Figueiredo Ferraz E Engenharia De Projeto Ltda. v. Republic of Peru
2011 U.S. App. LEXIS 24748
| 2d Cir. | 2011Background
- Figueiredo, an Appellee, obtained an arbitral award against Peru's Program, a Peruvian government entity, for over $21 million related to Peruvian water projects.
- Peru's cap statute limits annual payments to satisfy judgments to 3% of an agency's budget, a factor central to enforcement in the United States.
- Figueiredo filed a petition in the Southern District of New York to confirm the award under FAA, Panama Convention, and NY Convention, asserting FSIA jurisdiction.
- The District Court rejected several defenses, including lack of subject matter jurisdiction, FNC, and international comity, and did not directly resolve the cap's effect on enforcement.
- The Appellants appealed, arguing the case should have been dismissed under FNC and comity, and raising questions about Peru’s status and the cap’s applicability.
- This court granted interlocutory review to consider FNC, forum selection clause, and comity, and ultimately reversed, remanding to dismiss the petition on FNC grounds conditioned on Peru’s consent to suit there.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FNC dismissal is proper in a Panama/NY Convention enforcement action. | Figueiredo argues enforcement should proceed, as treaties favor arbitration enforcement and only procedural obstacles exist. | Peru argues the cap statute and sovereign interests justify dismissal to avoid enforcement here. | Yes; petition should be dismissed under FNC. |
| Whether Peru's three percent cap constitutes a public factor weighing against enforcement in the U.S. | Cap is not a controlling public factor; U.S. policy favors enforcement of arbitral awards. | Cap is a sovereign prerogative public factor that warrants dismissal to respect Peru's budget controls. | Yes; cap is a significant public factor tipping toward dismissal. |
| Whether Peru is an adequate alternative forum for enforcement of the award. | Peru is inadequate because the goal is enforcement against U.S.-located assets under the Panama/N.Y. Conventions. | Peru can adjudicate enforcement and potentially satisfy the cap there. | No; Peru is not an adequate alternative forum for enforcement here. |
| Whether comity considerations support or oppose enforcement in light of Peru's cap. | Comity should favor enforcement given treaty obligations and arbitral integrity. | Comity supports deferring to Peru's sovereign policy to limit payments. | Yes; comity weighs in favor of dismissal. |
| Whether subject-matter jurisdiction under FSIA/FAA is properly addressed before FNC analysis in this context. | FSIA/FAA jurisdiction exists to permit enforcement proceedings in U.S. courts. | FSIA/FAA issues are not dispositive when FNC governs the enforcement action. | Yes, FNC governs here; the petition should be dismissed. |
Key Cases Cited
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (Supreme Court, 1947) (public-interest factors in FNC balancing; congestion and local interests)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (Supreme Court, 1981) (substantive law differences not to govern FNC as a rule of thumb)
- Monegasque de Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002) (treaty grounds for enforcement and deference to district court in enforcement context)
- In re Arbitration Between Monegasque De Reassurances S.A.M. v. Nak Naftogaz of Ukraine, 311 F.3d 488 (2d Cir. 2002) (principles governing enforcement under New York Convention; forum non conveniens applied to enforcement)
- Iragorri v. United Technologies Corp., 274 F.3d 65 (2d Cir. 2001) (strong presumption in favor of plaintiff's forum choice; deference considerations)