and 08-2568 STEEL CORPORATION OF THE PHILIPPINES v. International Steel Services, Inc

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
Nos. 08-1853 and 08-2568
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STEEL CORPORATION OF THE PHILIPPINES
v.
INTERNATIONAL STEEL SERVICES, INC.,
Appellant
____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 06-cv-00386)
District Judge: Honorable Donetta W. Ambrose
____________
Argued October 29, 2009
Before: SMITH, FISHER and NYGAARD, Circuit Judges.
(Filed: November 19, 2009)
Leonard Fornella (Argued)
Babst, Calland, Clements & Zomnir
Two Gateway Center, 6th Floor
Pittsburgh, PA 15222
Attorney for Appellants
Paul W. Minnich (Argued)
Alex E. Snyder
Sean E. Summers
Barley Snyder
100 East Market Street
P.O. Box 15012
York, PA 17405
Attorneys for Appellee

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____________
OPINION OF THE COURT
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FISHER, Circuit Judge.
International Steel Services, Inc. (“ISSI”) appeals from an order of the District
Court entering judgment against ISSI in favor of Steel Corporation of the Philippines
(“SCP”) and an order denying ISSI’s motion for relief pursuant to Federal Rule of Civil
Procedure 60(b). We will affirm.
I.
We write exclusively for the parties, who are familiar with the factual context and
legal history of this case. Therefore, we will set forth only those facts necessary to our
analysis.
ISSI, a Delaware corporation headquartered in Pittsburgh, Pennsylvania, and SCP,
a Philippine corporation, entered into two separate contracts relevant to this litigation.
Under the Acid Regeneration Plant Supply and Installation Agreement (“ARP Contract”),
entered into on April 1, 1996, ISSI agreed to construct an acid regeneration plant for SCP.
Under the Iron Oxide Sales Agreement (“IOSA Contract”), entered into on April 15,
1997, ISSI agreed to purchase the iron oxide by-product of the plant. Both contracts
contained the following arbitration provision:
“The validity, performance and enforcement of this Contract shall be
governed by Philippine Laws. The parties agree that any dispute or claim

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arising out of this Contract shall be s[e]ttled by arbitration in accordance
with the Rules of Conciliation and Arbitration of the International Chamber
of Commerce. The proceedings on arbitration shall be conducted in
Singapore. The arbitral award shall be final and binding on both parties.”
(App. at A-57.) Separate disputes arose under each contract.
On September 18, 2002, ISSI commenced a claim against SCP under the ARP
Contract before the Construction Industry Arbitration Commission of the Philippines.
The Commission issued an award of $150,000 in ISSI’s favor against SCP (“ISSI
Award”) on August 20, 2003.
On May 5, 2003, SCP instituted a separate claim against ISSI under the IOSA
Contract in the International Chamber of Commerce International Court of Arbitration in
Singapore. On November 3, 2004, the arbitrator issued a final award of $647,965.50 in
SCP’s favor against ISSI (“SCP Award”). The SCP Award contained the following
provision:
“The applicable law of the arbitration proceedings is the Singapore
International Arbitration Act. The validity, performance and enforcement
of . . . the [IOSA Contract is] governed by the laws of the Philippines.”
(App. at A-67.) ISSI has not petitioned for judicial review of this award in Singapore.
On August 19, 2004, ISSI filed a petition in the Philippines Regional Trial Court
to vacate the SCP Award. Due to an alleged error in service that prevented SCP from
receiving an order, on January 4, 2006, the Regional Trial Court declared SCP in default
of ISSI’s petition to vacate, thereby allowing ISSI to present ex-parte evidence. In
response, SCP filed an Urgent Motion for Reconsideration. There is no evidence that the

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The District Court also denied reconsideration of the motion on August 28, 2006.1
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Regional Trial Court ever ruled on this Motion. Instead, a Notice of Pre-Trial indicates
that the parties were to attend a pre-trial conference on April 18, 2007. (Addendum
Exhibit A.) In an order of that same date, the Regional Trial Court referred the matter to
mediation and stayed further proceedings. (Addendum Exhibit B.) The mediation failed.
Meanwhile, on September 13, 2005, ISSI moved to execute the ISSI Award in the
Philippines. On July 17, 2007, the Philippine Court of Appeals, in an appeal by SCP, set
aside the Award on the basis that ISSI was obligated to pay SCP the greater sum of
$647,965.50 under the SCP Award. The Court of Appeals also noted that the Philippine
Regional Trial Court, over which the Court has appellate jurisdiction, did not have
jurisdiction to set aside the SCP Award. (App. at A-656.)
On January 19, 2006, SCP filed a Petition to Confirm the SCP Award under the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10,
1958 (“New York Convention”), in the Court of Common Pleas of York County,
Pennsylvania. Ultimately, the case was removed to federal court and transferred to the
Western District of Pennsylvania. ISSI filed a motion for judgment on the pleadings,
which the District Court denied on July 31, 2006. On July 31, 2007, after a discovery1
phase, the parties filed cross motions for summary judgment.
On February 6, 2008, the District Court denied ISSI’s motion for summary
judgment, granted SCP’s motion for summary judgment, and entered judgment in SCP’s

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The District Court denied ISSI’s motion for reconsideration on February 21, 2008.2
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favor in the amount of $647,965.50. ISSI filed a motion for relief pursuant to Federal2
Rule of Civil Procedure 60(b) to reduce the judgment in the amount of $150,000 by
offsetting the SCP Award by the amount of the ISSI Award. The District Court denied
the motion on April 23, 2008. ISSI filed a timely appeal.
II.
We have jurisdiction over this appeal pursuant to 28 U.S.C. §§ 1291 and 1294.
“The District Court’s grant of summary judgment and judgment on the pleadings is
subject to plenary review.” E.I. DuPont de Nemours & Co. v. United States, 508 F.3d
126, 131 (3d Cir. 2007). This Court will “construe all facts and inferences in the light
most favorable to the non-moving party, and ‘[j]udgment will not be granted unless the
movant clearly establishes there are no material issues of fact, and he is entitled to
judgment as a matter of law.’” Id. (citations omitted). Likewise, “[w]e review de novo
the District Court’s interpretation of the [New York] Convention.” Admart AG v. Stephen
& Mary Birch Foundation, Inc., 457 F.3d 302, 307 (3d Cir. 2006). Finally, “[w]e review
grants or denials of relief under Rule 60(b) . . . under an abuse of discretion standard.”
Budget Blinds, Inc. v. White, 536 F.3d 244, 251 (3d Cir. 2008).

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III.
ISSI sets forth three arguments on appeal. First and foremost, ISSI contends that
the District Court erred in holding that ISSI does not have a valid defense under either
Articles V(1)(e) or V(2)(b) of the New York Convention, and thus that the Court erred in
enforcing the SCP Award. In the alternative, ISSI argues that the District Court erred in
refusing to offset the SCP Award by the smaller ISSI Award pursuant to Federal Rule of
Civil Procedure 60(b)(5). We will address each contention in turn.
A.
ISSI argues that under Article V(1)(e) of the New York Convention, the Philippine
Regional Trial Court’s entry of default against SCP on ISSI’s petition to vacate the SCP
Award precludes a United States court from enforcing the Award. The applicable
language of Article V(1)(e) provides as follows:
“1. Recognition and enforcement of the award may be refused . . . only
if . . .
. . .
(e) The award . . . 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.”
Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. V(1),
June 10, 1958, T.I.A.S. No. 6997, 21 U.S.T. 2517. To prevail, ISSI must demonstrate
that the Philippines is a country with primary jurisdiction by showing that the Philippines

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The SCP Award was made in Singapore; therefore, the Philippines is not a3
country “in which” the Award was made.
Since the Philippine Regional Trial Court never ruled on SCP’s Urgent Motion4
for Reconsideration of the default judgment, but instead ordered mediation, it is
questionable whether the SCP Award has indeed been “set aside or suspended.”
However, as ISSI is unable to demonstrate that the Philippines is a country with primary
jurisdiction, we need not reach this issue.
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is a country “under the law of which” the SCP Award was made. ISSI is unable to do3 4
so.
The Sixth Circuit held in M & C Corp. v. Erwin Behr GmbH & Co., KG that the
Article V(1)(e) language “under the law of which” “‘refers exclusively to procedural and
not substantive law, and more precisely, to the regimen or scheme of arbitral procedural
law under which the arbitration was conducted.’” 87 F.3d 844, 848 (6th Cir. 1996)
(emphasis added) (quoting International Standard Electric Corp. v. Bridas Sociedad
Anonima Petrolera, Industrial Y Comercial, 745 F. Supp. 172, 178 (S.D.N.Y. 1990)); see
also Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 364 F.3d 274, 290 (5th Cir. 2004) (“Under the New York Convention, the
rulings of the Tribunal interpreting the parties’ contract are entitled to deference.”). Since
the SCP Award indicates that the arbitrator applied Singapore procedural law – “The
applicable law of the arbitration proceedings is the Singapore International Arbitration
Act” (App. at A-67) – Singapore, not the Philippines, is the country with primary
jurisdiction.

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In response, ISSI contends that the relevant question is not what procedural law the
arbitrator applied, but what procedural law the parties agreed should be applied.
However, even assuming, arguendo, that we look to the parties’ choice of procedural law,
and not the law applied by the arbitrator, ISSI’s argument still fails, as ISSI has not
demonstrated that the parties agreed in the IOSA Contract to an application of Philippine
procedural law.
Although the Third Circuit has not addressed this issue, the Fifth Circuit held in
Karaha Bodas Co., L.L.C. that “[u]nder the New York Convention, an agreement
specifying the place of the arbitration creates a presumption that the procedural law of
that place applies to the arbitration.” 364 F.3d at 291. The Fifth Circuit sensibly
explained that any other presumption would be illogical:
“Authorities on international arbitration describe an agreement providing
that one country will be the site of the arbitration but the proceedings will
be held under the arbitration law of another country by terms such as
‘exceptional’; ‘almost unknown’; a ‘purely academic invention’; ‘almost
never used in practice’; a possibility ‘more theoretical than real’; and a
‘once-in-a-blue-moon set of circumstances.’ Commentators note that such
an agreement would be complex, inconvenient, and inconsistent with the
selection of a neutral forum as the arbitral forum.”
Id. at 291 (footnotes omitted). We will apply the same presumption here. Accordingly,
ISSI bears the burden of showing that Philippine procedural law, not forum procedural
law, applies to the arbitration of the SCP Award.
ISSI’s primary argument in support of Philippine procedural law is that the parties
necessarily agreed to an application of that law by stating in the IOSA Contract that

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ISSI attempts to buttress this argument with two additional points, neither of5
which has merit. First, ISSI argues that the Rules of Conciliation and Arbitration of the
International Chamber of Commerce, and in particular Article 15(1), do not limit parties’
choice of law. This argument does not help ISSI meet its burden because there is still
insufficient evidence that ISSI and SCP actually chose Philippine procedural law over
forum procedural law in the IOSA Contract.
Second, ISSI asserts that the deposition testimony of Abeto Uy, the President and
Chairman of SCP, and Manuel Pamaran, SCP’s expert witness on the application of
Philippine law, indicates that SCP clearly understood that Philippine procedural law was
to apply. However, contrary to ISSI’s assertion, these depositions demonstrate only that
Uy and Pamaran neither knew nor understood which procedural law governed the SCP
Award.
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“enforcement” of the Contract would be governed by Philippine law. This is5
insufficient. Given the difficulty Singapore would likely have in researching,
deciphering, and applying another country’s procedural law, the use of the term
“enforcement,” as opposed to the term “procedure,” cannot in and of itself create the
“once-in-a-blue-moon set of circumstances” where the forum applies another country’s
procedural law. Id. at 291.
The analogous facts of Karaha Bodas Co., L.L.C. support this determination. The
litigation in Karaha Bodas Co., L.L.C. arose out of an arbitral award made in Switzerland
regarding contracts negotiated and allegedly breached in Indonesia. Id. at 281. Like the
instant case, the parties expressly agreed prior to arbitration that Switzerland would be the
site of arbitration and that Indonesian substantive law would apply. Id. at 290. Based on
these facts, the Fifth Circuit ultimately held that the Swiss tribunal properly applied Swiss

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Karaha Bodas Co., L.L.C. was arguably a more difficult case. Unlike the instant6
facts, the parties’ contract in Karaha Bodas Co., L.L.C. referenced certain Indonesian
civil procedure rules. Nevertheless, the Fifth Circuit held that the procedural references
“fall far short of an express designation of Indonesian procedural law necessary to rebut
the strong presumption that designating the place of the arbitration also designates the law
under which the award is made.” 364 F.3d at 292.
Although certainly not dispositive, it is worth noting that the Philippine Court of7
Appeals has also stated, albeit in dicta, that the Philippine Regional Trial Court did not
have jurisdiction to set aside the SCP Award. (App. at A-656.)
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procedural law. Id. at 293. Similarly, ISSI and SCP expressly agreed to use the6
substantive law of one country – the Philippines – while designating another country –
Singapore – as the forum, but did not expressly agree to a specific country’s procedural
law. Therefore, following the Fifth Circuit, we find that ISSI has failed to “rebut the
strong presumption that designating the place of the arbitration also designates the law
under which the award is made,” id. at 292, and thus that the Singapore International
Court of Arbitration properly applied Singapore procedural law.
In summary, the Philippines is not a country with primary jurisdiction over the
SCP Award, and the District Court did not err in holding that ISSI has no defense under
Article V(1)(e) of the New York Convention.7
B.
Similarly, ISSI contends that under Article V(2)(b) of the New York Convention,
enforcing the SCP Award would violate the fundamental principles of res judicata and
judicial comity and would run contrary to the public policy against forum shopping in the
United States. The relevant provision of Article V(2)(b) provides as follows:

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“2. Recognition and enforcement of an arbitral award may also be refused if
the competent authority in the country where recognition and enforcement
is sought finds that:
. . .
(b) The recognition or enforcement of the award would be contrary to the
public policy of that country.”
Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. V(2),
June 10, 1958, T.I.A.S. No. 6997, 21 U.S.T. 2517. ISSI argues that because the validity
of the SCP Award was already pending in the Philippines, SCP’s attempt to enforce the
Award in the United States was improper. Accordingly, ISSI asks that we defer to the
courts of the Philippines and refrain from enforcing the Award.
ISSI’s claim is without merit. To start, we must review Article V public policy
defenses narrowly. Admart AG, 457 F.3d at 308 (“courts have strictly applied the Article
V defenses and generally view them narrowly”). “Enforcement of foreign arbitral awards
may be denied [based on the New York Convention’s public policy defense] only where
enforcement would violate the forum state’s most basic notions of morality and justice.”
Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L’Industrie du Papier
(RAKTA), 508 F.2d 969, 974 (2d Cir. 1974). Here, ISSI’s contentions not only do not
violate the public policy of the United States, but they contravene the very purpose of the
New York Convention. “The principal purpose for acceding to the [New York]
Convention was to ‘encourage the recognition and enforcement of commercial arbitration
agreements in international contracts.’” Admart AG, 457 F.3d at 307 (quoting Scherk v.
Alberto-Culver Co., 417 U.S. 506, 520 n.15 (1974)). Accordingly, parties may bring suit

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to enforce awards notwithstanding the existence of ongoing proceedings elsewhere. See
Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan Minyak Dan Gas Bumi, 335
F.3d 357, 366-67 (5th Cir. 2003) (“Under the [New York] Convention, a court maintains
the discretion to enforce an arbitral award even when nullification proceedings are
occurring in the country where the award was rendered. Furthermore, an American court
and courts of other countries have enforced awards, or permitted their enforcement,
despite prior annulment in courts of primary jurisdiction.”). See also Yusuf Ahmed
Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 22 (2d Cir. 1997) (“The [New York]
Convention . . . eradicat[ed] the requirement that a court in the rendering state recognize
an award before it could be taken and enforced abroad.”).
Applying the foregoing principles to the instant case, SCP was entitled to bring
suit to enforce the SCP Award in the United States – where ISSI’s assets are located –
even though a motion to vacate the SCP Award was pending in the Philippines.
Enforcement of the SCP Award does not violate this country’s “most basic notions of
morality and justice.” Parsons & Whittemore Overseas Co., Inc., 508 F.2d at 974.
Therefore, the District Court did not err in holding that ISSI does not have an Article
V(2)(b) public policy defense against enforcement of the SCP Award in the United States.
C.
Lastly, ISSI challenges the District Court’s denial of its motion to offset the SCP
Award by the ISSI Award in the amount of $150,000 pursuant to Federal Rule of Civil

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The parties agreed at oral argument to offset the Awards. Their subsequent8
stipulation provides, “the Philippine arbitration award in favor of ISSI may be offset
against and deducted from the Singapore arbitration award and from the judgment entered
in this action in favor of SCP.” The agreement calculates the SCP and ISSI Awards,
together with interest and costs through October 31, 2009, at $789,427.10 and
$281,839.57, respectively. The parties will resolve the continuing calculation of interest
after October 31, 2009.
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Procedure 60(b)(5). Because the parties have since resolved this issue, we do not need to8
address it here.
IV.
For the foregoing reasons, we will affirm the orders of the District Court.

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