HIDROELECTRICA SANTA RITA S.A., а Guatemalan company v. CORPORACION AIC, SA, a Guatemalan company
No. 23-12519
United States Court of Appeals For the Eleventh Circuit
October 16, 2024
Non-Argument Calendar
Before WILSON, LUCK, and TJOFLAT, Circuit Judges.
Appeal from the United States District Court for the Southern District of Florida
D.C. Docket No. 1:21-cv-23807-RNS
Corporación AIC, S.A. (“AICSA“) appeals the District Court‘s order granting the petition of Hidroeléctrica Santa Rita S.A. (“HSR“) to confirm and enforce an arbitration award. After careful review, we affirm the District Court‘s order.
I. Background
AICSA and HSR are companies incorporated under the laws of Guatemala. HSR engaged AICSA for the full turnkey, design, engineering, procurement, construction, start-up, and commissioning of a new hydroelectric power plant. The power plant would be located on the Icbolay River in Cobán, a municipality in Guatemala. To govern their transaction and outline their obligations, AICSA and HSR entered into the Engineering, Procurement, and Construction Agreement (the “EPC Contract“). The EPC Contract requires disputes between the parties to be resolved through arbitration.
The local indigenous community did not support the construction of the power plant. Members of the community blocked access tо the construction site and threatened those working on it. Citing force majeure, HSR issued a notice to AICSA to suspend work under the EPC Contract. And HSR later issued a notice of termination for convenience of the EPC Contract.
The parties submitted briefs to the arbitral tribunal (the “Tribunаl“) to resolve their disputes. In its first ruling, the Tribunal concluded Novacom could not join the arbitration. In the Final Award, the Tribunal held that AICSA is entitled to retain $2,429,627.08 and €703,290.00 for work completed pursuant to the EPC Contract. AICSA, however, was required to return to HSR $7,017,231.52 and €435,168.00, plus interest. And, pertinent to this appeal, the Tribunal dismissed AICSA‘s claims that HSR breached the EPC Contract due to HSR‘s allegеd engagement in bribery schemes.
The Tribunal further issued a “Decision and Addendum” in response to applications by AICSA and HSR to correct and interpret the Final Award. In this Decision and Addendum, the Tribunal
Dissatisfied with the Tribunal‘s decision, AICSA initiated an action in the District Court seeking to vacate the arbitral award on the basis that the Tribunal had exceeded its powers. Corporacion AIC, S.A. v. Hidroelectrica Santa Rita S.A., No. 19-20294-CIV, 2020 WL 4478424, at *1 (S.D. Fla. Aug. 4, 2020). The District Court denied the petition and motion to vacate because Eleventh Circuit precedent foreclosed AICSA‘s claim that a party to an arbitrаtion under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention“) could challenge an arbitration panel‘s decision on the exceeding powers ground delineated in
Finally reaching the merits of AICSA‘s claim that the Tribunal exceeded its powers, the District Court grantеd HSR‘s petition to confirm the arbitral award. AICSA timely appealed, and we now must determine whether the Tribunal exceeded its powers.
II. Standard of Review
“We review the denial of a motion to vacate and the confirmation of international arbitration awards de novo.” Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, 78 F.4th 1252, 1261 (11th Cir. 2023) (first citing Técnicas Reunidas de Talarа S.A.C. v. SSK Ingeniería y Construcción S.A.C., 40 F.4th 1339, 1343 (11th Cir. 2022); and then citing Gianelli Money Purchase Plan & Tr. v. ADM Inv. Servs., Inc., 146 F.3d 1309, 1311 (11th Cir. 1998)). “[W]e accept the district court‘s findings of fact to the extent they are not clearly erroneous.” Scott v. Prudential Sec., Inc., 141 F.3d 1007, 1014 (11th Cir. 1998), overruled in part on other grounds by Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 128 S. Ct. 1396 (2008). “As a general rule, our review of an arbitration decision itself is extremely limited, ‘among the narrowest known to the law,’ for the very reason that arbitration is not litigation.” Hidroelectrica I, 34 F.4th at 1293
III. Discussion
The New York Convention is an international treaty which the United States acceded to in 1970, the purpose of which is to “encourage the recognition and enforcement of international arbitral awards to relieve congestion in the courts and to provide parties with an alternative method for dispute resolution that [is] speedier and less costly than litigation.” Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir. 1998) (alteration in original) (intеrnal citations and quotation marks omitted). Congress implemented the New York Convention through Chapter 2 of the FAA. See
One of the grounds for vacating an arbitral award in Chapter 1 of the FAA is “where the arbitrators exceeded their powers, оr so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”
Consequently, “an arbitral decision ‘even arguably construing or applying the contract’ must stand, regardless of a court‘s view of its (de)merits.” Oxford Health Plans LLC v. Sutter, 569 U.S. 564, 569 (2013) (quoting E. Associated Coal Corp. v. United Mine Workers of Am., Dist. 17, 531 U.S. 57, 62, 121 S. Ct. 462 (2000)). A court may overturn an arbitral determination when it reflects the arbitrator‘s “own notions of [economic] justice’ rather than ‘draw[ing] its essence from the contract.‘” Id. (alteration in original) (quoting E. Associated Coal Corp., 531 U.S. at 62).
Accordingly, “the sole question for us is whether the arbitrator (even arguably) interpreted the parties’ contract, not whether he got its meaning right or wrong.” Sutter, 569 U.S. at 569. This is a “high hurdle” because it is not enough to show that the arbitral authority committed even a serious error. Stolt-Nielson S.A. v. AnimalFeeds Int‘l Corp., 559 U.S. 662, 671 (2010)
AICSA contends that the Tribunal exceeded its authority in three ways. First, the Tribunal required AICSA to maintain the Advance Payment Bonds or, if those Bonds had expired, to obtain new ones. Second, the Tribunal denied AICSA‘s claim that HSR breached the EPC Contract‘s anti-corruption provisions. Third, the Tribunal refused to join the subcontractоr Novacom to the arbitration. We address each of AICSA‘s contentions in turn.
A.
AICSA first contends that the Tribunal exceeded its authority by determining that the EPC Contract requires AICSA to furnish new bonds if the Advance Placement Bonds have lapsed.
The EPC Contract required AICSA to furnish the Bonds to secure any obligations regarding the advance payments it received from HSR. If the EPC Contract terminated, the agreement provided that “all of the security provided by either Party, including the letters of the credit and the bonds, shall remain in full force and effect until the beneficiary of any such security determines . . . that all claims and potential claims are fully and finally settled and satisfied.” A dispute concerning HSR‘s payments to AICSA arose when the EPC Contract terminated, resulting in the arbitration at issue. When the Tribunal issued its Final Award in the arbitration, it ordered AICSA to “keep the Advance Payment Bonds in place” through AICSA‘s full payment of the amounts owed to HSR. The
We agree with the District Court that the Tribunal‘s decision did not “lack[] any contractual basis.” S. Commc‘ns Servs., Inc. v. Thomas, 720 F.3d 1352, 1359 (11th Cir. 2013) (quoting Sutter, 569 U.S. at 571). The Tribunal considered the language in the EPC Contract requiring the Bonds to “remain in full force and effect” until the settlement of all claims as meaning that AICSA must “keep in place” the security covering any to-be-returned advance payments and associated fees, costs, and interest. AICSA contested that its mandate tо “keep in place” the Bonds would require a new bond issuance, but the Tribunal referred to the Oxford Live Dictionary and Merriam Webster to demonstrate that the phrase encompasses an obligation to renew the Bonds if they were to lapse. Indeed, the Tribunal explained it chose this language to track the contractual language of the EPC Contract. The Tribunal at each step based its ruling in an interpretation of the EPC Contract‘s language.
Even if the Tribunal erred in its analysis of the contractual language, it makes no difference to our review as long as the Tribunal construed and applied the underlying contract. See Sutter, 569 U.S. at 569 (citing E. Associated Coal Corp., 531 U.S. at 62). The Tribunal‘s explanations evidence that it engagеd with the contract‘s language, thereby sticking to “[its] delegated task of interpreting a contract” and acting within the bounds of its authority. Id. at 572.
B.
AICSA next contends that the Tribunal exceeded its authority by denying AICSA‘s claim that HSR breached the EPC Contract‘s anti-corruption provisions.
The EPC Contract states that AICSA and HSR would comply with the Foreign Corrupt Practices Act (the “FCPA“).1 While completing the EPC Contract, HSR donated roughly $50,000 in roofing materials to the local Guatemalan community. HSR acknowledged that it paid for the materials at the behest of the local governor, but denied any illicit рurpose in contravention of its contractual obligations. AICSA claimed in arbitration that this payment constituted bribery in violation of the FCPA and thus amounted to a breach of the EPC Contract. The Tribunal‘s ruling denied AICSA‘s claim on two relevant grounds: lack of jurisdiction and lack of evidence.
Moreover, we cannot disturb the Tribunal‘s finding of fact that insufficient evidence supported AICSA‘s claim. Our authority to review arbitration awards under Chapter 1 of the FAA manifests a national policy favoring arbitration with limited review, such that we do not engage in “full-bore legal and evidentiary appeals that
The Tribunal consequently did not exceed its authority by ruling that HSR did not breach the аnti-corruption provisions of the EPC Contract.
C.
Finally, AICSA claims that the Tribunal exceeded its authority by refusing to join Novacom, AICSA‘s subcontractor, to the proceedings.
When HSR provided advance payments to AICSA, a portion of those payments was transmitted to Novacom pursuant to a separate contract between AICSA and Novаcom. And when HSR provided notices of suspension and termination to AICSA under the
We agree with the District Court that the Tribunal‘s decision to deny Novacom‘s joinder did not exceed its authority because the Tribunal arguably interpreted the parties’ contract.2 See Wiregrass, 837 F.3d at 1088. The EPC Contract states that “[i]f the Dispute involves or relates to any [third party] . . . еither Owner or Contractor may include such [third party] as a party to the Arbitration between Owner and Contractor.” The Tribunal parsed the language of this provision to find that the EPC Contract defines “Arbitration” according to the “Dispute” for which arbitration is commenced. A “Dispute” arises from claims asserted by either “Owner” (HSR) or “Contractor” (AICSA). The Tribunal interpreted this contractual language as manifesting an agreement between AICSA and HSR that each has a right to join a third party when arbitrating a claim asserted by HSR or AICSA, but not an
The Tribunal‘s interpretation of the EPC Contract to disallow the joinder of Novacom under these circumstances was not in excess of its authority precisely because it was an interpretation based in the contrаct. AICSA contends that the Tribunal‘s interpretation was a misreading of the contract that effectively nullified that contract term, but the Tribunal explained exactly how it derived its ruling from the contractual language. Even if we were to accept that this interpretation is a misreading of the contract, “a court should not reject an award on the ground that the arbitrator misread the contract.” Misco, 484 U.S. at 38 (citing United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 599 (1960)). That is because an arbitrator does not exceed his power when he makes errors. Gherardi, 975 F.3d at 1237 (citing Stolt-Nielson, 559 U.S. at 671). To vacate an arbitral award on the merits of the arbitrator‘s contract interpretation would make meaningless the parties’ bargained-for provisions establishing the finality of the arbitrator‘s intеrpretation. Enter. Wheel, 363 U.S. at 599. And although AICSA disagrees, the Tribunal did interpret the contract.
IV. Conclusion
Under the highly deferential standard of
AFFIRMED.