9 U.S.C. § 302 (incorporating
9 U.S.C. § 207); see also Employers Ins. of Wausau, 199 F.3d at 942.
Because "[t]he Inter-American Convention incorporates the [Federal
Arbitration Act's ("FAA")] terms unless they are in conflict with the
Inter-American Convention's terms," Productos Mercantiles E
Industriales, S.A. v. Faberge USA, Inc., 23 F.3d 41, 48 (2d Cir. 1994)
(citing 9 U.S.C. § 307), courts may consider grounds for vacatur that
are recognized under the FAA. See International Ins. Co. v. Caja Nacional
de Ahorrio Y Seguro, No. 00 C 6703, 2001 WL 322005, at *3 (N.D. Ill.
Apr. 2, 2001) ("Caja"), aff'd, 293 F.3d 392, 396-97, 2002 WL
1274129, at *3 (7th Cir. Jun. 7, 2002); The Home Ins. Co. v. Banco de
Seguros del Estado, No. 98 Civ. 6022, 1999 U.S. Dist. LEXIS 22478
(S.D.N.Y. Feb. 28, 1999) ("Home") (Westlaw citation not avail.); In re
Trans Chemical, 978 F. Supp. at 302-311. The FAA lists specific instances
where an award may be vacated. See 9 U.S.C. § 10 (a). Of relevance to
this case is the provision permitting vacatur where "the arbitrators
exceeded their powers, or so imperfectly executed them that a mutual,
final, and definite award upon the . . . matter submitted was not
made."*fn10 9 U.S.C. § 10 (a).
In addition, the Second Circuit has recognized that a court may vacate
an arbitration award that was rendered in "manifest disregard of the
law." Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 28 (2d Cir. 2000).
However, "review for manifest error is severely limited." Id. The Second
Circuit has cautioned that "manifest disregard clearly means more than
error or misunderstanding with respect to the law." Halligan v. Piper
Jaffray, Inc., 148 F.3d 197, 202 (2d Cir. 1998) (quotation marks
omitted). Specifically, a court may not vacate an arbitration award
unless it finds that: "(1) the arbitrators knew of a governing legal
principle yet refused to apply it or ignored it altogether, and (2) the
law ignored by the arbitrators was well defined, explicit, and clearly
applicable to the case." Greenberg, 220 F.3d at 28; see also Raiola v.
Union Bank of Switzerland, LLC, No. 98 Civ. 5031, 2002 WL 1484394, at *2
(S.D.N.Y. July 10, 2002).
The party seeking vacatur of an arbitration award bears the burden of
proving manifest disregard. See Greenberg, 220 F.3d at 28. "But, even if
that party proves that the arbitrators' decision is based on a manifest
error of  law, a court must nevertheless confirm the award if grounds
for the decision can be inferred from the facts of the case." McDaniel
v. Bear Stearns & Co., Inc., 196 F. Supp.2d 343, 351 (S.D.N.Y. 2002); see
also Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp.,
103 F.3d 9, 12 (2d Cir. 1997).
Banco contends that the Orders must be vacated because the Panel acted
in manifest disregard of the law and exceeded its authority in rendering
the Orders. This argument is based on Banco's claim that, as an
instrumentality of a foreign state,*fn11 it
is immune from posting prejudgment security under FSIA.*fn12
A. The Panel Did Not Act in Manifest Disregard of the Law
The FSIA, passed by Congress in 1976, "governs all claims of immunity
in every civil action against a foreign state or its political
subdivisions, agencies or instrumentalities." Stephens v. National
Distillers & Chem. Co., 69 F.3d 1226 (2d Cir. 1996) (quoting Verlinden
B.V. v. Central Bank of Nigeria, 461 U.S. 480, 488 (1983)). Pursuant to
section 1609 of the FSIA, a foreign state or its instrumentality is
generally immune from prejudgment attachment of its assets in the United
States, unless that state explicitly waives its immunity. See S&S
Machinery Co. v. Masinexportimport, 706 F.2d 411, 413 (2d Cir. 1983)
(citing 28 U.S.C. § 1609, 1610(d)). Specifically, that section
Subject to existing international agreements to
which the United States is a party at the time of
enactment of this Act the property in the United
States of a foreign state shall be immune from
attachment arrest and execution . . .
28 U.S.C. § 1609. The Second Circuit has held that the prohibition
against attachment may not be circumvented by denominating a prejudgment
restraint as an "injunctio[n] against the negation or use of property
rather than as [an] attachmen[t] against that property." S&S Machinery,
706 F.2d at 418. Thus, it held in Stephens that the posting of security
required under section 1213(c) of New York Insurance Law constituted a
prejudgment attachment from which foreign sovereigns were immune. See 69
F.3d at 1229.