Are Consent Awards Under the New York Convention Enforceable in U.S. Courts? Federal Court in Texas Says Yes

Transocean Offshore Gulf of Guinea VII Ltd. v. Erin Energy Corp., 2018 U.S. Dist. LEXIS 39494 (S.D. Tex. Mar. 12, 2018)

On March 12, 2018, in Transocean Offshore Gulf of Guinea VII Ltd. v. Erin Energy Corp., the U.S. District Court for the Southern District of Texas became the second U.S. court to recently determine that the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), as codified in the Federal Arbitration Act (“FAA”), applies to consent awards.  Although seemingly inconsequential at first glance, the question of whether consent awards—i.e., settlement agreements recorded by arbitral tribunals as awards—are subject to the New York Convention, has remained the subject of much debate within the field of international arbitration for many years.

In Transocean, the petitioners, Transocean Offshore Gulf of Guinea VII Limited and Indigo Drilling Limited, entered into an agreement to provide drilling equipment, personnel, and services in the waters off the coast of Nigeria to the respondent, Erin Energy Corporation.  Prior to the completion of the contract, a dispute arose and, pursuant to an arbitration clause, the petitioners initiated an arbitration under the rules of the London Court of International Arbitration (“LCIA”).  Before the tribunal made a decision on the merits, the parties reached a settlement and, at the parties’ request, the tribunal issued a consent award setting forth the terms of the parties’ settlement.    Continue reading “Are Consent Awards Under the New York Convention Enforceable in U.S. Courts? Federal Court in Texas Says Yes”

Federal Court Holds That it Lacks Subject Matter Jurisdiction to Review VA’s Decision to Begin Debarment Proceedings Since That Decision Is Not a Final Agency Action

Hope v. Dep’t of Veterans Affairs, 2018 U.S. Dist. LEXIS 28479 (E.D. Ark. Feb. 22, 2018)

This matter involved a motion for temporary restraining order and preliminary injunction (the “Motion”) filed by Richard Alan Hope (“Hope”) and his HVAC company, Powers of Arkansas (“Powers”), asking the District Court to prohibit the Department of Veterans Affairs (“VA”) from continuing debarment proceedings against them.  In 2012, Federal agents began investigating Hope for fraudulently presenting DAV Construction Company, Inc. as a legitimate service-disabled, veteran-owned small business in order to obtain government construction contracts.  Hope was indicted in 2016 for conspiracy to defraud, among other things.  The VA thereafter suspended Hope and Powers from government contracting based on the indictment.  The indictment was ultimately dismissed after the Court declared a mistrial.  In January of 2018, the VA lifted the suspensions, but issued notices of proposed debarment to Hope and Powers.  While debarment proceedings are pending, a contractor may not be awarded government contracts.

The Court first analyzed jurisdiction.  Absent waiver, sovereign immunity shields the VA from suit.  However, the Administrative Procedure Act (“APA”) waives sovereign immunity to allow judicial review of final agency actions.  The Court held that it lacked jurisdiction here because there was no final agency decision as to the proposed debarment.  Indeed, the VA has established procedures for debarment decisions and the proposal for debarment is only the first step.  The Court found that because the VA’s decision-making process had only just begun, and there had been no final agency action, the APA did not authorize the Court to review the merits of the proposed debarment at this time.  Continue reading “Federal Court Holds That it Lacks Subject Matter Jurisdiction to Review VA’s Decision to Begin Debarment Proceedings Since That Decision Is Not a Final Agency Action”

Contractor Who Failed to Challenge Arbitration Award Within Statutory Three Month Period Cannot Resurrect the Challenge as an “Affirmative Defense” to a Later Action for Confirmation

St. George Fire Prot. Dist. No. 2 v. J. Reed Constructors, Inc. 2018, La. App. LEXIS 262 (February 20, 2018)

J. Reed Constructors, Inc. (“J. Reed”) and St. George Fire Protection District No. 2 (“St. George”) entered into two construction contracts under which disputes were subject to binding arbitration. A dispute arose in which J. Reed contested St. George’s assessment of liquidated damages and claims for breach of warranty. The matter was submitted to arbitration and the arbitrator awarded St. George $58,865.00.

St. George petitioned the trial court to confirm the arbitration award, pointing out that the three month deadline for the parties to request that the award be vacated, modified, or corrected had lapsed.  J. Reed answered the petition by objecting to the confirmation of $41,660.00 for architect and attorney fees.  J. Reed acknowledged that it did not file a motion to modify within three months of the award, as required by the Louisiana Binding Arbitration Law (the “Act”), but argued that it was not prohibited from raising its objection as an affirmative defense in its answer to the petition.

The trial court rejected J. Reed’s argument and confirmed the award.  The Court of Appeals affirmed, holding that J. Reed’s right to challenge the award had been waived and could not be revived by characterizing the challenge as an affirmative defense to the petition to confirm.  Continue reading “Contractor Who Failed to Challenge Arbitration Award Within Statutory Three Month Period Cannot Resurrect the Challenge as an “Affirmative Defense” to a Later Action for Confirmation”