Third Circuit Reaffirms Core NY Convention Principles

The U.S. Third Circuit Court of Appeals has issued an important reaffirmation of certain core principles in the American jurisprudence of the New York Convention. In a “non-precedential” opinion that will nevertheless be very persuasive in future cases, the Court:
1. Declared, consistent with prior case law in other federal courts, that Convention Article V(1)(e)’s reference to “a competent authority of the country… under the law of which the award was made” refers “‘exclusively to procedural and not substantive law, and more precisely, to the regimen or scheme of arbitral procedural law under which the arbitration was conducted.'” Here, the Court held, the arbitration award was made in Singapore under Singapore arbitration procedural law, and so the order of a Philippine court that might have been construed as setting aside the award furnished no basis for a U. S. court to refuse enforcement.
2. The “public policy” defense to enforcement under Convention Article V(2)(b) extends only to “‘violat[ions] [of] the forum state’s most basic notions of morality and justice.'”
Here, the Court found, not only was there no violation of public policy by the District Cour proceeding with enforcement while set aside proceedings were pending in Singapore, but such action was fully consistent with the policy objectives underlying U.S. accession to the Convention.
Steel Corp. of the Philippines v. Int’l Steel Services, 2009 U. S. App. LEXIS 25404 (3d Cir. Nov. 19, 2009).