Article VI of the New York Convention: Discretion to Suspend or Proceed With Enforcement During Set-Aside Proceedings Abroad

I briefly note here two recent cases in the federal district court in Washington, D.C., in which the judges refused to grant foreign governments stays of enforcement of awards against them, under Article VI of the New York Convention, based on proceedings pending in foreign courts to set aside the awards. (G.E. Transport S.P.A. v. Republic of Albania, 2010 U.S. Dist. LEXIS 24180 (D.D.C. Mar. 16, 2010); Continental Transfert Technique Ltd. v. Federal Government of Nigeria, 2010 U.S. Dist. LEXIS 27336 (D.D.C. Mar. 23, 2010).
Each decision relies upon the leading U.S. case elaborating standards governing the exercise of discretion to proceed with or suspend enforcement proceedings under the Convention: Europcar Italia, S.p.A. v. Maiellano Tours, 156 F.3d 310, 317 (2d Cir. 1998). The Second Circuit in Europcar provided a non-exhaustive list of six factors for consideration, with primary emphasis upon two of the six: the general objectives of arbitration (expeditious resolution of disputes), and the status and expected duration of the set-aside proceedings pending abroad.
In the Albania case, the government challenged the $20 million + award in favor of GE in a court at the arbitral seat — Rome, Italy — and lost its initial application in that court to enjoin GE from proceeding with enforcement. The Court relied on this preliminary negative assessment of Albania’s set-aside prospects, GE’s uncontested projection that the Rome court would not render a final judgment earlier than 2014, and the fact that Albania had been a full participant in three years of arbitral proceedings, in deciding to go forward with the enforcement action.
In the Nigeria case, the Court relied foremost upon negative inferences arising from Nigeria’s procedural conduct: having let pass the deadline for filing a motion to vacate in the Nigerian court, Nigeria then failed to appear in this enforcement case until the Claimant sought entry of a default judgment, then obtained a 45-day extension of time to respond to that motion, and filed its set aside case in Nigeria during the ensuing interval.
Further, the Court found that the set aside case in Nigeria was stalled, the presiding judge having retired and not been replaced, and was unpersuaded that the scope of review under Nigerian law would meaningfully less deferential that under the Convention as applied in US courts.