Blue Ridge Investments, L.L.C. v. The Republic of Argentina
MEMORANDUM OPINION AND ORDER: For the reasons stated above, Respondent's motion to dismiss is denied. The Clerk of Court is directed to terminate the motion (Dkt. No. 18). (Signed by Judge Paul G. Gardephe on 9/30/2012) (js)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
BLUE RIDGE INVESTMENTS, LLC,
OPINION & ORDER
10 Civ. 153 (PGG)
THE REPUBLIC OF ARGENTINA,
PAUL G. GARDEPHE, U.S.D.J.:
On January 8, 2010, Petitioner Blue Ridge Investments, L.L.C. (“Blue Ridge”)
filed the instant petition to confirm an arbitral award rendered pursuant to the Convention on the
Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID
Convention” or the “Convention”). On June 22, 2011, Respondent Republic of Argentina
(“Argentina”) moved, pursuant to Federal Rules of Civil Procedure 12(b)(1), (2), and (6), to
dismiss the petition for lack of subject matter and personal jurisdiction under the Foreign
Sovereign Immunities Act (“FSIA”), 28 U.S.C. §§ 1604-1607 (2006), and for failure to state a
claim upon which relief can be granted. For the reasons stated below, Respondent’s motion to
dismiss will be DENIED.
On July 26, 2001, CMS Gas Transmission Company (“CMS”) filed an arbitration
claim against Argentina 1 with the International Centre for the Settlement of Investment Disputes
The dispute between Argentina and CMS concerned Argentina’s suspension of a tariff
adjustment formula for gas transportation. Argentina’s action injured an enterprise in which
CMS had an investment. (Pet. ¶ 6)
(the “ICSID”). 2 (Pet. ¶ 6) The dispute was arbitrated before an ICSID tribunal, and on May 12,
2005, the ICSID tribunal issued a final award in CMS’s favor in the amount of $133.2 million
(the “Award”). (Id. ¶ 7) “The tribunal found that Argentina [had] breached its obligations to
CMS, as a U.S.-protected investor in Argentina, under the bilateral investment treaty between the
U.S. and Argentina and the ICSID Convention.” (Id.)
On September 8, 2005, Argentina filed an application with the Secretary-General
of ICSID seeking annulment of the Award. (Id. ¶ 8) On September 25, 2005, the ICSID
Annulment Committee “confirmed Argentina’s obligation to pay CMS $133.2 million plus
interest in compensation, holding that ‘payment by Argentina of the sum awarded is . . .
obligatory.’” (Id.) Argentina has not paid any portion of the award. (Id. ¶¶ 12-13)
Blue Ridge, a Delaware corporation, is the purchaser and assignee of the Award.
(Id. ¶ 4) On June 5, 2008, Blue Ridge notified Argentina that it was the successor-in-interest to
CMS because of the purchase and assignment. (Id. ¶ 1)
Defendant moves to dismiss under Fed. R. Civ. P. 12(b)(1) for lack of subject
matter jurisdiction, under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction, and under
The ICSID was established by the ICSID Convention. The Convention “entered into force on
October 14, 1966, when it had been ratified by 20 countries.” ICSID Convention, Regulations
and Rules, Int’l Ctr. for the Settlement of Inv. Disputes 5 (2006), available at
http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf. The purpose of
ICSID is “to provide facilities for conciliation and arbitration of investment disputes between
Contracting States and nationals of other Contracting States in accordance with the provisions of
[the] Convention.” ICSID Convention, Art. 1(2). The jurisdiction of ICSID “extend[s] to any
legal dispute arising directly out of an investment, between a Contracting State (or any
constituent subdivision or agency of a Contracting State designated to the Centre by that State)
and a national of another Contracting State, which the parties to the dispute consent in writing to
submit to the Centre.” ICSID Convention, Art. 25(1).
Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. 3 A claim is
“properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district
court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States,
201 F.3d 110, 113 (2d Cir. 2000).
“In the context of a Rule 12(b)(1) challenge to jurisdiction under the FSIA, . . . the
district court ‘must look at the substance of the allegations’ to determine whether one of the
exceptions to the FSIA’s general exclusion of jurisdiction over foreign sovereigns applies.”
Robinson v. Gov’t of Malaysia, 269 F.3d 133, 140 (2d Cir. 2001) (quoting Cargill Int’l S.A. v.
M/T Pavel Dybenko, 991 F.2d 1012, 1019 (2d Cir. 1993)). The Second Circuit has described the
parties’ evidentiary burdens as follows: “The defendant must first ‘present[ ] a prima facie case
that it is a foreign sovereign.’” Id. at 141 n.7 (quoting Cargill Int’l, 991 F.2d at 1016). The
plaintiff then “‘has the burden of going forward with evidence showing that, under exceptions set
forth in the FSIA, immunity should not be granted, although the ultimate burden of persuasion
remains with the alleged foreign sovereign.’” Id. at 141 (quoting Cargill Int’l, 991 F.2d at 1016).
In other words, in assessing whether a plaintiff has sufficiently alleged or
proffered evidence to support jurisdiction under the FSIA, a district court must
review the allegations in the complaint, the undisputed facts, if any, placed before
it by the parties, and – if the plaintiff comes forward with sufficient evidence to
carry its burden of production on this issue – resolve disputed issues of fact, with
the defendant foreign sovereign shouldering the burden of persuasion.
As discussed below, Argentina’s motion under Rule 12(b)(2) turns on whether the Court has
subject matter jurisdiction. (See Resp. Br. 10)
Argentina argues that the Petition is facially insufficient in that it does not identify which
exception to immunity under the FSIA is applicable. (Resp. Br. 9-10) In alleging that this Court
has jurisdiction under 28 U.S.C. § 1330 (see Pet. ¶ 2), however, Blue Ridge has explicitly
invoked the FSIA and the exceptions to immunity set forth in the FSIA. See Foreign Sovereign
Immunities Act of 1976, Pub. L. No. 94-583, 90 Stat. 2891 (codifying 28 U.S.C. § 1330).
Section 1330(a) provides that
A Rule 12(b)(6) motion challenges the legal sufficiency of pleaded claims. “To
survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true,
to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). To meet this
standard, a complaint’s factual allegations must permit the Court, “draw[ing] on its judicial
experience and common sense,” “to infer more than the mere possibility of misconduct.” Id. at
679. “In considering a motion to dismiss . . . the court is to accept as true all facts alleged in the
complaint,” Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229, 237 (2d Cir. 2007) (citing
Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 87 (2d Cir. 2002)),
and must “draw all reasonable inferences in favor of the plaintiff.” Id. (citing Fernandez v.
Chertoff, 471 F.3d 45, 51 (2d Cir. 2006)). For purposes of a motion to dismiss, the “complaint is
district courts shall have original jurisdiction without regard to amount in controversy
of any nonjury civil action against a foreign state . . . as to any claim for relief in
personam with respect to which the foreign state is not entitled to immunity either
under sections 1605-1607 of this title or under any applicable international
28 U.S.C. § 1330(a). Respondent has not cited law demonstrating that more is required as a
matter of pleading. In any event, courts in this District have considered sua sponte whether
jurisdiction exists under a Section 1605 exception to immunity. See, e.g., U.S. Titan, Inc. v.
Guangzhou Zhen Hua Shipping Co., 16 F. Supp. 2d 326, 333 n.7, withdrawn in part on other
grounds, modified in part by 182 F.R.D. 97 (S.D.N.Y. 1998) (“Although [petitioner] has not
raised § 1605(a)(6)(B) as a basis for subject matter jurisdiction, the Court may consider it sua
sponte.”); Gabay v. Mostazafan Found. of Iran, 151 F.R.D. 250, 255 n.8 (S.D.N.Y. 1993)
(“Plaintiff suggests for the first time in his Reply Memorandum that jurisdiction is proper under
28 U.S.C. § 1605(a)(2), the ‘commercial activity’ exception. Although neither plaintiff nor
defendants brief this issue, the Court is entitled to address it sua sponte.” (citing Verlinden B.V.
v. Central Bank of Nigeria, 461 U.S. 480, 493 n.20 (1983)).
Here, in correspondence to the Court, and in its briefing, Petitioner has made clear that it is
relying on 28 U.S.C. § 1605(a)(1) and (6). (See Feb. 22, 2011 Petr. Ltr.; Petr. Opp. Br. 6-10)
The Court concludes that the “substance of the allegations” contained in the Petition support the
applicability of Section 1605(a)(1) and (6) of the FSIA, and will address Petitioner’s arguments
on the merits. Cargill Int’l, 991 F.2d at 1019.
deemed to include any written instrument attached to it as an exhibit or any statements or
documents incorporated in it by reference,” and the court may consider any document “which is
integral to the complaint.” Int’l Audiotext Network, Inc. v. Am. Tel. and Telegraph Co., 62 F.3d
69, 72 (2d Cir. 1995).
THE COURT HAS SUBJECT MATTER JURISDICTION
The Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602, et seq., is “the sole
basis for obtaining jurisdiction over a foreign state” in United States courts. Argentine Republic
v. Amerada Hess Shipping Corp., 488 U.S. 428, 443 (1989). The FSIA provides that a “foreign
state shall be immune from the jurisdiction of the courts of the United States and of the States
except as provided in sections 1605 to 1607 of this chapter.” 28 U.S.C. § 1604. Accordingly,
pursuant to the FSIA, “a foreign state is presumptively immune from the jurisdiction of United
States courts. . . .” Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993). However, “[t]hat
presumption can be overcome if a plaintiff shows that one of the exceptions to immunity under
28 U.S.C. §§ 1605-1607 applies.” Funnekotter v. Republic of Zimbabwe, No. 09 Civ.
8168(CM), 2011 WL 666227, at *2 (S.D.N.Y. Feb. 10, 2011).
Blue Ridge argues that two exceptions to sovereign immunity apply here: (1) the
exception for explicit or implicit waivers of immunity under 28 U.S.C. § 1605(a)(1); and (2) the
exception for confirmation of arbitral awards under 28 U.S.C. § 1605(a)(6). (Petr. Opp. Br. 6)
Argentina argues that it has not waived sovereign immunity, stating that (1) “[c]onsenting to
arbitrate before an ICSID tribunal hardly constitutes proof of a foreign state’s intent to waive
immunity to suit in United States courts” under Section 1605(a)(1); and (2) there was no waiver
under Section 1605(a)(6) because “Argentina did not make an agreement to arbitrate ‘with’ . . .
[or] ‘for the benefit of’ Petitioner.” (Resp. Br. 11; Resp. Reply Br. 2)
Implied Waiver Exception
Under Section 1605(a)(1),
[a] foreign state shall not be immune from the jurisdiction of courts of the United
States or of the States in any case . . . in which the foreign state has waived its
immunity either explicitly or by implication. . . .
28 U.S.C. § 1605(a)(1).
The Second Circuit has cautioned that “the implied waiver provision of Section
1605(a)(1) must be construed narrowly,” Shapiro v. Republic of Bolivia, 930 F.2d 1013, 1017
(2d Cir. 1999), and “courts have been reluctant to find an implied waiver where the
circumstances were not . . . unambiguous.” Id. Implied waiver is commonly found in cases
involving the enforcement of arbitration awards, however, so long as the award is rendered
pursuant to a convention to which the foreign state is a signatory, and the convention provides
for recognition and enforcement of the award in contracting states. See, e.g., Seetransport
Wiking Trader Schiffarhtsgesellschaft MBH & Co. v. Navimpex Centrala Navala, 989 F.2d 572,
578-79 (2d Cir. 1993); Liberian E. Timber Corp. v. Gov’t of the Republic of Liberia (“LETCO”),
650 F. Supp. 73, 76 (S.D.N.Y. 1986); M.B.L. Int’l Contractors, Inc. v. Republic of Trinidad &
Tobago, 725 F. Supp. 52, 55-56 (D.D.C. 1989).
In Seetransport, the Second Circuit found an implied waiver where a foreign state
was a signatory to the Convention on the Recognition and Enforcement of Arbitral Awards,
holding that “when a country becomes a signatory to the Convention, by the very provisions of
the Convention, the signatory State must have contemplated enforcement actions in other
signatory States.” Seetransport, 989 F.2d at 578. Similarly, in LETCO, Judge Weinfeld found
that “Liberia, as a signatory to the [ICSID] Convention, waived its sovereign immunity in the
United States with respect to the enforcement of any arbitration award entered pursuant to the
Convention.” LETCO, 650 F. Supp. at 76. Judge Weinfeld reasoned that “Liberia clearly
contemplated the involvement of the courts of any of the Contracting States, including the
United States as a signatory to the Convention, in enforcing the pecuniary obligations of the
Here, Argentina and the United States are both Contracting States to the ICSID
Convention. 5 Pursuant to Article 54 of the Convention, “[e]ach Contracting State shall
recognize an award rendered pursuant to th[e] Convention 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, Regulations and Rules, Int’l Ctr. for the Settlement of Inv.
Disputes (2006), available at
http://icsid.worldbank.org/ICSID/StaticFiles/basicdoc/CRR_English-final.pdf. Moreover, the
United States has enacted legislation implementing this provision. See 22 U.S.C. § 1650a(a)
(“An award of an arbitral tribunal rendered pursuant to chapter IV of 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.”).
Given its status as a Contracting State to the Convention, as well as its participation in the ICSID
arbitration, Argentina “must have contemplated enforcement actions in other signatory States,”
Seetransport, 989 F.2d at 578, “including the United States as a signatory to the Convention.”
LETCO, 650 F. Supp. at 76.
According to the International Centre for the Settlement of Investment Disputes, Argentina has
been a signatory to the ICSID Convention since May 21, 1991, and its membership has been
effective since November 18, 1994. See List of Contracting States and Other Signatories to the
Convention, Int’l Ctr. for the Settlement of Inv. Disputes, (as of July 25, 2012), available at
Argentina’s reliance on Argentine Republic v. Amerada Hess Shipping Corp., 488
U.S. 428 (1989) and Mar. Int’l Nominees Establishment v. Republic of Guinea (“MINE”), 693
F.2d 1094 (D.C. Cir. 1982) is misplaced. In Amerada Hess, the Supreme Court held that a
foreign state does not waive its immunity “by signing an international agreement that contains no
mention of a waiver of immunity to suit in United States courts or even the availability of a cause
of action in the United States.” Amerada Hess, 488 U.S. at 442-43. However, where, as here, a
foreign state has chosen to become a Contracting State for purposes of the ICSID Convention –
which provides for the automatic recognition and enforcement of awards in Contracting States –
that foreign state clearly anticipates “the availability of a cause of action in the United States,” at
least with respect to the recognition and enforcement of an award. Id.
MINE sheds no light on the issues here, because that case involved a proceeding
to confirm an American Arbitration Association (“AAA”) award, not a proceeding to enforce an
award under ICSID. See MINE, 693 F.2d at 1103 n.14 (“We need not decide whether Guinea’s
signing of the ICSID treaty would thus waive its immunity from proceedings enforcing ICSID
awards, for this is a proceeding to confirm an AAA arbitration.”). 6
The Court concludes that the implied waiver provision set forth in 28 U.S.C.
§ 1605(a)(1) is applicable. As a Contracting State to the ICSID Convention, Argentina has
waived its sovereign immunity with respect to the recognition and enforcement of arbitral
awards issued under the ICSID Convention.
MINE is also distinguishable in that there was no final ICSID award in that case. See MINE,
693 F.2d at 1103 (noting that “the State Department [had] urged th[e] court to find that
agreements to arbitrate with ICSID do not contemplate the involvement of domestic courts, at
least not before a final ICSID decision is to be enforced”) (emphasis added). Unlike the instant
case – which involves a final award under ICSID – MINE presented the issue of whether the
ICSID Convention “contemplate[s] a role for United States courts in compelling arbitration that
stalled along the way.” Id.
Arbitral Award Exception
Blue Ridge contends that Argentina also waived sovereign immunity under 28
U.S.C. § 1605(a)(6), which provides that
[a] foreign state shall not be immune from the jurisdiction of courts of the United
States or of the States in any case . . . in which the action is brought . . . to confirm
an award made pursuant to . . . an agreement to arbitrate, if . . . the agreement or
award is or may be governed by a treaty or other international agreement in force
for the United States calling for the recognition and enforcement of arbitral
28 U.S.C. § 1605(a)(6). As the Second Circuit has explained, Section 1605(a)(6) “provides an
exception to sovereign immunity in cases where a foreign state has agreed to arbitrate and the
arbitration agreement is or may be governed by a treaty signed by the United States calling for
the recognition and enforcement of arbitral awards.” Cargill Int’l, 991 F.2d at 1017.
“[T]he immunity exception in Section 1605(a)(6)(B) applies [where the foreign
state at issue is a] signator[y] to [ICSID] and Petitioner[’s] arbitration award was obtained
pursuant to that treaty.” Funnekotter, 2011 WL 666227, at *2 (holding that Section
1605(a)(6)(B) immunity exception applied where the Netherlands, Zimbabwe, and the United
States were all signatories to ICSID and the arbitration award was obtained pursuant to ICSID).
Here, Blue Ridge instituted the instant action “to confirm an award made pursuant
to [Argentina’s] agreement to arbitrate.” 28 U.S.C. § 1605(a)(6). The Award is governed by the
the ICSID Convention, “a treaty or other international agreement in force for the United States
calling for the recognition and enforcement of arbitral awards.” 28 U.S.C. § 1605(a)(6)(B); see
also 22 U.S.C. § 1650a(a) (“An award of an arbitral tribunal rendered pursuant to chapter IV of
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.”). Argentina and the United States are both signatories to the Convention.
Accordingly, Argentina’s agreement to submit its dispute with CMS to arbitration governed by
the ICSID Convention constituted a waiver of immunity under Section 1605(a)(6)(B) with
respect to recognition and enforcement of the Award. 7
Accordingly, this Court has subject matter jurisdiction under both Section
1605(a)(1) and Section 1605(a)(6).
THE COURT HAS PERSONAL JURISDICTION OVER ARGENTINA
Under the FSIA, personal jurisdiction exists “as to every claim for relief over
which the district courts have jurisdiction under [28 U.S.C. § 1330(a)] where service has been
made under section 1608 . . . .” 28 U.S.C. § 1330(b); see Capital Ventures Int’l v. Republic of
Argentina, 552 F.3d 289, 293 n.3 (2d Cir. 2009) (“Congress has provided that personal
jurisdiction over a foreign state exists when the FSIA permits a suit against that state and the
service of process requirements set forth in 28 U.S.C. § 1608 have been satisfied.”) 8 Argentina
does not argue that service has been improper; it merely contends (Resp. Br. 10) that personal
jurisdiction does not exist because this Court lacks subject matter jurisdiction. See 28 U.S.C. §
1330(b) (permitting exercise of personal jurisdiction only where a court also possesses subject
matter jurisdiction under 28 U.S.C. § 1330(a)). Because this Court has subject matter
Argentina’s argument that this exception does not apply because “Argentina did not make an
agreement to arbitrate ‘with’ . . . [or] ‘for the benefit of’ Petitioner” is unpersuasive. (Resp.
Reply Br. 2). Argentina contends that Petitioner, as an assignee, may not assert the Section
1605(a)(6) exception to immunity. Nothing in the plain language of this provision suggests that
an action “to confirm an award made pursuant to . . . an agreement to arbitrate” must be brought
by the party that entered into the arbitration agreement with the foreign state. Respondent has
likewise cited no law in support of this argument.
It is not necessary to conduct a due process analysis concerning the exercise of personal
jurisdiction over a foreign state. See Frontera Res. Azerbaijan Corp. v. State Oil Co. of
Azerbaijan Republic, 582 F.3d 393, 400 (2d Cir. 2009) (“[F]oreign states are not ‘persons’
entitled to rights under the Due Process Clause. . . .”). Accordingly, personal jurisdiction may be
exercised over a foreign state where the FSIA’s requirements are satisfied.
jurisdiction under 28 U.S.C. §§ 1605(a)(1) and (6), and because there has been no challenge to
service, this Court may exercise personal jurisdiction over Argentina.
PETITIONER HAS STATED A CLAIM
Argentina argues that the Petition should be dismissed under Rule 12(b)(6)
because (1) as an assignee, Petitioner lacks authority to seek recognition and enforcement of the
Award; (2) the Petition is barred by res judicata under Fed. R. Civ. P. 41(a); and (3) the Petition
is time-barred under New York’s one-year statute of limitations for lawsuits seeking
confirmation of an arbitration award.
Assignee’s Authority to Seek Confirmation of ICSID Award
Law Applicable to Interpretation of Treaties and Conventions
“‘The interpretation of a treaty, like the interpretation of a statute, begins with its
text.’” Abbott v. Abbott, 130 S. Ct. 1983, 1990 (2010) (quoting Medillin v. Texas, 552 U.S. 491,
506 (2008)); see also Swarna v. Al-Awadi, 622 F.3d 123, 132 (2d Cir. 2010) (“In interpreting a
treaty, it is well established that we ‘begin[ ] with the text of the treaty and the context in which
the written words are used.’”) (quoting Mora v. New York, 524 F.3d 183, 194 (2d Cir. 2008));
Foxworth v. Permanent Mission of Republic of Uganda to United Nations, 796 F. Supp. 761, 763
(S.D.N.Y. 1992) (“Interpretation of a treaty begins with its text and the context in which the
language is used.”) (citations omitted). “If the text of the treaty is clear and unambiguous, it is to
be enforced according to its terms, without the need for extrinsic evidence.” Bank of New York
v. Yugoimport SDPR J.P., 780 F. Supp. 2d 344, 360 (S.D.N.Y. 2011) (citing Jones v. Bill, 10
N.Y.3d 550, 555 (2008)); see also Brink’s Ltd. v. South African Airways, 93 F.3d 1022, 1027
(2d Cir. 1996) (“If the language is ‘reasonably susceptible of only one interpretation,’ our task of
interpretation ends there.”) (quoting Buonocore v. Trans World Airlines, Inc., 900 F.2d 8, 9-10
(2d Cir. 1990)).
“Although the Court may not engage in interpretation of treaty language that is
clear on its face, it may employ traditional methods of interpretation to discern the meaning of
ambiguous terms.” Am. Home Assurance Co. v. Jacky Maeder (Hong Kong) Ltd., 969 F. Supp.
184, 190 n.4 (S.D.N.Y. 1997) (citing Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 134 (1989)).
“General rules of statutory construction ‘may be brought to bear on difficult or ambiguous
passages,’ but [courts] also ‘look beyond the written words to the history of the treaty, the
negotiations, and the practical construction adopted by the [signatory] parties’ in determining the
meaning of a treaty provision.” Swarna, 622 F.3d at 132 (citing E. Airlines, Inc. v. Floyd, 499
U.S. 530, 535 (1991)); see also Medillin, 552 U.S. at 507 (“Because a treaty ratified by the
United States is ‘an agreement among sovereign powers,’ [a court may] also consider[ ] as ‘aids
to its interpretation’ the negotiation and drafting history of the treaty as well as ‘the post
[-]ratification understanding’ of signatory nations.”) (quoting Zicherman v. Korean Air Lines
Co., 516 U.S. 217, 226 (1996)).
Article 54 of the ICSID Convention
Article 54 is found in Chapter IV, Section 6, of the ICSID Convention. Chapter
IV is entitled “Arbitration,” and Section 6 is entitled “Recognition and Enforcement of the
Award.” Article 54 provides:
Each Contracting State shall recognize an award rendered pursuant to this
Convention 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. A Contracting State with a federal constitution may enforce
such an award in or through its federal courts and may provide that such
courts shall treat the award as if it were a final judgment of the courts of a
A party seeking recognition or enforcement in the territories of a
Contracting State shall furnish to a competent court or other authority
which such State shall have designated for this purpose a copy of the
award certified by the Secretary-General. Each Contracting State shall
notify the Secretary-General of the designation of the competent court or
other authority for this purpose and of any subsequent change in such
Execution of the award shall be governed by the laws concerning the
execution of judgments in force in the State in whose territories such
execution is sought.
ICSID Convention, Art. 54 (emphasis added).
Argentina and Blue Ridge’s dispute as to Article 54 turns on the meaning of “[a]
party” as used in Article 54(2). Argentina argues that “the term ‘party,’ as used in Article 54(2)
and throughout the ICSID Convention, refers to the parties to the arbitration. . . . In light of
ICSID’s consistent use of ‘party’ to mean a party to the underlying arbitration . . . only a party to
the underlying arbitration can seek recognition or enforcement of the award under Article 54(2);
a transferee or assignee cannot.” (Resp. Br. 13) (emphasis added) Because Blue Ridge is an
assignee, Argentina argues that it has no right to seek confirmation of the Award. (Id. at 12)
To begin, the term “party” is not defined in the ICSID Convention. Moreover,
when the Convention’s use of the term “party” is analyzed, it becomes clear that this word has
different meanings in different provisions, and does not invariably mean a “party to the
For example, Article 64 of the Convention reads as follows:
[a]ny dispute arising between Contracting States concerning the interpretation or
application of this Convention which is not settled by negotiation shall be referred
to the International Court of Justice by the application of any party to such
dispute, unless the States concerned agree to another method of settlement.
ICSID Convention, Art. 64 (emphasis added). Read in context, “party” – as used in Article 64 –
refers to a Contracting State.
Similarly, Article 67 of the Convention provides:
[t]his Convention shall be open for signature on behalf of States members of the
Bank [for Reconstruction and Development]. It shall also be open for signature
on behalf of any other State which is a party to the Statute of the International
Court of Justice and which the Administrative Council, by a vote of two-thirds of
its members, shall have invited to sign the Convention.
ICSID Convention, Art. 67 (emphasis added). Again, the term “party” in Article 67 does not
refer to a “party to the arbitration,” but rather refers to a State that is a “party to the Statute of the
International Court of Justice.” In sum, Argentina’s claim that “party” – as used in the
Convention – invariably refers to a “party to the arbitration” is simply wrong.
Moreover, in numerous Articles that use the terms “party” or “parties,” the
drafters chose – unlike in Article 54(2) – to include language that restricts or defines the scope of
these terms. For example, in Article 25 – part of the Convention chapter addressing “Jurisdiction
of the Centre” – the drafters refer to “the parties to the dispute,” stating that “[t]he jurisdiction of
the Centre shall extend to any legal dispute arising directly out of an investment, between a
Contracting State . . . and a national of another Contracting state, which the parties to the dispute
consent in writing to submit to the Centre.” ICSID Convention, Art. 25 (emphasis added).
Because of this qualifying language, it is clear that the remaining references in Article 25 to “the
parties” refer to “the parties to the dispute.”
Similarly, in Article 32 – part of the Convention chapter addressing
“Conciliation” – the Convention provides that “[a]ny objection by a party to the dispute that that
dispute is not within the jurisdiction of the Centre . . . shall be considered by the Commission
which shall determine whether to deal with it as a preliminary question or to join it to the merits
of the dispute.” ICSID Convention, Art. 32 (emphasis added). In Article 35 – in this same
chapter – the terms “party” and “parties” are again qualified: “Except as the parties to the
dispute shall otherwise agree, neither party to a conciliation proceeding shall be entitled in any
other proceeding . . . to invoke or rely on any views expressed or statements or admissions or
offers of settlement made by the other party in the conciliation proceeding. . . .” ICSID
Convention, Art. 35 (emphasis added). See also ICSID Convention, Art. 38 (“party to the
dispute”), Art. 39 (“party to the dispute”), Art. 41 (“party to the dispute”), Art. 42 (“party to the
dispute”), Art. 52 (“party to the dispute”), Art. 57 (“party to arbitration proceedings”).
In those Articles in which “party” or “parties” is not qualified or restricted, it is
generally abundantly clear from context how these terms should be construed. For example, in
Chapter IV, Section 3, of the Convention – entitled “Powers and Functions of the Tribunal” –
there are references to “party to the dispute,” but also references simply to “a party.” Compare
ICSID Convention, Arts. 41, 42 with ICSID Convention, Art. 45. In those instances in which
“party” or “parties” is not qualified or restricted, it is clear from context that these terms refer to
a party or parties to the arbitration. For example, Article 43 provides: “[e]xcept as the parties
otherwise agree, the Tribunal may, if it deems it necessary at any stage of the proceedings, (a)
call upon the parties to produce documents or other evidence, and (b) visit the scene connected
with the dispute, and conduct such inquiries there as it may deem appropriate.” ICSID
Convention, Art. 43 (emphasis added). Read in context, it is clear that “the parties” refers to “a
party to the arbitration,” because this section addresses rules applicable to the arbitration
The same cannot be said for the use of “a party” in Article 54, which is part of a
section dealing with “Recognition and Enforcement of the Award,” and perforce addresses
events after the arbitration proceeding is entirely complete and there has been a final award.
Use of the term “a party” – without any modifying language – is not common in
the Convention. 9 This phrase is used in Article 45, which – as noted above – is part of a section
addressing the “powers and functions of the tribunal.” It is clear from context that “a party” – as
used in Article 45 – refers to a party to the dispute:
(1) Failure of a party to appear or to present his case shall not be deemed an
admission of the other party’s assertions.
(2) If a party fails to appear or to present his case at any stage of the proceedings
the other party may request the Tribunal to deal with the questions submitted
to it and to render an award. Before rendering an award, the Tribunal shall
notify, and grant a period of grace to, the party failing to appear or to present
its case, unless it is satisfied that that party does not intend to do so.
ICSID Convention, Art. 45 (emphasis added).
“A party” is also used in Article 46, which is part of the same section. Again, it is
clear in context that “a party” as used in Article 46 refers to a party to the arbitration:
[e]xcept as the parties otherwise agree, the Tribunal shall, if requested by a party,
determine any incidental or additional claims or counterclaims arising directly out
of the subject-matter of the dispute provided that they are within the scope of the
consent of the parties and are otherwise within the jurisdiction of the Centre.
ICSID Convention, Art. 46 (emphasis added); see also ICSID Convention, Art. 49 (“The
Tribunal upon the request of a party made within 45 days after the date on which the award was
The terms “either party,” “both parties,” or “the parties,” are used much more frequently. See,
e.g., ICSID Convention, Arts. 25-26, 28-29, 30, 33-39, 42-44, 46-47, 50-52. In connection with
these terms, modifying language or context generally makes their meaning clear.
rendered may after notice to the other party decide any question which it had omitted to decide in
the award, and shall rectify any clerical, arithmetical or similar error in the award.”). 10
Again, the use of “a party” in Article 54(2) arises in a context in which a final
award has been rendered, the parties are no longer before the arbitration panel, and “a party” is
seeking to obtain “recognition or enforcement [of the award] in the territories of a Contracting
State.” ICSID Convention, Art. 54(2).
“A basic canon of statutory interpretation, which is equally applicable to
interpreting treaties, is to avoid readings that ‘render statutory language surplusage’ or
‘redundant.’” Sacirbey v. Guccione, 589 F.3d 52, 66 (2d Cir. 2009) (quoting Filler v. Hanvit
Bank, 378 F.3d 213, 220 (2d Cir. 2004)). The Court has demonstrated that “party” – as used in
the ICSID Convention – does not always refer to a “party to the arbitration.” But if, as Argentina
argues, “party” was intended to always mean a “party to the arbitration,” then the modifying
language repeatedly used throughout the Convention would constitute surplusage. Moreover,
had the drafters of the Convention intended to say in Article 54(2) that only a “party to the
arbitration” or a “party to the dispute” could seek recognition and enforcement of an ICSID
Convention award, they could have used this language, as was done in many other Convention
Considering the Convention as a whole, and how the terms “party” and “parties”
are used, the decision not to modify or restrict the term “party” in Article 54(2) undermines
Argentina’s argument that “a party” must mean “a party to the arbitration.” The Court concludes
that “a party” as used in Article 54(2) is ambiguous, because it is not “‘reasonably susceptible of
The only other uses of “a party” in the Convention are in Articles 56 and 57, which deal with
the appointment of conciliators or arbitrators. Again, it is clear from context that “a party” refers
to a party to the arbitration.
only one interpretation.’” Brink’s Ltd., 93 F.3d at 1027 (quoting Buonocore, 900 F.2d at 9-10);
see also Am. Home Assurance Co., 969 F. Supp. at 190 n.4 (“As ‘carrier’ is not defined in the
[Warsaw] Convention and is susceptible to a number of possible meanings, the Court concludes
that the term is ambiguous.”) “A party,” as used in Article 54(2), could reasonably be
understood to mean a “party to the arbitration,” or simply (and literally) an individual or entity
seeking to enforce an ICSID Convention award. 11
Moreover, when the Court considers – as it must – “the context in which the
written words are used,” Swarna, 622 F.3d at 132, Article 54(2) appears to do no more than
describe the procedure that must be used by a party seeking recognition or enforcement of an
award. See Compañia de Aguas del Aconquija SA and Vivendi Universal SA v. Argentina,
ICSID Case No. ARB/97/3, Decision on Request for a Continued Stay of Enforcement (Nov. 4,
2008) (“The second paragraph of Article 54 merely organizes the logistics of seeking the
recognition and enforcement, through the identification of a given judicial or other authority
whose function is merely administrative, in the sense of undertaking the operation of receiving
the copy of the award ‘certified by the ICSID Secretary-General’ as required under Article 49,
paragraph 1 of the ICSID Convention.”) (emphasis in original). Nothing in Article 54(2)
In “The ICSID Convention: A Commentary,” the treatise author opines that
[o]nly a party to the original ICSID arbitration proceeding may initiate the procedure under
Art. 54(2). This would exclude action by an interested third party. It would, in particular,
exclude action by a State purporting to act on behalf of its constituent subdivision or agency
. . . . The requirement that only one of the original parties may initiate a proceeding for the
recognition and enforcement of an award may also lead to problems of State succession or
corporate succession. . . .”
Christoph H. Schreuer, The ICSID Convention: A Commentary 1135-36 (2001). The author
does not explain the basis for his opinion, however, and his work does not disclose a textual
analysis of the term “party” as used in the Convention. Accordingly, the Court does not find the
author’s opinion persuasive.
suggests that it was intended to communicate that only a “party to the arbitration” can seek
enforcement of an ICSID Convention award, nor does any other provision in the Convention
suggest such a restriction. Any such intent could easily have been expressed.
Article 54(1) provides that Contracting States must “recognize an award rendered
pursuant to [the ICSID] Convention as binding and enforce the pecuniary obligations imposed by
that award . . . as if it were a final judgment of a court in that State.” The Convention thus
directs courts in Contracting States to apply their own laws in enforcing ICSID awards. Contrary
to Argentina’s contention, the Convention does not prescribe the manner in which ICSID awards
must be enforced, other than requiring that the party seeking enforcement of the award must
furnish a certified copy of the award to the designated court, and that awards be treated as “final
judgments” of courts in the Contracting State.
In enacting legislation to implement the ICSID Convention, Congress tracked the
language used in Article 54(1). The implementing legislation provides that an ICSID
Convention award’s “pecuniary obligations . . . 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.” 22 U.S.C. § 1650a(a). Nothing in the implementing legislation suggests that
only a party to the ICSID arbitration can seek enforcement of an ICSID award.
Because an ICSID Convention award is entitled to “the same full faith and credit”
as a final judgment of a state court, see 22 U.S.C. § 1650a(a), however, it is necessary to
consider New York law concerning the enforceability of a judgment issued by a sister state’s
courts. See Siag v. Arab Republic of Egypt, No. M-82, 2009 WL 1834562, at *2-3 (S.D.N.Y.
June 19, 2009) (“In treating an ICSID arbitration award as I would the final judgment of a state
court, the procedures of New York’s CPLR are relevant. . . . I will adopt the procedures of
Article 54 of the CPLR to effectuate the entry of judgment for an award rendered under the
ICSID Convention.”) Accordingly, the Court must determine whether a foreign judgment
entitled to full faith and credit in the State of New York can properly be assigned to a third party,
and whether that third party has authority to seek enforcement of that judgment.
Under New York General Obligations Law § 13-103, “[a] judgment for a sum of
money, or directing the payment of a sum of money, recovered upon any cause of action, may be
transferred.” N.Y. Gen. Oblig. L. § 13-103; see N.Y. Gen. Oblig. L. § 13-109 (“As used in
sections 13-101, 13-103, 13-105 and 13-107, the term ‘transfer’ includes sale, assignment,
conveyance, deed and gift.”). The Second Circuit has recognized that, “[u]nder this section[,]
the assignment of a judgment operates as a transfer of the present right to the judgment. . . .”
Law Research Serv., Inc. v. Martin Lutz Appellate Printers, Inc., 498 F.2d 836, 839 (2d Cir.
1974). Given that the Award must be treated as “a final judgment of a court of general
jurisdiction of one of the several States,” 22 U.S.C. § 1650a(a), this Court has no difficulty in
concluding that it is assignable under New York law. See Jugometal v. Samincorp, Inc., 78
F.R.D. 504, 507 (S.D.N.Y. 1978) (“[a]n assignee has the same standing to enforce an arbitration
award in this Court as its assignor would have”).
In sum, the Court concludes that nothing in the ICSID Convention, in Congress’s
legislation implementing ICSID, or in New York law prevents an assignee from seeking
recognition and enforcement of an ICSID Convention award.
Petitioner’s Claims Are Not Barred By Res Judicata
Argentina argues (Resp. Br. 15) that Blue Ridge’s claims are barred by the
doctrine of res judicata, which provides that “a final judgment on the merits of an action
precludes the parties or their privies from relitigating issues that were or could have been raised
in that action.” Allen v. McCurry, 449 U.S. 90, 94 (1980); see also Woods v. Dunlop Tire Corp.,
972 F.2d 36, 38 (2d Cir. 1992) (res judicata “‘prevents a party from litigating any issue or
defense that could have been raised or decided in a previous suit, even if the issue or defense was
not actually raised or decided’”) (quoting Clarke v. Frank, 960 F.2d 1146, 1150 (2d Cir. 1992)).
Whether a claim is precluded depends on “‘whether the same transaction or
connected series of transactions is at issue, whether the same evidence is needed to support both
claims, and whether the facts essential to the second were present in the first.’” Id. (quoting
N.L.R.B. v. United Techs. Corp., 706 F.2d 1254, 1260 (2d Cir. 1983)). “Res judicata challenges
may properly be raised via a motion to dismiss for failure to state a claim under Rule 12(b)(6).”
Thompson v. Cnty. of Franklin, 15 F.3d 245, 253 (2d Cir. 1994) (citations omitted).
Blue Ridge and its predecessor in interest, CMS, filed two earlier lawsuits seeking
enforcement of the Award. 12 In the first action, styled CMS Gas Transmission Co. v. The
While a court considering a motion to dismiss “‘is generally limited to the facts and
allegations that are contained in the complaint and in any documents that are either incorporated
into the complaint by reference or attached to the complaint as exhibits . . . [a court] may also
look to public records . . . in deciding a motion to dismiss.’” Simpson v. Melton-Simpson, 10
Civ. 6347(NRB), 2011 WL 4056915, at *2 (S.D.N.Y. Aug. 29, 2011) (quoting Blue Tree Hotels,
Inv. (Canada) Ltd. v. Starwood Hotels and Resorts, Worldwide, Inc., 369 F.3d 212, 217 (2d Cir.
2004)); see also Murphy v. Int’l Bus. Machs. Corp., No. 10 Civ. 6055(LAP), 2012 WL 566091,
at *2 n.1 (S.D.N.Y. Feb. 21, 2012) (“The Court takes judicial notice of the publicly available and
relevant filings and Orders in the [prior litigation] for the limited purposes of establishing the
‘fact of such litigation and related filings,’ and in order to determine ‘the preclusive effect of
[the] prior judgment for res judicata purposes.’”) (citations omitted); Chien v. Skystar Bio
Pharm. Co., 623 F. Supp. 2d 255, 260 n.3 (D. Conn. 2009) (“[I]n considering a res judicata
defense, a court may judicially notice prior pleadings, orders, judgments, and other items
appearing in the court records of prior litigation that are related to the case before the Court.”).
Here, the Court will take judicial notice of the petition filed in CMS Gas Transmission Co. v.
The Republic of Argentina, No. 08 Civ. 3169(LAP) and the related notice of voluntary dismissal,
Republic of Argentina, No. 08 Civ. 3169(LAP) (“CMS”) and filed on March 27, 2008, CMS
sought a judgment “[e]nforcing the Award” and “[a]warding CMS the sum of US$168,373,138,
plus interest. . . .” 13 (No. 08 Civ. 3169(LAP), Dkt. No. 1, ad damnum clause) On June 24, 2008,
CMS filed a notice of voluntary dismissal under Fed. R. Civ. P. 41(a)(1)(i). (08 Civ. 3169(LAP),
Dkt. Nos. 11, 12)
In the second action, Blue Ridge Invs., L.L.C. v. The Republic of Argentina, No.
09 Civ. 2377(GEL) (“Blue Ridge I”), which was filed on March 13, 2009, Blue Ridge sought a
judgment “[c]onfirming the . . . Award” and “[a]warding Blue Ridge, as successor in interest to
CMS, the sum of $133.2 million, plus interest. . . .” (No. 09 Civ. 2377(GEL), Dkt. No. 1, ad
damnum clause) On August 31, 2009, Blue Ridge I was dismissed by order of Judge Lynch (the
“Dismissal Order”). (09 Civ. 2377(GEL), Dkt. No. 3)
The Dismissal Order states:
The Court has been informed that the parties have reached a settlement in
principle of this case. Accordingly, it is hereby ORDERED that this action is
dismissed without costs and without prejudice to restoring the action to the
Court’s calendar, provided the application to restore the action is made within
(Id.) 14 Blue Ridge did not file an application to restore the action to the Court’s calendar.
The Petition in the instant action, filed by Blue Ridge on January 8, 2010, is
virtually identical to the petition filed in Blue Ridge I and seeks the same relief.
as well as the petition filed in Blue Ridge Invs., L.L.C. v. The Republic of Argentina, No. 09
Civ. 2377(GEL) and Judge Lynch’s dismissal order.
This sum reflected the original $133.2 million arbitral award plus interest through March 14,
So-called “30-day orders,” such as that issued in Blue Ridge I, are “frequently used by district
courts when parties report that a case is, or is about to be, settled, but that some additional time is
needed to finalize their agreement. Such orders dismiss or ‘discontinue’ the case, but permit
either party to have the case reinstated if settlement is not completed within a specified time,
usually 30 days.” Muze, Inc. v. Digital On Demand, Inc., 356 F.3d 492, 492-93 (2d Cir. 2004).
Argentina argues that “[b]ecause no . . . application to restore [the action to the
Court’s calendar] was made [in Blue Ridge I], timely or otherwise, the dismissal without
prejudice was converted into a dismissal with prejudice, according to the plain terms of the
[Dismissal] Order. Indeed, any contrary interpretation of the [Dismissal] Order would render its
thirty-day restoration requirement a complete nullity.” (Resp. Br. 16) In the alternative,
Argentina argues that “[e]ven if the August 2009 Dismissal Order were not deemed a dismissal
with prejudice, the Petition should still be barred pursuant to the ‘double dismissal’ rule imposed
by Fed. R. Civ. P. 41(a)(1)(B).” (Id. at 18)
“The starting point for analysis of the effect of [the Dismissal Order] is Fed. R.
Civ. P. 41.” Strategic Research Inst., Inc. v. Fabozzi, 187 F.R.D. 507, 509 (S.D.N.Y. 1999). The
parties’ respective interpretations of the Dismissal Order at the time it was entered are irrelevant,
because “this matter is governed by the Federal Rules of Civil Procedure and the principles of
former adjudication irrespective of plaintiff’s subjective understanding. . . .” Id. Because the
parties agree – and the Court finds – that the Dismissal Order constitutes a voluntary dismissal, it
is clear that Rule 41(a) governs interpretation of the Dismissal Order.
Rule 41(a) provides:
(a) Voluntary Dismissal.
(1) By the Plaintiff.
(A) Without a Court Order. Subject to Rules 23(e), 23.1(c), 23.2, and 66
and any applicable federal statute, the plaintiff may dismiss an action
without a court order by filing:
(i) a notice of dismissal before the opposing party serves either an
answer or a motion for summary judgment; or
(ii) a stipulation of dismissal signed by all parties who have
(B) Effect. Unless the notice or stipulation states otherwise, the dismissal
is without prejudice. But if the plaintiff previously dismissed any
federal – or state – court action based on or including the same claim,
a notice of dismissal operates as an adjudication on the merits.
(2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an action
may be dismissed at the plaintiff’s request only by court order, on terms
that the court considers proper. If a defendant has pleaded a counterclaim
before being served with the plaintiff’s motion to dismiss, the action may
be dismissed over the defendant’s objection only if the counterclaim can
remain pending for independent adjudication. Unless the order states
otherwise, a dismissal under this paragraph (2) is without prejudice.
Fed. R. Civ. P. 41(a).
Although Argentina argues that Rule 41(a)(1)(B) applies, this provision addresses
voluntary dismissals “[b]y the Plaintiff” through a notice of voluntary dismissal or a stipulation
of dismissal. Fed. R. Civ. P. 41(a)(1)(B) (emphasis added). Rule 41(a)(2), on the other hand,
applies to voluntary dismissals “by court order.” Fed. R. Civ. P. 41(a)(2). There is no question
that Blue Ridge I was dismissed by court order. Accordingly, Rule 41(a)(2) governs the res
judicata effect of the Dismissal Order.
The Court must first consider whether the Dismissal Order provides that the case
is dismissed with prejudice. The Dismissal Order does not explicitly provide that the dismissal
will be with prejudice if no party makes application to restore the case to the Court’s calendar
within thirty days. Indeed, the phrase “with prejudice” does not appear in the Dismissal Order.
While the Dismissal Order may be fairly said to imply that a failure to make an application to
restore the action would result in a dismissal with prejudice, the Dismissal Order does not state
The Second Circuit has not addressed whether dismissal orders pursuant to Rule
41(a)(2) must explicitly state that failure to make an application to restore the action to the
court’s docket within the prescribed time period will result in a dismissal with prejudice. Other
courts have concluded, however, that Rule 41(a)(2) governs the interpretation of 30-day and
similar orders, and that an order issued pursuant to Rule 41(a)(2) is presumptively without
prejudice, unless the order explicitly states otherwise.
For example, in Choice Hotels Int’l, Inc. v. Goodwin & Boone, 11 F.3d 469 (4th
Cir. 1993), the Fourth Circuit considered a 30-day order similar to that issued here. The order in
that case provided that “entry of this Order is without prejudice to the right of a party to move for
good cause within 30 days to reopen this action if settlement is not consummated.” Id. at 472.
The Court noted that “the order obviously was not explicit. . . . At most, [the order] implied that
failure to move to reopen its action within thirty days would make the dismissal prejudicial;
nowhere did the dismissal order state explicitly that the dismissal would be prejudicial if its
condition was not satisfied.” Id. at 472-73 (emphasis in original).
In concluding that the dismissal was without prejudice, the 11th Circuit reasoned
We find it plain . . . for two reasons that . . . Rule [41(a)(2)] requires the district
court’s specification to be explicit and clear. First, from the standpoint of the
plaintiff, fairness demands it. When a plaintiff fails to satisfy the district court’s
stated conditions and his action is dismissed with prejudice, the consequence is
draconian – his claims, however meritorious, are forever barred from being heard
on their merits. The plaintiff is entitled to be made aware of this drastic
consequence of failing to meet the court’s conditions at the time the conditions
are imposed, when he still has the opportunity to satisfy the conditions and avoid
it. . . . Giving such a warning poses no significant burden on the district court – it
must simply add to its order a sentence or a phrase stating explicitly and clearly
that failure to meet its conditions will result in prejudicial dismissal. Second,
from the standpoint of the courts, sound judicial practice dictates that district
courts make such an explicit and clear specification. As courts, our purpose is “to
render judgments in accordance with the substantial rights of the parties.” As a
result, we have long adhered to “the sound public policy of deciding cases on
their merits,” and not “depriving . . . part[ies] of [their] ‘fair day in court.’” . . .
Requiring district courts to provide explicit and clear notice when they intend to
dismiss the plaintiff’s action with prejudice if he fails to satisfy its conditions
promotes our strong preference that cases be decided on their merits.
Id. at 471-72 (citations omitted).
Other courts have reached the same result on similar facts. 15 See, e.g.,
Plumberman, Inc. v. Urban Sys. Dev. Corp., 605 F.2d 161, 162 (5th Cir. 1979) (order provided
that if plaintiff “fails to file the amended complaint within ten (10) days, its action shall be
dismissed”; court noted that “[b]ecause the order did not otherwise specify, the dismissal is
without prejudice. Consequently[,] it can have no res judicata effect”); Nedler v. Vaisberg, 427
F. Supp. 2d 563, 568-69 (E.D. Pa. 2006) (order provided that “[t]he Complaint is DISMISSED
without prejudice to Plaintiffs filing an amended complaint within twenty (20) days from the
date of this Order”; court noted that the “order made clear that the Complaint was dismissed
‘without prejudice’ (emphasis added). Given this explicit language, this Court must not construe
the dismissal as one to which prejudice attaches. . . . [B]ecause the language of the state court
order did not advise plaintiffs . . . of the drastic consequences of failing to meet the court’s
condition, res judicata does not apply.”).
Bernard Haldane Assoc., Inc. v. Harvard Prof’l Grp., 185 F.R.D. 180 (D.N.J. 1999), cited by
Argentina, is not to the contrary. In that case, the court considered the res judicata effect of a 60day order which provided as follows: “It appearing that it has been reported to the Court that the
above action has been settled; It is, on this 17th day of April, 1997, ORDERED this action is
hereby dismissed without costs and without prejudice to the right, upon good cause shown within
60 days, to reopen the action if the settlement is not consummated.” Id. at 181. Settlement
discussions subsequently broke down – outside the 60-day window – and the plaintiff thereafter
filed a complaint identical to the complaint in the prior action. Defendants moved to dismiss on
grounds of res judicata. Id. In ruling that the later complaint was barred by res judicata, the
Court relied on a local rule rather than on Fed. R. Civ. P. 41(a)(2): “[t]he similarity between the
wording used in the Order and that included in [the local rule] leads the Court to conclude that
[the prior judge] entered the Order in deliberate accordance with the authority granted to him by
[the local rule] rather than[Fed. R. Civ. P.] 41(a)(2).” Id. at 182. The court noted that “[t]he
distinction between these two rules is significant. The comment accompanying [the local rule]
specifically states that the rule is intended to ‘provide incentive to continue the settlement
process diligently since the case may only be reopened within 60 days.’” Id. (emphasis in
original). There is no corresponding local rule in the Southern District of New York.
In providing that “[u]nless the order states otherwise, a dismissal under this
paragraph (2) is without prejudice,” Rule 41(a)(2) appears to demand clarity. This Court also
finds the reasoning of Choice Hotels persuasive. Accordingly, Argentina’s motion to dismiss on
grounds of res judicata will be denied.
The Petition Is Not Time-Barred
Argentina argues that Blue Ridge’s petition is time-barred under New York’s oneyear statute of limitations for lawsuits seeking confirmation of an arbitration award.
Neither the ICSID Convention nor the legislation implementing the ICSID
Convention contains a statute of limitations. Failure to include a limitations period does not
mean that no limitations period applies, however. See Muto v. CBS Corp., 668 F.3d 53, 56-57
(2d Cir. 2012). Instead, “[i]t is the usual rule that when Congress has failed to provide a statute
of limitations for a federal cause of action, a court ‘borrows’ or ‘absorbs’ the local time
limitation most analogous to the case at hand.” Lampf, Pleva, Lipkind, Prupis & Petigrow v.
Gilbertson, 501 U.S. 350, 355 (1991) (citing Wilson v. Garcia, 471 U.S. 261, 266-67 (1985);
Auto. Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 704 (1966); Campbell v. Haverhill, 155
U.S. 610, 617 (1895)); see also Muto, 668 F.3d at 57 (“When a federal statute does not establish
a period of limitations for actions brought to enforce it, the district court’s task is ‘to “borrow”
the most suitable statute or other rule of timeliness from some other source.’ In doing so, the
courts ‘have generally concluded that Congress intended that the courts apply the most closely
analogous statute of limitations under state law.’”) (citation omitted). “This practice . . . has
enjoyed sufficient longevity [such] that we may assume that, in enacting remedial legislation,
Congress ordinarily ‘intends by its silence that we borrow state law.’” Lampf, 501 U.S. at 355
(quoting Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 147 (1987)); see
also Spira v. J.P. Morgan Chase & Co., No. 10-4590-cv, 2012 WL 615597, at *2 (2d Cir. 2012)
(“This doctrine flows from the assumption that ‘absent some sound reason to do otherwise,
Congress would likely intend that the courts follow their previous practice of borrowing state
provisions.’”) (quoting DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 158 n.12 (1983)).
“If the state limitation would undermine the goals of the federal statute, however,
the Supreme Court has set forth limited circumstances under which it might be preferable to
borrow a federal limitations period.” United Paperworkers Int’l Union and Its Local 340 v.
Specialty Paperboard, Inc., 999 F.2d 51, 53 (2d Cir. 1993) (citing Lampf, 501 U.S. at 355-56).
“[T]he test is as follows: ‘we borrow federal rather than state limitations periods where (1) a
federal rule of limitations clearly provides a closer analogy than state alternatives, and (2) the
federal policies at stake and the practicalities of the litigation render the federal limitation a
significantly more appropriate vehicle for interstitial lawmaking.’” Manning v. Utils. Mut. Ins.
Co., Inc., 254 F.3d 387, 393-94 (2d Cir. 2001) (quoting Phelan v. Local 305 of United Ass’n of
Journeyman, 973 F.2d 1050, 1058 (2d Cir. 1992)).
“On rare occasions, this Court has found it to be Congress’ intent that no time
limitation be imposed upon a federal cause of action.” Lampf, 501 U.S. at 356 n.3 (citing
Occidental Life Ins. Co. of Cal. V. EEOC, 432 U.S. 355, 367 (1977)). Although courts have
found in limited circumstances that no statute of limitations applies to a federal cause of action,
see S.E.C. v. Tandem Mgmt. Inc., No. 95 Civ. 8411(JGK), 2001 WL 1488218, at *5 (S.D.N.Y.
Nov. 21, 2001) (“‘[A]n action on behalf of the United States in its governmental capacity . . . is
subject to no time limitation, in the absence of congressional enactment clearly imposing it.’”)
(quoting E.I. Dupont De Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924)), the Supreme
Court has cautioned that “‘[a] federal cause of action “brought at any distance of time” would be
“utterly repugnant to the genius of our laws.”’” Agency Holding, 483 U.S. at 156 (quoting
Wilson, 471 U.S. at 271 (quoting Adams v. Woods, 2 Cranch 336, 341 (1805))).
“The first step in identifying a possible statute of limitations is identification of
the proper state analog. Next, the court must determine whether a conflict with federal policy is
created by implementation of this limitations period. In the absence of a conflict, the state law
will apply and it will be ‘simply besides the point’ that an appropriate federal analog exists.”
CSC Holdings, Inc. v. Kraut, 169 F. Supp. 2d 115, 117 (E.D.N.Y. 2001) (quoting North Star
Steel Co. v. Thomas, 515 U.S. 29 (1995)).
Argentina argues that the Court should borrow the one-year statute of limitations
set forth in CPLR § 7510, which governs lawsuits seeking to confirm arbitration awards. 16
(Resp. Br. 21-22) Because the Petition was filed on January 8, 2010, and seeks to confirm an
Award issued on May 12, 2005, Argentina contends that the Petition is time-barred. (Id. at 2324)
Blue Ridge argues that no statute of limitations applies to actions seeking
enforcement of ICSID awards. (Petr. Br. 21) In support of this argument, Blue Ridge notes that
the Federal Arbitration Act (“FAA”) – which provides statutes of limitations for confirming
awards under various conventions – does not apply to enforcement of ICSID Convention awards.
(Id.) Blue Ridge argues that, by “enacting the ICSID Act against the backdrop of legislation that
contained a statute of limitations for each existing category of arbitral awards for which
CPLR § 7510 provides: “[t]he court shall confirm an [arbitration] award upon application of
a party made within one year after its delivery to him, unless the award is vacated or modified
upon a ground specified in section 7511.”
confirmation could be sought in federal court, Congress deliberately chose to provide no
limitations period at all for recognition and enforcement of ICSID awards.” (Id.)
The Court rejects Blue Ridge’s argument. As discussed above, there is a strong
presumption that where Congress fails to reference a statute of limitations for a federal cause of
action, a court should borrow the most analogous state statute of limitation. The Supreme Court
has made clear that “the ‘state-borrowing doctrine’ may not be lightly abandoned.” Lampf, 501
U.S. at 356. Blue Ridge has cited no case law in support of its argument that no limitations
period applies to actions to confirm ICSID awards, nor has Blue Ridge pointed to anything in the
legislative history concerning the implementing legislation suggesting that Congress intended
that no limitations period would apply to actions seeking enforcement of ICSID awards. The
Court cannot find – based solely on the fact that Section 1605a provides that the FAA shall not
apply to enforcement of ICSID awards – that Congress intended that no statute of limitations
would apply to actions seeking enforcement of ICSID awards. Accordingly, the Court must
identify a proper state analog.
Article 54 of the ICSID Convention states that
[e]ach Contracting State shall recognize an award rendered pursuant to this
Convention 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. A
Contracting State with a federal constitution may enforce such an award in or
through its federal courts and may provide that such courts shall treat the award as
if it were a final judgment of the courts of a constituent state. . . . Execution of the
award shall be governed by the laws concerning the execution of judgments in
force in the State in whose territories such execution is sought.
(ICSID Convention, Art. 54) (emphasis added). “Congress has determined that in enforcing an
ICSID award, a federal court is to treat it as it would a final judgment from a state court: ‘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 in one
of the several states.’” Siag, 2009 WL 1834562, at *1 (quoting 22 U.S.C. § 1650a(a)) (citing
MINE, 693 F.2d at 1103 n.14 (“ICSID arbitrations are to be enforced as judgments of sister
Because ICSID awards are to be treated as final judgments of a state court –
rather than as arbitration awards – the most analogous state statute of limitations is that which
governs the enforcement of a final money judgment from the court of another state. Under New
York law, awards containing “pecuniary obligations” – or money judgments – are enforced
pursuant to CPLR § 211(b). CPLR § 211(b) requires that an action on a money judgment be
commenced within twenty years:
On a money judgment. A money judgment is presumed to be paid and satisfied
after the expiration of twenty years from the time when the party recovering it
was first entitled to enforce it. This presumption is conclusive, except as against a
person who within the twenty years acknowledges an indebtedness, or makes a
payment, of all or part of the amount recovered by the judgment, or his heir or
personal representative, or a person whom he otherwise represents. . . . The
presumption created by this subdivision may be availed of under an allegation that
the action was not commenced within the time limited.
CPLR § 211(b).
New York courts have held that out-of-state money judgments are subject to the
20-year statute of limitations in CPLR § 211(b). See, e.g., Schoonheim v. Epstein, 123 A.D.2d
549, 549 (1st Dep’t 1986) (“[V]ested and final money judgments under Alabama law . . . must be
given full faith and credit in this state and may be enforced, in the manner of any other money
judgment, within a statutory period of 20 years.”).
Because the 20-year statute of limitations set forth in CPLR § 211(b) is applicable
here, Petitioner’s action is not time-barred. 17
It also appears that borrowing the one-year statute of limitations from CPLR § 7510 would
lead to absurd results in the context of an ICSID award. The ICSID Convention provides for a
For the reasons stated above, Respondent's motion to dismiss is denied. The
Clerk of Court is directed to terminate the motion (Dkt. No. 18).
Dated: New York, New York
Paul G. Gardephe
United States District Judge
stay of enforcement of an award pending resolution of either party's annulment request. (lCSJD
Convention, Art. 52). An annulment request must be filed within 120 days of an award. (Jd.)
Here, Argentina sought annulment and obtained an order staying enforcement for more than a
year after the award was issued. (Thomas Decl., Ex. L; Pet. ~~ 7-8, 12-13)
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