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A federal court in the District of Columbia refused to vacate an arbitration award for manifest disregard of the law when a party claimed that it had established a prima facie case because the arbitrator's finding never indicated that the party did in fact establish a prima facie case.
In Int'l Thunderbird Gaming Corp. v. United Mexican States, No. Civ.A. 06-00748 HHK, 2007 WL 477459 (D.D.C. Feb. 14, 2007), Thunderbird, a Canadian corporation, sent letters to Mexican authorities asking if machines they planned to install would be legal in Mexico. Mexico said that the machines would be legal, but shortly after installation the machines were removed when it was determined that they involved luck and were therefore illegal under Mexican law.
Thunderbird brought a claim under the North American Free Trade Agreement (NAFTA), alleging expropriation without fair compensation. After an arbitrator issued an award in favor of Mexico, Thunderbird claimed that the award should be vacated because the arbitrator manifestly disregarded the law by refusing to abide by stated standards for burden of proof. Specifically, Thunderbird claimed that it established a prima facie case supporting its claim, and therefore the burden of proof should have shifted to Mexico.
In rejecting this claim and confirming the award in Mexico's favor, the Court noted that nothing in the record indicated that the arbitrator determined that Thunderbird had established a prima facie case. Additionally, even if Thunderbird had established a prima facie case, Mexico presented evidence that would have effectively rebutted the prima facie case.
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