United States District Court, District of Columbia
TIMOTHY J. KELLY UNITED STATES DISTRICT JUDGE
in this action, a foreign corporation and one of its
subsidiaries, have filed a complaint seeking recognition and
enforcement of an arbitration award entered by an
international tribunal against the Bolivarian Republic of
Venezuela. Venezuela was served by diplomatic pouch on April
6, 2018, and after it failed to respond to Plaintiffs'
complaint or otherwise appear in this action within 60 days
of the date of service, Plaintiffs filed a motion for default
judgment. For the reasons explained below, the Court will
grant the motion and enter judgment for Plaintiffs.
International Convention on the Settlement of Investment
Disputes between States and Nationals of Other States (the
“ICSID Convention” or “Convention”),
Mar. 18, 1965, 17 U.S.T. 1270, 330 U.N.T.S. 3, is a
“multilateral treaty aimed at encouraging and
facilitating private foreign investment in developing
countries.” Mobil Cerro Negro, Ltd. v. Bolivarian
Republic of Venezuela, 863 F.3d 96, 100 (2d Cir. 2017)
(citing Anthony R. Parra, The History of ICSID
11-12, 24-26 (Oxford 2012)). The Convention provides a
framework for resolving investment disputes between a
“contracting state” to the Convention and a
national of another contracting state, and it established the
International Centre for Settlement of Investment
Disputes-commonly referred to as “ICSID”-to
administer arbitral proceedings, including the proceeding at
issue in this case. ICSID Convention arts. 1-3, 25. ICSID
“has the authority to convene arbitration panels to
adjudicate disputes between international investors and host
governments in Contracting States.” TECO Guatemala
Holdings, LLC v. Republic of Guatemala, No. 17-102, 2018
WL 4705794, at *1 (D.D.C. Sept. 30, 2018) (internal quotation
marks omitted) (quoting Mobil Cerro Negro, 863 F.3d at 101)).
a contracting state or a national of another contracting
state may request that ICSID convene an arbitral tribunal.
See ICSID Convention art. 36. The tribunal will then, upon
considering the dispute, issue a written decision-called an
“award.” Id. art. 48. If either party
objects to the award, it may seek an annulment, equivalent to
pursuing a judicial appeal, before an ad hoc committee of
three individuals who were not members of the original panel.
Id. art. 52. Any award entered by ICSID under the
Convention, which includes any decision interpreting or
annulling the award, is binding on the parties. Id.
art. 53. ICSID, however, is “not empowered to enforce
awards.” TECO Guatemala, 2018 WL 4705794, at *2.
Instead, contracting states are required to “recognize
an award . . . 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.”
ICSID Convention art. 54.
United States is a contracting state to the Convention, see
ICSID, List of Contracting States and Other Signatories of
the Convention (Aug. 27, 2018), and Congress has passed
implementing legislation to give effect to the
Convention's requirement that contracting states
recognize and enforce ICSID awards. Specifically, 22 U.S.C.
§ 1650a(a) provides: “An award of an arbitral
tribunal rendered pursuant to [the ICSID Convention] shall
create a right arising under a treaty of the United States.
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.” That
section further provides that the Federal Arbitration Act
“shall not apply to enforcement of awards rendered
pursuant to the convention.” Id. Lastly,
§ 1650a(b) confers exclusive jurisdiction over these
actions on federal district courts.
Tidewater's Arbitration Proceedings
Tidewater Investment SRL, which is the corporate parent of
Plaintiff Tidewater Caribe, C.A., (collectively,
“Tidewater”) is a company organized and existing
under the laws of Barbados. See Compl. ¶ 2; ECF No. 14-2
(“ICSID Jurisdiction Opinion”) ¶¶ 1-4.
On February 16, 2010, Tidewater and several affiliates
commenced an arbitration proceeding against Venezuela under
the ICSID Convention concerning Venezuela's alleged
expropriation of Tidewater's investments in certain
ventures relating to the oil and gas industry in Venezuela in
2009. Compl. ¶ 13. Tidewater argued that ICSID had
jurisdiction to arbitrate Tidewater's claims against
Venezuela arising under two sources-the bilateral investment
treaty between Venezuela and Barbados (the “BIT”)
and a Venezuelan statute providing protections for
February 8, 2013, after briefing and a hearing, a panel of
arbitrators issued a jurisdictional decision finding that
only Tidewater's claims arising under the BIT were
arbitrable under the Convention. See ICSID Jurisdiction
Opinion. Following additional briefing and a hearing on the
merits, on March 13, 2015, the panel issued a written opinion
and judgment in favor of Tidewater-the Award-in the principal
amount of $46.4 million plus interest accruing at an annual
rate of 4.5% until full payment is made. See ECF No. 1-5
(“ICSID Award”) ¶ 217.
Award also instructed Venezuela to partially reimburse
Tidewater for its arbitration costs at an amount of $2.5
9, 2015, Venezuela filed an application for annulment of the
Award. ICSID convened a three-member ad hoc committee, which,
after further briefing and a hearing, issued a decision on
December 27, 2016, partially annulling the Award but leaving
intact the remainder. See ECF No. 1-6 (“ICSID
Annulment”) ¶ 230. Specifically, the amount of the
Award was reduced to $36.397 million, and Tidewater was
instructed to partially compensate Venezuela for its
annulment-proceeding costs. Id. Tidewater alleges
that this amounted to $122, 069, leaving a net award of costs
owed by Venezuela of $2, 377, 931. See Declaration of Miguel
López Forastier (“Forastier Decl.”), ECF
No. 14-1, ¶ 6.
to Tidewater, Venezuela has failed to pay any part of the