Opinion ID: 173592
Heading Depth: 1
Heading Rank: 5

Heading: In the absence of clear intent to the contrary, the FAA's vacatur standards apply to a Convention award rendered and enforced in the United States

Text: Under the Convention, a district court's role is limitedit must confirm the award unless one of the grounds for refusal specified in the Convention applies to the underlying award. Admart AG v. Stephen & Mary Birch Found., 457 F.3d 302, 307 (3d Cir.2006); see also 9 U.S.C. § 207. Article V of the Convention sets forth the grounds for refusal, [9] and courts have strictly applied the Article V defenses and generally view[ed] them narrowly. Admart AG, 457 F.3d at 308. Accordingly, if vacatur is limited to the grounds listed in the Convention, Ario would have little chance of success. We have recognized, however, that there is more flexibility . . . when the arbitration site and the site of the confirmation proceeding were within the same jurisdiction. Id. (citing Yusuf Ahmed Alghanim & Sons v. Toys R Us, Inc., 126 F.3d 15, 22-23 (2d Cir.1997)). In Yusuf, the Court of Appeals for the Second Circuit concluded that there are very different regimes for the review of arbitral awards (1) in the [country] in which, or under the law of which, the award was made, and (2) in other [countries] where recognition and enforcement are sought. 126 F.3d at 23. After conducting a thorough analysis of both regimes, it concluded that the FAA's vacatur standards applied to the Convention award it was reviewing because the arbitration award was made in the United States. Id. We previously adopted the second portion of Yusuf in Admart AG, `holding that, in an action to confirm an award rendered in, or under the law of, a foreign jurisdiction, the grounds for relief enumerated in Article V of the Convention are the only grounds available for setting aside an arbitral award.' 457 F.3d at 308 (quoting Yusuf, 126 F.3d at 20). We therefore looked only to the limited Article V grounds when reviewing a foreign Convention award. But unlike Admart AG, in this case the Convention award was rendered in the United States. Therefore, we must decide whether to adopt the first portion of the Yusuf decision and its articulation of the available grounds for vacating a Convention award rendered in the United States. The Yusuf Court held that, under Article V(1)(e) [of the Convention], the courts of the United States are authorized to apply United States procedural arbitral law, i.e., the [domestic] FAA, to nondomestic [Convention] awards rendered in the United States. [10] 126 F.3d at 19-20; see also Convention Art. V(1)(e) (Recognition and enforcement of the award may be refused . . . [if the award] has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.). Accordingly, the Yusuf Court concluded, [t]he Convention specifically contemplates that the [country] in which, or under the law of which, the award is made, will be free to set aside or modify an award in accordance with its domestic arbitral law and its full panoply of express and implied grounds for relief. 126 F.3d at 23. We agree with this interpretation, and now adopt it. This reasoning is also consistent with 9 U.S.C. § 208, also part of the Convention's implementing statute, in which Congress explicitly provided for the application of the domestic FAA to the extent that it did not conflict with the Convention. See 9 U.S.C. § 208 (Chapter 1 [of the FAA] applies to actions and proceedings brought under this chapter to the extent that chapter is not in conflict with this chapter or the Convention as ratified by the United States.). When both the arbitration and the enforcement of an award falling under the Convention occur in the United States, there is no conflict between the Convention and the domestic FAA because Article V(1)(e) of the Convention incorporates the domestic FAA and allows awards to be set aside or suspended by a competent authority of the country in which . . . that award was made. Here, because the arbitration took place in Philadelphia, and the enforcement action was also brought in Philadelphia, we may apply United States law, including the domestic FAA and its vacatur standards.