Published 31 January 2024
This article explores the obstacles posed by economic sanctions to the recognition and enforcement of international commercial arbitral awards. At the stage of recognition and enforcement, economic sanctions impede the enforceability of an award primarily on the basis of public policy defense, which is provided by Article V(2)(b) of the New York Convention. The decisions made by the enforcing courts in some jurisdictions show that economic sanctions are challenging the long tradition of upholding the validity of awards and adopting a narrow approach to interpret the public policy doctrine. Domestic courts in the place of enforcement face a dilemma between defending the validity of arbitral awards and safeguarding the effectiveness of their economic sanctions regimes. This article contends that economic sanctions should not easily affect the recognition and enforcement of an arbitral award. Then, the author proposes three recommendations to ensure that international commercial arbitral awards can be better recognized and enforced in the age of sanctions: (1) maintaining a restrictive interpretation of public policy; (2) establishing a reasonable evidentiary standard, and (3) applying the principle of reciprocity when necessary.
This paper will be part of the TDM Special Issue on "Sanctions and International Arbitration: Impact on Substantive and Procedural Issues". More information here www.transnational-dispute-management.com/news.asp?key=1960