Conproca, S.A. De C.V. v. Petroleos Mexicanos et al, No. 1:2011cv09165 - Document 34 (S.D.N.Y. 2013)
Court Description: OPINION AND ORDER re: 16 MOTION to Dismiss Petition to Confirm Award filed by Petroleos Mexicanos, Pemex-Refinacion. For the foregoing reasons, PEMEX's motion to dismiss the petition under forum non conveniens (Dkt. No. 16) is denied w ithout prejudice. PEMEX's motion to stay the enforcement of the awards (also Dkt. No. 16), is granted and further proceedings on CONPROCA's petition to confirm the awards (Dkt. No. 1) are stayed until 30 days after the expiration of the tim e to review the decision of whatever Mexican court ultimately determines the validity of the awards in Mexico. Questions regarding the need for, and appropriate amount of security, if any, to be posted during pendency of the stay may be addressed by separate application, if desired. (Signed by Judge Louis L. Stanton on 10/17/2013) (lmb)
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[J ORIGI~J,\L USDC SD~" DOCl\lL~ T UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK Eli \. , l'()'l( \1 . LY FlLtD I '\. D('C n: _ _ _~:-t;;:::::;-ml)- x DATEFlU(): CONPROCA, S.A. DE C.V., 10117//3 Petitioner, 11 Civ. (LLS) 9165 - against OPINION AND ORDER PETR6LEOS MEXICANOS AND PEMEX REFINANCI6N, Respondents. - Petitioner CONPROCA, S.A. venture between multinational laws of Mexico, (implementing the - X de C.V. corporat petitions under Inter-American Commercial Arbitration, 14 ( "CONPROCA"), I.L.M. joint organi zed under U.S.C. 9 Convention 336) a for 207, §§ on the 302 International confirmation of two arbitral awards in its favor issued in Mexico under Mexican law against Petroleos Mexicanos, corporation, "PEMEX" ) , and its conce Mexico's filiate di ng national oil Pemex Refinancion over es oration (collectively, an oil ref rehabilitation project in Cadereyta Jiminez, Nuevo Leon, The first award, ies' respective issued Ii 1 it ies "Liability Award") 2011 2012), (and amended with determines 17, 2008, typographic (the - establishes the in connect ion with the proj ect The second award, s co. 1 is corrections "Quantum Award") December 23, on April 19, PEMEX owes CONPROCA an estimated taxes, the calculation of PEMEX is annul the Mexico. the filed Quantum Award Tha t set On July 27, Mexican courts. court di mill as 2012, with the Mexico challenging the seeking to attack on The petit have the Eleventh ition, smissal petition a Fourth in ition to District Court in PEMEX of jurisdiction. t and spute. 1 PEMEX fil ssed the with act interest Quantum Award was dismissed for I an us ch the parties to seeking $311 U.S. PEMEX then Colleg e Court of of the annulment petit reinstated i . e ., to revive the awards) . Fourth Collegiate On December reinstated annulment 11, granted Court PEMEX's 2012, the Eleventh District petition (to vacate t awards) Court and entered an anti suit injunction requiring CONPROCA to "refrain [] from commencing or continuing any act aimed recognition or enforcement of the quantificat at obtaining award in Mexico See CONPROCA Reply at 31 35. When CONPROCA filed the initial Petition to Confirm the Arbitration Award (Dkt. No.1) on December 14, 2011, CONPROCA sought to confirm the Liabil Award, because the arbitration tribunal had not yet issued the Quantum Award. In subsequent fil ,the parties agree that the Final Award is "the more important of the two awards because it is the one that purports to settle the parties' dispute." Pet's Mem. Resp/s Mem. at 2. at 8 n.4, 2 "An amparo action is a judicial chal to the validity or constitutionality of acts of a government de . de R.L. de .V. v. Produccion, 2013 WL 4517225, at *3 n.4 (S.D.N.Y. Aug. 27 2013). award damages. Its sale remedy is a declaration of the invalidity of the challenged government action. Id. 1 - 2 and abroad, Ex. A to PEMEX's which is requested." annulment Oct. 2, 2013 Letter to Court at 4-5. Thus, the at present, can Court st ision llate the petition rema ct Court. will ew, The be pending les say that the ect to and they est e two it potential strict levels of take a year or two 11 for it to become final. Meanwhile, s court to PEMEX confirm consideration ternat moves them to the until is barred by court can the CONPROCA's arbitration PEMEX asks ng dismiss awards, forum ng in that non conveniens. stay this confirmation determine to courts petition the awards' validi DISCUSSION The parties agree that this e falls under the Inter American Convention on International Commercial Arbitration "Panama Convention" enforcement See "Conventiontl) Art. tion I (" Convention shall apply to the of arbitral awards made in the than the State enforcement of such awards are States Federal courts CONPROCA s enforcement of a State The because Mexican arbitration awards in the United States. Convent ion, territ or (the to Arbitration enforce an ") Act ("FAA") arbitral 3 the recogni tion award authorizes falling United under the 9 U.S.C Convent unless it the 9 U.S.C. of 1 " confirm the incl award spec fied said award rral of Convention § 207. Article V of refusal, A court 301. finds one of the grounds for refusal or de recognition apply. " § the Convention specifies certain grounds for ng Article 5 (e), which states that award may be refused with proof recognition "the decision is not binding on the parties or has annulled or suspended by a competent authority of the State in chI or according to the law of which, been made. decision Convent If Article VI of the des: If competent authority Article 5.1.e has been request suspend the tral decision, before ch decision is if it deems it appropriate, decision on the execution of decision, and at the request requesting execution, may also party to provide guaranties. s provision confirmat mentioned in to annul or authority invoked may, postpone a the arbitral of the party instruct the appropriate lows courts where enforcement is sought to stay in deference to annulment proceedings where the award has been rendered. Courts may also apply the procedural doctrine of forum non conveniens to di ss itions brought under the Convention. "Although the Convention establishes jurisdiction in t States through a venue statute 4 appended to the United Federal Arbitration Act, authori to convenience, J see 9 U.S.C. reject that § 203, 204, De Reassurances Ukraine, 311 F.3d 488, 497 (2d r. S.A.M. remains for jurisdiction cial economy and justice. between there reasons In re 1/ v. Nak of tration Naft z of 2002). While its efforts to annul the awards continue in Mexico, dismissal under forum non conveniens or a stay PEMEX Article VI of Convent 1. The ongoing litigation in Mexico challenges t the Quantum enforcement. Award and may direct In deciding whether to affect the validity of propri a stay under Art VI, a court must take into account the inherent tension tween compet concerns. On the one hand, the ournment of enforcement proceedings s the Is of arbitrat the tious resolution of disputes and the avoidance of protracted and expens lit ion. Under law of many countries, an arbitration award is final, binding, and enforceable even if subject to furt appeal court. A stay of irmation should not be lightly granted lest it encourage abusive tactics by the party that lost in arbitration. On the other hand, certain considerations favor ing a stay. One of the grounds for refusing to enforce an award under Article V(l) (e) is if t award "has been set aside or suspended by a competent authority of the country whi the award was made. Thus, where a parallel proceeding is ongoing in the originating country there is a possibility 11 5 of le the award will be set aside, a dist ct court may be acting improvident by ing the award prior to the completion the fore proceedings. Moreover, as here, it is the pI iff who first sought to enforce s award in originati country, the argument for enforcement by the pIa iff in the st ct court loses because the poss il ity of lict ts and the consequent offense to ernational comity can be laid at plaintiff's The limited scope of review allowed Convent also favors to proceedings in nating country t involve less deferential standards of review on premise that, under these circumstances, a foreign court weI termine versed in its own law is better suited to vali ty the award. Italia v. Maiellano Tours .A. Inc., 156 F.3d 310, --~-~~~.~~ .......~~~~--.~~~ ... --~~~~~~------~--~--~-- 317 18 terations The 1998) Cir. (2d orig Mexican ) (citations and Court reinstated District review the has will Mexican law. Mexico has an important those t j oint val Mexican ty of the the annulment awards under erest in its review of concern a Mexican national instrumentality, a venture, and the application of ies have agreed governs their of omitted) . petition Mexican footnotes courts, sputes. not United States the better course law whi It is courts, to both function declare what Mexican law is. In this case, interest in determining the validity of 6 is to respect Mexico's awards under Mexican and refrain their judgment. from action until the Mexican courts render The stay is therefore granted. 2. issues the question of the application of confirmation of (rather than its more conducting a validity in a forum non conveniens completed arbitration award 1 iar appl icat ion to the prospect litigation on the merits) its issuing country, is determined. I f to are de now being until actively the awards are inval of its lit under Mexican aw, those issues wi 1 probably never arise. The motion for dismissal now under forum non conveniens is ed. CONCLUSION For the foregoing reasons, PEMEX's mot to dismiss the under forum non conveniens (Dkt. No. 16) is denied petit without prej ceo PEMEX's motion to stay the enforcement of the awards (also Dkt. No. 16), is granted and further proceedings on CONPROCA's petit to confirm the awards (Dkt. No.1) are stayed until 30 days after the ration of the time to review the decision of whatever Mexican court timate determines the validity of the awards in Mexico. Questions regarding the need for, and appropriate amount of securi may , if any, to be posted during the pendency of the stay addressed by e application, if desired. - 7 So ordered. Dat New York, New York October 17, 2013 _ }~ t.. Jt;..t,.." LOUIS L. STANTON U.S.D.J. 8
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