Bamberger Rosenheim, Ltd. v. OA Development, Inc.

Case: 16-16163 Date Filed: 07/17/2017 Page: 1 of 10

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________

No. 16-16163
________________________

D.C. Docket No. 1:15-cv-04460-ELR

BAMBERGER ROSENHEIM, LTD.,
(ISRAEL),

Plaintiff-Appellant,
versus

OA DEVELOPMENT, INC.,
(UNITED STATES),

Defendant-Appellee.
________________________

Appeal from the United States District Court
for the Northern District of Georgia
________________________
(July 17, 2017)
Before MARTIN, JILL PRYOR, and MELLOY, * Circuit Judges.

*
Honorable Michael J. Melloy, United States Circuit Judge for the Eighth Circuit, sitting
by designation.
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MELLOY, Circuit Judge:

In this international arbitration dispute, we consider whether courts must

defer to an arbitrator’s interpretation of a venue provision in a concededly valid

agreement to arbitrate. We conclude that questions of arbitral venue, even those

arising in international arbitration, are presumptively for the arbitrator to decide.

Accordingly, because the arbitrator in the present case arguably interpreted the

arbitral-venue provision at issue, we defer to that interpretation. See Oxford

Health Plans LLC v. Sutter, 133 S. Ct. 2064, 2068 (2013). We therefore affirm the

district court’s confirmation of the arbitral award.

I.

Appellant Bamberger Rosenheim, Ltd. (“Profimex”), 1 an Israeli company,

raises capital for real estate investments. Appellee OA Development, Inc.

(“OAD”), an American company incorporated in the state of Georgia, develops

real estate. In 2008, Profimex and OAD entered into a Solicitation Agreement.

The Solicitation Agreement provided for the arbitration of disputes as follows:

Any disputes with respect to this Agreement or the performance of the
parties hereunder shall be submitted to binding arbitration proceedings
conducted in accordance with the rules of the International Chamber
of Commerce. Any such proceedings shall take place in Tel Aviv,
Israel, in the event the dispute is submitted by OAD, and in Atlanta,
Georgia, in the event the dispute is submitted by Profimex.

1
Profimex Ltd. is Bamberger Rosenheim’s wholly-owned subsidiary. The parties both
refer to the appellant as Profimex, and we will continue that practice.
2
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After relations between the parties deteriorated, Profimex commenced

arbitration in Atlanta against OAD for breach of contract. In the same Atlanta

arbitration, OAD submitted a counterclaim alleging that Profimex had defamed

OAD in statements to Israeli investors. Profimex objected to the counterclaim’s

arbitration in Atlanta, arguing “that a ‘dispute submitted by OAD’ [must] be

arbitrated in Tel Aviv, Israel.” The arbitrator, however, determined that venue for

the defamation counterclaim was proper in Atlanta, in part, because the “dispute”

was submitted by Profimex. The arbitrator ultimately found Profimex liable on

OAD’s defamation counterclaim.

Profimex filed a petition to vacate the arbitrator’s defamation award in

federal district court, and OAD filed a petition to confirm the award. Profimex

raised several grounds for vacatur and defenses against confirmation. The district

court, nevertheless, confirmed the award.

II.

“We review confirmations of arbitration awards and denials of motions to

vacate arbitration awards under the same standard, reviewing the district court’s

findings of fact for clear error and its legal conclusions de novo.” Frazier v.

CitiFinancial Corp., LLC, 604 F.3d 1313, 1321 (11th Cir. 2010). “Because

arbitration is an alternative to litigation, judicial review of arbitration decisions is

‘among the narrowest known to the law.’” AIG Baker Sterling Heights, LLC v.

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Am. Multi-Cinema, Inc., 508 F.3d 995, 1001 (11th Cir. 2007) (quoting Del Casal

v. E. Airlines, Inc., 634 F.2d 295, 298 (5th Cir. Unit B Jan. 1981)). This “limited

judicial review . . . ‘maintain[s] arbitration’s essential virtue of resolving disputes

straightaway.’” Oxford Health Plans, 133 S. Ct. at 2068 (alteration in original)

(quoting Hall St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 588 (2008)). “If

parties could take ‘full-bore legal and evidentiary appeals,’ arbitration would

become ‘merely a prelude to a more cumbersome and time-consuming judicial

review process.’” Id. (quoting Hall St. Assocs., 552 U.S. at 588).

On appeal, Profimex argues that the district court erred in confirming the

arbitral award under the New York Convention. See Convention on the

Recognition and Enforcement of Foreign Arbitral Awards, opened for signature

June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (entered into force with respect to

the United States Dec. 29, 1970) (“New York Convention”). The New York

Convention is codified under Chapter 2 of the Federal Arbitration Act (“FAA”), 9

U.S.C. §§ 201–08, and applies to “non-domestic” arbitral agreements and awards.

Indus. Risk Insurers v. M.A.N. Gutehoffnungshütte GmbH, 141 F.3d 1434, 1441

(11th Cir. 1998). Arbitral awards are non-domestic “when one of the parties to the

arbitration is domiciled or has its principal place of business outside of the United

States.” Id. Such awards “must be confirmed unless appellants can successfully

assert one of the seven defenses against enforcement of the award enumerated in

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Article V of the New York Convention.” Id. (emphasis added). Here, Profimex

asserts that “the arbitral procedure was not in accordance with the agreement of the

parties.” New York Convention, Art. V(1)(d).

Profimex also contends the district court erred in denying its petition to

vacate the award under Chapter 1 of the FAA, 9 U.S.C. §§ 1–16, which governs

domestic arbitration. Indus. Risk Insurers, 141 F.3d at 1440. Under 9 U.S.C. § 10,

a court “may make an order vacating the award” provided the petitioner establishes

one of several grounds for vacatur. In the present case, Profimex argues that “the

arbitrator[ ] exceeded [his] powers.” 9 U.S.C. § 10(a)(4).2

We see no reason to analyze Profimex’s arguments under the New York

Convention or § 10(a)(4) separately. In both arguments, Profimex asserts the

arbitrator improperly applied the arbitral-venue provision in the parties’ agreement

to arbitrate. According to Profimex, the venue provision required arbitration of the

defamation counterclaim in Tel Aviv, Israel. By arbitrating the counterclaim in

Atlanta, Profimex argues, “the arbitral procedure was not in accordance with the

2
We assume, without deciding, that § 10 applies to the award in the present case.
Compare Indus. Risk Insurers, 141 F.3d at 1445–46 (refusing to apply a domestic ground for
vacatur and stating that the “[New York] Convention’s enumeration of defenses is exclusive”),
with Yusuf Ahmed Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 20–21 (2d Cir. 1997)
(holding that the FAA’s domestic grounds for vacatur apply to non-domestic arbitral awards
rendered in the United States); see also BG Grp. PLC v. Republic of Arg., 134 S. Ct. 1198, 1208
(2014) (stating an arbitral “award may be ‘set aside or suspended by a competent authority of the
country in which, or under the law of which, that award was made’” (quoting New York
Convention, Art. V(1)(e)).
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agreement of the parties,” New York Convention, Art. V(1)(d), and “the

arbitrator[ ] exceeded [his] powers,” 9 U.S.C. § 10(a)(4).

The dispositive issue in the present case is whether this Court must defer to

the arbitrator’s venue determination. Ordinarily, “it is up to the parties to

determine whether a particular matter is primarily for arbitrators or for courts to

decide.” BG Grp., 134 S. Ct. at 1206. However, “[i]f the contract is silent on the

matter of who primarily is to decide ‘threshold’ questions about arbitration, courts

determine the parties’ intent with the help of presumptions.” Id. “On the one

hand, courts presume that the parties intend courts, not arbitrators, to decide what

we have called disputes about ‘arbitrability.’ These include questions such as

‘whether the parties are bound by a given arbitration clause,’ or ‘whether an

arbitration clause in a concededly binding contract applies to a particular type of

controversy.’” Id. (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79,

84 (2002)). “On the other hand, courts presume that the parties intend arbitrators,

not courts, to decide disputes about the meaning and application of particular

procedural preconditions for the use of arbitration.” Id. at 1207. Procedural

questions “are generally for the arbitrators themselves to resolve.” Klay v. United

Healthgroup, Inc., 376 F.3d 1092, 1109 (11th Cir. 2004).

As suggested by its arguments, Profimex concedes that the arbitration clause

in the Solicitation Agreement was binding. Similarly, Profimex does not dispute

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that the arbitration clause applied to the defamation counterclaim. Profimex

merely argues that the arbitration was conducted in the wrong arbitral venue. We

hold, consistent with at least four other circuits, “that disputes over the

interpretation of forum selection clauses in arbitration agreements raise

presumptively arbitrable procedural questions.” UBS Fin. Servs., Inc. v. W. Va.

Univ. Hosps., Inc., 660 F.3d 643, 655 (2d Cir. 2011); see also Cent. W. Va.

Energy, Inc. v. Bayer Cropscience LP, 645 F.3d 267, 273–74 (4th Cir. 2011);

Ridge at Red Hawk, LLC. v. Schneider, 493 F.3d 1174, 1178 & n.3 (10th Cir.

2007); Richard C. Young & Co., Ltd. v. Leventhal, 389 F.3d 1, 5 (1st Cir. 2004).

Such clauses determine where an arbitration is conducted, “not whether there is a

contractual duty to arbitrate at all.” See BG Grp., 134 S. Ct. at 1207 (“The

provision before us is of the . . . procedural[ ] variety. . . . It determines when the

contractual duty to arbitrate arises, not whether there is a contractual duty to

arbitrate at all.”).

Our review of the arbitrator’s venue determination, therefore, is limited to

“whether the arbitrator (even arguably) interpreted the parties’ contract, not

whether he got its meaning right or wrong.” Oxford Health Plans, 133 S. Ct. at

2068. Here, in deciding whether venue for the counterclaim was proper in Atlanta,

the arbitrator engaged with the language of the venue provision and determined

that the “dispute” was submitted by Profimex. Thus, “the briefest glance at the

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[award] reveals that the arbitrator in this case arguably ‘interpreted the [venue

provision].’” See S. Commc’ns Servs., Inc. v. Thomas, 720 F.3d 1352, 1359 (11th

Cir. 2013) (quoting Oxford Health Plans, 133 S. Ct. at 2068). “The arbitrator’s

construction holds, however good, bad, or ugly.” Oxford Health Plans, 133 S. Ct.

at 2071.

Profimex, primarily relying on three cases, nevertheless argues that the

arbitrator’s interpretation is not entitled to deference. We disagree. First, our

decision in Sterling Financial Investment Group, Inc. v. Hammer, 393 F.3d 1223

(11th Cir. 2004), does not stand for the proposition that arbitral venue is a question

for the courts to resolve independently. In that case, we simply held “that a federal

district court . . . has jurisdiction to enforce a forum selection clause in a valid

arbitration agreement that has been disregarded by the arbitrators.” Id. at 1225.

Indeed, by allowing arbitration to proceed in Texas, the arbitrator in Sterling

Financial clearly disregarded an unambiguous venue provision that only provided

for arbitration in Florida. See id. at 1224. We did not hold that courts should

review arbitral-venue provisions de novo; in Sterling Financial, it could not be said

that the arbitrator even arguably interpreted the parties’ contract.

Second, to the extent it is indistinguishable, we decline to follow Polimaster

Ltd. v. RAE Systems, Inc., 623 F.3d 832 (9th Cir. 2010). In Polimaster, a divided

panel of the Ninth Circuit, applying the New York Convention, held that an

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arbitrator incorrectly applied an arbitral-venue provision somewhat similar to the

provision in the present case. Id. at 837. 3 The panel’s holding rested on its

conclusion that the provision was “not ambiguous.” Id. The dissent, however,

concluded that the provision was susceptible to more than one reasonable

interpretation and that the arbitrator’s interpretation was thus entitled to deference.

Id. at 844 (Clifton, J., dissenting). Here, by contrast, we cannot say that the venue

provision is reasonably susceptible to only one interpretation. And, in any event,

we note that the Polimaster court failed to engage in any analysis as to whether

arbitral venue is a question of arbitrability.

Finally, the international character of the arbitration does not change our

calculus. Profimex argues that, in international arbitration, “disputes regarding

forum selection . . . are more akin to ‘questions of arbitrability’ than procedural

questions arising out of the arbitration.” To support this contention, Profimex

points to Scherk v. Alberto-Culver Co., 417 U.S. 506 (1974). In Scherk, the

Supreme Court stated that “[a] contractual provision specifying in advance the

forum in which disputes shall be litigated and the law to be applied is . . . an almost

indispensable precondition to achievement of the orderliness and predictability

essential to any international business transaction.” Id. at 516. But Scherk did not
3
The contract provided that arbitration was to be conducted “at the defendant’s site,” i.e.,
“the geographical location of the defendant’s principal place of business.” Polimaster, 623 F.3d
at 834. “[R]easoning that the contract did not specify where counterclaims should be brought,”
the arbitrator, much like the present case, allowed a counterclaim to be arbitrated in the same
country as the initial claim. Id. at 835.
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concern the choice between different arbitral forums; rather, Scherk concerned

whether a particular dispute should be resolved in arbitration or in court. Id. at

509–10.

And, while venue may impact the rules and laws applicable in international

arbitration, see, e.g., Karaha Bodas Co., LLC v. Perusahaan Pertambangan Minyak

Dan Gas Bumi Negara, 364 F.3d 274, 290–91 (5th Cir. 2004), we see no reason

why arbitral venue must be a question presumptively reserved to the courts. See

Howsam, 537 U.S. at 83 (“[O]ne might call any potentially dispositive gateway

question a ‘question of arbitrability’ . . . . The [Supreme] Court’s case law,

however, makes clear that . . . the phrase ‘question of arbitrability’ has a far more

limited scope.”). If parties do not want an arbitrator to resolve arbitral-venue

disputes, they “may agree to limit the issues they choose to arbitrate.” Stolt-

Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 683 (2010).4

AFFIRMED.

4
Profimex also argues the arbitrator erred in admitting certain deposition testimony. We
reject this argument. See Rosensweig v. Morgan Stanley & Co., Inc., 494 F.3d 1328, 1333 (11th
Cir. 2007) (“In making evidentiary determinations, arbitrators are not required to ‘follow all the
niceties observed by the federal courts,’ but they must give the parties a fundamentally fair
hearing.” (quoting Tempo Shain Corp. v. Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997))); id. at
1333–34 (upholding arbitrator’s evidentiary decision where there was at least one “reasonable
basis” for the decision); see also Ministry of Def. & Support for the Armed Forces of the Islamic
Republic of Iran v. Cubic Def. Sys., Inc., 665 F.3d 1091, 1096–97 (9th Cir. 2011) (noting that
the New York Convention’s public-policy defense “applies only when confirmation or
enforcement of a foreign arbitration award would violate the forum state’s most basic notions of
morality and justice” (internal quotation marks and citation omitted)).
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