Mobil Cerro Negro, Ltd. et al v. Bolivarian Republic of Venezuela
OPINION AND ORDER. For the foregoing reasons, the Court denies Venezuela's motion to vacate the Part One judgment. The Court, however, stays enforcement of the judgment, pending the outcome of Venezuela's application to ICSID to revise the arbitral award. The parties are directed to notify the Court, by joint letter to be submitted every 30 days from the date of this Opinion, as to the status of proceedings before ICSID. The Clerk of Court is directed to terminate the motion pending at docket number 12. re: 12 MOTION to Vacate 6 Judgment filed by Bolivarian Republic of Venezuela. (Signed by Judge Paul A. Engelmayer on 2/13/2015) (rjm)
subject to the ordinary requirements of service of process, personal jurisdiction over the award
debtor, and venue? Or may a more streamlined process be used?
The ICSID award creditors in this case take the position, supported by case law and
practice in this District, that to fill this gap in § 1650a, a district court may look to the forum
state’s law. New York law permits recognition of a foreign judgment on an ex parte basis, so
long as the judgment debtor is notified within 30 days. (The creditor must then wait another 30
days before attaching or executing on assets.) The award creditors here—ExxonMobil entities
(“Mobil”)—proceeded on that basis: A day after ICSID issued a $1.6 billion award in their favor
against the Bolivian Republic of Venezuela (“Venezuela”), Mobil brought an ex parte petition in
this District to recognize that award. The Court’s miscellaneous part (Part One) granted that
petition, and a final judgment (“the Part One judgment”) was entered. Mobil notified Venezuela
of the judgment soon thereafter.
Venezuela, the award debtor, now moves to vacate the Part One judgment. It makes two
arguments. First is that the enabling statute, § 1650a, does not permit ex parte recognition
proceedings—it is instead necessary to bring a plenary lawsuit. Second is that recognition of an
ICSID award against a foreign sovereign is governed by the Foreign Sovereign Immunities Act
(“FSIA”), 28 U.S.C. §§ 1330, 1602 et seq., which requires that any action against a foreign
sovereign be brought with service of process upon, and personal jurisdiction over, the sovereign,
and in a designated venue. Venezuela therefore argues that the Part One judgment is void for
want of subject matter and personal jurisdiction and because this District is an improper venue.
For the reasons that follow, the Court denies Venezuela’s motion to vacate the Part One
judgment. However, because Venezuela (after this action was filed) applied to ICSID to revise
the amount of the arbitral award and because ICSID has stayed enforcement of that award
pending resolution of Venezuela’s application, the Court stays enforcement of the Part One
judgment for the time being.
The arbitration award creditors are a series of ExxonMobil entities that, in the 1990s,
began investing in the oil industry in Venezuela. 2 See Dkt. 3 (“Award”), Ex. 1 ¶¶ 45–52. The
Court refers to these entities collectively as “Mobil.”
The arbitration award debtor is Venezuela, a leading petroleum-producing country.
Award ¶ 35. In 2007, Venezuela expropriated Mobil’s interests in certain oil projects in
Venezuela. Id. at ¶ 112.
The Arbitral Award
In 2007, Mobil commenced an arbitration against Venezuela, challenging the
expropriation. Mobil did so pursuant to a bilateral investment treaty under which Venezuela
waived its sovereign immunity with respect to Mobil’s claims. Mobil Br. 1.
The arbitration was conducted under the auspices of ICSID, a part of the World Bank.
Mobil and Venezuela actively participated in the arbitration and were represented by counsel.
See Award, p. 2.
This background is drawn from the parties’ submissions, including Mobil’s ex parte petition to
recognize the arbitration award, its memorandum of law in support of that petition, and its
accompanying declaration, see Dkt. 1–3; Venezuela’s motion to vacate the judgment, its
memorandum of law in support of that motion, and an accompanying declaration, see Dkt. 12–
14; Mobil’s memorandum of law in opposition and accompanying declaration, see Dkt. 25–26;
and Venezuela’s reply memorandum of law and accompanying declaration, see Dkt. 28–29.
These are Mobil Cerro Negro, Ltd.; Venezuela Holdings, B.V.; Mobil Cerro Negro Holding,
Ltd.; Mobil Venezolana de Petróleos Holdings, Inc.; and Mobil Venezolana de Petróleos, Inc.
See Dkt. 25 (“Mobil Br.”), at 1, n.1.
On October 9, 2014, the ICSID panel issued a 134-page decision (“the Award”) that
awarded Mobil $1,600,042,482, plus 3.25% interest, compounded annually from June 27, 2007
until payment. Id. ¶ 404. To date, Venezuela has not paid on the Award. Mobil Br. 2.
The next day—October 10, 2014—Mobil filed an ex parte petition in this District seeking
recognition of the Award and entry of judgment. Dkt. 1. The Hon. J. Paul Oetken, sitting in Part
One, held an ex parte hearing, see Dkt. 21, granted the petition, and entered a final judgment in
the amount of $1,600,042,482, plus 3.25% interest, compounded annually from June 27, 2007
until payment, see Dkt. 6. The same day, Mobil sent a letter to Venezuela’s counsel, notifying
them of the judgment and demanding payment. Dkt. 26, Ex. 1.
On October 14, 2014, Venezuela moved to vacate the judgment. It filed an
accompanying memorandum of law and declaration. See Dkt. 12–14. On October 23, 2014, this
matter was assigned to this judge. See Dkt. 23. On November 10, 2014, Mobil filed an opposing
brief and a declaration. See Dkt. 25–26. On November 24, 2014, Venezuela submitted a reply
brief and a declaration. See Dkt. 28–29. On December 12, 2014, the Court held argument.
Separately, on October 23, 2014, while Venezuela’s motion to vacate was pending,
Venezuela filed an application with the ICSID panel to revise the Award. See Dkt. 28 (“Pizzurro
Reply Decl.”), Ex. A. There, Venezuela did not contest that Mobil is owed $1,600,042,482, plus
interest. Instead, it argued that Mobil’s Award in that amount partly duplicates a recovery Mobil
previously received from another source—Venezuela’s state-owned oil company. See Award
¶¶ 375–77. On October 24, 2014, the ICSID Secretary-General registered Venezuela’s
application for revision and stayed enforcement of the Award. Pizzurro Reply Decl., Ex. A.
Venezuela moves, under Federal Rule of Civil Procedure 60(b), to vacate the Part One
Rule 60(b) permits a court to “relieve a party . . . from a final judgment” for a variety of
reasons, including, relevant here, that “the judgment is void” or for “any other reason that
justifies relief.” 3 See Nemaizer v. Baker, 793 F.2d 58, 61 (2d Cir. 1986). “A judgment is void
under Rule 60(b)(4) . . . ‘only if the court that rendered it lacked jurisdiction of the subject
matter, or of the parties, or if it acted in a manner inconsistent with due process of law.’” Grace
v. Bank Leumi Trust Co. of N.Y., 443 F.3d 180, 193 (2d Cir. 2006) (quoting Texlon Corp. v.
Mfrs. Hanover Commercial Corp., 596 F.2d 1092, 1099 (2d Cir. 1979)); see also “R” Best
Produce, Inc. v. DiSapio, 540 F.3d 115, 123 (2d Cir. 2008) (holding that Rule 60(b)(4) was
properly invoked to challenge lack of personal jurisdiction) (citing 11 Charles A. Wright, Arthur
In its entirety, Rule 60(b) states:
On motion and just terms, the court may relieve a party or its legal representative
from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have
been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or
misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is based on an
earlier judgment that has been reversed or vacated; or applying it
prospectively is no longer equitable; or
(6) any other reason that justifies relief.
R. Miller, & Mary Kay Kane, Fed. Prac. & Pro. § 2862, at 326–27 & n.10 (2d ed. 1995 & Supp.
2008)); see generally United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271 (2010). 4
“A motion under Rule 60(b) must be made within a reasonable time.” Fed. R. Civ. P.
60(c). Venezuela’s motion—made four days after the Part One judgment—was timely. See
Cent. Vermont Pub. Serv. Corp. v. Herbert, 341 F.3d 186, 189 (2d Cir. 2003).
Overview of Venezuela’s Challenges to the Part One Judgment
Venezuela does not argue that there is any substantive defect in the Part One judgment.
Instead, in moving to vacate, Venezuela makes two procedural arguments against that judgment.
The first is that 22 U.S.C. § 1650a, the enabling statute, does not authorize borrowing New York
State’s streamlined ex parte recognition procedure, as occurred here. Dkt. 14 (“Venezuela Br.”),
7–16. The second is that even if the enabling statute initially authorized that procedure, the
FSIA, enacted 10 years later, supersedes it where recognition actions are brought against foreign
sovereigns, and imposes service-of-process, personal jurisdiction, and venue requirements not
met here. Id. at 6–7, 16–17. Venezuela argues that under either § 1650a or the FSIA, a plenary
lawsuit is required to recognize an ICSID award against a foreign sovereign. Id. at 2, 14, 17.
The Court addresses these arguments in turn.
Venezuela’s Argument Based on § 1650a
Background on the ICSID Convention and the Enabling Statute
The ICSID Convention is an international treaty drafted in 1965 which entered into force
in 1966. See 17 U.S.T. 1270, T.I.A.S. No. 6090. The treaty’s purpose was to stimulate
economic development by private parties. See ICSID Convention pmbl. To further that goal, the
Mobil does not dispute that Rule 60(b) is a proper procedural vehicle under which Venezuela
may challenge the Part One judgment.
Convention supplies a neutral forum, an international arbitral institution known as ICSID, to
resolve disputes between a private party of one country and the government of another. See id.
ICSID has jurisdiction over a dispute where two requirements are met. First, there must
be an investment-related legal dispute between a state party to the Convention and a national of
another state that is also a party to the treaty. Second, the parties to the dispute must consent to
ICSID’s jurisdiction. 5
Where ICSID has jurisdiction, its determinations are final. ICSID awards are binding
and subject to review only within ICSID itself. See ICSID Convention art. 53 (ICSID awards
“shall be binding on the parties and shall not be subject to any appeal or to any other remedy
except those provided for in this Convention”). National courts thus lack the power to set aside
or modify ICSID awards. They may review such awards solely to confirm their authenticity.
See Dolzer & Schreuer, Principles of Int’l Inv. Law 224; Christoph G. Schreuer, The ICSID
Convention: A Commentary 1126 (2d ed., 2009).
See ICSID Convention art. 25 (“The jurisdiction of [ICSID] 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” ICSID);
accord id. pmbl. (“mutual consent by the parties to submit such disputes to” ICSID “constitutes a
binding agreement which requires in particular that . . . any arbitral award be complied with”);
see generally Rudolf Dolzer & Christoph Schreuer, Principles of Int’l Inv. Law 223 (2008).
In this respect, ICSID awards are more secure from attack than awards from other arbitral
institutions. 6 Other arbitral awards, whether governed by a statute or an international treaty, are
subject to substantive review, albeit limited. 7
ICSID awards, however, can and are expected to be recognized and enforced in national
courts. Article 54(1) of the ICSID Convention, addressing recognition, 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 constituent state.”
Article 55 of the ICSID Convention, addressing execution on assets, provides: “Nothing
in Article 54 shall be construed as derogating from the law in force in any Contracting State
See New York City Bar, Report by the Comm. on Int’l Commercial Disputes: Recommended
Procedures for Recognition & Enforcement of Int’l Arbitration Awards Rendered Under the
ICSID Convention 2–3 (July 2012) (“Committee Report”) (“ICSID arbitral awards are different
from every other kind of arbitral award because they are not subject to judicial review. The
ICSID system provides for a self-contained dispute resolution process that is intended to
foreclose the review by any court of final arbitral awards.”), available at http://www2.nycbar.
org/Publications/reports/index_new.php?type=subject&alpha=I (last visited February 12, 2015).
Domestic arbitral awards are governed by Chapter 1 of the Federal Arbitration Act (“FAA”), 9
U.S.C. § 1 et seq. These awards are subject to challenge on various grounds, including that the
award was procured by corruption, fraud, or undue influence; that the arbitrators exceeded their
powers or committed misconduct in refusing to hear material evidence; or that they made a clear
miscalculation. See id. §§ 10–11; see also Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559
U.S. 662, 672 n.3 (2010) (leaving open question whether an arbitrator’s “manifest disregard” of
the law supplies an independent basis for vacatur of an award). Many international arbitration
awards are governed by Chapter 2 of the FAA, 9 U.S.C. § 201 et seq., which codifies the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the New York
Convention”), June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38. The grounds on which an award
issued pursuant to the New York Convention can be attacked are reviewed infra, at pp. 35–37.
relating to immunity of that State or of any foreign State from execution.” Considered together,
Articles 54 and 55 provide that, for contracting states, recognition of ICSID awards is
compulsory, whereas the later execution of assets to satisfy such an award is subject to
contracting states’ domestic laws, which may vary. See Schreuer, The ICSID Convention 1143.
The United States has been a contracting state since 1966. See 17 U.S.T. 1270, T.I.A.S.
No. 6090. 8 The enabling statute passed by Congress and signed by President Lyndon B. Johnson
provides in full:
(a) Treaty rights; enforcement; full faith and credit; nonapplication of Federal
An award of an arbitral tribunal rendered pursuant to chapter IV of the 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. The Federal Arbitration Act (9 U.S.C. § 1
et seq.) shall not apply to enforcement of awards rendered pursuant to the
(b) Jurisdiction; amount in controversy
The district courts of the United States (including the courts enumerated in section
460 of title 28) shall have exclusive jurisdiction over actions and proceedings
under subsection (a) of this section, regardless of the amount in controversy.
22 U.S.C. § 1650a.
Venezuela was also a contracting state, between 1993 and 2012. Venezuela’s withdrawal from
ICSID in 2012 did not prevent ICSID from hearing and resolving this case, because Venezuela’s
membership and 2007 consent to ICSID jurisdiction gave it a continuing obligation to abide by
ICSID’s award. See ICSID Convention art. 72 (“Notice by a Contracting State [that it intends to
withdraw from ICSID] pursuant to Articles 70 or 71 shall not affect the rights or obligations
under this Convention of that State or of any of its constituent subdivisions or agencies or of any
national of that State arising out of consent to the jurisdiction of the Centre given by one of them
before such notice was received by the depositary.”).
The brief text of the enabling statute thus does not specify the procedural mechanism by
which an arbitral award is to be converted into a federal judgment. 9
Prior Ex Parte ICSID Recognition Actions in This District
On five occasions before this case, courts in this District have been presented with an
application ex parte to recognize an ICSID award. In four, the foreign sovereign was the award
debtor. 10 Each time, the district court recognized the ICSID award (i.e., converted it to a federal
court judgment) without requiring that a plenary lawsuit be brought.
LETCO: In Liberian Eastern Timber Corporation (LETCO) v. Republic of
Liberia, No. M-68, 1986 U.S. Dist. LEXIS 31062 (S.D.N.Y. Sept. 10, 1986), the award creditor
(LETCO) obtained an ICSID award against the Republic of Liberia. It then petitioned ex parte
for entry of judgment and for the issuance of writs of execution permitting LETCO to begin
enforcing that judgment. The Part One judge (Keenan, J.) granted LETCO’s petition in both
respects. Id. at *1–2.
Notified of the Part One judgment, Liberia then moved to vacate it, and “to enjoin the
issuance of executions to seize its property or assets in order to satisfy the judgment.” Liberian
See Edward G. Kehoe, “The Enforcement of Arbitral Awards against Foreign Sovereigns—the
United States,” in Enforcement of Arbitral Awards against Sovereigns 250 (R. Doak Bishop ed.,
2009) (“[Section] 1650a does not specify the procedural mechanism, whether be it in the form of
registration, a motion, complaint or otherwise, by which a party converts an ICSID award into an
enforceable U.S. federal court judgment.”) (provided in Dkt. 26, Ex. 7).
In four other cases, applications were made to recognize ICSID awards with notice to the
sovereign. See Duke Energy Int’l Peru Invs. No. 1 Ltd. v. Republic of Peru, 904 F. Supp. 2d 131
(D.D.C. 2012); Blue Ridge Invs., LLC v. Republic of Argentina, 902 F. Supp. 2d 367, 370
(S.D.N.Y. 2012) aff’d, 735 F.3d 72 (2d Cir. 2013); Cont’l Cas. Co. v. Argentine Republic, 893
F. Supp. 2d 747 (E.D. Va. 2012); Funnekotter v. Republic of Zimbabwe, No. 09 Civ. 8168 (CM)
(Dkt. 11) (S.D.N.Y. Feb. 1, 2010). The Court is unaware of other decisions as to the process for
recognition of ICSID awards.
E. Timber Corp. (LETCO) v. Republic of Liberia, 650 F. Supp. 73, 75 (S.D.N.Y. Dec. 12, 1986).
The district court (Weinfeld, J.) denied the motion to vacate. Id. at 76–77. It reasoned that
(1) Article 54 of the ICSID Convention obliges the United States, as a contracting party, “to
recognize and enforce the pecuniary obligation of the award”; (2) Liberia, as a Convention
signatory, waived its sovereign immunity with respect to recognition “of any arbitration award
entered pursuant to the Convention”; and (3) “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 award.” Id. at 76. The decision did
not address the fact that LETCO’s petition for entry of judgment had been brought ex parte. 11
Three cases decided without opinion: In the ensuing years, ex parte judgments
recognizing ICSID arbitral awards were entered, without a written decision, in three other cases
in this District. See Grenada v. Grynberg, No. 11 Misc. 45 (S.D.N.Y. Apr. 29, 2011) (Batts, J.);
Enron Corp. & Ponderosa Assets L.P. v. Argentine Republic, No. M-82 (S.D.N.Y. Nov. 20,
2007) (Buchwald, J.); Sempra Energy Int’l v. Argentine Republic, No. M-82 (S.D.N.Y. Nov. 14,
2007) (Buchwald, J.) (all provided in Dkt. 26, Ex. 3). The propriety of an ex parte recognition
proceeding does not appear to have been raised in these matters; indeed, it appears that the award
debtor did not object to the entry of any of these judgments.
Siag: The most sustained attention to the proper recognition procedure for ICSID
awards prior to this case came in Siag v. Arab Republic of Egypt, No. M-82 (PKC), 2009 WL
The Court, however, vacated the executions issued against Liberia’s property, on the ground
that the particular property at issue had not been used for “commercial activities,” and therefore
was immune from attachment under the FSIA. Id. at 77–78 (citing 28 U.S.C. § 1610(a)).
LETCO appealed, and the Second Circuit affirmed without opinion. See Liberian E. Timber
Corp. (LETCO) v. Republic of Liberia, 854 F.2d 1314 (2d Cir. 1987).
1834562 (June 19, 2009). Acting ex parte, the ICSID award creditors submitted to Judge Castel,
sitting in Part One, a proposed judgment incorporating the pecuniary obligations of the ICSID
award. Judge Castel directed the award creditors to brief whether the sovereign was entitled to
advance notice and an opportunity to be heard. See id. at *1.
After briefing, Judge Castel entered judgment for the creditors, upholding as proper their
ex parte application. He reasoned:
Article 54 subsection 1 of the ICSID provides that “[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 a court of a constituent state.” 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 of one of the
several states.” 22 U.S.C. § 1650a(a). . . .
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. In Keeton v.
Hustler Magazine, Inc., 815 F.2d 857 (2d Cir. 1987), the Second Circuit held that
Article 54 of the CPLR sets forth appropriate procedures for registering an out-ofstate federal court judgment in the State of New York, and further held that it can
function as a viable alternative to 28 U.S.C. § 1963, the federal statute that
governs registration and enforcement of an out-of-state federal court judgment.
Keeton noted that Article 54 of the CPLR establishes “procedures designed to
facilitate the registration of foreign, or out-of-state, judgments, for New York
will, with specified exceptions, simply recognize a foreign judgment as its own,
rather than require a separate action on the judgment.” 815 F.2d at 857. “Article
54 of the CPLR sets up a procedure for the simple New York registration of an
out-of-state judgment, obviating an action on the judgment . . . .” David D.
Siegel, N.Y. Practice § 435 (4th ed.). By its terms, CPLR § 5401 applies to “any
judgment . . . of a court of the United States or any other court which is entitled to
full faith and credit in this state . . . .”
In Keeton, the judgment debtor removed the Article 54 proceedings to
federal court, where its requests to set aside the judgment and stay the judgment’s
execution were denied. 815 F.2d at 858. Among other things, Keeton observed
that the plain text and the legislative history of Article 54 reflect an intention that
the CPLR provision should provide a vehicle through which the judgment of a
“sister state” could be enforced in New York. Id. at 859–61 (citing Knapp v.
McFarland, 462 F.2d 935 (2d Cir. 1972)). It concluded that the federal scheme
for registration of an out-of-state federal court judgment, 28 U.S.C. § 1963, did
not preempt the application of CPLR Article 54. Id. at 861–62.
Siag, 2009 WL 1834562, at *1–2.
Accordingly, Judge Castel held, it was appropriate for a federal court in New York to
“adopt the procedures of Article 54 of the CPLR to effectuate the entry of judgment for an award
rendered under the ICSID Convention.” Id. at *3. He directed the award creditors to provide
notice of the judgment he entered to the sovereign, the U.S. Department of State, and the U.S.
Attorney’s Office for this District. Id. 12 In so acting, Judge Castel recognized that, while an
ICSID award creditor may seek recognition ex parte, it may alternatively elect to file a plenary
action, see id. at *2 n.1, as some creditors have, see, e.g., Blue Ridge Invs., 902 F. Supp. 2d at
Siag thus identified CPLR Article 54 as a mechanism available for converting ICSID
awards into judgments in this District. Article 54 “sets up an expeditious registration procedure”
for New York to register an out-of-state judgment that is entitled to full faith and credit. David
D. Siegel, Practice Commentaries C5403:2 at 581–82 (McKinney’s 1997). A judgment creditor
who uses this procedure must, within 30 days of entry of judgment, notify the judgment debtor;
after filing proof of service, the judgment creditor must wait 30 more days before executing on
the judgment. See CPLR § 5403. The CPLR does not require that the “recognizing” court have
personal jurisdiction over the award debtor. See Siegel, N.Y. Practice § 435.
In this case, Judge Oetken similarly ordered Mobil to notify these three entities. See Dkt. 6,
21. Mobil has done so. See Dkt. 20 (Notice of Service, filed Oct. 16, 2014).
Analysis of Venezuela’s Arguments
Venezuela’s argument here under § 1650a is that Siag—and the other cases reviewed
above—were wrongly decided, and that the enabling statute does not permit a federal court in
New York to use non-plenary mechanisms such as CPLR Article 54 to convert an ICSID award
into a judgment. Venezuela, however, is mistaken. As explained below, the case law
overwhelmingly supports looking to the law of the forum state, here, New York, to fill the
procedural gap in § 1650a as to the manner in which a recognition proceeding is to occur. And
Venezuela’s contrary arguments, largely ones of policy, are not persuasive.
It is undisputed that there is a statutory gap. The ICSID Convention directed contracting
states to recognize and enforce the pecuniary obligations of ICSID awards once the creditor had
furnished a national court with a certified copy of its award. ICSID Convention art. 54(1). And
the enabling statute—although addressing enforcement of an award—is silent as to the
antecedent process by which the award is converted into an enforceable U.S. federal court
There is compelling authority supporting filling this statutory gap by looking, as Judge
Castel did in Siag, to the law of the forum state. The Rules of Decision Act states that “[t]he
laws of the several states, except where the Constitution or treaties of the United States or Acts
of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in
the courts of the United States, in cases where they apply.” 28 U.S.C. § 1652. Federal Rule of
Civil Procedure 69(a)(1) provides, inter alia, that the procedure for executing a judgment “must
accord with the procedure of the state where the court is located, but a federal statute governs to
the extent it applies.” And more generally, the Second Circuit has held it proper to apply the
forum state’s law when a court confronts such a gap in a federal statutory scheme, reflecting the
general rule that a federal court “has discretion to borrow from state law when there are
deficiencies in the federal statutory scheme.” Hardy v. N.Y. City Health & Hosp. Corp., 164
F.3d 789, 793 (2d Cir. 1999). 13
Applying these principles, the Second Circuit has repeatedly held that federal courts are
to borrow state law to fill gaps in a federal statutory scheme, including in cases whose subject
matter presents a quintessentially federal concern. Three examples illustrate the point.
In the area of copyright, the Copyright Act, 17 U.S.C. § 101 et seq., does not provide for
nationwide service of process. Accordingly, the Second Circuit has held, “‘a federal court [is to]
appl[y] the forum state’s personal jurisdiction rules.” Fort Knox Music Inc. v. Baptiste, 203 F.3d
193, 196 (2d Cir. 2000) (quoting PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1108 (2d Cir.
1997)). The Circuit therefore held that New York’s long-arm statute was to be used to determine
whether personal jurisdiction existed for a suit brought under the Act. See id. at 196–97.
In the area of bankruptcy, the Second Circuit has similarly held that a federal court is to
apply the forum state’s choice-of-law rules because the federal interests at stake are not weighty
enough to justify creating federal common law. See In re Gaston & Snow, 243 F.3d 599, 605–06
(2d Cir. 2001). It has explained that the “cases in which judicial creation of a special federal rule
would be justified . . . are . . . few and restricted,” id. at 606 (quoting O’Melveny & Myers v.
FDIC, 512 U.S. 79, 87 (1994)), and that “a significant conflict between some federal policy or
interest and the use of state law must first be specifically shown” to justify creating federal
As a general matter, “[s]tate law is applied by federal courts in three situations: (1) when they
are so required by Erie v. Tompkins, 304 U.S. 64 (1938), (2) when they are so directed by a
federal statute, or (3) as a matter of discretion in their exercise of power to so choose.”
Monmouth Cnty. Corr. Inst. Inmates v. Lanzaro, 643 F. Supp. 1217, 1221 (D.N.J. 1986), aff’d in
part, modified in part, 834 F.2d 326 (3d Cir. 1987) (citing 19 Wright, Miller & Cooper,
Jurisdiction § 4515 (1976)). The third of those scenarios is at issue here.
common law as opposed to applying the forum state’s law to fill the statutory gap, id. (quoting
Atherton v. FDIC, 519 U.S. 213, 218 (1997)).
Additionally, the Second Circuit has held that the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., leaves it to
the forum state’s law to address the length of a wind-up period, where a state seeks to recover
environmental cleanup costs from a dissolved corporation. Accordingly, it has applied the law of
the forum state, Delaware, which barred the claims of the plaintiff state (New York). See Marsh
v. Rosenbloom, 499 F.3d 165, 181–84 (2d Cir. 2007). The Second Circuit explained that, “where
federal statutory regulation is ‘comprehensive and detailed,’ as CERCLA is, we presume that
matters left unaddressed are ‘left subject to the disposition provided by state law.’” Id. at 181
(quoting O’Melveny, 512 U.S. at 85). “Although CERCLA is a federal statute for which there is
presumably an interest in uniform application, where there is no conflict between federal policy
and the application of state law, ‘a mere federal interest in uniformity is insufficient to justify
displacing state law in favor of a federal common law rule.’” Id. at 182 (quoting New York v.
Nat’l Serv. Indus., Inc., 460 F.3d 201, 208 (2d Cir. 2006)).
Applying these principles here, it is appropriate to look to the forum state’s law to fill the
statutory gap—to supply the procedure for recognizing an ICSID award and converting into a
judgment. It is no answer that the ICSID Convention involves an area of peculiarly federal
concern: The same is true of copyright, bankruptcy, and CERCLA. And the Second Circuit has
looked to the forum state’s law to fill gaps in cases like this, where the federal interest involved
foreign relations, including cases arising under international treaties and under the FSIA. See,
e.g., Pescatore v. Pan Am. World Airways, Inc., 97 F.3d 1, 12–13 (2d Cir. 1996) (applying forum
state’s choice of law rules in case arising under Warsaw Convention); Brink’s Ltd. v. S. African
Airways, 93 F.3d 1022, 1029–30 (2d Cir. 1996) (applying forum state’s choice of law rules
where jurisdiction was predicated on FSIA and liability governed by Warsaw Convention);
Barkanic v. Gen. Admin. of Civil Aviation of the People’s Republic of China, 923 F.2d 957, 961
(2d Cir. 1991) (applying New York choice of law principles in FSIA action; “the fact that we are
not compelled to apply state choice of law principles in this federal question case does not
preclude us from relying on state law if we believe that doing so would best effectuate Congress’
overall intent”) (citing United States v. Kimbell Foods, Inc., 440 U.S. 715, 728 (1979)).
The decisive issue instead is whether there is “a significant conflict between some federal
policy or interest and the use of state law.” Gaston & Snow, 243 F.3d at 606 (quoting Atherton,
519 U.S. at 218). Venezuela identifies no such federal interest. On the contrary, using the
streamlined recognition procedure in CPLR Article 54 effectuates the policy interests underlying
the ICSID enabling statute, because, by facilitating conversion of an ICSID award to a judgment,
it facilitates granting “full faith and credit” to the award and enables the creditor to move towards
enforcing it. As Judge Castel noted, § 1650a’s directive that ICSID awards be given “full faith
and credit” reflects that Congress, like the ICSID Convention that it was implementing, intended
that ICSID awards be expeditiously recognized, free from substantive review. See Siag, 2009
WL 1834562, at *1–3 (citing Keeton, 815 F.2d at 857; CPLR art. 54).
In considering whether borrowing state law is consistent with congressional intent, it is,
further, noteworthy that the state-law recognition procedure in CPLR Article 54 was a familiar
one in 1966, when Congress passed the ICSID enabling statute. Article 54 is based on the
Uniform Enforcement of Foreign Judgments Act (UEFJA), a draft statute proposed in 1948, and
revised in 1964, by the National Conference of Commissioners on Uniform State Laws. In a
preface to the 1964 UEFJA, the Commissioners endorsed a “speedy and economical method” of
registering judgments that are entitled to full faith and credit, explaining that due process does
not require a second trial following a state-court judgment and that this method spares parties the
cost and time of repeat litigation. Prefatory Note, Revised Uniform Enforcement of Foreign
Judgments Act (1964). The revised UEFJA permits a creditor to file a copy of his judgment with
the Clerk of Court in another state and, after notifying the judgment debtor, to begin executing
his judgment. Id. § 2. By 1965, several states had enacted recognition procedures based on the
revised UEFJA 14; to date, 47 states have done so. 15 Thus, when Congress enacted § 1650a, with
its gap as to the process for recognizing ICSID awards, it was on notice that expeditious, ex parte
recognition procedures were being used in both state and federal courts. See also 28 U.S.C.
§ 1963 (1948) (statute governing expeditious registration of federal judgments).
In opposing the borrowing of CPLR Article 54, Venezuela argues that borrowing forum
states’ laws would offend an interest in uniformity. But, as case law in the area of borrowing of
state law holds, where there is no demonstrated need for uniformity across federal-court
proceedings, a party’s articulation of a generalized interest in uniformity will not prevail. See,
e.g., Rosenbloom, 499 F.3d at 181–83. And Venezuela’s claim that uniformity is vital is
See, e.g., Wyo. Stat. Ann. § 1-17-701 et seq. (Feb. 11, 1965); 42 Pa. Cons. Stat. § 4306 (May
21, 1965); Wisc. Stat. Ann. § 806.24 (Nov. 24, 1965).
See Uniform Law Commission, The National Conference of Commissioners on Uniform State
Laws, Legislative Fact Sheet—Enforcement of Foreign Judgments Act (noting that all states but
California, Vermont, and Connecticut have enacted a version of the UEFJA), available at
0Judgments%20Act (last visited February 12, 2015).
particularly dubious in the ICSID context: By definition, ICSID awards are subject to unique
enforcement regimes in each of the more than 140 member states. 16
Venezuela also argues that borrowing expedited registration procedures such as New
York State’s may offend foreign comity. That is unpersuasive. Under the ICSID Convention,
the ICSID recognition process is entirely non-substantive. Beyond confirming that the ostensible
award did in fact issue from ICSID, a court presented with an application for recognition is not
empowered to re-assess the merits of the award—it does not sit as a court of appeals and is not
empowered to undertake substantive review. The only venue in which a party can challenge the
merits of such an award is ICSID itself. See ICSID Convention art. 53 (“The award shall be
binding on the parties and shall not be subject to any appeal or to any other remedy except those
provided for in this Convention.”). Symbolism aside, a foreign party has no valid ground to
claim offense at a streamlined recognition procedure. And, as more fully demonstrated below,
an expectation underlying the ICSID Convention was that awards would be expeditiously
recognized in contracting states. See infra, pp. 38–39.
It is, further, important to recognize that conversion of an award into a judgment leaves
the foreign sovereign free to challenge the later attachment of or attempted execution on its
assets. Because Venezuela is a foreign state, under the FSIA, Mobil can attach or execute on its
assets only after obtaining a court order permitting it to do so. See 28 U.S.C. § 1610(c); see also
infra, pp. 46–47; accord Tr. 28. In any event, under New York CPLR § 5403, there must be
See ICSID Convention art. 54(3) (“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, Database of ICSID Member States, available at https://icsid.worldbank.org/
visited February 12, 2015).
both prompt notice to the debtor and a waiting period of 30 days, after notice is given of a
recognized judgment, before a creditor can seek to attach or execute on assets.
In sum, whether Mobil applied for recognition of its award via a plenary lawsuit or an ex
parte application along the lines used here, the nature of that proceeding would not expand or
contract Venezuela’s substantive rights. Those rights—to challenge the award substantively
before ICSID and to resist attachment or execution in the United States to the extent assets are
found here—are unaffected by the recognition process. 17
In a final argument, Venezuela argues that, rather than borrowing from the forum state’s
law, a federal court asked to recognize an ICSID award should use the procedure used on the rare
occasions when an application is made to register a state-court judgment as a federal judgment.
Such a court undertakes a two-step inquiry: “(1) whether, under federal law, the judgment is
entitled to full faith and credit; and (2) what preclusive effect would the judgment be given under
the law of the rendering state.” Conopco, Inc. v. Roll Int’l, 231 F.3d 82, 90 n.7 (2d Cir. 2000).
The commentators to address the point agree that recognition of an ICSID award is a nonsubstantive proceeding that may be performed summarily where the forum state’s recognition
procedure so provides. See, e.g., Brian King et al., “Enforcing Awards Involving Foreign
Sovereigns,” in Int’l Commercial Arbitration in New York 421 (James H. Carter & John Fellas
eds., 2010) (“In other words, ICSID awards are automatically recognized in the United States,
without need for recognition proceedings.”); George K. Foster, Collecting from Sovereigns: The
Current Legal Framework for Enforcing Arbitral Awards and Court Judgments Against States
and Their Instrumentalities, and Some Proposals for its Reform, 25 Ariz. J. Int’l & Comp. L.
665, 702–03 (2008) (explaining that an ICSID “award is automatically enforceable . . . . States
are not permitted to invoke immunity form jurisdiction in connection with the recognition of an
adverse ICSID award, or to raise any other objections to recognition.”); Schreuer, The ICSID
Convention 1115 (“Recognition [of an ICSID award] is subject only to the requirements of the
Convention and may not be refused for reasons of domestic law. By contrast, Art. 54(3) subjects
execution to the modalities of the local law of the country where execution is sought.”) (citations
omitted) (emphases added); Committee Report, 26 (“[T]he stated goal of the ICSID Convention
[is] to ensure swift recognition and enforcement of ICSID awards without judicial oversight or
The federal court thereby must independently examine multiple factors, including “whether there
is a constitutional infirmity with the foreign court judgment.” Weininger v. Castro, 462 F. Supp.
2d 457, 472 (S.D.N.Y. 2006) (citing Kremer v. Chem. Constr. Corp., 456 U.S. 461, 482 (1982)).
Venezuela’s analogy does not hold up. There is no charter for a federal court to examine
an ICSID award as it would a state-court judgment for infirmities, because under § 1650a, such
awards are entitled to full faith and credit and are subject to substantive review by ICSID alone.
And there is no need to inquire, as to any particular application for recognition, whether there is
subject matter jurisdiction. That is because § 1650a gives federal district courts exclusive
jurisdiction to recognize and enforce such awards as federal judgments. And the FSIA, as
explained below, see infra, pp. 23–27, independently provides that such courts have subject
matter jurisdiction over actions to enforce ICSID arbitral awards.
For these reasons, the Court holds that, under § 1650a, a federal district court, asked to
recognize and convert an ICSID award to a judgment, may use the forum state’s recognition
procedure. The Part One judgment here, the product of using the recognition procedure set out
in New York CPLR Article 54, was consistent with the ICSID enabling statute.
Venezuela’s Arguments Based on the FSIA
Venezuela’s second argument—which appears to be one of first impression in this
District—is that the FSIA, enacted in 1976, supervenes the 1966 ICSID enabling statute, so as to
impose requirements on proceedings to recognize ICSID awards when brought against a foreign
sovereign. Venezuela argues that the FSIA, which supplies the sole basis for exercising
jurisdiction over a foreign sovereign, does not give rise to subject matter jurisdiction over an
ICSID recognition proceeding. Alternatively, Venezuela argues that the ex parte recognition
procedure used here is barred by the FSIA because it is inconsistent with the FSIA’s
requirements as to personal jurisdiction, service of process, and venue for cases against foreign
sovereigns. The Court first reviews the history and structure of the FSIA and then considers
Overview of the FSIA
The doctrine of foreign sovereign immunity is based on “reciprocal self-interest, and
respect for the power and dignity of the foreign sovereign.” Nat’l City Bank of N.Y. v. Republic
of China, 348 U.S. 356, 362 (1955). For much of its history, “the United States generally
granted foreign sovereigns complete immunity from suit in the courts of this country.”
Verlinden B.V. v. Cent. Bank of Nigeria, 461 U.S. 480, 486 (1983); see also The Schooner
Exchange v. McFaddon, 11 U.S. (7 Cranch) 116 (1812). Because the doctrine’s basis is comity
rather than the Constitution, federal courts “deferred to the decisions of the political branches—
in particular, those of the Executive Branch—on whether to take jurisdiction over actions against
foreign sovereigns and their instrumentalities.” Verlinden, 461 U.S. at 486.
Until the 1950s, the Executive Branch typically sought immunity for the foreign
sovereign. In 1952, however, the State Department adopted a new, more “restrictive” approach
to immunity. Samantar v. Yousuf, 130 S. Ct. 2278, 2285 (2010). Under that approach, foreign
sovereign immunity was “confined to suits involving the foreign sovereign’s public acts, and
[would] not extend to cases arising out of a foreign state’s strictly commercial acts.” Verlinden,
461 U.S. at 487. This policy shift, however, created difficulties, political and practical: Both the
State Department and the courts struggled to apply clear and consistent standards in deciding
whether to grant such immunity. Id. at 487–88.
In enacting the FSIA in 1976, Congress sought to provide uniformity and clarity to
foreign sovereign immunity. “Under the FSIA, courts, not the State Department, decide claims
of foreign-sovereign immunity according to the principles set forth in the statute.” Rubin v.
Islamic Republic of Iran, 637 F.3d 783, 793 (7th Cir. 2011). To that end, the FSIA “provides the
sole basis for obtaining jurisdiction over a foreign state in federal court.” Argentine Republic v.
Amerada Hess Shipping Corp., 488 U.S. 428, 439 (1989). “Congress’ decision to deal
comprehensively with the subject of foreign sovereign immunity in the FSIA, and the express
provision in [28 U.S.C.] § 1604 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 [28 U.S.C. §§] 1605–1607,’”
precludes other sources of jurisdiction over a foreign state. Amerada Hess, 488 U.S. at 438.
By way of structure, the FSIA, in pertinent part, defines a foreign sovereign, see 28
U.S.C. § 1603; sets out the scope of foreign sovereign immunity from jurisdiction, id. § 1604;
enumerates exceptions to foreign sovereign immunity, id. §§ 1605–07; specifies the manner by
which a foreign sovereign is to be served, id. § 1608; sets out the scope of foreign sovereign
immunity from attachment or execution, id. § 1609; enumerates exceptions to immunity from
attachment or execution, id. §§ 1610–11, and specifies the procedures that must be followed
when a party seeks to attach a foreign sovereign’s assets to satisfy a judgment, id. § 1610(c).
The FSIA also provides that personal jurisdiction over a foreign state exists over claims within
the statute’s scope where the statute’s service of process requirements have been met, id. § 1330.
Venezuela’s Challenge to Subject Matter Jurisdiction
Venezuela argues that the Court lacks subject matter jurisdiction over this recognition
action under the FSIA. The FSIA’s text, however, belies that claim. Two FSIA provisions
independently gave the Part One Court (and this Court) subject matter jurisdiction. Both appear
in § 1605, which sets out exceptions to sovereign immunity. And both have been held by the
Second Circuit to confer subject matter jurisdiction over actions arising out of ICSID awards.
The first is for arbitral awards. It states: “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 [arbitration] award . . . if . . . the . . . award is . . . governed by 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). Section 1605(a)(6)(B) applies here,
because the ICSID award against Venezuela was governed by a treaty, the ICSID Convention,
“calling for the recognition and enforcement of arbitral awards.” See Cargill Int’l S.A. v. M/T
Pavel Dybenko, 991 F.2d 1012, 1017 (2d Cir. 1993) (section 1605(a)(6)(B) “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”). And where an FSIA exception to
sovereign immunity applies, federal district courts have jurisdiction over “any non-jury civil
action against a foreign state.” Verlinden, 461 U.S. at 489–90 (quoting 28 U.S.C. § 1330(a)).
The second exception is for implied waivers by the foreign sovereign. It provides: “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). Section 1605(a)(1) applies here, because Article 54 of the
ICSID Convention represents such a waiver: Each contracting state is obliged to “recognize an
award rendered pursuant to this Convention as binding and enforce the pecuniary obligations
imposed by that award within its territories.”
Both of these exceptions to sovereign immunity have been held by the Second Circuit to
apply to actions to enforce ICSID awards against foreign sovereigns. See Blue Ridge Invs., 735
F.3d at 83–84 (“‘[W]hen a country becomes a [Contracting State] to the [ICSID], by the very
provisions of the [ICSID], the [Contracting State] must have contemplated enforcement actions
in other [Contracting] States.’”) (quoting Seetransport Wiking Trader Schiffarhtsgesellschaft
MBH & Co., Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572, 578 (2d Cir.
1993)). This Court has subject matter jurisdiction under those two exceptions.
In addition, there is, arguably, a third statutory basis for subject matter jurisdiction over
such an action. Section 1604—the provision which confers sovereign immunity—itself textually
exempts existing treaty obligations. It states: “Subject to existing international agreements to
which the United States is a party at the time of enactment of this Act[,] 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 (emphasis added). The
ICSID Convention was such a preexisting international agreement. It, and the enabling statute,
predated the FSIA by a decade. The italicized opening clause of § 1604, by its terms, leaves in
place—and reflects Congress’s intention not to disturb—the provisions of the ICSID Convention
and enabling statute that contemplated domestic lawsuits against foreign sovereigns to enforce
arbitral awards. 18 See In re Nw. Airlines Corp., 483 F.3d 160, 169 (2d Cir. 2007) (“We also
Construing this clause in Amerada Hess, the Supreme Court rejected the claim “that certain
international agreements entered into by petitioner and by the United States create an exception
to the FSIA here.” 488 U.S. at 441–42. It explained that “the FSIA was adopted ‘[s]ubject to
international agreements to which the United States [was] a party at the time of [its]
enactment.’ § 1604. This exception applies when international agreements ‘expressly conflic[t]’
with the immunity provisions of the FSIA, … hardly the circumstances in this case.” Id. at 442
(citations omitted). Because subject matter jurisdiction exists here based on the exceptions to
sovereign immunity in FSIA §§ 1605(a)(6)(B) and 1605(a)(1), the FSIA and the ICSID
Convention are consistent with respect to subject matter jurisdiction. However, if those
exceptions did not exist, the FSIA’s clause preserving international agreements as a source of
subject matter jurisdiction would apply here, because reading the FSIA to deny subject matter
jurisdiction over an action to enforce rights under the ICSID Convention would “expressly
conflict” with the Convention.
assume that Congress passed each subsequent law with full knowledge of the existing legal
landscape.”) (citing Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990)).
In the face of this clear statutory text, Venezuela, in arguing that there is no subject
matter jurisdiction, seizes on two of the Supreme Court’s statements describing the FSIA in
Amerada Hess. First, the Court stated, the FSIA “provides the sole basis for obtaining
jurisdiction over a foreign state in federal court.” 488 U.S. at 439. Second, it stated, “Congress’
decision to deal comprehensively with the subject of foreign sovereign immunity in the FSIA,
and the express provision in [28 U.S.C.] § 1604 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 [28 U.S.C.
§§] 1605–1607,’” precludes other sources of jurisdiction over a foreign state. 488 U.S. at 438.
Venezuela argues that, because Mobil did not comply with the FSIA’s requirement of service of
process but instead pursued recognition ex parte, subject matter jurisdiction is lacking.
Venezuela Br. 6.
That analysis is unpersuasive, for three reasons. First, Venezuela ignores the text of the
FSIA, two of whose exceptions to sovereign immunity squarely fit here. Second, Venezuela
conflates service of process (covered in § 1608) with subject matter jurisdiction (covered in
§§ 1604–07). Even assuming arguendo that Mobil were bound by the FSIA’s service of process
requirements, its noncompliance with them would deprive the Court of personal jurisdiction over
the foreign sovereign, see 28 U.S.C. § 1330(b), not of subject matter jurisdiction. Third, when
analyzed in full, Amerada Hess defeats Venezuela’s theory. The Supreme Court there explicitly
recognized the statutory exceptions (“sections 1605–1607”) to sovereign immunity. 488 U.S. at
438 (quoting 28 U.S.C. § 1604). And the analytic approach the Court took in the case reinforces
that subject matter jurisdiction is measured by those statutory provisions. The issue in Amerada
Hess was whether there was subject matter jurisdiction over a tort action against Argentina to
“recover damages for a tort allegedly committed by its armed forces on the high seas.” Id. at
431. The Court explained that, for such jurisdiction to exist, an FSIA statutory exception to
sovereign immunity must apply. Id. at 434–35. The Court then inquired whether any such
exception applied, id. at 439–43; because none did, subject matter jurisdiction was lacking and
the Court dismissed the case, id. at 443.
This Court therefore rejects Venezuela’s argument based on subject matter jurisdiction.
Venezuela’s Challenge to Service of Process, Personal Jurisdiction, and Venue
The FSIA’s Requirements
Venezuela’s more substantial argument is based on the fact that, in bringing this action ex
parte, Mobil did not comply with the FSIA’s requirements as to service of process and venue.
As to service of process, the FSIA sets out a hierarchy of modes. Service shall be made upon a
foreign state “in accordance with any special arrangement for service between the plaintiff and
the foreign state; or  if no special arrangement exists, by delivery of a copy of the summons and
complaint in accordance with an applicable international convention on service of judicial
documents,” such as the Hague Convention, 28 U.S.C. § 1608(a)(1)–(2). If these are impossible,
the FSIA provides for two back-up modes of service, id. § 1608(a)(3)–(4). 19 Where service has
been properly made and there is subject matter jurisdiction, personal jurisdiction exists over the
Specifically, if service cannot be made under the first two methods, then it should be made “by
sending a copy of the summons and complaint and a notice of suit, together with a translation of
each into the official language of the foreign state, by any form of mail requiring a signed
receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of
foreign affairs of the foreign state concerned.” Id. § 1608(a)(3). If that method is unavailable, as
well, there is a default mode of service involving certified mail, first sent to the U.S. Secretary of
State, and then transmitted “through diplomatic channels to the foreign state.” Id. § 1608(a)(4).
sovereign. Id. § 1330(b). As to venue, a civil action against a foreign state must be brought in
United States District Court for the District of Columbia, unless another district has a clear nexus
to the action, for example, where a substantial part of the events or omissions giving rise to the
claim occurred, or where a substantial part of the property that is the subject of the action is
situated. See 28 U.S.C. § 1391(f)(1)–(3).
Here, it is undisputed that the service of process requirement was not met, because Mobil
brought its petition for recognition, and obtained the Part One judgment, ex parte. For the same
reason, this action also did not comply with the requirement of FSIA § 1608 that a foreign state
be given 60 days after service or process to file an answer or other responsive pleading. Finally,
the FSIA’s venue requirement was also not met, because Mobil, in its petition, did not plead a
substantial nexus to this District. 20
Standards for Statutory Construction
The issue presented is therefore one of statutory construction: Does the FSIA require that
its service, venue, and other requirements be met—in effect, that a plenary civil action lawsuit be
brought—where an ICSID award creditor seeks to convert its award against a foreign sovereign
into a federal court judgment? Or did it leave intact an ICSID award creditor’s ability to use the
streamlined recognition procedures of a forum state, including ex parte recognition proceedings
where state law so provides, as the enabling statute permitted a creditor to do between its
enactment in 1966 and the enactment of the FSIA in 1976?
In considering this question, the Court is guided by familiar principles of statutory
construction. Where a statute’s text is clear, the Court must enforce it as written. See Lamie v.
At argument, Mobil explained that it sought recognition of the ICSID award in this District in
anticipation of later finding, and moving to attach, assets of Venezuela located here. Tr. 31.
U.S. Tr., 540 U.S. 526, 534 (2004). In determining whether a text is clear, “[t]he first step ‘is to
determine whether the language at issue has a plain and unambiguous meaning with regard to the
particular dispute in the case.’” Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450 (2002) (quoting
Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997)). “The plainness or ambiguity of statutory
language is determined by reference to the language itself, the specific context in which that
language is used, and the broader context of the statute as a whole.” Robinson, 519 U.S. at 341
(citing Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 477 (1992); McCarthy v.
Bronson, 500 U.S. 136, 139 (1991)); see also Lexecon Inc. v. Milberg Weiss Bershad Hynes &
Lerach, 523 U.S. 26, 36 (1998) (“[A] statute is to be considered in all its parts when construing
any one of them.”).
The Court must heed the clear text of a statute even if it conflicts with an earlier-ratified
treaty. See Breard v. Greene, 523 U.S. 371, 376 (1998) (“[A]n Act of Congress . . . is on a full
parity with a treaty, and . . . when a statute which is subsequent in time is inconsistent with a
treaty, the statute to the extent of conflict renders the treaty null.” (quoting Reid v. Covert, 354
U.S. 1, 18 (1957) (plurality opinion)); see also Whitney v. Robertson, 124 U.S. 190, 194 (1888)
(where treaty and federal statute conflict, “the one last in date will control the other”). Where,
however, statutory text is not clear, and there is a preceding treaty, the Court is to construe the
statute to avoid conflict with the treaty because, where “fairly possible, a United States statute is
to be construed so as not to conflict with international law or with an international agreement of
the United States.” Rest. (Third) of Foreign Relations Law § 114 (1987) (citing, inter alia,
Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804); Weinberger v. Rossi,
456 U.S. 25, 33 (1982); Lauritzen v. Larsen, 345 U.S. 571, 578 (1958); Chew Heong v. United
States, 112 U.S. 536, 539–40 (1884)).
Analysis of the FSIA’s Text
Analysis begins with the FSIA’s text. That text is silent on the issue presented: whether
the FSIA’s requirement of a plenary action against a sovereign was intended to apply in the
context of recognition of ICSID awards. The FSIA does not refer to recognition proceedings at
all, save to provide that actions to confirm awards “governed by a treaty or other intentional
agreement in force . . . calling for the recognition and enforcement of arbitral awards” fall within
the FSIA’s exception to sovereign immunity for arbitral awards. 28 U.S.C. § 1605(a)(6)(B); see
also id. § 1610(a)(6) (establishing exception to sovereign immunity from attachment of assets
where “the judgment is based on an order confirming an arbitral award rendered against the
foreign state” and where the attachment is consistent with the arbitral agreement). The statute
also does not refer to ICSID.
Contrary conclusions may be drawn from the statute’s silence. Venezuela argues that
because the FSIA is the only source of subject matter jurisdiction over a foreign sovereign, see
Saudi Arabia v. Nelson, 507 U.S. 349, 355 (1993), it follows that its requirement of a plenary
action was meant to apply to all proceedings brought against foreign sovereigns, including the
non-substantive one in which an award creditor seeks to convert an ICSID award into a federal
judgment. The absence of a textual exception to this general rule, Venezuela argues, means that
there is no such exception for an action to recognize an ICSID award. And therefore, it argues,
time-consuming and cumbersome though this process may be, to convert an ICSID award
against a foreign sovereign into a judgment, an award creditor must bring a plenary lawsuit
against the sovereign, in a district in which there is venue under the FSIA, and complying with
the FSIA’s requirements as to service of process and its timetable for an answer. From
Venezuela’s argument, it also follows that, for the award creditor to obtain relief (conversion of
the award into a judgment) in such a lawsuit, the creditor would have to move for a judgment
based on the award, presumably, by moving for judgment on the pleadings under Federal Rule of
Civil Procedure 12(c), or for summary judgment under Rule 56. See Venezuela Br. 2 (arguing
that to recognize an ICSID award requires “the institution of a plenary action, on notice, with
appropriate service of process”); see also id. at 14; Tr. 5 (arguing that to recognize an ICSID
award, a creditor must “go to the D.C. federal district court [and] file their complaint [and] serve
[the foreign state] in accordance with the provisions of section 1608(a).”).
In its brief, Mobil largely ignores the FSIA. It treats the ICSID enabling statute as the
only relevant statute. But, in fact, there are aspects of the FSIA’s text that support Mobil’s view
that Congress did not have ICSID award recognition in mind when it prescribed service, venue,
and other requirements for lawsuits against sovereigns.
First, the FSIA evinces an intention to leave existing practice under international treaties
undisturbed. As noted, FSIA § 1604, the immunity provision, states: “Subject to existing
international agreements to which the United States is a party at the time of enactment of this
Act[,] a foreign state shall be immune from the jurisdiction [of U.S. courts] except as provided
[in] this chapter.” 28 U.S.C. § 1604 (emphasis added). Although addressed to the existence of
immunity, not the mechanics by which an action is to be brought against a non-immune
sovereign, § 1604 fairly reflects an intention not to revise existing law or practice in an area
governed by treaty. This intention is easy to understand in the context of a statute animated in
part by considerations of international comity.
Second, the FSIA repeatedly uses terms that presuppose litigation over a contested issue,
e.g., a conventional lawsuit in which liability, damages, and/or the availability of attachment are
at issue. 21 This terminology uneasily fits the non-substantive, mechanistic context of ICSID
award recognition, in which, upon authentication of the award, its conversion into a judgment is
automatic. It suggests that, in enacting the FSIA, Congress had in mind a conventional lawsuit
against a sovereign to resolve issues of liability and/or damages, see, e.g., Republic of Argentina
v. Weltover, Inc., 504 U.S. 607 (1992) (breach of contract action against Argentina and its central
bank); Amerada Hess, 488 U.S. at 431 (tort action against Argentina to “recover damages for a
tort allegedly committed by its armed forces on the high seas”); Verlinden, 461 U.S. at 483
(breach of contract action against the Central Bank of Nigeria), and not the rara avis that is a
proceeding to convert a ICSID award into a federal court judgment.
Finally, as a matter of historical fact, there were relatively few ICSID arbitrations held
between 1966 and 1976, because ICSID was in its infancy and few litigants had pursued cases in
that forum. See Dolzer & Schreuer, Principles of Int’l Inv. Law 20 (“ICSID’s caseload remained
quite modest for two decades” but proliferated later, such that ICSID is now “the main forum for
the settlement of investment disputes”); see also id. at 224. As a practical matter, it is reasonable
to infer that Congress did not have the unique context of ICSID award recognition in mind when
it enacted the FSIA.
See, e.g., 28 U.S.C. § 1605(a)(3)–(4) (in identifying exceptions to sovereign immunity,
referring to “actions” where rights in property are “in issue”); id. § 1605(a)(5) (referring to
actions “in which money damages are sought against a foreign state for personal injury or
death”); id. § 1605(g) (addressing “limitation[s] on discovery”); id. § 1606 (addressing “extent
of liability,” and providing that standards for judging liability of a foreign sovereign are the same
as for a private individual, except as to punitive damages); id. § 1607 (addressing
“counterclaims”); id. § 1608 (in addressing service, referring to the “summons and complaint,”
the “plaintiff,” the “notice of suit,” and the “answer or other responsive pleading,” and noting
that a “judgment by default” cannot issue against a foreign state unless “the claimant establishes
his claim or right to relief by evidence satisfactory to the court”).
There is some force to both competing perspectives. Neither is obviously correct based
on the statute’s text. The Court concludes that the FSIA’s language does not have “a plain and
unambiguous meaning with regard to the particular dispute in the case,” Sigmon Coal, 534 U.S.
at 450 (citation omitted), and that it leaves congressional intent unclear as to whether the
procedures the FSIA prescribes were to apply to conversion of ICSID awards against foreign
sovereigns. The FSIA’s legislative history also does not appear to speak to this issue, a point
confirmed at argument. See Tr. 38.
Conflict with the ICSID Convention and the ICSID Enabling Statute
To resolve the ambiguity, it is therefore appropriate to examine the FSIA in broader
context. In particular, would construing the FSIA to require ICSID award creditors who wish to
convert their awards into federal court judgments to proceed by plenary lawsuit be in tension, or
outright conflict, with the ICSID Convention or its enabling statute? If so, the Court is to
construe the silent FSIA so as to avoid interference with the treaty and statute. See Rest. (Third)
of Foreign Relations Law § 114 (1987) (citing, inter alia, Charming Betsy, 6 U.S. (2 Cranch) at
118; Rossi, 456 U.S. at 33; Lauritzen, 345 U.S. at 578; Chew Heong, 112 U.S. at 539–40).
Based on the Court’s review of the history and purposes of the ICSID Convention, and
the texts of both the Convention and the ICSID enabling statute, requiring a plenary lawsuit to
obtain recognition of an ICSID award would be, at a minimum, in significant tension with the
intentions of the Convention and the enabling statute as to the process of recognition. A review
of that history is instructive.
The ICSID Convention was drafted in 1965 by delegates from many nations, including
the United States. In considering the recognition and execution of ICSID awards, the delegates
drew upon, referenced, and in important respects deliberately deviated from the terms of an
earlier treaty, the foundational treaty in the area of international arbitration: the Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (“the New York Convention”). To
understand the ICSID Convention’s view and treatment of award recognition and execution, it is
important therefore to understand the New York Convention. See, e.g., Yusuf Ahmed Alghanim
& Sons v. Toys “R” Us, Inc., 126 F.3d 15, 22 (2d Cir. 1997) (looking to prior treaties to explain
context for, and purpose of, treaty at issue).
The New York Convention was negotiated in 1958 and entered into force in 1959. It was
adopted to facilitate international enforcement of arbitral awards. See Scherk v. Alberto-Culver
Co., 417 U.S. 506, 510–11 (1974). The prior regime, the Convention on the Execution of
Foreign Arbitral Awards (“the Geneva Convention”), Sept. 26, 1927, 92 L.N.T.S. 301, was
viewed as too cumbersome. See Toys “R” Us, 126 F.3d at 21 (“The primary defect of the
Geneva Convention was that it required an award first to be recognized in the rendering state
before it could be enforced abroad,” a requirement known as “double exequatur”) (citing, inter
alia, Geneva Convention arts. 1(d), 4(2)). By 1965, 23 nations had ratified, and an additional 10
had signed, the New York Convention. 22
The scope of the New York Convention is far broader than ICSID’s, in that its coverage
extends to disputes between private parties, and to arbitral institutions generally. See Toys “R”
Us, 126 F.3d at 21 (citing New York Convention article I(1)). It requires courts in contracting
states to (1) give effect to private agreements to arbitrate, and (2) recognize and enforce
arbitration awards that were rendered either in other contracting states or “by permanent arbitral
Today, the New York Convention has more than 150 member states, including the United
States, see 21 U.S.T. 2517, T.I.A.S. No. 6997. See New York Convention Countries, available
at www.newyorkconvention.org/contracting-states/list-of-contracting-states (last visited
February 12, 2015).
bodies.” New York Convention arts. I–II. Under the New York Convention, a domestic court of
a contracting state is empowered to interpret the parties’ underlying agreement and to order the
parties to submit their dispute to arbitration, where the parties have so agreed, unless the court
“finds that the said agreement is null and void, inoperative or incapable of being performed.” Id.
art. II. As to recognition, the New York Convention provides that, once an arbitral award has
issued, the award creditor shall “supply” the court with the original award or a certified copy. Id.
art. IV. Courts in a contracting state, in turn, are required to “recognize arbitral awards as
binding and enforce them in accordance with the rules of procedure of the territory where the
award is relied upon,” subject to certain conditions. Id. art. III.
Significantly, these conditions permit the award debtor to contest recognition on a variety
of grounds. The New York Convention sets out 16 grounds (in seven subsections) on which a
court can “refuse” to recognize an arbitral award. Id. art. V. Fourteen bear on the validity of
the arbitration process or award: The debtor may argue, for example, that the underlying
arbitration agreement is invalid, that the arbitral panel was improperly composed, that the
decision rendered was outside the scope of the arbitration agreement, and/or that the award was
not final. Id. art. V(1)(a)–(e). 23 The remaining two grounds arise from the domestic law of the
Article V, in its entirety, provides:
1. Recognition and enforcement of the award may be refused, at the request of the party
against whom it is invoked, only if that party furnishes to the competent authority where the
recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to
them, under some incapacity, or the said agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon, under the law of the
country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or of the arbitration proceedings or was otherwise unable
to present his case; or
recognizing state. They permit a court to refuse to confirm an award where the dispute’s subject
matter cannot be arbitrated under the law of the recognizing state, or where recognition “would
be contrary to the public policy of that country.” Id. art. V(2)(a)–(b).
To be sure, confirmation of awards under the New York Convention—and under Chapter
2 of the Federal Arbitration Act, 9 U.S.C. § 201 et seq., the enabling statute which implements
and provides for enforcement in U.S. courts of awards rendered under the Convention—is
intended to proceed on an expedited basis. A party seeking confirmation of an award under the
Convention thus need not file a complaint, but may instead file a petition to confirm the award.
And the petition can be resolved on the papers, without the need for oral testimony or discovery.
However, the exceptions set out in the Convention invite some substantive review. And, based
(c) The award deals with a difference not contemplated by or not falling within the terms
of the submission to arbitration, or it contains decisions on matters beyond the scope of
the submission to arbitration, provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, that part of the award which
contains decisions on matters submitted to arbitration may be recognized and enforced;
(d) The composition of the arbitral authority or the arbitral procedure was not in
accordance with the agreement of the parties, or, failing such agreement, was not in
accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or
suspended by a competent authority of the country in which, or under the law of which,
that award was made.
2. Recognition and enforcement of an arbitral award may also be refused if the competent
authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the
law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of
on these exceptions, federal courts, presented with petitions to confirm—or to vacate—awards
rendered under the Convention, are frequently called upon to undertake such review. 24
Further, in light of the substantive nature of the confirmation process, the requirements of
personal jurisdiction, service of process, and venue have generally been held by federal courts to
apply to petitions to confirm arbitral awards under the New York Convention. 25
The ICSID Convention’s history26 reflects that the delegates who drafted it originally
planned to use the New York Convention’s recognition and enforcement provisions. See
See, e.g., Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 307 (2010) (addressing
scope of parties’ agreement to arbitrate); Zeiler v. Deitsch, 500 F.3d 157, 160 (2d Cir. 2007)
(addressing whether an arbitration panel was properly composed, given resignation of one of
three arbitrators); Avis Rent A Car Sys., Inc. v. Garage Employees Union, Local 272, 791 F.2d
22, 25 (2d Cir. 1986) (addressing whether arbitrator exceeded his powers); Yusuf Ahmed
Alghanim & Sons, W.L.L. v. Toys “R” Us, Inc., No. 96 Civ. 5853 (LMM), 1996 WL 728646, at
*1 (S.D.N.Y. Dec. 18, 1996) (addressing whether arbitral award was irrational and whether
arbitrators manifestly disregarded the law and the terms of the parties’ agreement) aff’d, 126
F.3d at 15).
See, e.g., Frontera Res. Azerbaijan Corp. v. State Oil Co. of Azerbaijan Republic, 582 F.3d
393, 396–97 (2d Cir. 2009) (requiring jurisdiction over defendant’s person or property to enforce
arbitral award under New York Convention) (citing Telcordia Tech Inc. v. Telkom SA Ltd., 458
F.3d 172, 178–79 (3d Cir. 2006); Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain
Co., 284 F.3d 1114, 1120–22 (9th Cir. 2002); Base Metal Trading, Ltd. v. OJSC “Novokuznetsky
Aluminum Factory,” 283 F.3d 208, 212–13 (4th Cir. 2002)); see also CME Media Enterprises
B.V. v. Zelezny, No. 01 Civ. 1733 (DC), 2001 WL 1035138, at *2 (S.D.N.Y. Sept. 10, 2001)
(addressing whether service of process was proper); see also Kelso Enters. Ltd. v. M/V
DIADEMA, No. 08 Civ. 8226 (SAS), 2009 WL 1788110, at *3 (S.D.N.Y. June 23, 2009)
(addressing appropriate venue for district court action arising under New York Convention),
aff’d sub nom. Kelso Enters. Ltd. v. A.P. Moller-Maersk, 375 F. App’x 48 (2d Cir. 2010)
In interpreting treaties, it is common to “consider as ‘aids to its interpretation’ the negotiation
and drafting history of the treaty as well as ‘the postratification understanding’ of signatory
nations.” Medellin v. Texas, 552 U.S. 491, 506 (2008) (quoting Zicherman v. Korean Air Lines
Co., 516 U.S. 217, 226 (1996)); see also El Al Israel Airlines, Ltd. v. Tsui Yuan Tseng, 525 U.S.
155, 176 (1999) (“The text, drafting history, and underlying purpose of the Convention, in sum,
counsel us to adhere to a view of the treaty’s exclusivity shared by our treaty partners.”); United
Schreuer, The ICSID Convention 1101; Analysis of Documents Concerning the Origin and the
Formulation of the [ICSID] Convention 246 (1970) (“History, Vol. I”); Documents Concerning
the Origin and the Formulation of the [ICSID] Convention 65, 272, 429, 521, 671, 888, 1018
(1968) (“History, Vol. II”). Delegates debated at length whether to retain a possibility of judicial
review of an award under domestic law, either by adopting the various grounds for “refusal”
under the New York Convention or by providing for a narrower ground for refusal based on the
public policy of the forum state. Schreuer, The ICSID Convention 1128–29; History, Vol. II,
661, 671, 699, 887, 888–95.
A number of delegates, however, urged that the ICSID Convention be a “self-contained
regime” with no judicial review. Schreuer, The ICSID Convention 1128; History, Vol. II, 425–
30, 519, 522, 575. A compromise resulted: Contracting states were required, without exception,
to recognize arbitral awards, but they were obliged to enforce only the pecuniary obligations of
awards, not other aspects such as specific performance. Schreuer, The ICSID Convention 1129;
History, Vol. II, 989–92, 1018.
Consistent with this approach, the delegates structured the ICSID Convention’s chapter
on recognition and enforcement to consist of three articles (Articles 53 through 55).
Article 53 is directed to the arbitrating parties. As noted, it provides that an ICSID
award is “binding on the parties,” is not subject to appeal “or to any other remedy except those
States v. Stuart, 489 U.S. 353, 365–66 (1989); Choctaw Nation v. United States, 318 U.S. 423,
provided for in this Convention,” 27 and it obligates each party to comply with the terms of the
Article 54 is directed to contracting states. As noted, it requires them to recognize an
ICSID award “as binding” and to enforce the award’s pecuniary obligations “as if it were a final
judgment of a court in that State.” ICSID Convention art. 54(1). There are no exceptions to the
contracting state’s duty to recognize the award. 28 Article 54 also directs that “[a] party seeking
recognition or enforcement in the territories of a Contracting State shall furnish” to a competent
court a certified copy of the award. Id. art. 54(2). Such a court therefore is to review only the
award’s authenticity; recognition thereafter is mechanistic and effectively “automatic.”
Schreuer, The ICSID Convention 1126. Article 54 also provides that, after recognition,
execution is governed by the domestic laws “in the State in whose territories such execution is
sought.” ICSID Convention art. 54(3).
Finally, Article 55 is directed to execution. It states: “Nothing in Article 54 shall be
construed as derogating from the law in force in any Contracting State relating to immunity of
that State or of any foreign State from execution.” Id. art. 55 (emphasis added). 29
Earlier portions of the ICSID Convention provide for the possibility of annulment, revision,
and interpretation by ICSID of an award. See ICSID Convention arts. 50–52.
See Schreuer, The ICSID Convention 1143 (“The obligation to recognize an award as binding
under Art. 54(1) is unconditional.”); see also supra, n.17.
Because this provision allows domestic law to inhibit an award creditor’s ability to collect on
an ICSID award, a leading commentator has described Article 55 as “the Achilles’ heel” of the
Convention—a “weak point” in “[t]he otherwise effective machinery of arbitration.” Schreuer,
The ICSID Convention 1144. But this was a deliberate choice. The delegates considered, but
rejected, providing that consent to ICSID jurisdiction was a waiver of immunity from execution.
See id. at 1145.
Articles 53 through 55 of the ICSID Convention thus represented a considered decision
to depart fundamentally from the New York Convention, in denying courts any power to review
the parties’ agreement to arbitrate, to decline to hear particular types of cases, and, most salient
here, to refuse to recognize ICSID awards. 30
As noted, Congress enacted § 1650a in 1966 to implement the ICSD Convention. In
mandatory terms, it provides that the pecuniary terms of an ICSID award “shall be enforced.”
And two other aspects of the statute’s text reflect Congress’s expectation, in accord with the
ICSID Convention, that ICSID award recognition would be non-substantive and automatic.
First, § 1650a uses a phrase conspicuously absent from Chapter 2 of the FAA, the
enabling statute for the New York Convention. It requires that an ICSID award be given “full
faith and credit”: “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.” Congress’s use of “full faith and credit” in the
ICSID enabling statute is significant, because that term has an acquired meaning. It tracks the
full faith and credit provision of the Constitution, see U.S. Const. art. IV, § 1. That provision, in
The ICSID Convention’s rules also differed from those of the New York Convention in that
they were binding. The New York Convention’s rules, by contrast, were default rules, which
were subject to existing agreements among the parties, to the law or treaties of the country where
the award was enforced, see New York Convention art. VII, and to the right of a contracting
country at the time of ratification to limit the treaty’s reach to particular types of cases, see id.
art. I (Contracting party may “declare that it will apply the Convention to the recognition and
enforcement of awards made only in the territory of another Contracting State. It may also
declare that it will apply the Convention only to differences arising out of legal relationships,
whether contractual or not, which are considered as commercial under the national law of the
State making such declaration.”).
turn, makes final the determinations of sister states, such that, subject to exceptions inapplicable
here, no attack can be made outside a state on a judgment rendered therein.
As the Supreme Court has held of the Constitution’s full faith and credit provision:
“Regarding judgments, . . . the full faith and credit obligation is exacting. A final judgment in
one State, if rendered by a court with adjudicatory authority over the subject matter and persons
governed by the judgment, qualifies for recognition throughout the land. For claim and issue
preclusion (res judicata) purposes, in other words, the judgment of the rendering State gains
nationwide force.” Baker v. Gen. Motors Corp., 522 U.S. 222, 233 (1998) (citations and
footnote omitted); accord Williams v. North Carolina, 317 U.S. 287, 294 (1942). 31 There are
only limited exceptions to the Constitution’s requirement of full faith and credit. None apply in
the context of an ICSID award. 32
Drawing upon the Supreme Court’s precedents, one commentator has helpfully summarized
the concept of full faith and credit as follows:
If a court in state “F-1” renders a final judgment in a case over which it
possesses both personal and subject matter jurisdiction, its judgment is entitled to
full faith and credit in state “F-2,” even if that judgment is based on a mistake of
fact or law. If the losing litigant wants to correct the error, the litigant must do so
in F-1’s courts, either on appeal or through some other type of direct attack. Once
the judgment is final according to the law of F-1, however, the Full Faith and
Credit Clause prohibits collateral attack in F-2. This is the Iron Law of Full Faith
and Credit. . . .
[T]he Full Faith and Credit Clause requires that the doctrines of repose
and finality be given interstate effect.
William L. Reynolds, The Iron Law of Full Faith and Credit, 53 Md. L. Rev. 412, 413–15
(1994) (“Reynolds”) (footnotes omitted).
Under the full faith and credit doctrine, a “recognizing” court need not recognize the
“rendering” court’s underlying judgment where that judgment is not on the merits, is not yet
final, resulted from fraud, or was issued in the absence of personal or subject matter jurisdiction.
See, e.g., Saylor v. Lindsley, 391 F.2d 965, 968 (2d Cir. 1968) (non-merits exception); Lynde v.
Section § 1650a’s use of “full faith and credit” is significant for another reason. Under
the full faith and credit doctrine, for a sister state’s judgment to be recognized, it is not necessary
that there be personal jurisdiction over the judgment debtor in the recognizing court. Instead, a
mechanistic process of interstate registration is commonly used. 33 It is reasonable to assume
that, when Congress used the term “full faith and credit” in the ICSID enabling statute, it
Lynde, 181 U.S. 183, 187 (1901) (lack of finality exception); Cole v. Cunningham, 133 U.S. 107,
112 (1890) (lack of jurisdiction and fraud exceptions); see also Reynolds, supra, at 417–30.
These exceptions have no bearing in the context of an ICSID award because, under the ICSID
Convention, an ICSID award necessarily reflects consent by both parties to ICSID’s jurisdiction,
follows a merits arbitration, represents a final judgment not subject to substantive challenge
within the courts of a contracting state, and equates to a judgment entered by a state’s highest
As the Supreme Court has explained:
Congress has provided for the interdistrict registration of federal-court judgments
for the recovery of money or property. 28 U.S.C. § 1963 (upon registration, the
judgment “shall have the same effect as a judgment of the district court of the
district where registered and may be enforced in like manner”). A similar
interstate registration procedure is effective in most States, as a result of
widespread adoption of the Revised Uniform Enforcement of Foreign Judgments
Act, 13 U.L.A. 149 (1986)  (listing adoptions in 44 States and the District of
Baker, 522 U.S. at 235 n.8; see also Siegel, N.Y. Practice § 435 (“The background of Article 54
suggests that there is no need to demonstrate that New York has jurisdiction.”); 11 Jean E. Maess
et al., Federal Procedure Lawyers Edition § 31:28 (“Personal jurisdiction in the court where a
judgment is being registered is not required by 28 U.S.C.A. § 1963.”); see generally Williams,
317 U.S. at 294 (“Art. IV, § 1 [of the Constitution] and the [congressional] Act of May 26, 1790
require that ‘not some but full’ faith and credit be given judgments of a state court. Davis v.
Davis, 305 U.S. 32, 40 [(1938)]. Thus even though the cause of action could not be entertained
in the state of the forum either because it had been barred by the local statute of limitations or
contravened local policy, the judgment thereon obtained in a sister state is entitled to full faith
and credit.”) (numerous citations omitted); cf. Registration in Federal District Court of Judgment
of Another Federal Court Under 28 U.S.C.A. § 1963, 194 A.L.R. Fed. 531 § 2[b] (2004) (“To
register a judgment, counsel should file a certified copy of the judgment with the clerk of the
registering court, who will enter it on the records in substantially the same manner as if judgment
had been rendered by the registering court.”) (citing, inter alia, Arenas v. Sternecker, 109 F.
Supp. 1 (D. Kan. 1953)).
intended to adopt the familiar meaning of this term of art. See Molzof v. United States, 502 U.S.
301, 307 (1992).
Second, the ICSID enabling statute provides: “The Federal Arbitration Act (9 U.S.C. § 1
et seq.) shall not apply to enforcement of awards rendered pursuant to the convention.” 28
U.S.C. § 1650a. Chapter 2 of the FAA, as noted, implemented the New York Convention.
Section 1650a thereby reflected Congress’s intention that the New York Convention, which
provided for limited substantive review of—and the right of the award debtor to challenge—
arbitral awards would not apply to the enforcement of ICSID awards.
When considered in light of the foregoing history and text, Venezuela’s claim that the
FSIA should be read to require an award creditor to bring a plenary lawsuit to recognize an
ICSID award is, therefore, deeply problematic. Venezuela’s construction would bring the FSIA
into grave tension with the objectives of the ICSID Convention and of Congress. That is because
the history and terms of the ICSID Convention unavoidably reveal that the contracting states to
the ICSID Convention intended to put in place an expedited and automatic recognition
procedure. They sought to depart from, not to double down on, the model of a contested
recognition process used under the New York Convention.
Ironically, if Venezuela were literally held to its advocacy here, requiring the creditor to
file a “plenary action” (initiated by a complaint and resolvable only upon full motions practice)
would give Venezuela more process than it was due under the New York Convention, under
which at least a streamlined petition-based confirmation process is used. And if Venezuela were
taken instead simply to advocate the use under the ICSID Convention of the procedures used
under the New York Convention, that notion, too, would plainly be odds with the intent of the
And also with Congress’s intent: Congress’s use of the term “full faith and credit” in the
ICSID enabling statute, and § 1650a’s proviso that the FAA’s enforcement procedures were not
to apply to ICSID awards, reveals that it, too, intended that an ICSID award be automatically
recognized, not subject to contested litigation. 34 Accordingly, although the ICSID enabling
statute does not affirmatively prescribe the procedures to be used for domestic recognition of an
ICSID award, the words it does use are highly revealing. When understood in historical context,
they underscore Congress’s expectation that award recognition would be automatic and not
subject to contest.
Notably, legislatures in a number of other contracting states drew the same conclusion. A
number of them permit immediate, and ex parte, recognition of ICSID awards. See, e.g., Part
62.21(2)(c) of the United Kingdom’s Rules of Civil Procedure (setting out requirements for
registration; registration may be obtained ex parte, but service must be made on judgment debtor
prior to execution); Australia Fed. Court Rule Order 68 (setting out requirements for registration;
application for registration “may be made without notice to any person”); see also Schreuer, The
By the end of 1975, at least 16 states had adopted the 1964 UEFJA and were using ex parte
proceedings to recognize sister-state judgments. See, e.g., Wash. Stat. § 6.36.010 et seq. (Mar.
18, 1953); Or. Rev. Stat. § 24.105 et seq. (May 21, 1955); R.I. Gen. Laws 1956, § 9-32-1 et seq.;
Wyo. Stat. Ann. § 1-17-701 et seq. (Feb. 11, 1965); 42 Pa. Cons. Stat. § 4306 (May 21, 1965);
Wisc. Stat. Ann. § 806.24 (Nov. 24, 1965); 12 Okl. St. Ann. § 719 et seq. (Apr. 15, 1968); Colo.
Rev. Stat. Ann. § 13-53-101 et seq. (July 1, 1969); N.D. C.C. § 28-20.1-01 et seq. (July 1, 1969);
N.Y. CPLR 5401 et seq. (Sept. 1, 1970); Ariz. Rev. Stat. § 12-1701 et seq. (Aug. 13, 1971); Ak.
Stat. § 09.30.200 et seq. (Aug. 16, 1972); Conn. Gen. Stat. Ann. § 52-604 et seq. (June 17,
1973); Id. Stat. § 10-1301 et seq. (July 1, 1974); 14 Me. Rev. Stat. Ann. § 8001 et seq. (May 22,
1975); S.D. Stat. § 15-16A-1 et seq. (1975). Another two adopted such laws in 1976. See S.C.
Code 1976, § 15-35-900 et seq.; Tenn. Stat. § 26-6-101 (1976). Although there is no evidence
that Congress focused at the time it passed the FSIA on the availability of these forum-state
procedures for use in ICSID award recognition proceedings involving a sovereign debtor,
Congress is presumed to have been aware of existing state law at the time it enacts legislation.
See, e.g., In re Nw. Airlines Corp., 483 F.3d at 169. Had Congress intended by passing the FSIA
to preclude use of such procedures, it could have said so.
ICSID Convention 1116–19 (summarizing French case law, which, too, permits ex parte
registration through the “exequatur” procedure); see generally El Al Israel Airlines, 525 U.S. at
176 (interpreting the treaty at issue by looking to its text, drafting history, purpose, and
interpretation “by our treaty partners”); Toys “R” Us, Inc., 126 F.3d at 21 (“This interpretation
of Article V(1)(e) also finds support in the scholarly work of commentators on the Convention
and in the judicial decisions of our sister signatories to the Convention.”).
Venezuela’s argument is flawed for another reason. Reading into the FSIA’s silence a
congressional intention to graft onto the ICSID enabling statute the FSIA’s requirements as to
service of process, personal jurisdiction, and venue would not serve any practical purpose.
Whatever parties participated in the award recognition process—whether it was conducted ex
parte or on notice to the debtor—one conclusion is certain: Registration of ICSID awards was
intended to be automatic. There are no grounds for challenging the award in the contracting
state. Any challenge to the award is to be made within ICSID. Permitting an ICSID award to be
converted, ex parte, into a federal judgment does not deprive the award debtor of a right (such as
a debtor has under the New York Convention) to challenge the award. It would merely provide
an avenue for delay.
This case, in fact, supplies an excellent example. Venezuela has not identified any
substantive defect in the award. Its motion to vacate the Part One Judgment is based solely on
asserted procedural infirmities under § 1650a and the FSIA. Venezuela has not identified any
legal basis on which, were it to be granted the right to be sued and to participate in the award
recognition process, it could, or would, challenge ICSID’s award to Mobil. But requiring the
creditor to comply with the FSIA’s procedures for such a lawsuit when the award debtor is a
sovereign—including potentially having to use the time-consuming process for serving a foreign
sovereign under the Hague Convention, or having to litigate the adequacy of personal
jurisdiction or of Mobil’s venue choice—could lead to substantial delays. 35
And construing the FSIA to permit ICSID creditors to continue to be able to use (via
borrowing) state recognition procedures as permitted by the ICSID enabling statute would leave
foreign sovereigns fully able to vindicate the rights they do have. A sovereign is at liberty to
challenge the award within ICSID, to seek its annulment, or, as Venezuela has done, to seek its
modification. See ICSID Conv. arts. 50–52; see generally Schreuer, The ICSID Convention
868–1075. And the strong protections that the FSIA affords sovereigns at the execution and
attachment stages are in no way impeded by this holding. The FSIA prevents a judgment
creditor from executing on a foreign sovereign’s assets until a court has ordered execution. A
court may order execution only after it has “determined that a reasonable period of time has
elapsed following the entry of judgment and the giving of any notice required under [28 U.S.C.
§ 1608(e), an FSIA service provision].” 28 U.S.C. § 1610(c). The FSIA also makes available to
judgment creditors only commercial property of the sovereign—other property of the sovereign’s
is immune. Id. § 1610(a). See Walters v. Indus. & Commercial Bank of China, Ltd., 651 F.3d
280, 289 (2d Cir. 2011) (“[T]he execution immunity afforded sovereign property is broader than
the jurisdictional immunity afforded the sovereign itself.”).
According to media reports that Mobil attached to its opposition to the motion to vacate,
Venezuela has stated that it will refuse to pay the ICSID award, even if it fails within ICSID to
unsettle that award. See Dkt. 26, Ex. 2 (Nathan Crooks & Jose Orozco, Chavez Says Venezuela
Won’t Accept World Bank Arbitration, Bloomberg, Jan. 9, 2012) (reporting that Venezuela’s
then-President Hugo Chavez has said, “[w]e won’t recognize any decisions from the ICSID,”
and that Mobil is “seeking the impossible, that we pay what we will never pay”). The Court, of
course, has not relied on these reports in reaching its legal conclusions. The Court recites them
here to illustrate the mischief that Venezuela’s construction of the FSIA could invite, by enabling
a contumacious award debtor to use the FSIA’s procedural requirements as a tool to delay paying
on an ICSID award.
Use of an ex parte process to convert an ICSID award into a judgment does not interfere
with any of these rights. Creation of a domestic judgment is a predicate to, not a substitute for,
execution upon a judgment. And where creditors have not abided by the FSIA’s requirements,
courts have nullified their actions, see, e.g., Gadsby & Hannah v. Socialist Republic of Romania,
698 F. Supp. 483, 485–86 (S.D.N.Y. 1988); Ferrostaal Metals Corp. v. S.S. Lash Pacifico, 652
F. Supp. 420, 423 (S.D.N.Y. 1987), recognizing that “the procedures mandated by 1610(c) are in
place to ensure that sufficient protection is afforded to foreign states that might be defendants in
actions in United States Courts,” Levin v. Bank of N.Y., No. 09 Civ. 5900 (RPP), 2011 WL
812032, at *7 (S.D.N.Y. Mar. 4, 2011); cf. LETCO, 650 F. Supp. at 77–78.
In this case, following the Part One judgment, Mobil put Venezuela on notice of the
judgment, see Dkt. 20, as required by CPLR Article 54; under the FSIA, Venezuela is entitled to
a “reasonable” amount of time to comply with the Part One judgment before any attachment or
execution is permitted, see 28 U.S.C. § 1610(c); Trans Commodities, Inc. v. Kazakstan Trading
House, No. 96 Civ. 9782 (BSJ), 1997 WL 811474, at *2–3 (S.D.N.Y. 1997). Venezuela will
also be free, consistent with the FSIA, to litigate other aspects of efforts Mobil may make to
collect on its judgment domestically. See, e.g., Republic of Argentina v. NML Capital, Ltd., 134
S. Ct. 2250, 2254–58 (2014) (breadth of post-judgment discovery); Ned Chartering & Trading,
Inc. v. Republic of Pakistan, 130 F. Supp. 2d 64, 66–67 (D.D.C. 2001) (whether “reasonable”
time had elapsed prior to execution).
The Court therefore rejects Venezuela’s claim that the FSIA sub silentio amended the
ICSID enabling statute, so as to require award creditors to pursue recognition of ICSID awards
against foreign sovereigns by means of plenary actions in compliance with the FSIA’s
requirements as to process, personal jurisdiction, and venue. 36 The procedures applicable to the
recognition process are instead those authorized by the ICSID enabling statute. And it, for the
reasons reviewed here, permits a court to adopt the judgment recognition procedures of the
forum state. Accordingly, Venezuela’s motion to vacate the Part One judgment is denied.
To the extent Venezuela makes a personal jurisdiction argument independent of the FSIA, it
lacks merit. Personal jurisdiction ordinarily is not required in recognition proceedings, whether
state or federal. The relevant issue is instead whether there was jurisdiction over the award
debtor at the time the underlying award was litigated; that is not in dispute here. See, e.g.,
Siegel, N.Y. Practice § 435 (“The background of Article 54 suggests that there is no need to
demonstrate that New York has jurisdiction.”); 11 Maess et al., Fed. Pro. Lawyers Edition
§ 31:28 (“Personal jurisdiction in the court where a judgment is being registered is not required
by 28 U.S.C.A. § 1963.”). And even if personal jurisdiction were necessary, it was waived here.
Where a nation becomes a contracting party to the ICSID Convention, “by the very provisions of
the [ICSID], the [Contracting State] must have contemplated enforcement actions in other
[Contracting] States,” including the United States. Blue Ridge Invs., 735 F.3d at 83–84 (quoting
Seetransport, 989 F.2d at 578); LETCO, 650 F. Supp. at 76 (“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 award.”). This
constitutes the “consent” or agreement to a jurisdiction that courts have found required in the
New York Convention context. See Transatl. Bulk Shipping Ltd. v. Saudi Chartering S.A., 622
F. Supp. 25, 27 (S.D.N.Y. 1985) (“Some basis must be shown, whether arising from the
respondent’s residence, his conduct, his consent, the location of his property or otherwise, to
justify his being subject to the court’s power.”); see generally City of New York v. Mickalis Pawn
Shop, LLC, 645 F.3d 114, 133 (2d Cir. 2011) (“Personal jurisdiction, unlike subject-matter
jurisdiction, can, however, be purposely waived or inadvertently forfeited.”) (citing Ins. Corp. of
Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982)).
To the extent that, in challenging venue, Venezuela relies on Continental Casualty v.
Argentine Republic, 893 F. Supp. 2d 747 (E.D. Va. 2012), its reliance is misplaced. The award
creditor there filed a plenary action to enforce an ICSID award; given that, the district court held
that the creditor was obliged to bring such an action in compliance with the FSIA, and
transferred the case to the District of Columbia. Id. at 754. Whether or not this ruling was
correct, Continental Casualty does not speak to whether a creditor is free alternatively to pursue
recognition through an ex parte proceeding such as under CPLR Article 54. Notably,
Continental Casualty cited case law from this District that approved of the use of ex parte award
registration. See id. at 751 n.9 (citing Siag, 2009 WL 1834562). Every other ICSID case
(besides Continental Casualty) has treated venue in New York as proper. See, e.g., Siag, 2009
WL 1834562, at *1–3; LETCO, 650 F. Supp. at 76; Blue Ridge Invs., 902 F. Supp. 2d 367.
Effect of Venezuela’s Pending Application to Modify the ICSID Award
After Venezuela moved to vacate the Part One judgment, it applied to ICSID for revision
of the arbitral award. Mobil Br. 2; Dkt. 29 (“Venezuela Rep. Br.”), 2 & n.1. Thereafter, the
ICSID Secretary-General stayed enforcement of the award. See Pizzurro Reply Decl., Ex. A. As
a result, the award cannot currently be enforced because the parties are litigating the precise
amount that will be offset on the ground that Mobil has already received a separate award against
the national oil company of Venezuela. See Tr. 18 (“As part of the arbitra[l] award, there is to be
a set-off with respect to the moneys [Mobil] previously received from PDVSA, the state-owned
oil company.”); Award ¶ 404(e).
At argument, the Court pursued this subject with counsel. Tr. 11, 12, 18. The Court’s
concern was that if the Part One judgment recognizing the award in Mobil’s favor remained in
place and was not stayed, Mobil, in theory, could seek attachment of more than the sum total of
assets to which it may ultimately be held entitled by ICSID. Id. at 13.
The prudent solution is for the Court, pending the outcome of Venezuela’s application for
revision, to stay enforcement of the Part One judgment. See id. at 23–24. As Mobil
acknowledged, under the FSIA, it cannot, in any event, attach Venezuelan assets without judicial
permission. See id. at 20; 28 U.S.C. § 1610(c). The Court, accordingly, stays enforcement of the
Part One judgment, pending the resolution of the application currently pending before ICSID.
For the foregoing reasons, the Court denies Venezuela’s motion to vacate the Part One
judgment. The Court, however, stays enforcement of the judgment, pending the outcome of
Venezuela’s application to ICSID to revise the arbitral award. The parties are directed to notify
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