Recognizing the growing importance of international arbitration as a means of settling international commercial disputes, the Convention on the Recog-nition and Enforcement of Foreign Arbitral Awards (the Convention) seeks to provide common legislative standards for the recognition of arbitration agreements and court recognition and enforcement of foreign and non-. domestic arbitral awards. . The term “non-domestic” appears to embrace awards which, although made in the state of enforcement, are treated as “foreign” under its law because of some foreign element in the proceedings, e..g. . another State’s procedural laws are applied..
The Convention’s principal aim is that foreign and non-domestic arbitral awards will not be discriminated against and it obliges Parties to ensure such awards are recognized and generally capable of enforcement in their jurisdiction in the same way as domestic awards. . An ancillary aim of the Convention is to require courts of Parties to give full effect to arbitration agreements by requiring courts to deny the parties access to court in con-travention of their agreement to refer the matter to an arbitral tribunal..
The Convention applies to awards made in any State other than the State in which recognition and enforcement is sought. .It also applies to awards “not considered as domestic awards”. . When consenting to be bound by the. Convention, a State may declare that it will apply the Convention.
- in respect to awards made only in the territory of another Party and.
- only to legal relationships that are considered “commercial” under its domestic law..
The Convention contains provisions on arbitration agreements. . This aspect was covered in recognition of the fact that an award could be refused . enforcement on the grounds that the agreement upon which it was based might not be recognized. .Article II (1) provides that Parties shall recognize written arbitration agreements. .
In that respect, UNCITRAL adopted, at its thirty-ninth session in 2006, a Recommendation that seeks to provide guidance to Parties on the interpretation of the requirement in article II (2) that an arbitration agreement be in writing and to encourage application of article VII (1) to allow any interested party to avail itself of rights it may have, under the law or treaties of the country where an arbitration agreement is sought to be relied upon, to seek recognition of the validity of such an arbitration agreement. .
The central obligation imposed upon Parties is to recognize all arbitral awards within the scheme as binding and enforce them, if requested to do so, under the lex fori. .Each Party may determine the procedural mechanisms that may be followed where the Convention does not prescribe any requirement..
The Convention defines five grounds upon which recognition and enforce-ment may be refused at the request of the party against whom it is invoked. . The grounds include incapacity of the parties, invalidity of the arbitration agreement, due process, scope of the arbitration agreement, jurisdiction of the arbitral tribunal, setting aside or suspension of an award in the country in which, or under the law of which, that award was made. .The Convention defines two additional grounds upon which the court may, on its own . motion, refuse recognition and enforcement of an award. . Those grounds relate to arbitrability and public policy..
The Convention seeks to encourage recognition and enforcement of awards in the greatest number of cases as possible. .That purpose is achieved through article VII (1) of the Convention by removing conditions for recognition and enforcement in national laws that are more stringent than the conditions in the Convention, while allowing the continued application of any national provisions that give special or more favourable rights to a party seeking to enforce an award. . That article recognizes the right of any interested party to avail itself of law or treaties of the country where the award is sought to be relied upon, including where such law or treaties offer a regime more favourable than the Convention..
Entry into force
The Convention entered into force on 7 June 1959 (article XII)..
How to become a party
The Convention is closed for signature. . It is subject to ratification, and is open to accession by any Member State of the United Nations, any other
State which is a member of any specialized agency of the United Nations, or is a Party to the Statute of the International Court of Justice (articles VIII and IX)..
Optional and/or mandatory declarations and notifications
When signing, ratifying or acceding to the Convention, or notifying a terri-torial extension under article X, 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 Party to the Convention. . It may also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration (article I)..
Any Party may denounce this Convention by a written notification to the Secretary-General of the United Nations. .Denunciation shall take effect one year after the date of the receipt of the notification by the Secretary-General (article XIII)..
United Nations Conference on International .
Commercial Arbitration, . new york, 20 may–10 june 1958
Excerpts from the Final Act of the United Nations Conference on International Commercial Arbitration
“1. . The Economic and Social Council of the United Nations, by resolution 604 (XXI) adopted on 3 May 1956, decided to convene a Conference of Plenipotentiaries for the purpose of concluding a convention on the recogni-tion and enforcement of foreign arbitral awards, and to consider other pos-sible measures for increasing the effectiveness of arbitration in the settlement of private law disputes. .[…]
“12. . The Economic and Social Council, by its resolution convening the Conference, requested it to conclude a convention on the basis of the draft convention prepared by the Committee on the Enforcement of International Arbitral Awards, taking into account the comments and suggestions made by Governments and non-governmental organizations, as well as the discussion at the twenty-first session of the Council..
“13. O on the basis of the deliberations, as recorded in the reports of the work-ing parties and in the records of the plenary meetings, the Conference prepared and opened for signature the Convention on the Recognition and Enforcement of Foreign Arbitral Awards which is annexed to this Final Act..[…]
“16. . In addition the Conference adopted, on the basis of proposals made by the Committee on Other Measures as recorded in its report, the following resolution:
The full text of the Final Act of the United Nations Conference on International Commercial
Arbitration (E/CONF.26/8Rev.1) is available at UNCITRAL
“Believing that, in addition to the convention on the recognition and enforcement of foreign arbitral awards just concluded, which would contri-bute to increasing the effectiveness of arbitration in the settlement of private law disputes, additional measures should be taken in this field,
“Having considered the able survey and analysis of possible measures for increasing the effectiveness of arbitration in the settlement of private law disputes prepared by the Secretary-General (document E/CONF..26/6),
“Having given particular attention to the suggestions made therein for possible ways in which interested governmental and other organizations may make practical contributions to the more effective use of arbitration,
“Expresses the following views with respect to the principal matters dealt with in the note of the Secretary-General:
“1. . It considers that wider diffusion of information on arbitration laws, practices and facilities contributes materially to progress in commercial. arbitration; recognizes that work has already been done in this field by . interested organizations, and expresses the wish that such organizations, so far as they have not concluded them, continue their activities in this regard, with particular attention to coordinating their respective efforts;
“2. . It recognizes the desirability of encouraging where necessary the establishment of new arbitration facilities and the improvement of existing facilities, particularly in some geographic regions and branches of trade; and believes that useful work may be done in this field by appropriate govern-mental and other organizations, which may be active in arbitration matters, due regard being given to the need to avoid duplication of effort and to concentrate upon those measures of greatest practical benefit to the regions and branches of trade concerned;
“3. . It recognizes the value of technical assistance in the development of effective arbitral legislation and institutions; and suggests that interested Governments and other organizations endeavour to furnish such assistance, within the means available, to those seeking it;
“4. . It recognizes that regional study groups, seminars or working . parties may in appropriate circumstances have productive results; believes that consideration should be given to the advisability of the convening of such meetings by the appropriate regional commissions of the United Nations and other bodies, but regards it as important that any such action be taken with careful regard to avoiding duplication and assuring economy of effort and of resources;
“5. . It considers that greater uniformity of national laws on arbitration would further the effectiveness of arbitration in the settlement of private law disputes, notes the work already done in this field by various existing . organizations, and suggests that by way of supplementing the efforts of these bodies appropriate attention be given to defining suitable subject matter for model arbitration statutes and other appropriate measures for encouraging the development of such legislation;
“Expresses the wish that the United Nations, through its appropriate organs, take such steps as it deems feasible to encourage further study of measures for increasing the effectiveness of arbitration in the settlement of private law disputes through the facilities of existing regional bodies and non-governmental organizations and through such other institutions as may be established in the future;
“Suggests that any such steps be taken in a manner that will assure proper coordination of effort, avoidance of duplication and due observance of budgetary considerations;
“Requests that the Secretary-General submit this resolution to the . appropriate organs of the United Nations..”
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