Introduction

A key advantage of arbitration over litigation is the enforceability of the decision in other countries. Generally, Court judgments are directly enforceable abroad only if there is a treaty between the two countries (although EU judgments are enforceable across the Union under a Regulation).

Arbitrations, on the other hand, can be enforced under the New York Convention (the Convention) to which most of the world has contracted. The Convention requires contracting states to recognise and enforce each other’s arbitral awards. 

Enforcing in England and Wales:

The mechanism for enforcing Convention awards in England and Wales is prescribed by Sections 100 to 103 of the Arbitration Act 1996 (theAct).

In order to enforce under the Convention, a party must produce originals or certified copies of the award and arbitration agreement and, if they are not in English, certified translations.

Whilst other options exist - e.g. the Geneva Convention 1927, Section 66 of the Act (which applies equally to domestic and foreign awards) or just suing on the award as a debt - the Convention is regarded as one of the most straightforward routes because the grounds for refusing to recognise or enforce a Convention award – all of which are set out below - are comparatively limited. Also, unlike enforcement under Section 66, it is for the respondent who resists enforcement to prove the existence of one of the grounds of refusal. 

Grounds for Refusal:

Section 103 (2) and (3) of the Act lists the grounds on which a Court may choose to refuse to recognise or enforce a Convention award. These are taken from Article V of the Convention itself, and they are as follows:

  1. where a party to the arbitration agreement was (under the law applicable to him) under some incapacity;  
  2. that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made;
  3. that a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present its case;
  4. that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration;
  5. that the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country in which the arbitration took place;
  6. that the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, it was made; or
  7. that recognition or enforcement of a Convention award may also be refused if the award relates to a matter which is not capable of settlement by arbitration, or if it would be contrary to public policy to recognise or enforce the award. 

Public policy is the most common ground which the Court uses to justify its refusal to recognise or enforce Convention awards. In addition to issues of domestic public policy, the Courts must also consider public policy in circumstances where enforcement of a Convention award would be likely to breach England’s international treaty obligations. The public policy defence is thus relatively broad in its scope and individuals should seek legal advice before entering arbitration agreements that are intended to be enforced in a particular jurisdiction. 

It should also be noted that even if a party establishes one of the above grounds, the English Courts are not obliged to refuse to recognise or enforce a Convention award. The grounds for refusal are discretionary and there have been cases in the past where the Court has recognised and enforced a Convention award notwithstanding the fact that there has been evidence to support a ground of refusal. Where a party has particularly strong grounds for challenging the recognition and enforcement of an award, however, the Court’s discretion is likely to be limited. 

S.66 of the Act v Enforcement of Convention awards

As noted in the article found here, section 66 of the Arbitration Act applies to all domestic or foreign arbitral awards. The Convention, on the other hand, applies only to foreign arbitral awards. Given the limited grounds for refusing recognition and enforcement under the Convention, a party should always explore whether it is possible to bring enforcement proceedings using this route in the first instance.