International Arbitration Enforcement Act of 1996

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``International Arbitration 
Enforcement Act of 1996''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) Arbitration is an efficient and flexible dispute 
        resolution mechanism of great benefit to United States persons 
        doing business internationally.
            (2) In some countries, particularly those with undeveloped 
        or inconsistent judicial systems, international arbitration may 
        be the only fair and reliable dispute resolution mechanism 
        available to United States persons.
            (3) The usefulness of international arbitration depends in 
        large measure on the commitment of foreign states to enforce 
        foreign arbitral awards pursuant to their accession to, and 
        observance of, the Convention on the Recognition and 
        Enforcement of Foreign Arbitral Awards.
            (4) United States persons are often without remedies when 
        foreign states violate the Convention by refusing to enforce 
        foreign arbitral awards or by otherwise impairing the ability 
        to collect the awards by improperly delaying their enforcement.
            (5) It is in the interest of the United States to maintain 
        the reliability of international arbitration, to promote the 
        observance of the Convention, and to protect United States 
        persons from economic injury resulting from violations of the 
        Convention by foreign states.
            (6) Similarly, it would be unjust to permit a foreign state 
        to be shielded from liability in the United States for the 
        damages suffered by a United States person abroad resulting 
        from a violation of the Convention by the foreign state.
            (7) It is therefore in the national interest to create a 
        judicial remedy in favor of United States persons injured as a 
        result of a violation of the Convention by a foreign state and 
        to facilitate the execution of any judgment entered in such an 
        action.

SEC. 3. PURPOSE.

    The purpose of this Act is to create a civil remedy against foreign 
states whose violation of the Convention injures United States persons 
by prohibiting the enforcement of foreign arbitral awards entered in 
favor of such United States persons or by impairing the ability of such 
United States persons to collect such awards.

SEC. 4. DEFINITIONS.

    As used in this Act--
            (1) Convention.--The term ``Convention'' means the 
        Convention on the Recognition and Enforcement of Foreign 
        Arbitral Awards, done at New York on June 10, 1958.
            (2) United states person.--The term ``United States 
        person'' means--
                    (A) any United States citizen or alien admitted for 
                permanent residence into the United States; and
                    (B) any corporation, trust, partnership, or other 
                judicial entity which is 50 percent or more 
                beneficially owned, directly or indirectly, by 
                individuals described in subparagraph (A).
            (3) Foreign arbitral award.--The term ``foreign arbitral 
        award'' means any arbitral award to which the Convention 
        applies.

SEC. 5. LIABILITY FOR VIOLATION OF THE CONVENTION.

    (a) Civil Remedy.--(1) Any foreign state that is certified by the 
President under subsection (b) to have injured a United States person 
through the state's violation of the Convention with respect to a 
foreign arbitral award shall be liable to the United States person for 
money damages consisting of--
            (A) the amount of the foreign arbitral award, plus any 
        interest provided for by the award; and
            (B) the attorney's fees and costs incurred by the United 
        States person in bringing an action under this Act with respect 
        to such certification.
    (2) Actions may be brought under paragraph (1) with respect to 
arbitral awards entered before, on, or after the date of the enactment 
of this Act.
    (b) Presidential Certification.--The President may certify an 
injury to a United States person through a violation of the Convention 
if--
            (1)(A) a foreign state has failed to enforce a foreign 
        arbitral award entered in favor of that United States person in 
        violation of the state's obligations under the Convention; or
            (B) a foreign state has impeded, in violation of its 
        obligations under the Convention, the enforcement of a foreign 
        arbitral award entered in favor of that United States person 
        such that the ability of the United States person to collect 
        the award may reasonably be presumed to have been impaired or 
        reduced; and
            (2) the United States person has exhausted all judicial and 
        administrative remedies in the foreign state in which the 
        arbitral award is sought to be enforced, or the further pursuit 
        of such remedies would reasonably be considered to be futile.
    (c) Effect of Presidential Certification.--A Presidential 
certification that a United States person has been injured by a foreign 
state's violation of the Convention shall, in any action brought under 
this Act, establish an evidentiary presumption that--
            (1) the foreign state certified to have violated the 
        Convention has done so; and
            (2) the damages suffered by the United States person are 
        equivalent to the amount of the award plus interest, if any.
    (d) Jurisdiction.--(1) Chapter 85 of title 28, United States Code, 
is amended by inserting after section 1331 the following new section:
``Sec. 1331a. Civil actions involving violations of the Convention on 
              the Recognition and Enforcement of Foreign Arbitral 
              Awards
    ``The district courts shall have exclusive jurisdiction, without 
regard to the amount in controversy, of any action brought under 
section 5 of the International Arbitration Enforcement Act of 1996.''.
    (2) The table of sections for chapter 85 of title 28, United States 
Code, is amended by inserting after the item relating to section 1331 
the following:

``1331a. Civil actions involving violations of the Convention on the 
                            Recognition and Enforcement of Foreign 
                            Arbitral Awards.''.
    (e) Waiver of Sovereign Immunity.--Section 1605 of title 28, United 
States Code, is amended--
            (1) by striking ``or'' at the end of paragraph (5);
            (2) by striking the period at the end of paragraph (6) and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(7) in which the action is brought with respect to 
        violations of the Convention on the Recognition and Enforcement 
        of Foreign Arbitral Awards under section 5 of the International 
        Arbitration Enforcement Act of 1996.''.
    (f) No Immunity From Attachment or Execution.--(1) Section 1610(a) 
of title 28, United States Code, is amended--
            (A) by striking the period at the end of paragraph (6) and 
        inserting ``, or''; and
            (B) by adding at the end the following:
            ``(7) the judgment or attachment relates to a claim for 
        which the foreign state is not immune under section 1605(a)(7), 
        regardless of whether the property is or was involved in or 
        related to the act giving rise to or upon which the claim is 
        based.''.
    (2) Section 1610(b) of such title is amended--
            (A) by striking ``or'' at the end of paragraph (1);
            (B) by striking the period at the end of paragraph (2) and 
        inserting ``, or''; and
            (C) by adding at the end the following:
            ``(3) the judgment or attachment relates to a claim for 
        which the foreign state is not immune under section 1605(a)(7), 
        regardless of whether the property is or was involved in or 
        related to the act giving rise to or upon which the claim is 
        based.''.
    (g) Limitations Period.--An action under this Act may be brought 
within one year after the President makes the certification under 
subsection (b) on which the action is based.

Summary: International Arbitration Enforcement Act of 1996 - Makes liable for money damages any foreign state that has injured a US person through its violation of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards with respect to a foreign arbitral award. Amends Federal law to grant district courts exclusive jurisdiction over violations of the Convention. Waives a foreign state's sovereign immunity in any action brought against it for violations of the Convention, including the enforcement of such actions.