Opinion ID: 595495
Heading Depth: 2
Heading Rank: 1

Heading: Direct Enforceability of the Award

Text: 35 The Iranian parties contend that the district court erred in refusing to enforce the Award because the Tribunal's awards are directly enforceable in United States courts, irrespective of the defenses to the enforcement of foreign arbitral awards provided for in the New York Convention. The Iranian parties do not, and cannot, point to any mechanism in the Accords for direct enforcement of Tribunal awards issued against United States nationals. 6 Nevertheless, the Iranian parties argue that Tribunal awards must be directly enforced because the Accords state that All decisions and awards of the Tribunal shall be final and binding. See Claims Settlement Declaration, Art. IV(1). 36 The Tribunal's own interpretation of the Accords reveals the lack of merit in the Iranian parties' position. In Islamic Republic of Iran v. United States, Case No. A/21, 14 Iran-U.S.Cl.Trib.Rep. 324 (1987), the Tribunal considered whether the Accords obligated the United States to satisfy awards issued in favor of Iran or its nationals upon the default of United States nationals. The Tribunal ruled that while the United States had no such obligation under the Accords, it had assumed a treaty obligation to provide an enforcement mechanism for the Tribunal's awards, stating: 37 It is therefore incumbent on each State Party to provide some procedure or mechanism whereby enforcement may be obtained within its national jurisdiction, and to ensure that the successful Party has access thereto. If procedures did not already exist as part of the State's legal system they would have to be established, by means of legislation or other appropriate measures. Such procedures must be available on a basis at least as favorable as that allowed to parties who seek recognition or enforcement of foreign arbitral awards. 38 Id. at 331 (emphasis added). Accordingly, the Accords require only that we grant the Award at least as favorable treatment as we grant other final and binding foreign arbitral awards. 39 The Iranian parties argue that where parties agree to final or binding arbitration, the resulting arbitral award must be treated as a final, res judicata judgment against the non-prevailing party. We disagree. The terms final and binding merely reflect a contractual intent that the issues joined and resolved in the arbitration may not be tried de novo in any court. See I/S Stavborg v. National Metal Converters, Inc., 500 F.2d 424, 427 (2d Cir.1974). Furthermore, we have held that even a final and binding arbitral award is subject to the defenses to enforcement provided for in the New York Convention. See Fotochrome, Inc. v. Copal Co., Ltd., 517 F.2d 512, 519 (2d Cir.1975). 7 Accordingly, the final and binding language in the Accords does not bar consideration of the defenses to enforcement provided for in the New York Convention.