Eletson v. Levona: SDNY Vacates Arbitral Award but Declines to Issue Anti-Enforcement Injunction

An arbitral award that has been vacated by a court at the seat of arbitration can almost never be enforced in other states. But the authority to determine post-vacatur enforceability rests with courts in states where enforcement is sought, not with the vacating court. In a cogent and well-reasoned opinion issued last week, Judge Lewis J. Liman of the Southern District of New York walks through the relevant principles.

Background

The decision relates to a dispute between Levona Holdings, a hedge fund, and Eletson Holdings, a Greek shipping concern. The central issue in that dispute was whether and when Eletson Holdings had acquired control of Eletson Gas LLC from Levona. The matter was submitted to JAMS arbitration, and in 2023 an award was entered in favor of Eletson based on a finding that Eletson Holdings had properly exercised a buyout option to acquire the shares of Eletson Gas.

In January 2026, that award was vacated in the Southern District of New York. Judge Liman found that Levona had provided clear and convincing evidence that Eletson committed fraud in the arbitration, including by giving false testimony regarding its exercise of the buyout option. He noted that the parties had not briefed the specific form that a final judgment should take if the award were vacated and invited further submissions on that point.

Levona asked for two things. First, they requested the court to enter not only a final judgment vacating the arbitral award, but a judgment “memorializ[ing] the determinations in the Vacatur Decision.”  Judge Liman declined this request, limiting his judgment to the vacatur of the award: “The Court’s opinion speaks for itself in laying out the facts that the Court necessarily found in determining that a fraud was committed [in the arbitration]. It is not the Court’s prerogative to arrogate for itself in this proceeding the preclusive findings that may be reached in other proceedings.”

Second, Levona requested a permanent anti-suit injunction that would bar Eletson’s former majority owners from enforcing the now-vacated award in foreign jurisdictions. (This is really a request for an anti-enforcement injunction, not an anti-suit injunction—I discuss that distinction in this primer.)

The New York Convention

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards establishes two different regimes for judicial review of an award. Only the state in which, or under the law of which, an award is made has the authority to modify or set aside the award. Other states have the authority to determine whether or not to recognize and enforce the award—and can refuse to do so only on the narrow set of grounds laid out in Article V.

It is extremely unlikely that a court in a foreign jurisdiction would recognize and enforce an award vacated at the seat of arbitration. Essentially, the foreign court would have to establish that the vacatur order itself violated either due process rights or local public policy such that it should not be recognized, thereby permitting enforcement of the original award. (Judge Liman stated that he had “no reason to believe that a foreign court will disregard [the SDNY’s] order and confirm and enforce an award that this Court has determined is unenforceable,” and in a lengthy passage explained why his order satisfied applicable requirements and should be entitled to preclusive effect.)

Nevertheless, whether to recognize a vacated award is a decision for the courts of the state in which enforcement is sought. As Judge Liman observed, “the decision of a court in a primary jurisdiction to vacate an award does not necessarily and as a matter of law foreclose a decision by a court in a secondary jurisdiction to enforce or confirm the same award.” As a result, he concluded, it would be inappropriate to issue an anti-enforcement injunction that would indirectly deprive courts in other states of the authority to make that determination.

Conclusion

Parties in transnational litigation sometimes take a “belt and suspenders” approach following the entry of judgment. Rather than relying solely on the law of recognition and enforcement to protect their interests, they seek anti-enforcement injunctions that would preclude even the possibility of non-recognition. This is not an appropriate use of injunctions, at least absent truly vexatious circumstances, which Judge Liman noted were not present in this case. And in the case of disputes involving arbitral awards, it is inconsistent with the architecture of the New York Convention.