By Grant Hanessian
Hanessian is a partner at Baker McKenzie in New York and chair of USCIB’s Arbitration Committee. He is the U.S. member of the ICC Court of Arbitration and an adjunct professor of law at Fordham Law School. Contact him at firstname.lastname@example.org.
A few weeks ago, the 60th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards – the “New York Convention” – was celebrated at United Nations headquarters and the U.S. Courthouse in New York.
The tremendous success of the New York Convention, which provides for national court enforcement of foreign arbitration awards and agreements, is one of the principal reasons arbitration has become the preferred choice of parties around the world for resolving cross border commercial disputes. Virtually all the world’s major trading nations have ratified the convention.
Following a conference at the UN featuring representatives from the International Chamber of Commerce, UN Commission on International Trade Law (UNCITRAL), International Bar Association, International Council for Commercial Arbitration, and U.S. Department of Commerce, a “birthday” celebration was held at the U.S. Courthouse on Pearl Street in Manhattan. ICC and UNCITRAL served as co-hosts of the event.
“The New York Convention is a tremendous example of how business and governments can work together to strengthen global governance, and its enduring relevance is a testament to ICC’s leadership in shaping the global environment for private dispute resolution over the past century,” ICC Secretary General John Denton observed at the reception. USCIB General Counsel Nancy Thevenin, who is immediate past chair of the New York State Bar Association International Section, helped organize the event and also made remarks.
ICC’s preeminence in international commercial arbitration is of course well known. The ICC International Court of Arbitration, created in 1923 to encourage settlement of disputes arising from international trade, has administered more than 23,000 disputes involving parties and arbitrators from 180 countries and independent territories.
It may be less well known that ICC initiated the process that led to creation of the New York Convention. At the UN conference, Anna Joubin-Bret, secretary of UNCITRAL, noted that ICC’s Commission on Arbitration and ADR prepared the first draft of the convention and submitted it to the UN in 1953. The UN Economic and Social Council then produced an amended draft that was discussed during a conference at UN Headquarters in May and June 1958, resulting in the UN’s adoption of the New York Convention on June 10, 1958.
Prior to adoption of the New York Convention, parties seeking to enforce foreign arbitral awards usually had to obtain two court decisions of exequatur, one from the country where the award was issued and another at the place of enforcement. The convention eliminated the requirement of double exequatur, significantly restricted the grounds for national court refusal of recognition and enforcement and placed the burden of proving such grounds on the party opposing such recognition and enforcement.
Under the New York Convention, national courts considering applications for recognition and enforcement of foreign awards may not review the merits of the arbitral tribunal’s decision. National courts have generally construed the grounds for refusal of recognition and enforcement under the Convention narrowly, and they have exercised their discretion to refuse recognition and enforcement only in exceptional cases. Enforcement of arbitral awards by national courts is now considerably easier than enforcement of national court judgements in many countries, greatly facilitating resolution of international business disputes.
The New York Convention, and complementary UNCITRAL texts such as the UNCITRAL Model Law on International Commercial Arbitration in 1985, have led to an increasingly harmonized arbitration law. The UNCITRAL model law, which has now been adopted by 111 jurisdictions in 80 countries, essentially repeats the grounds of the New York Convention for enforcement and setting aside foreign awards.
At the UN event, Helene van Lith, the secretary of the ICC Commission on Arbitration and ADR, emphasized the role ICC continues to play in applying and interpreting the convention through Court of Arbitration scrutiny of awards and the publication of the forthcoming third revised edition of the ICC Guide to National Procedures for Recognition and Enforcement of Awards Under the New York Convention. The increasing availability of national court decisions interpreting the Convention and UNCITRAL model law, through such sources as the ICC Guide and the online Case Law on UNCITRAL Texts, has importantly contributed to a uniform and predictable application of arbitration law around the world.
In these times when multilateral trade arrangements are under stress, everyone interested in the continued growth of international business should applaud the extraordinary vitality of the New York Convention as it enters its seventh decade.
August 14, 2018