United States / 23 October 1989 / United States, U.S. Court of Appeals, Ninth Circuit / Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., Gould Marketing, Inc., Hoffman Export Corporation, and Gould International, Inc. / 88-5879 / 88-5881
| Country | United States |
| Court | United States, U.S. Court of Appeals, Ninth Circuit |
| Date | 23 October 1989 |
| Parties | Ministry of Defense of the Islamic Republic of Iran v. Gould Inc., Gould Marketing, Inc., Hoffman Export Corporation, and Gould International, Inc. |
| Case number | 88-5879 / 88-5881 |
| Applicable NYC Provisions | II | I | IV | V | II(1) | I(1) | IV(1)(b) | V(1)(a) | V(1)(d) | V(1)(e) |
| Languages | English |
| Summary | The Ministry of War of the Imperial Government of Iran and Hoffman Electric Corporation, which later merged with Gould Marketing (“Gould”), entered into two agreements. Progress payments and performance under the contract were disrupted due to the Iranian revolution. Gould submitted claims before the Iran-U.S. Claims Tribunal seeking damages from Iran for breach of contract. The Tribunal issued a monetary award in favor of Iran. Iran sought confirmation and enforcement of the award in the United States District Court for the Central District of California. Gould argued that the District Court improperly exercised jurisdiction under Section 203 of the Federal Arbitration Act (“FAA”) and opposed the application on two grounds. First, it argued that there was no “agreement in writing” under Articles II and IV NYC. Second, it argued that the award did not fall within the ambit of the NYC because of an implied requirement under Article V(1)(e) NYC that the NYC applied only to awards made in accordance with national law, as opposed to international law. The United States Court of Appeals for the Ninth Circuit denied Gould’s motion to dismiss for lack of jurisdiction under Article 203 of the FAA. The Court first found that the award was subject to the NYC, as the requirements of Section 202 of the FAA had been fulfilled (namely, that (i) the award arose out of a legal relationship which was (ii) commercial in nature and (iii) was not entirely domestic in scope). The Court held that the award also satisfied the requirements of Article I(1) NYC and was “made in the territory of another Contracting State” by a “permanent arbitral bod[y]”. The Court found that Article IV(1)(b) NYC, which requires a party to submit "[t]he original agreement referred to in article II ... or a duly certified copy thereof”, and Article II(1) NYC, which requires that “each Contracting State shall recognize an agreement in writing […]”, both indicated that the award referred to in Section 203 of the FAA must emanate from a written arbitration agreement. The Court then explained that the Claims Settlement Declaration, which established the Iran-United States Claims Tribunal as a mechanism for binding third-party arbitration, satisfied “the agreement in writing” standard under the NYC. The Court further found that that an award need not be made “under a national law” for a court to entertain jurisdiction over its enforcement pursuant to the NYC. The Court concluded that if the parties choose not to have their arbitration governed by a “national law,” then the losing party could simply not avail itself of certain of the defenses listed in Article V(1)(a) and (e) NYC. |
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Attachment (1)
 Original Pending Adobe Acrobat PDF |
