Meaning
The legal process by which a domestic court recognizes and executes a binding decision issued by an arbitration tribunal. After the tribunal issues its final ruling, the prevailing party may need to apply to a civil court to compel compliance. The enforcement of arbitral awards is governed by national arbitration laws and international agreements that limit judicial review of the decision.
Treaty Application
The New York Convention requires local courts to recognize and execute these decisions across national borders. This international treaty is the main reason why companies choose arbitration over litigation in cross border contracts. It allows the winner to seize assets in any country that has signed the convention.
Procedural Step
To initiate the process, the creditor must supply the court with the original award. The court does not reexamine the merits of the case.
Refusal Ground
The debtor can resist the execution of the decision on very narrow grounds. These include lack of proper notice, invalidity of the arbitration agreement or if the award violates the public policy of the country where execution is sought. If none of these conditions are met, the court must enforce the ruling, which provides a high degree of certainty to international commercial entities who depend on the finality of their disputes.
