## Facts

- Fertilizer Corporation of India (Fertilizer), a company owned by the Republic of India, entered into a contract with IDI Management, Inc. (IDI), an Ohio corporation, for work connected to the design and/or construction of a fertilizer plant in India.
- The contract included an arbitration clause requiring disputes arising under the agreement to be resolved by arbitration.
- Disputes later arose and resulted in two related arbitration matters conducted in India, producing two different awards:
  - In the first arbitration, an award was issued in favor of IDI. Fertilizer pursued review in the Indian court system, and the Indian courts did not fully enforce that award while the appeal remained unresolved, which prevented IDI from collecting.
  - In the second arbitration, an award was issued in favor of Fertilizer (the award Fertilizer sought to enforce in the United States). IDI filed proceedings in India seeking to set aside that award; while those proceedings were pending, IDI refused to pay.
- Fertilizer filed a petition in the United States District Court for the Southern District of Ohio seeking confirmation and enforcement of the Indian award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), as implemented in 9 U.S.C. §§ 201–208.
- IDI opposed enforcement and raised multiple defenses under the New York Convention, including an argument that the award was not “binding” because it had not been reviewed by an Indian court for alleged errors of law and because set-aside proceedings were pending.
- IDI also asserted a public-policy defense tied to alleged arbitrator bias (including allegations about arbitrator B. Sen’s relationship to Fertilizer) and pressed a counterclaim seeking enforcement of IDI’s earlier, separate arbitration award.

## Issues

1. Under the New York Convention, may a U.S. court enforce a foreign arbitral award as “binding” even though proceedings in the country of origin are pending and the award has not been reviewed by that country’s courts for alleged legal error?
2. Did IDI establish any New York Convention grounds to refuse recognition and enforcement of the award, including the public-policy exception based on alleged arbitrator bias?

## Decision

- The court granted Fertilizer’s request to confirm and enforce the Indian arbitral award under the New York Convention and entered judgment for Fertilizer.
- The court rejected IDI’s defenses under Article V of the Convention, including the argument that the award was not “binding” merely because Indian-court review for legal error had not occurred and set-aside proceedings were pending.
- The court rejected IDI’s attempt to block enforcement through public-policy objections based on alleged arbitrator bias and treated the Convention’s public-policy exception as limited.
- The court did not permit IDI’s counterclaim on the earlier award to prevent enforcement of Fertilizer’s award in the U.S. proceeding.

## Legal Principles

- A petition to recognize and enforce a foreign arbitral award governed by the New York Convention is decided under the Convention’s limited, enumerated refusal grounds; the court does not re-try the merits of the dispute.
- For purposes of Article V(1)(e), an award can be “binding” even if the legal system of the seat permits some judicial review and even if proceedings challenging the award are pending; the mere possibility of judicial correction for legal error does not, by itself, defeat enforceability.
- The Article V(2)(b) public-policy exception is narrow and applies only where enforcement would violate the forum’s most basic notions of morality and justice; allegations of arbitrator partiality must be supported by a showing strong enough to meet that standard.
- A party opposing enforcement bears the burden of proving a Convention defense, and speculative or generalized objections to the foreign proceedings are not enough to refuse enforcement.

## Conclusion

Fertilizer Corp. of India v. IDI Management is a New York Convention enforcement decision in which the Southern District of Ohio confirmed an Indian arbitral award for Fertilizer and rejected IDI’s defenses, including the claim that the award was not “binding” because it lacked Indian-court review for legal error and the claim that enforcement should be refused on U.S. public-policy grounds based on alleged arbitrator bias.


Fertilizer Corp. of India v. IDI Management, 517 F. Supp. 948 (1981)