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      Proskauer on International Litigation and Arbitration:
       Managing, Resolving, and Avoiding Cross-Border Business or Regulatory Disputes
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  1. Generally, the Convention on Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (the “New York Convention”), enacted as chapter two of the Federal Arbitration Act (“FAA”; see 9 U.S.C. 201 et seq.), confers subject matter jurisdiction on the federal courts for actions or proceedings relating to an arbitration agreement involving at least one non-U.S. citizen, or where the agreement “involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states.” 9 U.S.C. §§ 202, 203. A corporation is deemed a citizen of the U.S. if it is incorporated or has its principal place of business in the United States. Id. Thus, federal courts can have subject matter jurisdiction even if the arbitration agreement involves two wholly foreign entities, and whether or not the place of arbitration is within or without the U.S. See Bergesen v. Joseph Muller Corp., 710 F.2d 928, 933-34 (2d Cir. 1983).
  2. However, the New York Convention cannot itself confer personal jurisdiction; it must still be shown that a defendant has minimum contacts with the forum in order for the court to be able to assert jurisdiction over the defendants’ person or property. See, e.g., Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1122-23 (9th Cir. 2002) (“[t]he Convention and the FAA authorize the exercise of subject matter jurisdiction but not personal jurisdiction”); Transatlantic Bulk Shipping, Ltd. v. Saudi Chartering S.A., 622 F. Supp. 25, 27 (S.D.N.Y. 1985) (in action under New York Convention, “[s]ome basis [for court’s jurisdiction] must be shown, whether arising from the respondent's residence, his conduct, his consent, the location of his property or otherwise, to justify his being subject to the court's power.”).
  3. In contrast to the New York Convention, chapter one of the FAA, which addresses enforcement of domestic arbitrations, does not itself confer subject matter jurisdiction. See 9 U.S.C. § 1 et seq. Therefore, to bring an action with respect to a domestic arbitration in federal court, there must be a federal question independent of any question under the FAA, or diversity of citizenship must be shown. See 28 U.S.C. §§ 1331, 1332.

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