Bamberger Rosenheim, Ltd. v. OA Development, Inc.
2017 U.S. App. LEXIS 12729
| 11th Cir. | 2017Background
- Profimex (Israeli) and OAD (Georgia) entered a 2008 Solicitation Agreement with an ICC arbitration clause specifying venue: Tel Aviv if OAD submits the dispute; Atlanta if Profimex submits the dispute.
- Profimex initiated arbitration in Atlanta alleging breach; OAD filed a defamation counterclaim in that same Atlanta arbitration.
- Profimex argued the counterclaim was a dispute “submitted by OAD” and therefore had to be heard in Tel Aviv; the arbitrator concluded the dispute was submitted by Profimex and kept venue in Atlanta.
- The arbitrator found Profimex liable on the defamation counterclaim; Profimex petitioned to vacate the award and OAD sought confirmation.
- District court confirmed the award; Profimex appealed arguing (1) the arbitral procedure violated the parties’ agreement under the New York Convention Art. V(1)(d) and (2) the arbitrator exceeded powers under 9 U.S.C. § 10(a)(4).
- The Eleventh Circuit reviewed de novo legal conclusions, applied narrow judicial review of arbitration awards, and framed the central question as whether courts must defer to an arbitrator’s interpretation of an arbitral-venue clause.
Issues
| Issue | Plaintiff's Argument (Profimex) | Defendant's Argument (OAD) | Held |
|---|---|---|---|
| Whether venue-selection interpretation is for courts or arbitrators | Venue is a question of arbitrability for courts; counterclaim submitted by OAD so venue must be Tel Aviv | Venue-selection clauses are procedural and presumptively for arbitrators to interpret | Court held forum-selection in arbitration is presumptively a procedural question for arbitrators; defer to arbitrator’s interpretation |
| Whether arbitrator exceeded authority / award must be vacated or not | Arbitrator ignored the agreement’s venue term, so award violates New York Convention Art. V(1)(d) and §10(a)(4) | Arbitrator engaged the clause and arguably interpreted it; that interpretation is dispositive under Oxford Health | Court held review limited to whether arbitrator even arguably interpreted the clause; here he did, so award confirmed |
Key Cases Cited
- Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 (2013) (arbitrator’s interpretation entitled to deference if he at least arguably interpreted the contract)
- BG Group PLC v. Republic of Argentina, 134 S. Ct. 1198 (2014) (distinguishes questions of arbitrability from presumptively procedural questions for arbitrators)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (procedural gateway questions generally for arbitrators)
- UBS Fin. Servs., Inc. v. W. Va. Univ. Hosps., Inc., 660 F.3d 643 (2d Cir. 2011) (forum-selection clauses in arbitration are presumptively for arbitrators)
- Polimaster Ltd. v. RAE Systems, Inc., 623 F.3d 832 (9th Cir. 2010) (contrasting view: appellate court declined to defer where clause found unambiguous)
- Sterling Fin. Inv. Grp., Inc. v. Hammer, 393 F.3d 1223 (11th Cir. 2004) (district court may enforce forum-selection clause when arbitrators disregard an unambiguous venue term)