## Facts

- Curaçao (a governmental entity within the Netherlands Antilles) and Solitron (a New York electronics manufacturer) entered a 1968 written development agreement executed in Curaçao.
- Curaçao agreed to develop an industrial park and construct two factory buildings and supporting infrastructure.
- Solitron agreed to lease the buildings for 20 years, install and operate a manufacturing facility, and generate specified employment levels.
- The agreement contained a broad clause requiring arbitration in Curaçao under Netherlands Antilles law for “all disputes” arising under the contract.
- Curaçao completed the factory buildings in 1970; Solitron did not execute leases, begin operations, or meet related contractual obligations.
- Curaçao commenced arbitration in Curaçao; Solitron received notice but chose not to participate.
- A Curaçao arbitral panel found Solitron in breach and awarded Curaçao approximately 445,000 Netherlands Antilles guilders plus interest and costs.
- The award was made enforceable in Curaçao through a writ of execution; Solitron did not timely pursue available annulment proceedings, and the award became a final Curaçao judgment.
- Curaçao petitioned in the Southern District of New York to enforce the award under the New York Convention and the Curaçao judgment under New York CPLR Article 53; the district court granted relief, and Solitron appealed.

## Issues

1. Whether the dispute, though involving a foreign governmental entity, was “commercial” and thus covered by the New York Convention for enforcement in U.S. courts.
2. Whether the federal New York Convention implementation preempted New York CPLR Article 53 as a mechanism to recognize and enforce the Curaçao money judgment.
3. Whether Curaçao tribunals and courts had jurisdiction over Solitron based on the contract and arbitration clause, consistent with due process.
4. Whether asserted defenses—impossibility due to wage increases and unrest, alleged unfairness/public policy concerns, and challenges to damages and procedure—justified refusal of enforcement under Convention Article V or CPLR Article 53.
5. Whether the Curaçao award and judgment were sufficiently final and conclusive to be enforced in New York.

## Decision

- The Second Circuit affirmed enforcement of the Curaçao arbitral award under the New York Convention and its implementing federal statute.
- The court also affirmed recognition and enforcement of the Curaçao judgment under CPLR Article 53, holding state law was not preempted on these facts.
- The court held Solitron consented to Curaçao jurisdiction through the agreement and arbitration clause; notice and an opportunity to be heard satisfied due process despite Solitron’s nonappearance.
- The court rejected impossibility and wage-related arguments as merits challenges not reviewable in enforcement proceedings under the Convention’s limited defenses.
- The court found the award and judgment final and enforceable because Solitron did not pursue timely annulment and the possibility of future disputes did not undermine finality of this adjudicated claim.

## Legal Principles

- The New York Convention applies to foreign arbitral awards arising from commercial relationships, including contracts with foreign governmental units when the underlying transaction is commercial in character.
- Convention Article V defenses are narrowly construed; enforcement proceedings are not a forum to relitigate the merits, reassess contract interpretation, or reweigh damages.
- A party’s contractual agreement to arbitrate in a foreign forum constitutes consent to that forum’s arbitral process and related judicial enforcement proceedings; nonparticipation after notice does not negate jurisdiction or due process.
- The Convention’s federal enforcement scheme does not necessarily preempt a state foreign-country money-judgment recognition statute when the state mechanism does not conflict with the federal regime.
- A foreign judgment confirming an arbitral award may be recognized as final and conclusive where the judgment is enforceable in the rendering jurisdiction and available direct challenges were not timely pursued.

## Conclusion

The Second Circuit enforced Curaçao’s arbitral award against Solitron under the New York Convention and separately recognized the Curaçao confirming money judgment under New York’s foreign-judgment statute, rejecting jurisdictional, public policy, and merits-based defenses and holding that state recognition law was not preempted in these circumstances.


Island Territory of Curaçao v. Solitron Devices, Inc., 489 F.2d 1313 (2d Cir. 1973)