## Facts

- International Bechtel Company Limited (Bechtel) and the Department of Civil Aviation of the Government of Dubai (Dubai) entered an agreement for work related to Dubai’s airport.
- The parties agreed that Dubai law governed the contract and that disputes would be resolved by arbitration seated in Dubai (using ad hoc procedures referenced in the materials as UNCITRAL-based).
- An arbitral tribunal issued an award in Bechtel’s favor.
- Dubai sought to nullify the award in Dubai courts.
- A Dubai court set the award aside, including on the ground that certain witness testimony was not taken under oath as required by Dubai procedural requirements.
- Bechtel appealed within the Dubai court system to the Dubai Court of Cassation.
- While the Dubai appeal was pending, Bechtel filed an action in the U.S. District Court for the District of Columbia seeking confirmation/enforcement of the award under the Federal Arbitration Act (FAA), rather than under the New York Convention.
- The D.D.C. initially denied Dubai’s motion to dismiss and stayed the U.S. case pending the outcome of the Dubai appeal.
- The Dubai Court of Cassation later affirmed the nullification, making the annulment final in Dubai.
- Dubai renewed its motion to dismiss in D.D.C. for failure to state a claim, arguing that a nullified award could not be confirmed.
- Bechtel responded that the D.D.C. should still confirm the award because the Dubai courts’ rulings were fundamentally unfair.

## Issues

1. Whether a U.S. district court may confirm an arbitral award under the FAA after the courts at the arbitration seat (Dubai) have finally nullified the award.
2. Whether allegations of “fundamental unfairness” in the foreign annulment proceedings supply a recognized legal basis for a U.S. court to disregard the foreign judgment and confirm the award.
3. Whether, after the award’s nullification in Dubai, Bechtel’s petition states a claim upon which relief can be granted in federal court.

## Decision

- The court granted Dubai’s renewed motion to dismiss.
- The court dismissed Bechtel’s petition for failure to state a claim.
- The court concluded that, after the Dubai Court of Cassation’s final decision setting the award aside, there was no longer an award for the D.D.C. to confirm.
- The court declined to treat the FAA as authorizing a U.S. court to review and reject the Dubai courts’ final judgment based on Bechtel’s claims of unfairness.

## Legal Principles

- The FAA provides mechanisms for enforcing arbitration agreements and awards, but it does not, by itself, create a free-standing substantive claim or a general mandate to confirm any award regardless of later nullification in the primary forum.
- When parties select a foreign seat and foreign governing law, the courts of that seat are the main supervisory authorities over the arbitration, including set-aside proceedings.
- A final judgment from the seat’s courts nullifying an award generally means the award cannot be confirmed as if it remained valid; a confirmation action premised on the continuing existence of the award fails once the award is set aside in the seat.
- International comity supports giving effect to a final, authoritative foreign judgment from the seat’s court system rather than re-litigating the validity of the award in U.S. court.
- A U.S. district court does not sit as an appellate tribunal over foreign courts; allegations that a foreign court misapplied its own procedure, without a recognized statutory or treaty basis for relief, do not supply authority to confirm an award that the seat has annulled.

## Conclusion

The D.D.C. dismissed Bechtel’s FAA petition because Dubai’s courts—culminating in the Dubai Court of Cassation—had finally nullified the arbitral award, leaving nothing for a U.S. court to confirm, and Bechtel’s claims of unfairness did not provide an independent legal basis for the federal court to disregard the seat-court judgment.


Bechtel Co. Ltd. v. Dubai, 360 F. Supp. 2d 136 (2005)