Globalization is the new buzz word and the lingua franca of international business. With the numerous advantages flowing through globalization, this new process is taking a new shape by getting more critical and unyielding. To elucidate further on its uphill spin, an onlooker can observe its increasing complexity through features such as the free market economy, the growing volume of international trade and the settlement of disputes between parties engaged in commercial activities across national boundaries. In this respect, the development and growing significance of international commercial arbitration over the last thirty years has strived hard to satisfy the always innovative and challenging practical needs of the international business community. Parties to international business transactions tend to accommodate arbitration as a speedy, flexible and secure method of dispute resolution. Nevertheless, international arbitration is in a position to withstand its own risks and loopholes. Within the arbitration region, arbitration proceedings involving a state as a party are judged under a very specific category. Indeed, history has demonstrated that states have a natural tendency to retain and maintain their sovereignty especially with regard to their judicial sovereignty. This tendency does not automatically eclipse when states agree to adopt any of the dispute resolution mechanisms such as arbitration. Moreover, each states' expectations differs from those of private parties who resort to arbitration. It should be noted that private parties who resort to arbitration is considered as a tantamount to escape from the strict requirements of litigation, whereas for states it is a tantamount to a loss of liberty and power.
[...] Conclusion: Lessons of the Noga arbitration case . Never say Never Again . The Noga case is illustrative of a case where a federal court authorized the enforcement of an arbitral award against a sovereign government. The Second Circuit ruled that under federal common law and international law, a foreign arbitration award can be confirmed against a sovereign nation where the arbitration agreement was signed by that nation's government and where the government but not the nation itself participated in the arbitration proceedings. [...]
[...] Richard Bovin, International arbitration with states: an overview of the risks J. INT'L. ARB. 285-299 (2002). The very nature of the purchased products has an impact and suggests that the Government entered into these agreements for the benefit of the Russian people and economy. Paul Williams, Jennifer Harris, State Succession to Debts and Assets: the modern law and policy HARV. INT'L.J 366-383 (2001). The first award was rendered in February 1997 and granted Noga approximately $23 million in damages plus accrued interest from April 1993. [...]
[...] Judge Dennis Jacobs, while concurring, expressed the opinion that the importance of determining which body of substantive law had to be applied to the present case should not be downplayed. He demonstrated that the question before the Court should have been decided under federal common law. As indicated before, the conclusions reached are the same whether international, Russian or federal common law is taken into account. Judge Jacobs justified his position and its result “serves the important federal policy favoring international arbitration agreements”. [...]
[...] BOVIN Richard, International Arbitration with States: An Overview of the Risks, J. INT'L. ARB 285-299 (2002). CARRIER Renaud, France: Shrinking of Immunity from Execution and Discovery of Diplomatic Immunity from Execution, MEALEY'S INT'L ARB. REP (2003). CARVER J.P, The Strengths and Weaknesses of International Arbitration involving a State as a party: Practical Implications, ARB. INT'L (1985). CRAWFORD James, OLLESON Simon, The Continuing debate on a U.N. convention on State responsibility, ICLQ 54.4 (959) (2005). CUNIBERTI Gilles, KAPLAN Charles, Arbitrage et volonté implicite de l'Etat de renoncer à son immunité d'exécution, JCP éd. [...]
[...] The scope of the Convention is wide : commercial arbitral agreement, unless it is between two United States citizens, involves property located in the United States, and has no reasonable relationship with one or more foreign states, falls under the Convention” Jain v. De Mere F.3d (7th Cir. 1995). Arbitral awards not within the scope of the Convention are the subject of Chapter one of the FAA. 21 U.S.T U.N.T.S The New York Convention is the most significant contemporary international agreement relating to commercial arbitration. [...]
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