Stephen Kho, Brendan Casey Article on 2nd Circuit Decision re: ICSID Awards Published by Bloomberg
“Second Circuit’s Decision on Enforcing ICSID Awards: Impact and Implications,” an article by Akin Gump international trade partner Stephen Kho and litigation counsel Brendan Casey, has been published by Bloomberg BNA’s International Trade Daily.
The article discusses a recent decision—Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela—by the 2nd Circuit Court of Appeals that makes the Foreign Sovereign Immunities Act the sole basis for enforcing international arbitration awards by the International Center for Settlement of Investment Disputes (ICSID).
The authors note that, prior to the 2nd Circuit ruling, the issue “had been treated differently in various U.S. District Courts with some, notably the District Court for the Southern District New York (‘‘SDNY’’), deciding that the FSIA and its procedural requirements were not mandatory in ICSID award enforcement actions, while others like the District Court of the District of Columbia (‘‘DDC’’) and the Eastern District of Virginia held that the FSIA was the sole basis for jurisdiction over foreign sovereigns and its procedural requirements were mandatory. This appears to be the first U.S. Court of Appeals decision on the issue.”
The article traces the history of ICSID award enforcement in U.S. federal courts, examines the history of Mobil’s arbitral proceedings against Venezuela for that country’s 2007 seizure of the company’s assets in the country, and reviews the 2nd Circuit decision.
Among the implications the authors see going forward is the fact that the 2nd Circuit has made enforcing ICSID awards within the U.S. more difficult, even as it has made ICSID award enforcement within the U.S. more consistent. It has also “clarified the position for ICSID award creditors facing actions for enforcement across U.S. jurisdictions.”
They also note that the decision will likely will shift ICSID award enforcement actions away from the SDNY—and the 2nd Circuit—as the FSIA’s venue requirements provide that actions for enforcement must be made in the District Court for the District of Columbia or in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”
To read the full article, please click here.