## Facts

- International Standard Electric Corp. (ISEC), a U.S. corporation, controlled an Argentine telecommunications company (CSEA) through a subsidiary.
- Bridas SAPIC, an Argentine corporation, acquired a 25% interest in CSEA under a May 7, 1979 shareholders agreement.
- The agreement provided that “all disputes connected to” it would be finally decided by ICC arbitration; it selected New York substantive law.
- The ICC fixed Mexico City as the seat of arbitration, and arbitration proceeded there under ICC rules.
- Bridas initiated ICC arbitration over disputes involving stock transactions, CSEA management, and alleged breaches of contractual and fiduciary duties.
- The tribunal issued a 1987 preliminary award upholding jurisdiction and later issued a unanimous final award in January 1990 granting Bridas substantial damages, interest, legal fees, and costs.
- ISEC petitioned in the Southern District of New York to vacate the award under the New York Convention; Bridas cross-petitioned to dismiss and to confirm/enforce the award.

## Issues

1. Whether a U.S. court has subject-matter jurisdiction under the New York Convention to vacate an arbitral award rendered at a foreign seat when the contract’s substantive law is New York law.
2. Whether enforcement should be refused under Article V of the New York Convention based on alleged procedural unfairness (including use of an undisclosed legal expert), excess of authority, or an allegedly penal interest component.

## Decision

- The court dismissed ISEC’s petition to vacate for lack of subject-matter jurisdiction.
- The court held that Article V(1)(e) allocates annulment authority to courts of the country of the seat (or whose procedural arbitration law governs), which here was Mexico, not New York.
- The court granted Bridas’s cross-petition and enforced the award.
- The court rejected ISEC’s Article V defenses, finding no showing that ISEC was unable to present its case, that the tribunal exceeded the submission, or that enforcement would violate U.S. public policy.

## Legal Principles

- Under the New York Convention, the power to set aside (annul) an international arbitral award lies in the “primary jurisdiction,” generally the courts at the arbitral seat and under the procedural law governing the arbitration, not the courts of a state whose substantive contract law was chosen.
- Courts asked to enforce a foreign arbitral award act as “secondary jurisdictions” and may only recognize or refuse recognition on the limited Article V grounds.
- Article V defenses are construed narrowly in light of the Convention’s pro-enforcement policy.
- A party may waive procedural objections, including alleged due-process violations, by failing to raise them timely during the arbitration.
- Use of arbitral assistance (including consultation on foreign law) does not, without proof of prejudice, establish that a party was “unable to present” its case or that enforcement violates public policy.
- The Convention’s public-policy exception is limited to circumstances where enforcement would offend the forum’s most basic notions of morality and justice.

## Conclusion

The court held it lacked authority to vacate an ICC award seated in Mexico and, applying the New York Convention’s limited and narrowly construed defenses, confirmed and enforced the award in the United States.


Int’l Standard Elec. Corp. v. Bridas SAPIC, 745 F. Supp. 172 (S.D.N.Y. 1990)