## Facts

- Europcar Italia S.p.A. (Italian car rental company) and Maiellano Tours, Inc. (U.S. travel agency) signed a 1988 agreement for Europcar to provide car rentals in Italy to Maiellano’s customers.
- The agreement selected Italian law and required disputes to be finally resolved by arbitration using Italian “arbitrato irrituale in equità” (informal, equitable proceedings).
- In 1991, the parties disputed entitlement to certain value-added-tax (VAT) refunds paid by the Italian tax authority to Maiellano.
- After disagreement over choosing a sole arbitrator, the parties executed a supplemental arbitration agreement establishing a three-arbitrator panel in Rome, again applying Italian law and describing the arbitrators as “amicable adjusters.”
- In 1992, the Rome panel issued an award for Europcar.
- Maiellano attacked the award in Italian courts on grounds including fraud; Italian proceedings continued while U.S. enforcement was sought (the Tribunal of Rome confirmed the award in 1996, with further review still pending).
- Europcar filed in the U.S. District Court for the Eastern District of New York to enforce the award under the New York Convention (9 U.S.C. § 201 et seq.).
- The district court granted summary judgment enforcing the award; Maiellano appealed.

## Issues

1. Whether an award issued through Italian “arbitrato irrituale in equità” is an “arbitral award” enforceable under the New York Convention and its federal implementing statute.
2. Whether the parties intended to be bound by a decision rendered by “amicable adjusters” in an “arbitrato irrituale” proceeding.
3. Whether the district court should have adjourned enforcement under Article VI of the New York Convention due to pending Italian proceedings seeking to set aside or invalidate the award.

## Decision

- The Second Circuit vacated the judgment enforcing the award and remanded.
- The court concluded the parties intended a binding arbitral process governed by Italian law, and the award could fall within the Convention despite its “arbitrato irrituale” form.
- The court held the district court did not adequately exercise its discretion under Article VI because it failed to weigh relevant considerations for whether to adjourn enforcement pending the Italian challenge.
- The court directed the district court to reconsider adjournment by applying a structured set of factors concerning efficiency, comity, and fairness.

## Legal Principles

- A foreign decision resulting from a nontraditional arbitral mechanism may qualify as an enforceable “arbitral award” under the New York Convention when the parties’ written agreement shows an intent to be bound and to obtain final dispute resolution.
- Contract language describing “final” arbitration and the parties’ conduct in invoking the process are key indicators of intent to be bound, even where arbitrators act as “amicable adjusters” and decide on equitable grounds.
- Article VI of the New York Convention authorizes an enforcing court to adjourn enforcement when set-aside or suspension proceedings are pending in the competent court at the arbitral seat.
- In deciding an Article VI adjournment request, courts should weigh factors including: (1) arbitration’s interest in speed and cost control; (2) the status and expected duration of the foreign proceedings; (3) whether the foreign action appears legitimate or dilatory; (4) whether the foreign court will address issues bearing on the award’s validity and the degree of review; (5) comparative hardship from enforcement versus delay; and (6) other case-specific considerations affecting comity, efficiency, and fairness, including the seat court’s connection to the dispute.

## Conclusion

The Second Circuit required a reasoned Article VI analysis before enforcing a foreign arbitral award that is simultaneously under challenge in the courts of the arbitral seat, vacating enforcement and remanding for application of specified discretionary factors while recognizing that an “arbitrato irrituale” award may be enforceable when the parties intended to be bound.


Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310 (2d Cir. 1998)