The opinion of the court was delivered by: Henry H. Kennedy, Jr. United States District Judge
Petitioner International Thunderbird Gaming Corporation ("Thunderbird"), a Canadian corporation, brings this action seeking to vacate and set aside an arbitration award in favor of Mexico. Before the court are Thunderbird's petition to vacate the award [#1] and Mexico's motion for confirmation, recognition and enforcement of the award [#8]. Upon consideration of the petition and motion, the oppositions thereto, and the record of the case, the court concludes that Thunderbird's petition should be denied, Mexico's motion should be granted, and the arbitration award should be confirmed.
Thunderbird, seeking to undertake investment activities in Mexico, sought via a solicitation ("Solicitud") to government officials an opinion ("Opinion") regarding the legality of certain types of entertainment machines. Petition, Ex. C (Menéndez-Tlacatelpa Ltr. to Director General de Gobierno de la Secretaria de Gobernacion, Aug. 3, 2000), Ex. D (Aceves Ltr. to Menéndez-Tlacatelpa, Aug. 15, 2000). As described in the Solicitud, the machines were stand-alone "skill machines" that tested their users' abilities, without the involvement of luck or betting. Solicitud ¶ 7. In the responsive Opinion, the government opined that so long as the machines functioned as they were described in the Solicitud (that is, without the intervention of luck or gambling), they would be permissible for commercial use and would fall outside the regulatory jurisdiction of the Mexican gaming authority, the Secretariat de Gobernacion. Opinion at 1--2.
After receipt of the Opinion, Thunderbird opened gaming facilities where patrons played at a variety of machines. These machines were primarily of two types: video slot machines (where video representations of wheels spun and the player pushed buttons to stop the reels) and video poker machines. Both of these types of machines were equipped with modifiable computerized random number generators that set the machines' payout rates, which rates were neither visible to nor otherwise known by the machine's users. Shortly after establishment of Thunderbird's facilities, Mexican authorities closed them.
Thunderbird responded by filing a request for an arbitration pursuant to the North American Free Trade Agreement ("NAFTA"), which provides protections to foreign investors against discrimination and expropriation without fair compensation.*fn1 The arbitration hearings were held in Washington, D.C., and the tribunal issued an award in favor of Mexico, with costs and partial fees also assessed in Mexico's favor. Petition, Ex. A ("Award"). The total award amounted to $1,252,862. With this action, Thunderbird petitions the court to vacate the award, arguing that the tribunal acted in manifest disregard of the law. Mexico moves, in turn, for confirmation, recognition, and enforcement of the award pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (2006), and Article VI of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). See 9 U.S.C. § 201 (incorporating the Convention into United States law).*fn2
Courts have long recognized that judicial review of an arbitration award is extremely limited. United Paperworkers Int'l Union v. Misco, Inc., 484 U.S. 29, 37--38 (1987); Kanuth v. Prescott, Ball & Turben, Inc., 949 F.2d 1175, 1178 (D.C. Cir. 1991). A court may vacate an award only if there is a showing that one of the limited circumstances enumerated in the Federal Arbitration Act ("FAA") is present, or if the arbitrator acted in manifest disregard of the law. LaPrade v. Kidder, Peabody & Co., 246 F.3d 702, 706 (D.C. Cir. 2001). Thunderbird bears the heavy burden of establishing that vacatur of the arbitration award is appropriate. Al-Harbi v. Citibank, N.A., 85 F.3d 680, 683 (D.C. Cir. 1996); see also LaPrade, 246 F.3d at 706. Furthermore, in the absence of a legal basis to vacate, this court has no discretion but to confirm the award. 9 U.S.C. § 9; Bryson v. Gere, 268 F. Supp. 2d 46, 54 (D.D.C. 2003).
Thunderbird's primary argument is that the NAFTA panel acted in "manifest disregard of the law" by announcing a particular standard for burdens of proof and then failing to apply that standard. See Al-Harbi, 85 F.3d at 682 (manifest disregard standard). Manifest disregard of the law "means more than error or misunderstanding with respect to the law." Kanuth, 949 F.2d at 1178. Thus, a party seeking to have an arbitration award vacated on this ground must at least establish that "(1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case." LaPrade, 246 F.3d at 706 (quoting DiRussa v. Dean Witter Reynolds, Inc., 121 F.3d 818, 821 (2d Cir. 1997)); see also Duferco Int'l Steel Trading v. T. Klaveness Shipping A/S, 333 F.3d 383, 390 (2d Cir. 2003) ("Even where explanation for an award is deficient or non-existent, we will confirm it if a justifiable ground for the decision can be inferred from the facts of the case.").
Thunderbird argues that the panel acted in manifest disregard of the law in applying the burden-of-proof standards it adopted. In its award, the panel articulated the following rule:
The Tribunal shall apply the well-established principle that the party alleging a violation of international law giving rise to international responsibility has the burden of proving its assertion. If said Party adduces evidence that prima facie supports its allegation, the burden of ...