Non-U.S. Arbitral Award Confirmed Against Non-U.S. Sovereign Under FSIA Exception

Thai-Lao Lignite (Thailand) Co., et al v. Government of the Lao People's Democratic Republic, 10 Civ. 5256 (S.D.N.Y Aug. 2011), presents a recent analysis of cross-motions to vacate and confirm arbitral awards, a mainstay in the international dispute resolution play book. The decision provides learning on several timely topics that we address more fully in the discussion of the enforcement and recognition of non-U.S. arbitral awards against non-U.S. sovereigns in our e-book, International Practice: Topics and Trends.

The agreement between the litigants provided for arbitration in Malaysia at the Kuala Lumpur Regional Centre for Arbitration under the UNCITRAL rules, with an award being permitted to be entered as a judgment "in any court of competent jurisdiction". Even though the respondent was a sovereign state, the parties' agreement itself contained a broad waiver of sovereign immunity. The District Court upheld this waiver.

The District Court independently based jurisdiction on an exception to the Foreign Sovereign Immunities Act, 28 U.S.C. sec. 1605(a)(6), which provides that a non-U.S. sovereign "shall not be immune from the jurisdiction of the courts of the United States" in an action

either to enforce an agreement made by the foreign state with or for the benefit of a private party to submit to arbitration all or any differences which have arisen or which may arise between the parties with respect to a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration under the laws of the United States, or to confirm an award made pursuant to such an agreement to arbitrate, if ... (B) the agreement or award is or may be governed by a treaty or other international agreement in force for the United States calling for the recognition and enforcement of arbitral awards ....

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