Finnish company Nokia Oyj recently commenced what could be a protracted battle to enforce an international arbitration award won last month against Blackberry-maker Research in Motion Ltd. (“RIM”). In late November, Nokia sued RIM in federal court in California to enforce the Swedish arbitrator’s decision, which stated that Nokia is entitled to receive royalties on RIM’s sale of WLAN-compliant mobile devices. “Wireless local access network systems” or “WLAN” technology allows mobile devices to connect to WiFi networks.
Until the dispute is resolved – presumably through the negotiation of a royalty or licensing agreement between RIM and Nokia – Nokia will likely have to sue to enforce the arbitral award in several countries where RIM is selling WLAN-compliant mobile devices. In addition to the United States, Nokia says that it has already filed suits in Britain and Canada to enforce the arbitrator’s decision.
In certain jurisdictions, Nokia’s task will be made substantially easier by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (commonly referred to as the “New York Convention”), which governs the enforcement of international arbitration awards in signatory countries, including the United States and 145 other countries. In the United States, for instance, Section 2 of the Federal Arbitration Act codifies the New York Convention and provides for the streamlined enforcement of foreign arbitral awards. Article V of the Convention sets forth limited grounds for challenging the enforcement of an award, including insufficient notice to the losing party and other procedural irregularities.
Following Nokia’s lead, companies doing business internationally should consider the advantages of arbitrating cross-border disputes. Not only is arbitration likely to be less expensive and faster than litigating a dispute in court, the New York Convention often makes a multi-front battle to enforce an arbitral award – as Nokia’s is sure to be – significantly easier.