Interpretation of Article V (2) (b) - Chapter 4 - Public Policy Exception Under The New York Convention: History, Interpretation, and Application - Revised Edition
Dr. Anton G. Maurer, LL.M. has been actively involved in international arbitration for more than 20 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 in more than 55 countries and in over 80 jurisdictions. He graduated with a law degree as well as a PhD in public international law from the University of Tübingen, Germany, and a Master of Laws in U.S. and Global Business Law from Suffolk University, Boston, MA. Anton Maurer has been a Partner with CMS Hasche Sigle since 1987. He started his career with Sigle Loose Schmidt Diemitz & Partners in Stuttgart, Germany and then worked as a foreign attorney with Johnson & Swanson in Dallas, Texas. He currently serves on the board of directors of the International Association of Defense Counsel; as Chair of the Advisory Board of The Southwestern Institute for International and Comparative Law; and, as a member of the Advisory Board of the Institute for Transnational Arbitration, and the Board of Trustees, all with the Center for American and International Law, Plano, Texas.
The question is how Article V(2)(b) of the New York Convention is to be interpreted.
As explained above, each party to the New York Convention has to interpret its obligations under the Convention in good faith in accordance with the natural and ordinary meaning to be given to the terms of the treaty in the context and in light of its object and purpose. Thereby, the preamble and annexes and any instrument drawn up in connection with the conclusion of the Convention must be included.1
Any analysis has to start by recognizing that Art. III of the New York Convention imposes on each party to the Convention the duty to recognize and enforce a foreign award if it is not entitled to refuse such recognition or enforcement under Art. V. Obviously Art. V is an exception to the general duty to recognize and enforce a foreign award. Under general interpretation rules applicable in civil law countries exceptions have to be interpreted narrowly.2 But this rule does not generally demand a narrow interpretation of the terms stipulated in Art. V; this term has to be interpreted in light of its object and purpose and the intention of the parties. By qualifying the term public policy with "of that country" it has to be accepted that the Conference did not try to find a transnational meaning of public policy.3
I. Limitation of Grounds
A. Literal Interpretation
B. Confirmed by Drafting History
II. Contrary to the Public Policy "of That Country"
A. Literal Interpretation
B. Not Governing Law nor Lex Arbitri
C. No Transnational Public Policy Intended
D. Differences Were Accepted
III. Literal Interpretation: "Public Policy" Is Not Identical with "Domestic Law"
A. Making Enforcement Easier Than under the 1927 Geneva Convention
B. Mistake in Fact or Law is Not Included in Art. V
C. Even the 1927 Geneva Convention Was Narrower Than "Domestic Law"
D. Differences in the Wording of the Public Policy Clause
E. Confirmed by Drafting History
IV. "May Also Be Refused"
B. Pro-Enforcement Bias
C. Discretion Can Also Be Exercised in Implementing the Convention in Domestic Law
V. "Public Policy"--Narrow or Wide Interpretation?
A. Goal to Uphold Finality of an Award
B. Drafting Changes Support Narrow Interpretation
C. Guidance from Art. 34 and 36 UNCITRAL Model Law?
D. Pro-Enforcement Policy
VI. Relationship between Article V(1) and V(2)(b)
A. Art. V(1) Has Its Own Meaning and Is Not Included in Art. V(2)
B. Working Papers Support Back-up Position of Public Policy
C. Party Autonomy and Burden of Proof
D. ILA Recommendation