The enforcement of annulled awards: an important step in the right direction

The article analyses Commisa v. PEP in which the District Court for the Southern District of New York recognized a Mexican award, despite its annulment at the seat, on the grounds that the annulment was "repugnatnt to fundamental notions of what is decent and just in the United States" and violated the "basic notions of justice" to which the United States subscribe. The reason for this finding was that the annulment was based on a statute that retroactively rendered the underlying dispute unarbitrable. The District Court's decision is an important development in the jurisprudence that rejects the proposition that awards annulled at the seat cannot be recognized. In the United States the enforceability of such awards was first upheld nearly two decades ago in Chromalloy and continued to be held possible by later cases, albeit subject to strict conditions which were not considered to be satisfied. By holding that Chromalloy "remains alive" and refusing to defer to a foreign annulment that flouted recognized principles of international arbitration, Commisa is evidence of the emergence of a more modern and arbitration-friendly approach to the treatment of annulled awards. The article discusses the broader implications of Commisa in the light of the debate on Article V(1)(e) of the New York Convention and on the treatment of foreign annulment judgements and advocates a more pro-arbitration stance aimed at preventing undue interferences by the courts of the seat from extending extraterritoriality.