(Berman Jackson, Judge)
United States District Court, District of Columbia.
Arbitration — ICSID Tribunal — Award — Summary judgment — Post-judgment interest rate — Whether rate to be calculated in accordance with ICSID Award or United States Code 1961, Title 28 — Attachment and execution — Application for stay — Whether action for attachment and execution meeting reasonable time requirement under United States Code 1610, Title 22 — Whether action for attachment reasonable during Venezuelan political and humanitarian crisis
Relationship of international law and municipal law — ICSID arbitration award — Summary judgment in United States — United States Code 1961, Title 28 — Post-judgment interest rate — Whether rate to be calculated in accordance with ICSID Award or United States Code 1961, Title 28
Recognition — Governments — Representatives — Whether United States Court recognizing Maduro or Guaidó government lawyers as proper representatives of Venezuela — The law of the United States
Summary:1The facts:—The Owens-Illinois European Group (“the plaintiff”), a glass manufacturing company, filed proceedings against the Bolivarian Republic of Venezuela (“Venezuela” or “the defendant”), seeking confirmation and enforcement of an arbitration award of more than $400 million (“the Award”). The Award was issued in 2015, by an International Centre for Settlement of Investment Disputes (“ICSID”) Tribunal, which found that the defendant had expropriated the plaintiff's Venezuelan glass factories in 2010.
Venezuela sought an annulment of the Award under the ICSID Convention, 1965, which was denied in December 2018. The plaintiff subsequently filed a motion for summary judgment. However, before written arguments were filed, new counsel entered an appearance for the defendant,
on the authority of Venezuela's Interim President, Mr Guaidó. A dispute arose over which set of attorneys would litigate the case on behalf of the State: counsel from the Maduro government, who had represented the State since the start of the case, or those from the government of Mr Guaidó, whose interim presidency the United States had formally recognized in 2019, after Venezuela's disputed presidential election. Both groups of lawyers opposed the motion for summary judgment and challenged the applicable post-judgment interest rate proposed by the plaintiff, but neither contested the Award. The plaintiff maintained that the post-judgment interest rate should be calculated at the rate provided for in the Award,2 while Venezuela argued that Title 28 of the United States Code 1961 applied.3In July 2019, the plaintiff filed a motion for execution and attachment of the Award. The defendant opposed the motion and applied for a stay of 120 days. It argued that insufficient time had elapsed since the entry of judgment, and that it was unreasonable to begin enforcement proceedings at that time, with Venezuela facing a political and humanitarian crisis. Mr Guaidó's representatives stated that his government was unable to pay down the debt because the Maduro regime retained substantial control over government operations, including the State's Treasury. They maintained that there was no evidence that Mr Guaidó's government was seeking to evade payment, and argued that the additional time would allow it to complete its debt restructuring plans.
Held:—The Award was confirmed.
(1) The Guaidó government lawyers were the proper representatives of Venezuela. The United States had formally recognized Mr Guaidó as the Interim President of Venezuela in January 2019, and a DC Circuit Court had confirmed that position in a decision that was binding on the Court (paras. 16–17).
(2) Post-judgment interest was to be calculated in accordance with the 1961 Federal Statute. The language in the Statute was mandatory and did not allow for judicial discretion. While parties could agree to apply a different rate, it was settled that the use of the words “until payment” in an award did not preclude the application of the Statute, or demonstrate the intent of the parties to do so. The interest rate set out in the Award applied to the pre-judgment period (paras. 20–8).
(3) The Award was confirmed. The plaintiff was entitled to the principal amount of $372,461,982 plus interest; costs and expenses of the arbitration and annulment, plus interest; and post-judgment interest rates on the total amount of the Award (para. 29).
Held:—The plaintiff's motion for attachment and execution was allowed. The defendant's application for a stay was denied.
(1) The “reasonable period of time” requirement under United States Code 1610(c), Title 22 was intended to provide foreign governments with sufficient time to manage their internal procedures for the payment of a judgment (para. 7).
(2) The defendant had failed to provide a timeline for its debt restructuring plans or to demonstrate that it was taking concrete steps to satisfy the judgment. Additionally, it had confirmed that it was unable to do so at that time. It could take years to transition into a different political regime and it would not be fair to delay the plaintiff's entitlement to judgment indefinitely (paras. 7–14).
The text of the decision on Motion for Leave to Seek Attachment and Execution commences at p. 602. The following is the text of the decision on Motion for Summary Judgment:4
[1] Plaintiff Owens-Illinois European Group (“OIEG”) brought this action pursuant to 22 USC § 1650a and Article 54 of the International Centre for Settlement of Investment Disputes (“ICSID”) Convention against the Bolivarian Republic of Venezuela seeking to confirm and enforce an arbitration award of more than $400 million. Compl. [Dkt. # 1]. In October of 2010, OIEG's factories were expropriated by the Venezuelan government, then headed by Hugo Chávez, and on September 7, 2011, OIEG commenced arbitration against Venezuela pursuant to the Netherlands–Venezuela Bilateral Investment Treaty. Id. ¶¶ 6, 12; Final Award [Dkt. # 1–10] ¶¶ 1, 110. On March 10, 2015, the tribunal found in favor of plaintiff, and it awarded OIEG $372,461,982 for the expropriation and $5,750,000 in costs and expenses. See Final Award [Dkt. # 1–14] ¶¶ 880–1, 976.
[2] A motion to dismiss has already been heard and denied, see Mar. 8, 2019 Hr'g Tr. [Dkt. # 54] (“3/8 Hr'g Tr.”), and plaintiff has filed a motion for summary judgment seeking confirmation of the Award. Pl.'s Mot. for Summ. J. [Dkt. # 60] (“Pl.'s Mot.”). Because 22 USC § 1650a requires this Court to confirm an arbitral award obtained under ICSID, and the sole issue raised in defendant's opposition pertains to the applicable post-judgment interest rate, the Court will enter judgment for plaintiff.
[3] The International Convention on the Settlement of Investment Disputes between States and Nationals of Other States is a multilateral treaty designed to provide a legal framework for resolving disputes between private investors and governments. Preamble, Mar. 18, 1965, 17 UST 1270 (“ICSID Convention”). The ICSID Convention established the International Centre for Settlement of Investment Disputes, which has the authority to convene arbitration tribunals to adjudicate disputes between international investors and host governments in contracting states. Id. art. 1. “Any Contracting State or any national of a Contracting State” may request that ICSID convene an arbitration tribunal. See id. art. 36. The tribunal, which consists of either a single arbitrator or “any uneven number of arbitrators,” id. art. 37, considers the dispute and issues a written award, which “deal[s] with every question submitted to the [t]ribunal, and … state [s] the reasons upon which it is based.” Id. art. 48.
[4] The parties have multiple avenues for contesting the tribunal's award: A party may request “revision” if there is a newly-discovered material fact previously unknown to the parties and arbitrator, see id. art. 51, or an “annulment” if a party challenges the tribunal's substantive decision. Id. art. 52. When a party seeks annulment, ICSID convenes an ad hoc committee of three members to review the award determination. Id. At a party's request, enforcement of an award is “stayed provisionally until the [c]ommittee” renders its decision. Id. But, “except to the extent that enforcement” has been stayed, the tribunal's award remains “binding on the parties and shall not be subject to any appeal or to any other remedy” other than those set forth in the ICSID Convention. Id. art. 53.
[5] ICSID is not empowered to enforce awards. Prevailing parties must register their awards with a court of a member state. The courts of member states are required to “recognize an award … as binding and [to] enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that [s]tate,” or, for a member state with “a federal constitution,” to “treat the award as if it were a final judgment of the courts of a constituent state.” Id. art. 54; see 22 USC § 1650a(a).
[6] The United States has been a member of the ICSID Convention since 1966, and Congress has enacted legislation implementing the Convention:
An award of an arbitral tribunal rendered pursuant to chapter IV of the convention shall create a right arising under a treaty of the United States. The pecuniary obligations imposed by such an award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States. The Federal Arbitration Act (9 USC 1 et seq.) shall not apply to...
