New York Convention

2021 FEB 17

Preliminary   > International Relations   >   Agreements   >   Int'l organisations & conventions

Why in news?

  • Cairn Energy has filed a case in a U.S. district court to enforce a $1.2 billion arbitration award it won in a tax dispute against India, ratcheting up pressure on the government to pay its dues.
  • In December, an arbitration body awarded the British firm damages of more than $1.2 billion plus interest and costs. The tribunal ruled India breached an investment treaty with Britain and said New Delhi was liable to pay.
  • Cairn aims to enforce the award under international arbitration rules, commonly called the New York Convention, and recover losses caused by India’s “unfair and inequitable treatment of their investments”.

About the convention:

  • The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention, was adopted by a United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959.
  • The Convention requires courts of contracting states to give effect to private agreements to arbitrate and to recognize and enforce arbitration awards made in other contracting states.
  • Widely considered the foundational instrument for international arbitration, it applies to arbitrations that are not considered as domestic awards in the state where recognition and enforcement is sought.
  • The New York Convention is very successful as as of August 2020, the Convention has 166 state parties, which includes 162 of the 193 United Nations member states plus the Cook Islands, the Holy See, and the State of Palestine.
  • Other international Arbitration laws like the UNCITRAL Model Law on International Commercial Arbitration works with the NYC.

PRELIMS QUESTION

Consider the following statements regarding Newyork Convention on arbitration:
1.India is a party to the convention.
2.It came into force in 1991.
Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2

Answer to Prelims Question