THE POWER OF THE NEW YORK CONVENTION: WHY NORTH CAROLINA BUSINESSES SHOULD TAKE ADVANTAGE OF IT.

• Date: 01 November 2022
• Author: Worthy, Mica Nguyen

The best markets for many of our business clients in North Carolina are overseas or online, with customer bases spread across the world. As they grow their business on a global scale, they inevitably grow concerned with being able to "hold the other side" to the deal. International arbitration is one powerful tool businesses engaged in the global economy have to mitigate this risk. When drafted properly in the parties' contract, a North Carolina company can file a claim in arbitration, have it heard and adjudicated in North Carolina, and then be able to enforce the arbitral award in almost any country in the world where the other side has assets.

The enforcement of arbitral awards is based on a treaty called the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). The United States is a contracting state to the New York Convention along with about 168 other countries and territories.

THE NEWYORK CONVENTION APPLIED IN NORTH CAROLINAFOREIGN AWARDS ENFORCED.

On June 24, 2022, the Fourth Circuit Court of Appeals affirmed the North Carolina federal court's ruling in Reddy v. Buttar, enforcing a Singaporean arbitration award under the New York Convention, against a citizen and resident of North Carolina. The plaintiff Rachan Reddy initiated arbitration proceedings against the defendant Rashid Buttar after a dispute arose concerning the sale of real property in the Philippines. The parties executed a purchase agreement (Agreement) under which Buttar was to sell Reddy shares of companies, which purportedly owned an island in the Philippines, for $3 million. Reddy paid several advances totaling $1.5 million, as well as $50,000 for taxes. Reddy later alleged that Buttar had breached the Agreement's warranty of title and demanded a refund of $1.5 million...