New York Federal Court Grants $12M Foreign Arbitration Award Under New York Convention

Carlton Fields
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Carlton Fields

The petitioner sought confirmation of an international arbitration award issued in its favor by the Society of Maritime Arbitrators. The petitioner and the respondent had entered into an agreement for the petitioner to charter a vessel to transport iron ore. The respondent objected to the arbitration in part on the ground that the parties’ agreement was procured by fraud and therefore void. The panel ruled in the petitioner’s favor and issued a final award of more than $12 million plus interest, finding no evidence of fraud or corruption. In opposition to the motion to confirm the award, the respondent argued that the panel lacked jurisdiction to arbitrate the dispute; that the award violated article V.1(c) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention); and that the award violated article V.2(b) of the New York Convention because it was procured by corruption and thus enforcement would be against U.S. public policy.

Article V of the New York Convention sets forth seven grounds upon which a court may refuse to enforce a foreign arbitration award. The court acknowledged that district courts are “strictly limited” to those seven defenses in determining whether to confirm a foreign award. The party opposing enforcement bears the “heavy” burden of proving that one of the seven defenses applies. Here, having found that the panel had jurisdiction to decide a threshold arbitrability issue, the court found that the respondent failed to establish any basis to disturb the award pursuant to the New York Convention. The court thus granted the petition to confirm. In addition, given the respondent’s failure to comply with the award or otherwise put forth a good faith basis for not complying, the court also granted the petitioner’s request for attorneys’ fees and costs arising from the proceeding.

Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco, C.A., No. 1:19-cv-11654 (S.D.N.Y. Dec. 10, 2020).

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