enforcement and recognition of arbitral awards on a territorial basis, that is, to those made in a country other than the United States.
The language of section 202 of Article 9 does not alter this interpretation. Section 202 merely states, in relevant part, that an award arising out of a commercial relationship "entirely between citizens of the United States" shall not fall under the Convention "unless that relationship involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relationship with one or more foreign states." The court does not interpret this language as expanding the scope of the Convention or as being inconsistent with the United States' declaration to apply the Convention on a territorial basis only, see Bergesen, 710 F.2d at 931.
First, the language is cast in terms of exclusion rather than inclusion. But it does so based on the status of the parties rather than the origin of the award. Hence, if two citizens of the United States obtain an award in another country (an award that would otherwise be enforceable under Article I(1) of the Convention) that award is excluded from being enforced under the Convention notwithstanding its otherwise enforceability under the territoriality provision of Article I(1) of the Convention. This limitation is itself limited, however, by the qualifying language that makes the award enforceable if it involves property abroad, envisages performance or enforcement abroad, or has some other reasonable relation to a foreign country. Thus, an award from another country that involves as parties two citizens of the United States may nonetheless be enforceable under the Convention if it meets one of the foreign relationship criteria set forth in the qualifying language. The qualifying language does not, however, serve to expand the scope of the Convention, as acceded to by the United States, to include an award between United States' parties issued in the United States. Such an interpretation would create an inconsistency between the accession declaration of the United States and the implementing language of section 202 of Article 9. The court will not reach such an anomalous result when a consistent interpretation is reasonably available. Furthermore, there is nothing in the legislative history which detracts from this interpretation.
Nor does the court agree with petitioner's contention that such language defines non-domestic arbitral awards. First, as the court has already discussed, the accession declaration of the United States effectively negates the non-domestic award option of Article I(1). Accordingly, there would have been no need to define a non-domestic award via the implementing legislation. Second, had Congress intended to do what petitioner suggests, it could have done so in a much more clear and straightforward manner rather than by backing into such a definition via language designed to limit a limitation. See A.J. van den Berg, When is an Arbitral Award Nondomestic Under the New York Convention of 1958?, 6 Pace L. Rev. 25, 48-49 (1985).
In reaching its conclusion, the court does not consider Fuller Co. v. Compagnie Des Bauxites De Guinee, 421 F. Supp. 938 (W.D. Penn. 1976), to support a different result. That case addressed the issue of whether two United States parties to an agreement could be compelled to arbitrate under the terms of the Convention. As the Fuller court itself noted, that is a different situation from one concerning the recognition and enforcement of an arbitral award. Fuller, 421 F. Supp. at 941 n.3. The Fuller case is distinguishable from the present case and its reasoning is not persuasive on the issue before this court.
For the foregoing reasons, the court grants respondent's motion to dismiss the petition to confirm an arbitral award and dismisses this cause in its entirety. Accordingly, respondent's motion for an order requiring a bond to be posted is denied as moot.
PHILIP G. REINHARD, JUDGE
UNITED STATES DISTRICT COURT
DATED: June 4, 1996