Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Huntington Ingalls Inc. v. Ministry of Defense of Bolivarian Republic of Venezuela

United States District Court, District of Columbia

June 13, 2019

HUNTINGTON INGALLS INCORPORATED, Petitioner,
v.
MINISTRY OF DEFENSE OF THE BOLIVARIAN REPUBLIC OF VENEZUELA, Respondent.

          MEMORANDUM OPINION

          KETANJI BROWN JACKSON UNITED STATES DISTRICT JUDGE.

         Petitioner Huntington Ingalls Incorporated has filed a petition asking this Court to recognize and enforce an arbitration award that an arbitral tribunal issued on February 19, 2018, in Huntington Ingalls's favor. (See Pet., ECF No. 1, ¶¶ 22-23; see also Pet'r's Opp'n to Resp.'s Mot. to Dismiss (“Pet'r's Opp'n”), ECF No. 22, at 8 (explaining that Huntington Ingalls seeks “recognition and enforcement of” an arbitration award).)[1] But the undisputed genesis of the arbitration award at issue is a lawsuit that a predecessor in interest to Huntington Ingalls instituted in the United States District Court for the Southern District of Mississippi in 2002. (See Pet. ¶ 10 & n.3.) And in 2010, when the Southern District of Mississippi compelled the arbitration proceedings that eventually gave rise to the instant enforcement action, that court specifically confirmed its intention to “retain jurisdiction in order to bring this matter to conclusion after arbitration.” Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of Republic of Venez., No. 1:02cv785, 2010 WL 5058645, at *5 (S.D.Miss. Dec. 4, 2010); (see also Pet. ¶¶ 16-20).

         Given this case history, the undersigned issued an Order to Show Cause why Huntington Ingalls's petition for enforcement should not be transferred to the Southern District of Mississippi or dismissed. (Order to Show Cause Why This Matter Should Not Be Transferred or Dismissed (“Order to Show Cause”), ECF No. 25.) In its response to that Order-which is before this Court at present-Huntington Ingalls vigorously maintains that the United States District Court for the District of Columbia should inject itself into a long-running legal dispute that is still pending in the Southern District of Mississippi, by granting Huntington Ingalls's enforcement petition and turning the arbitration award (which, again, resulted from arbitration proceedings that the Mississippi district judge initiated) into a judgment of this Court. (See Pet'r's Resp. to Order to Show Cause (“Pet'r's Resp.”), ECF No. 27, at 5.)

         As explained fully below, Huntington Ingalls provides no good cause for this Court to be the tribunal that recognizes and enforces the arbitration award at issue, and the undersigned cannot fathom any reason for exercising this Court's enforcement authority at the final stage of a matter that is plainly pending for resolution elsewhere. Therefore, Huntington Ingalls's (misplaced) enforcement petition will be DENIED without prejudice, and the instant case will be DISMISSED. A separate order consistent with this Memorandum Opinion will follow.

         I. BACKGROUND

         A. The Origins Of The Instant Dispute

         The original lawsuit from which the instant enforcement matter derives was filed 17 years ago. According to Huntington Ingalls's petition, on December 17, 1997, Ingalls Shipbuilding, Incorporated, entered into a contract with Respondent Ministry of Defense of the Bolivarian Republic of Venezuela (“the Ministry”), the object of which was “to refurbish two LUPO-class missile-armed frigates in the Venezuelan Navy[.]” (Pet. ¶ 5.) The contract was worth $315 million, with an allowance for additional compensation for “absolutely necessary” work. (Id. ¶¶ 5, 6.) The contract also contained an arbitration clause, which explained that “[s]hould the parties fail to resolve [a dispute] within thirty (30) days of the emergence of the dispute, then at the request of either party the matter shall be submitted for arbitration[.]” (Id. ¶ 8.) The arbitration clause further provided that “any arbitration . . . shall take place in Caracas, Venezuela.” (Id. (alteration omitted).)

         A dispute subsequently arose, and on April 5, 2002, Northrup Grumman Ship Systems, Inc. (“Northrup”)-Ingalls Shipbuilding's successor in interest and Huntington Ingalls's predecessor in interest-requested arbitration pursuant to the contract. (See Id. ¶ 9.) Then, in October of 2002, Northrup filed a lawsuit in the United States District Court for the Southern District of Mississippi seeking an order to compel arbitration. (See Id. ¶ 10); see also Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of Republic of Venez., No. 1:02cv785 (S.D.Miss. Oct. 24, 2002).

         The following year, on April 16, 2003, the Mississippi federal court entered an order compelling arbitration and finding that, “although . . . the Contract provides for arbitration in Venezuela, the Court finds that the forum-selection clause should not be enforced because the violently unstable political situation in Venezuela has rendered that country an unsuitable forum at this time.” Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of Republic of Venez., No. 1:02cv785, 2003 WL 27383249, at *1 (S.D.Miss. Apr. 16, 2003). That court proceeded to order that “[t]he arbitration shall take place in Pascagoula, Mississippi, or such other place inside the United States chosen by The Ministry[, ]” and “[i]f The Ministry prefers a location outside the United States, The Ministry may move this Court for good cause shown to consider such a request.” Id. at *2. Notably, in this order compelling arbitration, the Mississippi federal court plainly stated that the court “will retain jurisdiction . . . to resolve disputes relating to this Order and to enforce any arbitral award[, ]” id. at *1; furthermore, that court specifically noted that it would “retain jurisdiction to enforce this Order . . . and to enforce the decision and award rendered by the arbitrators[, ]” id. at *2.

         According to Huntington Ingalls's petition, the arbitration was set to take place in Mexico City (see Pet. ¶ 10), but the Ministry filed a motion to vacate the Mississippi federal court's arbitration order, after which that court stayed the arbitration pending its consideration of the Ministry's motion (see Id. ¶ 11). In September of 2005, a lawyer for the Ministry allegedly transmitted a settlement offer to Northrup, which was accepted. (See Id. ¶ 12.) However, the Ministry later contested the settlement (see id.), and the Mississippi district judge upheld the settlement (see id.); see also Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of Republic of Venez., No. 1:02cv785, 2007 WL 2783343, at *6 (S.D.Miss. Sept. 24, 2007). The Ministry appealed the district court's decision to the U.S. Court of Appeals for the Fifth Circuit (see Pet. ¶ 12); meanwhile, because the arbitration proceedings had been stayed for so long, in November of 2008, the arbitral tribunal responsible for the Mexico City arbitration terminated the arbitration. (See Id. ¶ 13.)

         In July of 2009, the Fifth Circuit vacated the district court's judgment enforcing the settlement, and also ruled that the termination of the arbitration mooted the district court's original order compelling arbitration. (See Id. ¶ 14); see also Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of the Republic of Venez., 575 F.3d 491, 502 (5th Cir. 2009). The court of appeals then remanded the case to the district court to determine whether to compel arbitration once more. See Northrop Grumman, 575 F.3d at 503.

         On remand, each party moved to compel arbitration in its desired forum: the Ministry sought to enforce the contract's arbitration clause and arbitrate in Venezuela, while Northrup sought to compel arbitration in Mississippi. (See Pet. ¶ 15.) On December 4, 2010, the Mississippi federal court issued an order compelling arbitration, but finding that “enforcing the forum selection clause would be unreasonable, and that an alternative forum for the arbitration should be found by the parties.” Northrop Grumman, 2010 WL 5058645, at *4. The court ordered that if the parties failed to agree on a location for the arbitration, “the Court will select the location and so notify the parties.” Id. at *5. Notably, and significantly for present purposes, when the Mississippi federal court issued its order compelling arbitration once again, it also reaffirmed that it would “retain jurisdiction in order to bring this matter to conclusion after arbitration.” Id. The Ministry appealed the district court's order compelling arbitration, but the Fifth Circuit dismissed the appeal for lack of jurisdiction. (See Pet. ¶ 16); see also Northrop Grumman Ship Sys., Inc. v. Ministry of Def. of the Republic of Venez., No. 11-60001 (5th Cir. Mar. 23, 2011) (per curiam).

         In March of 2011, the parties notified the Mississippi federal court that they had selected Washington, D.C., as the location for the arbitration. (See Pet. ¶ 17.) But when the arbitral tribunal convened in Washington, D.C., the Ministry raised numerous objections, including asserting that, per the arbitration agreement, the arbitration proceedings had to take place in Venezuela. (See Id. ¶ 18.) The tribunal rejected the Ministry's arguments, but determined “that it had the authority to choose where the proceedings outside of Venezuela would be conducted.” (Id. ¶ 20.) The tribunal then selected Rio de Janeiro, Brazil, as the location for the arbitration. (See id.)

         Thus, the long-awaited and twice-compelled arbitration proceedings took place in Brazil, between January 12 and January 18 of 2015. (See Id. ¶ 22.) On February 19, 2018, the tribunal issued an award of $128, 862, 457.27 in favor of Huntington Ingalls. (See Id. ¶¶ 22, 23(vi).)

         B. Procedural History

         On February 27, 2018, Huntington Ingalls filed a petition in this Court, seeking to have the United States District Court for the District of Columbia recognize and enforce the arbitration award. (See Pet.) The Ministry filed a motion to dismiss the petition on July 13, 2018 (see Def.'s Mot. to Dismiss the Pet., ECF No. 21), and this Court held a hearing on the motion on February 13, 2019 (see Min. Entry of Feb. 13, 2019). At that hearing, this Court asked the parties about the propriety of two federal district courts exercising jurisdiction over the same arbitration proceedings at the same time. (See, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.