District of Columbia Circuit remands a suit to district
court for further proceedings after considering the appealability of a stay
order and the applicability of a writ of mandamus in a case seeking to enforce
a London arbitral award against Belize
Belize is a country slightly smaller than Massachusetts,
formerly British Honduras. It is situated just south of Mexico and north of
Guatemala. In September 2005, the Prime Minister of Belize executed an
accommodation agreement with Belize Telemedia Limited on behalf of the
government of Belize. The agreement allowed Telemedia to acquire property in
order to better accommodate the government’s telecommunications needs. It would
also entitle Telemedia to a tax set‑off, to favorable business tax treatment,
and to exemption from import taxes.
According to the agreement, Belize law would govern the
agreement and that if Telemedia were to sue the government of Belize on the
agreement, then the government would irrevocably and unconditionally waive its
sovereign immunity. The agreement also stated that the London Court of
International Arbitration (LCIA) would resolve any contract disputes pursuant
to its rules.
In February 2008, a new Prime Minister announced that the
agreement was invalid and that he refused to abide by it. Telemedia claimed a breach
of the agreement and, on May 9, 2008, invoked the LCIA arbitration clause. The
Belize government took no part in the proceedings.
The tribunal found that the agreement was valid and, in
March 2009, issued a final award against Belize in the amount of $38 million.
The Prime Minister continued to argue that the agreement was invalid and that
the ruling of a foreign arbitral tribunal did not bind his government.
Telemedia assigned the final award to Belize Social Development Limited (BSDL).
On April 6, 2009, the Attorney General of Belize sued
Telemedia and BSDL in the Belize Supreme Court. The court issued an ex parte
interim injunction prohibiting Telemedia and BSDL from pursuing enforcement of
the final award in any jurisdiction outside of Belize. Telemedia sought to have
the injunction discharged and the final award declared valid and binding on the
government. Instead, the court extended the injunction.
In November 2009, BSDL petitioned a U.S. district court to
confirm and enforce the final award in accordance with section 207 of the
Federal Arbitration Act (FAA), 9 U.S.C. § 201‑208 (2006). The Government moved
in the alternative to stay or to dismiss the petition. BDSL then moved to
suspend the district court’s scheduling order and for a status conference. The
district court denied BSDL’s motion to suspend and its later motions to
clarify. The court granted Belize’s motion to stay the petition to confirm
pending the outcome of the Belize Supreme Court case.
BSDL appealed the stay order or, if the order is not yet
final, asks the appellate court to treat it as a petition for a writ of
mandamus. The U.S. Court of Appeals for the District of Columbia Circuit
vacates the stay order and remands the case to the district court for further
proceedings. The Court begins by determining whether the lower court’s stay is
a final decision for the purpose of appeal under Section 1291. The Court states
that a stay is not ordinarily a final order; however, there is the “effectively
out of court” doctrine that supports an appeal. The Court states, “The
doctrine’s applicability, however, is limited to cases where the object of the
stay is to require all or an essential part of the federal suit to be litigated
outside of federal court.” [Slip op. 8].
“The stay at issue may be sufficiently indefinite as to
require a finding of pressing need, but it is not so indefinite as to
constitute the equivalent of a dismissal under the ‘effectively out of court’
doctrine.” Therefore, the Court holds that the method of appeal BSDL calls for
does not afford it an adequate means of attaining the relief it requests. In
the alternative, BSDL invokes the collateral order doctrine. The Court notes
that it has previously acknowledged the similarities between the requirements
for mandamus and collateral order review.
“In cases where the claim of appealability is not
insubstantial, the court is mindful of the advantage of limiting the use of
appellate recourse in response to stay orders, yet keeping the door open for
the occasional case reflecting abuse of discretionary authority. Because BSDL
has shown a clear and indisputable right to the issuance of the writ and the
writ is appropriate here, we proceed with the analysis under the mandamus
framework.” [Slip op. 9]
Next, the Court finds that BSDL has shown a clear and
indisputable right to the issuance of mandamus because the lower court did not
issue its stay on a ground set forth in the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards [opened for signature June 10, 1958, 21
U.S.T. 2517, 330 U.N.T.S. 3 (“New York Convention”)]. The Court notes that the
government of Belize is unable to cite any authority to support the stay.
“The Agreement provides that the LCIA Rules govern
arbitration arising from any dispute over its terms. Because the arbitration
occurred in London and under the arbitral laws of England, the courts of
England are the competent authority with primary jurisdiction over the Final
Award. Absent proceedings for setting aside or suspending the Final Award in
those courts, the Government of Belize can offer no basis on which to conclude
that the stay of BSDL’s petition for enforcement was properly issued under the
FAA and the New York Convention.” [Slip op. 10]
After evaluating other circuit court opinions on point, the
Court finds that the stay was sufficiently indefinite to require a preliminary
finding of a pressing need. “Therefore the order as issued, staying BSDL’s
petition pending foreign litigation of indefinite duration, exceeded the proper
exercise of discretion by the district court under [Landis v. North American
Co., 299 U.S. 248 (1936)]” [Slip op. 13]
Lastly, the Court finds that mandamus is appropriate because
the FAA provides a carefully structured scheme for the enforcement of foreign
arbitral awards and represents an emphatic federal policy in favor of arbitral
dispute resolution, which applies with special force in the field of
international commerce. The plain terms of the FAA instruct a district court to
confirm an arbitral award unless it finds one of the grounds for refusal or
deferral of recognition or enforcement in the New York Convention.
“No such finding supported issuance of the stay here, and
that alone is sufficient to justify mandamus. Moreover, there could not have
been such a finding under Article VI of the Convention, for no ‘application for
the setting aside or suspension of the award’ had been made to a ‘competent
authority’ in England, the ‘country in which’ and ‘under the laws of which
[the] award was made.’” [Slip op. 13]
“[T]the original jurisdiction vested in the district court
by section 203 of the FAA and the limitations on that authority under section
207 of the FAA defined the district court’s task: to review and grant BSDL’s
petition to confirm the Final Award absent a finding that an enumerated
exception to enforcement specified in the New York Convention applied. The stay
order as issued was not in conformity with federal law and international
commitments, and the indefinite stay, lacking justification by any pressing
need, exceeded the bounds of any inherent authority the district court may have
had to stay proceedings in the interest of judicial economy. Mandamus is
appropriate here to compel the district court to exercise its authority when it
is its duty to do so.” [Slip op. 13‑14]
The Court concludes, however, that it should remand the case
because it may rightfully assume that the district court will conduct further
proceedings not inconsistent with the opinion.
The Dissenter would have dismissed the BSDL’s appeal.
“Mandamus for this case is akin to using a chainsaw to carve your holiday
turkey. Indeed, if you ask me which is the more extraordinary ‑ the District
Court’s temporary stay or this Court’s invocation of mandamus jurisdiction
under these circumstances ‑ I would say the latter.” [Slip op. 16]
Citation: Belize Soc. Dev. Ltd. v. Gov’t of Belize,
668 F.3d 724; 394 U.S.App. D.C. 179 (D.C. Cir. 2012).
**** Mr. William B. Blanchard (“Bill Blanchard”) is a Real Estate Attorney with offices in St. Charles and Oakbrook Terrace, Illinois. Bill specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals. Mr. Blanchard is General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review. - Attorney Profile: https://solomonlawguild.com/william-b-blanchard%2C-esq - Attorney News: https://attorneygazette.com/william-blanchard%2C-esq#40b43d7b-94b2-48d3-b055-1979a636f1e7
