Cont'l Transfert Technique Ltd. v. Fed. Gov't of Nigeria

• Decision Date: 26 March 2013
• Docket Number: Civil Action No. 08–2026(PLF).
• Citation: 932 F.Supp.2d 153
• Parties: CONTINENTAL TRANSFERT TECHNIQUE LIMITED, Plaintiff, v. FEDERAL GOVERNMENT OF NIGERIA et al., Defendants.
• Court: U.S. District Court — District of Columbia

932 F.Supp.2d 153

CONTINENTAL TRANSFERT TECHNIQUE LIMITED, Plaintiff,

v.FEDERAL GOVERNMENT OF NIGERIA et al., Defendants.

Civil Action No. 08–2026(PLF).

United States District Court, District of Columbia.

March 26, 2013.

Shaun Michael Gehan, Melissa E. Byroade, Paul F. Doyle, Joel A. Hankin, Kelley, Drye & Warren, New York, NY, for Plaintiff.

David Ludwig, Thomas Mansfield Dunlap, Dunlap Grubb & Weaver, PLLC, Leesburg, VA, Kenechukwu C. Okoli, Law Offices of K.C. Okoli, P.C., New York, NY, for Defendants.

OPINION

PAUL L. FRIEDMAN, District Judge.

This matter is before the Court on a motion by plaintiff Continental Transfert Technique Limited to amend the Court's Order and Judgment of August 3, 2011. In an earlier Opinion, the Court granted the motion in part and held the remainder of the motion in abeyance pending supplemental briefing. See Continental Transfert Technique Ltd. v. Federal Government of Nigeria, 850 F.Supp.2d 277 (D.D.C.2012). The Court now grants the remainder of Continental's motion in part and denies it in part. An Amended Judgment accompanies this Opinion.¹

Background on this case and the pending motion can be found in the Court's earlier opinions and will not be repeated here except as follows.² Continental initiated this action under the Federal Arbitration Act, 9 U.S.C. §§ 201 et seq. (“FAA”)—which codifies the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”)—to confirm a 2008 arbitral award that it obtained in the United Kingdom against the defendants (collectively, “Nigeria”). Continental also sought to enforce, under the District of Columbia's Uniform Foreign–Money Judgments Recognition Act, D.C. Code §§ 15–381 et seq. (“UFMJRA”), a 2009 judgment by the United Kingdom's High Court of Justice that confirmed the arbitral award as final and enforceable. See Am. Compl. ¶¶ 1–2.

In an Order and Judgment dated August 3, 2011, the Court granted Continental's motion for summary judgment. The Order and Judgment stated simply that the arbitral award was confirmed in its entirety and that the judgment issued by the High Court of Justice was enforceable under the UFMJRA. See Order and Judgment (Aug. 3, 2011). Continental promptly moved to amend the Order and Judgment under Rule 60(a) of the Federal Rules of Civil Procedure in order to, in its words, “correct the judgment to reflect the amount of $423,184,115.29 plus applicable post judgment interest.” Mot. at 2. This motion, the Court explained, comprised “three distinct requests.” Continental Transfert Technique Limited v. Federal Government of Nigeria, 850 F.Supp.2d at 281. First, Continental was requesting that the portions of its arbitral award granting certain sums in foreign currencies be converted into U.S. dollars, at the exchange rates that were in place on the date of the award. Second, Continental was seeking post-award, prejudgment interest on the arbitral award, at an interest rate of eighteen percent. Third, Continental was requesting postjudgment interest on the entire amount. See id. at 281–82.

The Court concluded that Continental was entitled under Rule 60(a) to correction of the Order and Judgment in order to include an award of postjudgment interest as mandated by statute, but that its first two requests could not be granted under that Rule. Continental Transfert Technique Limited v. Federal Government of Nigeria, 850 F.Supp.2d at 282–88. Although those requests did not fall within the purview of Rule 60(a), the Court determined that because Continental filed its motion within the time limit required for a motion to alter or amend the judgment under Rule 59(e), the Court might be able to treat the motion as one brought under that Rule. The parties, however, had not briefed the question of whether the stringent standards of Rule 59(e) were met, nor had they adequately briefed the underlying questions of whether Continental was entitled in the first place to prejudgment interest or conversion of its award into U.S. currency. The Court therefore held those two requests in abeyance, id. at 284, 286, and directed the parties to file supplemental memoranda addressing the following questions:

(1) whether Continental was entitled at the time of judgment to conversion of its foreign-currency awards into U.S. dollars at the specified exchange rates;

(2) whether Continental's request for such conversion after judgment satisfies the requirements of Rule 59(e) for altering or amending a judgment;

(3) whether Continental was entitled at the time of judgment to prejudgment interest at a rate of eighteen percent; and

(4) whether Continental's request for such interest after judgment satisfies the requirements of Rule 59(e) for altering or amending a judgment.

Order (Mar. 27, 2012). The parties have filed their supplemental memoranda. In view of their arguments, the applicable law, and the entire record in this case, the Court concludes that Continental was entitled at the time of judgment to part of the relief it has requested, and that it has met the standards for obtaining that relief under Rule 59(e).

I. CONVERSION OF ARBITRAL AWARD INTO UNITED STATES DOLLARS

A. Continental's Entitlement to Conversion of its Foreign Currencies

In the proposed order that it submitted with its motion for summary judgment, Continental requested that the portions of its arbitral award providing for amounts in British pounds and Nigerian naira be converted into U.S. dollars. See Proposed Order at 1. Conversion of such foreign currency amounts into dollars at judgment is the norm, rather than the exception. Elite Entertainment, Inc. v. Khela Bros. Entertainment Inc., 396 F.Supp.2d 680, 694 (E.D.Va.2005) (“[C]ourts ... agree that entering judgment in a foreign currency is strongly disfavored.”). Traditionally, even when a losing defendant's obligation was denominated in a foreign currency, most American courts “assumed that American judgments must be entered in dollars,” an assumption that likely rested in part “on the now repealed section 20 of the Coinage Act of 1792.” Competex, S.A. v. Labow, 783 F.2d 333, 337 (2d Cir.1986); see, e.g.,Int'l Silk Guild v. Rogers, 262 F.2d 219, 224 (D.C.Cir.1958) (“Once the District Court found Asahi Japan obligated to pay the Guild Y80,323.09, it was confronted with the problem of converting the yen into dollars, for American courts are permitted to render judgments only in dollars.”) (citing Section 20). While that rule no longer holds sway as an absolute proposition, see, e.g., Mitsui & Co., Ltd. v. Oceantrawl Corp., 906 F.Supp. 202, 203–04 (S.D.N.Y.1995), most judgments still are entered in U.S. dollars. See Elite Entertainment, Inc. v. Khela Bros. Entertainment Inc., 396 F.Supp.2d at 694;Restatement (Third) of the Foreign Relations Law of the United States § 823(1) (1987) (“Restatement”) (“Courts in the United States ordinarily give judgment on causes of action arising in another state, or denominated in a foreign currency, in United States dollars, but they are not precluded from giving judgment in the currency in which the obligation is denominated or the loss was incurred.”).

According to the Restatement, “a judgment in a foreign currency should be issued only when requested by the judgment creditor[.]” Restatement§ 823 cmt. b. Here, Continental made no such request—quite the opposite. Moreover, the values of the British pound and the Nigerian naira have declined relative to the dollar in recent years. Refusing to convert Continental's award into dollars, therefore, would effectively reduce the value of the award. ³ That result would run counter to the Restatement's direction that when a decision is made to convert the foreign currency into U.S. dollars, the choice of conversion rate should be animated by the need “to make the creditor whole and to avoid rewarding a debtor who has delayed in carrying out the obligation.” Restatement§ 823(2). Entering judgment in the now-depreciated naira and pound, when Continental specifically requested a dollar amount, finds no support in the case law and is contrary to the sensible policies articulated in the Restatement. The Court therefore concludes that Continental was entitled, as it requested, to conversion of the foreign currency portions of its arbitral award into dollars. See G.E. Transport S.P.A. v. Republic of Albania, 693 F.Supp.2d 132, 139–40 (D.D.C.2010) (adopting Restatement approach and converting portion of arbitral award that was stated in Euros into dollars).

The more intricate question is what exchange rates to use in converting the naira and pound into dollars. Answering this question requires selecting the proper date for which the corresponding exchange rates prevailing on that date should be employed. Two options emerge from a pair of Supreme Court decisions, both authored by Justice Oliver Wendell Holmes, Hicks v. Guinness, 269 U.S. 71, 46 S.Ct. 46, 70 L.Ed. 168 (1925), and Deutsche Bank Filiale Nurnberg v. Humphrey, 272 U.S. 517, 47 S.Ct. 166, 71 L.Ed. 383 (1926). The rule applied in Hicks is often referred to as the “breach day” rule, while that of Deutsche Bank is referred to as the “judgment day” rule. ReliaStar Life Ins. Co. v. IOA Re, Inc., 303 F.3d 874, 883 (8th Cir.2002). Under the “breach day” rule, the applicable exchange rate is the one that was in effect on the date that the defendant breached its obligations to the plaintiff. Id. (citing Hicks v. Guinness, 269 U.S. at 80, 46 S.Ct. 46). And in the context of international arbitration awards, one judge of this Court has concluded that the defendant is deemed to have breached its obligation on the date the arbitral award issued, which is when the defendant's obligation arose. G.E. Transport S.P.A. v. Republic of Albania, 693 F.Supp.2d at 140;cf.S.A.R.L. Aquatonic Laboratoires v. Marie Katelle, Inc., No. 06–0640, 2007 WL 2410373, at *2 (D.Ariz. Aug. 21, 2007) (using date of foreign judgment as “breach date” in action to enforce that...