Getma Int'l v. Republic of Guinea, No. 14-cv-1616, 2016 U.S. Dist. LEXIS 75019 (D.D.C. June 9, 2016) [click for opinion]
Getma International ("Getma") and the Republic of Guinea ("Guinea") had an ongoing dispute regarding Getma's contract with Guinea to develop Guinea's main port in Guinea's capital city, Conakry. In October 2011, the parties entered into an agreement to arbitrate their ongoing dispute before an arbitral tribunal composed of three arbitrators pursuant to the Arbitration Rules of the Common Court of Justice and Arbitration (the "CCJA").
In advance of the arbitration, the parties agreed that the arbitrators' fees would be fixed at €62,000. During the arbitration, the arbitration tribunal contacted the parties to request that the fees be increased to €450,000. The parties did not object. However, under the CCJA Arbitration Rules, any increase in arbitral fees must be approved by the CCJA Secretary General, who did not approve of the increase, citing prior CCJA precedent which provided that "[t]he arbitrator's fees and expenses are set exclusively by the Court, in accordance with the provisions of the Rules of Arbitration. Any separate arrangement between the parties and the arbitrators concerning their fees is null and void."
The parties thereafter arbitrated the dispute and Getma prevailed. Following a warning from the CCJA Secretary General, the arbitrators did not include a demand for the increased fees in the award. Yet the tribunal continued to express its frustration with the CCJA over the CCJA's repeated refusal to allow the tribunal to seek increased arbitrators' fees from the parties. And somehow, the tribunal eventually collected half of the increased arbitrators' fees from Getma. Guinea refused to pay the increased fees, however, and filed an annulment proceeding with the CCJA. The CCJA annulled the award, finding that the tribunal had violated its mission to conduct the arbitration proceeding in accordance with the CCJA Arbitration Rules.
Following entry of the award, Getma brought this case in the District of Columbia to enforce the award. During the annulment proceedings, the district court had stayed Getma's attempts to enforce the award. After the CCJA's annulment, the district court issued an order refusing to enforce the arbitral award over several of Getma's objections.
First, Getma argued that refusal to enforce the award was against strong U.S. public policy in favor of enforcing arbitral awards. However, the district court did not find this argument compelling, reasoning that "[w]here a foreign court has annulled an arbitral award, a court in this country may only ignore that annulment on 'limited . . . occasions' where extraordinary circumstances have been presented."
Next, Getma argued that the CCJA erred for allegedly having initially "encouraged" the arbitral tribunal to consult with and solicit an agreement from the parties regarding increased arbitrators' fees, only to reverse its position subsequently. The district court, however, found that only the CCJA Secretary General (not the CCJA at large) permitted the tribunal to contact the parties regarding a change in fees and he did not "encourage" them to accept the tribunals' suggested fee increase. Additionally, even if the Secretary General did encourage the parties to accept the increase, the CCJA later refused to accept any increase, which the court did not find to be improper (the court analogized such a scenario to a U.S. court granting a party's motion to reconsider, which occurs frequently).
Getma also argued that the CCJA was attempting to "sabotage" the arbitration by refusing to allow the tribunal to receive increased fees, which the district court dismissed as an "ill conceived" and "speculative" conspiracy theory. Next, the district court dismissed Getma's argument that the parties had agreed to the increase in fees. The district court found this argument unavailing because the purported "agreement" to increased fees was actually counter to the parties' written and negotiated agreement to arbitrate the dispute, which adopted the CCJA rules.
Getma also accused Guinea of advocating for the appointment of a Guinean judge to the CCJA for the purposes of annulling the award. The district court found that this accusation "raises concern," however, the court ultimately dismissed it, concluding that the Guinean judge was only one judge on an en banc panel that unanimously annulled the award.
Finally, Getma protested the annulment, claiming that it departed significantly from certain CCJA precedent and arbitration rules. The district court dismissed this argument as well, viewing it as similar to Getma's prior argument regarding public policy. In dismissing Getma's final argument, the district court cited several authorities to explain that any claim of misapplication of law or rules is generally not a violation of public policy within the meaning of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention").