34 F.4th 1290
11th Cir.2022Background
- Corporación AIC, S.A. (AICSA) and Hidroeléctrica Santa Rita S.A. (HSR), both Guatemalan, contracted for a Guatemalan hydroelectric project; arbitration was conducted in Miami under the parties’ agreement.
- A split three‑arbitrator panel ruled for HSR and ordered AICSA to return approximately $7 million and €435,000 in advance payments.
- AICSA petitioned the federal district court to vacate the award, arguing the arbitrators exceeded their powers under 9 U.S.C. § 10(a)(4).
- The district court denied vacatur, relying on Eleventh Circuit precedent (Industrial Risk / Inversiones) holding that Article V of the New York Convention supplies the exclusive grounds to refuse enforcement of Convention awards.
- The Eleventh Circuit panel affirmed as bound by prior precedent, but the opinion and a concurrence criticize Industrial Risk/Inversiones as inconsistent with Supreme Court authority (notably BG Group and Outokumpu) and explain the primary/secondary jurisdiction distinction under Article V(1)(e).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA §10 vacatur grounds (e.g., arbitrator ‘exceeded powers’) apply to New York Convention awards when heard in U.S. courts | §10 applies either via incorporation through Article V(1)(e) or directly when the U.S. is the arbitration’s primary jurisdiction | Only Article V’s enumerated defenses govern refusal of recognition/enforcement of Convention awards (Industrial Risk/Inversiones) | Panel: bound by Eleventh Circuit precedent — may not vacate under §10(a)(4) for Convention awards; affirmed |
| Whether Article V(1)(e) incorporates domestic vacatur standards or otherwise permits U.S. courts to set aside awards made in/under U.S. law | AICSA: Article V(1)(e) or Chapter 2 §208 permits application of Chapter 1 §10 vacatur grounds when U.S. is the seat or governing law | HSR: Article V(1)(e) is merely a defense allowing secondary courts to refuse enforcement if the award has been set aside at the seat; it does not import §10 into the Convention | Panel: did not reach a new holding because bound by precedent; majority affirms but explains they believe Article V(1)(e) and domestic law should govern vacatur at the seat and invites en banc review |
| If §10 applies, whether the arbitrators exceeded their powers in this case | AICSA: arbitral award exceeded powers — merits warrant vacatur | HSR: arbitration decision valid; merits do not support vacatur | Court: did not reach merits because bound to decide the preliminary jurisdictional question against AICSA; affirmed |
Key Cases Cited
- Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434 (11th Cir. 1998) (held Article V provides exclusive defenses to enforcement of Convention awards)
- Inversiones y Procesadora Tropical INPROTSA, S.A. v. Del Monte Int’l GmbH, 921 F.3d 1291 (11th Cir. 2019) (reaffirmed Industrial Risk; panel bound Eleventh Circuit precedent)
- BG Group PLC v. Republic of Argentina, 572 U.S. 25 (2014) (Supreme Court applied deferential review to arbitrators and evaluated FAA ‘exceeded powers’ question in treaty arbitration)
- GE Energy Power Conversion France SAS Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020) (Supreme Court: Convention requires courts to rely on domestic law to fill gaps)
- Yusuf Ahmed Alghanim & Sons v. Toys "R" Us, Inc., 126 F.3d 15 (2d Cir. 1997) (Article V(1)(e) contemplates primary‑jurisdiction courts applying domestic vacatur law)
- Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274 (5th Cir. 2004) (distinguishes primary/secondary jurisdiction; primary courts may annul under domestic law)
- Jacada (Europe), Ltd. v. Int’l Mktg. Strategies, Inc., 401 F.3d 701 (6th Cir. 2005) (recognized that awards made in U.S. may be vacated under domestic law)
- Bamberger Rosenheim, Ltd. v. OA Dev., Inc., 862 F.3d 1284 (11th Cir. 2017) (noting tension between Industrial Risk and BG Group and assuming §10 may apply without deciding)