3.3 Enforcing an Arbitral Award

• Library: The Virginia Arbitration Roadmap (Virginia CLE) (2011 Ed.)

3.3 ENFORCING AN ARBITRAL AWARD

3.301 Scope of the Acts.

A. Provisions. Chapter 1 of the FAA provides for the enforcement of, as well as the grounds for confirming, modifying, and vacating, an arbitral award rendered within the United States. The FAA provides that a judgment may be enforced "as if it was rendered in an action . . . [and] shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered." ⁷⁵ A party seeking to enforce an arbitration award must file the award along with other papers listed in section 13 of the FAA. Thereafter, the judgment will be docketed and can be enforced through any means otherwise available at law.

The New York Convention provides for the recognition and enforcement of, as well as the grounds for refusing to recognize, an international arbitral award. The New York Convention is enforced

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in the United States in accordance with 9 U.S.C. § 201 et seq. Chapter 3 of the FAA incorporates the articles of the Inter-American (Panama) Convention and provides for the enforcement of the same. ⁷⁶ The provisions of this convention are similar to those of the New York Convention. The difference between the two is mainly the number of signatories. Whereas approximately 144 countries from many parts of the world are signatories to the New York Convention, the Panama Convention is signed by 19 Latin American countries and the United States.

B. Goals. The New York Convention has broad application. Article I(1) of the New York Convention applies (i) to arbitration awards "made in the territory of a State other than the State where the recognition and enforcement of such awards are sought . . ." or (ii) to awards "not considered as domestic awards in the State where their recognition and enforcement are sought." The Convention does not define the phrase "not considered as domestic awards." Several circuits have construed this phrase broadly to include awards that, although made in the enforcing country, were decided within the legal framework of another country, such as an arbitration "placed" in one country that is decided under the substantive laws of another country or an arbitration involving parties domiciled or having their principal places of business outside the enforcing jurisdiction. ⁷⁷ This broad construction of the applicability of the New York Convention is in keeping with the underlying purpose of the Convention: to unify the world under one enforcement scheme for private dispute resolution. As noted by the Supreme Court in Scherk v. Alberto-Culver Co., ⁷⁸

The goal of the Convention, and the principal purposes underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements

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to arbitrate are observed and arbitral awards are enforced in the signatory countries.

C. Overlapping Coverage. Confusion may arise in situations in which both the New York Convention and chapter 1 of the FAA apply. For example, consider the situation where the arbitration was conducted in the United States and enforcement is sought in the United States (making chapter 1 applicable), yet one of the parties is a citizen of another country (making the New York Convention applicable).

The Second Circuit has recognized that chapter 1 of the FAA and the New York Convention can have overlapping coverage to the extent they do not conflict. ⁷⁹

3.302 Recognition and Enforcement of Awards. Procedurally, the New York Convention requires its contracting states to recognize arbitral awards as binding and to enforce them according to the particular state's rules of procedure. Under chapter 2 of the FAA, a party can obtain recognition and enforcement of an international arbitral award by filing a motion to confirm. Chapter 2, section 203 confers original subject matter jurisdiction to confirm awards to federal district courts.

WARNING: The grant of original jurisdiction provided by section 203 of the FAA does not extend to domestic arbitrations. Thus, to file an action in...