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ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Corvin Inc and Delmar Ltd, from different countries, have an arbitral award in favour of Corvin Inc. Delmar Ltd has assets only in a third country that is a party to the New York Convention 1958. What is the main benefit of the Convention to Corvin Inc?

The Convention lets Corvin Inc enforce the foreign award in the courts of the third country, which may refuse only on limited grounds such as an invalid arbitration agreement or public policy. Courts do not rehear the merits of the dispute.

  1. AIt lets Corvin Inc enforce the award in that country's courts with only limited grounds for refusalCorrect
  2. BIt removes the need for Delmar Ltd ever to have agreed to arbitrate
  3. CIt allows the third country's court to rehear the merits of the dispute in full
  4. DIt converts the award into a judgment of the court where the arbitration was held

Explanation

The New York Convention requires contracting states to recognise and enforce foreign arbitral awards, refusing only on limited listed grounds such as invalid agreement or public policy. It does not allow a rehearing of the merits, and a written agreement to arbitrate is still needed.

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