(1) Dominicana Renovables, S.L.'s ("Petitioner" or "Dominicana") Petition to Confirm in Part and Set Aside in Part Arbitral Award (hereafter, "Petition") [D.E. 1]; and
(2) The Dominican Republic's ("Respondent" or "Dominican Republic") Cross-Motion to Confirm Arbitration Award in its Entirety (hereafter, "Cross-Motion to Confirm Award") [D.E. 24].
These matters were referred to the undersigned pursuant to 28 U.S.C. § 636 by the Honorable Beth Bloom, United States District Judge [D.E. 30]. The undersigned held a hearing on these matters on October 1, 2021. See Paperless Minute Entry [D.E. 41]. For the reasons stated below, the undersigned respectfully recommends that the Petition be DENIED and that the Cross-Motion to Confirm Award be GRANTED.
On February 22, 2021, the Dominican Republic filed a request for modification of the Award under Article 36(2) of the ICC Arbitration Rules to correct arithmetic errors in the portion of the Award granting Petitioner compensatory damages. See Addendum dated April 23, 2021 (hereafter, the "Addendum") [D.E. 16-2 ¶¶ 13, 17–29].2 Dominicana opposed the request and did not file its own request for modification or correction of the Award. See id. ¶ 15. In the Addendum, the Tribunal granted in part and denied in part the request for modification, concluding that "two immaterial typographical errors were actually incurred, which do not affect the conclusion reached by the Tribunal regarding the amount to be compensated by the Dominican Government to Dominicana Renovables." See id. ¶ 48, 54.
On May 11, 2021, Dominicana filed its Petition seeking to confirm the Award in part and to set aside the portion of the Award rejecting its claim for lost profits. See Petition [D.E. 1]. On July 20, 2021, the Dominican Republic filed its Cross-Motion to Confirm Award requesting that the Award be confirmed in its entirety. Relying on the Florida International Commercial Arbitration Act ("FICAA"), Petitioner argues that the portion of the Award denying its lost profits claim should be set aside because the arbitration agreement required a "reasoned award" and "the Tribunal failed to provide "the detailed listing or mention of expressions or statements offered as justification" for the denial of lost profits. See Petition [D.E. 1 at 5, 6, 8]. Relying on the Federal Arbitration Act ("FAA") and Eleventh Circuit precedent, the Dominican Republic argues that: the Petition is untimely under the FAA because Dominicana did not serve it within three months after delivery of the Award; and, in any event, the Tribunal issued a "reasoned award" on Dominicana's lost profits claim. See Cross-Motion to Confirm Award [D.E. 24 at 8, 9]. The Dominican Republic further argues that, because there are no grounds to set aside the Award, it must be confirmed in its entirety. See id. at 39.
In 1970, the United States acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention" or "Convention"), which established a "strong presumption in favor of arbitration of international commercial disputes" and created "original federal subject-matter jurisdiction over any action arising under the Convention." Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir. 1998). "The New York Convention is codified under Chapter 2 of the Federal Arbitration Act ('FAA'), 9 U.S.C. §§ 201–08, and applies to 'non-domestic' arbitral agreements and awards." Bamberger Rosenheim, Ltd., (Israel) v. OA Dev., Inc., (U.S.), 862 F.3d 1284, 1288 (11th Cir. 2017) (citing Indus. Risk Insurers, 141 F.3d at 1440)). Arbitral awards are non-domestic when they were made "within the legal framework of another country, e.g., pronounced in accordance with foreign law" or "when one of the parties to the arbitration is domiciled or has its principal place of business outside of the United States." Indus. Risk Insurers, 141 F.3d at 1440 (quoting Bergesen v. Joseph Muller Corp., 710 F.2d 928, 932 (2d Cir. 1983)).
"When reviewing an arbitration award, 'confirmation under the Convention is a summary proceeding in nature, which is not intended to involve complex factual determinations, other than a determination of the limited statutory conditions for confirmations or grounds for refusal to confirm.'" Chelsea Football Club Ltd. v. Mutu, 849 F. Supp. 2d 1341, 1344 (S.D. Fla. 2012) (quoting Zeiler v. Deitsch, 500 F.3d 157, 169 (2d Cir. 2007)). Thus, "a district court must confirm an arbitration award under the Convention, unless one of the seven enumerated defenses in Article V apply." Sural (Barbados) Ltd. v. Gov't of the Republic of Trinidad and Tobago, No. 1:15-cv-22825-KMM, 2016 WL 4264061, at *2 (S.D. Fla. Aug. 12, 2016). The party seeking to set aside the arbitral award has the "heavy burden of proving that one of the seven defenses applies." Id. (citation omitted). Moreover, a party seeking to vacate, modify, or correct an arbitral award must serve the motion to vacate, modify, or correct the award "within three months after the award is filed or delivered." See 9 U.S.C. § 12.
(1) Recourse to a court against an arbitral award may be made only by an application to set aside an arbitral award pursuant to subsections (2) and (3).
(2) An arbitral award may be set aside by the court ... only if:
(a) The party making the application furnishes proof that:
1. A part to the arbitration agreement defined in s. 684.003(1)(c) was under some incapacity or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this state;
2. The party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case;
3. The award deals with a dispute not contemplated by or not falling within the terms of the submissions to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration ... .; or
4. The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties
(3) An application to set aside an arbitral award may not be made after 3 months have elapsed after the date on which the party making that application receives the award or, if a request had been made under s. 684.0044, after 3 months have elapsed after the date on which that request has been disposed of by the arbitral tribunal.
See Fla. Stat. §§ 684.0046 (1), (2), (3).
Chapter 2 of the FAA applies to arbitral awards pronounced according to foreign law or when one of the parties to the arbitration is domiciled outside of the United States. Bamberger Rosenheim, 862 F.3d at 1288. Here, the Award was pronounced in accordance with Dominican law and both of the parties involved are domiciled outside of the United States. See Award [D.E. 16-1 ¶¶ 2, 23]. Thus, the FAA applied to the Award.
Petitioner argues that the FICAA should apply in this case as a "gap filler" to the FAA because the FAA is "silent" "concerning deadlines for petitions to set aside when there is a correction or modification filed." See Petitioner's Opposition to Cross-Motion to Confirm Award (hereafter, "Opposition") [D.E. 27 at 14]. Under this "gap filler" theory, Dominicana's May 11, 2021 Petition would be timely because it was filed less than three months after the Tribunal's issuance of the Addendum on April 23, 2021. See Fla. Stat. § 684.0046 (3) (allowing a 3-month interval between disposition of a request that the arbitral tribunal correct an award under Section 684.0044 and the filing of an application to set aside the award).
However, under the explicit terms of Section 684.0046, the alternative 3-month interval for filing a request to set aside an award applies to correction requests made under Section 684.0044. Here, the Dominican Republic's request to correct arithmetic errors was made pursuant to Article 36 of the ICC Arbitration Rules, which were the applicable rules for the arbitration. See Addendum [D.E. 16-3 ¶¶ 30-32]; award [D.E. 16-1 at 5, ¶ 23]. Thus, the "gap filling" function of the FICAA is inapplicable here.
Petitioner argues that the Award should be partially set aside as to the denial of its lost profits claim because: the Tribunal did not issue a reasoned award; thus, the arbitration procedure was not carried out in accordance with the agreement of the parties as mandated by Section 684.0048(1)(a)(4) of the FICAA. See Petition [D.E. 1 at 12, 13, 16–18]. As noted above, the requirements for setting aside an arbitration award under the FICAA are similar to those in the FAA; and the FICAA "effectively mirrors the limited grounds to refuse enforcement in the New York Convention". See Sural, 2016 WL 4264061, at *6 n.4. Therefore, the undersigned addresses this contention in the context of the FAA.
Article V(1)(d) of the New York Convention provides, in relevant part, that recognition and enforcement of an arbitral award may be refused if "[t]he composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties." See THE NEW YORK CONVENTION, ARTICLE V, http://www.newyorkconvention1958.org (last visited Feb. 8, 2022). According to Petitioner, Article 32(2) of the agreed upon ICC Arbitration Rules, which states that "the award shall state the reasons upon which it is based," provides support for its contention that the Tribunal did not issue a sufficiently reasoned Award. See Petition [D.E. 1 ¶ 48] (quoting ICC Arbitration Rules, Art. 32(2)). Both parties rely on Cat Charter, LLC v. Schurtenberger, 646 F.3d 836 (11th Cir. 2011) for the standard that applies to a determination of what constitutes a "reasoned award". Compare Petition [D.E. 1 ¶¶ 1, 8, 47, 50] with Cross-Motion to Confirm Award [D.E. 24 at 8, 18].
In this regard, as mentioned above, Dominican law requires that the damage be so certain that it can be compensated. In that vein, the Tribunal cannot order compensation for future damages if they are contingent or hypothetical.
For this reason, given the embryonic nature of the Project, it is not possible for the Tribunal to conclude that La Isabella Park would have been carried out in the hypothesis that the CDEEE had granted the PPA Contract to Claimant.
In this sense, the Tribunal agrees with the [Dominican Republic] that it is not possible to recognize the income from the operation of the Park, that it is, the loss of profits claimed by Dominicana Renovables, because it is not possible to demonstrate that its construction was guaranteed.
Consequently, the Tribunal will only recognize the net investment made by Dominicana Renovables to the extent explained in the following section.
Id. ¶¶ 950–53. The Tribunal then outlined a timeline of the events leading up to what it deemed was the Dominican Republic's breach of the Concession Agreement, its valuations for Petitioner's initial investment, arbitration costs, and fees, and its ultimate award of these damages to Petitioner, which excluded Petitioner's claim for lost profits. See id. ¶¶ 954–81.
Already registered ?