Case of the Day: FDIC v. IIG Capital
Posted on August 15, 2013
The case of the day is FDIC v. IIG Capital, LLC (11th Cir. 2013). In a short, per curiam decision, the court affirmed the confirmation of an international arbitral award over IIG’s argument that an arbitrator was not impartial because he had had contacts with the FDIC’s counsel; that IIG had not agreed to the composition of the arbitral tribunal because it had been unaware of the contacts at the relevant times; and that recognition of the award would be against public policy. All three are possible defenses to recognition and enforcement under Article V of the New York Convention. However, the court held that the evidence of bias was insufficient to warrant an evidentiary hearing under its precedents. The arbitrator had hired the lawyer as a faculty member in an international arbitration program, the two were both founders of the International Chamber of Commerce’s Latin American Arbitration Group, and they were both founding members of the Latin American Arbitration Association. One of the contacts was sufficiently far in the past that it could not support a plausible claim of bias. With regard to the joint participation in an academic international arbitration program, the court repeated a remark of the district court judge: the contact showed “nothing beyond the kind of professional interactions that one would expect of successful lawyers active in the specialized area.” The court also pointed out that it was the arbitrator who hired the lawyer, and not the other way around.
The precedent on which the court relied, University Commons–Urbana v. Universal Constructors, Inc., 304 F.3d 1331 (11th Cir.2002), involved a domestic arbitration. Because the court held that even under that decision IIG was not entitled to an evidentiary hearing, it did not need to decide the point the FDIC raised, namely, that University Commons had no application in a New York Convention case.