April 2019 – “60 Years of the New York Convention: Key Issues and Future Challenges,” recently released by Wolters Kluwer, is a book that features authors from leading law firms around the world in commemoration of the momentous anniversary of the most important treaty in international arbitration. Chaffetz Lindsey partner Aníbal Sabater and associate Lídia Rezende. contributed Chapter 2, titled “An Arbitrator’s Obligation to Use Reasonable Efforts to Issue an Enforceable Award and Its Interaction with the New York Convention,” explains how arbitrators’ obligation to issue enforceable awards is fulfilled and how the New York Convention can help during the process.
ABOUT CHAPTER 2
An Arbitrator’s Obligation to Use Reasonable Efforts to Issue an Enforceable Award and Its Interaction with the New York Convention
Arbitrators must try to issue enforceable awards. The existence of this obligation is trite, but its fulfillment is unclear. This chapter explains how the obligation is fulfilled and how the New York (NY) Convention can be of assistance in the process. As set out in most international arbitration rules, the obligation may require arbitrators to look beyond the laws immediately applicable to the arbitration and anticipate where and how the award will be enforced. Laws that did not seem prima facie relevant to the case may somewhat unexpectedly become a bar or an obstacle to the effectiveness of the award. Arbitrators, however, are not seers. They do not predict the future and, as a rule, can only anticipate enforcement difficulties that have been previously identified by the parties. In trying to anticipate how an enforcement court will deal with an award, arbitrators should certainly consider the provisions in the NY Convention.
Even though not a perfect problem-solver, the NY Convention offers guidance to the arbitrators on what laws the enforcement court will apply and how those may differ from the laws immediately applicable to the arbitration. A case in point: whether an issue is capable of being resolved in arbitration is a matter arbitrators usually resolve applying the laws of the seat or those governing the contract; an enforcement court, by contrast, is directed by the NY Convention to apply its own laws. Thus, matters capable of resolution in arbitration at the seat may not be so in the place of enforcement, with the effect that an arbitration award validly issued at the seat is denied enforcement somewhere else. The NY Convention duly warns arbitrators about this risk of inconsistency.
Despite its usefulness, the NY Convention is to be approached with caution. Contrary to mainstream reports, the NY Convention does not contain a pro-enforcement bias that arbitrators can rely on. They should not assume the NY Convention will automatically lead to the enforcement of awards.
ABOUT THE BOOK
The book, focuses on the New York Convention of 1958, currently adhered to by 159 States including the major trading nations, remains the most successful treaty in this area of commercial law. This incomparable book, marking the Convention’s 60th anniversary, provides a fully updated analysis of the Convention’s application from international, comparative, and national perspectives. Drawing on a global conference held in Seville in April 2018 that was actively supported by UNCITRAL, the book’s 27 chapters, by highly qualified international practitioners and academics from different jurisdictions, address the subject with critical eyes, well aware of current developments and future challenges in the field of arbitration. Among the issues and topics covered are the following:
- Multi-tiered dispute resolution clauses.
- Applicability of the UN Convention on the Use of Electronic Communications in International Contracts.
- Complexities of enforcing orders determined by software.
- Enforcement of annulled awards.
- European Union law and the New York Convention.
- Enforcing awards against States and State entities.
- Sovereign immunity as a ground to refuse compliance with investor-State awards; Enforcement against non-signatories.
- Public policy exception.
- Arbitrating and enforcing foreign awards in specific countries and regions, including China, sub-Saharan Africa, and the ASEAN countries.
The book’s co-editors were Katia Fach Gómez, a tenured Professor of Private International Law at the University of Zaragoza, Spain, and Ana Mercedes López Rodríguez, the Head of the Law Department and a tenured professor of Private International Law, Comparative Law and Arbitration at Loyola University, Andalusia.