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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
| REPUBLIC OF PANAMA, Petitioner, v. JAIME JURADO and NATIONS ENERGY CORPORATION, Respondents. | ) Case No. __________ |
MEMORANDUM OF LAW IN SUPPORT OF PANAMA’S PETITION TO CONFIRM
AND ENFORCE FOREIGN ARBITRATION AWARD PURSUANT TO 22 U.S.C. § 1650a
Petitioner the Republic of Panama (“Panama”) respectfully submits this memorandum of
law in support of its petition to confirm and enforce the arbitration award (the “Award”) issued
on November 24, 2010, by an arbitral tribunal in International Centre for Settlement of
Investment Disputes (“ICSID”) Case No. ARB/06/19. The Award held in favor of Panama and
against Respondents Jaime Jurado (“Jurado”) and Nations Energy Corporation (“Nations”) as
well as Electric Machinery Enterprises Inc. (“EME”), which is in a Chapter 11 bankruptcy
proceeding in the bankruptcy court for this District and therefore not a party to this action.
ICSID is an autonomous international institution created under the auspices of the World
Bank to provide an impartial forum for the resolution of certain disputes between sovereign
states and foreign investors. Arbitration in the ICSID forum is governed by the Convention on
the Settlement of Investment Disputes Between States and Nationals of Other States (the “ICSID
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Convention”), Mar. 18, 1965, 575 U.N.T.S. 159, and ICSID’s Rules of Procedure for Arbitration
Proceedings, available at http://icsid.worldbank.org/ICSID/ICSID/RulesMain.jsp.
On August 3, 2006, Respondents Jurado and Nations as well as EME filed with ICSID a
Request for Submission to Arbitration (“Request for Arbitration”) against Panama. Jurado is a
resident of Tampa, Florida. Nations is an Arizona corporation with its principal place of
business in Florida. EME is a Florida corporation with its principal place of business in Florida.
EME is currently in a Chapter 11 bankruptcy proceeding in the bankruptcy court for this District,
styled In re Electric Machinery Enterprises, Inc., No. 8:08-bk-08642-MGW (Bankr. M.D. Fla.),
jointly administered under case number 8:08-bk-08639-MGW (Bankr. M.D. Fla.). Jurado owns
or is otherwise affiliated with both Nations and EME.
In the ICSID arbitration, Jurado, Nations, and EME alleged that Panama unlawfully
denied them the right to transfer certain tax credits to which they claimed they were entitled
based on their investment in a Panamanian company known as Corporación Panameña de
Energía S.A. (“COPESA”). Panama denied Claimants’ allegations in full and sought dismissal
of their claims. Panama also requested an award of the costs of the arbitration plus Panama’s
defense costs and attorneys’ fees.
On November 24, 2010, after briefing and a week-long arbitration hearing in
Washington, D.C., the ICSID tribunal issued an award (the “Award”) in favor of Panama and
against Jurado, Nations, and EME. An official, certified copy of the Award is attached as
Exhibit A to the Declaration of Whitney Debevoise (“Debevoise Declaration”). An unofficial
translation of the Award is attached as Exhibit B to the Debevoise Declaration. The Award
dismissed in full the claims against Panama and awarded a total of US$4,587,219.17 to Panama
for half of the arbitration costs and a portion of Panama’s defense costs and attorneys’ fees.
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Debevoise Decl. Ex. A ¶¶ 715-16 & Ex. B ¶¶ 715-16. The Award further provides that Jurado,
Nations, and EME are jointly and severally liable to Panama for this amount. Id.
On March 21, 2011, Claimants applied to ICSID for annulment of the Award. Debevoise
Decl. ¶ 5. On May 9, 2011, pursuant to Article 52(3) of the ICSID Convention, ICSID appointed
an ad hoc Committee to consider Claimants’ application for annulment. On June 15, 2012, the
ICSID ad hoc Committee issued an Order of Discontinuance of the annulment proceeding based
on Claimants’ failure to pay a deposit for the costs of the annulment proceeding, as ordered by
the ad hoc Committee. Id. ¶ 5 & Ex. C. The Award is thus final and not subject to further
review by ICSID or otherwise. Id. ¶ 6. Nevertheless, neither Respondents Jurado and Nations
nor EME has paid any part of the amount owed to Panama under the Award, despite Panama’s
efforts to collect payment. Id. ¶ 7.
Section 1650a(a) of Title 22, U.S.C., provides as follows:
An award of an arbitral tribunal rendered pursuant to chapter IV of
the [ICSID] convention shall create a right arising under a treaty of
the United States. The pecuniary obligations imposed by such an
award shall be enforced and shall be given the same full faith and
credit as if the award were a final judgment of a court of general
jurisdiction of one of the several States. The Federal Arbitration
Act (9 U.S.C. 1 et seq.) shall not apply to enforcement of awards
rendered pursuant to the convention.
22 U.S.C. § 1650a(a). Under Section 1650a(b), “[t]he district courts of the United States . . .
shall have exclusive jurisdiction over actions and proceedings under subsection (a) of this
section, regardless of the amount in controversy.” Id. § 1650a(b).
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Section 1650a implements Article 54 of the ICSID Convention, which provides as
follows:
Each Contracting State shall recognize an award rendered pursuant
to this Convention as binding and enforce the pecuniary
obligations imposed by that award within its territories as if it were
a final judgment of a court in that State. A Contracting State with
a federal constitution may enforce such an award in or through its
federal courts and may provide that such courts shall treat the
award as if it were a final judgment of the courts of a constituent
state.
ICSID Convention art. 54(1). Article 54 further provides that “[a] party seeking recognition or
enforcement in the territories of a Contracting State shall furnish to a competent court or other
authority which such State shall have designated for this purpose a copy of the award certified by
the Secretary-General.” Id. art. 54(2).
The Award is subject to automatic recognition and enforcement in the United States
under 22 U.S.C. § 1650a and Article 54 of the ICSID Convention. An arbitral tribunal rendered
the award in favor of Panama in the arbitration brought by Jurado, Nations, and EME under the
ICSID Convention. The Award requires Respondents Jurado and Nations as well as EME to pay
a total of US$4,587,219.17 to Panama. These pecuniary obligations in the Award “shall be
enforced and shall be given the same full faith and credit as if the award were a final judgment of
a court of general jurisdiction of one of the several States.” 22 U.S.C. § 1650a(a).
There is no basis for Respondents to challenge the Award in this Court or otherwise.
Under 22 U.S.C. § 1650a(a), the Federal Arbitration Act—including the provisions governing
court challenges to arbitration awards—do not apply to recognition and enforcement of ICSID
arbitration awards such as the Award. No other law allows a party to challenge an ICSID award
in court in the United States or otherwise outside of ICSID. Following the Order of
Discontinuance of the annulment proceeding, the Award is not subject to further review by
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ICSID. Accordingly, there is no obstacle to this Court immediately confirming and enforcing the
award and entering judgment against each of the Respondents for the full amount of the Award.
For the reasons set forth above, Panama respectfully requests that the Court grant the
Petition and enter judgment against each of the Respondents to confirm and enforce the
November 24, 2010 ICSID arbitration award, award Panama the sum of US$4,587,219.17, plus
post-judgment interest and costs in this action, as well as such other relief as the Court may deem
just and proper.
Dated: July 24, 2012 |
Respectfully submitted, |
Signature |
|
Whitney Debevoise |
|
Signature |
|
Donald R. Kirk |
|
Counsel for Petitioner |