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Second Circuit Affirms Confirmation of Arbitration Award Involving Dispute About Foreign Restaurant Franchises
June 30, 2025

The Second Circuit Court of Appeals has rejected a challenge to a confirmation of an arbitration award upholding the nonrenewal of a master franchise agreement for Subway restaurants.

Beginning in the 1990s, Subway International B.V. entered into a series of master franchise agreements with Subway Russia that allowed Subway Russia to operate Subway sandwich franchises in Russia. In 2020, Subway decided not to renew the master franchise agreement, claiming that it had the right to do so because of certain “defaults” by Subway Russia. Subway Russia disagreed and the parties arbitrated the matter.

An arbitrator ruled in favor of Subway. The parties cross-moved to confirm and vacate that award. The district court remanded the case for the arbitrator to decide one additional issue. After the arbitrator had ruled on that issue, the parties again cross-moved to confirm and vacate the award and the district court confirmed the award.

Subway Russia appealed and the Second Circuit affirmed. The court rejected Subway Russia’s arguments that: (1) Subway’s second petition to confirm was untimely; (2) the district court erred in changing its initial decision; and (3) the district court’s decisions were contradictory. The court explained that the district court appropriately remanded the case and thus exercised jurisdiction over the second petition for confirmation. The court held that the district court had authority to correct its first decision, which remanded the matter for a further ruling, and that its second decision did not conflict with its first decision.

Subway International B.V. v. Subway Russia Franchising Co., No. 24-1702 (2d Cir. May 12, 2025).
Authored By
Image: Brendan N. Gooley
Brendan N. Gooley
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