In Iraq Telecom Ltd. v. IBL Bank S.A.L., defendant IBL appealed an order from the district court that denied its application to stay the enforcement of a $3 million arbitration award rendered in favor of plaintiff Iraq Telecom. Without going into the underlying facts or procedural history, the court focused on whether the district court erred in its application of the factors set forth in Europcar Italia v. Maiellano Tours, 156 F.3d 310 (2d Cir 1998), for considering a request to stay enforcement proceedings pending the outcome of a parallel foreign proceeding. The court held the district court did not err in determining that the factors set forth in Europcar, on balance, weighed against staying enforcement of the award despite a pending Lebanese annulment action.

The court first noted that under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, a district court may, if it considers it proper, adjourn the decision on the enforcement of the award if an application for the setting aside or suspension of the award has been made in the jurisdiction in which the award was made. Applying the factors set forth in Europcar, the court noted that it reviews a district court decision in these matters for abuse of discretion, including (1) basing its decision on an error of law or wrong legal standard; (2) basing its decision on a clearly erroneous factual finding; or (3) reaching a conclusion that, “though not necessarily the product of a legal error or a clearly erroneous factual finding, cannot be located with the range of permissible decisions.

Applying this standard of review, the court found the district court properly applied the Europcar factors in denying the application to stay the enforcement proceedings pending the outcome of the parallel foreign proceeding. The court noted the district court’s determination that the two most important factors (the general objectives of arbitration and the status of the foreign proceeding) weighed against staying enforcement of the foreign award was reasonable. With regard to these factors, the court rejected IBL’s arguments that the district court erred by not considering future delay and the ramifications for international comity should the award be annulled in Lebanon, declining to disturb the district court’s findings on these factors. The court also concluded that the district court’s determination of the other Europcar factors was reasonable, including the conclusion that the balance of the possible hardships to each of the parties weighed against IBL’s request for a stay, and the district court did not abuse its discretion in determining that IBL was not likely to succeed in its Lebanese annulment action. The court affirmed the judgment of the district court, rejecting IBL’s application for a stay.

Iraq Telecom Ltd. v. IBL Bank S.A.L., No. 22-832 (2d Cir. Apr. 17, 2023)