Forum non conveniens is one of several judicial abstention doctrines, applied from time to time by U.S. courts, that permit a court to dismiss (without prejudice) a plenary action in its discretion. In a forum non conveniens case, the court’s jurisdiction is not in question, but the relative legal “inconvenience” of having the matter heard in that court, as opposed to another court of competent jurisdiction, is deemed sufficient for the U.S. court to abstain from exercising its authority. A defendant seeking abstention on forum non conveniens grounds typically is required to establish that an adequate alternative forum is available, and that a balancing of interests strongly favors dismissal by the U.S. court in favor of that other forum.
But can – or should – such a court-made doctrine properly be a defense in a non-plenary proceeding brought by an arbitration awardee seeking enforcement vis-à-vis assets in the United States? Could a court outside the U.S. grant that remedy instead? And in any case, do the applicable international conventions afford U.S. courts the latitude to enforce arbitral awards in their discretion?
Federal courts in the United States have varied views regarding the matter. Two prominent United States Courts of Appeals – the Second Circuit (which allows the forum non conveniens defense in an enforcement proceeding) and the District of Columbia Circuit (which does not) – take opposite views on the subject, and the U.S. Supreme Court recently declined to resolve the split. Therefore, the viability of the forum non conveniens defense in connection with the enforcement of arbitral awards varies and is uncertain in U.S. courts.
Should the forum non conveniens doctrine ever be a factor in a non-plenary proceeding to enforce an arbitral award? Arguably “no.” The 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), to which the U.S. is a party, was designed to facilitate the enforcement of international arbitration awards by means of more or less uniform judicial criteria and streamlined processes. Article V identifies seven grounds, meant to be exclusive, upon which recognition and enforcement of intentional arbitral awards may be refused. The Federal Arbitration Act (the “FAA”) provides, in the chapter implementing the New York Convention, that a court “shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified” in the New York Convention. 9 U.S.C. § 207 (emphasis added). The defense of forum non conveniens, as it is understood in the U.S., is not among the seven grounds provided in the New York Convention. Therefore, in accordance with the FAA, one would expect that forum non conveniens should not be entertained as a defense to the enforcement of an international arbitration award.
Second, it seems illogical that a non-plenary proceeding regarding recognition and enforcement of an arbitral award in the U.S., contemplating collection from assets here, could be better adjudicated or adjudicated at all in another country.
Nevertheless, the Second Circuit applied the forum non conveniens doctrine in 2002 to reject enforcement of an arbitration award in In re Arbitration between Monegasque de Reassurances SAM v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002) (“Monde Re”). In Monde Re, the Ukrainian government-owned...
