The New York Convention on the Recognition and enforcement ojjhreign arbitral awards done at New York, JO June 195N, is the most successful convention in international commercial arbitration. /1 is currently ratified by around 158 states all over the world without any difference in the level of development or political or social realities of states. The Convention gives a visa for arbitral awards made in a Convention state and guarantees enforcement elsewhere of the award except on few exhaustive grounds. It imposes obligations on slates and their courts to recognize and enforce foreign arbitral awards and arbitration agreement.<>. lt also imposes on courts the obligation to stay proceeding with a matter subject to arbitration agreement. Despite its interest to increase FD/ inflow and trade and the academia 's and business communities' curiosity for ratification, Ethiopia has not yet ratified the NYC. This paper aims at demonvtruting the challenges and prospects of ratification of the Convention by Ethiopia. Afier analyzing empirical and doctrinal evidences it. therefore, argues that by ratifying the Convention Ethiopia would be able to increase trade and investment, get access to lower interest rares and rates of return, improve its international image, improve on competition for trade and investment. improve its arbitration system, decrease it's courts Abstract 1 case loads and help its move towards the accession 10 WTO. The thesis has four chapters um/ a section; chapter one deals with the introduction and the research process. Chapter two contains three broad sections: on nature, advantages and disadvantages international commercial arbitration with in the first section; genesis, nature, purpose. advantages and disadvantages of the New York Convention in the second section and; the l]l\'C!TRA L Model Law in the third section. Chapter three, deals with the Ethiopian rules on arbitration by mainly consulting the Civil Cude and Civil Procedure Code of the country. Chapter four, the main part, demonstrates the Challenges and prospects of Ethiopian rutiflcution of the New York Convention and its future going forward. This is followed by a section on the conclusion of the study. Key words: commercial arbitration, New York Convention, Ethiopia, Ethiopian laws. Advantages, Disadvantages, UNCITRAL