The New York Convention and the Obligation to Recognise and Enforce Arbitration Agreements

Synková, Sandra

doi:10.1007/978-3-319-00134-0_5

Sandra Synková²

1020 Accesses

Abstract

The 1958 New York Convention on the recognition and enforcement of foreign arbitral awards is one of the most, if not the most, successful instruments of transnational commercial law. It has been instrumental in the development of arbitration as a favoured method of resolution of international trade disputes. The most prominent achievement of the New York Convention consists in its broad scope of application entailing uniformity and legal certainty world-wide. As outlined earlier, as of today, the Convention is in force between 148 parties. Its widespread ratification remains unmatched, other than by the United Nations Charter itself.

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Notes

1.
Cheng (2009), 679.
2.
See http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&lang=en.
3.
Charter of the United Nations, Statute of the International Court of Justice, San Francisco, 26 June 1945.
4.
Samuel (1989), 77. See also the discussion supra at Sect. 2.2, para. 10.
5.
See, e.g. Born (2009), 580 et seq.; Graffi (2011), 19 et seq.; Toby Landau and Salim Moollan, “Article II and the Requirement of Form” in Gaillard, Di Pietro (eds), “Enforcement of Arbitration Agreements and International Arbitral Awards: The New York Convention in Practice” 189 et seq.; Lew et al (2003), 130 et seq.; Schramm and Geisinger (2010), 49 et seq. See also Berger (2007), 301.
6.
See supra at Sect. 2.2.
7.
Meijer (1996), 98.
8.
Redfern et al (2009), 87; Born (2010), 123.
9.
Although in practice recognition and enforcement would typically go hand in hand. See, e.g. Lew et al (2003), 690.
10.
Redfern et al (2009), 627.
11.
Ibid. 628.
12.
Final Act of the United Nations Conference on International Commercial Arbitration, E/CONF.26/8/Rev.1, 3 at para. 1. See also supra at Sect. 4.5.2.1, para. 17 et seq.
13.
See, e.g. Redfern et al (2009), 20.
14.
Redfern et al (2009), 20. See also Chap. 2 at Sect. 2.1 et seq.
15.
See http://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXII-1&chapter=22&lang=en.
16.
See Arbitration Act 1996, s 107(2) and Schedule 4.
17.
See Article I(3) of the Convention.
18.
AS 1965 795.
19.
AS 1965 799; Monitoring implementation of the New York Convention, UNCITRAL Compilation available at http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/NYConvention_implementation.html. The com-pilation does not constitute an official document of the United Nations.
20.
Federal Decree of 17 December 1992, AS 1993 2434. See also AS 1993 2439.
21.
Additionally, the New York Convention applies by analogy to the recognition and enforcement of arbitral awards made in Switzerland, provided that the parties have fully waived the action for annulment against the awards and if the awards are to be enforced in Switzerland. See Article 192(2) PILA.
22.
The German Democratic Republic had acceded to the Convention with declarations, on 20 February 1975.
23.
Gesetz vom 15. März 1961 zum Übereinkommen über die Anerkennung und Vollstreckung ausländisher Schiedssprüche vom 10. Juni 1958 BGBI, 1961 II, p. 121.
24.
See infra. See also Weigand and Bühler (2002), 431; van den Berg (1981), 56.
25.
Article II(1) of the Convention.
26.
ICCA (2011), 23.
27.
Ibid.
28.
Similarly also Lew et al (2003), 112–112, para. 6.34.
29.
Report of the Secretary-General: Study on the Application and Interpretation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (A/CN.9/168).
30.
Ibid. 103, para. 18.
31.
Ibid. 103, para. 17. But cf. the decision of the (Swiss) Federal Supreme Court, 9 January 2008, 4A_436/2007, published in (2008) ASA Bulletin 26(2) 329–333, where the Court held that Article 7 PILA, dealing with the obligation to decline jurisdiction when seised with a claim that shall be arbitrated, applied to the matter at hand since the seat of the arbitral tribunal was expected to be in Switzerland. Conversely, if the seat of the arbitral tribunal was located abroad, Article II of the Convention would apply instead.
32.
See, e.g. United States Code (USC), Title 9, s 202.
33.
See Article II(1) of the Convention.
34.
Similarly, see also Article I(1) of the 1961 European Convention on International Commercial Arbitration: “This Convention shall apply: (a) to arbitration agreements concluded for the purpose of settling disputes arising from international trade between physical or legal persons having, when concluding the agreement, their habitual place of residence or their seat in different Contracting States.”
35.
See Lew et al (2003), 112 para. 6.36. See also Schramm and Geisinger (2010), 40–41.
36.
Article I(1) of the Convention.
37.
Similarly also van den Berg (1981), 57.
38.
The existence of such distinction was also referred to in Otto and Elwan (2010); Schramm and Geisinger (2010), 42.
39.
See also van den Berg (1981), 61.
40.
Note also that most of the modern arbitration statutes contain a legal fiction providing that the arbitral award is deemed to have been made at the seat of arbitration. See, e.g. the UNCITRAL Model Law Article 31(3).
41.
van den Berg (1981), 61.
42.
See, e.g. section 202 of Title 9 of the U.S. Code pursuant to which the Convention does not apply to arbitration agreements or arbitral awards which arise out of a relationship which is entirely between the citizens of the United States unless such relationship has a reasonable relation with one or more foreign states (place of performance, location of property, etc.).
43.
See supra at Sect. 1.6, para. 3 et seq.
44.
van den Berg (1981), 69; Schramm and Geisinger (2010), 43.
45.
Note that while the grounds are internationally uniform, the question of when an arbitration agreement shall be considered null and void, inoperative or incapable of being performed is left to be determined under some national law. See infra.
46.
van den Berg (1981), 123; Samuel (1989), 195.
47.
See Article VII of the Convention and the discussion supra at Sect. 4.5.2.1, para. 18 et seq. See also ICCA (2011), 155; the Recommendation regarding the interpretation of article II(2) and article VII(1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done in New York, 10 June 1958, adopted by the United Nations Commission on International Trade Law on 7 July 2006 at its thirty-ninth session, Issued in Official Records of the General Assembly, Sixty-first Session, Supplement No. 17 (A/61/17), Annex II; Schramm and Geisinger (2010), 47.
48.
ICCA (2011), 30.
49.
Arbitration Act 1996, s 100(1).
50.
Arbitration Act 1996, s 2(2)(a). See also Accentuate Ltd. v Asigra Inc [2009] 2 Lloyd’s Rep 599 at [9].
51.
§ 1025(2) ZPO.
52.
See, e.g. Poudret and Besson (2007), 429. See also Federal Supreme Court, 29 April 1996, Fondation M v Banque X, BGE 122 III 139.
53.
See § 176 PILA.
54.
See also ICCA (2011), 12.
55.
Ibid. 14.
56.
See also the Report on the survey relating to the legislative implementation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), Note by the Secretariat A/CN.9/656/ADD.1, 8 at para. 35.
57.
Vienna Convention on the Law of Treaties, 23 May 1969, Vienna, United Nations, Treaty Series, Vol. 1155, 331. See Articles 1 and 2(1)(a).
58.
Aust (2010), 77–78. Similarly also Shelton (2012), 5.
59.
Monitoring implementation of the New York Convention, UNCITRAL Compilation.
60.
Ibid.
61.
Interim report on the survey relating to the legislative implementation of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Note by the Secretariat, A/CN.9/585.
62.
Ibid. 4.
63.
Schmalenbach (2012), 87 para. 14.
64.
International Court of Justice, Arbitral Award of 31 July 1989, Guinea-Bissau v Senegal, Judgment, ICJ Reports 1991, 53.
65.
See infra.
66.
See Karl Zemanek, “Introduction to the Vienna Convention on the Law of Treaties”. Available at http://untreaty.un.org/cod/avl/ha/vclt/vclt.html.
67.
Schmalenbach (2012), 83 para. 6.
68.
It is interesting to note that the ICCA (2011) proceeds to the application of the Vienna Convention without any discussion as to the applicability of the Convention whatsoever.
69.
See also Article 33 of the Vienna Convention.
70.
Oliver Dörr, “Article 31. General rule of interpretation” in Dörr and Schmalenbach “Vienna Convention on the Law of Treaties: A Commentary” 541.
71.
Ibid.
72.
Sinclair (1984), 120.
73.
Ibid. 121.
74.
Ibid.
75.
Article 31(3)(b) of the Vienna Convention.
76.
Sinclair (1984), 138; Villiger (2009), 431.
77.
Villiger (2009), 431.
78.
Dörr, “Article 31. General rule of interpretation” 546.
79.
Final Act of the United Nations Conference on International Commercial Arbitration, E/CONF.26/8/Rev.1, 3 at para. 1.
80.
Ibid.
81.
ICCA (2011), 15.
82.
Ibid. 15; van den Berg (1981), 155.
83.
Bachand (2004), 540–541.
84.
Report of the Committee on the Enforcement of International Arbitral Awards, E/2704, E/AC.42/4/Rev.1, 5, para. 14. The hitherto existing international arbitration framework was made up of two multilateral conventions concluded under the auspices of the League of Nations: The Protocol on Arbitration Clauses of 24 September 1923 and the Geneva Convention on Execution of Foreign Arbitral Awards of 26 September 1927. See infra.
85.
Report of the Committee on the Enforcement of International Arbitral Awards, 6, para. 18.
86.
Article 32 of the Vienna Convention.
87.
Dörr, “Article 31. General rule of interpretation” 571.
88.
The Protocol on Arbitration Clauses, 24 September 1923, Geneva, League of Nations, Treaty Series, Vol. 27, 157.
89.
Report of the Committee on the Enforcement of International Arbitral Awards, E/2704, E/AC.42/4/Rev.1, Annex.
90.
The reasons for the rejection differed significantly from representative to representative. While some expressed that the proposal was imprecise and superfluous, others opined that it went beyond the scope of the Convention, for others it was simply unacceptable. See Ibid. at 6 para. 18.
91.
Summary Record of the Ninth Meeting, held 26 May 1958 (E/CONF.26/SR.9).
92.
See the Text Additional Protocol on the Validity of Arbitral Agreements Submitted by the Working Party No. 2, (E/CONF.26/L.52).
93.
Summary Record of the Twenty-First Meeting, held 5 June 1958, E/CONF.26/SR.21, 19.
94.
See supra at Sect. 5.4 et seq. See also Weigand and Bühler (2002), 431.
95.
See, e.g. Schramm and Geisinger (2010), 40.
96.
Graffi (2011), 37.
97.
Ibid.
98.
See supra at Sect. 5.2 et seq.
99.
See supra at Sect. 4.5.2.1, para. 11 et seq.
100.
But cf. the allocation of burden of proof in the proceedings. See R. Doak Bishop, Wade M. Coriell and Marcello Medina Campos, “The ‘Null and Void’ Provision of the New York Convention” 304–305; Schramm and Geisinger (2010), 102. See also Chap. 6 at Sect. 6.5 et seq.
101.
See Final Act of the United Nations Conference on International Commercial Arbitration, E/CONF.26/8/Rev.1, 3 at para. 1.
102.
See also Born (2009), 203 and the discussion of presumptive validity of arbitration agreements.
103.
Similarly also (Swiss) Federal Supreme Court, 16 January 1995, Compagnie de Navigation et Transports SA v MSC Mediterranean Shipping Company SA, BGE 121 III 38, at reason 2b.
104.
Cf. for example to the wording “unless the agreement is null and void, etc.”
105.
See, e.g. Summary Record of the Ninth Meeting, E/CONF.26/ST.9 at pp. 2 et seq.
106.
Similar conclusion was reached, for example, by Born (2009), 859.
107.
See also Schramm and Geisinger (2010), 100.
108.
See supra at Sect. 5.5.3, para. 4.
109.
Otto and Elwan (2010), 100. See also the expression of this rule in Article 9 of the UNCITRAL Model Law.
110.
For example, measures with respect of taking of evidence or provision of other judicial assistance, appointment or removal of arbitrators, etc.
111.
See, e.g. Otto and Elwan (2010), 101; Dimolitsa (1999), 237. See also the decision of the Swiss Federal Supreme Court, 26 January 1987, Ali and Fahd Shobokshi and General Agencies Corporation v Saiecom SA and Nicola Rivelli in van den Berg (1990) 505, 507. But cf. also Haas (2002), who posited that Article II(3) was applicable in cases where a party requests the court to declare that the arbitration agreement is valid or invalid, provided that the lex fori allows for such a possibility.
112.
See supra at Sect. 5.5.3 et seq.
113.
See supra at Sect. 5.6.2 et seq.
114.
Similarly also Born (2009), 861. See also the distinction in Article V between the validity (Article V(1)(a)) and scope (Article V(1)(c)) of an arbitration agreement as grounds for the refusal of recognition and/or enforcement of an award.
115.
Similarly also van den Berg (1981), 152.
116.
Some legal orders have taken the position that the existence of a dispute should not be readily assumed and, accordingly, provided for the requirement of a dispute explicitly. See, e.g. the (English) Arbitration Act 1975.
117.
van den Berg (1981), 149.
118.
The Convention therefore allows, for example, for claims framed in tort.
119.
van den Berg (1981), 480.
120.
For an overview see, e.g. Bernard Hanotiau, “The Law Applicable to Arbitrability” in van den Berg (ed.), “Improving the Efficiency of Arbitration and Awards: 40 Years of Application of the New York Convention (ICCA Congress Series No. 9)” 154–157.
121.
Ibid. 141 paras 7.34 et seq.
122.
See also Recommendation regarding the interpretation of article II(2) and article VII(1) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The Recommendation encourages States to apply article II(2) of the New York Convention “recognizing that the circumstances described therein are not exhaustive”. It was drafted in recognition of the widening use of electronic commerce and enactments of domestic legislation as well as case law, which were more favourable than the New York Convention in respect of the form requirement governing arbitration agreements, arbitration proceedings, and enforcement of arbitral awards.
123.
See also Article IV(1)(b) of the Convention requiring the party seeking recognition and enforcement of an award to supply the original arbitration agreement or a duly certified copy thereof.
124.
Lew et al (2003), 130 para. 7.5; van den Berg (1981), 171; Schramm and Geisinger (2010), 74. But cf. the Report of the United Nations Commission on International Trade Law on the work of its thirty-ninth session, 19 June–7 July 2006, A/61/17, 25-26 para.153, where the Commission noted that the purpose of Article 7 of the UNCITRAL Model Law 2006 was to record the content of the arbitration agreement as opposed to the meeting of the minds of the parties or any information regarding the formation of the agreement. The question of whether the parties actually agreed to arbitrate was deemed to be a substantive issue left to national legislation.
125.
van den Berg (1981), 177. See also Graffi (2011), 42.
126.
See, e.g. Born (2009), 582.
127.
See, e.g. Landau and Moollan, “Article II and the Requirement of Form” 189 et seq.; Born (2009), 580 et seq.; Lew et al (2003), 130 et seq.; Schramm and Geisinger (2010), 49 et seq.; Otto and Elwan (2010), 49 et seq.
128.
van den Berg (1981), 173; Born (2009), 536; Gaillard and Savage (1999), 374 para. 614; Lew et al (2003), 113 para. 6–39. See also, e.g. Basel Court of Appeal, 5 July 1994, DIETF Ltd. v RF AG, in van den Berg (ed.), “Yearbook Commercial Arbitration XXI” 685–689.
129.
See supra at Sect. 5.4 et seq.
130.
van den Berg (1981), 466; Born (2009), 599.
131.
van den Berg (1981), 178–179. See also the decisions both from civil and common law jurisdictions cited in Born (2009), 539.
132.
van den Berg (1981), 177.
133.
Ibid.
134.
“On entend par “convention écrite’…”; “La expresión ‘acuerdo por escrito’ denotará…”.
135.
van den Berg (1981), 180.
136.
Samuel (1989), 83; Contini (1959), 296. See also the (English) Arbitration Act 1975, s 7(1): “’arbitration agreement’ means an agreement in writing (including an agreement contained in an exchange of letters or telegrams) to submit to arbitration present or future differences capable of settlement by arbitration”.
137.
Samuel (1989), 83.
138.
See Geneva Convention Article 1(a).
139.
Samuel (1989), 84–85.
140.
See, e.g. Swiss Federal Supreme Court, 21 March 1995, Insurance Company v Reinsurance Company, in van den Berg (1997), 800–806.
141.
See Recommendation regarding the interpretation of Article II, paragraph 1 of the Convention on the recognition and the enforcement of foreign arbitral awards.
142.
Schramm and Geisinger (2010), 78.
143.
Otto and Elwan (2010), 102.
144.
Van den Berg (2003), 610.
145.
van den Berg (1981), 138.
146.
Schlosser (2002), para. 30.
147.
See infra at Sect. 8.3, para. 15 et seq.
148.
van den Berg (1981), 138.
149.
Ibid 139.
150.
See also Samuel (1989), 195; van den Berg (1981), 135.
151.
See supra at Sect. 5.5.3 et seq.
152.
Cf., e.g. the (English) Arbitration Act 1950 and the 1975 Act implementing the Convention. The 1950 Act (applicable in domestic arbitrations) allowed the courts to refuse a stay of the proceedings on grounds that the arbitration entails considerable expense, the charges of personal character and delay. In contrast the 1975 Act implementing the Convention provided for a mandatory stay of proceedings. See also infra at Sect. 6.2 et seq.
153.
See van den Berg (1981), 128.
154.
See also the discussion supra at Sect. 2.2 et seq.
155.
van den Berg (1981), 129.
156.
Ibid. 129.
157.
§ 4, 206 and 303 FAA.
158.
Born (2009), 539.
159.
See, e.g. Summary Record of the Ninth Meeting, E/CONF.26/ST.9, 2 et seq.
160.
ICCA (2011), 38.
161.
See supra at Sect. 2.4.5 et seq.
162.
See supra at Sect. 4.5.2.1 et seq.
163.
R. Doak Bishop, Wade M. Coriell and Marcello Medina Campos, “The ’Null and Void’ Provision of the New York Convention” 280.
164.
See, e.g. van den Berg (1981), 123.
165.
See also Di Pietro and Platte (2001), 105.
166.
van den Berg (1981), 123.
167.
Weigand and Bühler (2002), 467.
168.
See supra at Sect. 5.6.2, para. 7
169.
See, e.g. R. Doak Bishop, Wade M. Coriell and Marcello Medina Campos, “The “Null and Void” Provision of the New York Convention” 277.
170.
In the French and the Spanish texts one word is used (“caduque” and “nulo” respectively).
171.
R. Doak Bishop, Wade M. Coriell and Marcello Medina Campos, “The “Null and Void” Provision of the New York Convention” 276.
172.
van den Berg (1981), 156.
173.
Ibid 158.
174.
Ibid 159.

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Synková, S. (2013). The New York Convention and the Obligation to Recognise and Enforce Arbitration Agreements. In: Courts' Inquiry into Arbitral Jurisdiction at the Pre-Award Stage. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00134-0_5

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