District of Columbia Court reportedly upholds award set aside by Qatari Court and upheld by French Court | Practical Law

District of Columbia Court reportedly upholds award set aside by Qatari Court and upheld by French Court | Practical Law

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Lauren Mandell (Associate), Leah Witters (Associate), White & Case LLP

District of Columbia Court reportedly upholds award set aside by Qatari Court and upheld by French Court

Published on 02 Feb 2011International, USA
Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Lauren Mandell (Associate), Leah Witters (Associate), White & Case LLP
The District Court for the District of Columbia has indicated that it will enforce an award set aside by a Qatari court and upheld by a French court in a long-contested arbitration.
Qatari-based International Industrial Trading and Investment Company (IITIC) filed an application with the District Court for enforcement of an award against DynCorp. The underlying dispute began when DynCorp terminated its agreement with IITIC to launch and operate an office in Qatar after Qatar repealed laws that required investors to have a local agent. In response, IITIC brought claims in an arbitration governed by Qatari law, seated in Paris, using ICC rules, with hearings in Beirut.
The arbitrator sided with IITIC, requiring payment of damages, interest, costs of arbitration, and reimbursement for IITIC's share of the ICC fee. DynCorp appealed to the Qatari Court of Appeal, relying on a provision of Qatari law that allows courts to review the merits of an arbitrator's award if the parties' arbitration agreement does not state that the award is final and binding. The English version of the agreement stated the award was final and binding, but the Arabic version, which was to prevail in any dispute, did not.
The Qatari Court of Appeal agreed with IITIC. DynCorp then appealed to Qatar's highest court, which found for DynCorp and set aside the award because the court believed that the arbitrator misinterpreted Qatari law.
The Paris Court of Appeal, hearing a separate petition as the seat of the arbitration, found that DynCorp did not show that the arbitrator misinterpreted Qatari law. It also rejected DynCorp's argument that the agreement was invalid for allowing Qatari courts to review the merits because the argument was not raised in arbitration.
With this history, IITIC sought enforcement of the award in the District Court for the District of Columbia. It argued that Article 28 of the ICC Rules, which states that awards are binding on parties, and the New York Convention, preclude judicial review of the merits of an arbitral award and preclude the Qatari Court ruling from preventing enforcement in other countries. It also argued that the French decision was in effect binding on the District Court and that a US court had never refused to enforce an award upheld by a French court when France was the arbitral seat.
DynCorp responded that the Qatari court essentially ruled that the award was in manifest disregard of the law and a US court should not judge a country's interpretation of its own laws. DynCorp further argued that IITIC could not contest the Qatari court's decision because it drafted the arbitration agreement and participated in the arbitration and court proceedings, never objecting to jurisdiction.
The District Court stayed proceedings while the Paris Court of Appeal considered the matter. After the Paris court declined to annul the award, the District Court has indicated that it will grant the application for enforcement of the award.
The long path to enforcement in this arbitration illustrates the problems that can arise when multiple jurisdictions review an award. In this case, enforcement might have been expedited had the parties ensured that all the versions of the arbitral agreement were uniform.