Enforcing Foreign Arbitral Awards
In his International Arbitration column, John Fellas argues that, when it comes to the hurdles of personal jurisdiction and forum non conveniens, there is no good reason for foreign arbitral awards to be held to a higher standard than foreign judgments.
February 05, 2015 at 09:44 PM
12 minute read
In New York there are two obstacles to enforcing foreign arbitral awards that do not apply to foreign judgments. The U.S. Court of Appeals for the Second Circuit and other circuit courts have held that a party seeking to enforce a foreign arbitral award must establish personal jurisdiction over the award debtor and that forum non conveniens is a permissible defense. Frontera Res. Azer. Corp. v. State Oil Co. of Azerbaijan, 582 F.3d 393 (2d Cir. 2009) (personal jurisdiction); Monegasque Du Reassurances v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002) (forum non conveniens). By contrast, New York's First Department recently held that in an action to enforce a foreign judgment it is not necessary to establish personal jurisdiction over the judgment debtor and that the defense of forum non conveniens is inapplicable. Abu Dhabi Commercial Bank PJSC v. Saad Trading, 117 A.D.3d 609 (1st Dept. 2014).
This article argues that, when it comes to the hurdles of personal jurisdiction and forum non conveniens, there is no good reason for arbitral awards to be held to a higher standard. In particular, in the light of Daimler v. Bauman, 134 S. Ct. 746 (2014)—where the U.S. Supreme Court recently made it harder to clear the jurisdictional hurdle—it is necessary to rethink whether personal jurisdiction over the award debtor should be a precondition to the enforcement of a foreign arbitral award.
The Impact of 'Daimler'
While it is too early, and this is not the place, to assess the full impact of Daimler—where the court eliminated the “doing business” test for general, personal jurisdiction, asking instead whether a defendant is “at home” in the state—its waves have already surged over the law governing the enforcement of foreign arbitral awards. In Sonera Holding v. Çukurova Holding, 750 F.3d 221 (2d Cir.), cert. denied, 189 L.E.2d 837 (2014), the Second Circuit reversed a decision of a district court—rendered before Daimler—enforcing a Swiss arbitral award against Çukurova, a Turkish corporation, which it found to be subject to personal jurisdiction on the basis that it was “doing business” in New York. The Second Circuit rendered its decision after Daimler, and, in reversing, held that as a result of Daimler there was no jurisdiction over Çukurova because it was not “at home” in New York.
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