The statute of limitations for confirming a foreign commercial arbitral award in the United States is typically three years. This relatively short statute of limitations may pose a challenge on award creditors, especially if they discover later in the enforcement process that the award debtor has assets in the United States. However, the award creditor may consider first converting the award into a foreign judgment, then seeking recognition and enforcement of that foreign judgment in U.S. courts to take advantage of the longer statute of limitations for enforcing foreign judgments, specifically, foreign money judgments. This workaround is possible because a judgment, even if it enforces an arbitral award, is considered a separate instrument from the award itself. This article highlights four strategic considerations for a party seeking to recognize and enforce a monetary award in the United States using this method.
What Is the Statute of Limitations?
Foreign Arbitral Awards. Because the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) is silent on the statute of limitations for recognizing and enforcing an arbitral award, the law of the recognizing and enforcing jurisdiction generally determines the statute of limitations. In the United States, foreign awards are typically subject to the Federal Arbitration Act (FAA) Chapter 2’s limitations period of three years. See 9 U.S.C. §207. Tolling for this three-year limitations period is relatively limited. Some courts have held that tolling is possible “only if [a party] shows (1) that [the party] has been pursuing his rights diligently, and (2) that some extraordinary circumstances stood in [the party’s] way and prevented timely filing.” BCB Holdings Ltd. v. Gov’t of Belize, 110 F. Supp. 3d 233, 245 (D.D.C. 2015); see also Ramirez v. Yates, 571 F.3d 993, 997 (9th Cir. 2009).
