Convention on the Recognition and Enforcement of Foreign Arbitral Awards
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 NYC, it works with it. An award made in a country which is not a signatory to the NYC cannot take advantage of the Convention to enforce that award in the 164 Contracting States unless there is some bilateral recognition, whether or not the Arbitration was held under the provisions of the UNCITRAL Model Law.
Background
In 1953, the International Chamber of Commerce 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. 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
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. In China, a review of disputed cases in China found that from 2000 to 2011, in 17 cases the Supreme People's Court upheld the refusal to enforce the arbitration agreement due to a provision in Article V; China has an automatic appeal system to the highest court, so this includes all such refusals.Summary of provisions
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:- 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;
- 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;
- 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 ;
- 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 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;
- the subject matter of the award was not capable of resolution by arbitration; or
- enforcement would be contrary to "public policy".
- Conventional Reservation - some countries only enforce arbitration awards issued in a Convention member state
- Commercial Reservation – some countries only enforce arbitration awards that are related to commercial transactions
- 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.
Parties to the Convention
As of June2020, the Convention has 164 state parties, which includes 160 of the 193 United Nations member states plus the Cook Islands, the Holy See, and the State of Palestine. Thirty-four UN member states have not yet adopted the Convention. In addition, Taiwan has not been permitted to adopt 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, Falkland Islands, Turks and Caicos Islands, Montserrat, Saint Helena.| State | Date of Ratification | State | Date of Ratification |
| 30 November 2005 | 27 June 2001 | ||
| 7 February 1989 | 19 June 2015 | ||
| 6 March 2017 | - | - | |
| 2 February 1989 | 14 March 1989 | ||
| 29 December 1997 | 26 March 1975 | ||
| 2 May 1961 | 29 February 2000 | ||
| 20 December 2006 | 6 April 1988 | ||
| 6 May 1992 | 16 March 1993 | ||
| 15 November 1960 | 18 August 1975 | ||
| 16 May 1974 | 25 September 2014 | ||
| 28 April 1995 | 1 September 1993 | ||
| 20 December 1971 | 7 June 2002 | ||
| 25 July 1996 | 10 October 1961 | ||
| 23 March 1987 | 23 June 2014 | ||
| 5 January 1960 | 19 February 1988 | ||
| 12 May 1986 | 22 March 2018 | ||
| 15 October 1962 | - | - | |
| 4 September 1975 | 22 January 1987 | ||
| 25 September 1979 | 5 November 2014 | ||
| 28 April 2015 | 26 October 1987 | ||
| 1 February 1991 | 12 January 2009 | ||
| 26 July 1993 | 30 December 1974 | ||
| 29 December 1980 | 30 September 1993 | ||
| 22 December 1972 | 14 June 1983 | ||
| 28 October 1988 | 11 April 2002 | ||
| 3 January 1962 | 10 Jun 1958 | ||
| 30 August 1993 | 26 December 2010 | ||
| 19 January 1962 | 26 June 1959 | ||
| 15 December 2006 | 2 June 1994 | ||
| 30 June 1961 | 9 April 1968 | ||
| 16 July 1962 | 21 March 1984 | ||
| 23 January 1991 | 25 September 2014 | ||
| 5 December 1983 | 14 May 1975 | ||
| 3 October 2000 | 5 March 1962 | ||
| 24 January 2002 | 13 July 1960 | ||
| 7 October 1981 | , Islamic Republic of | 15 October 2001 | |
| 12 May 1981 | 5 January 1959 | ||
| 31 January 1969 | 10 July 2002 | ||
| 20 June 1961 | 15 November 1979 | ||
| 20 November 1995 | 10 February 1989 | ||
| 8 February 1973 | 28 April 1978 | ||
| 18 December 1996 | 17 June 1998 | ||
| 14 April 1992 | 11 August 1998 | ||
| 13 June 1989 | 16 September 2005 | ||
| 14 March 1995 | 5 October 2011 | ||
| 9 September 1983 | 10 March 1994 | ||
| 16 July 1962 | 5 November 1985 | ||
| 17 September 2019 | - | - | |
| 8 September 1994 | 22 June 2000 | ||
| 21 December 2006 | 30 January 1997 | ||
| 19 June 1996 | 14 April 1971 | ||
| 18 September 1998 | 2 June 1982 | ||
| 24 October 1994 | 23 October 2006 | ||
| 12 February 1959 | 11 June 1998 | ||
| 16 April 2013 | 4 March 1998 | ||
| 24 April 1964 | 6 January 1983 | ||
| 24 September 2003 | 14 October 1964 | ||
| 17 March 1970 | 14 March 1961 | ||
| 25 February 1999 | - | - | |
| 14 July 2005 | 31 March 2020 | ||
| 2 January 2015 | 10 October 1984 | ||
| 17 July 2019 | 8 October 1997 | ||
| 7 July 1988 | 6 July 1967 | ||
| 3 October 1961 | 18 October 1994 | ||
| 30 December 2002 | 13 September 1961 | ||
| 24 August 1960 | 31 October 2008 | ||
| 12 September 2000 | 17 May 1979 | ||
| 20 November 2012 | 19 April 1994 | ||
| 17 October 1994 | 12 March 2001 | ||
| 3 February 2020 | - | - | |
| 21 August 1986 | 28 May 1993 | ||
| 6 July 1992 | 3 May 1976 | ||
| 12 May 1977 | 9 April 1962 | ||
| 26 March 2018 | 28 January 1972 | ||
| 1 June 1965 | 9 March 1959 | ||
| 13 October 1964 | 14 August 2012 | ||
| 21 December 1959 | 12 June 2020 | ||
| 14 February 1966 | 17 July 1967 | ||
| 2 July 1992 | 12 February 1992 | ||
| 10 October 1960 | 21 August 2006 | ||
| 24 September 1975 | 30 September 1970 | ||
| 30 March 1983 | 7 February 1996 | ||
| 8 February 1995 | 12 September 1995 | ||
| 14 March 2002 | 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 |
| 14 November 1979 | |||
| 25 May 2014 | 26 March 1975 | ||
| 26 November 1980 | 26 March 1975 | ||
| 10 February 1976 | |||
| 26 June 1959 | |||
| 24 September 1975 | |||
| 10 February 1976 | |||
| 30 September 1970 | 19 April 1985 | ||
| 22 February 1979 | |||
| 19 April 1985 | |||
| 26 June 1959 | |||
States which are not party to the Convention
United States issues
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.Therefore, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 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." 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.
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. Based on that determination, the court held that the Convention preempted state law that sought to void arbitration clauses in international reinsurance treaties.