The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also 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 which are not considered as domestic awards in the state where recognition and enforcement is sought. Though other international conventions apply to the cross-border enforcement of arbitration awards, the New York Convention is by far the most important. Background In 1953, the International Chamber of Commerce (ICC) produced the first draft Convention on the Recognition and Enforcement of International Arbitral Awards to theUnited Nations Economic and Social Council. With slight modifications, the Council submitted the convention to the International Conference in the Spring of 1958. The Conference was chaired by Willem Schurmann, the Dutch Permanent Representative to the United Nations and Oscar Schachter, a leading figure in international law who later taught at Columbia Law School and the Columbia School of International and Public Affairs, and served as the President of the American Society of International Law. International arbitration is an increasingly popular means of alternative dispute resolution for cross-border commercial transactions. The primary advantage of international arbitration over court litigation is enforceability: an international arbitration award is enforceable in most countries in the world. Other advantages of international arbitration include the ability to select a neutral forum to resolve disputes, that arbitration awards are final and not ordinarily subject to appeal, the ability to choose flexible procedures for the arbitration, and confidentiality. Once a dispute between parties is settled, the winning party needs to collect the award or judgment. Unless the assets of the losing party are located in the country where the court judgment was rendered, the winning party needs to obtain a court judgment in the jurisdiction where the other party resides or where its assets are located. Unless there is a treaty on recognition of court judgments between the country where the judgment is rendered and the country where the winning party seeks to collect, the winning party will be unable to use the court judgment to collect. Countries which have adopted the New York Convention have agreed to recognize and enforce international arbitration awards. As of June 2015, there are 156 State parties which have adopted the New York Convention: 153 of the 193 United Nations Member States, theCook Islands, the Holy See, and the State of Palestine.[1] Forty-five UN Member States have not adopted the New York Convention and a number of British dependent territories have not had the Convention extended to them by Order in Council. Summary of provisions[edit] Under the Convention, an arbitration award issued in any other state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. These defenses are: a party to the arbitration agreement was, under the law applicable to him, under some incapacity; the arbitration agreement was not valid under its governing law; a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to present its case; the award deals with an issue not contemplated by or not falling within the terms of the submission to arbitration, or contains matters beyond the scope of the arbitration (subject to the proviso that an award which contains decisions on such matters may be enforced to the extent that it contains decisions on matters submitted to arbitration which can be separated from those matters not so submitted); the composition of the arbitral tribunal was not in accordance with the agreement of the parties or, failing such agreement, with the law of the place where the hearing took place (the "lex loci arbitri"); the award has not yet become binding upon the parties, or has been set aside or suspended by a competent authority, either in the country where the arbitration took place, or pursuant to the law of the arbitration agreement; the subject matter of the award was not capable of resolution by arbitration; or enforcement would be contrary to "public policy". Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes outside the courts. The parties to a dispute refer it toarbitration by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), and agree to be bound by the arbitration decision (the "award"). A third party reviews the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in the courts. Arbitration is often used for the resolution of commercial disputes, particularly in the context of international commercial transactions. In certain countries such as the United States, arbitration is also frequently employed in consumer and employment matters, where arbitration may be mandated by the terms of employment or commercial contracts. Scherk v. Alberto-Culver Co. Decided June 17, 1974 417 U.S. 506 Syllabus Respondent, an American manufacturer based in Illinois, in order to expand its overseas operations, purchased from petitioner a German citizen, three enterprises owned by him and organized under the laws of Germany and Liechtenstein, together with all trademark rights of these enterprises. The sales contract, which was negotiated in the United States, England, and Germany, signed in Austria, and closed in Switzerland, contained express warranties by petitioner that the trademarks were unencumbered and a clause providing that "any controversy or claim [that] shall arise out of this agreement or the breach thereof" would be referred to arbitration before the International Chamber of Commerce in Paris, France, and that Illinois laws would govern the agreement and its interpretation and performance. Subsequently, after allegedly discovering that the trademarks were subject to substantial encumbrances, respondent offered to rescind the contract, but when petitioner refused, respondent brought suit in District Court for damages and other relief, contending that petitioner's fraudulent representations concerning the trademark rights violated § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Petitioner moved to dismiss the action or alternatively to stay the action pending arbitration, but the District Court denied the motion to dismiss and, as sought by respondent, preliminarily enjoined petitioner from proceeding with arbitration, holding, in reliance on Wilko v. Swan, 346 U. S. 427, that the arbitration clause was unenforceable. The Court of Appeals affirmed. Held: The arbitration clause is to be respected and enforced by federal courts in accord with the explicit provisions of the United States Arbitration Act that an arbitration agreement, such as is here involved, "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. §§ 1, 2. Wilko v. Swan, supra, distinguished. Pp. 417 U. S. 510-520. (a) Since uncertainty will almost inevitably exist with respect to any contract, such as the one in question here, with substantial contacts in two or more countries, each with its own substantive laws and conflict of laws rules, a contractual provision specifying in advance the forum for litigating disputes and the law to be applied is an almost indispensable precondition to achieving the orderliness and predictability essential to any international business transaction. Such a provision obviates the danger that a contract dispute might be submitted to a forum hostile to the interests of one of the parties or unfamiliar with the problem area involved. Pp. 417 U. S. 515-517. (b) In the context of an international contract, the advantages that a security buyer might possess in having a wide choice of American courts and venue in which to litigate his claims of violations of the securities laws, become chimerical, since an opposing party may by speedy resort to foreign court block or hinder access to the American court of the buyer's choice. Pp. 417 U. S. 517-518. (c) An agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum selection clause that posits not only the situs of suit, but also the procedure to be used in resolving the dispute, and the invalidation of the arbitration clause in this case would not only allow respondent to repudiate its solemn promise but would, as well, reflect a "parochial concept that all disputes must be resolved under our laws and in our courts." The Bremen v. Zapata Off-Shore Co., 407 U. S. 1, 407 U. S. 9. P. 417 U. S. 519. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985), is aUnited States Supreme Court decision concerning arbitration of antitrust claims. The Court heard the case on appeal from the United States Court of Appeals for the First Circuit, which had ruled that the arbitration clause in a Puerto Rican car dealer's franchise agreement was broad enough to reach its antitrust claim. By a 5–3 margin it upheld the lower court, requiring that the dealer arbitrate its claim before a panel in Tokyo, as stipulated in the contract. Justice Harry Blackmun wrote for the majority that the Federal Arbitration Act (FAA) was broad enough to require arbitration of statutory claims as well as contractual ones, extending a recent line of Court decisions favorable to arbitration. A controversial footnote, creating a possible "prospective waiver" doctrine that would allow a party to avoid arbitration under foreign law, has been much criticized by commentators and at the same time raised by many litigants. In 2009 the Eleventh Circuit found it valid for an injured cruise-ship worker, but two years later cast doubt on that conclusion. In dissent, Justice John Paul Stevens argued that antitrust claims were too complex and important to be left to arbitrators and that in any event none of the claims were arbitrable under the terms of the contract itself. He expressed incredulousness that his colleagues would require an American company to arbitrate a claim under American antitrust law before a panel of foreign arbitrators. Justice Lewis Powell took no part in the case. While the case formed an important part of the Court's expansion of arbitrability in the late 20th and early 21st centuries, it could not have reached a court today. In 2002, after years of lobbying by the National Automobile Dealers Association, Congress passed the Motor Vehicle Franchise Contract Arbitration Fairness Act, which prohibited mandatory predisputearbitration clauses in motor vehicle dealership franchise agreements. President George W. Bush signed it into law, the first time a specific exception to the FAA had been legislated since the Court began expanding its scope. Underlying dispute[edit] In 1979 Soler was incorporated in San Juan, Puerto Rico, and became a Chrysler-Plymouth dealer, doing business in the Pueblo Viejodistrict of the nearby suburb of Guaynabo.[1] It and Mitsubishi Motors, a joint venture of Chrysler and Mitsubishi Heavy Industries, incorporated in Geneva, Switzerland, concluded two separate agreements to this effect: a distributor agreement with Chrysler and separate sales procedure agreements with Chrysler and Mitsubishi. The latter contained arbitration clauses requiring that any disputes under them be arbitrated in Japan under the rules of the Japan Commercial Arbitration Association (JCAA).[2] The goal of the manufacturer and dealer was to introduce the small cars Mitsubishi made for both Chrysler and itself to the Puerto Rican market, for which they were considered ideal.[3] Soler did excellent business in its first two years, selling more than twice the amount of vehicles set in its quota. As the market began to slow down in late 1981, the relationship between Soler and Mitsubishi began to break down. The dealer had trouble meeting sales targets under a higher quota, and Mitsubishi withheld shipments of new vehicles. Eventually 966 destined for Soler were stored near its factories in Japan. Soler began having trouble financing its purchases of new vehicles.[3] Seeing that other Japanese car makers were allowing their dealers in Puerto Rico to transshipexcess inventory to Latin America and the continental United States, Soler asked if it could do the same. Mitsubishi refused, saying the vehicles were customized for the Puerto Rican market. They lacked heaters and defoggers that they would have needed on the mainland, and their engines could not run on the lower-grade leaded gasoline sold in many Latin American countries at that time. Further, Soler had no experience with maritime shipping and would not been able to meet its service obligations under warranty for transshipped cars and trucks.[2][3] Mitsubishi also was concerned that transshipments to the continental U.S. would be seen as skirting the voluntary import restraintsJapanese automakers had been practicing in the American market to mitigate the potential political backlash from their distressed American counterparts.[4] Soler would later claim that it was told the real reason for the refusal to allow transshipping was that Mitsubishi and Chrysler had divided their territories, informally agreeing that the former brand would have preference outside the mainland U.S. while Chrysler maintained it domestically. The dealership then began to suspect that Mitsubishi intended to sabotage its business in order to replace it with a wholly owned subsidiary once the brand had been established in Puerto Rico.[3] Early in 1982 Soler stopped paying storage costs for the vehicles in Japan, claiming it had disowned them.[5] Later that year the franchise agreement either ended or was terminated. Analysis and commentary[edit] Commentators have ascribed much importance to Mitsubishi Motors, calling it "landmark"[69] and "significant".[70] It has been discussed in both the context of domestic and international arbitration. In the former area, critics of the increased role of arbitration in dispute resolution have objected to it strongly. Duke law professor Paul Carrington has complained that by denying the public policy behind the Sherman Act, the Court effectively repealed the treble-damages provision since there is no corresponding provision in Japanese competition law. Likewise, later decisions holding that the provisions of both the FAA and ADDCA can be satisfied by arbitration allow an older statute to effectively repeal a later one. "The Court has not explained the jurisprudence reflected in this intellectual gymnastic."[65] Ramona Lampley, a Wake Forest visiting professor who has since returned to private practice, calls the Mitsubishi trilogy the "vindication of statutory rights" trilogy. "Mitsubishi laid the cornerstone for the Court's sheltered fostering of arbitration agreements," she writes. However, "in a case intended to cast arbitration, even of remedial statutes, on equal or more favorable footing as the judicial forum, the Court crafted language that would soon give rise to a method for invalidating arbitration agreements" when litigants in later class actionswere able to invalidate arbitration clauses by successfully questioning whether the process would vindicate their statutory rights.[71] Within the international-arbitration context, commentators have applauded the Court's support for the process but criticized its reasoning. Laurence Smith, a law student at Penn, criticizes the decision as an "unprincipled" route to the proper result Instead of the balancing testthe Court used, he recommends a two-prong test based on the extraterritorial acceptance of U.S. antitrust law and the provisions of the Convention.[72] Another writer gladdened to see more support for international arbitration, Thomas Carbonneau, nevertheless found much to agree with in Stevens' dissent. "[T]here is much that is unfortunate about [the majority]'s reasoning and methodology," he wrote. "[It] is misguided; it advances a distorted and disproportionate view of arbitration."[70] Regulatory claims, he said, were by design best left to national courts, criticizing the Court's "anational" approach. In Mitsubishi, the submission of the plaintiff's antitrust claim to Japanese arbitrators may well have deprived the plaintiff of its statutorily conferred rights. While recourse to extraterritorial application of domestic law is a very questionable means of creating a transnational rule of law, regulatory rights should not be eliminated by the fact of participation in international commerce unless a legislative determination so provides. Until public regulatory provisions of a truly international character exist and reflect an authentic consensus among sovereigns, national regulatory law is one of the few available means of creating limits upon transnational conduct.[73] He also found footnote 19 to be a "careless afterthought ... it is unlikely that such an award would ever come to the United States for enforcement."[73] Other commentators have found that it either contradicts itself or the rest of the opinion, and/or offers no guidance to courts faced with such a case. Republic Act No. 9285             April 2, 2004 AN ACT TO INSTITUTIONALIZE THE USE OF AN ALTERNATIVE DISPUTE RESOLUTION SYSTEM IN THE PHILIPPINES AND TO ESTABLISH THE OFFICE FOR ALTERNATIVE DISPUTE RESOLUTION, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER 1 - GENERAL PROVISIONS SECTION 1. Title. - This act shall be known as the "Alternative Dispute Resolution Act of 2004." SEC. 2. Declaration of Policy. - it is hereby declared the policy of the State to actively promote party autonomy in the resolution of disputes or the freedom of the party to make their own arrangements to resolve their disputes. Towards this end, the State shall encourage and actively promote the use of Alternative Dispute Resolution (ADR) as an important means to achieve speedy and impartial justice and declog court dockets. As such, the State shall provide means for the use of ADR as an efficient tool and an alternative procedure for the resolution of appropriate cases. Likewise, the State shall enlist active private sector participation in the settlement of disputes through ADR. This Act shall be without prejudice to the adoption by the Supreme Court of any ADR system, such as mediation, conciliation, arbitration, or any combination thereof as a means of achieving speedy and efficient means of resolving cases pending before all courts in the Philippines which shall be governed by such rules as the Supreme Court may approve from time to time. CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION SEC. 19. Adoption of the Model Law on International Commercial Arbitration. - International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended approved on December 11, 1985, copy of which is hereto attached as Appendix "A". SEC. 20. Interpretation of Model Law. - In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to the travaux preparatories and the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, "International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264." SEC. 21. Commercial Arbitration. - An arbitration is "commercial" if it covers matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a transactions: any trade transaction for the supply or exchange of goods or services; distribution agreements; construction of works; commercial representation or agency; factoring; leasing, consulting; engineering; licensing; investment; financing; banking; insurance; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road. SEC. 22. Legal Representation in International Arbitration. - In international arbitration conducted in the Philippines, a party may be presented by any person of his choice. Provided, that such representative, unless admitted to the practice of law in the Philippines, shall not be authorized to appear as counsel in any Philippine court, or any other quasi-judicial body whether or not such appearance is in relation to the arbitration in which he appears. SEC. 23. Confidential of Arbitration Proceedings. - The arbitration proceedings, including the records, evidence and the arbitral award, shall be considered confidential and shall not be published except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of relevant documents in cases where resort to the court is allowed herein. Provided, however, that the court in which the action or the appeal is pending may issue a protective order to prevent or prohibit disclosure of documents or information containing secret processes, developments, research and other information where it is shown that the applicant shall be materially prejudiced by an authorized disclosure thereof. SEC. 24. Referral to Arbitration. - A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later that the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. SEC. 25. Interpretation of the Act. - In interpreting the Act, the court shall have due regard to the policy of the law in favor of arbitration. Where action is commenced by or against multiple parties, one or more of whom are parties who are bound by the arbitration agreement although the civil action may continue as to those who are not bound by such arbitration agreement. SEC. 26. Meaning of "Appointing Authority.". - "Appointing Authority" as used in the Model Law shall mean the person or institution named in the arbitration agreement as the appointing authority; or the regular arbitration arbitration institution under whose rules the arbitration is agreed to be conducted. Where the parties have agreed to submit their dispute to institutional arbitration rules, and unless they have agreed to a different procedure, they shall be deemed to have agreed to procedure under such arbitration rules for the selection and appointment of arbitrators. In ad hoc arbitration, the default appointment of an arbitrator shall be made by the National President of the Integrated Bar of the Philippines (IBP) or his duly authorized representative. SEC. 27. What Functions May be Performed by Appointing Authority. - The functions referred to in Articles 11(3), 11(4), 13(3) and 14(1) of the Model Law shall be performed by the Appointing Authority, unless the latter shall fail or refuse to act within thirty (30) days from receipt of the request in which case the applicant may renew the application with the Court. SEC. 28. Grant of Interim Measure of Protection. - (a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court an interim measure of protection and for the Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection or modification thereof, may be made with the arbitral tribunal or to the extent that the arbitral tribunal has no power to act or is unable to act effectively, the request may be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making request. (b) The following rules on interim or provisional relief shall be observed: (1) Any party may request that provision relief be granted against the adverse party: (2) Such relief may be granted: (i) to prevent irreparable loss or injury: (ii) to provide security for the performance of any obligation; (iii) to produce or preserve any evidence; or (iv) to compel any other appropriate act or omission. (3) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order. (4) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and evidence supporting the request. (5) The order shall be binding upon the parties. (6) Either party may apply with the Court for assistance in Implementing or enforcing an interim measure ordered by an arbitral tribunal. (7) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the order's judicial enforcement. SEC. 29. Further Authority for Arbitrator to Grant Interim Measure of Protection. - Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute following the rules in Section 28, paragraph 2. Such interim measures may include but shall not be limited to preliminary injuction directed against a party, appointment of receivers or detention, preservation, inspection of property that is the subject of the dispute in arbitration. Either party may apply with the Court for assistance in implementing or enforcing an interim measures ordered by an arbitral tribunal. SEC. 30. Place of Arbitration. - The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be in Metro Manila, unless the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties shall decide on a different place of arbitration. The arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts, or the parties, or for inspection of goods, other property or documents. SEC. 31. Language of the Arbitration. - The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the language to be used shall be English in international arbitration, and English or Filipino for domestic arbitration, unless the arbitral tribunal shall determine a different or another language or languages to be used in the proceedings. This agreement or determination, unless otherwise specified therein, shall apply to any written statement by a party, any hearing and any award, decision or other communication by the arbitral tribunal. The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined in accordance with paragraph 1 of this section. CHAPTER 5 - DOMESTIC ARBITRATION SEC. 32. Law Governing Domestic Arbitration. - Domestic arbitration shall continue to be governed by Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this Chapter. The term "domestic arbitration" as used herein shall mean an arbitration that is not international as defined in Article (3) of the Model Law. SEC. 33. Applicability to Domestic Arbitration. - Article 8, 10, 11, 12, 13, 14, 18 and 19 and 29 to 32 of the Model Law and Section 22 to 31 of the preceding Chapter 4 shall apply to domestic arbitration.