On April 13, 2023, in Corporación AIC v. Hidroelectrica Santa Rita,1 the U.S. Court of Appeals for the Eleventh Circuit overturned en banc more than two decades of prevailing precedent (Industrial Risk2and Inversiones3) which held that international arbitral awards rendered in the U.S. (known as “nondomestic awards”) may only be vacated (set aside) on the grounds set out in Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). The Eleventh Circuit instead ruled that only Chapter 1, Section 10, of the Federal Arbitration Act (FAA) provides the grounds to vacate these nondomestic awards rendered in the U.S. As a result of this ruling, the Eleventh Circuit has now joined the Second,4 Third,5 Fifth,6 Sixth,7 and Seventh8 Circuits to put an end to the long-standing circuit split on this issue.9

We discuss below the distinction between “domestic,” “nondomestic” and “foreign” awards in the context of international arbitration in the U.S., the origin of the circuit split, an overview of the Eleventh Circuit’s decision in Corporación AIC, and its significance in international arbitration in the U.S.

The U.S. distinction between “domestic,” “nondomestic,” and “foreign” awards

The FAA distinguishes between three types of arbitral awards: (1) domestic awards, (2) nondomestic awards, and (3) foreign awards. While both, domestic and nondomestic awards, are arbitral awards rendered in the U.S., foreign awards are rendered in arbitral proceedings having their legal seat outside of the United States. Also, both, nondomestic and foreign awards arise from an arbitration involving a non-U.S. party, “property located abroad,” “performance or enforcement abroad,” or “some other reasonable relation with one or more foreign States.”10 Thus, the difference between each kind of award lies in a territorial criterion (where it was rendered), and the presence of other international elements.

These distinctions are supported by the language used in the New York Convention. Indeed, article I(1) of the New York Convention states that it applies to the recognition and enforcement of both “foreign” awards (those “made in the territory of a State other than the State where the recognition and enforcement of such awards are sought”) and “nondomestic” awards (those “not considered domestic awards in the State where the recognition and enforcement of such awards are sought”).

In the United States, domestic awards (which are those rendered in the U.S. without an international element) are governed by Chapter 1 of the FAA, which was enacted in 1925. Among other purposes, Chapter 1 regulates the enforceability of arbitration agreements, providing for very limited scope of judicial review. Nondomestic and foreign awards are governed by Chapter 2 of the FAA, which incorporates into the FAA the New York Convention.11 Chapter 2 was added to the FAA in 1970 and provides a specific legal framework for arbitral agreements and awards falling under its scope. Chapter 1 still applies to nondomestic and foreign awards, but only to the extent Chapter 1 does not conflict with Chapter 2.12

Where did the split lie for nondomestic awards?

The specific regime for “nondomestic” awards under the FAA gave rise to the issue the Eleventh Circuit addressed in Corporación AIC. As nondomestic awards are rendered in the U.S., they are subject to vacatur under Section 10, Chapter 1 of the FAA. Also, since section 202, Chapter 2 of the FAA extends the application of the New York Convention to nondomestic awards, they are also subject to “confirmation” (recognition and enforcement) under Article V of the New York Convention. Thus, in the U.S., nondomestic awards are subject to both confirmation (recognition and enforcement) and vacatur procedures at the arbitration seat, which is a distinctive feature of the U.S. arbitration system.

However, as its name suggests, the New York Convention governs the recognition and enforcement of awards, and not their vacatur grounds, which have been left to the arbitration laws of each country. But, since section 207 of the FAA mandates courts to “confirm the award unless it finds one of the grounds” in Article V of the New York Convention, different interpretations arose as to whether Section 207 set the grounds for both, vacating and confirming a nondomestic award. This led to a Circuit split regarding which grounds for vacatur apply to nondomestic awards: those provided in Section 10 for domestic awards, or those provided in Article V for denying recognition and enforcement of foreign awards. The Eleventh Circuit decision in Corporación AIC has now put an end to this circuit split.

Corporación AIC v. Hidroeléctrica Santa Rita S.A.

This case arose from Corporación AIC’s motion to vacate an arbitral award rendered in Miami, Florida, in an arbitration against Hidroeléctrica, on grounds that the arbitral tribunal had exceeded its powers – a ground established in Section 10(a)(4), Chapter 1 of the FAA, but not included in the New York Convention (Chapter 2 of the FAA). In August 2020, the district court denied Corporación AIC’s motion following the precedents in Industrial Risk and Inversiones. Both cases had found that the grounds for vacatur of nondomestic awards were not governed by Section 10, Chapter 1 of the FAA, but rather by the New York Convention (Chapter 2 of the FAA), under which “excess of power” is not a ground for vacatur.13 On appeal, in May 2022, a panel from the Eleventh Circuit affirmed, finding that it was bound by the precedent established in Industrial Risk and Inversiones. However, the panel further opined that those cases had been wrongly decided and that they should be overruled by the full court (also known as en banc) – which subsequently occurred on April 13, 2023.

After analyzing the intricacies of the U.S. international arbitration framework, the Eleventh Circuit sitting en banc found that Article V of the New York Convention “does not purport to regulate the procedures or set out the grounds for vacatur in the primary jurisdiction,”14 that is, “the country which is the legal seat of the arbitration (or whose law governs the conduct of the arbitration).15 Instead, it found that Article V and Chapter 2 of the FAA “focuses only on recognition and enforcement.”16 The Eleventh Circuit then cited Section 208 of the FAA, which provides that “Chapter 1 applies to actions and proceedings brought under [Chapter 2] to the extent that [Chapter 1] is not inconsistent with [Chapter 2] or the Convention as ratified by the United States.” Based on this, the Eleventh Circuit concluded that since neither Chapter 2 nor the New York Convention set out vacatur grounds, there was no conflict in applying Chapter 1 of the FAA to the vacatur proceedings of nondomestic awards.17 Therefore, the full court held that “in a New York Convention case where the arbitration is seated in the United States, or where United States law governs the conduct of the arbitration, Chapter 1 of the FAA provides the grounds for vacatur of an arbitral award” and, to the extent inconsistent with this holding, overruled Industrial Risk and Inversiones.

Under the Eleventh Circuit’s approach, a district court simultaneously considering the confirmation or vacatur of a nondomestic award should look to Chapter 2 of the FAA and Article V of the New York Convention regarding the confirmation, and to Section 10 of Chapter 1 of the FAA for the applicable vacatur grounds. This position – shared by the other U.S. Circuits – has faced some criticism by commentators who, acknowledging that the New York Convention does not provide for vacatur grounds, argue that the grounds for denying recognition and enforcement of an award under Section 207 of the FAA should be the same as those for vacatur.18 For these commentators, the unique status of a “nondomestic award” created by Chapter 2 of the FAA should have a bearing on the grounds for vacating them, making them distinguishable from domestic awards subject to Chapter 1’s vacatur grounds. Otherwise, subjecting nondomestic awards to different grounds for recognition and enforcement and for vacatur, may lead a court to deny confirmation of nondomestic awards on grounds different to the ones set out in Article V of the New York Convention, in direct violation of Section 207 of the FAA.


Although the grounds for vacatur provided in Section 10 of the FAA largely correspond to the grounds for refusing recognition and enforcement of awards set out in Article V of the New York Convention, they are not identical. This is in contrast to the grounds for set aside provided in the UNCITRAL Model Law on International Commercial Arbitration, which are virtually identical to the Article V grounds.

Further, and although controversial, some federal circuits have found an additional implied ground for vacatur based on a “manifest disregard of the law” which is not set out in section 10 of the FAA.19

Parties to international arbitrations seated in Alabama, Georgia, and Florida as a seat for arbitration now have to account for these additional grounds for vacatur as result of the Eleventh Circuit’s recent departure from its previous precedent limiting grounds for challenges of nondomestic awards to those set forth in the New York Convention. Nevertheless, it is to be expected that the Eleventh Circuit’s, like other sister circuits,20 will take a narrow approach to these additional grounds for vacatur,21 which have generally been considered to overlap with Article V of the New York Convention,22 consistent with the United States’ Supreme Court’s pro-arbitration policy.