[PASSED] Commercial Arbitration Recognition

[Cretox State]

"A proposal on the international recognition and enforcement of arbitral awards. We firmly believe that arbitration, especially of international commercial disputes, carries numerous benefits over court litigation, including the ability to select a neutral forum, the confidentiality of proceedings, the finality of arbitral awards, and the flexibility of proceedings. However, these benefits can only be realized when arbitral awards are enforceable across borders."

Commercial Arbitration Recognition

Category: Free Trade
Strength: Significant

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The World Assembly,

Realizing that the member nations of this Assembly are significantly outnumbered by their external counterparts,

Believing it the responsibility of this august body to further the prosperity of the nations under its aegis and confer substantial benefits upon its membership,

Recognizing the importance of strengthening international commerce in achieving the above,

Highlighting the effectiveness of alternate dispute resolution, particularly through arbitration, in furthering international commerce by ensuring that any disputes arising from international commercial agreements can be efficiently resolved in in a forum that confers neutrality, finality of judgement, confidentiality, and procedural flexibility, all of which hinge upon the enforceability of resultant judgments, and

Wishing to provide a framework for the international recognition and enforcement of judgement arising from arbitration of international commercial disputes, thereby promoting free trade and commerce, hereby:

1. Defines:
   1. "arbitration" as the deciding of a legal dispute in a forum outside of a member nation's judiciary or international court of law;
   2. an "arbitral award" as a judgement on the merits of an arbitration by an arbitration tribunal, including judgments made by arbitrators appointed for a particular case as well as judgments made by a permanent arbitral body; and
   3. an "arbitration agreement" as any agreement providing for arbitration of a dispute;
2. Declares:
   1. all member nations must recognize arbitration agreements within their legal jurisdiction; and
   2. all member nations must recognize arbitral awards as binding, and enforce them to the extent required by the arbitral award;
3. Clarifies that member nations may not impose unnecessarily onerous conditions on the recognition and enforcement of arbitral awards within their legal jurisdiction;
4. Further clarifies that member nations may refuse to recognize or enforce an arbitral award if any of the following conditions are met:
   1. the arbitral award or the arbitration agreement preceding it are invalid under said award or agreement's governing law;
   2. the party against whom the award is invoked was given insufficient notice of the arbitration proceedings, or was otherwise unable to present its case;
   3. the arbitral award concerns matters beyond the scope of the arbitration agreement;
   4. the procedure of the arbitration was not in accordance with the arbitration agreement or its governing law;
   5. the arbitral award has not yet become binding on the involved parties; or
   6. the subject matter of the arbitral award cannot be resolved through arbitration;
5. Asserts that nothing in this resolution shall be construed to limit the ability of individuals, nations, and organizations to enter into an arbitration agreement;
6. Clarifies that this resolution shall only apply to arbitration agreements, arbitration, and arbitral awards arising from international commercial agreements between two firms, a firm and a government, or two governments, or similar agreements of an international character between two firms, a firm and a government, or two governments; and
7. Further clarifies that nothing in this resolution applies to arbitration, arbitration agreements, or arbitral awards issued by or under the jurisdiction of a non-member nation.

[Cretox State]

International Arbitration Accord

Category: Advancement of Industry
Area of Effect: Corporate Enterprise

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The World Assembly,

Understanding the importance of efficient dispute resolution to the success of any international commercial agreement,

Noting the significant advantages of arbitration as a means of efficient dispute resolution for international commercial agreements, including forum neutrality, finality of judgement, confidentiality, and flexibility of procedures,

Recognizing that the viability of arbitration as a means of dispute resolution hinges on the international enforceability of judgement arising from arbitration, and

Wishing to provide a framework for the international recognition and enforcement of judgement arising from arbitration of disputes, hereby:

1. Defines:
   1. "arbitration" as the deciding of a legal dispute in a forum outside of a member nation's judiciary;
   2. an "arbitral award" as a judgement on the merits of an arbitration by an arbitration tribunal, including judgments made by arbitrators appointed for a particular case as well as judgments made by a permanent arbitral body; and
   3. an "arbitration agreement" as any agreement providing for arbitration of a dispute;
2. Declares:
   1. all member nations must recognize arbitration agreements within their legal jurisdiction; and
   2. all member nations must recognize arbitral awards as binding, and enforce them to the extent required by the arbitral award;
3. Clarifies that member nations may not impose unnecessarily onerous conditions on the recognition and enforcement of arbitral awards within their legal jurisdiction;
4. Further clarifies that member nations may refuse to recognize or enforce an arbitral award if any of the following conditions are met:
   1. the arbitral award or the arbitration agreement preceding it are invalid under said award or agreement's governing law;
   2. the party against whom the award is invoked was given insufficient notice of the arbitration proceedings, or was otherwise unable to present its case;
   3. the arbitral award concerns matters beyond the scope of the arbitration agreement;
   4. the procedure of the arbitration was not in accordance with the arbitration agreement or its governing law;
   5. the arbitral award has not yet become binding on the involved parties; or
   6. the subject matter of the arbitral award cannot be resolved through arbitration;
5. Asserts that nothing in this resolution shall be construed to limit the ability of individuals, nations, and organizations to enter into an arbitration agreement.

[Tinhampton]

Delegate-Ambassador Alexander Smith: Ambassador whatshisface, you have authored no less than three draft proposals in recent months pertaining to arbitration. Do you have particular expertise in this area, or did you simply lose the Cretox State WA office's communal bet on who writes what?

[Cretox State]

Delegate-Ambassador Alexander Smith: Ambassador whatshisface, you have authored no less than three draft proposals in recent months pertaining to arbitration. Do you have particular expertise in this area, or did you simply lose the Cretox State WA office's communal bet on who writes what?

"Ambassador whatshisface here. It's a bit of a story, actually. To mark our nation's return to the international scene, the State authorized the construction of a new state-of-the-art headquarters for our WA delegation. Our usual domestic contractor for government buildings subcontracted the foreign [REDACTED] Corporation to provide materials and labor. The firm somehow managed to break nearly every single clause of the agreement, and as per said agreement, the two companies brought the issue to arbitration. The determination was massively in our contractor's favor, but [REDACTED]'s home country refuses to enforce it. So now the crooks got off basically scot-free, and I have to draft legislation out of the third floor bathroom in WA Headquarters.

Also, I've been having some issues with my employer (the State), and was unable to resolve them except through arbitration due to the predispute arbitration clause in my contract. Now, they're saying I have to submit to arbitration, or I'll get demoted. So consider this my personal revenge."

[Comfed]

“With all due respect, ambassador, your nation has authored many fine proposals to come before this assembly, but this proposal is not one of them. Arbitration is a way to make backroom deals at the expense of people. Strongly opposed.”

[Cretox State]

“With all due respect, ambassador, your nation has authored many fine proposals to come before this assembly, but this proposal is not one of them. Arbitration is a way to make backroom deals at the expense of people. Strongly opposed.”

"We wholeheartedly agree with your judgement that arbitration can be easily exploited in situations where the parties agreeing to it are in unequal positions of power. However, this proposal aims specifically to facilitate international commercial agreements, i.e., situations where the involved parties are entering into a mutually beneficial contract that is incredibly unlikely to be coerced. When disputes arise from international commercial agreements, arbitration is a highly desirable way of resolving said disputes. Let's say one of my nation's companies breaches a contract with one of yours. Do you truly believe that my nation's court system would be completely impartial in the matter? It would be far better to settle things in a neutral forum by experienced professionals in tune with international commercial culture, no? International arbitration allows for a high degree of neutrality in the dispute resolution process and in the seat where the arbitration is occurring. In today's global business environment, we would certainly value the highest degree of neutrality attainable in international disputes over any possible inconveniences of travel.

A further benefit of international commercial arbitration is the confidentiality of proceedings. While this may be an issue in situations where the balance of power is unequal, it is a huge advantage in commercial agreements. Would you seriously support distracting trials by media in cases where publicity is wholly unnecessary?

Arbitration is not a black and white issue, Ambassador. Few things ever are."

[Cretox State]

OOC: Bumping this.

[Tinfect]

"The Imperium absolutely will not allow entities beyond the Imperium to decide the application of law within our borders; we see no reason to allow a non-existent, mind you, 'arbitration' entity, supremacy over the jurisdiction of Imperial courts. They exist for a reason: to resolve disputes; to allow another entity to do so in stead of the Imperium is nothing more than to accept the idea that Imperial courts are incompetent."

[Kenmoria]

(OOC: How does this fall under ‘advancement of industry’? Your preamble does mention advancing commerce through arbitration, but that seems a rather tenuous link given that most of your clauses cover member nations’ recognition of arbitration.)

[Honeydewistania]

Strong against

[Cretox State]

(OOC: How does this fall under ‘advancement of industry’? Your preamble does mention advancing commerce through arbitration, but that seems a rather tenuous link given that most of your clauses cover member nations’ recognition of arbitration.)

OOC: My logic was that mandating enforcement of arbitral awards would ensure that arbitration of commercial disputes is effective and that its benefits concerning commerce can be fully realized. However, I think that Free Trade would be a better category here, since the inability to enforce judgement arising from dispute resolution is undoubtedly a strike against international commercial agreements and a barrier to commerce.

I'll update the draft more extensively later on.

[Cretox State]

"We've focused the draft exclusively on arbitration arising from international commercial agreements, in order to assuage concerns that this proposal would severely interfere with the sovereignty of national legal systems."

[Cretox State]

OOC: Bumping this for comments and tentative submission in a week or later.

[Honeydewistania]

I don't see the need for this

[Tinfect]

"Again, the Imperium has no desire to subordinate legitimate civil proceedings to unlawful and unqualified 'arbitrators'. Until it can be assured that this draft will not establish such things within the Imperium, it is unacceptable."

[Honeydewistania]

This was submitted, and

I don't see the need for this

[Cretox State]

I don't see the need for this

OOC: Quite surprising, given that the so-called "cornerstone of the international arbitration system," the New York Convention, is the basis of this proposal. Especially surprising considering that the significant benefits of arbitration in the resolution of international commercial disputes are well-documented, including here and here, as well as here, here, here, here, and here. All of this is moot if arbitral awards cannot be enforced across borders, and this enforcement in fact encourages voluntary compliance with contract provisions.

[Tinfect]

OOC:
This was submitted with virtually no drafting or effort to engage with criticism. Opposed on that ground, regardless of the draft.

[Cretox State]

OOC:
This was submitted with virtually no drafting or effort to engage with criticism. Opposed on that ground, regardless of the draft.

OOC: Sorry if I sound harsh, but this thread was up for quite a bit of time, and received no criticism other than Kenmoria's (which was addressed by changing the category), Honeydewistania's (which is a question of "need" that I addressed, the timing of which would not have mattered given the nature of the criticism), yours (which was aimed at the premise itself, and which I tried to address by limiting the scope to only disputes arising from commercial agreements), and Comfed's (which was, again, directed at the premise on the grounds that "arbitration is a way to make backroom deals"). No actionable, constructive feedback was given for over a month, and what feedback was given I tried to address as best as I could (it's difficult to act based off feedback that essentially says "I am opposed to the very idea of this proposal no matter what").

[Imperium Anglorum]

No actionable, constructive feedback was given for over a month, and what feedback was given I tried to address as best as I could (it's difficult to act based off feedback that essentially says "I am opposed to the very idea of this proposal no matter what").

Big agree on this.

That said, I think a non-reciprocity provision would have been good to add.

[Honeydewistania]

Why is the draft title 'International Arbitration Accord'?

[Cretox State]

Why is the draft title 'International Arbitration Accord'?

OOC: Erm... ignore the little man behind the curtain!

[Comfed]

OOC: I’m not voting for a Significant strength free trade proposal regardless of any arguments.

[Graintfjall]

To be honest, I will not be voting for [nor against] any of your proposals until you at the absolute least tell us the name of the person representing your nation in the WA. This is a roleplay game. Boasting of having 30 proposal drafts yet not even being able to engage with the basic way the game is played isn't a good thing.


That said:

No actionable, constructive feedback was given for over a month

I do sympathize.

[Cretox State]

To be honest, I will not be voting for [nor against] any of your proposals until you at the absolute least tell us the name of the person representing your nation in the WA. This is a roleplay game. Boasting of having 30 proposal drafts yet not even being able to engage with the basic way the game is played isn't a good thing.

That was not intended as boasting; I was responding to a question on that topic. However, you make a very valid point, and I'll start sorting that out shortly.