Zeyad Abouellail, <\/strong>Legal Content Officer at Jus Mundi<\/strong><\/a><\/strong><\/p>\n\n\n\n
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\nIntroducing “Arbitration Aftermath” by Zeyad Abouellail: Your guide to the latest post-award developments in the evolving landscape of investor-State and commercial arbitration. Each week, Zeyad explores a range of post-award news involving sovereign States with a global perspective \u2013\u2013 from post-award settlements, compliance with awards, to recognition and enforcement procedures, annulment, and more.<\/p>\n\n\n\n
\nDiscover more digests<\/a><\/div>\n<\/div>\n<\/blockquote>\n\n\n\n<\/div>\n\n\n\n
\n\n\n\nDeutsche Telekom v. India<\/strong><\/a>\u00a0<\/h2>\n\n\n\n
Deutsche Telekom Obtains Enforcement of USD 93 Million Award Against India in the US<\/strong><\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\nPCA Case No. 2014-10<\/strong>
Institution:<\/strong> PCA (Permanent Court of Arbitration)<\/a>
Tribunal:<\/strong>\u202fGabrielle Kaufmann-Kohler (President), Daniel M. Price (Appointed by the claimant), Brigitte Stern (Appointed by the State)
Seat of arbitration:<\/strong>\u202fGeneva, Switzerland <\/p>\n\n\n\n
\n\n\n\n<\/div>\n\n\n\nOn March 27, the US District Court for the District of Columbia\u202fdismissed<\/a>\u202fIndia\u2019s attempt to oppose enforcement of a USD 93 million BIT award won by Deutsche Telekom and confirmed the award.\u202f <\/p>\n\n\n\n
Background<\/strong> <\/p>\n\n\n\n
The dispute, which has involved multiple arbitrations and court proceedings, stems from a contract signed in 2005 between Devas Multimedia Private (\u201cDevas\u201d) and Antrix Corporation (the commercial arm of the Indian Space Research Organisation) for the procurement of S-band satellites aimed at providing high-speed internet services.\u202f <\/p>\n\n\n\n
Following Antrix\u2019s termination of the contract, Devas initiated an ICC arbitration against Antrix in 2011, and three Mauritius-based shareholders of Devas launched an arbitration under the\u202fMauritius \u2013 India BIT<\/a>\u202fin 2012 (CC\/Devas v. India 1<\/a>). A second treaty arbitration between the parties is currently pending at the PCA (CC\/Devas v. India 2<\/a>). (See our previous digests\u202fhere<\/a>;\u202fhere<\/a>;\u202fhere<\/a>). <\/p>\n\n\n\n
Deutsche Telekom (\u201cDT\u201d), a minority indirect shareholder of Devas, launched an arbitration under the\u202fGermany \u2013 India BIT<\/a>\u202f(\u201cBIT\u201d) in 2013.\u202f <\/p>\n\n\n\n
In a December 2017\u202fInterim Award<\/a>, the tribunal upheld jurisdiction and found India liable for breaching the BIT\u2019s fair and equitable treatment standard. The Swiss Federal Tribunal (\u201cSFT\u201d)\u202fdismissed<\/a>\u202fIndia\u2019s set-aside bid in December 2018. <\/p>\n\n\n\n
In a May 2020\u202fFinal Award<\/a>, the tribunal ordered India to pay DT USD 93.3 million in damages plus interest and a part of DT\u2019s costs.\u202f <\/p>\n\n\n\n
India applied to the Swiss Federal Tribunal to review both the interim and final awards, arguing fraudulent and unlawful investments and sought remittance of the case to the arbitral tribunal. However, in March 2023, the Swiss Federal Tribunal\u202fdismissed<\/a>\u202fIndia\u2019s request.\u202f <\/p>\n\n\n\n
Enforcement of the award in the US\u202f<\/strong> <\/p>\n\n\n\n
DT\u202fapplied<\/a>\u202fto enforce the award in the US in April 2021. The proceedings were\u202fstayed<\/a>\u202fin July 2022, pending the conclusion of the Swiss revision proceedings. The stay was\u202flifted<\/a>\u202fin December 2023.\u202f <\/p>\n\n\n\n
In its motion to dismiss the enforcement petition, India first argued that Article 9(2)(b)(v) of the BIT requires enforcement of awards against India to proceed under Indian law (and similarly for Germany, under German law). As such, enforcement should be denied under the doctrine of\u202fforum non conveniens.<\/em>\u202f <\/p>\n\n\n\n
In the March 27\u202fMemorandum Opinion<\/a>, Judge Richard J. Leon ruled that this argument can be \u201cdispatched with alacrity<\/em>\u201d. He explained that the Circuit has \u201csquarely held\u201d \u2018that the forum non conveniens is not available in proceedings to confirm a foreign arbitral award because only US courts can attach foreign commercial assets found within the United States\u2019\u201d.<\/em>\u202f <\/p>\n\n\n\n
Judge Leon then elaborated that this applies\u202f\u201ceven if the parties purported to agree to a different forum selection, which, at any rate, is an assumption fairly disputed by DT here\u201d.<\/em>\u202f <\/p>\n\n\n\n
India also contended that the Court lacked subject-matter jurisdiction under the Foreign Sovereign Immunities Act (\u201cFSIA\u201d) because India did not waive its sovereign immunity and did not agree to arbitrate the dispute with DT.\u202f <\/p>\n\n\n\n
Judge Leon emphasised that the issue of arbitrability of a dispute is not a jurisdictional question under the FSIA. He noted that DT met its burden of producing the jurisdictional facts for the application of the FSIA\u2019s arbitration exception.\u202f <\/p>\n\n\n\n
He concluded that India is not entitled to immunity under the FSIA. <\/p>\n\n\n\n
Judge Leon then explained that India\u2019s arbitrability arguments could be construed as a defense under the\u202fNew York Convention<\/a>. But even then, he highlighted that the Court \u201chas no power to second guess<\/em>\u201d the tribunal\u2019s findings on arbitrability.\u202f <\/p>\n\n\n\n
He also noted that the BIT\u2019s incorporation of the\u202fUNCITRAL Rules<\/a>\u202foffers \u201cclear and unmistakable evidence that the parties agreed to arbitrate arbitrability<\/em>\u201d. <\/p>\n\n\n\n
Finally, Judge Leon rejected India\u2019s request to reserve its merits defenses under the New York Convention for a later stage. He found that these arguments had already been raised before the arbitral tribunal, the Swiss Courts, and US courts and that India \u201ccannot demand another bite at the apple<\/em>.\u201d\u202f <\/p>\n\n\n\n
He concluded that \u201cIndia is not entitled to another opportunity to develop its Article V defenses<\/em>\u202f[\u2026]\u202fenough is enough!<\/em>\u201d and confirmed the award.\u202f <\/p>\n\n\n\n
Other enforcement proceedings<\/strong> <\/p>\n\n\n\n
In Switzerland, DT obtained\u202fan exequatur<\/a>\u202fof the final award in Geneva in 2020.\u202f <\/p>\n\n\n\n
In January 2023, the Berlin Higher Regional Court\u202fenforced<\/a>\u202fthe award, but only up to USD 10 million.\u202f <\/p>\n\n\n\n
DT also successfully enforced the award in Singapore, with the Singapore Court of Appeal\u202fupholding<\/a>\u202fits enforcement in December 2023 (see our previous digest\u202fhere<\/a>). <\/p>\n\n\n\n
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\n\n\n\nYukos Universal v. Russia<\/strong><\/a>
Hulley Enterprises v. Russia<\/strong><\/a>
Veteran Petroleum v. Russia<\/strong><\/a> <\/h2>\n\n\n\nDutch Supreme Court Confirms Attachment of Russian Trademarks by Yukos Shareholders<\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\nPCA Cases No. 2005-03\/AA226, 2005-04\/AA227, 2005-05\/AA228<\/strong>
Institution<\/strong>: PCA (Permanent Court of Arbitration)
Tribunal<\/strong>:\u202fL. Yves Fortier (President), Charles H. Poncet (Appointed by the claimants), Stephen M. Schwebel (Appointed by the State)
Seat of arbitration<\/strong>:\u202fThe Hague, Netherlands <\/p>\n\n\n\n
\n\n\n\n<\/div>\n\n\n\nOn March 22, the Dutch Supreme Court\u202fdismissed<\/a>\u202fRussia\u2019s appeal against the attachment of trademarks and copyrights of Russian vodka brands.\u202f <\/p>\n\n\n\n
Background<\/strong> <\/p>\n\n\n\n
In April 2016, the Hague District Court\u202fset aside<\/a>\u202fthe USD 50 billion\u202fawards<\/a>, holding that the tribunal lacked jurisdiction to hear the dispute under the\u202fEnergy Charter Treaty<\/a>. However, the awards were\u202freinstated<\/a>\u202fby the Hague Court of Appeal in February 2020.\u202f <\/p>\n\n\n\n
In November 2021, the Dutch Supreme Court\u202fdismissed<\/a>\u202fRussia\u2019s jurisdictional challenge to the award and most of its other objections.\u202f <\/p>\n\n\n\n
Nevertheless, after finding that Russia could raise procedural fraud claims in the set-aside proceedings – not only in the context of revocation proceedings as the Hague Court of Appeal had ruled – the Supreme Court remanded the case to the Amsterdam Court of Appeal to address Russia\u2019s procedural fraud arguments.\u202f <\/p>\n\n\n\n
Last February, the Amsterdam Court of Appeal\u202fdismissed<\/a>\u202fRussia\u2019s final attempt to set aside the Yukos awards (see our previous digest\u202fhere<\/a>). <\/p>\n\n\n\n
Attachment of Russia\u2019s Assets in FKP<\/strong> <\/p>\n\n\n\n
In April 2020, the District Court of The Hague granted leave to enforce the awards, and the investors targeted Russia\u2019s assets in state-owned FKP Sojuzplodoimport (\u201cFKP\u201d). The investors were successful in attaching trademarks and copyrights used in the marketing of Russian vodka in the Benelux region. <\/p>\n\n\n\n
In October 2020, the attachments were\u202flifted<\/a>\u202fby the Hague Court of Appeal.\u202f <\/p>\n\n\n\n
The attachment was later\u202fpartially confirmed<\/a>\u202fin June 2022 against Russia but not \u201cto the extent that it has been imposed at the expense of FKP<\/em>\u201d and to \u201cthe copyrights on the design of the products produced and sold under the Brands by or with the permission of FKP and\/or the Russian Federation.<\/em>\u201d <\/p>\n\n\n\n
Russia and FKP both appealed the confirmation of the attachment.\u202f <\/p>\n\n\n\n
In September, Dutch Advocate-General Vlas recommended that the Supreme Court upholds the attachment (see our previous digest\u202fhere<\/a>). <\/p>\n\n\n\n
Supreme Court Confirms Attachment of Russia\u2019s FKP assets<\/strong> <\/p>\n\n\n\n
Before the Supreme Court, Russia\u2019s arguments related to the status of the awards were due to the set-aside proceedings. Russia contended that the 2021 Supreme Court decision had revived the Hague District Court judgment that set aside the awards. As a consequence, the awards were set aside, and enforcement was no longer possible.\u202f <\/p>\n\n\n\n
In two separate judgments (here<\/a>;\u202fhere<\/a>), the Supreme Court dismissed Russia and FKP\u2019s appeals.\u202f <\/p>\n\n\n\n
The Supreme Court noted that the Hague District Court judgments that set aside the awards have lost their supporting basis since the Supreme Court dismissed Russia\u2019s arguments on the lack of a valid arbitration agreement in its 2021 decision.\u202f\u202f <\/p>\n\n\n\n
The Court also rejected Russia\u2019s other appeal grounds without motivating its decision.\u202f <\/p>\n\n\n\n
In a\u202fpress release<\/a>, Tim Osborne, CEO of GML (parent company of the investors), says that \u201cthis ruling of the Supreme Court paves the way for the sale of the Russian Federation\u2019s assets in satisfaction of the arbitral awards<\/em>\u201d. The trademarks will be sold at a public auction.\u202f <\/p>\n\n\n\n
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\n\n\n\nOmega Engineering and Rivera v. Panama<\/strong><\/a> <\/h2>\n\n\n\n
Panama files for enforcement of USD 4.8 million costs award against US investor<\/strong>\u00a0<\/strong><\/strong><\/strong><\/h4>\n\n\n\n
<\/div>\n\n\n\nICSID Case No. ARB\/16\/42<\/strong>
Institution<\/strong>:\u202fICSID (International Centre for Settlement of Investment Disputes)
Tribunal<\/strong>:\u202fLaurence Shore (President), Horacio A. Grigera Na\u00f3n (Appointed by the claimants), Zachary Douglas (Appointed by the State) <\/p>\n\n\n\n
\n\n\n\n<\/div>\n\n\n\nOn March 21, Panama\u00a0filed<\/a>\u00a0for enforcement of an ICSID\u00a0award<\/a>\u00a0that granted it USD 4.8 million in costs against US-based Omega Engineering and its owner, Oscar Rivera.<\/p>\n\n\n\n
The dispute arose out of multiple contracts for the construction of medical hospitals, a higher education center, a municipal hall, and other facilities. <\/p>\n\n\n\n
The investors\u202finitiated<\/a>\u202farbitration in 2016 under the\u202fPanama-USA BIT<\/a>\u202fand\u202fTPA<\/a>\u202f(\u201ctreaties\u201d), alleging improper termination of multiple contracts as well as failure to pay invoices and issue permits. The investors also alleged that Panama wrongfully initiated a criminal investigation of Mr. Rivera. According to the investors, Panama\u2019s actions violated the treaties\u2019 provisions on fair and equitable treatment, full protection and security, creeping expropriation, and umbrella clause.\u202f <\/p>\n\n\n\n
In October 2022, the arbitral tribunal\u202frejected<\/a>\u202fthe investors\u2019 claims on the merits and granted Panama a portion of its costs for USD 4.8 million.\u202f <\/p>\n\n\n\n
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