MEMORANDUM OPINION AND ORDER
Petitioners Sanluis Developments, L.L.C. (the "Company"), Sanluis Investments, L.L.C. ("Sanluis Investments"), and Sanluis Corporación, S.A. de C.V. ("Sanluis Corporación"), filed a petition in state court to vacate an interim arbitration award rendered on July 16, 2006 ("Interim Award") and a final award dated September 21, 2006, which included the addition of costs and attorneys' fees. Respondents CCP Sanluis, L.L.C. ("CCP Sanluis"), and AIP-Sanluis, L.L.C. ("AIP-Sanluis"), removed the action to federal court pursuant to 9 U.S.C. § 205 (2006) and 28 U.S.C. § 1441(a). Respondents have moved to dismiss the petition to vacate the arbitration award. For the reasons that follow, respondents' motion  is granted.
The following facts are taken from the Interim Award, the Petition to Vacate the Award, and the parties' briefs submitted to this Court.
All of the parties are Delaware limited liability companies, except Sanluis Corporación, which is a corporation organized under the laws of Mexico. Respondents CCP Sanluis and AIPSanluis are limited liability companies formed in part for the purpose of making an equity investment in the Company. On September 20, 2000, Sanluis Investments, CCP Sanluis, and AIP-Sanluis entered into an operating agreement ("Amended Operating Agreement") pursuant to which the Company was to be owned by Class A Members and Class B Members. Respondents are the holders of Class B Units and are thus Class B Members; Sanluis Investments is the holder of the Class A Units and is a Class A Member.
Under Section 7(a) of the related Members' Agreement, entered into on the same day as the Amended Operating Agreement, if no "Approved Sale [of the Company] nor a Qualified Public Offering has occurred by the fifth anniversary of the Closing Date [of the transaction]" then the Class B Members can "seek a sale of the Company (a 'Liquidity Transaction')" under the terms contained in the parties' agreements. Section 7(d) of the Members' Agreement provides that in the event the Class B Units exercise their right to seek a sale of the Company, the Class A Members have the right to purchase the Class B Units at a price that is the greater of a formula set forth in Section 7(d) of the Members' Agreement or the fair market value of the Class B Units. Section 7(c) of the Members' Agreement provides that if the parties cannot agree on the fair market value of the Class B Units an investment bank shall be appointed "to determine the fair market value of the Class B Units on a per Unit basis."
After five years passed with no Approved Sale or Qualified Public Offering of the Company, a dispute arose among the parties regarding what instructions, if any, were to be given to any investment bank that might be asked to determine the fair market value of the Class B Units in the event that CCP Sanluis and AIP-Sanluis were to exercise their right to seek a sale of the Company. CCP Sanluis and AIP-Sanluis, the Class B Members, maintained that any determination by an investment bank of the fair market value of the Class B Units must take into account the value of the Class B Liquidation Preference that the Class B Units enjoy under Section 9(a) of the Amended Operating Agreement. That section provides in effect that the Class B shareholders are entitled to a preferential distribution equal to their investment in the Company on the occurrence of any liquidation or sale of the Company. The Class A Members, on the other hand, asserted that any appraisal of the fair market value of the Class B Units should not take into account the Class B Liquidation Preference. Eventually the Class B Members invoked the arbitration clauses in the Amended Operating Agreement and Members' Agreement, which provide that
In the event that any dispute, claim or controversy . . . arising out of or relating to this Agreement . . . cannot be settled by the parties using reasonable efforts such Dispute shall be resolved solely by the referral of such Dispute by any party to binding arbitration to be conducted before the International Court of Arbitration of the International Chamber of Commerce (the "ICC International Court of Arbitration"). (Amended Operating Agreement § 26(a); Members' Agreement § 25(a).)*fn1 Acting on the joint nomination of the parties made within the time specified in the agreements, the Secretary General of the ICC confirmed the selection of the Hon. John S. Martin as the Sole Arbitrator on January 27, 2006, and the arbitration proceeded in New York, New York. (Interim Award 4.)
On July 13, 2006, Judge Martin issued a thirteen-page Interim Award in favor of the Class B Members (respondents here). Judge Martin determined that "any investment banker who may be asked to determine the fair market value of the Class B Units should value those units as if a sale of the Company were to take place and the Class B shareholders were entitled to receive the Liquidation Preference in connection with the distribution of the proceeds of the sale." (Interim Award 12.) Thereafter, on September 23, 2006, Judge Martin issued a three-page final award that incorporated his Interim Award and, pursuant to the provisions of the agreements between the parties, awarded to respondents their legal fees and costs. (The Interim Award and final award are hereinafter referred to simply as the "Award").
On October 2, 2006, petitioners filed a petition to vacate the Award on three grounds: (1) the Award was decided with manifest disregard of the law and the terms of the agreements and is irrational; (2) the award violates petitioners' right to due process; and (3) the arbitrator rendered an award that was beyond the scope of his authority. (See Pet. to Vacate ¶ 1; Pets.' Reply Memorandum of Law in Support of Mot. to Vacate Arbitration Award ("Pets.' Reply").) The crux of petitioners' argument is that the Class B Liquidation Preference is payable only "[u]pon consummation of a Liquidity Transaction" (Members' Agreement § 7(b)), but not in the circumstance where the Class A Members choose to purchase Class B Units from Class B Members. (See Pet. to Vacate ¶¶ 11, 14, 17--21; Pets.' Reply 6.)
A. The Applicable International Agreement
The Inter-American Convention on International Commercial Arbitration ("Panama Convention"), opened for signature Jan. 30, 1975, O.A.S.T.S. No. 42, 1438 U.N.T.S. 245, as implemented by Chapter 3 of the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 301--307, applies when an arbitration arises from a commercial relationship between citizens of signatory nations, in this case, the United States and Mexico. See 9 U.S.C. § 301; Banco de Seguros del Estado v. Mut. Marine Offices, Inc., 257 F. Supp. 2d 681, 684 (S.D.N.Y. 2003) (citing Productos Mercantiles E. Industriales, S.A. v. Faberge USA, Inc., 23 F.3d 41, 44 (2d Cir. 1994)). The Court has jurisdiction of this case pursuant to 28 U.S.C. § 1331. See 9 U.S.C. §§ 203, 301, 302.
The Panama Convention incorporates the FAA's terms unless they are in conflict with the terms of the Panama Convention. See Productos Mercantiles, 23 F.3d at 45 (citing 9 U.S.C. § 307). Accordingly, a court applying the Panama Convention may vacate an arbitration award based on the grounds recognized under the FAA.*fn2 See 9 U.S.C. § 307; Mut. Marine Offices, 257 F. Supp. 2d at 685; Home Ins. Co. v. Banco de Seguros del Estado (Uru.), No. 98 Civ. 6022 (KMW), 1999 U.S. Dist. LEXIS 22478, at *7 (S.D.N.Y. Feb. 17, 1999). In addition, the agreements explicitly provide that the Award is binding upon the parties "except to the extent otherwise ...