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Copyright © International Chamber of Commerce (ICC). All rights reserved.
( Source of the document: ICC Digital Library )
A. The Contracting State and the New York Convention
1. Name of Contracting State (also specify jurisdiction(s), if relevant)
United States of America.
Implementing jurisdictions: 50 states, 94 district courts and 12 circuit courts of appeal.
Note: This country answer identifies the general rules followed by the 12 circuits. To the extent any circuit or state has unique rules, those are included as well.
Explanatory note: The USA is a federal system comprising 50 states. Power is divided between the federal government, which comprises an executive branch, a legislative branch and a judicial branch, and the governments of the individual states, which also comprise executive, legislative and judicial branches.
The federal judiciary and most state court systems are tripartite comprising a trial court, an appellate court and a supreme court.
US district courts: The US district courts are the principal trial courts in the federal court system. There are 94 federal judicial districts (one or more in each state, the District of Columbia, Puerto Rico and the overseas territories).
US circuit courts: The 94 judicial districts are organized into 12 regional circuits. Each circuit has a US court of appeals that hears appeals from the circuit's district courts.
The Court of Appeals for the First Circuit hears appeals from district courts located in Maine, New Hampshire, Massachusetts, Rhode Island and Puerto Rico.
The Court of Appeals for the Second Circuit hears appeals from district courts located in New York, Connecticut and Vermont.
The Court of Appeals for the Third Circuit hears appeals from district courts located in Pennsylvania, New Jersey, Delaware and the Virgin Islands.
The Court of Appeals for the Fourth Circuit hears appeals from district courts located in South Carolina, North Carolina, West Virginia, Virginia and Maryland.
The Court of Appeals for the Fifth Circuit hears appeals from district courts located in Texas, Louisiana and Mississippi.
The Court of Appeals for the Sixth Circuit hears appeals from district courts located in Michigan, Ohio, Kentucky and Tennessee.
The Court of Appeals for the Seventh Circuit hears appeals from district courts located in Wisconsin, Illinois and Indiana.
The Court of Appeals for the Eighth Circuit hears appeals from district courts located in North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Missouri and Arkansas.
The Court of Appeals for the Ninth Circuit hears appeals from district courts located in California, Hawaii, Alaska, Arizona, Nevada, Oregon, Washington, Idaho, Montana and the territories of Guam and the Northern Mariana Islands.
The Court of Appeals for the Tenth Circuit hears appeals from district courts located in Wyoming, Utah, Colorado, New Mexico, Kansas and Oklahoma.
The Court of Appeals for the Eleventh Circuit hears appeals from district courts located in Florida, Georgia and Alabama.
The Court of Appeals for the D.C. Circuit hears appeals from district courts located in the District of Columbia.
US Supreme Court: The US Supreme Court hears a limited number of cases typically involving important questions about the Constitution or federal law.
US treaty ratification and implementing legislation: The federal government signs treaties that bind the USA internationally. Under the US Constitution, the head of the executive branch, the President, is authorized to enter into treaties. Once a treaty is ratified by the US legislature, the treaty becomes binding federal law. In some cases (incl. the New York Convention), the US legislature enacts implementing legislation that sets forth the statutory mechanism for implementation and allows for its enforcement.
2. Date of entry into force of the New York Convention
29 December 1970.
(Source: 9 U.S.C. §§ 201-208.)
3. Has any reservation been made under Art. I(3) of the New York Convention regarding:
(Sources: 9 U.S.C. § 201 Art. XVI; G. Aksen, 'Application of the New York Convention by United States Courts', Yearbook Commercial Arbitration, P. Sanders (ed.), Vol. IV (1979), pp. 341-59.)
(b) commercial relationships?
Section 202 of the United States Arbitration Act provides that '[a]n arbitration or arbitral award arising out of a legal relationship, whether contractual or not, which is considered commercial . . . falls under the Convention'.
(Source: 9 U.S.C. § 202.)
4. In addition to arbitral awards made in the territory of another State, the New York Convention (Art. I(1)) also applies to arbitral awards not considered as domestic awards in the State where recognition and enforcement are sought. Are there any awards rendered in your country that are not considered as domestic awards such that the New York Convention and the answers to this Questionnaire are applicable to them?
The Convention also generally applies to awards rendered in the United States when either (a) there is a non-US party to the arbitration or (b) even if the parties are all domestic, their relationship involves: (i) property located abroad; (ii) envisages performance or enforcement abroad; or (iii) has some other reasonable relation with one or more foreign States.
Case law relevant to the applicability of the New York Convention is as follows:
Signatory to a commercial contract requiring international arbitration was equitably estopped from avoiding arbitration with a non-signatory when the dispute that the non-signatory was seeking to resolve in arbitration was, at least in part, based upon the subject matter of the commercial contract that the estopped party had signed.
(Source: Sourcing Unlimited, Inc. v. Asimco Intern., Inc., 526 F.3d 38 (D. Mass 2008).)
If an arbitration agreement exists between the parties and is covered by the New York Convention, it is enforceable unless it is null and void, inoperative or incapable of being performed. Here, the court found that the arbitration clause falling within the scope of the Convention was effective upon the assignee of the contract containing the arbitration clause. The arbitration clause was originally between the English insurer and the Massachusetts owner of a commercial fishing vessel and required arbitration of all disputes in England. The court found that because the arbitration clause was valid between the original parties it was also valid for the assignee of the Massachusetts owner's rights.
(Source: DiMercurio v. Sphere Drake Ins., PLC, 202 F.3d 71 (1st Cir. 2000).)
Pre-printed arbitration clauses on the back of invoices sent by the seller to the buyer, which were not signed by both parties, were not 'agreements in writing' enforceable under the New York Convention.
(Source: AGP Industries SA, v. JPS Elastromerics Corp., 511 F. Supp.2d 212 (D. Mass 2007.)
An arbitral award rendered in the USA in a dispute between foreign entities was non-domestic and thus governed by the New York Convention. The court stated: 'we adopt the view that awards "not considered as domestic" denotes awards which are subject to the Convention not because made abroad, but because made within the legal framework of another country, e.g., pronounced in accordance with foreign law or involving parties domiciled or having their principal place of business outside the enforcing jurisdiction'.
(Source: Bergesen v. Joseph Muller Corp., 710 F.2d 928, 932 (2d Cir. 1983.)
Estoppel bound a non-signatory to an agreement to arbitrate where the non-signatory party received a direct benefit from the contract containing the arbitration agreement.
(Source: Best Concrete Mix Corp. LLC. v. Lloyd's of London Underwriters, 413 F. Supp.2d 182 (E.D.N.Y. 2006).)
An arbitration agreement in the plaintiff's employment contract was valid and enforceable under the New York Convention Act. The court specifically concurred with the district court's conclusion that contracts of employment for seaman are not excluded from the term 'commercial' in the New York Convention.
(Source: Razo v. Nordic Empress Stripping Ltd., 362 Fed. Appx. 243 (3rd Cir. 2009).)
The provision of the Federal Arbitration Act ('FAA') relating to non-domestic arbitral agreements applied to a dispute between a chemical plant operator and a shipping company regarding fuel deliveries where the operator had plants in Texas and Louisiana and the shipping company was a Swiss corporation with its principal place of business in Switzerland.
(Source: Glencore Ltd. v. Degussa Eng'g Carbons L.P., 848 F.Supp.2d 410 9 (S.D.N.Y. 2012).)
The order of the American Arbitration Association ('AAA') dismissing the respondent's claims owing to the parties' failure to make the required arbitration payment was final. Further, the court noted that Chapter 2 of the New York Convention Act was applicable because the award, i.e. order, was not domestic given that the contract, albeit between US citizens, was to be performed abroad (namely in Iraq).
(Source: Blackwater Security Consulting, LLC v. Nordan, 2011 WL 237840 (E.D.N.C. 2011).)
This issue has been addressed at least twice in the Fifth Circuit. In the recent case of Beiser v. Weyler, the Fifth Circuit held that where the Convention applies '[a]t least one of the parties to the agreement must not be a US citizen, or, if the agreement is entirely between US citizens, it must have some "reasonable relation" with a foreign state'.
Several years before, the US District Court for the Southern District of Texas opined that an award rendered in an AAA arbitration seated in Houston between Chinese and Pakistani companies could be enforced under the Convention. The court adopted the Second Circuit's Bergesen definition of 'non-domestic' as covering awards rendered in the USA between two foreign parties.
(Sources: Beiser v. Weyler, 284 F.3d 665 (5th Cir. 2002); In the Matter of the Arbitration Between: Trans Chemical Ltd. v. China National Machinery Import and Export Corporation, 978 F. Supp. 266 (S.D. Tex. 1997).)
A dispute 'related to' an arbitration agreement between a lessee and a lessor, even where the action in question was between the lessee and the lessor's subsidiary and even though it had not been established that the subsidiary would ultimately succeed in compelling the lessee to arbitrate because the arbitration agreement could conceivably affect the lessee's lawsuit given the subsidiary's assertion of defenses based on that agreement.
(Source: QPro Inc. v. RTD Quality Serv. USA, Inc., 2010 WL 2269988 (S.D. Tex. 2010).)
If an international arbitration clause 'falls under' the New York Convention, the Convention requires a district court to order arbitration. An agreement 'falls under' the Convention when (1) there is an agreement in writing to arbitrate the dispute, (2) the agreement provides for arbitration in the territory of a signatory to the Convention, (3) the relationship arises out of a commercial legal relationship, and (4) a party to the agreement is not a US citizen.
(Source: Lim v. Offshore Specialty Fabricators, Inc., 404 F.3d 898 (5th Cir. 2005).)
An arbitral award made in the USA, arising from a dispute not exclusively between US citizens, involving a contract that envisaged performance abroad and involving property abroad, was not domestic for the purpose of the applicability of the New York Convention.
(Source: Jacada (Europe), Ltd. v. International Marketing Strategies, Inc., 401 F.3d 701, 706-709 (6th Cir. 2005).)
The New York Convention applies to awards made in the USA between US parties if the underlying agreement was to be performed abroad.
(Source: Lander Co. Inc. v. MMP Investments, Inc., 107 F.3d 476 (7th Cir. 1997).)
The 21st Amendment does not authorize US courts to invalidate arbitration agreements between a domestic distributor and a foreign brewer under the Supremacy Clause.
(Source: Stawski Distrib. Co., Inc. v. Browary Zywiec S.A., 349 F.3d 1023 (7th Cir. 2003).)
The circuit court of the county of Missouri recognized that in order for agreements to fall under the Convention they must: involve property located abroad, envisage performance or enforcement abroad, or have some other reasonable relation with one or more foreign States. The court explained that where signatories to an arbitration agreement are all US citizens and nothing in the agreement gives rise to any relationship to a foreign State, s. 202's requirements of a 'reasonable relationship' are not satisfied.
(Source: Smoller v. Deutsche Bank AG, 2006 WL 2129792 (E.D. Mo) [not reported].)
The plaintiff brought an action to vacate the arbitration award construing the parties' arbitration agreement in an underlying vehicle sales agreement to allow for class arbitration. The defendant removed the action to federal court, asserting that his Danish citizenship rendered the arbitration award 'non-domestic' and the court therefore had jurisdiction. In rejecting the defendant's argument that the mere presence of a foreign national as a party to an arbitration agreement was sufficient to render an award non-domestic under 9 U.S.C. § 202, the court held that the proper test for establishing citizenship under the New York Convention was stated in 28 U.S.C. § 1332(a) ('a relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention').
(Source: North Motors, Inc. v. Knudsen, 2011 WL 2552573 (E.D.Mo. 2011).)
In the Ninth Circuit, an award made in the USA can be 'non-domestic' for purposes of the New York Convention when one of the parties to the agreement to arbitrate is a foreign entity (i.e. having foreign citizenship or its principal place of business outside the USA).
(Sources: Ministry of Defense of Islamic Republic of Iran v. Gould Inc., 887 F.2d 1357, 1363 (9th Cir. 1989); Certain Underwriters at Lloyd's London v. Argonaut Ins. Co., 264 F. Supp. 2d 926, 931-32 (N.D. Cal. 2003).)
For an arbitration agreement to fall within the Convention, one of the parties must be a non-US citizen. In Colorado Mills LLC v. Sunrich, LLC the court found that although the defendant's parent corporation was Canadian, the defendant's subsidiary-the party directly involved in the dispute-was a US company. The court stated that the plaintiff's arbitration request fell outside the Convention because the plaintiff had failed to show that the defendant's Canadian parent corporation-not directly involved in the dispute-was bound by the arbitration agreement between the US plaintiff corporation and the defendant's US subsidiary.
(Source: Colorado Mills LLC v. Sunrich, LLC., 2010 WL 1413173 (D. Colo. 2010).)
An arbitration seated in Tampa Florida between a US party and a German party was characterized as non-domestic. The court went on to hold that for such arbitrations, the exclusive legal test for setting aside would be Art. V of the New York Convention.
(Source: Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434 (11th Cir. 1998).)
An award issued by a tribunal sitting in Miami between a Canadian party and a Venezuelan party was considered non-domestic, and Art. V of the New York Convention supplied the legal test for determining whether the award should be set aside.
(Source: Four Seasons Hotels and Resorts, B.V. v. Consorcio Barr S.A., 377 F.3d 1164 (11th Cir. 2004).)
An injured seaman's contract that contained an agreement to arbitration did not require the injured seaman to submit his statutory claims against the defendant to arbitration under the New York Convention even though the statutory claims were pertinent to the cause of action giving rise to the arbitration.
(Source: Mayakan v. Carnival Corp., 2010 WL 2367228 (M.D. Fla. 2010).)
California follows the general rule that the New York Convention applies to awards considered non-domestic. An award that is rendered in the USA is considered non-domestic when either (i) one or more of the parties is not a citizen of the USA or (ii) the commercial transaction has some reasonable relation to a foreign State.
(Source: Gueyffier v. Ann Summers, Ltd., 50 Cal. Rptr. 3d 294, 302-304 (Cal. App. 2006).)
B. National sources of law
5. What specific sources of law are applicable to recognition and enforcement of foreign awards (e.g. statutes, regulations, codes, directives, other legal instruments)?
(i) Chapter 2 of the Federal Arbitration Act, 9 U.S.C. §§ 201-208, which implements the New York Convention in the USA; (ii) Chapter 1 of the Federal Arbitration Act, 9 U.S.C. §§ 1-16, but only to the extent not in conflict with the Convention or the implementing legislation in Chapter 2 of the FAA; (iii) Foreign Sovereign Immunities Act, 28 U.S.C. 1605(a)(6); (iv) Chapter 3 of the Federal Arbitration Act, 9 U.S.C. §§ 301-307, which implements the Panama Convention in the USA. In addition to the aforementioned federal statutes, there are numerous relevant state laws, including the following (listed by circuit):
(i) Maryland International Commercial Arbitration Act, Md. Code Ann. Cts. & Jud. Proc. §§ 3-2B-01-09 (2007); (ii) North Carolina International Commercial Arbitration and Conciliation Act, NC. Gen. Stat. §§ 1-567-30-87 (2007).
(i) Texas Civil Practice and Remedies Code, §§ 171.001-171.098 and §§ 172.001-172.215; (ii) Mississippi Code, §§ 11-5-1 - 11-15-35; (iii) Louisiana Revised Statutes, §§ 9:4201-9:4217 and §§ 9:4241-9:4276.
In Texas, the courts have confronted the question of how the Texas Arbitration Act interacts with the Federal Arbitration Act, of which the New York Convention is an integrated part. The Texas Supreme Court has stated that '[m]any courts of appeals wrongly view the FAA and TAA as mutually exclusive, but the US Supreme Court and this Court have held a different view for some time: the FAA only pre-empts contrary state law, not consonant state law' (In re D. Wilson Construction Co.). The Federal Court for the Eastern District of Louisiana has manifested a comparable legal position, stating 'because the Convention was negotiated pursuant to the Treaty power set forth in the US Constitution, and Congress passed enabling legislation to make the Convention the highest law of the land, the Convention must be enforced over all prior inconsistent rules of law' (Consorcio Rive, S.A. v. Briggs of Cancun, Inc.).
(Sources: In re D. Wilson Construction Co., 196 S.W.3d 774 (Tex. 2006); Consorcio Rive, S.A. v. Briggs of Cancun, Inc., 134 F. Supp. 2dd 789 (E.D. La. 2001).)
(i) Illinois International Commercial Arbitration Act, 710 ILCS 30/1-1-99-99 (modeled on the UNCITRAL Model Law); (ii) Indiana State Code, Chapter 34, Art. 57, IC-34-57 (domestic arbitration act available if all parties subject to suit in Indiana); (iii) Wisconsin Statutes, Chapter 788, Wis. Stats. 788 (domestic arbitration act).
A petition to confirm an arbitration award in the Ninth Circuit is governed procedurally by the Federal Rules of Civil Procedure applicable to the making and hearing of motions, as well as the local rules of civil procedure regarding motion practice. However, a district court generally is not required to hold a full evidentiary hearing on a motion to confirm an award.
(Source: Cypress Equipment Fund, Ltd. v. Royal Equipment, Inc., 1997 WL 106137 (N.D.Cal.).)
Applicable California laws include: California Arbitration Act, Cal. Code Civil Proc. §§ 1285-1294.2; California International Arbitration Act, Cal. Code Civil Proc. §§ 1297.11 et seq.; California Rules of Court, Rules 3.1100-3.1116, 3.1300-3.1312, Cal. Code Civ. Proc. §§ 1003-1020; local court rules and judge-made law.
Rules under the Federal Arbitration Act that are considered procedural in nature might not apply in California state courts.
(Source: Rosenthal v. Great Western Fin. Securities. Corp., 14 Cal. 4th 394, 409-10 (1996) (state procedural rules apply in state court proceedings except where such rules would defeat the purposes of federal law).)
When parties choose California law to govern their arbitration agreement, the procedural sections of the Federal Arbitration Act are not applicable.
(Sources: Cronus Investments, Inc. v. Concierge Svcs., 35 Cal. 4th 376, 380 (2005); Rambus, Inc. v. Hynix Semiconductors, Inc., 2007 WL 18829. *11-12 (Cal. App. 2007).)
The California Arbitration Act also governs the enforcement of arbitral awards in California courts and provides rules for seeking the confirmation or annulment of such awards. These rules may apply to petitions to enforce foreign or non-domestic arbitral awards.
(Source: Gueyffier, 50 Cal. Rptr. 3d at 302-304.)
Although the California International Arbitration Act does not contain specific rules governing the enforcement of awards, some of the provisions may still be relevant to petitions to enforce non-domestic arbitral awards where the arbitration is conducted in California.
(Sources: Mediafiction S.p.A. v. Miramax Film Corp., 2006 WL 3307068 (Cal. App. 2006); Cal. Code Civil Proc. §§ 1297.11-1297.13.)
In addition, petitions to confirm arbitral awards in California are governed procedurally by the rules generally applicable to the making and hearing of motions.
(Source: Cal. Code Civil Proc. § 1290.2; Cal. R. Ct. 3.1103(a)(2).)
Parties seeking to enforce arbitral awards in California courts must therefore consult the relevant Rules of Court, provisions of the Code of Civil Procedure, and any local court rules pertaining to law and motion practice.
(Sources: Cal. Code Civil Proc. § 1290.2; Cal. R. Ct. 3.1103(a)(2).)
The Eleventh Circuit has used the Florida International Arbitration Act when the setting aside standards were determined to be more favourable to the recognition and enforcement of foreign arbitral awards.
(Sources: Rintin Corp. v. Domar Ltd., 476 F.3d 1254 (11th Cir. 2007); New York Convention, Art. VII.)
C. Limitation periods (time limits)
(a) Is there a limitation period (time limit) applicable to the commencement of legal proceedings for recognition and enforcement of foreign awards?
(b) If yes, what is the applicable limitation period (time limit) and when does it start running?
Any party may apply to any court having jurisdiction for an order confirming the award against any other party to the arbitration within three years after an arbitral award falling under the Convention is made.
(Source: 9 U.S.C. § 207.)
The applicable limitation period starts running when the arbitration award is 'made' within the meaning of 9 U.S.C. § 207, i.e. on the date that it is issued by the arbitrators.
(Source: Seetransport Wiking Trader Schiffarhtsgesellschaft MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572 (2d Cir. 1993) (dismissing claim that statute of limitations began to run only after award became final according to the law governing the contract).)
The reference to a time limit for challenging an ICC award of three years after the award was 'made' means from the date of entry of the award, not the date on which it became final.
(Source: Seetransport Wiking Trader Schiffarhtsgellschaft MBH & Co. v. Navimpex Centrala Novala, 989 F.2d 572 (2nd Cir. 1993).)
Albeit not an international case, Policeman's Benevolent Association v. Borough of North Haledon suggests that when a party fails to bring an action to enforce an arbitral award within the time period specified for summary proceedings the party may still file a lawsuit to enforce the award within the six-year period for bringing breach-of-contract claims.
(Source: Policeman's Benevolent Association v. Borough of North Haledon, 158 N.J. 392, 401, 730 A.2d 320, 325 (N.J. 1999).)
D. National courts and court proceedings
7. What authority or court has jurisdiction over recognition and enforcement of foreign awards?
The federal district courts have jurisdiction to hear petitions to confirm foreign arbitration awards under the Federal Arbitration Act.
(Source: 9 U.S.C. § 203.)
In addition, 9 U.S.C. § 204 provides that an action or proceeding over which the district courts have jurisdiction pursuant to s. 203 may be brought 'in any such court in which save for the arbitration agreement an action or proceeding with respect to the controversy between the parties could be brought, or in such court for the district and division which embraces the place designated in the agreement as the place of arbitration if such place is within the United States'.
Alternatively, a party may apply for recognition and enforcement of a foreign or non-domestic award in a state court of general jurisdiction. However, the responding party can 'remove' such an action from the state court to a federal district court under 9 U.S.C. § 205. If the action remains in the state court, the Federal Arbitration Act will apply.
(Source: 9 U.S.C. § 205.)
The federal courts of the Fifth Circuit have interpreted this removal provision fairly broadly in relation to the enforcement of agreements to arbitrate. According to the court in Beiser, 'whenever an arbitration agreement falling under the Convention could conceivably affect the outcome of the plaintiff's case, the agreement "relates to" the plaintiff's suit. Thus the district court will have jurisdiction under § 205 over just about any suit in which a defendant contends that an arbitration clause falling under the Convention provides a defense.' Furthermore, the Beiser court stated that '[a] party may only waive his right to remove under the statute by clearly and explicitly saying so in the agreement'. The Fifth Circuit's decision in McDermott International, Inc. v. Lloyd's Underwriters of London also militated in favour of broad federal jurisdiction over Convention enforcement issues.
(Sources: Beiser v. Weyler, 284 F.3d 665 at 669, 672 (5th Cir. 2002); McDermott International, Inc. v. Lloyd's Underwriters of London, 944 F.2d at 1211-12; Safety Nat. Cas. Corp. v. Certain Underwriters At Lloyd's London, 587 F.3d 714 (5th Cir. 2009).)
8. What requirements, if any, must be met for the authority or court to accept jurisdiction over recognition and enforcement of foreign awards (e.g. domicile or assets of respondent in the jurisdiction, etc.)?
The district court must have both subject matter and personal jurisdiction to hear an enforcement action.
Chapter 2 of the Federal Arbitration Act explicitly grants federal courts subject matter jurisdiction over actions falling within the Convention. 9 U.S.C. § 203 provides that: 'An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States … shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.' To fall within the Convention, and thus to create subject matter jurisdiction in a US district court, the arbitration agreement must be in writing and arise from a commercial relationship; one of the parties must be a citizen of a country other than the USA; and the arbitration must take place in a country that is a signatory to the New York Convention. Personal jurisdiction must also be established under the traditional due process minimum contacts test.
(Sources: International Shoe Co. v. Washington, 326 U.S. 310 (1945) (outlining basic concepts of personal jurisdiction); Transatlantic Bulk Shipping Ltd. v. Saudi Chartering S.A., 622 F. Supp. 25, 27 (S.D.N.Y. 1985) ('Some basis must be shown, whether arising from the respondent's residence, his conduct, his consent, the location of his property or otherwise, to justify his being subject to the court's power.'); Telcordia Tech, Inc. v. Telkom SA Ltd, 458 F.3d 172 (3d Cir. 2006) (holding that 'the desire to have portability of arbitral awards' influences a US district court's analysis of personal jurisdiction).)
In certain instances, the jurisdictional requirement may be satisfied if the foreign party owns property within the forum state. This type of jurisdiction is known as in rem and refers to a court's ability to exercise jurisdiction over property located within the court's territorial jurisdiction. In Shaffer v. Heitner, the Supreme Court held that the mere presence of property in the forum state is not sufficient to establish jurisdiction. However, Shaffer recognized that a state may assert jurisdiction over property despite the absence of minimum contacts with its owner if the attachment is done for purposes of providing security for an in personam action being litigated against the owner in another forum.
(Source: Shaffer v. Heitner, 433 U.S. 186 (1977) at 210.)
In other words, a US citizen bringing an action in the USA to enforce a foreign arbitral agreement may request the court to seize or assert dominion and control over the foreign party's assets, even if that foreign party has no minimum contacts with the forum state.
(Sources: 9 U.S.C. §§ 201-208; Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330(a), 1605(a)(2), 1605(a)(6).)
The defendant was an agent of the Government of Ukraine for due process purposes because fully controlled by the Government; therefore, the defendant could not invoke the minimum contacts test to avoid personal jurisdiction in the district court action to confirm the award.
(Source: TMR Energy Ltd. v. State Property Fund of Ukraine, 411 F.3d 296 (D.D.C. 2005).)
9. Is the first decision granting or denying recognition and enforcement obtained through ex parte or inter partes proceedings?
The first decision is obtained through inter partes proceedings. The Federal Arbitration Act provides that 'any party to the arbitration may apply to the court so specified for an order confirming the award . . . Notice of the application shall be served upon the adverse party . . .'
(Sources: 9 U.S.C. § 9; see also 9 U.S.C. § 12 ('[n]otice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months'); 9 U.S.C. § 208 (providing that Chapter 1 of Title 9 applies to actions brought under Chapter 2 to the extent not in conflict with Chapter 2).)
(a) Is the first decision granting or denying recognition and enforcement subject to any form of appeal or recourse?
Yes. S. 16 of the Federal Arbitration Act provides that an appeal may be taken from an order confirming or denying confirmation of an award. This procedure transforms the award into a judgment of the court. It has the same executory force and effect as a judgment in a lawsuit in the same court.
(Source: 9 U.S.C. § 16(a)(1)(D), (E).)
(b) How many levels of appeal or recourse are available against this decision?
There is one level of appeal available as of right: the final decision of a US district court granting or denying recognition and enforcement can be appealed to a US circuit court. Thereafter, a party may request that the US Supreme Court review the decision of a US circuit, but the Supreme Court agrees to hear only a small percentage of the cases brought before it. A similar tripartite system is in place in most of the 50 states as well.
11. What is the earliest stage in legal proceedings for enforcement of foreign arbitral awards at which a party can obtain execution against assets (i.e. party actually obtains possession of assets as opposed to simply freezing assets)?
When and how a US citizen may attach (freeze) property pursuant to a foreign award, or execute against that property, in an enforcement action depends upon where the enforcement action is filed. State attachment and execution mechanisms apply whether a suit is filed in a state or federal court. See Fed. R. Civ. P. 64.
(Sources: 9 U.S.C. § 203; Fed. R. Civ. P. 64 ('[A]ll remedies providing for seizure of person or property for the purpose of securing satisfaction of the judgment ultimately to be entered in the action are available under the circumstances and in the manner provided by the law of the state in which the district court is held.').)
There must generally be a 'final judgment confirming the Arbitral Award' before parties can obtain execution against assets.
(Source: In the Matter of an Arbitration Between Karaha Bodas Company L.L.C., 264 F. Supp. 2d 470 (S.D. Tex. 2002).)
The option of prejudgment attachment in the Fifth Circuit (essentially, execution before a final award has been rendered) has not been ruled out entirely. The Fifth Circuit held that although 'we need not decide today whether pre-arbitration attachment . . . is protected by the Convention', it did remark that '[t]he Convention does not expressly forbid pre-arbitration attachment'.
(Source: E.A.S.T., Inc. of Stamford, CT v. M/V Alaia, 876 F.2d 1168 (5th Cir. 1989).)
Under the New York Convention, courts are permitted to consider granting the plaintiff's pre-judgment attachment request pursuant to a Connecticut statute allowing pre-judgment attachment while final judgment of the arbitration is pending.
(Source: Bahrain Telecomm. Co. v. Discoverytel, Inc., 476 F. Supp.2d 176 (D. Conn. 2007).)
E. Evidence required
(a) What evidence must be supplied for recognition and enforcement of foreign awards (e.g. arbitral award, contract containing arbitration clause, affidavits, witness statements, etc.)?
The applicant must supply the court with the arbitration agreement, the arbitration award, any documents reflecting the selection or appointment of the arbitrator, any written extensions of time to make the award, any documents used in an application to confirm, modify or correct the award, and any orders issued by a court resulting from such an application.
(Sources: New York Convention, Art. IV; Federal Arbitration Act, 9 U.S.C. § 13(a)((c).)
(b) Is it necessary to provide the entire document or only certain parts (e.g. entire contract or only arbitration clause)?
There is no case law or statute that directly answers this question. However, case law suggests that the entire document should be provided.
California law provides that the petition to confirm an arbitral award must 'set forth the substance or have attached a copy of the agreement to arbitrate'. It is not necessary to provide the entire arbitration agreement under California law.
(Source: Cal. Code Civil Proc. § 1285.4.)
(c) Are originals or duly certified copies required?
The Federal Arbitration Act is silent on the issue, as are the Federal Rules of Civil Procedure. Several courts have enacted rules regarding whether the original or a certified copy is acceptable, as well as related rules concerning numbers of copies filed with the court. Several of these local rules are identified below.
Either the duly authenticated original or a duly certified copy may be provided. The local rules for the US District Court for the District of Columbia require that an additional copy be provided with the original filing.
(Source: Rules of the US District Court for the District of Columbia, D.C.R. 5.1(c).).
For a copy to be duly certified, it is sufficient that the petitioner's counsel or a member of the arbitral tribunal certify that the copy is genuine.
(Sources: Bergesen v. Joseph Muller Corp., 710 F.2d 928, 934 (2d Cir. 1983); In re Arbitration between Continental Grain Co. & Foremost Farms Inc., 1998 WL 132805, at *2 (S.D.N.Y. 1998).)
Either an original or a duly certified copy will suffice.
(Source: New York Convention, Art. IV.)
Exception: the US District Court for the Northern District of Ohio requires an original unless the judicial officer assigned to the case orders otherwise.
(Source: Rules of the US District Court for the Northern District of Ohio, Rule 10.1.)
The following US district courts require an applicant to supply one additional copy (the courts do not state whether the additional copy must be duly certified): US District Court for the Eastern District of Michigan, US District Court for the Western District of Michigan and US District Court for the Middle District of Tennessee.
(Sources: Rules of the US District Court for the Eastern District of Michigan, LR 5.1(b); Rules of the US District Court for the Western District of Michigan, LCivR 10.4; Rules of the US District Court for the Middle District of Tennessee, LR 7.03(b).)
There is no requirement that originals or duly certified copies be filed. A duplicate is admissible to the same extent as an original unless (i) a genuine question is raised as to the authenticity of the original, or (ii) in the circumstances it would be unfair to admit the duplicate in lieu of the original. However, sufficient evidence must be provided to authenticate all documents that are filed.
(Sources: Fed. R. Evid. 1003; Fed. R. Evid. 901(a).)
Originals or certified copies of the award are not required under California law. The petition to confirm an arbitral award need only 'set forth or have attached a copy of the award'.
(d) How many originals or duly certified copies are required?
The Federal Arbitration Act is silent on the issue, as are the Federal Rules of Civil Procedure. It is necessary to consult the local civil procedure rules of the jurisdiction as the number of copies required varies among the district courts. In particular, local rules may require an additional copy for chambers (e.g. the local rules for the courts of both the Central and Northern Districts of California require courtesy copies).
(Sources: L.R. Central District of California, R. 11-4.1; L.R. Northern District of California, R. 5-1.)
(e) Does the authority or court keep the originals that are filed?
The Federal Arbitration Act and Federal Rules of Civil Procedure are silent on this issue. Practices vary by court and local rules. A sample of these local rules is provided below.
Yes. The local rules for the US District Court for the District of Columbia provide that no original paper in any case shall be removed from the place of filing.
(Source: Rules of the US District Court for the District of Columbia, D.C.R. 79.1.)
In the following US district courts, the clerk's office will keep the original unless the court orders its removal: US District Court for the Western District of Tennessee, US District Court for the Southern District of Ohio, US Western District of Kentucky, and the US Eastern District of Kentucky.
(Sources: Rules of the US District Court for the Western District of Tennessee, LR83.9(a); Rules of the US District Court for the Southern District of Ohio, L.R. 79.1; Rules of the US District Court for the Western District of Kentucky, LR 79.1; Rules of the US District Court for the Eastern District of Kentucky, LR 79.1.)
In the US District Court for the Northern District of Ohio, the court will keep the original unless the court orders its removal and the person requesting removal files a duly certified copy of the original and a duly signed receipt.
(Source: Rules of the US District Court for the Northern District of Ohio, Rule 79.1.)
In the US District Court for the Eastern District of Kentucky, the court will keep the original unless the Court orders its removal.
(Source: Rules of the US District Court for the Eastern District of Kentucky, LR 79.1.)
(a) Is it necessary to provide a translation of the documents supplied?
(b) If yes, into what language?
(Source: Jiangsu Changlong Chem. Co. v. Burlington Bio-Medical & Scientific Corp., 399 F. Supp. 2d 165, 168 (E.D.N.Y. 2005).)
(c) Is it necessary for the translations to be certified and, if yes, by whom (official or sworn translator, diplomatic or consular agent (of which country?) or by some other person)?
Yes. The translation must be certified by an official or sworn translator, or by a diplomatic or consular agent. There exist no specific rules regarding the nationality of the diplomatic or consular agent who may provide such certification.
(d) Is it necessary to provide a full translation of the documents or only a translation of certain parts (e.g. entire award or only part setting forth the decisions; entire contract or only arbitration clause)?
The Federal Arbitration Act does not state whether it is necessary to provide a full translation of the documents.
The Ninth Circuit requires a full translation of documents. California Rule of Court 3.1110 provides that 'exhibits written in a foreign language must be accompanied by an English translation, certified under oath by a qualified interpreter'.
(Source: Cal. Rules of Court, Rules 3.1110 (g) and 3.1103(a)(2).)
F. Stay of enforcement
(a) Can the authority or court stay legal proceedings for recognition and enforcement pending the outcome of an application to set aside or suspend the foreign award before the competent authority referred to in Art. V(1)(e) of the New York Convention?
Generally, under Art. VI of the New York Convention, the district court may stay an enforcement action if the moving party can demonstrate that a 'competent authority' is considering an 'application for the setting aside or suspension of the award' that the applicant seeks to enforce. Cases adding to this general principle are available in several circuits:
District courts have the authority to issue stays in confirmation actions under the New York Convention to the same extent as they can in ordinary cases (i.e. there are no restrictions imposed by the New York Convention on the district court's power to stay a case).
(Source: Hewlett-Packard Co., Inc. v. Helge Berg, 61 F.3d 101 (1st Cir. 1995).)
The factors that a district court should weigh when deciding whether to stay an enforcement proceeding are: (i) the general objectives of arbitration: the expeditious resolution of disputes and the avoidance of protracted and expensive litigation; (ii) the status of the foreign proceedings and the estimated time for those proceedings to be resolved; (iii) whether the award sought to be enforced will receive greater scrutiny in the foreign proceedings under a less deferential standard of review; (iv) the characteristics of the foreign proceedings, including whether they were brought to enforce an award (weighing in favour of a stay) or to set the award aside (which would tend to weigh in favour of enforcement), whether they were initiated before the underlying enforcement proceeding so as to raise concerns of international comity, whether they were initiated by the party now seeking to enforce the award in the federal court, and whether they were initiated under circumstances indicating an intent to hinder or delay resolution of the dispute; (v) a balance of the possible hardships to each of the parties; and (vi) any other circumstances that might shift the balance towards or against adjournment.
(Sources: Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310, 317 (2d Cir. 1998); also Nedagro B.V. v. Zao Konversbank, 2003 WL 151997, at *6-7 (S.D.N.Y. Jan. 21, 2003); Spier v. Calzaturificio Tecnica S.p.A., 1988 WL 96839, at *1-2 (S.D.N.Y. Sep. 12, 1988).)
The appellate court held that the case was properly dismissed without prejudice based on the pendency of proceedings to set aside the award in the jurisdiction in which it was rendered. The court found that the trial court's authority under Art. VI of the New York Convention to 'adjourn' the enforcement proceedings included not only the power to stay them, but also the power to dismiss them without prejudice.
(Source: Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 180-81 (3d Cir. 2006); also Jorf Lasfar Energy Co., S.C.A. v. AMCI Export Corp., 2005 WL 3533128 (W.D. Pa. 2005) (granting stay conditioned upon security).)
The federal court stayed enforcement of a Mexican arbitral award where proceedings appealing the validity of the award were ongoing in Mexico. The stay was granted provided the party challenging enforcement in federal court posted a bond for the full amount of the arbitral award.
(Source: Consorcio Rive, S.A. de C.V. v. Briggs of Cancun, Inc., 2000 U.S. Dist. LEXIS 899 (E.D. La. 2000).)
The court denied the defendant's request to stay the plaintiff's enforcement action while the defendant's cross arbitration claims were pending.
(Source: Wartsila Finland OY v. Duke Capital LLC., 518 F.3d 287 (5th Cir. 2008).)
The court granted a stay order, citing to the First Circuit's decision in Hewlett-Packard as well as the Second Circuit's decisions in Europcar Italia, S.p.A. The court explained that the reasons for staying an action-comity, judicial efficiency, and the convenience of the parties and the courts-are especially strong 'where a parallel proceeding is ongoing in the originating country and there is a possibility that the award will be set aside . . . [since] a court may be acting improvidently by enforcing the award prior to the completion of the foreign proceedings' (Europcar, 156 F.3d at 317).
(Source: Higgins v. SPX Corporation, 2006 U.S. Dist. LEXIS 20771, *9-10, *14-15 (W.D. Mich. 2006); also Fertilizer Corporation of India v. IDI Management, Inc., 517 F. Supp. 948, 961-62 (S.D. Ohio 1981).)
Courts can exercise their discretion to stay enforcement while an application to set aside an award is pending. Here, the court exercised its discretion to stay enforcement while an application to set aside an award was pending in France.
(Source: Alto Mar Girassol v. Lumbermen's Mut. Cas. Co., 2005 U.S. Dist. LEXIS 7479 (N.D. Ill. 2005).)
A court considering an enforcement action may postpone enforcement of an arbitral award under Art. VI of the New York Convention.
(Source: Korea Wheel Corp. v. JCA Corp'n, 2005 WL 3454335 (W.D. Wash.); also Belize Social Development Ltd. v. Belize, 668 F.3d 724 (discussing the effect of an request for a stay order on the applicability of an enforcement action under the New York Convention).)
(b) On what other grounds, if any, can the authority or court stay legal proceedings for recognition and enforcement (e.g. forum non conveniens)?
A case may be dismissed on grounds of forum non conveniens. The moving party must show that there is another forum in which the applicant may seek confirmation of the award. That the moving party currently owns no property in the USA is not a sufficient ground for dismissal.
Courts in the D.C. Circuit have considered claims for forum non conveniens dismissal. In TermoRio, the D.C. Circuit affirmed the district court's decision to dismiss a case partly on those grounds. An arbitration award had been issued in Colombia, but then vacated by Colombia's highest court (Termo Rio at 929). TermoRio then sought enforcement in the US District Court for the District of Columbia. The district court dismissed the case, and the D.C. Circuit affirmed, finding the Colombian court to be an authority competent to set aside the award (ibid. at 941).
TMR Energy suggests courts will require a showing that there is another forum in which to seek enforcement before dismissing on forum non conveniens grounds. TMR brought an action to enforce an arbitration award issued in Sweden against the State Property Fund of Ukraine ('SPF') (TMR Energy at 322). SPF argued that the case should be dismissed for forum non conveniens, but the D.C. Circuit affirmed the district court's decision not to dismiss, noting that TMR could only seek attachment of SPF property in the USA through the US courts (ibid. at 327). The court rejected SPF's claim that the forum was not appropriate because SPF owned no property in the USA, noting 'it may own property here in the future, and TMR's having a judgment in hand will expedite the process of attachment' (ibid. at 327).
In Continental Tranfert Technique Ltd. v. Fed. Gov. of Nigeria the court stated that 'when an alternate forum has jurisdiction to hear a case, and when trial in the forum would establish oppressiveness and vexation to a defendant out of proportion to the plaintiff's convenience, or when the chosen forum is inappropriate because of considerations affecting the court's own administrative and legal problems, the court may, in the exercise of its sound discretion, dismiss the case on forum non-conveniens grounds'.
(Sources: TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 941 (D.C. Cir. 2007); TMR Energy Ltd. v. State Property Fund of Ukraine, 411 F.3d 296, 305 (D.C. Cir. 2005); In re Chromalloy Aeroservices and the Arab Republic of Egypt, 939 F.Supp. 907, 909 (D.D.C. 1996); Continental Tranfert Technique Ltd. v. Fed. Gov. of Nigeria, 697 F. Supp.2d 46 (D.D.C. 2010).)
Although there are no reported decisions addressing staying legal proceedings for recognition and enforcement on the basis of forum non conveniens, the Second Circuit has dismissed a proceeding to enforce and recognize a foreign award on that basis. In Monde Re the Second Circuit found that, because Art. III of the New York Convention states that 'each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon', and because forum non conveniens is a procedural rule, courts are permitted to dismiss cases if there is an adequate alternative forum and if the movant can meet the familiar factors in favour of dismissal set forth in Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947). The Monde Re court found that the parties and the dispute had no connection to New York and affirmed a forum non conveniens dismissal.
Courts in the Second Circuit have also suggested that an award should not be enforced if the award is set aside or suspended in the originating country.
(Sources: Monegasque De Reassurances S.A.M. ['Monde Re'] v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002). Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310, 317 (2d Cir. 1998); also Nedagro B.V. v. Zao Konversbank, 2003 WL 151997, at *6-7 (S.D.N.Y. Jan. 21, 2003).)
Given the importance of discovery in legal proceedings in the United States, a court need not stay enforcement of an arbitration award under the New York Convention to give parties time to engage in discovery.
(Source: Imperial Ethiopian Gov't v. Baruch-Foster, Corp., 535 F.2d 334 (5th Cir. 1976).)
A district court may stay legal proceedings for recognition and enforcement on the basis of forum non conveniens. In deciding whether to stay such a proceeding, the district court must consider both public and private factors. (i) The public factors are 'court congestion; the local interest of having localized controversies decided at home; the interest of having a trial of a diversity case in a forum that is at home with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty'. (ii) The private factors are 'relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive'.
(Source: Venture Global Engineering v. Satyam Computer Services, Ltd., 2007 U.S. App. LEXIS 12822, *7-9 (6th Cir. 2007).)
A district court may stay legal proceedings for the enforcement of an arbitration award through its inherent power to stay (here, the court denied a request for enforcement of an award, pending the outcome of a separate but related arbitration proceeding).
(Source: Korea Wheel Corp. v. JCA Corp'n, 2005 WL 3454335 (W.D. Wash.).)
The Ninth Circuit has affirmed the dismissal of an action for enforcement of a New York Convention award under the doctrine of forum non conveniens (the Ninth Circuit did not consider whether the New York Convention precludes the application of forum non conveniens as this question was first raised on appeal).
(Source: Melton v. Oy Nautor Ab, 161 F.3d 13 (9th Cir. 1998).)
California has no specific rules concerning a court's authority to stay legal proceedings for recognition and enforcement of arbitral awards. However, California rules governing a court's authority generally to stay proceedings would also apply to petitions to confirm arbitral awards. For example, as a matter of comity, California courts have the discretion to stay an action pending the outcome of related foreign proceedings or proceedings in another state or federal court.
(Sources: Dial 800 v. Fesbinder, 118 Cal. App. 4th 32, 47 (2004); Gregg v. Superior Court, 194 Cal. App. 3d 134, 136-37 (1987).)
In addition, California courts may stay or dismiss proceedings on the ground of forum non conveniens where 'in the interest of substantial justice an action should be heard in a forum outside this state'.
(Source: Cal. Code Civil Proc. § 410.30(a).)
Finally, the perfecting of an appeal automatically stays proceedings in the superior court.
(Source: Cal. Code Civil Proc. § 916.)
(c) Is the granting of a stay of legal proceedings for recognition and enforcement conditional on the provision of security?
Courts may condition any stay of proceedings on the provision of security, but it is not required.
The District of Columbia Circuit does not specify whether the granting of a stay is conditional on the provision of security, but the district court likely has discretion to impose a security requirement.
The New York Convention, Federal Arbitration Act, Federal Rules of Civil Procedure and the Local Rules for the US District Court for the District of Columbia are silent on the question of security when staying arbitration confirmation proceedings. The district court in Int'l Bechtel Co. Ltd. did not require security when it stayed proceedings in that case. The court simply denied the motion to dismiss without prejudice and noted that it would entertain a further motion by either party after the Dubai court rendered its decision.
(Source: Int'l Bechtel Co. Ltd, 300 F.Supp.2d at 118.)
Whether the provision of security is required is subject to the discretion of the court.
(Sources: New York Convention, Art. VI; Nedagro B.V. v. Zao Konversbank, 2003 WL 151997, at *6-7 (S.D.N.Y. 21 Jan. 2003); Spier v. Calzaturificio Tecnica S.p.A., 1988 WL 96839, at *1-2 (S.D.N.Y. 12 Sep. 1988).)
The court may, but is not required to, condition a stay upon the posting of security. The appellate court held that the case was properly dismissed without prejudice as an 'adjournment' under Art. VI of the New York Convention, without any requirement of security.
(Source: Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172, 180-81 (3d Cir. 2006).)
Within the Fourth Circuit, Maryland has a rule that arbitral tribunals in an international commercial arbitration in Maryland may, at the request of a party and after an opportunity for the other party to the arbitration to be heard, order any party to post security or countersecurity.
(Source: Md Code Ann. Cts. & Jud. Proc. § 3-2B-06 (2007).)
The limited case law on this matter suggests that a bond in the amount of the award is likely to be required of the party challenging enforcement of the award in the federal court.
The court may order security if there is a showing that the party requesting the stay will not be able to pay the arbitration award. Otherwise, the court may order security if requested.
(Sources: New York Convention, Art. VI; Jacada (Europe), Ltd. v. International Marketing Strategies, Inc., 2003 U.S. Dist. LEXIS 26998, *23 (W.D. Mich. 2003); Fertilizer Corporation of India v. IDI Management, Inc., 517 F. Supp. 948, 962 (S.D. Ohio 1981).)
US Northern District of Illinois
The court exercised its discretion to stay enforcement while an application to set aside an award was pending in France. It also ordered that security be posted as a condition of the stay.
While there is no requirement that a party must post security, a district court may require this in certain circumstances.
(Sources: e.g. L.R. Northern District of California, R. 65.1-1; Korea Wheel Corp. v. JCA Corp'n., 2005 WL 3454335 (W.D. Wash.) (requiring the applicant for a stay of enforcement proceedings to provide security pending resolution of a related dispute).)
(a) Do the documents filed in legal proceedings for recognition and enforcement form part of the public record? If yes, can any steps be taken to preserve the confidentiality of such documents?
Yes. Federal court case files are presumed to be available for public inspection and copying (see Nixon v. Warner Communications, Inc.). However, public access rights are not absolute. Every court has supervisory power over its own records (ibid. at 598). Parties to a case may file a motion to seal certain material. Sealed material, although part of the case file, is accessible only by court order.
(Sources: Nixon v. Warner Communications, Inc., 435 U.S. 589 (1978); Privacy and Public Access to Electronic Case Files, The Judicial Conference Committee on Court Administration and Case Management, 2006.)
(b) If there are hearings on recognition and enforcement, are such hearings confidential? If not, can steps be taken to maintain the confidentiality of the legal proceedings?
No, the transcripts from judicial proceedings and hearings are considered part of the case file and, as explained above, are presumed to be available for public inspection and copying. To protect confidential information, however, parties may file a motion with the court to seal certain materials.
(c) Are judgments on recognition and enforcement published? If yes, can steps be taken to remove the names of the parties or avoid publication of confidential information (such as business or State secrets)?
Yes. Because common law courts rely on judicial precedent in interpreting and applying the law, judicial opinions are made readily available to courts and lawyers. Courts may provide special protection from unlimited public access for certain types of information and documents (including, in some instances, business secrets or State secrets).
(Source: United States Department of Justice v. Reporters Committee for Freedom of the Press, 489 U.S. 749 (1989).)
H. Other issues
16. When, if ever, can a party obtain recognition and enforcement of interim or partial foreign awards?
The Federal Arbitration Act and the Federal Rules of Civil Procedure do not specify whether interim or partial foreign awards may be confirmed. A number of courts have found that 'an award which finally and definitely disposes of a separate independent claim may be confirmed although it does not dispose of all the claims that were submitted to arbitration'.
(Source: Metallgesellschaft A.G. v. M/V Capitan Constante, 790 F.2d 280, 283 (2d Cir. 1986) (citing cases).)
A district court may accept jurisdiction with respect to 'an interim award that finally and definitely disposes of a separate independent claim . . . notwithstanding the absence of an award that finally disposes of all the claims that were submitted to the arbitration' provided the petitioner demonstrates an immediate need for relief.
(Sources: Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984) (internal quotation marks and citations omitted); Hall Steel Co. v. Metalloyd Ltd., 492 F. Supp. 2d 715, *11-14 (E.D. Mich. 2007).)
The New York Convention applies to orders for the disclosure of documents, and treats them as 'awards' so long as these orders are final. The court confirmed that the order in the case before it was final '[d]espite some possible superficial technical flaws, and despite its designation as an "order" instead of an "award"'.
(Source: Publicis Commun. v. True North Communs. Inc., 206 F.3d 725 (7th Cir. 2000).)
Interim and partial awards that are considered to be final as to a particular issue may be recognized and enforced.
(Sources: China Nat. Metal Products Import/Export Co. v. Apex Digital, Inc., 379 F.3d 796 (9th Cir. 2004); Pacific Reinsurance Management Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019 (9th Cir. 1991).).
The Eleventh Circuit reviewed the confirmation order of a partial award that resolved the jurisdictional phase of the arbitration and issued an anti-suit injunction. The order was reversed on the basis of waiver and the matter remanded to determine whether the conditions for non-recognition and non-enforcement of Art. V(1)(a) were satisfied and, if so, whether the lower court in the exercise of its discretion could nonetheless recognize and enforce the partial award. The arbitration was seated in Miami and involved foreign claimants and a foreign respondent.
The California International Arbitration Act authorizes an arbitral tribunal to 'make an interim award on any matter with respect to which it may make a final arbitral award' and states that '[t]he interim award may be enforced in the same manner as a final arbitral award'.
(Source: Cal. Code Civil Proc. § 1297.316.)
California decisional law also recognizes the ability of parties to enforce interim or partial arbitral awards when such awards finally dispose of a submitted issue.
(Source: Hightower v. Superior Court, 86 Cal. App. 4th 1415, 1440-41 (2001).)
The Ohio Revised Code s. 2712.60 states that 'interim award[s] may be enforced in the same manner as a final award'.
17. When, if ever, can a party obtain recognition and enforcement of non-monetary relief in foreign arbitral awards (e.g. order requiring a party to deliver up share certificates or other property)?
The Federal Arbitration Act and the Federal Rules of Civil Procedure do not address the enforcement of injunctive or other non-monetary foreign arbitration awards. Some courts have found that arbitration awards involving non-monetary relief can be confirmed.
(Sources: Southern Seas Navigation Ltd. of Monrovia v. Petroleos Mexicanos, 606 F.Supp. 692, 693-94 (S.D.N.Y. 1985), confirming a non-foreign equitable arbitral award that amounted to 'in effect, a grant of preliminary injunction'; also Alcatel Space, S.A. v. Loral Space & Comm. Ltd., 2002 WL 1391819, at *5-6 (S.D.N.Y. June 25, 2002).)
Recognition of a plaintiff's right to enforce an arbitral award that directed the defendant to cooperate in the management of the corporation and divestiture of stock shares.
(Source: Telenor Mobile Comms. AS v. Storm LLC., 584 F.3d 396 (2nd Cir. 2009).)
The Sixth Circuit recognizes and enforces foreign arbitral awards of non-monetary relief as long as the award otherwise satisfies the requirements of the New York Convention.
(Source: See Venture Global Engineering v. Satyam Computer Services, Ltd., 2007 U.S. App. LEXIS 12822, *3-6, *18 (6th Cir. 2007).)
The Sixth Circuit affirmed an order of the US District Court for the Eastern District of Michigan enforcing a foreign arbitration award that gave the petitioner the option of buying shares of stock.
(Source: Venture Global Engineering v. Satyam Computer Services, Ltd., 2007 U.S. App. LEXIS 12822, *3-6, *18 (6th Cir. 2007).)
The New York Convention applies to orders for the disclosure of documents, so long as these orders are final. The court confirmed that the order in the case before it was final '[d]espite some possible superficial technical flaws, and despite its designation as an "order" instead of an "award"'.
Courts in the Ninth Circuit have enforced awards granting equitable and injunctive relief. Specifically, courts have enforced awards requiring an interim payment into an escrow account as security for a final award.
(Sources: Pacific Reinsurance Management Corp. v. Ohio Reinsurance Corp. 935 F.2d 1019 (9th Cir. 1991) (under Federal Arbitration Act, Chapter 1); Certain Underwriters at Lloyd's London v. Argonaut Ins. Co. 264 F.Supp. 2d 926 (N.D. Cal. 2003); also Ever-Gotesco Resources and Holdings, Inc. v. PriceSmart, Inc., 192 F.Supp. 2d 1040 (S.D. Cal. 2002) (confirming the power of an arbitral tribunal constituted under the UNCITRAL Arbitration Rules generally to grant provisional relief).)
In an opinion recognizing the inherent equitable powers of the arbitrator, the Eleventh Circuit affirmed the enforcement of an award that included the obligation for the respondent to deliver shares of a company to the claimant.
(Source: Rintin Corp. v. Domar, Ltd., 476 F.3d 1254 (11th Cir. 2007).)
In general, California law does not limit the type of relief that may be awarded by an arbitral tribunal. California courts are extremely deferential to the remedies awarded by arbitrators.
(Source: Advanced Micro Devices, Inc. v. Intel Corp. 9 Cal. 4th 362, 383 (1994).)
California courts have enforced arbitral awards ordering various injunctive and equitable remedies, including declaratory relief and an accounting from the general partner (i.e. the process of communicating information about a business entity to pertinent stakeholders, here the other partners) (Pacific Inv. Co. v. Townsend); permanent injunctive relief (Swan Magnetics, Inc. v. Superior Court); the conveyance of real or personal property (Mleynek v. Headquarters Companies); and the granting of a license to use a party's intellectual property (Advanced Micro Devices).
(Sources: Pacific Inv. Co. v. Townsend, 58 Cal. App.3d 1, 7 (1976); Swan Magnetics, Inc. v. Superior Court, 56 Cal. App. 4th 1504, 1512 (1997); Mleynek v. Headquarters Companies, 165 Cal. App. 3d 1133 (1984); Advanced Micro Devices, 9 Cal. 4th at 385-88.)
18. When, if ever, can a party obtain recognition and enforcement of only part of the relief granted in foreign awards?
Art. V.1(c) of the New York Convention permits a court to recognize and enforce only part of an award where the award deals partly with matters falling within the terms or the scope of the submission to arbitration and partly with matters not within the terms or beyond the scope of the submission, and those parts can be 'separated'.
9 U.S.C. § 11 of the Federal Arbitration Act, taken in conjunction with 9 U.S.C. § 208 of the Federal Arbitration Act, permits a district court in and for the district 'wherein the award was made' to modify or correct an award-and so, in a sense, to recognize and enforce only part of the award as originally made.
9 U.S.C. § 11 sets out limited grounds on which a court may modify or correct an award, as follows: (a) where there was an evident material miscalculation of figures or an evident material mistake in a description of any person, thing or property referred to in the award; (b) where the award deals with a matter not submitted to the arbitrators, unless that matter does not affect the merits of the decision; and (c) where the award is imperfect in form.
(Source: Federal Arbitration Act, 9 U.S.C. §§ 11 and 208.)
The Ninth Circuit has confirmed that parties may not extend the grounds for modifying an arbitration award beyond those set forth in 9 U.S.C. § 11.
(Sources: Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 F.3d 987, 997 (9th Cir. 2003) (en banc); also Schoenduve Corp. v. Lucent Technologies, Inc., 442 F.3d 727 (9th Cir. 2006).)
California law does not allow courts to enforce only part of an arbitral award, absent a petition to correct the award. Section 1286 of the Code of Civil Procedure provides that 'the court shall confirm the award as made, whether rendered in this state or another state, unless in accordance with this chapter it corrects the award and confirms it as corrected . . .' (emphasis added).
The grounds for correcting an award under California law are very limited; courts have no power to modify or correct an award in any manner 'affecting the merits of the decision upon the controversy submitted'.
(Source: Cal. Code Civil Proc. § 1286.6.)
However, pursuant to the authority to correct an award, one California case allowed for partial enforcement by deleting the portion of an award as it applied to a non-party to the arbitration while confirming the remainder of the award against the parties to the arbitration.
(Source: Ikerd v. Warren T. Merrill & Sons, 9 Cal. App. 4th 1833, 1841 (1992).)
Beyond these decisions, and other than in the circumstances specifically covered by 9 U.S.C. § 11 or by Art. V.1(c) of the New York Convention, the issue has not been squarely addressed by the courts.
19. When, if ever, can a party obtain recognition and enforcement of foreign awards which have been set aside by the competent authority referred to in Art. V(1)(e) of the New York Convention?
One US district court has recognized and enforced a foreign arbitral award notwithstanding that the award had been set aside by a foreign court at the seat of the arbitration (Chromalloy Aeroservices v. Arab Republic). Acknowledging that it was 'a case of first impression', that court held: (1) the award was 'valid as a matter of US law'; and (2) the US court 'need not grant res judicata effect to the decision of the [foreign court which set aside the award]' (ibid. at 911, 914). Several US courts have cited Chromalloy but distinguished it on its facts or failed to reach the identical issue. These courts refused to enforce foreign arbitral awards that were set aside by courts at the seat of the arbitration (e.g. Baker Marine, Ltd. v. Chevron, Ltd., distinguishing Chromalloy and holding: 'Unlike the petitioner in Chromalloy, Baker Marine is not a United States citizen, and it did not initially seek confirmation of the award in the United States . . . [respondent] did not violate any promise in appealing the arbitration award . . . Recognition of the Nigerian judgment in this case does not conflict with United States public policy.'; Spier v. Calzaturificio Tecnica, S.p.A., distinguishing Chromalloy, refusing enforcement of a foreign award that was set aside by a foreign court, and holding: 'the Chromalloy district court's reliance upon the Federal Arbitration Act to disregard an Egyptian court's decision nullifying an Egyptian award was prompted by a particular circumstance not present in the case at bar: Egypt's blatant disregard of its contractual promise not to appeal an award'). See also Karaha Bodas Co. v. Negara, noting 'an American court and courts of other countries have enforced awards, or permitted their enforcement, despite prior annulment in courts of primary jurisdiction'. The D.C. Circuit recently addressed the issue of whether to enforce a foreign award that had been set aside in Termorio S.A. E.S.P. v. Electranta S.P. The D.C. Circuit acknowledged that a US court may enforce a foreign award that has been set aside if the decision to set aside violates public policy and 'basic notions of justice', but emphasized that 'courts have carefully limited the occasions when a foreign judgment is ignored on [those] grounds' (ibid. at 938). The court in Termorio refused to enforce the award set aside, finding there was no evidence that the decision to set aside fell within the narrow circumstances required (ibid. at 939: 'Appellants have neither alleged nor provided any evidence to suggest that the parties' proceedings before [the foreign court] or the judgment of that court violated any basic notions of justice to which we subscribe.' The D.C. Circuit's analysis suggests that a US court should defer to a foreign decision to set aside (and therefore refuse to enforce an annulled award) to the same extent a court would defer to any other foreign judgment. The analysis in the Chromalloy decision has been criticized by some scholars (e.g. Ray Y. Chan). Of note, no US court has held that a foreign award that has been set aside is per se unenforceable in the USA.
(Sources: Chromalloy Aeroservices v. Arab Republic, 939 F. Supp. 907, 914 (D.D.C. 1996); Baker Marine, Ltd. v. Chevron, Ltd., 191 F.3d 194, 197 (2d Cir. 1999); Spier v. Calzaturificio Tecnica, S.p.A., 71 F. Supp. 2d 279, 288 (S.D.N.Y. 1999); Karaha Bodas Co. v. Negara, 335 F.3d 357, 367 (5th Cir. 2003); Termorio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 937 (D.C. Cir. 2007); R.Y. Chan, 'The Enforceability of Annulled Foreign Arbitral Awards in the United States: A Critique of Chromalloy', 17 B.U. Int'l L.J. 141 (Spring 1999).)
20. Are there any other procedural or practical requirements relating to recognition and enforcement of foreign awards which are worth mentioning (e.g. unusually high court costs, filing fees, stamp duties, obligation to post security as a condition for seeking recognition and enforcement, obligation to identify the assets that will be the object of enforcement, etc.)?
Allen B. Green
A. Stephens Clay, Jean E. Kalicki, James L. Loftis, Dana C. MacGrath, Michael D. Nolan, William W. Park, Stephanie Reedy, C. Ryan Reetz, John H. Rooney, Peter Sherwin, Steven L. Smith, George M. Von Mehren, Janet Whittaker