Enforcing Vacated International Arbitration Awards : An Economic Approach

This article argues for an economic approach to a widely-debated issue in the international commercial arbitration literature: whether arbitration awards vacated in the arbitral situs should nonetheless be enforceable in other jurisdictions. Under this economic approach, parties should be permitted to resolve the issue by contract, with the default rule being that vacated awards are not enforceable (with the possible exception of judgments of the vacating court procured in bad faith). Conceptually, this approach is most like the approach reflected in In re Chromalloy Aeroservices, which is the only current approach that plainly focuses on the agreement of the parties in determining the enforceability of vacated awards. Ironically, although the Chromalloy court adopted the proper conceptual approach, it misapplied that approach on the facts of the case, too readily finding the parties had contracted around the default