Corporación Mexicana De Mantenimiento Integral v. Pemex-Exploración Y Producción
832 F.3d 92
2d Cir.2016Background
- COMMISA (Mexican subsidiary of KBR) contracted with PEP (a PEMEX subsidiary) to build oil platforms; contracts (governed by Mexican law) contained ICC arbitration clauses.
- After PEP seized the nearly-complete platforms and declared administrative rescission (2004), COMMISA initiated ICC arbitration in Mexico; the tribunal issued a preliminary injunction on performance-bond collection and, in December 2009, a final award awarding COMMISA ≈ $300 million.
- COMMISA sought confirmation of the award in SDNY; the district court confirmed (2010). PEP appealed to the Second Circuit and simultaneously obtained annulment of the same arbitral award in Mexico (Eleventh Collegiate Court) on grounds that PEP’s rescission was an act of state not subject to arbitration.
- The Second Circuit vacated and remanded for the district court to consider the Mexican court decision. On remand, after an evidentiary hearing, the district court again confirmed the award, concluding that deferring to the Mexican nullification would offend U.S. public policy (retroactivity, loss of forum, effect on contractual waivers of immunity, and de facto uncompensated expropriation).
- PEP appealed; the Second Circuit affirmed, holding the district court did not abuse its discretion in refusing comity to the Mexican annulment and confirming the award (including $106 million in performance-bond recovery).
Issues
| Issue | Plaintiff's Argument (COMMISA) | Defendant's Argument (PEP) | Held |
|---|---|---|---|
| Whether SDNY properly exercised personal jurisdiction over PEP | PEP waived/forfeited jurisdiction objection by seeking remand and litigating merits; also PEP functions as part of the Mexican state so due-process protections do not apply | SDNY lacks personal jurisdiction and venue; preservation of these defenses was timely | Forfeiture and alternative Bancec analysis: PEP treated as sovereign instrumentality; personal jurisdiction existed — PEP forfeited contesting it on these facts |
| Whether venue in SDNY was proper | Venue proper given PEP’s commercial contacts and forum conduct; forfeited if PEP sought remand | Venue improper in SDNY | Venue proper (forfeiture rationale and alternative statutory analysis under §1391(f)(3)) |
| Whether U.S. courts must recognize Mexican annulment of the arbitral award | Mexican annulment should not be given effect because it applied retroactive law, deprived COMMISA of a forum, and frustrated contractual waiver to arbitrate | Panama Convention and Mexican nullification require refusing confirmation | District court did not abuse discretion: refusing comity and confirming award was consistent with U.S. public policy exceptions to recognition |
| Whether the $106M performance-bond amount could be included in the U.S. confirmation judgment | The preliminary award enjoined bond collection and Final Award incorporated that injunction; inclusion merely enforces the final award | Inclusion exceeded confirmation authority because bonds were not explicitly listed in damages | $106M properly included: preliminary injunction and Final Award together authorized relief; confirmation may interpret and enforce award |
Key Cases Cited
- C & L Enters., Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411 (2001) (tribal or sovereign consent to arbitrate can waive immunity and allow enforcement of awards)
- Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (anti‑retroactivity principle; laws should not be applied retroactively to impair settled expectations)
- Ackermann v. Levine, 788 F.2d 830 (2d Cir. 1986) (comity: foreign judgments are generally given effect unless enforcement would offend the public policy of the forum)
- Baker Marine (Nig.) Ltd. v. Chevron (Nig.) Ltd., 191 F.3d 194 (2d Cir. 1999) (recognition of foreign annulment can be consistent with U.S. public policy analysis)
- Yusuf Ahmed Alghanim & Sons v. Toys "R" Us, Inc., 126 F.3d 15 (2d Cir. 1997) (Panama/New York Conventions embody a pro‑enforcement bias for foreign arbitral awards)
- First Nat’l City Bank v. Banco Para el Comercio Exterior de Cuba (Bancec), 462 U.S. 611 (1983) (treating an instrumentality as the foreign sovereign where necessary to prevent injustice; guides whether corporate form gives due‑process protections)
- Pravin Banker Assocs., Ltd. v. Banco Popular Del Peru, 109 F.3d 850 (2d Cir. 1997) (international comity is a prudential doctrine guiding treatment of foreign judgments)
- Tahoe‑Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) (government physical taking requires compensation; relevant to expropriation argument)