UNITED STATES 1 February 2023 Galaxia Electronics
United States District Court, Central District of California, 1 February 2023, LA CV16-05144 JAK (GJSx)
(Galaxia Electronics Co., Ltd. v. Luxmax, U.S.A., et al.)
UNITED STATES 1 February 2023 Galaxia Electronics
The Court granted confirmation of a KCAB award, finding that none of the enumerated grounds for refusal or deferral under the New York Convention applied. In particular, the Court found that there was no evidence of any incapacity of the parties or invalidity of the arbitration agreement; there had been no violation of due process in the arbitration in respect of one of the defendants, which had received several notices pursuant to the KCAB arbitration rules and had stopped participating in the arbitration despite multiple extensions and opportunities to participate; the arbitration clause in the parties’ contract governed any disputes arising out of or relating to the contract, so that the award did not contain decisions outside of the scope of the arbitration agreement; the composition of the arbitral tribunal was finalized in accordance with the KCAB rules; and the award was binding on the parties and had not been set aside by any authority.
The court discusses questions relating to the general approach taken by the Convention to the grounds for refusal of recognition and enforcement, including its pro-enforcement bias, as well as the system of the Convention, under which recognition and enforcement may only be denied on seven listed grounds and the petitioner has only the obligations set out in Art. IV.
Invalidity of the arbitration agreement: The court discusses other cases of invalidity of the arbitration agreement, including that there was no agreement at all or that the party was not a signatory thereto, that the incorrect arbitral institution was chosen, etc.
Award not binding, suspended or set aside: The court discusses the difference between the exclusive jurisdiction to set aside an award (primary jurisdiction), which belongs to the courts of the country of origin of the award, and the jurisdiction of all other courts to recognize and enforce the award (secondary jurisdiction); issues relating to the determination of the “competent authority”; and whether an award that has been set aside in the country of origin can be enforced in another State under the Convention.