The Geneva Protocol is a multilateral agreement on the basis of the acceptance and enforcement of arbitral rulings [3]. Later in 1927, the Geneva Convention on Execution of Foreign Award, League of Nations,1927 was established to stipulate the rules on the enforcement of the arbitral awards in accordance with the Arbitration Agreement. The essence of the 1927 Geneva Convention lies in the recognition and enforcement of the arbitral award which resulted from the 1923 Geneva Protocol. Therefore, only countries which were already parties to the 1923 Geneva Protocol will have the right to become a party to the 1927 Geneva Convention [4], and thus, in effect, the 1927 Geneva Convention and the 1923 Geneva Protocol are both required to be used simultaneously [5].

Later in 1958, the Economic and Social Council (ECOSOC), held the Conference on International Commercial Arbitration, between May 20 – June 10, 1958, in New York City. The outcome of that meeting was the adoption of the New York Convention. The essence of the New York Convention was that it assisted in expanding the scope of the acceptance and enforcement of foreign arbitral awards to become much more comprehensive and convenient than what is stipulated in the 1927 Geneva Convention. It also states that, a country that is a member of the New York Convention must give its recognition and enforcement according to the arbitral award regardless of where the ruling was made, unless an exception has been set by the New York Convention.

Thailand’s Affiliation to the New York Convention

Thailand joined as a member of the New York Convention 1958 on December 19, 1959.

As a result of becoming a member to this Convention, has required Thailand to abide to the stipulation that, foreign arbitral awards can also be enforced within Thailand, in accordance with the Sections 41- 44 of the Arbitration Act B.E. 2545.

In this regard, the court in the country requesting the enforcement of the award will not intervene in determining the validity and content of the award. They are required to only consider that whether the award has been decided through a lawful process. The requesting party in enforcing the award does not have to prove the integrity of the award, but it is the duty of the objector [LG1] or the disputing party to prove otherwise [6].

For further information, please contact THAC!

GETTING TO KNOW THE NEW YORK CONVENTION (1)