Getma International v. Republic of Guinea

 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT



Submitted March 7, 2017                Decided July 7, 2017

                       No. 16-7087

                  GETMA INTERNATIONAL,
                      APPELLANT

                             v.

                   REPUBLIC OF GUINEA,
                       APPELLEE


        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:14-cv-01616)


    Allen B. Green, William T. O’Brien, and Ivan W. Bilaniuk
were on the briefs for appellant.

    Jeffrey M. Prokop, James Grohsgal, and Jamie L.
Shookman were on the brief for appellee.

    Before: HENDERSON and SRINIVASAN, Circuit Judges, and
GINSBURG, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge SRINIVASAN.

     SRINIVASAN, Circuit Judge: This case arises from a
contract dispute between two foreign entities:        Getma
International, a French company, and the Republic of Guinea.
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After Guinea terminated a concession agreement between the
two parties, an arbitral tribunal issued a €39 million award
(plus interest) in favor of Getma. Guinea appealed the award
to the Common Court of Justice and Arbitration of the
Organization for the Harmonization of Business Law in Africa
(CCJA), a court of supranational jurisdiction for Western and
Central African States. The CCJA set aside Getma’s award.
Getma nonetheless seeks to enforce the annulled award in the
United States.

     For us to intervene in this quintessentially foreign dispute,
we would need to find the CCJA’s annulment of the award to
be repugnant to the United States’s most fundamental notions
of morality and justice. The district court held that Getma
failed to satisfy that stringent standard, and we agree.

                               I.

     In 2008, Guinea sought bids to expand and operate a port
in Conakry, the country’s capital. Getma submitted the
winning bid. Getma and the Republic of Guinea then entered
into a twenty-five-year Concession Agreement.           Their
partnership was short-lived. In December 2010, Guinea
elected a new president, who quickly terminated the
Agreement. Getma, protesting that the government’s sudden
about-face violated the contract, demanded a termination fee.
Guinea denied any breach of the contract, alleging among other
complaints that Getma had won the bidding process by bribing
the previous Guinean administration.

     The Agreement’s dispute-resolution provision stipulated
that the parties could “irrevocably settle[]” any disputes
through “arbitration proceedings subject to the Arbitration
Rules of the [CCJA].” J.A. 249. The parties selected a tribunal
of three arbitrators, all of whom were based in France. The
                                3
CCJA fixed the arbitrators’ fees at approximately €61,000.
After 14 months of arbitration, the arbitrators contacted the
CCJA’s Office of the Secretary General (which served as a
liaison between the arbitrators and the CCJA) about increasing
the fees to €450,000. In an e-mail, a representative responded
that the office would “contact the [CCJA] soon to adjust the
fees.” J.A. 1408.

     The CCJA denied the request by written order, citing
precedent establishing that an “arbitrator’s fees and expenses
are set exclusively by” the CCJA. J.A. 541-42, 554. The
arbitrators did not take no for an answer. Immediately after the
decision, the arbitrators wrote the CCJA two letters renewing
their request for increased fees. Likewise, Getma sent its own
letter urging the CCJA to reconsider its decision. The CCJA
remained unmoved. By April 2014, the CCJA had apparently
informed the arbitrators on four separate occasions that the
€61,000 fee would stand.

     Disregarding the CCJA’s decision, the arbitrators told the
parties they would withhold the arbitral award until the parties
paid them €450,000. When the CCJA’s Secretary General
learned about the arbitrators’ demand, he reprimanded them
and told them that their fee request was void. In a written letter,
the Secretary warned Getma that the award would be “subject
to invalidation” if it included an “invalid arrangement” for
arbitrator fees. J.A. 839.

     A few days later, the arbitrators issued a decision in favor
of Getma, awarding the company €39 million plus interest.
Although the award contained no mention of any demand for
increased arbitrators’ fees, the tribunal continued pursuing
payment. And despite the CCJA’s warning that an invalid fee
arrangement could jeopardize any award, Getma paid the
arbitrators €225,000. The arbitrators later filed suit in the Paris
                              4
Court of Appeals to collect the remaining €225,000 ostensibly
owed by Guinea. The Court ordered Getma to pay the balance
(plus interest) on a theory of joint and several liability.

     Meanwhile, Guinea filed an annulment petition with the
CCJA, asking the court to set aside the arbitral award. Sitting
en banc, the CCJA annulled the award. The court concluded
that the arbitrators “breached [their] duty by deliberately
ignoring the mandatory provisions” governing fees. J.A. 1468.
It added, however, that “the arbitral proceedings may be
reopened.” J.A. 1471. To date, Getma has not sought to reopen
the proceedings.

    Getma instead pursued relief in the United States, seeking
enforcement of its now-annulled award under the Federal
Arbitration Act, 9 U.S.C. §§ 201-208. The Act implements the
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, better known as the New York Convention.
Under the New York Convention, a district court may refuse to
enforce a foreign award if “a competent authority” has set it
aside under the law of the country in which the award was
made. New York Convention art. V(1)(e), June 10, 1958, 21
U.S.T. 2517. The district court refused to enforce the annulled
award on that ground.         In re Arbitration of Certain
Controversies Between Getma Int’l & Republic of Guinea, 191
F. Supp. 3d 43, 55 (D.D.C. 2016).

                             II.

     Getma appeals the district court’s decision, arguing that
we should give effect to the annulled award. We will enforce
an annulled award only if the annulment is “repugnant to
fundamental notions of what is decent and just” in the United
States. TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928,
938 (D.C. Cir. 2007) (quoting Tahan v. Hodgson, 662 F.2d
                               5
862, 864 (D.C. Cir. 1981)).        Getma has not satisfied that
demanding burden.

     As an initial matter, the parties debate the applicable
standard of review. Getma argues that we should review de
novo a district court’s decision to confirm or vacate a foreign
arbitral award, while Guinea contends we should review for
abuse of discretion. This Circuit has not expressly addressed
the standard of review, and our sister circuits have disagreed
on the issue.        Compare Corporación Mexicana de
Mantenimiento Integral, S. De R.L. de C.V. v. Pemex-
Exploración y Producción, 832 F.3d 92, 100 (2d Cir. 2016),
with Asignacion v. Rickmers Genoa Schiffahrtsgesellschaft
mbH & Cie KG, 783 F.3d 1010, 1014-15 (5th Cir. 2015). “We
need not resolve this question” here, as we would affirm the
district court “under either standard.” See de Csepel v.
Republic of Hungary, 714 F.3d 591, 606 (D.C. Cir. 2013).

     On the merits, there is no dispute that the CCJA is “a
competent authority” for purposes of article V(1)(e) of the New
York Convention. And for reasons of international comity, we
have declined to “second-guess” a competent authority’s
annulment of an arbitral award absent “extraordinary
circumstances.” TermoRio, 487 F.3d at 936-39 (internal
quotation marks omitted). “The standard is high, and
infrequently met,” such that we cannot enforce an annulled
award on a mere showing that the annulment is erroneous or
conflicts with the United States’s public policy. Id. at 938.
Instead, we will set aside an annulment only if it violates this
country’s “most basic notions of morality and justice.” Id.
(quoting Karaha Bodas Co. v. Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, 364 F.3d 274, 305-06 (5th Cir.
2004)).     Getma’s arguments under that standard are
unpersuasive.
                                6
     First, Getma claims that a Guinean judge on the 12-
member CCJA tainted the annulment decision. It is true that,
after Guinea prevailed, its Minister of Justice boasted in a
televised interview that the Guinean judge, Fodé Kante, had
alerted Guinea to the “flaws” in its case. J.A. 1638. Before the
district court, however, the Minister filed a declaration
recanting his interview statement, characterizing it as baseless
self-promotion. The district court credited the declaration,
largely because the Minister’s interview statement made no
sense chronologically: Judge Kante was appointed two months
after Guinea’s last submission in the annulment proceeding, so
he could have done nothing to shape Guinea’s presentation.
Nor could he have tipped the outcome against Getma, as the
full 12-member court issued a unanimous decision. Getma
Int’l, 191 F. Supp. 3d at 54. Getma points to no evidence
corroborating the Minister’s initial interview statement and
thus gives us no reason to disturb the district court’s credibility
finding.

     Second, Getma claims that the CCJA thwarted the parties’
intent to contract around the CCJA’s fee schedule. The
contract, however, evinces no such intent. The contract’s
arbitration clause specified that each party was to select one
arbitrator; those two arbitrators were to select a third; each
party was to “bear the cost of the arbitrator it appoints”; and all
other costs were to “be shared equally by the [p]arties.” J.A.
27. The contract therefore prescribed only how the parties
would select arbitrators and divide the costs. It gave no
indication concerning how the parties would determine
arbitrators’ fees, much less that it would displace the CCJA’s
fee rules. To the contrary, the parties agreed that the arbitration
would be “subject to . . . ‘The CCJA Arbitration Rules.’” Id.
According to longstanding CCJA precedent, “[t]he arbitrator’s
fees and expenses are set exclusively by the [CCJA],” and
                               7
“[a]ny separate arrangement between the parties and the
arbitrators concerning their fees is null and void.” J.A. 554.

     In any event, even if the parties intended to opt out of the
CCJA’s fee schedule, the CCJA’s decision to enforce its set
fees for arbitrators is not “repugnant to fundamental notions of
what is decent and just in the United States.” See TermoRio,
487 F.3d at 939 (quoting Tahan, 662 F.2d at 864). Getma
argues that the United States’s public policy generally favors
allowing parties to contract around default rules. In TermoRio,
however, we held that, despite the United States’s “emphatic
federal policy” in favor of arbitration, a foreign sovereign’s
differing policy was not repugnant to our own. Id. at 933
(internal quotation marks omitted). The same is true here. The
CCJA’s policy in setting arbitral fees—even against the
parties’ wishes—does not violate the United States’s most
basic norms of morality and justice.

     Third, Getma fashions a sort of cumulative-error
argument. It argues that, when considered in light of its
previous allegations, certain purported oddities in the
proceeding add up to a fatal problem. Again, Getma misses the
mark. It primarily contends that the CCJA promised to
increase the arbitrators’ fees and thus blindsided the parties by
rigidly enforcing its fee schedule via the annulment
proceeding. In support of its claim, Getma offers statements
from the Office of the Secretary General. But as the district
court observed, that office had no unilateral authority to
increase the arbitrators’ fees, and a representative had “merely
informed” the arbitrators “that he would contact the CCJA
about revising the arbitrators’ fees.” See Getma Int’l, 191 F.
Supp. 3d at 50. The CCJA itself never promised greater fees
than its default schedule prescribed.
                                8
     In fact, the CCJA made clear that increased fees would be
unacceptable. The CCJA informed the arbitrators at least five
times that its fee schedule was binding, and the Secretary
General “formally prohibited” the arbitrators “from seeking
payment of fees directly from the parties.” J.A. 828. In his
final formal letter, the Secretary warned the parties that, “if the
final award includes the payment of the amount of €450,000 to
the arbitrators, in accordance with the invalid arrangement, the
award will potentially be subject to invalidation by [the
CCJA].” J.A. 839. Although the final award did not expressly
demand increased arbitral fees, the arbitrators pursued (and
eventually collected from Getma) their requested €450,000 fee.
In that light, although the CCJA’s decision to set aside Getma’s
entire award might seem to be a harsh penalty, the parties had
fair notice that the arbitrators’ insistence on increased fees
could jeopardize the award.

     Finally, Getma claims that the CCJA misinterpreted its
own law in annulling the award. Getma does not argue,
however, that “erroneous legal reasoning” alone could
constitute a violation of public policy under the New York
Convention. See Appellant Br. 45-46. It alleges only that the
CCJA’s flawed legal analysis, together with other evidence of
taint and corruption, justify enforcing the annulled award. As
explained, however, there is scant evidence of taint in the
CCJA proceedings, and we see no infirmities that prejudiced
Getma in a manner so offensive to “basic notions of morality
and justice” as to justify disregarding the CCJA’s decision. See
TermoRio, 487 F.3d at 938. We therefore decline to enforce
the annulled award.
                             9
                     *   *   *    *   *

     For the foregoing reasons, we affirm the judgment of the
district court.

                                                 So ordered.