Petitioners Mitsubishi Heavy Industries, Ltd. and Mitsubishi Power Systems Americas, Inc. (“Mitsubishi”) moved to vacate a partial arbitration award entered by the International Centre for Dispute Resolution in favor of Respondent Stone & Webster, Inc. (“Stone & Webster”). The award provided that Mitsubishi was responsible for, among other things, liquidated damages, the liability for which (and the amount, if any) was contingent upon the outcome of a related action pending in Texas state court.
The U.S. District Court for the Southern District of New York found that it lacked authority to review Mitsubishi’s motion to vacate under the Federal Arbitration Act (“FAA”), because the Tribunal’s partial arbitration award was not “final” within the meaning of that statute. See, e.g., Michaels v. Mariforum Shipping, S.A., 624 F.2d 411, 414 (2d Cir. 1980) (noting that under the FAA, a district court only has the power to confirm or vacate a final arbitration award). The Court noted that the Tribunal’s award did not fully dispose of all the issues in the arbitration, or even the separate claim of whether Mitsubishi was liable for liquidated damages. See, e.g., Metallgesellschaft A.G. v. M/V Capitan Constante, 790 F.2d 280, 283 (2d Cir. 1986) (setting forth the exception in the Second Circuit whereby a partial arbitration award that “finally and definitely” disposes of a separate, independent claim may be confirmed” even though it does not dispose of all the claims submitted to arbitration). Rather, because the subject award was contingent upon the result of the related Texas litigation, the Court held that it was not “final” or reviewable under the FAA.
Click here to review a copy of the District Court’s decision, captioned Mitsubishi Heavy Inds. Ltd. v. Stone & Webster, Inc., No. 08-cv-00509 (S.D.N.Y., Sept. 29, 2009).