Originally from World Arbitration and Mediation Review (WAMR)

ABSTRACT

This article discusses the evolution of international commercial arbitration in Latin America through the progressive endorsement of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, commonly known as the New York Convention (“NYC”).  This article describes, in very broad strokes, the initial resistance and later acceptance of the NYC throughout the region, the development of the international arbitration field, and whether and how some of the proposed interventions regarding the functioning of the NYC are likely to affect Latin American jurisdictions.  Following an introduction that presents the topic, the article provides an overview of the historical context that led to the birth of the NYC.  The next section offers a brief description of the progressive endorsement of the NYC by Latin American jurisdictions, and its current state.  The article continues with a section that highlights some of the critiques and calls for reform of the NYC and ends with a brief reflection on the role of this treaty regarding the future of international dispute resolution in Latin America.

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Despite the historical commitment of Latin American countries to the advancement of international law, the promotion of international cooperation, and their own past practices regarding the ratification of the Geneva Protocol of 1923 and the Geneva Convention of 1927; the widespread acceptance of the NYC as well as other measures only occurred after international pressure mounted and governments across the region warmed up to market-oriented policies.  Latin America’s timid acceptance of the NYC, and more broadly of international dispute resolution, may be explained by different reasons.  Perhaps the main reason, was the Constitutional constraint that existed in some States, which prevented national courts from relinquishing their jurisdiction in favor of foreign tribunals.  The so-called Calvo Doctrine that was initially formulated in the nineteenth century as a constitutional defense mechanism against foreign intervention, ironically became an obstacle to the desire of Latin American States to open their doors to the capitalist world and to partake of the benefits of international trade and foreign direct investment.  Calvo-inspired constitutional provisions were meant to shield only Latin American governments from powerful foreign parties who might pose a threat to their sovereignty and independence.  Nevertheless, their impact not only hindered the possibility of investor-state arbitration, but also its commercial cognate.