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Introduction
International treaties are agreements under international law between sovereign states and international organizations. Such parties and disputes are governed by treaty where such treaties include treaty provisions that have the effect to govern either the enforcement of the award or the remedy for recovery of suits. Recovery suits are the subject of these.
Following this introduction, this research note discusses the role of international treaties in enabling recovery suits, their legal basis, enforcement, and problems, concentrating on instruments like the Hague Conventions, the United Nations Convention on Contracts for the International Sale of Goods (CISG), and bilateral investment treaties (BITs). It also discusses enforcement, conflicts between jurisdictions, and treaty compliance.
International treaties may be grounded in the principles of international law and domestically incorporated by states. Treaties are a primary source of international law as per Article 38(1) of the Statute of the International Court of Justice. Once ratified, such treaties bind the signatory states according to pacta sunt servanda (agreements must be kept) as articulated in Article 26 of the Vienna Convention on the Law of Treaties (1969). Domestically, the role of treaties depends on the state’s legal system. Monist systems automatically integrate treaties into domestic law when ratified, while dualist systems need legislative action to implement the treaty. For example, India has a dualist system in which treaties require the approval of Parliament before they can be applied in the domestic arena.
New York Convention (1958): The Convention on the Recognition and Enforcement of Foreign Arbitral Awards – popularly known as the New York Convention – is an important treaty in settling cross-border disputes. This obliges signatory states to recognize and enforce arbitral awards rendered in another contracting state, subject to certain conditions.
Directly Related to Recovery Suits: The New York Convention governs the enforceability of monetary awards resulting from international arbitration in various jurisdictions. For instance, in the Indian case of NTPC v. Singer Company (1992),) the Supreme Court endorsed the applicability of the New York Convention in the cases of enforceability of arbitral awards.
Hague Convention on the Recognition and Enforcement of Foreign Judgments (2019): The objective of this Convention is to establish a consistent legal arrangement concerning the acknowledgment and enforcement of foreign judgments in civil or commercial issues.
Importance to Recovery Suits: It means that judgments can be enforced across jurisdictions without worrying about procedural bottlenecks. While not yet ubiquitous, its ability to harmonize enforcement mechanisms is huge.
United Nations Convention against Corruption (UNCAC, 2003): The United Nations Convention Against Corruption (UNCAC) encompasses guidelines for recovering stolen assets with a strong emphasis on global collaboration in the tracing, freezing, and repatriation of illegally obtained assets. [Relevance to Recovery Suits] It supports states with recovery suits for assets drained by corrupt individuals, made famous by the Abacha Loot in Nigeria.
Bilateral investment treaties (BIT)s: BITs typically feature the settlement of disputes between investors and host states, including arbitration. They offer Investment Agreements framework for investors to recoup the damages from the states for violations of Investment Agreements as seen in disputes with International Centre for Settlement of Investment Disputes (ICSID)
European Union Regulations: Inside the EU, Brussels I (recast) governs the jurisdiction in civil and commercial matters and recognition of judgments.: Relevance to Recovery Suits: Helps quicken cross-border recovery suits in EU by offering standardized legal provisions
International treaties provide for the recognition and enforcement of foreign judgments, overcoming jurisdictional challenges:
Asset Tracing and Recovery
International treaties, such as UNCAC, facilitate states in locating and repatriating assets secreted in overseas jurisdictions. The Mechanisms include:
Non-uniform Adoption
Not all states are parties to key treaties, creating inconsistencies in enforcement. The Hague Convention on Foreign Judgments in Civil and Commercial Matters has seen little ratification, for example.
Sovereign Immunity
Sovereign immunity is also commonly applied, which can hinder enforcement of judgments or arbitral awards through recovery suits.
Disputes Between Public Policy and Domestic Law
Public policy exceptions are often used as a justification to prevent the enforcement of certain legal decisions. A well-known example is the case of Renusagar Power Co. v. General Electric Co. (1994), where the Indian Supreme Court linked foreign awards to Indian public policy and therefore it is limited.
Overcoming Procedural Obstacles
The procedural requirements in different jurisdictions can be very burdensome and are often the reasons for the delays in the recovery efforts.
Case Law Analysis
During this case, the foriegn aribtration earned Yukos shareholders $50 billion under the Energy Charter Treaty. The enforcement of it was made a considerable challenge owing to Russia’s non-compliance and subjects of state defiance in international cross border recovery actions.
This case under a BIT concerned the enforcement of an arbitral decision against India. The tribunal’s dependence on the principle of most-favored-nation treatment stressed the role of treaty provisions in enforcement actions and recovery.
This classical dispute that came before the Permanent Court of International Justice (PCIJ) created the principle of reparation, and thus highlighted the perspective of international law in recovery conflicts.
International conventions such as the UNCITRAL Model Law on Cross-Border Insolvency are essential in providing a framework for the recovery of debts owed by insolvent persons in different jurisdictions.
More and more corporations are resorting to international conventions in defence of their contractual rights and the recovery of damages in international trade.
Certain treaties that facilitate the recovery of stolen assets are useful to developing countries in instances where there is corruption or other illicit movement of money across borders.
Recommendations for Effective Utilization of Treaties
Cross-border disputes require the application of international law `and hence international treaties are critical in recovery suits. These treaties aim at ensuring that the reciprocal enforcement of judgments and recovery of assets is easy and that there are working arrangements among various countries. Of great concern is the fact that these treaties are not uniformly adopted and their adoption and procedural issues are slow This means that these countries will be unable to take full advantage of those treaties. With globalization increasing international transactions across borders, the importance of international treaties in recovery suits will only become more critical in the years to come.
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