TOURING THE AMERICAS ON A FRIGATE: CLASSROOM CONVERSATIONS INSPIRED BY NORTHROP GRUMMAN SHIP SYSTEMS VERSUS THE MINISTRY OF DEFENSE OF THE REPUBLIC OF VENEZUELA

Northrop Grumman Ship Systems v. Ministry of Defense of the Republic of Venezuela arose out of a 1997 contract under which Northrop Grumman Ship Systems Inc. was to refit two Venezuelan frigates. It was undisputed that the contract called for arbitration in Caracas. But, had circumstances in Caracas changed after the contract formed in such a manner that the ship builder would not be held to its arbitral bargain? And, if arbitration was not to take place in Venezuela, then where? Ultimately, an arbitration seated Rio de Janeiro, Brazil was held, but under Venezuelan arbitration law. That arbitration produced an award that U.S. federal courts enforced. When combined with an examination of the underlying arbitral proceedings themselves, a study of the two decades of federal court activity necessitated by the case reveals much of classroom interest: pathological arbitration clauses, distinctive choice of law issues, and a range of problems peculiar to sovereign contracts.