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ARBITRATION WORLD Understanding the Public Policy Exception Under the New York Convention by John Kelly and William KQ Ho (Melbourne) THE NEW YORK CONVENTION It is difficult to overstate the importance of the New York Convention (otherwise known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ) ("NY Convention") to international arbitration. The NY Convention mandates all adopting states to recognise and enforce international arbitral awards unless one of the exceptions applies. One such exception is where the recognition or enforcement of an award would be contrary to the public policy of the country where recognition and enforcement is sought. It is widely accepted by courts that the exceptions listed under Article V of the NY Convention should be narrowly and strictly interpreted, the emphasis being that arbitral awards should be recognised and enforced unless there are exceptional circumstances. Nevertheless, many unsuccessful parties have sought to resist the enforcement of an unfavourable award by arguing that it would be contrary to the public policy of the country where enforcement is sought (Art V(2)(b) of the NY Convention). The concept of "public policy" is not defined under the NY Convention, and this task is left to each adopting state. Not surprisingly then, this has resulted in the notion of public policy being manifested in various forms. 73