In Covington Marine Corp. v Xiamen Shipbuilding Indus. Co., (E.D. La. Mar. 14, 2012), Covington entered into a contract with Xiamen, a Chinese shipbuilder, in which Xiamen agreed to design and build four bulk carrier vessels. When the ships were never built, the dispute was referred to arbitration in London pursuant to the parties' agreement. The arbitration tribunal issued an award holding neither party liable. Covington appealed to the London High Court of Justice, which reversed this ruling. The High Court concluded that Xiamen was fully liable for breach of the ship construction contract. Covington then filed a petition with the district court in Louisiana to confirm and enforce the arbitral award.

Xiamen argued that the action should be dismissed under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. To establish personal jurisdiction, the applicant must show that the non-resident has purposefully availed himself of the benefits and protections of the forum state by establishing minimum contacts with the state and that the exercise of jurisdiction does not offend "traditional notions of fair play and substantial justice."

Covington argued that Xiamen should not be entitled to due process protections because Xiamen is a foreign entity related to the People's Republic of China (PRC) and because confirmation of foreign arbitral awards requires "minimal judicial scrutiny." The court disagreed and found that, since there was insufficient evidence that Xiamen was controlled by PRC, Xiamen was entitled to due process protection. The court went on to find that due process requires personal jurisdiction to be established in foreign arbitral confirmation actions brought under the New York Convention, and that Covington had failed to establish personal jurisdiction for these purposes. Covington failed to allege sufficient facts or evidence to support a finding that Xiamen had the requisite minimum contacts required for personal jurisdiction. Finding that the court had no personal jurisdiction over Xiamen, the court granted Xiamen's motion to dismiss.

This case demonstrates the importance of selecting a proper venue with personal jurisdiction over the respondent when trying to enforce a foreign arbitral award in U.S. federal court.