Science Applications International Corporation et al v. Hellenic Republic
Filing
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ORDER granting 3 Motion. For the reasons stated above, Petitioner's motion for an order finding that a "reasonable period of time" has elapsed following the entry of judgment pursuant to 28 U.S.C. § 1610(c) is GRANTED. The Clerk of Court is directed to terminate the motion at ECF No. 3. (As further set forth in this Order.) (Signed by Judge Analisa Torres on 4/24/2019) (cf)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SCIENCE APPLICATIONS INTERNATIONAL
CORPORATION,
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: __4/24/2019____
Petitioner,
-against-
18 Misc. 327 (AT) (GWG)
THE HELLENIC REPUBLIC,
ORDER
Respondent.
ANALISA TORRES, District Judge:
This proceeding arises from a judgment entered by the United States District Court for
the District of Columbia (the “D.C. Court”) against Respondent, the Hellenic Republic, that
Petitioner, Science Applications International Corporation,1 registered in this district. Petitioner
moves for an order finding that a “reasonable period of time” has elapsed since the judgment was
entered pursuant to 28 U.S.C. § 1610(c). ECF No. 3. For the reasons stated below, Petitioner’s
motion is GRANTED.
BACKGROUND
This case addresses the following scenario. An arbitral award is rendered against a
foreign state in a proceeding held in that foreign state. Then, in a United States district court, the
prevailing party successfully obtains a judgment enforcing the award against the foreign state.
The prevailing party wants to attach the foreign state’s assets to satisfy the judgment, so it moves
the district court—in this case, a different district court than the one that entered the judgment—
for an order finding that a “reasonable period of time” has elapsed since the judgment was
entered pursuant to 28 U.S.C. § 1610(c). In the meantime, proceedings are ongoing in the
Petitioner is now named Leidos, Inc., although “[w]hen it entered into the contract with the Hellenic Republic (and
when it initiated this lawsuit), Leidos was named the Science Applications International Corporation. Its changed
name does not carry any legal significance.” See Leidos, Inc. v. Hellenic Republic, 881 F.3d 213, 214 n.1 (D.C. Cir.
2018).
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foreign state’s courts to invalidate the arbitral award. Do these circumstances prevent the district
court from finding that a “reasonable period of time” has elapsed? The Court answers that
question in the negative, and finds that here, a “reasonable period of time” has elapsed.
In 2002, Petitioner and Respondent entered into a contract in which Petitioner agreed to
provide an operations security and support system to Respondent in connection with the 2004
Olympic Games in Athens. Resp. Opp. Ex. A ¶ 1, ECF No. 11-1.2 Thereafter, a dispute arose
concerning the contract. Id. ¶¶ 1–2. On June 16, 2009, Petitioner commenced arbitration in
Greece. Katopodis Decl. ¶ 5, ECF No. 11-7. In 2013, the arbitration panel issued an award (the
“Award”) in favor of Petitioner. Id. ¶ 6. Pursuant to the Award, Respondent was required to pay
Petitioner €39,818,298, $162,500 in arbitration costs, and interest. See D.C. Pet., D.C. ECF No.
1 ¶¶ 31–32.
On July 12, 2013, Petitioner filed a petition in the D.C. Court seeking an order
confirming the arbitration award and entering judgment in its favor. See generally id. In an
opinion dated January 5, 2017, the D.C. Court granted the petition, D.C. ECF No. 54, and on
January 6, 2017, judgment for Petitioner in the amount of €39,818,298 was entered, D.C. ECF
No. 55. On January 27, 2017, Petitioner moved the D.C. Court for an order (1) correcting the
judgment, arguing that it should have included arbitral fees and interest (both pre-judgment and
post-judgment), and (2) converting the revised judgment from euros to United States dollars.
D.C. ECF No. 56 at 1–2. On April 13, 2017, the D.C. Court granted Petitioner’s motion, D.C.
ECF Nos. 59, 60, and on April 18, 2017, the D.C. Court entered judgment for Petitioner in the
amount of $62,731,104.80 plus post-judgment interest, D.C. ECF No. 61.
Documents filed before the D.C. Court, Case No. 13 Civ. 1070, are cited as “D.C. ECF No. __.” Documents filed
before this Court are cited as “ECF No. __.”
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On May 10, 2017, Respondent appealed the judgment to the D.C. Circuit. See D.C. ECF
No. 62. In its opinion, the D.C. Circuit noted that “[t]he Hellenic Republic now appeals only the
conversion of the arbitral award [to U.S. dollars].” Leidos, Inc. v. Hellenic Republic, 881 F.3d
213, 216 (D.C. Circ. 2018). The D.C. Circuit reversed the D.C. Court, holding that the judgment
should have been entered in euros, and remanded to the D.C. Court. Id. at 220. On May 29,
2018, the D.C. Court entered judgment for Petitioner in the amount of €47,933,905.64 plus
$196,531.51 and post-judgment interest (the “Judgment”). Judgment, D.C. ECF No. 69.3 On
July 11, 2018, Petitioner registered the Judgment in this district pursuant to 28 U.S.C. § 1963.
ECF No. 1.
Meanwhile, on September 5, 2013, Respondent filed an action in the Athens Court of
Appeal seeking to annul the Award. Katopodis Decl. ¶ 7. In June 2014, the Athens Court of
Appeal annulled the Award. Id. ¶ 8. On September 22, 2016, the Greek Supreme Court vacated
the Athens Court of Appeal’s decision and remanded for further proceedings. Id. ¶ 10; see also
881 F.3d at 215–16 (discussing the case’s procedural history through the date of the D.C.
Circuit’s decision). On July 13, 2017, the Athens Court of Appeal dismissed Respondent’s
action seeking to annul the Award. Katopodis Decl. ¶ 11. On March 14, 2018, Respondent
appealed the Athens Court of Appeal’s latest decision to the Greek Supreme Court. Id. ¶ 12.
That decision is pending. See ECF No. 33 at 1. However, in the meantime, the Greek Supreme
Court suspended enforcement of the Award pending its decision. Katopodis Decl. ¶ 17.
On October 22, 2018, Petitioner filed a motion in this Court pursuant to 28 U.S.C. §
1610(c), seeking a finding that a “reasonable period of time” has elapsed following the entry of
the Judgment. ECF No. 3.
3
The increased amounts reflect the inclusion of pre-judgment interest. See D.C. ECF No. 60 at 5.
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DISCUSSION
I.
Legal Standard
Pursuant to the Foreign Sovereign Immunities Act, the property of an agency or
instrumentality of a foreign state within the United States may not be attached “until the court
has ordered such attachment and execution after having determined that a reasonable period of
time has elapsed following the entry of judgment and the giving of any [required] notice.” 28
U.S.C. § 1610(c). The statute does not define what constitutes a “reasonable time.” Factors that
courts consider, however, include “procedures, including legislation, that may be necessary for
payment of a judgment by a foreign state, which may take several months; representations by the
foreign state of steps being taken to satisfy the judgment; or any steps being taken to satisfy the
judgment; or evidence that the foreign state is about to remove assets from the jurisdiction to
frustrate satisfaction of the judgment.” Ferrostaal Metals Corp. v. S.S. Lash Pacifico, 652 F.
Supp. 420, 423 (S.D.N.Y. 1987) (quoting H.R. Rep. No. 1487, at 30 (1976), reprinted in 1976
U.S.C.C.A.N. 6604, 6629).
II.
Analysis
Almost eleven months have passed since the D.C. Court entered the Judgment on May
29, 2018. See Judgment. Although “the period of ‘reasonable time’ will of course vary
according to the nuances of each case,” Ned Chartering & Trading, Inc. v. Republic of Pakistan,
130 F. Supp. 2d 64, 67 (D.D.C. 2001), Respondent has not cited any cases in which this period
of time or longer has not met the requirement. Petitioner, on the other hand, has cited numerous
cases in which a court has found shorter periods of time to be “reasonable.” See, e.g., Owens v.
Republic of Sudan, 141 F. Supp. 3d 1, 9 (D.D.C. 2015) (three months); Ned Chartering, 130 F.
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Supp. 2d at 67 (six weeks); Gadsby & Hannah v. Socialist Republic of Romania, 698 F. Supp.
483, 486 (S.D.N.Y. 1988) (two months).
Respondent’s main argument that a “reasonable period of time” has not passed since the
entry of the Judgment is that its action to invalidate the Award is pending before the Greek
Supreme Court, which has temporarily suspended enforcement of the Award pending its
decision. See Resp. Opp. at 11, ECF No. 11 (“In sum, the Court should deny [Petitioner’s]
request for § 1610(c) relief and await the Greek Supreme Court’s decision.”).4
It is true that hypothetically, if the Greek Supreme Court were to invalidate the Award,
Respondent could move the D.C. Court to vacate the Judgment. In Thai-Lao Lignite (Thailand)
Co. v. Government of the Lao People’s Democratic Republic, the Second Circuit affirmed the
district court’s decision to vacate its judgment against Laos pursuant to Rule 60(b) of the Federal
Rules of Civil Procedure when the underlying award—which arose out of an arbitration in
Malaysia—was annulled by the Malaysian courts. 864 F.3d 172, 175, 177 (2d Cir. 2017). ThaiLao Lignite, however, does not preclude a § 1610(c) finding for two reasons. First, the case did
not concern § 1610(c). Rather, it concerned the validity of the underlying judgment, an issue
that is not before this Court (or the D.C. Court)—because the Award has not been annulled.
Second, even after the Malaysian courts vacated the arbitral award in Thai-Lao, the district court
declined to stay enforcement proceedings before rendering a decision on its Rule 60(b) motion,
noting that “the Malaysian court’s decision does not automatically render the original judgment
invalid . . .; such a determination must wait until the Court has examined the merits of
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Respondent does not argue that any other circumstances require an extended period of time to satisfy the
Judgment—for example, it does not argue that “procedures, including legislation, [] are necessary for payment” of
the Judgment, see Ferrostaal Metals Corp., 652 F. Supp. at 423; see also Resp. Opp. at 4 (“[Respondent] has been
consistently clear that it intends to pay the [A]ward if the Greek proceedings conclude in [Petitioner’s] favor.”). Nor
does Respondent argue that it has not received notice of the Judgment.
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Respondent’s Rule 60(b) motion.” No. 10 Civ. 5256, 2013 WL 1703873, at *2 (S.D.N.Y. Apr.
19, 2013). Put differently, it held that “[a]bsent a successful motion to stay enforcement
proceedings . . . or a successful challenge under Rule 60, the Court’s judgment remains valid and
enforceable. Consequently, the Court’s original judgment enforcing the Malaysian arbitral
award remains in effect, and proceedings to enforce that judgment must go forward.” Id.
Decisions on § 1610(c) motions also support Petitioner’s argument here. In Owens, the
Republic of Sudan argued after judgments had been entered against it that the court “should
interpret § 1610(c) to require waiting until the judgments can no longer be appealed.” 141 F.
Supp. 3d at 4. The court rejected Sudan’s request to interpret the word “judgment” in the statute
as “a final, non-appealable judgment,” noting that
[Section] 1610 does not forbid execution within some proximity of “final
judgment”—it doesn’t say “final” at all. It says execution cannot proceed until “a
reasonable period of time has elapsed following the entry of judgment.” . . . With
the passage of a reasonable time specifically tethered to the event of the entry of
judgment, there is no plausible hook in § 1610(c)’s text for Sudan’s theory.
Id. at 9 (quoting 28 U.S.C. § 1610(c)). Although that case concerned the possibility of an appeal
of the judgment in United States courts, as opposed to the possibility of the Award being
invalidated in foreign courts, the same reasoning applies—Section 1610(c) does not preclude a
finding that a reasonable time has passed just because a judgment may, one way or another,
eventually be vacated.
Respondent also makes the related argument that pursuant to the Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), the
Greek Supreme Court’s decision to temporarily suspend the Award provides this Court another
reason to withhold making a § 1610(c) finding at this time. See Resp. Ltr. at 2, ECF No. 33
(citing New York Convention art. 5(1)(e), June 10, 1958, 21 U.S.T. 2517 (“Recognition and
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enforcement of the award may be refused [if] . . .[t]he award . . . 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.”)). By making this argument and by requesting that the Court find that a “reasonable
period of time” has not elapsed until the Greek Supreme Court renders its decision, Respondent
is effectively requesting a stay of enforcement, as Petitioner recognizes. Pet. Reply at 5, ECF
No. 14.
Respondent already made a request for a stay before the D.C. Court, and it was rejected.
In 2013, before entering the initial judgment for Petitioner, the D.C. Court considered whether to
adjourn enforcement of the Award until after the resolution of the proceedings in the Greek
Courts, and declined to do so. D.C. ECF No. 54. The Court sees no reason to disturb that
holding in the context of this § 1610(c) motion. See 28 U.S.C. § 1963 (“A judgment [rendered in
a different district] shall have the same effect as a judgment of the district court of the district
where registered and may be enforced in like manner.”). Although the Greek Supreme Court’s
temporary suspension of the Award occurred after the D.C. Court entered the Judgment, the D.C.
Court considered essentially the same issue—the possibility that the Greek courts could vacate
the Award—and declined to stay proceedings. This Court will not disturb that decision. Cf.
Royal & Sun All. Ins. Co. of Can. v. Century Int’l Arms, Inc., 466 F.3d 88, 92 (2d Cir. 2006)
(“The mere existence of parallel foreign proceedings does not negate the district courts’ virtually
unflagging obligation to exercise the jurisdiction given them.” (internal quotation marks, citation,
and ellipsis omitted)).
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For the reasons stated above, Petitioner’s motion for an order finding that a “reasonable
period of time” has elapsed following the entry of judgment pursuant to 28 U.S.C. § 1610(c) is
GRANTED. The Clerk of Court is directed to terminate the motion at ECF No. 3.
SO ORDERED.
Dated: April 24, 2019
New York, New York
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