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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
|
DP World Djibouti FZCO, Petitioner, v. Republic of Djibouti, Respondent. |
No. 23-cv-1524-CKK-ZMF |
Petitioner DP World Djibouti FZCO (“DP World”) filed this action to recognize and enforce an arbitration award against Respondent, the Republic of Djibouti (“Djibouti”). Pet. to Confirm Foreign Arbitration Award 1 (“Pet.”), ECF No. 1. This case arises from a contractual dispute regarding the construction and operation of a port facility in Djibouti. Id. On January 20, 2022, a tribunal of the London Centre for International Arbitration (“LCIA”) issued an award in favor of DP World. Pet., Ex. A, Third Partial Final Award (“Award”) 41–42, ECF No. 1-2. DP World now moves to enforce the award under Chapter 2 of the Federal Arbitration Act, 9 U.S.C. § 201, et seq., which codifies the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). Pet. at 1. The undersigned recommends that the Petitioner’s motion be GRANTED.
In October 2006, Djibouti and Doraleh Container Terminal (“DCT”) signed a concession agreement, under which DCT was contracted to construct, develop, and manage a container terminal facility. Id. at 6. DCT is a joint venture company owned in part by DP World. Id. at 2.
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DP World was not a party the agreement, but the agreement gave DP World certain rights, including rights to royalties and rights to protect shareholders. Id. at 6. The contract also contained an arbitration clause, which provided for arbitration of any dispute under LCIA rules. Id. at 7.
Djibouti eventually violated terms of the contract and demanded renegotiation of it. Id. at 2. In December 2017, Djibouti purported to cancel the contract, took physical control of the facility, and expelled DP World from Djibouti. Id. at 2, 9.
In February 2018, DP World and DCT commenced arbitration proceedings at the LCIA. Id. at 10. In 2018 and 2020, respectively, LCIA issued first and second partial awards. Id. at 4 n.3. On January 22, 2022, LCIA awarded DP World a judgment of $148,163,408 plus interest, which it now seeks to confirm.1 Award at 41–42. This award summed DP World’s loss of management fees and loss of dividends arising from Djibouti’s breach. Pet. at 12.
On May 26, 2023, DP World filed a Petition to Confirm Arbitration Award. See id. at 15. On March 13, 2024, Djibouti filed a Statement of Non-Opposition to DP World’s petition. Statement of Non-Opp’n to Pet. to Confirm Foreign Arbitration Award 1, ECF No. 24. On April 9, 2024, DP World filed a Notice of Unopposed Petition. Notice of Unopposed Pet. & Submission of Unopposed Proposed Order & Proposed J. (“Unopposed Pet.”) 1, ECF No. 26. DP World requested $189,967,357, which included lost management fees, lost dividends, and interest on each of those principal amounts. Unopposed Pet., Ex. B, Proposed J. 1–2, ECF No. 26-2. DP World had calculated interest up to and including April 15. Id. On July 3, 2023, DP World updated its proposed order, calculating interest up to July 31, 2024. Notice of Unopposed Pet. & Submission
1 DCT was also awarded a judgment, which it pursues in a separate action. Pet. at 3 n.2. ↩
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of Updated Unopposed Proposed Order & Proposed J. (“Updated Proposed Order & J.”) 1, ECF No. 28.
Judicial review of arbitral awards is “extremely limited.” Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 354 (D.C. Cir. 2006) (quoting Teamsters Loc. Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001)). “Courts . . . do not sit to hear claims of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower courts.” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 38 (1987). A court is thus not “authorized to reconsider the merits of an award.” Id. at 36. Indeed, a court must confirm an award even if it “is convinced [the arbitrator] committed serious error.” Major League Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (quoting Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57, 62 (2000)). “It is only when the arbitrator strays from interpretation and application of the agreement and effectively ‘dispense[s] his own brand of industrial justice’ that his decision may be unenforceable.” Id. (quoting Steelworkers v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960)).
This Court “has a continuing duty to examine its subject matter jurisdiction.” Bronner v. Duggan, 324 F.R.D. 285, 294 (D.D.C. 2018). “There are two prerequisites for this Court’s subject-matter jurisdiction here. ‘First, there must be a basis upon which a court in the United States may enforce a foreign arbitral award; and second, Respondents must not enjoy sovereign immunity from such an enforcement action.’” Archirodon Constr. (Overseas) Co. v. Gen. Co. for Ports of
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Iraq, No. 22-cv-1571, 2024 WL 341066, at *2 (D.D.C. Jan. 30, 2024) (brackets omitted) (quoting Diag Human, S.E. v. Czech Republic-Ministry of Health, 824 F.3d 131, 134 (D.C. Cir. 2016)).
This Court has subject matter jurisdiction over this petition. First, “an action or proceeding falling under the [New York] Convention shall be deemed to arise under the laws and treaties of the United States. The district courts . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.” Id. (quoting 9 U.S.C. § 203). “An arbitral award between non-U.S. parties, like the one at issue here, ‘falls under the Convention’ as long as it ‘arises out of a legal relationship, whether contractual or not, which is considered as commercial.’” Id. (brackets omitted) (quoting 9 U.S.C. § 203); see Pet. at 1. “There is no doubt that the Award arises out of such a relationship and thus falls under the Convention.” Achirodon, 2024 WL 341066, at *2; see Pet. at 1–2.
Second, Djibouti has waived its immunity from suit under Section 1605(a)(1), both by acceding to the New York Convention and by agreeing to arbitrate disputes arising under the concession Agreement pursuant to LCIA Rules. See Tatneft v. Ukraine, 771 F. App’x 9, 10 (D.C. Cir. 2019) (citing Creighton Ltd. v. Qatar, 181 F.3d 118, 123 (D.C. Cir. 1999)) (holding that “a sovereign, by signing the New York Convention, waives its immunity from arbitration-enforcement actions in other signatory states”).2
The LCIA ordered Djibouti to pay DP World for its loss of management fees, loss of dividends, and losses resulting from seizure of its offshore bank account as well as interest compounded annually on those amounts. Award at 41-42. Djibouti does not oppose DP World’s
2 Djibouti does not claim a personal jurisdiction defense or “offer . . . grounds for non-enforcement.” Archirodon, 2024 WL 341066, at *6; see generally Pet. ↩
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calculation of damages and interest. See generally Unopposed Pet. The Court sees no reason to deny DP World’s request. Archirodon, 2024 WL 341066, at *7 (“Courts in this district have accordingly awarded [interest] in civil judgments confirming foreign arbitral awards.”).
For the foregoing reasons, the Court recommends GRANTING DP World’s petition and awarding a judgment and interest at DP World’s calculated amount. See Updated Proposed Order & J. at 1.
The parties are hereby advised that, under the provisions of Local Rule 72.3(b) of the U.S. District Court for the District of Columbia, any party who objects to the Report and Recommendation must file a written objection thereto with the Clerk of this Court within fourteen days of the party’s receipt of this Report and Recommendation. The written objections must specifically identify the portion of the report and/or recommendation to which objection is made and the basis for such objections. The parties are further advised that failure to file timely objections to the findings and recommendations set forth in this report may waive their right of appeal from an order of the District Court that adopts such findings and recommendation. See Thomas v. Arn, 474 U.S. 140, 144–45 (1985).
Date: July 5, 2024
Signature
2024.07.05
16:13:34
-04'00'
ZIA M. FARUQUI
UNITED STATES MAGISTRATE JUDGE