Published: March 1991
Categories of Disputes
Enforcement of Arbitral Awards
New York Convention
Description: The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) resulted from an international effort to make arbitration a more effective means of resolving transnational business disputes. In 1970, the United States acceded to the Convention and Congress implemented its provisions by enacting chapter 2 of the Federal Arbitration Act (the “FAA” or the “Act”). During the last two decades, federal and state courts have been called upon to interpret and apply the Convention to enforce international arbitration agreements and awards in nearly one hundred cases. In a 1974 landmark decision, Scherk v. Alberto-Culver Co., the Supreme Court outlined a federal policy favoring recognition and enforcement of international arbitration agreements and awards, and established guidelines for interpreting the Convention. The Court held that an arbitration clause in a “truly international agreement” must be considered valid, irrevocable, and enforceable:
The goal of the Convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.
This article examines the application of the New York Convention by United States courts, which, with few exceptions, have consistently compelled arbitration and confirmed arbitral awards under the Convention. The courts have also respected the integrity of the arbitral process through a narrow construction of the grounds for judicial intervention and review.
*Partner, Reid & Priest, New York, N.Y.; Member of the Bar, New York; Member, Board of Directors, American Arbitration Association.
**Attorney, Office of the Solicitor, U.S. Department of the Interior, Washington, D.C., former Associate, Reid & Priest, New York, N.Y.; Member of the Bar, New York and Illinois.