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    Memorandum Opinion and Order of the United States District Court for the District of Columbia


    On August 24, 2020, this Court entered its [50] Memorandum Opinion and [49] Order rejecting Respondent Ukraine's challenges pursuant to Article V of the New York Convention, and granting Petitioner Pao Tatneft's Petition to Confirm Arbitral Award and to Enter Judgment in Favor of Petitioner. See Memorandum Opinion, ECF No. 50; Order, ECF No. 49 (both incorporated by reference herein). As reflected in the August 24, 2020 Memorandum Opinion, the underlying July 29, 2014 foreign arbitral award ("the Award") entered in favor of Petitioner Pao Tatneft and against Respondent Ukraine by the International Arbitral Tribunal, which was confirmed by this Court, was in the amount of US $112 million, with interest at the U.S. dollar LIBOR rate plus 3% compounded every three months, accruing until the date of payment. The Award stated further that the interest on $68.44 million (of the total $112 million) would begin accruing on May 12, 2009, while interest on the other $43.56 million would begin accruing on January 27, 2010, though accrual of interest was suspended for sixty days after the issuance of the Award. Before issuing its Judgment, specifying the exact monetary amount of the award, this Court directed Petitioner Pao Tatneft ("Pao Tatneft") to file a proposed order of judgment, including a brief summary of the calculation of interest, and the Court permitted Respondent Ukraine ("Ukraine") an opportunity to respond thereto. See Order, ECF No. 49.1

    Subsequently, Pao Tatneft filed its [51] Notice of Filing of Proposed Judgment, which proposed a judgment amount of "USD $112,000,000 plus prejudgment interest as provided in the Award, such amounts together comprising USD $171,245,493" as of September 21, 2020 (the date of filing), with a request that this Court "add $15,000 to this amount for each day between September 21, 2020, and the date this judgment is entered to reflect prejudgment interest accruing during that time." See Proposed Judgment, ECF No. 51-1, at 2 & n.1. Pao Tatneft included its [51-2] chart explaining the accrued interest.

    Ukraine's [54] Response alleged primarily that, because there was a computation error in the award; namely, an internal discrepancy in the Award when refencing the two sums on which interest is calculated, this Court was without jurisdiction to correct the error and enter judgment with accrued interest, as the power to correct the discrepancy rests with the arbitral authority.2 Furthermore, Ukraine alleged that, even assuming arguendo that the two underlying sums ($68.44 million and $43.56 million) noted in the dispositive clause of the Award were the correct sums, Pao Tatneft's calculation of interest could be challenged on two additional grounds: (1) it was calculated on a 360-day year; and (2) it was based on an assumption that the USD LIBOR rate would remain at 0,225%. Ukraine concluded therefore that this Court may only enter a judgment on the award as to the principal of $112 million.

    In its Reply, ECF No. 55, Pao Tatneft argued that any allegation of a "computation error" in the Award's calculation of post-Award interest was untimely because "[t]his Court has already rejected each of Ukraine's defenses to recognition of the Award under the New York Convention" and determined that the Award should be confirmed, with calculation of interest left as the only open issue. Pao Tatneft Reply, ECF No. 55, at 2. Pao Tatneft next proceeded to explain how its interest calculations were consistent with the language of the Award.
    Consequently, Ukraine filed its [56] Motion for Leave to File a Sur-Reply, which was granted by this Court despite Pao Tatneft filing its [57] Opposition thereto. In its [59] Sur-Reply, Ukraine challenged aspects of the interest calculation (which will be addressed later in this Memorandum Opinion). Ukraine acknowledged that both parties agreed that the Court lacks the power to modify the Award. Ukraine argued that, because the "[c]ontradictory principal amounts" in the Award made it impossible to calculate interest as "[t]he Award simply does not contain a single, authoritative basis for the calculation of accrued interest," Sur-Reply, ECF No 59, at 1-2, any awarding of interest by this Court would be an improper modification of the Award. Ukraine asserted further that the aforementioned argument "did not require reconsideration of the Court's August 24 Order [because it] raised a jurisdictional issue [regarding the Court's inability to modify an award] not subject to forfeiture." Ukraine's Sur-Reply, ECF No. 59, at 4.
    In this case, both parties acknowledge that "district courts sitting in enforcement proceedings" under the New York Convention "lack the power to correct or otherwise modify [foreign arbitral awards]." See Ukraine's Response, ECF No. 54, at 4; Pao Tatneft's Reply, ECF No. 55, at 1 (both relying on Termorio S.A. E.S.P. v. Elextranta S.P., 487 F.3d 928, 936 (D.C. Cir. 2007) (rejecting the enforcement of an arbitration award that had been lawfully set aside by a competent authority in the State where the award was made)); see also Int'l Trading & Indus. Inv. Co. v. Dyncor Aerospace Tech., 763 F. Supp. 2d 12, 23 (D.D.C. 2011) ("[C]ourts sitting in a country outside the seat of arbitration ‘lack subject [-] matter jurisdiction over claims seeking to vacate, set aside, or modify a foreign arbitral award.'") (quoting Gulf Petro Trading Co. v. Nigerian Nat'l Petroleum Corp., 512 F.3d 742, 747 (5th Cir. 2008)). The parties differ however in whether this Court's awarding of interest — which relies on the language set forth in the dispositive clause of the underlying Award as opposed to some inconsistent language noted earlier in the Award — should be characterized as a "modification" of the Award. Pao Tatneft makes clear that its proposed judgment "does not reflect a request that the Court correct or modify the Award – as directed by this Court, it simply calculates the "exact monetary amount" of prejudgment interest in accordance with the Award." Pao Tatneft Reply, ECF No. 55, at 2. This Court agrees with Pao Tatneft and finds unconvincing Ukraine's argument that interest should not be awarded, as the Award clearly provides for the accrual of interest and there is no reason to characterize the awarding of interest that is specified in the Award as a modification of that Award.
    Accordingly, the only issue before this Court is whether Pao Tatneft's calculation of interest is consistent with the Award. Ukraine first criticized Pao Tatneft for calculating interest based on a denominator of 360 days, instead of 365 days. See Ukraine's Response, ECF No. 54, at 9-10. Pao Tatneft explained that the reason it did so is because "[t]he USD LIBOR rate, which the Tribunal set as the basis for the interest rate to be paid pursuant to the Award, itself is calculated using the 360-day denominator." Pao Tatneft Reply, ECF No. 55, at 3.3 Ukraine contested the use of 360 days on grounds that "[t]he Award's formula for calculating interest is silent as to the number of days in a year" and "[n]owhere does the Award suggest that these banking conventions should apply in the different context of interest accruing on an arbitral award[…]" Ukraine's Sur-Reply, ECF No. 59, at 4. This Court need not engage in speculation as to what the arbitral panel intended as the Award provides for calculation of interest at the USD LIBOR rate, and the USD LIBOR is calculated using a 360-day denominator. The Court finds that it is appropriate for Pao Tatneft to use the 360-denominator in calculating interest.
    Ukraine next criticized Pao Tatneft for compounding interest at the end of each calendar quarter rather than in three-month intervals from the date interest started accruing. See Pao Tatneft Response, ECF No. 54, at 9 & n.1. Pao Tatneft noted that "both approaches are common, and more importantly, the difference here is immaterial: Compounding prejudgment interest in this case at three-month intervals instead of at the end of each quarter would reduce total prejudgment interest as of September 21, 2020 by only 221 dollars (or approximately 0.0004%)." See Pao Tatneft Reply, ECF No. 55, at 4 (emphasis in original). Pao Tatneft indicated further that Ukraine provided an "alternative interest calculation" which understated the interest due by "over USD $1 million by arbitrarily (and inconsistently excluding numerous dates from the accrual of interest," with no explanation for the basis of this exclusion of dates. Pao Tatneft Reply, ECF No. 55, at 4. This Court notes that Ukraine did not attempt to rebut any of these statements regarding its alternate calculation and the exclusion of certain dates. Accordingly, this Court finds that the manner in which Pao Tatneft has compounded interest at three-month intervals is appropriate.
    Finally, Ukraine contested Pao Tatneft's aforementioned calculation of daily interest of $15,000, which was based on the three-month USD LIBOR rate remaining at or above 0,177%. See Pao Tatneft's Reply, ECF No. 55, at 3 n.4 (noting the 0,177%, which was a typographical correction of an earlier number). Ukraine suggested instead that interest will accumulate at "[a rate of] $14,841 according to Ukraine's calculation," which uses a USD LIBOR rate of 0,225%. See Ukraine's Response, ECF No. 54, at 11. Ukraine challenged Pao Tatneft's calculation on grounds that it assumes that the "three-month USD LIBOR rate will remain at 0,225%[,] [and] [t]here is no guarantee" of this. Ukraine's Response at 10. Pao Tatneft notes however that Ukraine's calculation of interest is based on the 365-day denominator. See Pao Tatneft Reply, ECF No. 55, at 3 n.4. This 365-day denominator employed in Ukraine's calculation has been rejected by this Court, and this Court has confirmed that the three-month USD LIBOR rate has not fallen below 0,177% during the period from September 21, 2020 (the date of the proposed judgment) through January 6, 2021.4 Accordingly, Pao Tatneft's interest calculation of $15,000 per day for each day between September 21, 2020 and the date of the Judgment, which will shall be filed today, is affirmed by this Court.
    Based on the reasoning set forth in this Court's [50] Memorandum Opinion and [49] Order and herein, it is this 11th day of January 2021

    ORDERED that the proposed judgment proffered by Pao Tatneft is affirmed by this Court, with the result that Petitioner Pao Tatneft is awarded a judgment against Respondent Ukraine in the amount of USD $112,000,000.00, plus prejudgment interest as provided in the Award, such amounts together comprising USD $172,910,493.00.5 Pursuant to Fed. R. Civ. P. 58, the Court will issue a Judgment in a separate document, and it is further

    ORDERED that, once the Judgment has been issued, this case shall be DISMISSED.

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