Article V, Paragraph 1, Item (A) of the New York Convention as a Ground For Refusal of Recognition and Enforcement of a Foreign Arbitral Award with Regards to Incapacity of a Party

Abstract

The incapacity defense of one or both of the parties to an arbitration agreement, envisioned in Art. V, para. 1, i. (a) of the New York Convention has been interpreted differently in many jurisdictions over the 66 years of existence of the Convention. This article aims to create a discussion and commentary regarding some of the problems that arise before the current case law of Bulgarian courts in applying the unified grounds for refusal of recognition and enforcement of foreign arbitral awards, specifically concentrating on the incapacity defence under the Convention. Upon its adoption, the Contracting States considered the need to introduce a directly applicable legal instrument, due to the significant difference in the conditions. The application of the NYC poses a challenge to both the legal theory and the jurisprudence. The validity of the problems analysed is conditioned by the need to ensure the correct interpretation of the Convention.