ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms
Alpha Ltd won an arbitral award against Beta Inc, whose assets are in a different country. Both countries are parties to the New York Convention 1958. Which statement is correct about enforcing the award there?
The local court should recognise and enforce the award. Under the New York Convention, refusal is allowed only on narrow grounds such as an invalid agreement, unfairness in the procedure or public policy. The court does not reopen the merits of the dispute.
- AThe local court must re-examine the full merits of the dispute before enforcing the award
- BThe local court should recognise and enforce the award, refusing only on limited grounds such as invalid agreement or breach of public policyCorrect
- CThe award can only be enforced if it was made in the country where Beta's assets are located
Explanation
The New York Convention requires contracting states to recognise and enforce foreign arbitral awards, subject to a limited list of refusal grounds (for example invalid arbitration agreement, no fair opportunity to present a case, or public policy). The court does not review the merits, so the first option is wrong. The award need not be made in the enforcing state.
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