New York Convention warrants the Court of Enforcement to independently determine the existence of an arbitration agreement, even if an arbitration panel in a foreign state has already rendered an award

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The Jiangsu Beier Decoration Materials Co. Ltd. v. Angle World LLC case highlights the importance of an enforceable arbitration agreement under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). The case also highlights the requirement for a court to independently determine the existence of an agreement to arbitrate even if an arbitration panel in a foreign state has already rendered an award.

The dispute between Jiangsu Beier Decoration Materials Co. Ltd. and Angle World LLC arose when Angle World failed to pay Jiangsu the $1.3 million owed under the distribution agreement. To resolve the matter, Jiangsu and Angle World signed a memorandum of understanding in June 2018, which was later revised to include an arbitration clause. The revised agreement, which was sent via email, was never signed by Angle World but the parties exchanged emails indicating that they had agreed to the revised payment schedule.

Jiangsu initiated an arbitration against Angle World before the China International Economic and Trade Arbitration Commission (CIETAC) and the arbitration tribunal ruled in favor of Jiangsu. Jiangsu then filed a petition before the U.S. District Court for the Eastern District of Pennsylvania seeking confirmation of the award, however, the district court granted Angle World’s motion to dismiss as it failed to produce an arbitration agreement enforceable under the New York Convention.

Jiangsu appealed the district court’s decision and the Third Circuit vacated the district court’s decision. The Third Circuit explained that a court need not limit its review to the factual allegations in the petition itself and that an agreement to arbitrate may be “contained in an exchange of letters or telegrams.” The Third Circuit also made clear that the district court was not bound by the prior decisions of the Chinese courts or CIETAC and must independently determine the existence of an agreement to arbitrate.

The Third Circuit vacated the district court’s orders and remanded the matter to the district court to consider the entirety of the record, including the exchange of emails relied on by Jiangsu. The Third Circuit emphasized that the district court must independently determine the existence of an agreement to arbitrate, even if an arbitration panel in a foreign state has already rendered an award.

In conclusion, the Jiangsu Beier Decoration Materials Co. Ltd. v. Angle World LLC case highlights the importance of a clear and enforceable agreement to arbitrate under the New York Convention. It also emphasizes the requirement for a court to independently determine the existence of such an agreement, even if an arbitration panel in a foreign state has already rendered an award.

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