International arbitration awards are typically enforced through a multi-step process that relies on international treaties and national laws. If there’s no international treaty but a national law exists, the national law will govern the enforcement of an international arbitral award. Conversely, if there’s no national law but only a treaty, the treaty will likely be applied.
When a state has both national legislation and has signed a treaty for the recognition and enforcement of arbitral awards, these should be interpreted harmoniously to give effect to the recognition and enforcement of international arbitral awards.
The primary mechanism for enforcing international arbitration awards is the 1958 New York Convention, officially known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This treaty, ratified by over 160 countries, is a cornerstone of international arbitration enforcement.
The first step in enforcement is having the award recognized by a court in the country where enforcement is sought. This process typically involves filing the arbitral award with the court, along with a certified copy of the award and the original arbitration agreement. These documents must be translated into the official language of the country where enforcement is sought.
Specific enforcement procedures can vary depending on the national laws of the enforcing country. Some countries have adopted the UNCITRAL Model Law on International Commercial Arbitration, which provides a framework for enforcement procedures in line with the 1958 New York Convention.
While the New York Convention provides for the enforcement of awards, it also outlines limited grounds on which enforcement can be refused. These include invalidity of the arbitration agreement, violation of due process, awards beyond the scope of the arbitration agreement, improper composition of the arbitral tribunal, and awards not yet binding or set aside in the country of origin.
Once recognized, the award is treated like a domestic court judgment. The winning party can then use local legal procedures to execute the award, which may include seizing assets, garnishing wages or bank accounts, and placing liens on property and articles of incorporation when dealing with corporations.
Enforcing international arbitration awards can be complex due to various factors: differences in national laws and procedures, potential for parallel proceedings in multiple jurisdictions, issues of sovereign immunity when dealing with state entities, and the need to locate assets in jurisdictions where enforcement is possible.
While the New York Convention has streamlined the process of enforcing international arbitration awards, it can still be complex and time-consuming. Successful enforcement often requires careful planning, knowledge of local laws, and sometimes creative legal strategies.
