Originally from:
The Practice of International Litigation - 2nd Edition - Looseleaf
The Practice of International Litigation - 2nd Edition - Electronic
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'Non-domestic' Arbitral Awards and the New York Convention
Lawrence W. Newman and Michael Burrows
ARBITRAL AWARDS rendered outside the United States are not
enforceable as judgments in this country until they have been presented in
court for recognition and enforcement, just as must be done for the
confirmation and enforcement of domestic arbitral awards. The
Convention on the Recognition and Enforcement of Foreign Arbitral
Awards (the New York Convention) — which was signed in New York
City on June 10, 1958, under the auspices of the United Nations and has
since been ratified by some 100 nations, including the United States (in
1968) — is the primary basis for the enforcement of foreign arbitral awards
in the United States.
The convention provides both for the recognition and enforcement
within signatory nations of "foreign" arbitral awards issued within other
countries that are also signatories to the convention and for the recognition
and enforcement within signatory nations of awards considered "nondomestic."
In 1970 legislation was enacted to implement the terms of the
convention in Chapter 2 of the Federal Arbitration Act (FAA). Under FAA
§203, federal courts have original jurisdiction for any action or proceeding
"under the convention" regardless of the amount in controversy. Whether
an arbitral award is enforceable in the United States under the convention is
of importance because the grounds upon which a court can vacate a
convention award are narrower than those on which a U.S. domestic award may be set
aside.
An action or proceeding falls under the convention in two situations.
First, under the first sentence of Article I(l) of the convention, an action or
proceeding falls under the convention if it is brought to enforce an arbitral
award issued in a signatory country other than the country in which
enforcement of the award is sought. Thus, an award issued in France, a
signatory nation, would be considered a"foreign" award in the United States
and would fall under the convention. Second — the situation that is the
focus of this article — an action or proceeding falls under the convention
pursuant to the second sentence of Article I(1) if the arbitral award is "not
considered as domestic in the State where [its] recognition and enforcement
[is] sought."
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
