On 3 November 2015, the United States District Court for the District of Columbia granted the Republic of Guinea’s motion to stay a petition to enforce an international arbitration award rendered against it and in favor of Getma International, pending the conclusion of the foreign proceedings to annul said award.
In 2008, Getma International and Guinea entered into a Concession Agreement, pursuant to which Getma International would develop Guinea’s main port in Conakry, its capital city. In 2009, the parties amended the Concession Agreement and in 2011, Guinea terminated said Agreement.
As a result, Getma International invoked the dispute resolution clause of the Concession Agreement to recover damages. The dispute resolution clause provided for the resolution of any contractual disputes between the parties in accordance with the Common Court of Justice and Arbitration (CCJA) arbitration rules.
In May 2014, the CCJA arbitral tribunal rendered a decision in favor of Getma International, awarding it more than EUR 38.5 million plus interest.
In July 2014, Guinea filed a petition with the CCJA seeking to annul the award on, inter alia, the ground that the CCJA arbitral tribunal did not fully consider evidence that allegedly demonstrated that Getma International procured the Concessions Agreement through corruption.
In September 2014, Getma International filed a petition before the United States District Court for the District of Columbia to confirm and enforce the CCJA award pursuant to the Federal Arbitration Act (FAA) 9 U.S.C. § 201 (2012). Guinea sought to stay the District Court’s proceedings, pending the outcome of the annulment proceedings.
The District Court’s Opinion:
The District Court relied on the Convention for the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (New York Convention) which is implemented and codified in the FAA. Specifically, the District Court noted that the New York Convention provides it with the discretion to defer confirmation and enforcement of the award, if there is a pending annulment action in another jurisdiction.
In deciding whether to grant a stay, the District Court considered five factors set out by the Second Circuit in Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F. 3d 310, 316-317 (2d Cir. 1998), namely:
“(1) the general objectives of the arbitration – the expeditious resolution of disputes and the avoidance of protracted and expensive litigation; (2) the status of foreign proceedings and the estimated time for those proceedings to be resolved; (3) whether the award sought to be enforced will receive greater scrutiny in the foreign proceedings under a less deferential standard of review; (4) the characteristics of the foreign proceedings including (i) whether they were brought to enforce an award (which would tend to weigh in favor of a stay) or to set the award aside (which would tend to weigh in favor of enforcement); (ii) whether they were initiated before the underlying enforcement proceeding so as to raise concerns of international comity; (iii) whether they were initiated by the party now seeking to enforce the award in federal court; and (iv) whether they were initiated under circumstances indicating an intent to hinder or delay resolution of the dispute; (5) a balance of the possible hardships to each of the parties, keeping in mind that if enforcement is postponed under … the [New York] Convention, the party seeking enforcement may receive ‘suitable security’ and that, under … the Convention, an award should not be enforced if it is set aside or suspended in the originating country; and (6) any other circumstances that could tend to shift the balance in favor of or against adjournment.”
The District Court held that based on the factors set out in Europcar, the confirmation and enforcement of the award should be stayed. Nevertheless, the District Court clarified that the stay should not be indefinite as this could be seen as an abuse of process and, therefore, granted the stay only until April 2006, that is, the date on which Guinea represented that the CCJA would render a decision on the annulment petition.
A more detailed summary and an excerpt of this decision, indexed and searchable according to the list of topics published in http://www.newyorkconvention.org/court+decisions/description will be published in the 2016 volume of the Yearbook Commercial Arbitration, published by the International Council of Commercial Arbitration (ICCA).
Source: District Court’s Opinion in www.fastcase.com