The Federal Circuit has upheld a district court’s confirmation of a $455 million award by an international arbitration tribunal, but modified the judgment to clarify that, after the date of the district court’s judgment confirming the award, interest will accrue at the federal statutory rate rather than the tribunal’s higher post-award rate.
The case involved patent infringement and breach of contract claims regarding technologies related to genes that provide resistance to certain herbicides. The Federal Circuit found that it had jurisdiction over the appeal as the matter arose under the patent laws of the United States. Because the case involved an international arbitration, enforcement of the award was regulated by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), which, like the Federal Arbitration Act, requires that courts apply a highly deferential standard of review when evaluating challenges to the decisions of arbitrators. In this case, the Federal Circuit found that appellants failed to show that the tribunal’s decision was contrary to public policy, reflected a manifest disregard for the law, or was otherwise reversible under these deferential standards.
However, the Federal Circuit found that the district court erred by denying a motion to amend its judgment to use the federal statutory rate for post-judgment interest, rather than the higher rate that the tribunal stated would apply “from the date of this Award until full payment.” The Federal Circuit emphasized the distinction between post-award interest (i.e., after the date of the arbitration award) and post-judgment interest (i.e., after the date of district court’s order confirming that award), and noted that it was undisputed that the tribunal’s attention was not called to this distinction. Citing precedent holding that the statutory rate applies to post-judgment interest unless the parties or arbitrators “unambiguously express their intent to replace the federal rate for the post-judgment period,” the Federal Circuit found that there was no such unambiguously expressed intent and, therefore, the federal statutory rate would apply to that period.
Bayer CropScience AG v. Dow Agrosciences LLC, 2016-1530 (Fed. Cir. Mar. 1, 2017)
This post written by Jason Brost.
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