The DC Circuit Court of Appeals recently affirmed the dismissal of a second petition to confirm an international arbitration award in favor of a BVI\/Israeli construction company (GSS Group) against the Port Authority of Liberia. Following the Liberian civil war, the Port Authority awarded a multi-million dollar construction contract to GSS to revitalize the port in Monrovia. \u00a0The Port Authority, an independent entity of the Liberian government, ultimately cancelled the contract following government objections over lack of transparency in bidding.<\/p>\n
The construction contract called for arbitration in London pursuant to the laws of England and Wales. \u00a0After it was terminated, GSS filed an arbitration proceeding against the Port Authority in London. \u00a0Meanwhile, the Liberian Public Procurement and Concession Commission, a government organization charged to ensure fairness and transparency in public procurement contracts, sought a declaration from a Liberian court that the agreement was invalid and unenforceable. \u00a0The Liberian court agreed with the government. \u00a0A month later, a sole arbitrator found the Port Authority liable to GSS for more than $44 million.<\/p>\n
GSS sought to confirm the award against the Port Authority in the US. \u00a0The Port Authority argued the court lacked personal jurisdiction. \u00a0GSS contended that because the Port Authority was a state-owned enterprise and not a \u201cperson\u201d under the Due Process Clause, GSS could not challenge jurisdiction. \u00a0The court disagreed and held that GSS was akin to a private corporation, entitled to challenge personal jurisdiction and that the case lacked any discernable connection to the forum. \u00a0When GSS failed to timely argue that the Port Authority was legally indistinguishable from the Liberian government to confer jurisdiction, the case was dismissed. \u00a0On appeal, the decision was affirmed.<\/p>\n
GSS tried again in the same forum. \u00a0Its second petition to confirm was filed initially against Liberia and the Port Authority was added some weeks later. \u00a0This time, GSS argued that Liberia was subject to suit as a sovereign and could not challenge personal jurisdiction. \u00a0GSS argued that because the Port Authority was an agent of the government, Liberia was liable for the award. \u00a0The district court again dismissed. \u00a0The court ruled that the Port Authority was an independent entity of the government and that GSS had not proven the requisite agency to establish subject matter jurisdiction over Liberia. \u00a0The district court also found that collateral estoppel barred GSS from revisiting its claim against the Port Authority.<\/p>\n
On appeal, the Court affirmed the ruling that the suit against the Port Authority was barred by issue preclusion. \u00a0The Court noted that \u201c[p]reclusion applies if a later argument \u2018is related to the subject-matter and relevant to the issues that were litigated and adjudicated previously, so that it could have been raised.\u2019” \u00a0<\/em>The issue <\/em>was necessarily decided in the first case because GSS could have argued agency at that time. \u00a0The Court also affirmed the dismissal of Liberia because the Port Authority was a separate legal entity and GSS failed to establish either the principal\/agent relationship or that the underlying conduct constituted fraud in order to hold Liberia liable.<\/p>\n This case highlights the significance of personal jurisdiction, subject matter jurisdiction <\/em>and issue preclusion\u00a0<\/em>in confirmation of international arbitration awards. \u00a0While the court had subject matter jurisdiction pursuant to the FAA and New York Convention as to the Port Authority, the petitioner still needed to establish personal jurisdiction and failed to do so. \u00a0The second attempt was then precluded by the first. \u00a0The case is GSS Group Ltd. v. National Port Authority of Liberia<\/em>, No. 14\u20137041 (D.C. Cir. May 17, 2016). \u00a0The opinion is here<\/a>.<\/p>\n If you have questions or issues regarding this post, please contact me.<\/p>\n","protected":false},"excerpt":{"rendered":" The DC Circuit Court of Appeals recently affirmed the dismissal of a second petition to confirm an\u2026<\/p>\n","protected":false},"author":1,"featured_media":96,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-95","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-posts"],"_links":{"self":[{"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/posts\/95","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/comments?post=95"}],"version-history":[{"count":6,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/posts\/95\/revisions"}],"predecessor-version":[{"id":305,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/posts\/95\/revisions\/305"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/media\/96"}],"wp:attachment":[{"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/media?parent=95"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/categories?post=95"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ajborrassolaw.com\/briefs\/wp-json\/wp\/v2\/tags?post=95"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}