Court Opinion

ID: 2994088
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:12:42.978351+00
Date Added: 2024-06-11T11:45:20.197803
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 99-1304

Employers Insurance of Wausau,

Plaintiff-Appellee,

v.

Banco De Seguros Del Estado,

Defendant-Appellant.

Appeal from the United States District Court
for the Western District of Wisconsin.
No. 98 C 521--Barbara B. Crabb, Judge.

Argued September 13, 1999--Decided December 15, 1999

      Before Posner, Chief Judge, and Cudahy and Kanne,
Circuit Judges.

      Kanne, Circuit Judge. Banco De Seguros Del
Estado ("Banco") was a member of a Lloyd’s,
London syndicate that reinsured several insurance
policies underwritten by Employers Insurance of
Wausau ("Wausau"), a Wisconsin insurance company.
In September 1995, an arbitration panel awarded
Wausau $7,783,324 from the syndicate, of which
Banco was liable for $181,319. When Wausau filed
a petition in the district court to confirm the
arbitration award against Banco, Banco moved to
vacate, claiming that Wausau’s service of notice
of arbitration did not comply with the terms of
their reinsurance contract or with the Foreign
Sovereign Immunities Act ("FSIA"), 28 U.S.C.
sec.sec. 1330, 1602-1611. The district court
granted Wausau’s motion to confirm and denied
Banco’s motion to vacate. Banco appeals, claiming
that the district court made errors of law and
fact in determining that notice of arbitration
had been served properly on Banco. Finding no
error, we affirm.

I.  History
      Banco is the state insurance bank and an
instrumentality of the Sovereign Republic of
Uruguay. Wausau is a mutual insurance company
organized under Wisconsin law with its principal
place of business in Wausau, Wisconsin. Between
1966 and 1973, Wausau entered into a series of
contracts known as excess retrocessional
insurance treaties ("Treaties") with more than
100 underwriters at Lloyd’s, London and other
London market insurance companies, including
Banco, commonly referred to as the
"retrocessionaires." Under the Treaties, the
retrocessionaires agreed to reinsure Wausau for
specified percentages of direct reinsurance
losses paid by Wausau, as long as those losses
were within the coverage of the Treaties.

      The Treaties were identical to one another,
except for the specific percentages of coverage
allocated to a particular party under each one.
Each Treaty contained an arbitration clause,
which stated that any arbitration requested by
the parties would take place in Wausau,
Wisconsin. The arbitration clause did not specify
what procedures would be used in the event of an
arbitration. Each Treaty also contained a
"Service of Suit" clause, which provided that:

It is agreed that in the event of a failure of
the [retrocessionaires] hereon to pay any amount
claimed to be due hereunder, [retrocessionaire],
at the request of the reinsured, will submit to
the jurisdiction of any Court of competent
jurisdiction within the United States and will
comply with all requirements necessary to give
such Court jurisdiction . . .

It is further agreed that service of process in
such suit may be made upon Messrs. Mendes & Mount
. . . and that in any suit instituted against
[retrocessionaires], [retrocessionaires] will
abide by the final decision of such Court or of
any Appellate Court in the event of an appeal.

[Mendes & Mount] are authorized and directed to
accept service of process on behalf of
[retrocessionaires] in any such suit and/or upon
the request of the reinsured to give a written
undertaking to the reinsured that they will enter
a general appearance upon [retrocessionaire’s]
behalf in the event such suit will be instituted.

Further, pursuant to any statute of any state,
territory or district of the United States which
makes provision therefor, [retrocessionaires]
hereby designate the Superintendent, Commissioner
or Director of Insurance or other officer
specified for that purpose in the statute, or his
successor or successors in office, as their true
and lawful attorney upon whom may be served any
lawful process in any action, suit or proceeding
instituted by or on behalf of the reinsured . .
. and hereby designate the above-named as the
person to whom the said officer is authorized to
mail such process or a true copy thereof.
      The New York law firm of Mendes & Mount was
designated as the party to accept service for
Banco. Each Treaty also contained an
"intermediary clause," which designated Pritchard
& Baird, Inc., ("Pritchard") as the "intermediary
. . . through whom all communications and
transactions relating thereto shall be
transmitted by the parties."

      Pursuant to the intermediary clause, Wausau and
the retrocessionaires originally communicated
through Pritchard. However, Pritchard became
insolvent in 1975, and the parties to the
Treaties thereafter used Leslie & Godwin, a
British firm, as an intermediary. The parties
never amended their Treaty to reflect this
change. Leslie & Godwin contacted Banco through
another intermediary, Argenhall, S.A., an
Argentine brokerage firm.

      In 1984, Wausau began to submit proofs of loss
to Leslie & Godwin and to Lord, Bissell & Brook,
counsel to the lead underwriter among the
retrocessionaires, Merrett Syndicate. These
proofs of loss showed that policy-holders on
policies reinsured by Wausau suffered extensive
injuries related to asbestos contamination.
Merrett Syndicate engaged Lord, Bissell & Brook
to audit these claims and determine whether they
fell within the scope of the Treaties. Despite
continued submissions of proofs of loss, the
retrocessionaires refused to reimburse Wausau for
its losses.

      By 1991, Wausau determined that the
retrocessionaires had not complied with the terms
of the Treaties. On May 27, 1991, Wausau sent a
demand for arbitration to Lord, Bissell & Brook,
as agent for Merrett Syndicate, according to the
custom of Lloyd’s, London that the lead
underwriter traditionally handles claims on
behalf of all underwriters in a syndicate. Lord,
Bissell & Brook then forwarded Wausau’s
arbitration demand to Leslie & Godwin, who
attempted to notify the other retrocessionaires.
In June 1991, Leslie & Godwin sent Argenhall a
letter informing Banco of Wausau’s arbitration
demand and asking for confirmation that Lord,
Bissell & Brook would represent them. Banco
claims that it never received this communication.
In the letter, Leslie & Godwin requested that
Banco respond, but Banco did not.

      On August 19, 1991, Wausau petitioned the
Marathon County Circuit Court in Wisconsin for an
order compelling the retrocessionaires to proceed
with arbitration. The Wisconsin Commissioner of
Insurance was served with two copies of the
petition, and Mendes & Mount was served with one
copy. In addition, Wausau provided Leslie &
Godwin and Lord, Bissell & Brook each with a copy
of the petition. The caption of the petition
identified the respondents to the petition as
including "certain London Market Insurance
Companies, including those identified in Appendix
A." Appendix A to the petition lists among the
respondents the following two parties: "Banco"
and "Banco di Seguros del Estado." Banco claims
that Mendes & Mount did not notify it of the
petition.

      The trial court granted Wausau’s motion in
October 1991, and the Wisconsin Court of Appeals
affirmed the circuit court’s decision in
Employers Ins. of Wausau v. Jackson, 505 N.W.2d
147 (Wis. Ct. App. 1993). In February 1995, the
Wisconsin Supreme Court also affirmed. See
Employers Ins. of Wausau v. Jackson, 527 N.W.2d
681 (Wis. 1995). The arbitration proceedings
commenced in the summer of 1995. In August 1995,
Leslie & Godwin again contacted Argenhall and
attempted to inform Banco that it was a party in
the arbitration proceeding and to ask Banco if it
wished Lord, Bissell & Brook to represent it in
the proceedings. Banco did not respond to this
message and did not participate in the
proceedings.

      On September 18, 1995, the arbitration panel
issued an award in favor of Wausau in the amount
of $7,783,324 as a full and final settlement of
all its loss claims. The retrocessionaires were
each liable for a portion of the award, which
varied according to each retrocessionaire’s
proportionate share of the coverage allocation.
The retrocessionaires were given forty-five days
to pay their respective shares. If they did not
pay, each would be subject to stiff penalties,
including 7.5 percent interest and joint and
several liability for attorneys’ fees and costs,
and would be required to provide a $9,000,000
letter of credit to Wausau to secure payment of
the retrocessionaires’ ultimate liability.
Banco’s share of the total award was $181,319,
but Banco was not listed on the arbitration
award. Banco claims that it was never informed of
the arbitration proceedings, and it has not paid
either its share of the award or its additional
penalties, which now exceed $9,000,000.

      In July 1998, Wausau filed a petition to
confirm the arbitration award as to Banco in the
United States District Court for the Western
District of Wisconsin. Wausau served this
petition on both the Wisconsin Commissioner of
Insurance and on Mendes & Mount. Banco’s name was
listed in the caption, and Mendes & Mount caused
process to be served on Banco at its principal
place of business in Montevideo, Uruguay. Banco
responded to the motion with a motion to vacate
the arbitration panel’s award. It claimed that it
had never received notice of the arbitration and
was not properly served in accordance with
Wisconsin law or the requirements of the FSIA. On
January 5, 1999, the district court denied
Banco’s motion to vacate and granted Wausau’s
motion to confirm. The court found that service
on Mendes & Mount and the Wisconsin Commissioner
of Insurance of the petition to compel
arbitration was sufficient to meet the
requirements of the Treaties, Wisconsin law and
the constitutional right to due process.

II.   Analysis

      On appeal, Banco argues that the district court
erred by determining that Wausau’s service of
process was effective as to Banco, and it argues
that the court made clearly erroneous findings of
fact in granting Wausau’s motion to confirm its
arbitration award. In reviewing the grant of a
motion to confirm an arbitration award, we decide
questions of law de novo and review findings of
fact for clear error. See First Options of
Chicago, Inc. v. Kaplan, 514 U.S. 938, 947-48
(1995); Geneva Secs., Inc. v. Johnson, 138 F.3d
688, 691 (7th Cir. 1998).

      As an instrumentality of the sovereign state of
Uruguay, Banco is a "foreign state" within the
meaning of sec.sec. 1603 (a)-(b) of the FSIA. See
sec. 1603(a) ("A ’foreign state’ . . . includes
a political subdivision of a foreign state or an
agency or instrumentality of a foreign state as
defined in subsection (b)."); sec. 1603(b)(1)-(3)
(defining "instrumentality" as "a separate legal
person, corporate or otherwise . . . which is an
organ of a foreign state . . . or a majority of
whose shares or other ownership interest is owned
by a foreign state . . . which is neither a
citizen of a State of the United States . . . nor
created under the laws of any third country").
Foreign states possess immunity from the
jurisdiction of courts of the United States,
except as specified by the FSIA. See sec.sec.
1604-1607. By agreeing to a Treaty which
designated Wausau, Wisconsin, as the site of any
arbitration, however, Banco has waived its
immunity in any proceeding to confirm the
arbitral award. See sec. 1605(a)(6)(A). Federal
courts have original subject matter jurisdiction
over all suits involving foreign states, see sec.
1330(a), and Banco admits that Wausau’s motion to
confirm satisfied the FSIA service requirements,
so there is also personal jurisdiction over Banco
in this matter. See sec.sec. 1330(b), 1608(b)(1).

      Because the United States and Uruguay are both
signatories, the Inter-American Convention on
International Commercial Arbitration ("Inter-
American Convention") Article V(1)(b), Jan. 30,
1975, reprinted at 9 U.S.C. sec. 301, governs the
procedure of confirming an arbitral award as well
as the procedure of refusal for an award./1
Section 302 of the Inter-American Convention
incorporates certain sections of the New York
Convention, codified at 9 U.S.C. sec.sec. 201-
208, into arbitration proceedings where both
parties are citizens of signatory states. See 9
U.S.C. sec. 302 (incorporating 9 U.S.C. sec.sec.
202-205, 207); see also Jain v. de Mere, 51 F.3d
686, 689 (7th Cir. 1995) ("[A]ny commercial
arbitral agreement, unless it is between two
United States citizens, involves property located
in the United States, and has no reasonable
relationship with one or more foreign states,
falls under the [New York] Convention.").

      Under the New York Convention, within three
years of any arbitral award any party to the
arbitration may apply to any court with
jurisdiction for an order confirming the award
against any other party to the arbitration. See
9 U.S.C. sec. 207; Generica Ltd. v.
Pharmaceutical Basics, Inc., 125 F.3d 1123, 1129
(7th Cir. 1997). That 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 Inter-American]
Convention." 9 U.S.C. sec. 207 (as applied in 9
U.S.C. sec. 302 to the Inter-American
Convention). Article V of the Inter-American
Convention specifies seven grounds for refusal of
recognition, among them that a party "was not
duly notified of the appointment of the
arbitrator or of the arbitration procedure to be
followed or was unable, for any other reason, to
present his case . . . ." Inter-American
Convention, Article V(1)(b).

      Although arbitration "is simply a matter of
contract between the parties," First Options, 514
U.S. at 943, and the parties to a contract can
choose to modify the technical requirements for
notice of arbitration in the same way that they
can modify any other arbitration procedure, there
is no evidence in the Treaties between Banco and
Wausau of any special notification procedure to
be followed in the event of an arbitration.
Absent any agreement to the contrary, Article
V(1)(b) grants a party the due process rights of
the forum state, in this case those of Wisconsin
and the United States. See Parsons & Whittemore
Overseas Co. v. Societe Generale De L’Industrie
Du Papier, 508 F.2d 969, 975-76 (2d Cir. 1974)
(interpreting analogous Article V(1)(b) of New
York Convention). See also Productos Mercantiles
E Industriales, S.A. v. Faberge USA, Inc., 23
F.3d 41, 45 (2d Cir. 1994) (stating that Inter-
American Convention is "intended . . . to reach
the same results as those reached under the New
York Convention"). The right to adequate notice
is one part of a fundamentally fair hearing. See
Mullane v. Central Hanover Bank & Trust Co., 339
U.S. 306, 314 (1950) ("An elementary and
fundamental requirement of due process in any
proceeding which is to be accorded finality is
notice reasonably calculated, under all the
circumstances, to apprise interested parties of
the pendency of the action and afford them an
opportunity to present their objections.").
However, like all other due process rights, the
right to notice may be waived prior to
attachment. See D.H. Overmyer Co. v. Frick Co.,
405 U.S. 174, 185 (1972). Accordingly, if Banco
did not waive its right to notice and was not
provided with notice reasonably calculated under
the circumstances of arbitration, we may refuse
to enforce the award pursuant to Article V(1)(b).

A.   Waiver

      The Treaties between Banco and Wausau contain a
"Service of Suit" clause which designates that,
in any suit filed to recover any amount of money
due under the Treaties, Mendes & Mount and the
Wisconsin Commissioner of Insurance may be served
as Banco’s agents for service of process. Wausau
argues that by designating special agents for the
service of process Banco has waived its right to
notice reasonably calculated to apprise it of the
pending arbitration.

      For an American court to assert personal
jurisdiction over a foreign defendant, the court
must generally determine that the company has
"purposefully avail[ed] itself of the privilege
of conducting activities within the forum State."
Hanson v. Denckla, 357 U.S. 235, 253 (1958); see
also Koster v. Automark Indus., 640 F.2d 77, 78
(7th Cir. 1981). However, by agreeing to
designate an agent for service of process, as
Banco has, foreign companies can waive this
requirement of "minimum contacts." See RAR, Inc.
v. Turner Diesel, Ltd., 107 F.3d 1272, 1280 (7th
Cir. 1997) (holding that, because personal
jurisdiction is waivable, parties can contract
around minimum contacts requirement). Personal
jurisdiction in a given dispute is conditioned on
both a court’s ability to assert jurisdiction
over a defendant and a defendant’s receipt of
notice and opportunity to be heard. See Phillips
Petroleum Co. v. Shutts, 472 U.S. 797, 811-12
(1985) (distinguishing right to notice from right
to personal jurisdiction); Fuentes v. Shevin, 407
U.S. 67 (1972). By designating a local agent to
serve process, Banco knowingly waived its right
to dispute personal jurisdiction. There is no
evidence that Banco knowingly waived its right to
"notice reasonably calculated." Without
knowledge, we are loath to determine that a party
has waived its due process rights. See, e.g.,
Sethness-Greenleaf, Inc. v. Green River Corp., 65
F.3d 64, 67 (7th Cir. 1995) ("[W]aiver in
contract law is the intentional relinquishment of
a known right"). We find that Banco’s designation
of an agent for service of process did not
constitute a waiver of its right to notice
reasonably calculated to allow it to be heard.

B.   Notice Reasonably Calculated

      Banco admits that a copy of the motion to
compel arbitration was served by a proper person
on its designated agents. It argues that the
motion itself was insufficient to provide notice
to either Banco or its agents that Banco was a
party to the arbitration. Banco relies on three
contentions to assert that Wausau’s motion is
insufficient to provide notice reasonably
calculated to Banco or its agents: (1) Wausau did
not follow proper Wisconsin procedures in its
service of process on Banco’s agents; (2) Wausau
failed to follow the special service of process
procedure required by the FSIA for foreign
sovereigns; (3) even if Wausau followed the
proper Wisconsin procedures, these procedures do
not provide "notice reasonably calculated" as
required by the United States Constitution and
the Wisconsin Constitution.

      Banco contends that Wausau failed to meet
Wisconsin’s notice requirement because it failed
to list Banco in the caption of its motion to
compel arbitration and it failed to serve a
formal summons with its motion on Banco’s agents.
Banco argues that the parties did not specify by
contract the rules under which arbitration would
be conducted. Therefore, because Article V(1)(b)
requires that, absent a waiver, arbitration
proceedings must meet the due process rights of
the forum state, see Iran Aircraft Indus. v. Avco
Corp., 980 F.2d 141, 145-46 (2d Cir. 1992),
Wausau needed to meet both the notice
requirements and the statutory service
requirements of the forum state.

      We disagree with Banco’s contention that Article
V(1)(b) of the Inter-American Convention requires
that service of process be made in accordance
with the forum state’s service of process
statute. Service of process according to statute
raises a presumption that due process has been
met. See Mid-America Tablewares, Inc. v. Mogi
Trading Co., 100 F.3d 1353, 1358-59 (7th Cir.
1996) (Wisconsin Constitution grants personal
jurisdiction whenever state long-arm statute has
been met, as long as statute meets due process
requirements of federal Constitution); Federated
Rural Elec. Ins. Corp. v. Inland Power & Light
Co., 18 F.3d 389, 391 (7th Cir. 1994). However,
Article V(1)(b) only provides Banco with the
protection of due process, and due process does
not require Wausau to meet state statutory
requirements for service of process. See Osteen
v. Henley, 13 F.3d 221, 225 (7th Cir. 1993) ("[A]
violation of state law . . . is not a denial of
due process, even if the state law confers a
procedural right."). It only requires that Wausau
provide Banco with "notice reasonably calculated"
under the federal due process standard. See
generally Waterspring, S.A. v. Trans Marketing
Houston Inc., 717 F.Supp 181, 186 (S.D.N.Y. 1989)
("An agreement to arbitrate in New York
constitutes a consent to submit to the personal
jurisdiction of the courts of New York, and such
consent ’includes consent to service by any
method consistent with due process.’"); Lawn v.
Franklin, 328 F. Supp. 791, 794 (S.D.N.Y. 1971)
("Where there is advance consent to the
jurisdiction by contract the service of process
may be made by any method consistent with due
process."). Thus two of Banco’s arguments may be
merged into one; that by failing to name it in
the caption of its motion and providing Mendes &
Mount with only one copy of the motion, Wausau
failed to provide Banco with "notice reasonably
calculated." Both the United States and Wisconsin
adhere to the standard of "notice reasonably
calculated" enunciated in Mullane. See Greene v.
Lindsey, 456 U.S. 444, 449-50 (1982); Dillon v.
Dillon, 176 N.W.2d 362, 365-66 (Wis. 1970)
(adopting Mullane notice standard, along with
compliance with state long-arm statute, as the
due process requirement for Wisconsin
Constitution).

      Under Wisconsin law, a principal is "bound and
affected by such knowledge and notice as its
agents received." Lakeshore Commercial Fin. Corp.
v. Bradford Arms Corp., 173 N.W.2d 165, 172 (Wis.
1970). See generally Smith v. Metropolitan Life
Ins., 94 F.2d 277, 280 (7th Cir. 1938) (finding
notice to a designated agent binding on party).
Here, Banco’s designation of registered agents
for service of process created an agency
relationship from which actual notice, rather
than constructive notice, must be inferred. See
Peterson v. Sealed Air Corp., 902 F.2d 1232, 1237
(7th Cir. 1990). Service upon a duly appointed
agent comports with the due process clause. See
Nat’l Equipment Rental, Ltd. v. Szukhent, 375
U.S. 311, 317-18 (1964); Kaplan v. United States,
133 F.3d 469, 475 (7th Cir. 1998). In Kaplan, we
found that providing notice to a designated
"notice partner" in a limited partnership
satisfied the due process notice requirement for
other limited partners who were not personally
given notice. Appellants argued that certain
provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 ("TEFRA"), 26 U.S.C.
sec.sec. 6621-34, were unconstitutional because
it denied due process to certain partners with a
de minimis stake in the partnership personal
notice of an adjustment to a limited
partnership’s taxes. In finding that notice to
some partners imputed notice upon all members of
the partnership, we noted the "common-law
principle of partnership law that notice to one
general partner constitutes notice to all
partners." Kaplan, 133 F.3d at 475. That common-
law principle depends on the characterization of
a partnership as a web of interlocking agency
relationships, in which each principal is imputed
actual knowledge from the knowledge of any of his
agents. We find the principle set forth in Kaplan
applicable to the facts before us. Thus, if
either Mendes & Mount or the Wisconsin
Commissioner of Insurance received actual notice
that Banco was subject to the Wausau arbitration,
then Banco received notice sufficient to meet the
requirements of due process.

      Banco rests its contention that Wausau did not
serve its agents with adequate notice that Banco
was a party on two facts: (1) the motion to
compel arbitration fails to list Banco correctly
in either the official caption or Appendix A; (2)
each agent was provided with only one copy of
process, despite the large number of
retrocessionaires. Banco argues that Wausau
instead should have sent a copy of process to
Banco’s (and every other retrocessionaire’s)
principal place of business. However, "notice
reasonably calculated" requires only that the
notice provided "be of such nature as reasonably
to convey the required information." Mullane, 339
U.S. at 314. In the circumstances before us,
Wausau was merely required to inform Banco, or
one of its registered agents, of its motion to
compel arbitration against the syndicate, or of
its wish to conduct arbitration.

      No reasonable person could be expected to serve
more than 100 copies (that is, one copy for each
retrocessionaire) of the same motion on Mendes &
Mount and the Commissioner of Insurance. As the
district court noted, the purpose of the Service
of Suit clause is, in part, to anticipate the
burden of personally serving the numerous members
of each Lloyd’s syndicate individually and avoid
it by designating a uniform agent for all.
Moreover, know-ing that the same person would be
agent to each of the retrocessionaires, no
reasonable person would expect each
retrocessionaire to be listed in the caption. If
the agent must index the Appendix to find the
names of some retrocessionaires, it would not be
unreasonable to expect the agent to do so for all
of them. Had Wausau not erroneously listed Banco
in the Appendix as either "Banco" or "Banco di
Seguros del Estado," there would be no reason to
question that it provided Banco’s agents with
"notice reasonably calculated" to apprise them of
Banco’s involvement in the pending arbitration.

      Wausau misspelled Banco’s name in the Appendix,
so we must consider whether this error is one of
sufficient magnitude to compromise Wausau’s
attempt to provide Banco with notice. We will not
allow a technical error such as a spelling
mistake to implicate Banco’s right to due
process, because both Mendes & Mount and the
Wisconsin Commissioner of Insurance had the duty
as agents of Banco to make a reasonable inquiry
into who "Banco di Seguros del Estado" might be.
See, e.g., Dombeck v. Chicago, Milwaukee, St.
Paul & Pac. R.R. Co., 129 N.W.2d 185, 194 (Wis.
1964) ("The general rule is that a principal may
recover from his agent for loss or damage caused
the principal by the negligent act of the
agent."). The burden of deciphering the technical
error in its principal’s name in this case should
rest on Banco’s agents: the Wisconsin
Commissioner of Insurance and Mendes & Mount.
Thus, we agree with the district court that
Wausau’s service of its motion on both Mendes &
Mount and the Wisconsin Commissioner of Insurance
provided Banco with "notice reasonably
calculated" of the pending arbitration.

      In the alternative, Banco argues that, as the
instrumentality of a foreign sovereign, it has
general immunity from suit in the United States,
subject only to the exceptions of the FSIA.
Pursuant to the FSIA, certain formalities must be
followed in the proper service of a complaint.
Section 1608 of the FSIA requires that service be
made "(1) by delivery of a copy of the summons
and complaint in accordance with any special
arrangement for service between the plaintiff and
the agency or instrumentality . . . ," or "(2) if
no special arrangement exists, by delivery of a
copy of the summons and complaint in accordance
with an applicable international convention on
service of judicial documents." Id. at sec.
1608(b)(1)-(2).

      Banco contends that the only clause in the
treaty that could constitute a "special
arrangement" for the purposes of the act was the
intermediary clause, but neither it nor the
procedures of any applicable international
convention were followed. In addition, Banco
notes that Wausau never served the summons
required in both sec. 1608(b)(1) and sec.
1608(b)(2). Therefore, Banco contends that it was
never properly served with notice of the pending
arbitration.
      Banco’s attempts to shield itself beneath the
procedural requirements of the FSIA merely
obfuscate the real issue of notice. Banco seems
to believe that any improprieties in Wausau’s
service of the motion to compel arbitration
relieve Banco of notice of the arbitration.
Instead, such an impropriety would render Banco
immune to the action compelling parties to
arbitrate. Wausau admittedly did not serve Banco
with a summons, so might not have been able to
compel Banco into arbitration.

      Other retrocessionaires were compelled to enter
arbitration with Wausau, and arbitration
occurred. By agreeing to the arbitration
provision in its Treaty, Banco agreed to submit
itself to the decision made by any arbitrators
empaneled pursuant to the arbitration clause.
Banco is bound to the arbitral award not by the
motion to compel arbitration, but by the language
of the Treaty that it made with Wausau.

      Banco, of course, could have retained immunity
from any proceedings to confirm the award had
Wausau not served notice of the motion to confirm
an arbitration award. However, Wausau properly
served notice of the motion to confirm, and we
must confirm the award regardless whether Banco
could have been forced to participate in the
arbitration. See 9 U.S.C. sec. 207 ("The 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 [Inter-American] Convention." (emphasis
added)). We have already determined that Banco
had notice as required by Article V(1)(b) of the
Inter-American Convention, and any fault in
Banco’s inability to appear at the arbitration
rests with Banco’s designated agents, not with
Wausau. Absent any grounds for refusal of
recognition of the award, we are compelled by the
Inter-American Convention to confirm it.
      Banco also obfuscates the issue of notice by
claiming that the arbitration award was, in
effect, a default judgment, so the requirements
of sec. 1608(e) of the FSIA must be met. Section
1608 requires that any claimant of a default
judgment establish his right to relief "by
evidence satisfactory to the court." sec.
1608(e). However, sec. 1608(e), like the rest of
the FSIA, refers to judicial proceedings. Wausau
never sought a default judgment against Banco;
instead it seeks to confirm an arbitral award in
the manner provided by the FSIA. Section 1608(e)
does not apply.

C.   Findings of Fact

      Banco also argues that the district court made
clearly erroneous findings of fact which led it
incorrectly to grant Wausau’s motion to confirm.
Banco disputes three "undisputed facts" found by
the district court: (1) Wausau notified all
retrocessionaires of its filing of suit by
service on Mendes & Mount; (2) a custom exists at
Lloyd’s, London that the petitioner need only
inform the lead retrocessionaire of matters
relating to the operation of the Treaties; (3)
Leslie & Godwin had not communicated directly
with Banco, but instead sent information in care
of Argenhall. We review findings of fact made in
motions to confirm arbitration for clear error,
see First Options, 514 U.S. at 947-48, and will
reverse the trial court only if we come to a
"definite and firm conviction" that it made a
mistake. Anderson v. City of Bessemer City, 470
U.S. 564, 573 (1985) (quoting United States v.
United States Gypsum Co., 333 U.S. 364, 395
(1948)).

      We are unconvinced that any of the district
court’s findings of undisputed fact are clearly
in error. Banco contends that, because it
disputes receiving notice of the arbitration
after Wausau served Mendes & Mount, all the
retrocessionaires did not receive notice of the
pending arbitration. We have found that each
retrocessionaire listed in the caption of the
motion to compel arbitration must be imputed to
have received actual notice by service on Mendes
& Mount. Because Banco does not provide us with
evidence that any other retrocessionaire was
omitted from the motion to compel arbitration, we
see no error in the district court’s finding.

      In holding that Banco received notice of
arbitration by Wausau’s service of the motion to
compel, we do not rely on any of the other
findings of fact that Banco urges us to review.
As such, these findings do not prejudice Banco,
and "[a]n error that is not prejudicial is still
an error, but it is unlikely to be a clear
error." Chaulk v. Volkswagen of America, Inc.,
808 F.2d 639, 644 (7th Cir. 1986) (Posner, J.,
dissenting). After our review of the facts, we
find that Banco presented the district court with
no evidence to controvert either of the other
undisputed facts that it asserts were found
erroneously. Absent any evidence that would tend
to contradict such findings, we find no clear
error in the other findings of fact made by the
district court.

III.   Conclusion

      Because we find that Wausau’s motion to compel
arbitration effectively gave Banco notice of
arbitration proceedings and because we find that
the district court made no clearly erroneous
findings of fact in confirming the arbitration
award in favor of Wausau or in denying Banco’s
motion to vacate the arbitration award, the
decisions of the district court are AFFIRMED.

/1 As the district court noted, since both the
United States and Uruguay are also signatories of
the Convention on the Recognition and Enforcement
of Foreign Arbitral Awards ("New York
Convention"), Dec. 29, 1970, reprinted at 9
U.S.C.A. sec. 201, codified at 9 U.S.C. sec.sec.
201-208, unless a majority of the other
retrocessionaires are also signatories of the
Inter-American Convention, the New York
Convention would actually apply to this dispute.
See 9 U.S.C. sec. 305. However, as we discuss
below, the provisions of both conventions are
interpreted to reach the same result in each
case, and, lacking knowledge of the signatory
status of the home states of the remaining
retrocessionaires, the parties have stipulated
that the Inter-American Convention shall apply.
Since the outcome would not be affected if we
instead applied the New York Convention, we agree
with the district court that "the point appears
to be technical."