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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 20-13039
____________________
CORPORACIÓN AIC, SA,
Plaintiff-Appellant,
versus
HIDROELÉCTRICA SANTA RITA S.A.,
a Guatemalan company,
Defendant-Appellee.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:19-cv-20294-RNS
____________________
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2 Opinion of the Court 20-13039
Before WILLIAM PRYOR, Chief Judge, and WILSON, JORDAN,
ROSENBAUM, JILL PRYOR, NEWSOM, BRANCH, GRANT, LUCK, LAGOA,
BRASHER, and TJOFLAT, Circuit Judges. 1
JORDAN, Circuit Judge:
The United States is a signatory to the New York Conven-
tion, a treaty which regulates international arbitration awards. See
Convention on the Recognition and Enforcement of Foreign Arbi-
tral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 4739. Con-
gress has implemented the Convention through Chapter 2 of the
Federal Arbitration Act. See
9 U.S.C. §§ 201 et seq.
Our task is to decide what grounds can be asserted to vacate
an arbitral award governed by the New York Convention. We
hold that in a case under the Convention where the United States
is the primary jurisdiction—the jurisdiction where the arbitration
was seated or whose law governed the conduct of the arbitration—
the grounds for vacatur of an arbitral award are set out in domestic
law, currently Chapter 1 of the FAA. And we overrule Industrial
Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH,
141 F.3d
1434, 1445–46 (11th Cir. 1998), and Inversiones y Procesadora
Tropical INPROTSA, S.A. v. Del Monte International GmbH, 921
1
Judge Tjoflat was a member of the en banc Court, having elected to partici-
pate in this decision pursuant to
28 U.S.C. § 46(c)(1).
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20-13039 Opinion of the Court
3
F.3d 1291, 1301–02 (11th Cir. 2019), to the extent that they are in-
consistent with our ruling.
I
This case arose from a dispute between two Guatemalan
companies, Corporación AIC, S.A., and Hidroeléctrica Santa Rita,
S.A. Pursuant to a contract signed in March of 2012, Corporación
AIC agreed to build a new hydroelectric power plant for Hidroe-
léctrica in Guatemala. In October of 2013, Hidroeléctrica issued a
force majeure notice that forced Corporación AIC to stop work on
the project. Hidroeléctrica eventually filed an arbitration proceed-
ing in the International Court of Arbitration to recover advance
payments it had made to Corporación AIC, and the latter counter-
claimed for damages, costs, and other expenses. See Corporación
AIC, S.A. v. Hidroeléctrica Santa Rita, S.A.,
34 F.4th 1290, 1292–93
(11th Cir. 2022).
The arbitration was held in Miami, Florida, and a divided
arbitral panel ordered Corporación AIC to return about $7 million
and €435,000 in advance payments but allowed it to keep what it
had earned on the contract, about $2.5 million and €700,000. See
id. at 1292–93. Everyone agrees that the arbitral award was a non-
domestic award governed by the New York Convention because it
was issued in the United States in a dispute between two foreign
companies. See
id. at 1293–94;
9 U.S.C. § 202.
Dissatisfied with the arbitral decision, Corporación AIC filed
suit in federal court seeking to vacate the award. It asserted that
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4 Opinion of the Court 20-13039
the arbitral panel had exceeded its powers, a ground set out in
9
U.S.C. § 10(a)(4), a provision of Chapter 1 of the FAA. See 34 F.4th
at 1293. The district court ruled that such a challenge was unavail-
able because under Eleventh Circuit precedent, namely Industrial
Risk and Inversiones, the grounds for vacatur of an arbitral award
governed by the New York Convention are limited to those set out
in Article V of the Convention. The district court therefore did not
analyze whether the arbitral panel had exceeded its powers. See id.
A panel of this court affirmed. The panel concluded that it
was bound by Industrial Risk and Inversiones but opined that those
cases were wrongly decided and should be overruled by the full
court. See 34 F.4th at 1292, 1301; id. at 1302 (Jordan, J., concurring).
We vacated the panel opinion and ordered rehearing en banc. See
50 F.4th 97 (11th Cir. 2022).
II
Industrial Risk, decided in 1998, held that when a party seeks
vacatur of an arbitral award issued under the New York Conven-
tion a district court can only consider the grounds set out in Article
V of the Convention. See
141 F.3d at 1446. After setting out the
purpose of the New York Convention—encouraging the recogni-
tion and enforcement of international arbitral awards—we stated
in Industrial Risk that an arbitral award that falls within the Con-
vention “must be confirmed unless [the challenger] can success-
fully assert one of the seven defenses against enforcement enumer-
ated in Article V of the . . . Convention.”
Id. at 1441. In so doing
we cited to a former Fifth Circuit case and a district court case from
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20-13039 Opinion of the Court 5
Delaware, both of which involved a proceeding to enforce (but not
a proceeding to vacate) an arbitral award under the Convention.
See
id. at 1442 (citing Imperial Ethiopian Gov’t v. Baruch-Foster
Corp.,
535 F.2d 334, 335–36 (5th Cir. 1976), and Nat’l Oil Corp. v.
Lybian Sun Oil Co.,
733 F. Supp. 800, 813 (D. Del. 1990)). We
noted that the Convention’s “enumeration of defenses” to recog-
nition and enforcement of an award “is exclusive” under § 207 of
the FAA, but then read those defenses as also constituting the only
grounds for vacatur of an award. See
141 F.3d at 1446. In other
words, we equated the defenses to recognition and enforcement
with the grounds for vacatur. See
id. at 1445-46.
Over 20 years later, Inversiones adhered to Industrial Risk
because it constituted binding Eleventh Circuit precedent. See In-
versiones, 921 F.3d at 1301–02. Although we had previously noted
some tension between Industrial Risk and BG Group, PLC v. Re-
public of Argentina,
572 U.S. 25, 44–45 (2014), in Bamberger Rosen-
heim, Ltd., (Israel) v. OA Development, Inc., (United States),
862
F.3d 1284, 1287 n.2 (11th Cir. 2017), we concluded in Inversiones
that BG Group did not abrogate Industrial Risk. See 921 F.3d at
1302.
We now consider whether the grounds for vacatur of a New
York Convention arbitral award are set out in Article V of the Con-
vention or in § 10 of the FAA.
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6 Opinion of the Court 20-13039
III
Our task is to interpret the New York Convention and the
FAA. As a result, our review is plenary. See Underwriters at
Lloyd’s Subscribing to Cover Note B0753PC1308275000 v. Expedi-
tors Korea, Ltd.,
882 F.3d 1033, 1039 (11th Cir. 2018) (treaty inter-
pretation); United States v. Garcon,
54 F.4th 1274, 1277 (11th Cir.
2022) (en banc) (statutory interpretation). We begin with some
background concepts concerning international arbitration, and
then turn to the language of the Convention and the FAA.
A
Arbitration awards, including international ones, “are not
self-enforcing and are only given legal effect through court orders
and judgments enforcing them.” 3 Martin Domke, Domke on
Commercial Arbitration § 42:1 (3d ed. 2022). In the usual interna-
tional arbitration case, the prevailing party goes to court seeking a
judgment which recognizes and enforces (i.e., confirms) the award.
The losing party, in turn, opposes recognition and enforcement,
and sometimes—as here—moves to vacate the award. See CBF
Indústria de Gusa S/A v. AMCI Holdings, Inc.,
850 F.3d 58, 72 (2d
Cir. 2017); Stephen Balthasar, International Commercial Arbitra-
tion 794 (2d ed. 2021). For example, Chapter 2 of the FAA provides
that “any party to the arbitration may apply to any court having
jurisdiction under this chapter for an order confirming the award
as against any other party to the arbitration.”
9 U.S.C. § 207.
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20-13039 Opinion of the Court 7
Confirmation under the FAA is essentially the same as
recognition and enforcement under the New York Convention. In-
deed, § 207 of the FAA uses confirmation interchangeably with
recognition and enforcement: “The court shall confirm the award
unless it finds one of the grounds for refusal or deferral of recogni-
tion or enforcement of the award specified in the said Convention.”
As the Second Circuit has put it: “Read in context with the New
York Convention, it is evident that the term ‘confirm’ as used in [§]
207 [of the FAA] is the equivalent of ‘recognition and enforcement’
as used in the New York Convention for the purposes of foreign
arbitral awards.” CBF,
850 F.3d at 72. See also LLC SPC Stileks v.
Republic of Moldova,
985 F.3d 871, 875 (D.C. Cir. 2021) (stating
that, under § 207 of the FAA, “[c]onfirmation is the process by
which an arbitration award is converted to a legal judgment”). 2
Set aside, suspend, and annul under the New York Conven-
tion are, in turn, generally interchangeable with vacatur under the
FAA. They all refer to the invalidation of an arbitral award. See
2
Strictly speaking, recognition and enforcement are distinct legal concepts.
Recognition adjudicates the validity (i.e., the binding nature) of an arbitral
award, while enforcement reduces such an award to a judgment. See Com-
pañía de Inversiones Mercantiles S.A. v. Grupo Cementos de Chihuahua
S.A.B. de C.V.,
58 F.4th 429, 454 (10th Cir. 2023); Rogelio Vidal, Influence of
the Arbitral Seat in the Outcome of an International Commercial Arbitration,
50 Int’l Lawyer 329, 335 (2017). But to be enforced an award must be recog-
nized. See CBF,
850 F.3d at 72; Nigel Blackaby, Redfern and Hunter on Inter-
national Arbitration 611 (6th ed. 2015). So in practice enforcement is function-
ally the same as recognition and enforcement.
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8 Opinion of the Court 20-13039
Restatement of the Law, U.S. Law of Int’l Com. Arbitration and
Investor-State Arbitration § 1.1 cmt. uu (ALI Proposed Final Draft
2019) (“Restatement of International Arbitration”) (“Vacatur is
largely synonymous with ‘annul’ and ‘set aside’ as those terms are
understood in the New York and Panama Conventions.”). 3
Recognition and enforcement “serve different purposes
[and] request different relief” than vacatur. See McLaurin v. Ter-
minix Int’l Co., LP,
13 F.4th 1232, 1238 (11th Cir. 2021) (addressing
the FAA). Recognition and enforcement seek to give effect to an
arbitral award, while vacatur challenges the validity of the award
and seeks to have it declared null and void. See CBF,
850 F.3d at
72; Blackaby, International Arbitration, at 570.
With respect to judicial remedies, the New York Conven-
tion allocates different responsibilities to different jurisdictions.
The country which is the legal seat of the arbitration (or whose law
governs the conduct of the arbitration) is referred to as the primary
jurisdiction and its law (the lex arbitri) generally controls the pro-
cedural side of the proceeding. All other countries which are sig-
natories to the Convention are considered secondary jurisdictions.
See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara,
335 F.3d 357, 364 (5th Cir. 2003); CBF,
850 F.3d
3
The Proposed Final Draft of the Restatement of International Arbitration was
approved by the Council and membership of the American Law Institute in
2019, and represents the official position of the Institute until the Restatement
is officially published.
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20-13039 Opinion of the Court 9
at 71; Alan Scott Rau, Understanding (and Misunderstanding) “Pri-
mary Jurisdiction,” 21 Am. Rev. of Int’l Arb. 47, 49 (2010). 4
Under the New York Convention, only courts in the pri-
mary jurisdiction can vacate an arbitral award. See, e.g., BG
Group,
572 U.S. at 37 (“[T]he national courts and the law of the
legal situs of arbitration control a losing party’s attempt to set aside
[an] award.”) (internal quotation marks omitted); TermoRio S.A.
E.S.P. v. Electranta S.P.,
487 F.3d 928, 935 (D.C. Cir. 2007) (“Only
a court in a country with primary jurisdiction over an arbitral
award may annul that award.”) (citation omitted); M & C Corp. v.
Erwin Behr GmbH & Co., KG,
87 F.3d 844, 849 (6th Cir. 1996) (“[A]
motion to vacate [under the New York Convention] may be heard
only in the courts of the country where the arbitration occurred or
in the courts of any country whose procedural law was specifically
invoked in the contract calling for arbitration[.]”) (emphasis de-
leted); Restatement of International Arbitration, at § 1.3(a) (“The
choice of an arbitral seat ordinarily determines . . . the courts that
have the exclusive authority to set aside the arbitral award.”). An
award that is vacated is generally a nullity in the primary
4
The lex arbitri should not be confused with whatever substantive law (the
lex causae) governs the parties’ commercial relationship. Parties may select a
seat of arbitration in one country but choose to apply the law of a different
country to their dispute. See generally Lindo v. NCL (Bahamas), LTD.,
652
F.3d 1257, 1275 (11th Cir. 2011); Loukas Mistelis, Reality Test: Current State
of Affairs in Theory and Practice Relating to “Lex Arbitri,” 17 Am. Rev. of Int’l
Arb. 155, 158-61 (2006).
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10 Opinion of the Court 20-13039
jurisdiction. See Restatement of International Arbitration, at §§ 1.1
cmt. pp & 4.1 cmt. d.; Blackaby, International Arbitration, at 618.
Vacatur also has legal consequences internationally, as it is a
ground on which recognition and enforcement of the vacated
award may be refused by a court in a secondary jurisdiction. See
New York Convention, Art. V(1)(e); Zeiler v. Deitsch,
500 F.3d 157,
165 n.6 (2d Cir. 2007).
Courts in secondary jurisdictions can only decide whether
to recognize and enforce an arbitral award. See New York Con-
vention, Art. III (“Each Contracting State shall recognize arbitral
awards as binding and enforce them in accordance with the rules
of procedure of the territory where the award is relied upon, under
the conditions laid down in the following articles.”). See also
Karaha,
335 F.3d at 369 (explaining that “a court of secondary juris-
diction[,] under the New York Convention, [is] charged only with
enforcing or refusing to enforce a foreign arbitral award”). The le-
gal effect of the recognition and enforcement (or the denial of
recognition and enforcement) of an award is limited to the second-
ary jurisdiction that rules on the request. See Blackaby, Interna-
tional Arbitration, at 615 (“The immediate consequence of a refusal
to enforce an award is that the winning party fails to get what it
wants—namely seizure of the loser’s assets in the place in which
enforcement is sought . . . [I]t should be borne in mind that [the
winning party] may still have an award that can be enforced in
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20-13039 Opinion of the Court 11
another state in which the losing party has assets.”) (emphasis de-
leted). 5
B
“The interpretation of a treaty, like the interpretation of a
statute, begins with its text.” GE Energy Power Conversion France
SAS, Corp. v. Outokumpu Stainless USA, LLC,
140 S. Ct. 1637,
1645 (2020) (internal quotation marks omitted). We turn, there-
fore, to the relevant language of the New York Convention and the
FAA.
1
Article III of the Convention calls upon signatory countries
to “recognize arbitral awards as binding and enforce them in ac-
cordance with the rules of procedure of the territory where the
award is relied upon,” under the conditions laid down in other Ar-
ticles. Article IV then lists the conditions that must be fulfilled for
recognition and enforcement: “To obtain the recognition and en-
forcement mentioned in [Article III], the party applying for recog-
nition and enforcement shall, at the time of the application, supply
5 Sometimes the same country can act as both the primary and secondary ju-
risdiction. This occurs when the prevailing party seeks recognition and en-
forcement of the arbitral award in the primary jurisdiction and the losing party
seeks to vacate the award in the same jurisdiction. In such a case the court
considering the parties’ dueling requests performs a “double role,” exercising
secondary jurisdiction with respect to the request for recognition and enforce-
ment and primary jurisdiction with respect to the request for vacatur. See
Zeiler,
500 F.3d at 165 n.6.
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12 Opinion of the Court 20-13039
(a) [t]he duly authenticated original award . . . ; [and] (b) [t]he orig-
inal agreement . . . .”
Article V sets out a limited number of grounds on which a
court can refuse to recognize and enforce an arbitral award. It does
so through two subsections.
First, Article V(1) provides that recognition and enforce-
ment of an arbitral award “may be refused” on five grounds: (a) the
parties to the arbitral agreement were “under some incapacity” or
the agreement is “not valid under the law to which the parties have
subjected it . . . or under the law of the country where the award
was made;” (b) the “party against whom the award is invoked was
not given proper notice of the appointment of the arbitrator or of
the arbitration proceedings or was otherwise unable to present his
case;” (c) the “award deals with a difference not contemplated by
or not falling within the submission to arbitration, or it contains
decisions on matters beyond the scope of the submission to arbi-
tration . . . ;” (d) the “composition of the arbitral authority or the
arbitral procedure was not in accordance with the agreement of the
parties, or, failing such agreement, was not in accordance with the
law of the country where the arbitration took place;” or (e) the
“award has not yet become binding on the parties, or has been set
aside or suspended by a competent authority of the country in
which, or under the law of which, that award was made.”
Second, Article V(2) provides that recognition and enforce-
ment “may also be refused” on two additional grounds: (a) the
“subject matter of the difference is not capable of settlement by
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20-13039 Opinion of the Court 13
arbitration under the law of t[he] country” where, or under the law
of which, the award was made; or (b) the “recognition and enforce-
ment of the award would be contrary to the public policy of that
country.”
The only reference to vacatur (i.e., “set aside or suspended”)
in Article V is found in subsection (1)(e). Article V(1)(e) allows a
court exercising secondary jurisdiction to deny a request to recog-
nize and enforce a New York Convention award on the ground
that it has been vacated by a court (“a competent authority”) in the
primary jurisdiction (“in which, or under the law of which, that
award was made”). But it does not purport to regulate the proce-
dures or set out the grounds for vacatur in the primary jurisdiction.
See Restatement of International Arbitration, at § 4.9 reporters’
note (a)(iv) (“[I]t is well established that the New York [Conven-
tion] . . . do[es] not regulate the grounds for vacating Convention
awards under national arbitration law.”); Reimar Wolff, New York
Convention on the Recognition and Enforcement of Foreign Arbi-
tral Awards: Commentary 7 (Hart Publishing 2012) (explaining that
Article V “does not harmonize the grounds for challenging an
award”) (emphasis deleted).
The other Articles of the Convention—all of which refer to
recognition and enforcement—confirm that Article V(1)(e) does
not provide the grounds for vacatur. See Lozano v. Montoya Al-
varez,
572 U.S. 1, 11 (2014) (“For treaties, which are primarily com-
pact[s] between independent nations, our duty [i]s to ascertain the
intent of the parties by looking to the document’s text and
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14 Opinion of the Court 20-13039
context.”) (internal quotation marks and citation omitted). Article
I establishes the limited scope of the Convention in relation to ar-
bitral awards, stating that the “Convention shall apply to the recog-
nition and enforcement of arbitral awards.” Article III introduces
the provisions related to recognition and enforcement, mandating
that signatory countries “recognize arbitral awards as binding and
enforce them . . . under the conditions laid down in the following
articles.” Article IV lists the conditions that must be fulfilled by a
party “[t]o obtain the recognition and enforcement” of an award.
Article V then enumerates the only grounds on which “[r]ecogni-
tion and enforcement of the award may be refused.” And Article
VI allows a court exercising secondary jurisdiction to “adjourn the
decision on the enforcement of the award” in the face of a pending
vacatur application in the primary jurisdiction. 6
Chapter 2 of the FAA implements the Convention. The two
texts should therefore be read harmoniously. See Antonin Scalia &
Bryan Garner, Reading Law: The Interpretation of Legal Texts 252
(2012); William N. Erskine, Jr., Interpreting Law: A Primer on How
to Read Statutes and the Constitution 121 (2016). Like Article V of
the Convention, Chapter 2 of the FAA focuses only on recognition
and enforcement. As noted, § 207 of the FAA directs courts to con-
firm an arbitral award “unless it finds one of the grounds for refusal
or deferral of recognition or enforcement of the award specified in
the . . . Convention.” And Article V enumerates the grounds on
6 All the emphases in this paragraph are ours.
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20-13039 Opinion of the Court 15
which a court exercising secondary jurisdiction can refuse to rec-
ognize and enforce an award. Not surprisingly, our more recent
cases have recognized that § 207 and Article V address enforcement
and recognition. See, e.g., Lindo v. NCL (Bahamas), Ltd.,
652 F.3d
1257, 1263 (11th Cir. 2011) (“Article V of the Convention . . . enu-
merates seven defenses that—like
9 U.S.C. § 207—are directed at
courts considering whether to recognize and enforce an arbitral
award. Article V applies at the award-enforcement stage.”).
In sum, neither Article V of the Convention nor § 207 of the
FAA provides the grounds on which a court in the primary juris-
diction can vacate an arbitral award. In coming to a different con-
clusion, Industrial Risk “d[id] not track the [text or] logic of the . . .
Convention.” Charles H. Brower II, Hollow Spaces,
61 Buff. L.
Rev. 731, 821 (2013).
2
Chapter 2 of the FAA provides that “Chapter 1 applies to ac-
tions and proceedings brought under [Chapter 2] to the extent that
[Chapter 1] is not inconsistent with [Chapter 2] or the Convention
as ratified by the United States.”
9 U.S.C. § 208. In discussing
§ 208—Chapter 2’s so-called residual clause—the Supreme Court
has explained that “the [New York] Convention was drafted against
the backdrop of domestic law,” and concluded that “the Conven-
tion requires courts to rely on domestic law to fill gaps; it does not
set out a comprehensive regime that displaces domestic law.” Ou-
tokumpu,
140 S. Ct. at 1645.
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16 Opinion of the Court 20-13039
Based on the Supreme Court’s discussion in Outokumpu
and the New York Convention’s binary framework, we hold that
the primary jurisdiction’s domestic law acts as a gap-filler and pro-
vides the vacatur grounds for an arbitral award. Stated differently,
in a case like this one, § 208 of the FAA contemplates that the
grounds for vacatur are the ones set out in Chapter 1 of the FAA.
And because Article V of the Convention is “simply silent” on the
grounds for vacatur, there is no conflict if Chapter 1 is applied. See
Outokumpu,
140 S. Ct. at 145. Cf. BG Group,
572 U.S. at 29 (ad-
dressing, in a case where the international arbitral proceeding was
seated in the United States, whether the arbitrators exceeded their
powers under § 10(a)(4) of the FAA).
This is how the Second, Third, Fifth, and Seventh Circuits
have interpreted the Convention. Their decisions, which align
with the language of Article V of the Convention and Chapter 2 of
the FAA, are persuasive. See Yusuf Ahmed Alghanim & Sons v.
Toys “R” Us, Inc.,
126 F.3d 15, 22 (2d Cir. 1997) (“There is no indi-
cation in the Convention of any intention to deprive the rendering
state of its supervisory authority over an arbitral award, including
its authority to set aside that award under domestic law.”); Ario v.
Underwriting Members of Syndicate 53 at Lloyds for 1998 Year of
Account,
618 F.3d 277, 292 (3d Cir. 2010) (agreeing with Yusuf ,
126
F.3d at 23, that “‘[t]he Convention specifically contemplates that
the [country] in which, or under the law of which, the award is
made, will be free to set aside or modify an award in accordance
with its domestic arbitral law’” and explaining that “[w]hen both
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20-13039 Opinion of the Court 17
the arbitration and the enforcement of the award falling under the
Convention occur in the United States, there is no conflict between
the Convention and the domestic FAA”); Karaha Bodas,
335 F.3d
at 368 (“By its silence on the matter, the Convention does not re-
strict the grounds on which primary-jurisdiction courts may annul
an award, thereby leaving to a primary jurisdiction’s local law the
decision whether to set aside an award.”); Lander Co. v. MMP
Invs., Inc.,
107 F.3d 476, 478 (7th Cir. 1997) (“[T]he New York Con-
vention contains no provision for seeking to vacate an award, alt-
hough it contemplates the possibility of the award’s being set aside
in a proceeding under local law . . . and recognizes defenses to the
enforcement of an award.”).
The Restatement of International Arbitration reads the Con-
vention in the same manner: “[T]he exclusive vacatur grounds
[where the arbitration is seated in the United States] are those set
out in FAA § 10. This interpretation is supported by the text of the
New York Convention—which does not purport to regulate the
grounds for vacating awards at the arbitral seat—and of the FAA,
as well as by the majority of the U.S. courts of appeal to have ad-
dressed the issue.” Restatement of International Arbitration, at §
4.9 cmt. a. See also id. at § 4.14 cmt. a (“The scope and proper
exercise of set-aside authority are determined by the arbitration
law of the country in which or under the law of which the award
was made.”). And so do most international arbitration scholars.
See James H. Carter & John Fellas, International Commercial Ar-
bitration in New York §§ 1.88, 1.91 (2d ed. 2016) (“Nondomestic
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18 Opinion of the Court 20-13039
arbitral awards issued by a tribunal seated in the United States or
made pursuant to U.S. arbitration law may be vacated under U.S.
arbitration law. . . . This means that U.S. courts may vacate awards
made in the United States relying on the grounds listed in [§] 10 of
the FAA[.]”); Blackaby, International Arbitration, at 635 (“[T]he
New York Convention does not in any way restrict the grounds on
which an award may be set aside . . . by the court of [primary juris-
diction]. This is a matter that is left to the domestic law of the
country concerned.”); Albert Jan van den Berg, The New York Ar-
bitration Convention of 1958: Towards a Uniform Judicial Inter-
pretation 95 (1981) (“[T]he grounds on which the award has been
set aside in the country of origin can be any ground set out in the
arbitration law of that country.”); Wolff, New York Convention, at
367 (“The NYC sets neither any standards nor any limits for the
courts of the State where the award was rendered for their deci-
sion-making process as to setting aside or suspending the award.
An application to set aside the award in the country of origin is
governed by the domestic law of the seat State.”) (emphasis de-
leted); Lea H. Kuck & Amanda R. Kalantirsky, Vacating an Inter-
national Arbitration Award Rendered in the United States: Does
the New York Convention, the Federal Arbitration Act or State
Law Apply?, 3 Arb. L. Rev. 4, 7 (2011) (“The Convention contains
no description of or limitation on the capacity of the jurisdiction
where the award was rendered to apply its own law vacating the
award. This means that the parties’ choice of the seat of arbitration
can have significant consequences for any judicial review of the
award.”).
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20-13039 Opinion of the Court 19
We recognize that one leading international arbitration trea-
tise defends Industrial Risk (and, by definition, Inversiones). See
Gary B. Born, International Commercial Arbitration 3211 (3d ed.
2021) (asserting that the reference to the Convention in § 207 of the
FAA “does not include the more expansive bases for vacatur under
§ 10 of the domestic FAA and, on the contrary, was included in
§ 207 precisely to avoid consideration of § 10’s domestic vacatur
grounds in recognition actions”). But that treatise glosses over the
critical fact that the Convention does not set out any grounds for
vacatur, ignores the differences between recognition/enforcement
and vacatur, and fails to account for the varied roles of courts in
primary and secondary jurisdictions in post-award judicial proceed-
ings. It also does not satisfactorily address § 208’s command that
Chapter 1 of the FAA—including its § 10 vacatur grounds—applies
in New York Convention cases as long as there is no conflict.
C
Hidroeléctrica contends that applying domestic grounds to
the vacatur of international arbitral awards would run counter to
the New York Convention’s objective of standardizing the treat-
ment of such awards. See, e.g., Richard W. Hulbert, The Case for
Coherent Application of Chapter 2 of the Federal Arbitration Act,
22 Am. Rev. of Int’l Arb. 45, 72 (2011) (“An intention that incon-
sistent standards are to be applied to the validity of an award falling
under the Convention, by the same court in the same case between
the same parties, depending on whether the issue is to confirm the
award (at the suit of the winner) or to vacate it (at the suit of the
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20 Opinion of the Court 20-13039
loser), cannot easily (or even plausibly be imputed to Congress.”)).
We are not persuaded.
The argument may have some appeal on policy grounds,
but it starts from a faulty premise—it wrongly presumes that the
Convention seeks to prescribe comprehensive standards which dis-
place domestic law across the board. See Outokumpu,
140 S. Ct.
at 1645. “While it would have provided greater reliability to the
enforcement of awards under the Convention had the available
grounds [for vacatur] been defined in some way, such action would
have constituted meddling with national procedure for handling
domestic awards, a subject beyond the competence of the Confer-
ence.” Leonard V. Quigley, Accession by the United States to the
United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards,
70 Yale L.J. 1049, 1069–70 (1961). The
Convention, which does not provide the grounds for vacatur, can-
not attempt to make uniform that which it does not address.
D
Hidroeléctrica also argues that, even if Industrial Risk and
Inversiones were wrongly decided, principles of stare decisis coun-
sel against overruling them because of the settled expectations they
have created. Hidroeléctrica is correct that “[o]verruling precedent
is never a small matter,” Kimble v. Marvel Ent., LLC,
576 U.S. 446,
455 (2015), but here we conclude that it is appropriate.
Though stare decisis is a hallmark of our judicial system, it
“is not an inexorable command[.]” McKinney v. Pate,
20 F.3d 1550,
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20-13039 Opinion of the Court 21
1565 n.21 (11th Cir. 1994) (en banc) (citation omitted). We may
overrule a prior case that is “plainly and palpably wrong” if doing
so would not “result in more harm than continuing to follow the
erroneous decision.” McCarthan v. Dir. of Goodwill Indus.-Sun-
coast, Inc.,
851 F.3d 1076, 1096 (11th Cir. 2017) (en banc) (citation
omitted).
In deciding whether to overrule precedent, we consider “the
quality of the decision’s reasoning; its consistency with related de-
cisions; legal developments since the decision; and reliance on the
decision.” Ramos v. Louisiana,
140 S. Ct. 1390, 1405 (2020) (cita-
tion omitted). Here these factors weigh in favor of overruling
those aspects of Industrial Risk and Inversiones which hold that Ar-
ticle V of the New York Convention provides the vacatur grounds
for an arbitral award.
For starters, Industrial Risk and Inversiones are wrong, and
clearly so. They fail to analyze the text of the New York Conven-
tion or of Chapter 2 of the FAA. And they improperly conflate
recognition and enforcement with vacatur by ignoring the different
roles given to primary and secondary jurisdictions in post-award
judicial proceedings under the Convention.
In addition, Industrial Risk and Inversiones are outliers.
They are in significant tension with the Supreme Court’s under-
standing of the Convention in Outokumpu, 140 S. Ct. at 1645, and
they directly conflict with the decisions of our sister circuits.
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22 Opinion of the Court 20-13039
In evaluating whether a prior decision “causes ‘more harm
than good’ we . . . evaluate a range of consequences.”
SmileDirectClub, LLC v. Battle,
4 F.4th 1274, 1285 (11th Cir. 2021)
(en banc) (W. Pryor, C.J., concurring) (citation omitted). In this
respect, some commentators have noted that if left undisturbed In-
dustrial Risk and Inversiones may affect how we interpret and ap-
ply the Inter-American Convention on International Commercial
Arbitration (popularly known as the Panama Convention), Jan. 30,
1975, S. Treaty Doc. No. 97–12, 1438 U.N.T.S. 245, which Congress
implemented through Chapter 3 of the FAA,
9 U.S.C. §§ 301 et seq.
See Juan C. Garcia & Ivan Bracho Gonzalez, Interpretation of Arti-
cle V of the New York Convention in the Eleventh Circuit: Indus-
trial Risk Insurers,
74 U. Miami L. Rev. 1080, 1108 (2020).
Although we do not address the Panama Convention today,
we note that its enforcement and recognition provisions are “sub-
stantively identical” to those in the New York Convention. See
Esso Expl. & Prod. Nigeria Ltd. v. Nigerian Nat’l Petroleum Corp.,
40 F.4th 56, 62 n.2 (2d Cir. 2022); TermoRio,
487 F.3d at 933. Re-
lying on the panel decision in this case, one of our recent decisions
states that the “Panama Convention lists seven defenses which pro-
vide the exclusive grounds for vacatur.” Técnicas Reunidas de
Talara S.A.C. v. SSK Ingenería y Construcción S.A.C.,
40 F.4th
1339, 1344 (11th Cir. 2022) (citing Corporación AIC, 34 F.4th at
1298). This statement in Técnicas Reunidas equating recognition
and enforcement with vacatur was arguably dicta because the case
was decided solely on waiver grounds, see 40 F.4th at 1345-46, but
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20-13039 Opinion of the Court 23
it nevertheless shows that Industrial Risk and Inversiones may not
be limited to the New York Convention and may spill over to the
Panama Convention.
We acknowledge that Industrial Risk and Inversiones may
have created certain reliance interests. But those interests, we
think, are relatively minor. First, there are two sets of parties who
might be detrimentally affected by our decision today: (a) those
whose arbitral proceedings under the New York Convention (i) are
seated somewhere within the Eleventh Circuit and (ii) are cur-
rently ongoing; and (b) those whose agreements stipulate to an ar-
bitral location within the Eleventh Circuit but have not yet initi-
ated arbitration proceedings. Whether those parties number in the
single, double, or triple digits is anyone’s guess. Second, we do not
know which, if any, of these parties chose to conduct their arbitral
proceedings in the Eleventh Circuit because of Industrial Risk and
Inversiones. Cf. Franchise Tax Bd. of Cal. v. Hyatt,
139 S. Ct. 1485,
1499 (2019) (“[C]ase-specific costs are not among the reliance inter-
ests that would persuade us to adhere to an incorrect resolution of
an important constitutional question.”).
IV
We hold that in a New York Convention case where the ar-
bitration is seated in the United States, or where United States law
governs the conduct of the arbitration, Chapter 1 of the FAA pro-
vides the grounds for vacatur of an arbitral award. To the extent
that Industrial Risk and Inversiones are inconsistent with this hold-
ing, we overrule them.
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24 Opinion of the Court 20-13039
The district court correctly followed Industrial Risk and In-
versiones, which constituted binding precedent at the time, and de-
clined to address Corporación AIC’s argument that the arbitral
award should be vacated because the panel exceeded its powers
under
9 U.S.C. § 10(a)(4). We vacate the judgment in favor of Hi-
droeléctrica and remand for the district court to consider Corpo-
ración AIC’s § 10(a)(4) contention. 7
VACATED and REMANDED.
7
We decline Hidroeléctrica’s invitation to decide the § 10(a)(4) issue ourselves.
