[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
____________ FILED
U.S. COURT OF APPEALS
No. 05-16351 ELEVENTH CIRCUIT
July 14, 2008
_____________
THOMAS K. KAHN
CLERK
D.C. Docket No. 02-23249-CV-KMM
FOUR SEASONS HOTELS AND RESORTS, B.V.,
FOUR SEASONS HOTELS LIMITED,
FOUR SEASONS CARACAS, C.A.,
Plaintiffs-Appellees,
versus
CONSORCIO BARR, S.A.,
Defendant-Appellant.
______________
Appeal from the United States District Court
for the Southern District of Florida
_____________
(July 14, 2008)
Before TJOFLAT and CARNES, Circuit Judges, and HODGES,* District Judge.
*
Honorable Wm. Terrell Hodges, United States District Judge for the Middle District of
Florida, sitting by designation.
TJOFLAT, Circuit Judge:
For the second time, Consorcio Barr, S.A. (“Consorcio”), appeals a district
court order confirming a partial arbitration award in favor of Four Seasons Hotels
and Resorts, B.V., Four Seasons Hotels Limited, and Four Seasons Hotels
Caracas, C.A. (collectively “Four Seasons”), made by an international arbitration
panel sitting in Miami, Florida.1 On July 20, 2004, in Four Seasons Hotels &
1
On April 9, 1997, these parties – all of them foreign – entered into five agreements
whereby Four Seasons would operate a hotel for Consorcio in Caracas, Venezuela. The parties’
relationship eventually soured, and on November 6, 2001, Four Seasons sued Consorcio in the
United States District Court for the Southern District of Florida for breach of their Hotel
Licensing Agreement based on Consorcio’s violation of the Computer Fraud & Abuse Act, 18
U.S.C. § 1030 (“CFAA”), the Florida Uniform Trade Secrets Act, Fla. Stat. §§ 688.001-.009
(“FUTSA”), and the Lanham Act, 15 U.S.C. §§ 1051 et seq. At the conclusion of a bench trial,
the district court gave Four Seasons damages. Consorcio appealed, and we affirmed in an
unpublished opinion. See Four Seasons Hotels & Resorts, B.V. v. Consorcio Barr S.A., No. 03-
16189 (11th Cir. March 31, 2005) (affirming the district court’s judgment of liability against
Consorcio for breach of the License Agreement, and for violation of the CFAA, FUTSA, and
Lanham Act).
Meanwhile, on November 30, 2001, Four Seasons initiated arbitration proceedings
against Consorcio in Miami, Florida, for breach of the four remaining agreements: Hotel
Management Agreement, Hotel Services Agreement, Hotel Advisory Agreement, and Hotel Pre-
opening Services Agreement (collectively “agreements”).
On November 22, 2001, Consorcio sued Four Seasons Caracas for breach of the Hotel
Management Agreement in Caracas, Venezuela. On November 15, 2002, the Tenth Civil,
Commercial and Traffic Court of First Instance in and for the Caracas Metropolitan Judicial
District (“Court of First Instance”) struck down as vague the arbitration agreement that was
before us in Four Seasons Hotels & Resorts v. Consorcio Barr, S.A., 377 F.3d 1164 (11th Cir.
2004), and is before us in this appeal. Court of First Instance November 15, 2002 Opinion, No.
26939 at 8. Four Seasons Caracas appealed that decision to the final Venezuelan authority on
jurisdiction, the Supreme Court of Justice, Political Administrative Division (“Political
Administrative Court”). On March 25, 2003, that court held that the arbitration agreement did
not “eliminat[e] the jurisdiction [of] the Venezuelan courts to hear the case at hand,” implying
2
Resorts v. Consorcio Barr S.A., 377 F.3d 1164 (11th Cir. 2004), we vacated the
first confirmation order and remanded the case with a narrow mandate to the
district court: determine whether Consorcio has shown that the arbitration
agreement is invalid and, if so, whether Four Seasons’ motion for confirmation
should be denied pursuant to Article V(1)(a) of the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (“New York
that an arbitration panel shared jurisdiction with the Venezuelan courts with respect to disputes
the contract committed to arbitration. Political Administrative Court March 25, 2003 Opinion,
No. 26939 at , pages 17-18. The court did not answer the questions of whether Consorcio had
conclusively chosen the Caracas trial court as the forum for litigating the parties’ dispute or
whether Four Seasons had conclusively chosen the arbitration panel in Miami as the forum.
Meanwhile, in a collateral action called an “amparo,” Consorcio sought a constitutional
declaration enjoining the enforcement of the partial arbitration award in Venezuela. On March
26, 2003, the Tenth Superior Court for Civil, Commercial and Traffic Matters of the Judicial
Circuit of the Metropolitan Area of Caracas (“Superior Court”) held void certain injunctions in
the partial award on the ground that enforcing those injunctions in Venezuela would violate
Consorcio’s rights under the Venezuelan Constitution. Superior Court March 26, 2003 Opinion,
No. 4467 at 14. That decision was vacated by the Supreme Court, Constitutional Division
(“Constitutional Court”), on September 26, 2003, because Venezuela had already asserted
jurisdiction over the underlying contract dispute and therefore Consorcio’s constitutional rights
were not in jeopardy. Constitutional Court September 26, 2003 Opinion, No. 4467 at 14. That
same court, on a subsequent “amparo” action, declined to enjoin the arbitration proceedings in
Miami. Constitutional Court November 19, 2004 Opinion, at 19-20.
It is unclear from the record whether there has been a final decision by any Venezuelan
court that squarely holds the arbitration agreement invalid. Rather, it appears that the
Venezuelan courts have allowed Consorcio and Four Seasons Caracas to engage in parallel
litigation in Venezuelan courts and before the arbitral tribunal.
On March 22, 2004, before Consorcio took the instant appeal, the arbitration panel issued
its final decision, awarding Four Seasons the relief it sought, including compensatory damages
for breach of contract in the sum of $8,166,100. Four Seasons thereafter sought enforcement of
the award in a separate action it brought in the district court, styled In the Matter of the
Arbitration Between: Four Seasons Hotels & Resorts, B.V. v. Consorcio Barr, S.A., No. 04-
20673-KMM (S.D. Fla. filed March 22, 2004). The district court has stayed proceedings in that
case pending our resolution of this appeal.
3
Convention”), June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, reprinted in 9
U.S.C. § 201 note (2002). Four Seasons, 377 F.3d at 1171. The district court has
again confirmed the partial award, and this time we affirm.
I.
Consorcio’s arguments on appeal demonstrate a misunderstanding of the
scope of our mandate to the district court, which was stated in light of the contours
of our obligations under the New York Convention: a court “shall confirm [an
arbitration] award unless it finds one of the grounds for refusal or deferral of
recognition or enforcement of the award specified in [the] Convention.” 9 U.S.C.
§ 207. Further, the Convention provides that “[r]ecognition and enforcement of an
award may be refused” if the defendant shows one of the defenses listed in Article
V. Convention, Art. V (emphasis added).2
In its previous appeal, Consorcio raised three defenses to confirmation
under Article V, under sections (1)(a), (1)(c), and 2(b). We declined to address the
merits of Consorcio’s arguments under Article V(1)(c)3 and (2)(b),4 respectively,
2
In remanding the case in Four Seasons, 377 F.3d at 1172 n.6 (11th Cir. 2004), we
observed that “[t]he permissive ‘may’ indicates that, notwithstanding the applicability of a
defense against confirmation, courts retain the discretion to confirm the arbitral award.” Id.
3
Article V(1)(c) of the New York Convention allows a court, upon proof, to refuse to
enforce an award if:
The award deals with a difference not contemplated by or not falling within the
4
because Consorcio had not raised them before the district court. Four Seasons,
377 F.3d at 1168-70. We went on to hold, though, that Consorcio, by merely
participating in the arbitration proceedings, had not waived its defense under Art.
V(1)(a) – that the arbitration agreement is invalid.5 We explained that we were
remanding the case
to the district court so that it may consider for the first time the merits
of Consorcio’s argument that the Venezuelan court’s ruling favors
non-confirmation of the award. We note that, even if the court finds
that Article V(1)(a) applies, the court must exercise its discretion to
determine whether confirmation nevertheless is appropriate. The
court should balance the Convention’s policy favoring confirmation
of arbitral awards against the principle of international comity
embraced by the Convention.
terms of the submission to arbitration, or it contains decisions on matters beyond
the scope of the submission to arbitration . . ..
Convention, Art. V(1)(c).
4
Article V(2)(b) allows a court to refuse to enforce an award if the court finds that:
The recognition or enforcement of the award would be contrary to the public
policy of [the country of the enforcing court].
Convention, Art. V(2)(b).
5
Article V(1)(a), upon proof, allows a court to refuse to enforce an arbitral award if:
The parties to the agreement referred to in Article II were, under the law
applicable to them, under some incapacity, or the said agreement is not valid
under the law to which the parties have subjected it or, failing any indication
thereon, under the law of the country where the award was made.
Convention, Art. V(1)(a).
5
Four Seasons, 377 F.3d at 1171.
After reviewing the Venezuelan courts’s decisions referred to above, see
supra note 1, and the opinion of the arbitral panel, the district court came to an
independent conclusion that the arbitration agreement is valid under United States
law. Because Consorcio had not shown the only defense that was available to it
on remand, the court had no discretion under the Convention to refuse
confirmation of the award.
II.
In its brief to us, instead of arguing that the district court erred when it
found that the arbitration agreement between the parties valid, Consorcio raises
the two defenses that we declined to consider last time.6 By failing to present its
6
First, Consorcio argues that the parties did not agree to arbitrate arbitrability, a defense
under Article V(1)(c), but the arbitral panel nonetheless reached and decided it. In the course of
making this argument, Consorcio repudiates the argument it should have made, namely, that the
arbitration agreement is invalid:
Four Seasons’ stated position, adopted by the District Court, is that ‘the
substantive law that applies to the agreements to arbitrate is the law of the United
States.’ . . . Consorcio continues to disagree with Four Seasons, the arbitrators and
the district court, but that is not the basis for this argument because under both
Venezuelan and U.S. law, these Agreements do not provide the arbitrators with
the power to determine their own jurisdiction.
Appellant’s Br. at 18, n.8 (emphasis added).
Second, effectively arguing a defense under Art. V(1)(c), Consorcio argues that the
district court did “not comply with this court’s mandate to balance the Convention’s policy
favoring confirmation of arbitral awards against the principle of international comity embraced
by the Convention.” Appellants’ Br. at 19 (quoting Four Seasons, 377 F.3d at 1171). Our
6
Article V(1)(a) argument on appeal, Consorcio has abandoned the only defense
available to it.7 Thus we are presented with no argument on appeal that suggests
that the district court erred in following our mandate.
AFFIRMED.
admonition to balance policies favoring arbitration and international comity was directed to the
court’s discretion, however, “even if the court finds that Article V(1)(a) applies.” Four Seasons,
377 at 1171. As explained supra, in Part I of this opinion, Article V of the New York
Convention gives a court discretion to refuse enforcement only after a defense has been shown.
Because the court did not find that Consorcio had shown a defense under Article V(1)(a), it did
not err by not considering Consorcio’s international comity arguments.
7
There is no question that determining which substantive law governs the validity of the
arbitration agreement is a logical precursor to determining whether the agreement is valid.
Because Consorcio has waived its defense that the agreement is invalid, however, we need not
address the district court’s conclusion that the agreement is subject to United States law.
7