Author: Marc J. Goldstein*
Published: August 2014
Description: The question of what treatment should be afforded by U.S. courts to an arbitral award falling under the New York Convention that already has been set aside by a court at the place of arbitration is much discussed by specialists in the field but less frequently encountered in the day-to-day work of the courts. The question has reached federal appellate courts and been addressed at that level only twice – in the Baker Marine and TermoRio cases. The issue has not had sufficient judicial exposure for a cohesive approach to have developed. Each case inevitably raises, among other questions, what respect should be given to the result of a judicial proceeding in a country with which the United States enjoys more or less sanguine diplomatic and trade relations. Principles of comity among nations, drawn from what may be termed the U.S. federal common law of foreign relations, have tended to prevail over principles of deference to the arbitration outcomes of arbitration derived from the New York Convention and the Federal Arbitration Act. In contrast, arbitration theorists who view the arbitration process as being only minimally connected to the State that plays host to the arbitration find deference to the outcomes in the Host State’s courts less compelling. Whereas the issue is far from settled in the United States, there remains a need for discussion despite the extensive literature already devoted to the question. This article explores the evolution of U.S. law, considers how the French theory of “de-localization” fits (or does not) with U.S. law, and concludes that principles of deference to the decisions of international arbitrators, developed in U.S. arbitration jurisprudence, deserve greater weight than they have received when the question of enforcement of an annulled award is presented.
I. IN THE BEGINNING, THERE WAS CHROMALLOY
The 1996 decision of a U.S. district court in Washington, D.C. in Chromalloy Aeroservices v. Arab Republic of Egypt, granted recognition of an award made in favor of a U.S. company against the Egyptian State by an arbitral tribunal with its seat in Cairo, Egypt. The arbitration had been conducted under Egyptian arbitration law by agreement of the parties, and the award had been set aside by …
*Arbitrator and Attorney, Member of the New York Bar.