US court accepts personal jurisdiction defence in enforcement proceedings

In First Investment Corporation of the Marshall Islands v. Fujian Mawei Shipbuilding, Ltd (First Investment), a US court recently refused to recognize and enforce an arbitral award issued against two entities from the People’s Republic of China on the basis that the court lacked personal jurisdiction over those entities. The court also refused to abrogate the PRC’s sovereign immunity by permitting enforcement proceedings to move ahead against the PRC itself.

The First Investment ruling confirms that most US jurisdictions will allow personal jurisdiction defenses in actions to enforce foreign arbitral awards under the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), even though no such defense appears in Article V of the New York Convention. First Investment is also important because it reaffirms the necessity of understanding local procedures in New York Convention enforcement proceedings…

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