Refusing the Recognition of a Foreign Arbitral Award Set Aside Abroad - Thesis Example

The New York Convention’s chief objective is to ensure that non–domestic and foreign arbitral awards are not subjected to discrimination. Moreover, this convention requires the parties to ensure that the arbitral awards can be enforced in their jurisdiction, in the same manner as the domestic awards. Another goal of the New York Convention is to oblige the courts to compel parties to adhere to their arbitration agreements, by not granting access to courts. Courts are empowered to refuse recognition of an arbitral award or its implementation, in accordance with the provisions of the New York Convention.

Such grounds for refusal are aimed at safeguarding the crucial interests of the nation that has to implement the award. Refusal could also be for the express purpose of providing procedural norms for the protection of the parties. This apparently connotes that arbitration agreements are no longer relevant in addressing the requirements of contemporary business transactions. In the area of recognition and implementation of arbitral awards, considerable harmonization has been realized. This can be principally attributed to the universal adoption of the New York Convention.

There has been a steady increase in the countries that have joined this Convention. For instance, in the year 2002, 5 countries became Contracting States to the New York Convention. In the majority of the cases, arbitral awards are voluntarily executed by the parties. For instance, 90% of the ICC arbitral awards are executed voluntarily. A major reason for such voluntary execution is that the business community is not in favor of damaging its reputation by not accepting an arbitral tribunal’s decision that it has voluntarily agreed to comply with.

A few of the institutions of arbitration, like the ICC, have been seen to request the disputants to comply with the arbitral award, immediately. Thus, the provisions of the ICC Rules of Arbitration state that an award is binding on the parties. It also states that consent by the parties to submit their dispute to arbitration implies that they will implement the award without any delay. In addition, such parties are also deemed to have foregone their rights to any recourse relating to a valid waiver of the award.

Although this obligation influences most of the parties to voluntarily execute an award, there are some countries that do not believe it to be a blanket waiver of recourses relating to breach of due process, the competence of the tribunal, or international public order. However, a few of the recent rulings of the courts promote the idea that this waiver connotes the concurrence of the parties to bring the arbitration to its conclusion on the basis of the arbitral panel’s decision.