Reinsurance Focus

The US Court of Appeals for the Ninth Circuit recently issued an opinion determining that an arbitration award of the International Court of Arbitration of the International Chamber of Commerce (“ICC”) in favor of the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran was not “contrary to the public policy” of the United States under the New York Convention. The Court of Appeals agreed with the position of the United States as amicus curiae that confirmation of the award did not violate any public policy of the United States. The Ninth Circuit noted that there was a strong presumption in favor of foreign arbitration awards and that US relations with Iran were heavily regulated. The Court of Appeals noted that there was an inherent difference between an arbitration award and a “payment” which would be prohibited under existing sanctions law related to Iran. Furthermore, the Ninth Circuit declined to refuse to confirm the award as it could be authorized by the US government’s issuance of a specific license. The Court of Appeals concluded that Cubic’s argument that the ICC award was not yet binding on the parties was without merit. The Ninth Circuit also held that the district court’s judgment is a “money judgment” subject to post-judgment interest, and that a district court had discretion to award pre-judgment interest and attorney’s fees in an action to confirm an award under the New York Convention. The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran v. Cubic Defense Sys., Inc., No. 98-01165 (9th Cir. Dec. 15, 2011).

This post written by John Black.

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