414 F.Supp.3d 94
D.D.C.2019Background
- TECO (U.S. investor) brought an ICSID arbitration under DR-CAFTA against Guatemala over tariff-setting that allegedly reduced EEGSA’s returns; the tribunal awarded TECO $21,100,552 for "historical loss" but rejected a $222,484,783 "loss of value" claim.
- Both parties sought annulment at ICSID: Guatemala sought full annulment; TECO sought partial annulment. An ad hoc committee partially annulled the tribunal’s decision (vacating the handling of the loss-of-value claim and awarding certain interest and costs) but left the historical-loss award intact and permitted resubmission of the loss-of-value claim to a new tribunal.
- TECO petitioned the U.S. District Court for the District of Columbia to confirm and enforce the (unanulled) award; Guatemala moved to dismiss and later opposed enforcement, asserting multiple defenses and seeking discovery and a stay.
- The court framed its role under the ICSID Convention and 22 U.S.C. § 1650a: limited judicial review, treat an ICSID award as entitled to the same full faith and credit as a state-court judgment (applying principles of 28 U.S.C. § 1738), but not to relitigate the award’s merits.
- Guatemala argued (1) the court could apply Rule 60 or similar defenses (fraud), (2) issue/claim preclusion from a separate Iberdrola arbitration barred the award, (3) the award was not final under the "complete arbitration rule," and (4) discovery and a stay were warranted.
- The court denied Guatemala’s defenses and requests, granted TECO’s motion for summary judgment, and ordered enforcement of the unannulled award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of judicial review for ICSID awards | TECO: courts may only authenticate and enforce awards, not revisit merits | Guatemala: ICSID awards are "final judgments" so Rule 60 defenses and broader judicial remedies should apply | Court: Review is limited; treat award like state-court judgment under §1650a and §1738; cannot relitigate merits |
| Fraud/Rule 60 or extrinsic fraud defense | TECO: Rule 60 and FAA do not apply; fraud allegations already for ICSID mechanisms | Guatemala: may raise fraud (extrinsic) to avoid enforcement; seeks discovery | Court: Rule 60 inapplicable; must apply §1738/full-faith standard; Guatemala failed to show extrinsic fraud; no discovery warranted |
| Issue/claim preclusion based on Iberdrola arbitration | TECO: prior Iberdrola award is not controlling here; different treaty/facts | Guatemala: Iberdrola tribunal’s jurisdictional ruling precludes this tribunal’s authority | Court: Rejected; treaties, parties, legal standards and evidence differ; Guatemala failed to press preclusion earlier and cannot collaterally attack the ICSID decision |
| Finality/complete-arbitration rule and request for stay | TECO: ad hoc committee made the historical-loss award final and enforceable; loss-of-value can be pursued separately | Guatemala: enforcement is premature while residual arbitration continues; court should stay or wait for final arbitration | Court: Unanulled portion is final and enforceable absent a stay; denied stay request; complete-arbitration rule does not bar enforcement of discrete, final award |
Key Cases Cited
- Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, 863 F.3d 96 (2d Cir. 2017) (ICSID awards receive limited judicial review; courts may only authenticate and enforce)
- Teamsters Local Union No. 61 v. United Parcel Service, Inc., 272 F.3d 600 (D.C. Cir. 2001) (scope of judicial review under arbitration statutes is limited)
- Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) (limits on collateral attacks and relitigation of foreign adjudicative decisions)
- Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) (equitable power to set aside judgments in cases of fraud is narrowly applied)
- Peabody Holding Co. v. United Mine Workers of Am., 815 F.3d 154 (4th Cir. 2016) (discussion of the complete-arbitration rule and finality of awards)
- Metallgesellschaft A.G. v. M/V Capitan Constante, 790 F.2d 280 (2d Cir. 1986) (partial awards can finally dispose of separate claims)
- In re Genesys Data Techs., Inc., 204 F.3d 124 (4th Cir. 2000) (federal courts enforcing foreign/state judgments must apply the rendering jurisdiction’s rules under §1738)
- Harris Trust & Sav. Bank v. Ellis, 810 F.2d 700 (7th Cir. 1987) (fraud-on-the-court principle and requirement to seek relief from the rendering court)