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The New York Convention - the Cornerstone of International Commercial Arbitration

Release time：2023-12-07 11:34:06

I. Background of the New York Convention

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, was signed in New York in 1958. It is an international treaty aimed at facilitating the recognition and enforcement of arbitral awards in cross-border commercial arbitrations. China became a party to the New York Convention in 1987. To date, 172 countries have joined the convention, making it one of the most widely accepted treaties in international commercial law.

II. Significance of the New York Convention

(1) Significance for the Development of the International Commercial Arbitration System

Before the convention, different countries had varying standards for recognizing and enforcing foreign arbitral awards, leading to significant uncertainty and risk in international commercial activities. The New York Convention established a unified legal framework for the recognition and enforcement of international commercial arbitral awards in the international community, promoting international trade and investment. The widespread participation of countries in the convention facilitated legal cooperation, broadened the scope of recognized and enforced arbitral awards, enhanced the efficiency of resolving transnational disputes, and saved valuable time and costs for international commercial entities.

(2) Significance for the Development of International Arbitral Institutions

The implementation of the New York Convention has positively impacted the development of international arbitral institutions. It increased the predictability of international arbitration, enhanced the attractiveness of international arbitral institutions for dispute resolution, strengthened their position as effective means of peacefully resolving international commercial disputes, and gave rise to well-known international arbitral institutions such as the ICC International Court of Arbitration, the American Arbitration Association (“AAA”), the Singapore International Arbitration Centre (“SIAC”), the Hong Kong International Arbitration Centre (“HKIAC”), and the Asia Pacific International Arbitration Chamber (“APIAC”). The rapid development of international arbitral institutions has made them a major battlefield for resolving international commercial disputes.

(3) Significance for the Development of China's Arbitration System

The importance of the New York Convention for China is self-evident. President Xi Jinping recently emphasized the need to strengthen the rule of law in foreign-related matters, actively develop foreign-related legal services, and cultivate world-class arbitration institutions during the tenth collective study session of the Central Committee of the Communist Party of China. With the rapid development of China's economy and the advancement of the Belt and Road Initiative, the New York Convention provides a solid international legal framework for various international collaborations on the "Belt and Road" platform. As a party to the New York Convention, China's position in the field of international arbitration will be further elevated. The continuous improvement and internationalization of China's arbitration legal system will further enhance the acceptance and credibility of Chinese arbitral awards in the international community.

(4) Significance for the APIAC

As a member of the international arbitration community, the APIAC is closely connected to the spirit of the New York Convention. Dedicated to providing fair and efficient resolution services for cross-border commercial disputes, APIAC is particularly relevant in the context of the Belt and Road Initiative, which has strengthened economic ties between China and Southeast Asian countries. The increasing cooperation in business activities has generated a growing demand for international arbitration services, and APIAC is poised to provide professional and efficient solutions. Moreover, with the continuous progress of foreign-related rule of law in China, APIAC’s awards have been more widely recognized and implemented internationally, and its credibility has been further strengthened.

III. 172 States parties to the New York Convention

Asian country

Afghanistan, Bahrain, Bangladesh, Bhutan, Brunei, Cambodia, China, Cyprus, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, Syria, Tajikistan, Thailand, Timor-Leste, Turkmenistan, United Arab Emirates, Uzbekistan, Vietnam, Yemen.

American countries

Antigua and Barbuda, Argentina, Bahamas, Barbados, Belize, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Green, Suriname, Trinidad and Tobago, USA, Uruguay, Venezuela.

African countries

Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cape Verde, Cameroon, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Egypt, Equatorial Guinea, Eritrea, Swaziland, Ethiopia, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Cô te d 'Ivoire, Kenya, Lesotho, Liberia, Libya, Madagascar, Malawi, Mali. Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Somalia, South Africa, South Sudan, Sudan, Tanzania, Togo, Tunisia, Uganda, Zambia and Zimbabwe.

European countries

Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, Montenegro. Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.

Oceania countries

Australia, Fiji, Kiribati, Marshall Islands, Fiji, Kiribati, Micronesia, Nauru, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, Micronesia, Nauru, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

IV. Key Points about the New York Convention

(1) The convention applies to the recognition and enforcement of arbitral awards.

Article 1

1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

2. The term "arbitral awards" shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.

3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, 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 Contracting State. 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.

(2) Contracting states shall recognize arbitration agreements.

Article 2

1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

2. The term "agreement in writing" shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

(3) Recognition or enforcement by States parties.

Article 3

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

(4) Claim for recognition and enforcement.

Article 4

1. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply:

(a) The duly authenticated original award or a duly certified copy thereof;

(b) The original agreement referred to in article II or a duly certified copy thereof.

2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

(5) Objection of recognition and enforcement.

Article 5

1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:

(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or

(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) The recognition or enforcement of the award would be contrary to the public policy of that country.

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