Ninth Circuit Precedent Rejects Forum Non Conveniens in International Arbitration Enforcement Actions

In the matter of Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., the Ninth Circuit enforced a $1.3 billion arbitral award, holding for the first time that the doctrine of forum non conveniens—the argument that a suit is more properly litigated in a different venue—does not apply when a party is enforcing a foreign international arbitral award in the United States under the New York Convention (the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards)—i.e., the treaty under which signatory nations, including the U.S., agree to enforce international arbitration agreements and awards.

This case arose out of the efforts of Devas Multimedia Private Ltd. and four intervenors (Devas) to enforce an international arbitral award against a corporation wholly owned by India, Antrix Corp. Ltd. (Antrix). Devas sought to confirm the award in the United States—in the Western District of Washington—under the New York Convention. There, Antrix unsuccessfully argued the district court should have dismissed the case in favor of litigation in India under the doctrine of forum non conveniens. On appeal, a three-judge panel unanimously rejected that argument, ruling the doctrine does not apply to actions confirming foreign arbitral awards in the United States under the New York Convention.

In doing so, the court reasoned that the framework of an enforcement action under the New York Convention precludes a forum non conveniens defense, stating "Even apart from the New York Convention's text and purpose, the structure of an enforcement action under the convention forecloses forum non conveniens on its own terms.” "The doctrine of forum non conveniens presupposes an adequate alternative forum. But a proceeding to confirm a foreign award seeks to reach the sovereign's commercial assets located in the United States, and only a United States court can attach assets found here. A foreign court therefore cannot supply the relief such an action seeks."

The matter is not yet concluded, as the court ordered the district court to decide the effect of the Indian court’s decision setting aside the award, which was finalized while the appeal was pending. In the meantime, the Ninth Circuit’s decision is binding precedent for enforcement actions involving foreign arbitral awards in the United States. Thus, when drafting arbitration clauses in international agreements, parties that wish to arbitrate disputes—and then enforce any resulting arbitral award—outside of the United States should include language addressing both the venue for the arbitration and the venue for enforcement of any resulting arbitral award. They can no longer assert the doctrine of forum non conveniens to avoid having to enforce foreign arbitral awards in the United States.

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