Court Opinion

ID: 9483620
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:26:50.165259+00
Date Added: 2024-06-11T17:49:44.407553
License: Public Domain

CARDAMONE, Circuit Judge,
dissenting:
The issue before us is whether Avco was denied an opportunity to present its case before the Iran-United States Claims Tribunal at the Hague. To rule, as the majority does, that it was denied such an opportunity renders the Tribunal’s award unenforceable under article V(l)(b) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517 (the New York Convention). I respectfully dissent because it seems to me that a fair reading of this record reveals that Avco was not denied such an opportunity. Thus, in my view the arbitral award is enforceable under the New York Convention.
I
Avco’s focus is on a pre-trial colloquy between its counsel and Judge Mangard of the Tribunal regarding the use of summaries in place of some of the invoices Avco needed to prove its claim. Judge Mangard stated the panel would not be very “enthusiastic about getting kilos and kilos of invoices,” and added that there appeared to be no objection to using summaries of certain invoices, and suggested to counsel that “as a precaution” Avco might get an account summary made. Based on this brief exchange, Avco now makes the dubious argument that this colloquy constituted a binding pre-trial ruling by the Tribunal that summaries of those particular invoices could substitute for the invoices and would be sufficient evidence at trial.
At the time of trial Judge Mangard was no longer a member of the Tribunal. Another judge who was present at the pretrial had also been replaced. The three-judge panel hearing the case retained therefore only one of the original judges present at the pre-trial exchange. These trial judges had different concerns than had the earlier panel. One of the new judges, Judge Ansari, questioned the adequacy of Avco’s proof based only on summaries of invoices. He noted that it was “the first or one of the few cases” he had heard of in which none of the invoices were produced as evidence. In response, Avco’s counsel stressed the massive number of invoices involved, mentioning that Avco “chose to substantiate [the] invoices through other methods,” and stated, “we simply chose not to put in thousands of pages of documents.” (emphasis added.) Concluding that Avco’s proof did not establish its claim, the Tribunal declined to grant *147Avco an award based only on summaries of its invoices.
II
The New York Convention obligates U.S. courts to enforce foreign arbitral awards unless certain defenses provided in article V(l) of the Convention are established. The specific defense with which we deal in the case at hand appears in article V(l)(b). That section states that enforcement of an arbitral award may be denied if the court is satisfied that the party against whom the award is sought to be enforced was unable to present its case before the arbitration panel.
Based on the facts before us, Avco fails to meet the legal standard of being unable to present its case before the arbitral Tribunal so as to render the award unenforceable under the New York Convention. That standard, as the majority points out, essentially involves a due process inquiry to see whether the party against whom enforcement is sought has been put on notice and has had an opportunity to respond. See Parsons & Whittemore Overseas Co. v. Societe Generale de l’Industrie du Papier (RAKTA), 508 F.2d 969, 975-76 (2d Cir.1974). Unfortunately, only limited case law exists on this issue, and those cases that can be found merely note, in applying article V(l)(b), that due process serves as an interpretive guide.
One of the reasons for this dissent is because until today no federal or foreign case appears to have used article V(l)(b)’s narrow exception as a reason to refuse to enforce an arbitral award due to the arbitration panel’s failure to consider certain evidence. Moreover, some decisions have rejected the article V(l)(b) defense under other, somewhat analogous circumstances. For example, in Parsons & Whittemore Overseas Co., 508 F.2d at 975-76, we refused to use the defense to bar enforcement based on an arbitral Tribunal’s refusal to accommodate a key witness’ schedule, stating that the inability to present one’s witness was “a risk inherent in an agreement to submit to arbitration.” Similarly, another court has held that a party was not denied the opportunity to present its defenses under article V(l)(b) when it had notice of an arbitration, but chose not to respond. See Goetech Lizenz AG v. Evergreen Systems, 697 F.Supp. 1248, 1253 (E.D.N.Y.1988). The court in Evergreen Systems ruled that the defendant’s “failure to participate was a decision that was reached only after the Company had full knowledge of the peril at which it acted.” Id. In the face of Judge Ansari’s repeated questioning of Avco’s counsel, Avco was plainly placed on similar notice of the possible risk that the panel would choose not to rely on invoice summaries in determining whether to grant it an award.
Further support for finding that Avco was not denied due process arises from a like exception to enforceability that appears in the Federal Arbitration Act, 9 U.S.C. § 10 (1988). That Act also provides an exception to enforcement for the inability to present one’s case at arbitration. The more extensive case law available under § 10 supports the conclusion that Avco was not denied due process before the Iran-U.S. Claims Tribunal. Avco’s protests that the events in this case were more “egregious” than in other cases involving the inability to present one’s case at arbitration are unpersuasive. The ruling by the Hague Tribunal in the instant matter was not high-handed or arbitrary as are those cases, upon which Avco relies, arising under the Federal Arbitration Act. A reading of those cases reveals that they either involve arbitration hearings actually cut short and not completed before an award was rendered, see Confinco, Inc. v. Bakrie & Bros, N.V., 395 F.Supp. 613, 615 (S.D.N.Y.1975); Teamsters, Local Union No. 506 v. E.D. Clapp Corp., 551 F.Supp. 570, 577-78 (N.D.N.Y.1982), aff'd, 742 F.2d 1441 (2d Cir.1983), or a panel’s outright refusal to hear certain relevant evidence at all, see Harvey Aluminum Inc. v. United Steelworkers, 263 F.Supp. 488, 493 (C.D.Cal.1967).
The present picture is vastly different. Avco had a full opportunity to present its claims, and was on notice that there might be a problem with its proof, especially giv*148en Judge Ansari’s concerns voiced at trial. The earlier panel surely had never said that the invoices themselves would not be accepted or considered as evidence at trial. Nor did the pre-trial colloquy clearly indicate that the earlier panel had issued a definitive ruling that account summaries would be sufficient substitute proof for the invoices. Avco did not declare, after hearing Judge Ansari’s comments, that it had been precluded by the pre-trial colloquy from producing the invoices, nor did it then attempt to introduce them before the panel. Rather than address Judge Ansari’s concerns through producing the invoices themselves, Avco reiterated its “choice” to produce only a summary of the invoices. In so doing it took a calculated risk. Under these circumstances, Avco can scarcely credibly maintain that it was prevented from presenting its ease before the Tribunal.
Ill
When reviewing the grant of summary judgment which dismissed the action to enforce the award, we must view the facts in the light most favorable to the Iranian parties. When so viewed those facts fail to demonstrate that Avco was denied the opportunity to present its claims to the Tribunal. For the reasons stated I think the district court erred in reaching the opposite conclusion. Accordingly, I dissent and vote to enforce the award.