UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

____________________________________

)

ANATOLIE STATI; GABRIEL STATI; )

ASCOM GROUP, S.A.; TERRA RAF )

TRANS TRAIDING LTD., )

 )

Petitioners, )

)

v. ) Civil Action No. 14-1638 (ABJ)

)

REPUBLIC OF KAZAKHSTAN, )

)

Respondent. )

____________________________________)

MEMORANDUM OPINION

Petitioners, Anatolie Stati, Gabriel Stati, Ascom Group, S.A., and Terra Raf Trans Traiding 

Ltd. (“Stati parties”)1 have brought this action to enforce an international arbitration award against 

the respondent, the Republic of Kazakhstan (“Kazakhstan”), in the United States. The matter is 

fully briefed and ripe for decision, but before the Court can turn to the merits of the dispute, it must 

address respondent’s motion for reconsideration of the Court’s May 11, 2016, Order denying 

respondent’s motion for leave to submit additional defense grounds in opposition to the motion to 

confirm the arbitral award. For the reasons that follow, the Court will deny respondent’s motion 

and it will confirm the award.2 

 

1 Anatolie Stati is the father of Gabriel Stati. Both are citizens of Moldova and Romania. 

ASCOM Group S.A. is a joint stock company incorporated and located in Moldova and owned 

entirely by Anatolie Stati. Terra Raf Trans Traiding Ltd. is a limited liability company 

incorporated and located in Gibraltar and owned in equal shares by Anatolie Stati and Gabriel 

Stati. Pet. to Confirm Arbitral Award (“Pet.”) [Dkt. # 1] ¶¶ 2–5. 

2 In its prior Memorandum Opinion, the Court found that it has subject matter jurisdiction 

over this action under the Federal Arbitration Act and the Foreign Sovereign Immunities Act. See

Stati v. Republic of Kazakhstan, 199 F. Supp. 3d 179, 181 (D.D.C. 2016).
2

BACKGROUND

A. Factual Background 

Petitioners have been involved in the oil and gas business in Kazakhstan for approximately 

17 years. Between 1999 and 2000, petitioners purchased controlling shares in two Kazakh 

companies, Kazpolmunay LLP (“KPM”) and Tolkynneftagaz LLP (“TNG”). Pet. ¶¶ 28–30. The

companies owned the subsoil use rights to the Borankol oil field, the Tolkyn gas field, and the 

Tabyl exploration block in Kazakhstan. Id. ¶¶ 29–30. Petitioners eventually came to own 100% 

of KPM and TNG, and in 2000, those companies obtained approval from Kazakhstan to explore 

and develop various oil and gas fields located in the country. Id. ¶ 31; Arb. Award [Dkt. # 2-1, 2-

2, 2-3, 2-4] (“Award”) ¶ 229. A year later, in 2001, petitioners, through KPM and TNG, invested 

more than one billion dollars in the development of the Borankol and Tolkyn fields, and the Tabyl 

Block. Pet. ¶ 32.

In 2008, Kazakhstan began a government investigation of Anatolie Stati and his 

companies, including his compliance with export tax laws. Award ¶¶ 296–99. Petitioners and 

respondent disagree on what followed. According to petitioners, the government of Kazakhstan 

began to intimidate and harass petitioners into selling their investments to the state-owned

company KazMunaiGas at a substantial discount. Pet. ¶ 33. Specifically, petitioners claim that 

Kazakhstan “baselessly” accused petitioners of fraud and forgery, levied more than $70 million 

dollars in back taxes, arrested KPM’s general manager for “illegal entrepreneurial activity,” and 

ultimately seized all of KPM and TNG’s assets. Id. And on July 21, 2010, Kazakhstan terminated 

petitioners’ subsoil use contracts. Award ¶ 611.

Kazakhstan’s version of events is that the Kazakh Tax and Customs Committee properly 

assessed $62 million dollars in taxes to petitioners, and that a lawful criminal investigation by the 

Kazakh authorities led to the arrest and imprisonment of KPM’s General Director. Award ¶¶ 394, 
3

430, 440, 492. Respondent maintains that it was the investigation that led to the termination of 

KPM and TNG’s subsoil use contracts on July 21, 2010, and it disputes the claim that Kazakhstan 

expropriated petitioners’ assets. Id. ¶¶ 591–611. Instead, respondent takes the position that the 

Kazakh state oil company and its subsidiary placed petitioners’ oil and gas fields into trust 

management on a temporary basis only. Id. ¶ 611.

B. Procedural Background

On July 26, 2010, petitioners filed a Request for Arbitration with the Stockholm Chamber 

of Commerce (“SCC”) in Sweden. Req. for Arb., Ex. C. to Decl. of Charlene C. Sun [Dkt. # 2-6] 

(“Req. for Arb.”). The request states:

Over the past two years, Kazakhstan has engaged in a campaign of 

harassment and illegal acts against [petitioners] that culminated on 

July 21, 2010 with the State’s notice of unilateral termination of the 

companies’ Subsoil Use Contracts, the illegal expropriation of [petitioners’] 

Kazakh investments, and the subsequent commandeering of [petitioners’] 

offices by personnel of State-owned KazMunaiGas and the Kazakh 

Ministry of Oil and Gas.

Id. ¶ 4. Petitioners further alleged that Kazakhstan’s harassment “clearly had expropriation as its 

ultimate goal, and it had the effect in the process of destroying both the market value and 

alienability of [petitioners’] investments.” Id. ¶¶ 4, 8. The request invoked the Energy Charter 

Treaty (“ECT”), an international agreement signed by the respondent, which allows investors to 

submit disputes to the SCC for arbitration. Energy Charter Treaty, art. 26(4)(c), Dec. 17, 1994, 

2080 U.N.T.S. 95, 121–22. Accordingly, the arbitral proceedings were governed by the SCC’s 

Arbitration Rules. Pet. ¶ 22.

On December 19, 2013, the SCC tribunal issued an award in favor of petitioners and against 

respondent. Pet. ¶ 27. The tribunal determined that Kazakhstan breached its obligation to provide 

fair and equitable treatment under Article 10(1) of the ECT. Award ¶¶ 1085–95. It awarded 
4

petitioners $497,685,101 for the alleged expropriation of petitioners’ assets in Kazakhstan. 

Id. ¶ 1859. This total included $277.8 million for the Borankol and Tolkyn oil and gas fields, 

$31.3 million for the subsoil use contracts, $199 million for an unfinished liquefied petroleum gas 

plant (“LPG plant”), and $8,975,496.40 in legal costs. Id. ¶¶ 1856–61, 1885.3

On September 30, 2014, petitioners asked this Court to confirm the arbitral award in the 

United States pursuant to the Federal Arbitration Act (“FAA”), 9 U.S.C. § 201 et seq., which 

codifies the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral 

Awards, June 10, 1958, 330 U.N.T.S. 38, commonly known as the “New York Convention.” 

Pet. ¶ 1. The Stati parties sought to enforce the foreign arbitral award here on the grounds that 

Kazakhstan maintains assets in the United States. Id. ¶ 46. Respondent opposed the petition to 

confirm based on five grounds under the New York Convention, focusing primarily on the SCC’s

appointment of respondent’s arbitrator and its alleged failure to enforce the requirement that there 

be a three-month settlement period prior to the initiation of an arbitration. Resp’t’s Opp. to Pet. 

[Dkt. # 20] (“Resp’t’s Opp.”). Petitioners filed a reply, Pet’rs’ Reply Mem. in Supp. of Pet. [Dkt. 

# 24] (“Pet’rs’ Reply”), and the Court granted respondent leave to file a sur-reply. Resp’t’s SurReply in Supp. of Resp’t’s Opp. [Dkt. # 28] (“Resp’t’s Sur-Reply”). By May 26, 2015, the parties 

had completed briefing on the merits. 

1. Respondent’s motion for leave to include additional defense grounds. 

According to respondent, in June of 2015, it became aware of “new evidence” that 

petitioners had “obtained the [arbitral] [a]ward through fraud.” Resp’t’s Mot. for Leave to Submit

 

3 In the Petition to Confirm the Award, petitioners assert that respondent must pay them 

“$506,660,597.40 plus (a) compound prejudgment interest as set forth in the Award from April 9, 

2009 to the date that judgment is entered herein, and (b) post-judgment interest from the date that 

judgment is entered to the date of satisfaction.” Pet. ¶ 48. 
5

Additional Grounds in Supp. of Opp. to Pet. [Dkt. # 32] (“Initial Mot.”) at 4, 6. Respondent waited 

till April 5, 2016, though – nearly a year after learning about the alleged fraud and completing the 

merits briefing in this case – to file a motion seeking leave to submit additional defenses to 

enforcement of the arbitral award. Id. at 1, 4.

In that motion, respondent argued that petitioners procured the award through fraud by 

submitting “false testimony and evidence to the SCC Arbitration tribunal” that “materially 

misrepresented the LPG Plant construction costs for which they claimed reimbursement in the 

[arbitration].” Id. at 4. Respondent contended that the newly discovered fraud afforded it two 

additional defenses under Article V(2)(b) and Article V(1)(b) of the New York Convention. Id. at 

4–6. Under Article V(2)(b) the Court could refuse recognition of the award because enforcement 

of a fraudulently obtained arbitral award would be contrary to United States public policy. Id. at 

4–5. And respondent also asserted that “the intentional giving of false evidence” during the 

arbitration “denied [respondent] the opportunity to present its case,” thus rendering the arbitral 

award unenforceable under Article V(1)(b) of the New York Convention. Id. at 5–6. 

In the absence of an applicable rule setting forth the standard to be applied to respondent’s

motion, the Court considered whether justice required permitting respondent to “add new grounds 

to its opposition to the petition to confirm the award, more than a year after the original opposition 

was filed.” Order (May 11, 2016) [Dkt. # 36] at 2–3 (“Order”). The Court reviewed the SCC 

arbitration award and denied the motion, reasoning that “it [would] not be in the interest of justice 

to conduct a mini-trial on the issue of fraud here when the arbitrators expressly disavowed any 

reliance on the allegedly fraudulent material.” Id. at 4. In other words, the evidence respondent 

sought to discredit was not material to the decision. 
6

The Court derived this conclusion based on its own detailed review of the award, which 

stated in relevant part:

Regarding the value of damages caused by Respondent’s action, the 

Tribunal has taken note of the various extensive arguments submitted by the 

Parties relying on their respective experts’ reports. However, the Tribunal 

considers that it does not have to evaluate these reports and the very 

different results they reach. In the view of the Tribunal, the relatively best 

source for the valuation . . . are the contemporaneous bids that were made 

for the LPG Plant by third parties after Claimants’ efforts to sell the LPG 

Plant . . . . 

Award ¶ 1746. The panel concluded:

[T]he Tribunal considers it to be of particular relevance that an offer was 

made for the LPG Plant by state-owned KMG at that time for USD 199 

million. The Tribunal considers that to be the relatively best source of 

information for the valuation of the LPG Plant among the various sources 

of information submitted by the Parties regarding the valuation for the LPG 

Plant during the relevant period . . . . Therefore, this is the amount of 

damages the Tribunal accepts in this context.

Id. ¶¶ 1747–48. 

Kazakhstan then filed the instant motion for reconsideration, Resp’t’s Mot. for Recons. of 

May 11, 2016, Order [Dkt. # 37] (“Mot. for Recons.”), and petitioners opposed the motion. Pet’rs’

Mem. of P. & A. in Opp. to Resp’t’s Mot. for Recons. [Dkt. # 38] (“Pet’rs’ Opp.”). Petitioners 

pointed out that Kazakhstan “has the opportunity to litigate the very same fraud allegations in the 

courts of Sweden, which is the seat of the arbitration and primary jurisdiction in this case.” Id. at 

5. Respondent confirmed that the parties were litigating the fraud issue in Sweden, where it was 

seeking to vacate the award, but it argued that the Swedish proceeding should not affect the Court’s 

review of the petition to confirm, or the motion for reconsideration. See Reply in Supp. of Mot. 

for Recons. [Dkt. # 39] at 3–5.
7

2. The Swedish proceedings to vacate the arbitral award.

In light of the pendency of the Swedish proceedings to vacate the award, this Court

exercised its discretion to stay this case pending the resolution of the proceedings before the Svea 

Court of Appeal in Sweden, noting that they “could have a dramatic impact on the petition to 

confirm the arbitration award.” Stati, 199 F. Supp. 3d at 193. It observed that if “respondent [was] 

successful in the set-aside proceeding [in Sweden], confirmation of the award [would] be unlikely” 

in the United States. Id., citing New York Convention, art. V(1)(e) (providing that enforcement 

of an award may be refused when the “award . . . has been set aside . . . by a competent authority 

of the country in which, or under the law of which, that award was made”). In that same ruling, 

the Court found that it had subject matter jurisdiction over the dispute under the FAA and the 

Foreign Sovereign Immunities Act. Id. at 184–190.

 On December 9, 2016, the Svea Court of Appeal issued its decision upholding the Award 

and rejecting Kazakhstan’s arguments, including the argument that the Award should be vacated 

in light of the alleged fraud. Svea Court of Appeal J., Exs. 1–3 to Joint Report (Dec. 30, 2016)

[Dkt. # 45-1, 45-2, 45-3] § 5.3.1 (“Svea Court of Appeal Opinion”). Kazakhstan presented at least 

two theories of fraud before the Svea Court of Appeal. First, it argued, much as it had before this 

Court, that the Stati parties had submitted false evidence on the value of the LPG plant in the form 

of sworn testimony and expert reports during the arbitration. Id. § 3.1.2.1. Second, respondent 

argued that the award was tainted by fraud that took place prior to the start of the arbitration. Id. 

It alleged that representatives for the Stati parties presented financial statements that falsely 

inflated the amounts invested in the LPG plant to a third-party company, KMG, and that KMG 

was fraudulently induced into bidding $199 million for the LPG plant. Id. According to 
8

respondent, since it was the KMG bid that was used by the tribunal to value the LPG plant, the 

arbitral award was procured by fraud. Id. 

Following a review of the full record, the Svea Court of Appeal rejected all of Kazakhstan’s

contentions. First, it concluded that “[s]ince the arbitral tribunal based its assessment [of the LPG 

plant] on the indicative bid” and not the allegedly false “witness testimony, witness affidavits, and 

expert reports” submitted by the Stati parties during the arbitration, this evidence did not have 

“immediate importance for the outcome.” Svea Court of Appeal J., Ex. 3 to Joint Report (Dec. 30, 

2016) [Dkt. # 45-3] at 45.

4

 The Svea Court of Appeal recited the legal principle that “there can be 

no question of declaring an arbitral award invalid solely on the ground that false evidence or untrue 

testimony has occurred, when it is not clear that such have been directly decisive for the outcome.” 

Id. Since “even if [the evidence] were proven to be false,” it would not have changed the outcome 

of the arbitration, the court deemed it insufficient to invalidate the award. Id. 

Second, the Svea Court of Appeal concluded that because the KMG indicative bid was 

made “prior to the initiation of the arbitration,” the bid did not constitute “per se” false evidence, 

even if “possibly incorrect information regarding the amount invested in the LPG plant was among 

the factors that KMG took into account when calculating the size of its offer.” Id. at 46. It 

concluded that the allegedly false financial statements “did not directly constitute any basis for the 

arbitral tribunal’s assessment of the value of the LPG plant.” Id. In other words, any alleged 

 

4 In its August 5, 2016 Memorandum Opinion and Order, the Court directed the parties to 

file an English translation of the Svea Court of Appeal decision when it issued. Stati, 199 F. Supp. 

3d at 193. Instead of submitting a single version, each of the parties submitted their own separate 

versions and averred that an agreed-upon translation of the entire decision would be “involved and 

likely controversial” and ultimately “unnecessary.” Joint Status Report [Dkt. # 46] at 16–17. The 

Court has reviewed the sections it has referenced in its opinion and finds that they are not 

inconsistent. Compare petitioners’ translation, Ex. 2 to Joint Status Report (Dec. 30, 2016) 

[Dkt. # 45-2] at 40–42, and respondent’s translation, Ex. 3 Joint Status Report (Dec. 30, 2016) 

[Dkt. # 45-3] at 44–46. 
9

dishonesty in business transactions that preceded the arbitration proceedings did not constitute a 

fraud on the tribunal and was too remote to warrant annulment of the award. 

Kazakhstan then challenged the decision in the Swedish Supreme Court, arguing that the 

Svea Court of Appeal committed “grave procedural error” when it issued its decision. Ex. B. to 

Decl. of Alexander Foerster [Dkt. # 46-2] ¶ 3. This Court continued its stay pending the resolution

of that proceeding, Min. Order (Apr. 3, 2017); Min. Order (Aug. 15, 2017), and petitioners moved 

to lift the stay on September 29, 2017. Pet’rs’ Mot. to Lift Stay [Dkt. # 60]. Before this Court 

ruled on that motion, the Swedish Supreme Court ruled in favor of the Stati parties on October 24, 

2017. Pet’rs’ Suppl. Status Report Concerning Status of Proceedings in Sweden [Dkt. # 64]. This 

marked the end of Kazakhstan’s efforts to set aside the arbitral award in the jurisdiction with the 

sole authority to vacate the arbitral award. 

Since the Swedish award was now final and binding, the Court granted petitioners’ motion 

to lift the stay on November 6, 2017, and it invited the parties to file supplemental briefs discussing 

what impact, if any, the decisions by the Swedish authorities should have on the resolution of 

Kazakhstan’s pending motion for reconsideration of the Court’s May 11, 2016, Order denying

respondent’s request to introduce additional defense grounds based upon its fraud allegations. 

Min. Order (Nov. 6, 2017). 

Kazakhstan argued that the decisions by the Svea Court of Appeal and the Swedish 

Supreme Court based on Swedish law should have no impact on the issue presented in its motion 

for reconsideration because “neither of these decisions made factual findings regarding the merits 

of Kazakhstan’s fraud allegations, nor did they apply the New York Convention,” as this Court is 

required to do. Kazakhstan’s Resp. to Nov. 6, 2017, Min. Order [Dkt. # 65] (“Resp’t’s Resp. to 

Nov. 6 Min. Order”). Meanwhile, petitioners emphasized that respondent presented its “fraud case 
10

in full” to the Svea Court of Appeal, the seat of the arbitral award, which concluded “[t]hat the 

Award was not the product of fraud,” and its ruling was left undisturbed by the Swedish Supreme 

Court. Pet’rs’ Suppl. Submission in Opp. to Mot. for Recons. [Dkt. # 66] at 1–2. Petitioners also 

argued that the Court should deny respondent’s motion based on the principles of preclusion and 

comity, id. at 3–10, and respondent argued in a sur-reply that the principles of preclusion and 

comity are inapplicable. Kazakhstan’s Resp. to Pet’rs’ Suppl. Submission in Opp. to Mot. for 

Recons. [Dkt. # 68] at 25. 

I. THE MOTION FOR RECONSIDERATION

STANDARD OF REVIEW

The Court evaluates respondent’s motion for reconsideration under Rule 54(b) of the 

Federal Rules of Civil Procedure, which governs reconsideration of non-final decisions. The rule 

states that “any order . . . that adjudicates fewer than all the claims or the rights and liabilities of

fewer than all the parties . . . may be revised at any time before the entry of a judgment adjudicating 

all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P. 54(b). The Court may 

grant relief under Rule 54(b) “as justice requires.” Capitol Sprinkler Inspection, Inc. v. Guest 

Servs., Inc., 630 F.3d 217, 227 (D.C. Cir. 2011) (internal citations omitted); see also Parker v. 

John Moriarty & Assocs., 221 F. Supp. 3d 1, 2 (D.D.C. 2016). While this standard “affords 

considerable discretion to the district courts,” Bldg. Indus. Ass’n of Superior Cal. v. Babbitt, 161 

F.3d 740, 743 (D.C. Cir. 1998), it is limited by the principle that once the parties have “battled for 

the court’s decision, they should neither be required, nor without good reason permitted, to battle 

for it again.” Wannall v. Honeywell Int’l, Inc., 292 F.R.D. 26, 30–31 (D.D.C. 2013), quoting Elec.

Privacy Info. Ctr. v. U.S. Dep’t of Homeland Sec., 811 F. Supp. 2d 216, 224 (D.D.C. 2011). “In 

this Circuit, it is well-established that ‘motions for reconsideration,’ whatever their procedural 
11

basis, cannot be used as ‘an opportunity to reargue facts and theories upon which a court has 

already ruled, nor as a vehicle for presenting theories or arguments that could have been advanced 

earlier.’” Loumiet v. United States, 65 F. Supp. 3d 19, 24 (D.D.C. 2014), quoting Estate of Gaither 

ex rel. Gaither v. Dist. of Columbia, 771 F. Supp. 2d 5, 10 (D.D.C. 2011).

The “as justice requires” standard under Rule 54(b) involves concrete considerations of 

whether the court “has patently misunderstood a party, has made a decision outside the adversarial 

issues presented to the [c]ourt by the parties, has made an error not of reasoning, but of 

apprehension, or where a controlling or significant change in the law or facts [has occurred] since 

the submission of the issue to the [c]ourt.” Cobell v. Norton, 224 F.R.D. 266, 272 (D.D.C. 2004)

(internal citations omitted). Other courts in this district have read the standard to require that the 

court grant a motion for reconsideration “only when the movant demonstrates: (1) an intervening 

change in the law; (2) the discovery of new evidence not previously available; or (3) a clear error 

in the first order.” Stewart v. Panetta, 826 F. Supp. 2d 176, 177 (D.D.C. 2011), quoting Zeigler v. 

Potter, 555 F. Supp. 2d 126, 129 (D.D.C. 2008).

Here, respondent does not point to a change in the law. Nor does it argue that it discovered 

new evidence after it had already filed its motion. It simply repeats arguments made 

unsuccessfully before and couples them with arguments it chose not to raise at that time, and it 

suggests that the Court’s ruling was erroneous. But none of the reasons advanced at this time 

requires a change in the outcome. 

ANALYSIS

Respondent argues first that the Court’s conclusion that the “arbitrators did not rely upon” 

the alleged fraud is “factually incorrect.” Mot. for Recons. at 1. Second, it maintains that the 

Court applied the wrong legal standard when it interpreted respondent’s public policy defense 
12

under Article V(2)(b) of the New York Convention. Id. at 10–11. And third, it contends that the 

May 11, 2016, Order failed to consider its alternate defense under Article V(1)(b) of the New York 

Convention. Id. at 11–12.

A. The Court did not err as a matter of fact. 

The Court did not err as a matter of fact in its May 11, 2016, Order for the simple reason 

that respondent did not present the facts it now seeks to introduce in its motion for reconsideration. 

And because respondent does not claim that these facts were not available to it at the time it filed 

its initial motion to include additional defenses, they are improperly raised now. Furthermore, the 

Court did not err in evaluating the facts that were before it when respondent filed its initial motion, 

and accordingly reconsideration on this ground is denied. 

In its initial motion to include additional defenses, respondent alleged that petitioners and 

their representatives had submitted false sworn testimony and expert reports “during the SCC 

Arbitration” that “fraudulently and materially misrepresented the LPG Plant construction costs for 

which they claimed reimbursement.” Initial Mot. at 3, 4. In other words, respondent accused 

petitioners of defrauding the tribunal directly. The Court found that since the arbitrators expressly 

disavowed reliance on either parties’ valuations in determining the amount of the damages, the 

alleged fraud had no effect on the outcome of the arbitration. See Order at 3–4, citing 

Award ¶¶ 1746–48. 

Kazakhstan attempts to discredit the Court’s finding by positing, without support, that the 

Court simply “relied on the Stati party’s representations in their Opposition Brief” when it reached 

its conclusion. Resp’t’s Resp. to Nov. 6 Min. Order at 4; Mot. for Recons. at 3. Since the Court’s 

ruling was expressly based upon the language in the arbitral award, this hypothesis does not 
13

warrant serious consideration, much less a revision of the terms of the Order. So the Court did not 

err as a matter of fact in this regard.

5

In its motion for reconsideration, respondent now claims that the indicative bid the 

arbitrators did select as a measure of the value the LPG plant – the “KMG bid” – was itself the 

product of fraud. Mot. for Recons. at 3, 9–10. Kazakhstan alleges that prior to the start of the 

arbitration, representatives for the Stati parties presented KMG with false financial statements that 

inflated the value of the plant and fraudulently induced KMG to offer $199 million for the plant. 

Id. at 9. Since the bid was tainted by fraud, respondent argues that the fee award predicated on the 

amount of the bid was procured by fraud. Id. at 10. 6

The problem is that none of these facts were presented to the Court in respondent’s initial 

motion to include additional defenses. Indeed, there was not a single reference to “KMG” or the 

facts supposedly suggesting fraudulent inducement. So the Court did not err in failing to grant 

relief on this basis. 

Respondent attempts to minimize its omission by characterizing these facts as mere 

“details” it planned to brief once it was granted leave by the Court. Mot. for Recons. at 1 n. 3. But 

it is apparent that these facts go to the very heart of respondent’s current defense and that they 

support an entirely separate theory of fraud that respondent did not seek leave to introduce. Since 

respondent is not claiming that the evidence of KMG’s fraudulent inducement was not available 

to it at the time it filed its initial motion, but rather that it simply elected not to raise it, the Court 

finds that those facts are improperly raised now. A motion for reconsideration is not “an 

 

5 Indeed, the Svea Court of Appeal arrived at the same conclusion when it was presented 

with the same fraud theory. Svea Court of Appeal Opinion § 5.3.1.

6 The Svea Court of Appeal rejected respondent’s attempt to invalidate the award on this 

basis as well. Svea Court of Appeal Opinion § 5.3.1.
14

opportunity to reargue facts and theories upon which a court has already ruled, nor as a vehicle for 

presenting theories or arguments that could have been advanced earlier.” Estate of Gaither ex rel. 

Gaither, 771 F. Supp. 2d at 10, quoting Secs. & Exch. Comm’n, 729 F. Supp. 2d at 14 (D.D.C.

2010). 

Accordingly, the Court did not commit an error of fact, and it denies reconsideration based 

on this ground. 

B. The Court did not err as a matter of law. 

Respondent argues in the alternative that the Court’s conclusion that the alleged fraud was 

not “germane to the petition to confirm” because “the arbitrators did not rely upon the allegedly 

fraudulent evidence” is incorrect as a matter of law. Mot. for Recons. at 10. Respondent objects 

to what it characterizes as the Court’s “outcome-determinative” approach; it argues that when 

considering a public policy defense under Article V(2)(b) of the New York Convention, evidence 

of fraud is “germane . . . whether or not the arbitral tribunal relied on the fraud,” Mot. for Recons. 

10–11, and “the submission of false evidence, in itself, constitutes a basis for non-recognition” of 

the arbitral award. Resp’t’s Resp. to Nov. 6 Min. Order at 6. Respondent mischaracterizes both 

the Court’s ruling and the applicable legal standard. 

In determining whether to enforce a foreign arbitral award in the United States, the Court 

must follow the FAA which codifies the New York Convention. The “Convention authorizes the 

recipient of a foreign arbitral award to seek confirmation and enforcement of the award in federal 

court.” In Re Arbitration of Certain Controversies Between Getma Int’l & Republic of Guinea, 

191 F. Supp. 3d 43, 48–49 (D.D.C. 2016), aff’d sub nom. Getma Int’l v. Republic of Guinea, 862 

F.3d 45 (D.C. Cir. 2017), citing 9 U.S.C. §§ 202, 207. Under the FAA, courts “may refuse to 

enforce the award only on the grounds explicitly set forth in Article V of the Convention.” 
15

TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 935 (D.C. Cir. 2007), quoting Yusuf Ahmed 

Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2d Cir. 1997).

Under Article V(2)(b) of the New York Convention, a court may refuse to enforce a foreign

arbitral award if it “would be contrary to the public policy” of the country where enforcement is 

sought. Belize Bank Ltd. v. Gov’t of Belize, 852 F.3d 1107, 1110–11 (D.C. Cir.), cert. denied, 138 

S. Ct. 448 (2017), quoting New York Convention art. V(2)(b). The D.C. Circuit has recognized 

that an arbitral award obtained through fraud would be contrary to U.S. public policy under Article 

V(2)(b) of the New York Convention. Enron Nigeria Power Holding, Ltd. v. Fed. Republic of 

Nigeria, 844 F.3d 281, 287 (D.C. Cir. 2016). However, the public policy defense is “construed 

narrowly,” and it requires a respondent to meet the “heavy burden” of proving that the arbitral 

award “tends clearly to undermine the public interest, the public confidence in the administration 

of the law, or security for individual rights of personal liberty or of private property.” Id., at 289, 

quoting TermoRio S.A. E.S.P., 487 F.3d at 938. The evidence proffered in support of the motion 

for reconsideration does not rise to that standard. 

When determining whether an arbitration award is so tainted by fraud that its recognition 

would violate U.S. public policy under Article V(2)(b) of the New York Convention, courts have

applied the three-prong test used to determine whether an award should be vacated as fraudulently 

obtained under Section 10(a) of the FAA.

7 Under this test:

(1) the movant must establish the fraud by clear and convincing evidence; 

(2) the fraud must not have been discoverable upon the exercise of due 

diligence before or during the arbitration; and (3) the person challenging the 

award must show that the fraud materially related to an issue in the 

arbitration. 

 

7 Under 9 U.S.C. § 10(a)(1), courts may vacate an arbitral award where “the award was 

procured by corruption, fraud, or undue means.”
16

Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 

306 (5th Cir. 2004), citing Bonar v. Dean Witter Reynolds, Inc., 835 F.2d 1378, 1383 (11th 

Cir.1988) (collecting cases applying the three-prong test under Section 10(a) of the FAA). 

Respondent complains that this Court placed undue emphasis on whether the fraud affected 

the outcome when it applied this test, and it states that “federal courts of appeals have held that . . . 

‘it is not necessary to establish that the result of the arbitration would have been different if the 

fraud had not occurred.’” Mot. for Recons. at 10, quoting Karaha Bodas Co., 364 F.3d. at 306–

07.8 But a review of the Court’s Order reveals that it did not articulate or apply the standard recited 

by respondent, and that the holding was consistent with the well-established principle that a party 

seeking to resist enforcement of an award on the basis of fraud must demonstrate a connection 

between the alleged fraud and the decision. 

Although the D.C. Circuit has not clearly articulated the materiality standard necessary to 

vacate or deny enforcement of an arbitral award due to fraud, the nexus requirement has been 

widely recognized in the appellate courts, including in the cases cited by respondent. See Odeon 

Capital Grp. LLC, 864 F.3d at 196 (“petitioner must demonstrate a nexus between the alleged 

fraud and the decision made by the arbitrators”); Envtl. Barrier Co., LLC, 540 F.3d at 608 (“[the 

court] must find a nexus between the purported fraud and the arbitrator’s final decision”); Forsythe 

 

8 While some courts have used that language, see, e.g., Odeon Capital Grp. LLC v. 

Ackerman, 864 F.3d 191, 196 (2d Cir. 2017) (“For fraud to be material . . . petitioner must 

demonstrate a nexus between the alleged fraud and the decision made by the arbitrators, although 

petitioner need not demonstrate that the arbitrators would have reached a different result.”); Bonar, 

835 F.2d at 1383 (holding that the legal standard “does not require the movant to establish that the 

result of the proceedings would have been different had the fraud not occurred”), at least one circuit 

has questioned its logic. Envtl. Barrier Co., LLC v. Slurry Sys., Inc., 540 F.3d 598, 608 (7th Cir. 

2008) (expressing skepticism over the “odd proposition that something might be material to an 

issue in an arbitration, but immaterial to the outcome”). 
17

Int’l, S.A. v. Gibbs Oil Co. of Tex., 915 F.2d 1017, 1022 (5th Cir. 1990) (“requiring a nexus 

between the alleged fraud and the basis for the panel’s decision”). 

Courts in this district have consistently looked for proof of a nexus as well. As one court 

on this district summarized: 

Courts in this District have . . . demanded proof that the misconduct or fraud 

had some bearing on the arbitrator's final decision. See Owen–Williams v.

BB & T Inv. Servs., Inc., 717 F. Supp. 2d at 17–18 (D.D.C. 2010) (finding 

that even if party had made fraudulent misrepresentations in order to secure 

delay in arbitral proceedings, no proof that this changed outcome of 

arbitration and so conduct was immaterial); Pigford v. Johanns, 421 F. 

Supp. 2d 130, 135 (D.D.C. 2006) (unethical misrepresentation as to 

counsel’s bar status not enough to satisfy nexus requirement because no 

showing that it led to different result); Bryson v. Gere, 268 F. Supp. 2d 46, 

50 (D.D.C. 2003) (movant must prove that substantial misconduct actually 

prejudiced outcome of arbitration).

ARMA, S.R.O. v. BAE Sys. Overseas, Inc., 961 F. Supp. 2d 245, 255 (D.D.C. 2013). 

So, even applying the case law identified by respondent, which recites the broadly 

recognized principle that a party seeking to invalidate an award based on fraud must be able to 

point to at least some connection between the complained-of fraud and the decision, the Court did 

not err in its initial ruling. 

C. Respondent’s alternate argument does not support reconsideration. 

Respondent complains that the Court’s May 11, 2016, Order “did not address Kazakhstan’s 

alternate argument” that respondent was “denied the opportunity to present its case” before the 

arbitral panel because it had to “respon[d] to fraudulent evidence,” and that this constitutes an 

independent ground on which to deny enforcement of the arbitral award under Article V(1)(b) of 

the New York Convention. Mot. for Recons. 11–12. While the Court’s Order did not expressly 

address respondent’s alternate argument under Art. V(1)(b) of the Convention, its conclusion that 

the evidence of alleged fraud that respondent sought to introduce was immaterial, disposed of this
18

alternate argument, and thus, reconsideration on this ground is also unwarranted. Moreover, the 

arbitrators’ decision reflects that respondent presented expert valuations of its own, and that it had 

a full and fair opportunity to present its case to the tribunal. 

D. Reconsideration is not required by justice.

In the end, respondent has not established that reconsideration of the Court’s May 11, 2016,

Order is “required by justice” under Federal Rule of Civil Procedure 54(b). Capitol Sprinkler 

Inspection, Inc., 630 F.3d at 227. This is particularly true since Kazakhstan does not deny that it 

had an opportunity to litigate the very issues it belatedly seeks to raise here in the jurisdiction 

where the arbitration took place. While the Court acknowledges that the legal standards to be 

applied in each situation are different, the fact that the Svea Court of Appeal heard and rejected 

respondent’s fraud claims, and that its ruling was upheld by the Swedish Supreme Court, lends 

force to this Court’s view that it would not be contrary to the public policy of the United States, 

and it would not violate this country’s “most basic notions of morality and justice,” see Belize 

Bank Ltd., 852 F.3d at 1111, to let the Court’s May 11, 2016, Order stand and decline to hear the 

evidence again in the limited context of this enforcement proceeding. In other words, there is a 

difference between enforcing an award that is alleged to be tainted by fraud that has never been 

addressed and enforcing an award after the jurisdiction that issued it has heard and rejected the 

allegations. As noted earlier, the public policy defense is “construed narrowly” Enron Nigeria 

Power Holding, Ltd., 844 F.3d at 289, and this heavy burden exists precisely because the public 

policy exception is not an invitation to re-try valid, final arbitral awards. 

In sum, “[t]he Supreme Court has recognized an ‘emphatic federal policy in favor of 

arbitral dispute resolution.’” TermoRio S.A. E.S.P., 487 F.3d at 933, quoting Mitsubishi Motors 

Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985). And since the United States 
19

became a signatory of the New York Convention in 1970, “that federal policy applies with special

force in the field of international commerce.” Id., quoting Mitsubishi Motors Corp., 473 U.S. at 

631. This framework militates against re-examining the award and conducting a “mini-trial” on a 

substantive issue in the arbitration, especially in the context of a motion for reconsideration of a 

prior ruling of this Court. 

II. THE PETITION TO CONFIRM THE ARBITRAL AWARD

STANDARD OF REVIEW

Under the FAA, a district court “shall confirm the [arbitral] award unless it finds one of 

the grounds for refusal or deferral of recognition or enforcement of the award specified in the [New 

York] Convention.” 9 U.S.C. § 207. “Consistent with the ‘emphatic federal policy in favor of 

arbitral dispute resolution’ recognized by the Supreme Court . . . the FAA affords the district court 

little discretion in refusing or deferring enforcement of foreign arbitral awards.” Belize Soc. Dev. 

Ltd. v. Gov’t of Belize, 668 F.3d 724, 727 (D.C. Cir. 2012), quoting Mitsubishi Motors Corp., 473 

U.S. at 631. As noted earlier, courts “may refuse to enforce the award only on the grounds 

explicitly set forth in Article V of the Convention.” TermoRio S.A. E.S.P., 487 F.3d at 935, quoting 

Yusuf Ahmed Alghanim & Sons, 126 F.3d at 23; see also Int’l Trading & Indus. Inv. Co. v. DynCorp 

Aerospace Tech., 763 F. Supp. 2d 12, 19 (D.D.C. 2011) (collecting cases). 

Because “the New York Convention provides only several narrow circumstances when a 

court may deny confirmation of an arbitral award, confirmation proceedings are generally 

summary in nature.” Int’l Trading, 763 F. Supp. 2d at 20, citing Zeiler v. Deitsch, 500 F.3d 157, 

167 (2d Cir. 2007). The party resisting confirmation bears the heavy burden of establishing that 

one of the grounds for denying confirmation in Article V applies. See New York Convention, art. 

V; Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F.2d 334, 336 (5th Cir. 1976); see also 
20

Ottley v. Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987) (“[T]he showing required to avoid 

summary confirmation is high.”).

The New York Convention provides seven exemptions to recognition and enforcement of 

an arbitral award. New York Convention, art. V(1)–(2). Respondent contends that the arbitration 

agreement is unenforceable under four of them: Article V sections 1(a), (b), (d), and 2(b).

ANALYSIS

A. Article V(1)(a) of the New York Convention is inapplicable.

Respondent argues first that the arbitral award is unenforceable under Article V(1)(a) of 

the New York Convention because petitioners failed to comply with a requirement in the Energy 

Charter Treaty that there be a three-month settlement period prior to the initiation of the arbitration. 

Resp’t’s Opp. at 27–35. 

Under Article V(1)(a) of the New York Convention, an award may be refused if the 

“agreement is not valid under the law to which the parties have subjected it or, failing any 

indication thereon, under the law of the country where the award was made.” New York 

Convention, art. V(1)(a). 

The ECT, to which Kazakhstan is a signatory, provides that if a dispute cannot be solved 

“within a period of three months from the date on which either party to the dispute requested 

amicable settlement, the Investor party to the dispute may choose to submit it for resolution” before 

an international arbitration. ECT, art. 26(2)–(3)(a). This provision is referred to by the parties as 

the “cooling-off period.” Respondent claims that this requirement was a jurisdictional prerequisite 

to the tribunal’s authority. Resp’t’s Opp. at 28. It asserts that the SCC’s failure to enforce the 

cooling-off period prior to the arbitration means that Kazakhstan “made no valid offer to 
21

[p]etitioners to arbitrate and certainly did not consent to arbitrate” even though Kazakhstan 

participated in the arbitration for nearly three years. Id. at 27. 

The Court’s prior Memorandum Opinion concerning its subject matter jurisdiction in this 

case addressed the arguments brought by respondent under this defense. Stati, 199 F. Supp. 3d at 

184–90. Based on the language of the ECT, the Court concluded that Kazakhstan gave its 

unconditional consent to arbitrate subject only to two exceptions that do not relate to the coolingoff period. The Court reasoned: 

While it does appear that the contractual requirement to attempt to come to 

a negotiated resolution is mandatory [under the ECT], that provision does 

not serve as a condition precedent to the contracting parties’ consent to 

international arbitration. Article 26(3)(a) of the ECT specifies: 

“[s]ubject only to subparagraphs (b) and (c), each Contracting Party hereby 

gives its unconditional consent to the submission of a dispute to 

international arbitration or conciliation in accordance with the provisions of 

this Article.” Id. at 29-30, art. 26(3)(a) (emphasis added). Although 

respondent is correct that article 26(3) requires arbitration to proceed in 

accordance with article 26’s provisions, including the three-month 

settlement period, the international arbitration provision does not act as a 

condition precedent to a party’s consent, which is “[s]ubject only to 

subparagraphs (b) and (c).

Id. at 185–86. Accordingly, the Court ruled that the cooling-off period is a procedural requirement 

under the ECT, not a jurisdictional one.9 Id. at 188. Under the Supreme Court’s precedent “such 

procedural prerequisites are for the tribunal, not the Court, to interpret and apply.” Id. at 189, 

citing BG Grp., PLC v. Republic of Argentina, 134 S. Ct. 1198, 1207 (2014). Therefore, this Court 

deferred to the tribunal’s conclusion that the procedural hurdle had been satisfied, and found that 

there was a valid agreement to arbitrate between the parties. Id.; see also Award ¶ 830. 

 

9 The SCC tribunal also concluded that the cooling-off period was a procedural requirement, 

rather than a jurisdictional one, based on the express language of Article 26 of the ECT. 

Award ¶ 829. 
22

The Court sees no reason to depart from its prior ruling. In BG Grp., PLC the Supreme 

Court analyzed whether a precondition in an investment treaty between Argentina and the United 

Kingdom was procedural or jurisdictional in nature. 134 S. Ct. 1198. In that case, the provision 

required a claimant to submit a dispute to a local court and allow 18 months to lapse without a 

decision before submitting the dispute to arbitration. Argentina alleged that the arbitrators did not 

have jurisdiction because BG Group initiated arbitration without waiting the requisite 18 months. 

Id. at 1205. The Supreme Court found that the eighteen-month provision was procedural, not 

jurisdictional in nature, because it governed when the duty to arbitrate arose, rather than whether 

the duty existed at all. Id. at 1207. As a result, the Court held that satisfaction of the condition 

was for the arbitrators to decide, not the courts, because parties “normally expect a forum-based 

decision-maker to decide forum-specific procedural gateway matters.” Id., quoting Howsam v. 

Dean Witter Reynolds, Inc., 537 U.S. 79, 86 (2002).10

Respondent’s separate defense under Article(1)(a) is equally unavailing. It argues that the 

tribunal lacked jurisdiction over petitioner Terra Raf Trans Traiding Ltd. (“Terra Raf”) because it 

 

10 The Court also notes that the tribunal’s decision is worthy of deference given respondent’s 

own actions during the arbitration proceedings. On January 18, 2011, Kazakhstan sent a letter to 

the SCC objecting to petitioners’ failure to await the expiration of the three-month period, and it 

proposed a stay of the arbitration to cure the defect. Ex. 26 to Resp’t’s Opp. [Dkt. # 20-26] at 1. 

Specifically, Kazakhstan proposed that:

[T]he Tribunal order Claimants to engage in amicable settlement 

discussions as required by Article 26 of the ECT, and that the proceedings 

be suspended during the three-month period in satisfaction of that 

jurisdictional requirement . . . notwithstanding the fact that this 

jurisdictional defect could result in dismissal after full briefing and hearing 

on the merits.

Id. at 3. With the consent of both parties, the tribunal granted the stay on February 22, 2011. 

Award ¶ 830. Because respondent proposed and obtained a means to cure the alleged procedural 

deficiency, its claim that the initial failure to wait still invalidates the arbitration is not persuasive. 
23

did not qualify as an “investor” under the ECT, and therefore that petitioner cannot seek to enforce 

the award. Resp’t’s Opp. 58–59. 

Petitioner Terra Raf is a limited liability company incorporated and located in Gibraltar, a 

territory controlled by the United Kingdom. Resp’t’s Opp. 58; Pet. ¶ 5. Half of the company is 

owned by petitioner Anatolie Stati, and the other half is owned by his son, petitioner Gabriel Stati. 

Pet. ¶¶ 2–5. Respondent argues that because Gibraltar is not a party to the ECT, Terra Raf does 

not qualify as an “investor” under the treaty, and therefore, Kazakhstan was not bound by a valid 

agreement to arbitrate with the company. Resp’t’s Opp. 58–59. 

Respondent raised this argument before the tribunal. Award ¶¶ 733–38. The tribunal 

rejected it, finding that the ECT provides protections to investors from Gibraltar because Gibraltar 

is part of the “European Community,” which is a party to the ECT. Id. ¶ 746. The Court finds no 

reason to second-guess the tribunal’s conclusion since respondent itself acknowledges that “both 

the United Kingdom and the European Union are signatories of the ECT,” Resp’t’s Opp. at 58, 

and the Court’s review is “extremely limited.” Kurke v. Oscar Gruss & Son, Inc., 454 F.3d 350, 

354 (D.C. Cir. 2006); see also Misco, Inc., 484 U.S. at 38. (“Courts thus do not sit to hear claims 

of factual or legal error by an arbitrator as an appellate court does in reviewing decisions of lower 

courts.”).

B. Article V(1)(b) of the New York Convention is inapplicable. 

Respondent contends that the Court should reject confirmation of the award because it was 

not given adequate notice to appoint an arbitrator. Resp’t’s Opp. at 36–48. Article V(1)(b) of the 

New York Convention authorizes a court to refuse recognition and enforcement of an award if 

“the party against whom the award is invoked was not given proper notice of the appointment of 

the arbitrator, or of the arbitration proceeding or was otherwise unable to present his case.” Article 
24

V(1)(b) “essentially sanctions the application of the forum state’s standards of due process.” Iran 

Aircraft Indus. v. Avco Corp., 980 F.2d 141, 145–46 (2d Cir. 1992), quoting Parsons & Whittemore 

Overseas Co. v. Societe Generale De L’Industrie Du Papier (Rakta), 508 F.2d 969, 975 (2d Cir. 

1974).

1. The SCC’s notices to respondent. 

As noted earlier, on July 26, 2010, petitioners submitted a formal Request for Arbitration 

to the Stockholm Chamber of Commerce, claiming that Kazakhstan’s actions violated its 

obligations under the Energy Charter Treaty, to which Kazakhstan is a signatory. Pet. ¶ 21. In its 

Request for Arbitration, petitioners proposed that the dispute be resolved by a tribunal composed 

of three arbitrators, with each party nominating one. Req. for Arb ¶¶ 111–12. Petitioners also 

proposed to Kazakhstan that the two party-appointed arbitrators select a chairman for the panel, 

and that if they could not agree, that the SCC would appoint the chairman pursuant to the SCC 

Arbitration Rules. Id. ¶ 113. 

On August 5, 2010, the SCC Secretariat forwarded petitioners’ Request for Arbitration to 

Kazakhstan by courier and attached its own cover letter which requested an answer from 

Kazakhstan by August 26, 2010. Ex. 2 to Resp’t’s Opp. [Dkt. # 20-3] at 2 (“First Notification”). 

The SCC letter explained, “[i]n accordance with Article 5 of the SCC Rules, you are requested to 

submit an Answer to the SCC,” and indicated that the Answer “shall contain comment on the seat 

of arbitration and on the proposition of the Claimants that the Chairperson be selected by the partyappointed arbitrators.” Id. The Kazakh Ministry of Justice received the SCC’s letter on August 

9, 2010, but it did not respond. Ex. 3 to Resp’t’s Opp. [Dkt. # 20-4] at 2–3; Resp’t’s Opp. at 22.

On August 27, 2010, having not received an Answer, the SCC Secretariat sent a second 

letter by courier to Kazakhstan, extending the deadline. Ex. 4 to Resp’t’s Opp. [Dkt. # 20-5] 
25

(“Second Notification”). The second letter requested that Kazakhstan “submit an Answer in 

accordance with Article 5” by September 10, 2010 “at the latest,” and it warned that “failure to 

submit an Answer does not prevent the arbitration from proceeding.” Id. Kazakhstan received the 

second letter on August 31, 2010, but again, it did not respond by the deadline. Resp’t’s Opp. at 

22.

On September 13, 2010, three days after the extended deadline to submit an Answer had 

passed, petitioners submitted a request to the SCC to appoint an arbitrator on behalf of Kazakhstan 

pursuant to Article 13(3) of the SCC rules. Ex. 6 to Resp’t’s Opp. [Dkt. # 20-7]. Although the 

SCC Secretariat forwarded the request to Kazakhstan on that day, the request was not delivered to 

the Kazakh Ministry of Justice until September 23, 2010 because it was sent by registered mail 

rather than by courier. See Ex. 7 to Resp’t’s Opp. [Dkt. # 20-8]; Resp’t’s Opp. 22. The SCC 

appointed an arbitrator on behalf of Kazakhstan on September 20, 2010, three days before 

Kazakhstan received petitioners’ forwarded request. Ex. 8 to Resp’t’s Opp. [Dkt. # 20-9]. 

On September 23, 2010, the SCC Secretariat issued a letter to the parties notifying them 

that the SCC had appointed Professor Lebedev as the arbitrator on behalf of Kazakhstan. Ex. 9 to 

Resp’t’s Opp. [Dkt. # 20-10]. The letter further noted that the “Chairperson will be appointed 

shortly.” Id. Kazakhstan received the letter via courier on September 27, 2010. Ex. 10 to Resp’t’s

Opp. [Dkt. # 20-11]. 

Approximately two months later, on December 2, 2010, respondent objected through its 

counsel to the SCC’s appointment of Professor Lebedev and requested an opportunity to appoint 

its own arbitrator. Ex. 15 to Resp’t’s Opp. [Dkt. # 20-16]. Kazakhstan argued that it had not been 

given sufficient time to select an arbitrator due in part to bureaucratic hurdles involving the 
26

allocation of state funds for legal services and language barriers. Id.11 Petitioners opposed 

respondent’s request, arguing that respondent failed to invoke any of the grounds for challenging

an arbitrator set forth in the SCC Arbitration Rules, which pertain to impartiality, independence, 

or lack of qualifications. Ex. 17 to Resp’t’s Opp. [Dkt. # 20-18]. On December 15, 2010, the SCC 

Board found no grounds to disqualify the arbitrator and dismissed Kazakhstan’s challenge. Ex. 18 

to Resp’t’s Opp. [Dkt. # 20-19].

2. Respondent received proper notice. 

“Due process requires notice reasonably calculated, under all the circumstances, to apprise 

interested parties of the pendency of the action and afford them an opportunity to present their 

objections.” Crooks v. Mabus, 845 F.3d 412, 423 (D.C. Cir. 2016), quoting Reeve Aleutian 

Airways, Inc. v. United States, 982 F.2d 594, 599 (D.C. Cir. 1993) (internal quotation marks 

omitted). A notice “must be of such a nature as reasonably to convey the required information, 

and it must afford a reasonable time for those interested to make their appearance.” Mullane v. 

Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314–15 (1950). This standard was satisfied by

the two letters sent by the SCC dated August 5, 2010, and August 27, 2010.

Respondent does not dispute that it received the two SCC letters. Instead it argues that the 

content of the communications was inadequate because the letters did not state explicitly that 

Kazakhstan was supposed to appoint an arbitrator by a specific deadline. Resp’t’s Opp. at 16–17, 

40. This is not borne out by the documents themselves. 

 

11 See also Resp’t’s Opp. at 20. But respondent does not elaborate on how language issues 

interfered with its ability to respond or to make a timely request for additional time. 
27

The first SCC letter dated, August 5, 2010, stated: 

In accordance with Article 5 of the SCC Rules, you are requested to submit 

and Answer to the SCC, by 26 August 2010 at the latest.12

First Notification at 2. Article 5(1)(v) of the SCC Arbitration Rules provides that an Answer:

Shall include . . . if applicable, the name, address, telephone number, 

facsimile number and e-mail address of the arbitrator appointed by 

Respondent. 

Ex. 1 to Resp’t’s Opp. [Dkt. # 20-2] (“SCC Arbitration Rules”) at 7. So the notice plainly informed 

respondent of the date by which it was to name an arbitrator. In the event there was any ambiguity 

about that, the SCC included two attachments with the letter: the Arbitration Rules and petitioners’ 

Request for Arbitration, which laid out petitioner’s proposal on how to constitute the tribunal. Id.; 

Req. for Arb. ¶¶ 111–12. 

Furthermore, Article 5(3) establishes that, “[f]ailure by the [r]espondent to submit an 

Answer shall not prevent the arbitration from proceeding.” SCC Arbitration Rules at 8. Both 

provisions were plainly applicable in this situation and the Court finds that the first letter along 

with its attachments reasonably put respondent on notice of its obligation to submit an Answer and 

proffer an arbitrator. Furthermore, the respondent received a second opportunity to be heard, when 

the SCC sent a second notification and extended its deadline. In the second letter, the SCC again 

directed respondent to “submit an Answer in accordance with Article 5 of the SCC Rules” and 

warned that “failure to submit an Answer does not prevent the arbitration from proceeding.” 

Second Notification at 2. 

 

12 The letter went on: “Your Answer shall contain comment on the seat of arbitration and on 

the proposition of the Claimants that the Chairperson be selected by the party-appointed 

arbitrators.” First Notification at 2.
28

Faced with respondent’s failure to respond, the SCC Board reasonably went ahead and 

appointed an arbitrator on respondent’s behalf as it is permitted to do under the SCC’s default 

rules. Under Article 12 of the SCC rules, “[w]here the parties have not agreed on the number of 

arbitrators, the Arbitral Tribunal shall consist of three arbitrators . . . .” SCC Arbitration Rules at 

9. Article 13(1) of the SCC Arbitration Rules allows the SCC to set the time period by which to 

appoint an arbitrator if the parties have not agreed to a time period. Id. And Article 13(3) further 

provides that “[w]here a party fails to appoint an arbitrator(s) within the stipulated time period, the 

Board shall make the appointment.” Id. at 10.

Respondent later chose to object to the appointment of its arbitrator and the SCC took its 

arguments into consideration, along with petitioners’ objections, and found that there were no 

grounds on which to disqualify the arbitrator appointed on behalf of respondent. Ex. 18 to Resp’t’s

Opp. [Dkt. # 20-19].

Thus, the Court finds that respondent was “reasonably” informed of the proceeding and its 

obligation to appoint an arbitrator and given an “opportunity to be heard.” Mullane, 339 U.S. at 

314. Respondent’s inability to appoint its arbitrator was not due to a lack of notice but rather a 

lack of timely participation on its part. See Bernstein Seawell & Kove v. Bosarge, 813 F.2d 726, 

729 (5th Cir. 1987) (“[D]ue process is not violated if the hearing proceeds in the absence of one 

of the parties when the party’s absence is the result of his decision not to attend.”). 

Respondent argues in the alternative that 32 days was simply not enough time to appoint 

an arbitrator and that this time period “constitutes a substantial deviation from the norm of 

international arbitration.” Resp’t’s Opp. at 46–47. Respondent never sought an extension of time 

and the SCC gave it additional time on its own initiative. Moreover, the Court finds that the

amount of time was reasonable particularly since the parties agreed to conduct the arbitral 
29

proceedings under the SCC rules, and respondent does not claim that the 32 day timeframe was 

inconsistent with those rules.

Given all of these reasons, the Court finds that respondent received “proper notice of the 

appointment of the arbitrator” and it rejects its defenses under Article V(1)(b) of the New York 

Convention. 

C. Article V(1)(d) of the New York Convention is inapplicable.

Next, respondent asserts that that the arbitral award is unenforceable under Article V(1)(d) 

of the New York Convention which allows a court to deny enforcement of an arbitral award if: 

[T]he composition of the arbitral authority or the arbitral procedure was not 

in accordance with the alleged agreement of the parties, or, failing such 

agreement, was not in accordance with the law of the country where the 

arbitration took place. 

New York Convention, art. V(1)(d). 

Respondent makes three arguments under this provision, two of which simply repeat prior 

arguments. First, respondent argues that the SCC failed to comply with its own rules relating to 

the appointment of arbitrators. Second, it asserts that the SCC failed to enforce the cooling-off 

period as it was required to do under the ECT. Last, it maintains that the tribunal committed other 

procedural errors relating to the admission and weight of evidence during the proceeding. 

The Court has already addressed the first two points in Sections II.A–B and finds that the

same reasoning applies here. The Court finds that the SCC did not violate its rules when it 

appointed an arbitrator on respondent’s behalf. The rules plainly allow for the SCC to do so when, 

as here, a party fails to appoint an arbitrator by the set deadline. And a party’s failure to respond 

does not halt the proceedings, including the appointment of the arbitrator. As to the cooling-off 

period, the Court defers to the tribunal’s conclusion that this procedural requirement was satisfied 

when the tribunal imposed a three-month stay at respondent’s request. Furthermore, the Court 
30

notes that when a “party’s challenge involves an application of the arbitral institution’s own rules, 

courts typically have deferred to the arbitral panel’s interpretation of them.” Belize Bank Ltd., 191 

F. Supp. 3d at 37, citing York Research Corp. v. Landgarten, 927 F.2d 119, 123 (2d Cir.1991). 

Respondent also complains that the tribunal committed three types of procedural errors: 

(1) ignoring the submission of expert evidence and other evidence regarding 

almost every major disputed issues of the case; (2) failing to consider 

Kazakhstan’s objections that certain deductions would need to be made 

from any eventual award to [p]etitioners; and (3) going beyond the 

submissions of the [p]arties and ignoring the [p]arties’ submissions and the 

applicable law on multiple occasions. 

Resp’t’s Opp. at 53–54. But respondent points to only one example of these alleged irregularities. 

It argues that the testimony of one of its expert witnesses on the value of the LPG plant was not 

afforded sufficient weight in deciding the amount of the award. Id. at 55–56. 

This is not a basis to decline to enforce the award. It is not for this Court, given its limited 

scope of review, to second-guess the tribunal’s weighing of evidence. Respondent’s invitation to 

re-try the merits of the arbitration undermines the very purpose of the New York Convention. See 

TermoRio S.A. E.S.P., 487 F.3d at 934, quoting Mitsubishi Motors Corp., 473 U.S. at 639 (“The 

utility of the [New York] 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.”); see also Bosack v. Soward, 586 F.3d 1096, 1105 (9th Cir. 2009) (“[The 

court] ‘ha[s] no authority to re-weigh the evidence’ presented to the arbitration panel.”) (citations 

omitted).

The Court finds that the tribunal acted within its authority when it chose to disregard both 

parties’ experts, and to instead value the LPG plant using a contemporaneous third-party bid. See 

Slaney v. The Int’l Amateur Athletic Fed’n, 244 F.3d 580, 592 (7th Cir. 2001), quoting Generica 

Ltd. v. Pharm. Basics, Inc., 125 F.3d 1123, 1130 (7th Cir. 1997) (“The extent of an arbitrator’s 
31

latitude is such that an “arbitrator is not bound to hear all of the evidence tendered by the parties 

. . . [H]e must [merely] give each of the parties to the dispute an adequate opportunity to present 

its evidence and arguments.”). Based on the single example that respondent provides, it is apparent 

that the issue is not that respondent was not given an adequate opportunity to be heard but rather 

that it takes issue with the result. This is precisely what the Court is not allowed to consider in an 

enforcement proceeding under the New York Convention. 

D. Article V(2)(b) of the New York Convention is inapplicable.

Finally, respondent argues again, this time under Article V(2)(b) of the New York 

Convention, that the arbitral award is unenforceable because it was not given notice of its 

opportunity to appoint its arbitrator. Article V(2)(b) of the New York Convention prevents the 

enforceability of an arbitral award when the arbitral award “would be contrary to the public 

policy” of the country where enforcement is sought, Belize Bank Ltd., 852 F.3d at 1110–11, 

quoting New York Convention, art. V(2)(b), and respondent asserts that the lack of notice 

contravenes public policy in the United States. As noted earlier, “[t]he public-policy exception 

under the New York Convention is construed narrowly and applied ‘only where enforcement 

would violate the forum state’s most basic notions of morality and justice.’” Chevron Corp. v. 

Republic of Ecuador, 949 F. Supp. 2d 57, 69 (D.D.C. 2013), quoting Parsons, 508 F.2d at 974; 

see also TermoRio S.A. E.S.P., 487 F.3d at 938. Since the Court has already concluded that 

respondent received adequate notice, respondent has certainly not met this high burden. 

CONCLUSION

For the reasons set forth above, respondent’s motion for reconsideration pursuant to 

Federal Rule of Civil Procedure 54(b) is denied. It is further ordered that the petition to confirm 

the arbitral award is granted because none of the grounds for refusal or deferral of the award set 
32

forth in the New York Convention apply. A separate order will issue. 

AMY BERMAN JACKSON

United States District Judge

DATE: March 23, 2018