DC court refuses to enforce annulled CCJA award
Getma International petitioned the United States District Court of District of Columbia to confirm and enforce a foreign arbitral award against the Republic of Guinea pursuant to the Federal Arbitration Act. The Court previously stayed this case, pending the outcome of Guinea’s attempt to have the award annulled. That stay was effectively lifted after the parties informed the Court that the award had been annulled.
The New York Convention provides that a 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.”
"Such grounds include the following: incapacity of the parties; invalidity of the underlying agreement; deficient notice of the arbitration proceedings; an award beyond the scope of the arbitration agreement; improper composition of the arbitration panel; and an award that has not yet become binding, or 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.”
Getma argued that the annulment of the arbitral award by the CCJA was “repugnant to U.S. public policy” because it “violat[ed] basic notions of justice,” and the Court should, therefore, confirm and enforce the award. The court stated that the “test of public policy cannot be simply whether . . . [a court] would set aside an arbitration award if the award had been made and enforcement had been sought . . . [in the United States].”
The court finally asserted that “None of Getma’s public policy-oriented contentions compel [it] to go against the grain and ignore the CCJA’s annulment of the arbitral award”. While acknowledging “the parties’ foreign arbitration process was not without some unusual events” it concluded that “these events were the product of their arms’ length negotiation of the dispute resolution clause in the Concession Agreement” and that they “must bear the consequences of those events”. Thus it decided that “an arbitration award does not exist to be enforced in . . . [this Court] if it has been lawfully ‘set aside’ by a competent authority in the [foreign] State in which the award was made.”
For more information on the Getma International vs Republic of Guinea arbitral award and annulment proceeding click here.
For more details on the DC court decision click here.