Introduction -

On June 29, 2017, a New York state appellate court unanimously upheld an extraordinary lower court order in a decision that may have significant implications for the cross-border enforcement and recognition of arbitral awards. This case had seen a lower court vacate an arbitral award rendered in New York. The lower court then took the additional step of enjoining the holder of the vacated award (the “award creditor”) from taking any action anywhere in the world to enforce, execute or collect on the award. While it remains to be seen whether this lower court order will have any practical effect, this highly unusual development adds another dimension to the already-contentious debate concerning the enforceability in secondary jurisdictions of awards that have been vacated by domestic courts at the seat of arbitration.

Background: Regime Governing Enforcement of International Arbitral Awards -

The principal legal instrument governing the recognition and enforcement of arbitral awards internationally is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (better known as the “New York Convention”). A large majority of nations (157) are party to this Convention, including all of the world’s major economies. The United States has ratified the New York Convention, and its implementing legislation is codified in Chapter 2 of the Federal Arbitration Act (FAA).