Liechtenstein: the last piece of the puzzle

The Alpine principality - known for its private banks - became the last EEA country to sign the convention last month. It will enter into force in the country on 5 October.

Albert Jan van den Berg, a renowned Dutch arbitrator and New York Convention scholar, says that the development follows Liechtenstein's introduction of new arbitration legislation based on the Model Law, which came into force last November - replacing an 1895 act. He says: 'The country is situated between Austria and Switzerland - both active international arbitration centres - and it wants some of the action'.
Van den Berg adds that he can 'can only speculate' why Liechtenstein hasn't been a signatory until now, mentioning the country's conservatism and proliferation of private wealth as possible factors. 'It certainly came as a surprise to one client of mine who wanted to enforce against assets in Liechtenstein a couple of years ago,' he says.
'Now the government recognises that things have to change and perhaps sees a future in the services industry,' van den Berg continues. The country also has the potential to become, like the Netherlands, a springboard for arbitration claims brought by corporate vehicles. Low business taxes and easy rules of incorporation mean that letterbox companies account for a reported 30 per cent of its state revenue.
The convention was adopted in New York on 10 June 1958 and entered into force a year later. The first countries to sign were Belgium, Costa Rica, El Salvador, Germany, India, Israel, Jordan, the Netherlands, the Philippines, and Poland. Today, there are 146 countries that have either signed or ratified the convention. Pakistan passed legislation to enact it just last month, after five years of relying on temporary ordinances.
States may include a 'reservation' when acceding to the Convention. Liechtenstein's accession applies 'the basis of reciprocity' which means it recognises and enforces awards 'made only in the territory of another Contracting State,' under article 1(3) of the Convention.
German-speaking Liechtenstein is not a member of the EU. According to the CIA World Factbook, it has the highest GDP per person in the world and the world's lowest external debt. Its currency is the Swiss franc.
The country is one of three surviving principalities in Europe. Monaco acceded to the New York Convention in 1982 but the principality of Andorra, in the eastern Pyrenees, is not a signatory.
Van den Berg has recently developed a website dedicated to the New York Convention.