Youâve filed for and obtained an Arbitration Award in your country against a US debtor. Now you need to make it good in the US. Hereâs how
Domesticating a Foreign Arbitration Award in the U.S.
by David Greenberg
Assistant Vice President, International Collections
Originally published: September 23, 2011
There are currently 146 signatory countries to the 1958 NY Convention on the Enforcement of Foreign
Arbitration Awards. Generally referred to as the New York Convention, this UN treaty was ratified by the United
States on September 30, 1970.
The following article describes the process for domesticating in the United States Foreign Arbitration Awards
that were obtained by the creditor/exporter in a signatory country to the New York Convention.
U.S. Process of Domesticating Foreign Arbitration Awards
In general, an Arbitration Award issued by a competent tribunal in any country that is a signatory to the NY
Convention can be enforced through the courts in the United States. The process involves initiating a lawsuit for
Judgment on Arbitration and using the foreign Award as the Cause of Action.
Weight of Arbitration Awards under the U.S. Legal System
Arbitral Awards carry considerable influence in the U.S. federal judicial system. The U.S. Supreme Court has held
it is the will of the Congress (under Title 9 of the United States Code) that preference be given to the arbitration
process over litigation. (See: http://www.law.cornell.edu/uscode/text/9)
There are almost no grounds under the U.S. legal system to appeal an Award issued in final and binding
arbitration. Judges are constrained only to consider the following points:
? Was an Arbitration Agreement signed by the parties?
? Did all parties receive the relevant notices?
? Was the Award consistent with the submitted agreement or did the arbitrator stray from the issue
? Was the arbitration conducted in accordance with the provisions of the 1985 Model Law on
International Commercial Arbitration (of the United Nations Commission on International Trade Law-
UNCITRAL)? (See: http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf)
Beyond the narrow considerations above, U.S. judges may not provide further judicial review of the merits of
the underlying case. Therefore, if the following documentation is provided and the recommendations heeded, it
is likely that the U.S. legal system will move swiftly to provide a Judgment on Arbitration upholding the Award.
In most cases, this will be accomplished by Summary Judgment, a final decision by the judge resolving the
lawsuit without a trial.
Documentation Required to Initiate Judgment on Arbitration
The following documents are required to initiate a Judgment on Arbitration:
? Agreement, signed by the parties, which contains the Arbitration Agreement/clause
? Notice of Arbitration
? Appointment of Arbitrators
? Notice of Hearing Date for the Arbitration
? Notice of Arbitration Award
Either originals or copies are acceptable. However, copies must bear attestation by a Notary Public and be
legalized (authenticated) by an apostille in accordance with the 1961 Convention Abolishing the Requirement of
Legalisation for Foreign Public Documents (also referred to as the 1961 Hague Convention).
Since the U.S. Court will require all documents submitted to be in English, translations should be provided where
Typical Defenses Brought by Respondents
The defenses most typically offered by respondents (debtors) in lawsuits for Judgment on Arbitration are:
1. I never signed the Arbitration Agreement.
2. I never received any of the relevant notices of the Arbitration hearing and Award.
3. The notices I received were not in my language, so I did not understand what they were.
Because debtors often attempt to defend against an Arbitration Award claiming not to have received timely
notice of the hearing and subsequent Award, we strongly recommend that creditors do not rely on the
arbitration tribunal to serve these documents on the debtor.
Upon receipt of arbitration notices, we recommend the creditor provide a copy of the notices to a competent
U.S. representative (for instance, their collection agency or attorney). The U.S. representative should then
engage a process server in the debtor?s locality to serve copies of the notices to the debtor in a fashion
consistent with local law and for the purpose of gaining a ?proof of service?. There will be a charge to the debtor
for serving such notices. However, the fee will be well worth the investment in terms of helping to ensure the
Arbitration Award is upheld in the U.S.
Regarding the defense (#3) that the notices ?were not in my language?. If the respondent (buyer/debtor) signed
an agreement allowing arbitration proceedings to occur in a language other than his own, he has no argument
against them being written in the claimant?s (seller/creditor?s) language.
That said, it is my experience that whenever a claimant goes out of his way to be fair and informative
throughout the arbitration process, a reviewing court tends to look favorably upon that extra effort. Translating
notices and documents into the respondent's language falls into this category. Providing the ?courtesy? of a
translation, if the arbitration authority does not already perform that function, would tend to help the
claimant's/creditor?s cause in general. ABC-Amega, therefore, asks that notices be translated into English and
delivered to us for service. We then serve the debtor with both the foreign language notices and the English
Judgment on Arbitration - Suit Process
Once the required documents are submitted to the creditor?s US lawyer, he/she will initiate the lawsuit for
Judgment on Arbitration using the foreign Award as the Cause of Action, and send the defendant/debtor a
summons. If the defendant fails to respond, the court will issue a Default judgment in the plaintiff's (creditor's)
If the debtor does file an answer to the lawsuit, the case will enter a discovery phase. During this phase, the
parties reveal the evidence they intend to present in support of their side of the case. Once concluded, the court
will consider motions for Summary Judgment. If it determines there are no issues of fact remaining to be tried,
the court will enter its judgment.
However, if the court still believes issues remain, it will set a trial date. Remember, the judge is only allowed to
examine issues of arbitrability (see the section above titled "Weight of Arbitration Award in the U.S."). He
cannot examine issues of fact underlying the merits of the original case. Therefore, it is rare for such an issue
to go to trial. In most cases, a Default or Summary Judgment will be rendered. However, should there be a trial,
the plaintiff?s (creditor?s) witnesses will need to be present. At the conclusion of the trial, the court will render
either a judgment in favor of the plaintiff or a dismissal of the case.
The time necessary to gain Default, Summary Judgment or Judgment at Trial will vary from jurisdiction to
jurisdiction. On the average, one could expect a Default or Summary Judgment within 90 days of filing the
enforcement action. Gaining a Judgment by Trial, however, depends upon scheduling availability as determined
by the state court calendars, which are often backed up and over crowded.
David Greenberg's collection industry experience spans three decades. Dave was instrumental in the expansion of
ABC-Amega?s international collections department and their earning of ?E? and ?E-Star? honors from the U.S.
President for excellence. He has served on the Panel of Commercial Arbitrators of the American Arbitration
Association and is a current member of the Commercial Law League of America and the Association of Executives
in Finance, Credit and International Business. Dave has traveled the world, giving educational presentations in
the areas of international arbitration, foreign documentation, and credit reporting management.
This information is provided by ABC-Amega Inc. for informational purposes only and is not intended to be legal
advice and is not a substitute for competent legal advice on the referenced subject. ABC-Amega Inc. provides 1st
and 3rd party commercial collection services since 1929 and collecting in more than 200 countries worldwide, For
further information, contact email@example.com or visit www.abc-amega.com.
1100 Main Street Buffalo, NY 14209