United States / 15 December 2011 / United States, U.S. Court of Appeals, Ninth Circuit / The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran, as Successor in Interest to the Ministry of War of the Government of Iran v. Cubic Defense Systems, Inc., as Successor in Interest to Cubic International Sales Corpo / 99–56380, 99–56444
| Country | United States |
| Court | United States, U.S. Court of Appeals, Ninth Circuit |
| Date | 15 December 2011 |
| Parties | The Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran, as Successor in Interest to the Ministry of War of the Government of Iran v. Cubic Defense Systems, Inc., as Successor in Interest to Cubic International Sales Corpo |
| Case number | 99–56380, 99–56444 |
| Applicable NYC Provisions | V | V(1)(e) | V(2)(b) |
| Source | online: http://www.ca9.uscourts.gov/ (official website of the U.S. Court of Appeals for the Ninth Circuit) |
| Languages | English |
| Summary | The Appellee, the Ministry of Defense and Support for the Armed Forces of the Islamic Republic of Iran (the “Ministry”), obtained an arbitral award in 1997 against the Appellant, Cubic Defense Systems, Inc. (“Cubic”), based on a contract had been terminated following the Iranian Revolution. The arbitral proceedings, seated in Switzerland, were conducted under the auspices of the International Court of Arbitration of the International Chamber of Commerce. The Ministry subsequently filed a petition in the United States District Court for the Southern District of California to confirm the award. The District Court confirmed the award, but denied the Ministry’s request for post-award, pre-judgment interest and attorneys’ fees. Cubic appealed, arguing that the award should not have been confirmed because it violated U.S. public policy against trade and financial transactions with the Islamic Republic of Iran, or, alternatively, that it had not become binding on the parties. Cubic also disputed the application of post-judgment interest. The Ministry cross-appealed the District Court’s denial of post-award, pre-judgment interest and attorneys’ fees. The United States Court of Appeals for the Ninth Circuit affirmed the District Court’s decision, but remanded for the District Court to reconsider granting the Ministry post-award, pre-judgment interest and attorneys’ fees. First, the Court considered Cubic’s public policy defense to enforcement in accordance with Article V(2)(b) NYC and rejected it, stating that this defense is construed very narrowly given the strong federal policy favouring confirmation of foreign arbitral awards. The Court recognized that U.S. relations with the Islamic Republic of Iran (“Iran”) were heavily regulated pursuant to a sanctions policy prohibiting payments to Iran, but noted that special federal licensing programs created exceptions to the sanctions policy. The Court then distinguished between confirmation versus enforcement or payment of an award, and saw no reason to refuse to confirm the arbitral award, which in the Court’s view was not synonymous with requiring payment of the award. Next, the Court analysed Cubic’s argument that the award had not become binding on the parties in accordance with Article V(1)(e) NYC, and rejected it. The Court held that the award was binding and final as all arbitration appeals had been exhausted, which Cubic did not dispute. The Court also held that the District Court’s judgment was a money judgment subject to post-judgment interest because it identified the parties for and against whom judgment was entered and the definite and certain sum owed to the judgment creditor. The District Court’s judgment satisfied the criteria for a money judgment by expressly incorporating the terms of the arbitral award, which indicated a definite and certain sum that Cubic owed to the Ministry. Finally, the Court held that a district court may, in its discretion, award post-award, pre-judgment interest and attorneys’ fees in an action to confirm an arbitral award, unless otherwise provided in the award. Thus, the Court vacated the District Court’s denial of the Ministry’s request for post-award, pre-judgment interest and attorneys’ fees and remanded for reconsideration. |
| see also : |
Attachment (1)
 Original Language Adobe Acrobat PDF |
