Enforcement of Foreign Arbitral Awards in the US
Every contract, in general, has a clause to go for arbitration in case of disputes regarding the agreement. When both parties are from the same country, that is the US, the issue of enforcement is not a complex issue. However, If the contract or agreement in question is an international one, the arbitration clause should be carefully drafted in order to comply with the standards and procedures of the US law, as even a slight non-compliance would render the arbitral award useless. Here, I have tried to simplify as possible to explain how an international arbitration award is enforced in the US.
The recognition and enforcement of international arbitral awards is primarily based on the New York Convention of 1958 and the Panama Convention of 1975. The federal arbitration act (FAA) of 1925 incorporates both of these conventions. Sections 207 and 304 of the FAA govern the recognition and enforcement of the foreign award.
Section 207 mandates that the court “shall” confirm the award, unless “it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention."
Persons who are seeking enforcement of awards must satisfy the requirements of both personal and subject matter jurisdiction under US law.
To enforce a foreign arbitration award, the following documents must be submitted.
a.????The agreement in contention
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b.????The award
After getting recognition, the award becomes a domestic judgment of US, which can be enforced by a court.
While enforcing it, the court will look into whether the defendant received proper notice, and whether enforcing the same would be against public policy or not.
For domestic judgments, a CTC of judgement, form AO 451, filing fees. For enforcing an out-of-the-state judgement or a foreign judgement, the party must pursue the recognition of the judgment.