40 F.4th 1339
11th Cir.2022Background
- Técnicas Reunidas (Peruvian) subcontracted SSK for refinery work; the contract required ICC arbitration and specified Miami as the seat.
- During the final arbitration hearing (March 2020), Técnicas’ counsel Cristián Conejero participated; shortly thereafter Conejero and associate Gianfranco Lotito left Ferrero DU to join Cuatrecasas, which represented SSK.
- Conejero informed Técnicas’ corporate representative and, on April 13, 2020, notified the arbitral panel and lead counsels of the move (requested confidentiality and asserted continued client confidentiality).
- The arbitral panel issued a $40 million award to SSK on March 18, 2021; Técnicas objected to arbitrator conflicts in April 2021 but raised counsel side-switching for the first time in a June 16, 2021 federal petition to vacate.
- The district court confirmed the award, found the public-policy defense narrow, concluded Técnicas waived any objection by failing to timely raise it during the arbitration, and denied sanctions; the Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney side-switching requires vacatur as a public-policy violation | Side-switching violates U.S./Florida public policy; prejudice is presumed and vacatur is required | Enforcement favors arbitration; Florida RPC inapplicable; no prejudice shown | Court did not decide whether side-switching violated policy; vacatur denied because objection was waived |
| Whether Técnicas waived the right to challenge by failing to object promptly | Could not waive because counsel never obtained informed consent or written waiver; lacked an avenue to raise during arbitration | Técnicas knew the facts and waited over a year and until adverse award to object, so it waived the defense | Waiver: Técnicas had full knowledge and delayed more than a year; waiver dispositive |
| Whether actual prejudice must be shown at enforcement stage | Prejudice should be presumed when counsel switches sides | To overturn a final result, plaintiff must show actual prejudice to the arbitration outcome | Held that prejudice is not presumed at enforcement stage; Técnicas presented no evidence of actual prejudice |
| Which convention/rules govern and whether Florida RPC apply | Florida is seat; Florida Rules of Professional Conduct apply even if counsel never practiced in Florida | Both parties Peruvian so Panama Convention governs; applicability of Florida RPC was disputed but not dispositive | Court applied Panama Convention; did not resolve applicability of Florida RPC because waiver resolved case |
Key Cases Cited
- Indus. Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434 (11th Cir. 1998) (standard of review for arbitral-award confirmation under the Convention)
- Corporación Mexicana De Mantenimiento Integral v. Pemex-Exploración Y Producción, 832 F.3d 92 (2d Cir. 2016) (Panama and New York Conventions treated similarly for certain defenses)
- Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A., 34 F.4th 1290 (11th Cir. 2022) (applying narrow public-policy defense and limited review of arbitral awards)
- Cvoro v. Carnival Corp., 941 F.3d 487 (11th Cir. 2019) (public-policy defense is narrow; presumption favoring enforcement)
- W.R. Grace & Co. v. Loc. Union 759, Int’l Union of United Rubber, Cork, Linoleum & Plastic Workers of Am., 461 U.S. 757 (1983) (public policy must be explicit, well-defined, and dominant)
- AAOT Foreign Econ. Ass’n (VO) Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 139 F.3d 980 (2d Cir. 1998) (party with knowledge of possible ethical taint cannot remain silent and later object)
- Enron Nigeria Power Holding, Ltd. v. Fed. Republic of Nigeria, 844 F.3d 281 (D.C. Cir. 2016) (contractual waiver of judicial review of awards conflicts with public-policy protections)
- University Commons-Urbana, Ltd. v. Universal Constructors Inc., 304 F.3d 1331 (11th Cir. 2002) (distinguishes waiver where the complaining party lacked full knowledge of facts)
- Middlesex Mut. Ins. Co. v. Levine, 675 F.2d 1197 (11th Cir. 1982) (waiver requires full knowledge of the facts)