Ministry of Defense of the Islamic Republic of Iran v. Gould Inc.

887 F.2d 1357 (1989)

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Ministry of Defense of the Islamic Republic of Iran v. Gould Inc.

United States Court of Appeals for the Ninth Circuit
887 F.2d 1357 (1989)

  • Written by Elizabeth Yingling, JD

Facts

In the 1970s, the Ministry of War of the Imperial Government of Iran (Iran) (defendant) and Gould Inc. (then known as Hoffman Electric Company) (plaintiff) entered into contracts pursuant to which Gould would provide and install military equipment. The intervening Iranian Revolution disrupted the contractually required progress payments and performance. In accordance with the Algiers Accords (accords), Gould filed a breach-of-contract claim against Iran in the Iran–United States Claim Tribunal (tribunal). Iran submitted a counterclaim against Gould and sought in excess of $80 million. The tribunal issued an award of $3.6 million against Gould. Iran sued to confirm and enforce the award in the United States District Court for the Central District of California. Gould moved to dismiss, arguing that the district court lacked subject-matter jurisdiction because the tribunal proceedings did not comply with the terms of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). The Federal Arbitration Act (FAA), which incorporated the New York Convention into U.S. law, provided that the New York Convention shall apply to the recognition and enforcement of foreign arbitral awards issued under the New York Convention. Gould argued that the New York Convention required a written arbitration agreement between the parties. The New York Convention required contracting states to recognize written arbitration agreements and required written arbitration agreements to be filed with the tribunal. Gould also argued that the New York Convention required that the proceedings be subject to “national” arbitration law. Gould claimed that because the tribunal’s award was based upon international law, it violated the New York Convention. Under Article V, paragraph (1)(e) of the New York Convention, enforcement of an award should not be granted if the award had been set aside by a competent authority of the country under which law the award was made. Article V, paragraph (1)(d) provided that enforcement should not be allowed if the arbitration procedure was contrary to the agreement of the parties or, absent an agreement, to the law of the country in which the arbitration took place. The district court denied Gould’s motion to dismiss, finding it had subject-matter jurisdiction to enforce the tribunal’s award. Gould appealed.

Rule of Law

Issue

Holding and Reasoning (O’Scannlain, J.)

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