| Abstract: | The Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, often referred to as the New York Convention, has established itself
as a regulatory and enforcement instrument which is crucial to international
trade. This is evident from the fact that more than 150 countries have so far
ratified the convention. Although Ethiopia is one of the earliest signatories,
it has not yet ratified the convention. Hence an inquiry into the possible
rationale for Ethiopia’s reluctance is necessary. Such an inquiry can only be
made by comparing the advantages and disadvantages of ratifying the
convention, as any decision to withhold ratification, after signing, must have
been motivated by an assessment of the pros and cons of the Convention.
The advantages of ratifying the Convention are many. The major benefits
include boosting a country’s goodwill as business friendly and contract
enforcing, helping a country borrow on lower rate of interest and enhancing
investor motivation toward lower rate of return on investment, ease of
enforcing contracts abroad for domestic parties, ease of attracting foreign
investment, and so on. The disadvantages are mainly two: that of
impairment on sovereignty like any other treaty, and elimination of the
opportunity for domestic traders to avoid payment of international debts.
In view of the pros and cons higlighted above, it is fairly safe to conclude
that there are more advantages than disadvantages in ratifying the 1958 New
York Convention. This can be substantiated by the lack of any member
country that has withdrawn from or renounced the Convention. Compared to
the ICSID Convention from which some countries have withdrawn upon
finding that its demerits outweigh its advantages, the absence of such
withdrawals from the New York Convention indicates that ratifying it is not
as worrisome as it is often thought from the outside. Therefore, it is high
time for Ethiopia to consider ratifying this Convention. |
