## Facts

- Karl F. Landegger, a U.S. citizen and New York resident, entered into an investment agreement (Jan. 30, 1961) with Bayerische Hypotheken und Wechsel Bank, a German bank, involving an investment in a German pulp and paper company.
- The agreement included an annexed arbitration provision requiring that disputes be resolved by arbitration in Germany and stating that the arbitral board’s award would be “final.”
- A dispute arose in 1965, and Landegger commenced arbitration in Munich under the contract’s arbitration procedure.
- On August 16, 1971, the German arbitration panel issued an award in Landegger’s favor, granting money damages and awarding costs.
- Bayerische filed an action in the Land Court of Munich I seeking to vacate the arbitral award; Landegger sought execution of the award, and the matters proceeded in the German court.
- The German court sustained the award as to money damages but did not sustain it as to the arbitration-cost assessment, and it permitted enforcement subject to a security arrangement tied to the award amount plus interest (returnable if Bayerische ultimately prevailed on appeal).
- Bayerische appealed in Germany.
- While the German appeal was pending, Landegger brought a diversity action in the U.S. District Court for the Southern District of New York to enforce the German arbitral award and sought security against Bayerische’s New York assets.
- In the SDNY action, Landegger moved for summary judgment. Bayerische opposed and moved to stay the federal action pending the outcome of the German appeal, arguing (among other things) that the award lacked the finality required for enforcement under a U.S.–Germany treaty and that enforcement should be refused on fairness grounds.

## Issues

1. Whether the German arbitral award, upheld as to money damages by a German court but on appeal and subject to a security-based enforcement condition, was sufficiently final to be enforced in SDNY.
2. Whether SDNY should stay the enforcement action pending the German appeal.
3. Whether enforcement should be denied on due-process or public-policy grounds based on Bayerische’s claim that it was not given an adequate opportunity to be heard in the German proceedings.

## Decision

- The court granted Landegger’s motion for summary judgment enforcing the German arbitral award in New York, with appropriate recognition that the German court did not sustain the arbitration-cost portion.
- The court denied Bayerische’s motion to stay the SDNY action pending the German appeal.
- The court concluded that the award was enforceable even though an appeal remained pending in Germany, given the contract’s “final” arbitration language and the German court’s decision sustaining the award’s merits (money damages) and permitting enforcement subject to security.
- The court rejected Bayerische’s treaty-based and fairness objections, finding no adequate basis to treat the award as unenforceable or to refuse recognition on procedural-fairness grounds.

## Legal Principles

- A foreign arbitral award may be treated as sufficiently final for U.S. enforcement when the merits have been sustained in the courts of the rendering country and the award has present enforceability there (including enforceability conditioned on security), even if further review remains available.
- A pending foreign appeal does not automatically bar enforcement of a foreign arbitral award in U.S. court; whether to pause enforcement is a discretionary case-management decision.
- Comity may support recognition of a foreign arbitral award that has been tested in the rendering country’s courts; comity does not require delaying enforcement in the United States solely because foreign appellate proceedings continue.
- Due-process and public-policy defenses to enforcement require a strong showing of fundamental unfairness; participation in the foreign process and access to foreign judicial review weigh against such defenses.

## Conclusion

The SDNY enforced Landegger’s German arbitration award (as sustained on the merits by the Munich court) and refused to stay the case pending the German appeal, holding that the award had adequate finality for enforcement despite the ongoing appeal and security-based enforcement condition, and that Bayerische did not establish a procedural-fairness or public-policy basis to deny enforcement.


Landegger v. Bayerische Hypotheken und Wechsel Bank, 357 F. Supp. 692 (1972)