In many instances, a losing party will voluntarily comply with an arbitration award, so that enforcement proceedings will not be necessary. If, on the other hand, the prevailing party is required to initiate judicial enforcement because of the recalcitrance of the losing party, the good news is that the award is likely to be enforced. One of the prime reasons parties include an arbitration clause in an international contract is the relatively certain enforceability of the award. The likelihood of enforcement is high because so many countries have adopted international conventions that are pro-enforcement, that is, they provide only narrow grounds for refusing to enforce. This chapter will discuss some of the issues and procedures pertinent to recognition and enforcement of awards under international conventions and various national laws, as well as the limited grounds for refusing enforcement.

APPLICATION OF INTERNATIONAL CONVENTIONS

The Convention on Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention, requires courts of Contracting States to enforce both arbitration agreements and arbitration awards. Currently, more than 140 countries are parties to the New York Convention. The New York Convention has contributed to the growth of international arbitration because parties in Contracting States are confident that if they prevail in an arbitration, they will obtain a remedy. A recent study noted that for corporate counsel, the most important reason for choosing arbitration over litigation to settle disputes was the enforceability of awards.