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            Title China Minmetals Materials Import and Export Co. v. Chi Mei Corp.

 

            Date 2003

            By

            Subject Other\Concurring

                

 Contents

 

 

Page 1

8 of 52 DOCUMENTS

CHINA MINMETALS MATERIALS IMPORT AND EXPORT CO., LTD. v. CHI MEI CORPORATION, Appellant

Nos. 02-2897 and 02-3542

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

334 F.3d 274; 2003 U.S. App. LEXIS 13012

April 7, 2003, Argued

June 26, 2003, Filed

SUBSEQUENT HISTORY: As Amended July 3, 2003. PRIOR HISTORY:   **1   On Appeal from the United States District Court for the District of New Jersey. (D.C. Civ. No. 01-03481). Honorable Dennis M. Cavanaugh, District Judge.

DISPOSITION: Order of district court entered June 11,

2002 and judgment of district court entered August 22,

2002 vacated. Case remanded for further proceedings.

CASE SUMMARY:

PROCEDURAL POSTURE: Appellant, a New Jersey corporation, sought review of an order from the United States District Court for the District of New Jersey grant- ing the motion of appellee, a corporation formed and ex- isting under the laws of the People's Republic of China, to confirm and enforce a foreign arbitration award and from the judgment entered in favor of appellee in the amount of the arbitration award.

OVERVIEW: Appellant contended that the dispute arose out  of  a  currency  conversion  transaction,  but  appellee asserted  that  the  dispute  involved  two  contracts  that provided  for  binding  arbitration.  The  court  vacated  the order  and  remanded  for  further  proceedings.  Although the China International Economic and Trade Arbitration Commission (CIETAC) rejected appellant's argument that the contracts were forged and that there was thus no valid writing  exhibiting  an  intent  to  arbitrate,  the  court  held that under the rule of First Options appellant was entitled to present evidence of the agreement's invalidity to the district court for an independent determination. The court also held that the absence of any reference to a valid writ- ten agreement to arbitrate in United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Sept. 1, 1970, 21 U.S.T. 2517, T.I.A.S. 6997, art. V, which was incorporated into the Federal Arbitration

Act in 9 U.S.C.S. § 207, did not foreclose a defense to enforcement on invalidity grounds. Finally, whether the court applied federal or New Jersey law, it found no waiver of appellant's objection to CIETAC's jurisdiction.

OUTCOME: The court vacated the order and remanded the  case  to  the  district  court  for  further  proceedings  to ascertain the validity of the contracts.

LexisNexis(R) Headnotes

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

HN1  Ordinarily, in reviewing a district court's order con- firming an arbitration award, the court of appeals would review the district court's factual findings for clear error and  its  legal  conclusions  de  novo.  However,  when  the district court does not make findings of fact, the court of appeals decides the case on a legal basis and its entire review is plenary.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Federal Arbitration Act

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN2  See 9 U.S.C.S. § 207.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN3  See United Nations Convention on the Recognition and  Enforcement  of  Foreign  Arbitral  Awards,  Sept.  1,

1970, 21 U.S.T. 2517, T.I.A.S. 6997, art. V.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN4  See United Nations Convention on the Recognition and  Enforcement  of  Foreign  Arbitral  Awards,  Sept.  1,

1970, 21 U.S.T. 2517, T.I.A.S. 6997, art. IV.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

334 F.3d 274, *; 2003 U.S. App. LEXIS 13012, **1

Page 2

HN5  See United Nations Convention on the Recognition and  Enforcement  of  Foreign  Arbitral  Awards,  Sept.  1,

1970, 21 U.S.T. 2517, T.I.A.S. 6997, art. II.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

HN6  The district court and not the arbitration panel must decide the question of arbitrability - that is, the question whether a certain dispute is subject to arbitration under the terms of a given agreement - unless the parties clearly and unmistakably have agreed that the arbitrator should de- cide arbitrability. In other words, relying on the principle that a party can be forced to arbitrate only those issues it specifically has agreed to submit to arbitration, unless the district court finds that there was clear and unmistakable evidence that the parties agreed to arbitrate arbitrability, the district court independently must determine whether the parties agreed to arbitrate the merits of the dispute. Civil  Procedure  >  Alternative  Dispute  Resolution  > Federal Arbitration Act

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN7    The   Federal   Arbitration   Act,   of   which   the Convention  on  the  Recognition  and  Enforcement  of Foreign  Arbitral  Awards  is  a  part,  establishes  a  strong federal policy in favor of arbitration and the presumption in  favor  of  arbitration  carries  special  force  when  inter- national commerce is involved. Nonetheless, the liberal federal policy favoring arbitration agreements is at bottom a policy guaranteeing the enforcement of private contrac- tual arrangements, and because arbitration is a matter of contract, no arbitration may be compelled in the absence of an agreement to arbitrate.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

HN8  Before a party to a lawsuit can be ordered to arbi- trate and thus be deprived of a day in court, there should be  an  express,  unequivocal  agreement  to  that  effect.  If there  is  doubt  as  to  whether  such  an  agreement  exists, the matter, upon a proper and timely demand, should be submitted to a jury. Only when there is no genuine issue of fact concerning the formation of the agreement should the court decide as a matter of law that the parties did or did not enter into such an agreement.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

Civil  Procedure  >  Alternative  Dispute  Resolution  > Federal Arbitration Act

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN9   A  distinction  exists  between  contracts  asserted to  be  void  or  nonexistent  and  contracts  alleged  to  be voidable,  in  which  case  arbitration,  including  arbitra-

tion of a fraud question, may be appropriate. Under both the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act, a  court  must  decide  whether  an  agreement  to  arbitrate exists before it may order arbitration.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN10  9 U.S.C.S. § 207 provides that a court in which enforcement of a foreign arbitration award is sought shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN11   The  absence  of  any  reference  to  a  valid  writ- ten agreement to arbitrate in Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards does not foreclose a defense to enforcement on the grounds that there never was a valid agreement to arbi- trate. Read as a whole, the Convention contemplates that a court should enforce only valid agreements to arbitrate and only awards based on those agreements. Therefore, a district court should refuse to enforce an arbitration award under the Convention where the parties did not reach a valid agreement to arbitrate, at least in the absence of a waiver of the objection to arbitration by the party oppos- ing enforcement.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

HN12   In  its  simplest  form,  competence-competence simply means that the arbitrators can examine their own jurisdiction without waiting for a court to do so;  if one side says the arbitration clause is invalid, there is no need to adjourn arbitration proceedings to refer the matter to a  judge.  Under  this  brand  of  competence-competence, however, the arbitrators' jurisdictional decision is subject to judicial review at any time before, after, or during ar- bitration proceedings, as was traditionally the case under English law. The French form of competence-competence goes somewhat further. A court only can decide arbitra- bility before an arbitral panel has been constituted if the alleged arbitration agreement is clearly void; otherwise, courts must decline to hear the case until after an arbitral award is rendered. Finally, the strictest form of compe- tence-competence is the traditional German kompetenz- kompetenz, under which an arbitral panel's jurisdictional decision in a case where the parties agreed to a kompe- tenz-kompetenz clause essentially is insulated from any form of judicial review.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

334 F.3d 274, *; 2003 U.S. App. LEXIS 13012, **1

Page 3

HN13  Under the rule of First Options, a party that op- poses enforcement of a foreign arbitration award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards on the grounds that the alleged agreement containing the arbitration clause on which the arbitral  panel  rested  its  jurisdiction  was  void  ab  initio is  entitled  to  present  evidence  of  such  invalidity  to  the district court, which must make an independent determi- nation  of  the  agreement's  validity  and  therefore  of  the arbitrability  of  the  dispute,  at  least  in  the  absence  of  a waiver precluding the defense.

Civil  Procedure  >  Alternative  Dispute  Resolution  > Judicial Review

Civil       Procedure              >              Appeals  >              Reviewability       > Preservation for Review

HN14  A party does not waive its objection to arbitra- bility where it raises that objection in arbitration. A party does not have to try to enjoin or stay an arbitration pro- ceeding in order to preserve its objection to jurisdiction. A jurisdictional objection, once stated, remains preserved for judicial review absent a clear and unequivocal waiver. Therefore, where a party objects to arbitrability but never- theless participates in the arbitration proceedings, waiver of the challenge to arbitral jurisdiction will not be inferred. Civil Procedure > State & Federal Interrelationships > Choice of Law

Civil  Procedure  >  Alternative  Dispute  Resolution  > Federal Arbitration Act

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN15  Federal law applies to the interpretation of arbi- tration agreements and, thus, whether a particular dispute is within the class of those disputes governed by the arbi- tration and choice of law clause is a matter of federal law. However, a court deciding whether the parties agreed to arbitrate a certain matter should apply ordinary state-law principles  governing  contract  formation.  First  Options' principles concerning application of state law are no less applicable in the international context than under domes- tic arbitration law.

Civil       Procedure              >              Appeals  >              Reviewability       > Preservation for Review

Civil  Procedure  >  Alternative  Dispute  Resolution  >

Federal Arbitration Act

Civil  Procedure  >  Alternative  Dispute  Resolution  > Foreign Arbitral Awards

HN16  In New Jersey, even in the absence of a contrac- tual submission of an issue to arbitration, a party may by conduct or agreement waive his legal right to judicial de- termination, but mere participation in the arbitration does not conclusively bar a party from seeking a judicial de- termination of arbitrability, even as late as the time of the claimant's application to confirm the award. On the other hand,  mere assertion of an objection does not dictate a finding of non-waiver.

COUNSEL: J. Jeffrey Weisenfeld (argued), New York, NY. Attorney for Appellee.

David L. Braverman, Robert C. Seiger, III, Esq., Richard E.  Miller  (argued),   Braverman,   Kaskey  &  Caprara, Philadelphia, PA. Attorneys for Appellant.

JUDGES:               BEFORE:                ALITO,   FUENTES,              and

GREENBERG, Circuit Judges. OPINIONBY: GREENBERG OPINION:

*276   OPINION OF THE COURT

GREENBERG, Circuit Judge.

This matter comes on before this court on an appeal by the Chi Mei Corporation ("Chi Mei") from the district court's order entered June 11, 2002, granting the motion of China Minmetals Import & Export Co. ("Minmetals") to  confirm  and  enforce  a  foreign  arbitration  award  and from  the  judgment  entered  on  August  26,  2002,  in  fa- vor  of  Minmetals  and  against  Chi  Mei  in  the  amount of $4,040,850.41. For the reasons stated herein, we will vacate  the  district  court's  order  and  judgment  and  will remand the case for further proceedings.

I. BACKGROUND

Chi Mei is a New Jersey corporation and Minmetals is a corporation

334 F.3d 274, *277; 2003 U.S. App. LEXIS 13012, **1

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*277     formed  and  existing  under  the  laws  of  the People's Republic of China **2  ("PRC"). n1 Production Goods  and  Materials  Trading  Corp.  of  Shantou  S.E.Z.

("Shantou"), which also is implicated in this action, like- wise is a corporation formed and existing under the laws of the PRC.

n1 Inasmuch as the district court enforced the arbitration  award  without  opinion,  it  did  not  ex- plicitly find any facts in this case. Nevertheless, the facts we summarize are undisputed except as noted.

This dispute arises out of a transaction involving Chi Mei,  Minmetals,  and  Shantou.  The  parties  dispute  al- most  every  detail  of  the  transaction;  for  example,  Chi Mei  refers  to  it  as  a  "currency  conversion  transaction" n2  while  Minmetals  calls  it  a  contract  for  purchase  by Minmetals of electrolytic nickel cathode. Moreover, we do not find the parties' descriptions of the transactions to be completely clear, a problem that fortunately does not impede our ability to decide this case. Chi Mei argues that it never intended nor agreed to sell anything to Minmetals and alleges that the contracts on which Minmetals relies

**3   were forged. On the other hand, Minmetals argues that Chi Mei failed to deliver the goods it promised to sell after receiving payment by drawing on a line of credit of several million dollars.

n2 The PRC imposes strict restrictions on for- eign  currency  transactions,  allowing  only  autho- rized parties to convert PRC currency ("RMB") into United States dollars.

According  to  Chi  Mei,  on  or  about  June  12,  1997, Shantou  sought  out  Chi  Mei  to  discount  a  certain  sum of US dollars. J.A. at 119. n3 Chi Mei orally agreed to provide discounting services for a .7% commission of the amount  of  US  dollars  before  discount.  Minmetals  was to obtain the funds by way of a letter of credit obtained from the Bank of China, as the PRC apparently authorized Minmetals to engage in currency conversion transactions.

Chi Mei asserts, however, that Shantou did not disclose its relationship with Minmetals to it and that it was un- aware of Minmetals' role in the transaction until after the delivery of the proceeds of the letter of credit to Shantou.

**4    Chi  Mei  subsequently  was  to  transfer  the  funds to accounts Shantou designated, and Chi Mei did so. By contrast, Minmetals asserts that the transaction involved an agreement to purchase electrolytic nickel cathode al- loy, it issued letters of credit worth several million dollars to Chi Mei, and Chi Mei knowingly submitted to a New York bank numerous false documents evidencing the sale, including an invoice, weight packing list, quality certifi- cate, and bill of lading, in order to collect funds under the letters of credit. Minmetals contends that Chi Mei did not deliver the goods described in the contracts.

n3  Chi  Mei  sets  forth  its  version  of  the  facts primarily in the affidavit of Jiaxiang Luo, its presi- dent during the relevant period, which it submitted to the district court in opposition to Minmetals' mo- tion to enforce and in support of Chi Mei's motion to dismiss. See J.A. at 115-26.

Two contracts submitted to a bank in the PRC that purport to be contracts for the sale of nickel by Chi Mei to  Minmetals   **5    for  a  sum  equal  to  the  amount  of the letters of credit (the "Sale of Goods contracts") are central to this dispute. Chi Mei alleges that the two con- tracts were entirely fraudulent, containing a forged sig- nature  of  a  nonexistent  Chi  Mei  employee  as  well  as a  forged  corporate  stamp.  Chi  Mei  further  alleges  that it  was  unaware  of  the  existence  of  these  contracts  un- til  it  appeared  at  the  arbitration  that  is  the  subject  of this dispute. The contracts provide for binding arbitration of any disputes in connection with the contracts before the China International Economic and Trade Arbitration Commission ("CIETAC"). App. at 33.

According to Chi Mei, it performed its duties under the  oral  agreement  governing  the  currency  discounting transaction and delivered the funds to Shantou after col- lecting

334 F.3d 274, *278; 2003 U.S. App. LEXIS 13012, **5

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*278    its .7% commission. n4 Shantou then allegedly misappropriated the funds, refusing to remit any of them to Minmetals. n5

lidity of the contracts." Id. at 49. On August 30, 2000, the CIETAC panel awarded Minmetals an amount in excess of $4 million.

**6

n4 At oral argument on the appeal, counsel for Chi Mei suggested for the first time that insofar as there may have been some agreement to sell goods, that agreement involved a company called Hexin

(Far East) Development Ltd., not Chi Mei. This al- ternative argument does not affect our analysis in this opinion.

n5 Chi Mei indicates that Minmetals filed crim- inal  complaints  in  the  PRC  against  Chi  Mei  and Shantou.  Chi  Mei  was  exonerated  after  a  formal inquiry by the Beijing Police Department,  which did not result in a criminal charge, while Weizhe Lin, the president of Shantou, was convicted of the criminal offense of conversion in connection with this matter. Id. at 122.

n6  According  to  Jiaxiang  Luo,  the  Chi  Mei president,  the  contracts  submitted  by  Minmetals to CIETAC were in fact different from the two con- tracts presented to the Bank of China. App. at 124-

25. According to him, all four contracts were forged and fraudulent. Id.

In July 2001, Minmetals moved in the district court for an order confirming and enforcing the arbitration award. Chi  Mei  opposed  the  motion  and  filed  a  cross-motion to deny the relief Minmetals sought, submitting numer- ous documents and affidavits,  including the affidavit of Jiaxiang Luo, the Chi Mei president. Minmetals did not submit  any  contrary  affidavits.  The  district  court  heard oral argument on the motions and, without conducting an evidentiary hearing, on June 11, 2002, entered an order granting Minmetals' motion to confirm **8   and enforce the award and denying Chi Mei's cross-motion. The court, however, did not file an opinion explaining its decision

On or about November 14, 1997, Minmetals initiated an arbitration proceeding before CIETAC against Chi Mei pursuant to the arbitration clauses contained in the Sale of  Goods  contracts.  n6  Chi  Mei  repeatedly  objected  to CIETAC's jurisdiction but, nevertheless, appeared before it, submitting evidence that the contracts which contained the  arbitration  clause  on  which  Minmetals  relied  were forged. Chi Mei also argued that Minmetals' flouting of Chinese law should prevent its recovery in the arbitration. Id. at 44-45. The arbitration tribunal held that Chi Mei failed to meet its burden of showing that the contracts at issue were forged,  and that even if Chi Mei's signature and stamp had been forged, its actions, such as providing documents **7   to the New York bank and drawing on the letters of credit, constituted "confirmation of the va-

and, accordingly, we do not know the basis for its entry of the order. On August 26, 2002, the district court en- tered judgment in favor of Minmetals in the amount of

$4,040,850.41. This appeal followed.

II. JURISDICTION AND STANDARD OF REVIEW The district court had jurisdiction pursuant to 9 U.S.C.

§  203  and  28  U.S.C.  §  1331,  and  we  have  jurisdiction pursuant to 28 U.S.C. § 1291. n7 HN1  Ordinarily,  in reviewing a district court's order confirming an arbitra- tion award, we would review the district court's factual findings for clear error and its legal conclusions de novo. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,

947-48, 115 S. Ct. 1920, 1926, 131 L. Ed. 2d 985 (1995). Here, however, inasmuch

334 F.3d 274, *279; 2003 U.S. App. LEXIS 13012, **8

Page 6

*279   as the court, at least explicitly, did not make find- ings of fact, and we, in any event, are deciding the case on a legal basis, our entire review is plenary.

n7 Chi Mei filed two notices of appeal, the first following the June 11, 2002 order and the second following entry of the judgment. Because the sec- ond notice of appeal supplies a jurisdictional basis for us to consider all the issues, we need not con- sider  the  effect  of  the  first  notice  of  appeal.  See Livera  v.  First  Nat'l  State  Bank,  879  F.2d  1186,

1190 (3d Cir. 1989).

**9

III. DISCUSSION

A. FORGERY ALLEGATIONS

The  primary  issue  in  this  case  is  whether  the  dis- trict court properly enforced the foreign arbitration panel's award where that panel, in finding that it had jurisdiction, rejected Chi Mei's argument that the documents providing for arbitration were forged so that there was not any valid writing exhibiting an intent to arbitrate. This issue actually involves two distinct questions. First, we must consider whether  a  foreign  arbitration  award  might  be  enforce- able  regardless  of  the  validity  of  the  arbitration  clause on which the foreign body rested its jurisdiction. In this regard, Minmetals points out that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards

(the  "Convention")  differs  somewhat  from  the  general provisions of the Federal Arbitration Act ("FAA"),  and particularly argues that Article V of the Convention re- quires enforcement of foreign awards in all but a handful of  very  limited  circumstances,  one  of  which  is  not  the necessity for there to be a valid written agreement pro- viding for arbitration. If we conclude, however, that only those awards based on a valid agreement to arbitrate are enforceable, we also **10    must consider who makes the  ultimate  determination  of  the  validity  of  the  clause at  issue.  Thus,  in  considering  the  second  question,  we must examine the district court's role, if any, in reviewing the foreign arbitral panel's finding that there was a valid agreement to arbitrate.

9 U.S.C. § 207 provides:

HN2   Within  three  years  after  an  arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter

for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recog- nition or enforcement of the award specified in the said Convention.

The Convention is incorporated into the FAA in 9 U.S.C.

§ 207 and appears at 9 U.S.C.A. § 201 historical n. Article

V of the Convention provides:

HN3   1.  Recognition  and  enforcement  of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent author- ity where the recognition and enforcement is sought, proof that:   **11

(a) The parties to the agreement referred to in article II were, un- der the law applicable to them, under  some  incapacity,  or  the said agreement is not valid un- der  the  law  to  which  the  par- ties  have  subjected  it  or,  fail- ing any indication thereon, un- der the law of the country where the award was made; or

. . . .

(c) The award deals with a dif- ference not contemplated by or not  falling  within  the  terms  of the submission to arbitration, or it  contains  decisions  on  mat- ters  beyond  the  scope  of  the submission  to  arbitration,  pro- vided  that,  if  the  decisions  on matters submitted to arbitration can be separated from those not so  submitted,  that  part  of  the award which contains decisions on matters submitted to arbitra- tion may be recognized and en- forced; or

(d) The composition of the arbi- tral authority or the arbitral pro- cedure

334 F.3d 274, *280; 2003 U.S. App. LEXIS 13012, **11

Page 7

*280    was  not  in  accordance with  the  agreement  of  the  par- ties, or, failing such agreement, was not in accordance with the law of the country where the ar- bitration took place; or

. . . .

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority  in  the  country  where  recognition and enforcement is sought **12   finds that:

(a) The subject matter of the dif- ference  is  not  capable  of  set- tlement by arbitration under the law of that country; or

(b) The recognition or enforce- ment of the award would be con- trary to the public policy of that country.

Article IV establishes the procedure for seeking en- forcement of an award under Article V:

HN4  1. To obtain the recognition and en- forcement mentioned in the preceding arti- cle,  the  party  applying  for  recognition  and enforcement shall, at the time of the applica- tion, supply:

(a) The duly authenticated orig- inal  award  or  a  duly  certified copy thereof;

(b)  The  original  agreement  re- ferred to in article II or a duly certified copy thereof.

. . . .

Article II provides:

HN5  1. Each Contracting State shall recog- nize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which

may arise between them in respect of a de- fined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

2. The term 'agreement in writing' shall in- clude an arbitral clause in a contract or an arbitration agreement, **13   signed by the parties or contained in an exchange of letters or telegrams.

3.  The  court  of  a  Contracting  State,  when seized of an action in a matter in respect to which the parties have made an agreement within the meaning of this article,  shall,  at the  request  of  one  of  the  parties,  refer  the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Minmetals argues that each article of the Convention governs  a  different  aspect  of  arbitration  procedure-- Article  II  sets  forth  the  grounds  for  compelling  arbi- tration,  Article IV describes the procedure required for seeking enforcement of an award, and Article V provides that once an award is made, the courts of a contracting state must enforce that award unless one of the narrow grounds for nonenforcement is proven. This case, accord- ing to Minmetals, therefore involves only Article V, under which in its view "the requirement of a valid written agree- ment is not necessary for enforcement." Appellee's Br. at

6. Chi Mei, on the other hand, argues that the Convention must be read as a whole and that Article V both explicitly and implicitly incorporates Article II's **14   valid writ- ten agreement requirement. In addition, Minmetals argues that the arbitration panel's decision as to the validity of the arbitration agreement is conclusive unless an Article V exception applies, which, it argues, is not the case here. Chi Mei, for its part, argues that the district court had an obligation to determine independently the validity of the agreement.

Because  the  domestic  FAA  (chapter  1  of  the  FAA)

is  applicable  to  actions  brought  under  the  Convention

(chapter  2  of  the  FAA)  to  the  extent  they  are  not  in conflict,  9 U.S.C. § 208,  Chi Mei relies heavily on the Supreme  Court's  decision  in  First  Options  of  Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S. Ct. 1920, 131 L. Ed.

2d 985. First Options involved the domestic FAA,

334 F.3d 274, *281; 2003 U.S. App. LEXIS 13012, **14

Page 8

*281   not the Convention, but involved facts similar to those in this case. In First Options, as here, the district court  confirmed  an  arbitration  award  where  the  parties against whom the award was enforced had argued both in the arbitration proceedings and before the district court that they had not signed the document containing the ar- bitration clause. Id. at 941,  115 S. Ct. at 1922. In that

**15   case, the Court held that HN6  the district court and not the arbitration panel must decide the question of arbitrability--that is, the question whether a certain dis- pute is subject to arbitration under the terms of a given agreement--unless the parties clearly and unmistakably have agreed that the arbitrator should decide arbitrability. Id.  at  943,  115  S.  Ct.  at  1923-24.  In  other  words,  the Court, relying on the principle that "a party can be forced to  arbitrate  only  those  issues  it  specifically  has  agreed to submit to arbitration," id. at 945, 115 S. Ct. at 1925, held that,  unless the district court found that there was clear and unmistakable evidence that the parties agreed to arbitrate arbitrability, the district court independently must determine whether the parties agreed to arbitrate the merits of the dispute, id. at 943-45, 115 S. Ct. at 1923-

25.

Chi Mei therefore argues that, under First Options, the district court should have concluded that the parties did not agree to arbitrate arbitrability n8 and, faced with the evidence presented by Chi Mei in opposition to enforce- ment and the lack of evidence submitted in response by

**16    Minmetals, the district court should have found that the dispute was not arbitrable because the contract had been forged, or at least should have conducted a hear- ing to resolve that issue. If this case had arisen under the domestic FAA, First Options clearly would have settled in  Chi  Mei's  favor  both  the  question  of  the  need  for  a valid agreement to arbitrate and the question of the dis-

trict court's role in reviewing an arbitrator's determination of arbitrability when an award is sought to be enforced. We, therefore, must determine whether First Options pro- vides the rule of decision in a case involving enforcement of a foreign arbitration award under the Convention.

n8 Minmetals does not point to any evidence supporting a conclusion that the parties manifested an intent to arbitrate arbitrability.

Our          cases       involving                enforcement           under      the Convention largely have arisen under Article II, with one party seeking an order compelling another party to arbi- trate a dispute. Under those cases, it is clear that **17   if Minmetals had initiated proceedings in the district court to  compel  arbitration,  the  court  would  have  been  obli- gated to consider Chi Mei's allegations that the arbitra- tion clause was void because the underlying contract was forged. See Sandvik v. Advent Int'l Corp.,  220 F.3d 99,

104-07 (3d Cir. 2000). It is, of course, true that HN7  the FAA, of which the Convention is a part, establishes a  strong  federal  policy  in  favor  of  arbitration  and  that the presumption in favor of arbitration carries " 'special force' " when international commerce is involved. Id. at

104 (quoting Mitsubishi Motors Corp. v. Soler Chrysler- Plymouth, Inc., 473 U.S. 614, 631, 105 S. Ct. 3346, 3356,

87 L. Ed. 2d 444 (1985)). Nonetheless,  we have stated that the " 'liberal federal policy favoring arbitration agree- ments . . . is at bottom a policy guaranteeing the enforce- ment  of  private  contractual  arrangements,'  "  id.  at  105

(quoting Mitsubishi, 473 U.S. at 625, 105 S. Ct. at 3353), and that because "arbitration is a matter of contract, . . . no arbitration may be compelled in the absence of an agree- ment  to  arbitrate,"  id.  at  107-08  (citing   **18    AT&T Techs, Inc. v. Communications

334 F.3d 274, *282; 2003 U.S. App. LEXIS 13012, **18

Page 9

*282    Workers of Am.,  475 U.S. 643,  648,  106 S. Ct.

1415, 1418, 89 L. Ed. 2d 648 (1986)).

In Sandvik, we affirmed the district court's denial of a motion to compel arbitration where the district court had concluded  that  it  had  to  determine  whether  the  parties in fact had entered into a binding agreement to arbitrate before it could compel arbitration. Id. at 104-07. In that case,  there  was  a  dispute  as  to  whether  the  agreement containing the arbitration agreement was binding on the defendant corporation where it alleged that its attorney signed the contract without proper authorization. Id. at

101-02. We relied on our decision in Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51 (3d Cir. 1980), in which we stated:

HN8  Before a party to a lawsuit can be or- dered to arbitrate and thus be deprived of a day in court, there should be an express, un- equivocal agreement to that effect. If there is doubt as to whether such an agreement exists, the matter, upon a proper and timely demand, should  be  submitted  to  a  jury.  Only  when there  is  no  genuine  issue  of  fact  concern- ing  the  formation  of  the  agreement   **19  should  the  court  decide  as  a  matter  of  law that the parties did or did not enter into such an agreement.

Id. at 106 (quoting Par-Knit Mills, 636 F.2d at 54).

In Sandvik, we drew HN9  a distinction between con- tracts asserted to be void or nonexistent, as was the case there  and  is  the  case  here,  and  contracts  alleged  to  be voidable, in which case arbitration, including arbitration of the fraud question,  may be appropriate under Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395,

87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967). n9 We concluded that "because" under both the Convention  and the FAA

a court must decide whether an agreement to arbitrate ex- ists before it may order arbitration, the District Court was correct in determining that it must decide whether the attorney's  signature bound Advent before it could order arbitration." Id. at 107; see also GE Co. v. Deutz AG, 270

F.3d 144, 152-56 (3d Cir. 2001) (affirming district court's decision in case to compel an international arbitration to submit arbitrability question to jury after finding arbitra- tion clause's application to defendant **20  ambiguous). Notably, although we supported our conclusion with ref- erences to the "null and void" language in Article II of the Convention, we based our decision on straightforward notions of contract law rather than on any technical inter- pretation of the language of the treaty. See Sandvik, 220

F.3d at 105-10.

n9 In Prima Paint, the plaintiff brought an ac- tion to rescind a contract with the defendant on the basis  of  fraud  in  the  inducement.  The  defendant moved to arbitrate the dispute on the basis of an arbitration clause contained in the contract alleged to  have  been  induced  fraudulently.  The  Supreme Court held that the arbitrator should decide the chal- lenge based on fraud in the inducement of the entire contract. Prima Paint, 388 U.S. at 403-04, 87 S. Ct. at 1806.

In this case, however, an arbitral tribunal already has rendered a decision, and has made explicit findings con- cerning the alleged forgery of the contract, including the arbitration clause. "The goal of the Convention,   **21  and the principal purpose underlying American adoption and  implementation  of  it,  was  to  encourage  the  recog- nition and enforcement of commercial arbitration agree- ments in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced in the signatory countries." Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n.15,

334 F.3d 274, *283; 2003 U.S. App. LEXIS 13012, **21

Page 10

*283    94  S.  Ct.  2449,  2457  n.15,  41  L.  Ed.  2d  270

(1974). In an oft-cited opinion concerning enforcement of a foreign arbitration award, the Court of Appeals for the Second Circuit noted the "general pro-enforcement bias  informing  the  Convention,"  explaining  that  the Convention's "basic thrust was to liberalize procedures for enforcing foreign arbitral awards." Parsons & Whittemore Overseas Co. v. Societe Generale de l'Industrie du Papier,

508 F.2d 969, 973 (2d Cir. 1974).

Consistently with the policy favoring enforcement of foreign arbitration awards, courts strictly have limited de- fenses to enforcement to the defenses set forth in Article V of the Convention, and generally have construed those exceptions  narrowly.  See,  e.g.,  id.  at  973-77;  see  also Biotronik  Mess-und  Therapiegeraete  GmbH  &  Co.  v. Medford  Med.  Instrument  Co.,  415  F.  Supp.  133,  136,

140-41 (D.N.J. 1976). **22    As the Court of Appeals for the Second Circuit has noted, "there" is now consid- erable caselaw holding that,  in an action to confirm an award rendered in, or under the law of, a foreign jurisdic- tion, the grounds for relief enumerated in Article V of the Convention are the only grounds available for setting aside an arbitral award." Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys 'R' Us, Inc., 126 F.3d 15, 20 (2d Cir. 1997) (em- phasis added) (citing M&C Corp. v. Erwin Behr GmbH & Co., 87 F.3d 844, 851 (6th Cir. 1996); Int'l Standard Elec. Corp. v. Bridas Sociedad Anonima Petrolera, Industrial y Comercial, 745 F. Supp. 172, 181-82 (S.D.N.Y. 1990); Brandeis Intsel Ltd. v. Calabrian Chems. Corp., 656 F. Supp. 160, 167 (S.D.N.Y. 1987); Albert Jan van den Berg, The New York Arbitration Convention of 1958: Towards a Uniform Judicial Interpretation 265 (1981)).

This  narrow  interpretation  of  the  Convention  is  in keeping with 9 U.S.C. § 207 HN10  which unequivocally provides that a court in which enforcement of a foreign ar- bitration award is sought "shall confirm the award unless it finds one of the grounds **23    for refusal or defer- ral of recognition or enforcement of the award specified

in the said Convention." (emphasis added). The absence of a written agreement is not articulated specifically as a ground for refusal to enforce an award under Article V of the Convention. In fact, the Convention only refers to an "agreement in writing" in Article II, which requires a court of a contracting state to order arbitration when pre- sented with an agreement in writing to arbitrate, unless it finds that agreement to be void,  inoperative,  or inca- pable of being performed. This distinction, according to Minmetals, is enough to differentiate this case from cases like First Options,  which arose under the FAA, n10 as well as from cases like Sandvik and Deutz, which arose under Article II.

n10  As  Minmetals  notes,  the  grounds  for  re- fusal  to  enforce  an  award  are  broader  under  the FAA than under the Convention. Furthermore, the FAA  refers  repeatedly  to  the  need  for  a  written agreement, see MCI Telecommunications Corp. v. Exalon  Indus.,  Inc.,  138  F.3d  426,  429  (1st  Cir.

1998) (citing numerous provisions of the FAA that refer to a "writing" and relying on that statutory lan- guage in holding that "determining whether there is a written agreement to arbitrate the controversy in question is a first and crucial step in any enforce- ment proceeding before a district court"), while the Convention does not. Neither of these distinctions in itself supplies a convincing reason to refuse to apply First Options to a case under the Convention, however, inasmuch as neither of these points played any role in the Supreme Court's analysis in First Options. The Court based its decision in that case largely on straightforward contract principles rather than on a technical statutory analysis.

**24

On the other hand, the crucial principles common to all of these decisions--that arbitration

334 F.3d 274, *284; 2003 U.S. App. LEXIS 13012, **24

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*284    is  a  matter  of  contract  and  that  a  party  can  be forced to arbitrate only those issues it specifically agrees to  submit  to  arbitration--suggest  that  the  district  court here  had  an  obligation  to  determine  independently  the existence of an agreement to arbitrate even though an ar- bitration panel in a foreign state already had rendered an award, unless Minmetals' argument concerning the exclu- sive nature of Article V or some other principle provides a  meaningful  reason  to  distinguish  the  cases  we  have cited. Thus, we consider whether Convention cases cited by Minmetals, which contrast Article II with the stricter Article V, provide a compelling reason to distinguish this case from Sandvik and Deutz. Furthermore, there is some question whether the culture of international arbitration, which  informs  the  structure,  history,  and  policy  of  the Convention, provides a basis for distinguishing this case from First Options.

With regard to the first question, we are not convinced by Slaney v. International Amateur Athletic Federation,

244 F.3d 580 (7th Cir. 2001), or by Yusuf   **25    Ahmed Alghanim, both cited by Minmetals, that the absence from Article V of the lack of a valid written agreement as a ground  for  refusal  to  enforce  an  award  is  fatal  to  Chi Mei's contention that forgery of the arbitration agreement should preclude its enforcement. In Slaney, the Court of Appeals for the Seventh Circuit held that a foreign arbitra- tion award should be enforced against the plaintiff despite her argument that there was not a valid "agreement in writ- ing" as required by Article II of the Convention. The court explained:

Assuming that this case had come to the dis- trict court and the IAAF had sought to compel Slaney to arbitrate her claims, a determina- tion as to whether there had been a writing might pose a barrier to the IAAF's position. However,  that is not the case. Here,  an ar- bitration  has  already  taken  place  in  which, as  we  have  determined,  Slaney  freely  par-

ticipated.  Thus,  the  fact  that  Slaney  sug- gests  there  is  no  written  agreement  to  ar- bitrate,  as  mandated  by  Article  II  of  the New  York  Convention  is  irrelevant.  See, e.g.,Coutinho  Caro  &  Co.,  U.S.A.,  Inc.  v. Marcus Trading Inc., 2000 U.S. Dist. LEXIS

8498, Nos. 3:95CV2362 AWT, 3:96CV2218

AWT, 3:96CV2219 AWT, 2000 WL 435566

at **26   *5 n.4 (D. Conn. March 14, 2000)

(recognizing a difference between the situa- tion where a party seeks to compel arbitration and a situation in which one attempts to set aside an arbitral award that has already been issued). What is highlighted here is the dif- ference between Article II of the Convention, which dictates when a court should compel parties to an arbitration, and Article V, which lists the narrow circumstances in which an ar- bitration decision between signatories to the Convention should not be enforced.

Id. at 591. The court went on to apply ordinary rules of contract  law  in  holding  that  the  plaintiff  was  estopped from  arguing  that  the  lack  of  a  binding  written  agree- ment precluded enforcement because she had participated freely in the arbitration proceeding, had not argued that she  never  agreed  to  the  arbitration  clause  during  those proceedings, and had let the opportunity to do so pass by when she withdrew from those proceedings. Id. The court also  considered  certain  defenses  to  enforcement  under Article V but rejected all of them. Id. at 592-94.

Minmetals  relies  on  Slaney  for  the  proposition  that lack of a valid written **27    agreement to arbitrate is irrelevant to enforcement under Article V, which neither mentions such an agreement nor explicitly incorporates the written agreement requirement of Article II. We, how- ever, will not apply Slaney in the way Minmetals suggests. First, it appears that the language in Slaney suggesting that lack of a

334 F.3d 274, *285; 2003 U.S. App. LEXIS 13012, **27

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*285    written agreement is irrelevant in an Article V case is dicta. The court rested its decision primarily on an estoppel theory because Slaney had participated freely in the arbitration without arguing that lack of a written agreement to arbitrate deprived the arbitral tribunal of ju- risdiction. Id. In applying estoppel principles, the court stated:  "We see no reason why, even in the absence of a writing, ordinary rules of contract law should not apply." Id. In this case, as we discuss below, Chi Mei continually objected to the arbitration panel's jurisdiction and always has maintained that the purchase contracts were forged. Estoppel is therefore not applicable in this case. Moreover, the court in Slaney did not discuss First Options in con- sidering Slaney's position with regard to the alleged lack of a written agreement to arbitrate. n11

n11  We  do  not  suggest  that  the  court's  anal- ysis  was  inconsistent  with  First  Options.  The Supreme Court explicitly stated that "when" decid- ing whether the parties agreed to arbitrate a certain matter (including arbitrability),  courts generally .

. . should apply ordinary state-law principles that govern the formation of contracts." First Options,

514 U.S. at 944, 115 S. Ct. at 1924. On the facts of Slaney, therefore, the court's conclusion that "non- signatories  to  an  arbitration  agreement  may  nev- ertheless  be  bound  according  to  ordinary  princi- ples  of  contract  and  agency,  including  estoppel" was consistent with the Court's reasoning in First Options.Slaney, 244 F.3d at 591.

**28

Minmetals' reliance on Yusuf Ahmed Alghanim like- wise is misplaced. In that case,  the court distinguished between awards rendered in a foreign state and awards rendered in the state in which enforcement is sought, hold- ing that a court may consider implied grounds of relief under  the  FAA,  such  as  the  arbitrator's  manifest  disre- gard of the law, when asked to enforce an award rendered in the United States under the Convention. Yusuf Ahmed

Alghanim, 126 F.3d at 20-23. The court stated:

In sum, we conclude that the Convention mandates very different regimes for the re- view  of  arbitral  awards  (1)  in  the  state  in which, or under the law of which, the award was  made,  and  (2)  in  other  states  where recognition and enforcement are sought. The Convention  specifically  contemplates  that the state in which, or under the law of which, the award is made, will be free to set aside or modify an award in accordance  with its domestic  arbitral  law  and  its  full  panoply of  express  and  implied  grounds  for  relief. See  Convention  art.  V(1)(e).  However,  the Convention is equally clear that when an ac- tion for enforcement is brought in a foreign state, the state may refuse to enforce **29  the award only on the grounds explicitly set forth in Article V of the Convention.

Id. at 23.

At first blush, Yusef Ahmed Alghanim might appear to support Minmetals' position as it holds that awards ren- dered in a foreign state must be enforced unless one of the specific narrow exceptions in Article V is proven, while a United States court may refuse to enforce an award ren- dered in the United States or under United States law on other grounds implied under the FAA. First Options is, of course, a case under the FAA, and Minmetals suggests that  it  is  therefore  irrelevant  here  as  the  award  in  this case was made in a foreign state. First Options, however, did  not  involve  an  implied  ground  for  relief  under  the FAA. Rather, it involved the more fundamental question of  whether  the  party  opposing  enforcement  was ever  a party to a valid agreement to arbitrate. In Yusuf Ahmed Alghanim, there was no challenge to the validity of the arbitration agreement--only the arbitrator's interpretation of contract terms and application of

334 F.3d 274, *286; 2003 U.S. App. LEXIS 13012, **29

Page 13

*286    New York law on lost profits were disputed. Id. at 23-25.

We therefore find that HN11  the absence of any ref- erence **30    to a valid written agreement to arbitrate in Article V does not foreclose a defense to enforcement on  the  grounds  that  there  never  was a  valid  agreement to  arbitrate.  Minmetals  cannot  point  to  any  case  inter- preting  Article  V  of  the  Convention  so  narrowly  as  to preclude  that  defense  and  we  are  aware  of  none.  n12

Nor do the text and structure of the Convention compel such an interpretation. Indeed,  although only Article II contains an "agreement in writing" requirement, Article IV  requires  a  party  seeking  to  enforce  an  award  under Article V to supply "the" original agreement referred to in article II" along with its application for enforcement. Furthermore, Article V expressly provides that the party opposing enforcement may furnish "to the competent au- thority where the recognition and enforcement is sought proof that . . . the said agreement is not valid . . . ." Read as a whole, therefore, the Convention contemplates that a court should enforce only valid agreements to arbitrate and only awards based on those agreements. Thus,  the concern we expressed in our decisions in Article II cases like Sandvik and Deutz--that parties only be required to arbitrate  those  disputes  they   **31    intended  to  arbi- trate--is likewise present in this case. We therefore hold that a district court should refuse to enforce an arbitra- tion  award  under  the  Convention  where  the  parties  did not reach a valid agreement to arbitrate,  at least in the absence of a waiver of the objection to arbitration by the party opposing enforcement. n13

n12 At oral argument, counsel for Chi Mei for the  first  time  urged  that  Europcar  Italia,  SPA  v. Maiellano Tours, Inc.,  156 F.3d 310,  315-16 (2d Cir.  1998),  provided  direct  support  for  its  read- ing of the Convention. In that case,  however,  the party resisting enforcement did not argue that the agreement containing the arbitration clause (which was  executed  in  1988)  was  forged  or  fraudulent; rather,  it  argued  that  one  of  the  agreements  on which the arbitrators based their substantive deci-

sion (which was executed in 1979) was forged. Id. The  court  therefore  concluded  that,  inasmuch  as the 1988 arbitration agreement explicitly provided that the arbitrators would decide disputes involving the validity of that agreement,  the party resisting enforcement had the opportunity to raise the issue of forgery of the 1979 agreement during the arbitra- tion proceedings, and, in any event, the existence of the 1979 agreement had only a minor influence on the arbitrators' substantive decision, enforcing the award would not violate public policy under Article V(2)(b). Id. Here, in the face of Chi Mei's argument that the contract containing the arbitration clause it- self is forged Europcar is inapposite. We express no opinion as to the applicability of Article V(2)(b) to this case.

**32

n13 We do not, however, hold, as Chi Mei urges, that Article V "incorporates" Article II's valid writ- ten  agreement  requirement.  In  this  respect,  there is indeed some distinction between Article II and Article V. The former explicitly requires an "agree- ment in writing" while the latter requires only that the parties have reached an agreement as to arbitra- bility under ordinary contract principles.

We therefore are left with the question whether the in- ternational nature of this case distinguishes it from First Options. Stated more precisely, we must ask whether the international  context  of  the  arbitration  at  issue  affects the principle that the district court should decide whether there was a valid agreement to arbitrate. As already noted, First Options held that, in a case arising under the domes- tic FAA, the district court independently should make that decision, even after the arbitrators have decided that they did have jurisdiction, absent clear and unmistakable evi- dence that the parties intended to leave that determination to the arbitrators.

334 F.3d 274, *287; 2003 U.S. App. LEXIS 13012, **32

Page 14

*287  Preliminarily on the issue it is worth noting **33  that we previously have applied First Options in the in- ternational  context,  albeit  in  a  case  seeking  to  compel arbitration  rather  than  to  confirm  an  award.  See  Deutz,

270 F.3d at 155 ("We recognize that First Options is a do- mestic arbitration case, but the international nature of the present litigation does not affect the application of First Options' principles."). Furthermore, one district court in this circuit has refused to distinguish international arbitra- tion proceedings from domestic arbitration proceedings, despite  the  greater  presumption  in  favor  of  arbitration in  the  international  context,  in  applying  First  Options to  a  case  involving  the  Inter-American  Convention  on International  Commercial  Arbitration,  which  is  imple- mented in Chapter 3 of the FAA, 9 U.S.C. § 301. Am. Life Ins. Co. v. Parra, 25 F. Supp. 2d 467, 474, 476 (D. Del.

1998).

There   nonetheless   may   be   reason   to   think   that the  international  posture  of  this  case  removes  it  from the   scope   of   First   Options.   For   example,   interna- tional  arbitration  rules  tend  to  favor  the  rule  of  com- petence-competence (sometimes known as kompetenz- kompetenz)--the **34    principle that gives arbitrators

the  power  to  decide  their  own  jurisdiction--more  than American  arbitration  rules.  n14  One  commentator  has opined that "international arbitration rules normally pro- vide explicitly that the arbitrators have the power to deter- mine their own jurisdiction," so that agreements incorpo- rating international arbitration rules fall within "the agree- ment of the parties exception of First Options." Ian R. MacNeil et al., IV Federal Arbitration Law: Agreements, Awards And Remedies Under the Federal Arbitration Act

§  44.15.1  (Supp.  1996)  (quoted  in  Parra,  25  F.  Supp.

2d  at  476.  See  also,  Conrad  K.  Harper,  The  Options in First Options:  International Arbitration and Arbitral Competence,  771 PLI/Comm 127,  141-43 (1998) (not- ing that even prior to First Options some courts had held that by incorporating ICC Arbitration Rules into an ar- bitration agreement the parties clearly and unmistakably had authorized the arbitral tribunal to determine its own jurisdiction and arguing that incorporation of such rules is  too  often  overlooked  by  the  courts).  But  see  Parra,

25 F. Supp. 2d at 476 (rejecting the suggestion that the

**35   parties clearly and unmistakably agreed to submit arbitrability disputes to the arbitral panel by submitting to an arbitration proceeding governed by Inter-American Commercial Arbitration

334 F.3d 274, *288; 2003 U.S. App. LEXIS 13012, **35

Page 15

*288     Commission  rules,   which  authorize  arbitra- tors  to  resolve  such  disputes).  The  contracts  in  this case,  for  example,  incorporate  the  rules  of  CIETAC. App.  at  31.  Those  rules  do  indeed  allow  the  arbi- trators  the  power  to  determine  their  own  jurisdiction. China  International  Economic  and  Trade  Arbitration Commission. Arbitration Rules Ch. I, § 1. Art. 4 ("The Arbitration Commission has the power to decide on the existence and validity of an arbitration agreement and on Jurisdiction over an arbitration case."). Nonetheless, in- corporation of this rule into the contract is relevant only if the parties actually agreed to its incorporation. After all, a contract cannot give an arbitral body any power, much less  the  power  to  determine  its  own  jurisdiction.  If  the parties never entered into it.

n14          Article     21             of             the           United     Nations

Commission           on            International          Trade      Law

("UNCITRAL")  Rules  of  Arbitration  states  that

"the" arbitral tribunal shall have the power to rule on objections that it has no jurisdiction, including any  objections  with  respect  to  the  existence  or validity of the arbitration clause or of the separate arbitration  agreement."  UNCITRAL  Arbitration Rules   Art.   21.   The   International   Chamber   of Commerce  ("ICC")  Rules  of  Arbitration  allow a  party  that  contests  the  existence,  validity,  or scope  of  an  arbitration  agreement  to  ask  a  court to   decide   whether   a   valid   agreement   exists; if  the  court  so  finds,  then  the  arbitral  tribunal rules  on  the  arbitrability  of  the  specific  dispute before it. ICC Rules of Arbitration Art. 6(2). The Arbitration  Rules  of  the  International  Center  for Settlement  of  Investment  Disputes  ("ICSID")  as well   as   the   American   Arbitration   Association

("AAA") International Arbitration Rules likewise give  arbitral  tribunals  the  power  to  rule  on  their own         jurisdiction,            including                objections              with respect to the existence,  scope,  or validity of the arbitration   agreement.   ICSID   Arbitration   Rule

41(1);  AAA  International  Arbitration  Rules  Art.

15. The London Court of International Arbitration

("LCIA") Rules go one step further,  granting the arbitration  tribunal  the  same  power,  and  further providing  that  "by"  agreeing  to  arbitration  under these Rules, the parties shall be treated as having agreed  not  to  apply  to  any  state  court  or  other judicial   authority   for   any   relief   regarding   the Arbitral Tribunal's jurisdiction or authority . . . ." LCIA Rules of Arbitration Art. 23.4.

**36

Although  incorporation  of  CIETAC  rules  in  an  al- legedly forged contract is not enough in itself to require

that Chi Mei be bound by the arbitration clause in this case,  Minmetals  nonetheless  suggests  that  the  interna- tional  nature  of  this  dispute  is  sufficient  to  distinguish this case from First Options. Thus, it could be argued that international norms favoring competence-competence, as well as American policy favoring arbitration particularly strongly  in  international  cases,  are  sufficient  to  render First  Options  inapplicable  in  the  international  context. Competence-competence is applied in slightly different ways around the world. The one element common to all nations is the conferral of the power to decide jurisdic- tion on the arbitrators themselves. It is important to note, however, that this principle says nothing about the role of judicial review.

HN12  In its simplest form, competence-competence simply means that the arbitrators can examine their own jurisdiction without waiting for a court to do so;  if one side  says  the  arbitration  clause  is  invalid,  there  is  no need to adjourn arbitration proceedings to refer the mat- ter  to  a  judge.  William  W.  Park,  Determining  Arbitral Jurisdiction:   Allocation  of  Tasks  Between  Courts  and Arbitrators **37  , 8 Am. Rev. Int'l Arb. 133, 140 (1997). Under this brand of competence-competence,  however, the arbitrators' jurisdictional decision is subject to judi- cial review at any time before, after, or during arbitration proceedings, as was traditionally the case under English law. See id. at 140 & n.22. The French form of compe- tence-competence goes somewhat further. A court only can decide arbitrability before an arbitral panel has been constituted if the alleged arbitration agreement is clearly void; otherwise, courts must decline to hear the case un- til after an arbitral award is rendered. Id. at 141. Finally, the strictest form of competence-competence is the tra- ditional German kompetenz-kompetenz, under which an arbitral panel's jurisdictional decision in a case where the parties agreed to a kompetenz-kompetenz clause essen- tially was insulated from any form of judicial review. Id. at 141-42.

Despite  these  different  formulations,  however,  and despite  the  principle's  presumption  in  favor  of  allow- ing  arbitrators  to  decide  their  own  jurisdiction,  it  ap- pears  that   **38    every  country  adhering  to  the  com- petence-competence principle allows some form of judi- cial review of the arbitrator's jurisdictional decision where the party seeking to avoid enforcement of an award ar- gues that no valid arbitration agreement ever existed. See id.  at  140-42.  Even  the  traditional  German  model  al- lowed for judicial review when the very making of the competence-competence agreement was challenged. See Adriana Dulic, First Options of Chicago, Inc. v. Kaplan and the Kompetenz-Kompetenz Principle, 2 Pepp. Disp. Resol.  L.J.  77,  79  (2002).  Furthermore,  in  1985,  the United Nations Commission on International Trade Law

("UNCITRAL")

334 F.3d 274, *289; 2003 U.S. App. LEXIS 13012, **38

Page 16

*289     proposed   its   Model   Law   on   International Commercial  Arbitration,  which  prohibits  parties  from limiting the power of the arbitral tribunal to rule on its own jurisdiction, but which allows substantial opportunity for judicial review of that ruling. UNCITRAL Model Law on International Commercial Arbitration Art. 16. If a juris- dictional challenge is made, the arbitral panel either may issue  a  preliminary  ruling  on  jurisdiction  or  may  defer that decision until issuance of its final award. Id. In either case, the **39   party challenging jurisdiction may seek judicial review of a tribunal's decision that it has juris- diction over the dispute. Id. Both England and Germany, as  well  as  nearly  40  other  countries  and  several  states within the United States have enacted legislation based on the Model Law. UNCITRAL, Status of Conventions and Model  Laws,  at  http://www.unicitral.org/en-index.htm.

(last modified Mar. 20, 2003).

It therefore seems clear that international law over- whelmingly favors some form of judicial review of an ar- bitral tribunal's decision that it has jurisdiction over a dis- pute, at least where the challenging party claims that the contract on which the tribunal rested its jurisdiction was invalid. International norms of competence-competence are therefore not inconsistent with the Supreme Court's holding in First Options, at least insofar as the holding is  applied  in  a  case  where,  as  here,  the  party  resisting enforcement  alleges  that  the  contract  on  which  arbitral jurisdiction was founded is and always has been void.

In sum, First Options holds that a court asked to en- force an arbitration award, at the request of a party oppos- ing enforcement, may determine independently the arbi- trability of the dispute. Although   **40    First Options arose under the FAA, the Court's reasoning in the case is based on the principle that "arbitration is simply a mat-

ter of contract between the parties; it is a way to resolve those disputes--but only those disputes--that the parties have agreed to submit to arbitration." First Options, 514

U.S. at 943, 115 S. Ct. at 1924. This rationale is not spe- cific  to  the  FAA.  It  is  a  crucial  principle  of  arbitration generally, including in the international context. Indeed, even international laws and rules of arbitration that tradi- tionally grant arbitrators more leeway to decide their own jurisdiction have allowed a party objecting to the validity of the agreement to arbitrate to seek judicial review of an arbitral panel's decision that it has jurisdiction under the alleged agreement. For these reasons, we hold that,

HN13  under the rule of First Options, a party that op- poses enforcement of a foreign arbitration award under the Convention on the grounds that the alleged agreement containing  the  arbitration  clause  on  which  the  arbitral panel rested its jurisdiction was void ab initio is entitled to present evidence of such invalidity to the district court, which **41   must make an independent determination of the agreement's validity and therefore of the arbitra- bility of the dispute, at least in the absence of a waiver precluding the defense.

In  this  case,  the  district  court  confirmed  and  en- forced the arbitral award without opinion. Chi Mei asks us  to  reverse  the  district  court's  judgment  and  remand with instructions to enter judgment in its favor denying Minmetals' motion to confirm and enforce and granting its motion to dismiss. On this record, we cannot grant this relief. Although Chi Mei proffered evidence suggesting that the contracts providing for arbitration were forged, Minmetals presented the sale of goods contracts and other documents evidencing the existence of valid contracts to the district court. In the alternative, Chi Mei asks that we remand the case to the

334 F.3d 274, *290; 2003 U.S. App. LEXIS 13012, **41

Page 17

*290   district court for further proceedings to ascertain the validity of the contracts. Given the apparent dispute of facts,  we agree that a remand is appropriate. On re- mand, the district court is free to treat Chi Mei's motion to dismiss as a motion for summary judgment, to entertain opposition to it, and to conduct such further proceedings as may be appropriate.

B. WAIVER **42

Minmetals also argues that Chi Mei has waived the forgery/jurisdiction argument by participating voluntarily in the arbitration proceedings rather than seeking a stay of arbitration in the district court. n15 Chi Mei counters by arguing that it did not participate on the merits of the arbitration, but rather appeared only to object to jurisdic- tion and that, regardless of its participation on the merits, it preserved its right to challenge jurisdiction by properly objecting  to  jurisdiction  and  by  arguing  the  forgery  is- sue before the arbitral panel. Although it did not issue a written opinion, the district court plainly was concerned with this issue as it asked counsel for both sides numerous questions about waiver at oral argument.

n15 We note that Minmetals contends that "Chi Mei waived its right to claim a lack of a written ar- bitral agreement," Appellee's br. at 18, and thus we do not consider the sometimes elusive distinction between the application of principles of waiver and estoppel. See Slaney, 244 F.3d at 591.

**43

We repeatedly have held under the FAA, including in our opinion in First Options in which the Supreme Court affirmed our judgment, that HN14  a party does not waive its objection to arbitrability where it raises that objection in  arbitration:   "A  party  does  not  have  to  try  to  enjoin

or stay an arbitration proceeding in order to preserve its objection to jurisdiction. . . . A jurisdictional objection, once stated, remains preserved for judicial review absent a clear and unequivocal waiver. . . . Therefore, where a party objects to arbitrability but nevertheless participates in the arbitration proceedings, waiver of the challenge to arbitral jurisdiction will not be inferred." Kaplan v. First Options  of  Chicago,  Inc.,  19  F.3d  1503,  1510  (3d  Cir.

1994), aff'd, 514 U.S. 938, 115 S. Ct. 1920, 131 L. Ed. 2d

985; see also Pa. Power Co. v. Local Union # 272, IBEW,

886 F.2d 46, 50 (3d Cir. 1989).

Minmetals argues that this case is different from our precedent under the domestic FAA because it arises under the Convention. Yet the principle we state on the limita- tion of waiver to jurisdiction of the arbitrators is well- settled in this court and **44   Minmetals offers no com- pelling reason to ignore it here. There is, however, some question whether federal or state law should govern the waiver issue. In Deutz, we observed that HN15  "federal" law applies to the interpretation of arbitration agreements" and that "thus, 'whether a particular dispute is within the class  of  those  disputes  governed  by  the  arbitration  and choice of law clause is a matter of federal law.' " Deutz,

270 F.3d at 154 (quoting Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39, 43 (3d Cir.

1978)). We recognized, however, that the Supreme Court in First Options stated that a court deciding whether the parties agreed to arbitrate a certain matter should apply

"ordinary state-law principles governing contract forma- tion." Id. (citing First Options, 514 U.S. at 944, 115 S. Ct. at 1924). We went on to uphold the parties' choice of law by applying Pennsylvania law to the arbitrability dispute in that case, noting that First Options' principles concern- ing application of state law were no less applicable in the international context than under domestic arbitration law and

334 F.3d 274, *291; 2003 U.S. App. LEXIS 13012, **44

Page 18

*291   that, in any **45   event, application of federal law would not have altered the outcome of the case. Id. at

155.

In this case it appears that if state law is applicable it  is  that  of  New  Jersey,  the  state  in  which  Chi  Mei  is incorporated, has its offices, and does business. n16 New Jersey law may be somewhat more tolerant than federal law  of  the  notion  that  a  party  may  waive  its  objection to an arbitrator's jurisdiction by participating in arbitra- tion proceedings. In New Jersey Manufacturers Insurance Co. v. Franklin, 160 N.J. Super. 292, 389 A.2d 980 (N.J. Super. Ct. App. Div. 1978), the New Jersey intermediate appellate court held that HN16  "even" in the absence of a contractual submission of an issue to arbitration, a party may by conduct or agreement waive his legal right to  judicial  determination,"  but  that  "mere  participation in the arbitration does not conclusively bar a party from seeking a judicial determination of arbitrability, even as late as the time of the claimant's application to confirm the award." Id. at 983, 984. On the other hand, the same court has held that "mere assertion of an objection does not dictate a finding of non-waiver." Highgate Dev. Corp. v. Kirsh,  224 N.J. Super. 328,  540 A.2d 861,  863 (N.J. Super. Ct. App. Div. 1988). **46   In Franklin, the court held that a party preserved its objection to an arbitrator's jurisdiction by clearly "flagging" that issue in its mem- oranda to the arbitrator while presenting what the court called a "mere alternative argument on the merits" in the same memoranda. Franklin, 389 A.2d at 984-85. In Kirsh, the court found a waiver where a party entered what the court suggested was a "nominal objection to the arbitra- tor's jurisdiction" and proceeded to participate fully in the merits of the arbitration and even filed its own counterde- mand for arbitration. Kirsh, 540 A.2d at 863-64. Finally, the New Jersey Supreme Court, in dicta, has noted that

a party may preserve its objection to an arbitrator's ju- risdiction in an uninsured motorist case by "making an objection to the propriety of the arbitration on the ground of no coverage and participating in the arbitration pro- ceeding under protest to decide the other . . . questions." In re Arbitration Between Wilmer Grover and Universal Underwriters Ins. Co.,  80 N.J. 221,  403 A.2d 448,  452

(N.J. 1979).

n16 We note that to the extent that the parties treat state law as applicable they seem to assume that the law is that of New Jersey.

**47

The record in this case makes clear that Chi Mei's par- ticipation in the CIETAC proceedings largely was limited to arguing the forgery issue. Although it appears to have presented at least one alternative argument, it consistently objected to the arbitral panel's jurisdiction both in the ar- bitration proceedings and before the district court. App. at 41-45. Furthermore, its decision to proceed with the arbitration despite its jurisdictional objection was likely necessary to prevent an award being entered against it in its absence; it appears that Minmetals may not have had sufficient contacts with New Jersey or the United States for it to have been subject to the jurisdiction of the federal district court in New Jersey or elsewhere, so that Chi Mei likely would not have been able to initiate suit against it to enjoin the arbitration, at least not in the United States. n17 See id. at 212. Thus, whether we apply federal law or New Jersey law, the result is the same:  Chi Mei did not waive its objection to CIETAC's jurisdiction inasmuch as it participated in the arbitration primarily to argue the forgery/jurisdiction

334 F.3d 274, *292; 2003 U.S. App. LEXIS 13012, **47

Page 19

*292   issue and consistently objected to CIETAC's ju- risdiction throughout **48   the proceedings. n18

n17 Our result would not be different even if Chi Mei could have initiated an action in the United States to enjoin arbitration and have obtained juris- diction over Minmetals in that action.

n18 Because we hold that the district court has an obligation to determine the validity of an agree- ment to arbitrate where a party raises that point as an issue before it may enforce a CIETAC award, we need not reach Chi Mei's arguments raising de- fenses  under  Article  V  of  the  Convention.  If  the court holds on remand that the agreements are valid, Chi  Mei's  arguments  regarding  defenses  may  re- quire resolution.

IV. CONCLUSION

For the foregoing reasons, we will vacate the order of the district court entered June 11, 2002, and the judgment of the district court entered August 22, 2002, and remand this case to that court for further proceedings consistent with this opinion.

CONCURBY:

ALITO

CONCUR: ALITO, Circuit Judge, concurring:

I join the Court's opinion but write separately to elab- orate  on  the  importance   **49    of  Article  IV,  Section

1(b) of the Convention in this case. As the Court notes,

"the crucial principles . . . that arbitration is a matter of contract and that a party can be forced to arbitrate only those issues it specifically agrees to submit to arbitration .

. . suggest that the district court here had an obligation to determine independently the existence of an agreement to arbitrate." Opinion of the Court at 14. These princi- ples  find  expression  in  Article  IV,  Section  1(b),  which provides that a party seeking to enforce an arbitral award must, "at the time of the application, supply . . . the orig- inal agreement referred to in article II or a duly certified copy thereof." Convention at art. IV, § 1(b). Because a party seeking to enforce an arbitral award cannot satisfy

this obligation by proffering a forged or fraudulent agree- ment, this provision required the District Court to hold a hearing and make factual findings on the genuineness of the agreement at issue here.

Article  IV,  Section  1(b),  as  noted,  requires  a  party seeking enforcement to supply the court with "the" origi- nal agreement referred to in article II," and it is apparent that this means that the party seeking enforcement **50  must provide the court with either a duly signed written contract containing an arbitration clause or an agreement to arbitrate that is evidenced by an exchange of letters or telegrams. Article II provides as follows:

1. Each Contracting State shall recognize an agreement in writing under which the par- ties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a de- fined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.

2. The term 'agreement in writing' shall in- clude an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or tele- grams.

3.  The  court  of  a  Contracting  State,  when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article,  shall,  at the  request  of  one  of  the  parties,  refer  the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Id. at art. II (emphasis added). Article II thus refers to an  "agreement"   **51    on three  occasions:  (1) when discussing the obligation of each "Contracting State" to

"recognize an agreement in writing";  (2) in defining an

"agreement in writing"; and (3) in requiring the court in which enforcement is sought to compel arbitration when the parties "have made an agreement

334 F.3d 274, *293; 2003 U.S. App. LEXIS 13012, **51

Page 20

*293   within the meaning of " Article II. Both the first and  second  references  concern  an  "agreement  in  writ- ing," and the third reference merely directs the reader to a definition of "agreement" set forth elsewhere in Article II. Since  an "agreement  in writing"  is the only  type of

"agreement" discussed in Article II, it seems clear that an

"agreement referred to in article II" means an "agreement in writing" as defined in that Article. Thus, a party seeking enforcement of an arbitral award under Article IV must supply the court with an "agreement in writing" within the meaning of Article II.

An "agreement in writing," Article II tells us, means

"an arbitral clause in a contract or an arbitration agree- ment, signed by the parties or contained in an exchange of letters or telegrams." Id. at art. II, § 2. To enforce the award granted by the arbitral tribunal, Minmetals was therefore required to demonstrate **52   to the District Court that it and Chi Mei had agreed to arbitrate any dispute arising out of the purported nickel contracts and that they had done so by means of either (1) a written contract signed by both parties or (2) an exchange of letters or telegrams between  them.  Since  Minmetals  does  not  contend  that Chi Mei agreed to arbitrate disputes relating to the pur- ported nickel contracts by way of an exchange of letters or telegrams, it follows that Minmetals was required to prove to the District Court that Chi Mei signed a writ- ten agreement to arbitrate the dispute adjudicated by the arbitral tribunal. Chi Mei specifically disputes this issue, claiming that the signatures of its officers on the purported nickel contracts were forged. As a result, the Convention required  the  District  Court  to  inquire  into  whether  Chi Mei's officers signed the purported nickel contracts.

Minmetals contends, however, that where an arbitral tribunal has already determined that the parties entered

into  a  written  agreement  to  arbitrate  their  dispute,  the Convention requires the District Court to assume that the tribunal's  determination  was  correct.  Minmetals's  read- ing  of  the  Convention,  however,  would  render   **53  the  prerequisites  to  enforcement  of  an  award  set  forth in  Article  IV  superfluous.  It  is  well  established  that  "

'courts should avoid a construction of a statute that ren- ders any provision superfluous.' " United Steelworkers of Am. v. North Star Steel Co., 5 F.3d 39, 42 (3d Cir. 1993)

(quoting Pennsylvania v. United States Dept. of Health and Human Servs., 928 F.2d 1378, 1385 (3d Cir. 1991)). If Minmetals's reading were correct, there would be no purpose for Article IV, Section 1(b)'s requirement that a party "applying for recognition and enforcement" of an arbitral award supply the court with the parties' signed, written  agreement  or  exchange  of  letters  or  telegrams. On Minmetals's view, the existence of a valid agreement would be conclusively established once the party seek- ing  enforcement  pointed  out  the  portion  of  the  arbitral tribunal's decision in which it found that the parties had entered into a written agreement to arbitrate, and there- fore Minmetals's position would make the Convention's requirement  that  the  party  seeking  enforcement  submit the original agreement a meaningless formality.

The better reading of Article IV --  which comports with **54   fundamental principles of arbitration --  re- quires that the party seeking enforcement both (1) supply a document purporting to be the agreement to arbitrate the parties' dispute and (2) prove to the court where enforce- ment is sought that such document is in fact an "agreement in writing" within the meaning of Article II, Section 2. In the present case, accordingly, Minmetals was required to demonstrate to the District Court that an officer of Chi Mei signed the purported

334 F.3d 274, *294; 2003 U.S. App. LEXIS 13012, **54

Page 21

*294    nickel contracts. Because the District Court or- dered the award enforced without requiring Minmetals to

make that showing, its decision must be vacated.

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