On Jan. 18, 2017, the Second Circuit in CBF Industria De Gusa S/A v. AMCI Holdings, 846 F.3d 35 (2d Cir. 2017) (decision amended on March 2, 2017. No. 15-1133-cv(L), 2017 WL 816878 (2d Cir. March 2, 2017)), revisited its holding in Orion Shipping & Trading Co. v. Eastern States Petroleum, 312 F.2d 299 (2d Cir. 1963), issued 54 years earlier to the day. In so doing, the Second Circuit held that the Orion Shipping rule—a two-step procedure governing the enforcement of arbitral awards under §9 of the Federal Arbitration Act (FAA)—did not apply to the enforcement of foreign arbitral awards under §207 of the FAA. Although clarifying the procedure that applies to the enforcement of foreign arbitral awards against a debtor named on the award, the decision failed to address what procedure applies when an award-creditor seeks to enforce a foreign arbitral award against an alleged alter-ego of the award-debtor that is not named on the award.

‘Orion Shipping’

In Orion Shipping, which was decided in 1963, seven years prior to the United States’ accession to the New York Convention, the Second Circuit addressed the procedure for confirmation of non-domestic arbitral awards (international awards decided in the United States), pursuant to §9 of the FAA. The decision, authored by Second Circuit Judge Irving R. Kaufman and joined by Judges Charles E. Clark and Paul R. Hays, held that a proceeding to confirm an arbitral award was not the proper occasion to extend the binding effect of an award to an alleged alter-ego. The panel instead reasoned that the award-creditor must first confirm the award, before seeking to impute liability to a third party at a “separate” post-judgment proceeding. 312 F.2d 299 at 301. The Second Circuit’s reasoning centered on its concern that alter-ego claims—generally complex and time-consuming—would “unduly complicate and protract” the confirmation of an arbitral award, which is intended to be a streamlined, summary proceeding. Id.

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