The New York Convention 1958 Through the Looking Glass in 2021
Adapted from a paper given to the Caribbean Branch of the Chartered Institute of Arbitrators Triennial conference on 28 May 2021.
I've always had plenty to say about the New York Convention. I am reminded daily in the course of my work in the law and frequently by my friends in conversation of the importance of history to issues arising in our day to day lives, not least in discussions about the future. What happens next? How can we know where we are going if we have no appreciation of where we came from? An appreciation of the history is vital.
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards was signed in New York on 10 June 1958 after a long debate. Representatives from 45 UN member states attended the conference at UN headquarters between 20 May and 10 June 1958. Other states and intergovernmental organisations attended as observers. At the conclusion of the conference, representatives from 24 member states signed the final text of the Convention. After accession by the requisite three member states, it came into force on 7 June 1959.
It is one of the UN's most important and successful private international law treaties governing international trade. It underpins the success of international commercial arbitration as the preferred means for the resolution of international commercial disputes and it has done so now for more than 60 years. I have emphasized "international" because it has no application to domestic arbitration agreements and awards. In addition, a number of signatories have availed themselves of the "commercial" exception available to participating states, and have declared and confined the application of the Convention to disputes which arise out of legal relationships (whether contractual or not) which are defined as "commercial" under the national law of the relevant state.
The New York Convention, as it is known, reminds me of one of my own professional mentors, Professor Pieter Sanders from the Netherlands. He died some years ago shortly after reaching his 100th birthday. He was a remarkable jurist and a fascinating man. Pieter Sanders' contributions to humanity were unique. He was also a lifelong practising lawyer and academic. (He also had a fantastic eye for art, which is altogether another story.) Pieter was involved in the reconstruction of the Netherlands after the Second World War. Following his release from internment, and after the Netherlands were liberated in 1945, he took up the position of Secretary General of the general war ministry in the office of the first post-war Prime Minister of the Netherlands.
Not least among his many achievements is that he was one of the principal drafters of the 1958 New York Convention. He was also a founding member of the International Council for Commercial Arbitration ( "ICCA") established in 1961, and co-incidentally it is ICCA, which promulgated the New York Convention, that has gathered in and maintained a library of the many decisions of national courts interpreting the Convention, rather than the UN.
Pieter also contributed to the drafting of the 1976 UNCITRAL Arbitration Rules (which preceded the UNCITRAL Model Law on International Commercial Arbitration by nine years). The Model Law 1985 is the foundation of the national law of arbitration in 118 different jurisdictions and 88 states – almost half of the countries in the world – and counting.
In 1986, Pieter participated in the drafting of the new Dutch arbitration legislation which was lauded as one of the most modern national arbitration laws of its time. Unsurprisingly that Act was largely based on the UNCITRAL Model law introduced in 1985, which itself was amended and updated only in 2006.
All of these developments in the law and practice of international commercial arbitration can be tied back to the New York Convention. Furthermore, when one looks at the enforcement provisions in the 2018 Singapore Convention on Mediation, you can see also the hand of the drafters of the New York Convention. Their terms, drafted 60 years apart, have marked similarities. The Singapore Convention is mediation's equivalent of the New York Convention (or at least that is what is hoped for, in order to underpin the success of mediation as a tool for the resolution of international commercial disputes).
In 2002, during my year of office as the President of the Chartered Institute of Arbitrators, which seems like a lifetime ago now, I had the privilege to sit with William Slate III (the then the President of the AAA) and Pieter Sanders to judge the final of the Vienna Viz Moot competition. Pieter was then 90 years old. At the banquet following the conclusion of the Moot, Professor Eric Bergsten was giving a vote of thanks to Pieter for chairing the final arguments. His introduction was effusive to the point of embarrassment. In typical, self-effacing Pieter style, he leaned over to me and said: "Karen, this is very nice but one day soon you know, I will be gone and then "poof", just like the Cheshire Cat in Alice in Wonderland, only the smile will remain."
In fact, Pieter was wrong, because beyond the enigmatic smile of the Cheshire Cat, is an enduring legacy of incalculable benefit to the international business community. The New York Convention is a legend in the arena of international treaties, arguably still the most successful international private law treaty ever made.
So, does it need to be modernized? Does it need to be replaced? Is it necessary or desirable to do anything to it at all? These are the issues for today.
You can read Karen Gough's full post on our Commercial, Construction & International Arbitration Blog here.