In an opinion addressing an issue of first impression in the Fifth Circuit, the United States Court of Appeals for the Fifth Circuit has ruled that when assessing personal jurisdiction in an action to confirm a foreign arbitration award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), a federal court should consider not only contacts related to the arbitration proceeding but jurisdictional contacts related to the parties\u2019 underlying dispute.<\/p>\n\n\n\n
In\u00a0Conti 11. Container Schiffarts-GMBH & Co. KG M.S., MSC Flaminia v. MSC Mediterranean Shipping Co. S.A.<\/em>, 91 F.4th 789 (5th Cir. 2024), Conti, a German shipping company, chartered a vessel, the Flaminia, to MSC, a Swiss corporation, under a charterparty that required all disputes arising out of the agreement to be arbitrated in London. In June 2012, MSC (USA) \u2013 a wholly owned New York subsidiary of MSC \u2013 received a request from an American chemical manufacturer to ship three chemical tank containers out of New Orleans. MSC (USA) arranged to have the chemical tank containers loaded onto the Flaminia at the Port of New Orleans. The tanks exploded during Atlantic transit, causing extensive damage and three deaths.[1]<\/a>\u00a0Conti commenced an arbitration against MSC in London under the charterparty, and the tribunal issued an award ruling that MSC breached the charterparty by failing to comply with the International Maritime Dangerous Goods Code and awarding Conti approximately $200 million in damages.<\/p>\n\n\n\n Conti subsequently filed a petition in the United States District Court for the Eastern District of Louisiana seeking to confirm the arbitration award pursuant to the New York Convention. MSC moved to dismiss the petition, arguing that there were insufficient forum contacts to confer personal jurisdiction.<\/p>\n\n\n\n The district court denied MSC\u2019s motion to dismiss for lack of personal jurisdiction, rejecting its argument that the only relevant contacts for determining whether the court has personal jurisdiction were those relating to the London arbitration. Instead, the court considered MSC\u2019s contacts relating to the underlying dispute that led to the arbitration, relying primarily on decisions of the Second, Third, Ninth, and Tenth Circuits.[2]<\/a>\u00a0The district court further rejected MSC\u2019s argument that the Supreme Court\u2019s decision in\u00a0Badgerow v. Walters<\/em>\u00a0forbids \u201clooking through\u201d the arbitration petition to the underlying dispute to assess personal jurisdiction.<\/p>\n\n\n\n On appeal, the Fifth Circuit agreed with the district court in rejecting MSC\u2019s argument that the court should have limited its jurisdictional analysis to contacts related only to MSC\u2019s refusal to pay the arbitral award. On this issue of first impression in the Fifth Circuit, the court of appeals followed the reasoning of the Tenth Circuit in\u00a0Compa\u00f1\u00eda de Inversiones Mercantiles, S.A. v. Grupo Cementos de Chihuahua S.A.B. de C.V.<\/em>, 970 F.3d 1269 (10th Cir. 2020), and the Second Circuit in\u00a0Sol\u00e9 Resort, S.A. de C.V. v. Allure Resorts Mgmt., LLC<\/em>, 450 F.3d 100, 104 (2d Cir. 2006). Specifically, the Tenth Circuit held in\u00a0Compa\u00f1\u00eda de Inversiones Mercantiles, S.A.<\/em>\u00a0that on a petition to confirm a Bolivian arbitration award against a group of Mexican companies, the \u201cproper jurisdictional inquiry\u201d in an action to confirm the foreign arbitral award is whether the award beneficiary was injured \u201cby the defendant\u2019s forum activities in connection with the claim that led to the arbitration, as opposed to the defendant\u2019s forum activities in connection with the arbitration proceeding itself.\u00a0The Fifth Circuit further observed that six other circuits follow an approach similar in considering a defendant\u2019s contacts related to the underlying dispute that led to the arbitral award, and not only contacts related to the arbitration proceeding itself.<\/p>\n\n\n\n The Fifth Circuit further rejected MSC\u2019s argument that the Supreme Court\u2019s decision in\u00a0Badgerow v. Walters<\/em>\u00a0forbids \u201clooking through\u201d the arbitration petition to the underlying dispute to assess personal jurisdiction. In\u00a0Badgerow<\/em>, the Supreme Court held that in determining whether a court has subject matter jurisdiction to confirm a domestic arbitration award, the court must look only to the application to confirm the arbitration award, and not to the parties\u2019 underlying dispute that led to the arbitration.\u00a0In\u00a0Conti<\/em>, the Fifth Circuit distinguished\u00a0Badgerow<\/em>, noting that\u00a0Badgerow\u00a0<\/em>addressed subject matter jurisdiction rather than personal jurisdiction, and involved a domestic arbitration governed by Chapter 1 of the Federal Arbitration Act (FAA), rather than a foreign arbitration in\u00a0Conti<\/em>, which is governed by Chapter 2 of the FAA. Analyzing the statutory language, the Fifth Circuit concluded that there is nothing in Chapter 2 of the FAA that forbids a court from considering the parties\u2019 dispute for purposes of assessing personal jurisdiction.<\/p>\n\n\n\n Applying these standards, the Fifth Circuit nevertheless ruled in favor of MSC, finding that sole forum contact \u2013 the loading of tanks in New Orleans, which resulted from the unilateral activities of other parties whose actions were not attributable to MSC \u2013 was insufficient to confer personal jurisdiction over MSC. The Fifth Circuit therefore remanded with instructions to dismiss the case for lack of personal jurisdiction.<\/p>\n\n\n\n This case brings the Fifth Circuit in line with the other circuits that have addressed the issue of the scope of a court\u2019s personal analysis in an action to confirm a foreign arbitration award. These cases confirm that a district court is not constrained to a defendant\u2019s forum contacts related to the arbitration proceeding, but may consider forum contacts related more broadly to the parties\u2019 underlying dispute for purposes of determining whether there is personal jurisdiction to confirm a foreign arbitration award.<\/p>\n\n\n\n DLA Piper- James E. Berger<\/a>,\u00a0Charlene Sun<\/a>\u00a0and\u00a0Joshua Wan<\/a><\/p>\n\n\n\n USA\/February 22 2024<\/p>\n","protected":false},"excerpt":{"rendered":" In an opinion addressing an issue of first impression in the Fifth Circuit, the United States Court of Appeals for the Fifth Circuit has ruled that when assessing personal jurisdiction in an action to confirm a foreign arbitration award under the Convention on the Recognition and Enforcement of Foreign Arbitral […]<\/p>\n","protected":false},"author":1,"featured_media":1855,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[14,84],"tags":[],"class_list":["post-2067","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-nicarb-adr-developments","col-lg-4 col-md-6"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/blog.nicarb.org\/wp-content\/uploads\/2022\/09\/ENFORCEMENT-OF-DOMESTIC-ARBITRAL-AWARD.jpg?fit=1130%2C580&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pcb80P-xl","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2067","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/comments?post=2067"}],"version-history":[{"count":1,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2067\/revisions"}],"predecessor-version":[{"id":2068,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2067\/revisions\/2068"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media\/1855"}],"wp:attachment":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media?parent=2067"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/categories?post=2067"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/tags?post=2067"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}