## Facts

- Compagnie des Bauxites de Guinee (CBG) and Hammermills, Inc. entered into a contract for the purchase and sale of ore-crushing and ore-handling equipment for use at CBG’s bauxite-crushing facility.
- The contract required that disputes be resolved by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC).
- A dispute arose, and CBG initiated ICC arbitration alleging that Hammermills breached the contract.
- A sole arbitrator heard the merits and took the matter under advisement.
- The ICC Rules contemplated an award of costs, including legal costs, and the arbitrator requested that each party submit a statement of its legal costs; each party submitted the requested statement.
- Under ICC practice, the arbitrator submitted a draft award to the ICC Court of Arbitration for review of the award’s form before the award was issued.
- The draft award submitted for ICC review did not include any quantified award of legal costs.
- After the ICC Court of Arbitration approved the draft as to form, the arbitrator added an award of legal costs to the final award before signing it.
- The final award dismissed CBG’s claims and ordered CBG to pay Hammermills’ legal costs.
- After receiving the award, CBG filed an action in federal court seeking to vacate, modify, or correct the award, arguing that the legal-costs component was improper.
- Hammermills filed a counterpetition seeking recognition and enforcement of the award under the New York Convention and supported enforcement with a sworn affidavit from counsel to the ICC Secretariat stating that the ICC Rules set no specific procedure for awarding legal fees and leave the matter to the arbitrator’s discretion.

## Issues

1. Whether recognition and enforcement should be refused under Article V(1)(b) of the New York Convention because CBG allegedly lacked adequate notice and a fair opportunity to be heard regarding the arbitrator’s intent to award legal costs.
2. Whether recognition and enforcement should be refused under Article V(1)(d) (and related arguments under Article V(1)(c)) because the arbitrator added legal costs to the final award after the ICC Court of Arbitration approved the draft award as to form, allegedly contrary to ICC procedures or beyond the submission to arbitration.

## Decision

- The court denied CBG’s request to vacate, modify, or correct the arbitral award.
- The court granted Hammermills’ request for recognition and enforcement of the award under the New York Convention.
- On Article V(1)(b), the court concluded CBG had sufficient notice that legal costs were in issue in the arbitration, including because the arbitrator requested—and CBG provided—cost submissions under the ICC Rules.
- On the claimed ICC-procedure defect, the court concluded CBG did not carry its burden to show that the method and timing of adding legal costs to the award amounted to a Convention defense, relying in part on evidence about how the ICC Rules operate in practice (including the ICC Secretariat affidavit).

## Legal Principles

- Defenses to recognition and enforcement under Article V of the New York Convention are construed narrowly, and the party resisting enforcement bears the burden of proof.
- Article V(1)(b) requires a showing that the resisting party was unable to present its case; where the arbitration rules provide for costs and the tribunal requests cost submissions that the party supplies, the party generally has notice that costs may be awarded.
- An award of costs authorized by the parties’ chosen arbitration rules is generally treated as within the scope of the submission to arbitration for purposes of Article V(1)(c).
- Under Article V(1)(d), a party must show that the arbitral procedure was not in accordance with the parties’ agreement; courts may consider evidence of institutional rules and practice when assessing claimed procedural violations.
- A technical objection to the sequence of drafting or issuance steps, without a showing that the agreed rules were materially violated in a way that prevented a fair chance to address the issue, will not justify refusal of enforcement.

## Conclusion

The court enforced the ICC award under the New York Convention, holding that CBG had adequate notice and an opportunity to address legal costs during the arbitration and that CBG failed to prove that the arbitrator’s inclusion of a legal-costs award in the final award—after ICC review of the draft as to form—constituted a Convention ground to refuse recognition and enforcement.


Compagnie des Bauxites de Guinee. v. Hammermills, Inc., 1992 WL 122712 (1992)