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What an Asian Company Needs to
Know about Enforcing Arbitral
Awards in the United States
In this article, the author describes the processes and potential pitfalls involved where an overseas
party seeks to enforce an international arbitral award in the United States under the Federal Arbitration
Act. An hypothetical case study involving an award between Asian, US and European parties is used to
give practical illustrations of points made.
C
Company B and Company C refused to
carry out the award.
Since the award itself is not self-
executing, it requires conversion to a court
judgment. That is, Company A needs to
seek a court's assistance to enforce the
award by executing it against the assets of
the losing party. Company A believes that
Company B has a principal place of
business in the United States and substantial
assets across the nation. Company C is
believed to export products to the United
States which Company A hopes to seize as
part of its enforcement efforts. For these
reasons, Company A contemplates bringing
an enforcement action in a US court.
This article discusses what Company A
should know in its efforts to enforce the
arbitral award in the United States. What
are the applicable laws in an enforcement
action in the United States? What are the
potential challenges facing Company A?
What defenses will be available to
Companies B and C?
Federal Arbitration Act
In the United States, arbitration
proceedings and the enforcement of foreign
arbitral awards are governed by the Federal
Arbitration Act (the 'FAA'). The FAA has
three Chapters addressing different aspects
of arbitration. FAA Chapter 1 governs
domestic arbitrations. FAA Chapter 2 is the
US enabling legislation codifying the
Convention on the Recognition and
Enforcement of Foreign Arbitral Awards
1958 (the 'New York Convention'). Chapter
3 codifies the Inter-American Convention
on International Commercial Arbitration.
Applicability of the New York
Convention as reflected in US
judicial decisions1
Foreign award
On Company A's application to enforce
the award, the US court will apply the New
York Convention. Since the award was
rendered outside of the United States, it is
considered a 'foreign award,' which mandates
the application of the Convention.2
Non-domestic award
Even assuming that the award was
rendered in the United States, the New York
Convention would still apply, since the
award has "a reasonable relation with a
foreign state" and is thus 'non-domestic'
under the FAA and relevant Federal cases.3
Section 202 of the FAA states that an
award is non-domestic if -
"... that relationship involves property
located abroad, envisages performance or
enforcement abroad, or has some other
reasonable relation with one or more
foreign states."4
The courts have held that the 'reasonable
relation' test is met if the award is made
within the legal framework of another
country, eg where it is pronounced in
accordance with a foreign law or involves
parties domiciled or having their principal
place of business outside the United States.5
Company A's award certainly fits this
description since, among other things, it
involves a contract to be performed in Asia.6
No signatory State requirement
US courts have held that a party need
not come from a signatory State in order for
the New York Convention to apply.7
Thus,
Jung-Hye Yeum
ompanies enter into arbitration
agreements to obtain a final and
binding resolution of commercial
disputes. The successful prosecution of an
arbitration may not, however, be the final
step. Where the losing party refuses to
carry out the award, the successful party
must seek judicial assistance to enjoy the
relief granted by the award. The victor
must invoke the powers of a court to
enforce the award by executing it against
the assets of the losing party.
Special challenges are presented when
the successful party attempts to enforce an
award in a jurisdiction other than the one in
which it was rendered. In particular,
differences in substantive and procedural
laws may make enforcement time-
consuming and costly.
Scenario: hypothetical arbitration
involving an Asian company
An Asian company ('Company A') has
successfully completed an arbitration arising
out of breach of contract by a European
company ('Company B') and an American
company ('Company C'). The contract was
to be performed in Asia. The arbitration
took place in Asia and was administered by
an Asian arbitral institution. While Company
A hoped that the losing parties would
voluntarily perform the arbitral award, both

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for example, if Company A were based in
Taiwan, a territory not recognised as a
country under international law and so not
a signatory to the New York Convention,
this would be no bar to the application of
the Convention to enforcement proceedings
before a US court.8
Federal policy favoring arbitration
and heavy burden of proof
The United States strongly favors
arbitration as a means of settling disputes
efficiently and avoiding long and expensive
litigation.9
Furthermore, under the New
York Convention, courts may not
discriminate against foreign awards or in
favor of domestic awards.10
In fact, US
courts have held that the Federal policy
favoring arbitration is even stronger in the
context of international arbitration.11
A party opposing enforcement has the
burden of proving that one of the seven
defenses under the New York Convention
applies.12
As one court has noted, "[t]he
burden is a heavy one, as the showing
required to avoid summary confirmance is
high. (sic)"13
Thus, companies B and C have
to carry this substantial burden to resist the
award.
Limitations period
In seeking enforcement of the award in
the US, Company A must bring an action
within the three year limitations period laid
down by 9 USC § 207. This period starts to
run when the award is decided by the
arbitrators, not when the award becomes
final according to the law that governs the
underlying contract.14
Thus, Company A
should not consider any potential appeal by
Company B or C in the Asian nation where
the award was rendered in calculating the
statutory limitations period.
Federal court vs state court
The FAA provides that Federal courts
have original and removal jurisdiction without
regard to the amount in controversy when
an action is brought under the New York
Convention.15
Thus, Company A should
bring the action in a Federal District Court,
as opposed to a State court.
Personal jurisdiction requirement
US courts have consistently held that
the New York Convention and Chapter 2 of
the FAA do not dispense with the
jurisdictional requirements of due process.
Accordingly, Company A should ascertain
which US State has personal jurisdiction
over Company B and C and seek
enforcement there.16
In the United States, the exercise by the
court of personal jurisdiction must satisfy
the due process requirements of the
Federal Constitution. Firstly, the defendant
must be properly served with process
under Rule 4 of the Federal Rules of Civil
Procedure. Secondly, one of the following
bases for personal jurisdiction must be
established:
(a) that the defendant is domiciled in the
State where the enforcement action is
brought;
(b) that the defendant was served while
physically present in that State;
(c) that the defendant consented to
personal jurisdiction in the forum State,
either expressly or implicitly; or
(d) that the defendant had sufficient minimum
contacts with the forum State.17
Bases (a) and (b) will likely apply only in
proceedings to enforce the award against
Company C, an American company.
Company B's case may be more
problematic, since it is not based in the
United States. Company A will mostly likely
have to rely on either base (c) or (d) above.
Asserting jurisdiction based on consent
is unlikely to be available, however. For
example a party implicitly consents to
personal jurisdiction in enforcement
proceedings under the New York
Convention in the State in which the party
agreed to arbitrate disputes arising out of
the underlying contact.18
In Company A's
case, the arbitration took place in Asia. As
there is no indication that Companies A and
B implicitly selected the United States as a
forum to enforce the award, no implicit
consent exists.
Accordingly, Company A must show
that Company B has certain contacts with
the forum State, such that the maintenance
of the suit does not offend "traditional
notions of fair play and substantial justice".19
Depending on the nature of the defendant's
contacts with the forum, a Federal court
may obtain either specific or general
jurisdiction over that party. Whether
dealing with general or specific jurisdiction,
the touchstone is 'purposeful availment.'20
In asserting personal jurisdiction,
Company A need only prima facie show
the existence of facts supporting jurisdiction
in its pleadings and affidavits in order to
avoid dismissal. Absent an evidentiary
hearing, the court will accept Company A's
uncontroverted allegations and resolve in its
favor factual conflicts contained in the
parties' filings.21
Specific or general jurisdiction
Where Company B challenges
jurisdiction, the court will make the following
enquiries. Does Company A's claim arise
out of or have a substantial connection to
Company B's contacts with the forum, ie
the State where the court sits? If the
answer is in the affirmative, then the court
has 'specific jurisdiction.'
Alternatively, if Company B has
continuous and systematic general business
contacts with the forum, the court has
general jurisdiction. Thus, if the court finds
Company B's shipment of goods into the
State continuous and systematic, such that
it has purposefully availed itself of the
forum state, the court will likely assert
general jurisdiction over Company B.22
Reasonableness requirement
Even if Company A can show sufficient
minimum contacts, it may be subject to an
additional requirement of 'reasonableness.'
By virtue of the decision of the US Supreme
Court in Burger King, courts have held that
even if the prevailing party has the requisite
minimum contacts to support the exercise
of general jurisdiction, the assertion of
jurisdiction should also be reasonable.23
In
deciding whether it is reasonable to exercise
jurisdiction, courts will consider and assess
seven factors:
1. the extent of a defendant's purposeful
interjection into the forum State's affairs;
2. the burden on the defendant of
defending enforcement in the forum;
3. the extent of any conflict with the
sovereignty of the defendant's home
State;
4. the forum State's interest in adjudicating
the dispute;
5. the most efficient means of judicially
resolving the controversy;
6. the importance of the forum to the
plaintiff's interests in convenient and
effective relief; and
7. the existence of an alternative forum.24
Rule 4(k)(2) jurisdiction
Assuming that Company B is not subject
to the personal jurisdiction of any State
court of general jurisdiction, Company A
can assert jurisdiction on the ground that
Company B has sufficient contacts with the
United States as a whole. Rule 4(k)(2) of the

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Federal Rules of Civil Procedure provides
that with respect to claims arising under
Federal law, a party may establish personal
jurisdiction over a non-resident defendant
who is not subject to the jurisdiction of the
courts of general jurisdiction of any US State.
If Company A is unable to find out how
extensive Company B's contacts with the
United States may be, the court may allow
discovery on the extent of the latter's
nationwide contacts.25
Availability of quasi-in rem
jurisdiction
Notwithstanding the general/specific
personal jurisdiction requirement, Company
A may be able to assert jurisdiction over
Company B based on the latter's property
in the State. No minimum contacts are
necessary where quasi-in rem jurisdiction is
used to attach property to collect a debt
based on a claim already adjudicated in a
forum having personal jurisdiction.26
Significantly, quasi-in rem jurisdiction
cannot be based on mere speculation
about the possible existence of property.
Company A must be able to identify
specific assets.27
Furthermore, even if the court has
quasi-in rem jurisdiction, it can confirm the
award only to the extent that there exist
assets in the forum. Thus if, for argument's
sake, Company B has only $100 in a bank
account identified by Company A, the
court will likely enforce the award only
against that $100 worth of assets.28
The New York Convention
defenses
Section 207 of the FAA provides that a
court must enter an order confirming the
award unless the court finds "one of the
grounds for refusal or deferral of recognition
or enforcement of the award specified" in
the New York Convention.29
Article V of the New York Convention
sets forth seven grounds for refusing to
recognize and enforce an award. Five of
these grounds can be raised only by the
party against whom the award is being
invoked. The remaining two grounds may
be raised either by the court on its own
motion or by the party opposing
enforcement. Essentially, in order to resist
the enforcement of the award, Companies
B and C must prove:
1. the absence of a valid agreement to
arbitrate;
2. lack of notice or of the opportunity to
be heard;
3. that the award exceeds the scope of
the arbitration agreement,
4. that the arbitral tribunal was not
properly constituted or the arbitral
procedure was not properly conducted;
or
5. that the award is not yet binding or has
been set aside or suspended by a
competent authority in the country in
which, or under the laws of which, the
award was made.
In addition, the court may refuse to
enforce an award:
1. if the subject matter of the arbitration is
not capable of settlement by arbitration
under US law; or
2. if enforcement would be contrary to
the public policy of the United States.
The Article V grounds are
exhaustive
There is a considerable body of case law
holding that a party who seeks to resist
enforcement of an award under the New
York Convention is limited to raising objections
based on the specific grounds enumerated
in Article V of the Convention.30
For example, an argument that an
award rendered by the China International
Economic and Trade Arbitration Commission
should not be enforced because the
arbitration agreement or a copy thereof
had not been submitted in support of the
application to enforce as required by Article
IV(1)(b) of the Convention was rejected
because it was not an Article V ground.31
Thus, any potential attempt by Company B
or C to resist enforcement of the award on
a ground that is not based on Article V of
the Convention is likely to be rejected.32
Potential availability of FAA
defenses to US awards
Should Company A instead have obtained
an award rendered in the United States or
under US law, the losing party who seeks to
set aside or vacate the award may assert the
defenses set forth in the domestic FAA33
.
Relying on Article V(1)(e) of the New York
Convention, courts have explained that
there is no indication in the Convention of
any intention to deprive the rendering State
of its supervisory authority over an arbitral
award, including its authority to set aside that
award under domestic law.34
Under this
rationale, the rendering State is free to set
aside or modify an award in accordance
with its domestic arbitral law and the full
panoply of express and implied grounds for
relief conferred by that law. 35
The defenses identified in the domestic
FAA are more extensive than those available
under the New York Convention. Under
section 10 of the FAA, the grounds for
vacating an award are:
1. that the award was procured by
corruption, fraud, or undue means;
2. that there was evident partiality or
corruption in the arbitrators, or either
of them;
3. that the arbitrators were guilty of
misconduct in refusing to postpone the
hearing, upon sufficient cause being
shown, or in refusing to hear evidence
pertinent and material to the
controversy, or of any other misbehavior
by which the rights of any party have
been prejudiced; or
4. that the arbitrators exceeded their
powers, or so imperfectly executed
them that a mutual, final, and definite
award upon the subject matter
submitted was not made.36
Under section 11 of the FAA, an award
may be modified or corrected rather than
vacated. The grounds for modification or
correction are:
1. that there was an evident material
miscalculation of figures or an evident
material mistake in the description of
any person, thing, or property referred
to in the award;
2. that the arbitrators have made an award
upon a matter not submitted to them,
unless it is a matter not affecting the
merits of the decision upon the matter
submitted; or
3. that the award is imperfect as a matter
of form not affecting the merits of the
controversy.37
The forum non conveniens
doctrine
Company B may seek to resist
enforcement in the United States on the
ground of forum non conveniens. Although
not one of the New York Convention
defenses, some courts have held that the
doctrine of forum non conveniens is a
viable defense on the ground that the
doctrine is procedural rather than
substantive.38
In evaluating the forum non
conveniens question, the courts consider:
(i) the level of deference owed to the

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plaintiffs; (ii) the availability of an adequate
alternative forum; and (iii) whether the
public and private interest factors weigh in
favor of an adjudication in the plaintiff's
chosen forum or in the defendant's
proposed alternative.39
Conclusion
There is no analogous multilateral treaty
regarding the enforcement of foreign
judgments and having the scope of the
New York Convention. Furthermore, the
United States has yet to ratify any bilateral
treaty regarding the enforcement of foreign
judgments. Despite the various challenges
faced by parties in enforcing arbitral awards
in the United States, the consensus appears
to be that awards are much easier to
enforce than court judgments, given
especially the applicability of the New York
Convention. It has also been recognized
that the general attitude towards foreign
awards is very pro-enforcement in the
United States, whether the award is rendered
in favor of the American or the foreign
party.40
On the other hand, the successful
party to an arbitration should be aware that
obtaining an order to enforce an award
from the court does not guarantee that it
will successfully secure the assets of the
losing party. There is always a risk that the
losing party may attempt to remove the
assets from the jurisdiction or render them
inaccessible during the pendency of the
enforcement proceedings. For this reason,
the successful party should also examine
the availability of conservatory measures
under the state law of the enforcement
jurisdiction when commencing an
enforcement action.
Jung-Hye Yeum
Duane Morris LLP, New York
1 This article cites representative cases concerning
the enforcement of international arbitral awards
in the United States. A company seeking
enforcement in the United States should
investigate the efficacy and precedential value
of those cases in a given jurisdiction.
2 New York Convention, Article I(1); Bergesen v
Joseph Muller Corp, 710 F 2d 928, 932 (2d Cir
1983).
3 Jacada (Europe) Ltd v International Marketing
Strategies Inc, 401 F 3d 701, 708 (6th Cir 2005);
Stone & Webster Inc v Triplefine International
Corp, 118 Fed Appx 546, 548-49 (2d Cir 2004).
4 9 USC § 202; Deiulemar Compagnia di
Navigazione SpA v Transocean Coal Co Inc,
2004 WL 2721072, *4 (SDNY, 30 November
2004).
5 Jacada (Europe) Ltd (note 3) 401 F 3d 701, 708
(6th Cir 2005); Stone & Webster Inc (note 3),
118 Fed Appx 546, 548-49 (2d Cir 2004).
6 Beijing Sansheng Development Corp v
Advertisement Technology Corp, 2003 WL
1699327 (WD Tex 2003).
7 Trans Chemical Ltd v China National Machinery
Import & Export Corp, 978 F.Supp 266 (SD Tex
1997), aff'd 161 F 3d 314 (5th Cir 1998)
(confirming arbitral award in favor of a Pakistani
corporation). Pakistan ratified the New York
Convention on 14 July 2005.
8 Stone & Webster Inc v Triplefine International
Corp (note 3).
9 Encyclopaedia Universalis SA v Encyclopaedia
Britannica Inc, 403 F 3d 85 (2d Cir 2005).
10 Fotochrome Inc v Copal Co Ltd, 517 F 2d 512,
518 (2nd Cir 1975) (citing Article III of the New
York Convention).
11 Compagnie Noga d'Importation et d'Exportation
SA v Russian Federation, 361 F 3d 676 (2d Cir
2004).
12 Encyclopaedia Universalis SA, 403 F 3d 85, 90
(2d Cir 2005) (citing Article V(1)); Karaha Bodas
Co LLC v Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 364 F 3d 274, 288 (5th Cir
2004).
13 Encyclopaedia Universalis SA, 403 F 3d 85, 90
(2d Cir 2005), citing Yusuf Ahmed Alghanim &
Sons v Toys 'R' Us Inc, 126 F 3d 15, 23 (2d Cir
1997) and Ottley v Schwartzberg, 819 F 2d
373, 376 (2d Cir 1987).
14 Seetransport Wiking Trader Schiffarhtsgesellschaft
mbH & Co KG v Navimpex Centrala Navala, 989
F 2d 572 (2d Cir 1993).
15 9 USC §§ 203, 205.
16 Glencore Grain Rotterdam BV v Shivnath Rai
Harnarain Co, 284 F 3d 1114, 1121-22 (9th
Cir
2002). See also article III of the New York
Convention.
17 International Shoe Co v State of Washington, 326
US 310, 66 S Ct 154, 90 L Ed 95 (1945).
18 Marine Trading, Ltd v Naviera Comercia Naylamp
SA, 879 F Supp 389, 390 (SDNY 1995).
19 Glencore Grain Rotterdam BV (note 16), 284 F
3d 1114, 1123 (9th Cir 2002).
20 Ibid at 1123.
21 Ibid at 1119.
22 C f B a s e Meta l Trad i n g L td v O S J C
Novekuznestsky Aluminum Factory, 283 F 3d
208 (4th
Cir 2002).
23 Glencore Grain Rotterdam BV (note 16), 284 F
3d 1114 (9th
Cir 2002) (citing Burger King Corp
v Rudzewicz, 471 US 462, 105 S Ct 2174, 85 L
Ed 2d 528 (1985)).
24 Ibid.
25 Dardana Ltd v AO Yuganskneftegaz, 317 F 3d
202, 208 (2d Cir 2003).
26 CME Media Enterprises BV v Zelezny, 2001 WL
1035138, at *3 (SDNY, 10 September 2001).
27 Glencore Grain Rotterdam BV (note 16), 284 F.
3d 1114, 1127-28 (9th Cir 2002).
28 CME Media Enterprises BV (note 26), 2001 WL
1035138, at *3 (SDNY, 10 September 2001)
(petition to confirm $23.35 million granted only
to the extent of $0.05, the amount remaining in
a depleted bank account).
29 9 USC § 207.
30 Eg Guang Dong Light Headgear Factory Co Ltd
v ACI International Inc, 2005 WL 1118130 (D
Kan, 10 May 2005).
31 Coutinho Caro & Co USA Inc v Marcus Trading
Inc, 2000 WL 435566, at *10 (D Conn, 4 March
2000).
32 But see Re Arbitration Between Chromalloy
Aeroservices and Arab Republic of Egypt, 939 F
Supp 907 (DDC 1996).
33 Yusuf Ahmed Alghanim & Sons v Toys 'R' Us Inc
(note 13); Jacada (Europe) Ltd v International
Marketing Strategies Inc, 255 F Supp 2d 744
(WD Mich 2003).
34 Ibid.
35 Ibid.
36 9 USC § 10.
37 9 USC § 11.
38 Monegasque de Reassurances SAM. v Nak
Naftogaz of Ukraine, 311 F 3d 488, 498 (2d Cir
2002); but see Dominguez-Cota v Cooper Tire
& Rubber Co, 396 F 3d 650 (5th Cir 2005)
(declining to treat forum non conveniens as a
non-merits issue). See also article III of the New
York Convention.
39 Adbullahi v Pfizer Inc, 77 Fed Appx 48 (2nd Cir
2003); Monegasque de Reassurances SAM. v
Nak Naftogaz of Ukraine (note 38).
40 See in particular Parsons & Whittemore
Overseas Co Inc v Societe Generale de l'Industrie
du Papier (RAKTA), 508 F 2d 969 (2d Cir 1974).