In a request that highlights the benefits of international arbitration, Plaintiff Jiewen Lin has filed a Petition to Confirm and Enforce a Foreign Arbitration Award against several Defendants. The case is pending before Judge O’Toole in the U.S. District Court for the District of Massachusetts. According to the Complaint, from 2009 to 2013 the Plaintiff loaned Defendant Binglin Zhong approximately $2 million to ameliorate cash flow problems with his business. Zhong only made partial payments and, after blowing past a date certain by which he was required to pay the overdue principal and interest, the Plaintiff filed a request for arbitration—a remedy expressly provided by the parties’ loan contract. The arbitration took place in China before the Guangzhou Arbitration Commission. Despite receiving notice of the proceeding, Mr. Zhong was absent from the hearing and the Commission heard the case and issued a decision relying solely on evidence submitted by Ms. Lin. The Commission ruled in favor of Ms. Lin, ordering Mr. Zhong to repay the loan principal and interest, a notarization fee, attorneys’ fees, and the arbitration fee in an amount totaling approximately $1,679,619. Ms. Lin contends Mr. Zhong has failed to pay this sum.
In the Complaint, Ms. Lin now turns to the United States court system to enforce her Chinese arbitration award and order Mr. Zhong to pay. In doing so, she relies on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, colloquially known as the “New York Convention.” Adopted by more than 80 percent of the world’s countries, the New York Convention aims to ensure that arbitration awards entered in one member country are recognized and enforced in every other member country throughout the world. The New York Convention accomplishes this by effectively turning foreign arbitration awards into judgments enforceable by national courts. Thus, in this case, Ms. Lin can petition the U.S. District Court for the District of Massachusetts to enforce her Chinese arbitration award against Mr. Zhong—a Massachusetts resident—and use the power of the court to compel him to pay. In this way, the New York Convention adds teeth to the enforceability of international arbitration, ensuring that the resulting awards are enforced equally throughout the world. Parties considering international arbitration should thus be reassured that their opponents will not be able to avoid the result by hiding behind the court system of their home country.