Belize's Adoption Of The New York Convention

Belize is a contracting state to the New York Convention, having become the 168th state party in 2021. The Convention, which relates to the recognition and enforcement of foreign arbitral awards, will enter into force for Belize on 13 June 2021.

Belize acceded to the New York Convention in 2021

Belize is a Contracting State to the New York Convention, having acceded to the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in 2021. This means that Belize has agreed to recognise and enforce foreign arbitral awards made in the territory of another Contracting State, providing that certain conditions are met.

The New York Convention is a multilateral treaty, which entered into force in 1959, and is widely considered to be a foundational text in the field of international commercial arbitration. As of 2024, there are 172 parties to the Convention.

By acceding to the New York Convention, Belize has agreed to be bound by its provisions, which include:

• Recognition and enforcement of arbitral awards: Contracting States undertake to "recognise" arbitral awards as binding and to "enforce" them in accordance with the rules of procedure of the territory where the award is relied upon.
• Limited grounds for refusal of recognition or enforcement: The Convention sets out limited grounds on which recognition or enforcement of an award may be refused, such as incapacity of a party, invalidity of the arbitration agreement, or awards that deal with matters which are not capable of settlement by arbitration.
• Application of the Convention: The Convention applies to arbitral awards made in the territory of a Contracting State and to awards that are not considered as domestic awards in the State where recognition or enforcement is sought.

The New York Convention is an important tool for promoting international trade and investment, and Belize's accession to the Convention demonstrates its commitment to providing a stable and predictable legal framework for foreign investors. It is worth noting that Belize's arbitration law, the Arbitration Act, also incorporates the New York Convention into domestic law, further strengthening the country's commitment to upholding arbitration awards.

The Convention applies to arbitral awards made after Belize's accession

Belize acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention, on 15 March 2021, becoming the 168th State Party to the Convention. The Convention entered into force for Belize on 13 June 2021.

The New York Convention, established in 1958, is a foundation instrument of international arbitration. It requires courts of contracting states to enforce arbitration agreements and recognise and enforce arbitral awards made in other states, subject to specific limited exceptions. The Convention's principal aim is to ensure that foreign and non-domestic arbitral awards are not discriminated against.

The application of the Convention to arbitral awards made after Belize's accession demonstrates the country's commitment to adhering to international standards and obligations regarding the recognition and enforcement of foreign arbitral awards. It also highlights the importance Belize places on creating a predictable and stable legal environment for international arbitration.

By acceding to the New York Convention, Belize has joined a large number of jurisdictions that have adopted the Convention. This move by Belize contributes to the global recognition and enforcement of foreign arbitral awards, promoting consistency and certainty in international arbitration.

Belize's Arbitration Act incorporates the New York Convention into domestic law

Belize formally acceded to the New York Convention in 2021. The country's Arbitration Act, last amended in 1980, incorporates the provisions of the convention into domestic law. While Belize is not a party to the convention, the Caribbean Court of Justice (CCJ), Belize's final appellate court, has held that the provisions of the convention embodied in the Act by the 1980 Ordinance give effect to the New York Convention in domestic law.

The New York Convention applies to the recognition and enforcement of foreign arbitral awards and the referral by a court to arbitration. It is very successful, with 172 contracting states as of January 2023. An arbitration award issued in any contracting state can generally be enforced in any other contracting state, subject to certain limited defences. These include incapacity of a party, improper notice of proceedings, an award dealing with issues outside the scope of the arbitration, and the award conflicting with public policy.

The convention is particularly relevant for cross-border commercial transactions, as it provides an enforceable means of alternative dispute resolution. Other advantages of arbitration include the ability to select a neutral forum, the finality of awards, flexible procedures, and confidentiality.

Belize initiated negotiations for a Belize- El Salvador partial scope agreement in 2023

Belize is a signatory to the New York Convention, having formally acceded to the Recognition and Enforcement of Foreign Arbitral Awards in 2021.

In December 2023, Belize and El Salvador took steps to strengthen their trade relations by signing a General Framework Agreement, committing both countries to begin negotiations for a Partial Scope Trade Agreement (PSA). This agreement serves to solidify the friendship, cooperation, and solidarity between the two nations, as well as their commitment to enhancing trade relations for mutual benefit.

The initiative is in line with the Belizean government's mandate to improve trade relations with Central America. The agreement aims to facilitate the expansion of exports of Belizean products, create a more conducive environment for attracting investments, and encourage export diversification with new products.

The first round of negotiations for the Belize-El Salvador PSA was launched in October 2022. The agreement seeks to strengthen bilateral cooperation by granting preferential margins on tariffs, eliminating non-tariff barriers, providing legal certainty to investments, and holding capacity-building initiatives.

The agreement will also improve economic activity for local farmers and enhance their technical abilities. It will provide legal certainty for investments by aligning the legal frameworks of both countries and creating a stable environment that encourages businesses to explore opportunities for collaboration and innovation.

Additionally, the PSA includes provisions for the promotion of investment between both countries, joint venturing, and the facilitation of necessary permits, licenses, and contracts for technical, commercial, or administrative assistance related to investments. It also emphasizes discouraging anti-competitive business practices and protecting investments from nationalization, expropriation, or similar measures.

The chapter on investments in the agreement contains provisions for the settlement of disputes between investors and the host country. Furthermore, the agreement covers land transportation to facilitate the trade of goods between Belize and El Salvador, ensuring freedom of transit for vehicles and their drivers.

A Land Transportation Committee will be established to address the problems currently faced at the Belize-Guatemala borders.

Belize has no bilateral investment, free trade, or bilateral taxation treaties with the US

Belize is a small economy in Central America with a GDP of US$1.2 billion in 2020. The country has no bilateral investment, free trade, or bilateral taxation treaties with the US. However, it is a qualifying country under the US Generalized System of Preference (GSP) and the US-Caribbean Basin Trade Partnership Act (CBTPA).

Belize actively seeks foreign direct investment (FDI) to relieve fiscal pressure and diversify its economy. While there are no laws explicitly discriminating against foreign investors, they face challenges such as a lack of transparency, land insecurity, bureaucracy, delays, and corruption. US firms have also faced difficulties in areas like bidding, procurement, and dispute settlement, especially with state-owned enterprises (SOEs).

Belize has Bilateral Investment Treaties with several countries, including Austria, Cuba, El Salvador, Italy, the Netherlands, the Republic of China (Taiwan), the United Arab Emirates, and the United Kingdom. It also has a Partial Scope Agreement (PSA) with Guatemala and economic agreements with Taiwan and Mexico. As a member of the Caribbean Community (CARICOM), Belize coordinates its foreign, economic, and trade policies with other members.

Belize's small, tourism-dependent economy is vulnerable to external shocks, such as the global health crisis and economic downturns in the US. Its proximity to North America has led to a reliance on tourism as the primary economic sector. The agriculture sector, the second most important, is based on exports like sugar, bananas, and citrus juice and is susceptible to environmental disasters and preferential market access policies.

Belize's stable currency is pegged to the US dollar, and the country has a history of anti-corruption laws and efforts, including signing the UN Convention Against Corruption (UNCAC) in 2016.

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