In a case between Northrop Grumman and the Republic of Venezuela, the courts were faced with the issue of compelling arbitration in a venue other than the one the parties had agreed to. The Fifth Circuit affirmed the lower court’s decision to compel arbitration in a venue other than Venezuela.
As relevant to this discussion, the facts involved an agreement between the parties, entered into before Hugo Chavez came to power, that called for the arbitration of any disputes in Caracas, Venezuela. Some time later, in the face of a dispute and believing that it would not get a fair shake in Venezuela, Northrop Grumman sought to compel arbitration in another location. Finding arbitration in Venezuela to be impractical due to the political situation, the arbitration proceeded in Brazil. There, Northrop Grumman was awarded $128 million.
In granting Northrop Grumman’s motion to enforce that award, the court rejected Venezuela’s argument that venue was improperly changed. Its appeal followed.