In a noteworthy decision from earlier this year, the Eleventh Circuit Court of Appeals has opted to align itself with the Second, Third, Fifth, Sixth, Seventh, Ninth, Tenth, and D.C. circuits. The case in question is the much-watched en banc decision of Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A.
In this case, the Eleventh Circuit held that the grounds for vacatur under Chapter 1 of the Federal Arbitration Act (FAA) can also apply to nondomestic arbitration awards. This includes arbitration awards that are rendered in the U.S. but involve a non-U.S. party.
Before this decision, the applicability of the FAA’s domestic grounds to vacate to nondomestic awards was uncertain. Now, however, the Eleventh Circuit’s judgement has brought further clarity to this legal issue, aligning with the perspective of several other circuits.
The impact of this shift cannot be understated, especially for legal professionals working with international corporations and law firms who are engaged in or considering arbitration in the United States. They will need to understand the potential for vacatur under the FAA, even if the arbitration is categorized as nondomestic due to the involvement of a non-U.S. party.
Moreover, this ruling gives us a clearer picture of how U.S. arbitration law could be evolving, especially relevant in an age of increasingly globalized business and trade.