Justia Arbitration & Mediation Opinion Summaries

In 2001, China and Nigeria signed a bilateral investment treaty to encourage investment between the two countries, agreeing to treat each other's investors fairly and protect their investments. Zhongshan Fucheng Industrial Investment, a Chinese company, invested in Nigeria by participating in a joint venture with Ogun State to develop a free-trade zone. After years of development and significant investment, Ogun State abruptly terminated its relationship with Zhongshan, and Nigerian federal authorities expelled the company's executives. Zhongshan initiated arbitration proceedings, and an arbitrator found that Nigeria had breached its obligations under the treaty, awarding Zhongshan over $55 million in damages.The United States District Court for the District of Columbia held that it had jurisdiction over the case, finding that the Foreign Sovereign Immunities Act’s (FSIA) arbitration exception applied because the award was governed by the New York Convention, an international arbitration treaty. Nigeria appealed, arguing that it was immune from suit under the FSIA.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the FSIA’s arbitration exception applied because the arbitration award arose from a legal relationship considered commercial, governed by the New York Convention. The court found that Nigeria had an arbitration agreement with Zhongshan, an arbitration award was issued, and the award was governed by the New York Convention. The court rejected Nigeria's argument that the New York Convention only applies to private acts, holding that the treaty covers arbitral awards arising from sovereign acts when a state consents to arbitration. Thus, the court affirmed the district court's jurisdiction and the enforceability of the arbitration award. View "Zhongshan Fucheng Industrial Investment Co. Ltd v. Federal Republic of Nigeria" on Justia Law

The case involves a dispute between Commodities & Minerals Enterprise, Ltd. (CME) and CVG Ferrominera Orinoco, C.A. (FMO). CME sought to confirm a New York Convention arbitration award of $187.9 million against FMO. FMO opposed the confirmation, alleging that CME procured the underlying contract through fraud, bribery, and corruption, arguing that enforcing the award would violate U.S. public policy. The district court confirmed the award, ruling that FMO was barred from challenging the confirmation on public policy grounds because it failed to seek vacatur within the three-month time limit prescribed by the Federal Arbitration Act (FAA).The United States District Court for the Southern District of Florida initially reviewed the case. CME moved to confirm the arbitration award in December 2019. FMO opposed the confirmation nearly two years later, citing public policy concerns. The district court granted CME’s motion, explaining that FMO was barred from opposing confirmation on public policy grounds due to its failure to seek vacatur within the FAA’s three-month time limit.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that, based on its recent en banc decision in Corporación AIC, SA v. Hidroélectrica Santa Rita S.A., FMO should have been allowed to assert its public policy defense in opposition to confirmation. The court clarified that the grounds for vacating a New York Convention arbitration award are those set forth in U.S. domestic law, specifically Chapter 1 of the FAA, which does not recognize public policy as a ground for vacatur. However, the court affirmed the district court’s confirmation of the award, concluding that FMO’s public policy defense failed on the merits because it attacked the underlying contract, not the award itself. View "Commodities & Minerals Enterprise, Ltd. v. CVG Ferrominera Orinoco C.A." on Justia Law

In this case, a private insurance company, TIG Insurance Company, sought to enforce two judgments against the Republic of Argentina. The dispute centers on whether Argentina, as the successor to a state-owned Argentine company, Caja Nacional de Ahorro y Seguro, is liable under reinsurance contracts that Caja entered into with TIG in 1979. TIG alleged that Caja failed to pay as promised under these contracts, leading to arbitral awards and subsequent judgments in TIG's favor.The United States District Court for the District of Columbia initially ruled in favor of Argentina, finding that Argentina's property was immune from execution under the Foreign Sovereign Immunities Act (FSIA) because it was not used for commercial activity at the time the writ would issue. The court also held that the Illinois district court lacked jurisdiction over Argentina for the 2018 judgment and that TIG needed to amend the 2001 judgment in Illinois to name Argentina before seeking enforcement in D.C. TIG appealed these decisions.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and concluded that two FSIA exceptions—the arbitration and waiver exceptions—might apply. The court held that an agreement could be "made by" a sovereign if it legally binds that sovereign to arbitrate, even if the sovereign was not an original signatory. The court also found that implied waiver does not require evidence of subjective intent but can be based on objective actions, such as agreeing to arbitration or a choice-of-law clause. The court vacated the district court's decisions and remanded for further analysis and factfinding on these issues.The appellate court affirmed the denial of TIG's request for jurisdictional discovery and precluded TIG from advancing an alter ego theory or arguing that Argentina failed to raise its immunity in a responsive pleading. The case was remanded for further proceedings consistent with the appellate court's instructions. View "TIG Insurance Company v. Republic of Argentina" on Justia Law

In a dispute between the Republic of Djibouti and Doraleh Container Terminal (Doraleh), Doraleh secured a $474 million arbitral award against Djibouti. Djibouti then nationalized a majority interest in Doraleh and appointed a provisional administrator, Chantal Tadoral, to manage the company. Quinn Emanuel, a law firm, sought to enforce the arbitral award in the U.S. District Court for the District of Columbia, claiming to represent Doraleh. However, Tadoral stated she did not authorize the filing, and Djibouti requested the case be dismissed.The District Court for the District of Columbia entered judgment for Doraleh, holding that Quinn Emanuel’s authority was irrelevant or, alternatively, that Djibouti had forfeited the issue by not raising it during arbitration. Djibouti appealed, arguing that the district court erred by not determining whether Quinn Emanuel had the authority to represent Doraleh.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and disagreed with the district court. The appellate court held that Quinn Emanuel’s authority is relevant and that the issue of a lawyer’s authority can be challenged at any point in litigation. The court found that Djibouti presented substantial evidence questioning Quinn Emanuel’s authority, which required the district court to determine whether the law firm had the authority to file the suit. Consequently, the appellate court vacated the judgment and remanded the case to the district court to determine Quinn Emanuel’s authority to represent Doraleh. View "Doraleh Container Terminal SA v. Republic of Djibouti" on Justia Law

Webuild S.P.A., an Italian investment company, formed a consortium with other companies to work on the Panama Canal expansion project. After the project's completion, Webuild initiated an arbitration against Panama under the ICSID, alleging that Panama breached its obligations under a bilateral investment treaty by providing incomplete information and making unfair financial demands. Webuild sought discovery from WSP USA, which had acquired the project's engineering consultant, Parsons Brinkerhoff.The United States District Court for the Southern District of New York initially granted Webuild's ex parte application for discovery under 28 U.S.C. § 1782. However, following the Supreme Court's decision in ZF Automotive US, Inc. v. Luxshare, Ltd., which limited § 1782 to governmental or intergovernmental tribunals, the district court vacated its order and quashed the subpoena. The court concluded that the ICSID arbitration tribunal did not qualify as a governmental or intergovernmental entity under § 1782.The United States Court of Appeals for the Second Circuit reviewed the district court's decision de novo. The appellate court affirmed the lower court's ruling, agreeing that the ICSID tribunal did not exercise governmental authority as required by § 1782. The court noted that the tribunal was formed specifically for the arbitration, funded by the parties, and its members had no official governmental affiliation. Thus, the ICSID tribunal did not meet the criteria established by the Supreme Court in ZF Automotive for a "foreign or international tribunal" under § 1782. View "Webuild v. WSP USA Inc." on Justia Law

The case revolves around a dispute between the Estate of Ke Zhengguang and Stephany Yu, concerning the enforcement of an arbitral award issued in Hong Kong. The award was the result of a business dispute involving real estate in China. The arbitration panel ordered Yu and her two sisters to pay the Estate and Xu Hongbiao a sum of money for the losses they sustained. After Yu paid Xu his share, the Estate sought to collect the remaining half from Yu, a U.S. citizen residing in Maryland.Yu challenged the enforcement of the award in the District Court of Maryland, arguing that the court was an inconvenient forum, that necessary parties were not included in the proceedings, and that enforcing the award would violate Chinese currency control laws, thereby violating U.S. policy favoring international comity. She also argued that the judgment should be in Renminbi (RMB), as provided in the arbitral award, not in U.S. dollars. The district court rejected all of Yu's arguments and confirmed the award under the New York Convention, entering judgment in favor of the Estate against Yu in a total amount of $3.6 million.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court found none of Yu's arguments persuasive and held that the district court was correct in confirming and enforcing the arbitral award. The court also held that the district court did not err in entering the judgment in U.S. dollars, as it was within its discretion to do so. View "In re Estate of Ke Zhengguang v. Yu" on Justia Law

The case involves the Government of Romania's appeal against three judgments that confirmed an international arbitral award. The dispute originated from Romania's adoption of tax incentives to encourage investment in certain economically "disfavored" regions of the country. The Micula brothers and associated entities built food production facilities in Romania relying on these incentives. However, Romania repealed most of the tax incentives in 2005 in preparation to join the EU, leading the Miculas to file for arbitration in 2005.The district court confirmed the award in 2019 and entered judgment for $356,439,727, net of payments made and with interest. Romania challenged the subject matter jurisdiction, arguing that the arbitration clause in the Sweden-Romania BIT was void as of Romania’s 2007 accession because EU law prohibits intra-EU agreements to arbitrate EU law disputes between a member state and the citizens of another member state. The district court ruled EU law was inapplicable because the parties’ dispute predated Romania’s EU membership and the award did not “relate to the interpretation or application of EU law.”In 2022, Romania sought relief from the 2019 Confirmation, and ensuing sanctions, arguing that two decisions of the EU’s highest court in 2022 held that “the agreement to arbitrate in the [Sweden-Romania] BIT was void the moment that Romania entered the EU.” The district court denied the motion, concluding that the CJEU Decisions did not hold Romania’s accession retroactively voided its pre-EU consent to arbitrate.The United States Court of Appeals for the District of Columbia Circuit affirmed the district court's denial of Romania's Rule 60(b) motion for relief from judgment. The court held that the district court's jurisdictional analysis was not premised on the "interpretation and application of EU law." Rather, the district court independently found the requisite "jurisdictional fact" under the arbitration exception of an agreement to arbitrate with the Miculas. The court also found that the 2022 CJEU decisions did not support the interpretation that Romania’s 2007 accession to the EU retroactively rendered the preexisting agreement to arbitrate with Swedish investors “void ab initio.” View "Micula v. Government of Romania" on Justia Law

Following the disclosures of the new information, Grupo Unidos challenged the impartiality of the arbitrators before the International Court of Arbitration (“ICA”) of the International Chamber of Commerce. The ICA agreed that some arbitrators failed to make a few disclosures but, notably, did not find any basis for removal and rejected Grupo Unidos’s challenges on the merits. Thereafter, Grupo Unidos moved -- unsuccessfully -- for the vacatur of the awards in the United States District Court for the Southern District of Florida. Autoridad del Canal de Panama, in turn, cross-moved for confirmation of the awards, which the district court granted. Grupo Unidos appealed.   The Eleventh Circuit affirmed. The court agreed with the International Court of Arbitration and the district court that Grupo Unidos has presented nothing that comes near the high threshold required for vacatur. Accordingly, the court affirmed the denial of vacatur and the confirmation of the awards. The court wrote that there is no indication in this record that Grupo Unidos did not have a robust opportunity to present evidence and confront the other side’s evidence. View "Grupo Unidos por el Canal, S.A., et al. v. Autoridad del Canal de Panama" on Justia Law

Plaintiff-appellee Baker Hughes Services International, LLC, after winning an Ecuadorian arbitration against the Ecuador-based Pesago Consortium, secured an arbitral award enforceable jointly and severally against the Consortium’s two members: Defendant and third-party Campo Puma Oriente S.A. Plaintiff then brought its award to Oklahoma and sued Defendant to confirm the award in the United States. Plaintiff again prevailed, and the district court entered judgment against Defendant for the award’s amount, prejudgment interest, and attorney’s fees. Defendant challenged the enforcement of the arbitration award, arguing: (1) the U.S. district court lacked subject matter jurisdiction to confirm the award; (2) the district court should not have confirmed the award because the parties never agreed to arbitrate their dispute; and (3) the district court improperly awarded attorney’s fees and incorrectly calculated prejudgment interest. After its review, the Tenth Circuit Court of Appeals affirmed affirm everything except the district court’s award of prejudgment interest, which was vacated and remanded for the district court to reconsider. View "Baker Hughes Services International v. Joshi Technologies International" on Justia Law

Respondent the State of Libya (“Libya”) appealed from a district court judgment granting Petitioner Olin Holdings Limited’s (“Olin”) petition to confirm an arbitration award issued under a bilateral investment treaty between Libya and the Republic of Cyprus and denying Libya’s cross-motion to dismiss the petition on forum non-conveniens grounds. On appeal, Libya’s primary argument is that the district court erred by declining to independently review the arbitrability of Olin’s claims before confirming the final award.   The Second Circuit affirmed. The court held that Libya was not entitled to de novo review of the arbitral tribunal’s decisions because it “clearly and unmistakably” agreed to submit questions of arbitrability to the arbitrators in the first instance. The court further concluded that the district court properly confirmed the final award and rejected Libya’s cross-motion to dismiss the petition. The court explained that regarding the public and private interest factors, the district court held that Libya fell well short of satisfying its heavy burden because it “failed to identify even one” factor that weighed in favor of dismissal. On appeal, Libya makes “no persuasive argument identifying an error in the factual or legal components of the district court’s discretionary decision.” View "Olin Holdings Ltd. v. State of Libya" on Justia Law