THE ENFORCEMENT OF ARBITRAL AWARDS UNDER THE ICSID CONVENTION AND PUBLIC POLICY

Abstract

International arbitration emerged as a response to cross-border trade and foreign investments. It is an instrument which enables the uninterrupted flow of foreign capital which has a significant impact on the national economy, particularly considering that arbitral awards are enforced in national jurisdictions. The profit-oriented economic trend and its impact on individual states is even more visible in international investments, given that the foreign investor who operates on the territory of a Host State is included not only in economic but also in social affairs of that State. This poses a challenge: how should a State preserve national interests? Referring to the relevant provisions of the New York Convention (1958) and the ICSID Convention (1965), the author elaborates on the idea that public policy may be used in the enforcement stage as justification for non-compliance with the rendered arbitral award. The author introduces relevant arbitration practice that has challenged the interpretation of Article 54 of the ICSID Convention, and analyzes the impact it has had on the ICSID system.