Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 1 of 24

[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 20-13039

____________________

CORPORACIÓN AIC, SA,

Plaintiff-Appellant,

versus

HIDROELÉCTRICA SANTA RITA S.A.,

a Guatemalan company,

Defendant-Appellee.

____________________

Appeal from the United States District Court

for the Southern District of Florida

D.C. Docket No. 1:19-cv-20294-RNS

____________________

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 2 of 24

2 Opinion of the Court 20-13039

Before WILLIAM PRYOR, Chief Judge, and WILSON, JORDAN,

ROSENBAUM, JILL PRYOR, NEWSOM, BRANCH, GRANT, LUCK, LAGOA,

BRASHER, and TJOFLAT, Circuit Judges. 1

JORDAN, Circuit Judge:

The United States is a signatory to the New York Conven-

tion, a treaty which regulates international arbitration awards. See

Convention on the Recognition and Enforcement of Foreign Arbi-

tral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 4739. Con-

gress has implemented the Convention through Chapter 2 of the

Federal Arbitration Act. See 9 U.S.C. §§ 201 et seq.

Our task is to decide what grounds can be asserted to vacate

an arbitral award governed by the New York Convention. We

hold that in a case under the Convention where the United States

is the primary jurisdiction—the jurisdiction where the arbitration

was seated or whose law governed the conduct of the arbitration—

the grounds for vacatur of an arbitral award are set out in domestic

law, currently Chapter 1 of the FAA. And we overrule Industrial

Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d

1434, 1445–46 (11th Cir. 1998), and Inversiones y Procesadora

Tropical INPROTSA, S.A. v. Del Monte International GmbH, 921

1

Judge Tjoflat was a member of the en banc Court, having elected to partici-

pate in this decision pursuant to 28 U.S.C. § 46(c)(1).

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 3 of 24

20-13039 Opinion of the Court 3

F.3d 1291, 1301–02 (11th Cir. 2019), to the extent that they are in-

consistent with our ruling.

I

This case arose from a dispute between two Guatemalan

companies, Corporación AIC, S.A., and Hidroeléctrica Santa Rita,

S.A. Pursuant to a contract signed in March of 2012, Corporación

AIC agreed to build a new hydroelectric power plant for Hidroe-

léctrica in Guatemala. In October of 2013, Hidroeléctrica issued a

force majeure notice that forced Corporación AIC to stop work on

the project. Hidroeléctrica eventually filed an arbitration proceed-

ing in the International Court of Arbitration to recover advance

payments it had made to Corporación AIC, and the latter counter-

claimed for damages, costs, and other expenses. See Corporación

AIC, S.A. v. Hidroeléctrica Santa Rita, S.A., 34 F.4th 1290, 1292–93

(11th Cir. 2022).

The arbitration was held in Miami, Florida, and a divided

arbitral panel ordered Corporación AIC to return about $7 million

and €435,000 in advance payments but allowed it to keep what it

had earned on the contract, about $2.5 million and €700,000. See

id. at 1292–93. Everyone agrees that the arbitral award was a non-

domestic award governed by the New York Convention because it

was issued in the United States in a dispute between two foreign

companies. See id. at 1293–94; 9 U.S.C. § 202.

Dissatisfied with the arbitral decision, Corporación AIC filed

suit in federal court seeking to vacate the award. It asserted that

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 4 of 24

4 Opinion of the Court 20-13039

the arbitral panel had exceeded its powers, a ground set out in 9

U.S.C. § 10(a)(4), a provision of Chapter 1 of the FAA. See 34 F.4th

at 1293. The district court ruled that such a challenge was unavail-

able because under Eleventh Circuit precedent, namely Industrial

Risk and Inversiones, the grounds for vacatur of an arbitral award

governed by the New York Convention are limited to those set out

in Article V of the Convention. The district court therefore did not

analyze whether the arbitral panel had exceeded its powers. See id.

A panel of this court affirmed. The panel concluded that it

was bound by Industrial Risk and Inversiones but opined that those

cases were wrongly decided and should be overruled by the full

court. See 34 F.4th at 1292, 1301; id. at 1302 (Jordan, J., concurring).

We vacated the panel opinion and ordered rehearing en banc. See

50 F.4th 97 (11th Cir. 2022).

II

Industrial Risk, decided in 1998, held that when a party seeks

vacatur of an arbitral award issued under the New York Conven-

tion a district court can only consider the grounds set out in Article

V of the Convention. See 141 F.3d at 1446. After setting out the

purpose of the New York Convention—encouraging the recogni-

tion and enforcement of international arbitral awards—we stated

in Industrial Risk that an arbitral award that falls within the Con-

vention “must be confirmed unless [the challenger] can success-

fully assert one of the seven defenses against enforcement enumer-

ated in Article V of the . . . Convention.” Id. at 1441. In so doing

we cited to a former Fifth Circuit case and a district court case from

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 5 of 24

20-13039 Opinion of the Court 5

Delaware, both of which involved a proceeding to enforce (but not

a proceeding to vacate) an arbitral award under the Convention.

See id. at 1442 (citing Imperial Ethiopian Gov’t v. Baruch-Foster

Corp., 535 F.2d 334, 335–36 (5th Cir. 1976), and Nat’l Oil Corp. v.

Lybian Sun Oil Co., 733 F. Supp. 800, 813 (D. Del. 1990)). We

noted that the Convention’s “enumeration of defenses” to recog-

nition and enforcement of an award “is exclusive” under § 207 of

the FAA, but then read those defenses as also constituting the only

grounds for vacatur of an award. See 141 F.3d at 1446. In other

words, we equated the defenses to recognition and enforcement

with the grounds for vacatur. See id. at 1445-46.

Over 20 years later, Inversiones adhered to Industrial Risk

because it constituted binding Eleventh Circuit precedent. See In-

versiones, 921 F.3d at 1301–02. Although we had previously noted

some tension between Industrial Risk and BG Group, PLC v. Re-

public of Argentina, 572 U.S. 25, 44–45 (2014), in Bamberger Rosen-

heim, Ltd., (Israel) v. OA Development, Inc., (United States), 862

F.3d 1284, 1287 n.2 (11th Cir. 2017), we concluded in Inversiones

that BG Group did not abrogate Industrial Risk. See 921 F.3d at

1302.

We now consider whether the grounds for vacatur of a New

York Convention arbitral award are set out in Article V of the Con-

vention or in § 10 of the FAA.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 6 of 24

6 Opinion of the Court 20-13039

III

Our task is to interpret the New York Convention and the

FAA. As a result, our review is plenary. See Underwriters at

Lloyd’s Subscribing to Cover Note B0753PC1308275000 v. Expedi-

tors Korea, Ltd., 882 F.3d 1033, 1039 (11th Cir. 2018) (treaty inter-

pretation); United States v. Garcon, 54 F.4th 1274, 1277 (11th Cir.

2022) (en banc) (statutory interpretation). We begin with some

background concepts concerning international arbitration, and

then turn to the language of the Convention and the FAA.

A

Arbitration awards, including international ones, “are not

self-enforcing and are only given legal effect through court orders

and judgments enforcing them.” 3 Martin Domke, Domke on

Commercial Arbitration § 42:1 (3d ed. 2022). In the usual interna-

tional arbitration case, the prevailing party goes to court seeking a

judgment which recognizes and enforces (i.e., confirms) the award.

The losing party, in turn, opposes recognition and enforcement,

and sometimes—as here—moves to vacate the award. See CBF

Indústria de Gusa S/A v. AMCI Holdings, Inc., 850 F.3d 58, 72 (2d

Cir. 2017); Stephen Balthasar, International Commercial Arbitra-

tion 794 (2d ed. 2021). For example, Chapter 2 of the FAA provides

that “any party to the arbitration may apply to any court having

jurisdiction under this chapter for an order confirming the award

as against any other party to the arbitration.” 9 U.S.C. § 207.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 7 of 24

20-13039 Opinion of the Court 7

Confirmation under the FAA is essentially the same as

recognition and enforcement under the New York Convention. In-

deed, § 207 of the FAA uses confirmation interchangeably with

recognition and enforcement: “The court shall confirm the award

unless it finds one of the grounds for refusal or deferral of recogni-

tion or enforcement of the award specified in the said Convention.”

As the Second Circuit has put it: “Read in context with the New

York Convention, it is evident that the term ‘confirm’ as used in [§]

207 [of the FAA] is the equivalent of ‘recognition and enforcement’

as used in the New York Convention for the purposes of foreign

arbitral awards.” CBF, 850 F.3d at 72. See also LLC SPC Stileks v.

Republic of Moldova, 985 F.3d 871, 875 (D.C. Cir. 2021) (stating

that, under § 207 of the FAA, “[c]onfirmation is the process by

which an arbitration award is converted to a legal judgment”). 2

Set aside, suspend, and annul under the New York Conven-

tion are, in turn, generally interchangeable with vacatur under the

FAA. They all refer to the invalidation of an arbitral award. See

2

Strictly speaking, recognition and enforcement are distinct legal concepts.

Recognition adjudicates the validity (i.e., the binding nature) of an arbitral

award, while enforcement reduces such an award to a judgment. See Com-

pañía de Inversiones Mercantiles S.A. v. Grupo Cementos de Chihuahua

S.A.B. de C.V., 58 F.4th 429, 454 (10th Cir. 2023); Rogelio Vidal, Influence of

the Arbitral Seat in the Outcome of an International Commercial Arbitration,

50 Int’l Lawyer 329, 335 (2017). But to be enforced an award must be recog-

nized. See CBF, 850 F.3d at 72; Nigel Blackaby, Redfern and Hunter on Inter-

national Arbitration 611 (6th ed. 2015). So in practice enforcement is function-

ally the same as recognition and enforcement.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 8 of 24

8 Opinion of the Court 20-13039

Restatement of the Law, U.S. Law of Int’l Com. Arbitration and

Investor-State Arbitration § 1.1 cmt. uu (ALI Proposed Final Draft

2019) (“Restatement of International Arbitration”) (“Vacatur is

largely synonymous with ‘annul’ and ‘set aside’ as those terms are

understood in the New York and Panama Conventions.”). 3

Recognition and enforcement “serve different purposes

[and] request different relief” than vacatur. See McLaurin v. Ter-

minix Int’l Co., LP, 13 F.4th 1232, 1238 (11th Cir. 2021) (addressing

the FAA). Recognition and enforcement seek to give effect to an

arbitral award, while vacatur challenges the validity of the award

and seeks to have it declared null and void. See CBF, 850 F.3d at

72; Blackaby, International Arbitration, at 570.

With respect to judicial remedies, the New York Conven-

tion allocates different responsibilities to different jurisdictions.

The country which is the legal seat of the arbitration (or whose law

governs the conduct of the arbitration) is referred to as the primary

jurisdiction and its law (the lex arbitri) generally controls the pro-

cedural side of the proceeding. All other countries which are sig-

natories to the Convention are considered secondary jurisdictions.

See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan

Gas Bumi Negara, 335 F.3d 357, 364 (5th Cir. 2003); CBF, 850 F.3d

3

The Proposed Final Draft of the Restatement of International Arbitration was

approved by the Council and membership of the American Law Institute in

2019, and represents the official position of the Institute until the Restatement

is officially published.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 9 of 24

20-13039 Opinion of the Court 9

at 71; Alan Scott Rau, Understanding (and Misunderstanding) “Pri-

mary Jurisdiction,” 21 Am. Rev. of Int’l Arb. 47, 49 (2010). 4

Under the New York Convention, only courts in the pri-

mary jurisdiction can vacate an arbitral award. See, e.g., BG

Group, 572 U.S. at 37 (“[T]he national courts and the law of the

legal situs of arbitration control a losing party’s attempt to set aside

[an] award.”) (internal quotation marks omitted); TermoRio S.A.

E.S.P. v. Electranta S.P., 487 F.3d 928, 935 (D.C. Cir. 2007) (“Only

a court in a country with primary jurisdiction over an arbitral

award may annul that award.”) (citation omitted); M & C Corp. v.

Erwin Behr GmbH & Co., KG, 87 F.3d 844, 849 (6th Cir. 1996) (“[A]

motion to vacate [under the New York Convention] may be heard

only in the courts of the country where the arbitration occurred or

in the courts of any country whose procedural law was specifically

invoked in the contract calling for arbitration[.]”) (emphasis de-

leted); Restatement of International Arbitration, at § 1.3(a) (“The

choice of an arbitral seat ordinarily determines . . . the courts that

have the exclusive authority to set aside the arbitral award.”). An

award that is vacated is generally a nullity in the primary

4

The lex arbitri should not be confused with whatever substantive law (the

lex causae) governs the parties’ commercial relationship. Parties may select a

seat of arbitration in one country but choose to apply the law of a different

country to their dispute. See generally Lindo v. NCL (Bahamas), LTD., 652

F.3d 1257, 1275 (11th Cir. 2011); Loukas Mistelis, Reality Test: Current State

of Affairs in Theory and Practice Relating to “Lex Arbitri,” 17 Am. Rev. of Int’l

Arb. 155, 158-61 (2006).

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 10 of 24

10 Opinion of the Court 20-13039

jurisdiction. See Restatement of International Arbitration, at §§ 1.1

cmt. pp & 4.1 cmt. d.; Blackaby, International Arbitration, at 618.

Vacatur also has legal consequences internationally, as it is a

ground on which recognition and enforcement of the vacated

award may be refused by a court in a secondary jurisdiction. See

New York Convention, Art. V(1)(e); Zeiler v. Deitsch, 500 F.3d 157,

165 n.6 (2d Cir. 2007).

Courts in secondary jurisdictions can only decide whether

to recognize and enforce an arbitral award. See New York Con-

vention, Art. III (“Each Contracting State shall recognize arbitral

awards as binding and enforce them in accordance with the rules

of procedure of the territory where the award is relied upon, under

the conditions laid down in the following articles.”). See also

Karaha, 335 F.3d at 369 (explaining that “a court of secondary juris-

diction[,] under the New York Convention, [is] charged only with

enforcing or refusing to enforce a foreign arbitral award”). The le-

gal effect of the recognition and enforcement (or the denial of

recognition and enforcement) of an award is limited to the second-

ary jurisdiction that rules on the request. See Blackaby, Interna-

tional Arbitration, at 615 (“The immediate consequence of a refusal

to enforce an award is that the winning party fails to get what it

wants—namely seizure of the loser’s assets in the place in which

enforcement is sought . . . [I]t should be borne in mind that [the

winning party] may still have an award that can be enforced in

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 11 of 24

20-13039 Opinion of the Court 11

another state in which the losing party has assets.”) (emphasis de-

leted). 5

B

“The interpretation of a treaty, like the interpretation of a

statute, begins with its text.” GE Energy Power Conversion France

SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637,

1645 (2020) (internal quotation marks omitted). We turn, there-

fore, to the relevant language of the New York Convention and the

FAA.

1

Article III of the Convention calls upon signatory countries

to “recognize arbitral awards as binding and enforce them in ac-

cordance with the rules of procedure of the territory where the

award is relied upon,” under the conditions laid down in other Ar-

ticles. Article IV then lists the conditions that must be fulfilled for

recognition and enforcement: “To obtain the recognition and en-

forcement mentioned in [Article III], the party applying for recog-

nition and enforcement shall, at the time of the application, supply

5 Sometimes the same country can act as both the primary and secondary ju-

risdiction. This occurs when the prevailing party seeks recognition and en-

forcement of the arbitral award in the primary jurisdiction and the losing party

seeks to vacate the award in the same jurisdiction. In such a case the court

considering the parties’ dueling requests performs a “double role,” exercising

secondary jurisdiction with respect to the request for recognition and enforce-

ment and primary jurisdiction with respect to the request for vacatur. See

Zeiler, 500 F.3d at 165 n.6.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 12 of 24

12 Opinion of the Court 20-13039

(a) [t]he duly authenticated original award . . . ; [and] (b) [t]he orig-

inal agreement . . . .”

Article V sets out a limited number of grounds on which a

court can refuse to recognize and enforce an arbitral award. It does

so through two subsections.

First, Article V(1) provides that recognition and enforce-

ment of an arbitral award “may be refused” on five grounds: (a) the

parties to the arbitral agreement were “under some incapacity” or

the agreement is “not valid under the law to which the parties have

subjected it . . . or under the law of the country where the award

was made;” (b) the “party against whom the award is invoked was

not given proper notice of the appointment of the arbitrator or of

the arbitration proceedings or was otherwise unable to present his

case;” (c) the “award deals with a difference not contemplated by

or not falling within the submission to arbitration, or it contains

decisions on matters beyond the scope of the submission to arbi-

tration . . . ;” (d) the “composition of the arbitral authority or the

arbitral procedure was not in accordance with the agreement of the

parties, or, failing such agreement, was not in accordance with the

law of the country where the arbitration took place;” or (e) the

“award has not yet become binding on the parties, or has been set

aside or suspended by a competent authority of the country in

which, or under the law of which, that award was made.”

Second, Article V(2) provides that recognition and enforce-

ment “may also be refused” on two additional grounds: (a) the

“subject matter of the difference is not capable of settlement by

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 13 of 24

20-13039 Opinion of the Court 13

arbitration under the law of t[he] country” where, or under the law

of which, the award was made; or (b) the “recognition and enforce-

ment of the award would be contrary to the public policy of that

country.”

The only reference to vacatur (i.e., “set aside or suspended”)

in Article V is found in subsection (1)(e). Article V(1)(e) allows a

court exercising secondary jurisdiction to deny a request to recog-

nize and enforce a New York Convention award on the ground

that it has been vacated by a court (“a competent authority”) in the

primary jurisdiction (“in which, or under the law of which, that

award was made”). But it does not purport to regulate the proce-

dures or set out the grounds for vacatur in the primary jurisdiction.

See Restatement of International Arbitration, at § 4.9 reporters’

note (a)(iv) (“[I]t is well established that the New York [Conven-

tion] . . . do[es] not regulate the grounds for vacating Convention

awards under national arbitration law.”); Reimar Wolff, New York

Convention on the Recognition and Enforcement of Foreign Arbi-

tral Awards: Commentary 7 (Hart Publishing 2012) (explaining that

Article V “does not harmonize the grounds for challenging an

award”) (emphasis deleted).

The other Articles of the Convention—all of which refer to

recognition and enforcement—confirm that Article V(1)(e) does

not provide the grounds for vacatur. See Lozano v. Montoya Al-

varez, 572 U.S. 1, 11 (2014) (“For treaties, which are primarily com-

pact[s] between independent nations, our duty [i]s to ascertain the

intent of the parties by looking to the document’s text and

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 14 of 24

14 Opinion of the Court 20-13039

context.”) (internal quotation marks and citation omitted). Article

I establishes the limited scope of the Convention in relation to ar-

bitral awards, stating that the “Convention shall apply to the recog-

nition and enforcement of arbitral awards.” Article III introduces

the provisions related to recognition and enforcement, mandating

that signatory countries “recognize arbitral awards as binding and

enforce them . . . under the conditions laid down in the following

articles.” Article IV lists the conditions that must be fulfilled by a

party “[t]o obtain the recognition and enforcement” of an award.

Article V then enumerates the only grounds on which “[r]ecogni-

tion and enforcement of the award may be refused.” And Article

VI allows a court exercising secondary jurisdiction to “adjourn the

decision on the enforcement of the award” in the face of a pending

vacatur application in the primary jurisdiction. 6

Chapter 2 of the FAA implements the Convention. The two

texts should therefore be read harmoniously. See Antonin Scalia &

Bryan Garner, Reading Law: The Interpretation of Legal Texts 252

(2012); William N. Erskine, Jr., Interpreting Law: A Primer on How

to Read Statutes and the Constitution 121 (2016). Like Article V of

the Convention, Chapter 2 of the FAA focuses only on recognition

and enforcement. As noted, § 207 of the FAA directs courts to con-

firm an arbitral award “unless it finds one of the grounds for refusal

or deferral of recognition or enforcement of the award specified in

the . . . Convention.” And Article V enumerates the grounds on

6 All the emphases in this paragraph are ours.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 15 of 24

20-13039 Opinion of the Court 15

which a court exercising secondary jurisdiction can refuse to rec-

ognize and enforce an award. Not surprisingly, our more recent

cases have recognized that § 207 and Article V address enforcement

and recognition. See, e.g., Lindo v. NCL (Bahamas), Ltd., 652 F.3d

1257, 1263 (11th Cir. 2011) (“Article V of the Convention . . . enu-

merates seven defenses that—like 9 U.S.C. § 207—are directed at

courts considering whether to recognize and enforce an arbitral

award. Article V applies at the award-enforcement stage.”).

In sum, neither Article V of the Convention nor § 207 of the

FAA provides the grounds on which a court in the primary juris-

diction can vacate an arbitral award. In coming to a different con-

clusion, Industrial Risk “d[id] not track the [text or] logic of the . . .

Convention.” Charles H. Brower II, Hollow Spaces, 61 Buff. L.

Rev. 731, 821 (2013).

2

Chapter 2 of the FAA provides that “Chapter 1 applies to ac-

tions and proceedings brought under [Chapter 2] to the extent that

[Chapter 1] is not inconsistent with [Chapter 2] or the Convention

as ratified by the United States.” 9 U.S.C. § 208. In discussing

§ 208—Chapter 2’s so-called residual clause—the Supreme Court

has explained that “the [New York] Convention was drafted against

the backdrop of domestic law,” and concluded that “the Conven-

tion requires courts to rely on domestic law to fill gaps; it does not

set out a comprehensive regime that displaces domestic law.” Ou-

tokumpu, 140 S. Ct. at 1645.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 16 of 24

16 Opinion of the Court 20-13039

Based on the Supreme Court’s discussion in Outokumpu

and the New York Convention’s binary framework, we hold that

the primary jurisdiction’s domestic law acts as a gap-filler and pro-

vides the vacatur grounds for an arbitral award. Stated differently,

in a case like this one, § 208 of the FAA contemplates that the

grounds for vacatur are the ones set out in Chapter 1 of the FAA.

And because Article V of the Convention is “simply silent” on the

grounds for vacatur, there is no conflict if Chapter 1 is applied. See

Outokumpu, 140 S. Ct. at 145. Cf. BG Group, 572 U.S. at 29 (ad-

dressing, in a case where the international arbitral proceeding was

seated in the United States, whether the arbitrators exceeded their

powers under § 10(a)(4) of the FAA).

This is how the Second, Third, Fifth, and Seventh Circuits

have interpreted the Convention. Their decisions, which align

with the language of Article V of the Convention and Chapter 2 of

the FAA, are persuasive. See Yusuf Ahmed Alghanim & Sons v.

Toys “R” Us, Inc., 126 F.3d 15, 22 (2d Cir. 1997) (“There is no indi-

cation in the Convention of any intention to deprive the rendering

state of its supervisory authority over an arbitral award, including

its authority to set aside that award under domestic law.”); Ario v.

Underwriting Members of Syndicate 53 at Lloyds for 1998 Year of

Account, 618 F.3d 277, 292 (3d Cir. 2010) (agreeing with Yusuf , 126

F.3d at 23, that “‘[t]he Convention specifically contemplates that

the [country] in which, or under the law of which, the award is

made, will be free to set aside or modify an award in accordance

with its domestic arbitral law’” and explaining that “[w]hen both

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 17 of 24

20-13039 Opinion of the Court 17

the arbitration and the enforcement of the award falling under the

Convention occur in the United States, there is no conflict between

the Convention and the domestic FAA”); Karaha Bodas, 335 F.3d

at 368 (“By its silence on the matter, the Convention does not re-

strict the grounds on which primary-jurisdiction courts may annul

an award, thereby leaving to a primary jurisdiction’s local law the

decision whether to set aside an award.”); Lander Co. v. MMP

Invs., Inc., 107 F.3d 476, 478 (7th Cir. 1997) (“[T]he New York Con-

vention contains no provision for seeking to vacate an award, alt-

hough it contemplates the possibility of the award’s being set aside

in a proceeding under local law . . . and recognizes defenses to the

enforcement of an award.”).

The Restatement of International Arbitration reads the Con-

vention in the same manner: “[T]he exclusive vacatur grounds

[where the arbitration is seated in the United States] are those set

out in FAA § 10. This interpretation is supported by the text of the

New York Convention—which does not purport to regulate the

grounds for vacating awards at the arbitral seat—and of the FAA,

as well as by the majority of the U.S. courts of appeal to have ad-

dressed the issue.” Restatement of International Arbitration, at §

4.9 cmt. a. See also id. at § 4.14 cmt. a (“The scope and proper

exercise of set-aside authority are determined by the arbitration

law of the country in which or under the law of which the award

was made.”). And so do most international arbitration scholars.

See James H. Carter & John Fellas, International Commercial Ar-

bitration in New York §§ 1.88, 1.91 (2d ed. 2016) (“Nondomestic

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 18 of 24

18 Opinion of the Court 20-13039

arbitral awards issued by a tribunal seated in the United States or

made pursuant to U.S. arbitration law may be vacated under U.S.

arbitration law. . . . This means that U.S. courts may vacate awards

made in the United States relying on the grounds listed in [§] 10 of

the FAA[.]”); Blackaby, International Arbitration, at 635 (“[T]he

New York Convention does not in any way restrict the grounds on

which an award may be set aside . . . by the court of [primary juris-

diction]. This is a matter that is left to the domestic law of the

country concerned.”); Albert Jan van den Berg, The New York Ar-

bitration Convention of 1958: Towards a Uniform Judicial Inter-

pretation 95 (1981) (“[T]he grounds on which the award has been

set aside in the country of origin can be any ground set out in the

arbitration law of that country.”); Wolff, New York Convention, at

367 (“The NYC sets neither any standards nor any limits for the

courts of the State where the award was rendered for their deci-

sion-making process as to setting aside or suspending the award.

An application to set aside the award in the country of origin is

governed by the domestic law of the seat State.”) (emphasis de-

leted); Lea H. Kuck & Amanda R. Kalantirsky, Vacating an Inter-

national Arbitration Award Rendered in the United States: Does

the New York Convention, the Federal Arbitration Act or State

Law Apply?, 3 Arb. L. Rev. 4, 7 (2011) (“The Convention contains

no description of or limitation on the capacity of the jurisdiction

where the award was rendered to apply its own law vacating the

award. This means that the parties’ choice of the seat of arbitration

can have significant consequences for any judicial review of the

award.”).

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 19 of 24

20-13039 Opinion of the Court 19

We recognize that one leading international arbitration trea-

tise defends Industrial Risk (and, by definition, Inversiones). See

Gary B. Born, International Commercial Arbitration 3211 (3d ed.

2021) (asserting that the reference to the Convention in § 207 of the

FAA “does not include the more expansive bases for vacatur under

§ 10 of the domestic FAA and, on the contrary, was included in

§ 207 precisely to avoid consideration of § 10’s domestic vacatur

grounds in recognition actions”). But that treatise glosses over the

critical fact that the Convention does not set out any grounds for

vacatur, ignores the differences between recognition/enforcement

and vacatur, and fails to account for the varied roles of courts in

primary and secondary jurisdictions in post-award judicial proceed-

ings. It also does not satisfactorily address § 208’s command that

Chapter 1 of the FAA—including its § 10 vacatur grounds—applies

in New York Convention cases as long as there is no conflict.

C

Hidroeléctrica contends that applying domestic grounds to

the vacatur of international arbitral awards would run counter to

the New York Convention’s objective of standardizing the treat-

ment of such awards. See, e.g., Richard W. Hulbert, The Case for

Coherent Application of Chapter 2 of the Federal Arbitration Act,

22 Am. Rev. of Int’l Arb. 45, 72 (2011) (“An intention that incon-

sistent standards are to be applied to the validity of an award falling

under the Convention, by the same court in the same case between

the same parties, depending on whether the issue is to confirm the

award (at the suit of the winner) or to vacate it (at the suit of the

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 20 of 24

20 Opinion of the Court 20-13039

loser), cannot easily (or even plausibly be imputed to Congress.”)).

We are not persuaded.

The argument may have some appeal on policy grounds,

but it starts from a faulty premise—it wrongly presumes that the

Convention seeks to prescribe comprehensive standards which dis-

place domestic law across the board. See Outokumpu, 140 S. Ct.

at 1645. “While it would have provided greater reliability to the

enforcement of awards under the Convention had the available

grounds [for vacatur] been defined in some way, such action would

have constituted meddling with national procedure for handling

domestic awards, a subject beyond the competence of the Confer-

ence.” Leonard V. Quigley, Accession by the United States to the

United Nations Convention on the Recognition and Enforcement

of Foreign Arbitral Awards, 70 Yale L.J. 1049, 1069–70 (1961). The

Convention, which does not provide the grounds for vacatur, can-

not attempt to make uniform that which it does not address.

D

Hidroeléctrica also argues that, even if Industrial Risk and

Inversiones were wrongly decided, principles of stare decisis coun-

sel against overruling them because of the settled expectations they

have created. Hidroeléctrica is correct that “[o]verruling precedent

is never a small matter,” Kimble v. Marvel Ent., LLC, 576 U.S. 446,

455 (2015), but here we conclude that it is appropriate.

Though stare decisis is a hallmark of our judicial system, it

“is not an inexorable command[.]” McKinney v. Pate, 20 F.3d 1550,

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 21 of 24

20-13039 Opinion of the Court 21

1565 n.21 (11th Cir. 1994) (en banc) (citation omitted). We may

overrule a prior case that is “plainly and palpably wrong” if doing

so would not “result in more harm than continuing to follow the

erroneous decision.” McCarthan v. Dir. of Goodwill Indus.-Sun-

coast, Inc., 851 F.3d 1076, 1096 (11th Cir. 2017) (en banc) (citation

omitted).

In deciding whether to overrule precedent, we consider “the

quality of the decision’s reasoning; its consistency with related de-

cisions; legal developments since the decision; and reliance on the

decision.” Ramos v. Louisiana, 140 S. Ct. 1390, 1405 (2020) (cita-

tion omitted). Here these factors weigh in favor of overruling

those aspects of Industrial Risk and Inversiones which hold that Ar-

ticle V of the New York Convention provides the vacatur grounds

for an arbitral award.

For starters, Industrial Risk and Inversiones are wrong, and

clearly so. They fail to analyze the text of the New York Conven-

tion or of Chapter 2 of the FAA. And they improperly conflate

recognition and enforcement with vacatur by ignoring the different

roles given to primary and secondary jurisdictions in post-award

judicial proceedings under the Convention.

In addition, Industrial Risk and Inversiones are outliers.

They are in significant tension with the Supreme Court’s under-

standing of the Convention in Outokumpu, 140 S. Ct. at 1645, and

they directly conflict with the decisions of our sister circuits.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 22 of 24

22 Opinion of the Court 20-13039

In evaluating whether a prior decision “causes ‘more harm

than good’ we . . . evaluate a range of consequences.”

SmileDirectClub, LLC v. Battle, 4 F.4th 1274, 1285 (11th Cir. 2021)

(en banc) (W. Pryor, C.J., concurring) (citation omitted). In this

respect, some commentators have noted that if left undisturbed In-

dustrial Risk and Inversiones may affect how we interpret and ap-

ply the Inter-American Convention on International Commercial

Arbitration (popularly known as the Panama Convention), Jan. 30,

1975, S. Treaty Doc. No. 97–12, 1438 U.N.T.S. 245, which Congress

implemented through Chapter 3 of the FAA, 9 U.S.C. §§ 301 et seq.

See Juan C. Garcia & Ivan Bracho Gonzalez, Interpretation of Arti-

cle V of the New York Convention in the Eleventh Circuit: Indus-

trial Risk Insurers, 74 U. Miami L. Rev. 1080, 1108 (2020).

Although we do not address the Panama Convention today,

we note that its enforcement and recognition provisions are “sub-

stantively identical” to those in the New York Convention. See

Esso Expl. & Prod. Nigeria Ltd. v. Nigerian Nat’l Petroleum Corp.,

40 F.4th 56, 62 n.2 (2d Cir. 2022); TermoRio, 487 F.3d at 933. Re-

lying on the panel decision in this case, one of our recent decisions

states that the “Panama Convention lists seven defenses which pro-

vide the exclusive grounds for vacatur.” Técnicas Reunidas de

Talara S.A.C. v. SSK Ingenería y Construcción S.A.C., 40 F.4th

1339, 1344 (11th Cir. 2022) (citing Corporación AIC, 34 F.4th at

1298). This statement in Técnicas Reunidas equating recognition

and enforcement with vacatur was arguably dicta because the case

was decided solely on waiver grounds, see 40 F.4th at 1345-46, but

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 23 of 24

20-13039 Opinion of the Court 23

it nevertheless shows that Industrial Risk and Inversiones may not

be limited to the New York Convention and may spill over to the

Panama Convention.

We acknowledge that Industrial Risk and Inversiones may

have created certain reliance interests. But those interests, we

think, are relatively minor. First, there are two sets of parties who

might be detrimentally affected by our decision today: (a) those

whose arbitral proceedings under the New York Convention (i) are

seated somewhere within the Eleventh Circuit and (ii) are cur-

rently ongoing; and (b) those whose agreements stipulate to an ar-

bitral location within the Eleventh Circuit but have not yet initi-

ated arbitration proceedings. Whether those parties number in the

single, double, or triple digits is anyone’s guess. Second, we do not

know which, if any, of these parties chose to conduct their arbitral

proceedings in the Eleventh Circuit because of Industrial Risk and

Inversiones. Cf. Franchise Tax Bd. of Cal. v. Hyatt, 139 S. Ct. 1485,

1499 (2019) (“[C]ase-specific costs are not among the reliance inter-

ests that would persuade us to adhere to an incorrect resolution of

an important constitutional question.”).

IV

We hold that in a New York Convention case where the ar-

bitration is seated in the United States, or where United States law

governs the conduct of the arbitration, Chapter 1 of the FAA pro-

vides the grounds for vacatur of an arbitral award. To the extent

that Industrial Risk and Inversiones are inconsistent with this hold-

ing, we overrule them.

USCA11 Case: 20-13039 Document: 69-1 Date Filed: 04/13/2023 Page: 24 of 24

24 Opinion of the Court 20-13039

The district court correctly followed Industrial Risk and In-

versiones, which constituted binding precedent at the time, and de-

clined to address Corporación AIC’s argument that the arbitral

award should be vacated because the panel exceeded its powers

under 9 U.S.C. § 10(a)(4). We vacate the judgment in favor of Hi-

droeléctrica and remand for the district court to consider Corpo-

ración AIC’s § 10(a)(4) contention. 7

VACATED and REMANDED.

7

We decline Hidroeléctrica’s invitation to decide the § 10(a)(4) issue ourselves.