Lead Opinion
Opinion for the Court by Circuit Judge ROGERS.
Dissenting opinion by Circuit Judge KAVANAUGH.
This case involves a petition to confirm and enforce a foreign arbitration award against the Government of Belize pursuant to section 207 of the Federal Arbitration Act, 9 U.S.C. § 207. The plaintiff appeals an order staying the proceeding pending the outcome of related litigation in Belize. We conclude that the stay order as issued exceeded the proper exercise of authority of the district court and remand the case for further proceedings.
I.
The Federal Arbitration Act, 9 U.S.C. §§ 201-208 (2006) (“FAA”), codifies the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which addresses “the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought.” Art. I, opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (“New York Convention”). Under the New York Convention, “[e]ach Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon.” Id. art. III. Section 207 of the FAA provides that the district court, when exercising its original jurisdiction pursuant to section 203 of the FAA, “shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207. Article VI of the Convention limits the grounds for deferral of a decision on enforcement to those specified in Article V(1)(e): enforcement proceedings may be adjourned only if “an application for the setting aside or suspension of the award has been made to a competent authority,” N.Y. Convention art. VI, “of the country in which, or under the law of which, that award was made,” id. art. V(l)(e).
Consistent with the “emphatic federal policy in favor of arbitral dispute resolution” recognized by the Supreme Court as “applying] with special force in the field of international commerce,” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
The facts underlying the issuance of the challenged stay order are as follows. On September 19, 2005, the Prime Minister of Belize executed an “Accommodation Agreement” with Belize Telemedia Limit
Any dispute arising out of or in connection with this Agreement including any question regarding its existence, validity or termination, which cannot be resolved amicably between the parties shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (LCIA) Rules which Rules are deemed to be incorporated by reference under this Section. There shall be 3 arbitrators.
Id. § 15.2.
On February 8, 2008, a new Prime Minister, who also served as the Minister of Finance of Belize, publieally and formally announced that he believed the Agreement was invalid and would not abide by it. Telemedia, claiming breaches of the Agreement, invoked the arbitration clause and submitted a request for arbitration to the LCIA on May 9, 2008. Although notified, the Government of Belize did not participate in the proceedings. The arbitral tribunal issued a final award on March 18, 2009, (“Final Award”) ruling that the Agreement was valid and binding on the Government of Belize under Belize law, and that it had jurisdiction over Telemedia’s claims, which it concluded were meritorious and entitled Telemedia to declaratory relief and damages of over 38 million in Belize dollars. On March 20, 2009, the Prime Minister repeated his view that the Agreement was illegal and invalid, noted that the local courts had rejected its provisions on tax exemption, and stated that the Government of Belize would “not be bound by any ruling of a foreign arbitral tribunal where that ruling conflicts with a position taken by Belize’s superior courts.” Resp’t Mot. Stay or, in Alternative, Dismiss Pet., Exh. 29 (Decl. Juan Basombrio, Esq. Mar. 26, 2010, attaching newspaper article quoting Prime Minister). The same day, Telemedia assigned the monetary portion of the Final Award to Belize Social Development Limited (“BSDL”), a company incorporated in the British Virgin Islands.
On April 6, 2009, the Attorney General of Belize sued Telemedia and BSDL in the Belize Supreme Court, alleging that “enforcement of the ‘Final Award’ ... would be contrary and repugnant to the Constitution and the Laws of Belize,” and sought to block its enforcement. Id. Exh. 1 (Decl. of Michael Young, S.C., Mar. 26, 2010,
On November 16, 2009, BSDL filed a petition in the district court here to confirm and enforce the Final Award pursuant to section 207 of the FAA, 9 U.S.C. § 207. The Government of Belize moved to stay or, in the alternative, to dismiss the petition. It also amended the Supreme Court Judicature Act “to strengthen the provisions relating to contempt of court” by subjecting persons who fail to comply with an injunction to fines up to $250,000, or imprisonment for five to ten years, or both, with an additional fine of $100,000 for each day the offense continues. Supreme Court of Judicature (Amendment) Act, 2010, c. 91, § 106A (Belize). Citing this enactment, BSDL moved to suspend the district court’s scheduling order and for a status conference. The district court denied BSDL’s motion to suspend and its subsequent motions to clarify. By minute order of October 12, 2010, the district court granted Belize’s motion to stay the petition to confirm “pending resolution of the parties’ case before the Belize Supreme Court.”
BSDL appeals the stay order or, in the alternative, if the order is not final, requests that its appeal be treated as a petition for a writ of mandamus.
II.
This court has treated an attempted appeal as an application for a writ of mandamus, and granted effective relief, where a “stay order as issued exceeded the proper exercise of authority of the District Court.” Dellinger v. Mitchell,
“The traditional use of the writ [of mandamus] in aid of appellate jurisdiction both at common law and in the federal courts has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so.” Roche v. Evaporated Milk Assn.,
1. “Ordinarily mandamus may not be resorted to as a mode of review where a statutory method of appeal has been prescribed or to review an appealable decision of record.” Roche,
“[A] stay is not ordinarily a final decision for purposes of [28 U.S.C.] § 1291,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
BSDL also invokes the collateral order doctrine of Cohen v. Beneficial Industrial Loan Corp.,
2. BSDL has shown a “clear and indisputable” right to the issuance of the writ, for the issuance of the stay was not based on a ground set forth in the New York Convention. Under the FAA, Articles V(l)(e) and VI of the New York Convention provide the only grounds on which the district court “may, if it considers it proper, adjourn the decision” on enforcement: “If an application for the setting aside or suspension of the award has been made to a competent authority,” N.Y. Convention art. VI, “of the country in which, or under the law of which, that award was made,” id. art. V(l)(e) (emphasis added). See 9 U.S.C. § 207.
In support of the stay, the Government of Belize relies on section 15.1 of the Agreement, which states the law of Belize governs the Agreement, in contending that Belize is the country “under the law of which” the Final Award was made.
Furthermore, to the extent the stay purported to be issued pursuant to the district court’s inherent authority in the interest of judicial economy, “[t]he applicable jurisprudence appears in Landis v. North American Co.,
The scope of the stay and the reasons for its issuance determine whether a stay is immoderate. For instance, in Trujillo v. Conover & Co. Communications,
Hence, the stay as issued is sufficiently indefinite to require a finding of a pressing need under Landis. The Government’s suggestion such a finding is required only where there is a “fair possibility that the stay will work damage to someone else,” Appellee’s Br. 27 (quoting Landis,
3. Mandamus is appropriate because the FAA, by codifying the New York Convention, provides a carefully structured scheme for the enforcement of foreign arbitral awards and represents an “emphatic federal policy in favor of arbitral dispute resolution,” which “applies with special force in the field of international commerce.” Mitsubishi Motors Corp.,
Given the federal courts’ “virtually unflagging obligation ... to exercise the jurisdiction given them,” Hoai v. Sun Ref. & Mktg. Co.,
Our dissenting colleague makes much of the lack of an opposition to the stay. Instead of filing an opposition to the motion for a stay, BSDL filed a motion to suspend the scheduling order and for a status conference, advising the district court that its failure to respond was based not on agreement that a stay was warranted but on fear of criminal sanctions for violation of the anti-enforcement injunction issued by the Supreme Court of Belize. Both BSDL’s petition to enforce the Final Award and Belize’s motion to stay the enforcement proceedings alerted the district court that it was obligated to proceed in accordance with the FAA and the New York Convention. Contravening the clear dictates of this governing law, both federal and international, and lacking supporting reasoning of any kind, contrary to Supreme Court precedent, the district court’s stay order is extraordinary in nature. Although our dissenting colleague repeatedly characterizes the stay order — which has already lasted for more than a year — as “temporary,” Dis. Op. 734, it in fact contained no temporal limitations and could very well last indefinitely.
We conclude that there is no need to vacate the stay or mandate any action by
Notes
. The original party to the Agreement was Belize Telecommunications Limited. On May 29, 2007, pursuant to the Belize Telecommunications Undertaking (Belize Telecommunications Limited Operators) Vesting Act of 2007, the businesses of Belize Telecommunications Limited were transferred to Belize Telemedia Limited.
. Belize and Telemedia subsequently adopted three amendments to the Agreement on November 21, 2005, December 15, 2006, and January 7, 2008. The "Agreement” referenced in this opinion includes these amendments.
. The fact that Belize is not a party to the New York Convention is irrelevant. If the place of the award is "in the territory of a party to the Convention, all other Convention states are required to recognize and enforce the award, regardless of the citizenship or domicile of the parties to the arbitration.” Creighton Ltd. v. Gov’t of the State of Qatar,
. The possibility of "multiple judicial proceedings on the same legal issues” affords the district court no other justification for the stay, for these "are characteristic of the confirmation and enforcement of international arbitral awards under the Convention.” Karaha Bodas,
Dissenting Opinion
dissenting:
I respectfully dissent. This case arises out of a messy commercial dispute between a Belize company and the Government of Belize. A London arbitration panel ruled in favor of the Belize company. The company then sued in U.S. District Court to enforce the arbitration award. Because of ongoing judicial proceedings in Belize related to this matter, the Government of Belize asked for a temporary stay, which was uncontested by the company. The District Court then entered a temporary stay — understandably, since the stay is only temporary and the company did not oppose it.
The company has now appealed and, in the alternative, sought mandamus to overturn the temporary stay. But we do not have appellate jurisdiction. As the majority opinion appears to acknowledge, there is no final order because the company was not placed “effectively out of court,” nor does this case fit within the narrow confines of the collateral order doctrine. See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
Although the majority opinion does not assert that we have appellate jurisdiction under the principles governing appeals of final or collateral orders, it invokes mandamus jurisdiction. But mandamus is an “extraordinary” remedy reserved for correcting egregious missteps by a district court, not for upending temporary stay orders — and particularly not temporary stay orders like the one here, which was issued in response to an uncontested temporary stay motion. See Cheney v. U.S. Dist. Court,
Even if we think the District Court erred under the Federal Arbitration Act by entering a temporary stay, its error was hardly “extraordinary.” Mandamus for this case is akin to using a chainsaw to carve your holiday turkey. Indeed, if you ask me which is the more extraordinary— the District Court’s temporary stay or this Court’s invocation of mandamus jurisdiction under these circumstances — I would say the latter.
I would dismiss the appeal for lack of appellate jurisdiction and deny the petition for a writ of mandamus. I respectfully dissent.
