Originally from Dispute Resolution Journal

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PART 1: RECOGNITION AND ENFORCEMENT OF

FOREIGN ARBITRAL AWARDS

I. THE FUNDAMENTALS OF RECOGNITION AND
ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

Arbitration is one of the most preferred methods for solving cross
boarder commercial disputes that often arise in the area of
international commerce. The popularity of arbitration has been
increasing over the past decade due to expansion in commercial
activities around the world and the development of new robust
arbitration laws by several countries in an effort to promote
arbitration. Arbitration provides parties with a mechanism to solve
their dispute in their own way as the process is driven and tailored by
the parties’ agreement. Therefore, recognition and enforcement of
foreign arbitral awards is a very important aspect of arbitration. As a
result most countries have developed national arbitration laws for
solving commercial disputes and enforcing foreign arbitral awards.

Enforcement of arbitral awards often occurs when the parties comply
with an arbitral award, the award is then enforced amicably. However,
when one of the parties does not voluntarily comply with the award, the
other party may seek to recognize and enforce such an award in a
country in which the other party has assets. Further, the losing party has
the right to set aside the arbitral award. The challenge of an award aims
to modify or set aside the award, whereas recognition and enforcement
aims to put the award into effect. Hence, comes the need for an
international instrument to organize and harmonize recognition and
enforcement of foreign arbitral award. Consequently, this lead to the
development of the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards.