78 F.4th 1252
11th Cir.2023Background
- Grupo Unidos (a European consortium) contracted to build new Panama Canal locks; disputes were to be resolved under ICC Rules in Miami.
- Tribunal: three experienced arbitrators (Gaitskell, von Wobeser, Gunter); extensive five-year arbitration produced a Partial Award and then a Final Award awarding Autoridad del Canal roughly $285 million.
- After the Partial Award, Grupo Unidos requested expanded disclosures; arbitrators disclosed prior and concurrent service on other, unrelated panels that involved counsel or arbitrators who also participated in Panama 1.
- Grupo Unidos challenged the arbitrators before the ICC International Court of Arbitration (ICA); ICA found some disclosure lapses but denied disqualification and rejected the challenges.
- Grupo Unidos moved in federal court to vacate the awards arguing evident partiality and invoked New York Convention defenses; district court denied vacatur and confirmed the awards.
- On appeal (after this Court’s en banc decision in Corporación AIC adopting FAA Chapter 1 as the vacatur basis for U.S.-seated New York Convention arbitrations), the Eleventh Circuit affirmed denial of vacatur under 9 U.S.C. § 10(a)(2) (evident partiality) and rejected Article V defenses to confirmation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether awards should be vacated under FAA §10(a)(2) for evident partiality | Non-disclosures of arbitrators’ overlapping service with each other and with Canal counsel created reasonable doubts about impartiality | Overlaps reflect routine professional familiarity among elite arbitrators and counsel; no actual bias or undisclosed business dealings | Denied vacatur: disclosures, even if belated, did not show actual conflict or reasonable person standard for evident partiality |
| Whether enforcement would violate U.S. public policy (NY Convention art V(2)(b)) | Late disclosures amounted to evident partiality that violates U.S. public policy against biased arbitrators | Public-policy defense is narrow; no violation because no evident partiality shown | Rejected: public-policy exception not met because FAA/ICC rules not breached in a way that shocks basic notions of justice |
| Whether tribunal procedure violated parties’ agreement or governing law (NY Convention art V(1)(d)) | Composition/procedure breached ICC Rules and parties’ agreement because of nondisclosures Grupo Unidos would not have consented to | ICA followed ICC challenge procedure and found no disqualifying conflicts; ICC Rules were applied; minor nondisclosures did not taint composition | Rejected: ICA reasonably applied ICC Rules; composition and procedures complied with agreement and law |
| Whether Grupo Unidos was unable to present its case or lacked notice (NY Convention art V(1)(b)) | Nondisclosures denied fundamental procedural fairness and impaired Grupo Unidos’ ability to present its case | Grupo Unidos had full opportunity to present evidence; process was impartial and adversarial rights preserved | Rejected: no showing of material procedural defect or deprivation of basic due process rights |
Key Cases Cited
- Corporación AIC, SA v. Hidroeléctrica Santa Rita S.A., 66 F.4th 876 (11th Cir. 2023) (en banc) (Chapter 1 FAA governs vacatur where New York Convention applies and arbitration is U.S.-seated)
- Oxford Health Plans LLC v. Sutter, 569 U.S. 564 (2013) (federal policy favors finality of arbitration and narrow judicial review)
- Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145 (1968) (arbitrators must disclose dealings that might create impression of bias)
- Univ. Commons-Urbana, Ltd. v. Universal Constructors Inc., 304 F.3d 1331 (11th Cir. 2002) (evident partiality requires nondisclosure that would lead reasonable person to suspect conflict)
- Gianelli Money Purchase Plan & Tr. v. ADM Inv. Serv., Inc., 146 F.3d 1309 (11th Cir. 1998) (evident partiality exception strictly construed; allegations must be direct and demonstrable)
- Mitsubishi Motors Corp. v. Soler Chrysler Plymouth, Inc., 473 U.S. 614 (1985) (international awards receive heightened deference)
- Técnicas Reunidas de Talara S.A.C. v. SSK Ingeniería y Construcción S.A.C., 40 F.4th 1339 (11th Cir. 2022) (narrow construction of New York Convention defenses)
- Cvoro v. Carnival Corp., 941 F.3d 487 (11th Cir. 2019) (public-policy defense to enforcement of international awards is rarely successful)
- Hall Street Assocs., LLC v. Mattel, Inc., 552 U.S. 576 (2008) (arbitration is a complete method of dispute resolution; limited judicial review)
- In re Andros Compania Maritima, S.A., 579 F.2d 691 (2d Cir. 1978) (prior co-arbitrations with counsel do not automatically warrant vacatur)