Friday, July 14, 2017

Case of the Day: Mesa Power Group, LLC v. Gov't of Canada, 2017 U.S. Dist. LEXIS 92037 (D.D.C. June 15, 2017)


Plaintiff sued in the D.C. federal court to vacate the arbitration award rendered under NAFTA, alleging the arbitrators exceeded their power. In the underlying arbitration, plaintiff procured a renewable energy contract with the Canadian government. Shortly thereafter, the Canadian government awarded a different renewable energy contract to a consortium of two Korean companies. Plaintiff (i.e. the claimant) alleged to the arbitral panel that its original contract was an exclusive. The panel found for Canada, and awarded Canada the cost and fees.

The D.D.C. rejected the motion. As a threshold matter, the court rejected Canada's argument that the Eleventh Circuit law must apply because the seat of arbitration was in Miami. Under the Eleventh Circuit law, vacating an arbitral award pursuant to Federal Arbitration Act is not available to a foreign arbitral award. The court, however, found that a federal circuit (and district courts thereunder) must follow its own interpretation of the federal statute. Then the court denied the plaintiff's motion.


The connection to Asia is a bit thin in this case, but the law is highly interesting. Here, we have a situation that looks like conflict of laws, but actually is not. As a practical matter, two federal circuits may have differing case law. But as a matter of federal jurisprudence, there is only one federal law, and no such thing as a conflict within the federal law. So in case of a circuit split, the plaintiff can shop around for the favorable law as much as it wants! Although the plaintiff in this case lost even under the more lenient standards, this is a way to leverage the circuit split in a way that may not be possible in a true conflict of laws situation.

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