The U.S. District Court for the Southern District of New York confirmed an arbitral award done in Mexico, despite the fact that the award had been nullified by a Mexican Court. The arbitration between the subsidiary of a Texan company and an instrumentality of Mexico was conducted in Mexico City according to the rules of the International Chamber of Commerce. The award, worth nearly four hundred million U.S. dollars, was confirmed in the U.S. District Court for the Southern District of New York. The respondent instrumentality of Mexico appealed to the Second Circuit Court of Appeals and filed proceedings in the Mexican Eleventh Collegiate Court on Civil Matters to nullify the award.
In September 2011, the Eleventh Collegiate Circuit nullified the award, holding "that arbitrators are not competent to hear and decide cases brought against the sovereign, or an instrumentality of the sovereign, and that proper recourse of an aggrieved commercial party is in the Mexican district court for administrative matters." Resultantly, the Second Circuit Court of Appeals remanded the case to the District Court to address the effect that the nullification should have on the judgment confirming the award.
The District Court declined to defer to the Mexican court's ruling, and held that "the Eleventh Collegiate Circuit decision violated basic notions of justice in that it applied a law that was not in existence at the time the parties' contract was formed." The U.S. District Court therefore reconfirmed the award.