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Micula v. Government of Romania

United States District Court, D. Columbia.

May 18, 2015

Viorel Micula, Petitioner,
v.
The Government of Romania, Respondent

For VIOREL MICULA, Petitioner: Danforth Newcomb, LEAD ATTORNEY, SHEARMAN & STERLING LLP, New York, NY.

MEMORANDUM OPINION

Amit P. Mehta, United States District Judge.

I. INTRODUCTION

Petitioner Viorel Micula has asked this court to confirm an arbitration award entered in his favor against the Government of Romania under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. Confirming, or recognizing, that arbitration award would render it an enforceable judgment of this court. Micula contends that the court should confirm the award ex parte --that is, without serving the Government of Romania--under 22 U.S.C. § 1650a, which provides: " The pecuniary obligations imposed by such an award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States." The question before the court is whether a statute that empowers federal courts to " enforce" an international arbitration award as if it were a final state court judgment permits a federal court, as a precursor to enforcement, to recognize or confirm such an arbitration award on an ex parte basis.

The court concludes that section 1650a does not permit use of such an ex parte procedure and therefore denies Micula's petition. If Micula wishes to have his arbitration award recognized and enforced in a United States federal court, he must file a plenary action, with proper service on the Government of Romania under the Foreign Sovereign Immunities Act of 1976.

II. BACKGROUND

A. The Convention on the Settlement of Investment Disputes between States and Nationals of Other States

The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (" Convention" or " ICSID Convention" ) established the International Centre for Settlement of Investment Disputes (" ICSID" ). Convention on the Settlement of Investment Disputes between States and Nationals of Other States art. 1, opened for signature Mar. 28, 1965, 17 U.S.T. 1270 [hereinafter ICSID Convention]. The Convention entered into effect on October 14, 1966, after it had been ratified by 20 countries, including the United States.[1] Id. art. 68; ICSID, Contracting States and Measures Taken by Them for the Purpose of the Convention, at 1-6, ICSID Doc. ICSID/8-A (Sept. 2014).

The Convention's purpose was to promote economic development and private international investment by providing a legal framework and procedural mechanism that could be used to resolve (primarily economic) disputes between private investors and governments. Id. at Preamble; SEN. EXEC. REP. NO. 2, at 1 (1966). " ICSID has jurisdiction over a dispute where two requirements are met. First, there must be an investment-related legal dispute between a state party to the Convention and a national of another state that is also a party to the treaty. Second, the parties to the dispute must consent to ICSID's jurisdiction." Mobile Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, __ F.Supp.3d __, No. 14 Civ. 8163, 2015 WL 631409, at *3 (S.D.N.Y. Feb. 13, 2015). Where ICSID has jurisdiction, its decisions are final and are subject to review only within ICSID itself. [WL] at *4.

The Convention, however, did not confer upon ICSID the power to enforce its awards. It left that function to its contracting states. Article 54(1) of the Convention provides:

Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state.

ICSID Convention art. 54(1).

The ICSID Convention was not self-executing. See Medellin v. Texas, 552 U.S. 491, 506, 128 S.Ct. 1346, 170 L.Ed.2d 190 (2008) (explaining when a treaty obligation requires legislation to become domestic law). It thus required its Contracting States to " take such legislative or other measures as may be necessary for making the provisions of this Convention effective in its territories." ICSID Convention art 69. Congress gave the ICSID Convention domestic effect in the United States by passing the Convention on the Settlement of Investment Disputes Act of 1966 (" Investment Disputes Act" ). See Convention on the Settlement of Investment Disputes Act of 1966, Pub. Law 89-532, 80 Stat. 334 (1966) (codified at 22 U.S.C. § § 1650 and 1650a). ...


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