Background
Petitioners, trustees of an insolvent Dutch life insurance company, sought to enforce a €150 million arbitration award against Respondents in North Carolina federal court. They pursued two paths: confirming the award under the Federal Arbitration Act and the New York Convention, and enforcing the Dutch court judgment that had already confirmed the award under North Carolina state law. The district court confirmed the award under federal law, ruling the statute of limitations was permissive, but did not rule on the state law claim.
The court’s reasoning
The court held that Section two zero seven of the Federal Arbitration Act imposes a mandatory three-year limitations period for confirming foreign arbitration awards. The word ‘may’ in the statute grants discretion to petition but does not negate the time limit. The court distinguished its prior decision in Sverdrup, which applied to domestic arbitration under Section nine, noting that Chapter two of the FAA contains its own distinct limitations period. The court further found that the Dutch court order confirming the award constituted a foreign-country judgment recognizable under the North Carolina Uniform Foreign-Country Money Judgments Recognition Act, as it was final, conclusive, and enforceable under Dutch law.
What it means going forward
Creditors seeking to enforce foreign arbitration awards in the Fourth Circuit must file petitions within three years of the award’s issuance to utilize the expedited confirmation procedures of the Federal Arbitration Act. However, they may still pursue enforcement through state law mechanisms if a foreign court has already issued a judgment confirming the award.