The case of the day is Brittania-U Nigeria, Ltd. v. Chevron USA, Inc. (5th Cir. 2017). Brittania-U (the double-T is how it spells its name) sued Chevron USA, Ali Moshiri, and Moncef Attia in the Texas state courts. The claim was that Chevron Nigeria, a division of Chevron USA, had invited bids for the sale of its interest in Nigerian oil mining leases. Attia, who worked for BNP Paribas (Chevron’s advisor in the bidding process), invited Brittania-U to participate, and Moshri, a Chevron employee, was involved in the negotiations. Brittania-U and Chevron had signed a confidentiality agreement that contained an agreement to arbitrate disputes in London under the UNCITRAL Rules. Brittania-U alleged that it had submitted the high bid but had not won the auction. It sued for fraud in the inducement. The defendants removed the case to the district court and moved to dismiss. Brittania-U moved to remand the case to the Texas courts. The district court denied the motion to remand and granted the motion to dismiss on the grounds that questions of arbitrability were for the arbitrator to decide, and Brittania-U appealed.

The main jurisdictional issue was whether the case fell under the New York Convention, even if all of the parties were US parties. (The defendants were all US citizens, and the court noted that the citizenship of Brittania-U was unclear but assumed arguendo that it was a US party for these purposes). While the Fifth Circuit has precedents that include the presence of a non-US party as one of the factors in deciding whether a case falls under the Convention, in fact, the presence of a non-US party is not necessary. As 9 U.S.C. § 202 provides:

An agreement or award arising out of [a commercial legal] relationship which is entirely between citizens of the United States shall be deemed not to fall under the Convention unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states.

Here, the relationship envisaged performance abroad—it involved the sale of Nigerian oil mining leases—and it involved property situated abroad. The arbitration provision called for arbitration abroad, in London. And when a case falls under the Convention, it is removable as long as the subject matter of the case “relates to” the arbitration agreement. 9 U.S.C. § 205. This is a broad provision that the Fifth Circuit has held allows removal as long as the agreement to arbitrate could conceivably affect the outcome of the case, which plainly was so here. So the motion to remand was properly denied.

The Fifth Circuit also affirmed the denial of the motion to dismiss. Brittania-U argued that the parties had not delegated the power to decide matters of arbitrability to the arbitrator. Joining the DC Circuit, the Second Circuit, and the Ninth Circuit, the court held that when parties adopt the UNCITRAL Rules, they are clearly and unmistakably giving the arbitrator power to decide arbitrability, because the UNCITRAL Rules give the arbitrator the power to decide on his or her own jurisdiction. This is a less clear grant than in, for example, the AAA Rules, but it is enough. The slightly more difficult question was what to do about the two individual defendants, who were not parties to the contract and thus not parties to the agreement to arbitrate. Should the arbitrator have power to decide whether the claims against them were arbitrable? The court focused on the fact that the party seeking to avoid arbitration, Brittania-U, was a party to the agreement to arbitrate, even if the two individual defendants were not. Perhaps the case would have, and should have, come out differently if Brittania-U had demanded arbitration against the two individuals and they sought to enjoin the arbitration.