Originally from World Arbitration and Mediation Review (WAMR)

PREVIEW

I.  NEW YORK CONVENTION/PANAMA CONVENTION

A.    Puerto Rico as Signatory to the New York Convention

The Convention on Recognition and Enforcement of Foreign Arbitral Awards (hereinafter the “New York Convention” or the “Convention”)  is in full force and effect in Puerto Rico.  Because Puerto Rico is an unincorporated territory of the United States,  all treaties signed and ratified by the political branches in Washington, D.C. have fully binding effect in Puerto Rico.  The New York Convention is no exception to the rule. Signed by President Lyndon Johnson in 1968 and ratified by the U.S. Senate in that same year,  the New York Convention only became fully binding in the United States in 1970 with President Richard Nixon’s deposit of the instrument of ratification with the United Nations.  At that time the Convention also became fully enforceable in Puerto Rico. Furthermore, the U.S. Congress’ enactment in 1970 of Chapter 2 of the Federal Arbitration Act (hereinafter the “FAA”),  implementing the New York Convention, is also fully binding in Puerto Rico.

Upon acceding to the New York Convention, the United States made it clear that the protections available under the treaty would only be applicable to the recognition and enforcement of arbitral awards rendered in the territory of other contracting parties arising out of legal relationships considered “commercial” under U.S. domestic law.   Thus, as a threshold matter, a party seeking recognition and enforcement of a foreign arbitral award in Puerto Rico must first make a showing that the rendering jurisdiction is a contracting party to the Convention and that the legal relationship binding both sides is “commercial” in nature.

B.    Puerto Rico as Signatory to the Panama Convention

The United States signed the Inter-American Convention on International Commercial Arbitration (hereinafter the “Panama Convention”) in 1978.  The ratification of this international treaty, pursuant to the dictates of the U.S. Constitution, took place in 1986.   This legal instrument, however, was finally deposited with the General Secretariat of the Organization of American States in 1990,  at which time the Panama Convention became binding in the United States and, consequently, in Puerto Rico. Chapter 3 of the FAA, which incorporates the Panama Convention to U.S. domestic law, also enjoys fully binding effect in Puerto Rico.