Yusuf Ahmed Alghanim & Sons v. Toys "R" Us - 96 Civ. 5853 (LMM), 1996 U.S. Dist. LEXIS 18734 (S.D.N.Y. Dec. 13, 1996)

Rule:

9 U.S.C.S. § 203 confers federal question jurisdiction of proceedings brought under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. 

Facts:

An arbitral award was entered in favor of petitioner and against respondents in the sum of $ 46,440,000, with interest at nine percent. Petitioner sought to confirm the award pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("Convention"), and respondents filed a motion to vacate, or, in the alternative, to modify under the Federal Arbitration Act ("FAA"). Respondents assert three grounds for vacating the award: that it is "completely irrational"; that it manifestly disregards the law; and that it disregards and fails to honor the well-defined, explicit, and clearly applicable terms of the parties' agreement. 

Issue:

Did the court have jurisdiction over proceedings brought under the Convention on the Recognition and Enforcement of FAA?

Answer:

Yes.

Conclusion:

The court confirmed the award. The court noted that petitioner sought confirmation pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, while respondents sought vacation or modification under the Federal Arbitration Act. The court found that 9 U.S.C.S. § 203 conferred federal question jurisdiction of proceedings brought under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The court concluded that because it had subject matter jurisdiction pursuant to § 203, it could exercise supplemental jurisdiction over the FAA challenge to the award. The court held that respondents had not established any ground for vacating the award. Furthermore, the court held that respondents had shown no basis for a reduction in the amount of the award.