On 17 July 2019, Papua New Guinea (PNG) deposited its instrument of accession with the United Nations Secretary-General to become the 160th state to accede to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and the fourth country of the South Pacific region.
The New York Convention is widely recognised as a foundation instrument of international arbitration. It requires courts of other signatory United Nations member states to give effect to arbitration agreements and to recognise and enforce awards made in other states, subject to specific limited exceptions.
This is a positive development for the South Pacific resulting from the assistance of the Asian Development Bank (ADB) through its Law and Policy Reform Program and the United Nations Commission on International Trade Law (UNCITRAL).
The introduction of international arbitration in the South Pacific region, as a successful dispute resolution mechanism to resolve cross-border commercial disputes, assures foreign investors that contractual rights and obligations will be upheld, which in turn, encourages foreign investment and trade, and improves the region's access to international markets and investments. Therefore, this is important progress for PNG and will have a direct impact on the number of foreign investors and the different types of major development projects that are proposed.
The ADB have also recently provided assistance to the Government of Fiji in the drafting of the Fiji International Arbitration Bill 2017 to implement the New York Convention into domestic law. This follows Fiji's accession to the New York Convention on 27 September 2010 (in force from 26 December 2010).
There are now four of the fifteen countries of the South Pacific region that have acceded to the New York Convention, consisting of the Republic of Marshall Islands, Cook Islands, Fiji and PNG.
The New York Convention will come into force for PNG on 15 October 2019.
ADB and UNCITRAL will continue providing support to the PNG Government in the preparation of an Arbitration Bill to give domestic law effect to the New York Convention.