87 F. Supp. 3d 573
S.D.N.Y.2015Background
- Mobil (ExxonMobil entities) obtained a $1.6 billion ICSID arbitral award against Venezuela for expropriation and filed an ex parte petition in the S.D.N.Y. to convert the ICSID award into a federal-court judgment under 22 U.S.C. § 1650a.
- The S.D.N.Y. Part One judge granted recognition and entered a final judgment the day after the award; Mobil then served notice on Venezuela per New York CPLR Article 54 procedures.
- Venezuela moved under Fed. R. Civ. P. 60(b) to vacate the Part One judgment, arguing (1) § 1650a does not permit ex parte/state-law recognition procedures and instead requires a plenary action, and (2) the FSIA requires compliance with its service, personal jurisdiction, and venue rules for suits against foreign states.
- The court concluded federal courts may borrow forum-state recognition procedures (here, CPLR Art. 54) to convert ICSID awards into federal judgments under § 1650a, and that the FSIA does not displace that procedure insofar as recognition (as distinct from execution) is concerned.
- Because Venezuela applied to ICSID to revise the award and ICSID stayed enforcement pending revision, the court denied the motion to vacate but stayed enforcement of the Part One judgment pending ICSID proceedings.
Issues
| Issue | Plaintiff's Argument (Mobil) | Defendant's Argument (Venezuela) | Held |
|---|---|---|---|
| Whether § 1650a permits conversion of an ICSID award into a federal judgment via forum-state recognition procedures (e.g., NY CPLR Art. 54) | § 1650a is silent on procedure; federal courts should borrow forum-state procedures to effectuate "full faith and credit" and facilitate prompt recognition | § 1650a does not authorize ex parte or non-plenary recognition; a plenary suit is required | Court held § 1650a allows use of forum-state recognition procedures to convert an ICSID award into a federal judgment |
| Whether the FSIA requires ICSID award recognition proceedings against a foreign state to follow FSIA service, personal jurisdiction, and venue rules (i.e., plenary action) | The FSIA does not negate the enabling statute’s recognition regime; FSIA exceptions and §1604 preserve treaty-based recognition practice | FSIA provides the exclusive basis for jurisdiction over foreign states and thus must govern procedure; noncompliance with FSIA service rules vitiates the judgment | Court held FSIA does not displace the ICSID recognition procedure; FSIA governs jurisdiction/execution but does not compel plenary suit for recognition |
| Whether subject-matter jurisdiction existed for recognition action | Recognition of ICSID awards falls within FSIA exceptions (arbitral-award exception and implied waiver) and §1650a grants district courts exclusive jurisdiction | Argued lack of subject-matter jurisdiction because FSIA is sole basis and its procedures weren’t followed | Court held subject-matter jurisdiction existed under FSIA §1605(a)(6)(B) and §1605(a)(1), and §1604’s preservation of preexisting treaties reinforces jurisdiction |
| Whether the Part One judgment must be vacated immediately given Venezuela’s pending ICSID revision application | Mobil argued recognition is proper and execution is separately governed by FSIA; any offsets or adjustments can be addressed in execution phase | Venezuela sought vacatur or at least to block enforcement pending ICSID revision to avoid over-attachment | Court denied vacatur but stayed enforcement of the judgment pending resolution of Venezuela’s application to ICSID |
Key Cases Cited
- Liberian E. Timber Corp. v. Republic of Liberia, 650 F. Supp. 73 (S.D.N.Y. 1986) (upholding ex parte federal recognition and enforcement steps for an ICSID award; relevant precedent in the district)
- Blue Ridge Invs., LLC v. Republic of Argentina, 735 F.3d 72 (2d Cir. 2013) (held FSIA exceptions applicable to enforcement of ICSID awards; contracting-state consent implies enforceability)
- Amerada Hess Shipping Corp. v. Argentine Republic, 488 U.S. 428 (1989) (describing the FSIA as the sole basis for jurisdiction over foreign states and framing analysis of FSIA exceptions)
- Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480 (1983) (discussing historical treatment of sovereign immunity and the shift toward statutory scheme)
- Baker v. General Motors Corp., 522 U.S. 222 (1998) (explaining the force of the Full Faith and Credit obligation and interstate recognition principles)
- Keeton v. Hustler Magazine, Inc., 815 F.2d 857 (2d Cir. 1987) (endorsing application of CPLR Article 54 procedures in federal courts for recognition/registration of out-of-state judgments)