​Introduction of The New York Convention

Introduction of The New York Convention
 
The New York Convention is an international treaty that governs the recognition and enforcement of arbitral awards globally. It was created in 1958 to promote uniformity in recognizing and enforcing arbitral awards and has been ratified by 159 countries. This comprehensive guide to the New York Convention provides information about its history, how it works, and its advantages and disadvantages.
 
History of the New York Convention
The United Nations commission drafted the New York Convention in 1956, and it came into force in 1959. Currently, the Convention has 159 contracting states and is one of the most crucial treaties that regulate international commercial arbitration. The Convention offers a comprehensive system for recognizing and enforcing foreign arbitral awards and applies to commercial disputes arising from international contracts.
 
What is the New York Convention?
The New York Convention is an international treaty that promotes uniformity in recognizing and enforcing arbitral awards worldwide. It is also the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
 
How the New York Convention Works
The New York Convention applies to all arbitral awards made in the territory of a state party to the Convention, regardless of the dispute's subject matter or the parties nationality. It also applies to awards made in another contracting state if that state's law recognizes arbitral awards. The Convention does not apply to certain disputes, such as family law, inheritance, bankruptcy, or insolvency.
 
For an arbitral award to be enforceable under the New York Convention, it must first be recognized by a court in the country where enforcement is sought. The court will consider whether there is any reason why recognition and enforcement should not be granted, and grounds for refusal may include a conflict with public policy, non-arbitrable disputes, or procedural irregularities.
 
Advantages and Disadvantages of the New York Convention
The New York Convention is an important tool for businesses because it allows them to resolve commercial disputes without going to court. Arbitration is often seen as a cheaper and faster alternative to litigation. It can be less disruptive for businesses because it doesn't require them to stop operations during the proceedings.
 
There are some limitations to using the New York Convention, however. First, it only applies to disputes arising from commercial contracts, so it cannot be used to resolve individual disputes. Second, not all countries have ratified the Convention, so it may not be possible to enforce an arbitral award in a country that has not ratified it. Finally, even if a court recognizes an arbitral award in one country, there is no guarantee that other countries will enforce it.
 
When to Use (and Not to Use) the New York Convention
The New York Convention can be used to settle commercial disputes arising from international contracts but not to settle disputes arising from non-international contracts. The Convention can be used to recognize and enforce arbitral awards made in another country but not to recognize and enforce domestic arbitral awards.
 
Conclusion
The New York Convention is a significant treaty that governs the recognition and enforcement of arbitral awards worldwide. It offers a comprehensive system for recognizing and enforcing foreign arbitral awards and can be used to settle commercial disputes arising from international contracts. While there are limitations to using the New York Convention, it can be a useful tool in settling cross-border commercial disputes.