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Just how strong is the law on enforcement of international arbitration?  Can a country enforce a foreign arbitral award that the country of origin has vacated?  See MGL Notes on Contracts, Numbers 2 and 3, concerning arbitration.
One reason often cited for choosing arbitration over court litigation is the enforceability of the resulting award;  foreign arbitration is generally considered to be more easily enforceable than the decision of a foreign court.  Just how firmly enforceable arbitral decisions are was explored recently in a U.S. Federal case to enforce an award made in a Mexican arbitration.  Corporación Mexicana de Matenimiento Integral, S. de R.L. de C.V.  v. Pemex-Exploración y Producción, No. 10 Civ. 206 (AKH), 2013 WL, 4517225 (S.D.N.Y. Aug. 23, 2013)

The case involved a Mexican subsidiary of the U.S. company KBR (Corporation Mexicana de Mantenimiento Integral, S. de R.L. de C.V. -- or simply "COMMISA") and the Mexican state oil company (PEMEX) and arose from a 1997 contract for COMMISA's maintenance of some offshore oil platforms for PEMEX.  A few years later, either COMMISA ceased work and was allegedly in breach or PEMEX tried by administrative action to rescind the agreement, allegedly resulting in its breach of the agreement. Because the parties had  so chosen in the contract (as PEMEX was empowered by its charter to do), arbitration followed, under the auspices of the highly respected International Chamber of Commerce (ICC).  The panel of arbitrators ruled in favor of COMMISA, awarding more than $300 million in damages, and, while PEMEX launched a series of attempts to nullify the arbitration, COMMISA moved to enforce the award in federal court in New York, in a jurisdiction where PEMEX raised capital and held assets.  Among other arguments, PEMEX claimed  that the panel had acted beyond the acceptable scope of arbitration, because an administrative rescission by a state entity is not subject to arbitration in Mexico.  The argument was correct, but only because of a statute that came into effect after commencement of the contract and after the statute of limitations expired for challenging the Mexican decision in the courts.  The U.S. court ultimately held that the law should not apply,   In short, the New York court considered the factors allowed under the New York Convention and decided that it had to enforce the arbitral award in the US, even though the case had been vacated in its original jurisdiction.

For a full treatment of what occurred, see the following article on the subject (click here)