The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is a pro-arbitration international treaty designed to promote the worldwide recognition and enforcement of arbitral awards. The Convention has been described as “one of the most important and successful United Nations treaties in the area of international trade law.” Over 150 countries have adopted the New York Convention.
The basic tenet of the New York Convention is that contracting states have the reciprocal obligation to enforce foreign arbitral awards unless the awards violate certain procedural norms. The most well known reciprocity provision in the New York Convention is Article I(3), which provides that contracting states may declare their adherence to the terms of the New York Convention to be predicated on whether the country where the arbitral award was made also is a signatory to the Convention. This reciprocity option has been adopted by approximately half the contracting states. Therefore, in about half the contracting states, the New York Convention’s terms will not apply unless the country where the arbitration award was made also agrees to be bound by the terms of the New York Convention.
There is a second, less well known reciprocity provision in the New York Convention. Article XIV of the New York Convention provides, “A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting States except to the extent that it is itself bound to apply the Convention.”