Republic of Argentina v. Bg Group Plc ( 2010 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
REPUBLIC OF ARGENTINA, )
)
Plaintiff, )
)
v. ) Civil Action No. 08-485 (RBW)
)
BG GROUP PLC, )
)
Defendant. )
____________________________________)
MEMORANDUM OPINION
The Republic of Argentina (“Argentina”), the petitioner in this case, seeks to vacate or
modify an arbitral award (the “Award”) rendered against it and in favor of respondent BG Group
PLC (“BG Group”) under the Federal Arbitration Act, 9 U.S.C. §§ 1-14 (2006) (the “FAA”).
Petition to Vacate or Modify Arbitration Award (the “Petition” or “Pet’r’s Pet.”) ¶ 3. In
response, BG Group filed a cross-motion to confirm the Award under the FAA and the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21
U.S.T. 2517, 330 U.N.T.S. 38, available at 1970 WL 104417 (the “New York Convention” or the
“Convention”), which was ratified by Congress and codified at 9 U.S.C. §§ 201-08 (2006).
Cross-Motion for Recognition and Enforcement of Arbitral Award (the “Resp’t’s Cross-Mot.”)
at 1. After carefully considering Argentina’s petition to vacate or modify the Award, BG
Group’s cross-motion to confirm the Award, and all relevant documents and exhibits attached to
1
those submissions,1 the Court concludes for the reasons below that it must deny Argentina’s
petition to vacate or modify the Award.
I. Background
During the late 1980s and early 1990s, Argentina undertook a “wide [economic]
reformation process,” which included entering into numerous bilateral investment treaties with
various foreign nations in the hopes of attracting foreign investors. Resp’t’s Cross-Mot. at 1;
Pet’r’s Pet. ¶ 13. One of the treaties entered into during this period was the Agreement for the
Promotion and Protection of Investments, Arg.-U.K., Dec. 11, 1990, 1765 U.N.T.S. 33 (the
“Investment Treaty”), between Argentina and the United Kingdom. Resp’t’s Cross-Mot. at 1;
Pet’r’s Pet. ¶ 13. Similar to other bilateral investment treaties, the Investment Treaty was
designed to ensure foreign investors that they would be treated fairly and equitably, to provide
them with “full protection and security,” and to restrict the host country “from expropriating the
assets of such investors without just compensation.” Resp’t’s Cross-Mot. at 1. To address any
disputes arising from these investments, Argentina and the United Kingdom agreed to a two-
tiered system of dispute resolution in which the dispute could be submitted to a “competent
tribunal” of the country “in whose territory the investment was made,” after which the matter
1
In addition to Argentina’s petition and BG Group’s cross-motion, the Court considered the following documents in
reaching its decision: (1) Argentina’s Memorandum of Points and Authorities in Reply to Respondent’s Opposition
to the Motion to Vacate or Modify Arbitration Award and in Opposition to Respondent’s Cross-Motions for
Confirmation of the Award and For a Pre-Judgment Bond (the “Pet’r’s Reply”); (2) BG Group’s Memorandum of
Points and Authorities in Reply to Petitioner’s Opposition to Respondent’s Cross-Motion for Recognition and
Enforcement and for a Pre-Judgment Bond (the “Resp’t’s Reply”); (3) BG Group’s Supplemental Memorandum of
Law in Support of Respondent’s Motion for Pre-Judgment Bond (the “Resp’t’s Supp. Mem.”); (4) Argentina’s
Supplemental Memorandum of Points with Regard to Posting a Bond (the “Pet’r’s Supp. Mem.”); (5) Argentina’s
Second Supplemental Memorandum of Points with Regard to Posting of Bond (the “Pet’r’s 2d Supp. Mem.”); (6)
BG Group’s Supplemental Memorandum of Law on the Applicability of the New York Convention (the “Resp’t’s
2d Supp. Mem.”); and (7) BG Group’s Supplemental Memorandum in Support of Respondent’s Motion for a Pre-
Judgment Bond (the “Resp’t’s 3d Supp. Mem.”).
2
could be referred to arbitration under certain conditions, or the dispute could be submitted
directly to international arbitration. Investment Treaty, art. 8(2).2
Also as part of its economic reforms, Argentina enacted several measures in an effort “to
reduce inflation and the public deficit,” including “privatization of certain state[-]owned
companies in many sectors[,] including the gas transportation and distribution industry.” Pet’r’s
Pet. ¶ 15. As part of these efforts, Argentina divided its gas transportation and distribution
industry, Gas del Estado, Sociedad del Estado, into two transportation companies and eight
distribution companies. Id. ¶ 18. BG Group, a United Kingdom company, invested in one of the
eight distribution companies, MetroGAS, through a consortium of investors known as Gas
Argentino, S.A. Id. ¶ 20. Eventually, BG Group acquired a 54.67% interest in Gas Argentino,
S.A., which in turn owned 70% of MetroGAS. Id. ¶ 21.
In 2001, after a period of exceptional economic growth, Argentina began to experience
an economic crisis. Pet’r’s Pet. at 6-7. In its efforts to respond to this predicament, Argentina
enacted an emergency law in 2002, implementing regulatory measures that negatively impacted
2
Article 8(2) of the Investment Treaty provides for recourse to arbitration under the following circumstances:
(a) if one of the Parties so requests . . .:
(i) where, after a period of eighteen months has elapsed from the moment when the dispute
was submitted to [a] competent tribunal of the [country] in whose territory the investment was
made . . . ;
(ii) where the final decision of the aforementioned tribunal has been made but the Parties are
still in dispute;
(b) where the [Parties] have so agreed.
Furthermore, the Investment Treaty provides that “where the dispute is referred to international arbitration,” the
parties “may agree to refer the dispute either to: (a) the International Centre for the Settlement of Investment
Disputes [(the “ICSID”)] . . . or (b) an international arbitrator or ad hoc arbitration tribunal . . . under the Arbitration
Rules of the United Nations Commission on International Trade Law [(the “UNCITRAL Rules”)]. Award at 6
(citing Article 8(3)(a)-(b) of the Treaty). Here, “[b]ecause the [p]arties failed to agree on submission of the dispute
to the . . . []ICSID[], BG [Group] submitted to arbitration under . . . []the UNCITRAL Rules[].” Id. at 7.
3
BG Group’s investment in MetroGAS. Id.; Resp’t’s Cross-Mot. at 2. Pursuant to the Investment
Treaty, BG Group initiated international arbitration proceedings on April 25, 2003.3 Resp’t’s
Cross-Mot. at 2; Pet’r’s Pet. ¶ 6. An arbitral panel commenced proceedings in New York and
Washington, D.C. beginning in July of 2006. Pet’r’s Pet. ¶ 4.
Argentina raised a number of objections at the outset of the arbitration. First, Argentina
objected to the arbitral panel’s jurisdiction to entertain BG Group’s claims, arguing, inter alia,
that the Investment Treaty authorizes recourse to arbitration “only where disputes have been
submitted for 18 months to the competent tribunal of the State which hosts the decision,” i.e., a
competent tribunal in Argentina. Award ¶ 140. Second, Argentina challenged the arbitral
panel’s jurisdiction on the grounds that BG Group’s claims were derivative in nature, and such
claims “are proscribed by international law and by [Argentine] corporate law.” Id. ¶ 191. Third,
Argentina challenged the appointment of Albert Jan van den Berg to the arbitral panel, id. ¶ 8,
alleging that Jan van den Berg had issued arbitrary and capricious rulings in previous arbitrations
involving Argentina, Pet’r’s Pet. ¶ 75-76. Each of these objections was rejected. Award ¶ 157
(finding that BG Group’s claims were arbitrable); id. ¶ 205 (concluding that the arbitral panel
“has jurisdiction to hear BG[ Group’s] claims as they relate to its indirect shareholding in
MetroGAS”); id. ¶ 11 (noting that the International Chamber of Commerce International Court
of Arbitration (the “ICC Court”) “had decided to reject [Argentina’s] challenge [to] Professor
Albert Jan van den Berg” to the arbitral panel).4 Both parties then proceeded with the arbitration,
and, on December 24, 2007, the arbitral panel unanimously ruled in favor of BG Group and
3
Over 25 foreign investors initiated arbitration against Argentina claiming violations of bilateral investment treaties
caused by the emergency law’s enactment. Resp’t’s Opp’n at 2.
4
Under Article 12(1)(b) of the UNCITRAL Rules, which governed the arbitration at issue in this case, a challenge
to the seating of an arbitrator on an arbitral panel must be brought before an “appointing authority” that has been
previously designated by the parties. In this case, the ICC Court had been designated as the “appointing authority”
by the parties. Award ¶ 9.
4
issued an award in the amount of $185,285,485.85 plus costs, attorneys’ fees, and interest.
Pet’r’s Pet. at 3. In its decision, the arbitral panel rejected numerous arguments raised by
Argentina, one of which was its reliance on the “state of necessity” doctrine to exonerate it from
liability.5 Award ¶ 391. The arbitral panel then concluded that Argentina breached the
Investment Treaty and awarded damages to BG Group based on the fair market value of its
investment in MetroGAS. Id. ¶ 422.
Clearly unsatisfied with the outcome of the arbitration decision, Argentina filed its
petition to vacate or modify the Award on March 21, 2008. In support of its prayer for relief,
Argentina asserts the following arguments: (1) “[t]he [a]rbitrators exceeded their authority by
disregarding [the] terms of [the] parties’ agreement,” Pet’r’s Pet. ¶ 41; (2) “[t]he [a]rbitral
[t]ribunal misunderstood applicable law . . . and failed to correctly apply [such law],” id. ¶ 61;
(3) “[t]he International Court of Arbitration exceeded its authority by failing to disqualify [Jan
van den] Berg from serving as [an] arbitrator,” id. ¶ 69; (4) the award was procured by
“corruption, fraud, or undue means,” id. ¶¶ 79-80; and (5) the arbitral tribunal imposed a
disproportionate and unfair award, id. ¶ 107. BG Group, in turn, argues that Argentina’s claims
are “without merit and must be dismissed.” Resp’t’s Cross-Mot. at 16.6 BG Group also moves
to have the Award confirmed pursuant to 9 U.S.C. § 9 and Article IV of the New York
Convention. Id. at 36.
5
Argentina argued that it could invoke the “state of necessity” doctrine because it was purportedly “compelled to
depart from [its] obligations with [the United Kingdom] in order to preserve an essential state interest in a situation
of grave or imminent danger.” Award ¶ 391.
6
BG Group also seeks an order from the Court requiring Argentina to post a pre-judgment bond before having its
petition considered by the Court. On March 31, 2010, the Court issued an order requiring Argentina to post a pre-
judgment bond. Upon further reflection, however, the Court concludes that the posting of a bond is unnecessary, in
light of the Court’s conclusion here that Argentina’s petition to vacate or modify the Award is entirely without
merit. Accordingly, the March 31, 2010 Order is vacated, and BG Group’s cross-motion for a pre-judgment bond is
denied as moot.
5
II. Standard of Review
The Court’s authority to vacate an arbitral award is governed by 9 U.S.C. § 10(a), which
provides the following:
In any of the following cases the United States court in and for the district
wherein the award was made may make an order vacating the award upon the
application of any party to the arbitration-
(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of
them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent
and material to the controversy; or of any other misbehavior by which the
rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them
that a mutual, final, and definite award upon the subject matter submitted was
not made.
Additionally, the Court may modify or correct an arbitral award if (1) the movant can
demonstrate that there “was an evident material miscalculation of figures[,] or an evident
material mistake in the description of any person, thing, or property referred to in the award,” (2)
the arbitrator has rendered a decision “upon a matter not submitted to [him], unless it is a matter
not affecting the merits of the decision upon the matter submitted,” or (3) “the award is imperfect
in matter of form not affecting the merits of the controversy.” 9 U.S.C. § 11. The Supreme
Court has held that the grounds enumerated in Sections 10(a) and 11 of the FAA are the
exclusive means for vacating, modifying, or correcting an arbitral award.7 Hall St. Assoc., LLC
v. Mattel, Inc., 552 U.S. 576, 581 (2008).
7
In addition to Sections 10(a) and 11 of the FAA, Argentina relies on the non-statutory ground that an arbitral award
may be vacated where the award was issued in “manifest disregard of the law.” Lessin v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 481 F.3d 813, 816 (D.C. Cir. 2007). A question remains, however, as to whether this basis for
(continued . . .)
6
In relying on these standards to determine whether vacatur or modification of the Award
is warranted, the Court must remain mindful of the principle that “judicial review of arbitral
awards is extremely limited,” and that this Court “do[es] not sit to hear claims of factual or legal
error by an arbitrator” in the same manner that an appeals court would review the decision of a
lower court. Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604
(D.C. Cir. 2001) (quoting Kanuth v. Prescott, Ball & Turben, Inc., 949 F.2d 1175, 1178 (D.C.
Cir. 1991)). In fact, careful scrutiny of an arbitrator’s decision would frustrate the FAA’s
“emphatic federal policy in favor of arbitral dispute resolution,” Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985) (internal citation omitted)—a policy
that “applies with special force in the field of international commerce,” id.—by “undermining
the goals of arbitration, namely, settling disputes efficiently and avoiding lengthy and expensive
litigation,” LaPrade v. Kidder, Peabody & Co., 94 F. Supp. 2d 2, 4-5 (D.D.C. 2000) (Sullivan,
J.), aff’d 246 F.3d 702 (D.C. Cir. 2001). Instead, “a court must confirm an arbitration award
where some colorable support for the award can be gleaned from the record.” Id. Thus, “[t]he
showing required to avoid summary confirmation of an arbitration award is high, and a party
(. . . continued)
vacating an arbitral award survived the Supreme Court’s recent decision in Hall Street Associates LLC v Mattel,
Inc., 552 U.S. 576 (2008). There, the Supreme Court concluded that Sections 10(a) and 11 of the FAA “provide the
. . . exclusive grounds for expedited vacatur and modification,” 552 U.S. at 584 (emphasis added), but
acknowledged that its “vague phrasing” of the “manifest disregard of the law” standard in prior precedents has
caused confusion amongst the various circuit courts of appeals, with some circuits viewing that standard as being
encompassed within the grounds explicitly listed under the FAA (specifically Sections 10(a)(3) and (4)), id. at 585,
while others, including the District of Columbia Circuit, have viewed the standard as independent of the grounds
explicitly enumerated under Section 10(a), see Lessin, 481 F.3d at 816 (“In addition to the grounds under the [FAA]
. . . on which an arbitration award may be vacated, an award may be vacated only if it is ‘in manifest disregard of the
law.’”). The Supreme Court remained silent, however, as to which approach is correct, and neither the Supreme
Court nor the District of Columbia Circuit have yet to weigh in on whether Hall Street Associates affects any of
their respective precedents. See Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., ___ U.S. ___, ___, ___ S. Ct. ___,
___, 2010 WL 1655826, at *7 n.3 (Apr. 27, 2010) (declining to decide whether the “manifest disregard of the law”
standard survived Hall Street Associates); Regnery Pub., Inc. v. Miniter, No. 09-7039, 2010 WL 1169843, at *1
(D.C. Cir. Mar. 17, 2010) (assuming, without deciding, that the “manifest disregard of the law” standard survived
Hall Street Associates). Regardless, the Court need not conclusively determine whether precedent regarding the
“manifest disregard of the law” standard has continued viability in light of Hall Street Associates, for Argentina’s
claims nonetheless fail under that standard for the reasons discussed below.
7
moving to vacate the award has the burden of proof.” Willemijn Houdstermaatschappij, BV v.
Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997) (citations omitted).
III. Legal Analysis
Before addressing the merits of the Petition, the Court must first assess whether it has
subject-matter jurisdiction under the FAA to entertain this dispute. In the Petition, Argentina
cites 9 U.S.C. § 203 as the basis for the Court’s jurisdiction over this matter, see Pet’r’s Pet. at 2
(“This court has jurisdiction over . . . this Petition pursuant to 9 U.S.C. §§ 201 et seq.”), which
confers jurisdiction on this Court to entertain “action[s] or proceeding[s] falling under the [New
York] Convention,” 9 U.S.C. § 203 (2006). Although Argentina seemingly took the position in
its jurisdictional statement that the Award falls within the ambit of the New York Convention, it
has actually taken the opposite position in this litigation with regards to whether the Court has
the authority to grant BG Group’s cross-motion for a pre-judgment bond pursuant to Article VI
of the New York Convention. See, e.g., Pet’r’s 2d Supp. Mem. at 2. The Court suspects that
Argentina merely intended to argue against the applicability of the Convention for the sole
purpose of defeating BG Group’s efforts at securing a pre-judgment bond, but in so doing,
Argentina has also potentially undermined its own invocation of this Court’s subject-matter
jurisdiction. This is because without recourse to Section 203, the Court is likely without any
other basis to find that it has subject-matter jurisdiction, as the FAA does “not itself bestow[]
jurisdiction on the federal district courts” under 28 U.S.C. § 1331, Karsner v. Lothian, 532 F.3d
876, 882 (D.C. Cir. 2008) (quoting Kasap v. Folger Nolan Fleming & Douglas, Inc., 166 F.3d
1243, 1245-46 (D.C. Cir. 1999)), jurisdiction is not available under 28 U.S.C. § 1332 because
diversity jurisdiction is not available where “a lawsuit [is] brought by one alien against another
alien, without a citizen of a state on either side of the litigation,” see, e.g., Saadeh v. Farouki, 107
8
F.3d 52, 58 (D.C. Cir. 1997); see also Pet’r’s Pet. ¶¶1-2 (noting that the petitioner is the
Argentinean government, while the respondent is a British corporation), and there is no other
independent ground for federal court jurisdiction that the Court is aware of that would allow it to
entertain this matter. Given that Argentina has called into question the applicability of the New
York Convention, and that the resolution of this issue may have a material effect on the Court’s
jurisdiction, the Court has no choice but to first resolve the issue of whether the exercise of
jurisdiction over this matter is proper under Section 203 before addressing the merits of
Argentina’s petition and BG Group’s cross-motion. See Mt. Healthy City Sch. Dist. Bd. of
Educ. v. Doyle, 429 U.S. 274, 278 (1977) (concluding that all courts “are obliged to inquire sua
sponte whenever a doubt arises as to the existence of federal jurisdiction”); Sinochem Int’l Co.
Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. 422, 430-31 (2007) (citing Steel Co. v. Citizens
for Better Env’t, 523 U.S. 83, 93-102 (1998)) (“[A] federal court generally may not rule on the
merits of a case without first determining that it has jurisdiction over the category of a claim in
suit . . . .”).
A. The Jurisdiction of the Court to Entertain the Petition and Cross-Motion
As noted above, whether the Court has subject-matter jurisdiction over this dispute
hinges on whether the Award is one that is covered under the New York Convention. Article
I(1) of the New York Convention provides the following:
This Convention shall apply to the recognition and enforcement of arbitral awards
made in the territory of a State other than the State where the recognition and
enforcement of such awards are sought, and arising out of differences between
persons, whether physical or legal. It shall also apply to arbitral awards not
considered as domestic awards in the State where their recognition and
enforcement are sought.
New York Convention, art. I(1). Put differently, the first sentence applies to arbitral awards that
are issued outside the territorial boundaries of the nation where enforcement is being sought,
9
while the second sentence refers to awards that are issued within the borders of the nation where
enforcement is sought, yet are sufficiently foreign in character as to not be considered “domestic
awards” in that country.8 The parties agree that the Award was issued in the District of
Columbia and it therefore falls outside the bounds of the “extraterritorial” provision of Article
I(1). See Bergensen v. Joseph Muller Corp., 710 F.2d 928, 932 (2d Cir. 1983) (concluding that
an arbitral award issued in New York “does not meet the territorial criterion”). The parties do
not agree, however, whether the United States recognizes the “non-domestic” provision at all,
and even if it does, whether this Award falls within the meaning of a “non-domestic” award
under Article I(1) of the New York Convention.
In support of its argument that the United States does not recognize the “non-domestic”
provision of the New York Convention, Argentina relies on the United States’s invocation of a
reservation contained in Article I(3) of the Convention, Pet’r’s 2d Supp. Mem. at 2, which was
aptly described by one of the Convention’s drafters as the “reciprocity clause,” see, e.g., United
Nations Conference on International Commercial Arbitration, May 20-June 10, 1958, Adoption
and Signature of the Final Act and Convention, at 9, U.N. Doc. E/CONF.26/SR.23 –
E/CONF.26/L.60 (June 9, 1958). The clause maintains, in part, that “[t]he United States of
America will apply the Convention, on the basis of reciprocity, to the recognition and
enforcement of only those awards made in the territory of another Contracting State.”9 New
8
For ease of reference, the Court will refer to the first provision of Article I(1) as the “extraterritorial” provision,
and the second provision as the “non-domestic” provision.
9
Article I(3) of the New York Convention states the following:
When signing, ratifying[,] or acceding to this Convention, or notifying extension under article X
hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the
recognition and enforcement of awards made only in the territory of another Contracting State. It
may also declare that it will apply the Convention only to differences arising out of legal
(continued . . .)
10
York Convention, Note by the Department of State, 21 U.S.T. 2517, 330 U.N.T.S. 38, available
at 1970 WL 104417, at *1. Argentina argues that a plain reading of this declaration compels “a
district court to recognize and enforce only . . . arbitral award[s] rendered in a foreign state.”
Pet’r’s 2d Supp. Mem. at 4.
Argentina’s reading of the reservation fails to comport with the well-known canon of
statutory construction that a court must “give effect, if possible, to every word . . . used,” Reiter
v. Sonotone Corp., 442 U.S. 330, 339 (1979), because its interpretation renders superfluous the
phrase “on the basis of reciprocity” as it is used in the declaration. Indeed, Argentina’s proffered
interpretation of the “reciprocity clause” has nothing to do with the concept of reciprocity
whatsoever. By taking into account the reciprocity language, it is evident that Article I(1) of the
New York Convention is not concerned with the applicability of the “non-domestic” provision,
but rather, as noted by BG Group, the clause addresses “the inapplicability of the New York
Convention to [arbitral] awards rendered in States that are not a party to the . . . Convention.”
Resp’t’s 2d Supp. Mem. at 2-3. It is BG Group’s interpretation of Article I(1), not Argentina’s,
that accounts for each and every word comprising the “reciprocity clause.”
Another defect present in Argentina’s interpretation of the “reciprocity clause” is that it
directly conflicts with Congress’s understanding of the New York Convention’s extensive reach
to arbitral awards issued in the United States, as reflected in the language of 9 U.S.C. § 202(2006), which provides that:
[a]n agreement or award arising out of [a commercial] relationship which is
entirely between citizens of the United States shall be deemed not to fall under the
Convention unless that relationship involves property located abroad, envisages
(. . . continued)
relationships, whether contractual or not, which are considered as commercial under the national
law of the State making such declaration.
11
performance or enforcement abroad, or has some other reasonable relation with
one or more foreign states.
While it is clear that arbitral awards “between citizens of the United States” that maintain “some
. . . reasonable relation[ship] with one or more foreign states” are covered by the New York
Convention pursuant to Section 202, Congress did not explicitly state whether Section 202
applies to arbitral awards rendered abroad, awards issued domestically, or both. But in reading
Section 202 in pari materia with the New York Convention, it is evident that Congress did not
intend for this provision to relate to arbitral awards issued outside of the territorial jurisdiction of
the United States, as an award rendered under that circumstance falls within the explicit language
of the “extraterritorial” provision of Article I(1) of the Convention. See New York Convention,
art. I(1); Albert Jan van den Berg, When Is an Arbitral Award Nondomestic Under the New York
Convention of 1958, 6 Pace L. Rev. 25, 39 (1985) (“[T]he New York Convention always applies
to the recognition and enforcement of an arbitral award made in another state.”). Thus, Congress
must have intended for Section 202, and the provisions of the New York Convention, to apply to
arbitral awards issued within the territorial boundaries of the United States, i.e., awards covered
under the “non-domestic” provision of the Convention. Accordingly, Section 202 debunks any
argument that Congress, in ratifying the New York Convention, understood the “reciprocity
clause” to limit the reach of that treaty to only those arbitral awards issued extraterritorially.
As for whether the Award constitutes a “non-domestic” award under the New York
Convention, the starting point in resolving that question is the Convention itself. As the plain
text of Article I(1) states, each individual signatory to the Convention determines what
constitutes a “non-domestic” award. See New York Convention, art. I(1) (applying the
Convention to “arbitral awards not considered as domestic awards in the State where their
recognition and enforcement are sought”). And, as noted above, Congress intended to “spell[]
12
out its definition of” a “non-domestic” award in Section 202 of the FAA, and that in doing so, it
did not exclude from its definition arbitral awards involving two foreign parties. Bergensen, 710
F.2d at 933. In fact, Section 202 extends the coverage of the New York Convention to arbitral
awards “between citizens of the United States” that maintain some “reasonable relation[ship]
with one or more foreign states.” 9 U.S.C. § 202. Given that Congress plainly intended for the
New York Convention to cover certain arbitral awards issued in matters involving two domestic
parties, it would be nonsensical for this Court to conclude that the Award—which was issued in
a dispute involving two foreign parties, a foreign treaty, and a foreign investment —falls outside
the reach of a treaty that was ratified for the purpose of recognizing and enforcing foreign
arbitral awards. Therefore, the Award plainly falls within the “non-domestic” provision of
Article I(1) of the New York Convention and, consequently, this Court has subject-matter
jurisdiction to entertain this matter under 9 U.S.C. § 203.1010
BG Group contends that the Court should not entertain the Petition because Argentina failed to comply with 9
U.S.C. § 12, which requires a party moving to vacate, modify, or correct an arbitral award to serve “[n]otice of [the]
motion . . . upon the adverse party or his attorney within three months after the award is filed or delivered.”
Specifically, BG Group alleges that the Award was delivered to the parties on December 24, 2007, and that
Argentina did not serve notice of the Petition until April 8, 2008, approximately two weeks after the limitations
period expired on March 24, 2008. Resp’t’s Cross-Mot. at 14. On the other hand, Argentina asserts that it had sent
an e-mail, with the Petition attached, to both BG Group and its counsel on March 20, 2008. Pet’r’s Reply at 5; see
also Pet’r’s Pet., Ex. 3 (Affidavit of Fernando Koatz) ¶ 6-7 (declaring under oath that the Petition was served on BG
Group and its counsel on March 20, 2008).
While Section 12 of the FAA is unquestionably applicable to the Petition now before the Court, see 9 U.S.C. § 208(providing that 9 U.S.C. §§ 1-12 are applicable to matters covered under the New York Convention “to the extent
that [they] are not in conflict with [9 U.S.C. §§ 201-208] or the Convention as ratified by the United States”), the
problem with construing Section 12 in the context of international arbitration awards is that this provision “is an
anachronism [that does not] account for the internationalization of arbitration law subsequent to its enactment.”
Matter of Arbitration Between InterCarbon Bermuda, Ltd. and Caltex Trading and Transp. Corp., 146 F.R.D. 64, 67
n.3 (S.D.N.Y. 1993). This is because Section 12 prescribes the appropriate manner of service for parties located in a
district within the United States, but does not “give any direction for service on a foreign party.” Id. at 67. Further
complicating the analysis is that the Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents in Civil and Commercial Matters (the “Hague Convention”), Nov. 15, 1965, 20 U.S.T. 361, 658
U.N.T.S. 163, presumably governs the method for serving process on an adverse party abroad, at least in the absence
of any mandate to the contrary. But under the Hague Convention, a petitioner’s compliance with Section 12 of the
FAA would be virtually impossible because the Convention requires that a “central authority” located within the
receiving country be solely responsible for serving the documents within that country, id. art. 5, and these “central
authorities can and do take significantly longer than 90 days to arrange for service of process,” Broad v.
(continued . . .)
13
B. The Merits of the Petition and Cross-Motion
Turning to the merits of the Petition, Argentina relies on several provisions under 9
U.S.C. §§ 10(a) and 11 in support of its request for vacatur or modification of the Award.
Specifically, Argentina argues that the Award should be vacated for the following reasons: (1)
the arbitral panel exceeded its authority under the Investment Treaty, 9 U.S.C. § 10(a)(4); (2) the
arbitral panel acted “in manifest disregard of the law,” LaPrade, 246 F.3d at 706 (citation
omitted); (3) there was “evident partiality or corruption” on the part of one of the arbitrators on
the panel, 9 U.S.C. § 10(a)(2); (4) the Award was procured through “corruption, fraud, or undue
means,” 9 U.S.C. § 10(a)(1); and (5) the Award is disproportionate, unfair, and irrational, and
therefore should be modified pursuant to 9 U.S.C. § 11. The Court will address each issue in
turn.
1. Whether the Arbitral Panel and ICC Court Exceeded Their Authority
Argentina proffers several arguments in support of its position that the Court should
vacate the Award pursuant to Section 10(a)(4) of the FAA. First, Argentina contends that the
ICC Court exceeded its authority by failing to disqualify Jan van den Berg from serving on the
(. . . continued)
Mannesmann Anlagenbau AG, 196 F.3d 1075, 1077 (9th Cir. 1999). And because various courts have observed that
“[t]here is no statutory or common law exception to” the three-month time limitation set forth under Section 12,
strict enforcement of the limitations period set forth under Section 12 would effectively bar any petition to vacate an
arbitral award where foreign parties stand on both sides of the aisle. Dalal v. Goldman Sachs & Co., 541 F. Supp.
2d 72, 76 (D.D.C. 2008 ) (Sullivan, J.), aff’d 575 F.3d 725 (D.C. Cir. 2009); see also Webster v. A.T. Kearney, Inc.,
507 F.3d 568, 574 (7th Cir. 2007) (denying the petition to vacate because it was filed one day late); Sanders-
Midwest, Inc. v. Midwest Pipe Fabricators, Inc., 857 F.2d 1235, 1238 (8th Cir. 1988) (finding no exceptions to the
time for service of notice as prescribed under Section 12).
Fortunately for the Court, the quandary of applying Section 12 in the international arbitration context is a perplexing
problem whose resolution will be left for another day, as this issue does not involve a question of jurisdiction, Dalal,
541 F. Supp. 2d at 76 (construing the three-month time limitation under Section 12 as a statute of limitations, rather
than a jurisdictional bar), that the Court must resolve first before addressing the merits, Sinochem, 549 U.S. at 430-
31 (citing Steel Co., 523 U.S. at 93-102). Furthermore, the Court need not resolve this issue because even assuming
that Argentina timely served notice of the Petition, the Court nonetheless concludes that the Petition is without
merit. The Court will, therefore, pass on the question of whether Argentina is time-barred under Section 12 from
asserting the claims at issue here.
14
panel. Pet’r’s Pet. ¶ 69. Second, Argentina asserts that the Court must vacate the Award under
Section 10(a)(4) because the arbitral panel improperly “permit[ed] BG [Group] to arbitrate its
claims” before seeking recourse in the Argentine courts. Id. ¶ 60. Third, Argentina contends
that the arbitral panel acted outside the bounds of its authority by allowing BG Group to “bring[]
a derivative claim on behalf of MetroGAS.” Id. And fourth, Argentina argues that the arbitral
panel wrongfully rejected “the discounted cash flow method” in calculating the amount of the
Award. Id. ¶ 105.
In order for Argentina to prevail in its efforts to vacate the Award under Section 10(a)(4),
it must demonstrate that the “arbitrator stray[ed] from interpretation and application of the
agreement and effectively dispense[d] his own brand of industrial justice.” Stolt-Nielsen S.A. v.
AnimalFeeds Int’l Corp., ___ U.S. ___, ___, ___ S. Ct. ___, ___, 2010 WL 1655826, at *7 (Apr.
27, 2010) (citations and internal quotation marks omitted). But, “if an arbitrator was arguably
construing or applying the contract, a court must defer to the arbitrator's judgment.” Madison
Hotel v. Hotel & Rest. Employees, Local 25, 144 F.3d 855, 859 (D.C. Cir. 1998) (citation and
internal quotation marks omitted). In conducting its review, the Court “may review the
substance of an arbitration award, [but] only the narrowest circumstances will justify setting the
award aside.” Id. at 858-59 Applying these standards here, it is evident that Argentina has failed
demonstrate that vacatur is appropriate under Section 10(a)(4).
On the question of whether the ICC Court exceeded its authority by failing to unseat Jan
van den Berg from the arbitral panel, the claim is without merit. Nowhere in its Petition does
Argentina dispute the ICC Court’s authority under the Investment Treaty or the UNICTRAL
arbitration rules to entertain its objection to Jan van den Berg’s appointment to the arbitral panel.
And, to the extent that Argentina argues that the ICC Court exceeded its authority by allowing a
15
partial and biased arbiter to sit on the panel, that argument must be rejected because Argentina
has failed to provide any evidence establishing partiality on the part of Jan van den Berg. See
infra p. 20-21. Argentina has simply provided no basis from which the Court could vacate the
Award based on the ICC Court’s exercise of authority.
Likewise, Argentina has not met its burden of showing that the arbitral panel exceeded its
authority by entertaining BG Group’s claims without requiring that recourse first be sought in the
Argentine court system. The panel concluded that BG Group need not seek recourse in the
Argentine court system before arbitrating this dispute because “[a]s a matter of treaty
interpretation, . . . Article 8(2)(a)(i) cannot be construed as an absolute impediment to
arbitration” where “any such interpretation would lead to the kind of absurd and unreasonable
result proscribed by Article 32 of the Vienna Convention [on the Law of Treaties].”11 Award ¶
147. And, the arbitral panel concluded that a strict textual interpretation of Article 8(2)(a)(i)
would result in an “absurd and unreasonable result” because Argentina had promulgated
“emergency legislation . . . whose purpose was to bar recourse to the courts by those whose
rights were felt to be violated.” Id. ¶ 148; see also id. ¶ 149 (concluding that Argentina had also
implemented a decree which “provided for a stay of all suits brought by those whose rights were
allegedly affected by the [government’s] emergency measures”). As the cited language
illustrates, the panel correctly turned to the text of Article 8(2)(a)(i) of the Investment Treaty and
relevant international law sources in attempting to discern its jurisdiction to hear BG Group’s
11
Article 32 of the Vienna Convention on the Law of Treaties, to which Argentina is a signatory, provides that
“[r]ecourse may be had to supplementary means of interpretation” when standard means of treaty interpretation
would “leave[] the meaning [of the provision] ambiguous or obscure[,] or . . . lead[] to a result which is manifestly
absurd or unreasonable.” The arbitral panel was authorized, if not compelled, to resort to sources of international
law in construing Article 8(2)(a)(i) of the Investment Treaty. See Investment Treaty, art. 8(4) (requiring “[t]he
arbitral tribunal [to] decide the dispute in accordance with the provisions of [the Investment Treaty] and the
applicable principles of international law”).
16
claims, and it relied upon a colorable, if not reasonable, interpretation of these provisions in
concluding that the matter was arbitrable. Under Section 10(a)(4) and controlling case law, the
Court is without authority to disturb the panel’s conclusions.
Argentina’s remaining efforts to vacate the Award under Section 10(a)(4) must also be
rejected. In determining whether international law authorized BG Group to bring “a derivative
claim on behalf of MetroGAS,” Pet’r’s Pet. ¶ 60, the panel reviewed several arbitration decisions
and ultimately concluded that those cases supported the proposition that derivative claims are
allowable under international law. In fact, the two cases cited by Argentina to support its
argument that the panel could not hear derivative claims were actually found by the arbitral panel
to stand for the opposite proposition. See Award ¶ 192 (“In support for its position [that
derivative claims are not allowable] under international law, [Argentina] initially relied on
Barcelona Traction, Light and Power Co. [(Belg. v. Spain), 1970 I.C.J. 3 (Feb. 5)], and it later
invoked . . . [GAMI Investments, Inc. v. United Mexican States, UNCITRAL/NAFTA, Final
Award (Nov. 15, 2004)]”), id. ¶ 197 (concluding that international law “does not require a
claimant shareholder to be a majority or controlling owner for his investment to qualify for
protection”); id. ¶ 193 (“The Tribunal finds the GAMI decision apposite and compelling as it
relates generally to derivative claims, and specifically to the significance of Barcelona
Traction.”). Similarly, when the panel concluded that Section 2.2 of the Investment Treaty was
silent on the standard for calculating damages, the arbitral panel properly turned to sources of
international law to “identify the rule of law that governs in that situation.” Stolt-Nielsen S.A.,
___ U.S. at ___, ___ S. Ct. at ___, 2010 WL 1655826, at *7; see also Award ¶ 423-24 (relying
“on the principle established in 1928 by the Permanent Court of International Justice in the Case
Concerning the Factory at Charzów [(F.R.G. v. Pol.), 1928 P.C.I.J. (ser. A) No. 17, at ¶ 330
17
(Sept. 13)]” that “reparation is due for failure to apply a convention even where the convention
itself is silent on the issue”); id. ¶ 428 (construing customary international law to require that the
wrongful act be the proximate cause of the damages, and that the damages must not be
speculative in nature). And, the panel determined that under customary international law, BG
Group was entitled to the difference in value of BG’s investment before the enactment of
Argentina’s emergency laws and the value of the investment after the legislation was adopted.
Id. ¶ 440 (referring to BG Group’s relinquishment of “an 18.8% indirect interest in MetroGAS in
exchange for a US$38.2 million write-off,” resulting “in a post-Emergency Law value of BG’s
45.11% interest in MetroGAS of US$91,825,244.15”); id. ¶ 441 (relying on BG Group’s expert
witness in determining that the company’s share in MetroGAS prior to the enactment of the
emergency laws was US$277.0 million); id. ¶ 443 (concluding that BG Group is entitled to
approximately US$185 million in damages). Whether the arbitral panel’s reached the correct
result in resolving these issues is not a matter fit for resolution by the Court; rather, it is merely
enough that the arbitral panel reached conclusions that could arguably be justified by a colorable
construction of the Investment Treaty’s provisions and any applicable concepts derived from
international law. And here, the Court is satisfied that the panel’s conclusions meet that
threshold. The arbitral panel having provided sustainable constructions of the Investment Treaty,
the Court must rebuff Argentina’s efforts to vacate the Award under Section 10(a)(4).
2. Whether the Arbitral Panel Acted In Manifest Disregard of the Law
To prevail under the “manifest disregard of the law” standard, Argentina must
demonstrate “more than error or misunderstanding with respect to the law.” LaPrade, 246 F.3d
at 706. Rather, it must show that “(1) the arbitrators knew of a governing legal principle[,] yet
refused to apply it or ignored it altogether[,] and (2) the law ignored by the arbitrators was well[-
18
]defined, explicit, and clearly applicable to the case.” Id. Here, Argentina argues that the
arbitral panel’s exercise of jurisdiction over BG Group’s claims, as well as the panel’s rejection
of the “state of necessity” doctrine relied upon by Argentina in the arbitration, were made in
“manifest disregard of the law.” Pet’r’s Reply at 10, 12. These arguments are simply without
merit.
In resolving the jurisdictional question, the arbitral panel did not “ignore[] the plain
language of the [Investment] Treaty,” as Argentina suggests. Pet’r’s Reply at 10 (emphasis
added). Rather, as noted above, the arbitral panel construed Article 8(2)(a)(i) of the Investment
Treaty together with Article 32 of the Vienna Convention and determined that the former was
not applicable under the particular circumstances of this case. Given that the arbitral panel
provided a colorable justification for its interpretation of the Investment Treaty, it can hardly be
said that the panel disregarded the applicable law.
Similarly, Argentina’s argument that the arbitral panel “misunderstood . . . and failed to
correctly apply the [‘state of necessity’] doctrine” is nothing more than a mere assertion of error,
and not that the panel manifestly disregarded the law. Pet’r’s Pet. ¶ 61. Indeed, Argentina even
admits that the panel addressed the “state of necessity” doctrine in issuing the Award. See id. ¶
64 (contending that “[i]n a mere[] short seven paragraphs of the Award . . . the [panel] arbitrarily
dismissed [the ‘]state of necessity[’] defense”). But putting aside the fact that the arbitral panel
considered, rather than ignored, Argentina’s invocation of the “state of necessity” doctrine, it is
far from certain that the doctrine is “clearly applicable” in this case. As the arbitral panel
explained in issuing the Award, a country cannot invoke the “state of necessity” doctrine without
being subject to “very restrictive conditions” to ensure that the country does not abuse the
doctrine and “violate . . . international law with impunity.” Award ¶ 410; see also International
19
Court of Justice, Case Concerning The Gabcikovo-Nagymaros Project (Hungary/Slovakia), 1997
I.C.J. 7 (Sept. 25) (concluding that the “state of necessity” doctrine, as codified in Article 25 of
the International Law Commission’s Articles on State Responsibility, is limited to circumstances
in which there is “grave and imminent peril”). And, the panel found that Argentina could not
invoke this doctrine because, inter alia, it had lured BG Group and other investors to accept
measures that Argentina described as temporary, but later “set[] up a mechanism . . . that was
never intended to restore the conditions of Argentina’s initial representations.” Award ¶ 411.
Thus, the “state of necessity” doctrine is by no means “clearly applicable” to this case; if
anything, the arbitral panel explained why this doctrine has no application to the facts of this
case whatsoever. The Court, therefore, rejects Argentina’s challenges to the arbitral panel’s
decision based on the “manifest disregard of the law” standard.
3. Whether There was Evident Partiality or Corruption With the Arbitrators
To have the award vacated under Section 10(a)(2), Argentina must present evidence of
partiality or corruption that is “direct, definite, and capable of demonstration[,] rather than
remote, uncertain, or speculative.” Al-Harbi v. Citibank, N.A., 85 F.3d 680, 683 (D.C. Cir.
1996) (citation omitted). Indeed, Argentina has the “heavy” burden to “establish specific facts
that indicate improper motives on the part of an arbitrator.” Id. (emphasis added and citation
omitted). As grounds for its position, Argentina contends that arbitrator Albert Jan van den Berg
presided over four arbitral matters arising out of the Investment Treaty, and that in the first
matter (involving a company named LG&E), he held that Argentina could rely on the “state of
necessity” doctrine, while in the three other arbitrations (including the one now being disputed
before the Court), Jan van den Berg concluded, without elaboration, that the doctrine could not
be invoked. Pet’r’s Pet. ¶ 71. Argentina argues that Jan van den Berg’s inconsistent decisions,
20
as well as his failure to explain the reasoning behind his decisions, is evidence of bias and that
the Award must be vacated for those reasons. Id. ¶ 76. The argument lacks merit.
Jan van den Berg’s failure to provide an explanation for his decision is hardly evidence of
nefarious intent on his part, especially given the well-settled principle that arbitrators have no
obligation to disclose the basis upon which their awards are made. Wilko v. Swan, 346 U.S.
427, 436 (1953). Furthermore, there could be a number of innocuous reasons to explain why Jan
van den Berg reached a different conclusion in the first case. For example, there may be a
material factual distinction between this case and the LG&E case. See, e.g., Resp’t’s Reply at 2
n.3 (asserting that the LG&E tribunal accepted Argentina’s defense of necessity based on a
provision which is contained in the bilateral investment treaty between the United States and
Argentina, but does not exist in the Investment Treaty at issue here). Or, it may be that LG&E
failed to articulate a persuasive argument in opposition to Argentina’s invocation of the state of
necessity doctrine, while BG Group and the other litigants have since raised convincing
challenges. The upshot is that there is no basis for the Court to conclude that Jan van den Berg
was a biased arbiter without engaging in rank speculation. Accordingly, Argentina has failed to
provide the Court with “direct” and “definite” evidence of arbiter bias which is necessary to
prevail under Section 10(a)(2) of the FAA. Al-Harbi, 85 F.3d at 683.
4. Whether the Award was Procured by Corrupt, Fraudulent, or Undue Means
Argentina asserts that the Award was procured by “corrupt, fraud, or undue means”
because witness statements presented in this case contain “passages that are identical or
substantially identical to a witness statement presented in [another unrelated] case.” Pet’r’s Pet.
¶ 82. Specifically, Argentina observes that the “witness statements presented in this case have
many passages that are identical or substantially identical to a witness statement presented in [an
21
earlier] case,” and that because counsel for BG Group represented the plaintiff involved in the
earlier case, the statements must “reflect what [c]ounsel would have [the] witness[es] declare,”
rather than “what the witness[es] saw, thought[,] or believed at the time” the statements were
made. Id. ¶ 82.
But Argentina assumes too much. At best, the similarities between the witness
statements establish that counsel drafted the declarations in both cases. Assuming that counsel
did in fact have a heavy hand in drafting the declarations at issue in these cases, their actions do
not rise to the level of wrongdoing unless Argentina can prove that the witness signed the
statement without subscribing to the facts stated therein. See Resolution Trust Corp. v. Bright, 6
F.3d 336, 342 (5th Cir. 1993) (finding no ethics violation where attorneys drafted an affidavit but
“made sure that [the witness] signed [it] only if she agreed with its contents”). Argentina has
provided no evidence to that effect, and thus there is nothing in the record before the Court that
allows for vacatur of the Award pursuant to Section 10(a)(1).
5. Whether a “Disproportionate,” “Unfair,” and “Irrational” Award Can Be
Modified Under 9 U.S.C. § 11Finally, Argentina argues that the Court should modify the Award because the arbitral
panel’s rejection of the “discounted cash flow basis” standard resulted in a disproportionate,
unfair, and irrational Award. Pet’r’s Reply at 17. Unfortunately for Argentina, Section 11 of the
FAA does not authorize the Court to modify the Award on these grounds. Rather, the Court can
modify the Award under Section 11 only if it finds that the Award contains a “material
miscalculation of figures,” 9 U.S.C. § 11(a), i.e., a “mathematical error appear[ing] on [its] face,”
Grain v. Trinity Health, Mercy Health Servs., Inc., 551 F.3d 374, 378 (6th Cir. 2008) (quoting
Apex Plumbing Supply, Inc. v. U.S. Supply Co., 142 F.3d 188, 194 (4th Cir. 1998)), the
arbitrators had decided a matter that was “not submitted to them,” 9 U.S.C. § 11(b), or that the
22
Award “is imperfect in matter of form not affecting the merits of the controversy,” id. § 11(c).
Argentina does not rely on any of these as grounds for modifying the Award under Section 11
and therefore relief under this provision is not available to it. The request for such relief must
therefore be denied.
IV. Conclusion
“A federal court cannot vacate [or modify] an arbitral award merely because it is
convinced that the arbitration panel made the wrong call on the law.” Howard Univ. v. Metro.
Campus Police Officer’s Union, 519 F. Supp. 2d 27, 37 (D.D.C. 2007) (Walton, J.) (quoting
Wallace v. Buttar, 378 F.3d 182, 190 (2d Cir. 2004)). Yet Argentina’s attack on the validity of
the Award is premised on nothing more than numerous assertions of error on the part of the
arbitral panel. To be sure, under a more searching, appellate-style review, the arguments
presented by Argentina in its Petition could very well carry the day. But, because the Court in
this circumstance does not sit like “an appellate court does in reviewing the decisions of lower
courts,” Kanuth, 949 F.2d at 1178, the Court has no choice but to deny the relief sought by
Argentina in its Petition.
The remaining question in this matter, therefore, is whether the Court should grant BG
Group’s cross-motion to confirm the Award. Argentina argues that it “should be given [a] full
opportunity to respond to [BG Group’s cross-motion] once the Court has [rendered] a decision”
regarding its Petition, “considering the serious violations of public policy” allegedly committed
by the arbitral panel,12 Pet’r’s Reply at 22, while BG Group responds that Argentina has had
more than a month to oppose the cross-motion, but that in any event, “Argentina’s challenge to
the Award on public policy grounds is entirely without foundation,” Resp’t’s Reply at 4 n.4. The
12
Article V(2)(b) of the New York Convention provides a court with the authority to refuse recognition of an
arbitral award if confirmation of the award “would be contrary to the public policy of that country.”
23
Court shares a level of empathy with BG Group’s position (i.e., that Argentina could have (and
should have) set forth in its memorandum in opposition to BG Group’s cross-motion the basis
for vacatur on public policy grounds), and that given the nature of the Award, the Court is highly
skeptical that the Award violates this country’s “most basic notions of morality and justice.”
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 939 (D.C. Cir. 2007) (quoting Karahas
Bodas Co., LLC v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274,
305-06 (5th Cir. 2004)).
Nonetheless, in light of Argentina’s express reservation for further briefing on the issue
of whether vacatur is appropriate under Article V(2)(b) of the New York Convention, the Court
concludes that Argentina should be given the opportunity to submit a supplemental
memorandum. Thus, any supplemental memorandum that Argentina desires to submit on this
issue shall be filed on or before June 30, 2010, BG Group shall file its memorandum in
opposition to Argentina’s supplemental memorandum on or before July 21, 2010, and Argentina
shall file its brief in reply to BG Group’s opposition memorandum on July 30, 2010. And, to
ensure the prompt resolution of this matter, the parties shall then appear before the Court at 9:30
a.m. on August 13, 2010, for a hearing on the merits of BG Group’s motion to confirm the
Award. The Court expects strict adherence to this schedule, given the inconvenience and
additional delay that BG Group will have to endure as a result of additional briefing.
Accordingly, the Court will not grant Argentina any extensions of time to file its submissions
absent the most compelling circumstances, and the failure of Argentina to timely file a
supplemental memorandum will result in the Court treating BG Group’s cross-motion as
conceded.
24
SO ORDERED on this 7th day of June, 2010.13
REGGIE B. WALTON
United States District Judge
13
The Court issued an order on March 31, 2010, granting BG Group’s motion for a pre-judgment bond and, inter
alia, staying further action in this case until otherwise ordered by the Court. In light of the foregoing analysis, the
Court will issue an order accompanying this memorandum opinion (1) vacating the March 31, 2010 order; (2) lifting
the stay and administratively reopening the case; (3) denying Argentina’s Petition to Vacate or Modify an Award;
(4) denying as moot BG Group’s Motion for a Pre-Judgment Bond; (5) directing Argentina to file a supplemental
memorandum explaining its reasons why the Court should refrain from confirming the Award pursuant to Article
V(1)(c) of the New York Convention, if any it intends to file, on or before June 30, 2010; (6) directing BG Group to
file its memorandum in opposition to Argentina’s supplemental memorandum, if any it intends to file, on or before
July 21, 2010; (7) directing Argentina to file its brief in reply to BG Group’s opposition memorandum, if any it
intends to file, on or before July 30, 2010; and (8) directing the parties to appear before the Court at 9:30 a.m. on
August 13, 2010, for a hearing on the merits of BG Group’s motion to confirm the Award.
25