Business Litigation Practice Group
1 of 5
January 2, 2013
Fifth Circuit Holds that Personal Jurisdiction is Required in
New York Convention Recognition Proceedings
On December 21, 2012, the U.S. Court of Appeals for the Fifth Circuit issued
its decision in First Investment Corporation of the Marshall Islands v. Fujian
Mawei Shipbuilding, Ltd.,i in which that court addressed, for the first time,
whether a proper basis of personal jurisdiction is necessary in order to grant a
petition to confirm a foreign arbitration award under the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(the “New York Convention”) and Chapter 2 of the Federal Arbitration Act.
It held in the affirmative, reasoning that the requirement of personal
jurisdiction is rooted in the United States Constitution and must be satisfied
regardless of whether the New York Convention or its implementing
legislation explicitly included such a requirement.
Summary
First Investment Corporation of the Marshall Islands (“First Investment”)
obtained an arbitration award against Fujian Shipbuilding Industry Group
Corp. (FSIGC) and Fujian Mawei Shipbuilding Ltd. (“Mawei”) (together, the
“Fujian Entities”). FSIGC is 100%-owned by the People’s Republic of China
(PRC), and Mawei is a private corporation of which FSIGC is a majority
shareholder. The arbitration took place in London and was conducted by a
tribunal of three arbitrators. First Investment sought to confirm the award
pursuant to the New York Convention in the Chinese courts, but encountered
several difficulties along the way. As an example, First Investment claimed
that the Chinese embassies in London and Athens initially refused to
authenticate documents that were necessary for First Investment to
commence a confirmation proceeding in China; however, upon the
intervention of the Greek government, the Chinese embassy in Athens
eventually acquiesced to provide the necessary authentication. First
Investment also claimed that it was deprived, without explanation, the
assistance of its Chinese counsel and its translator during a hearing before the
Chinese court; instead the court provided First Investment with a student
translator with a limited legal vocabulary. The Chinese court ultimately
denied enforcement of the award on grounds that the arbitral tribunal was not
constituted in accordance with the parties’ agreement.
First Investment then commenced a confirmation proceeding in the Eastern
District of Louisiana against the Fujian Entities and the PRC as well, on the
ground that the Fujian Entities were each alter-egos of the PRC. The first
default judgment entered by the district court against the Fujian Entities and
For more information, contact:
James E. Berger
+1 212 556 2202
jberger@kslaw.com
Charlene C. Sun
+1 212 556 2107
csun@kslaw.com
King & Spalding
New York
1185 Avenue of the Americas
New York, New York 10036-4003
Tel: +1 212 556 2100
Fax: +1 212 556 2222
www.kslaw.com
