SCIENCE APPLICATIONS INTERNATIONAL CORPORATION v. HELLENIC REPUBLIC

Filing 54

MEMORANDUM OPINION to the Order granting Petitioner's Petition to Enforce the Award of the Hellenic Republic. Signed by Judge Gladys Kessler on 1/5/17. (CL)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

In The Matter of the
Arbitration of Certain
Controversies Between
SCIENCE APPLICATIONS
INTERNATIONAL CORP.,
Civil Action No. 13-cv-1070(GK)
Petitioner,
and
THE HELLENIC REPUBLIC,
Respondent.

MEMORANDUM OPINION

On

12,

July

Petitioner

2013,

Science

Applications

International Corporation ("Petitioner" or "SAIC"), now "Leidos,
Inc.," filed a Petition to Confirm Arbitration Award ("Petition")
[Dkt.

1]

No.

("Respondent"
this

Court

or
to

International
Arbitration

against

Respondent,

The

"Hellenic Republic") .
confirm

Chamber

("ICC")

an
of

The

arbitration
Commerce

Republic

Hellenic

Petitioner now asks

award

granted

International

by

the

Court

of

and to enter judgment against the Hellenic

Republic ..
I.

BACKGROUND

On September 5, 2013, while the Petition with this Court was
pending,

the Hellenic Republic filed an action to set aside the

ICC award in the Athens Court of Appeals.

See Pet.'s Motion to

Confirm Arbitration Award and to Enter Judgment at 2-3
20].

On March 27,

2014,

[Dkt. No.

the Parties filed a Joint Motion for a

Stay pending a decision by the Athens Court of Appeals
16], which was granted on March 28,

2014

[Dkt. No.

[Dkt. No. 17]. On June

18, 2014, the Athens Court of Appeals issued a decision annulling
the ICC award. See Consent Motion for Briefing Schedule [Dkt. No.
18]. On September 8,

2014,

Petitioner filed a Motion to Confirm

the Arbitration Award and Enter Judgment [Dkt. No. 20]. On November
17,

2014, Respondent filed a Cross-Motion to Dismiss or to Deny

Petition to Confirm Award [Dkt. No. 25].
On January 9, 2015, Petitioner filed an appeal of the Athens
Court of Appeals annulment decision with the Supreme Court of the
Hellenic Republic
2015,

the

Parties

("the Greek Supreme Court"). As of November 6,
had not

received any decision by the Greek

Supreme Court. Thereafter, the Parties filed Joint Status Reports
on the proceedings before the Greek Supreme Court, until it issued
a decision.
On November 2, 2016, the Parties filed a Joint Status Report
notifying this Court of the September 22,

2016,

decision of the

Greek Supreme Court [Dkt. No. 48]. It ruled in favor of Petitioner
LEIDOS,

Inc.

Corporation}
annulling

the

(formerly,
reversing

the

arbitration

Science
Athens
award,

Applications
Court
and

of

thereby

original ICC award to Petitioner. In addition,
2

International

Appeals

decision

reinstating

the

the Greek Supreme

Court remanded the case back to the Athens Court of Appeals for a
new hearing to address only one rather minor issue discussed in
the Supreme Court's decision.

That hearing is now scheduled for

November 16, 2017.
In response to the November 2, 2016 Joint Status Report, the
Court Ordered the Parties to submit their positions as to what, if
anything,
Supreme

this Court should do,

Court had ruled

Petitioner

submitted

a

[Dkt.

given the fact
No.

Position

49] .
Brief

that the Greek

On December 16,
as

to

Impact

2016,
on

Its

Arbitration Award Enforcement Petition of Supreme Court of the
Hellenic Republic's Decision ("Pet. 's Position Br.") [Dkt. No. 51] .
Respondent submitted its Position Statement that this Court should
deny the Petitioner's request for enforcement of the decision of
the Greek Supreme Court.
II.

[Dkt. No. 52].

STANDARD OF REVIEW

Under the New York Convention, which has been implemented by
the Federal Arbitration Act, 9

u.s.c.

201 et.

§

~'

a court "may,

if it considers it proper, adjourn the decision on the enforcement
of the award.
added),

and

, " New York Convention Article VI

stay proceedings

where

"a parallel

(emphasis

proceeding

is

ongoing in the originating country and there is a possibility that
the award will be set aside." Europcar Italia v. Maiellano Tours,
Inc.,

156 F.3d 310,

316-18

(2d Cir.

1998). But,

court is not required to do so. See id.
3

of course,

the

In

determining

whether

to

enforce

an

Arbitration

Award

against a foreign state, this Court must balance the factors which
weigh in favor of or against enforcement. Chevron Corp. and Texas
Petroleum Company v. Republic of Ecuador, 949 F. Supp. 2d 57, 7173 (D.D.C. 2013)
In Europcar,
stay

of

(applying Europcar, 156 F.3d at 316-18).
the Second Circuit cautioned courts that "[a]

confirmation

should

not

be

lightly

granted

lest

it

encourage abusive tactics by the party that lost in arbitration."
Europcar,

156

F.3d at 316-18.

In order to aid judges as

they

exercise their discretion, the Second Circuit enumerated a number
of factors that should be considered. They are:
" ( 1) the general objectives of arbi trg.tion-the expeditious
resolution of disputes and the avoidance of protracted and
expensive litigation;
(2) the status of foreign proceedings and the estimated time
for those proceedings to be resolved;
(3) whether the award sought to be enforced will receive
greater scrutiny in the foreign proceedings under a less
deferential standard of review;
(4) the characteristics of the foreign proceedings including
(i) whether they were brought to enforce an award (which would
tend to weigh in favor of a stay) or to set the award aside (which
would tend to weigh in favor of enforcement); (ii) whether they
were initiated before the underlying enforcement proceeding so as
to raise concerns of international comity; (iii) whether they were
initiated by the party now seeking to enforce the award in federal
court; and (iv) whether they were initiated under circumstances
indicating an intent to hinder or delay resolution of the dispute;
( 5) a balance of the possible hardships to each of the
parties, keeping in mind that if enforcement is postponed under
Article VI of the Convention, the party seeking enforcement may
receive "suitable security" and that, under Article V of the
4

Convention, an award should not be enforced if it is set aside or
suspended in the originating country.
., and
( 6) any other circumstances that could tend to shift the
balance in favor of or against adjournment."
Europcar, 156 F.3d at 317-18.

III. ANALYSIS

A. Factors One and Two
Factor One focuses on "the general objectives of arbitrationand

the

avoidance

Europcar,
the

of

protracted

156 F.3d at 317.

foreign

proceedings

are

so

closely

expensive

litigation."

Factor Two focuses on "the status of
and

proceedings to be resolved."
factors

and

the

Id.

related,

estimated

time

for

those

Given the fact that these two
the

Court

will

examine

them

together.
Stays are undesirable because "the adjournment of enforcement
proceedings impedes
resolution

of

the goals of arbitration -

disputes

expensive litigation."

and
Id.

the

avoidance

of

the expeditious
protracted

It is clear that granting a

and

stay in

this case would thwart those fundamental objectives. The dispute
between these two parties has now lasted almost 13 years.
Petition~

See

14. The Petitioner, LEIDOS, filed its most recent demand

for arbitration in June 2009 - seven and a half years ago. Petition
~21.

Petitioner

filed

a

previous

arbitration

demand

in

2006.

Petition ~ 14. The ICC tribunal issued its opinion in 2013. And,

5

finally, Petitioner predicts that it will take the Athens Court of
Appeals and the Greek Supreme Court until at least 2020 to bring
the case to an absolute end.

In sum,

it will have taken-at a

minimum-at least eleven years for the Petitioner to obtain the
fruits of this specific litigation.
The Petitioner argues that "[g]ranting a stay in this case
would thwart the objectives of arbitration." Pet.'s Position Br.
at 7. The Court agrees. In fact, there can be little disagreement
on this

issue.

As

Petitioner has made clear,

this dispute has

already lasted almost 13 years and may .well last, at a minimum,
until 2020.

If that prediction is accurate-and there have been

many past road blocks and continuances in this litigation-it would
mean that the litigation may last for well over 15 years.
Courts have found that the first and second factors weighed
in favor of enforcement in cases involving far shorter litigation
time periods.

For example,

in G.E.

Transp.S.P.A. v.

Republic of

Albania, 693 F. Supp.2d 132, 139 (D.D.C.2010), this Court concluded
that

only

four

years

from

the

time

a

complex

case

was

in

arbitration sufficed to "plainly weigh in favor of confirmation
rather than adjournment." Id. This Court ruled similarly in Chevron
Corp. and Texas Petroleum Company v. Republic of Ecuador,

949 F.

Supp. 2d 57, 72 (D.D.C. 2013), because the case had been submitted
to arbitration over six years earlier. The Court held that further
delay would "surely . . . not constitute 'expeditious resolution'
6

of the dispute which originated
Id.;

see

also

Gold

Reserve,

[more than a decade earlier] . "

Inc.

v.

Bolivarian

Republic

of

Venezuela, 146 F. Supp. 3d 112, 135 (D.D.C. 2015), appeal docketed,
No.

15-7158

factor

(D.C.

Cir.,

certainly

Dec.

favored

30,

2015)

enforcement

(holding that the first
rather

than

a

stay

of

proceedings when a petitioner had filed for arbitration more than
six years earlier) .
Moving
proceedings

to

the

Second

and

estimated

Factor,
time

for

"the

status

of

foreign

those

proceedings

to

be

resolved," it must be remembered that although the Greek Supreme
Court reversed the set aside and reinstated the award, years still
remain to fully litigate the one minor issue that remains. When
foreign proceedings are not likely to be reversed in the near
future, Courts have concluded that the second factor weighs against
a stay of enforcement. See Chevron Corp., 949 F. Supp. 2d at 72.
For all these reasons, the Court concludes that there is no
question that
granting

the

Factors One and Two weigh strongly in favor of
Petitioner's

request

for

enforcement

of

the

arbitration award, which was upheld by the Greek Supreme Court.
B. Factor Three

Factor Three focuses on whether the award requested will be
judged in

the

foreign proceedings

under a

different

and

differential standard of review. Europcar, 156 F.3d at 317.

7

less

Regarding whether the Respondent's right to be heard will be
reviewed with a differential standard, Petitioner argues that the
Respondent will be unable to satisfy its burden of showing that
the "standard is not so much more exacting than the one applied
here."

See Chevron Corp., 949 F. Supp. 2d at 72. There is nothing

to suggest that a differential standard will be used,

nor does

Respondent refer to any change in the standard of review.
C. Factor Four

Factor Four raises a number of questions. First, item (i)· of
Factor Four asks

"whether

[the foreign proceedings]

. were

brought to enforce an award (which would tend to weigh in favor of
the stay] or to set the award aside (which would tend to weigh in
favor of enforcement)." The answer to that question is very simple
and that is that the Respondent initiated the foreign proceedings
to vacate the initial ICC Award. This clearly weighs in favor of
enforcement.
Item

(ii)

of

proceedings

were

proceeding.

Again,

Factor
initiated

Four

questions

before

the

whether

underlying

the answer is very simple,

the

foreign

enforcement

and that is they

were not initiated before the underlying enforcement proceeding
and,

therefore,

there needs to be no concern about international

comity.
Item (iii) of Factor Four asks whether the foreign proceedings
were initiated by the Party now seeking to enforce the award in
8

federal court.
initiated
Respondent,
thus,

by

The answer is simple, namely, that they were not
the

not

Party

now

Petitioner,

seeking

to

initiated the

enforce

the

award.

foreign proceedings;

this factors weighs in favor of enforcement as well.

See

Gold Reserve Inc., 146 F. Supp. 3d at 136.
Item (iv) of Factor Four asks whether the foreign proceedings
were initiated under circumstances indicating an intent to hinder
or delay resolution of the dispute.

While the Petitioner does at

one point suggest such an intent on the part of Respondent,

the

Court does not have sufficient information to provide an answer.
Overall, Factor Four clearly weighs in favor of enforcement.
D. Factors Five and Six
Factors Five and Six may be viewed as residual factors- they
direct the Court to consider "a balance of the possible hardships
to the Parties," and if there is " [a] ny other circumstance that
could

tend

to

shift

the

balance

in

favor

of

or

against

adjournment," respectively. Europcar, 156 F.3d at 318. While there
is little information given by the Parties about Factor Five, it
is certainly clear that the Respondent,

the Hellenic Republic,

will not have to endure possible hardship given the fact that it
is

a

country

with

a

treasury

and

all

the

resources

that

a

government has, whereas, the Petitioner is a private firm that may
well suffer hardship for not gaining access to the substantial
amount of money awarded by the Hellenic Supreme Court.
9

Neither party has presented any other factors that this court
should consider under Factor Six.

IV.

CONCLUSION

All of the issues covered by the Factors laid out in Europcar
are overwhelmingly in favor of the Petitioner.

Significantly, the

Respondent has not been able to counter any of the reasons given
to show that the Petitioner is clearly entitled to prevail.
For all the reasons given, the Court concludes that the
Petitioner's Petition to Enforce the Award of the Hellenic
Republic should be granted. An Order shall accompany this
Memorandum Opinion.

Gl~~~!~

January 5, 2017

United States District Judge

Copies to: attorneys on record via ECF

10