Florida Lawyer Sarah E. Cox is publishing series of
instructional articles, all of which will be available on her Blog; second part
now available.
The second part in Sarah Cox's series of instructional articles
is now available on her Blog. The second article on Business & Real Estate
addresses the case of Belize Social Development Ltd. v. Government of Belize,
No. 14-7002 (D.C. Cir.).
Ms. Cox summarizes the case. In action to enforce arbitral award
against Belize, District of Columbia Circuit rejects Belize’s claims of
immunity because transactions at issue were essentially the sale of real estate
and thus commercial in nature; New York Convention’s definition of “commercial”
is not the same as the FSIA’s definition.
To go into more detail, in 2005, Belize Telemedia Limited
(“Telemedia”), Belize’s largest private telecommunications company, and the
Government of Belize (“Belize”), acting under the direction of then-Prime Minister
Said Musa, entered into an agreement styled “The Accommodation Agreement” to
purchase properties from Belize which the country desired to sell in order to
better accommodate the Government’s communication needs. According to this
agreement, Telemedia was to obtain relief from tax and regulatory burdens
otherwise applicable to the company, and receive other significant benefits.
The parties also agreed on the following arbitration clause: "Any dispute
arising out of or in connection with this Agreement including any question
regarding its existence, validity or termination, which cannot be resolved
amicably between the parties shall be referred to and finally resolved by
arbitration under the London Court of International Arbitration (LCIA) Rules
which Rules are deemed to be incorporated by reference under this
Section."
In November 2009, pursuant to section 207 of the Federal
Arbitration Act (“FAA”), BSDL brought suit in the District Court for the
District of Columbia to confirm the arbitral award. Belize moved to stay
confirmation of the award pending resolution of related litigation in Belize,
which the district court granted. BSDL then appealed.
The United States Court of Appeals for the District of Columbia
Circuit reversed, noting that under the FAA, the stay order was not in
conformity with federal law and international commitments. The Court remanded
and instructed the district court to review and grant BSDL’s petition to
confirm the Final Award absent a finding that an enumerated exception to enforcement
applied. On remand, Belize argued that the Prime Minister at the time of the
entry of the agreement lacked authority to enter either the contract or the
arbitration agreement, and that the district court lacked subject matter
jurisdiction over the dispute claiming its sovereign immunity under the Foreign
Sovereign Immunities Act (“FSIA”). Because Belize had not provided support for
its claim with respect to the arbitration agreement, the district court held
that jurisdiction was proper under the arbitration exception to the FSIA, and
granted BSDL’s petition to confirm the award. Belize appealed.
The United States Court of Appeals for the District of Columbia
Circuit affirms the judgment of the District Court. The key issue here is
whether and under what circumstances the Foreign Sovereign Immunities Act
(FSIA), 28 U.S.C. § 1605(a)(6), arbitration exception applies to a case in
which the action was brought to confirm an award made pursuant to an agreement
to arbitrate.
Sarah Cox notes that the court comes to the conclusion that:
"(1) the Convention’s purpose was to ‘encourage the recognition and
enforcement of commercial arbitration agreements in international contracts,’
TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 933 (D.C. Cir. 2007);
(2) the word ‘commercial’ is a ‘term of art’; and (3) in implementing the
Convention, Congress intended that word to have the meaning generally attached
to that term in the international commercial arbitration context. As we
discussed above, ‘commercial’ in the context of international arbitration
refers to matters which have a connection to commerce. Belize’s argument to the
contrary will not sell.”
The Court thus affirms the District Court’s decision.
The Case Citation is Belize Social Development Ltd. v.
Government of Belize, No. 14-7002 (D.C. Cir.). The article will be published in
full on the Blog of Sarah Cox at https://SarahECoxBlog.blogspot.com
About Sarah E. Cox
Sarah E. Cox is a Personal Injury & Real Estate Attorney in
Fort Myers, Florida.
Law Office of Sarah Cox & Associates, LLC
5055 Greenbriar Drive
Fort Myers, FL 33919-1910
United States
Office: (305) 563-0475
Ms. Cox received her Juris Doctor from Whittier School of Law in
2005, and was admitted to the Florida Bar in 2008.
Before law school, Ms. Cox attended Edison Community College
(now Florida Southwestern State College), and University of South Florida, and
received her Bachelor’s Degree in Psychology in 1997 (Magna Cum Laude, Phi Beta
Kappa Honors).
Ms. Cox interned at the Ruth Cooper Center Drug Abuse Treatment
and Education in Fort Myers, where she worked with mentally handicapped
individuals and lead group meetings.
References
Attorney Profile at: https://solomonlawguild.com/sarah-ellen-cox
Blog at: https://SarahECoxBlog.blogspot.com
