FAN Mingchao: 60 Years of New York Convention -- Is It still in its Infancy

Keynote Speech on the 60th Anniversary of New York Convention and “One Belt and One Road” Conference

by Mr. FAN Mingchao

Director of the ICC Arbitration &ADR，North Asia

Good morning, ladies and gentlemen.

Actually, it's not really morning. It's already 12 o'clock. It's never wise to stand between you and your lunch, although Ms. Kim will share my burden, who will be the last speaker. And I also apologize for the little delay in adding my slides. I thank the staff for helping me.

So, Secretary Joubin-Bret, President Xiaochun LIU, it is a real pleasure and honour for me to participate in this 60th anniversary of the New York Convention, as well as the 35th anniversary of the Shenzhen Court of International Arbitration. I thank the organizers, the Shenzhen Court of International Arbitration, and the UNCITRAL Regional Centre for Asia-Pacific very much for this opportunity.

My topic of the presentation is “60 Years of the New York Convention -- is it still in its Infancy?” That's a question. I would like to go through very quickly, as briefly as possible, the present, the past, and the prospects.

The present, apparently, as we know, Queen Mary has published its newest survey on international arbitration which also includes a lot things about arbitration enforcement. Then we will go through a little bit the story before 1958, a little bit the operation of what Anna has just said. Then we will look at the prospect, what is go beyond arbitration.

The Queen Mary survey 2018 provides some very good news about arbitration in terms of enforcement. Among all the most valuable characteristics of international arbitration, enforcement of awards has again ranked number 1 among all of them. Apparently it was also ranked number 1 in 2015. Therefore, enforceability of international arbitration remains the most attractive characteristic towards all the client and companies.

So I stole the map from UNCITRAL. As we can see, almost every country in the world has been covered by UNCITRAL's New York Convention. Likely, we are going to have the rest of them to be covered by the New York Convention so that international arbitration can be used more widely in the future.

A little bit about the story before 1958.

I thank Anna very much for mentioning ICC of its efforts bringing the draft convention of the New York Convention to the world. As we all know, that the enforcement of international arbitration award had been there before the New York Convention under the Geneva system. In 1923, there was the Geneva Protocol on Arbitration Clauses, then in 1927, Geneva Convention on the Execution of Foreign Arbitral Awards. However, ICC ambitiously provided to the United Nation its report on awards in order to perfection of enforcement of international arbitral awards in 1953. Then we are very happy that it was accepted by the United Nations as an initiative to be considered in 1954, and also it went into the official procedure from 1955, then 1956, 1958, and we see now the final act and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards by the United Nations. This actually only took us five years to come up with a really successful convention all around the world. This is a reproduction of the report and the preliminary draft of the convention adopted by the Committee on International Commercial Arbitration at its meeting of 13 March 1953.

I apologize for the incapability to preserve all the original documents, but we are very happy to reproduce this document for your reference. These are the documents that we found at the United Nations to witness all the proud procedure we had gone through to make it possible for the world, the New York Convention, including the agenda, the provisional agenda and so on and so forth. Unfortunately, the resolution is not high enough. But what I can provide you is the clear version of the preliminary draft of the convention, which ICC provided to the United Nations. And the final version of the draft convention which was submitted for the adoption.

To be honest, the wording said were a little bit different but very nicely all the topics that were important to the business community were covered, and this preliminary draft convention has been a work from ICC and proudly together with the United Nations, afterwards, to make it a successful convention.

The reason why I provided this history to you is that I would like to emphasize the importance of the cooperation between the public and the private sectors to achieve the great things. New York Convention apparently is a convention made by an international, intergovernmental organization, which reflects the interests of public sectors, the sovereign interests as well as the private interests. Therefore it is impossible for us to imagine, without the cooperation between private and public sectors, any great things can be achieved. One of the good examples is the cooperation between ICC and the United Nations. The history of the cooperation is presented here. In 1946, ICC was granted top-level consultative status with the UN. Then in 1953, the New York Convention. 1969, ICC and UN established the GATT Economic Consultative Committee. 1984, ICC and UNEP started the 1^st World Industry Conference on Environment Management. In 1992, UN endorsed ICC INCOTERMS Rules, which is a kind of interaction between UN and ICC. Then in 2001, ICC and UNCTAD established Investment Advisory Council. And finally, in 2017, ICC takes up its position as a representative of the international business community. It's a very good example of interaction between private and public to make things great.

Again, we return to the Queen Mary survey. The bad things. Both in 2018 and 2015, these are the concerns that the clients have towards international arbitration. Number 1, cost. Number 2, lack of effective sanction. Number 3, lack of power in relation to third parties. Number 4, lack of speed. Number 5, lack of insight into arbitrators' efficiency. It means arbitration is good, but arbitration is not perfect. Therefore, are we going to go beyond arbitration? Why? As mentioned, there is lack of effective sanction during the arbitral process, lack of third-party mechanism, lack of appellate mechanism, cost, efficiency. These are all the big concerns of the private sectors. Why did this happen?

Up to now, after 60 years, we are not seeing any competing or parallel global enforcement framework to meet increasing diversified demand in the business community and inspire the reform of arbitration itself. Therefore, how do we resolve that?

Number 1, to establish some completing global frameworks. For example, UNCITRAL has done great work to establish the mediation for settlement enforcement framework, which will be expected within a year, and also litigation. Litigation, apparently, is still the major dispute resolution mechanism in the world. How do we survive, how do we live with this fact? The Hague Conference has also done a great job. Furthermore, the reinterpretation of the classic principles. Confidentiality has been considered one of the most important features of arbitration, but what about transparency? UNCITRAL has adopted a transparency convention towards arbitration and ICC has done a lot to make arbitration more transparent, for example, ICC has published a composition about the tribunal on the website for people to know who is arbitrating ICC arbitration cases.

Number 2, the measures, the efforts to adopt effective measures that has been taken in litigation, for example consolidation, early dismissal, and emergency arbitration.

And finally, party autonomy versus EP, expedited procedure. Party autonomy apparently is the cornerstone of arbitration. However, is the interpretation of absolute party autonomy the best thing to serve the interests of the parties? Are we supposed to reconsider the interpretation of party autonomy through the procedure of expedited procedure mechanism, and so on and so forth? These are open questions for us to consider in the future.

Therefore, to summarise, the private sector, including arbitral institutions, cannot wait for the public sector to legislate, yet it needs to interact with others to improve the overall framework of the international business environment and dispute resolution. I also listed several documents for your reference. The Mediation Settlement Convention, The Hague Conference Convention on the Judgment, the UN Convention on Transparency, as well as ICC's Report on the Local Procedure with regard to the Enforcement of Foreign Arbitral Awards, for your reference.

So, before I wrap up, I would like to answer my own question. Is New York Convention still in its infancy? The New York Convention has been a great success, but more importantly, it prevents us from being too satisfied to progress to a more comprehensive and more successful international legal framework for dispute resolution. It inspires us to work together to promote a better business environment through better dispute resolutions. It brings me to the end of my presentation. My best wishes for the great success of this conference.

Thank you very much.