404 F.Supp.3d 265
D.D.C.2019Background
- Petitioners (Viorel and Ioan Micula and three Swedish-controlled companies) invested in Romania under incentives created by Emergency Government Ordinance No. 24/1998 (EGO 24). Romania repealed EGO 24 in 2004 (pre-EU accession), which Petitioners say caused losses.
- Petitioners invoked the Sweden–Romania BIT and obtained an ICSID award in December 2013 for RON 376,433,229 (approx. $116M) plus interest. Romania sought annulment at ICSID; an ad hoc tribunal denied annulment in February 2016.
- The European Commission issued a State Aid Decision (2015) and a suspension injunction, concluding payment of the Award would be unlawful state aid; the Commission’s actions produced parallel EU litigation and a clash with the ICSID outcome.
- Petitioners sought enforcement of the ICSID award in U.S. courts under 22 U.S.C. § 1650a; an ex parte SDNY confirmation was vacated on appeal after Mobil Cerro Negro held FSIA governs ICSID enforcement and summary ex parte confirmation was improper, returning proceedings to D.C.
- The EU General Court annulled the Commission’s State Aid Decision in June 2019, finding the Commission lacked competence because the underlying acts occurred before Romania’s EU accession; the court found no extant EU bar to payment.
- This Court held it has subject-matter jurisdiction under the FSIA arbitration exception, rejected Romania’s act-of-state and foreign-compulsion defenses, found Romania had not fully satisfied the Award, and entered judgment for Petitioners in the net amount of $331,557,687 (after credited payments and interest).
Issues
| Issue | Petitioners' Argument | Romania's Argument | Held |
|---|---|---|---|
| FSIA subject-matter jurisdiction (arbitration exception) and effect of Achmea | FSIA §1605(a)(6) applies to ICSID awards; Achmea (CJEU) is distinguishable and does not void the BIT arbitration clause here | Achmea invalidates intra‑EU BIT arbitration clauses after accession, so the arbitration clause (post‑accession) is unenforceable and FSIA exception does not apply | Court: Jurisdiction exists under FSIA arbitration exception; Achmea inapplicable because key events and arbitration arose pre‑accession and ICSID tribunal did not decide EU law issues; General Court decision supports this view |
| Act of State / Foreign sovereign compulsion doctrines | No valid extant EU act now bars payment because the EU State Aid Decision was annulled; preparatory acts cannot resurrect a competence defect | Commission’s investigation and suspension injunction (and related preparatory acts) still bar Romania from paying and require U.S. courts to abstain | Court: Doctrines do not block confirmation; General Court annulment and legal analysis mean Commission lacked competence and preparatory acts do not bar enforcement |
| Alleged satisfaction / setoffs of the Award | Petitioners acknowledge limited forced executions were applied but argue Romania has not fully satisfied the Award and many Romanian setoffs/transfers are invalid under Romanian law | Romania asserts it satisfied the Award via tax setoffs, transfers into Treasury accounts, and forced executions | Court: Romania failed to show full satisfaction; Romanian tax setoffs were annulled, Treasury account funds remained inaccessible and were withdrawn, and only certain forced executions (≈ $11.2M) reduce judgment amount |
| Scope of U.S. court review in §1650a proceedings | Petitioners: U.S. courts may not revisit merits of ICSID awards; only non‑merits defenses (authenticity, finality, offsets) are allowed | Romania sought merits‑type review via EU-law defenses and jurisdictional challenges | Court: Confirms limited role—no merits review of ICSID award; may consider non‑merits defenses (jurisdiction under FSIA, authenticity, offsets). Romania’s merits-style challenges fail |
Key Cases Cited
- Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96 (2d Cir. 2017) (FSIA supplies jurisdictional and procedural rules for enforcing ICSID awards; summary ex parte confirmation improper)
- Medellin v. Texas, 552 U.S. 491 (U.S. 2008) (treaties are not self‑executing when implementing legislation is required)
- Blue Ridge Invs., L.L.C. v. Republic of Argentina, 735 F.3d 72 (2d Cir. 2013) (ICSID awards fall within FSIA’s arbitration exception)
- Belize Soc. Dev. Ltd. v. Gov’t of Belize, 794 F.3d 99 (D.C. Cir. 2015) (FSIA is the sole basis for U.S. jurisdiction over foreign states)
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (U.S. 1983) (district court must establish an applicable FSIA exception before proceeding)
- Micula v. Gov’t of Romania, 104 F. Supp. 3d 42 (D.D.C. 2015) (earlier D.D.C. ruling rejecting ex parte summary confirmation)