TheCase: How the NY Convention ensures enforcement of arbitral awards

TheCase: How the NY Convention ensures enforcement of arbitral awards

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The subject of international arbitration, which plays a significant role in strengthening relations between states, and the mechanisms of its application have elicited a diversity of opinions. Some scholars and experts complain about the difficulty of applying it in various states due to the different procedures in each local legal system. At the same time, other experts highlight the role that foreign arbitration plays in facilitating the resolution of disputes over international investments. On the ground, what is the basis for enforcing foreign arbitral awards?
Arbitral awards are the core focus of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention. The main objective of the convention is to ensure nondiscrimination between foreign and domestic arbitral awards. Hence, it obligates member states to ensure that such decisions are generally recognized and considered enforceable in their jurisdictions, similar to domestic arbitration awards. One of the ancillary objectives of the convention is that it requires the courts of states that are party to the agreement to make arbitration agreements fully effective.
Defining and clarifying the foreign character of the arbitral award is of great importance, because the distinction between local and foreign awards results in a difference in the legal rules applicable in each case. Foreign arbitral awards mean not only awards issued by the appointed arbitrators in specific cases, but also the awards issued by the permanent arbitral tribunal to which the parties resort.
The criterion for differentiating between a national and a foreign arbitral award is the place where it is issued, as it is stated in the convention that the award is considered foreign if it was published in the territory of a country other than the one in which recognition and enforcement of the award are requested. If the arbitral award is not considered a national award, recognition and enforcement of that award are requested.
The New York Convention also added a fundamental and essential supplement that provides foreign arbitral awards with better opportunities for implementation, as it stipulates that neither more severe conditions nor judicial fees are imposed for the recognition or implementation of these foreign awards.

• Dimah Talal Alsharif is a Saudi lawyer and legal consultant. Twitter: @dimah_alsharif

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