Attachment in Aid of Convention Award Enforcement

A U.S. District Court judge in San Francisco recently granted an order of attachment, in aid of enforcement of the award of the ICC tribunal seated in Stockholm. Recognition and enforcement in the U.S. court were therefore governed by the New York Convention and Chapter Two of the Federal Arbitration Act. The Court’s opinion is a useful guide to many of the essential elements of recognition and enforcement of a Convention award in the U.S. federal courts. The case is Sony Ericsson Mobile Communications AB v. Delta Electronics (Thailand) Public Company Limited, 2009 U.S. Dist. LEXIS 36497 (N.D. Cal. April 15, 2009).
Here, rather than provide a conventional case comment, I propose to identify the generally-applicable legal principles underlying the Court’s decision. These will be familiar to most experienced U.S. arbitration practitioners, but perhaps instructive for others:
1. An award falls under the Convention, and therefore may be enforced in a court of the United States, if (inter alia) it is made in the territory of a Convention Member State. This award was made in Stockholm, Sweden, and therefore the award was subject to recognition and enforcement in the U.S., even though the parties were of Swedish and Thai nationality.
2. That the Convention confers subject matter jurisdiction does not preempt inquiry into in personam jurisdiction, under well-developed due process principles. (Thus Sony Ericsson’s initial U.S. confirmation action, in the Southern District of New York, had been dismissed for lack of in personam jurisdiction over the Thai Defendant).
3. The fact that parallel proceedings to enforce an award are pending abroad (here, in Thailand) will not ordinarily prevent the U.S. court from hearing the case. The general principle, applicable to all cases not only arbitration award enforcement, is that there must be “exceptional circumstances” to justify a federal court declining jurisdiction on the basis of a parallel proceeding abroad. Further, simultaneous proceedings to enforce the same award are consistent with the New York Convention.
4. The issuance of “prejudgment” remedies such as writs of attachment, is, in the federal courts, determined under the standards and according to the procedures established by the law of the state where the U.S. District Court seized of the action is located. Here, the availability of a writ of attachment was determined by California law.
4. State provisional remedy law and New York Convention enforcement law intersect, because the Court must determine whether the Petitioner has a “probably valid” claim for recognition and enforcement. The Petitioner will have a probably valid claim unless it is probable that the Court will find that one of the Convention grounds for refusal or deferral of recognition or enforcmeent exists. The burden is on the Respondent to show that such a ground exists.
5. If the Respondent asserts, as a ground for refusal of recognition and enforcement, that the arbitral tribunal lacked jurisdiction, the Court must decide what degree of deference is due to the arbitral tribunal’s determination, in the award, that it did indeed have jurisdiction. If the parties have clearly agreed to submit questions of arbitrability to the arbitrators, the court will defer to the arbitrators’ arbitrability determination. If not, the court considers the arbitrability issue de novo.