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”