Feb. 19 -- The U.S. Court of Appeals for the Second Circuit Feb. 19 affirmed the district court's confirmation of an arbitration award for Citigroup Inc. (C)in a dispute over a multi-billion dollar investment between the investment bank and Abu Dhabi Investment Authority (Abu Dhabi Investment Authority v. Citigroup Inc., 2d Cir., 12-1068-cv, 2/19/14).
In a summary order, the appeals court rejected ADIA's argument that the arbitration panel manifestly disregarded the law in its analysis of New York's conflict of law rules.
The dispute stemmed from ADIA's $7.5 billion investment in Citi in 2007. When disagreements arose, ADIA filed an arbitration claim with the International Centre for Dispute Resolution pursuant to the investment agreement's arbitration clause, seeking either rescission of the contract or money damages of over $4 billion.
After a 16-day hearing, the panel rendered an award in Citi's favor, the court said. ADIA moved to vacate the award, arguing that the panel manifestly disregarded the law in applying New York substantive law to its allegations. However, the district court rejected ADIA's objections and confirmed the award (46 SLD, 3/8/13).
Affirming, the appeals court said that consistent with the parties' agreement, the panel decided the choice-of-law question by consulting case law and international arbitration treatises. Based on that research, it concluded that New York law applied.
ADIA also argued that the panel erroneously analyzed New York's conflict of law rules, but the court said it “would not matter if it did.” It cited authority for the proposition that even if a court is convinced the arbitrator committed serious error, it need not overturn the arbitrator's decision.
To see the summary order, go to http://www.bloomberglaw.com/public/document/Abu_Dhabi_Investment_Authority_v_Citigroup_Inc_Docket_No_1301068_.
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