You Can’t Always Get What You Want

A CCA Blog*

       By Richard H. Silberberg, Past President, College of Commercial Arbitrators

Arbitration practitioners and neutrals alike are familiar with the abundant case law setting a high bar for losing parties seeking to avoid enforcement of a foreign arbitration award under the New York Convention. In a case argued before the Second Circuit Court of Appeals on February 16, 2024, one member of the three-judge panel invoked the words of Don Corleone in The Godfather to underscore that users of arbitration must accept the result of the dispute resolution process that they selected.

In Huzhou Chuangtai Rongyuan Investment Management Pa v. Qin, the federal district court rejected Qin’s argument that the court should deny enforcement of a $457 million CIETAC arbitration award in favor of certain investors in his movie theater company on the ground that Qin was not properly served with notice of the arbitration. On appeal, Qin tried to convince the Second Circuit that he had been “severely prejudice[d]” by the lack of notice because, among other things, he was unable to select an arbitrator.**

At oral argument, the three-judge panel indicated that Qin was unlikely to succeed because the notice of arbitration was reasonably calculated to reach Qin, he ultimately did receive notice of the arbitration proceeding, and he participated in the proceeding.  U.S. Circuit Judge Gerard E. Lynch used the opportunity to emphasize that parties that sign up for arbitration, but are unsuccessful, cannot look to the courts to avoid the consequences of their agreement to arbitrate.

“When people come here complaining about arbitration, I often feel like The Godfather at the beginning of the movie, you know?  You showed us no respect.  You didn’t come to the courts, you chose arbitration, you agreed to arbitrate, you agreed to vest lots of power in this arbitration system in another country. That’s fine, that’s your right.
But then you come here, and you’re not satisfied with the arbitration. You’re not satisfied with what you bargained for. You’re not satisfied with the arbitrator’s decision as to what was fair notice and what wasn’t. And you’re asking us to second-guess this. That’s not how it works . . . you can’t come back here and now say, ‘Well, this didn’t go the way it might have gone in a federal court.’ Well, boo-hoo, it didn’t.”

The Aardvark won’t be surprised if the district court’s order is promptly and summarily affirmed.

**As first reported by Caroline Simson in Law360.

*We are using the Aardvark moniker to denote our CCA Blog. The Aardvark will provide content from time to time about cases, developments and issues associated with the practice of Arbitration. We hope you will find the blog entries interesting and useful. We encourage you to watch for the Aardvark and its arbitration content that we hope you will enjoy.

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