Summary

Appendix

SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court is AFFIRMED in part and VACATED in part.

Occidental Exploration and Production Company ("OEPC") appeals from a judgment of the United States District Court for the Southern District of New York (Hellerstein, J.) that (1) denied its motion to vacate an arbitration award, (2) granted a motion by Andes Petroleum Ecuador Limited ("Andes") to confirm the arbitration award, and (3) awarded pre- judgment interest. We assume the parties' familiarity with the underlying facts and the record of prior proceedings, to which we refer only as necessary to explain our decision to affirm in part and vacate in part.

I. Background

In 1999 OEPC entered into a contract with an arm of the Ecuadorian government to carry out hydrocarbon development in the Ecuadorian Amazon Region. In 2000 OEPC and Andes entered into two agreements in which OEPC assigned to Andes an interest in the rights to the development project. In 2006 the parties amended one of those agreements by entering into a separate letter agreement. Following a dispute implicating the terms of the letter agreement, Andes commenced an arbitration proceeding against OEPC in 2016. Consistent with the parties' agreements and the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") that were incorporated therein, each party "appoint[ed] an arbitrator of its choice" to a three- person tribunal, and the "party-appointed arbitrators. . . appoint[ed] a presiding arbitrator." Joint App'x 189. Andes appointed Richard Ziegler, OEPC appointed Robert Smit, and together, Zeigler and Smit appointed James Hosking to chair the tribunal.

The parties' agreement and the applicable AAA Commercial Arbitration Rules required all arbitrators to be "wholly independent and impartial." Joint App'x 189; see Joint App'x 209. The AAA Rules and the arbitrator oath required by the parties' agreements mandated disclosure of "any circumstance likely to give rise to justifiable doubt as to the arbitrator's impartiality or independence." Joint App'x 208; see also Joint App'x 239. These disclosure obligations continued throughout the arbitration.

During the arbitrator selection process, Smit disclosed that he had a professional connection to one of Andes's counsel, Laurence Shore, from an unrelated prior arbitration and arbitration conferences. In 2018, after the OEPC Andes arbitration panel was constituted, Smit and Shore were both appointed to a tribunal in a separate, unrelated arbitration. Neither Smit nor Shore disclosed their appointment, although it was listed publicly online. The OEPC-Andes arbitration resulted in an arbitral award in favor of Andes in the amount of $391,879,747, plus interest and the costs of the arbitration proceedings.

OEPC contends that Smit and Shore "secretly maintained a close, direct relationship as co-equals in a confidential arbitration that gave Shore a behind the-scenes look at Smit's decision-making process, inside information on his views about specific contract doctrines, and ample opportunity for ex parte communication, collegial discussions, and collaborative decision-making." Appellant's Br. 17.

OEPC alleges that this violated the Federal Arbitration Act (FAA) because of Smit's "evident partiality," 9 U.S.C. § 10(a)(2), and because Smit "exceeded [his] powers," id. § 10(a)(4). OEPC also argues that the undisclosed relationship prevents confirmation of the award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards art. V, § 1(d), June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38 ("Convention") (as applied through the FAA, 9 U.S.C. §§ 201-08), because the arbitration panel was not constituted in accordance with the parties' agreements.

The District Court denied OEPC's motion to vacate and confirmed the award. It then entered final judgment in favor of Andes in the amount of $558,577,380.56, which included pre-judgment interest totaling $166,107,500.79 as well as arbitration costs. On appeal, OEPC contests both the District Court's confirmation of the arbitration award and the District Court's calculation of pre-judgment interest.

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