The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (New York Convention) is a key instrument in the efficiency of international commercial arbitration. The New York Convention requires all contracting parties, over 160 states in 2016, to recognize and enforce international arbitration agreements on the one hand, and international arbitration awards on the other hand, subject to very limited caveats.
The fundamental requirement of presumptive validity of international arbitration agreements is contained at Article 2(1) of the New York Convention which provides that contracting states are required to recognize written agreements to arbitrate past or future disputes when the subject matter is capable of being settled by arbitration. Further, in accordance with Article 2(3), when the Parties have provided for such arbitration agreement, national courts must refer the Parties to arbitration and not hear the dispute.
Article 3 of the New York Convention provides for the presumptive finality of foreign arbitral awards by mandatorily requiring contracting states to recognize foreign arbitral awards as binding and enforce them, subject to the very limited exceptions contained at Article 5 of the New York Convention (e.g. excesses of jurisdiction, violations of fundamental procedural rights and public policy).
In practical terms, an award is “foreign” when it has been issued in a jurisdiction other than the jurisdiction where one Party seeks to have it enforced, and it will be enforced when both jurisdictions are contracting states to the New York Convention.
Therefore, the New York Convention does not affect the authority of a domestic court to annul or set aside an award made in the same jurisdiction, because it is not considered a foreign award, but a domestic award.