Focus on energy storage
The energy storage industry is not a completely new industry and there have been short lived booms before.
This year marks the 60th anniversary of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). We interview Mark Baker and Pierre Bienvenu, Norton Rose Fulbright’s global co-heads of international arbitration, about the New York Convention regime and the influence it has had on international arbitration over the last 60 years.
The New York Convention governs two fundamental aspects of international arbitration, namely how States will treat arbitration agreements and arbitral awards that were made in other jurisdictions. It is arguably the most successful UN convention. There are currently some 157 Contracting States to the convention, and as a result, it creates an almost universal, common regime governing these two important issues.
In brief, the New York Convention provides that Contracting States will recognize written arbitration agreements and, at the request of any party, their courts will refer to arbitration any matter brought before them in respect of which there is an arbitration agreement. The only exception is where the arbitration agreement is null, void, inoperative or incapable of being performed. Contracting States also agree to recognize foreign arbitral awards as binding and to enforce them in accordance with their rules of procedure. Importantly, as discussed further below, there are very limited grounds under the New York Convention on which a party can resist enforcement of an award.
Prior to the New York Convention, the principal regimes applicable to arbitration agreements and awards were the 1923 Geneva Protocol on Arbitration Clauses and the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards. Although important precursors, by the early 1950s, these regimes were considered to be cumbersome and to no longer meet the needs of international trade. The International Chamber of Commerce (ICC) therefore initiated a process to replace these regimes with a new comprehensive convention. This process was subsequently taken over by the United Nations Economic and Social Council. The New York Convention as we know it was ultimately adopted at the 1958 UN conference in New York and it entered into force in 1959.
The success of international arbitration itself is attributed in great part to the New York Convention, primarily due to the ability to enforce foreign awards almost anywhere in the world. The simple procedure and limited grounds for resisting recognition and enforcement, and a nearly global acceptance of the New York Convention, has provided a successful combination. There is no equivalent regime for recognition and enforcement of foreign court judgments.
The process prescribed by the New York Convention is very simple – a party seeking enforcement need only supply to the court a copy of the arbitration agreement and the arbitral award. Enforcement may be resisted on only the grounds listed in Article V(1) and (2) of the convention.
Those grounds are
The New York Convention, in essence, sets out minimum requirements for recognition and enforcement of arbitration agreements and foreign awards. Contracting States implement those into their domestic laws. The formalities of enforcement must therefore be undertaken in accordance with domestic procedural rules.
This means that although in substance the approaches taken by Contracting States should largely align, there can be procedural differences. Differences can also arise because the New York Convention permits domestic arbitration regimes that are more favorable to recognition and enforcement — whether by providing for less rigorous procedural requirements, more restrictive grounds for challenging awards, or other more favorable domestic practices.
The Convention on the International Centre for Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention, also known as the Washington Convention) is a comparable arbitration regime — though (as its name suggests) it is particularly focused on investor‑State dispute settlement. It has an equivalent reach (some 153 states) and arguably an even stricter regime for enforcing ICSID awards.
There is no equivalent global regime for enforcement of foreign court judgments. However, more recently the Hague Convention on Choice of Court Agreements (Hague Convention) has made some progress towards establishing such a regime. Under the Hague Convention, State parties must recognize exclusive choice of court agreements in civil matters, and their courts must stay proceedings before them brought in breach of such an agreement. They must also recognize judgments of the chosen court. The EU, US, Singapore, China, Mexico, Ukraine and Montenegro have now signed up to that convention, though not all have ratified it yet. If sufficient other States (in particular, key trading nations) sign up to and ratify the Hague Convention, it could prove an important alternative regime to the New York Convention.
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