Fiji has ratified the 1958 Convention on the Recognition of Foreign Arbitral Awards.
Arbitration awards in Convention countries may now be directly enforced in Fiji, and vice versa.
Introduction
1. On 27 September 2010, Fiji ratified the 1958 Convention on the Recognition of Foreign Arbitral Awards (New York Convention). The Convention enters into force in Fiji, in accordance with its articles, on 26 December 2010. The Convention has 145 State parties, which include all of Fiji’s major trading and investment partners. It adds a necessary international dimension to Fiji’s (under-used) arbitration laws.
2. For decades, the New York Convention has been an important facilitator of international commerce. This long-overdue step should (theoretically) improve the confidence of offshore investors, infrastructure providers, financiers and other commercial parties doing business in Fiji who prefer arbitration to court proceedings as a means of resolving disputes.
What the Convention does
3. In brief, the Convention allows for courts in Convention countries (which now include Fiji) to:
(a) directly enforce, as though they were judgments, arbitration awards made in other Convention countries
(b) refer contractual disputes to arbitration if the contract in question has an arbitration clause.
What it means
4. This means:
(a) offshore parties can come directly to the Fiji courts to enforce arbitration awards they have obtained against Fiji parties in other Convention countries.
Previously, an arbitration award could not be easily enforced in Fiji, making arbitration unattractive for the resolution of disputes in cross-border contracts involving Fiji parties (including the Fiji Government)
(b) offshore parties, if they are sued in Fiji over contracts which contain arbitration provisions, can ask Fiji courts to refer those disputes to arbitration in accordance with the contracts.
Previously, Fiji courts had limited ability to order parties to take their disputes to arbitration in another country.
Fiji businesses investing, working or trading offshore and who may gain arbitration awards in other countries will now have the same rights in foreign courts.
What remains to be done
5. Existing laws and court rules need to be amended to fully give effect to the New York Convention. Without these amendments, Fiji courts’ ability to implement the provisions of the Convention is limited. New York Convention processes can be legally technical, so the Fiji courts will also have to develop the necessary skills and experience to effectively implement them. The Convention provides normal legal safeguards for parties who wish to resist enforcement. However the ratification of the Convention could lead to an increase in the use of arbitration to resolve disputes and give confidence to overseas contracting parties that they will be able to recover money or other property in Fiji if they gain an arbitration award against a Fiji party. Effective implementation of the Convention processes will be the challenge.
Please contact any of:
Richard Naidu
Partner
Direct Dial +679 322 1816
[email protected]
Jon Apted
Partner
Direct Dial +679 322 1812
[email protected]
if you need any further information on dispute resolution and arbitration.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.