The recognition of an award is a defensive process in which a party to an arbitration asks a national court to “recognize an award as valid and binding upon the parties in respect of the issues with which it dealt”.1 It is a prerequisite for the enforcement of an award, defined as a process during which the court not only recognizes the award but “ensure[s] that it is carried out, by using legal sanctions as are available”.2 The recognition of an award, its enforcement and execution constitute normally the last stages of arbitration whenever the final award rendered by an arbitral tribunal is not executed by one of the parties voluntarily.
The recognition and enforcement of arbitral awards out-side the jurisdiction of the seat of the arbitration are usually treated under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”)3 and/or relevant domestic legislation. A number of regional conventions also deal with the recognition and enforcement of arbitral awards between their State parties or under specific conditions.4 Some States have also concluded bilateral agreements containing rules in respect of the recognition and enforcement of arbitral awards.
III. The New York Convention
The New York Convention contains principles for the recognition and enforcement of foreign arbitral awards.6 As of February 2020, 162 States are Contracting Parties to the Convention.7 The Convention distinguishes between and provides for the recognition and enforcement within its State parties of: (i) “foreign” arbitral awards issued within other States that are Parties to the Convention and (ii) the awards that are not considered domestic award in the State where recognition and enforcement is sought.
The New York Convention further allows its parties to make two types of reservations under Article I(3): reciprocity and commercial relationships reservations. The reciprocity reservation allows a State to limit application of the convention. Instead to application to all foreign awards, a State to declare at the time of signing, ratifying or acceding to the Convention that it would apply the Convention to the recognition and enforcement of awards made only in the territory of another State party. The second type of reservations allows a State to limit the scope of application of the Convention to those differences arising out of legal relationships that are “considered as commercial under the national law of the state making such declaration.”
The definition of “foreign” and a reference to “non-domestic” arbitral awards is provided in Article I(1) of the New York Convention. “Foreign” arbitral awards are defined as those made in the territory of a State party to the New York Convention other than the State party where the recognition and enforcement are sought. “Non-domestic” awards are defined under the domestic legislation of the State party where recognition and enforcement are sought.
Recognition and enforcement of an award may be refused by a local court following a challenge by a party on the grounds stated in Article V(1) of the New York Convention.
Article V(1) protects the interests of the award-debtor. The court may invoke ex officio the following grounds stated in Article V(2) that serve to protect the vital interests of the forum State:
IV. Non-recognition in practice
The list of grounds for the refusal to enforce or recognize an award under the New York Convention is exhaustive and should be interpreted restrictively.9 However, national courts have broadly interpreted Article III of the New York Convention10 when an investor tried to enforce an arbitral award against sovereign State assets.11 National courts have noted that the New York Convention required recognition and enforcement in accordance with the national rules of procedure. In this sense, national rules of procedure may incorporate international treaties, customary international and general principles of law, including rules on State immunity.
Gaillard, Emmanuel and Di Pietro, Domenico, Enforcement of Arbitration Agreements and International Arbitral Awards – The New York Convention in Practice, Gaillard, Emmanuel and Di Pietro, Domenico, (eds.), Cameron May, 2008
ICCA, 50 Years of the New York Convention, ICCA Congress Series No. 14, Dublin, Van den Berg, A.J., ed., Kluwer Law International, 2009
Kronke, Herbet, Nacimiento, Patricia, Otto, Dirk and Port, Nicola C., Recognition and Enforcement of Foreign Arbitral Awards – A Global Commentary on the New York Convention, Kluwer Law International, 2010
Veeder, V.V., Is There a Need to Revise the New York Convention? in Gaillard, Emmanuel (ed.), The Review of International Arbitral Awards, IAI Series on International Arbitration No. 6, Juris Publishing, 2010, p. 183
Paulsson, Jan, May or Must Under the New York Convention: An Exercise in Syntax and Linguistics, in 14 Arb. Int’l, 1998, p. 227
Gaillard, Emmanuel and Siino, Benjamin, Enforcement under the New York Convention in The Guide to Challenging and Enforcing Arbitration Awards, Global Arbitration Review, 2019, pp. 86-99
Clay, Thomas, La Convention de New York vue par la doctrine française, in 27 ASA Bull. 50, 2009, pp. 54-56
The International Bureau of the Permanent Court of Arbitration, The Court’s Role in the Recognition and Enforcement of Awards: Practical Implications, MIAC 2010 Conference: An African seat for the 21st Century, p. 107
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