CHAPTER 14 ENFORCEMENT OF AWARDS

• Jurisdiction: United States

International Energy and Minerals Arbitration
(Sep 2013)
CHAPTER 14
ENFORCEMENT OF AWARDS
John P. Bowman
Partner, King & Spalding LLP
Houston, Texas, USA

JOHN P. BOWMAN is a Partner with King & Spalding LLP in Houston, where he is engaged in an arbitration and litigation practice representing primarily international oil companies and service companies in a wide range of commercial and investment disputes. He is a frequent writer and speaker on international arbitration and international oil and gas topics. Mr. Bowman is Adjunct Professor for International Arbitration at the University of Oklahoma College of Law (2012 and 2013). He is currently President-Elect of the Association of International Petroleum Negotiators. Among his recent professional honors, Chambers Global 2013, Chambers USA 2013, and Legal 500 U.S. 2013 rank Mr. Bowman as a leader in International Arbitration. Best Lawyers in America 2013, the Guide to the World's Leading Energy Attorneys (10th ed.), and International Who's Who of Business Lawyers Oil & Gas 2013 recognize Mr. Bowman as one of the world's leading oil and gas lawyers. He was awarded the AIPN Education Award for 2010-2011 and 2011-2012 and its Legacy Award for 2012-2013. In 2011, 2012 and 2013, he co-chaired the University of Texas, AIPN, Texas State Bar Oil & Gas Section Conference on International Upstream Energy Transactions. Mr. Bowman is a member of the Advisory Boards of the University of Texas Global Center for Energy, International Arbitration and Environmental Law, the Institute for Transnational Arbitration, and the Institute for Energy Law. He is a Fellow of the College of Commercial Arbitrators and of The Chartered Institute of Arbitrators. He received his J.D. from the University of Kansas School of Law in 1980, where he was Editor-in-Chief of the Kansas Law Review.

Enforcement of International Awards in the U.S.

John P. Bowman

Silvia Marchili

King & Spalding

Applicable Standards in the US - Federal Arbitration Act (FAA)

• Domestic Awards ? FAA - Chapter 1 (General Provisions)

• International Awards ? FAA - Chapter 2 (New York Convention)

• International Awards ? FAA - Chapter 3 (Panama Convention)

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Recognition & Enforcement of International Awards

• All three FAA Chapters set a high bar for a party resisting enforcement of an arbitration award.

• In Hall Street, the US Supreme Court noted the existence of:

a national policy favoring arbitration with just the limited review needed to maintain arbitration's essential virtue of resolving disputes straightaway. Any other reading opens the door to the full-bore legal and evidentiary appeals that can "rende[r] informal arbitration merely a prelude to a more cumbersome and time-consuming judicial review process," ... and bring arbitration theory to grief in post-arbitration process.

Hall Street Assoc. LLC v. Mattel Inc., 552 U.S. 576, 588 (2008).

• According to the US Supreme Court:

[t]he goal of the Convention, and the principal purpose underlying American adoption and implementation of it, was to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries.

Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15 1974).

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• Article V(1) of the New York Convention sets forth limited grounds for refusing to recognize and enforce an award:

a. the parties were suffering under some incapacity or the arbitral agreement was invalid;

b. the party against whom the award is invoked was not given proper notice of the arbitrator's appointment or the arbitration proceedings or was unable to present his case;

c. the award decides matters not within the scope of the arbitration agreement;

d. the composition of the arbitral tribunal or the procedure used did not accord with the parties' agreement or applicable law; or

e. the award has not yet become binding or has been set aside or suspended by a competent authority of the country where the award was rendered.

• Article V(2) provides two further grounds for refusing to enforce an award:

a. non-arbitrability of the subject matter; and

b. the recognition or enforcement of the award would be contrary to the public policy.

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• Focus on three main issues regarding enforcement:

a. Jurisdiction

b. Forum non conveniens

c. Awards set aside at seat

Jurisdiction

• In order to enforce foreign arbitral awards in the US, the party seeking enforcement has the burden of proving that the court has personal jurisdiction over the defendant and subject matter jurisdiction over its claims.

• In making its determination as to personal jurisdiction, the court may choose to hold an evidentiary hearing or it may rely on written submissions.

• If the court chooses to rely on written submissions, the enforcing party would only need to prove jurisdiction prima facie.

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• In enforcing arbitral awards, federal courts generally hold that discovery is permitted to establish jurisdiction.

• Mazda Motor Corp., 123 F.3d 1353, 1367 (11th Cir. 1997):

"Resolution of a pretrial motion that turns on findings of fact - for example, a motion to dismiss for lack of personal jurisdiction pursuant to Fed.R.Civ.P.1 2(b)(2) - may require some limited discovery before a meaningful ruling can be made."

• District courts, however, have "wide latitude to determine the scope of discovery" and may exercise that discretion to deny jurisdictional discovery "when the plaintiff has not made out a prima facie case for jurisdiction." Frontera Resources Azerbaijan Corp., 582 F.3d 393, 401 (2d Cir. 2009).

• Courts typically will deny jurisdictional discovery where a plaintiff has merely asserted conclusory allegations that jurisdiction exists or speculated that facts supporting jurisdiction might be uncovered through discovery.

Personal Jurisdiction

[A]s to the [FAA] ...., it authorizes the court to hear a new category of action not previously within its subject matter jurisdiction. It does not, however, give the court power over all persons throughout the world who have entered into an arbitration agreement covered by the Convention. Some basis must be shown, whether arising from the respondent's residence, his conduct, his consent...