Public Policy Exception and Arbitrability Defence under the New York Convention 1958

Following the academic tradition: Victoria Bùi, nailing her thesis to the wall in Uppsala University Main Building.

The New York Convention 1958 advocates a pro-enforcement policy, urging its Member States to interpret and apply the limited grounds for refusing recognition and enforcement of arbitral awards restrictively. Over time, this pro-enforcement approach has evolved into a consensus, yet there is a lack of empirical evidence substantiating this widely held view. Victoria searches evidence-based law insights on the consensus. She seeks to move away from the purely anecdotal discussions:

“I have scrutinised the varied notions of public policy, including domestic/national, international, and transnational public policy, and have distinguished the nuances of the arbitrability concept, noting a distinct approach in the U.S. I have also investigated the relationship between public policy and arbitrability. Arbitrability is essentially a question of whether something may be permitted to be resolved by arbitration or reserved for the exclusive jurisdiction of the courts”, explains Victoria. 

Victoria’s research comprises three steps: first, examining the general notions of public policy and arbitrability. Second, analysis of the specific provisions of the New York Convention 1958 related to the public policy exception and arbitrability defence, along with the UNCITRAL Model Law’s role in attempting to shape Member States’ arbitration legislations. The research highlights the very great diversity of interpretation and applications by different Member States due to their varied legal, cultural, and economic backgrounds.

The third step, investigation of the enforcement-friendly stance, is made through a quantitative study of national court decisions. The study analyses the frequency and success rates of public policy and arbitrability defences. Emphasis is placed on the appropriate methods used for the study. Transparency for verification of the results is emphasised. The results are presented in percentage terms and graphs for ease of visualisation.

“The findings suggest, contrary to the conclusion one would reach from a study limited to the diversity of interpretation and application noted above, that there is in fact a strong pro-enforcement approach, with only 11% of cases successfully invoking the public policy or inarbitrability defences in challenged proceedings”, says Victoria and concludes:

“This study brings to the surface the unexpectedly strong influence of the New York Convention 1958 and the Model Law in achieving consensus despite the diversity highlighted. Its insights offer suggestions for future research and legislative development in this field, and I hope that the study contributes to the understanding of public policy and arbitrability as concepts as well as defences, underscoring their application in different legal contexts and providing empirical evidence on the pro-enforcement spirit!”