## Facts

- Texaco Overseas Tankship Ltd. (Texaco), a British company, contracted with Okada Shipping Co., Ltd. (Okada), a Japanese company, to charter ships to transport Texaco’s cargo.
- The contract included an arbitration clause requiring disputes to be decided by a three‑member arbitration panel seated in New York.
- After Texaco’s cargo was damaged, Texaco demanded arbitration in New York and mailed Okada notice naming Texaco’s appointed arbitrator.
- Under the clause, Okada had 20 days after receiving Texaco’s notice to designate the second arbitrator, but Okada did not do so.
- Pursuant to the clause’s appointment mechanism, Texaco mailed Okada a further notice naming a second arbitrator, and the first and second arbitrators selected a third arbitrator.
- Okada received notice of the arbitration hearing date.
- The law firm Okada had retained resigned before the hearing, and Okada did not appear at the hearing.
- The arbitrators issued an award ordering Okada to pay money damages to Texaco.
- Texaco sued in Japan (Osaka District Court) seeking recognition and enforcement of the New York arbitral award in Japan under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), to which Japan and the United States were parties.
- Okada resisted enforcement, arguing the award should not be enforced because Okada had not been given an opportunity to present a defense in the arbitration.

## Issues

1. Whether the New York arbitral award was recognizable and enforceable in Japan under the New York Convention.
2. Whether enforcement had to be refused because Okada was not given proper notice or was otherwise unable to present its case within the meaning of New York Convention article V(1)(b).

## Decision

- The Osaka District Court recognized and enforced the New York arbitral award in Japan.
- The court rejected Okada’s contention that it had been denied an opportunity to present its defense.
- The court treated Okada’s failure to appoint an arbitrator and its nonappearance after receiving hearing notice as matters attributable to Okada, not as procedural defects requiring refusal of enforcement under article V(1)(b).

## Legal Principles

- Under the New York Convention, a foreign arbitral award is to be recognized and enforced unless the resisting party proves a specified refusal ground.
- Article V(1)(b) focuses on whether the resisting party received proper notice and had a real chance to present its case; a party’s choice not to take available steps after receiving notice generally does not satisfy this refusal ground.
- When an arbitration agreement sets out an appointment mechanism for arbitrators, the tribunal may be constituted according to that mechanism if a party fails to appoint within the agreed time.
- The withdrawal or resignation of counsel, without more, does not itself establish that a party was “unable to present its case” where the party received notice and could have appeared or arranged representation.

## Conclusion

The Osaka District Court enforced Texaco’s New York arbitral award against Okada under the New York Convention, holding that Okada’s lack of participation—despite receiving notice and the benefit of the contract’s arbitrator‑appointment procedure—did not amount to a denial of an opportunity to present its case under article V(1)(b).


Texaco Overseas Tankship Ltd. v. Okada Shipping Co., Ltd., Osaka District Court Judgment of 22 April 1983 (1983)