United States / 02 September 1998 / United States, U.S. Court of Appeals, Second Circuit / Europcar Italia, S.p.A. v. Maiellano Tours, Inc. / 97-7224
| Country | United States |
| Court | United States, U.S. Court of Appeals, Second Circuit |
| Date | 02 September 1998 |
| Parties | Europcar Italia, S.p.A. v. Maiellano Tours, Inc. |
| Case number | 97-7224 |
| Applicable NYC Provisions | V | VI | V(2)(b) | V(1)(e) |
| Languages | English |
| Summary | Maiellano Tours, Inc. (“Maiellano”), an American travel agency, and Europcar Italia S.p.A. (“Europcar”), an Italian car rental business, entered into a service agreement which contained a clause providing for arbitration under rules known in the Italian legal system as “arbitrato irrituale in equità” (informal proceedings). A dispute arose and an arbitral tribunal rendered a monetary award in favor of Europcar. Europcar commenced an action in Italian courts to confirm the arbitration award and to obtain an order of payment. While litigation was underway in the Italian courts, Europcar filed an action in the Eastern District of New York seeking recognition and enforcement of the arbitral award pursuant to the NYC and Section 207 of the Federal Arbitration Act (“FAA”). The District Court entered judgment for Europcar. Maiellano appealed the decision, arguing that: (i) an award granted under the rules known as “arbitrato irrituale” does not give rise to a binding arbitral award which can be enforced under the NYC and that the parties did not intend to be legally bound by such a decision; (ii) that the award was based on a forged contract and was therefore contrary to United States public policy; and (iii) the District Court should have suspended the proceedings to await the outcome of the pending Italian litigation. The United States Court of Appeals for the Second Circuit vacated the decision of the lower court and remanded the case to the District Court to reconsider its decision not to adjourn the enforcement proceedings pending the outcome of the Italian appeal. The Court found that the arbitration award was binding upon the parties under Article V(1)(e) NYC, because awards made under arbitrato irrituale are contractually binding on the parties even if they are not automatically enforceable. The Court then rejected Maiellano’s argument that the enforcement of the award would be contrary to the public policy of the United States under Article V(2)(b) NYC, holding that the issue of whether the underlying contract was forged was a matter to be determined exclusively by the arbitrators. It considered that since Maiellano had failed to raise this claim before the arbitral tribunal, the issue was now forfeited. The Court finally held that that Article VI NYC gives discretion to a court to adjourn proceedings on the enforcement of the award when proceedings to set aside or suspend the award are ongoing before a competent authority of the country in which the award was made. The Court noted that a District Court must take into account the tension between expeditious resolution of disputes, on the one hand, and the possibility of conflicting results, on the other, when deciding on adjournment of enforcement proceedings. |
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Attachment (1)
 Original Pending Adobe Acrobat PDF |
