## Facts

- AAOT Foreign Economic Association (VO) Technostroyexport (Techno), a Russian foreign trade association, contracted in 1991–1992 to sell non-ferrous metals to International Development and Trade Services, Inc. (IDTS), a U.S. buyer.
- The contracts required arbitration of disputes before the International Court of Commercial Arbitration in Moscow under agreed rules.
- Disputes arose regarding IDTS’s performance; a tribunal was constituted, hearings occurred, and the tribunal issued two awards for Techno totaling about $200 million.
- IDTS participated in the arbitration, submitting papers and appearing at hearings.
- During the arbitration, IDTS received information (through an interpreter it sent to Moscow) suggesting the process might be corrupt or biased and that bribes were commonly paid.
- Despite this knowledge, IDTS did not seek disqualification of arbitrators or otherwise raise corruption/bias objections before the awards issued.
- Techno petitioned in the Southern District of New York to confirm the awards under the New York Convention (9 U.S.C. §§ 201–208); IDTS resisted confirmation under Article V(2)(b), asserting enforcement would violate U.S. public policy.
- The district court confirmed the awards; IDTS appealed.

## Issues

1. Whether enforcement should be denied under Article V(2)(b) of the New York Convention when the resisting party alleges corruption or partiality but knew of the allegations during arbitration and failed to object before an adverse award.
2. Whether a party waives a later public-policy challenge to confirmation by fully participating in the arbitration without timely raising known integrity objections.
3. Whether generalized, non-case-specific allegations of corruption suffice to meet the Article V burden to prevent enforcement.

## Decision

- The Second Circuit affirmed confirmation of both arbitral awards.
- The court held IDTS could not rely on corruption/partiality allegations to block enforcement because it knew of the claimed improprieties during the arbitration yet proceeded without objection until after it lost.
- The court further held IDTS’s evidentiary showing was insufficient because it consisted largely of generalized assertions and hearsay, not concrete proof tied to these awards or this tribunal.
- The public-policy defense was rejected as inconsistent with the Convention’s strong pro-enforcement mandate and the narrow scope of Article V(2)(b).

## Legal Principles

- Article V(2)(b) of the New York Convention is construed narrowly; refusal to enforce is permitted only where enforcement would be repugnant to the forum’s most basic notions of morality and justice.
- A party with knowledge of potential arbitrator corruption or partiality must raise the objection before an adverse award is rendered; silence coupled with full participation constitutes waiver.
- The party opposing enforcement bears a heavy burden to establish an Article V defense; speculative or generalized claims about corruption in a foreign forum are inadequate without specific proof of misconduct affecting the challenged award.

## Conclusion

The Second Circuit confirmed substantial foreign arbitral awards, holding that a party may not withhold known corruption or bias objections during arbitration and then invoke public policy to resist enforcement after losing, especially where the supporting evidence is generalized and not tied to the particular proceeding.


AAOT Foreign Econ. Ass’n (VO) Technostroyexport v. Int’l Dev. & Trade Servs., Inc., 139 F.3d 980 (2d Cir. 1998)