Baker Marine v. Chevron

• Citation: 191 F.3d 194
• Decision Date: 01 August 1998
• Docket Number: 97-9617,Docket Nos. 97-9615
• Parties: (2nd Cir. 1999) BAKER MARINE (NIG.) LTD., Petitioner-Appellant, v. CHEVRON (NIG.) LTD. and CHEVRON CORP., INC., Respondents-Appellees. BAKER MARINE (NIG.) LTD., Petitioner-Appellant, v. DANOS AND CUROLE MARINE CONTRACTORS, INC., Respondent-Appellee
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

Page 194

191 F.3d 194 (2nd Cir. 1999)

BAKER MARINE (NIG.) LTD., Petitioner-Appellant, v. CHEVRON (NIG.) LTD. and CHEVRON CORP., INC., Respondents-Appellees.

BAKER MARINE (NIG.) LTD., Petitioner-Appellant, v. DANOS AND CUROLE MARINE CONTRACTORS, INC., Respondent-Appellee.

Docket Nos. 97-9615, 97-9617

August Term, 1998

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: September 23, 1998

Decided: August 12, 1999

Appeals from two judgments of the United States District Court for the Northern District of New York (McAvoy, J.), denying petitions to confirm foreign arbitration awards and sanctioning the petitioner. The Court of Appeals (Leval, J.) affirms the denial of the petitions to confirm the foreign awards.

FEYI O. GAJI, Binghamton, N.Y. (Catherine E. Cronin, Johnson City, N.Y., Of Counsel), for Petitioner-Appellant.

ANTHONY L. PACCIONE, New York, N.Y. (Loretta Shaw-Lorello, Hertzog, Calamari & Gleason, New York, N.Y., Of Counsel), for Respondents-Appellees, Chevron (Nig.) Ltd. and Chevron Corp., Inc.

ALAN J. POPE, Binghamton, N.Y. (John M. Domurad, O'Connor, Gacioch, Pope & Tait, LLP, Binghamton, N.Y. , On the Brief), for Respondent-Appellee, Danos and Curole Marine Contractors, Inc.

Before: MESKILL, LEVAL and STRAUB, Circuit Judges .

LEVAL, Circuit Judge:

Baker Marine (Nig.) Ltd. ("Baker Marine") appeals from two judgments of the United States District Court for the Northern District of New York (Thomas J. McAvoy, District Judge), in favor of appellees Chevron-Nigeria and Chevron Corporation ("Chevron") and Danos and Curole Marine Contractors, Inc. ("Danos").

BACKGROUND

Baker Marine, Danos, and Chevron are corporations involved in Nigeria's oil industry. In September 1992, Baker Marine and Danos entered a contract to bid to provide barge services for Chevron. Baker Marine agreed it would provide local support, while Danos agreed it would provide management and technical equipment. The bid by Baker Marine and Danos was successful, and in October 1992, the two companies jointly entered a contract with Chevron to provide barge services.

The contract with Chevron included provisions for the arbitration of disputes which the contract between Baker Marine and Danos incorporated by reference. These provisions stated that "[a]ny dispute, controversy or claim arising out of this Contract, or the breach, termination or validity thereof, shall be finally and conclusively settled by arbitration in accordance with the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL)." Two different clauses further specified that the arbitration "procedure (insofar as not governed by said UNCITRAL rules . . . ) shall be governed by the substantive laws of the Federal Republic of Nigeria" and that the contracts "shall be interpreted in accordance with the laws of the Federal Republic of Nigeria." The contracts also provided that "judgment upon the award of the arbitrators may be entered in[] any court having jurisdiction thereof," and that the contract and awards under it "shall be governed by the 1958 United Nations Convention on Recognition and Enforcement of Foreign Arbitration Awards ['Convention' or 'New York Convention']." The United States and Nigeria are parties to the Convention, 21 U.S.T. 2517, 330 U.N.T.S. 38, reprinted at 9 U.S.C. § 201 note.

Baker Marine charged Chevron and Danos with violating the contracts. Pursuant to those contracts, the parties submitted to arbitration before panels of arbitrators in Lagos, Nigeria. By written decisions of early 1996, one panel of arbitrators awarded Baker Marine $2.23 million in damages against Danos a second panel awarded Baker Marine $750,000 in damages against Chevron.

Baker Marine promptly sought enforcement of both awards in the Nigerian Federal High Court. Danos and Chevron appealed to the same court to vacate the awards on various grounds. By written opinions of November 1996 and May 1997, the Nigerian court set aside the two arbitration awards. In the Chevron action, the court concluded that the arbitrators had improperly awarded punitive damages, gone beyond the scope of the submissions, incorrectly admitted parole evidence, and made inconsistent awards, among other things. The court found that the Danos award was unsupported by the evidence.

In August 1997, Baker Marine brought these actions in the Northern District of New York seeking confirmation of the awards under the United States law implementing the Convention, chapter 2 of the Federal Arbitration Act ("FAA"), 9 U.S.C. §§201-09.¹

The district court denied Baker Marine's petitions to enforce the arbitral awards, concluding that under the Convention and principles of comity, "it would not be proper to enforce a foreign arbitral award under the Convention when such an award has been set aside by the Nigerian courts." Baker Marine appeals.

This dispute falls under the Convention because Baker Marine is seeking enforcement of arbitration awards in a nation other than the nation where the awards were made. See Convention, art. I ("This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought"). Under American law, when a party brings an action to confirm an arbitration award falling under the Convention, a court "shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9 U.S.C. §207. Article V of the Convention provides that a court may refuse to enforce an arbitration award "only" upon proof of the conditions specified therein. Convention, art. V; see also Yusuf Ahmed Alghanim & Sons v. Toys "R" Us, Inc., 126 F.3d 15, 20 (2d Cir. 1997) (Article V provides exclusive grounds for setting aside an arbitral award), cert. denied, 118 S. Ct. 1042 (1998). Article V(1)(e) provides that a court may refuse enforcement of an award that "has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made." Convention, art. V(1)(e). Baker Marine does not contest that the Nigerian High Court is a competent authority in the country in which, and under the law of which, the award was made. The district court relied on the decision of the Nigerian court and Article V(1)(e) in declining to enforce the award.

Baker Marine argues that the district court's ruling failed to give effect to Article VII of the Convention, which provides that the Convention shall not "deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the count[r]y where such award is sought to be relied upon." Art. VII(1). Baker Marine contends that the awards were set aside by the Nigerian courts for reasons that would not be recognized under U.S. law as valid grounds for vacating an arbitration award and that under Article VII, it may invoke this country's national arbitration law, notwithstanding the action of the Nigerian court.

We reject Baker Marine's argument. It is sufficient answer that the parties contracted in Nigeria that their disputes would be arbitrated under the laws of Nigeria. The governing agreements make no reference whatever to United States law. Nothing suggests that the...