On March 2, 2017, in CBF Indústria de Gusa S/A v. AMCI Holdings, Inc., the US Court of Appeals for the Second Circuit, on a petition for a rehearing to amend its January 18, 2017 decision, clarified that the applicable law for an enforcement action of a foreign arbitral award is the law of the enforcing jurisdiction ( (2d Cir. Mar. 2, 2017)).

The appellants successfully brought claims in an ICC arbitration and appealed two judgments of the US District Court for the Southern District of New York. The judgments dismissed the appellants' initial petition to enforce, and a subsequent action to confirm a foreign arbitral award issued in Paris against appellees who were alter-egos of the award-debtor.

The holdings from the original January and amended March decisions remain the same. The Second Circuit held that the district court erred when it dismissed both the petition to enforce and action to confirm the award because:

For a more thorough analysis of these issues, see Legal Update, Dismissal of Petition to Enforce Arbitral Award Reversed: Second Circuit.

The defendants moved for a rehearing asking the court to reverse and re-instate the dismissals. The Association of the Bar of the City of New York filed an amicus curiae‎ brief () supporting a rehearing. The Association asked the court to clarify or correct that part of its decision suggesting that the enforcement of a valid New York Convention award against a person or entity that was not a party to the arbitration or named in the award turns on the scope of the arbitration agreement.

In its March 2, 2017 decision, the Second Circuit granted rehearing and amended its January decision for the limited purpose of clarifying the applicable law for an enforcement action. The court instructed the district court, when acting under its secondary jurisdiction, to evaluate the enforcement action under the standards set out not only in the New York Convention and Chapter 2 of the Federal Arbitration Act (FAA) (as previously instructed) but also "the applicable law in the Southern District of New York."

The New York Convention requires that a signatory state recognize arbitration awards as binding and enforce them according to the procedural rules of the jurisdiction where the award is relied upon. The court's January decision suggested that the enforcement of the foreign arbitral award hinged solely upon the scope of the arbitration agreement and whether the parties agreed to have an arbitrator decide if a non-signatory could be bound to the award.

The Second Circuit clarified that whether a third party not named in an arbitral award may have the award enforced against it under any legal principle, including alter-ego liability, is left to the law of the enforcing jurisdiction. The matter was remanded to the district court to determine whether the applicable law in the Southern District of New York required the award-debtor's alleged alter-egos to pay.