The Eleventh Circuit decided twenty years ago that the New York Convention would govern non-domestic awards, and the issue seemed settled for the circuit. See Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir. 1998). But that decision was called into question by the U.S. Supreme Court in BG Group PLC v. Republic of Argentina, 572 U.S. 25, 44-45 (2014). In BG Group, the Court analyzed whether a specific FAA Section 10 ground required vacatur of a non-domestic award. The Court did not address whether FAA Section 10 grounds should govern to begin with, but by engaging in an analysis of whether a Section 10 ground applied to a particular award, the Court opened the door to later arguments that Section 10 does supply the grounds to challenge non-domestic awards. The Eleventh Circuit appeared to accept those arguments in a 2017 opinion, where, in a footnote, it implied that the BG Group decision did rule that the FAA Section 10 grounds governed challenges to non-domestic awards. See Bamberger Rosenheim, Ltd., (Israel) v. OA Dev., Inc., (United States), 862 F.3d 1284, 1287 n.2 (11th Cir. 2017).
In Del Monte, however, the Eleventh Circuit revisits and squarely addresses the issue, making clear that Industrial Risk still governs—the New York Convention provides the only grounds to challenge a non-domestic award rendered in the United States. Del Monte, 921 F.3d 1291 at 1301-02. (The Panama Convention applied in the Del Monte case, but that made no meaningful difference to the analysis at issue, as the Panama Convention is the Inter-American analogue to the New York Convention and is incorporated into the FAA in Chapter 3.) The Eleventh Circuit emphasizes that the BG Group decision did not overrule Industrial Risk because the Supreme Court did not directly address the issue—it only decided whether a particular ground applied to the facts before it, not whether the convention provides the exclusive grounds for vacating non-domestic awards.
As a practical matter, the grounds for challenge and vacatur are largely similar between the FAA and the New York Convention. But the Eleventh Circuit’s deference to the New York Convention could be an advantage for attracting international arbitrations to the circuit, a point that was noted in an amicus brief filed by the Atlanta International Arbitration Society in support of the position ultimately adopted in Del Monte. Limiting challenges of international awards rendered in the United States to the internationally-adopted standards provides certainty and familiarity to international parties. They will likely feel more comfortable having challenges governed by international standards to which they are accustomed, which could be beneficial to arbitrators practicing in Florida, Georgia, and Alabama when parties choose their seat for international arbitrations.
Also, limiting challenges to those under the New York Convention precludes use of the much-maligned “manifest disregard of the law” doctrine. Even if rarely successful, its availability allows parties to make mischief during enforcement proceedings.
The Eleventh Circuit’s decision puts it in the minority of the circuit split, with at least the Second (Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2d Cir. 1997)); Third (Ario v. Underwriting Members at Lloyds, 618 F.3d 277, 292 (3d Cir. 2010)); Fifth (Gulf Petro Trading Co. Inc. v. Nigerian National Petroleum Corp., 512 F.3d 742 (5th Cir. 2008)); and Sixth Circuits (Jacada (Europe), Ltd. v. Int’l Mktg Strategies, 401 F.3d 701, 709 (6th Cir. 2005)) falling on the other side. But its minority position could make it more attractive to international parties that choose to seat their arbitrations in the United States. Stay tuned, though. A petition for certiorari is pending before the Supreme Court, (Petition for a Writ of Certiorari, Inversiones y Procesadora Tropical Inprosta S.A. v. Del Monte International GMBH, No. 19-117 (U.S. July 25, 2019)), which could settle the question once and for all.