Understanding the “United Nations Conference on International Commercial Arbitration” and the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards” in the context of External Trade Disputes

Initially, the United Nations Commission on International Trade Law (UNCITRAL) was established by the UN General Assembly on December 17th, 1966 to unify international trade law as a tool to encourage the globalization of international trade and the free flow of goods. It was concluded that different legal and judicial systems prevailing in UN member states remain a significant hurdle in the expansion of world trade. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, has been adopted by the United Nations General Assembly.

Credit – The International Court for Dispute Resolution

Features to regulate the Functions of Convention (Arbitration)

Under Article XV of Convention:

The Secretary General of United Nations is authorized to notify member of any specialized agency of UN to become a member of this convention with signatures and ratification.

Binding Effect of Convention

Convention on Recognition and Enforcement of “Foreign Arbitral Awards”, also known as the New York Convention, provides a framework for the recognition and enforcement of international arbitration agreements and awards. Some features that regulate the functions of the convention are:

The convention requires courts of contracting states to recognize and enforce arbitration agreements in writing such as the arbitration clause in a contract, subject to certain limited exceptions

Courts of contracting states to recognize and enforce foreign arbitral awards subject to limited grounds for refusal. This ensures that awards made in one country can be enforced in another country without the need for further court proceedings

Courts of contracting states to stay court proceedings where there is an arbitration agreement and one party requests referral to arbitration in order to ensure that parties to an arbitration agreement have the right to have their disputes resolved through arbitration instead of litigation

Convention requires courts of contracting states to refrain from interfering with the conduct of arbitral proceedings except in limited circumstances such as where necessary to protect the rights of the parties or prevent fraud

Arbitrators are to be independent and impartial and that parties be given an opportunity to challenge the appointment of an arbitrator if there are concerns about impartiality

Arbitral awards are final and binding and there will be no further appeal or review of the merits of the award in order to ensure that parties to an arbitration have a final and conclusive resolution of their dispute

Uniform interpretation and application of  provisions of the Convention across all contracting states in order to promote the certainty and predictability of international arbitration is also provided

 

Author

Hafiz Munawar Iqbal

Advocate Supreme Court

International Arbitration Advisor