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Gretton Ltd. v. Republic of Uzbekistan

United States District Court, District of Columbia

February 6, 2019

GRETTON LTD., Petitioner,



         Petitioner Gretton Ltd. seeks to enforce a foreign arbitral award assessed against the Republic of Uzbekistan. Gretton itself, however, never had any direct dealings with Uzbekistan. Rather, the dispute arose between the Central Asian country and a company called Oxus Gold, PLC over Oxus's investments in two gold-mining operations there. Although the underlying Award is still working its way through direct-appeal proceedings in France, Gretton - Oxus's litigation funder and assignee of the Award's proceeds - has clamored to have its day in court in the United States. Uzbekistan has now moved to dismiss the Petition, lodging a host of jurisdictional objections to enforcement of the Award, or alternatively to stay the case. Finding it appropriate to stay these proceedings pending the decision of the Paris Court of Appeal, the Court will grant Uzbekistan's Motion in part without treating its arguments to dismiss the suit entirely.

         I. Background

         The underlying controversy stems from Oxus's involvement in two projects related to mining and exploration of gold deposits in Uzbekistan. On August 31, 2011, it filed a notice of arbitration against Uzbekistan seeking $1.2 billion for the purported expropriation of its investments. See ECF No. 5-2 (Arbitral Award), ¶¶ 60, 1019. The arbitral panel, sitting in Paris, issued its Award on December 17, 2015. Id. at 1. It found Uzbekistan liable for only $10, 299, 572 plus interest that - based on Petitioner's calculations - brings the grand total to $13, 026, 908.12. Id. at 396; see also ECF No. 5-8 (Declaration of Kevin N. Ainsworth), ¶ 5.

         On April 26, 2016, Oxus initiated a proceeding before a court in Paris, seeking recognition of the Award. See ECF No. 17-13 (Declaration of Andrea Pinna), ¶ 4. Having received that recognition, it then filed a request on July 26, 2016, before the Paris Court of Appeal for partial vacatur of the Award - namely, it sought to set aside certain portions of the Award denying its claims but to leave intact the portion for which damages were already awarded. Id., ¶ 5. Uzbekistan has naturally opposed; it has also argued that, if the Paris court were to set aside any of the Award, it should vacate the entire Award, rather than merely the portion Oxus lost in arbitration. The parties have submitted several rounds of briefing, and the Paris Court of Appeal is scheduled to hold a hearing on March 26, 2019. Id., ¶¶ 7-8.

         While these proceedings were pending in Paris, Gretton filed its Petition against Uzbekistan in this Court in July 2018 seeking to enforce the piece of the Award in which Oxus prevailed. See ECF No. 1 (Petition to Confirm Arbitration Award). It has represented that Oxus assigned it the proceeds of the Award back in 2012. Id. at 2-3. Uzbekistan now moves to dismiss the Petition on several grounds. See ECF No. 17 (Motion to Dismiss or Stay). It has also moved, in the alternative, for the Court to stay the case pending the outcome of the set-aside proceedings in Paris. Id.

         II. Legal Standard

         The Federal Arbitration Act, 9 U.S.C. §§ 201-208, codifies the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, better known as the New York Convention. Pursuant to the Convention, a district court “shall confirm [an] [arbitral] award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207. “Consistent with the ‘emphatic federal policy in favor of arbitral dispute resolution' recognized by the Supreme Court[, ] . . . t h e FA A affords the district court little discretion in refusing or deferring enforcement of foreign arbitral awards.” Belize Social Development Ltd. v. Government of Belize, 668 F.3d 724, 727 (D.C. Cir. 2012) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985)).

         Under the Convention, however, district courts do have discretion to stay proceedings if “an application for the setting aside or suspension of the award has been made to a competent authority.” New York Convention art. VI. Because “the adjournment of enforcement proceedings impedes the goals of arbitration - the expeditious resolution of disputes and the avoidance of protracted and expensive litigation” - “[a] stay of confirmation should not be lightly granted.” Europcar Italia, S.p.A. v. Maiellano Tours, Inc., 156 F.3d 310, 317 (2d Cir. 1998).

         III. Analysis

         Uzbekistan challenges the Petition to enforce the Award on several bases. It argues that the Court lacks subject-matter jurisdiction because no exception to immunity has been satisfied under the Foreign Sovereign Immunities Act. See Mot. at 2. It also contends that Gretton's efforts to effect service were defective and that personal jurisdiction therefore does not exist. Id. Finally, Respondent urges dismissal under the forum non conveniens doctrine because France is an adequate alternative forum for adjudication. Id. In the event the Court declines to dismiss, Uzbekistan last maintains that this “case should be stayed pending the outcome of proceedings to set aside the Award.” Id. at 3.

         Ordinarily, courts must begin by assuring themselves of their own jurisdiction. See Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94-95 (1998). There are, however, exceptions to that general precept. The Court first concludes that it is proper to treat the stay question without ruling on the jurisdictional issues and then explains why a stay is appropriate here.

         A. Addressing Stay First

         Although a court must establish its jurisdiction to hear a case before analyzing any merits issue, see Foster v. Chatman, 136 S.Ct. 1737, 1745 (2016), it may - “when considerations of convenience, fairness, and judicial economy so warrant” - “deny[] audience to a case on the merits” on a non-jurisdictional “threshold ground[].” Sinochem Int'l Co. v. Malaysia Int'l Shipping Co., 549 U.S. 422, 425, 431-32, 436 (2007) (citations omitted). In Sinochem, the Court reasoned that it could make a forum non conveniens determination before resolving subject-matter jurisdiction because - while the FNC analysis could “involve a brush with factual and legal issues of the underlying dispute” - it was nonetheless a “threshold, nonmerits issue” since “[r]esolving [it] does not entail any assumption by the court of substantive law-declaring power.” Id. at 433 (internal quotation marks and citation omitted); see also Pub. Citizen v. U.S. Dist. Court for the Dist. of Columbia, ...

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