The New York Convention

INTRODUCTION
 Foreign Arbitration Awards were introduced to protect and promote interests of parties who want speedy
resolutions through modern methods rather than traditional ones.
 The New York convention also known as the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards.
 It was first adopted by the United Nations diplomatic conference on 10 June 1958 and was enforced on 7
June 1959.
 It is often considered as one of the most important treaties in the field of international trade law and as a
foundation stone in the field of international arbitration.
 Under the New York Convention, recognition is being given to the rights of the states to arbitrate, and to
enforce the foreign Arbitration Awards.
 At present, the convention is signed by 156 state parties.
PURPOSE OF THE NEW YORK CONVENTION
 It was adopted mainly for promoting healthy business relations between the countries and to promote
harmony and coordination among the states.
 It aims to reduce the burden of the states to decide which laws to be enforced or the procedures of which
countries to be followed during the process of the arbitration.
♦The two main actions which were taken by the New York convention are as follows:
1. Enforcement of Foreign Arbitral Award
 The first action is to recognize the awards made in the foreign territory and is defined under the Article 1 of
the convention.
 It is the obligation of the states to recognize such awards and enforce them according to the Article 3 of the
convention.
 A state which needs to seek the enforcement needs to submit the following documents:
 The arbitral award
 The arbitral document according to the article 4 of the convention
2. Referral to the Court by the method of Arbitration
 Article II, paragraph 3, provides that a court of a Contracting State, when seized of a matter in respect of
which the parties have made an arbitration agreement,at the request of one of the parties, refer them to
arbitration.
ESSENTIALS UNDER NEW YORK CONVENTION
 It creates a uniform international framework which enables various countries to establish strong trade and
commercial relations and solve disputes with the help of arbitration.
 It achieves this by
 firstly requiring the signatory states to enforce the awards rendered in the signatory state,and
 secondly by limiting the grounds on which the states may refuse recognition and enforcement.
 The states who are a party to this convention are required to bind to the foreign awards and enforce them
according to the rules and procedures established by the New York Convention.
 The procedure is free from any complex procedures and charges. The states just need to submit to a
competent court in the contracting state where the enforcement is sought.
Procedure for Enforcement
 Article III opens the provisions relating to the enforcement of arbitral awards falling under the Convention
(Articles III-VI).
 It contains the general obligation for the Contracting States to recognize Convention awards as binding and
to enforce them in accordance with their rules of procedure.
 Generally it speaking three possibilities exist in the Contracting States for regulating the procedure for
enforcement of a Convention award:
1. enforcement procedure according to specific provisions laid down in a special Act,
2. enforcement procedure as for a foreign award in general, and
3. enforcement procedure as for a domestic award.
 The general obligation to recognize Convention awards under Article III of the Convention can also be
considered as the basis for the application of the procedural law of the forum.
 Examples are discovery of evidence, estoppel or waiver, set-off or counterclaim against award, the entry of
judgement clause (United States), period of limitation for enforcement of a Convention award, and interest
on the award.
 Finally, the second sentence of Article III, in which it is stated that there shall not be imposed substantially
more troublesome conditions or higher fees or charges on the recognition or enforcement of Convention
awards.
The main provisions of the convention are as follows
Article-1
 This convention shall observe the popularity and enforcement of arbitral awards made within the territory of
a state.
 It shall also practise to arbitral awards no longer considered as home awards inside the nation in which their
reputation and enforcement are sought.
Article II
 Every Contracting nation shall understand an agreement in writing which the events adopt to submit to
arbitration any or all variations that have arisen.
 The term “agreement in writing” shall include an arbitral clause in a settlement or an arbitration agreement
that are signed by way of the events.
Article III
 Every Contracting nation shall apprehend arbitral awards as binding and put in force them in accordance
with the rules of process of the territory.
Article IV
 If the said award or agreement is not made in a professional language which the award is relied upon, the
party making use of for reputation and enforcement of the award shall produce a translation of these
documents into such language.
ARTICLE V
 The main feature in Art V is the grounds for refusal of enforcement.
 Enforcement may be refused “only if” the party against whom the award is invoked is able to prove one of
the grounds of the enforcement of the award would violate its (international) public policy (Article V(2)).
 This main feature is almost unanimously affirmed by the courts.
Article VI
 According to Article VI, if the setting aside or suspension of the award is requested in the country in which,
or under the law of which, the award was made, the court may adjourn.
 The word“may adjourn”indicate that the court has discretionary power to adjourn its decision
Article VII
 The provisions of the prevailing convention shall not have an effect on the validity of multilateral or bilateral
agreements regarding the recognition and enforcement of arbitral awards entered into by the Contracting
States.
Article VIII
 This convention shall be open till 31 December 1958 for signature on behalf of any Member of the United
international locations.
 This convention shall be ratified and the tool of ratification will be deposited with the Secretary-standard of
the United Nations.
Article IX
 This convention shall be open for accession to all States stated in article VIII.
 Accession shall be effected by the deposit of an instrument of accession with the Secretary-popular of the
united international locations.
Article X
 Any nation might also, at the time of signature, ratification or accession, claim that this conference shall
enlarge all or any of the territories for the worldwide members of the family of which it’s far accountable.
CONCLUSION
The New York Convention applies to arbitration proceedings that are not regarded as domestic awards in the state
where acknowledgement and regulation are sought. It is widely regarded as the fundamental device for
international arbitration.