Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela
863 F.3d 96
| 2d Cir. | 2017Background
- Mobil subsidiaries obtained a $1.6 billion ICSID award (Oct. 9, 2014) against the Bolivarian Republic of Venezuela for expropriation.
- Mobil filed an ex parte petition in S.D.N.Y. the next day seeking recognition and immediate entry of a federal judgment under 22 U.S.C. § 1650a; the Motion Term judge entered judgment that day.
- Venezuela moved under Fed. R. Civ. P. 60(b)(4) to vacate, arguing the court lacked subject-matter and personal jurisdiction because Mobil did not comply with the FSIA’s service/venue rules; the assigned district judge denied vacatur, invoking a ‘‘procedural gap’’ in §1650a and applying New York CPLR Article 54 procedures.
- The Second Circuit heard the appeal; the U.S. (as amicus) and Venezuela argued the FSIA provides the sole basis for jurisdiction over foreign states and its procedures must be followed; the ICSID award was later substantially reduced by an ICSID annulment decision.
- The Second Circuit reversed: it held §1650a does not displace the FSIA for suits against sovereigns, federal courts must enforce ICSID awards via a plenary action complying with the FSIA (service and venue), and the ex parte judgment was void for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument (Mobil) | Defendant's Argument (Venezuela) | Held |
|---|---|---|---|
| Whether 22 U.S.C. §1650a independently grants subject-matter jurisdiction over enforcement actions against foreign sovereigns | §1650a creates a treaty-based right and grants federal courts exclusive jurisdiction to enforce ICSID awards | FSIA provides the exclusive basis for jurisdiction over foreign states; §1650a does not displace FSIA | FSIA is the sole source of jurisdiction over foreign sovereigns; §1650a does not independently authorize jurisdiction over sovereign award-debtors |
| Whether actions to convert ICSID awards into federal judgments may proceed ex parte under forum-state summary procedures (e.g., N.Y. CPLR Art. 54) | §1650a and the Convention permit streamlined/summary treatment; courts may borrow state recognition procedures to enter federal judgments ex parte | Enforcement against sovereigns must follow FSIA procedures (service, venue); allowing state ex parte procedures would conflict with FSIA’s comprehensive scheme | Federal courts must treat ICSID awards as enforced via a civil action; cannot bypass FSIA by using state ex parte registration procedures |
| Whether FSIA service and venue provisions apply to enforcement of ICSID awards | Section 1650a’s silence and Convention’s objective of finality counsel against FSIA procedural requirements | FSIA controls; its procedural rules (28 U.S.C. §§1608,1391(f)) apply and must be satisfied | FSIA’s service and venue rules apply; plaintiffs must serve and establish venue under the FSIA before entry of judgment |
| Whether the ex parte judgment was void and subject to vacatur under Rule 60(b)(4) | Entry was proper under §1650a and state procedures; personal jurisdiction not required for recognition | Judgment is void because Mobil failed to effect FSIA service; court lacked personal jurisdiction | Judgment vacated as void for lack of personal jurisdiction; case remanded with instruction to dismiss petition without prejudice to a FSIA-compliant action |
Key Cases Cited
- Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428 (Supreme Court 1989) (FSIA is the sole basis for obtaining jurisdiction over a foreign state)
- Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480 (Supreme Court 1983) (FSIA replaces prior ad hoc immunity regime and supplies comprehensive rules)
- Blue Ridge Inv., L.L.C. v. Republic of Argentina, 735 F.3d 72 (2d Cir. 2013) (FSIA arbitration and waiver exceptions apply to enforcement of ICSID awards)
- Keeton v. Hustler Magazine, Inc., 815 F.2d 857 (2d Cir. 1987) (registration/enforcement of an out-of-district federal judgment in New York state court under CPLR Article 54)
- NML Capital, Ltd. v. Republic of Argentina, 134 S. Ct. 2250 (Supreme Court 2014) (FSIA interpreted as comprehensive framework for sovereign immunity)
- Continental Casualty Co. v. Argentine Republic, 893 F. Supp. 2d 747 (E.D. Va. 2012) (§1650a is not an independent grant of subject-matter jurisdiction over foreign sovereigns; FSIA procedures govern)
- Micula v. Government of Romania, 104 F. Supp. 3d 42 (D.D.C. 2015) (requiring plenary action under FSIA to enforce ICSID award)