As Am. Ins. Co. c. Univ. from Ghana1:21-cv-6472-NRB (SDNY Aug 15, 2022) [click for opinion]
On July 30, 2021, ACE American Insurance Company (“Chubb”) filed a petition under the Federal Arbitration Act (the “FAA”), 9 USC § 1 and following.and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Agreement“), while searching, among others, to confirm and enforce a foreign arbitral award against the University of Ghana (“UG”). UG filed a motion to dismiss the claim for lack of personal jurisdiction, lack of jurisdiction in the matter and inappropriate venue, and alternatively requested a stay of the case pending related arbitration in London. The district court granted UG’s motion to dismiss.
The court resolved the motion based solely on lack of personal jurisdiction, without addressing UG’s arguments as to subject matter or venue. In doing so, the court cited “the interests of judicial restraint and judicial economy” and noted that personal jurisdiction and subject matter jurisdiction are preliminary issues that should be determined before any decision on the merits, but it did not There is no requirement for which of the two questions of jurisdiction must be decided first.
The court stated that in an action to enforce a foreign arbitral award, the enforcing court must have in personam or quasi in rem jurisdiction. To determine whether the exercise of personal jurisdiction is appropriate, courts first apply the long arm law of the forum state and then consider whether personal jurisdiction is consistent with the due process protections established in under the Constitution. However, in that case, Chubb essentially admitted that there was no legal basis for personal jurisdiction and that it could not meet the constitutional requirements of due process. Chubb instead asserted two other bases of jurisdiction: (1) the arbitration clause in the underlying agreement established UG’s consent to New York’s jurisdiction, and (2) jurisdiction existed under the Foreign Sovereign Immunities Act (the “AISA“).
The court rejected Chubb’s consent to jurisdiction argument. In doing so, he explained that a court infers consent to jurisdiction when a party agrees to arbitrate in a state where the FAA makes those agreements specifically enforceable and in those circumstances, therefore, there is no need to analyze jurisdiction under applicable law or the Federal Constitution. due process requirements. However, the tribunal held that the wording of the arbitration clause at issue was unambiguous when it provided that the place of arbitration would be London, United Kingdom or New York only in the event of the occurrence of a precondition specific – if arbitration in the United Kingdom was impossible due to a Force Majeure Event occurring there. Where such precondition did not occur and was not presumed to have occurred, the court held that UG had not consented to personal jurisdiction in New York.
The court also rejected Chubb’s argument that the court had personal jurisdiction under the FSIA, which gives district courts personal jurisdiction over non-jury civil actions against foreign states “as to any claim for relief.” in personam from which the foreign state is not entitled to immunity.” “Foreign state” includes “a political subdivision of a foreign state or an agency or instrument of a foreign state”. Chubb a asserted that UG was an agency or instrument of the Republic of Ghana within the meaning of the FSIA and UG did not contest this characterization.However, the court still rejected Chubb’s argument because, notwithstanding the FSIA, the agencies and instruments of sovereign states are entitled to the protection of the exercise of personal jurisdiction under the Due Process Clause because they, unlike foreign states and their alter egos, are disti ncts. . The court noted that in this situation a plaintiff must demonstrate that the defendant has minimal contact with the district court forum or is an alter ego of the sovereign state in order to establish personal jurisdiction and Chubb conceded that UG had no contact with the United States.
Allie Stackhouse of the Los Angeles office contributed to this summary.
November 2022 Volume 22, Number 1
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