FSIA Governs Effort to Convert ICSID Arbitration Award to Judgment

The World in U.S. Courts: Winter 2018 - Foreign Sovereign Immunity Act (FSIA)

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Micula v. Government of Romania, October 23, US Court of Appeals for the Second Circuit, October 23, 2017

Swedish nationals and affiliated companies won an ICSID arbitration award in Paris against the Government of Romania. They then sought to utilize a summary ex parte proceeding in federal court in New York to convert the award into a judgment that could be executed against Romanian property located in the US. In this decision, the Court of Appeals vacates an order entering that judgment, finding that the district court had no jurisdiction over the dispute. It first concludes that the FSIA provides the exclusive means by which an ICSID arbitration award may be enforced against a sovereign, and observes that the summary ex parte procedure did not satisfy the FSIA’s procedural requirements, including service of process on the sovereign. The Court of Appeals also noted that New York would not in any event have been an appropriate venue, as the FSIA’s default venue of the District of Columbia would not have been displaced in favor of New York, which had no connection with the dispute.

[Editor’s note: The Micula case is also addressed in the Arbitration section of this report.]

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