Will the Hague Convention be to court litigation what the New York Convention has been to arbitration, asks Jan-Jaap Baer
When it comes to doing business internationally, there are two important and related disputes risks that parties typically address upfront in their contracts:
- Forum risk—in what forum will any dispute be resolved?
- Enforcement risk—will you get a court judgment or arbitral award which “travels” well, allowing swift and easy access to the rewards of your victory?
In both areas arbitration currently has benefits over court litigation. This is due to the successful 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention) which ensures that:
- arbitration agreements are widely recognised, whereas choice of court agreements are not always respected under divergent national rules, particularly where cases are brought before a court other than that chosen by the parties;
- arbitral awards are generally easier to enforce than court judgments, as most countries are party to the New York Convention but there is no real equivalent for court
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