Article 1 of the New York Convention states:
“This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.”
Considering the above, we are informed of two standards in identifying foreign arbitral awards; the standard of territory; the standard of non-domestic.
The basis of the standard of territory is as follows; the territory where an award is made is the territory where the award is enforced, the award is domestic; if the award is foreign, the New York Convention shall apply.
According to the New York Convention, it is easy to say that although foreign factors may be involved in an award, the award may simply be domestic as the territory where the award is made and the territory where the award is enforced are the same.
The standard of non-domestic infers the territory where an award is made is the territory where the award is enforced; however, if the performing court considers the arbitral award not to be domestic, the award shall be considered foreign and the New York Convention shall apply. According to the legislative background of the New York Convention, the non-domestic standard is mainly applied to contracts agreed upon by both parties and the awards are made in accordance with the law of the foreign country. The court in the place of performance can justify this standard as the award is made in accordance with the other countries’ law. It is noteworthy that the standard of the territory will prevail when both standards may be applied. The standard of non-domestic is a complementary standard, which shall not be in conflict with any other and shall be applied to extend the scope and application of the New York Convention.