American courts may enforce and recognize international commercial arbitral awards pursuant to the New York Convention. An arbitral award can be subject of scrutiny before the courts of the country of the seat of arbitration and courts of the seat of arbitration may annul an award. Once an award is annulled, the question is whether a decision to annul an award renders it void, or a court outside of the seat of arbitration may refuse to enforce the judgment annulling the award and enforce the award. Courts may treat the judgment annulling an award as a judgment for the purpose of enforcement and recognition. In this view, courts may refuse to enforce a judgment annulling an award if the judgment does not conform with traditional U.S grounds for enforcement of a judgment. The public policy exception is one of the grounds on which courts sometimes refuse to enforce a decision annulling an award. Recent decisions in Termorio, Pemex and Thai Lao Lignite have treated judgments annulling an award as judgments and evaluated their validity on public policy grounds. Public policy is the most reliable basis of analysis of the validity of decisions regarding an award. If a decision annulling an award satisfies the requirements of public policy, then the judgment must be enforced and the award is void. In this view, there is no need to inquire further about the consequences of an annulled award and the control of public policy can provide the best alternative.
Public Policy Exception in Enforcement of Foreign Judgments: Setting Aside an Award in the Country of the Seat of Arbitration,
16 Pepp. Disp. Resol. L.J.
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