Enforcement of Annulled Arbitral Awards: What Is and What Ought to Be?

The rival approaches for enforcement of annulled arbitral awards have arisen from the differing interpretations of the New York Convention by the sovereign states. The internationalist approach which justifies the enforcement of annulled awards relies on the use of permissive 'may' in Articles V(1)(e) and VII of the Convention. On the other hand, the classic approach gives a mandatory effect to Article V(1)(e) of the New York Convention, thereby recognizing annulment as a ground for non-enforcement of an award. The ideal solution, however, would be to establish a balanced approach wherein annulled awards are not recognized in any jurisdiction as a general rule, while identifying the exceptional circumstances that would justify the enforcement of annulled awards. Moreover, this balanced approach can be efficiently put into practice through the formation of an international body formed under the NewYork Convention, which would have the sole authority to annul awards. The power of annulment, thus, would be transferred from national courts to a supranational body, thereby ensuring predictability and uniformity in the recognition and enforcement of international awards without posing a threat to the sovereignty of any state.