USA Law and Practice Contributed by: Jason W. Myatt, Ankita Ritwik and Charline Yim, Gibson, Dunn & Crutcher LLP
4. Arbitral Awards 4.1 Legal Issues Concerning Enforcement of Arbitral Awards As a preliminary matter, and as addressed further at 4.2 Variations in Approach to Enforcement of Arbitral Awards, the procedure applicable to seeking recogni - tion and enforcement of an arbitral award in the US will vary depending on the nature of the award. Name - ly, whether it is a domestic arbitral award or foreign arbitral award, and, if it is a foreign award, whether it was issued under the International Centre for Settle - ment of Investment Disputes Convention (the “ICSID Convention”). A domestic arbitral award is an award arising out of a relationship entirely between US citizens, as long as that relationship does not involve property or per - formance abroad, or other reasonable relation with a foreign state (in which case Chapter 2 of the Federal Arbitration Act (FAA) would apply – see below). With respect to the recognition and enforcement of domes - tic arbitral awards, the procedure is governed either by Chapter 1 of the FAA where the arbitration involves commerce beyond one US state, or otherwise by the relevant US state’s law. With respect to the recognition and enforcement of a foreign arbitral award not issued under the ICSID Convention, the US is a party to two international agreements that have been codified into US law in the FAA, Chapters 2 and 3, respectively: the UN Conven - tion on the Recognition and Enforcement of Foreign Arbitral Awards in 1958 (the “New York Convention”); and the Inter-American Convention on International Commercial Arbitration in 1975 (the “Panama Con - vention”) (which the US has signed subject to certain reservations). With respect to the recognition and enforcement of an award issued under the ICSID Convention, recognition and enforcement is governed by 22 USC § 1650a. Before filing a petition to recognise and enforce an arbitral award, an award-creditor should keep the fol - lowing considerations in mind.
• Insufficient Notice – Where the defendant in the foreign proceeding did not receive sufficient notice in the foreign court. • Fraud – Where the judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case. • Repugnant to US Public Policy – Where the judg - ment or the cause of action on which the judg - ment is based contravenes US public policy (or the public policy of the state in which recognition is sought). • Inconsistent – Where the judgment conflicts with another final and conclusive judgment. • Contrary to Parties’ Consent – Where the judgment contradicts a prior agreement between the par - ties to resolve the dispute in question in a different forum or manner, such as through arbitration. • Forum Non Conveniens – Where jurisdiction is based only on personal service and “the foreign court was a seriously inconvenient forum for the trial of the action”. The 2005 Model Act incorporates two additional dis - cretionary grounds. • Doubtful Integrity – Where the circumstances of the foreign judgment raise substantial doubt about the foreign court’s integrity with respect to the specific judgment. • Insufficient Due Process – Where the circumstanc - es of the specific proceeding in the foreign court did not provide the judgment debtor with sufficient due process. Common Law Principles Common law principles typically involve violations of US constitutional norms. Many of these norms mir - ror those above, such as insufficient due process, a lack of an impartial foreign tribunal, or conflict with US laws (ie, those protecting debtors from certain creditor actions) or public policy. Though common law princi - ples are applicable generally regardless of the basis for recognition, they are most relevant for states with - out a statutory process for recognition.
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