Enforcing a London award against a state-controlled entity in New York

Ground (i), due process, is weak unless Petrobras Sul can show that the refusal of a 30-day adjournment deprived it of a fair opportunity to present its case. Tribunals have broad procedural discretion; junior counsel continued, the hearing was completed, and there is no indication that essential evidence was excluded. A challenge under article V(1)(b) requires serious prejudice, not mere inconvenience. Ground (ii), the Brazilian set-aside, is also weak: article V(1)(e) refers to a set-aside by a competent authority of the country where the award was made, which is England, not Brazil. A Brazilian court is not the supervisory court for a London-seated award. Ground (iii), sovereign immunity, is unlikely to succeed if Petrobras Sul is a separate legal entity and the arbitration concerned commercial activity; the US Foreign Sovereign Immunities Act contains an arbitration exception, and agreeing to arbitrate is a waiver for that purpose, though immunity from execution is separate. Ground (iv), corruption/public policy, is the strongest if supported by evidence, because it goes to the enforceability of the award itself. It is also the most difficult: the burden is on Petrobras Sul, and the standard is narrow international public policy.

The Convention gives limited weight to a set-aside judgment from a court that was not the supervisory court. Article V(1)(e) permits refusal of enforcement where the award 'has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made'. The award was made in London under English law as the seat, so the Brazilian judgment is not a set-aside by a competent authority for Convention purposes. The US court should treat it as at most evidence of the Brazilian court's view, not as binding. Even a set-aside at the seat is not automatically conclusive in every jurisdiction, but a non-seat judgment is much weaker. The US court conducts a de novo review of the Convention grounds; it does not sit as an appeal court on the merits. It may consider the Brazilian findings if they bear on corruption, but it must make its own assessment. Hanjin should argue that the Brazilian proceedings were not the supervisory jurisdiction and that the judgment cannot displace the London award. The court should enforce unless a Convention ground is established.

The court should treat corruption as a serious public policy issue but not allow the enforcement stage to become a full retrial of the merits. The burden is on Petrobras Sul to establish a Convention ground by clear and convincing evidence. The court may permit limited discovery into the corruption allegation and may consider the tribunal's findings, any criminal investigation, audit reports, and the procurement record. Hanjin should assemble the tribunal's reasoning on corruption, the absence of any conviction or final finding, the evidence it submitted, and the fact that Petrobras Sul had the opportunity to raise the point in the arbitration. Hanjin should also address whether the alleged corruption taints the award or only the underlying contract, and whether refusal of enforcement is a proportionate response. If the tribunal expressly considered and rejected the corruption defence, the court should be slow to reweigh that finding. If new evidence emerges that was not available in the arbitration, the court may assess it, but the standard remains high. Hanjin should also prepare for the possibility of a stay pending foreign proceedings.