United States District Court, District of Columbia
P. Mehta United States District Judge
case is one in a recent series of cases filed in this
District Court in which Respondent Government of Belize finds
itself seeking to prevent the confirmation of an
international arbitration award entered against it. In two
cases that preceded this one-Belize Social Development
Ltd. v. Government of Belize, No. 09-cv-2170 (RJL), and
BCB Holdings Ltd. v. Government of Belize, No.
14-cv-1123 (CKK)-the district courts confirmed the
arbitration awards at issue and, in both cases, the Court of
Appeals affirmed the district courts’
rulings.In Belize Social Development and
BCB Holdings, the Government of Belize raised many
of the same arguments that it has raised in this case. This
court, therefore, does not write on a clean slate. Indeed, as
will be seen, the Court of Appeals’ decisions in
Belize Social Development and BCB Holdings
foreclose several of Respondent’s arguments made in
The Belize Bank Limited (“Bank”) brings this
action against Respondent Government of Belize
(“Belize”) to enforce a 2013 arbitration award
issued by the London Court of International Arbitration in
London, England. The Bank was awarded BZ$36, 895,
509.46 plus interest and now seeks to confirm the
award under the Federal Arbitration Act, 9 U.S.C. § 201,
et seq., which codifies the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards.
reasons below, the Bank’s Petition to Confirm the
Foreign Arbitration Award will be granted and Belize’s
Motion to Dismiss the Petition will be denied.
2001 to 2004, the Bank entered into various loan agreements
with Universal Health Services Company Limited, a health
services provider in Belize. Pet. to Confirm Foreign
Arbitration Award, ECF No. 1 [hereinafter Pet.], ¶ 14.
In December 2004, Said Musa, Belize’s then-Prime
Minister and Minister of Finance, signed a “Guarantee
and Postponement of Claim Agreement”
(“Guarantee”) on the behalf of Belize, which
purported to guarantee payment to the Bank of all debts and
liabilities owed to the Bank by Universal Health Services.
Resp’t’s Prelim. Resp. to Pet., ECF No. 13
[hereinafter Resp.], at 3.
early 2007, it became apparent to the Bank that Universal
Health Services would be unable to service its debt to the
Bank. Pet. ¶ 15. When Belize declined to satisfy the
debt under the Guarantee, Belize entered into a Settlement
Deed with the Bank in March 2007 to discharge its liability
under the Guarantee. Id. ¶ 16. Integrated into
the Settlement Deed was a Loan Note that obligated Belize to
pay the Bank a total of BZ$33, 545, 820, with interest
accruing daily and compounded monthly on demand or in any
event no later than September 23, 2007. Id. ¶
17. Belize, however, failed to pay the Bank the first monthly
interest payment, which was due on April 23, 2007.
Id. ¶ 20. On May 9, 2007, the Bank notified
Belize that it was in default on the Loan Note and invoked a
provision accelerating the full amount of the principal
together with all accrued interest. Id. Belize did
not respond to the demand or make any payment. Id.
Bank then invoked a dispute resolution clause contained in
the Settlement Deed, requiring the parties to arbitrate any
disputes in London, England, under the Rules of the London
Court of International Arbitration (“LCIA”).
Id. ¶¶ 18, 22. The Bank commenced
arbitration proceedings under the LCIA Rules in May 2007,
seeking, among other things, a declaration that the
Settlement Deed and Loan Note were valid and payment of the
sums due under the Loan Note. Id. ¶ 22. Belize
did not, however, participate in the arbitration.
Id. ¶ 23. In July 2007, the arbitral tribunal
rendered a Partial Award on Jurisdiction, holding that it had
jurisdiction over the dispute. Id. ¶ 25.
Following the Partial Award, in January 2008, the Bank and
Belize entered into a settlement agreement (“2008
Settlement Agreement”) that terminated the arbitration
proceedings before entry of a Final Award. Id.
February 2008, following elections, the government of Belize
changed. Id. ¶ 27. The new government sought to
invalidate the 2008 Settlement Agreement through litigation
in the Belizean courts. Id. ¶¶ 27-28. The
Bank, however, succeeded in obtaining an order from the
Belizean Supreme Court-a trial level court-that stayed the
local litigation in favor of arbitration proceedings.
Id. ¶ 32. Deeming the litigation to be a
violation of the 2008 Settlement Agreement, the Bank
re-initiated arbitration under the LCIA Rules on July 9,
2008. Id. ¶ 33. In the 2008 Arbitration, the
Bank sought a declaration that the 2008 Settlement Agreement
was valid and payment of the amounts owed under that
Agreement. Id. Alternatively, the Bank asserted
that, if the 2008 Settlement Agreement was not valid, the
Bank was entitled to collect damages based on Belize’s
breach of the Loan Note attached to the Settlement Deed.
Belize did not initially participate in the 2008 Arbitration.
Id. ¶ 34. The LCIA appointed the same arbitral
tribunal that presided in the prior proceedings. Id.
The panel issued the First Partial Award on August 4, 2009,
holding that the panel “had jurisdiction over the
Bank’s claims arising out of the 2008 Settlement
Agreement. . . . [but] that part of the 2008 Settlement
Agreement was void.” Id. ¶ 36. The
tribunal reserved for later consideration all other issues,
including the Bank’s alternative claims under the
Settlement Deed and Loan Note. Id.
a two-year stay to allow for the conclusion of new litigation
filed in the Belizean courts, the second phase of the 2008
Arbitration began in late 2011. Id. ¶ 41.
Belize elected to participate in that phase of the
proceedings. Id. Belize soon thereafter made various
challenges to the composition of the arbitral panel, which
the LCIA denied. Id. ¶¶ 42-45. Belize then
withdrew from the 2008 Arbitration. Id. ¶ 46.
January 15, 2013, the arbitral tribunal entered a Final
Arbitration Award in favor of the Bank. Id. ¶
47. The panel found that the Loan Note was valid and
enforceable and that Belize had breached it. Id. It
ordered Belize to pay the Bank the sum of BZ$36, 895, 509.46,
plus interest at 17%, compounded on a monthly basis from
September 8, 2012, until the date of payment. Id.
Belize refused the Bank’s demand for payment in the
full amount of the Final Award. Id. ¶ 48.
April 18, 2014, the Bank filed in this court a Petition to
Confirm Foreign Arbitration Award and to Enter Judgment.
See generally Pet. Belize moved to dismiss the
Petition, see generally Mem. of P. & A. in Supp.
of Resp’t’s Mot. to Dismiss, ECF No. 12-1
[hereinafter Mot. to Dismiss], and filed a Preliminary
Response to the Petition, see generally Resp. The
Petition and the Motion to Dismiss are now ripe for
Belize’s Motion to Dismiss
advances a host of arguments for dismissal of the
Bank’s confirmation petition. They are as follows: (1)
the court lacks subject matter jurisdiction because Belize
has foreign sovereign immunity under the Foreign Sovereign
Immunities Act (“FSIA”); (2) dismissal is
appropriate under the doctrine of forum non
conveniens; (3) the court lacks personal jurisdiction
over Belize; and (4) dismissal is warranted on grounds of
international comity. The court considers each of these
arguments in turn.
Subject Matter Jurisdiction
Court of Appeals recently has explained that:
Where jurisdiction is sought over a foreign sovereign for the
enforcement of an arbitral award, we have held two conditions
must be satisfied: “First, there must be a basis upon
which a court in the United States may enforce a foreign
arbitral award; and second, [the foreign sovereign] must not
enjoy sovereign immunity from such an enforcement
Diag Human, S.E. v. Czech Republic-Ministry of
Health, No. 14-7142, 2016 WL 3064507, at *2 (D.C. Cir.
May 31, 2016) (quoting Creighton Ltd. v. Gov’t of
the State of Qatar, 181 F.3d 118, 121 (D.C. Cir. 1999)).
As the Court of Appeals did in Diag Human, ...