United States / 08 August 2012 / United States, U.S. Court of Appeals, Second Circuit / Werner Schneider, acting in his capacity as insolvency administrator of Walter Bau AG (In Liquidation) v. the Kingdom of Thailand / 11–1458–cv
| Country | United States |
| Court | United States, U.S. Court of Appeals, Second Circuit |
| Date | 08 August 2012 |
| Parties | Werner Schneider, acting in his capacity as insolvency administrator of Walter Bau AG (In Liquidation) v. the Kingdom of Thailand |
| Case number | 11–1458–cv |
| Applicable NYC Provisions | V | V(1)(c) |
| Source |
online: PACER |
| Languages | English |
| Summary | The Respondent-Appellant, the Kingdom of Thailand (“Thailand”), appealed the decision of the United States District Court for the Southern District of New York confirming an arbitral award in favor of Schneider (acting as insolvency administrator for Walter Bau AG), rendered pursuant to the arbitral framework for investors established by the Bilateral Investment Treaty between Germany and Thailand. Prior to the arbitration, the parties had agreed that the Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL Rules”) would govern the arbitration and that the arbitral tribunal would be empowered to rule on its own jurisdiction. On appeal, Thailand argued that the lower court erred by applying a deferential, rather than de novo, standard of review to the arbitral tribunal’s decision regarding jurisdiction. The United States Circuit Court for the Second Circuit affirmed the lower court’s confirmation of the arbitral award, but held that the lower court should have inquired into whether the Parties had intended to arbitrate questions of arbitrability by clear and unmistakable evidence before reviewing the arbitrators’ jurisdictional decisions deferentially. The Court reasoned that in the absence of clear and unmistakable evidence that the parties had delegated matters of arbitrability to the arbitrator, questions of arbitrability are for a court to decide, regardless of whether they are related to the scope or formation of the arbitration agreement. However, in the present case, the Court determined that by incorporating the UNCITRAL Rules, the parties had clearly and unmistakably demonstrated their intent to delegate issues of arbitrability to the arbitrator. Thus, the Court concluded that Thailand was not entitled to independent judicial review of the arbitral tribunal’s jurisdictional decision, stating that “[a]lthough the [New York] Convention recognizes that an award may not be enforced where predicated on a subject matter outside the arbitrator’s jurisdiction, it does not sanction second-guessing the arbitrator’s construction of the parties’ agreement”, which, it reasoned, would frustrate the purpose of submitting disputes to arbitration. |
Attachment (1)
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