Chapter 2 of the Federal Arbitration Act (FAA) incorporates the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), and grants federal courts subject-matter jurisdiction over actions “falling under” the Convention. 9 U.S.C. § 203. In Molecular Dynamics, the Second Circuit held that this jurisdictional grant does not extend to actions to vacate awards issued in arbitrations seated abroad.
The dispute arose from a failed joint venture predecessor to develop medical-imaging technology between SDBM Limited (SDBM) and Spectrum Dynamics Medical Limited’s (Spectrum). When the joint venture failed, Spectrum and SDBM filed countervailing claims for breach of contract before the Swiss Chambers’s Arbitration Institution, pursuant to the joint venture’s arbitration agreement. The agreement provided for arbitration seated in Geneva, Switzerland, but also gave New York courts exclusive jurisdiction “on matters concerning the [arbitration.]” The Swiss tribunal ultimately awarded Spectrum approximately $14 million in damages, plus fees and costs.
