A view from the United States: A round-up of significant appellate decisions

The US continues to be a common jurisdiction in which to enforce arbitral awards. This is due in part to the well-developed jurisprudence of US courts on matters concerning arbitration, which continues to grow. As always, much of the attention is focused on the US Supreme Court and its recent decision in CC/Devas (Mauritius) Ltd. v. Antrix Corp., 605 US ____ (2025).  We previously covered that decision here. But, in this article, we survey four notable decisions from the federal courts of appeals on arbitration issues in 2025. Those decisions address:

Jurisdiction over foreign states – interpretation and application of the Foreign Sovereign Immunities Act 

To obtain subject-matter jurisdiction over a foreign state—defined to include many state-owned entities—in US courts, a litigant must show that one of the exceptions to sovereign immunity under the Foreign Sovereign Immunities Act (FSIA) applies.¹ Parties seeking recognition of an award against a foreign state frequently invoke the FSIA’s arbitration exception, which provides that “a foreign state shall not be immune from the jurisdiction of courts of the United States or of [individual US states] in any case . . . (6) in which the action is brought . . . to confirm an award made pursuant to [a covered] agreement to arbitrate” in specified circumstances, including when the award is governed by a treaty in force for the United States calling for the recognition and enforcement of arbitral awards (eg, the New York Convention). This exception was at issue in the two cases discussed below. 

The decision is one of the latest entries in the long-running Yukos saga. The plaintiffs, who were shareholders in Yukos, commenced an arbitration against Russia under the Energy Charter Treaty (ECT) in 2005, alleging that Russia had unlawfully expropriated Yukos’s assets.³ The arbitral tribunal eventually issued an award of over $50 billion in the shareholders’ favor.⁴ 

The shareholders sought recognition and enforcement of the award in the US District Court for the District of Columbia, relying on the FSIA’s arbitration exception.⁵ Russia argued that the arbitration exception did not apply because (i) it had not agreed to arbitrate under the ECT, which it signed but never ratified, and (ii) the shareholders—companies controlled by Russian citizens—were not investors from another state and therefore could not invoke the protections of the ECT.⁶ Notably, Russia had raised both arguments as jurisdictional objections in the underlying arbitration, and the tribunal rejected them.⁷ The US district court found that to be dispositive, holding that it was bound by the arbitral tribunal’s findings on both issues.⁸   

The Court of Appeals took a more nuanced approach. It distinguished between (i) the existence or validity of an arbitration agreement and (ii) the scope of an arbitration agreement.⁹ It reasoned that the existence or validity of an agreement to arbitrate is a fundamental “jurisdictional” question required for the FSIA’s arbitration exception to sovereign immunity to apply. Because federal courts have a duty to determine their own jurisdiction, the DC Circuit held that they “may not defer to an arbitral tribunal or otherwise outsource the obligation to determine jurisdictional facts that go to the waiver of sovereign immunity under the FSIA.”¹⁰ By contrast, questions about the scope of an arbitration agreement do not go to jurisdiction, so a tribunal’s decision on those matters is entitled to deference.¹¹   

Applying that rule to Russia’s two arguments, the DC Circuit held that the district court erred by deferring to the tribunal on the first question, but not the second.  Whether the ECT applied at all was a question that went to the existence of an arbitration agreement—a jurisdictional requirement under the FSIA. Therefore, “the district court was required to decide Russia’s claim de novo, without deferring to the” tribunal’s findings.¹² In contrast, it held that Russia’s argument that the shareholders were not covered investors under the ECT merely went to the scope of an agreement to arbitrate (ie, did the agreement extend to those particular plaintiffs), which is not jurisdictional, and the district court therefore correctly deferred to the tribunal’s findings on that issue.¹³ This case will continue to be one to watch on remand, as the district court considers whether Russia agreed to arbitrate under the ECT. 

For more detailed coverage of this decision, see our recent blog post.  

The plaintiffs were two Mauritian mining companies that had prevailed in an ICC arbitration against the Zimbabwe Mining Development Corporation (ZMDC) in 2014, then successfully obtained a judgment from the High Court of Zambia confirming their arbitral award.¹⁴ Several years later, they commenced an action in U.S. federal district court seeking recognition—not of the arbitral award itself, pursuant to the New York Convention—but of the Zambian judgment confirming the award, pursuant to the District of Columbia Uniform Foreign-Country Money Judgments Recognition Act. 

The Court of Appeals held that the arbitration exception did not apply because the plaintiffs had not brought an action to confirm an arbitral award, but rather to confirm a foreign judgment, which are “two concepts that we consistently have understood to be distinct.”¹⁵ It also rejected the plaintiffs’ argument that the Republic of Zimbabwe had implicitly waived jurisdiction by signing the New York Convention and agreeing to arbitrate in a jurisdiction that had done the same.¹⁶ Starting from the principle that an implied waiver of immunity will rarely be found “without strong evidence that this is what the foreign state intended,” the court held that signing the New York Convention, which addresses the confirmation of arbitral awards, “does not demonstrate an intent to waive immunity from judgment recognition actions.”¹⁷ In this respect, the court declined to follow an earlier Second Circuit decision that had reached the opposite conclusion, setting up a potential divergence between those two circuits on the scope of the FSIA’s implied-waiver exception. At some point, the US Supreme Court may take up this issue to clarify the scope of that exception, so this is an area to watch. 

Set-aside of awards outside the seat of arbitration 

In this case, the parties’ agreement provided for disputes to be submitted to arbitration seated in Switzerland, but also provided that the courts of New York would have exclusive jurisdiction over all matters concerning the arbitration.¹⁸ After an arbitration between the parties in Switzerland led to a pair of awards, the losing party commenced an action in New York federal court to set aside (ie, vacate) the awards, relying on the agreement’s exclusive-jurisdiction clause.¹⁹ 

The district court ruled that it lacked subject-matter jurisdiction to hear the vacatur petition and dismissed the case because, under the New York Convention, only the courts of the country in which an award is made (the seat of arbitration) may vacate an arbitral award; the courts of other countries are thus limited to deciding whether not to recognize and enforce the award on one of the grounds specified in the Convention.²⁰ The district court held that this arrangement could not be circumvented by contract.²¹ 

The Court of Appeals agreed that the district court lacked jurisdiction over the petition to vacate the awards, but for a different reason. Its starting point was that federal courts have subject-matter jurisdiction only over the classes of cases that they have been authorized to hear by US law.²² The petitioner argued that the court had jurisdiction under 9 U.S.C. § 203, which implements the New York Convention and provides that federal district courts shall have original jurisdiction over an “action or proceeding falling under the [New York] Convention.”²³ 

The Court of Appeals observed that the Convention addresses the recognition and enforcement of foreign and non-domestic awards, and that a petition to vacate is not an action to recognize or enforce an award.²⁴ It also observed that while the Convention does address vacatur proceedings, it refers only to proceedings in the seat of arbitration.²⁵ Thus, the court concluded that “[t]he Convention simply does not speak to the type of action Plaintiffs-Appellants have brought”—an action to vacate an arbitral award in a jurisdiction other than the arbitral seat.²⁶ Accordingly, it held that such an action cannot be deemed to “fall under” the New York Convention, and therefore that 9 U.S.C. § 203 does not provide a basis for federal court jurisdiction.²⁷

In grounding its decision in a lack of subject-matter jurisdiction under 9 U.S.C. § 203, however, the court expressly declined to decide whether “parties to an international arbitration may, consistent with the New York Convention, designate by contract one country as the arbitral seat and another as a venue for vacatur proceedings.”²⁸ It thus left open the question of whether such an agreement could be given effect in US state court, or even in federal court if a different basis for subject-matter jurisdiction were present, such as diversity jurisdiction. 

Compelling arbitration after the demise of arbitral institutions 

In that case, the parties had entered into an agreement that provided for disputes to be submitted to arbitration under the Arbitration Rules of the Dubai International Financial Center – London Court of International Arbitration (DIFC-LCIA).²⁹  However, in 2021, the United Arab Emirates disbanded the DIFC-LCIA and replaced it with a new institution.³⁰ Baker Hughes subsequently sued several of Dynamic’s subsidiaries in Louisiana state court. After removing the case to federal court, the defendants moved to compel arbitration. The district court denied that motion, ruling that what it termed the “forum-selection clause” was invalid and unenforceable because the specified forum (DIFC-LCIA) no longer existed and was, therefore, unavailable to hear the dispute.³¹

The Court of Appeals reversed.³² It first expressed “doubts” about whether selection of the DIFC-LCIA rules implicitly was also a selection of the DIFC-LCIA as the exclusive arbitral institution—a question other circuits had answered in the affirmative—but ultimately concluded that it did not need to resolve the issue.³³ It did so on the basis that “[e]ven assuming that the parties impliedly designated the DIFC-LCIA as the proper arbitral forum, and that said forum is unavailable, the district court should have considered whether the parties’ intent was to arbitrate generally or instead to set an exclusive forum.”³⁴ The court held that designation of a particular arbitral forum is integral to the arbitration agreement only if the parties have unambiguously expressed their intent not to arbitrate their disputes in the event that forum is unavailable.³⁵ In the absence of such unambiguous intent, it held, the parties’ purpose should be considered to have been to arbitrate generally, and a court is permitted to designate an alternate forum for the arbitration.³⁶ Particularly given that the agreement in this case also provided for possible arbitration in Saudi Arabia, the Fifth Circuit concluded that the parties had not taken a DIFC-LCIA-or-nothing approach to arbitration. It remanded for the district court to determine whether the DIFC-LCIA rules could be applied by an available forum or to compel arbitration in Saudi Arabia.