Meaning
Specific section of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards that lists the exhaustive grounds upon which a court may refuse to enforce an award. Local courts use article v to verify that the underlying arbitration adhered to fundamental standards of due process and public policy. The provision serves to protect the sovereignty of the enforcing state while maintaining the finality of private dispute resolution.
Grounds Identification
Challenges under this provision usually involve claims of incapacity or improper notice regarding the appointment of the arbitrator. If a party can prove that the arbitration agreement was invalid under the law of the country where the award was made, the court may decline enforcement.
Public Policy
National courts maintain the right to refuse recognition if the award contradicts the fundamental legal principles of the jurisdiction where assets are located. This application of article v ensures that private settlements do not bypass mandatory local statutes.
Procedural Irregularity
A court investigates whether the composition of the arbitral authority followed the agreement of the parties. When the procedure departs from what was signed in the investment contract, the resulting award faces a high risk of being set aside. The tribunal must have acted within the scope of the submission to arbitration to avoid this specific ground for refusal.
If the award deals with a difference not contemplated by the terms of the submission, the court may refuse to recognize that portion of the decision. This check preserves the consensual nature of the arbitration process.
