*2 Before HOLMES , Chief Judge, MATHESON , and ROSSMAN , Circuit Judges.
_________________________________ MATHESON , Circuit Judge.
_________________________________ A Bolivian arbitration tribunal awarded $36 million in damages to Compañía de Inversiones Mercantiles S.A. (“CIMSA”) against Grupo Cementos de Chihuahua S.A.B. de C.V. (“GCC”). GCC fought the award in the Bolivian courts, losing before a chamber of Bolivia’s highest constitutional court in 2016. In 2019, CIMSA obtained an order from the U.S. District Court for the District of Colorado confirming the award. In 2020, GCC convinced a different chamber of Bolivia’s highest constitutional court to invalidate its prior decision, and a Bolivian trial judge subsequently annulled the award. GCC then moved the U.S. district court to vacate the confirmation order. The district court (1) denied GCC’s motion and (2) ordered GCC to turn over assets located in Mexico to satisfy the award. GCC brought *3 separate appeals from these two rulings. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm in both appeals.
I. BACKGROUND A. Shareholder Agreement to Arbitration – 2005-2015 The Parties’ Shareholder Agreement – 2005
In 2005, GCC, a set of related Mexican companies, sought to acquire an
interest in Bolivia’s largest cement company, Sociedad Boliviana de Cemento, S.A.
(“SOBOCE”).
Compañía I
,
Id. at 1276-77. CIMSA accepted, and on September 22, 2005, the parties entered into a shareholder agreement as SOBOCE’s two principal shareholders (the “Shareholder Agreement”). Id. at 1277.
The Shareholder Agreement allowed each party to sell its shares in SOBOCE to a third party after a period of five years, so long as the selling party gave notice to the other party and provided it an opportunity to purchase the shares on the same or
better terms within 30 days.
Under the Shareholder Agreement, (1) the parties would submit any disputes
regarding a breach to international arbitration for final resolution and (2) the rules
and regulations of the Inter-American Commercial Arbitration Commission
(“IACAC”) would govern.
See
21-1196, Suppl. App. at 2. The “national chapter of
the [IACAC] in Bolivia” would conduct the arbitration, three arbitrators would
preside, and Bolivian law would apply.
Id.
;
Compañía I
,
The Parties’ Commercial Dispute – 2009-2011
In 2009, GCC informed CIMSA that it intended to sell its SOBOCE shares
after the five-year holding period.
Compañía I
,
In July 2011, GCC notified CIMSA that a Peruvian company had tendered a firm offer to buy GCC’s SOBOCE shares. Id. CIMSA reiterated its desire to purchase the shares. This time GCC said it would accept CIMSA’s proposed payment terms. Id. In August 2011, GCC sent CIMSA a draft purchase agreement. Id.
But “[r]ight before the transaction was set to close, GCC demanded an increase in the number of SOBOCE shares CIMSA would place in trust, from 4% to 27%, allegedly to ensure CIMSA’s compliance with a longer payment schedule.” *5 In response, “CIMSA attempted to exercise its right of first refusal under the terms . . . that had been negotiated by the parties.” Id. GCC said CIMSA’s attempt to exercise that right was invalid and sold its SOBOCE shares to the Peruvian company. Id.
Arbitration – 2011-2015
In November 2011, CIMSA invoked the Shareholder Agreement’s arbitration clause and initiated arbitration proceedings, claiming that GCC violated the Shareholder Agreement by failing to honor the right of first refusal. Id. at 1278. A three-member tribunal (the “Arbitral Tribunal”) presided over the arbitration in Bolivia. Id. The parties agreed to bifurcate the proceedings into a merits phase and a damages phase. Id.
In September 2013, the Arbitral Tribunal issued a merits ruling, holding that GCC breached the right of first refusal in the Shareholder Agreement (the “Merits Award”). Id. In April 2015, the Arbitral Tribunal awarded CIMSA approximately $34 million in damages and $2 million in fees and costs, with interest accruing at 6 percent annually on those amounts (the “Damages Award”). at 1280.
B. Court Proceedings – 2015-2021 Post-arbitration court proceedings primarily occurred in Bolivia and the United States, often simultaneously. GCC attempted to annul the Merits and Damages *6 Awards in Bolivia and block their enforcement in Mexico, while CIMSA sought to confirm the arbitral award in the United States. To facilitate an understanding of the background facts and proceedings underlying these appeals, we first provide background on Bolivian courts and legal procedures. We then summarize the proceedings in Bolivia and the United States.
Bolivian Courts and Procedures
a. Bolivian courts
The Bolivian judiciary has multiple court levels, including trial courts and a
Supreme Court. Mauricio Ipiña Nagel,
Update: The Bolivian Legal System
, N.Y.U. Hauser Glob. L. Program, GlobaLex, https://perma.cc/6FVQ-SQKA. Bolivian judges
for the Civil and Commercial Court are trial judges, and each judge is assigned a
distinguishing number—e.g., the “Twelfth Judge.”
See Compañía I
,
When a party asserts a constitutional violation, a court is randomly assigned to
review it and is referred to as a “Guarantee Court.”
Compañía I
,
21-1196, App., Vol. II at 370; 21-1196, App., Vol. IV at 804 n.4. The Plurinational
Constitutional Tribunal (the “PCT”)—independent from the other Bolivian courts—
reviews Guarantee Court decisions. Nagel,
supra
. The PCT is the highest
constitutional court. ;
Compañía I
,
b. Bolivian procedures
In Bolivia, a litigant may initiate an
amparo
, “an extraordinary remedy that
must be based on an alleged violation of rights protected by the Bolivian Constitution.”
Compañía I
,
Under Bolivian law, a Guarantee Court’s decisions regarding amparos “shall be complied with immediately.” 21-1196, App., Vol. IV at 779; see also 21-1196, App., Vol. II at 374. A party can seek immediate compliance with an amparo decision by filing a queja por incumplimiento (“ queja ”) with the Guarantee Court *8 that issued that decision. See 21-1196, Vol. IV at 779. A queja “is a special mechanism used to compel compliance by officials with existing amparo decisions.” Id. at 813-14. Bolivian law allows “Guarantee Courts and the PCT to adopt necessary measures to ensure compliance with amparo decisions.” Id. at 779.
Bolivian Court Proceedings: GCC’s Challenges to the Merits and Damages
Awards – 2015-2017
GCC sought to annul the Merits and Damages Awards in two separate proceedings. This appeal mainly concerns GCC’s challenge to the Damages Award. We briefly describe the Merits Award proceedings before detailing the Damages Award proceedings.
a. Merits Award proceedings
After the Arbitral Tribunal decided for CIMSA on the merits, GCC filed a
request in a Bolivian court to annul that award.
Compañía I
,
GCC did so, asserting that the Eighth Judge violated its due process rights and the
right to a defense. at 1297; 21-1196, App., Vol. II at 370, 412. “GCC’s
amparo
was assigned to . . . a Guarantee Court, which in October 2015 granted GCC’s
requested relief, annulled the Eighth Judge[’s] [d]ecision, and remanded the matter to
the Eighth Judge for a new decision.”
Compañía I
,
b. Damages Award proceedings
On July 3, 2015, GCC sought leave from the Arbitral Tribunal to file a request in a Bolivian court to annul the Damages Award. at 1280. The Arbitral Tribunal granted GCC leave, and on September 24, 2015, GCC filed a request to annul the Damages Award. See 21-1196, App., Vol. II at 383. The matter was assigned to the Twelfth Civil and Commercial Court of the Judicial District of La Paz (the “Twelfth Judge”).
i. Annulment and subsequent proceedings
On October 9, 2015, the Twelfth Judge annulled the Damages Award. 21-1196, App., Vol. III at 512-13; App., Vol. II at 383. CIMSA then filed two amparos challenging that decision.
First, on October 28, 2015, CIMSA filed an amparo against the Arbitral Tribunal (the “First Amparo ”). 21-1196, App., Vol. III at 537-38. It asked the court to set aside (1) the Arbitral Tribunal’s order granting GCC leave to seek judicial *10 annulment of the Damages Award and (2) the Twelfth Judge’s annulment decision. Id. at 537-38.
In January 2016, a Guarantee Court denied the First
Amparo
. 21-1196,
App., Vol. II at 384. The court explained that it could not reach the merits of the
First
Amparo
because the Twelfth Judge annulled the Damages Award and the
Twelfth Judge was not included as a party to the First
Amparo
. 21-1196, App.,
Vol. IV at 717-18. The Guarantee Court thus could not invalidate the Arbitral
Tribunal’s grant of leave without affecting the annulment decision, which was
outside the scope of the First
Amparo
. at 804. By law, the Guarantee Court’s
amparo
decision was sent to the PCT for review.
Compañía I
,
Second, on April 8, 2016, CIMSA filed an
amparo
against the Twelfth Judge,
seeking to set aside the annulment decision (the “Second
Amparo
”). 21-1196,
App., Vol. II at 384; 21-1196, App., Vol. III at 538; 21-1196, App., Vol. IV at 772.
On October 21, 2016, a different Guarantee Court denied CIMSA’s Second
Amparo
because CIMSA could not file it while the First
Amparo
was pending before the PCT.
21-1196, App., Vol. II at 384; App., Vol. IV at 806. That decision was also sent by
law to the PCT for review.
Compañía I
,
ii. PCT review of the Amparos
1) November 2016 PCT decision
In November 2016, the PCT affirmed the Guarantee Court’s decision rejecting CIMSA’s First Amparo . 21-1196, App., Vol. II at 384; 21-1196, App., Vol. IV at 805. It explained that because annulling the Arbitral Tribunal’s order granting *11 leave to GCC would lead to annulment of the Twelfth Judge’s decision, the PCT could not reach CIMSA’s request because the Twelfth Judge was not included as a party. 21-1196, App., Vol. IV at 718.
2) December 2016 PCT decision In December 2016, a different chamber of the PCT decided the Second Amparo (the “December 2016 PCT Judgment”). 21-1196, App., Vol. III at 516. The PCT vacated the Twelfth Judge’s annulment order and directed the Twelfth Judge to issue a new order consistent with the PCT’s decision. Id. at 547.
First, the PCT determined that it could consider the Second Amparo even though CIMSA filed it while the First Amparo was pending. Id. at 538-39. It explained that the two amparos were separate because they involved different defendants and underlying facts and sought different relief. Id. at 538-39. Specifically, the First Amparo challenged the Arbitral Tribunal’s “procedural order,” which addressed a “purely . . . procedural, rather than a substantive, matter.” Id. at 537-38. The Second Amparo named the Twelfth Judge as a party and challenged her annulment decision. Id. at 538.
Second, on the merits of the Second Amparo , the PCT held that the Twelfth Judge’s annulment order “was arbitrary and unreasonable, and consequently violated [CIMSA’s] right to due process.” Id. at 546. The annulment order violated CIMSA’s due process rights because the Twelfth Judge “got into questioning, considering and revisiting the examination of the evidence . . . and arriv[ed] at a different interpretation than that arrived at by the arbitrators.” at 540.
Immediately after the December 2016 PCT Judgment, GCC sought clarification from the PCT, arguing the December ruling had invalidated the PCT’s November 2016 decision. 21-1196, App., Vol. IV at 808-09. In a January 2017 order, the PCT said “there was no potential for contradiction” between the two PCT decisions because the first was procedural and did not address the merits, whereas the December 2016 PCT Judgment did address the merits. Id. at 809. The PCT reiterated that each amparo “involved distinct parties, subject matters, and causes of action.” Id.
iii. Remand before the Twelfth Judge
In April 2017, CIMSA petitioned the Twelfth Judge to issue a new decision consistent with the December 2016 PCT Judgment. Id. The next day, the Twelfth Judge issued an order stating that she would do so. Id. But GCC immediately initiated a collateral action before the PCT “challenging the constitutionality of Bolivia’s arbitration law and its restriction on the right to appeal an arbitral award,” which stayed the proceedings before the Twelfth Judge. 21-1196, App., Vol. V at 1203-04. The PCT rejected GCC’s challenge, finding it “manifestly meritless,” and again directed the Twelfth Judge to issue a new decision on GCC’s request for annulment of the Damages Award. Id. at 1204.
Following that PCT order, GCC argued to the Twelfth Judge that she lacked jurisdiction to enter a new decision because a different Bolivian trial judge’s nullification of the Merits Award effectively nullified the Damages Award. The Twelfth Judge then requested clarification from the IACAC as to the status of the *13 Merits Award, but the IACAC did not respond. ; 21-1196, App., Vol. IV at 811. GCC then asked the Twelfth Judge to certify that the Damages Award proceedings were still pending and that the Damages Award was thus not binding. 21-1196, App., Vol. IV at 812. In response, the Twelfth Judge certified that the Damages Award proceedings were pending but declined to certify whether the Damages Award was binding. Id . No further action was taken.
United States Court Proceedings: Confirmation of the Damages Award –
2015-2020
In September 2015, CIMSA petitioned the United States District Court for the District of Colorado to confirm the arbitration award. CIMSA relied on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), June 10, 1958, 21 U.S.T. 2517. Compañía I , 970 F.3d at 1276, 1280. The New York Convention—implemented through the Federal Arbitration Act—“is a multilateral treaty that addresses international arbitration.” GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC ,
In June 2018, CIMSA filed a renewed motion to confirm the Damages Award.
Dist. Ct. Doc. 50. “GCC responded to the confirmation motion and filed a
‘cross-motion’ to dismiss the petition,” arguing it was not subject to personal
jurisdiction.
Compañía I
,
The district court found that it had personal jurisdiction over GCC. In March 2019, it confirmed the Damages Award, concluding it was binding under the New York Convention (the “Confirmation Judgment”). Id. GCC appealed, arguing the district court erred in exercising personal jurisdiction and in confirming the award. See id. at 1276.
In August 2020, in Compañía I , we affirmed the district court’s rulings on personal jurisdiction and confirmation of the Damages Award. We said that “[t]he district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts” and that “exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary.” Id. We further said that service of process on GCC’s United States counsel was proper. Id. In affirming the district court’s confirmation of the arbitral award, we agreed with the district court that Bolivian courts had not set aside the Merits Award and that the district court’s *15 confirmation of the award was appropriate under the New York Convention even if GCC’s challenge to the Damages Award remained pending in Bolivia. Id.
Bolivian Court Proceedings: GCC’s Post-Confirmation Challenge to the
Damages Award – 2019-2020
In May 2019—approximately two months after the U.S. district court confirmed the arbitral award—GCC initiated a new challenge to CIMSA’s amparos . It asked the Guarantee Court that decided the First Amparo to enforce its decision dismissing that amparo and also to dismiss the Second Amparo . 21-1196, App., Vol. IV at 813. The Guarantee Court denied GCC’s request, explaining that the December 2016 PCT Judgment was binding and that GCC must seek any relief regarding the Second Amparo from the same Guarantee Court that addressed it. Id. GCC challenged that decision in that Guarantee Court through a queja , which “is a special mechanism used to compel compliance by officials with existing amparo decisions.” Id. at 813-14. In its queja , GCC argued that the Second Amparo was invalid because CIMSA impermissibly filed it in “breach” of the First Amparo . at 814; 21-1196, App., Vol. V at 1207. The Guarantee Court denied the queja because, as the December 2016 PCT Judgment concluded, there was no identity between parties, subject matters, and causes of action between the two amparos . 21-1196, App., Vol. IV at 814-15.
GCC appealed the Guarantee Court’s decision to the PCT. [6] Id. at 815. A different chamber of the PCT, which had not been involved in any of the prior PCT decisions, reviewed the queja . Compare id. at 704, with id. at 771, and 21-1196, App., Vol. III at 516. On October 29, 2020, the PCT notified the parties that it had granted GCC relief and invalidated the December 2016 PCT Judgment (the “2020 PCT Order”). 21-1196, App., Vol. IV at 718-19, 722. [7] It determined that, although the two amparos involved different defendants, “the object and purpose of both actions turned out to be the same” because both related to the arbitration and GCC’s request for annulment. 21-1196, App., Vol. III at 720. The PCT concluded that “the [Second Amparo ] was [the] product of deceit induced by [CIMSA], failing to observe the implicit mandate of the [First Amparo ], since it generated duplicity of actions, that could have led to judicial chaos.” Id. at 721. The Second Amparo thus “was not brought to juridical life” and “no authority [was] bound to observe a determination arising from” it. Id. The PCT ordered “strict observance of the effect caused by the [First Amparo ] proceeding” such that all actions after the Guarantee Court’s January 2016 order—which rejected the First Amparo on procedural grounds—“are annulled and not subject to validation.” at 722.
In light of the PCT’s ruling, the Twelfth Judge issued an ex parte order on November 5, 2020, reinstating her decision to annul the Damages Award and returning the matter to the Arbitral Tribunal to issue a new damages award. Id. at 729, 819. Days later, CIMSA sought reconsideration of that decision or the right to appeal, but the Twelfth Judge denied both requests. Id. at 819, 821. CIMSA challenged the Twelfth Judge’s dismissal of its request to appeal, which was denied. Id. at 821-23.
United States Court Proceedings – 2020-2021
With the 2020 Bolivian orders in hand, GCC returned to the U.S. district court and moved under Federal Rule of Civil Procedure 60(b)(5) to vacate the district court’s judgment confirming the arbitral award. Id. at 658. Under Rule 60(b)(5), “[o]n motion and just terms, the court may relieve a party . . . from a final judgment” if that judgment “is based on an earlier judgment that has been reversed or vacated.”
The district court denied that motion. It “conclude[d] that application of the [Bolivian] orders would offend basic standards of justice,” which outweighed according comity to those orders. 21-1196, App., Vol. V at 1198, 1212, 1218. It also determined that GCC’s conduct in Bolivian and U.S. courts “swayed [Rule 60(b)’s] equitable considerations decidedly against it.” at 1219. GCC timely appealed.
In September 2021, the district court ordered GCC to turn over certain assets located in Mexico to the court’s registry to satisfy the judgment against it (the “Turnover Order”). 21-1324, App., Vol. VII at 1808-809. GCC timely appealed.
* * * * *18 We turn next to each appeal, providing additional background information as needed. We first address GCC’s appeal of the district court’s order denying relief under Rule 60(b)(5), Case No. 21-1196. We then consider GCC’s appeal of the district court’s order requiring GCC to turn over certain assets, Case No. 21-1324.
II. CASE NO. 21-1196 – DENIAL OF RELIEF UNDER RULE 60(b)(5) GCC argues that the district court erred by refusing to vacate the Confirmation Judgment. It contends that the 2020 Bolivian court orders annulling the Damages Award required vacatur. Because the district court did not abuse its discretion by refusing to vacate its Confirmation Judgment, we affirm.
A.
Standard of Review
We review a district court’s denial of a Rule 60(b)(5) motion for abuse of
discretion, “keeping in mind that Rule 60(b) relief is extraordinary and may only be
granted in exceptional circumstances.”
Dronsejko v. Thornton
,
B. Legal Background This appeal concerns whether the district court abused its discretion when it denied a motion to vacate its judgment confirming a foreign arbitral award under the
New York Convention and Rule 60(b)(5). We thus provide background on the Convention, Rule 60(b)(5), and related case law.
New York Convention
As noted above, the New York Convention is a multilateral treaty on
international arbitration. Its principal purpose “was to encourage the recognition and
enforcement of commercial arbitration agreements in international contracts and to
unify the standards by which agreements to arbitrate are observed and arbitral awards
are enforced in the signatory countries.”
Scherk v. Alberto-Culver Co.
,
The New York Convention contemplates that an arbitral award may be issued
in one country but confirmed in another country. 21 U.S.T. 2517, arts. I, V. Courts
have referred to these countries as primary and secondary jurisdictions.
See, e.g.
,
Thai-Lao Lignite (Thailand) Co. v. Gov’t of Lao People’s Democratic Republic
,
The Convention lists seven defenses. A secondary jurisdiction “may . . .
refuse[]” to recognize and enforce an award if the party opposing confirmation
establishes that any one of them applies. 21 U.S.T. 2517, art. V;
Compañía I
,
One of the defenses provides that “[r]ecognition and enforcement of the [arbitral] award may be refused” if “[t]he award . . . has been set aside or suspended by a competent authority” in the primary jurisdiction. 21 U.S.T. 2517, art. V(1)(e). Another defense provides that “[r]ecognition and enforcement of an arbitral award
may also be refused if the competent authority in the country where recognition and
enforcement is sought finds that . . . [t]he recognition or enforcement of the award
would be contrary to the public policy of that country.” , art. V(2)(b). When a
primary jurisdiction has annulled an arbitral award, a secondary jurisdiction must
balance comity to the foreign annulment order against its country’s public policy.
See Corporación Mexicana de Mantenimiento Integral, S. de R.L. de C.V. v.
Pemex-Exploración y Producción
,
Federal Rule of Civil Procedure 60(b)(5)
The Convention instructs a secondary jurisdiction to enforce arbitral awards in
accordance with its rules of procedure. 21 U.S.T. 2517, art. III. In the United States,
the Federal Rules of Civil Procedure apply.
See Thai-Lao
,
Under Federal Rule of Civil Procedure 60(b)(5), a “court may relieve a
party . . . from a final judgment” if that judgment “is based on an earlier judgment
that has been reversed or vacated.” But a court is not required to set aside a
judgment “simply because it was based on a prior judgment that has later been
reversed.”
Manzanares v. City of Albuquerque
,
“Rule 60(b) gives the court a grand reservoir of equitable power to do justice
in a particular case.”
Manzanares
,
In
Thai-Lao
, the Second Circuit explained that “in ruling on a Rule
60(b)(5) motion, even in the context of a judgment entered on a foreign arbitral
award under the New York Convention, a district court should be guided by the full
range of interests protected by Rule 60(b).”
Relevant Circuit Cases
Only six circuit decisions, four from the Second Circuit and two from the D.C.
Circuit, have addressed whether a U.S. court may confirm an arbitral award that a
primary jurisdiction has annulled. Only
Thai-Lao
concerned a district court’s ruling
on a Rule 60(b)(5) motion to vacate a judgment confirming an arbitral award that
later had been annulled in the foreign primary jurisdiction. Although “[n]one of
these [six] out-of-circuit cases binds this Court,”
Tucker v. Faith Bible Chapel
International
,
a. Baker Marine
In
Baker Marine (Nig.) Ltd. v. Chevron (Nig.) Ltd.
,
States. at 196. The district court refused to confirm the awards and instead *24 accorded comity to the Nigerian annulment. Id. The Second Circuit affirmed. Id. at 198. It explainеd that the appellant “ha[d] shown no adequate reason for refusing” to recognize the annulment order. Id. at 197. It noted that “[r]ecognition of the Nigerian [annulment order]” did not “conflict with United States public policy.” Id. at 197 n.3.
b. Pemex
In
Pemex
, the Second Circuit affirmed the district court’s confirmation of an
arbitral award despite a Mexican court’s annulment of that award.
After arbitration in Mexico, a U.S. district court confirmed the arbitral award. Id. at 99. The nonprevailing party in arbitration then appealed the confirmation judgment to the Second Circuit and simultaneously filed an action in Mexico to annul the award. Id. A Mexican court annulled the award while the appeal was pending, so the Second Circuit remanded for the district court to consider the effect of the annulment. Id. The district court declined to accord comity to the annulment and again confirmed the award. at 100.
On appeal from the district court’s refusal to accord comity and its second confirmation of the arbitral award, the Second Circuit explained that under the Panama Convention, although a secondary jurisdiction may confirm an arbitral *25 award that a primary jurisdiction has set aside, it must weigh comity to the foreign annulment order. Id. at 106. Thus, an annulment “is generally conclusive unless enforcement of the [annulment] would offend the public policy of the state in which enforcement is sought.” Id. (quotations and alterations omitted). The Pemex court explained that an annulment is unenforceable on public policy grounds if it “tends clearly to undermine the public interest, the public confidence in the administration of the law, or security for individual rights of personal liberty or of private property.” Id. (quotations omitted).
The Second Circuit concluded that the district court did not abuse its discretion by confirming the arbitral award despite the Mexican annulment because public policy concerns overcame comity. Id. at 107. It determined that “giving effect” to the foreign annulment would be “repugnant to fundamental notions of what is decent and just” under U.S. public policy. Id. at 97, 108-11.
c. Thai-Lao
In
Thai-Lao
, the Second Circuit held that the district court did not abuse its
discretion by vacating its confirmation of an arbitral award based on the primary
jurisdiction’s later annulment of that award.
After arbitration in Malaysia, (1) the losing party moved to annul the award in Malaysia, (2) the U.S. district court confirmed the award, and (3) a Malaysian court then annulled the award. at 175, 179-180. The district court then vacated its confirmation judgment. Id. at 175, 180. It accorded comity to the Malaysian annulment because giving effect to the annulment order would not violate U.S. *26 “notions of what is decent and just.” Id. at 180-81 (quotations omitted). On appeal, the appellant—the prevailing party in the arbitration—argued that the district court erred because it did not consider the “full range of interests protected by Rule 60(b)” and should have given more weight to the nonprevailing party’s inequitable conduct. Id. at 182. The Second Circuit, emphasizing that it reviewed for abuse of discretion, see id. at 181,182, 187, 189, held the district court “did not exceed the permissible bounds of its discretion” by granting relief, id. at 187.
In explaining its decision, the court said that under the New York Convention, comity interests generally constrain a court from disregarding a primary jurisdiction’s annulment of an arbitral award. Id. at 183, 186. But it also said a primary jurisdiction’s annulment is not “dispositive,” id. at 186, and a court may refuse to accord comity to an annulment “to vindicate fundamental notions of what is decent and just in the United States,” id. at 176 (quotations omitted). A foreign annulment is therefore unenforceable if that annulment or “giving effect to [it]” would violate U.S. public policy. Id. at 183-84, 186.
The court also explained that under Rule 60(b)(5), a district court should consider the timeliness of the motion, whether the movant acted equitably, and the importance of finality of judgments. Id. at 182, 186. It concluded that the district court did not abuse its discretion by vacating its confirmation judgment because vacatur did not violate U.S. public policy and Rule 60(b)(5) considerations did not bar vacatur. at 189.
d. Esso
In Esso , the Second Circuit held the district court did not abuse its discretion by еxtending comity to foreign orders partially annulling an arbitral award. 40 F.4th at 61, 77. After arbitration in Nigeria, (1) a Nigerian trial court annulled the arbitral award, (2) the prevailing party in arbitration petitioned to confirm the award in the U.S., and (3) the Nigerian Court of Appeal affirmed partial annulment of the arbitral award. Id. at 64-66. The Second Circuit noted that appeals from the partial annulment orders were pending before the Supreme Court of Nigeria. Id. at 65.
Quoting
Pemex
,
Esso
said that based on “the prudential concern of international
comity,”
id.
at 73, a foreign annulment order “is generally conclusive unless enforcement
of the [order] would offend the public policy of the state in which enforcement is
sought,”
id.
at 63 (quoting
Pemex
,
e. TermoRio
In
TermoRio
, the D.C. Circuit affirmed the dismissal of an action to confirm a
foreign arbitral award.
The D.C. Circuit concluded that the appellants failed to show that the foreign annulment should be disregarded on public policy grounds. Id. at 939. It explained that “there is a narrow public policy gloss on Article V(1)(e) of the Convention and that a foreign [annulment] is unenforceable as against public policy to the extent that it is repugnant to fundamental notions of what is decent and just in the United States.” Id. (quotations omitted). The court determined that the appellants had “neither alleged nor provided any evidence to suggest that the parties’ proceedings before Colombia’s [highest administrative court] or the [annulment order] of that court violated any basic notions of justice to which we subscribe.”
f. Getma
In
Getma International v. Republic of Guinea
,
The D.C. Circuit said that, “for reasons of international comity, [it has]
declined to ‘second-guess’ a competent authority’s annulment of an arbitral award
absent ‘extraordinary circumstances.’” (quoting
TermoRio
,
‘repugnant to fundamental notions of what is decent and just’ in the United States.”
Id.
(quoting
TermoRio
,
Applicable Law
The foregoing describes the law that is relevant to our review of the district court’s vacatur decision under the abuse of discretion standard. We describe here how it applies to the following scenarios.
When the prevailing party in arbitration seeks confirmation of a foreign
arbitral award in a U.S. district court, the New York Convention calls for recognition
and enforcement of the award absent any defenses to doing so. 21 U.S.T. 2517,
art. V(1). This was the situation when CIMSA requested the district court to confirm
the Bolivian arbitral award. The district court entered the Confirmation Judgment,
and this court affirmed.
Compañía I
,
When the prevailing party seeks confirmation and the nonprevailing party
presents the defense that the foreign jurisdiction has set the arbitral award aside, the
district court must perform a weighing analysis, generally according cоmity to the
foreign annulment order unless doing so violates United States public policy.
See Pemex
,
When the nonprevailing party moves the district court under Rule 60(b)(5) to
vacate the court’s previous confirmation judgment on the ground that the movant
obtained an annulment order from the foreign jurisdiction, additional considerations
come into play. This was the situation in
Thai-Lao
, where the nonprevailing party
sought to obtain annulment of the arbitral award in the foreign jurisdiction before the
district court had ruled on the prevailing party’s request for confirmation of the
award, but the annulment order issued after the confirmation order. 864 F.3d
at 179-80. The Second Circuit said, as in
Pemex
, that the district court must balance
*31
comity against United States’ public policy. at 176. But when seeking relief
under Rule 60(b)(5), the moving party must provide “highly convincing” evidence
that it is entitled to this extraordinary remedy and that its conduct as a matter of
equity should allow vacatur.
Id.
at 182;
see also Jackson
,
Like Thai-Lao , our case involves a Rule 60(b)(5) motion to vacate a confirmation order because the foreign jurisdiction has annulled the arbitral award. But the cases differ in two significant respects. First, unlike in Thai-Lao , the district *32 court here denied the Rule 60(b)(5) motion. Second, the highest Bolivian constitutional court had rejected annulment of the arbitral award before the Confirmation Judgment, and GCC initiated new proceedings in Bolivia seeking annulment after that judgment. As the district court determined, this implicates the United States’ interest in the finality of the arbitral award and the Confirmation Judgment and also raises questions about the equity of GCC’s conduct. We explore those issues below.
C.
Analysis
GCC argues that the district court (1) applied the incorrect legal standard and
(2) erred in weighing the relevant factors. We disagree. The district court applied
the correct legal standard and reasonably evaluated the factors relevant to resolving a
Rule 60(b)(5) motion based on a later-annulled arbitral award. We cannot say that a
“definite, clear or unmistakable error occurred below.”
Jackson
,
The Applicable Legal Test
a. Analysis
GCC asserts that the district court applied the wrong legal test when it denied vacatur. It contends the district court “alter[ed] the . . . [relevant] test in a manner never adopted by any other court” by concluding that “even though the Bolivian annulment orders were not repugnant to public policy, vacatur of its own judgment supposedly would be.” 21-1196, Aplt. Br. at 29; see also Oral Arg. at 01:40-02:11. The only relevant inquiry, GCC says, is whether the “ order itself is repugnant to fundamental notions of what is decent and just.” 21-1196, Aplt. Br. at 29 (quotations omitted). We disagree. GCC advances a flawed analysis and a selective reading of the case law. A district court may decline to enforce a primary jurisdiction’s annulment order if the order itself is repugnant or if enforcing that order would offend public policy. The Second Circuit articulated this approach, the Convention supports it, and we adopt it here.
First, contrary to GCC’s contention that the district court adopted a novel test, the Second Circuit has applied the same test that the district court applied in this
case. In
Pemex
, the Second Circuit “h[e]ld that the [district court] properly exercised
its discretion in confirming the [arbitral] award because
giving effect to
the
subsequent nullification of the award in Mexico would run counter to United States
public policy.”
In Pemex , the Second Circuit recognized “four powerful [public policy] considerations:
(1) the vindication of contractual undertakings and the waiver of sovereign immunity;
(2) the repugnancy of retroactive legislation that disrupts contractual expectations; (3) the need to ensure legal claims find a forum; and
(4) the prohibition against government expropriation without compensation.” Id. (spacing altered). The court did not find the annulment order itself violated these policies. It instead determined that enforcing the annulment order would offend each one. First, it said that “ [g]iving effect ” to the annulment order would undo the parties’ waiver of sovereign immunity in the arbitration agreements, “thereby impairing one of the core aims of contract law.” Id. at 108 (emphasis added). Second, it said that “ [g]iving effect to the nullification would likewise impair the closely-related concept of *35 avoiding retroactive application of laws.” Id. (emphasis added). [15] Third, it said that if the district court “had recognized and implemented the nullification of the arbitral award, [the prevailing party at arbitration] would have had no sure forum in which to bring its contract claims,” a consequence at odds with U.S. public policy and that “magnifies the injustice.” at 109-10 (emphasis added). [16] Fourth, the Mexican law “frustrated relief that had been granted to [the prevailing party] in the arbitral forum,” amounting “to a taking of private property without compensation for the benefit of the government.” Id. at 110. [17]
The Second Circuit thus looked beyond the annulment order itself to consider, as the district court did here, whether “giving effect” or “implement[ing]” the annulment order would violate public policy. It upheld the district court’s confirmation of the arbitral award even though the award had been declared a nullity in Mexico. See id. at 111. “[T]o do otherwise”—that is, enforce the annulment—“would undermine public confidence in laws and diminish rights of personal liberty and property.” Id.
In
Thai-Lao
, the Second Circuit reaffirmed that a court may consider whether
“
giving effect
to the judgment annulling the award would offend” U.S. public policy.
In sum, Pemex and Thai-Lao both support the district court’s consideration in this case of whether enforcing the 2020 Bolivian orders would violate U.S. public policy. At the very least, they do not foreclose the district court from doing so. [18]
Second, the district court’s approach was also consistent with the New York
Convention. The Convention encourages “recognition and enforcement” of foreign
arbitral awards. 21 U.S.T. 2517, art. III. But “recognition and enforcement of the
award may be refused” if (1) the award “has been set aside” by the primary
jurisdiction,
id.
, art. V(1)(e); or (2) “[t]he recognition or enforcement of the award
would be contrary to the public policy” of the secondary jurisdiction,
id.
,
art. V(2)(b).
[19]
The D.C. Circuit has recognized a “public policy gloss” on the set-
*38
aside provision.
TermoRio
,
Third, GCC’s stance effectively ignores that its vacatur motion asked the district court to enforce the annulment order. Just as CIMSA sought “recognition and enforcement” of the arbitral award under the Convention, GCC sought recognition and enforcement of the Bolivian order annulling that award when it moved for vacatur. “Recognition” and “enforcement” align with our holding that the district court could consider (1) whether the annulment order itself was contrary to public policy—whether it should be recognized—and (2) whether giving effect to the annulment would violate public policy—whether it should be enforced. Indeed, “enforce” means “[t]o give force or effect to (a law, etc.).” Enforce, Black’s Law Dictionary (11th ed. 2019). “The recognition of an award is different from its enforcement, therefore, it is possible to recognize and not enforce an award, but impossible to enforce it without previous recognition.” Gonzalo Vial, Influence of the Arbitral Seat in the Outcome of an ‘may’ entitles a court to grant recognition or enforcement of an arbitral award even though one or more grounds for withholding such relief has been established.” One of those grounds would be a set-aside order.
International Commercial Arbitration , 50 Int’l Lawyer 329, 335 (2017). The same can be said of an annulment order.
Fourth, GCC’s narrow approach is illogical and impractical. GCC asked the district court to vacate the Confirmation Judgment because Bolivian courts had annulled the arbitral award. The court refused because enforcing the annulment would violate U.S. public policy. GCC argues this consideration should have been irrelevant—all that matters, GCC says, is whether the Bolivian annulment itself or how it was obtained is repugnant to U.S. public policy. See 21-1196, Aplt. Br. at 26-27, 29. This cramped view defies logic because enforcement of an annulment order can undermine U.S. public policy apart from whether the foreign order should be recognized. And GCC’s view is impractical because it would render the district court powerless to protect U.S. public policy in this circumstance. If the district court had granted GCC’s motion and vacated the Confirmation Judgment, it would have enforced—given effect to—the annulment order. And if, as the district court found, enforcement would violate U.S. public policy, that concern weighs against comity to the foreign annulment. The district court thus *40 properly considered whether enforcing the 2020 Bolivian orders would violate U.S. public policy.
We conclude that when a court has been asked to vacate an order confirming an arbitral award that has later been annulled, it may balance against comity considerations (1) whether the annulment is repugnant to U.S. public policy or (2) whether giving effect to the annulment would undermine U.S. public policy. Although the district court here may have found the 2020 Bolivian orders were not repugnant, it did not legally err by considering whether giving effect to those orders through vacatur of its Confirmation Judgment would offend U.S. public policy.
b. Response to the dissent
The dissent asserts that by considering whether enforcing the annulment would violate public policy, the district court adopted a “novel test” that (1) our sibling circuits have “consistently rejected” and (2) is inconsistent with the Convention. Dissent at 25-33. We disagree.
First, our sibling circuits have endorsed—and have never rejected—this test. As
discussed,
Pemex
framed its entire opinion around this approach: (1) at the outset it
“h[e]ld that the [district court] properly exercised its discretion in confirming the
[arbitral] award because giving effect to the subsequent nullification of the award in
Mexico would run counter to United States public policy,”
The dissent says those cases are different because the foreign annulment order in
both violated public policy and hеre the district court concluded the 2020 Bolivian Orders
did not violate public policy.
See
Dissent at 29-31. But
Pemex
never said that the
foreign annulment order itself violated public policy.
[21]
In addressing each public policy
consideration, the Second Circuit concluded that “giving effect to” or “implement[ing]”
the annulment order would offend public policy.
See Pemex
,
The dissent further claims that even if
Pemex
and
Thai-Lao
support considering
whether enforcement violates public policy, in light of
Esso
, the Second Circuit “no
longer labors under” that “misimpression.” Dissent at 31. But
Esso
never questioned, let
alone overruled,
Pemex
’s “hold[ing] that the [district court] properly exercised its
discretion in confirming the [arbitral] award because
giving effect to
the subsequent
nullification of the award” would violate U.S. public policy.
Dissent at 29 (quotations omitted). But
Pemex
emphasized that the foreign annulment
order “specifically stated it was not retroactively applying [Mexican law]” that was not in
effect at the time of arbitration.
Even if Pemex could be read as having repugnancy concerns about the annulment order itself, as the dissent contends, the court plainly was primarily concerned with the enforcement of, or giving effect to, the order.
Indeed,
Esso
did not address the many statements in
Pemex
and
Thai-Lao
that
support considering whether enforcement of the foreign annulment order would violate
U.S. public policy.
See, e.g.
,
Pemex
,
The dissent also suggests that because the D.C. Circuit focused in its cases on the foreign annulment order, it has rejected the district court’s approach. See Dissent at 28-29. But as discussed, just because the D.C. Circuit limited its analysis to whether a foreign annulment order was repugnant to public policy does not foreclose consideration of whether enforcement would violate public policy. See Op. at 37 n.18.
In sum, our sibling circuits have not “consistently rejected” a district court’s consideration of whether enforcing an annulment order would violate public policy, as the dissent suggests. Dissent at 28. As discussed in detail throughout this opinion, those cases support, or at least do not foreclose, a district court’s consideration of whether a foreign annulment order itself or enforcing that order violates public policy.
Second, the dissent suggests that the Convention prevents courts from considering whether enforcing a foreign annulment order would violate public policy. It nоtes the Convention only “permits a refusal to enforce an award [, not a foreign annulment order,] on public policy grounds.” Dissent at 26. But, as the dissent also notes, “the majority correctly explains that United States courts have placed a ‘public policy gloss’ on Article V(1)(e),” id. at 22, which says “[r]ecognition and enforcement of [an arbitral] award may be refused” if the award “has been set aside,” 21 U.S.T. 2517, art. V(1)(e). Indeed, the dissent “agree[s] . . . that the public policy defense . . . forms part of the international bargain by which signatories agree to recognize other signatories’ *45 decisions.” Dissent at 23-24. Because Article V(1)(e) allows a court to refuse “[r]ecognition and enforcement ,” 21 U.S.T. 2517, art. V (emphasis added), a court may refuse to enforce an annulment order if doing so would violate public policy.
Rule 60(b)(5) Analysis
In addition to its claim of legal error, GCC challenges the district court’s balancing of the factors relevant to a Rule 60(b)(5) motion.
As discussed, the district court confirmed the Damages Award after Bolivia’s highest constitutional court had rejected GCC’s attempt to annul that award. After confirmation, GCC initiated a new attempt in Bolivia to annul the Damages Award and succeeded. GCC then moved under Rule 60(b)(5) in the district court for vacatur of the Confirmation Judgment on the ground that the 2020 Bolivian orders annulled the Damages Award.
Under the legal framework previously described, in deciding whether to grant
vacatur of a confirmed arbitral award, a district court weighs comity considerations
*46
against whether an annulment order or enforcing that order would be repugnant to
U.S. public policy. “[W]e review [the] district court’s decision to extend or deny
comity to a foreign proceeding for abuse of discretion.”
Pemex
,
We conclude that the district court did not abuse its discretion. In denying the
Rule 60(b)(5) motion to vacate, the court concluded that (1) giving effect to the 2020
Bolivian orders would offend U.S. public policy and (2) GCC acted inequitably in the
United States and Bolivian proceedings. 21-1196, App., Vol. V at 1212-13. GCC
has failed to show “a complete absence of a reasonable basis” for these
determinations.
Jackson
,
a. Public policy
i. Analysis
The district court concluded that vacating its Confirmation Judgment would offend United States public policy, outweighing comity to the 2020 Bolivian orders. See 21-1196, App., Vol. V at 1212-13, 1218. It said giving effect to those orders *47 through vacatur would encourage “proceedings without end.” Id. at 1215-16. The court explained that when it entered the Confirmation Judgment, there was a “final resolution” on the Damages Award from Bolivia’s highest constitutional court. Id. at 1216. In 2016, the PCT had overruled the Twelfth Judge’s annulment of the Damages Award and directed her to issue a new decision. Id. After the Confirmation Judgment in 2019, GCC initiated a new attempt at annulment and ultimately succeeded. Id. at 1216-17.
Based on GCC’s repeated attempts to challenge the Damages Award, the
district court determined that granting GCC relief would undermine the finality of the
Confirmation Judgment and the arbitral award by “encourag[ing] an endless barrage
of challenges to unfavorable arbitral awards or court orders.”
Id.
at 1216. It said that
“[t]he Supreme Court has long recognized ‘[p]ublic policy dictates that there be an
end of litigation.’”
Id.
at 1217 (quoting
Federated Dep’t Stores, Inc. v. Moitie
,
The district court acted within its discretion. Three strong United States interests support this conclusion: (1) protecting the finality of judgments, *48 (2) upholding pаrties’ contractual expectations, and (3) the policy in favor of arbitral dispute resolution. [26]
First, the Supreme Court has acknowledged “the law’s important interest in the
finality of judgments.”
Sanchez-Llamas v. Oregon
,
Rule 60(b)(5) supports this interest by providing only limited grounds for vacatur.
See Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc.
,
Here, GCC attempted to undo the Confirmation Judgment, which the district court entered after Bolivia’s highest constitutional court had rejected GCC’s attempt to annul the Damages Award. After the district court issued the Confirmation different procedural contexts, as we explain above, the district court’s reliance on finality to deny vacatur of the Confirmation Judgment under Rule 60(b)(5) was not an abuse of discretion. The dissent says “[i]f the district court anchored its finality concerns to the
2016 PCT Orders, this would be problematic” because “the 2016 PCT Orders were both
conflicting” and “the district court simply selected one of the two as its reference point.”
Dissent at 45. But the district court based the finality analysis on its Confirmation
Judgment. And the district court followed
Compañía I
, which affirmed the Confirmation
Judgment based on the December 2016 PCT Judgment.
See
Judgment, GCC initiated a new challenge to the Damages Award leading to a queja . A separate chamber of the PCT reversed the 2016 decision that had rejected annulment of the Damages Award.
The district court appropriately considered GCC’s actions leading to its
vacatur motion. In every case affirming a district court’s decision not to confirm an
arbitral award due to a foreign court’s annulment, the movant had sought annulment
in the primary jurisdiction
before
confirmation of the arbitral award in the United
States.
See Esso
,
Based on the facts of this case, the district court acted within its discretion to conclude that the U.S. interest in finality outweighed comity concerns. [31]
Second, public policy favors upholding the parties’ contractual expectations in
the arbitration context, including the finality of arbitral awards. “The principal
purpose of the [Federal Arbitration Act (“FAA”)] is to ensure that private arbitration
agreements are enforced according to their terms.”
AT&T Mobility LLC v.
Concepcion
,
Other courts have honored parties’ contractual expectations in declining to
give effect to a foreign court’s annulment of an arbitral award.
See Pemex
, 832 F.3d
at 107-08 (affirming district court’s denial of vacatur in part to “vindicat[e] [the
parties’] contractual undertakings” and support “investment-backed expectation[s] in
contracting”);
id.
at 108 (noting concern that “[g]iving effect to the nullification”
*53
“would deprive [the prevailing party at arbitration] of its contract rights”);
In re Arb.
Between Chromalloy Aeroservices & Arab Republic of Egypt
,
Here, “the parties’ agreement demonstrates that the arbitration award became
binding upon issuance for purposes of the New York Convention.”
Compañía I
,
Third, pointing to the Convention, the Supreme Court has recognized the
“emphatic federal policy in favor of arbitral dispute resolution” that “applies with
special force in the field of international commerce.”
Mitsubishi
,
* * * * The interests in the finality of judgments, respecting parties’ contractual expectations, and the U.S. policy favoring arbitral dispute resolution support the district court’s conclusion that vacatur of its Confirmation Judgment would violate U.S. public policy. These considerations correspondingly support the district court’s decision against extending comity to the 2020 Bolivian orders. The district court entered a Confirmation Judgment following a final judgment from Bolivia’s highest constitutional court refusing to annul the Damages Award. Only after the Confirmation Judgment did GCC initiate a new challenge, its fourth, to the Damages Award. The district court acted within its discretion to find that public policy concerns about enforcing the 2020 Bolivian orders outweighed according comity to those orders.
ii. Response to the dissent
The dissent contends that (1) finality is not a valid public policy consideration, (2) the district court undervalued comity, and (3) we misconstrue the parties’ arbitration agreement. None of these arguments has merit.
1) Finality The dissent “question[s]” whether finality is a proper public policy consideration as a matter of law. See Dissent at 44. Although it admits that “GCC’s litigation conduct may implicate interests under Rule 60(b)(5),” the dissent claims those interests are “not a *55 matter of United States public policy.” at 46-47. And although the dissent recognizes that “[t]he Supreme Court assigns the assessment of public policy to judges,” id. at 39, it argues that the New York Convention narrows the range of public policy considerations the district court may weigh. The dissent offers no support for these statements.
The Supreme Court and Tenth Circuit cases cited earlier recognize a strong
interest in finality. And in
Thai-Lao
, the only other case concerning the Convention and
Rule 60(b)(5), the Second Circuit recognized the interest in “preserving the finality of
judgments.”
2) Comity
The dissent accuses the district court of “neglect[ing] to situate comity as the
‘guiding value’ against which to weigh the proffered public policy interest under the
Convention.” Dissent at 33 (quoting
Esso
,
In providing legal background, the district court said: “The Convention’s implicit
concerns for comity must be considered and deference must generally be afforded to the
decision of a competent authority in the primary jurisdiction.” 21-1196, App., Vol. V
at 1210. Indeed, it relied on the same authority as the dissent does.
Compare id.
(“The
annulment of an arbitral award in the primary jurisdiction should be given significant
weight.” (quoting
Thai-Lao
,
In its Rule 60(b)(5) analysis, the district court again stressed the “narrow public policy exception to the principle of comity under the New York Convention.” 21-1196, App., Vol. V at 1212; see id. (“[C]ompelling circumstances [must] exist to justify the enforcement of an arbitral award that has been set aside by a competent authority.”). The *57 court recognized the import of comity and the narrow circumstances under which an annulment order may not be accorded comity.
The dissent repeatedly uses the term “presumption of comity,” Dissent at 7, 8, 34, 37, 39, 43, 48, which does not appear in the Convention or any of the cases discussed here. Indeed, Thai-Lao said:
The Convention’s concern for comity is thus only one of the considerations to be taken into account in deciding a Rule 60(b)(5) motion. Accordingly, courts acting on Rule 60(b)(5) motions that are based on later-annulled arbitral awards must not simply treat the annulment as dispositive of the Rule 60(b)(5) analysis. They should analyze the full range of Rule 60(b) considerations, including the weighty interests served by protecting the finality of judgments of our courts, and must be attentive to the fact that the burden of demonstrating that vacatur is appropriate lies with the party seeking that result.
3) The parties’ arbitration agreement
The dissent suggests we are “frustrat[ing]” the parties’ “agree[ment] to arbitrate
under Bolivian . . . law.” Dissent at 48-49. But the dissent’s view instead would frustrate
the parties’ agreement, which provides that all arbitral awards are final, and which was
key to our determination in
Compañía I
that the Damages Award was binding.
Compañía I
said: “[T]he parties’ agreement demonstrаtes that the arbitration award
became binding upon issuance for purposes of the New York Convention” because the
parties “expressly waive[d] all actions for annulment, objection, or appeal against the
award.”
The dissent also “assume[s] CIMSA . . . knew the possibility of appeal through the Bolivian judicial system.” Dissent at 49. But CIMSA protected against that possibility through its contract with GCC. At that time, the parties bargained for binding arbitration. See 21-1196, Suppl. App. at 2. They agreed arbitral awards “shall be final and of mandatory compliance” and “waive[d] all actions for annulment, objection, or appeal against the award.” The “possibility of appeal” would violate that clear choice of forum and agreement to finality. The parties agreed to international arbitration, the international rules provided awards would be final, and the Convention requires “[e]ach Contracting State shall recognize arbitral awards as binding.” 21 U.S.T. 2517, art. III.
* * * *
We have no quarrel with the dissent about the importance of comity. Had we
considered the Rule 60(b)(5) motion as a district court in the first instance, we may have
found that comity outweighed any competing public policy concerns and granted the
motion. But we review only for abuse of discretion and “may not substitute our own
judgment for that of the trial court.”
Mid-Continent Cas. Co. v. Vill. at Deer Creek
Homeowners Ass’n, Inc.
,
b. Equitable conduct
GCC also challenges the district court’s conclusion that its conduct in the Bolivian and United States proceedings weighed against Rule 60(b)(5) relief. See 21-1196, App., Vol. V at 1218-19. The district court made clear that the U.S. public policy interests in preserving the Confirmation Judgment were sufficient to deny GCC’s motion. It discussed GCC’s conduct insofar as it “reinforced” denial of relief. Id. at 1218.
We find no abuse of discretion in the district court’s additional analysis finding that GCC’s conduct also weighed against relief. The record supports the court’s conclusion that GCC acted inequitably by (1) initiating another challenge to the Damages Award in Bolivian courts only after its efforts against enforcement of the arbitral award in the United States failed and (2) delaying proceedings in the United States by frustrating service of process for nearly three years and refusing to satisfy the arbitral award. See Suppl. App. at 46-48.
i. GCC’s conduct in Bolivia
The district court did not abuse its discretion in concluding that GCC acted inequitably in the Bolivian proceedings in relation to the United States’ proceedings because it “slept on its rights.” 21-1196, App., Vol. V at 1218. GCC “waited until its efforts to defend against enforcement in the United States were unsuccessful” before it initiated a new challenge to the Damages Award leading to a queja . Id. It waited until May 2019—after the district court had confirmed the award against it—to initiate yet a fourth, new attempt in the Bolivian courts to set aside the Damages Award. at 1218-19.
As discussed, the 2020 PCT Order was based on a challenge that GCC initiated after the district court confirmed the Damages Award. 21-1196, App., Vol. III at 614; 21-1196, App., Vol. IV at 813. Not only did GCC wait to pursue its queja , but the PCT had previously rejected the arguments presented in that queja . Years before GCC filed its May 2019 queja , the PCT had twice refused to invalidate the Second Amparo (and thereby the Damages Award) based on GCC’s argument that it was duplicative of the First Amparo . 21-1196, App., Vol. III at 524-25, 538-39; 21-1196, App., Vol. IV at 808-09. Nonetheless, GCC asserted again in its post- *62 confirmation queja that the Second Amparo was duplicative of the First Amparo and therefore invalid. 21-1196, App., Vol. IV at 704-05, 712-14, 813-15. GCC thus continued raising the same challenges in Bolivia until it received the answer it wanted.
GCC’s justification for its delay rings hollow. GCC asserts it “did not bring
[its
queja
] any sooner only because it thought it had already prevailed in obtaining а
[Bolivian] judgment setting aside the Merits Award” in January 2017. 21-1196,
Aplt. Br. at 41. But in
Compañía I
, we rejected GCC’s argument that the January
2017 order set aside the Merits Award.
GCC’s other arguments are also unpersuasive. It contends that in
Thai
-
Lao
,
the arbitration loser’s delay in asking a Malaysian court to set aside an arbitral award
did not amount to inequitable conduct, so GCC’s delay in filing the
queja
should not
count against it. 21-1196, Aplt. Br. at 40-41. But recall that
Thai-Lao
reviewed a
*63
grant
of Rule 60(b)(5) relief for abuse of discretion, which included the consideration
of inequitable conduct.
Thai-Lao
,
GCC also argues that by considering its conduct in Bolivian proceedings,
United States courts are “polic[ing] the litigation conduct of parties in foreign
courts,” 21-1196, Aplt. Br. at 40, and “micromanag[ing] foreign court deadlines,”
21-1196, Aplt. Reply Br. at 22. The district court’s analysis was hardly
“micromanaging.” The court would have been remiss to ignore GCC’s conduct in
Bolivia given that GCC sought extraordinary relief here under Rule 60(b)(5) based on
proceedings it initiated in Bolivia. Indeed,
Thai-Lao
evaluated the movant’s conduct
in Malaysian proceedings.
See Thai-Lao
,
ii. GCC’s conduct in the United States
The district court also determined that GCC acted inequitably in the United States proceedings by frustrating service of process and failing to satisfy the arbitral *64 award. 21-1196, App., Vol. V at 1219. The court explained that CIMSA’s inability to serve GCC at its publicly listed address significantly delayed confirmation of the Damages Award. Id. It further noted that after the Confirmation Judgment, GCC “repeatedly asked for a stay while refusing to post a supersedeas bond” and made no effort to satisfy the arbitral award despite its substantial business activity in the United States.
The district court acted within its discretion in concluding GCC acted
inequitably in the United States proceedings. The court was well-situated to assess
how GCC’s actions affected the proceeding before it. We noted in
Compañía I
that
CIMSA was unable to serve GCC in Mexico for nearly two years because GCC’s
offices were not located at its published address.
In addition, GCC repeatedly shunned its obligation to satisfy the Damages
Award. On multiple occasions, it sought to stay execution of the Confirmation
Judgment without posting a supersedeas bond. Dist. Ct. Docs. 108, 202, 239. Under
the Federal Rules, “a party may obtain a stay by providing a bond or other security.”
Fed. R. Civ. P. 62(b). We have explained that “[a] party against whom judgment is
entered may either satisfy the judgment or post a supersedeas bond.”
United Int’l
Holdings, Inc. v. Wharf (Holdings) Ltd.
,
GCC had the burden to show it was entitled to relief under Rule 60(b)(5). Its conduct in both the Bolivian and United States proceedings appropriately informed the district court, which did not abuse its discretion by concluding that GCC’s conduct provided an additional basis for denying it relief.
D. Conclusion The district court acted within its discretion in declining to grant GCC the extrаordinary relief of vacatur under Rule 60(b)(5). It applied the correct legal standard by considering whether the 2020 Bolivian orders or giving effect to those orders would offend U.S. public policy. And it reasonably concluded that (1) vacatur would offend United States public policy to the point of outweighing comity to the 2020 Bolivian orders and (2) GCC’s conduct also supported denial of relief under Rule 60(b)(5). We do not “find[] a complete absence of a reasonable basis” in the court’s decision, nor can we be “certain that the decision is wrong.” Jackson , 880 F.3d at 1191. We thus affirm.
III. CASE NO. 21-1324 – TURNOVER ORDER GCC challenges the Turnover Order, arguing that (1) Colorado’s turnover rule does not allow a court to order turnover of property held by third parties abroad, (2) the Turnover Order is an impermissible extraterritorial application of United States law, and (3) the district court should have abstained from entering the Turnover Order on international comity grounds. These arguments are unavailing. The district court did not abuse its discretion by entering the Turnover Order, and we
affirm.
A. Additional Procedural History GCC challenged the Arbitral Tribunal’s decisions not only in Bolivia but also in Mexico. GCC contends that the resulting 2014 and 2021 Mexican court orders support its challenge to the Turnover Order. We summarize those orders and the U.S. district court turnover proceedings.
2014 Mexican Injunction
Following the 2013 arbitral Merits Award, GCC, proceeding ex parte, asked a Mexican court to stay the damages phase of the arbitration. 21-1324, App., Vol. V at 1191. On December 3, 2014, the court “provisionally” (1) enjoined CIMSA from commencing any proceedings to confirm any arbitral award and (2) suspended the arbitration damages proceeding (the “2014 Mexican Injunction”). at 1203-04. The Arbitral Tribunal in Bolivia concluded that the Mexican court lacked jurisdiction to issue the injunction, disregarded it, and ultimately issued the Damages Award. 21-1324, App., Vol. VII at 1810.
United States Turnover Proceedings
Approximately six months after the 2019 Confirmation Judgment, CIMSA sought an order requiring GCC to turn over certain assets to the court’s registry to satisfy the Damages Award. 21-1324, App., Vol. IV at 960. The district court stayed consideration of CIMSA’s request pending our resolution of Compañía I . 21-1324,
App., Vol. V at 1288-90. After that decision issued, the parties provided supplemental briefing regarding a turnover order. See 21-1324, App., Vol. VI at 1528, 1612; 21-1324, App., Vol. VII at 1726.
In September 2021, the district court granted CIMSA’s motion and issued the Turnover Order under Colorado Rule of Civil Procedure 69(g). 21-1324, App., Vol. VII at 1808-09, 1834. It directed GCC to turn over the following assets located in Mexico: (1) publicly traded common stock held in GCC’s corporate treasury; (2) funds held by GCC’s in-house bank, Cementos de Chihuahua, S.A. de C.V.; and (3) interest payments due on nine intercompany loans to GCC’s subsidiaries. at 1808-09.
2021 Mexican Injunction
GCC, again proceeding ex parte, next asked a Mexican trial court, the Mexico City Superior Court, whether it was obligated to comply with the Turnover Order. *68 See Aplt. Reply Br. Addendum at 2. On November 23, 2021, a Mexican trial judge enjoined GCC and other affiliated Mexican entities from complying with the Turnover Order, the Confirmation Judgment, or any other decisions requiring GCC to pay the Damages Award (the “2021 Mexican Injunction”). Id. at 2-4. Because the 2021 Mexican Injunction was issued after the Turnover Order, the U.S. district court never considered it because GCC had already brought this appeal. at 1. GCC’s opening brief does not mention that it had initiated proceedings in Mexico after the Turnover Order.
B.
Standard of Review
Courts review a district court’s entry of a turnover order for abuse of
discretion.
Jiao v. Xu
,
C. Legal Background The district court entered the Turnover Order under Colorado Rule of Civil Procedure 69(g). We previously reviewed a turnover order issued under that rule in Wharf . We provide background on (1) the applicable federal and state prоcedural rules and (2) Wharf .
Applicable Rules of Civil Procedure
Federal Rule of Civil Procedure 69(a) states: “The procedure on execution [on
a money judgment]—and in proceedings supplementary to and in aid of judgment or
execution—must accord with the procedure of the state where the court is located
. . . .” It “defers to state law to provide methods for collecting judgments.”
Mackey
v. Lanier Collection Agency & Serv., Inc.
,
Under Colorado law, a prevailing party is “entitled to employ supplemental
proceedings in aid of execution to collect [on a] judgment.”
First Nat. Bank of
Denver v. Dist. Ct. In & For City & Cnty. of Denver
,
The court, master, or referee may order any party or other person over whom the court has jurisdiction, to apply any property other than real property, not exempt from execution, whether in the possession of such party or other person, or owed the judgment debtor, towards satisfaction of the judgment.
Colo. R. Civ. P. 69(g). Colorado courts “interpret[] [Rule 69] liberally to assist
judgment creditors in enforcing final money judgments.”
Isis Litig., L.L.C. v. Svensk
Filmindustri
,
Wharf
In
Wharf
, this court affirmed an order entered under Colorado’s turnover rule
against a foreign judgment debtor whose assets were held by third parties abroad.
First, we concluded the turnover order did not conflict with the presumption against extraterritoriality. As we explained, this presumption “limit[s] the United States’ ability to hold a party legally accountable for conduct that occurred beyond its borders.” The presumption therefore did not apply because the turnover order
“merely directed a party over whom it had personal jurisdiction to turn over assets.” Id. We said that“[o]nce personal jurisdiction of a party is obtained, the District Court *71 has authority to order it to ‘freeze’ property under its control, whether the property be within or without the United States.” Id. (quoting United States v. First Nat’l City
Bank
,
Second, the turnover order did not raise comity concerns.
Id.
We explained
that “[i]n general, we will not consider an international comity . . . issue unless there
is a ‘true conflict’ between United States law and the relevant foreign law.”
at 1223 (quoting
Hartford Fire Ins. Co. v. California
,
D. Analysis GCC argues (1) it did not possess the assets under Colorado’s turnover rule, (2) the order calls for impermissible extraterritorial application of United States law, and (3) the order violates principles of comity. These arguments are unpersuasive. In Wharf , we upheld a turnover order under almost identical circumstances and rejected the extraterritoriality and comity arguments that GCC makes here. We thus affirm the district court.
Application of Colorado Rule 69(g) to Assets Held by Third Parties Abroad
GCC contends the district court misapplied Rule 69(g) because third parties held its assets abroad, so GCC did not “possess” them. We disagree. GCC possessed *72 the assets under Rule 69(g) for the same reason Wharf upheld Rule 69(g)’s application to property held by third parties abroad.
Under Rule 69(g), a court “may order any party or other person over whom the court has jurisdiction” to apply property “whether in the possession of such party or other person . . . towards satisfaction of the judgment.” Colo. R. Civ. P. 69(g). Because it is undisputed that the district court had jurisdiction over GCC, the only issue is whether GCC possessed the assets.
In
Wharf
, we upheld a turnover order under Rule 69(g) that applied to assets
held in foreign bank accounts and foreign stock certificates.
Contrary to GCC’s suggestion, “possession” under Rule 69(g) does not require
actual possession.
See
21-1324, Aplt. Br. at 14. The Colorado Supreme Court has
explained that “[i]t is the principle and policy of [Rule 69(g)] to subject all property
*73
of the judgment debtor, not specifically exempt, to the payment of his debts.”
Hudson
,
Dictionaries point to the same conclusion. The Supreme Court of Colorado
“frequently look[s] to the dictionary to ascertain the meaning of undefined words in a
statute.”
See People v. Thoro Prods. Co.
,
Practical considerations also support this reading. If Rule 69(g) applied only to assets over which the judgment debtor had actual possession, then a judgment debtor’s assets would never be subject to turnover if a third party held them outside the court’s jurisdiction. Under such a reading, a judgment debtor could avoid *74 enforcement of a judgment by transferring its property to any foreign third party, including a foreign bank.
Finally, GCC’s reliance on
Commonwealth of Northern Mariana Islands v.
Canadian Imperial Bank of Commerce
,
subsidiary to turn over the judgment debtor’s assets held abroad.
Id.
at 64. Here, the
district court ordered GCC to turn over assets held abroad; it did not, as in
Mariana
Islands
, order a third party to direct a foreign entity to turn over assets. Indeed,
Mariana Islands
noted that the order there differed from the order in
Miller v.
Doniger
,
The district court did not err in applying Rule 69(g) to GCC’s assets held by related third parties abroad because the court had jurisdiction over GCC and GCC had control over and therefore possessed those assets.
Presumption Against Extraterritoriality
The district court correctly applied Wharf ’s holding that a turnover order under Rule 69(g) does not implicate the presumption against extraterritoriality. 210 F.3d at 1236. GCC’s suggestion that we should overrule Wharf lacks merit.
The presumption against extraterritoriality “reflects the presumption that
United States law governs domestically but does not rule the world.”
Kiobel v. Royal
Dutch Petroleum Co.
,
Extraterritoriality principles limit the United States’ ability to hold a party legally accountable for conduct that occurred beyond its borders. Here, the district court merely directed a party over whom it had personal jurisdiction to turn over assets. The location of those assets is irrelevant.
GCC argues that Supreme Court cases decided after
Wharf
that address the
presumption against extraterritoriality require us to overrule
Wharf
. But GCC does
not identify any Supreme Court decision addressing enforcement of a federal court
judgment confirming a foreign arbitral award. Nor do any of the cases that GCC
discusses “contradict[] or invalidate[] our prior analysis” in
Wharf
.
United States v.
Salazar
,
GCC asserts that this case gives rise to the presumption against
extraterritoriality because the Supreme Court in
RJR Nabisco
“expressly extended the
presumption to statutes affording relief” and Colorado’s turnover rule “affords
relief.” 21-1324, Aplt. Br. at 19. But, as GCC acknowledges, the issue in
RJR
Nabisco
was whether a statute providing a private right of action applied
extraterritorially.
See id.
(quoting
RJR Nabisco
,
GCC also emphasizes
Morrison
’s statement that courts “must ‘apply the
presumption [against extraterritoriality] in all cases.’” 21-1324, Aplt. Br. at 18
(quoting
Morrison
,
The district court correctly followed Wharf when it concluded that the Turnover Order did not implicate the presumption against extraterritoriality. We discern no basis to overrule Wharf .
Principles of Comity
Finally, GCC argues the district court erred by concluding that the Turnover Order did not violate principles of comity. We find no such error. The Turnover Order did not conflict with foreign law and thus did not raise comity concerns.
a. Additional legal background
Comity is “neither a matter of absolute obligation . . . nor of mere courtesy and
good will.”
Hilton v. Guyot
,
of its laws.” at 164. Comity “counsels voluntary forbearance when a sovereign
which has a legitimate claim to jurisdiction concludes that a second sovereign also
has a legitimate claim to jurisdiction under principles of international law.”
Wharf
,
In
Wharf
, we said the turnover order did not raise international comity
concerns.
Id.
“In general, we will not consider an international comity . . . issue
unless there is a ‘true conflict’ between United States law and the relevant foreign
*78
law.” at 1223 (quoting
Hartford Fire
,
b. Analysis
GCC seeks reversal of the Turnover Order on comity grounds because (1) the Turnover Order conflicted with Mexican law, (2) comity considerations other than a conflict with foreign law should have been considered, and (3) its assets were “exempt from execution” under Rule 69(g).
i. True conflict with Mexican law
GCC argues that the Turnover Order conflicts with the 2014 Mexican Injunction, the Mexican Stock Exchange Act, and the 2021 Mexican Injunction. But, as in Wharf , there is no true conflict between the Turnover Order and foreign law. The district court сorrectly held that the order did not raise comity concerns.
1) The 2014 Mexican Injunction The Turnover Order does not conflict with the 2014 Mexican Injunction because the injunction expired before the Turnover Order was entered.
In 2014, GCC moved ex parte in Mexico for certain “provisional” measures pending conclusion of the Bolivian proceedings regarding annulment of the Merits Award. 21-1324, App., Vol. V at 1191-93. GCC sought to (1) suspend the damages phase of the arbitration and (2) prevent CIMSA from enforcing any arbitral award. Id. at 1191-93. The Mexican court “provisionally” granted GCC the requested relief, calling the 2014 Mexican Injunction an “interim measure.” Id. at 1203. The 2014 Mexican Injunction remained in effect only until annulment proceedings regarding the Merits Award concluded. GCC acknowledges that Merits Award annulment proceedings concluded nearly five years before the Turnover Order was entered. 21-1196, Aplt. Br. at 41 (GCC “thought it had already prevailed in obtaining a judgment setting aside the Merits Award” in January 2017); 21-1324, App., Vol. VII at 1808-09 (Turnover Order entered in September 2021). The 2014 Mexican Injunction expired by its terms.
GCC argues, though, that the 2014 Mexican Injunction did not expire because “the annulment proceedings ended with the Damages Award being annulled.” 21-1324, Aplt. Br. at 33. But the 2014 Mexican Injunction concerned the Merits Award annulment proceedings, not the Damages Award annulment proceedings. As the district court noted, GCC had represented that the 2014 Mexican Injunction only “ordered a stay of the arbitral proceedings until the annulment of the [Merits] Award had been decided.” 21-1324, App., Vol. VII at 1824 n.12 (quoting GCC’s Resp. to Mot. to Confirm at 15).
GCC also asserts that the 2014 Mexican Injunction is viable because the Mexican court never annulled or revoked it. 21-1324, Aplt. Br. at 33-34. But because the injunction provided the terms of its expiration, the court did not need to revoke it. See 21-1324, App., Vol. V at 1203. The 2014 Mexican Injunction said its measures were “provisionally decreed until a final resolution [was] reached on the adoption of the interim measures requested, or a final and definitive resolution on the annulment recourse [was] dictated.” Id. at 1203.
In sum, the 2014 Mexican Injunction expired by its own terms and did not conflict with the Turnover Order.
2) Mexican Stock Exchange Act GCC argues the Turnover Order’s requirement that GCC transfer its shares conflicts with the Mexican Stock Exchange Act, which forbids it to transfer its “treasury shares.” 21-1324, Aplt. Br. at 34. According to GCC, under that Act, “treasury shares . . . can only be issued to new shareholders . . . and cannot be transferred.”
The district court rejected this argument. It concluded there was no conflict with the Mexican Stock Exchange Act because “the shares at issue [were] not Treasury Shares but [were] instead freely transferrable shares held in GCC’s corporate treasury.” 21-1324, App., Vol. VII at 1821. On appeal, GCC repeats its argument that treasury shares cannot be transferred under the Act, 21-1324, Aplt. Br. at 34-35, but it does not contest the district court’s determination that the shares were *81 freely transferrable because they were not treasury shares. In short, GCC has not shown that the district court erred.
GCC has not shown that the district court erred by concluding there was no conflict between the Turnover Order and the Mexican Stock Exchange Act.
3) 2021 Mexican Injunction For the first time in its reply brief, GCC asserts that we must accord comity to the 2021 Mexican Injunction, which prohibits GCC from complying with the Turnover Order. We disagree.
As an initial matter, because GCC failed to raise this argument in its opening
brief, it is waived. “We have held that a failure to raise an issue in an opening brief
waives that issue, and that we will not entertain issues raised for the first time on
appeal in an appellant’s reply brief.”
Platt v. Winnebago Indus., Inc.
,
Even if we reach this issue because the 2021 Mexican Injunction issued just
days after GCC filed its opening brief, its argument fails. Courts do not accord
comity when a party deliberately seeks to block collection of a confirmed U.S.
judgment. In
Motorola v. Uzan
,
Comity is not warranted here. GCC sought an injunction in Mexico to avoid
its obligations under the Turnover Order. It now argues that “it would strike at the
heart of comity” to require GCC to take actions “that are expressly prohibited by a
Mexican court.” 21-1324, Aplt. Reply Br. at 4. But “[c]omity is not advanced when
a foreign country condones an action brought solely to interfere with a final U.S.
*83
judgment.”
SAS
,
ii. The district court’s failure to weigh other factors GCC also argues that the district court erred by failing to consider comity factors beyond whether a true conflict exists. See 21-1324, Aplt. Br. at 26-29. We disagree. Under Wharf , once the district court determined there was no true conflict, it correctly held that the Turnover Order did not implicate international comity concerns.
In
Wharf
, we said, “In general, we will not consider an international
comity . . . issue unless there is a ‘true conflict’ between United States law and the
relevant foreign law.”
GCC’s argument to the contrary is not persuasive. It asserts that “the Ninth
Circuit has held ‘the district court erred when it required the existence of a true
conflict when it analyzed the application of international comity.’” 21-1324, Aplt.
Br. at 27 (quoting
Mujica v. AirScan Inc.
,
Further,
Mujica
is distinguishable because it involved claims for damages
brought by Colombian plaintiffs based on a bombing in Colombia against U.S.
companies.
iii. Assets not exempt from execution
Finally, GCC seeks reversal because the Turnover Order targets proрerty that is “exempt from execution” under Rule 69(g). Rule 69(g) allows a court to order turnover of property “not exempt from execution.” Colo. R. Civ. P. 69(g).
The district court rejected this argument. 21-1324, App., Vol. VII at 1816. It determined that
Mexican law applied to determine whether the assets were exempt under Rule 69(g), id. at 1814;
Article 434 of the Mexican Federal Code of Civil Procedure, “which enumerates specific assets exempt from attachment,” was the relevant law, id. at 1815 (quotations omitted), and Article 434 covered both attachment and execution, id. at 1815-16; and
Article 434 did not list any of the assets at issue, and they were thus not “exempt from execution” under Rule 69(g), id. at 1816.
The court explained that Article 434 exempted the following categories of assets from execution:
1.- assets expressly incorporated into the so-called Family Assets, 2.- personal items, 3.- artisan’s working instruments, 4.- agricultural equipment, 5.- books and records of individuals rendering personal services , 6.- military equipment, 7.- instruments and equipment essential to the operation of a commercial or industrial facility, 8.- grains, 9.- usufruct itself but not the products derived therefrom, 10.-certain real property rights . . ., 11.- wages of public servants, 12.- life rent, 13.- ownership as member of a rural area under community ownership. (quoting Dist. Ct. Doc. 139-1 at 7). This list does not include any of the assets at
issue here.
On appeal, GCC repeats arguments that the district court rejected: (1) Article 434 is inapplicable because it lists assets that are exempt from attachment , *86 not execution ; and (2) assets can be exempt from execution based on Mexican public policy or court orders. See 21-1324, Aplt. Br. at 36-37. We find neither argument persuasive.
First, GCC provides no basis to reject the district court’s conclusion that Article 434 pertains to assets that are exempt from execution. Relying on its expert, GCC asserts that Article 434 lists assets “exempt from ‘attachment’ not ‘execution.’” 21-1324, Aplt. Br. at 36. GCC’s expert said that “[a]ttachment . . . is a form of pre or post judgment relief that prevents an asset from being sold until a judgment is issued or the debtor pays a debt.” Id. (quoting 21-1324, App., Vol. V at 1278.) But that statement does not show that Article 434 applies to attachment and not execution. Neither GCC nor its expert cites any authority indicating that Mexican law distinguishes between attachment and execution. GCC has thus not shown the district court erred by concluding that Article 434 addresses assets exempt from execution.
Second, GCC provides no ground for concluding that Mexican public policy or court orders exempt the assets from execution. It asserts that “sub-section XV of Article 434 says that ‘any other assets exempted by law’ are exempt from attachment.” at 36. But GCC cites nothing to support its argument that this *87 provision means that assets can be exempt from execution on public policy grounds. Without more, we cannot conclude the district court erred.
* * * * The Turnover Order does not raise comity concerns.
E. Conclusion The district court did not err by entering the Turnover Order. We affirm the district court.
21-1196; 21-1324, Compañía de Inversiones Mercantiles S.A. v. Grupo Cementos de Chihuahua S.A.B. de C.V.
ROSSMAN, J., dissenting
My colleagues in the majority affirm the district court’s decision under Federal Rule of Civil Procedure 60(b)(5). I would reverse. [1]
Before us is a “quintessentially foreign dispute.”
Getma Int’l
v.
Republic
of Guinea
,
In August 2020, after several years of parallel proceedings where GCC sought to invalidate the Awards in Bolivia while CIMSA sought to enforce them in the United States, this court affirmed the Awards in Compañía de Inversiones Mercantiles, S.A. v. Grupo Cementos de Chihuahua S.A.B. de C.V. , 970 F.3d 1269 (10th Cir. 2020) (“ CIMSA I ”). The panel in CIMSA I *89 acknowledged, however, the Damages Award remained subject to then-ongoing litigation in Bolivia. at 1275. [2]
The Bolivian litigation over the Damages Award ended three weeks after the mandate issued in CIMSA I . In October 2020, the Plurinational Constitutional Tribunal (the “PCT” or “Tribunal”)—the highest court in Bolivia, similar to the United States Supreme Court—ruled for GCC, concluding the Damages Award must be set aside under Bolivian law (the “2020 PCT Order”). The 2020 PCT Order also conclusively resolved a conflict between apparently competing 2016 rulings in Bolivian courts.
The inconsistencies between the November 2016 PCT Order and the December 2016 PCT Order were a product of simultaneous remand proceedings originating in different chambers of the PCT—a unique feature of Bolivia’s highest court. The 2020 PCT Order declared the December 2016 PCT Order a juridical nullity and essentially reinstated the earlier 2016 decision— *90 this resulted in the annulment of the Damages Award. There is no serious question the 2020 PCT Order is the last word on the Damages Award: the Bolivian courts have followed its mandate to order a new damages arbitration, Mexican courts have observed it, [3] and CIMSA has no pending challenges to reinstate the Damages Award in Bolivia. [4]
About a year before the 2020 PCT Order entered, and while the parties
were litigating the Damages Award in Bolivia, the District of Colorado granted
CIMSA’s request to enforce the Awards, based on the December 2016 PCT
Order (the “Confirmation Judgment”).
CIMSA I
,
Though the Confirmation Judgment rested on a now-annulled Damages
Award, CIMSA opposed Rule 60(b)(5) relief. “[T]here is no obligation on the
part of the court to extend comity to a foreign judgment,” CIMSA claimed. R.
vol. IV at 890. CIMSA urged the court to disregard the 2020 PCT Order on
public policy grounds, contending the order was “repugnant to fundamental
notions of what is decent and just” in the United States—a standard drawn
from the Restatement (Second) of Conflict of Laws § 117, cmt. c (1971), and
cases interpreting Article V(2)(b)’s “public policy” exception to enforcement of
a foreign arbitral award.
TermoRio S.A. E.S.P.
v.
Electranta S.P.
,
In reply, GCC clarified comity was actually at its zenith because the Rule 60(b)(5) proceeding involved a foreign judgment annulling an arbitral award governed by treaty . GCC explained the New York Convention unquestionably requires contracting states to give great deference to the authority of the *92 primary jurisdiction (the arbitral seat) and permits a court in the secondary jurisdiction to reject the arbitral seat’s judgment only in very narrow circumstances—if the foreign judgment is so-called “repugnant.” But, as GCC emphasized, the repugnancy standard “is high” and “infrequently met,” and applies “[o]nly in clear-cut cases.” TermoRio , 487 F.3d at 938 (alteration in original) (citation omitted). CIMSA did not prove the Bolivian orders were repugnant, GCC maintained, and took issue with the Bolivian court system only when it stopped ruling in its favor. GCC also contended the district court could not second guess the decisions of Bolivia’s highest court.
The district court denied GCC’s Rule 60(b)(5) motion. R. vol. V at 1198-1220. The district court assumed the 2020 PCT Order was valid and had nullified the Damages Award under Bolivian law. The district court also rejected CIMSA’s public policy argument, holding, “I do not consider the 2020 [Bolivian] orders themselves to be ‘repugnant to fundamental notions of what is decent and just’ in the United States . . . .” Id. at 1215. Still, the district court refused to extend comity to the foreign arbitral seat because “application of those orders through vacatur of this Court’s prior [Confirmation] Judgment would rise to that unacceptable level.” In other words, the district court determined that extending comity to the 2020 PCT Order would require undoing its own Confirmation Judgment, and this vacatur would offend United *93 States public policy which, the court reasoned, “dictates that there be an end of litigation.” at 1217 (citation omitted).
To be sure, “[
p
]
roperly applied
Rule 60(b) strikes a balance between
serving the ends of justice and preserving the finality of judgments.”
Nemaizer
v.
Baker
,
The district court’s decision to deny Rule 60(b)(5) relief was guided by two fundamental errors of law, which, regrettably, the majority now endorses.
First
, the district court mistakenly declined to extend comity to the 2020
PCT Order after concluding the order was not “repugnant,” as CIMSA had
argued. This error alone compels reversal. Every other court to consider the
issue has held—based on well-established comity principles and the language
of the New York Convention—that a foreign judgment setting aside a foreign
arbitral award should be respected unless the judgment
itself
is “repugnant to
*94
fundamental notions of what is decent and just.”
TermoRio
,
Second
, the district court mistakenly determined a general finality
interest in the secondary jurisdiction could satisfy the repugnancy standard
under the New York Convention and thus overcome any deference owed to the
arbitral seat. No other court has so held, and for good reason. “[P]rotecting the
finality of judgments of our courts” is a “weighty interest[]” under Rule 60(b)(5),
Thai-Lao
,
I fear the majority opinion reprises the mistakes it affirms. The majority opinion frequently emphasizes the district court’s vast discretion under Rule 60(b)(5) and leans heavily on deferential appellate review. But discretion and deference cannot insulate legal errors, as the majority itself observes. Maj. Op. at 19 (“A district court abuses its discretion . . . when it . . . ‘fails to consider the applicable legal standard.’” (citation omitted)); see El Encanto , 825 F.3d at 1162 (“[W]e decide the presence or absence of legal error de novo. So really in cases like this, where everything turns on the interpretation of rules, *95 regulations, and statutes, it’s a bit anomalous to ask whether the district court abused its discretion.”).
The majority also sets out a new legal rule under the New York Convention, concluding a court in the secondary jurisdiction may decline comity to a primary jurisdiction’s annulment order if the order itself is repugnant or if its enforcement would offend public policy. And by endorsing the district court’s generalized concerns over finality as a legitimate basis for invoking the Convention’s narrow public policy exception, the majority mistakenly suggests the presumption of comity yields readily to an easily satisfied “repugnancy” standard. The majority opinion also creates a circuit split and moves this court out of line globally with signatory countries.
We should reverse the district court’s order denying Rule 60(b)(5) relief and remand with instructions to vacate the judgment. Because my colleagues in the majority conclude otherwise, I respectfully dissent.
* * * * This dissent proceeds as follows. Part I addresses Rule 60(b)(5) as a procedural tool operating within the Convention. Part II considers and rejects the majority’s conclusion that the district court exercised its Rule 60(b)(5) discretion in a manner “consistent” with the Convention. Maj. Op. at 37. Part III explains why refusing to enforce the 2020 PCT Order after concluding the Order itself was not “repugnant to fundamental notions of what is decent and *96 just” was legal error . Part IV discusses why vindicating finality, though a relevant interest under Rule 60(b)(5), is not alone a public policy sufficient to overcome the presumptive extension of comity contemplated under the New York Convention. Part V concludes with some practical considerations about the implications of today’s decision.
I
The majority opinion explains Rule 60(b)(5) provides an “extraordinary
remedy” requiring “extraordinary circumstances.” Maj. Op. at 22 (citing
Jackson v. Los Lunas Cmty. Program
, 880 F.3d 1176, 1191-92 (10th Cir.
2018)).
[5]
It also underscores the vastness of a district court’s discretion under
Rule 60(b)(5)—“a grand reservoir of equitable power.” Maj. Op. at 22 (quoting
Manzanares
v.
City of Albuquerque
,
Though we are reviewing the decision to deny Rule 60(b)(5) relief, this is ultimately a New York Convention case. The Convention provides contracting *97 nations—including the United States and 169 other countries—will recognize and enforce arbitral awards “in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down” in other provisions. New York Convention art. III. As the district court correctly concluded, Rule 60(b)(5) is one such rule of procedure. R. vol. V at 1212 n.6; Thai-Lao , 864 F.3d at 185 (“Rule 60(b)(5) applies to motions to vacate judgments confirming arbitral awards that are subsequently set aside in the primary jurisdiction.”).
Our cases counsel Rule 60(b) “should be liberally construed when substantial justice will thus be served.” Thompson v. Kerr-McGee Refin. Corp. , 660 F.2d 1380, 1385 (10th Cir. 1981). The Rule is a procedural acknowledgement that things change, that facts come to light, that decisions rendered may be unrendered; it is itself an exception to finality. See Frew ex rel. Frew v. Hawkins , 540 U.S. 431, 441 (2004) (“The Rule encompasses the traditional power of a court of equity to modify its decree in light of changed circumstances.”).
When there has been a “significant change either in factual conditions or
in law,” Rule 60(b)(5) “provides a means by which a party can ask a court to
modify or vacate a judgment.”
Horne
v.
Flores
, 557 U.S. 433, 447 (2009)
(quoting
Rufo
v.
Inmates of Suffolk Cnty. Jail
,
GCC’s motion came within the clear purview of Rule 60(b)(5). Recall, GCC invoked Rule 60(b)(5) because, under Article V(1)(e) of the Convention, the Damages Award had been “set aside or suspended by a competent authority of” Bolivia, “the country in which, [and] under the law of which, that award was made.” Here, the Confirmation Judgment was “based on” the December 2016 PCT Order, since nullified by the 2020 PCT Order.
The majority insists, however, “a court is not required to set aside a judgment ‘simply because it was based on a prior judgment that has later been reversed.’” Maj. Op. at 22 (quoting Manzanares , 628 F.3d at 1241). That general principle helps little under the circumstances. What matters here is not just that the district court has discretion under Rule 60(b)(5), as the majority highlights, but whether its exercise of that discretion comports with the New York Convention. Manzanares , a purely domestic civil-rights action, is not about applying Rule 60(b)(5) to a foreign judgment overturning an arbitral award under the New York Convention. Here, the treaty makes all the *99 difference because it informs and guides a district court’s discretion under Rule 60(b)(5).
The Second Circuit in
Thai-Lao
has articulated the general rule: a Rule
60(b)(5) motion should be granted where a foreign arbitral award has been set
aside. While the majority touches on the Second Circuit’s understanding, Maj.
Op. at 25-26, its recitation remains incomplete. The majority does not
acknowledge “[t]he annulment of an arbitral award in the primary jurisdiction
should . . . be given
significant weight
” under Rule 60(b)(5).
Thai-Lao
, 864 F.3d
at 186 (emphasis added). Nor does the majority discuss, as the Second Circuit
did, that when Rule 60(b)(5) is invokеd as a procedural tool under Article III,
“district courts should consider the point that ‘under the Convention, the power
and authority of the local courts of the [primary jurisdiction] remain of
paramount importance.’” (alteration in original) (quoting
Yusuf Ahmed
Alghanim & Sons
v.
Toys “R” Us, Inc
.,
Finally, the movant invoking Rule 60(b)(5) under the New York Convention does not face the high barrier suggested by the majority. As the Second Circuit recognized, there is not an “onerous burden for the beneficiaries *100 of the annulment” seeking relief under Rule 60(b)(5). Thai-Lao , 864 F.3d at 187. Indeed, “[c]ourts considering Rule 60(b)(5) motions are generally, and correctly, solicitous of a movant seeking relief when a prior judgment on which the challenged judgment relies has been vacated.” at 186 (citations omitted). This solicitude makes sense because the Convention provides a strong presumption in favor of the primary jurisdiction’s ruling (here, Bolivia) but tightly circumscribes the discretion of secondary jurisdictions (any other signatory in which enforcement is sought, including the United States).
The majority does not decide the burden allocation issue, noting “[w]e
need not resolve which party bears the burden on the public policy versus
comity question because we can decide this appeal irrespective of which party
may bear that burden.” Maj. Op. at 31 n.12. There seems no reason we should
not follow the framework as articulated by the Second Circuit in
Thai-Lao
.
Rule 60(b)(5) places on movants the burden of showing entitlement to relief—
vacatur, in our case.
[6]
When the vacatur request is based on Article V(1)(e), as
*101
here, the movant must show the challenged judgment relies on a prior
judgment that has been annulled.
Thai-Lao
,
Here, GCC carried its burden under Rule 60(b)(5). For purposes of Article V(1)(e), GCC showed the 2020 PCT Order was valid and had annulled the legal basis for the Confirmation Judgment. CIMSA then asserted a public policy defense, claiming repugnancy of the 2020 PCT Order based on alleged irregularities in the Bolivian political and judicial systems. The district court rejected CIMSA’s public policy argument. Under these circumstances, identical to those where Thai-Lao upheld Rule 60(b)(5) vacatur, [8] the district court *102 mistakenly refused to extend deference to the primary jurisdiction’s application of its own law to set aside an arbitration award issued in its country. Instead, the district court elevated its own conception of United States public policy and procedural values over a treaty that demands international comity and speaks in terms of mutual obligation. The district court effectively read the Convention out of its Rule 60(b)(5) analysis, and the majority opinion endorses that mistake.
II I now turn to the majority’s conclusion that the district court exercised its Rule 60(b)(5) discretion in a manner “consistent” with the Convention. See Maj. Op. at 37. As I will explain, the district court’s decision to deny Rule deference is pierced when the district court errs on the law, so the standard of review does no meaningful work for the majority.
Second , the majority emphasizes here, GCC initiated new proceedings in Bolivia after the district court’s Confirmation Judgment, but there, Laos had sought annulment before the confirmation judgment. This difference, the majority claims, “implicates the United States’ interest in the finality of the arbitral award and the Confirmation Judgment.” Maj. Op. at 32. The majority’s rule—where “proceedings-after-Confirmation” necessarily trigger U.S. finality interests—sets an arbitrary post. But Thai-Lao explains finality does not “stand in the way” of vacatur where “the party seeking to enforce the Award [here, CIMSA] knew proceedings to set aside the Award in the primary jurisdiction were ongoing before the District Court entered judgment, and the party seeking vacatur [here, GCC] sought relief promptly after courts in the primary jurisdiction annulled the award.” 864 F.3d at 189. In our case, everyone knew set-aside proceedings were pending in Bolivia and, when they concluded, GCC filed its Rule 60(b)(5) motion within fifteen days.
60(b)(5) relief runs counter to the text of the Convention, the intent of its drafters, and the nearly universal practice of all its signatories providing for deference to the lawful decisions of the primary jurisdiction. Only in exceptional circumstances, absent here, should an annulment by courts of the primary jurisdiction not carry effect in every secondary jurisdiction.
A Our analysis must begin with the Convention’s text, Medellín v. Texas , 552 U.S. 491, 506 (2008), but may also include an examination of the negotiating and drafting history to determine the shared understanding of that text. See id. at 507 (“Because a treaty ratified by the United States is ‘an agreement among sovereign powers,’ we have also considered as ‘aids to its interpretation’ the negotiation and drafting history of the treaty . . . .”) (citation omitted).
The Convention provides, “Each 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, under the conditions laid down in the following articles.” New York Convention, art. III. Recall, one of those “conditions” is that “[r]ecognition and enforcement of the award may be refused, at the request of the party against whom it is invoked,” art. V(1), if that party shows that “[t]he award has . . . been set aside or suspended by a *104 competent authority of the country in which, or under the law of which, that award was made,” art. V(1)(e).
The Convention is thus clear the arbitral seat alone has the authority
and the jurisdiction to vacate an award.
See
Albert Jan van den Berg,
Annulment of Awards in International Arbitration
,
in
International
Arbitration in the 21st Century: Towards “Judicialization” and Uniformity?
134 (Richard B. Lillich & Charles N. Brower eds. 1994);
cf. Int’l Standard Elec.
Corp.
v.
Bridas Sociedad Anónima Petrolera
,
A necessary corollary of this observation is the primary state “may set
aside an award on grounds that are not consistent with the laws and policies
of a secondary Contracting State.”
TermoRio
,
In practice, a view has prevailed globally that annulled awards carry no legal force. Professor Pieter Sanders, the text’s drafter and the “Father of the Convention,” understood the enforcement of an annulled award to be a legal impossibility and a potential violation of the public policy of any country willing to conclude otherwise. Pieter Sanders, New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards , 6 Neth. Int’l L. Rev. 43, 55 (1959); cf. Gary B. Born, International Commercial Arbitration 3389 (2d ed. 2014) (comparing annulment to an appellate court’s vacatur of a trial court judgment).
Conscious of our modest role as one оf many jurisdictions worldwide interpreting a shared text, we ought to examine, too, the decisions of our sister *106 signatories. This review allows us to better discern the Convention’s meaning. [9] The majority pays these decisions little mind.
Most foreign courts generally refuse to recognize and enforce arbitration awards set aside at the primary jurisdiction. Brazil has a categorical bar on recognition of set-aside awards. [10] German courts have similarly held that enforcement of annulled awards “must” be denied and that null awards no longer exist to be enforced. [11] Swiss and Dutch courts will defer to the seat of arbitration absent a finding that exceptional reasons—e.g., significant due *107 process violations—counsel otherwise. [12] Israel follows the same approach. [13] And in England and Wales, one seeking to enforce a set-aside award must bear “a heavy burden to establish not only that a foreign court’s decisions were wrong or manifestly wrong[,] but that they are so perverse as for it to be concluded that they could not have been arrived at in good faith or otherwise than by bias .” [14] Only one signatory jurisdiction, France, consistently permits enforcement of annulled awards, but it does so based on domestic law treating *108 foreign awards as decoupled from the arbitral seat and thus functionally domestic. [15]
B Every circuit court in the United States to consider the matter has held a foreign court order annulling an arbitration award issued under its own laws must be given effect unless the foreign order itself is “repugnant to fundamental notions of what is decent and just.” [16] I now address that narrow caveat.
Article V(1)(e) clearly provides awards set aside in the primary jurisdiction—here, Bolivia—may be unenforceable. But a different section, Article V(2)(b), provides that recognition and enforcement of an award may be refused if a secondary jurisdiction concludes recognition or enforcement would be “contrary to the public policy of that country.” Though the text of the Convention says nothing about public policy as a ground to refuse recognition of an Article V(1)(e) vacatur , the majority correctly explains that United States courts have placed a “public policy gloss” on Article V(1)(e). Maj. Op. at 37-38. This “public policy gloss” is essentially what CIMSA relied upon in defending against GCC’s Rule 60(b)(5) motion, R. vol. IV at 890-905, and what the district court identified as the “narrow public policy exception to the principle of comity under” the Convention, id. vol. V at 1212.
If we are to venture beyond the text of the Convention, however, we again would be wise to consider its drafting history.
The drafters favored a narrow public policy exception to recognition and enforcement of an arbitral award set aside in the primary jurisdiction. The Convention delegates sought to “limit the scope of the public policy clause as far as possible.” 2 Pieter Sanders, International Commercial Arbitration 323 (1960). The narrow exception under Article V(2)(b) represented a change from the 1927 Geneva Convention, which required an affirmative demonstration that “recognition or enforcement of the award [would not be] contrary to the *110 public policy or to the principles of the law of the country in which it is sought to be relied upon.” Convention on the Execution of Foreign Arbitral Awards, Sept. 26, 1927, art. 1(e), 92 L.N.T.S. 301.
The public policy exception asks whether the award is “distinctly
contrary to the basic principles of the legal system of the country where the
award is invoked.” U.N. Econ. & Soc. Council,
Report of the Committee on the
Enforcement of International Arbitral Awards
, Mar. 28, 1955 (UN Doc.
E/AC.42/4/Rev.1), at 13;
see Slaney
v.
Int’l Amateur Athletic Fed’n
, 244 F.3d
580, 593 (7th Cir. 2001);
Fotochrome, Inc.
v.
Copal Co.
,
I agree with the majority and district court that the public policy defense has an appropriate place within the New York Convention. It forms part of the *111 international bargain by which signatories agree to recognize other signatories’ decisions, and functions as an “escape device[] designed to protect the fundamental, mandatory policies of national legal regimes.” 3 Gary B. Born, International Commercial Arbitration § 26.05(C)(9)(a) (3d ed. 2020). But the public policy exception is just that—an exception. The district court correctly acknowledged this limitation in theory yet did not observe it in practice.
III The district court assumed, rightly, “that the 2020 [PCT] Order overturned [the December 2016 PCT Order] and that the Twelfth Judge had authority to nullify the Damages Award.” R. vol. V at 1215. It correctly assumed, too, “both courts are ‘competent authorit[ies]’ as defined by Article V(1)(e).” Id. (alteration in original). The district court then accurately articulated the exception to comity as “a narrow public policy exception when a foreign judgment or the foreign proceedings are ‘repugnant to fundamental notions of what is decent and just.’” Id . at 1211 (emphases added). The district court rejected CIMSA’s arguments about bias and corruption in Bolivia and concluded the 2020 PCT Order annulling the arbitration award was not repugnant to United States public policy. at 1215 (“I do not consider the 2020 orders themselves to be ‘repugnant to fundamental notions of what is decent and just’ in the United States . . . .”) (citation omitted). Everyone—the *112 district court, the majority, Maj. Op. at 40, 51 n.31, and I—agree on this point. That should end the discussion and require reversal.
Having found the 2020 PCT Order itself not repugnant, the district court should have afforded comity to the Bolivian decree and vacated its Confirmation Judgment, which enforced a now-null foreign arbitral award. Instead, the district court refused to vacate its Confirmation Judgment because this would mean enforcing the 2020 PCT Order and that enforcement would be “repugnant” to “fundamental notions of what is decent and just.” R. vol. V at 1215-16.
The majority affirms the district court’s application of this enforcement-focused repugnancy standard. According to the majority, “[a] district court may decline to enforce a primary jurisdiction’s annulment order if the order itself is repugnant or if enforcing that order would offend public policy.” Maj. Op. at 33. Per the majority’s “either-or” framing, district courts in this circuit now may refuse to afford comity to foreign judgments under the New York Convention if either the foreign judgment itself is repugnant or the enforcement of that judgment would offend, or simply “undermine,” public policy. Id. at 33, 40. This is an extraordinary grant of discretionary power to district courts, unsupported by the Convention—which sought to circumscribe *113 such open-ended discretion—or cases interpreting it. [17] Nevertheless, the majority adopts this novel test, convinced the “the Convention supports” this approach and “[t]he Second Circuit articulated” it. at 33. I respectfully disagree on both fronts.
A
First
, the text of the Convention supports neither the district court’s
enforcement-focused repugnancy test nor the majority’s either-or analysis. A
treaty’s text is always paramount but becomes especially important when
reviewing exercises of jurisprudential power not otherwise provided for.
See
Medellín
,
Recall, in studying the Convention, we see the public policy exception in
Article V(2)(b) permits a refusal to enforce an
award
on public policy grounds.
Article V(2)(b) does not provide a defense to the
enforcement of foreign court
judgments
.
TermoRio
,
Eschewing the text, the majority cites only one case,
TermoRio
, which
supposedly approves a public policy enforcement defense to Article V(1)(e)
vacaturs. Maj. Op. at 37-38. The
TermoRio
court accepted there may be “a
narrow public policy gloss on Article V(1)(e).”
B Second , our sister circuits have consistently rejected the test performed by the district court and affirmed by the majority. [18]
In
Getma
, the D.C. Circuit emphasized the determination of repugnancy
looked to the foreign judgment itself.
See
Confronted with these cases, the majority seeks shelter in the Second Circuit’s Pemex and Thai-Lao decisions. Maj. Op. at 33-37. True, the language in both Pemex and Thai-Lao references the repugnancy of the foreign judgments and their enforcement in this country. But a closer look reveals little more than first-blush support for the majority’s reasoning.
Pemex
and
Thai-Lao
did
not
do what the district court and majority do
here: find the foreign judgment itself was not violative of this country’s public
policy
but still refuse to enforce it
. In
Pemex
, for example, the court found the
Mexican decision at issue involved “retroactive legislation” and the “taking of
private property without compensation” by Mexican authorities. 832 F.3d at
107-08, 110. Given these concerns with the repugnancy of the Mexican
judgment itself, enforcing that judgment would “offend[] basic standards of
justice in the United States.” at 111.
[19]
Thai-Lao
, citing
Pemex
, adopted the
*117
same approach: enforcement or vacatur might offend United States public
policy
but only if
there was something about the parties’ conduct or the foreign
courts’ reasoning that “so tainted” the foreign order itself. 864 F.3d at 175.
These cases confirm the public policy/repugnancy analysis turns on the
repugnancy of the foreign judgment.
See Esso
,
Nor does the majority’s understanding accord with the Second Circuit’s
own understanding of
Pemex
. According to the majority, the
Pemex
court
“never said that the foreign annulment order itself violated public policy,” Maj.
Op. at 41, but
Esso
unambiguously understood
Pemex
to involve a repugnant
foreign order.
See
To the extent the foreign judgment is repugnant as against United States public policy, therefore, it obviously would be repugnant to enforce it here. This makes all the sense in the world under the Convention: it preferences the arbitral seat’s processes and judgments while preserving the narrow discretion of the secondary jurisdiction. Cf. Laker Airways Ltd. v. Sabena, Belgian World Airlines , 731 F.2d 909, 937 (D.C. Cir. 1984) (“[F]rom the earliest times, authorities have recognized that the obligation of comity expires when the strong public policies of the forum are vitiated by the foreign act .”) (emphasis added).
If Pemex and Thai-Lao created a misimpression, the Second Circuit no longer labors under it. Writing for the Second Circuit in Esso , Judge Carney (who also authored Thai-Lao ) could not have been clearer:
[W]e clarify that the standard set forth in Pemex for evaluating a petition to enforce an arbitral award that has been annulled in the primary jurisdiction is, simply, whether the foreign judgment setting aside the award is, in the operative phrase, “repugnant to fundamental notions of what is decent and just” in the United States.
In the D.C. and Second Circuits, the appropriate question is thus whether there is something about the foreign judgment itself, or the processes that yielded it, that violates fundamental notions of decency and justice in the United States. In this circuit, by contrast, a court now may balance against comity “whether the annulment is repugnant” or “whether giving effect to the annulment would undermine U.S. public policy.” Maj. Op. at 40. This is a novelty anchored neither by text nor precedent and one that I cannot endorse.
Here, when confronted with whether the 2020 Bolivian orders were “repugnant,” the district court unambiguously answered “no.” R. vol. V at 1215. Unlike the court in Pemex , which had identified fundamental problems implicating the repugnancy of the annulment order, the district court here found none. At this point, the district court should have recognized the “power and authority of the local courts of the rendering state remain[ing] of paramount importance,” Yusuf , 126 F.3d at 22, and acknowledged the presumptive comity interests counseling vacatur of the Confirmation Judgment. Instead, it refused to afford comity and enforced a null award. Unlike my colleagues in the majority, I would have followed the consistent approach of our sister circuits and reversed on this issue alone.
IV Even under the majority’s repugnancy-enforcement test, the district court committed reversible error in performing the New York Convention’s *120 public policy balancing analysis, which resulted in denial of GCC’s Rule 60(b)(5) motion.
First
, the district court neglected to situate comity as the “guiding value”
against which to weigh the proffered public policy interest under the
Convention.
Esso
,
Second , the district court mistakenly determined vindicating finality interests, without more, could overcome the presumptive extension of comity under the Convention.
Third , the district court impermissibly second guessed the decisions of Bolivia’s highest court.
A
According to the majority, “[w]hen a primary jurisdiction has annulled
an arbitral award, a secondary jurisdiction must balance comity to the foreign
annulment order against its country’s public policy.” Maj. Op. at 21. But a
primary jurisdiction’s judgment annulling an arbitration award deserves
comity
unless
outweighed by a relevant public policy interest of the secondary
jurisdiction.
See Pemex
,
“Comity is not just a vague political concern favoring international cooperation when it is in our interest to do so. Rather it is a principle under which judicial decisions reflect the systemic value of reciprocal tolerance and goodwill.” Société Nationale Industrielle Aérospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa , 482 U.S. 522, 555 (Blackmun, J., concurring in part and *122 dissenting in part). Comity is part of the “true foundation on which the administration of international law must rest,” one of the vital “rules . . . which arise from mutual interest and utility, from a sense of the inconveniences which would result from a contrary doctrine.” Joseph Story, Commentaries on the Conflict of Laws § 35 (M. Bigelow ed., 8th ed. 1883). It is not a light courtesy afforded; it is a “moral necessity to do justice, in order that justice may be done to us in return.”
Comity considerations are at their apex when, as here, there is no United
States involvement.
Spier
v.
Calzaturificio Tecnica, S.p.A.
,
In
Hilton
v.
Guyot
,
there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries, and there is nothing to show either prejudice in the court, or in the system of laws under which it was sitting, or fraud in procuring the judgment, or any other special reason why the comity of this nation should not allow it full effect . . . .
Id. at 202. Hilton did not endorse refusals to recognize foreign judgments based only on the fact that the processes of other countries may, literally, be foreign to our own. at 205 (“[W]e are not prepared to hold that the fact that the [foreign] procedure . . . differed from that of our own courts is, of itself, a sufficient ground for impeaching the foreign judgment.”).
Interpreting
Hilton
, we have explained principles of comity “
require
recognition of a foreign judgment” if these basic due process guarantees are
met.
Society of Lloyd’s
v.
Reinhart
, 402 F.3d 982, 999 (10th Cir. 2005)
(emphasis added) (summarizing
Hilton
factors);
cf. Her Majesty the Queen in
Right of the Province of B.C.
v.
Gilbertson
,
Comity also generally precludes us from inquiring into the merits of foreign adjudications, or another signatory’s interpretation of its own law. See Navani v. Shahani , 496 F.3d 1121, 1128 (10th Cir. 2007) (finding English court’s interpretation of English law to be “entitled to our respect”); Shealy v. Shealy , 295 F.3d 1117, 1123 (10th Cir. 2002) (refusing to “second guess” a German court’s interpretation of German law).
The majority says comity is not a command. Maj. Op. at 77. It is, though, a central corollary of our own sovereignty and the deference due to a world that does not halt at our frontiers. Comity concerns are acute in international commercial arbitration, which depends on states giving effect to the outcome of proceedings in countries with processes and laws different from their own. W. Michael Reisman, Systems of Control in International Adjudication and Arbitration 139 (1992).
The Second and D.C. Circuits have uniformly recognized the need to approach the question of vacated foreign arbitral awards with the same deferential presumption of comity the distriсt court here neglected to extend.
The D.C. Circuit has stressed the presumption of comity attaches to valid
foreign judgments under the Convention. In
TermoRio
, the court found lawful
annulment by a competent court in the arbitral seat destroyed any cause of
action for enforcement in the United States.
The Second Circuit in
Thai-Lao
affirmed it is an extraordinary case that
will present those “rare circumstances” in which “it would
not
be an abuse of
discretion to reject the demands of comity in favor of honoring public policy.”
And in
Esso,
the Second Circuit again affirmed comity as “a vital
prudential concern,” reiterated that repugnancy is a “demanding” standard,
and clarified that Article V(1)(e) is not “an invitation to a relaxed exercise of
impressionistic discretion.”
The district court should have started its balancing inquiry with comity considerations at their zenith. This is not a case where the record evidenced the due process concerns identified in Hilton or the Restatements. And only foreign, private parties are involved. The remaining question was whether a prevailing United States public policy interest, necessary to vindicate fundamental notions of decency and justice, existed here to override the presumption of comity due to the 2020 PCT Order. On this record, none exists.
B “Public policy” first appears to be an ethereal concern permitting unbounded, interpretive discretion. Like comity, however, public policy is a concrete concept, well developed by U.S. courts and particularly well defined in the Convention context.
The Supreme Court assigns the assessment of public policy to judges.
W.R. Grace & Co.
v.
Local Union 759
,
In the Convention context, it takes “much more than a mere assertion
that the judgment of the primary State ‘offends the public policy’ of the
secondary State to overcome a defense raised under Article V(1)(e).”
TermoRio
,
The Convention’s public policy exception thus applies only in cases
implicating “the forum state’s most basic notions of morality and justice.”
Vantage Deepwater Co.
v.
Petrobras America, Inc.
,
Unlike the majority opinion, our sister circuits uniformly emphasize the narrowness of the public policy gloss.
The Second Circuit in Baker Marine focused on the hazards of the public policy defense as imported to Article V(1)(e). Enforcement of annulled awards, *129 the court reasoned, would thwart the purpose of the Convention by “seriously undermin[ing] finality and regularly produc[ing] conflicting judgments.” 191 F.3d at 197 n.2. These conflicting judgments would encourage global forum shopping, as the losing party would “pursue its adversary ‘with enforcement actions from country to country until a court is found, if any, which grants the enforcement.’” Id . (citation omitted).
The D.C. Circuit in
TermoRio
acknowledged the public policy exception
existed, but only when the foreign judgment was “repugnant to
fundamental
notions of what is
decent
and
just
,”
And in
Getma
, the D.C. Circuit understood the fundamental notions
standard to be a “demanding burden” and “infrequently met.”
Even the Second Circuit’s Pemex decision, which confirmed an annulled award, ultimately clarifies the fineness of the Convention’s public policy gloss. *130 The Pemex court warned United States courts “should act with trepidation and reluctance in enforcing an arbitral award that has been declared a nullity by the courts having jurisdiction over the forum in which the award was rendered.” 832 F.3d at 111. The majority dismisses this aspect of Pemex , viewing the repugnancy standard as a catch-all concern providing a losing foreign litigant any number of vetoes in United States court. See Maj. Op. at 24-25. That reading does not withstand scrutiny. Pemex concerned extraordinary circumstances implicating the parties’ fundamental rights— whether the very existence of substantive rights or the availability of a forum in which to vindicate them. [21]
The weight of authority shows only dominant, well-defined, and clearly expressed public policies might surmount the presumption of comity in the Convention context. Here, against that strong presumption, the district court set an interest in “finality.” As the majority correctly notes, various decisions outside the Convention context acknowledge finality as an important United States public policy. Maj. Op. at 48-49 n.27. And protecting the finality of judgments in our courts fits well within “the full range of interests” under Rule *131 60(b), Thai-Lao , 864 F.3d at 186, which, of course, itself exists “to make an exception to finality,” Buck v. Davis , 137 S. Ct. 759, 779 (2017) (citation omitted). But I would not conclude, as the majority does, Maj. Op. at 54-55, that a public policy under Rule 60(b)(5) is identical to the term “public policy” used in Article V(2)(b) of the New York Convention. [22] Rather, I question whether finality is so dominant and clearly defined an interest as to qualify as a United States public policy for a repugnancy analysis under the Convention and, even if it so qualifies, whether it alone rises to the level of repugnancy as something so offensive to our laws. [23] The majority says yes to both; I disagree.
To start, what was the finality interest the district court identified for the Convention’s public policy exception? Reading the record, it is hard to tell.
Recall, CIMSA’s public policy pitch consisted of attacks on the Bolivian judiciary and the merits of the 2020 PCT Order under Bolivian law. The district court rejected those arguments. R. vol. V at 1215. Instead, the district court focused only on vindicating finality interests. Id. at 1218. As the majority explains, the district court determined “granting GCC relief would undermine the finality of the Confirmation Judgment and the arbitral award.” Maj. Op. at 47 (emphasis added). “Repugnant,” the district court declared, “is a fitting description of proceedings without end.” R. vol. V at 1216.
If the district court anchored its finality concerns to the 2016 PCT Orders, this would be problematic. GCC persuasively explains the 2016 PCT Orders were both conflicting (meaning the district court simply selected one of the two as its reference point) and clearly not final under Bolivian law (subject, as they were, to pending litigation at the arbitral seat). Opening Br. at 35. No one understood there to be a “final” word on the merits of the Damages Award in Bolivia until the 2020 PCT Order.
If the district court based its finality concerns only on preserving its own Confirmation Judgment—which seems to be the majority’s reading, see Maj. Op. at 51 n.31—this is even more troubling. I have no doubt the district court *133 was legitimately frustrated, given (as it described) the “congeries of rulings and clarification orders” in the Bolivian courts and the years of parallel proceedings contesting the Merits Award and the Damages Award, including before the district court and this court. R. vol. V at 1201. But even an objectively understandable interest in protecting the finality of its own Confirmation Judgment under Rule 60(b)(5) cannot obviate the district court’s obligation to identify a public policy for Convention purposes —one that would legitimately satisfy the high bar of the infrequently-met repugnancy standard and overcome any deference owed to the arbitral seat.
The majority faults GCC for initiating new proceedings in Bolivia after the district court’s Confirmation Judgment entered and concludes this “implicates the United States’ interest in the finality of the arbitral award and the Confirmation Judgment.” Maj. Op. at 32. As an initial matter, no one understood, or should have understood, the Bolivian proceedings to be final. CIMSA—and the district court and this court in CIMSA I —knew GCC was seeking to set aside the arbitral award when CIMSA pursued the Confirmation Judgment. CIMSA sought enforcement in the United States the next day after GCC pursued annulment in Bolivia. And GCC sought relief promptly, filing its Rule 60(b)(5) motion within fifteen days of the 2020 PCT Order. GCC’s litigation conduct may implicate interests under Rule 60(b)(5), but it is not a *134 matter of United States public policy. [24] Like the district court, the majority incorrectly imports a U.S. court’s finality interest under Rule 60(b)(5) into the distinct public policy exception contemplated by the Convention.
To my knowledge, no other U.S. court has rested its refusal to recognize
a competent jurisdiction’s vacatur of an arbitral award under the New York
Convention only on the ambient “finality” interest invoked here.
Thai-Lao
,
consistent with the weight of U.S. caselaw, teaches finality is not a shibboleth
to be uttered whenever justice requires us to revisit our prior judgments.
Indeed,
Thai-Lao
recognizes, in the Convention context, discretion under Rule
60(b)(5) is “constrained by the prudential concern of international comity.” 864
F.3d at 183 (citations omitted). In only
one
of the cases cited by the majority—
Pemex
—did the U.S. court enforce an award annulled at the issuing seat on
any
grounds.
See
Maj. Op. at 23-29. And there, the
Pemex
court specifically
*135
identified compelling public policy interests it understood to override the
presumption of comity. “[I]n the rare circumstances of this case,” the Second
Circuit explained, the district court “did not abuse its discretion by confirming
the arbitral award at issue because to do otherwise
would undermine public
confidence in laws and diminish rights of personal liberty and property
.”
Pemex
,
The majority identifies two additional “strong United States interests” to shore up affirmance: “upholding parties’ contractual expectations” and “the policy in favor of arbitral dispute resolution.” Maj. Op. at 47-48. The majority says these interests “support the district court’s conclusion that vacatur of its Confirmation Judgment would violate U.S. public policy. These considerations correspondingly support the district court’s decision against extending comity to the 2020 Bolivian orders.” Id. at 54. Again, the majority blurs the line between Rule 60(b)(5) and the Convention’s narrow public policy exception. Id . In any case, neither interest supports denying Rule 60(b)(5) relief to GCC.
First , the majority claims its decision upholds “parties’ contractual expectations in the arbitration context.” at 52. I don’t see that. The parties *136 here agreed to arbitrate under Bolivian, not U.S., law. The majority’s decision to affirm frustrates that choice by nullifying an undisputedly competent Bolivian tribunal’s decision and injures the standardizing impulse behind the Convention. The majority claims its decision enforces the agreement to “allow parties to ‘foretell with accuracy what will be their rights and liabilities under the contract.’” (citation omitted). But beyond this circuit becoming a haven for parties to enforce now-null awards from around the world, I do not read the majority opinion to advance predictability goals.
And while the decision is a boon for CIMSA, neither parties’ agency is respected, contrary to the majority’s aim. Maj. Op. at 52-53. I would assume CIMSA, the Bolivian party to the agreement, knew the possibility of appeal through the Bolivian judicial system, notwithstanding the parties’ waiver. See R. vol. IV at 802-03 (CIMSA’s Bolivian litigation counsel explaining Bolivian law provides “very limited discretion” to refuse appeals for annulment).
Second
, the majority identifies an “emphatic federal policy in favor of
arbitral dispute resolution.” Maj. Op. at 53 (quoting
Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc.
, 473 U.S. 614, 631 (1985)).
Mitsubishi
, on
which the majority leans for this point, instructively frames its discussion of
the “emphatic federal policy” within the parameters of a “strong presumption
in favor of enforcement of freely negotiated contractual choice-of-forum
provisions.” 473 U.S at 631. But the majority dilutes this “strong presumption,”
*137
essentially holding our court is a more competent decisionmaker than the
Bolivian arbitrators and the Bolivian PCT.
[25]
And what the majority describes
as this country’s pro-enforcement bias, Maj. Op. at 53, is better understood as
a pro-comity bias. The extension of comity is a first principle of the Convention
and essential to international arbitration. It also benefits the development of
business and industry, which “will hardly be encouraged if . . . we insist on a
parochial concept that all disputes must be resolved under our laws and in our
courts.”
M/S Bremen
v.
Zapata Off-Shore Co.
,
C Finally, the district court also departed from fundamental comity principles by detouring into several discrete commentaries on the merits of the *138 Bolivian proceedings. The majority appears untroubled by the district court’s observations.
As the majority correctly acknowledges, “the secondary jurisdiction’s role
is not to second-guess the primary jurisdiction’s ‘substantive determinations
made under [its own] law.’” Maj. Op. at 27 n.11 (quoting
Esso
,
The 2020 PCT Order explained the later of the two 2016 Orders was a
juridical nullity because “it is not possible to file two or more legal protection
proceedings with the same purpose whenever a prior action is pending.” R. vol.
IV at 713. All agree this substantive determination on a matter of Bolivian law
upended the legal basis for the Confirmation Judgment. The district court’s
“analysis [should] go no further: it is simply not [a] court’s role to engage in a
more probing analysis of the substance of [another] court’s judgments.”
Esso
,
Yet, the district court:
questioned if the PCT correctly concluded Bolivian law trumped the parties’ contractual agreement not to appeal, R. vol. V at 1217 n.11; opined the “2020 Procedural Order reversed a well-reasoned decision by the PCT . . . on two specious grounds,” id. at 1216 n.9 (emphases added); expressed doubts about the authority of a Bolivian judge to annul the arbitration award, id. at 1215 n.8;
looked outside the record to suggest the 2020 PCT Order was motivated by bias against CIMSA’s principal, id. at 1214 n.7; and viewed the timing of the 2020 PCT Order as suspiciously “serendipitous” given the country’s ongoing election, id. at 1214-15 n.7.
The
CIMSA I
panel humbly recognized Bolivian foreign proceedings
might not “follow an entirely familiar pattern.”
CIMSA I
,
V I end with two practical observations.
First , today’s decision may create an unwarranted split between our court and the Second and D.C. Circuits. Our sister circuits have unambiguously held the narrow public policy exception in the Convention focuses on the repugnancy of the foreign judgment, not its enforcement, supra at Part III . Relying on Second Circuit opinions since clarified, the majority tacks in the opposite direction. Maj. Op. at 40. This split frustrates the predictability and administrability of an otherwise successful Convention.
Focusing on procedural posture, the majority claims there is no split because “no other circuit has reviewed a district court’s denial of a Rule 60(b)(5) motion to vacate a judgment confirming a foreign arbitral award based on a later foreign annulment order.” Maj. Op. at 44 n.24. But our sister circuits have addressed the precise substantive question at issue in this case and have *141 determined the foreign judgment to be the operative focus of potential repugnancy. The question isn’t new; the majority’s answer is.
Second
, we undermine the most basic foundation of private arbitration—
that the parties are autonomous and may choose the seat and laws of their
arbitral proceedings—when the decisions rendered in their chosen seat have
no meaning here. We encourage global forum shopping and forum shopping
among the circuits. We undermine finality by leaving standing two competing
decisions, the Bolivian high court’s judgment setting aside an award and the
District of Colorado’s contrary Confirmation Judgment, and thus encourage
every losing party “to pursue its adversary ‘with enforcement actions from
country to country until a court is found . . . which grants the enforcement.’”
Baker Marine
,
For these reasons, I would reverse the district court’s refusal to vacate its enforcement of a null arbitration award, and I respectfully dissent from the contrary judgment of my colleagues in the majority.
Notes
[1] As we discuss below, Bolivia’s highest constitutional court is comprised of groups of judges, known as “chambers.” 21-1196, App., Vol. IV at 879 n.2; 21-1196, App., Vol. V at 1056-57, 1201 n.1.
[2] Our opinion in
Compañía de Inversiones Mercantiles, S.A. v. Grupo Cementos
de Chihuahua S.A.B. de C.V.
,
[3] Court proceedings also occurred in Mexico, but those are primarily relevant to Case No. 21-1324, so we defer our discussion of those proceedings until we turn to that appeal.
[4] With the adoption of the [Bolivian] Constitution in 2009, individuals can petition an action of amparo ( acción amparo constitucional ) to vindicate their constitutional rights. The amparo action is one which grants protection against the illegal or wrongful acts or omissions of public officials, as well as individual or collective persons, that restrict, suppress or threaten with restricting or suppressing a person’s fundamental rights and guarantees recognized by the Constitution. In other words, this action can be filed against public and private actors that arbitrarily impair the constitutional rights of others. In essence, the amparo action allows a person the ability to activate constitutional justice in defense of her fundamental rights or constitutional guarantees, in the face of ultra vires actions. Jorge Farinacci-Fernós, When Social History Becomes A Constitution: The Bolivian Post-Liberal Experiment And The Central Role Of History And Intent In Constitutional Adjudication , 47 Sw. L. Rev. 137, 174 (2017) (quotations omitted).
[5] As we describe in more detail below, on September 25, 2015, CIMSA petitioned
to confirm the Damages Award in the United States District Court for the District of
Colorado.
See Compañía I
,
[6] Unlike an amparo , which is immediately sent to the PCT for review, a party must appeal a queja decision to the PCT. See 21-1196, App., Vol. IV at 815.
[7] Although the order is dated February 18, 2020, it appears that the PCT backdated
the order.
Compare
App., Vol. IV at 704 (order dated February 18, 2020),
with id.
at 722-25 (indicating the order was signed on October 29, 2020);
see Compañía I
,
[8] These are the 2020 PCT Order granting GCC’s queja and the Twelfth Judge’s reinstatement of the order annulling the Damages Award. Although only the Twelfth Judge’s order annulled the Damages Award, the 2020 PCT Order provided the basis for that decision.
[9] In Thai-Lao , the district court granted vacatur. Here, the district court denied vacatur. In both instances, the standard of review on appeal is abuse of discretion.
[10] The Panama Convention is another multilateral international treaty governing
the enforcement of arbitral awards.
Goldgroup
,
[11]
Esso
noted the secondary jurisdiction’s role is not to second-guess the primary
jurisdiction’s “substantive determinations made under [its own] law” but to assess foreign
annulment orders “only so far as is required to ascertain whether they are plainly
incompatible with U.S. notions of justice.”
[12] The New York Convention and the cases allocate burdens on the parties as
follows. When the prevailing party in arbitration seeks confirmation of the award in a
secondary jurisdiction, it must provide a copy of the arbitral award and the agreement to
arbitrate. 21 U.S.T. 2517, art. IV(1). The nonprevailing party must establish a defense to
confirmation, such as a foreign annulment order.
See id.
, art. V(1);
Compañía I
, 970 F.3d
at 1287, 1295-96. The burden then shifts to the prevailing party to show that public
policy considerations outweigh comity to the annulment order.
See Esso
,
[13] The dissent asserts, contrary to the procedural history, that “everyone knew set-
aside proceedings were pending in Bolivia” at the time of confirmation, so this case is
like
Thai-Lao
. Dissent at 14-15 n.8;
see id.
at 46. But in
Thai-Lao
, the losing party
moved for annulment in Malaysia nearly a year before the U.S. district court’s
confirmation judgment.
[14] The court used the words “
[g]iving effect
to [the] twelfth-hour invocation of
sovereign immunity.”
Pemex
,
[15] The annulment order relied on a Mexican law that was enacted after the
arbitral tribunal issued a preliminary award and that ended arbitration of certain
claims.
Pemex
,
[16] The court explained that “[a]bsent confirmation of the [arbitral] award,” the
prevailing arbitral party “would lose the opportunity to bring its claims” due to a change
in Mexican law on the applicable statute of limitations and due to an application of res
judicata in Mexico that “offends basic domestic principles of claim preclusion.”
Pemex
,
[17] The court expressed concern about causing an unconstitutional taking by
enforcing the annulment order, stating the order “did no more than apply th[e] Mexican
law,” but “[i]n the United States, [enforcement of this law] would be an unconstitutional
taking.”
Pemex
,
[18] The Second Circuit decided
Esso
after oral argument. In a Fed. R. App. P. 28(j)
letter, GCC asserts, “
Esso
refutes . . . that U.S. enforcement can be deemed repugnant.”
Doc. 10926658. But
Esso
does not say that
Pemex
and
Thai-Lao
wrongly stated that a
district court may uphold an arbitral award when giving effect to a foreign annulment
would violate U.S. public policy. Indeed,
Esso
relies on language from those cases that
support a district court’s doing so.
See
[19] See Restatement (Third) U.S. Law of Int’l Comm. Arb. § 4.16 cmt. c (Am. L. Inst. Proposed Final Draft 2019): “The Restatement adopts the general understanding that the [New York and Panama] Conventions’ use of the permissive term
[20] In
DeJoria v. Maghreb Petroleum Exploration, S.A.
,
[21] Instead,
Pemex
said it was “in no position to pass upon [the Mexican] court’s
interpretation of Mexican law,”
[22] The dissent says
Pemex
held only that enforcing the Mexican judgment would
violate public policy “[g]iven [its] concerns with the repugnancy of the [foreign
annulment] itself.” Dissent at 29. That reading conflicts with the overarching conclusion
in
Pemex
: “We hold that the [district court] properly exercised its discretion in
confirming the award because giving effect to the subsequent nullification of the award in
Mexico would run counter to United States public policy . . . .”
[23] The dissent says “
Esso
unambiguously understood
Pemex
to involve a
repugnant foreign order.” Dissent at 29-30 n.19. But we see no such “unambiguous[]
underst[anding].” Indeed,
Esso
quotes
Pemex
’s statement that “[a] final judgment
obtained through sound procedures in a foreign country is generally conclusive unless
enforcement
of the judgment would offend the public policy of the state in which
enforcement is sought.”
Esso
,
[24] Thus, unlike the dissent, we see no circuit split. See Dissent at 53-54. Only the Second and D.C. Circuits have decided relevant cases. The Second Circuit cases— especially Pemex and Thai-Lao —support a district court’s consideration of whether enforcement of a foreign judgment would violate U.S. public policy. At the very least, they do not foreclose it, and neither do the D.C. Circuit cases. The dissent claims that these out-of-circuit cases “have addressed the precise substantive question at issue in this case” and “determined the foreign judgment to be the operative focus of potential repugnancy.” Dissent at 53-54 (quotations and emphasis omitted). For the reasons discussed, the cases do not say that. Also, no other circuit has reviewed a district court’s denial of a Rule 60(b)(5) motion to vacate a judgment confirming a foreign arbitral award based on a later foreign annulment order. The unique procedural posture of this case further undercuts the dissent’s claim of a circuit split.
[25] The dissent asserts that this appeal “is ultimately a New York Convention case.”
Dissent at 9. But as the dissent appears to acknowledge, the Convention is not self-
executing. None of its provisions “operates of itself without the aid of any legislative
provision.”
Medellin v. Texas
,
[26] As discussed above,
Pemex
identified the following public policy
considerations: “(1) the vindication of contractual undertakings and the waiver of
sovereign immunity; (2) the repugnancy of retroactive legislation thаt disrupts contractual
expectations; (3) the need to ensure legal claims find a forum; and (4) the prohibition
against government expropriation without compensation.”
Pemex
,
[27] The Supreme Court has recognized the importance of finality in a variety of
contexts,
see, e.g.
,
Concepcion v. United States
,
[29] The district court’s concern about “an endless barrage of challenges to
unfavorable arbitral awards or court orders,” 21-1196, App., Vol. V at 1216, aligns with
the finality principle embodied in 28 U.S.C. § 1291 to avoid piecemeal litigation,
Clark
,
[30] In Pemex and this case, the district court declined to enforce an order annulling an arbitral award. The Second Circuit in Pemex , deferring to the district court’s balancing of comity and public policy, held the district court did not abuse its discretion. The different procedural posture of this case compared to Pemex should make our deference to the district court stronger because GCC sought to undo a judgment. In Pemex , the prevailing arbitral party asked the district court to confirm an arbitral award despite the presence of an annulment order. Here, by contrast, the district court had already confirmed the arbitral award after Bolivia’s highest constitutional court had refused to annul it, this court had affirmed the confirmation in Compañía I , and then GCC, the losing arbitral party, asked the district court to vacate the confirmation judgment—an extraordinary remedy under Rule 60(b)(5)—based on a post-confirmation annulment order.
[31] GCC asserts the district court: Improperly “rested its finality analysis on the supposed finality of the December 2016 PCT [Judgment].” 21-1196, Aplt. Br. at 35. In fact, its finality analysis “rested” on the finality of its Confirmation Judgment. “Ignored” that the 2016 PCT Order had remanded for further proceedings. 21-1196, Aplt. Br. at 35. In fact, the district court addressed the remand. 21-1196, App., Vol. V at 1216. “Import[ed] U.S. law on how precedent should be treated into the Bolivian legal system,” 21-1196, Aplt. Br. at 37, and used “finality” as nothing more than a shorthand for disagreeing with the highest Bolivian court. In fact, the district court assumed that the 2020 PCT Order overturned the 2016 PCT Order and was not repugnant. 21-1196, App., Vol. V at 1215. Its denial of vacatur stemmed from the U.S. public policy consequences of enforcing the 2020 Bolivian orders. Incorrectly relied on finality to “treat[] the PCT decisions as repugnant to fundamental notions of justice.” 21-1196, Aplt. Br. at 37-38. But the district court “did not consider the 2020 orders themselves to be repugnant.” 21-1196, App., Vol. V at 1215.
[32] GCC asserts we should disregard the parties’ agreement that arbitral awards would be final because “U.S. courts uniformly hold that this language does not insulate such judgments from judicial review.” 21-1196, Aplt. Br. at 38 (quotations omitted). Even so, the parties’ agreement still supports the parties’ expectation that arbitral awards would be final and is an appropriate consideration for judicial review.
[33] The dissent states that we have crafted a “new permissive” and “unbounded”
“approach” in which “a public policy under Rule 60(b)(5) is identical to the term ‘public
policy’ used in Article V(2)(b) of the New York Convention.” Dissent at 44 and 44 n.22.
That is not what we have said and is not our intent. We hold only that finality was a valid
public policy interest for the district court to consider in this case, as demonstrated by the
ample support cited above, including
Thai-Lao
,
[34] The dissent asserts that we “say[] comity is not a command.” Dissent at 37.
Confusingly, it points to our direct quote of
Hilton v. Guyot
,
[35] The dissent cites decisions from foreign jurisdictions “to better discern the Convention’s meaning.” Dissent at 19. They are, of course, not binding here, and at least two of those cases acknowledge that a secondary jurisdiction has discretion to enforce an arbitral award despite a set-aside order. See, e.g. , LCivA 44/21 B.I. Science (2009) Ltd. v. Luminati Networks Ltd. (2021), Judgment of the Supreme Court of Israel, 21 Apr. 2021 (jusmundi.com), at 8 (while “[i]n general, setting aside the arbitral award in the Original Country bars its enforcement and recognition in a foreign country,” “the court [in the secondary jurisdiction] has discretion in the matter, and is able to recognize and enforce the arbitral award even though it was set aside in the Original Country”); Malicorp v. Government of the Arab Republic of Egypt [2015] EWHC 361, ¶ 22 (a secondary jurisdiction tribunal should “give effect to” an annulment order “unless it offends . . . domestic concepts of public policy”) (quotations omitted).
[36] The dissent also addresses the interest in enforcing arbitral awards, saying
this “pro-enforcement bias . . . is better understood as a pro-comity bias” because “[t]he
extension of comity is a first principle of the Convention.” Dissent at 50. But the
Convention says “[e]ach Contracting State
shall
recognize arbitral awards as binding,”
21 U.S.T. 2517, art. III, and that “[r]ecognition and enforcement of [an] [arbitral]
award
may be
refused” if it “has been set aside,”
id.
, art. V(1)(e). The dissent’s
“bias” characterizations do not stand up under the Convention’s mandatory language
for enforcement of arbitral awards and permissive language for extending comity to a
foreign annulment order.
See
Restatement (Third) U.S. Law of Int’l Comm. Arb. § 4.16
cmt. b (Am. L. Inst. Proposed Final Draft 2019) (“As with other grounds for granting or
denying recognition or enforcement, public policy is interpreted in light of the
presumption in favor of effectuating [arbitral] awards.”);
see also Pemex
,
[37] As previously discussed, (1) GCC filed an action to annul the Damages Award. 21-1196, App., Vol. II at 383. After the PCT rejected annulment, GCC also (2) unsuccessfully challenged the constitutionality of Bolivia’s arbitration law and (3) argued the Twelfth Judge lacked jurisdiction to enter a Damages Award decision because a different Bolivian trial judge had annulled the Merits Award. 21-1196, App., Vol. V at 1203-04.
[38] GCC failed to inform this court in Compañía I that it had filed a queja . In its briefing, GCC represented that “proceedings regarding the annulment of the Damages Award remain[ed] pending” because it had argued to the Twelfth Judge that she “lacked jurisdiction to rule on the Damages Award because it was effectively nullified by the annulment of the Merits Award.” 19-1151, Aplt. Br. at 10. But GCC never mentioned that it had initiated a new queja or appealed to the PCT. Now GCC seeks to benefit from the fact that the queja was pending during Compañía I . It argues here that “[h]ad the 2020 PCT Order issued only a few weeks earlier, this Court could have considered it” in Compañía I . 21-1196, Aplt. Br. at 34.
[39] As we explain below, in proceedings involving execution on a money judgment, a federal court applies the rules of procedure of the state where it is located. Fed. R. Civ. P. 69(a). Here, the district court was in Colorado, so Colorado rules of civil procedure applied.
[40] Because GCC filed its opening brief on November 16, 2021, five days before the 2021 Mexican Injunction issued, it first mentioned the injunction in its reply brief.
[41] Courts evaluate the extraterritorial reach оf statutes under the canon of statutory
interpretation known as the “presumption against extraterritoriality.”
RJR Nabisco, Inc.
v. Eur. Cmty.
,
[42] It is also undisputed that the third parties holding GCC’s assets were outside the court’s jurisdiction. See 21-1324, Aplt. Br. at 10; 21-1324, Aplee. Br. at 21.
[43] The prior version of Colorado’s turnover rule applied to property “in the hands”
of the debtor.
Hudson
,
[44] Although GCC does not explain why its exempt-assets theory concerns comity, we nonetheless address this argument.
[45] Further undermining GCC’s argument is its acknowledgement that it could transfer treasury shares if a Mexican court ordered it to do so. 21-1324, Aplt. Br. at 34. As the district court said, GCC has “present[ed] no logical reason why a corporation would be permitted to place its repurchased shares on the stock exchange for purchase by a third-party and why a Mexican court would be permitted to order a transfer of those shares to a third-party, but the corporation would be prohibited from transferring the same shares to the same third-party in satisfaction of a foreign judgment.” 21-1324, App., Vol. VII at 1821.
[46] Before the district court, the parties disputed whether Colorado or Mexican law applied to determine whether the assets were exempt from execution. 21-1324, App., Vol. VII at 1814. On appeal, neither party challenges the district court’s choice-of-law analysis.
[47] CIMSA cites a secondary source stating that under Mexican law, “enforcement is done through attachment,” suggesting there is no distinction between attachment and execution. 21-1324, Aplee. Br. at 25 (quoting Ovalle Favela, José, Derecho Procesal Civil 293-295 (Oxford University Press) (2012)).
[1] Because I would reverse in Case No. 21-1196, I do not reach the turnover order in Case No. 21-1324.
[2] The majority suggests GCC acted inequitably by failing to notify the CIMSA I panel of its queja por incumplimiento filing. Maj. Op. at 62 n.38; see also id. at 32 n.13. I disagree. The salient—and undisputed—point is this court (like the district court) knew of ongoing litigation over the Damages Award in Bolivia when it rendered its decision. See CIMSA I , 970 F.3d at 1275 (acknowledging “[t]he parties continue to litigate the [D]amages [A]ward in Bolivia”). That GCC did not further specify those ongoing Bolivian proceedings involved a queja is of no moment, particularly given the observation by the CIMSA I panel it was unable to “render[] consistent[] and logical all of the twists, turns, and orders in the Bolivian proceedings, at least by standards recognizable to American jurists and litigants.” Id. at 1297.
[3] GCC had challenged the arbitral awards in Mexico, too. CIMSA I , 970 F.3d at 1275.
[4] The Merits Award stands in favor of CIMSA. As the district court correctly observed, “[t]he nullification proceedings in the context of the Merits Award did not end favorably for GCC.” R. vol. V at 1213.
[5] Notably,
Jackson
draws this “extraordinary” language from cases where the
reviewing court was concerned with litigants using Rule 60(b) as an
impermissible substitute for direct appeal—a circumstance not presented here.
See, e.g.
,
Servants of Paraclete
v.
Does
,
[6] Citing
Thai-Lao
,
[7] This was also the burden allocation framework understood by the parties and applied by the district court in the Rule 60(b)(5) proceedings. See R. vol. III at 665-67; vol. V at 1215; see also vol. IV at 890-905.
[8] The majority contends Thai-Lao “differ[s] in two significant respects” and thus does not compel vacatur here. Maj. Op. at 31. I respectfully disagree. First , the majority observes here, the district court denied the Rule 60(b)(5) motion, but there, the district court had granted it. Maj. Op. at 31-32. The majority appears to suggest that, where abuse of discretion review is applied, reversal necessarily requires more than affirmance. But the veil of
[9] Considering the decisions of our sister signatories where a treaty is concerned also helps us become more clearly aware of our legal system’s practiсes and biases, which will not always be shared by the other signatories, and some of which may implicitly lead us to favor the categorical righteousness of our own determinations.
[10] S.T.J.J. [Superior Tribunal de Justiça], Sentença Estrangeira Contestada No. 2011/0129084-7, Relator: Min. Jorge Mussi, 16.12.2015, (Braz.) available at STJ - Jurisprudência do STJ (finding an award annulled in Argentina to be null in Brazil); cf. Corte Suprema de Justicia [C.S.J.] [Supreme Court], 8 september 2011, EDF Internacional S.A. c. Endesa Latinoamericana S.A. et al. , no. 4390-2010) (Chile), available at Base Jurisprudencial del Poder Judicial (pjud.cl) (refusing to enforce judgment in Chile that was set aside in Argentina).
[11] See, e.g. , Bundesgerichtshof [BGH] [Federal Court of Justice] Feb. 22, 2001, 23 Neue Juristische Wochenschrift [NJW] 1730, 1730-31 (“If the arbitral award is not yet binding in the issuing State or if it has been set aside, it must be refused recognition in the executing State.”) [translated]; Oberlandesgericht [OLG] München [Higher Regional Court] Jul. 30, 2012, 6 Zeitschrift für Schiedsverfahren [SchiedsVZ] 339, 341 (“If a foreign arbitral award is set aside in the country of origin, it can no longer have any effect in Germany[.]”) [translated].
[12] Tribunal fédérale [TF] [Federal Supreme Court] Dec. 8, 2003, 4P.173/2003/ech (Switz.) (“Pursuant to [Article V(1)(e)], enforcement of an arbitral award must be refused if the party objecting to enforcement provides proof that the award . . . [has been] set aside or suspended by a competent authority in the country in which, or pursuant to which law, it was rendered.”) (emphasis added) [translated]; Hoge Raad der Nederlanden [HR] [Supreme Court of the Netherlands] 24 november 2017, NJ 2019/223 m.nt. H.J. Snijders ([Applicant]/OJSC Novolipetsky Metallurgichesky Kombinat) (Neth.) (placing on party requesting enforcement of annulled award burden of showing “special circumstances” to disregard Article V(1)(e)) [translated].
[13] LCivA 44/21 B.I. Science (2009) Ltd. v. Luminati Networks Ltd. (2021), available at Luminati Networks v. B.I. Science, Judgment of the Supreme Court of Israel, 21 Apr 2021 (jusmundi.com) (“In general, after the arbitral award is set aside in the Original Country, it should not be recognized and enforced by virtue of the New York Convention, except for exceptional cases. For example, the decision to set it aside was made by a judicial forum that is not autonomous and independent.”) [translated].
[14] Maximov v. Open Joint Stock Co. OJSC “Novolipetsky Metallurgichesky Kombinat” [2017] EWHC (Comm) 1911 (emphasis added); see also Malicorp v. Government of the Arab Republic of Egypt [2015] EWHC (Comm) 361.
[15] See, e.g. , Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., Oct. 9, 1984, Bull. civ. I, No. 248 (Fr.) (holding French courts must apply “more-favorable-right” provisions of domestic law).
[16]
Esso Expl. & Prod. Nigeria Ltd.
v.
Nigerian Nat’l Petroleum Corp.
, 40 F.4th
56, 71 (2d Cir. 2022) (“[T]he standard . . . for evaluating a petition to enforce
an arbitral award that has been annulled in the primary jurisdiction is, simply,
whether the foreign judgment setting aside the award is . . . ‘repugnant to
fundamental notions of what is decent and just’ in the United States.”) (citation
omitted);
Getma
,
[17] Nor is it the legal standard understood by the parties. In opposing Rule 60(b)(5) relief, CIMSA identified at least five separate grounds on which the district court should find the 2020 PCT Orders to be the product of corruption or bias or brazen legal error. CIMSA did not rely on the repugnancy of enforcement ; it offered, instead, reasons a U.S. court might find the foreign judgment repugnant.
[18] The majority first affirmatively states “[t]he Second Circuit articulated” the repugnancy-enforcement test used here, Maj. Op. at 33, but later, the majority claims only that the Second Circuit in Pemex and Thai-Lao never explicitly rejected its approach, id. at 42. Respectfully, the majority and I must read these opinions very differently. In both Pemex and Thai-Lao , the Second Circuit’s central focus for public policy purposes was the foreign order itself. See, e.g. , Pemex , 832 F.3d at 108 (finding extension of comity inappropriate in part because Mexican judgment was based on “[r]etrоactive legislation that cancels existing contract rights” and “is repugnant to United States law”).
[19] At note 22, the majority claims this “reading conflicts with the overarching conclusion in Pemex ” and further contends the Second Circuit “plainly was primarily concerned with the enforcement of, or giving effect to,” the Mexican order, not the repugnancy of the Mexican order itself. The majority’s
[20] The majority says “presumption of comity” is a phrase that “does not appear
in the Convention or any of the cases discussed here.” Maj. Op. at 57. Yet that
language derives from, and faithfully describes, the applicable law.
See Pemex
,
832 F.3d at 106 (“Accordingly, ‘a final judgment obtained through sound
procedures in a foreign country is generally conclusive . . .
unless
. . .
enforcement of the judgment would offend the public policy of the state in
which enforcement is sought.’” (alterations and emphasis in original) (quoting
Ackermann
,
[21] According to the majority, “The different procedural posture of this case compared to Pemex should make our deference to the district court stronger because GCC sought to undo a judgment.” Maj. Op. at 51 n.30. Again, I fail to understand how deferential appellate review can insulate legal error, notwithstanding any difference in procedural posture.
[22] In grounding its new permissive approach to the Convention’s public policy exception, the majority appears to conflate “public policy” in the general sense—i.e., the way we might discuss zoning policy—with “public policy” in the Convention’s Article V(2)(b) exception. Maj. Op. at 55 (“[T]he Convention . . . does not define ‘public policy’ and says nothing about what counts as a valid public policy concern.”). Perhaps the majority is suggesting any and every U.S. “public policy” is a “public policy” for purposes of the Convention, but I see no support for such an unbounded approach.
[23] Our courts have rejected a “doctrine of disability at self-correction.”
Helvering
v.
Hallock
,
[24] GCC argues convincingly that it was availing itself of rights and remedies under Bolivian law. Opening Br. at 39-44. But in describing the procedural history, the majority uses language that adds an air of the disreputable to what appears just to be lawyering : “GCC convinced a different chamber of [the PCT] to invalidate its prior decision,” Maj. Op. at 2; “GCC initiated a new attempt in Bolivia to annul the Damages Award and succeeded,” id. at 45; “GCC initiated a new attempt at annulment and ultimately succeeded,” id. at 47; “Based on GCC’s repeated attempts to challenge the Damages Award . . .” id. ; “Here, GCC attempted to undo the Confirmation Judgment,” id. at 49; “GCC thus continued raising the same challenges in Bolivia until it received the answer it wanted.” at 62 (emphases added). Significantly, the district court did not suggest GCC’s arguments were frivolous or made in bad faith. The record would not support such a conclusion anyway.
[25] The majority’s reliance on
In re Arb. Between Chromalloy Aeroservices &
Arab Republic of Egypt
,
[26] There is also, as the majority correctly observes, a Mexican court decision
forbidding GCC from complying with any asset turnover requests globally,
based on the comity that court afforded to the Bolivian PCT. Reply Br. Addenda
2-4. I note this court in
CIMSA I
(1) observed pending proceedings in Mexico
regarding the Awards’ validity and (2) believed they were more efficient than
those here.
CIMSA I
,