Iran Aircraft Indus. v. Avco. Corp.

980 F.2d 141 (1992)

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Iran Aircraft Indus. v. Avco. Corp.

United States Court of Appeals for the Second Circuit
980 F.2d 141 (1992)

Facts

The Algiers Accords were agreements between the United States and Iran that provided for the release of 52 American hostages held in Tehran, Iran. The accords created a tribunal to provide binding arbitration of existing disputes between the governments of the United States and Iran and the nationals of those countries. The tribunal was vested with exclusive jurisdiction over such claims. Avco Corp. (plaintiff) had contracted with Iran Aircraft Industries (Iran Aircraft) (defendant) to repair and replace helicopter engines and parts. Following the Iranian Revolution of 1978–1979, disputes arose between the parties regarding performance and payment under the contracts, and they were submitted to the tribunal for arbitration. The arbitration panel consisted of judges from the United States and Iran and one from Sweden who had been selected from a group of judges from other countries pursuant to the accords. At a prehearing conference, which neither the Iranian judge nor Iran Aircraft attended, Avco’s counsel and the Swedish judge discussed whether Avco must produce volumes of invoices or could have an accounting firm audit the accounts and certify the totals in order to reduce the paperwork produced. It was decided that the summary evidence was preferable. By the time the tribunal held a hearing on the merits, the Swedish judge had resigned, and a French judge took his place. The French judge inquired as to why the invoices had not been produced, and Avco explained what had occurred at the prehearing conference. The tribunal then issued an award, disallowing Avco’s claims that were based on the summary of accounts. The district court refused to enforce the award under Article V(1)(b) of the New York Convention because Avco was unable to present its case to the tribunal. Iran Aircraft appealed, claiming that, under the accords, the tribunal’s decision was final and binding.

Rule of Law

Issue

Holding and Reasoning (Lumbard, J.)

Dissent (Cardamone, J.)

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