Commercial arbitration has numerous advantages, but the recognition and enforcement of foreign awards in international commercial disputes present significant challenges. One legal tradition defines arbitration as referring disputes to the decision and opinion of a third party, rather than national competent courts. Foreign commercial arbitration pertains to resolving disputes related to commercial and trade matters. The primary criteria for distinguishing whether an award is foreign or domestic are the place of issuance and the governing law of arbitration. Of these two, the place of issuance is more reliable and is also endorsed by the New York Convention. Furthermore, following the UNCITRAL Model Law, if one of the arbitration's constituent factors is foreign, the award is considered foreign. According to the UNCITRAL Model Law, the term "commercial" should be interpreted broadly to include matters arising from any relationship of a commercial nature, whether contractual or non-contractual. In judicial practice, U.S. courts tend to broadly interpret the scope of what qualifies as commercial.

To resolve disputes through arbitration, a prior agreement between the parties is necessary, as arbitration cannot proceed without an arbitration agreement, which serves as a form of private law. After an arbitral award is issued, the presence of the debtor’s assets in a country suffices for the courts of that country to have jurisdiction to enforce the award under the New York Convention. Therefore, the creditor must investigate where the debtor's assets are located, identify where enforcement procedures are more straightforward, and determine the most suitable court jurisdiction.

Under the New York Convention, as soon as the applicant for recognition and enforcement presents the arbitral award, they are entitled to obtain recognition and enforcement. It is then the opposing party or the court that must prove the existence of one of the grounds for refusing recognition and enforcement listed in Article 5 of the Convention. Article 5 of the New York Convention allows countries to reject arbitration awards that conflict with their public policy. According to the Convention, the benchmark is the public policy of the country where the award is invoked. Public policy lacks a fixed scope and varies according to circumstances. Many regard this relativity as being location-dependent, calling it "spatial relativity," where public policy differs from one place to another.

International commercial arbitration and its outcomes can influence not only the parties involved but also the public order and social systems of countries and may even conflict with them. The compatibility of an award with a country's laws is one of the conditions considered in arbitration laws worldwide. However, emphasis is placed on distinguishing its concept in domestic law and private international law. Public policy is also described as a set of rules concerning the proper governance of a country. Its nature requires universal respect, making any breach inconceivable. Public policy can be invoked wherever fundamental principles and societal institutions are violated. This concept has spatial and temporal relativity, influenced by cultural, religious, and social diversity, and aligns with the time and place of each country. No one can predict the public policy of a country tomorrow.

The interests of society are among the most significant considerations within the concept of public policy, which inherently includes them. Some argue that the criterion of public policy is primarily subject to the judgment of the legal community where the award is enforced. The New York Convention, however, refers to the public policy of the country where recognition and enforcement are sought and does not mention transnational public policy. Thus, the New York Convention does not provide a place for transnational public policy. International public policy, recognized by various countries, refers to principles that all countries globally respect and cannot tolerate being violated, such as an arbitrator favoring the formation of an arbitration tribunal through fraud.

This article seeks to examine how U.S. federal courts, in judicial practice, define the criterion of public policy regarding the recognition, enforcement, or rejection of international commercial arbitration awards under Article 5(2)(b) of the 1958 New York Convention. It also investigates whether sanctions have been considered a public policy criterion. Generally, U.S. judicial practice has been supportive and consistent in recognizing and enforcing awards issued in both domestic and foreign commercial arbitrations. This legal approach aligns with the common view of arbitration as a suitable method for resolving disputes arising from international commercial transactions and presents arbitration as an attractive alternative to court proceedings.

One of the notable features of arbitration in the U.S. is that U.S. courts are more inclined to accept foreign arbitral awards than foreign court judgments. According to Martin Ferga (one of the four U.S. representatives on the arbitration panel of the International Centre for Settlement of Investment Disputes of the World Bank), this is due to the fast-paced nature of transnational commercial activities, or in other words, the globalization of the U.S. economy. The complexities associated with the laws of multiple jurisdictions, judicial and cultural differences among merchants, and complex corporate legal entities, all increasingly play a role in economic utility and efficiency, seeking a dispute resolution method that aligns with parties’ expectations for fairness and the application of judicial cultures. Arbitration alone meets both of these aspects.

The final section of this article analyzes some cases reviewed by U.S. courts to illustrate how the public policy criterion has been narrowly interpreted.