Federal Deposit Insurance Corporation v. IIG Capital LLC

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 12-10686
Non-Argument Calendar
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D.C. Docket No. 1:11-cv-21784-UU
FEDERAL DEPOSIT INSURANCE CORPORATION,
as Receiver for Republic Federal Bank, N.A.,
Plaintiff - Appellee,
versus
IIG CAPITAL LLC,
Defendant - Appellant.
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Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 7, 2013)
Before CARNES, Chief Judge, MARTIN, and KRAVITCH, Circuit Judges.
PER CURIAM:
IIG Capital appeals the district court’s confirmation and enforcement of the
award resulting from arbitration between the FDIC and IIG on the ground that the
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sole arbitrator, Grigera Naon, failed to disclose his prior and ongoing contacts with
Jose Astigarraga, counsel for the FDIC. IIG argues that it is entitled to an
evidentiary hearing to determine the extent of Naon and Astigarraga’s contacts and
whether the award should be vacated because of them.
International arbitration awards such as the one in this case “are subject only
to minimal standards of domestic judicial review for basic fairness and consistency
with national public policy.” Industrial Risk Insurers v. M.A.N.
Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir. 1998). An “arbitral
award must be confirmed unless appellants can successfully assert one of the seven
defenses against enforcement of the award enumerated in Article V of the New
York Convention.” Id. at 1441. IIG asserts three of those defenses: (1) IIG was
unable to present its case before an impartial arbitrator, (2) the composition of the
arbitral authority was not what IIG agreed to because IIG was not aware of Naon’s
contacts with Astigarraga, and (3) recognizing the award of a biased arbitrator
would be contrary to United States public policy. See Art. V §§ (1)(b), (1)(d),
(2)(b).
The “mere appearance of bias or partiality is not enough to set aside an
arbitration award,” but it is enough to require the district court to grant an
evidentiary hearing. University Commons-Urbana v. Universal Constructors, Inc.,
304 F.3d 1331, 1340 (11th Cir. 2002). IIG contends that under University
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Commons, it has presented sufficient evidence of contacts that call Naon’s
impartiality into question to require the district court to hold an evidentiary hearing
to determine if any of the defenses it asserts apply.1 IIG focuses its appeal on three
contacts between Naon and Astigarraga: (1) Naon, who was the director of an
international arbitration program at American University, hired Asitarraga as a
faculty member for the summer program, held from June 1 to June 17, 2010, (2)
Naon and Astigarraga were two of the three founding members of the International
Chamber of Commerce’s Latin American Arbitration Group in 2003 and may still
be members, and (3) Naon and Astigarraga are founding members of the Latin
American Arbitration Association, which was organized some time before
November 10, 2010. We review the district court’s factual findings for clear error
and its legal conclusions de novo. Id. at 1337.
The summer international arbitration program took place after the arbitration
hearings were over but before the award was rendered on September 2, 2010. The
district court concluded that the fact that Naon and Astigarraga participated in that
program during the arbitration period reveals “nothing beyond the kind of
professional interactions that one would expect of successful lawyers active in the
1 The FDIC argues that University Commons is inapplicable in this case because the
agreement in that case was a domestic arbitration agreement. Because we hold that even under
University Commons, the district court was not required to grant IIG an evidentiary hearing, we
need not decide if University Commons applies in cases dealing with an international arbitration
agreement.
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specialized area.” We agree. In University Commons we held that an evidentiary
hearing was warranted when an arbitrator and counsel participated in the same
mediation, litigation, or other arbitration because an arbitrator’s “ruling in the
arbitration could be seen as a way to curry favor in the other matter.” Id. at 1340.
It is difficult to see how Naon and Astigarraga’s participation in the same summer
program would lead Naon to curry favor with Astigarraga by ruling in his party’s
favor. And Naon, the arbitrator, was the director of the summer program. As the
party with the power to hire Astigarraga, Naon had no need to gain Astigarraga’s
favor through the ruling.
Naon and Astigarraga’s contact through a professional organization in 2003,
years before the arbitration began, does not warrant an evidentiary hearing under
University Commons. See University Commons, 304 F.3d at 1340 (holding that
the arbitrator and counsel’s participation in the same arbitrations, mediations, and
litigations before the arbitration began did not warrant an evidentiary hearing
because “familiarity due to confluent areas of expertise does not indicate bias”).
And Naon and Astigarraga’s formation of the Latin American Arbitration
Association during the period of arbitration is not sufficiently similar to the
contacts in University Commons to lead us to reverse the district court’s decision.
That professional contact does not give Naon a motive for using his decision to
curry Astigarraga’s favor.
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AFFIRMED.
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