Belize Social Development Limited v. Government of Belize
5 F. Supp. 3d 25
D.D.C.2013Background
- In 2005 the Government of Belize (GOB) and Belize Telecommunications Ltd. (BTL, later Telemedia) entered Accommodation Agreements containing an LCIA arbitration clause; Telemedia later assumed BTL's rights.
- After a 2008 change in Belize government, Telemedia initiated LCIA arbitration (GOB refused to participate); the LCIA tribunal issued a Final Award in March 2009 in Telemedia's favor (declaratory and monetary relief).
- Two days after the award, Telemedia assigned the monetary portion to Belize Social Development Ltd. (BSDL), which filed to confirm and enforce the LCIA award in D.C. federal court in 2009.
- GOB pursued litigation and legislation in Belize (including alleged injunctions and statutes criminalizing disobedience), and claimed the Accommodation Agreements were void under Belize law.
- The D.C. Circuit held the district court must apply the New York Convention and remanded; the district court here rejected GOB's motions to stay/dismiss and confirmed the award, finding New York Convention defenses inapplicable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction / FSIA immunity | BSDL: FSIA arbitration exception applies because award governed by New York Convention; court has jurisdiction | GOB: Sovereign immunity applies; assignment invalid so no waiver | Held: FSIA §1605(a)(6)(B) applies; court has jurisdiction despite GOB's arguments |
| Forum non conveniens | BSDL: U.S. is proper forum to attach foreign sovereign property and enforce award | GOB: Belize courts are adequate and more appropriate | Held: Dismissal improper; no adequate alternative because U.S. courts are uniquely able to attach GOB property |
| Standing / assignment validity | BSDL: Telemedia validly assigned monetary award to BSDL under English law; BSDL has standing to enforce | GOB: Assignment invalid under Accommodation Agreement and Belize law | Held: Assignment governed by English law and valid; BSDL has standing |
| Article V defenses under New York Convention (invalid contract, revenue rule, public policy, suspension by competent authority, political question/act of state) | BSDL: Arbitration clause severable; award enforcable; revenue rule, act-of-state, political-question, and public-policy defenses do not bar enforcement; no English proceedings to suspend award | GOB: Agreement void ab initio under Belize law; revenue rule and public policy bar enforcement; Belize injunction/suspension exists | Held: Court rejected all Article V defenses — arbitration clause severable (Buckeye); revenue rule inapplicable (contract enforcement, not tax collection); no competent-authority suspension (no English stay); public-policy and political-question/act-of-state defenses insufficient |
Key Cases Cited
- Belize Soc. Dev. Ltd. v. Gov't of Belize, 668 F.3d 724 (D.C. Cir. 2012) (remanding and instructing district court to apply New York Convention)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (federal policy strongly favors arbitration)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (arbitration clause is severable; challenges to entire contract for arbitrability go to arbitrator)
- Creighton Ltd. v. Gov't of the State of Qatar, 181 F.3d 118 (D.C. Cir. 1999) (FSIA arbitration exception applies to New York Convention awards)
- TMR Energy Ltd. v. State Prop. Fund of Ukraine, 411 F.3d 296 (D.C. Cir. 2005) (only U.S. courts can attach foreign sovereign property in U.S.; affects forum non conveniens analysis)
- Pasquantino v. United States, 544 U.S. 349 (U.S. 2005) (discussing the revenue rule and its origins in rule against foreign penal enforcement)
- Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265 (U.S. 1995) (9 U.S.C. §15 removes act-of-state doctrine as a bar to arbitration)
- TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928 (D.C. Cir. 2007) (public-policy defense to enforcement of foreign arbitral awards is narrowly construed)