Conclusion - Chapter 7 - The Public Policy Exception under the New York Convention: History, Interpretation and Application - Second Edition
Dr. Anton G. Maurer, LL.M., FCIArb has been actively involved in international arbitration for more than 30 years, concentrating on commercial, post M&A, and corporate disputes, and the enforcement of foreign arbitral awards. He is also actively involved in international litigation and has been professionally involved in disputes or transactions in more than 65 countries and in over 90 jurisdictions. He graduated with a law degree as well as a PhD in public international law from the University of Tübingen, Germany, a Master of Laws in U.S. and Global Business Law from Suffolk University, Boston, MA, and a CIArb Diploma in International Arbitration.
Anton Maurer is an independent arbitrator, and the managing director of Anton Maurer International Legal Services GmbH which is seated in St. Moritz, Switzerland, and Anton Maurer International Legal Services Rechtsanwaltsgesellschaft mbH which is seated in Stuttgart, Germany. He frequently is appointed as an arbitrator.
The New York Convention made enforcement of foreign arbitral awards generally considerably easier, but still there is an obvious lack of uniformity.
Albert Jan van den Berg argues that the public policy defense rarely causes enforcement to be refused. He thinks that one reason for this is the distinction drawn between domestic and international public policy, for what is considered public policy in domestic relations does not necessarily constitute public policy in international relations. Hence, the number of matters considered as falling under public policy in international cases is smaller than in domestic ones. This distinction is justified by the different purposes of domestic and international relations, and it is gaining increasing acceptance by the courts in cases falling within the scope of the New York Convention. Karl-Heinz Böckstiegel argues that public policy plays a greater role in the theory of arbitration than in practice. Both statements are statistically true if one looks at the number of judgments where enforcement of foreign arbitral awards was refused, especially in Europe and in North America. About 2,500 court decisions have been reported on the interpretation and application of the New York Convention in the first 46 volumes of the Yearbook of Commercial Arbitration. Among them, there were about 1,030 decisions in which the defendant had raised the public policy defense; in more than 100 cases, the courts refused enforcement of the award based on the public policy defense. However, this rather low number of decisions refusing the enforcement based on a public policy defense was achieved only because in a rather higher number of cases, the relevant highest courts of the respective country reversed the decisions of lower courts which would have refused the enforcement of awards based on a public policy defense. A score of less than 10 percent can be considered to be a successful achievement for an international convention. However, if one counts all reported judgments where the aggrieved party opposed recognition and enforcement based on a public policy exception, then this ground plays also a great role in practice. Several commentators correctly call the public policy exception under Art. V (2) (b) probably the “most misused ground for non-enforcement [of] all”.