Founding Attorney
Vacating a foreign arbitral award in the United States is narrow. A U.S. court generally decides whether to recognize the award, not whether to set it aside. Set-aside applications belong, under the New York Convention, to the courts of the seat. A party resisting enforcement must prove one of the Convention’s listed defenses.
This guide is for a company that lost abroad and now faces enforcement in Florida or another U.S. court. It explains where to challenge the award, what Article V allows, and what to do first. For the opposite position, see our guide to enforcing an award in Florida.
Where a Challenge to a Foreign Award Belongs
First, separate two different proceedings. A set-aside application attacks the award itself. It is made to a court of the country where the award was made, or under whose law it was made. An enforcement proceeding asks a court to recognize the award. The respondent can only resist it on the Convention’s grounds.
The Convention links the two. Article V(1)(e) allows refusal where the award “has been set aside or suspended by a competent authority” of that country. Article VI then lets the enforcing court adjourn its decision. It may also “order the other party to give suitable security.” Read the text on the official UNCITRAL copy of the Convention.
Chapter 1 of the Federal Arbitration Act is different. Section 10(a) says that “the United States court in and for the district wherein the award was made” may vacate the award. The text lists four grounds: corruption, fraud or undue means; evident partiality; misconduct by the arbitrators; and excess of powers. For those grounds in a domestic setting, see our article on the motion to vacate.
The Seven Defenses to Recognition
Article V is a closed list. The Eleventh Circuit, which covers Florida, held in Industrial Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434 (11th Cir. 1998), that “the Convention’s enumeration of defenses is exclusive.” The party resisting enforcement carries the burden. The Eleventh Circuit repeated that point in Lindo v. NCL (Bahamas) Ltd., 652 F.3d 1257, 1263 (11th Cir. 2011).
Article V(1) lists five grounds that the resisting party must prove:
- The parties were under some incapacity, or the agreement was not valid under the applicable law.
- The party “was not given proper notice” or was otherwise unable to present its case.
- The award deals with matters not contemplated by the submission to arbitration.
- The tribunal’s composition or procedure did not follow the parties’ agreement.
- The award is not yet binding, or has been set aside or suspended at the seat.
Article V(2) adds two grounds that the court itself may raise. The subject matter must be capable of settlement by arbitration under the enforcing country’s law. The award also must not be “contrary to the public policy of that country.” The Eleventh Circuit has said that the public policy defense “should be construed narrowly,” in Industrial Risk, quoting Parsons & Whittemore.
Deadlines and Where to File
Under 9 U.S.C. § 207, a party may apply for confirmation “within three years after an arbitral award falling under the Convention is made.” The court “shall confirm the award unless it finds one of the grounds for refusal or deferral” listed in the Convention. See the text of section 207. Federal district courts have original jurisdiction under 9 U.S.C. § 203, whatever the amount in controversy.
Therefore the clock matters on both sides. A respondent should check the seat’s own time limit for a set-aside application. Those limits are short in many countries and come from local law, so confirm them with counsel at the seat.
Common Mistakes When Resisting Enforcement
First, parties raise the merits. Article V does not let a U.S. court re-decide the dispute. Second, parties plead a ground outside the list, such as an “arbitrary and capricious” award. Under Industrial Risk, that omission is decisive. Third, parties miss the seat’s set-aside deadline and lose the Article V(1)(e) argument.
Finally, parties wait to respond. Gather the arbitration agreement, the award, the procedural orders and the record of any notice problem early. That record is the proof the Convention requires.
How Transnational Matters Handles This Stage
Transnational Matters PLLC is a Miami law firm that represents parties in ICC, ICDR and ICSID proceedings and appears in Florida federal and state courts. Davy Karkason is admitted to the Florida Bar and is an Associate of the Chartered Institute of Arbitrators. We review the award, the seat’s law and the Article V record before advising on a response. Our international arbitration attorney team works with local counsel at the seat when a set-aside application is needed.
FAQ
Can a U.S. court vacate a foreign arbitral award?
Generally, the courts of the seat decide set-aside applications. A U.S. court asked to enforce can refuse recognition only on the Convention’s grounds. Section 10 of the FAA refers to the district where the award “was made.”
What defenses can I raise against enforcement?
Article V lists seven grounds. The Eleventh Circuit treats that list as exclusive. You carry the burden of proof.
How long does the winning party have to enforce?
Section 207 gives three years from the date the award is made to apply for confirmation.
Conclusion
Resisting a foreign award is a procedural exercise: identify the seat, preserve the Article V record, and act before the deadlines run. Call 305.417.9866 or schedule a consultation to discuss your situation. If you are not ready to book a call, complete our case assessment questionnaire and we will review the matter before contacting you.
