Ingaseosas International Co. v. Aconcagua Investing LTD. ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 5, 2012
No. 11-10914
JOHN LEY
________________________
CLERK
D. C. Docket No. 1:09-cv-23078-PCH
INGASEOSAS INTERNATIONAL CO.,
Petitioner-Appellant,
versus
ACONCAGUA INVESTING LTD.,
Respondent-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(July 5, 2012)
Before EDMONDSON and ANDERSON, Circuit Judges, and EDENFIELD,*
District Judge.
PER CURIAM:
________________
* Honorable B. Avant Edenfield, United States District Judge for the Southern District of
Georgia, sitting by designation.
This is an appeal from the district court’s order dismissing a petition to
vacate an international arbitration award that has already been confirmed in a final
judgment and fully satisfied in the British Virgin Islands. The facts of this case
are undisputed, and our holding is limited to these particular facts. After careful
review, we affirm the district court’s judgment.
I.
Ingaseosas International Co. (“IIC”) and Aconcagua Investing Ltd. (“AIL”)
are both British Virgin Islands companies with principal places of business in the
British Virgin Islands. In February of 2008, IIC agreed to sell AIL shares it
owned in another British Virgin Islands corporation with Coca-Cola Bottling
Company franchise rights. Their stock purchase agreement provided that IIC and
AIL would resolve any disputes through a final, binding arbitration to be seated in
Miami, Florida, and governed by New York law. The transaction contemplated by
the stock purchase agreement did not close as planned. In October of 2008,
claiming breach of contract, AIL initiated an arbitration proceeding against IIC in
Miami; IIC, represented by counsel, filed a counterclaim with the arbitrator against
AIL. The parties participated in an arbitration hearing. On August 20, 2009, the
arbitrator issued his final award, requiring IIC to pay approximately $11 million to
AIL within thirty days.
2
By the expiration of the thirty-day period, IIC had not paid AIL the amount
required by the arbitration award. Therefore, on September 22, 2009, pursuant to
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. 38 (“New York
Convention” or “Convention”), AIL applied to the High Court of the British
Virgin Islands (“BVI court”) to enforce the award and incorporate it into a
judgment.1 In response, on October 14, 2009, IIC filed a motion to vacate the
arbitration award in the district court.2
IIC notified the BVI court of the vacatur proceedings, and in response to a
request by IIC, the BVI court stayed the enforcement action for one week, until
November 12, 2009. The BVI court’s order stated that if IIC provided security in
the amount of approximately $7 million, the stay “would continue until the
determination of [IIC’s] Motion to Vacate the Arbitration Award” in the district
court.3 IIC chose not to pay the security and chose not to appeal the BVI court
1
It is undisputed that AIL properly sought enforcement of the award in the BVI
court. Under the terms of the New York Convention, AIL could have filed an enforcement
action in any of the over 140 contracting states, other than any state where the award was
rendered or where the award is “considered as domestic.” See Convention, Art. 1.
2
Notably, the BVI court had scheduled a hearing on AIL’s application to enforce
the award for October 15, 2009. As such, IIC’s initial vacatur petition was filed one day before
the hearing on AIL’s enforcement application.
3
After refusing to sell the bottling company stock to AIL, thus breaching its
contract of sale with AIL, IIC sold that stock to a third party for approximately $13 million. The
3
order requiring it. Accordingly, the stay was lifted, and on November 12, 2009,
the BVI court entered an order granting AIL leave to enforce the final arbitral
award and a judgment in favor of AIL and against IIC in the same terms as that
award. IIC again opted not to appeal. On November 30, 2009, AIL filed in the
district court its opposition to IIC’s motion to vacate, as well as a cross-motion
seeking confirmation of the award.
When IIC refused to pay the final judgment, AIL requested that the BVI
court appoint liquidators for IIC in order to secure payment. IIC again moved for
a stay of the BVI proceedings pending the vacatur action in the district court.4 On
January 25, 2010, the BVI court declined to order a stay and appointed liquidators
for IIC. IIC did not appeal the BVI court’s denial of its second request for a stay
or the court’s appointment of liquidators.
On February 4, 2010, the district court held a status conference “to discuss
how best to proceed on the cross-motions to vacate/confirm the arbitral award in
this case.” The liquidators hired new, independent counsel who appeared at the
amount of the bond required by the BVI court corresponded with an installment payment that IIC
was scheduled to receive at that time from the new purchaser.
4
There is nothing in the record or the parties’ briefs to suggest that IIC indicated
any readiness to give appropriate security at that time.
4
status conference on their behalf.5 The liquidators’ counsel informed the district
court of the liquidation, explaining that the liquidators needed time to evaluate the
merits of IIC’s petition to vacate the award in order to determine whether it would
be worth the time, effort, and money to pursue IIC’s claim. Accordingly, at the
request of the liquidators and with the consent of all parties present, the district
court stayed the case in order to allow the liquidators time to decide how to
proceed. The district court’s order explained that the case could be reopened by
an appropriate motion from either party. Upon review, the liquidators’ counsel
ultimately advised the liquidators that the prospects of success of IIC’s motion to
vacate were “exceedingly low.” As such, the liquidators never sought to lift the
stay in the district court case. Rather, they proceeded, pursuant to the mandate of
the BVI court, to liquidate sufficient assets of IIC to satisfy IIC’s liability to AIL.
One of IIC’s shareholders requested permission from the BVI court to
assume control over the motion to vacate pending in the district court. The court
denied this request, specifically noting that AIL “holds an unappealed judgment”
that the court believed “creates an estoppel against the company in this
5
According to an order of the BVI court, IIC’s original counsel, who is also the
company’s current (post-liquidation) counsel, attempted to persuade the liquidators to refrain
from informing the district court that IIC had been placed in liquidation. It was for this reason
that the liquidators secured replacement counsel. IIC’s original counsel nevertheless attended the
status conference.
5
jurisdiction.” According to the BVI court:
Even if the company did succeed in setting aside the award in Florida,
it would still remain a judgment debtor here. . . . No reason is advanced
why the fact that the award had been set aside in Florida should be
capable of having any impact upon the judgment obtained here. Any
suggestion that it might seems to me to be inconsistent with the
principles underlying the enforcement of New York Convention awards.
The court pointed out that nobody had suggested that the granting of AIL’s
enforcement application was flawed. In sum, the BVI court was unwilling to
allow IIC’s shareholder to prosecute the motion to vacate in the district court
because, “even on the assumption that, contrary to the advice received by the joint
liquidators, the motion will succeed, . . . that [motion] would have no impact on
[AIL’s] status as a judgment creditor.”6 Nevertheless, in order to ensure no
prejudice to IIC’s position in the district court, the BVI court directed the
liquidators not to discontinue the vacatur proceedings.
Despite IIC’s resistance,7 the liquidators were able to collect sufficient
funds to cover AIL’s judgment. As noted above, after refusing to sell the bottling
6
The BVI court noted that “if the award were to be set aside for fraud or mistake”
the outcome could be different. However, the court continued to explain: “[IIC] has not (or has
not yet) suggested that.”
7
According to the BVI court, IIC threatened to sue the liquidators for illegally
assisting AIL and damaging IIC. IIC also refused to disclose certain information to the
liquidators that they were unconditionally entitled to, and it attempted to persuade the new
purchaser of the shares in the bottling company not to pay.
6
company stock to AIL, thus breaching the contract with AIL, IIC sold the stock to
a third party. The liquidators were able to consummate that sale, and the
liquidators received from the new purchaser sufficient funds to pay off IIC’s $11
million liability to AIL, thereby satisfying the BVI court judgment. After the
judgment was paid, IIC was taken out of liquidation, as the company turned out to
be solvent. At that point, IIC’s administration was returned to its board of
directors.
Subsequently, on December 7, 2010, IIC moved to reopen the vacatur
proceedings in the district court. AIL opposed reopening the case and filed a
cross-motion to dismiss the petition to vacate the award. AIL argued that the
district court was without subject matter jurisdiction to consider the vacatur
motion and that IIC was engaging in futile post-arbitration litigation. On January
13, 2011, the district court held a hearing on IIC’s motion to reopen the case. The
court lifted the stay; however, on February 10, 2011, it granted AIL’s motion to
dismiss. The court held that, although it would have had jurisdiction over a
motion to enforce the award, 9 U.S.C. § 203 did not provide subject matter
jurisdiction over the motion to vacate it.
II.
We affirm the district court’s dismissal of this case, although we rely upon a
7
different ground. We conclude that events have transpired such that the district
court is unable to grant IIC effective relief, and thus the case is moot. See C&C
Prods., Inc. v. Messick, 700 F.2d 635, 636 (11th Cir. 1983) (“If later events
preclude the grant of effective relief, the appeal must be dismissed as moot.”); In
re Club Assocs., 956 F.2d 1065, 1069 (11th Cir. 1992) (“Central to a finding of
mootness is a determination by an appellate court that it cannot grant effective
judicial relief.”).
After AIL filed a motion to confirm and enforce the arbitration award in the
BVI court, IIC initiated the instant action in the district court by filing a motion to
vacate the award. Subsequent thereto, however, the BVI court provided an
opportunity for IIC to stay the enforcement proceedings pending the results of the
district court action, upon posting bond. After IIC failed to post bond, the BVI
court proceeded and enforced the award, reduced it to a judgment in favor of AIL,
and appointed liquidators of IIC who liquidated the assets of IIC and then paid the
judgment in full. IIC, which was represented by counsel throughout all the
proceedings before the arbitrators and before the BVI court, never appealed the
BVI court’s decisions.8 Thus, subsequent to the filing of IIC’s motion to vacate
8
To recap, IIC did not appeal the BVI court’s requirement of a bond to continue a
stay of its proceedings pending those in the district court, the amount of the bond, the
enforcement of the award, the appointment of liquidators, or the ultimate satisfaction of the
8
and during the pendency of the instant action, the BVI court enforced the arbitral
award at issue by entering a final, unappealed judgment against IIC and in favor of
AIL, and that judgment—which incorporated the terms of the arbitration
award—was fully satisfied by IIC.
Although the mootness question was litigated in the district court and
briefed in the initial briefing on appeal, and despite intensive questioning at oral
argument and an opportunity for additional, supplementary briefing in this Court,
IIC has failed to cite any precedent or authority that would enable the district court
to provide effective relief under the circumstances. After extensive research, we
too have found no such precedent. To the contrary, our research uncovered the
following case which holds that a party cannot idly stand by and allow an
arbitration award to be confirmed and then seek to the vacate same. The Second
Circuit decision in The Hartbridge, 57 F.2d 672 (2d Cir. 1932) (before L. Hand,
Swann, and Augustus Hand, Circuit Judges) held:
As we understand the statute a motion to confirm puts the other party to
his objections. He cannot idly stand by, allow the award to be
confirmed and judgment thereon entered, and then move to vacate the
award just as though no judgment existed. . . . After judgment we think
the award can be vacated only if the judgment can be, and to vacate the
judgment an adequate excuse must be shown for not having presented
objections to the award when the motion to confirm was heard.
judgment.
9
Id. at 673.9
IIC does not dispute the fact that the BVI court had jurisdiction to confirm
and enforce the arbitration award. Nor does IIC dispute the fact that Article VI of
the Convention conferred authority upon the BVI court to require bond to stay its
proceedings when notified of IIC’s motion to vacate the award in the district court.
See Convention, Article VI. Moreover, significantly, IIC has never challenged the
reasonableness of the bond required by the BVI court. Instead, the record
indicates that the amount of the bond was reasonable, and that IIC had the ability
to pay same. See note 3, supra. Not only did IIC fail to appeal any of the actions
of the BVI court, but counsel for IIC agreed in the district court to stay the vacatur
proceedings, in effect agreeing that the proceedings pursuant to the BVI court’s
mandate should go forward and take precedence over the vacatur proceedings in
the district court.10 IIC had ample opportunity to stay the enforcement proceedings
9
Of course, The Hartbridge arose in a different context, involving a domestic
arbitral award that was confirmed under the provisions of the Federal Arbitration Act. 57 F.2d at
673. That case did not involve an award that fell under the terms of the New York Convention.
We nevertheless find the reasoning of The Hartbridge forceful given the facts of the case at bar.
10
At the February 4, 2010, status conference, counsel for IIC’s liquidators
affirmatively requested that the district court stay the vacatur proceedings in order to allow time
to evaluate IIC’s petition to vacate and determine how to best proceed. Counsel for AIL
consented to the stay. Notably, counsel for IIC—the corporation’s pre-liquidation and current
counsel—was also present at the status conference. IIC’s counsel did not object to a stay or
express any concern whatsoever; in fact, the transcript reveals that IIC’s counsel was apparently
in agreement that a stay of the district court action was appropriate. At the very least, IIC’s
10
in the BVI court in order to proceed first with its motion to vacate in the district
court, but instead, stood idly by while the arbitral award at issue in this case was
confirmed, entered into a judgment, and satisfied in the British Virgin Islands.
IIC does argue that it was agreed that New York law would govern and the
arbitration would take place in Miami, and does point out that the Miami district
court would therefore be considered a court of “primary jurisdiction.”11 IIC then
vaguely suggests that, even under the unique circumstances of this case, as the
primary jurisdiction, the district court has authority to simply ignore the previous
judgment of the BVI court and order effective relief notwithstanding. However,
IIC has cited no case or other authority which stands for such a proposition. Our
research has found none. We see nothing in the language of the Convention which
suggests such a proposition. To the contrary, Article VI of the Convention
counsel, by its silence, implicitly agreed to entry of the stay. See District Court order, Docket
No. 26 at 1 (“The liquidators have requested that this case be held in abeyance until he [sic] can
review the matter and make a business judgment on how best to proceed, and the parties have
agreed to stay the case.”) (emphasis added).
11
The nomenclatures of “primary jurisdiction” and “secondary jurisdiction” were
developed by the Fifth Circuit in Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara, 335 F.3d 357, 367-68 (5th Cir. 2003). This terminology is used to describe
the binary scheme under the New York Convention for addressing non-domestic arbitrations; the
Convention assigns different roles to the courts in the country in which, or under the law of
which, an award is rendered—primary-jurisdiction courts—and the courts of all other signatory
countries—secondary-jurisdiction courts. Id. at 368. In short, secondary-jurisdiction courts have
limited authority to review and decide whether to enforce a foreign arbitral award, while primary-
jurisdiction courts have the exclusive authority to affirmatively set aside or annul the award. Id.11
expressly contemplates a situation where a court of secondary jurisdiction has a
pending motion to enforce an arbitration award, and where an application to set
aside the award is made to a primary-jurisdiction court. In that situation, the
Convention provides that the secondary-jurisdiction court “may, if it considers it
proper” stay its proceedings, and may condition such a stay upon the provision of
bond. See Convention, Article VI. Thus, under Article VI, although a party
seeking to vacate an award in a court of primary jurisdiction should have an
opportunity to stay enforcement of the award in a secondary-jurisdiction court, if
that party declines to post bond, the secondary-jurisdiction court clearly has
authority to proceed uninterrupted with its enforcement proceedings. The
implication of Article VI is that a party who fails to post bond (and thus fails to
protect its proceedings to vacate in the primary jurisdiction) risks losing the
benefit of any superior force the primary jurisdiction would otherwise have had,
and takes its chances in the secondary-jurisdiction court. IIC is in the shoes of the
party who declined to post bond. Thus, the language of the Convention carries
implications contrary to IIC’s vague suggestion that the mere fact of the district
court’s primary-jurisdiction status makes it such that the district court can provide
effective relief here notwithstanding the final, unappealed judgment enforcing the
arbitration award in the BVI court.
12
It is true that the Convention “envisions multiple proceedings that address
the same substantive challenges to an arbitral award.” Karaha Bodas Co. v.
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 367 (5th
Cir. 2003). Because of this, we can imagine cases where a court of primary
jurisdiction could provide effective relief by vacating an arbitral award
notwithstanding an inconsistent previous decision of a secondary-jurisdiction
court enforcing the award. For example, if a secondary-jurisdiction court raced to
a judgment to confirm and enforce an award, if the party seeking to vacate the
award in a primary-jurisdiction court was not given the opportunity to post bond
and stay the enforcement proceedings in a secondary-jurisdiction court, or if the
jurisdiction of the primary-jurisdiction court is otherwise usurped by a secondary-
jurisdiction court, we acknowledge that a much more persuasive argument could
be made and that a different outcome could be warranted. We need not—and we
do not—address such a case.12 As noted above, the facts of the instant case are the
polar opposite of any such persuasive case. The facts here are unique, involving a
party, IIC, who repeatedly failed to protect its rights in the BVI court, and who,
12
Our opinion today should not be construed as holding that the judgment of a
secondary-jurisdiction court enforcing an arbitral award automatically divests courts in the seat
of the arbitration of their jurisdiction over the award—i.e., their authority to subsequently set
aside or annul the award.
13
after determining that the prospects of success on its motion to vacate were
“exceedingly low,” actually encouraged the precedence of the BVI court
proceedings (consenting to a stay in the district court, the effect of which was to
allow the proceedings in the BVI court to take precedence). As in The Hartbridge,
IIC simply stood idly by. 57 F.2d at 673. We cannot conclude that the fact that
the district court is a court of primary jurisdiction—without more—demonstrates
that there could be effective judicial relief in this case.
In attempting to demonstrate how a district court order vacating the award
could provide effective relief, IIC makes a vague and conclusory assertion that, if
IIC “were to decline to return the Award proceeds upon a vacatur by the Trial
Court following a remand from this Court, [IIC] could seek in the BVI court an
annulment of the [British Virgin Islands] judgment.”13 IIC fails to cite any
precedent or authority in support of this assertion. Our own research reveals that
several commentators have opined that a court of primary jurisdiction would have
the power under the Convention’s scheme to vacate an arbitration award
notwithstanding the fact that it had previously been enforced by a court of
13
IIC’s suggestion that a vacatur would lead to a second arbitration in which the
arbitrator could “consider[] moneys obtained by [AIL] to satisfy the Award as an element of
damages flowing from the parties’ contractual dispute” is wholly without merit and does not
warrant extended discussion.
14
secondary jurisdiction.14 These commentators suggest that the party, upon
obtaining such a vacatur judgment, could return to the secondary-jurisdiction court
and seek to set aside the judgment of that court which had previously enforced the
award or institute a restitution action in the enforcing court to recover amounts
paid pursuant to that judgment.15 For several reasons, however, we do not believe
the instant case presents any possible prospect of effective relief for IIC. Most
significantly, the BVI court has already indicated that vacatur of the award in the
district court would have no effect on its final, unappealed judgment, in the
absence of fraud or mistake. And, despite ample opportunity, IIC has proffered no
facts suggesting fraud or mistake or any other possible basis for collaterally
attacking the judgment of the BVI court. Moreover, wholly aside from the
liquidators’ counsel’s estimation that the motion to vacate had an “exceedingly
low” prospect of success, in light of the obvious failure of IIC to protect its rights
14
Importantly, however, as one commentator has explained, such a situation “is
likely not to occur” in practice because, when there are doubts about the validity of the award
that could lead to a setting aside, the secondary-jurisdiction court has the power to adjourn its
decision on enforcement pending a decision in the country of origin. See Albert Jan van den
Berg, The New York Arbitration Convention of 1958, at 351 (1981).
15
See, e.g., Albert Jan van den Berg, The New York Arbitration Convention of
1958, at 351 (1981); Leonard V. Quigley, Accession by the United States to the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 70 Yale L. J. 1049,
1071 (1961); Note, Michael H. Strub, Jr., Resisting Enforcement of Foreign Arbitral Awards
Under Article V(1)(e) and Article VI of the New York Convention: A Proposal for Effective
Guidelines, 68 Tex. L. Rev. 1031, 1062-63 (1990); W. Michael Tupman, Staying Enforcement of
Arbitral Awards under the New York Convention, 3 Arb. Int’l 209, 220 (1987).
15
in the BVI court and its express consent in the district court that the BVI court
proceedings could take precedence over those in the district court, the possibility
of IIC obtaining a vacatur is extremely remote, if not non-existent. Finally, none
of the above-mentioned commentators have suggested the possibility of relief in a
factual situation similar to the instant unique facts.
Even if this appeal is not technically moot, we hold that it should be treated
as such for prudential reasons. See Jordan v. Sosa, 654 F.3d 1012, 1033 (10th Cir.
2011) (“Even if we were to conclude that [the plaintiff’s] claims could survive our
constitutional-mootness inquiry, we would bar those claims on prudential-
mootness grounds.”); United States v. (Under Seal), 757 F.2d 600, 603 (4th Cir.
1985) (“Passing the possibly difficult conceptual question of whether the appeal
has been mooted in constitutional case or controversy terms, we conclude that, in
any event, we should treat it as moot for prudential reasons.”). Pursuant to the
doctrine of prudential mootness, we may exercise our discretion and decline to
grant declaratory relief in the context of a controversy that has become “so
attenuated that considerations of prudence and comity . . . counsel the court to stay
its hand, and to withhold relief it has the power to grant.” Chamber of Commerce
v. U.S. Dep’t of Energy, 627 F.2d 289, 291 (D.C. Cir. 1980). The critical question
becomes “whether changes in circumstances that prevailed at the beginning of the
16
litigation have forestalled any occasion for meaningful relief.” Int’l Bhd. of
Boilermakers v. Kelly, 815 F.2d 912, 915 (3d Cir. 1987). As one of our sister
circuits has explained:
Where it is so unlikely that the court’s grant of declaratory judgment
will actually relieve the injury, the doctrine of prudential mootness—a
facet of equity—comes into play. This concept is concerned, not with
the court’s power under Article III to provide relief, but with the court’s
discretion in exercising that power. Declaratory relief, like other forms
of equitable relief, is discretionary. . . . Where it is uncertain that
declaratory relief will benefit the party alleging injury, the court will
normally refrain from exercising its equitable powers.
Penthouse Int’l, Ltd. v. Meese, 939 F.2d 1011, 1019-20 (D.C. Cir. 1991) (citations
omitted).
Even if IIC were somehow able to persuade the district court on remand to
vacate the award at issue, we cannot see how an order from that court would
provide IIC with any meaningful relief. First, it is uncertain how IIC would
attempt to proceed in the event that it obtained a vacatur judgment from the district
court. As a result of its own litigation decisions, IIC finds itself in this unique
situation in which any effective relief is so remote. IIC has cited no authority in
support of its conclusory assertion that a vacatur would enable it to seek relief in
the BVI court; and it is only by our own research that we have discovered
commentators opining that it is theoretically possible for a party who obtains a
17
vacatur of an already-enforced and satisfied Convention award to return to the
enforcing court and file some type of restitution action.16 See Ali v Cangemi, 419
F.3d 722, 724 (8th Cir. 2005) (en banc) (concluding that case was “prudentially
moot in light of the myriad of uncertainties”). More importantly, it is extremely
unlikely—if not impossible—that IIC would be able to actually remedy its alleged
injury by undoing the consequences of the final, unappealed (and fully satisfied)
judgment of the BVI court.17 As discussed, IIC did not take advantage of the
16
Some courts have found that, pursuant to the express terms of the Convention, a
secondary-jurisdiction court has discretion to enforce an award even when there has been a prior
annulment of the award in the primary-jurisdiction court. See, e.g., Karaha Bodas Co. v.
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 369 (5th Cir. 2003)
(“As an enforcement jurisdiction, our courts have discretion under the Convention to enforce an
award despite annulment in another country, and have exercised that discretion in the past.”).
The authorities are split on this point. See 2 Gary B. Born, International Commercial Arbitration
2675-99 (2009) (laying out split of authority among courts and commentators and analyzing
strength of various approaches); Termorio S.A. v. Electranta S.P., 487 F.3d 928, 936 (D.C. Cir.
2007) (concluding that Convention includes a “principal precept” that “an arbitration award does
not exist to be enforced in other Contracting States if it has been lawfully ‘set aside’ by a
competent authority in the State in which it was made”); Chromalloy Aeroservices. v. Arab
Republic of Egypt, 939 F. Supp. 907, 909 (D.D.C. 1996) (holding that, as a secondary-
jurisdiction court, court had discretion to recognize and enforce an arbitral award
notwithstanding a previous set-aside of the award by a court in the seat of the arbitration).
Whether a secondary-jurisdiction court has discretion to enforce an award that has already been
set aside in the primary jurisdiction, or under what circumstances enforcement of an already-
vacated award could be appropriate, are questions that are not before us. Nevertheless, the
notion that the Convention may grant the BVI court discretion to enforce an award vacated in the
primary jurisdiction—even where, unlike this case, the vacatur precedes the enforcement
application—adds an additional layer of uncertainty to any effective relief for IIC.
17
We note this Court’s prior statement in B.L. Harbert International, LLC v.
Hercules Steel Co., 441 F.3d 905 (11th Cir. 2006): “When a party who loses an arbitration
award assumes a never-say-die attitude and drags the dispute through the court system without an
objectively reasonable belief it will prevail, the promise of arbitration is broken. Arbitration’s
allure is dependent upon the arbitrator being the last decision maker in all but the most unusual
18
opportunity to obtain a stay of the enforcement proceedings pending a decision on
its motion to vacate and actually encouraged the enforcement proceedings in the
BVI court to take precedence; and furthermore, the BVI court has already
indicated that a subsequent vacatur of the award in the district court would not
have any impact on that court’s judgment or AIL’s status as a judgment creditor.18
Under the circumstances, it is plainly “uncertain that declaratory relief will benefit
the party alleging injury.” Penthouse, 939 F.2d at 1020. Considerations of
international comity and prudence counsel that we stay our hand and withhold
IIC’s requested declaratory relief, and we hold that the instant case is prudentially
moot.
cases. The more cases there are, like this one, in which the arbitrator is only the first stop along
the way, the less arbitration there will be. If arbitration is to be a meaningful alternative to
litigation, the parties must be able to trust that the arbitrator’s decision will be honored sooner
instead of later.” Id. at 913.
18
Our concerns parallel those that typically arise in the context of a bankruptcy
appeal in which a court is asked to determine whether a “reorganization plan has been so
substantially consummated that effective relief is no longer available.” In re Club Assocs., 956
F.2d 1065, 1069 (11th Cir. 1992) (quotations omitted). In that context, “[t]he mootness inquiry
necessarily involves many subsidiary questions,” including whether a stay pending appeal has
been obtained, and if not, why not. Id. at 1069 n.11. Although the failure to obtain a stay
pending appeal in the bankruptcy court will not necessarily preclude appellate review, we have
held that it is relevant to the court’s “equities determination which underlay the mootness
inquiry.” Id. at 1070; see also In re Winn-Dixie Store, Inc., 286 Fed. App’x 619, 622-23 (11th
Cir. 2008) (unpublished) (considering party’s failure to seek a stay of confirmation order pending
appeal when analyzing the doctrine of “equitable mootness”); In re Healthco Int’l, Inc., 136 F.3d
45, 48 (1st Cir. 1998) (“The ‘equitable’ mootness test inquires whether an unwarranted or
repeated failure to request a stay enabled developments to evolve in reliance on the bankruptcy
court order to the degree that their remediation has become impracticable or impossible.”).
19
III.
For the foregoing reasons, under the particular and unique facts of the
instant case, we cannot conclude that the district court can provide effective
judicial relief to IIC. We therefore hold that the case is moot.
AFFIRMED.
20