## Facts

- Universal Forum of Cultures Barcelona 2004, S.L., in liquidation (Forum) and the Council for a Parliament of the World’s Religions (Council), along with the UNESCO Centre of Catalonia (Centre), entered a June 4, 2003 Memorandum of Understanding (MOU) to hold the 2004 Parliament of the World’s Religions event in Barcelona, Spain.
- The MOU stated it was governed by Spanish law and set a two-step dispute process: executive officers of the Forum, Council, and Centre would “seek to mediate” disputes, and if that failed, the parties accepted institutional arbitration administered by the Court of Arbitration of Barcelona (TAB), which would appoint the arbitrator(s).
- After the event, the Council owed money to the Forum, but the parties disputed the amount.
- Following extended discussions, the Forum sent a January 2005 letter setting out the claimed outstanding debt and a proposed payment schedule; the Council signed and returned the schedule but later failed to make the required payments.
- In May 2010, the Forum commenced arbitration in Barcelona under the MOU’s arbitration clause.
- The Council objected that arbitration was not allowed because the MOU required mediation as a condition precedent and, in the Council’s view, mediation had not occurred; it also argued the later letter agreement displaced the MOU’s arbitration clause.
- The arbitrator (applying Spanish law and the MOU) concluded the MOU required the parties only to attempt mediation because it said they would “seek” to mediate, and found the Forum’s communications were enough to satisfy that obligation.
- In September 2011, the arbitrator issued a final award in the Forum’s favor, awarding roughly $276,196 (euro equivalent) plus interest and costs.
- In March 2012, the Forum filed a petition in the Northern District of Illinois to confirm the foreign arbitral award under the New York Convention and the Federal Arbitration Act (FAA), 9 U.S.C. §§ 201–208.
- The Council moved to dismiss for lack of subject-matter jurisdiction under Rule 12(b)(1) or, alternatively, asked the court to refuse confirmation; the Forum filed a cross-motion to confirm.

## Issues

1. Whether the district court had subject-matter jurisdiction under 9 U.S.C. § 203 because the petition sought recognition and enforcement of a foreign arbitral award falling under the New York Convention.
2. Whether the MOU contained a valid, enforceable agreement to arbitrate, or whether the Council showed that the 2005 payment-schedule letter displaced or extinguished the MOU’s arbitration provision.
3. Whether the Council carried its burden to prove any New York Convention Article V ground to refuse enforcement, including arguments based on the mediation step, the arbitrator’s authority, or alleged procedural defects.

## Decision

- The court denied the Council’s Rule 12(b)(1) motion, holding the action fell under the New York Convention and the court had jurisdiction under 9 U.S.C. § 203.
- The court rejected the Council’s claim that the 2005 letter agreement eliminated the MOU’s arbitration clause, finding the MOU remained a valid written agreement to arbitrate.
- The court held the Council failed to prove any Convention defense that would allow refusal of enforcement, including defenses framed around the mediation language and the arbitrator’s handling of the dispute.
- The court denied the Council’s request to refuse confirmation and granted the Forum’s cross-motion, confirming the foreign arbitral award.

## Legal Principles

- A petition to confirm a foreign arbitral award that falls under the New York Convention arises under federal law, and federal district courts have original jurisdiction under 9 U.S.C. § 203.
- Under the Convention and 9 U.S.C. § 207, a court must confirm an award unless the party resisting enforcement proves one of the limited grounds for refusal listed in Article V.
- Article V defenses are construed narrowly; the court does not reconsider the merits of the dispute or correct alleged legal or factual errors by the arbitrator.
- A party opposing confirmation bears the burden to establish a Convention defense such as: invalid arbitration agreement, lack of notice or opportunity to be heard, award beyond the scope of submission, improper tribunal composition or procedure, award not binding or set aside at the seat, or violation of U.S. public policy.
- Disagreements with the arbitrator’s reading of the contract—such as whether “seek to mediate” requires completion of formal mediation—generally do not justify non-enforcement absent a proven Article V ground.
- A later payment arrangement will not displace an earlier arbitration agreement unless it clearly replaces or negates the parties’ agreement to arbitrate.

## Conclusion

The Northern District of Illinois confirmed the Barcelona arbitral award under the New York Convention, holding it had jurisdiction, the MOU remained a valid agreement requiring arbitration in Barcelona, and the Council did not prove any Article V defense based on the mediation language, the later payment-schedule letter, or alleged defects in the arbitral process.


Universal Forum of Cultures Barcelona 2004 v. Council for a Parliament of the World's Religions, 2013 U.S. District LEXIS 39719 (2013)