Belize Soc. Dev. Ltd. v. Gov't of Belize

Citation668 F.3d 724
Decision Date13 January 2012
Docket NumberNo. 10–7167.,10–7167.
PartiesBELIZE SOCIAL DEVELOPMENT LIMITED, Appellant v. GOVERNMENT OF BELIZE, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

OPINION TEXT STARTS HERE

Appeal from the United States District Court for the District of Columbia (No. 1:09–cv–02170).

Louis B. Kimmelman argued the cause and filed the briefs for appellant. Joseph S. Hall entered an appearance.

Juan C. Basombrio, pro hac vice, argued the cause for appellee. With him on the brief was Jay C. Johnson.

Before: ROGERS, GARLAND and KAVANAUGH, Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

Dissenting opinion by Circuit Judge KAVANAUGH.

ROGERS, Circuit Judge:

This case involves a petition to confirm and enforce a foreign arbitration award against the Government of Belize pursuant to section 207 of the Federal Arbitration Act, 9 U.S.C. § 207. The plaintiff appeals an order staying the proceeding pending the outcome of related litigation in Belize. We conclude that the stay order as issued exceeded the proper exercise of authority of the district court and remand the case for further proceedings.

I.

The Federal Arbitration Act, 9 U.S.C. §§ 201–208 (2006) (“FAA”), codifies the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which addresses “the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought.” Art. I, opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (“New York Convention”). Under the New York Convention, [e]ach Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon.” Id. art. III. Section 207 of the FAA provides that the district court, when exercising its original jurisdiction pursuant to section 203 of the FAA, “shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207. Article VI of the Convention limits the grounds for deferral of a decision on enforcement to those specified in Article V(1)(e): enforcement proceedings may be adjourned only if “an application for the setting aside or suspension of the award has been made to a competent authority,” N.Y. Convention art. VI, “of the country in which, or under the law of which, that award was made,” id. art. V(1)(e).

Consistent with the “emphatic federal policy in favor of arbitral dispute resolution” recognized by the Supreme Court as “appl[ying] with special force in the field of international commerce,” Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985), the FAA affords the district court little discretion in refusing or deferring enforcement of foreign arbitral awards: the Convention is “clear” that a court “may refuse to enforce the award only on the grounds explicitly set forth in Article V of the Convention.” TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 935 (D.C.Cir.2007) (quoting Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys ‘R’ Us, Inc., 126 F.3d 15, 23 (2d Cir.1997)); see also Alghanim & Sons, 126 F.3d at 20. It is equally clear that a court may adjourn enforcement proceedings only on the grounds explicitly set forth in Article V(1)(e) of the Convention. See N.Y. Convention art. VI.

The facts underlying the issuance of the challenged stay order are as follows. On September 19, 2005, the Prime Minister of Belize executed an “Accommodation Agreement” with Belize Telemedia Limited (“Telemedia”) 1 on behalf of the Government of Belize. The Agreement called for Telemedia to acquire certain properties “in order to better accommodate the Government's telecommunications needs,” and “in consideration” for which the Government of Belize agreed to give Telemedia a number of assurances and benefits. Gov't Telecomm. Accomodn. Agrmt. § 1, Sept. 19, 2005.2 Telemedia would be entitled to: a tax set-off for purposes of a guaranteed 15% minimum rate of return, favorable business tax treatment, and exemption from import taxes. The Agreement stated that it was governed by Belize law, id. § 15.1, and that if Telemedia were to bring proceedings against the Government of Belize or its assets in relation to the Agreement, the Government “irrevocably and unconditionally” waived its immunity, id. § 15.5. Additionally, the Agreement provided:

Any dispute arising out of or in connection with this Agreement including any question regarding its existence, validity or termination, which cannot be resolved amicably between the parties shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (LCIA) Rules which Rules are deemed to be incorporated by reference under this Section. There shall be 3 arbitrators.Id. § 15.2.

On February 8, 2008, a new Prime Minister, who also served as the Minister of Finance of Belize, publically and formally announced that he believed the Agreement was invalid and would not abide by it. Telemedia, claiming breaches of the Agreement, invoked the arbitration clause and submitted a request for arbitration to the LCIA on May 9, 2008. Although notified, the Government of Belize did not participate in the proceedings. The arbitral tribunal issued a final award on March 18, 2009, (“Final Award”) ruling that the Agreement was valid and binding on the Government of Belize under Belize law, and that it had jurisdiction over Telemedia's claims, which it concluded were meritorious and entitled Telemedia to declaratory relief and damages of over 38 million in Belize dollars. On March 20, 2009, the Prime Minister repeated his view that the Agreement was illegal and invalid, noted that the local courts had rejected its provisions on tax exemption, and stated that the Government of Belize would “not be bound by any ruling of a foreign arbitral tribunal where that ruling conflicts with a position taken by Belize's superior courts.” Resp't Mot. Stay or, in Alternative, Dismiss Pet., Exh. 29 (Decl. Juan Basombrio, Esq. Mar. 26, 2010, attaching newspaper article quoting Prime Minister). The same day, Telemedia assigned the monetary portion of the Final Award to Belize Social Development Limited (BSDL), a company incorporated in the British Virgin Islands.

On April 6, 2009, the Attorney General of Belize sued Telemedia and BSDL in the Belize Supreme Court, alleging that “enforcement of the ‘Final Award’ ... would be contrary and repugnant to the Constitution and the Laws of Belize,” and sought to block its enforcement. Id. Exh. 1 (Decl. of Michael Young, S.C., Mar. 26, 2010, attaching the Fixed Claim Form 1–2). The court issued an ex parte interim injunction prohibiting Telemedia and BSDL from pursuing enforcement of the Final Award in any jurisdiction outside of Belize. See id. Exh. 5 (Order, Apr. 7, 2009, at 2). When Telemedia sought to have the court discharge the injunction and issue a declaration that the Final Award was valid and binding on the Government of Belize, the court, on July 20, 2009, extended the injunction “until the conclusion of the Claim herein or until further Order.” Id. Exh. 12 (Order, July 20, 2009, at 2); see id. Exh. 13 (Sup.Ct.Decision, July 20, 2009).

On November 16, 2009, BSDL filed a petition in the district court here to confirm and enforce the Final Award pursuant to section 207 of the FAA, 9 U.S.C. § 207. The Government of Belize moved to stay or, in the alternative, to dismiss the petition. It also amended the Supreme Court Judicature Act “to strengthen the provisions relating to contempt of court by subjecting persons who fail to comply with an injunction to fines up to $250,000, or imprisonment for five to ten years, or both, with an additional fine of $100,000 for each day the offense continues. Supreme Court of Judicature (Amendment) Act, 2010, c. 91, § 106A (Belize). Citing this enactment, BSDL moved to suspend the district court's scheduling order and for a status conference. The district court denied BSDL's motion to suspend and its subsequent motions to clarify. By minute order of October 12, 2010, the district court granted Belize's motion to stay the petition to confirm “pending resolution of the parties' case before the Belize Supreme Court.”

BSDL appeals the stay order or, in the alternative, if the order is not final, requests that its appeal be treated as a petition for a writ of mandamus.

II.

This court has treated an attempted appeal as an application for a writ of mandamus, and granted effective relief, where a “stay order as issued exceeded the proper exercise of authority of the District Court.” Dellinger v. Mitchell, 442 F.2d 782, 782 (D.C.Cir.1971); see id. at 788–89; cf. Ukiah Adventist Hosp. v. FTC, 981 F.2d 543, 548–49 & n. 6 (D.C.Cir.1992) (citing Sierra Rutile Ltd. v. Katz, 937 F.2d 743, 749 (2d Cir.1991); Beard v. Carrollton R.R., 893 F.2d 117, 120 (6th Cir.1989)). Given the “carefully crafted framework for the enforcement of international arbitration awards” TermoRio, 487 F.3d at 935, presented in the FAA and the New York Convention, it is evident that the stay order as issued exceeded the proper exercise of authority of the district court.

“The traditional use of the writ [of mandamus] in aid of appellate jurisdiction both at common law and in the federal courts has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so.” Roche v. Evaporated Milk Assn., 319 U.S. 21, 26, 63 S.Ct. 938, 87 L.Ed. 1185 (1943); see Cheney v. Dist. Court for Dist. of Columbia, 542 U.S. 367, 380, 124 S.Ct. 2576, 159 L.Ed.2d 459 (2004). Because the writ, see 28 U.S.C. § 1651(a), is a ‘drastic and extraordinary’ remedy,” Cheney, 542 U.S. at 380, 124 S.Ct. 2576 (quoting Ex parte Fahey...

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