The Recognition and Enforcement of Foreign Arbitral Awards

Overview of the New York Convention

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, universally recognized as the New York Convention, was formally adopted during a United Nations diplomatic conference on 10 June 1958 and subsequently entered into force on 7 June 1959. This pivotal international instrument mandates that the judicial authorities of its contracting states uphold private agreements to arbitrate and recognize and enforce arbitration awards rendered in other signatory states. Widely regarded as the cornerstone of contemporary international arbitration, the Convention's provisions extend to arbitral awards that are not classified as domestic within the jurisdiction where their recognition and enforcement are sought.

Key Provisions of the Convention

Under the auspices of the New York Convention, an arbitral award issued in any contracting state generally enjoys broad enforceability within any other contracting state, subject only to a narrowly defined set of exceptions. These limited grounds for refusal of recognition and enforcement include:

• Invalidity of Arbitration Agreement: A party to the arbitration agreement was, under the applicable law, subject to a legal incapacity, or the arbitration agreement itself was deemed invalid according to its governing law.
• Procedural Impropriety/Lack of Due Process: The party against whom the award is invoked was not afforded proper notification regarding the appointment of the arbitrator or the initiation of the arbitration proceedings, or was otherwise precluded from adequately presenting its case.
• Exceeding Mandate: The arbitral award addresses a matter not contemplated by, or falling outside the scope of, the submission to arbitration, or it contains decisions on matters beyond the tribunal's jurisdiction. (However, an award containing such extraneous decisions may be enforced to the extent that the decisions on matters properly submitted to arbitration can be severed from those not so submitted).
• Irregular Tribunal Composition or Procedure: The constitution of the arbitral tribunal or the arbitral procedure was not in conformity with the agreement of the parties or, in the absence of such agreement, with the law of the place where the arbitration took place (lex loci arbitri).
• Award Not Yet Binding or Set Aside: The award has not yet become binding upon the parties, or it has been set aside or suspended by a competent authority in the country where the arbitration occurred, or pursuant to the law governing the arbitration agreement.
• Non-Arbitrable Subject Matter: The subject matter of the dispute was not amenable to resolution by arbitration under the law of the enforcing state.
• Public Policy Violation: The recognition or enforcement of the award would be contrary to the public policy of the enforcing state.

Permissible Reservations by Contracting States

Additionally, the Convention permits states to apply certain types of reservations:

• Reciprocity Reservation (Conventional): Some states may declare that they will apply the Convention only to the recognition and enforcement of awards made in the territory of another contracting state.
• Commercial Reservation: Certain states may limit the application of the Convention to disputes arising out of legal relationships, whether contractual or not, that are considered commercial under their national law.
• Reciprocity Reservation (Non-Contracting States): Some states may choose not to limit the Convention's application exclusively to awards from other contracting states, but may, however, apply it to awards from non-contracting states only to the extent that such non-contracting states grant reciprocal treatment.

States may elect to make any or all of these reservations. Given that two distinct issues are sometimes conflated under the term "reciprocity," it is imperative to ascertain precisely which reservation(s) an enforcing state has declared.

Global Adherence to the Convention

As of January 2023, the New York Convention boasts 172 state parties, encompassing 169 of the 193 United Nations member states, alongside the Cook Islands, the Holy See, and the State of Palestine. Twenty-four UN member states have yet to accede to the Convention. Furthermore, Taiwan has not been permitted to adopt the Convention (though it generally enforces foreign arbitration judgments), and several British Overseas Territories have not had the Convention extended to them via Order in Council. These British Overseas Territories currently not covered by the New York Convention include: Anguilla, Falkland Islands, Turks and Caicos Islands, Montserrat, and Saint Helena (inclusive of Ascension and Tristan da Cunha).

Access the Full Text of the Convention

For comprehensive reference, the complete text of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards is available in multiple languages:

• English Version
• French Translation
• Spanish Translation
• Russian Translation
• Mandarin Translation