Moral Rights & Public Policy: Enforcing California Arbitration Awards Under the 1958 New York Convention

The New York Convention's promise is deceptively simple: an arbitral award made in one contracting state shall be recognized and enforced in another. After more than six decades in operation, with 172 contracting states, the Convention has largely delivered on that promise. But nowhere is the gap between the Convention's general pro-enforcement architecture and its practical limits more interesting than in the international entertainment industry. This blog post considers a set of enforcement risks that practitioners advising on California-seated arbitrations have not yet adequately grappled with. The argument is this: as standard-form entertainment agreements turn toward California-law-governed frameworks that reflect U.S. assumptions about creators' rights and contractual constructs, the public policy exception under Article V of the Convention is becoming a more plausible practical enforcement obstacle in civil law jurisdictions.

The Architecture of Article V: Narrow by Design, Variable in Practice

The grounds for refusing recognition and enforcement under Article V of the New York Convention are exhaustive and, on their face, narrow. They include procedural deficiencies in the arbitral process (Articles V(1)(a)–(d)), the non-binding or annulled status of the award (Article V(1)(e)), non-arbitrability of the subject matter (Article V(2)(a)), and the public policy of the enforcing state (Article V(2)(b)).

The Second Circuit’s landmark ruling in Parsons & Whittemore Overseas Co. v. Société Générale de l’Industrie du Papier, 508 F.2d 969 (2d Cir. 1974), established the interpretive template that most common law jurisdictions have since followed: Article V grounds are to be construed narrowly, and the public policy exception will only justify refusal where the award offends the “forum state’s most basic notions of morality and justice.” The Second Circuit’s standard has been consistently applied by federal courts. See e.g. Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310 (2d Cir. 1998), Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (5th Cir. 2004). However, Article V(2)(b) is not a uniform standard. Its content is supplied by the domestic legal order of each enforcing court, meaning that what constitutes “public policy” in California or New York is not what it means in Paris, Stockholm, London, Singapore, or Munich. For entertainment disputes, this heterogeneity is not only a technical inconvenience but a very central enforceability risk.

Furthermore, California’s entertainment industry presents a set of enforcement dynamics that distinguish it from most other sectors in which international commercial arbitration operates. Understanding those dynamics is essential context for appreciating how and why moral rights-based public policy objections can arise. Namely, creator’s rights in U.S. entertainment contracts are often structured so that the same underlying legal relationship can be subject to either commercial arbitration or guild arbitration—or both at once. This layered structure creates further unique risks under Article V(1)(d).

The Globalization of Entertainment & Hollywood’s Guild Arbitration System

Los Angeles is the contractual home of the global entertainment economy. The major studios and streaming platforms, and the three dominant record labels all operate under contracts governed by California law, often administered by California-based institutional arbitral forums—mainly ICC, JAMS and AAA—and embedded in a guild framework that has no precise equivalent anywhere else in the world. For example, the Writers Guild of America, the Screen Actors Guild-American Federation of Television and Radio Artists, and the Directors Guild of America each maintain arbitration regimes under their respective collective bargaining agreements. For domestic enforcement, guild awards are confirmed through federal courts under the Labor Management Relations Act, 29 U.S.C. § 185, applying the deferential “draws its essence” standard established by the Supreme Court’s Steelworkers Trilogy—United Steelworkers v. Enterprise Wheel & Car Corp., 80 S.Ct. 1358 (1960). Thus, a notable feature of entertainment arbitration in the U.S. is the potential for concurrent proceedings. Hypothetically, guild arbitration could cover the collective bargaining agreement’s labor claims and commercial arbitration for separately negotiated deal terms. The exclusive nature of most guild arbitration clauses limits the scope of this overlap to disputes involving subject matter that are distinct from the collective bargaining agreement. That said, the legal framework and rights of a U.S. collective bargaining agreement remains operative into global enforcement proceedings.

Because although Los Angeles is the contractual home of the entertainment economy, the modern supply-chains of entertainment production are spread across the world. California’s own Film Commission reported in 2023 that the state lost approximately USD 1.46 billion in production tax revenue with roughly 25% of that loss attributable to production migrating to foreign jurisdictions rather than other U.S. states. Thus, when a dispute concerns a specific production shot abroad—say, a credit or residuals dispute tied to a project financed and partly shot in the UK, Canada, or Hungary—the production entity, human labor, the completion bond, or the escrowed production funds may be structured and held entirely outside the U.S., even though the signatory studio is California-based. Enforcement would then require a foreign court’s cooperation.

Guild awards are procedurally exposed in this sense because Article V(1)(d) tests the tribunal’s composition and procedure against the parties’ own agreed process. A guild’s arbitration architecture is typically assembled from a collective bargaining agreement together with separately maintained internal policy manuals rather than a single, codified administered rule set. See Marino v. Writers Guild of America East, Inc. 992 F.2d 1480 (1993) describing this multi-tiered architecture as an established fact of record. A foreign court has considerably more room to find that some step of the process was “not in accordance with the agreement of the parties” than it would applying the same inquiry to an ICC, JAMS, or AAA award. The practical issue is thus straightforward: where a claim is structured as a private commercial arbitration under recognized institutional rules, the resulting award will carry a cleaner enforcement profile. This structural question should be assessed at the outset of negotiating the entertainment contract.

Moral Rights & California Arbitration Awards: Public Policy Concerns

With a globalized entertainment economy where the relevant players and assets are spread across the world, Article V(2)(b) containing the public policy exception presents a central enforcement risk: guild compensation frameworks and California entertainment contracts in general, are often premised on the U.S. work-for-hire doctrine, under which the studio is the statutory author and copyright owner of works created by employees. See e.g. the Writers Guild of America West. That premise is not shared by many civil law jurisdictions, where the human creator is invariably the first author; and an award whose logic depends on it may face resistance before an enforcing court whose copyright law is structured on fundamentally different principles.

This dichotomy of premises stems from a diverging approach by the international community’s implementation of copyright law under the Berne Convention. The Berne Convention requires its signatories to protect authors’ moral rights of attribution and integrity independently of economic rights. See the Berne Convention for the Protection of Literary and Artistic Works, Paris Act 1971, Article 6bis. When the U.S. decided to implement the Berne Convention it expressly noted in the Implementation Act of 1988 that the Convention “is not self-executing” under the U.S. legal acquis. Therefore, California and U.S. law, extends moral rights only to visual art under the Visual Artists Rights Act, 17 U.S.C. § 106A, a provision that the courts have read narrowly and that has no application to most of the commercial entertainment content. Hollywood contracts can e.g. include broad assignments, waivers of attribution rights, and contractual clauses that modify or repurpose a writer’s or director’s work.

An arbitral award issued under such an agreement awarding damages in a manner that presupposes the validity of an integrity rights waiver, could present an enforcing civil law court with precisely the kind of conflict that Article V(2)(b) is designed to resolve in favor of the local mandatory rule. Civil law systems have taken their Berne Convention obligations seriously. In France, the droit moral codified in the Code de la propriété intellectuelle, Articles L121-1 à L121-9 are considered “perpetual, inalienable and imprescriptible” and have been treated as a rule of ordre public, resistant to contractual derogation. See Cour de Cassation, Chambre civile 1, du 28 janvier 2003, 00-20.294. German law is comparable: §§ 13-14 of the Act on Copyright and Related Rights (Urheberrechtsgesetz) protect rights of attribution and integrity as a matter of the monistic conception of authorship. The German system treats the moral right of attribution and integrity as inseparable from authorship itself, i.e., the human creator remains the author for all purposes, even where the economic exploitation rights are fully assigned. Whether that rule express a legislative value fundamental to the German legal order, and thus a legitimate basis for ordre public objections, has not yet been tested. Similarly, §3 of the Swedish Copyright Act (1960:729), protects the author’s moral rights through attribution rights and establishes the non-derogatory “right of respect” that one’s works are not “offended”. This right may only be waived with binding effect insofar as the waiver concerns a use limited in kind and scope. Blanket-waivers or waivers with similar effects are, thus, null and void.

Whether a challenge based on moral rights would succeed in a specific case depends on how directly the award implicates the waived right, and on the enforcing court’s threshold for ordre public intervention. In many civil law jurisdictions, this has not yet been tested. The practical consequence is that entertainment awards seeking enforcement in civil law jurisdictions carry a higher public policy risk-profile than awards from most other commercial sectors, and the risk is not uniform: minimizing exposure requires, at minimum, avoiding unlimited or blanket moral-rights waiver language and, ideally, expressly reserving the creator’s moral right to avoid the ordre public objection even under the strictest of regimes.

Pre-Enforcement Planning as Strategic Considerations

The New York Convention is a robust enforcement instrument, and the entertainment industry’s cross-border arbitration framework generally functions well within it. But the Convention’s public policy exception is not a dormant provision. In jurisdictions with strong moral rights traditions and mandatory legislation on authors’ economic rights, the gap between a California-law arbitral award and local mandatory rules is concrete.  Enforcement strategy should, therefore, be approached as a sector-specific exercise rather than a general application of the New York Convention’s principles. Arbitration clauses in entertainment agreements with international dimensions should be structured with enforcement in mind. Where an enforcement risk is identified, the solution may be a governing law clause, a targeted carve-out from the arbitration agreement, or a strategic decision to restructure the damages theory so that the award does not require an enforcing court to validate a waiver that is void under its mandatory rules.