## Facts

- Martin I. Spier, a New York engineer, contracted in 1969 with Calzaturificio Tecnica, S.p.A., an Italian footwear manufacturer, to provide technical expertise for manufacturing plastic footwear and ski boots in Italy in exchange for fees.
- The contract was executed in Italy, drafted in Italian, and provided for payment in Italian lire based on the official dollar exchange rate.
- The contract required disputes to be submitted to informal “friendly conciliator” arbitration in Italy, decided “pro bono et aequo.”
- Spier claimed breach and initiated arbitration in Italy; Italian arbitrators issued an award for Spier that included a component later described by Italian courts as an unauthorized “bonus” or “pay-off.”
- Tecnica challenged the award in Italy; the Treviso Tribunal annulled the award, and appellate courts in Venice and the Supreme Court of Cassation affirmed the annulment.
- Spier sought enforcement in the Southern District of New York; an earlier federal decision deferred enforcement pending the outcome of the Italian annulment proceedings.
- After the Italian annulment became final, Spier renewed the federal petition to enforce the award despite the Italian judgments.

## Issues

1. Whether, under Article V(1)(e) of the New York Convention, a U.S. court should refuse enforcement of a foreign arbitral award that has been annulled by courts in the country where the award was made and whose law governed the arbitration.
2. Whether the U.S. court nonetheless should exercise any discretion to enforce the award despite annulment, based on fairness or public policy concerns.

## Decision

- The court denied Spier’s petition to confirm and enforce the Italian arbitral award.
- Because Italy was the arbitral seat and the governing law jurisdiction, the Italian courts’ final judgments setting aside the award triggered Article V(1)(e).
- Applying Second Circuit guidance, the court treated enforcement of an award annulled in the primary jurisdiction as strongly disfavored absent exceptional circumstances.
- The court found no showing that the Italian annulment proceedings violated fundamental fairness or U.S. public policy; the Italian courts annulled the award on the ground that the arbitrators exceeded their authority.
- The prior federal deferral pending Italy’s final determination supported denying enforcement once annulment became final.

## Legal Principles

- Under the New York Convention, Article V(1)(e), recognition and enforcement may be refused when a competent authority in the country where, or under whose law, the award was made has set the award aside or suspended it.
- Courts in the arbitral seat function as courts of primary jurisdiction regarding an award’s validity; other Convention courts act in a secondary jurisdiction role and generally defer to the primary jurisdiction’s annulment decisions.
- In the Second Circuit, enforcement of an award annulled at the seat ordinarily will be denied unless the party seeking enforcement demonstrates extraordinary circumstances, such as an annulment that offends basic fairness or fundamental public policy.

## Conclusion

The court refused to enforce the Italian arbitral award because it had been finally annulled by Italian courts in the primary jurisdiction, and the petitioner did not establish any fairness or public policy basis to disregard the annulment under Article V(1)(e) of the New York Convention.


Spier v. Calzaturificio Tecnica, S.p.A., 71 F. Supp. 2d 279 (S.D.N.Y. 1999)