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Parties Involved:
BCB Holdings Limited
Appellee
Belize Bank Limited
Appellee
Government of Belize
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 15-7063 September Term, 2015

 FILED ON: MAY 13, 2016

BCB HOLDINGS LIMITED AND BELIZE BANK LIMITED,

APPELLEES

v.

GOVERNMENT OF BELIZE,

APPELLANT

Consolidated with 15-7069 

Appeals from the United States District Court

for the District of Columbia

(No. 1:14-cv-01123)

Before: ROGERS, GRIFFITH, and KAVANAUGH, Circuit Judges.

J U D G M E N T

This appeal was considered on the record from the United States District Court for the

District of Columbia and on the briefs and oral arguments of the parties. The Court has afforded the

issues full consideration and has determined that they do not warrant a published opinion. See D.C.

Cir. R. 36(d). It is

ORDERED and ADJUDGED that the judgment of the District Court is hereby

AFFIRMED.

BCB Holdings Limited and Belize Bank Limited are two Belizean banking companies. In

2005, those two companies signed an agreement with the Belizean Prime Minister regarding, among

other things, their tax treatment. In 2008, the Government of Belize repudiated that agreement. In

response, BCB Holdings and Belize Bank invoked the agreement’s arbitration clause. On August

20, 2009, an arbitral tribunal in London ruled against Belize and ordered the country to pay a

substantial amount (approximately $20.5 million in U.S. dollars), plus interest and costs. The two

companies first tried to enforce the award in Belize itself. But that effort failed because Belize’s

highest court ruled that the award contravened Belize’s separation-of-powers system. So on July 1,

2014, BCB Holdings and Belize Bank sought to enforce the award in the U.S. District Court for the

District of Columbia. Belize moved to dismiss the suit on a variety of grounds, including

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international comity, public policy, forum non conveniens, and the statute of limitations. The

District Court found none of Belize’s arguments persuasive, and it enforced the arbitral award. See

BCB Holdings Ltd. v. Belize, 110 F. Supp. 3d 233 (D.D.C. 2015).

We affirm. Under the Federal Arbitration Act, U.S. courts must enforce foreign arbitral

awards unless they find “one of the grounds for refusal or deferral of recognition or enforcement of

the award specified in” the United Nations Convention on the Recognition and Enforcement of

Foreign Arbitral Awards, 21 U.S.T. 2517 (1958), also known as the New York Convention. 9 U.S.C

§ 207. In this case, Belize asks us to deny enforcement on the basis of international comity. Belize

argues that the Convention instructs courts to enforce arbitral awards “in accordance with the rules

of procedure of the territory” where the enforcement action is brought. New York Convention art.

III. But Belize has failed to provide support for its assertion that the doctrine of international comity

is a “rule of procedure” of the United States.

Belize also claims that the District Court should have refused to enforce the arbitral award

because it was the result of a corrupt bargain between the two companies and the former Belizean

Prime Minister. Under the New York Convention, courts may decline to enforce an arbitral award

if “enforcement of the award would be contrary to the public policy of that country.” New York

Convention art. V(2)(b). But courts should rely on the public policy exception only “in clear-cut

cases” where “enforcement would violate the forum state’s most basic notions of morality and

justice.” Termorio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 938 (D.C. Cir. 2007) (citations

omitted). In this case, Belize has not shown that enforcement would violate the most basic U.S.

notions of morality and justice. The arbitral tribunal did not find any corruption. And Belize’s

highest court refused to enforce the award not because the underlying agreement was tainted by

corruption, but rather because the agreement violated Belize’s separation of powers. Belize has

failed to justify the use of the public policy exception in this case.

Belize also argues that the District Court should have refused to enforce the arbitral award

based on two other public policies: the separation of powers and international comity. But

enforcement in this case would not violate any “basic notion of morality and justice” rooted in either

of those two doctrines.

Belize contends that the District Court should have dismissed the enforcement action on

forum non conveniens grounds. That argument is squarely foreclosed by our precedent. In TMR

Energy Ltd. v. State Property Fund of Ukraine, 411 F.3d 296 (D.C. Cir. 2005), we held that the

doctrine of forum non conveniens does not apply to actions in the United States to enforce arbitral

awards against foreign nations. See id. at 303-04.

Finally, Belize claims that BCB Holdings and Belize Bank were time-barred from bringing

their enforcement action. Generally, parties must bring suit to enforce an arbitral award within

“three years after [it] is made.” 9 U.S.C. § 207. Here, BCB Holdings and Belize Bank took almost

five years. But the District Court equitably tolled the statute of limitations so that their claims were

not time-barred. BCB Holdings Ltd., 110 F. Supp. 3d at 245. The District Court reasoned that BCB

Holdings and Belize Bank had pursued their rights to the arbitral award diligently. Id. According

to the District Court, the two companies had failed to enforce the award only because of an external

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obstacle – a 2010 Belize criminal statute that, as relevant here, imposed imprisonment and

substantial fines on those who violated a Belize Supreme Court injunction, including injunctions

against pursuing enforcement of arbitration awards against Belize. Cf. Belize Social Development

Ltd. v. Belize, 668 F.3d 724, 729 (D.C. Cir. 2012). That statute was ruled unconstitutional in January

2014. But up until that point, the District Court observed, the statute had a “chilling effect” on

enforcement efforts. BCB Holdings Ltd., 110 F. Supp. 3d at 245. This Court has not resolved the

appropriate standard of appellate review for equitable tolling decisions. But even under de novo

review, we agree with the District Court that equitable tolling was appropriate under all the

circumstances here. The companies persuasivelyexplain that theyand their lawyers were reasonably

chilled from enforcing the award in the United States because they might thereby run afoul of the

Belizean statute and risk criminal penalties. So long as the statute was in effect, therefore, it was

reasonable for BCB Holdings and Belize Bank to avoid any action – including starting an

enforcement suit in the United States. And once the statute was ruled unconstitutional, it was

reasonable for BCB Holdings and Belize Bank to then file the enforcement action in the District

Court within six months.

We have carefully considered all of Belize’s arguments. We affirm the judgment of the

District Court.

Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is

directed to withhold issuance of the mandate herein until seven days after resolution of any

timely petition for rehearing or rehearing en banc. See Fed. R. App. P. 41(b); D.C. Cir. R. 41.

FOR THE COURT:

Mark J. Langer, Clerk

BY: /s/

Ken Meadows

Deputy Clerk

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