The success of international commercial arbitration in today’s global economy is largely due to an international treaty familiarly referred to as the New York Convention, which makes foreign arbitral awards enforceable in signatory countries. This chapter is addressed to parties who intend to enforce a foreign arbitral award under the Convention in the United States. It endeavors to sketch how U.S. law applies in this area.
The New York Convention is the short name for a multinational treaty officially known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (the Convention, Articles I - XVI), which became effective as of June 7, 1959. The United States is a signatory to the Convention, and enforces this treaty through Chapter 2 of the U.S. Arbitration Act (FAA, §§ 201-208).
II. FAA Chapter 2
Chapter 2 of the FAA contains eight provisions of which § 202 is the operative one as it defines the types of arbitration awards that the Convention applies to. It provides that all foreign arbitral awards arising out of commercial relationships fall under its terms, except those arising out of a commercial relationship “which is entirely between citizens of the United States,” unless that relationship (1) involves property located abroad, (2) envisages performance or enforcement abroad, or (3) has some other reasonable relation with one or more foreign states.