The New York Convention: A Pillar of International Arbitration

16.06.2026

In international commercial relations, one of the most significant questions is the following: what happens when a dispute has been resolved in one country, an award has been rendered, but that award needs to be enforced in another country? This is precisely the question addressed by the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention.

Today, the Convention is regarded as one of the cornerstones of international commercial arbitration, as it establishes a legal mechanism whereby an arbitral award rendered in one State may be recognised and enforced in another State, only on limited and strictly defined grounds. One of its fundamental principles is set out in Article III, under which each Contracting State is obliged to recognise arbitral awards as binding and to ensure their enforcement in accordance both with the relevant provisions of the Convention and with the rules of procedure of the State in whose territory recognition and enforcement of the award is sought. Furthermore, in respect of awards to which the Convention applies, it is impermissible to impose conditions that are substantially more burdensome, or fees or charges that are higher, than those imposed in relation to the recognition and enforcement of domestic arbitral awards.[1]

How Was the New York Convention Created?

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), commonly known as the New York Convention, is a cornerstone of international commercial arbitration. With a view to revising the Geneva Convention and the related Protocol, as well as remedying the deficiencies identified in the regulatory framework then in force, in 1953 the International Chamber of Commerce prepared the initial draft of the New York Convention in Paris and submitted it to the United Nations Economic and Social Council. The text revised by the Council was subsequently presented to the conference held in New York in 1958, in which delegations from 45 States participated. The final text of the New York Convention was adopted at that conference. The Convention entered into force on 7 June 1959.[2]

Georgia acceded to the New York Convention on 2 June 1994, and the Convention entered into force with respect to Georgia on 31 August 1994. [3] Accordingly, Georgia is a Contracting State to the New York Convention, which means that the recognition and enforcement of foreign arbitral awards in Georgia is carried out on the basis of both the Convention and domestic legislation. In this regard, particular importance is attached to the Law of Georgia on Arbitration, Article 44 of which establishes the procedure for the recognition and enforcement of arbitral awards, while Article 45 sets out the grounds for refusing such recognition and enforcement. Georgian judicial practice further confirms that, in matters concerning the recognition and enforcement of foreign arbitral awards, the Supreme Court applies the New York Convention in conjunction with the Law of Georgia on Arbitration. For example, in the decision of the year 2025, the Court expressly referred to Articles III, IV and V of the Convention and clarified that the grounds for refusal provided under Article 45 of the Law of Georgia on Arbitration derive from Article V of the Convention. [4]

Why Is This Convention Particularly Important for Business?

The practical significance of the New York Convention is particularly evident in international business and investment. When companies and investors operate across different jurisdictions, it is crucial for them to know in advance that, in the event of a dispute, the arbitral award rendered will in fact be enforceable.

This is precisely what the Convention ensures: If an arbitral award is rendered in one State, its recognition and enforcement may also be sought in another State, except where there are specific grounds for refusing enforcement as provided for by the Convention.

For this reason, the New York Convention is not merely a legal instrument, but one of the principal guarantees of confidence in international trade and investment.

It is noteworthy that the practical effectiveness of the New York Convention becomes even more apparent when compared with the regime governing the recognition and enforcement of foreign court judgments. Unlike arbitral awards, foreign court judgments are not yet supported by a single, universal international instrument comparable in scope and global reach to the New York Convention. Although certain international mechanisms exist in the field of the recognition and enforcement of judgments, including the 2005 Hague Convention on Choice of Court Agreements[5] and the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters[6], neither their substantive reach nor the number of participating States approaches that of the New York Convention. [7] This circumstance further emphasizes the Convention’s exceptional significance: it has conferred upon arbitral awards a degree of international enforceability for which no equivalent mechanism of comparable scale has yet been established in respect of court judgments.

The Main Purpose of the Convention

The principal purpose of the New York Convention was to support and strengthen arbitration as a means of resolving international commercial disputes, thereby facilitating international trade and investment.[8] In order to achieve this purpose, the Convention serves several fundamental objectives:

Facilitating cross-border enforcement

The Convention promotes the recognition and enforcement of foreign arbitral awards in different countries by establishing a uniform system of rules applicable worldwide.[9]

Promoting international trade

The easier it is to enforce an award, the more predictable international commercial relations become. The Convention establishes rules that apply globally and reduces differences in approaches among States.

Ensuring uniformity

One of the essential purposes of the Convention was to ensure uniformity.[10] In particular, it sought to create an effective international legal framework that would be capable of practical application and would facilitate the recognition and enforcement of both arbitral awards and arbitration agreements.[11]

In this respect, the uniform interpretation of the Convention by courts assumes particular importance, since it is judicial practice that determines how effectively this international mechanism operates. Like the drafters of other international treaties, the authors of the Convention sought to establish a uniform system of international legal standards for the enforcement of arbitration agreements and arbitral awards. As Born concludes, the importance of the New York Convention to international commercial arbitration further heightens the need for the Convention to be interpreted uniformly by courts. [12]

What Should a Court Assess Where an Arbitration Agreement Exists?

Where one of the parties informs the court that the dispute is already subject to an arbitration agreement, the court may be required to assess the validity and operative effect of that agreement. In such circumstances, attention is usually given to several principal issues.

Arbitrability

The court must assess whether the dispute is of such a nature that it may be referred to arbitration at all; in other words, whether the dispute that has arisen between the parties is capable of being the subject-matter of arbitration.

Formal validity

It must be determined whether the form prescribed by law for an arbitration agreement has been complied with.

Existence of the agreement

It is important to establish whether the parties had a genuine and concordant intention to submit the dispute to arbitration.

Scope of the agreement

The court must determine whether the specific arbitration agreement covers the dispute brought before it.

Efficiency of the agreement

It must also be assessed whether the agreement is null or void, or objectively incapable of being performed.

Presumption of Validity of an Arbitration Agreement

In assessing the above issues, particular importance attaches to the fundamental approach according to which both the New York Convention and the Law of Georgia on Arbitration are based on the presumption of validity of an arbitration agreement.

This means that, as a rule, an arbitration agreement is deemed to be valid and enforceable, both from a formal and a substantive legal perspective, unless the contrary is established. In particular, the agreement should be regarded as operative unless it is shown that it is:[13]

void
set aside
invalid
impossible to perform

This presumption is of considerable practical importance, as it confers operative force on the arbitration agreement from the outset and reduces the risk of its being called into question without proper grounds

Why Is Defining the Scope of Application So Important?

For any multilateral international treaty, it is of particular importance to determine the cases to which it applies. In the case of the New York Convention as well, the provisions on scope of application occupy a central place, since the Convention is intended to establish uniformity in the recognition and enforcement of foreign arbitral awards.

It must be possible to determine which foreign arbitral awards fall within the Convention’s enforcement regime and which do not.

What Does Article I(1) Regulate?

Article I(1) of the Convention determines the arbitral awards to which the regime of recognition and enforcement applies.[14]

This Article concerns awards that:

arise out of disputes between natural or legal persons; and
satisfy the “foreign” criterion.

The “foreign” criterion may exist in two cases:

the award was made in the territory of a State other than the State where its enforcement is sought;
the award is regarded in the State of enforcement as “non-domestic”

This provision is of great practical significance, as it is the starting point for determining whether a particular arbitral award falls within the scope of the Convention. It is important that the concept of an “arbitral award” and its foreign or “non-domestic” character be properly understood, as well as the manner in which these issues have been interpreted in practice.

What Does Article I(2) Clarify?

Article I(2) clarifies what is encompassed by the term “arbitral awards”. [15] Under the Convention, this concept applies not only to awards made by arbitrators appointed for a specific dispute, but also to awards made by permanent arbitral bodies.

Historically, this provision was included in the Convention at the request of certain States; however, in modern practice it has relatively limited independent significance.

What Does Article I(3) Provide?

Article I(3) allows Contracting States to limit the scope of application of the Convention by means of certain reservations. [16] Article I(3) grants each Contracting State the right, when signing, ratifying or acceding to the Convention, or when notifying its extension, to limit the territorial and subject-matter scope of application of the Convention as defined in Article I(1).

The Reciprocity Reservation

A State may declare that it will apply the Convention only to awards made in the territory of another Contracting State.

The Commercial Reservation

A State may also declare that the Convention will apply only to disputes arising out of legal relationships that are considered “commercial” under its national law.

Several States have indeed made use of these reservations; however, as the number of Contracting States has increased, their practical significance has gradually diminished.[17]

Priority of the Parties’ Agreement with Respect to the Arbitral Procedure

The Convention also addresses the procedures applicable in international arbitration, albeit indirectly. It clearly protects one fundamental idea: the parties may themselves determine how their arbitration is to be conducted, and States should, as a rule, recognise that choice. This indirect support is reflected in Articles II and V(1)(d) of the Convention.[18]

Article II of the Convention operates at an early stage of the dispute, namely, where at least one of the parties nevertheless brings before a State court a dispute that is subject to an arbitration agreement. The logic of Articles II(1) and II(3) is not limited to requiring the court to “formally” recognise the arbitration agreement. Such recognition also has practical content: the court must refer the parties to arbitration within the framework that they themselves have agreed. This includes not only the agreement that the dispute is to be resolved by arbitration, but also the agreement as to the procedure by which that arbitration is to be conducted, for example, under which rules, with how many arbitrators, under the administration of which institution, or in what form the proceedings are to take place.

The Convention permits, by way of exception, Contracting States to refuse to give effect to such agreements in limited and exceptional circumstances, with a view to safeguarding the integrity of the arbitral process. Otherwise, however, it does not restrict the parties’ procedural autonomy.[19]

This idea appears in an even clearer form in Article V(1)(d), which concerns the post-arbitration stage, namely, the recognition and enforcement of an arbitral award. Under that provision, recognition or enforcement of an award may be refused if “the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place

Compared with Article II, Article V(1)(d) gives even clearer priority to the parties’ agreement regarding arbitral procedures and treats the law of the country of the seat of arbitration only as a subsidiary or default mechanism, applicable where the parties have not reached an agreement on procedural matters.[20]

Reading these two provisions together allows the Convention to be understood not merely as an instrument for the enforcement of foreign arbitral awards, but also as a text that systematically reinforces one of the central principles of international arbitration: the procedural autonomy of the parties. The Convention does not dictate to the parties which procedure they must choose, but it clearly provides that their choice is legally significant and, as a rule, deserving of respect. This is precisely where its indirect, yet highly important, influence on the architecture of international arbitral procedure lies.

The New York Convention is one of the most important legal instruments in international commercial arbitration. Its significance lies not only in the fact that it facilitates the recognition and enforcement of foreign arbitral awards. More broadly, the Convention creates the legal confidence without which international trade and investment would be far more difficult and less predictable.

For this reason, the New York Convention continues to be a document that brings together the effectiveness of arbitration, international legal uniformity, and the practical interests of business.

[1] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958), Article III

[2] Tsertsvadze, Giorgi, International Arbitration: A Comparative Analysis, Tbilisi, 2008, p. 48.

[3] https://newyorkconvention1958.org/index.php?lvl=cmspage&pageid=11&menu=576&opac_view=-1

[4] Ruling of the Supreme Court of Georgia, Case №ა-2962-შ-77-2025, September 29, 2025

[5] Convention of 30 June 2005 on Choice of Court Agreements

[6] Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters

[7] Gilles Cuniberti, Signalling the Enforceability of the Forum’s Judgments Abroad, 56 Rivista di diritto internazionale privato e processuale, 2020, pp. 33, 36

[8] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1]

[9] A. van den Berg, The New York Arbitration Convention of 1958 1, 6, 54-55, 168-69, 262-63, 274, 357-58 (1981)

[10] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1] (c)

[11] Liebscher, Christoph, New York Convention: Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958, Preliminary Remarks, in Wolff, Reinmar, ed. New York Convention: Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958: Article-by-Article Commentary. 2nd ed. München; Baden-Baden; Oxford: Bloomsbury Publishing Plc, 2019, p. 4

[12] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1] (c)

[13] Group of Authors: Giorgi Kekenadze and Sophio Tkemaladze, Guide to Arbitration for City (District) Court Judges (UNDP Georgia, 2017), p. 30.

[14] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958), Article I (1)

[15] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958), Article I (2)

[16] United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 10 June 1958), Article I (3)

[17] Ehle, Bernd, “Article I [Scope of Application]” in Wolff, Reinmar, ed. New York Convention: Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958: Article-by-Article Commentary. 2nd ed. München; Baden-Baden; Oxford: Bloomsbury Publishing Plc, 2019, p. 28

[18] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1] (c) (iii)

[19] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1] (c) (iii)

[20] Born, Gary B., International Commercial Arbitration Third Edition, Kluwer Law International B.V., The Netherlands, 2021, Para 1.04 [A] [1] (c) (iii)