Int'l Standard Elec. Corp. v. Bridas Sociedad Anonima Petrolera, Indus. Y Comercial - 745 F. Supp. 172 (S.D.N.Y. 1990)

Rule:

Under Article V(1)(e) of the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 3 U.S.T. 2517, T.I.A.S. No. 6997, 330 U.N.T.S. 38, 9 U.S.C.S. §§ 201 et seq., an application for the setting aside or suspension of an arbitration award can be made only to the courts or the competent authority of the country in which, or under the law of which, that award was made.

Facts:

Petitioner American Corporation sold stock in its Argentine subsidiary to the respondent Argentine corporation. The shareholder agreement contained a clause for arbitration of disputes and further provided that New York law would be applied to the dispute. The Argentine corporation sought arbitration of a dispute. After New York state courts denied the American corporation's attempts to avoid international arbitration, the arbitration was held in Mexico. The arbitration panel awarded damages to the respondent. Petitioner brought an action to vacate the foreign arbitral award. Respondent filed a cross-petition to enforce the award.  

Issue:

1. Did the U.S. court have jurisdiction to vacate the foreign arbitral award? 
2. Did U.S. court have jurisdiction to enforce the foreign arbitral award?

Answer:

1) No. 2) Yes.

Conclusion:

The court held that it had no jurisdiction of the American corporation's petition, because Article V(1)(e) of the Convention, which gave jurisdiction to set aside an award only to the courts of the nation whose law was applied, referred to the procedural, not substantive, law under which the award was made. This was Mexican, not New York law. However, the court had jurisdiction to enforce the award. It held that the American corporation could not object at this stage to the failure to identify the expert used by the panel because it failed to object during the arbitration.