Opinion ID: 772585
Heading Depth: 3
Heading Rank: 4

Heading: New York Convention Defenses

Text: 25 Slaney alternatively suggests that even if we are to determine that she is bound by the arbitration panel's decision, the New York Convention provides exceptions in which a court need not enforce a foreign arbitral decision, and that those defenses to enforcement are applicable to the Tribunal's decision. 26 The first such defense raised by Slaney is that the Tribunal's decision should not be enforced because she was denied the opportunity to present her case. Slaney contends that under the IAAF rules, the IAAF has the burden of proving beyond a reasonable doubt that a doping offense has occurred. Her defense, she puts forth, was that the IAAF could not scientifically prove beyond a reasonable doubt that any prohibited substance was in her urine. Thus, when the Tribunal concluded it was bound by the IAAF's position--that upon a showing that an athlete had a T/E ratio greater than 6:1 the burden shifted to the athlete to show by clear and convincing evidence that the elevated ratio was due to a pathological or physiological condition--the Tribunal in effect denied Slaney a meaningful opportunity to present her case. 27 Article V(1)(b) of the New York Convention states that recognition and enforcement of an award may be refused if the party against whom it is invoked furnishes proof that it was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case. (emphasis added). A court of appeals reviews a district court's decision confirming an arbitration award under ordinary standards: accepting findings of fact that are not clearly erroneous and deciding questions of law de novo. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 947-48, (1995); Generica Ltd. v. Pharmaceutical Basics, Inc., 125 F.3d 1123, 1129 (7th Cir. 1997). As we have noted, in order to comport with the requirement that a party to a foreign arbitration be able to present her case, we require that the arbitrator provide a fundamentally fair hearing. See Generica, 125 F.3d at 1130. A fundamentally fair hearing is one that meets the minimal requirements of fairness--adequate notice, a hearing on the evidence, and an impartial decision by the arbitrator. Sunshine Mining Co. v. United Steelworkers, 823 F.2d 1289, 1295 (9th Cir. 1987) (internal citation omitted). Nevertheless, parties that have chosen to remedy their disputes through arbitration rather than litigation should not expect the same procedures they would find in the judicial arena. See Generica, 125 F.3d at 1130. Specifically, concerning evidentiary matters, the Supreme Court has noted that [a]rbitrators are not bound by the rules of evidence. Bernhardt v. Polygraphic Co., 350 U.S. 198, 203-04 n. 4, (1956). The extent of an arbitrator's latitude is such that an arbitrator is not bound to hear all of the evidence tendered by the parties.... [H]e must [merely] give each of the parties to the dispute an adequate opportunity to present its evidence and arguments. Generica, 125 F.3d at 1130 (citing Hoteles Condado Beach v. Union De Tronquistas, 763 F.2d 34, 39 (1st Cir. 1985)). It is when the exclusion of relevant evidence actually deprived a party of a fair hearing that it is appropriate to vacate an arbitral award. See id. 28 In Generica, we surveyed several cases in which an arbitrator's award was not enforced by the courts on the grounds raised now by Slaney. For example, in Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 21 (2d Cir. 1997), the court held that, under the FAA sec. 10(a), an arbitration panel's refusal to continue hearings to allow a witness to testify, the only witness with evidence of fraud not found from other sources, was fundamental unfairness and misconduct sufficient to vacate the award. In Iran Aircraft Indus. v. Avco Corp., 980 F.2d 141, 146 (2d Cir. 1992), a court also vacated an arbitration award, in that instance because the tribunal changed evidentiary rules during the hearing and thus prevented a party from presenting its documentary evidence. See also Hoteles Condado, 763 F.2d at 40.) (vacating award when the arbitrator excluded the only evidence available to refute the claims); Hall v. Eastern Air Lines, Inc., 511 F.2d 663, 664 (5th Cir. 1975) (refusing to enforce an award because the arbitration board refused to give weight to a party's previously untendered alibi defense). Our examination of these cases leads us to conclude that Slaney's allegation has no merit. This defense to enforcement of a foreign arbitration need not apply when a panel employs a burden-shifting test in a fair manner. Slaney was not denied an opportunity to present her evidence. Rather, the arbitrator's decision merely maintained the same standard of proof the IAAF had always been guided by. As such, Slaney's complaint does not truly attack the procedure implemented by the arbitration panel, but rather an underlying evidentiary decision of the panel. Unfortunately for Slaney, as the Supreme Court has noted, arbitrators are not bound by the rules of evidence. Bernhardt, 350 U.S. at 203-04 n.4. Thus, this attempted defense must fail. 29 Slaney's final submission on this issue is that presuming she had committed a doping offense based on a test that is scientifically invalid and discriminatory towards female athletes violated the 'most basic notions of morality and justice.' Slaney further postulates that eliminating the presumption of [her] innocence based upon her elevated T/E ratio also violates... explicit public policy that is well defined and dominant and is ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interests. 30 According to Article V(2)(b) of the New York Convention, [r]ecognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:... [t]he recognition or enforcement of the award would be contrary to the public policy of that country. In Fotocrome, Inc. v. Copal Co., 517 F.2d 512, 516 (2d Cir. 1975), the Second Circuit noted that the public policy defense is exceedingly narrow. While Slaney states that the Tribunal's decision meets the stringent requirements of that case and others, in that the Tribunal's decision violated the most basic notions of morality and justice, id., and that enforcement would entail a violation of a paramount legal principle that is ascertained by reference to the laws and legal precedents and from general considerations of supposed public interests, Industrial Risk Insurers v. M.A.N. Gutenhoffnungshutte GmbH, 141 F.3d 1434, 1445 (11th Cir. 1998) (internal quotations omitted), she provides little support for her contention. 31 Reduced to its essence, Slaney contends that the burden-shifting approach adopted by the IAAF violates United States public policy. We disagree. According to the parties, proving the presence of exogenous testosterone in the body by scientific tests is not possible at the present time. Therefore, the IAAF has adopted the rebuttable presumption of ingestion from a high T/E ratio in an athlete's urine, as detailed throughout this opinion. Were the IAAF not to make use of the rebuttable presumption, it would be nearly impossible, absent eyewitness proof, to ever find that an athlete had ingested testosterone. As the IAAF notes, criminal defendants are frequently required to come forward with proof establishing a basis for asserting affirmative defenses. See, e.g., Martin v. Ohio, 480 U.S. 228 (1987); Leland v. Oregon, 343 U.S. 790 (1952). We hope that at some juncture, science will develop a means for detecting exogenous testosterone in athletes, such that an athlete's T/E ratio of 11.6:1 can be discounted if it is based on innocent factors. However, until that point in time, we are confident that requiring an athlete to prove by clear and convincing evidence that her elevated ratio was due to pathological or physiological factors does not invoke a violation of United States public policy as federal case law has required in order for a court to refuse to enforce a foreign arbitral award. 32 Thus, having found that (1) Slaney participated in the IAAF arbitration, (2) her present state-law complaint seeks to relitigate issues decided by the IAAF Tribunal, (3) the New York Convention mandates enforcement of the arbitrator's decision, and (4) there is no defense that should bar enforcement of the arbitration decision, we find that the district court did not err in dismissing Slaney's state-law claims against the IAAF pursuant to Fed.R.Civ. P. 12(b)(1).