Satellite Communications Company Secures $1.3 Billion Arbitral Award Enforcement

Introduction

The Ninth Circuit Court of Appeals enforced a $1.3 billion arbitral award issued to a satellite communications company. This decision clarifies the limits of the forum non conveniens doctrine in the context of international arbitration, establishing that it does not apply in cases seeking to enforce international arbitral awards. The ruling affects companies involved in international arbitration, with the most significant practical consequence being the increased likelihood of enforcement of such awards in US courts.

Full News Breakdown

The dispute was triggered by a satellite communications company seeking to enforce an international arbitral award. The core disagreement was over the enforceability of the award in US courts. The Ninth Circuit ultimately ruled in favor of the company, enforcing the $1.3 billion award.

• Court: Ninth Circuit

• Date: Wednesday

• Primary Legal Issue: enforceability of international arbitral awards in US courts

• Court Reasoning: the concept of forum non conveniens does not apply in cases seeking to enforce international arbitral awards

• Holding: the $1.3 billion arbitral award is enforceable in US courts

• Practical Outcome: the award was enforced, resulting in a significant financial outcome for the satellite communications company

How Does This Affect You?

Before this ruling, there was uncertainty over the enforceability of international arbitral awards in US courts. The Ninth Circuit resolved this uncertainty by clarifying that the concept of forum non conveniens does not apply in such cases. Companies involved in international arbitration can now more reliably expect to have their awards enforced in US courts. This change creates a compliance obligation for practicing lawyers, law students, and businesses to review their arbitration agreements and enforcement strategies.

For Lawyers & Advocates

• Reviewing existing arbitration agreements to ensure compliance with the New York Convention and the Federal Arbitration Act (FAA) is crucial, as the enforceability of international arbitral awards in US courts is more certain.

• Drafting arbitration agreements should consider the implications of this ruling on the choice of forum and the enforceability of awards, taking into account the FAA and relevant case law such as Mitsubishi Motors v. Soler Chrysler-Plymouth.

• The use of forum non conveniens as a defense to enforcement of international arbitral awards is no longer viable, altering the strategy for responding to such enforcement actions.

• Lawyers may wish to advise clients on the increased likelihood of enforcement of international arbitral awards in US courts and the potential impact on their business operations.

• The ruling may influence the willingness of companies to participate in international arbitration, as the likelihood of enforcement of awards in US courts is now higher.

For Law Students

The decision provides an opportunity to examine the interplay between the FAA and the New York Convention in enforcing international arbitral awards. The core legal doctrine to focus on is the inapplicability of forum non conveniens in international arbitral award enforcement.
The decision is particularly relevant for the study of:

• International Arbitration

• Federal Courts

• Conflict of Laws

• Alternative Dispute Resolution
  Comparing this judgment to Mitsubishi Motors v. Soler Chrysler-Plymouth and Scherk v. Alberto-Culver illuminates the doctrinal question of how US courts balance the FAA and the New York Convention in enforcing international arbitral awards.

For Businesses

• Companies involved in international arbitration may want to review their arbitration agreements and consider the implications of this ruling on their dispute resolution strategies.

• Businesses operating in the satellite communications industry may want to reassess their risk profile regarding international arbitration and award enforcement.

• General Counsel of companies with international operations may find it useful to evaluate the potential impact of this ruling on their company's arbitration agreements and enforcement strategies.

• Boards of companies involved in international arbitration may consider revising their internal documentation and filing processes to take into account this new development.

Key Takeaways

• The law now clearly states that the concept of forum non conveniens does not apply in cases seeking to enforce international arbitral awards.

• Practicing lawyers may find it useful to advise their clients on the increased likelihood of enforcement of international arbitral awards in US courts.

• Regulators and courts can no longer apply the forum non conveniens doctrine to deny enforcement of international arbitral awards.

• Companies may want to watch for upcoming rulemaking or amendments to the Federal Arbitration Act that may further clarify the enforceability of international arbitral awards.

• General Counsel of companies with international operations may want to review their arbitration agreements and enforcement strategies before the next potential dispute arises.

Source: BREAKING: 9th Circ. Enforces $1.3B Devas Satellite Award