Foreign Arbitration Award Confirmed Under International Treaty

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A federal U.S. district court recently confirmed a foreign arbitration award obtained by a Belizean telecommunications company against the Government of Belize in arbitral proceedings held before a tribunal appointed by the London Court of International Arbitration (“LCIA”). Factually, the case involved agreements between the company and Belize, wherein the company paid money in exchange for certain tax benefits and investment return guarantees associated with its telecommunications improvement plan. When Belize later refused to comply with the agreements, the company (i) requested arbitration before the LCIA, pursuant to the agreements, (ii) won declaratory and monetary relief upon Belize’s default, and (iii) assigned the monetary portion of the award to Belize Social Development, a British Virgin Island organization. Legally, the court first held that the arbitration award was governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) (of which the Federal Arbitration Act is a codification) because England (where the arbitration took place) and the United States are both parties to the Convention. The court emphasized that, under the Convention, it should confirm the foreign award absent a finding that an enumerated exception to enforcement specified in the Convention applies. The court methodically deconstructed and denied Belize’s procedural arguments, including lack of subject-matter jurisdiction, lack of standing, forum non conveniens, international comity, and failure to join a required party under F.R.C.P. 19, and then turned to the exceptions to the Convention proffered by Belize, again ruling in favor of the company. The Convention arguments revolved around the following: (i) failure to produce copies of the arbitral award and accommodation agreements (Art. IV(1)); (ii) invalidity of accommodation agreements (Art. V(1)(a)); (iii) inappropriateness of arbitration (Arts. V(1)(c) and V(2)(a)); (iv) suspension of the award by a “competent authority” (Art. V(1)(e)); and (v) public policy (Art. V(2)(b)). None of these arguments was found to be meritorious, and the court confirmed the arbitral award. Belize Social Development Ltd. v. Government of Belize, Case No. 09-2170 (RJL) (D.D.C. Dec. 11, 2013).

Topics:  Arbitration, Arbitration Agreements, International Arbitration

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, Civil Remedies Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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