Preventive Requests for the Enforcement of Foreign Arbitral Awards: Toward an Effective Filtering Mechanism Under the New York Convention - ARIA - Vol. 25, No. 2 2014

Author(s): 

Elsa A. Paparemborde

Page Count: 

36 pages

Media Description: 

1 PDF Download

Published: 

December, 2014

Practice Areas: 

New York Convention,

Arbitral Awards,

Enforcement of Arbitral Awards

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Description: 

Originally from American Review of International Arbitration - ARIA

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I. INTRODUCTION: THE BUILDING BLOCKS OF THIS STUDY

 

A. Resituating the New York Convention: Its Framework, History and Goals

 

International commercial arbitration has many merits, chief among which are

predictability and flexibility. Parties can pre-emptively devise their own method

of dispute resolution in their contracts to best suit their respective needs and

preferences. This allows them to find a mutually agreed upon procedure, applicable

law, seat of arbitration and set of adjudicators.1 However, this ability to take

control of the adjudicative process outside of national courts is only useful if, in

turn, the “necessary legal framework can be internationally secured.”2

 

 

The Convention on the Recognition and Enforcement of Foreign Arbitral

Awards (“New York Convention”) is an essential piece of this legal framework, in

place to ensure that parties’ commitment to arbitrate is enforceable and that

arbitral awards can be recognized and executed in a variety of nations.3 The use of

the New York Convention is not prompted in every arbitral proceeding. In fact,

the vast majority of arbitral awards are executed voluntarily.4 Nevertheless, this

treaty is arguably the “most important convention in the field of arbitration,” its

magna carta.5 It enshrines the commitment of its 148 signatories to the process of

arbitration and to the recognition and enforceability of its results across borders.

 

 

The scope of the New York Convention is rather large. As was just hinted, it

is not only concerned with the international recognition of arbitral awards but also

with their enforcement. Those two notions must be clearly differentiated.

Recognition is usually used as a defensive tool when national courts are asked to

grant a remedy with regard to a matter already arbitrated. It is a shield of sorts, a

means of avoiding re-litigation of adjudicated matters.7 In contrast, enforcement

focuses on the carrying out of an award, to give it a practical effect in a foreign

forum.8 To continue with the same analogy, it is the sword to recognition’s shield

and much more commonly argued in national courts under the New York

Convention.9 The greater popularity of enforcement is probably due, in part, to the

perceived limited utility of recognition, although some authors have suggested, and

we will come back to it towards the end of this study, that recognition should be

resorted to in a broader set of circumstances than just in matters of re-litigation.10

 

 

The success of the New York Convention framework, whether it is to

recognize or enforce, is completely contingent on national cooperation and

participation. Ultimately, the Convention is interpreted and applied by local

courts. It is those courts that will determine how efficient and reliable the global

enforcement system is.11 Nevertheless, the drafters of the Convention did their

best to create a text, at the onset, that would facilitate the local courts’ task,

providing a clear and broad pro-enforcement mandate.

 

 

The text of the New York Convention did not come about in a vacuum. After

the First World War, the increasing globalization of business prompted the

proliferation of international commercial arbitration proceedings.12 This eventually

led to the passing of the Geneva Protocol on Arbitration Clauses by the League of

Nations in 192313 and then the Geneva Convention on the Execution of Foreign

Awards (“Geneva Convention”) in 1927.14 Both of those treaties focused their

attention on the international enforceability of arbitral awards but failed to provide

an efficient mechanism to facilitate it.15 The main pitfall of the Geneva

Convention was its requirement of double exequatur.16 This meant that, for a

foreign award to be enforceable in a Geneva Convention contracting state, it had
to have been finalized and approved in its country of origin, posing a costly