Losing party waited too long before challenging award

Where the Federal Arbitration Act gives the losing party three months to challenge an award, the losing party waited too long before filing its motion to vacate. Although the losing party argued the time to appeal ran from the date of post-award motions, the arbitration award was clearly and expressly intended to be a final award as to all outstanding claims before it, including liability and damages, and in fact decided all such issues.

Background

The underlying dispute between First Kuwaiti General Trading & Contracting W.L.L., or FKTC, and Kellogg Brown & Root, or KBR, issues out of several contracts for logistics work during the invasion of Iraq in 2003, as to which there have been a series of administrative appeals, judicial proceedings and alternative dispute resolutions. Before the court is FKTC’s motion to vacate a July 26, 2022, final award on claims submitted for arbitration rendered by the International Centre for Dispute Resolution, or ICDR, together with KBR’s cross-motion to confirm that arbitral award.

FKTC argues that the ICDR tribunal showed a manifest disregard for the applicable law. In response, KBR argues that FKTC has not filed its motion to vacate within three months of the arbitration award and therefore the motion to vacate is untimely. It further contends that if the motion to vacate is deemed timely, it must be denied on its merits, as there is no basis upon which to find that the ICDR tribunal acted improperly.

Timeliness

The Federal Arbitration Act states that “Notice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered.” The parties do not dispute that the motion to vacate the arbitration award was filed more than three months after July 26, 2022.

FKTC argues that the three month time period did not begin to run until the tribunal issued and delivered its decision on its post-award motions on Oct. 20, 2022. FKTC argues that its motion to vacate must be considered timely under the “complete arbitration rule,” whose purpose, it contends, is comparable to those formal court rules intended to resolve all issues before post-judgment motions are decided.

Unlike the cases that have found applicable the complete arbitration rule, the arbitration award was clearly and expressly intended to be a final award as to all outstanding claims before it, including liability and damages, and in fact decided all such issues. The court finds and concludes that for the purposes of 9 U.S.C. §12 the three month period within which to file FKTC’s motion to vacate began to run on July 26, 2022, and its filing of its motion to vacate on Jan. 5, 2023, was untimely.

The parties agreed to submit to arbitration all remaining claims, the ICDR tribunal, in fact, decided in its arbitration award, as it and the parties intended, all remaining claims that had been submitted to it for resolution; the Article 30 motions did not authorize reconsideration or an expansion of those claims submitted and the tribunal’s decision on the Article 30 motion did not substantively change any aspect of the final award.

Confirmation

KBR has moved the court to confirm the award of the ICDR tribunal. FKTC opposes that request on the grounds that this court lacks the jurisdiction and authority to confirm the award because the parties did not explicitly agree that a court could enforce the award (i.e. the agreement does not contain language that explicitly references judicial enforcement).

In the arbitration agreement, the parties clearly and explicitly agreed that a resolution through arbitration as to all subcontract disputes was “final and binding”; and the arbitration award, which resolved all outstanding disputes, was a “final” award. Courts, including the Fourth Circuit, have recognized that an intent to have an award judicially enforceable can be inferred from references to the finality of an arbitration award. That the parties contemplated judicial enforcement is further reflected in FKTC’s application to the court to vacate the award.

Plaintiff’s motion to vacate the arbitration award denied. Defendant’s motion to confirm the arbitration award granted.

First Kuwaiti General Trading & Contracting W.L.L. v. Kellogg Brown & Root, Case No. 1:23-mc-1, May 12, 2023. EDVA at Alexandria (Trenga). VLW 023-3-257. 14 pp.