Argued: December 19, 2012
Appeal from an order and judgment of the United States District Court for the Southern District of New York (Cedarbaum, J.), denying Petitioner-Appellant VRG Linhas Aereas S.A.'s petition to confirm a Brazilian arbitral award against Repondents-Appellees MatlinPatterson Global Opportunities Partners II L.P. and MatlinPatterson Global Opportunities Partners (Cayman) II L.P. The district court decided that the parties' dispute was beyond the scope of their arbitration agreement. It did so, however, without first asking whether the parties had agreed to an arbitration clause that clearly and unmistakably assigns to an arbitral panel any questions about the scope of their arbitration agreement, if any. We therefore vacate the district court's judgment and remand for it to decide whether the parties so agreed.
DONALD FRANCIS DONOVAN (Carl Micarelli, Debevoise & Plimpton LLP; Richard I. Werder, Jr., William B. Adams, and Elizabeth M. Devaney, Quinn Emanuel Urquhart & Sullivan, LLP, on the brief), Debevoise & Plimpton LLP, New York, N.Y., for Petitioner-Appellant.
ROBERT H. SMIT (Tyler B. Robinson, Juan A. Arteaga, and Michelle Hertz, on the brief), Simpson Thacher & Bartlett LLP, New York, N.Y., for Respondents-Appellees.
Before: CALABRESI, LYNCH, and CHIN, Circuit Judges.
CALABRESI, Circuit Judge:
After receiving an arbitral award against Respondents-Appellees MatlinPatterson Global Opportunities Partners II L.P. and MatlinPatterson Global Opportunities Partners (Cayman) II L.P. (collectively "MatlinPatterson"), Petitioner-Appellant VRG Linhas Aereas S.A. ("VRG") filed a petition in the Southern District of New York seeking confirmation of the award in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). 9 U.S.C. §§ 201-08. MatlinPatterson argued in response, as it had in arbitration and court proceedings in Brazil, that the Arbitral Tribunal administered by the International Court of Arbitration of the International Chamber of Commerce ("ICC") lacked jurisdiction over its dispute with VRG. The district court (Cedarbaum, J.) issued an oral ruling agreeing with MatlinPatterson and thereafter denied VRG's petition by handwritten endorsement.
On appeal, VRG argues that the district court usurped the Arbitral Tribunal's role when it decided that the scope of the parties' arbitration agreement-assuming there was one-did not extend to the dispute at hand. The question of who is to decide whether a dispute is arbitrable is one that must necessarily precede the question of whether a dispute is arbitrable. We therefore vacate the district court's judgment and remand so that it may decide, in the first instance and on the particular facts of this case, who-the court or the Arbitral Tribunal-has the power to determine the scope of the alleged arbitration agreement between VRG and MatlinPatterson. As we describe more fully below, this power-to determine the scope of any agreement to arbitrate-is to remain with the district court unless the parties agreed to an arbitration clause that clearly and unmistakably assigns such questions to arbitration.
MatlinPatterson is a private equity fund based in New York; VRG, based in São Paulo, Brazil, is a subsidiary of Gol Linhas Aereas Inteligentes S.A. ("Gol"), a Brazilian airline. Gol-through a subsidiary, GTI-acquired VRG in 2007 from two of MatlinPatterson's indirect subsidiaries, Varig Logistica S.A. and Volo do Brasil S.A. The transaction was accomplished through a Share Purchase and Sale Agreement ("the Agreement"), written in Portuguese, and signed on March 28, 2007 by all of the entities just mentioned but one: MatlinPatterson.
Six Addenda to the Agreement were also executed, including one (Addendum 5) that MatlinPatterson did sign, and that gives rise to the dispute before us. In Addendum 5, a one-page document also signed by GTI and Gol, MatlinPatterson agreed not to compete with VRG or invest in any of its competitors in the passenger airline market for a period of three years. Addendum 5 did not mention arbitration. The parties sharply dispute, however, whether the signatories to Addendum 5 agreed to incorporate the arbitration provisions detailed in § 14 of the main Agreement. Their dispute turns in part on divergent translations of a phrase that appears at the end of Addendum 5, describing that document as "aditando os termos do Contrato"—that is, "amending" (VRG's translation) or "supplementing" (MatlinPatterson's) the terms of the main Agreement.
Soon after the sale of VRG, a dispute arose over an adjustment to the purchase price. In December 2007, VRG referred the dispute to arbitration, naming MatlinPatterson as a party. Over the latter's objections, the three-member Arbitral Tribunal appointed under ICC rules unanimously determined, after briefing and a two-day hearing, that MatlinPatterson had agreed to arbitration and-though the panel divided on this question-that its agreement to arbitrate encompassed the parties' purchase price dispute. Following a subsequent three-day hearing on the merits of that dispute, the Tribunal, in September 2010, unanimously issued its award holding MatlinPatterson liable for damages resulting from fraudulent misrepresentations it made during the sale of VRG. MatlinPatterson has challenged the arbitral award in the Brazilian courts, so far unsuccessfully.
The present case arose in January 2011, when VRG filed a petition in the Southern District of New York for confirmation of its foreign arbitral award against MatlinPatterson, in accordance with the New York Convention, 9 U.S.C. § 207. As it had in Brazil, MatlinPatterson argued in the district court that the Arbitral Tribunal lacked jurisdiction over its dispute with VRG. The district court agreed, ruling from the bench that even if MatlinPatterson had agreed to arbitrate disputes over its noncompete agreement with VRG, it had not agreed to arbitrate what the district court described ...