21 F.4th 829
D.C. Cir.2021Background
- Tatneft (a Russian company) and Tatarstan joined with Ukraine to form Ukrtatnafta; Tatneft failed to make full capital contributions and its ownership stake was reduced.
- Ukrtatnafta shares were later sold to AmRuz and Seagroup for promissory notes; Ukrainian courts later invalidated those purchases and the shares were sold at auction to the Privat Group.
- Tatneft initiated arbitration under the Russia–Ukraine Bilateral Investment Treaty; a three‑arbitrator tribunal (including Professor Francisco Orrego Vicuña) awarded Tatneft damages.
- Vicuña accepted an unrelated appointment from counsel for one side and did not disclose that appointment; Ukraine argued nondisclosure and illegality of the underlying share purchases as grounds to refuse enforcement.
- The U.S. District Court for D.C. enforced the award, denied untimely supplemental briefing on the illegality issue, rejected bias and public‑policy defenses, and declined forum non conveniens dismissal; the D.C. Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Tatneft) | Defendant's Argument (Ukraine) | Held |
|---|---|---|---|
| Whether New York Convention art. V(1)(c) bars enforcement because AmRuz/Seagroup's purchases were illegal (no consent to arbitrate) | Enforcement proper; Ukraine waived or untimely raised illegality argument | Purchases were illegal under Ukrainian law, so parties never consented to arbitrate those disputes | Court declined to consider untimely claim; refusal to allow supplemental briefing affirmed; enforcement upheld |
| Whether tribunal composition was improper under New York Convention art. V(1)(d) because Vicuña failed to disclose appointments | Tribunal composition complied with UNCITRAL; no duty to disclose a single unrelated appointment | Vicuña’s undisclosed appointment by one party’s counsel gave rise to justifiable doubts about impartiality | Court: nondisclosure did not create justifiable doubts; enforcement not barred |
| Whether enforcement violates U.S. public policy (New York Convention art. V(2)(b)) because underlying share purchases were illegal | Enforcement does not offend U.S. public policy; arbitration should stand | Enforcement would sanction an illegal taking and violate public policy against illegality | Court: U.S. public policy defense is narrow; Ukraine did not show enforcement would violate U.S. fundamental policy; defense rejected |
| Whether the district court exceeded its authority by "modifying" the award (selecting dispositive amount) | District court enforced the award as written (dispositif controls) | District court effectively modified inconsistent figures in the award | Court: no internal inconsistency in award; no unlawful modification |
| Whether forum non conveniens required dismissal in favor of Ukraine | U.S. forum appropriate and necessary to attach any U.S. assets | Ukraine is proper forum for merits; case should be litigated in Ukraine | Court: forum non conveniens inapplicable where U.S. courts may be needed to attach U.S. commercial assets; dismissal denied |
Key Cases Cited
- TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928 (D.C. Cir. 2007) (public‑policy exception to enforcement is narrow)
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (2007) (procedural posture for deciding forum non conveniens before resolving jurisdictional merits)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) (forum non conveniens balancing test)
- TMR Energy Ltd. v. State Prop. Fund of Ukraine, 411 F.3d 296 (D.C. Cir. 2005) (forum non conveniens unavailable where U.S. court must attach U.S. assets)
- LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871 (D.C. Cir. 2021) (confirming rule that forum non conveniens is unavailable in confirmation proceedings when U.S. attachment power is relevant)
- Belize Bank Ltd. v. Gov’t of Belize, 852 F.3d 1107 (D.C. Cir. 2017) (discussing standards for evident partiality and public‑policy challenges)
- United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29 (1987) (courts may refuse to enforce contracts or awards that violate law or public policy, applied narrowly)
- Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350 (D.C. Cir. 2006) (standard of review for confirming arbitral awards)
- Chevron Corp. v. Ecuador, 795 F.3d 200 (D.C. Cir. 2015) (arbitral tribunals decide arbitrability when parties consent)
- Nat’l Indem. Co. v. IRB Brasil Resseguros S.A., 164 F. Supp. 3d 457 (S.D.N.Y. 2016) (single party appointment and payment do not per se create disqualifying partiality)