of Professor George A. Bermann of Columbia Law School, sworn to
June 18, 1990 at 22-29 ("Bermann Aff."), citing for this
proposition and discussing rulings of the Supreme Court of
India (Oil and Natural Gas Commission v. The Western Company of
North America, decision of January 16, 1987, 12 Y.B.Com.Arb.
473 ); the Brussels Court of Appeals (S.A. Mines,
Minerais et Metaux v. Mechema, Ltd., decision of October 14,
1980, 7 Y.B.Com.Arb. 316 ); the Supreme Court of France
(Cour de Cassation) (Maatschappij voor Industriele Research en
Ontwikkeling B.V. v. Henri Lievremont and M. Cominassi,
decision of May 25, 1983, 12 Y.B.Com.Arb. 480 ); the West
German Supreme Court (Bundesgerichtshof, decision of February
12, 1976, 2 Y.B.Com.Arb. 242 ); the Spanish Supreme Court
(Tribunal Supremo) (Cominco France S.A. v. Soguiber S.L.,
decision of March 24, 1982, 8 Y.B.Com.Arb. 408 ); and the
Supreme Court of South Africa (Laconian Maritime Enterprises
Ltd. v. Agromai Lineas Ltd., decision of August 27, 1985, 14
Y.B.Com.Arb. 693 ).
Finally, we should observe that the core of petitioner's
argument, that a generalized supervisory interest of a state in
the application of its domestic substantive law (in most
arbitrations the law of contract) in a foreign proceeding, is
wholly out of step with the universal concept of arbitration in
all nations. The whole point of arbitration is that the merits
of the dispute will not be reviewed in the courts, wherever
they be located. Indeed, this principle is so deeply imbedded
in American, and specifically, federal jurisprudence, that no
further elaboration of the case law is necessary. That this was
the animating principle of the Convention, that the Courts
should review arbitrations for procedural regularity but resist
inquiry into the substantive merits of awards, is clear from
the notes on this subject by the Secretary-General of the
United Nations. See Bermann Aff., supra, at 32-33.
Accordingly, we hold that the contested language in Article
VI(e) of the Convention, ". . . the competent authority of the
country under the law of which, [the] award was made" 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, and not the
substantive law of contract which was applied in the case.
In this case, the parties subjected themselves to the
procedural law of Mexico. Hence, since the situs, or forum of
the arbitration is Mexico, and the governing procedural law is
that of Mexico, only the courts of Mexico have jurisdiction
under the Convention to vacate the award. ISEC's petition to
vacate the award is therefore dismissed.
We now turn to Bridas' cross-petition to enforce the award.
ISEC apparently concedes, as it must, that this Court has
jurisdiction under the Convention to enforce the Award, and
that to avoid enforcement ISEC must establish one of the
authorized defenses under Article V of the Convention.
Unfortunately, ISEC's papers are insufficiently rigorous in
structure, substance and argument to determine with precision
what provisions of the Convention it is proceeding under in
resisting enforcement of the Award.
We assume that ISEC is, in substance, asserting defenses
under Article V(1)(b), in that it was unable to present its
case because "the parties must be given the identity of the
expert and the expert's opinion, as well as a meaningful
opportunity to rebut that opinion", Supplemental Memorandum of
Law In Support of ISEC's Petition to Vacate and Deny
Enforcement of the Arbitral Award dated July 23, 1990 ("ISEC
Supp.Mem.") at 1.; under Article V(1)(c) in that the Arbitral
Panel decided matters beyond the scope of the submission to it,
because the arbitrators "exceeded their authority by awarding
damages based on equitable norms, rather than on law," ISEC
Mem. at 28; and under Article V(2)(b) in that enforcement of
the Award would be contrary to the public policy of the United
States because "the secret procedures utilized by the
arbitrators when they appointed an expert violated due process
standards. . . ." Id. at 11.
In connection with the first defense, an inability to present
its case, ISEC asserts that its rights under the Convention
were subverted by the panel's use of a "secret expert" in New
York Law, ISEC Mem. at 11-28, and by the acceptance and
presumed consideration by the panel of a brief in Spanish, on
the question of the interest award, submitted out of time by
Bridas, Affidavit of David Branson, Esq., sworn to April 25,
1990, at 9-12 ("Branson Aff.").
Following closure of the record and voluminous submissions by
the parties, the panel sent a letter to counsel on December 14,
1988 advising of its interest in having four points of New York
Law addressed at oral argument. The panel also announced its
intention of appointing "an independent recognized expert on
New York corporate and contract law," to advise on the four
legal points identified. Branson Aff., Ex. 4. Bridas objected
to the appointment, and did so in the clearest, most emphatic,
and unequivocal terms. The record on this point is set forth in
the Reply Memorandum of Law In Support of Bridas' (A) Motion to
Dismiss ISEC's Petition to vacate and (B) Cross-Petition to
Enforce the Arbitration Award ("Bridas Reply Mem."), at 27-30.
These objections, which counsel for ISEC saw as they were
submitted to the panel, explicitly complained of the failure to
grant the parties access to the expert's credentials and
ISEC's counsel responded to the panel in a five sentence
telex dated December 21, 1988, only the last sentence of which
deals with the subject of the expert. This single, neutral and
wholly uncritical sentence reads as follows: "Finally, I
believe that the parties should be informed concerning the
selection of the legal expert, his role and the issues to be
put to him." Branson Aff., Ex. 5. It should be noted that no
objection is raised to non-disclosure of the expert's name. It
is clear on reading the text of the panel's response of
December 29, 1988 to the Branson telex, that the panel did
indeed inform ISEC on the selection, the role of and the issues
to be addressed by the expert. Branson Aff., Ex. 7. On February
14, 1989, ISEC's counsel wrote to the panel, and advised as
There is another point regarding the retention of
the expert. ITT is the owner of hundreds of
corporations. It is possible that a New York
lawyer could be in a firm that has represented one
of these subsidiaries but he/she might not be
aware of its connection to ITT. Should one later
be found to exist, it might jeopardize the award.
If the parties are given the name of the expert,
they could assure that no conflict exists. Of
course, it goes without saying that neither party,
directly or indirectly would have any contact with
the expert or the firm.
Branson Aff., Ex. 10.
Now what does the plain meaning of this representation to the
panel tell us? It tells us, of course, that ISEC accepts the
panel's response to its telex as broadly satisfactory. Nowhere
is the word secrecy mentioned, and certainly the grim shadow of
star chamber is nowhere invoked, as indeed nowhere is an
imminent traducing of American due process standards mentioned.
What we have is a modest and helpful suggestion, an
afterthought really, that the panel may wish to avert a wholly
theoretical and speculative possibility that a conflict of
interest might exist for the expert selected. No concern is
expressed about nor demand made for access to the expert's
report, his formal credentials, and most importantly, his role
in the proceedings.
By letter of February 21, 1989, the panel advised the parties
in response to the "suggestion" (an excellent choice of word,
we believe) of ISEC on the conflict matter that it favored "the
selection of a university professor, totally detached from any
law firm." Branson Aff., Ex. 11.
This completely satisfied ISEC, in that it expressed itself
no more on the matter. We further note, although we in no way
rely upon, the fact that ISEC promptly remitted its portion of
the expert's fee, in contrast to its shameless footdragging on
paying its fair share of expenses associated with every other
aspect of this long and expensive proceeding. Bridas Reply Mem.
We also find that having abandoned whatever objection to the
expert that can be said to have been made in its telex of
December 21, 1988, ISEC cannot now seek the refuge of its
adversary's arguments when, during the heat of that engagement,
it stood utterly silent on the merits of the matter, lent no
voice or encouragement, and by tactics and tone sought to
thereby ingratiate itself with the panel. We can, sadly, divine
no other purpose, since counsel now insists that his profound,
substantive objections to the process, unvoiced in the record,
mirrored those of his opponent.
Such cleverness is the bane of judges the world over. This is
what led Hamlet as he reflected on the scull of Yorick to mock
the profession so cruelly. We understand our obligation not to
allow a party to impeach on later review a decision of a trial
judge, or as here, an arbitral panel, where that party had full
opportunity to contest it, and full notice of the vigorous
argument of an adversary contesting it, and chose instead not
to associate himself with the argument, and not to contest the
matter. We thus find as a fact that ISEC never objected to the
consultation of an expert by the panel and never demanded
access to his report.
Accordingly, we hold that no objection to the appointment
procedure used in the selection and consultation of the expert
on New York law was made, that any objections ISEC in fact had
were waived, and ISEC will not now be heard to complain about
As Judge Weinfeld observed in Hunt v. Mobil Oil Corp,
654 F. Supp. 1487, 1518 (S.D.N.Y. 1987):
If this [objection] were upheld, it would mean
seven years of arbitral activities of the parties,
of their lawyers and the huge legal expenses
incurred would go down the drain . . . [a party
cannot] wait in ambush and then render wasteful
years of effort at an expenditure of millions of
dollars. A party "cannot remain silent, raising no
objection during the arbitration proceeding, and
when an award adverse to him has been handed down
complain of the situation of which he had
knowledge from the first," Cook Indus., Inc. v.
Itoh & Co., [449 F.2d 106 (2d Cir. 1971)] [cite].
As our colleague Judge Duffy stated in La Société Nationale
pour La Récherche, La Production, Le Transport, La
Transformation et La Commercialisation des Hydrocarbures v.
Shaheen Natural Resources, 585 F. Supp. 57, 62, 65 (S.D.N Y
1983), aff'd, 733 F.2d 260 (2d Cir.), cert. denied,
469 U.S. 883, 105 S.Ct. 251, 83 L.Ed.2d 188 (1984), a case in
which he rejected asserted "procedural deficiencies" in an ICC
arbitration as defenses to enforcement of a foreign arbitral
award, the party resisting enforcement
should have presented its objection to the
arbitration panel. . . . To deny recognition and
enforcement to the arbitration award . . . at this
stage would be to violate the goal and the purpose
of the Convention, that is, the summary procedure
to expedite the recognition and enforcement of
arbitration awards. See Imperial Ethiopian
Government v. Baruch-Foster Corp., 535 F.2d 
at 335 [(5th Cir. 1976)].
ISEC asserts that the action by the panel constitutes (a) a
violation of the due process standards of the United States;
(b) a violation of the public policy of the United States; and
(c) a violation of arbitration procedures under the Convention.
Since we will not pass upon the appropriateness of the
appointment of the legal expert for the reasons stated, these
arguments are dismissed. Furthermore, the objection to the
receipt by the panel of a memorandum of law from Bridas as out
of time is dismissed as frivolous.