ARE STATES ‘PERSONS’ FOR THE PURPOSES OF THE NEW YORK CONVENTION?: THE RULING OF THE UNITED STATES COURT OF APPEALS FOR THE DC CIRCUIT IN ZHONGSHAN FUCHENG INDUSTRIAL INVESTMENT CO. LTD V FEDERAL REPUBLIC OF NIGERIA (No. 23-7016) IN VIEW

Abstract

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) applied for the recognition and enforcement of foreign arbitral awards which arose out of differences between ‘persons’. The question had persisted on whether ‘persons’ in the Convention included States, whether acting in their sovereign capacity or acting in their private capacity. The aim of this study was to review the state of law on the purport of the word ‘persons’ for the purposes of recognition and enforcement under the New York Convention in the light of the recent split decision of the US Court of Appeals for the DC Circuit in Zhongshan Fucheng Industrial Investment Co. Ltd v Federal Republic of Nigeria. The objective of this study was to determine whether ‘persons’ included States both acting in their sovereign capacity and in their private or commercial capacity. Doctrinal method was employed in the course of this research with the analyses of the relevant sections of the New York Convention itself and case laws. This research found that the New York Convention did not define the word ‘persons’ used in Article 1 (1). It was further found that the failure to define the word ‘persons’ in the New York Convention had sometimes led to controversies on whether States qualified as such, whether acting in their sovereign capacity or private capacity. It was also found that except to the extent that States consented, sovereign acts of a State generally enjoyed sovereign immunity. It was therefore recommended that the New York Convention should be amended to include a clause that should specifically define ‘persons’ as natural and juridical persons, including a State only when acting in private or commercial capacity.