Ninth Circuit Upholds Iran's Arbitration Award - Enforcement Does Not Violate Public Policy

The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention") has a strong presumption in favor of recognition and enforcement of foreign arbitration awards.

In Iran v. Cubic Defense Systems, Inc., 2011 WL 6225235 (9th Cir. Dec. 15, 2011 (Cal.)),
Iran's Ministry of Defense obtained its arbitration award after a lengthy judicial process stemming from a 1977 contract entered into by the parties for an air combat maneuvering range system. Cubic sought to vacate arbitration award and prevent its confirmation and enforcement in Federal Courts, arguing that enforcement of the arbitration award would be against public policy. The Ninth Circuit held public policy precludes enforcement only when confirmation or enforcement of a foreign arbitration award "would violate the forum state's most basic notions of morality and justice" -- e.g., not tantamount to payments or economic support to Iran; transfers of wealth not barred by sanctions; Iran already had access to U.S. judiciary.

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