381 F.Supp.3d 1332
D. Colo.2019Background
- Goldgroup and DynaResources contracted in 2006 (Option Agreement) with an arbitration clause specifying arbitration in Denver under AAA/ICDR rules and a forum-selection clause for Denver; Mexican law applied to share-acquisition issues.
- Multiple parallel proceedings followed: Goldgroup sued in Mazatlán (injunction re: shares); DynaResources sued in Texas (dismissed/refiled in Mexico City); Goldgroup demanded arbitration in Denver in March 2014; DynaResources sought declaratory/injunctive relief in Colorado federal court to stop the arbitration.
- The AAA and the arbitrator proceeded; the arbitrator ruled he had jurisdiction to decide arbitrability and declined to stay the arbitration despite a Mexico City court order finding the arbitration tacitly waived under Mexican law.
- DynaResources did not participate in the arbitration hearing (citing the Mexico City order); the arbitrator issued a final award in August 2016 in favor of Goldgroup, finding no waiver and awarding damages and fees.
- Goldgroup sought confirmation of the award in federal court in Colorado; DynaResources moved to vacate, relying on the Mexico City order and various FAA and Panama Convention defenses. The magistrate recommended vacatur; the district court rejected that recommendation and confirmed the award.
Issues
| Issue | Plaintiff's Argument (Goldgroup) | Defendant's Argument (DynaResources) | Held |
|---|---|---|---|
| Who decides waiver of the right to arbitrate (court or arbitrator)? | Arbitrator (and courts previously signaled arbitrator authority); arbitrability issues fall to arbitrators under the parties’ incorporation of AAA/ICDR rules. | Courts can decide waiver based on litigation conduct; Mexico City court exercised that power. | Court: Under controlling Tenth Circuit analysis, waiver by litigation conduct is a question for a court (not the arbitrator), but whether the Mexico City court could decide it was not established here. |
| Does a Mexico City court order finding waiver preclude a U.S. arbitration held in Denver? | No; the arbitration forum and procedural law are U.S.-based by contract; the Mexico City order did not find the clause invalid and lacked shown authority to enjoin the U.S. arbitration. | Yes; the Mexico City court found the arbitration unenforceable and its order barred participation and annulled/suspended the arbitration. | Court: The Mexico City order did not establish invalidity or effective annulment of the award under applicable law; DynaResources failed to show the Mexican court could validly enjoin or nullify the U.S. arbitration. |
| Are domestic FAA vacatur standards (9 U.S.C. §10) available when the Panama Convention applies? | Domestic FAA defenses apply to awards rendered in the U.S.; thus §§10(a) grounds may be considered via the Convention and §307. | The Convention’s limited defenses govern; domestic FAA should not expand defenses beyond the Convention. | Court: Agrees with circuits allowing domestic FAA defenses to apply to Convention awards rendered in the U.S.; nonetheless, vacatur is narrowly construed and DynaResources did not meet the heavy burden. |
| Did the arbitrator exceed powers or commit misconduct by proceeding after the Mexico City order and awarding damages/fees? | Arbitrator acted within authority (Article 15 of ICDR rules), reasonably refused to postpone, and properly awarded damages and fees related to breach. | Arbitrator exceeded authority/misconduct under §10(a)(3)–(4) by ignoring foreign court order and continuing without DynaResources’ participation; fee awards were improper/indeterminate. | Court: Rejected vacatur under §10(a)(3), §10(a)(4), and §10(a)(2); arbitrator provided reasonable bases; fee awards as damages were within arbitrator’s remedial discretion. |
Key Cases Cited
- Bowen v. Amoco Pipeline Co., 254 F.3d 925 (10th Cir. 2001) (arbitral-review is highly deferential)
- CEEG (Shanghai) Solar Science & Tech. Co. v. Lumos LLC, 829 F.3d 1201 (10th Cir. 2016) (arbitrator interpretations receive maximum deference)
- Dish Network L.L.C. v. Ray, 900 F.3d 1240 (10th Cir. 2018) (errors of law or fact by arbitrator do not justify reversal absent manifest disregard)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (1987) (courts cannot reconsider merits of an award where arbitrator arguably construed the contract)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (presumption that procedural questions like waiver are for arbitrators unless specified otherwise)
- Pre-Paid Legal Servs. v. Cahill, 786 F.3d 1287 (10th Cir. 2015) (distinguishing Howsam where statutory/default issues made waiver a question for courts)