Reciprocity and the Federal Reservation under the New York Convention - Appendix 2 - Arbitration Law of Canada: Practice and Procedure - Third Edition
Originally from Arbitration Law of Canada: Practice and Procedure, 3rd Ed.
RECIPROCITY AND THE FEDERAL RESERVATION UNDER
THE NEW YORK CONVENTION
As stated in Chapter 2, there has been some debate about the positions of Ontario and Quebec with respect to the reciprocity provision in the New York Convention. The issue appears to be strictly academic as we have the practical experience of 30 years of success in having awards from Canada routinely enforced elsewhere without the issue being raised. Further, Ontario has introduced new legislation, Bill 27, the Burden Reduction Act, 2026 that will make both the New York Convention and the 2006 Model Law expressly part of the law of Ontario. The following may quickly become of academic interest only.
Article 1(3) of the New York Convention provides that “any State may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State…
Reciprocity is not unusual in treaties and historically it was a mandatory requirement. Of the 150 countries who have signed the New York Convention, only 12 have not taken advantage of this reciprocity provision.
As all provinces are part of the territory of Canada and Canada is a Contracting State as that term is defined in the Vienna Convention on the Law of Treaties, at first blush this reciprocity reservation should not be seen to be of any concern, notwithstanding, as discussed in Chapter 2, Ontario and Quebec do not have legislation specifically implementing all of the provisions of the Convention.
The issue however is not with Article 1(3). The New York Convention also has what is known as a federal state reservation, Article XI. Article XI provides that in the case of a federal or non-unitary state, the obligations of the federal Government under the Convention are recognized to be limited to those within the legislative jurisdiction of the federal authority. The obligation of the federal government with respect to those Articles of the Convention that do not come within the legislative jurisdiction of the federal authority are to be brought to the notice of the appropriate province with a “favorable recommendation” to take legislative action. In the case of the Canada, the federal authority extends only to arbitrations in which one of the parties is Her Majesty in right of Canada, a departmental corporation, or a Crown corporation or in relation to maritime or admiralty matters.