United States District Court, District of Columbia
KONOIKE CONSTRUCTION CO. LTD., Plaintiff,
MINISTRY OF WORKS, TANZANIA, et al., Defendants.
RICHARD J.LEON UNITED STATES DISTRICT JUDGE
Konoike Construction Co. Limited ("Konoike" or
"plaintiff) filed this action to confirm an arbitral
award entered in its favor by the International Chamber of
Commerce's International Court of Arbitration
("ICC"). The ICC determined that defendants, the
Ministry of Works of Tanzania, the Tanzanian National Roads
Agency, the Ministry of Transport of Tanzania, and the
Attorney General of the United Republic of Tanzania
(collectively, "Tanzania" or
"defendants"), owed Konoike outstanding payments on
a road construction contract. After the deadline to respond
to Konoike's petition to confirm its arbitral award
passed without response, the Clerk of the Court declared each
defendant in default, and Konoike moved for entry of a
motion prompted Tanzania to begin participating in this case.
Tanzania opposed the motion for default judgment and, in its
opposition brief, asked that its default be set aside. I now
have before me dueling requests to enter judgment on, and to
set aside, the Clerk's default.
can set aside a default "for good cause,"
Fed.R.Civ.P. 55(c), I cannot say that the record before me
demonstrates the requisite good cause here. The record does,
however, establish that Konoike's ICC award qualifies for
judicial confirmation under the applicable statute and
convention. Accordingly, I will GRANT Konoike's motion
for entry of default judgment and CONFIRM its arbitral award.
Konoike also seeks an award of attorneys' fees and costs,
but because Tanzania has not unjustifiably refused to abide
by the ICC award, that portion of Konoike's request will
is a Japanese limited liability company that, in 2003,
entered into a contract with the Tanzanian Ministry of Works
to upgrade a seventy-nine-mile stretch of road between the
cities of Dodoma and Manyoni in central Tanzania.
See Pet. Confirm Arb. Award ("Pet.")
¶¶8, 14 [Dkt. # 1]. After a series of delays and
disputes, Konoike terminated the contract, in 2008, having
completed most, but not all, of the anticipated work.
Id. ¶¶ 15-18. Konoike then initiated
arbitration, seeking payments due under the contract,
compensation for delays and disruptions to the project, and
costs arising from the contract's termination.
Id. ¶¶ 19-23. Tanzania participated in the
arbitration but ultimately lost. Id.
¶¶23-30. And in 2016, the ICC awarded Konoike
contract damages of TZS 20, 714, 401, 234.00; USD 38, 964,
296.00; and JPY 324, 734, 551.00. Id.
¶¶29-30. The arbitral award also provided that
Tanzania must (i) indemnify Konoike for "any final
amount of [value-added tax ("VAT")], . . . which
the Tanzanian Revenue Authority seeks to recover on sums
awarded in the underlying arbitration in excess of any VAT
which [Konoike] has so far paid in respect of the Project or
the Contract"at issue; (ii) indemnify Konoike for
"any interest, fines, penalties and/or other charges
that may be imposed on [Konoike] in relation to VAT on the
Project or Contract, provided that any such interest, fines,
penalties or other charges do not arise in whole or in part
from any fault on the part of Konoike; (iii) pay
Konoike's arbitration costs of TZS 677, 864.82; USD 141,
425.12; JPY 16, 446, 083.30; and GBP 7, 435, 908.79; and (iv)
pay to Konoike the ICC's arbitration costs of USD 534,
220.00. Pet. Ex. 1 at 282-83 [Dkt. # 1-2].
petitioned this Court to confirm the ICC award on September
26, 2017. See Pet. at 9. The petition included a
request that Tanzania pay the attorneys' fees and costs
associated with this proceeding. See Id. Three
months later, in January 2018, Konoike filed an affidavit in
support of default, noting that no response to its petition
had been filed. See [Dkt. #17]. The Clerk entered
default against Tanzania the next day, see [Dkt. ##
18-21], and in March, Konoike moved for entry of default
judgment on its petition, see PL's Mot. Default
J [Dkt. # 22]. Tanzania appeared in the case shortly after
the motion for default judgment was served, and it now
opposes the motion and asks that the default be set aside.
See Defs.' Mem. Opp. Mot. Default J.
("Opp.") [Dkt. # 36], The parties' requests are
ripe for resolution.
Confirmation of the ICC Award
Konoike seeks confirmation of its ICC award pursuant to the
New York Convention, as implemented by Chapter 2 of the
Federal Arbitration Act, 9 U.S.C. §§ 201-208. Pet.
¶ 1. The New York Convention applies when
(i) [a foreign arbitral] award arises from a commercial legal
relationship between the parties; (ii) there was a written
agreement to arbitrate disputes arising from that
relationship; (iii) the agreement provided for arbitration
proceedings to take place in a signatory country to the New
York Convention; and (iv) at least one of the parties is not
an American citizen.
Newco Ltd. v. Gov't of Belize, 156 F.Supp.3d 79,
81 (D.D.C. 2015).
the Convention's requirements is satisfied here.
Konoike's ICC award arose from a contract dispute between
Konoike and Tanzania. See Pet. Ex. 1 at 24-25. The
contract at issue, including the arbitration clause, was
memorialized in writing. See Pet. Ex. 3 § 20.6
[Dkt. # 1-4]. The parties agreed that the arbitration would
take place in England, see Pet. Ex. 1 at 13, a
signatory to the New York Convention, see Belize Soc.
Dev. Ltd. v. Gov `t of Belize, 5 F.Supp.3d 25, 35 n.l 1
(D.D.C. 2013). And no party to the arbitration is an American
citizen. See Pet. ¶¶8-13.
arbitral award is subject to the New York Convention,
Congress has provided that federal district courts have
jurisdiction over confirmation proceedings. See 9
U.S.C. § 203; Newco, 156 F.Supp.3d at 82. That
jurisdiction extends to proceedings against foreign
sovereigns, see 28 U.S.C. § 1605(a)(6), and
courts may assert personal jurisdiction over foreign
sovereigns in a New York Convention proceeding "where
service has been made pursuant to the Foreign Sovereign
Immunities Act," Newco, 156 F.Supp.3d at 82
(citing 28 U.S.C. §§ 1330(a), 1608). Tanzania
concedes that it "was served with the petition, summons,
notice of suit and accompanying documents in this case on
October 23, 2017," and raises no suggestion that service