Brittania-U Nigeria, Limited v. Chevron USA, Incor
2017 U.S. App. LEXIS 14692
| 5th Cir. | 2017Background
- In 2013 Chevron Nigeria invited Brittania-U to bid for three Nigerian Oil Mining Leases; Brittania-U signed a confidentiality agreement containing an arbitration clause adopting the UNCITRAL Rules and giving the arbitrator power to decide jurisdiction and validity of the arbitration provision.
- Brittania-U bid higher but did not win; it sued Chevron, BNP Paribas employee Moncef Attia, and Chevron employee Ali Moshiri in Texas state court for fraudulent inducement and tortious interference.
- Chevron removed the suit to federal court asserting jurisdiction under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and diversity; defendants moved to dismiss based on the arbitration clause; Brittania-U moved to remand.
- The district court denied remand and dismissed the case in favor of arbitration; Brittania-U appealed both rulings.
- The Fifth Circuit held that Convention jurisdiction existed because the dispute concerned leases and performance in Nigeria and the arbitration was to occur in London, a Convention signatory.
- The court also held the confidentiality agreement (by incorporating UNCITRAL Rules) clearly and unmistakably delegated arbitrability to the arbitrator, and that delegation applied to disputes with the nonsignatory defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction under the Convention | Removal improper; insufficient foreign element | Convention applies because arbitration involves foreign property, performance, and London seat | Held: Convention jurisdiction exists; removal proper |
| Whether arbitration agreement "relates to" the state-court action to permit removal under 9 U.S.C. § 205 | Agreement does not sufficiently affect outcome to permit removal | Agreement could conceivably affect disposition; removal allowed | Held: Agreement relates to the suit; removal authorized |
| Whether incorporation of UNCITRAL Rules delegates arbitrability to arbitrators | Delegation not clear/unmistakable | Incorporation of UNCITRAL Rules vests arbitrator with power to decide jurisdiction | Held: Incorporation clearly and unmistakably delegates arbitrability |
| Whether delegation of arbitrability binds nonsignatory defendants (Attia, Moshiri) | Nonsignatories cannot force arbitration; delegation inapplicable | Delegation applies via contract-law doctrines and signatory expectations; Contec analogous | Held: Delegation applies to disputes with nonsignatories; dismissal for arbitration proper |
Key Cases Cited
- Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327 (5th Cir. 2004) (tests when Convention applies and when foreign element suffices)
- Beiser v. Weyler, 284 F.3d 665 (5th Cir. 2002) (arbitration agreement "relates to" action if it could affect outcome for removal under § 205)
- Petrofac, Inc. v. DynMcDermott Petroleum Ops. Co., 687 F.3d 671 (5th Cir. 2012) (incorporation of arbitration rules can clearly and unmistakably delegate arbitrability)
- Contec Corp. v. Remote Solution Co., 398 F.3d 205 (2d Cir. 2005) (delegation clause applied where signatory expectations supported binding nonsignatories)
- Chevron Corp. v. Ecuador, 795 F.3d 200 (D.C. Cir. 2015) (UNCITRAL Rules incorporation treated as delegating arbitrability)
- Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069 (9th Cir. 2013) (same conclusion on UNCITRAL Rules delegating arbitrability)
- Kubala v. Supreme Prod. Servs., Inc., 830 F.3d 199 (5th Cir. 2016) (framework for analyzing contract formation and delegation of arbitrability)
- Gilbert v. Donahoe, 751 F.3d 303 (5th Cir. 2014) (standard of review for motions to dismiss in favor of arbitration)