Opinion ID: 758022
Heading Depth: 2
Heading Rank: 3

Heading: Alleged Forgery of Agreement

Text: 28 Maiellano also argues that the award was based on the allegedly forged 1979 agreement and therefore enforcement would be contrary to United States public policy. The Convention provides that a federal court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention. 9 U.S.C. § 207. Article V(2)(B) of the Convention allows a court to refuse enforcement where to do so would violate the public policy of the enforcing state. However, this public policy exception is to be construed very narrowly and should be applied only where enforcement would violate our 'most basic notions of morality and justice.'  Waterside Ocean Navigation Co. v. International Navigation Ltd., 737 F.2d 150, 152 (2d Cir.1984) (quoting Fotochrome, 517 F.2d at 516); see also Parsons & Whittemore, 508 F.2d at 974. No such public policy concerns are implicated in this case. 29 Maiellano has apparently confused the issue of a fraudulently obtained arbitration agreement or award, which might violate public policy and therefore preclude enforcement, see Waterside Ocean, 737 F.2d at 153; Tahan v. Hodgson, 662 F.2d 862, 864 (D.C.Cir.1981), with the issue of whether the underlying contract that is the subject of the arbitrated dispute was forged or fraudulently induced--a matter to be determined exclusively by the arbitrators. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967); Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 960 (10th Cir.1992); Island Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313, 1316 n. 2, 1319 (2d Cir.1973); Meadows Indem. Co. v. Baccala & Shoop Ins. Services, Inc., 760 F.Supp. 1036, 1041 (E.D.N.Y.1991). Indeed, the supplemental arbitration agreement at issue here, whose validity Maiellano does not dispute, incorporates this rule of law by expressly providing that any dispute [arising] with respect to the application of [the 1988] agreement, including its validity, execution or resolution, ... shall be settled by a final arbitration by an Arbitration Panel. (emphasis added). Thus, if Maiellano failed to raise the issue of the forged 1979 agreement to the arbitrators, the issue is forfeited. See National Wrecking Co. v. International Bhd. of Teamsters, Local 731, 990 F.2d 957, 960 (7th Cir.1993) (issues not raised before arbitrator are waived in enforcement proceeding). And if Maiellano did raise the issue to the arbitrators, it cannot seek to relitigate the matter here. See Barbier v. Shearson Lehman Hutton Inc., 948 F.2d 117, 120-21 (2d Cir.1991); Fotochrome, 517 F.2d at 512, 517-18; Halley Optical, 752 F.Supp. at 640; Bridas Sociedad, 745 F.Supp. at 181. It is also significant that the Italian Tribunal, in confirming the arbitration award, determined that the arbitrators had based their decision primarily on the ten-year business relationship that had existed between the parties, and that the allegedly forged 1979 agreement had only a minor influence on their decision. Furthermore, even if the arbitrators erroneously determined that the 1979 agreement was valid, an arbitration award cannot be avoided solely on the ground that the arbitrator may have made an error of law or fact. See National Wrecking, 990 F.2d at 960; Hewlett-Packard, Inc. v. Berg, 867 F.Supp. 1126, 1130-32 (D.Mass.1994) (same rule for foreign arbitration awards under the Convention), vacated and remanded on other grounds, 61 F.3d 101 (1st Cir.1995). Thus, we agree with the district court that enforcement of the arbitration award would not violate public policy. 30