United States / 10 September 1997 / United States, U.S. Court of Appeals, Second Circuit / Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys "R" Us, Inc. / 96-9692
Country | United States |
Court | United States, U.S. Court of Appeals, Second Circuit |
Date | 10 September 1997 |
Parties | Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys "R" Us, Inc. |
Case number | 96-9692 |
Applicable NYC Provisions | I | V | I(1) | V(1)(e) |
Languages | English |
Summary | Toys “R” Us, Inc., an American company, and Yusuf Ahmed Alghanim & Sons, W.L.L. (“Alghanim”), a privately owned Kuwaiti business, entered into a license agreement. A dispute arose and Toys “R” Us commenced arbitration pursuant to an arbitration clause contained in the license agreement, which provided for arbitration in the United States before the American Arbitration Association (“AAA”). The arbitrators ruled in favor of Alghanim. Alghanim brought a petition before the United States District Court for the Southern District of New York to confirm the award under the NYC. Toys “R” Us cross-moved to vacate or modify the award under the Federal Arbitration Act (“FAA”), arguing that the award was in manifest disregard of the law and the terms of the agreement. The District Court granted the petition to confirm the award. Toys “R” Us appealed. The United States Court of Appeals for the Second Circuit affirmed the District Court’s decision. It first held that the NYC was applicable pursuant to Article I(1) NYC and section 202 of the FAA. It stated that the NYC mandated different regimes for the review of arbitral awards, (i) in the state in which or under the law of which the award was made, the courts of which were the only competent authority to set aside the award, and (ii) in other states where recognition and enforcement was sought. The Court of Appeals noted that it had been asked to decide on both confirmation and a vacatur action. It held that a court may only refuse to enforce the award under the limited grounds listed in Article V NYC and thus, declined to read into the NYC the defenses to the confirmation of an arbitral award set out in the FAA. The Court of Appeals also held that under Article V(1)(e) NYC it had the authority to set aside or modify the award in accordance with its domestic arbitral law. Having decided that the FAA governed Toys “R” Us’ cross-motion to vacate the award, the Court found that none of the FAA grounds for vacatur were applicable. |
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Attachment (1)
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