Citigroup, Inc. v. Abu Dhabi Investment Authority
776 F.3d 126
2d Cir.2015Background
- Citigroup and ADIA entered an Investment Agreement containing a broad arbitration clause for any dispute related to the Agreement.
- In 2009 ADIA initiated arbitration alleging dilution of its investment; the panel awarded in Citigroup’s favor after extensive proceedings.
- Citigroup moved to confirm the arbitration award; the district court confirmed the award in March 2013, which ADIA appealed.
- While the confirmation appeal was pending, ADIA commenced a second arbitration under the same Agreement, asserting new or continuing breaches.
- Citigroup filed suit under the Declaratory Judgment Act, the All Writs Act, and FAA to enjoin the second arbitration, arguing claim preclusion and protection of the prior judgment.
- The district court denied the All Writs Act relief and compelled arbitration; Citigroup appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can the All Writs Act enjoin a second arbitration to protect a prior confirmation judgment? | Citigroup: yes to preserve the integrity of the judgment. | ADIA: no; All Writs Act not warranted here. | No; All Writs Act cannot enjoin the second arbitration. |
| Who should determine the claim-preclusion effect of a federal confirmation judgment? | Citigroup seeks court determination; seeks to protect judgment. | ADIA argues arbitrators should decide preclusion. | Arbitrators determine claim-preclusion, not the court, in line with Belco and National Gypsum. |
| Does treating federal confirmations differently from state confirmations create a hierarchical problem? | Citigroup warns of unequal treatment under FAA. | ADIA argues for uniform approach via arbitrators. | Better to treat both the same and let arbitrators decide their preclusive effects. |
Key Cases Cited
- Belco Petroleum Corp. v. United States Fire Insurance Co., 88 F.3d 129 (2d Cir. 1996) (arbitrators decide claim preclusion from a prior arbitration.)
- United States Fire Insurance Co. v. National Gypsum Co., 101 F.3d 813 (2d Cir. 1996) (arbitrators decide issue preclusion from prior litigation.)
- American Express Financial Advisors Securities Litigation, 672 F.3d 113 (2d Cir. 2011) (All Writs Act enjoinment discussed where settlement retained jurisdiction.)
- In re Y&A Group Sec. Litig., 38 F.3d 382 (8th Cir. 1994) (district court best interpreter of its judgment; limited arbitration context.)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (preclusion policy and arbitration framework considerations.)
- John Hancock Mutual Life Ins. Co. v. Olick, 151 F.3d 132 (3d Cir. 1998) (district court should decide preclusion in certain post-judgment contexts.)
- Emp’rs Ins. Co. of Wausau v. OneBeacon Am. Ins. Co., 744 F.3d 25 (1st Cir. 2014) (federal judgments confirming arbitration do not automatically preclude subsequent arbitrations.)