1

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA,

v. Case No.: 1:20-cv-23278-MGC

REAL PROPERTY LOCATED AT 7505 AND 7171 

FOREST LANE, DALLAS, TEXAS 75230, etc. 

Defendant.

__________________________________________/

UNITED STATES OF AMERICA,

Plaintiff,

v. Case No.: 1:20-cv-25313-MGC 

REAL PROPERTY LOCATED AT 55 PUBLIC SQUARE,

CLEVELAND, OHIO, etc., 

Defendant,

________________________________________________/

CLAIMANTS OPTIMA VENTURES, LLC,

OPTIMA 7171, LLC, OPTIMA 55 PUBLIC SQUARE LLC, KORF AND LABER’S

REPLY IN SUPPORT OF MOTION TO COMPEL ARBITRATION

The United States’ Opposition to Motions to Compel Arbitration, (ECF#54) (the 

“Opposition”) first attacks the Claimants by engaging in a multi-page recitation of self-serving 

allegations that are irrelevant to the underlying legal issues regarding arbitrability. The 

Opposition then demands discovery pursuant to Rule G, while also seeking, yet again, a stay 

of the proceedings. The Opposition concludes with a flawed analysis of bilateral investment 

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treaties which finds no support in case law or legal authority. In fact, in the entire Opposition, 

the United States cites only one arbitration related federal case.

1

The reason that the United States avoids relevant legal authorities is because the law

clearly demonstrates that the claims in this civil forfeiture action are arbitrable pursuant to a 

number of key provisions contained within the applicable treaties and laws:

First, as the letter of transmittal to the U.S.-Ukraine BIT makes clear, it is the “investor

or investment[ ]” that hasthe “freedom to choose to resolve disputes with the host government 

through international arbitration.”ECF#36-1:2 (emphasis added). 

Second, when an agreement to arbitrate is entered into, the courts must compel 

arbitration. Article II(3) of the New York Convention provides that courts, “when seized of 

1 The only arbitration related federal case cited by the United States is an inapposite case from 

the Northern District of California, which has nothing to do with a bilateral investment treaty 

such as the U.S.-Ukraine BIT and which also has nothing to do with the New York 

Convention, also an international treaty. See ECF#54:17 (citing Breazeale v. Victim Servs., Inc., 

198 F. Supp. 3d 1070, 1076 (N.D. Cal. 2016)). Breazeale involved interpretation of the 

domestic Federal Arbitration Act (the “FAA”), 9 U.S.C. § 1, et seq., and the exercise of state

criminal police powers. One of the key issues in Breazeale was the intrusion of the FAA into 

the “exercise of the state’s police power,” which is a classic federalism concern. That 

federalism concern is not present here, because it is the federal government that seeks to 

expropriate Claimants’ investments in the United States. And unlike the domestic FAA, the 

New York Convention is an international treaty incorporated by statute in 9 U.S.C. § 201, et 

seq. Pursuant to 9 U.S.C. § 201, “[t]he Convention on the Recognition and Enforcement of 

Foreign Arbitral Awards of June 10, 1958, shall be enforced in United States courts in 

accordance with this chapter.” The FAA only applies to the New York Convention “to the 

extent that [the FAA] is not in conflict with [9 U.S.C. § 201, et seq.] or the [New York] 

Convention as ratified by the United States.” 9 U.S.C. § 208. In other words, the FAA applies 

only “ ‘to the extent that [the FAA] is not in conflict’ with the Convention Act [9 U.S.C. § 201, et 

seq.] or the New York Convention.” Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279, 

1285 (11th Cir. 2015) (quoting Bautista v. Star Cruises, 396 F.3d 1289, 1299 (11th Cir. 2005)). 

The only other arbitration case cited by the United States is a state court case from the 

Supreme Court of California, which, again, related only to the domestic FAA and state police 

powers, not the New York Convention, bilateral investment treaties, and the federal 

government. See ECF#54:17 (citing Iskanian v. CLS Transportation Los Angeles, LLC, 327 P.3d 

129, 150 (Cal. 2014)). To the extent that the Claimants referred to the New York Convention 

Act, (9 U.S.C. § 201, et seq.), as the “FAA” in their motions to compel arbitration that 

reference was a misnomer. The FAA is set forth in 9 U.S.C. § 1, et seq., and the New York 

Convention Act, 9 U.S.C. § 201, et seq, is only subject to the FAA to the extent that the FAA 

is not in conflict with the New York Convention. See 9 U.S.C. § 208; Escobar, 805 F.3d at 

1285.

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an action in a matter in respect of which the parties have made an agreement within the 

meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, 

unless it finds that the said agreement is null and void, inoperative or incapable of being 

performed.”

Third, Article 26 of the International Centre for Settlement of Investment Disputes 

(“ICSID”) Convention states that a party’s consent to arbitrate under ICSID “shall, unless 

otherwise stated, be deemed consent to such arbitration to the exclusion of any other 

remedy.” 

Fourth, Article 25(4) of the ICSID Convention states a party may, “at the time of 

ratification, acceptance or approval of this Convention or at any time thereafter, notify the 

Centre of the class or classes of disputes which it would or would not consider submitting to 

the jurisdiction of the Centre,” which the United States has not done. ”

2

Fifth, the U.S.-Ukraine BIT does not require the “exhaustion of local administrative 

or judicial remedies as a condition of [the United States’] consent to arbitration under this 

Convention.” See BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 32 (2014) (noting that 

certain BITs require “exhaustion of local remedies” prior to arbitration, but “[t]he question is 

whether the parties intended to give courts or arbitrators primary authority to interpret and 

apply a threshold provision in an arbitration contract,” and holding that “the parties (even if 

they are sovereigns) intended to give that authority to the arbitrators.”). In fact, the U.S.-

Ukraine BIT provides the option of submitting to the courts of the United States or, 

alternatively, to binding arbitration. See U.S.-Ukraine BIT, Art. VI(2) (“... the national or 

company concerned may choose to submit the dispute for resolution: . . . to the courts or 

administrative tribunals of the Party that in a Party to the dispute; or . . . . to the submission 

of the dispute for settlement by binding arbitration[.]”). Here, Claimants have elected to 

pursue their claims through binding arbitration before ICSID and the United States has 

consented to arbitration pursuant to the U.S.-Ukraine BIT and the ICSID Convention. 

Accordingly, pursuant to Article II(3) of the New York Convention, the Court must 

therefore “refer the parties to arbitration.” That is especially so where, as here, the U.S.-

2 See https://icsid.worldbank.org/about/member-states/database-of-memberstates/member-state-details?state=ST181

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Ukraine BIT and the ICSID Convention delegate questions of arbitrability to the arbitrators. 

See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 527 (2019) (“before referring 

a dispute to an arbitrator, the court determines whether a valid arbitration agreement exists . 

. . . But if a valid agreement exists, and if the agreement delegates the arbitrability issue to an 

arbitrator, a court may not decide the arbitrability issue.”); BG Grp., PLC v. Republic of 

Argentina, 572 U.S. 25, 29 (2014) (“In our view, the matter is for the arbitrators, and courts 

must review their determinations with deference.”).

ARGUMENT

The arguments set forth in the United States’ Opposition, and addressed seriatim 

below, are entirely without merit. Claimants’ claims are arbitrable under clear, unequivocal 

and controlling arbitration law. The Court should thus direct the United States to arbitration.

First, the United States fundamentally misunderstands or otherwise obfuscates the 

purpose of the U.S.-Ukraine BIT and the nature of the claims subject to arbitration. The U.S.-

Ukraine BIT provides a number of rights to Ukrainians who invest in the United States. 

Among those rights is the obligation that “[i]nvestment shall at all times be accorded fair and 

equitable treatment, shall enjoy full protection and security and shall in no case be accorded 

treatment less than that required by international law.” U.S.-Ukraine BIT, Art. II (3)(a). In 

Claimants’ Notice of Arbitration, Claimants explain that Article 62 of the Ukrainian

Constitution provides that “a person shall be deemed innocent of committing a crime and 

shall not be subjected to a criminal punishment unless his/her guilt has been proven through 

a legal procedure and established by a court verdict of guilty.” 20-cv-23278, ECF#36-2:8; 20-

cv-25313, ECF#26-2:8. “The Ukrainian Constitution further provides the Ukrainian 

Prosecutor’s Office is exclusively empowered to initiate criminal charges.” Id. “Ukrainian 

civil and commercial courts therefore uniformly hold that they lack authority to conclude or 

find that conduct violates the Criminal Code of Ukraine in the absence of criminal charges 

filed by the Ukrainian Prosecutor’s Office and a finding of violations of the Criminal Code of 

the Ukraine by a Ukrainian criminal court.” Id. The Ukrainian Supreme Court has held that:

In accordance with Article 62 of the Constitution of Ukraine, Article 6 of the 

Convention for the Protection of Human Rights and Fundamental Freedoms, 

a person is considered innocent of committing a crime, as well as cannot be 

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subjected to criminal punishment, until his guilt is proven through legal 

procedure and established by a court verdict of guilty.

[...] The treatment of a person whose guilt in the commission of a criminal 

offense has not been established by a court sentence that has entered into legal 

force must be consistent with the treatment of an innocent person. The 

presumption of innocence must be viewed in general legal and procedural 

senses. As a general legal requirement, it determines the position of the 

individual in society. Although this principle is formulated as a principle of 

criminal procedure, its effect goes beyond the scope of the criminal process.

The presumption of innocence is an objective legal provision. This is a 

requirement of the law, addressed to all citizens, officials, state and public 

organizations, to public thought in general.

20-cv-23278, ECF#36-2:89-90; 20-cv-25313, ECF#26-2:87-88. 

There can be no money laundering without an underlying crime. See United States v. 

Christo, 129 F.3d 578, 579–80 (11th Cir. 1997) (holding that it is only after a “predicate crime 

becomes ‘a completed offense’ ” that “money laundering can occur.”). The money laundering 

charges in this case are all predicated on the occurrence of crimes in Ukraine, yet in Ukraine 

there have been no such criminal charges let alone convictions. The United States asks the 

Court to find that Claimants’ owners are criminals in their own land, where they are now 

innocent under their own laws, so that the United States can then take all of their investments.

See generally 20-cv-23278, ECF#36-2:76-100; 20-cv-25313, ECF#26-2:73-137 (Declaration of 

Dmytro Marchukov describing relevant Ukrainian law). The U.S.-Ukraine BIT provides 

Claimants with the right to have their investments treated in accordance with international 

law. Claimants allege in their Notices of Arbitration that the initiation of these forfeiture 

actions violate international law insofar as the United States’ conduct both violates customary 

international law’s “limitations on a nation’s exercise of its jurisdiction to prescribe,” Hartford 

Fire Ins. Co. v. California, 509 U.S. 764, 815 (1993) (Scalia, J., dissenting),3and unlawfully

interferes with Ukrainian sovereignty and jurisdiction to enforce its own laws, in accordance 

with its own procedures and Constitutional requirements, within its own territory. 20-cv23278, ECF#36-2:25; 20-cv-25313, ECF#26-2:2-26. In other words, Claimants maintain in 

3 See F. Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 165 (2004); Societe Nationale 

Industrielle Aerospatiale v. U.S. Dist. Court for S. Dist. of Iowa, 482 U.S. 522, 544 (1987). 

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the arbitration that the United States attempt via this civil forfeiture action to declare the 

Ukrainians criminals in their own land, where they are now innocent under their own laws, 

violates customary international law and, therefore, violates Article II(3)(a)-(b) of the U.S.-

Ukraine BIT.4 Put bluntly, the question is whether international law allows the United States 

to bring this civil forfeiture case in the first place. That is a question which Claimants have 

submitted to arbitration and which is not otherwise capable of being adjudicated piecemeal.

5

Second, the United States claims that the Claimants are improperly seeking to divest 

this Court of jurisdiction. Not so. Claimants are seeking to enforce the binding arbitration 

agreement that the United States entered into when it signed the U.S.-Ukraine BIT. In all 

instances the Court must properly have jurisdiction in order to compel arbitration. See generally 

Jain v. de Mere, 51 F.3d 686, 690 (7th Cir. 1995). It is true that 28 U.S.C. § 1355(a) provides 

4

 Imagine if Ukraine were to initiate a Ukrainian court action seeking to deprive a United 

States’ investor of its investment in Ukraine, based on Ukraine’s unilateral interpretation and 

application of the United States’ laws, to conduct and losses occurring entirely in the United 

States. For instance, imagine that Ukraine were to allege that JPMorgan Chase & Co. 

committed bank fraud under U.S. law by participating in a conspiracy to lend funds to 

homeowners who it knew or should have known could not afford mortgages. Ukraine claims 

that this conspiracy led to the 2008 financial crisis and was criminal under U.S. law. 

Therefore, Ukraine claims that all of JPMorgan’s money is traceable to a criminal bank fraud 

pursuant to U.S. law, and Ukraine asserts that it may take any and all investments traceable 

to JPMorgan, even though the United States never criminally charged JPMorgan or its 

owners and instead bailed them out. Query what position the United States government 

would take as to the applicability of the U.S.-Ukraine BIT. 

5

In fact, pursuant to the U.S.-Ukraine BIT, Claimants could have made this argument based 

on the U.S.-Ukraine BIT and international law to this Court in a motion to dismiss, but 

elected instead to proceed through arbitration pursuant to Article VI of the U.S.-Ukraine BIT. 

See U.S.-Ukraine BIT, Art. II(7) (“Each Party shall provide effective means of asserting claims 

and enforcing rights with respect to investment, investment agreements, and investment 

authorizations.”); Art. III(2) (“A national, or company of either Party that asserts that all or 

part of its investment has been expropriated shall have a right to prompt review by the 

appropriate judicial or administrative authorities of the other Party to determine whether any 

such expropriation has occurred and, if so, whether such expropriation, and any associated 

compensation, conforms to the principles of international law.”); Art. VI(2)(“ In the event of 

an investment dispute, the parties to the dispute should initially seek a resolution through 

consultation and negotiation. If the dispute cannot be settled amicably, the national or 

company concerned may choose to submit the dispute for resolution: . . . to the courts or 

administrative tribunals of the Party that in a Party to the dispute; or . . . to the submission of 

the dispute for settlement by binding arbitration[.]”).

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that, “The district courts shall have original jurisdiction, exclusive of the courts of the States, 

of any action or proceeding for the recovery or enforcement of any fine, penalty, or forfeiture, 

pecuniary or otherwise, incurred under any Act of Congress . . .”). That this Court has subject 

matter jurisdiction is well and good, because the Court may then compel arbitration pursuant 

to Article II(3) of the New York Convention, which requires that a court properly “seized of 

an action . . . shall, at the request of one of the parties, refer the parties to arbitration.” 9 

U.S.C. § 206 likewise provides that, “A court having jurisdiction under this chapter may direct 

that arbitration be held in accordance with the agreement at any place therein provided for, 

whether that place is within or without the United States.” (emphasis added).

By way of illustrative example, the federal courts have exclusive jurisdiction over 

admiralty claims, yet such claims are routinely subject to binding arbitration. Compare 28 

U.S.C. § 1333 (“The district courts shall have original jurisdiction, exclusive of the courts of 

the States, of: . . . Any civil case of admiralty or maritime jurisdiction, saving to suitors in all 

cases all other remedies to which they are otherwise entitled.”) with Martinez v. Carnival Corp., 

744 F.3d 1240, 1245–47 (11th Cir. 2014) (holding that cruise ship worker who sustained a 

back injury while working on the ship brought action against owner of cruise ship was 

required to arbitrate pursuant to New York Convention); Isanto v. Royal Caribbean Cruises, Ltd., 

No. 20-CV-23715, 2020 WL 6262981, at *6 (S.D. Fla. Oct. 23, 2020) and Wells Fargo Bank 

Int'l Corp. v. London Steam-Ship Owners' Mut. Ins. Ass'n, Ltd., 408 F. Supp. 626, 630 (S.D.N.Y. 

1976) (“A dispute arising under a contract of maritime insurance, such as the one involved 

here, is within the admiralty and maritime jurisdiction of this court pursuant to 28 U.S.C. s 

1333. . . . That this action may be an appropriate one for a stay pending arbitration under 9 

U.S.C. s 3 does not vitiate that jurisdiction.”). 

Likewise, in the context of claims brought under the Securities Exchange Act, “[t]he 

district courts of the United States . . . shall have exclusive jurisdiction of violations of this 

chapter or the rules and regulations thereunder, and of all suits in equity and actions at law 

brought . . . .” 15 U.S.C. § 78aa. Yet “[e]ven U.S. statutory claims are amenable to arbitral 

resolution—even U.S. statutory claims containing anti-waiver provisions, such as the U.S. 

securities law barring any provision that requires a security buyer to waive compliance with 

the Securities Exchange Act of 1934.” Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257, 1264–65 

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(11th Cir. 2011) (citing Scherk v. Alberto-Culver Co., 417 U.S. 506, 513 (1974)). “[W]e are well 

past the time when judicial suspicion of the desirability of arbitration and of the competence 

of arbitral tribunals” should inhibit enforcement of the Act “ ‘in controversies based on 

statutes.’ ” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-27 (1985). 

Third, the United States argues that, if it is forced to honor its obligations pursuant to 

the bilateral investment treaties that it signed, then “purported investors from Albania to 

Uruguay could evade the jurisdiction of the federal courts in exchange for arbitration under 

the BITs,” which the United States argues would then make it more difficult to commandeer 

those foreign investors’ investments for the United States’ own purposes. The United States 

also argues that “[a]ny other approach would be chaotic and unworkable” because the United 

States’ domestic courts’ “[e]xclusivity is necessary to prevent the ‘inefficient and piecemeal 

litigation’ that would result if a court or arbitration tribunal presiding over a competing action 

sought to adjudicate legal rights to the same property.” Not only do all of these hypothetical 

policy arguments fail of their own weight, they are also expressly excluded from the Court’s 

analysis at the motion to compel stage. “[T]he [New York] Convention Act creates two causes 

of action in federal court for a party seeking to enforce an arbitration agreement that falls 

under the New York Convention: a motion to compel arbitration ‘in accordance with the 

agreement,’ 9 U.S.C. § 206; and a motion to ‘confirm’ an arbitral award, id. § 207.” Suazo v. 

NCL (Bahamas), Ltd., 822 F.3d 543, 546 (11th Cir. 2016). Whether the arbitration would be 

against public policy is not to be resolved on a motion to compel arbitration “at the initial 

arbitration-enforcement stage” but rather should be “resolved at the arbitral award-enforcement 

stage.” Lindo, 652 F.3d at 1267 (emphasis in original). The “public policy defense applies at 

the award-enforcement stage, not the initial arbitration-enforcement stage.” Id. The United 

States “cannot raise” any “public policy defense at this initial arbitration-enforcement stage.” 

Lindo, 652 F.3d at 1282; see Mitsubishi, 473 U.S. at 639 n.21 (“The utility of the Convention 

in promoting the process of international commercial arbitration depends upon the 

willingness of national courts to let go of matters they normally would think of as their own.”). 

The Supreme Court has “rejected . . . insistence that ‘American standards of fairness’ 

must govern the controversy, commenting that such judicial obstinacy ‘demeans the 

standards of justice elsewhere in the world, and unnecessarily exalts the primacy of United 

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States law over the laws of other countries.’” Lindo, 652 F.3d at 1265 (quoting Scherk, 417 

U.S. at 517 n.11). “If the United States is to be able to gain the benefits of international accords 

and have a role as a trusted partner in multilateral endeavors, its courts should be most 

cautious before interpreting its domestic legislation in such manner as to violate international 

agreements.” Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 539 (1995). 

“That concern counsels against construing [statutes] to nullify foreign arbitration clauses 

because of inconvenience to the plaintiff or insular distrust of the ability of foreign arbitrators 

to apply the law.” Id. As the Supreme Court observed in Scherk:

[T]he delegates to the Convention voiced frequent concern that courts of 

signatory countries in which an agreement to arbitrate is sought to be enforced 

should not be permitted to decline enforcement of such agreements on the basis 

of parochial views of their desirability or in a manner that would diminish the 

mutually binding nature of the agreements.

417 U.S. at 520 n.15. If the New York Convention could be read to “impl[y] that arbitration 

agreements are invalid ab initio whenever the application of foreign law may displace a U.S. 

statutory claim—the public policy exception would swallow the rule that signatory nations 

‘shall recognize’ arbitration agreements.” Id. (citing New York Convention, art. II(1)). In 

sum, public policy defenses are not to be resolved at the initial arbitration-enforcement stage 

But even if the law permitted consideration of public policy at this stage, public policy 

favors the enforcement of a valid agreement to arbitrate contained in a bilateral investment 

treaty, the enforcement of which is mandated by the New York Convention. Contrary to the 

United States’ contention that piecemeal litigation would result if arbitration were ordered, 

piecemeal litigation would in fact result if Claimants were forced to arbitrate whether this civil 

forfeiture action is illegal under international law before an arbitral tribunal, while at the same 

time proceeding in this civil forfeiture to litigate through to a trial. That is why Article VI of 

the U.S.-Ukraine BIT provides the option of submitting a claim either to the U.S. courts or to 

binding arbitration. Having selected the latter, piecemeal litigation will only follow if 

Claimants’ case proceeds in Court while the legality of this forfeiture action under 

international law is being arbitrated. 

The United States’ desire to avoid the obligations of the treaties that it entered into, 

because honoring the treaties will allegedly make it more difficult to deprive foreign investors 

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of their assets is no reason to find that the matter should not be arbitrated. See Vimar, 515 U.S. 

at 539. With respect to the (rather condescending) statement that “[a]rbitrators who are not

United States judges—who have no obligation to uphold United States laws, to afford the

procedural rights of the Supplemental Rules or the Federal Rules of Civil Procedure, or to

follow the precedent of the United States courts—would be charged with deciding

fundamental issues of American law and controlling the exercise of the government’s police

powers,” this sort of claim is exactly what the Supreme Court anticipated when it stated that, 

“[i]f the United States is to be able to gain the benefits of international accords and have a 

role as a trusted partner in multilateral endeavors, its courts should be most cautious before 

interpreting its domestic legislation in such manner as to violate international agreements[,]”

which “counsels against construing [statutes] to nullify foreign arbitration clauses because of 

inconvenience to the plaintiff or insular distrust of the ability of foreign arbitrators to apply 

the law.” Id. at 539. An international arbitral tribunal is in as good a position as anyone to 

interpret the Ukrainian constitution and the Ukrainian Criminal Code, which this civil 

forfeiture action places directly at issue. Compare 20-cv-23278, ECF#1, ¶¶ 64-73 and 20-cv25313, ECF#1, ¶¶ 63-71 (alleging violations of the Ukrainian Criminal Code) with Christo, 

129 F.3d at 579–80 (holding that it is only after a “predicate crime becomes ‘a completed 

offense’ ” that “money laundering can occur.”). And that is why there is no “public policy” 

defense with respect to a motion to compel arbitration pursuant to 9 U.S.C. § 206. The United 

States may “not raise any public policy defense” at the motion to compel stage because the 

public policy defenses “appl[y] only at the arbitral award-enforcement stage and not at the 

arbitration-enforcement stage.”Suazo, 822 F.3d at 552. Contrary to the United States’ 

argument that “[n]owhere in the Treaty does the United States—or, for that matter, 

Ukraine—surrender its sovereign authority to enforce its laws against foreign investors,” the 

U.S.-Ukraine BIT expressly provides Claimants with the right to arbitrate the legality of this 

forfeiture action under international law, whether the treaty permits such a claim is for the 

arbitrators, and “the parties (even if they are sovereigns) intended to give that authority to the 

arbitrators.” BG Grp., 572 U.S. at 43.

Fourth, the United States inexplicably splits hairs, claiming that this case is about 

whether the United States can obtain “title” to the property, not whether it can take the 

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pecuniary value of the property. What the United States seeks to do is to deposit all of the 

money derived from the sale of the properties with the U.S. Marshals Service.6 Then the 

United States seeks to forfeit that money permanently. In the arbitration, Claimants argue 

that the United States is required to pay that money back because it was obtained in violation 

of international law. But Claimants also ask the Tribunal to “DECLARE that the United 

States has breached its obligations acquired under the U.S.-Ukraine BIT.” 20-cv-23278, 

ECF#36-2:44; 20-cv-25313, ECF#26-2:40. The United States asserts that “[g]enerally 

speaking, the ICSID Convention provides only for the enforceability of pecuniary remedies 

(i.e., monetary damages).” ECF#54:15. That is simply false.7“An examination of the powers 

of international courts and tribunals to order measures concerning performance or injunction 

and of the ample practice that is available in this respect, leaves this Tribunal in no doubt 

about the fact that these [non-pecuniary] powers are indeed available . . . . [I]n addition to 

declaratory powers, it has the power to order measures involving performance or injunction 

of certain acts. Jurisdiction is therefore also affirmed on this ground.” Enron Corporation and 

Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, January 14, 2004, 

Decision on Jurisdiction, ¶¶ 76-81 (collecting cases). “An obligation imposed by an award 

that is expressed not in monetary terms but in terms of an obligation to perform a particular 

act or to refrain from a certain course of action is equally binding and gives rise to the effect 

of res judicata.” Christoph Schreuer, Non-Pecuniary Remedies in ICSID Arbitration, 20 Arb. 

Int’l 325, 325 (2004), available at https://www.univie.ac.at/intlaw/pdf/cspubl_71.pdf. “The 

fact that in the cases so far published, ICSID tribunals have nearly always framed the 

obligations imposed by their awards in pecuniary terms is not due to a belief that they lack 

the power to proceed otherwise.” Id. “Rather, the cases involved situations in which the 

investment relationship had broken down and the claimants have preferred to frame their 

demands in monetary terms.” Id.

6

In fact, the property in Case No. 20-cv-25313 (Cleveland) has already been sold and the 

funds are on deposit with the U.S. Marshals. 

7 See Christoph Schreuer, Non-Pecuniary Remedies in ICSID Arbitration, 20 Arb. Int'l 325, 

325 (2004), available at https://www.univie.ac.at/intlaw/pdf/cspubl_71.pdf

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Claimants may arbitrate whether the United States’ attempt to take title to their 

property is unlawful under international law and the notion that monetary damages versus 

“title” makes a difference is simply an attempt obfuscate what is otherwise a clearly on point 

arbitration agreement. In fact, pursuant to the U.S.-Ukraine BIT “ ‘investment’ means every 

kind of investment in the territory of one Party owned or controlled directly or indirectly by 

nationals or companies of the other Party, such as equity, debt, and service and investment 

contracts; and includes: (i) tangible and intangible property, including rights, such as 

mortgages, liens and pledges[.]” 20-cv-23278, ECF#36-1:10; 20-cv-25313, ECF#26-1:10. 

Plainly, the kinds of investments covered by the U.S.-Ukraine BIT include title to real

property and where, as here, Claimants allege that the forfeiture action with respect to their 

investments violates international law,

8

their dispute as to the legality of this forfeiture action 

under international law may clearly be submitted to binding arbitration pursuant to the U.S.-

Ukraine BIT. 

The United States also ignores that the U.S.-Ukraine BIT “authorizes the use of 

international arbitration associations, the rules of which provide that arbitrators shall have 

the authority to interpret provisions of this kind . . . .[see] ICSID Convention, Regulations and 

Rules, Art. 41(1) (2006 ed.) (‘Tribunal shall be the judge of its own competence’).” BG Grp., 

572 U.S. at 40; see also Henry Schein, 139 S. Ct. at 527;WasteCare Corp. v. Harmony Enterprises, 

Inc., 822 F. App’x 892, 895 (11th Cir. 2020). It is for the arbitrators, not the Court, to 

determine whether Claimants’ claims fall within the scope of the U.S.-Ukraine BIT pursuant 

to its plain language. 

Fifth, the United States claims that only rights “conferred or created by the Treaty” are 

subject to arbitration. The United States concedes that such rights include “an obligation on 

behalf of each ‘Party’ to the Treaty—i.e., the United States and Ukraine—to accord to 

investments of ‘nationals or companies’ of the other Party certain treatment, including ‘fair

and equitable treatment,’ as defined by international law.” And Claimants have submitted to 

arbitration their claim that the initiation and prosecution of this civil forfeiture action violates 

8 The United States itself recognizes that Ukrainians were investing in the United States and 

that these properties are the subject of Ukrainian investment. See 20-cv-23278, ECF#1, ¶¶ 

19, 28 n.3, 84; 20-cv-25313, ECF#1, ¶¶ 18, 25 n.3, 80. 

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the limitations imposed by international law on, inter alia, the United States’ jurisdiction to 

prescribe. 20-cv-23278, ECF#36-2:16-25; 20-cv-25313, ECF#26-2:17-26. See F. Hoffmann-La 

Roche, 542 U.S. at 165 (“But why is it reasonable to apply those laws to foreign conduct insofar 

as that conduct causes independent foreign harm and that foreign harm alone gives rise to the plaintiff's 

claim? . . . . Why should American law supplant, for example, Canada's or Great Britain’s or 

Japan's own determination about how best to protect Canadian or British or Japanese 

customers from anticompetitive conduct engaged in significant part by Canadian or British 

or Japanese or other foreign companies?”) (emphasis in original); Hartford, 509 U.S. at 815

(“Under the Restatement [of Foreign Relations Law], a nation having some ‘basis’ for 

jurisdiction to prescribe law should nonetheless refrain from exercising that jurisdiction ‘with 

respect to a person or activity having connections with another state when the exercise of such 

jurisdiction is unreasonable.’”) (Scalia, J., dissenting); Societe Nationale, 482 U.S. at 543 n. 27

(“ ‘[N]othing would be more convenient in the promiscuous intercourse and practice of 

mankind, than that what was valid by the laws of one place, should be rendered of no effect 

elsewhere, by a diversity of law[.]’”). Textually, the U.S.-Ukraine BIT provides Claimants 

with the right to challenge whether this civil forfeiture action’s treatment of investments 

violates international law. Claimants have exercised that right and these claims must now be 

arbitrated. 

In fact, pursuant to the U.S.-Ukraine BIT, Claimants could have made this argument 

based on international law to this Court in a motion to dismiss, but elected instead to proceed 

through arbitration pursuant to Article VI of the U.S.-Ukraine BIT. See Footnote 5, supra.

Here, the Claimants have elected to submit their claims to arbitration – instead of Court –

which the plain language of the U.S.-Ukraine BIT clearly allows.

Perhaps most significantly, the United States again ignores that the U.S.-Ukraine BIT 

“delegates the arbitrability question to an arbitrator”[.]” WasteCare, 822 F. App’x at 895; see 

BG Grp., 572 U.S. at 40; Henry Schein, 139 S. Ct. at 527. It is for the arbitrators, not the Court, 

to determine whether Claimants’ claims fall within the scope of the U.S.-Ukraine BIT 

pursuant to its plain language.

Sixth, the United States argues that the U.S.-Ukraine BIT does not “surrender [the 

United States’] sovereign authority to enforce its laws against foreign investors” and also 

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argues that the U.S.-Ukraine BIT does not “otherwise suspend the normal operation of either 

country’s laws or divest its courts of jurisdiction to adjudicate those laws against a foreign 

investor.” Those arguments are directly contradicted by the letter of transmittal submitted to 

President Clinton by Secretary of State Warren Christopher. See 20-cv-23278, ECF#36-1:5; 

20-cv-25313, ECF#26-1:5 (“In paragraph 3(c), each Party pledges to respect any obligations 

it may have entered into with respect to investments. Thus, in dispute settlement under 

Articles VI or VII, a Party would be foreclosed from arguing, on the basis of sovereignty, that 

it may unilaterally ignore its obligations to such investments.”). Indeed, the U.S.-Ukraine BIT 

also expressly places limits on the exercise of “police power” to expropriate investments. “If 

public purpose automatically immunizes the measure from being found to be expropriatory, 

then there would never be a compensable taking for a public purpose.” 20-cv-23278, ECF#36-

2:33, ¶ 69; 20-cv-25313, ECF#26-2:32, ¶ 70 (quoting Compañía de Aguas del Aconquija S.A. and 

Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/97/3, Award of 20 August

2007, at ¶ 7.5.21);. When countries like Venezuela take foreign investors property they often

do so under color of “police power,” but that does not exclude countries like Venezuela from 

liability pursuant to bilateral investment treaties. As set forth in the Notices of Arbitration, 

just because there is a public purpose does not mean that there is no liability under the treaty. 

See 20-cv-23278, ECF#36-2:32-35, ¶¶ 64-73; 20-cv-25313, ECF#26-2:31-34, ¶¶ 65-73; see also

20-cv-23278, ECF#36-2:17-25, ¶¶ 21-44; 20-cv-25313, ECF#26-2:18-28, ¶¶ 27-50. And these 

treaties are bilateral meaning that the United States cannot take investments carte blanche by 

refencing “police power” and thereby escape the scope of the obligations entered into via the

bilateral investment treaties that the United States promotes all around the world and, in this 

case, signed. See 20-cv-23278, ECF#36-2:32, ¶ 66 n.53; 20-cv-25313, ECF#26-2:31, ¶ 67 n.52

(citing International Law Commission’s (ILC) Draft Articles on State Responsibility, Art. 25 

(“Necessity may not be invoked by the State as a ground for precluding the wrongfulness of 

an act not in conformity with an international obligation of that State unless the act: (a) Is the 

only way for the State to safeguard an essential interest against a grave and imminent peril; 

(b) Does not seriously impair an essential interest of the State or States towards which the 

obligation exists, or of the international community as a whole.”).

Moreover, pursuant to Article 25(4) of the ICSID Convention:

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Any Contracting State may, at the time of ratification, acceptance or approval 

of this Convention or at any time thereafter, notify the Centre of the class or 

classes of disputes which it would or would not consider submitting to the 

jurisdiction of the Centre.

The United States has not notified ICSID of any “class or classes of disputes which it would 

or would not consider submitting to the jurisdiction of the Centre.”9

On the contrary, the United States has signed the ICSID Convention which contains 

the subheading “Jurisdiction of the Centre” and provides that “[c]onsent of the parties to 

arbitration under this Convention shall, unless otherwise stated, be deemed consent to such 

arbitration to the exclusion of any other remedy.” ICSID Convention, Art. 26. “The object of 

this provision is not in doubt. It is to ensure that an ICSID Tribunal, duly constituted, has 

exclusive jurisdiction over any dispute of which it is seized.” Perenco Ecuador Limited v. Republic 

of Ecuador and Empresa Estatal Petróleos del Ecuador, ICSID Case No. ARB/08/6, Decision on 

Provisional Measures, May 8, 2009, ¶ 61. “The claims which the [United States] [is] invoking 

the legal process of the domestic courts to enforce are the claims which [Claimants] ha[ve]

brought this arbitration to challenge.” Id. The United States’ insistence on persisting with this

domestic civil forfeiture “process violates Article 26.” Id. Claimants “would violate the Article 

if [they] were, in the domestic courts of [the United States], to advance the arguments which 

[they will rely on in th[e] arbitration[.]” Id. “Unless and until the Tribunal rules that it has no 

jurisdiction to entertain this dispute, if its jurisdiction is hereafter challenged, or the Tribunal 

delivers a final award on the merits, none of the parties may resort to the domestic courts of 

[the United States] to enforce or resist any claim or right which forms part of the subject matter 

of this arbitration.” Id. “Among the rights that may be protected by provisional measures is 

the right guaranteed by Article 26 to have the ICSID arbitration be the exclusive remedy for 

the dispute to the exclusion of any other remedy, whether domestic or international, judicial 

or administrative.” Tokios Tokelés v. Ukraine, ICSID Case No. ARB/02/18, Jan. 18, 2005, 

Procedural Order No. 3, ¶ 7.

9 https://icsid.worldbank.org/about/member-states/database-of-member-states/memberstate-details?state=ST181

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Perhaps most significantly, (again at risk of repetition), the United States again ignores 

that the U.S.-Ukraine BIT “delegates the arbitrability question to an arbitrator[.].” WasteCare, 

822 F. App’x at 895; see BG Grp., 572 U.S. at 40; Henry Schein, 139 S. Ct. at 527. It is for the 

arbitrators, not the Court, to determine whether Claimants’ claims fall within the scope of the 

U.S.-Ukraine BIT pursuant to its plain language and whether the U.S. Ukraine BIT is

otherwise subject to a “police powers” exception. 

Seventh, the United States argues that Rule G(6) automatically stays the obligation to 

respond to a motion to compel arbitration while “special interrogatories” are served and 

additionally argues that a stay is required under 18 U.S.C. § 981(g)(1). As set forth in ECF#56, 

Claimants take no issue with this action being stayed pursuant to 9 U.S.C. § 3, with an 

important caveat: that the Court also “direct that arbitration be held in accordance with the” 

U.S.-Ukraine BIT pursuant to 9 U.S.C. § 206. See Sedco, Inc. v. Petroleos Mexicanos Mexican Nat. 

Oil Co. (Pemex), 767 F.2d 1140, 1146 (5th Cir. 1985) (noting that by reason of the incorporation 

of Chapter 1 into Chapter 2 pursuant to 9 U.S.C.A. § 208, both the Federal Arbitration Act 

and the Convention provide that a district court may stay an action upon finding that a dispute 

in the pending lawsuit is subject to arbitration). In consenting to the U.S.-Ukraine BIT and 

ICSID Convention, the United States committed to forego all other remedies, including those 

discovery mechanisms available in this civil forfeiture action, such as “special interrogatories” 

pursuant to “Rule G.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991) 

(“[Plaintiff] also complains that the discovery allowed in arbitration is more limited than in 

the federal courts . . . . Although those procedures might not be as extensive as in the federal 

courts, by agreeing to arbitrate, a party ‘trades the procedures and opportunity for review of 

the courtroom for the simplicity, informality, and expedition of arbitration.’”); Caley v. 

Gulfstream Aerospace Corp., 428 F.3d 1359, 1378 (11th Cir. 2005) (“[D]iscovery limitations are 

consistent with the goals of ‘simplicity, informality, and expedition’ touted by the Supreme 

Court[.]”). Discovery is now only available through ICSID, not “Rule G” which no longer 

has any impact on this matter subject to arbitration.10

10 The Government’s attempt to use Rule G to short circuit a motion to compel arbitration 

appears to conflict with Fed. R. Civ. P. 81(a)(6)(B) (“These rules, to the extent applicable, 

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In short, if the United States wants a stay of Case Nos. 20-cv-23278 and 20-cv-25313 

in lieu of dismissal, Claimants do not oppose the United States getting what it is asking for 

with the caveat that the Court also “direct that arbitration be held in accordance with the” 

U.S.- Ukraine BIT pursuant to 9 U.S.C. § 206.

CONCLUSION

Like any other party to a contract, the United States must honor its agreement to 

arbitrate. See BG Grp., 572 U.S. at 37 (“As a general matter, a treaty is a contract, though 

between nations. Its interpretation normally is, like a contract's interpretation, a matter of 

determining the parties' intent.”). The rule of law requires that the United States honor its 

obligations entered into pursuant to the U.S.-Ukraine BIT. 

Based on the foregoing, the Court should stay this action and “direct that arbitration 

be held in accordance with the” U.S.- Ukraine BIT pursuant to 9 U.S.C. § 206.

Dated: March 8, 2021

Respectfully submitted,

Black, Srebnick, Kornspan & Stumpf, P.A.

201 South Biscayne Blvd., Suite 1300

Miami, FL 33131

Tel: (305) 371-6421

Fax: (305) 371-6322

govern proceedings under the following laws, except as these laws provide other procedures: 

. . . . [including] 9 U.S.C., relating to arbitration”). Rule G, in turn, states that “[t]o the extent 

that this rule does not address an issue, Supplemental Rules C and E and the Federal Rules 

of Civil Procedure also apply,” (emphasis added), which necessarily includes Fed. R. Civ. P. 

81(a)(6). Although a motion to compel arbitration is sometimes construed as a Rule 12(b)(1) 

motion to dismiss, it is actually governed by its own statutory framework. See 9 U.S.C. §§ 1 et 

seq. (the “Federal Arbitration Act” or “FAA”); 9 U.S.C. § 201, et seq. (the “New York 

Convention”). Rule G and other Federal Rules of Civil Procedure do not apply to procedures 

relating to arbitration to the extent that the FAA and New York Convention provide different 

procedures. See Fed. R. Civ. P. 81(a)(6) (“These rules, to the extent applicable, govern 

proceedings under the following laws, except as these laws provide other procedures: . . . .9 

U.S.C., relating to arbitration”). The United States’ interpretation of Rule G conflicts with 

the procedures set forth in the FAA and New York Convention, and therefore the procedures 

set forth in the FAA and New York Convention apply.

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By: /s/ Howard M. Srebnick

Howard M. Srebnick

Florida Bar No. 919063

Robert T. Dunlap

Florida Bar No. 11950

HSrebnick@RoyBlack.com

RDunlap@RoyBlack.com 

Attorneys for Claimants Korf and the 

Corporate Entities

Kasowitz Benson Torres LLP

1633 Broadway

New York, New York 10019

(212) 506-1700 

Marc E. Kasowitz 

Mark P. Ressler

Ronald R. Rossi

Sarmad M. Khojasteh

Joshua Paul

Pro Hac Vice Anticipated

MKasowitz@kasowitz.com

MRessler@kasowitz.com

RRossi@kasowitz.com 

SKhojasteh@kasowitz.com 

JPaul@kasowitz.com 

Attorneys for Claimants Korf and the 

Corporate Entities

/s/ Scott A. Srebnick

Scott A. Srebnick, P.A.

201 South Biscayne Boulevard

Suite 1210

Miami, FL 33131

Telephone: (305) 285-9019

Facsimile: (305) 377-9937

Scott@srebnicklaw.com 

Attorney for Claimant Laber

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