New York convention article v(2)(b). United States Court of Appeals, District of Columbia Circuit upholds decision of United States District Court for the District of Columbia regarding enforcement of foreign arbitral tribunal award

On December 9, 2004, Said Musa, the Prime Minister of Belize, signed a confidential agreement under which Belize agreed to serve as the guarantor of a loan made to a Belizean health services provider by the Bank. By 2007, that health services provider was in default, making Belize liable for the outstanding loan balance. Pursuant to a March 23, 2007 settlement agreement, Belize agreed to pay the debt in full but under pressure from public protests, Belize refused to make any payment pursuant to the settlement agreement with the Bank.

Following Belize’s default, the Bank—in accordance with a dispute resolution clause included in the settlement agreement—began arbitration proceedings against Belize in London, England, under the Rules of the London Court of International Arbitration (LCIA). Because Belize largely declined to participate in the early stages of the arbitration, however, the LCIA had to step in and appoint Belize’s arbitrator in Belize’s stead. The LCIA nominated Zachary Douglas as Belize’s member of the arbitral tribunal. *1109

In March 2012, five years after Douglas’s initial appointment, Belize challenged Douglas’s continued service on the arbitral tribunal.

Belize questioned Douglas’s impartiality as a member of the arbitral tribunal. The LCIA then created a three-member “Division” to consider Belize’s challenges. Belize Bank Ltd. v. Gov’t of Belize, Case No. 81116 (London Ct. Int’l Arb. 2012). The Division rejected both of Belize’s alternatives. Id. at 11-18. Belize did not take the Division’s adverse decision well, withdrawing from the arbitration proceedings and refusing to participate thereafter. Nonetheless, the proceedings continued.

“On appeal, Belize raises multiple challenges to the district court’s judgment. We have accorded each of Belize’s arguments “full consideration after careful examination of the record,” Bartko v. SEC, 845 F.3d 1217, 1219 (D.C. Cir. 2017) (quoting Ozburn-Hessey Logistics, LLC v. NLRB, 833 F.3d 210, 213 (D.C. Cir. 2016)), but find them either largely asked and answered by Circuit precedent, see BCB Holdings Ltd. v. Gov’t of Belize, 650 Fed. Appx. 17 (D.C. Cir. 2016) (per curiam); Belize Soc. Dev. Ltd. v. Gov’t of Belize, 794 F.3d 99 (D.C. Cir. 2015); Belize Soc. Dev. Ltd. v. Gov’t of Belize, 668 F.3d 724 (D.C. Cir. 2012), or otherwise properly resolved by the district court. Only one issue raised by Belize warrants further discussion—whether the district court’s enforcement of the arbitral award violated the New York Convention because it was “contrary to the public policy of the United States. Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (“New York Convention”), art. V(2)(b), 21 U.S.T. 2517, T.I.A.S. 2517, T.I.A.S. No. 6997, 330 U.N.T.S. 3 (1970); 9 U.S.C. § 207. *1109

On April 18, 2014, the Bank filed a Petition to Confirm Foreign Arbitration Award and to Enter Judgment in district court. The district court granted the petition, concluding, inter alia, that enforcement of the award in the United States was not contrary to United States public policy under New York Convention art. V(2)(b). Belize Bank Ltd., 191 F.Supp.3d at 38. *1110

“In order to set aside an award under the FAA’s ‘evident partiality’ standard, the party challenging the award must ‘establish[] specific facts that indicate improper motives on the part of the arbitrator.’ Al-Harbi v. Citibank, N.A., 85 F.3d 680, 683 (D.C. Cir. 1996). We believe an allegation that an arbitral tribunal member is a member of the same chambers as another barrister who, in proceedings unrelated in fact and time, represented a conflicting interest, is insufficient to meet that burden, let alone to demonstrate that enforcement would violate the United States’ “most basic notions of morality and justice” as required to set aside an award under the New York Convention. Termo-Rio, 487 F.3d at 938. First, “barristers are all self-employed ... precisely in order to maintain the position where they can appear against or in front of one another.” Laker Airways, [1999] QB 45 at 52; accord Stephan Landsman, The Servants, 83 MICH. L. REV. 1105, 1106-07 (1985) (“Although barristers must join a set of chambers, each is considered a sole practitioner and is prohibited from entering into any partnership arrangements. Each must develop and sustain his or her own practice.” (footnote omitted)). Because the chambers model is designed to protect a barrister’s independence—a fact acknowledged by English courts, see Laker Airways, [1999] QB at 52 (rule “prevent[ing] barristers at the same chambers from appearing against one another ... has never been recognized, and the contrary practice is an every day occurrence in the [English] Courts”), and scholars, see Landsman, supra at 1106-07—we are aware of no ethical rule that would require conflict imputation in these circumstances. Without more, a perceived conflict arising from another barrister’s practice does not give rise to the Commonwealth Coatings duty to disclose or otherwise create an appearance of impropriety. See 393 U.S. at 151-52, 89 S.Ct. 337 (White, J., concurring).” *1113

Secondly, Court stated they cannot say that Douglas’s membership in Matrix Chambers threatened the arbitration process’s amicable and trusting atmosphere. However, Court expressed that “insistence on the appearance of neutrality” is vital to “ensuring the reality of fair adjudication.” At the same time, however, questions about appearance are resolved from the perspective of the parties. See Matter of Andros Compania Maritima, S.A. (Marc Rich & Co., A.G.), 579 F.2d 691, 700 (2d Cir. 1978).

Considered together, these factors demonstrate that enforcement of the LCIA arbitral award would not violate the United States’ most basic notions of morality and justice. For the foregoing reasons, the United States Appeal Court affirmed judgment of the district court. TermoRio, 487 F.3d at 938. *1114

CITATION: Belize Bank Ltd. v. GOVERNMENT OF BELIZE, 852 F. 3d 1107—Court of Appeals, Dist. of Columbia Circuit 2017.

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