SECOND CIRCUIT ORDERS DISMISSAL OF SUIT TO CONFIRM A PERUVIAN ARBITRATION AWARD IN NEW YORK ON FORUM NON CONVENIENS GROUNDS
The Peruvian arbitration awarded over $21 million in connection with a consulting agreement for engineering studies on water and sewage services in Peru. A Peruvian statute, however, significantly limited the amount the consultant could recover from the Peruvian government. Consequently, the consultant filed a petition to confirm the award in U.S. district court in New York, where the consultant hoped to collect the full amount of the award from Peruvian assets located there. The lower court denied dismissal of the petition, in part, due to the policy supporting international arbitration under the Panama Convention. Over a vigorous dissenting opinion, the Second Circuit panel majority reversed, holding that “the cap statute is a highly significant public factor warranting [forum non conveniens] dismissal.” The court acknowledged: “Although enforcement of [international] awards is normally a favored policy of the United States and is specifically contemplated by the Panama Convention, that general policy must give way to the significant public factor of Peru’s cap statute.” Figueiredo Ferraz v. Republic of Peru, No. 09-3925 (2d Cir. Dec. 14, 2011).
This post written by Michael Wolgin.
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